Re: CSF Seminar with Jeffrey Gates

["William B. Ryan" <william_b_ryan@xxxxxxxxxxx>]

Rick Holt wrote: http://csf.colorado.edu/mail/pkt/apr99/0010.html

"Starting May 7, CSF is pleased to announce a very interesting seminar
with Jeffrey Gates, author of *The Ownership Solution:
Shared Capitalism for the 21st Century.*"

Similar ideas were originated in the earlier third of this century by
C. H. Douglas and his colleagues.

1.  From *Credit-Power and Democracy,* published 1920, Appendix, "A
Practical Scheme for the Establishment of Economic and Industrial
Democracy," pp. 148-150:

"Draft Scheme for the Mining Industry: (1) For the purpose of
efficient operation each geological mining area shall be considered as
autonomous administratively.  (2) In each of these areas a branch of a
Bank, to be formed by the Miners' Federation of Great Britain shall be
established, hereinafter referred to as the Producers' Bank.  The
Government shall recognise this Bank as an integral part of the mining
industry regarded as a producer of wealth, and representing its
credit.  It shall ensure its affiliation with the Clearing House.  (3)
The shareholders of the Bank shall consist of all persons engaged in
the Mining Industry, ex-officio, whose accounts are kept by the Bank.
 Each shareholder shall be entitled to one vote at a shareholders'
meeting.  (4) The Bank as such shall pay no dividend.  (5) The Capital
already invested in the Mining properties and plant shall be entitled
to a fixed return of, say, 6 percent., and, together with all fresh
Capital, shall continue to carry with it all the ordinary privileges
of Capital administration other than Price-fixing.  Depreciation shall
be set against appreciation.  (6) The Boards of Directors shall make
all payments of wages and salaries direct to the Producers' Bank in
bulk.  (7) In the case of a reduction in cost of working, one half of
such reduction shall be dealt with in the National Credit Account, one
quarter shall be credited to the Colliery owners, and one quarter to
the Producers' Bank.  (8) From the setting to work of the Producers'
Bank all subsequent expenditure on capital account shall be financed
jointly by the Colliery owners and the Producers' Bank, in the ratio
which the total dividends bear to the total wages and salaries..."

>From appended commentary by A. R. Orage, *Credit-Power and Democracy,*
pp. 172-174:

"...It is certain that the proposal to recognise the rights in
perpetuity of the Capital already existing in the Mining (or any
other) Industry will arouse opposition among those who are more
concerned with historic phrases than with facts, and more disposed to
revenge, under the cloak of 'principle,' than to the discovery of the
best practical solution of the social problem.  Such opposition,
however, must be faced, and, if possible, overcome; and the means to
this end are two.  In the first place, it can be pointed out that as a
matter of fact every other method of dealing with existing Capital
than the frank recognition of its claims is either unpractical or
amounts in the end to a veiled recognition of the claims in question.
 What are, in fact, the proposals?  They are confiscation out and out,
purchase by the State, or confiscation with what is called a
'compassionate allowance'--the provision, that is to say, of
terminable annuities to the dispossessed owners of Capital.  Is there
any practical man in the Labour Movement who believes in his heart
that either of the methods of confiscation suggested is conceivably
possible without a real revolution?  Assuming for a single instant
that a real revolution would not destroy Capital in the process (and
thereby nullify itself as a means of confiscating Capital), does any
Labour leader, responsible or irresponsible, believe that confiscation
without revolution is possible?...There are, as we have said,
Socialists and Labour leaders who preach confiscation as a
'principle,' and who, we have no doubt, would try to put the principle
into practice; but it is more than doubtful whether one of them
honestly believes that a policy of confiscation is practicable, save
by means of a revolution in which much of the Capital in question
would disappear.

"Purchase by the State, on the other hand, is simply covert, instead
of overt, recognition of the claims of Capital.  It is perfectly true
that by transferring by purchase the ownership of the existing Capital
from its present owners to the State, the present owners are got rid
of--from the industry in question.  But not only are there new owners
exercising all and even more of the privileges of the transferred
Capital, but the bought-out former owners are now provided with
Financial Credit (in the form of money or State bonds) with which they
can proceed, if they please, to acquire Capital either in another
industry in the same country or in an industry abroad.  In short,
State-purchase is powerless to 'get rid of' the Capitalist qua
Capitalist.  The policy differs from confiscation, perhaps, in being
practicable; indeed, many capitalists would welcome it as a means of
liquidating their present Capital; but its effect is much the same.
An attempt at confiscation would destroy Capital; and State-purchase
would not 'abolish the Capitalist.'  Neither method is, therefore,
really practical towards the real end in view.

"The Scheme's recognition of the claims of existing Capital does not
rest, however, solely on the ground of expediency.  Expediency, it is
true, is not to be despised as a means to an end, when the end is
nothing less than the welfare of the world.  And a good many
'principles' would be worth sacrificing to the practical task of
solving the economic problem of mankind.  However, as has been said,
it is not wholly or even mainly a matter of expediency in the present
case; it is also a matter of principle; and the principle becomes
clear when it is realised, first, that the only privilege which
Capital now exercises to the detriment of Society _and_ of
itself--namely, Price-fixing--is removed from it; and, secondly, that
all the 'fresh Capital' (much of it the direct property of the
individual Producers) ranks equally with the existing Capital in its
claim to privileges..."

2.  From C. H. Douglas, *The Monopoly of Credit,* published 1931, pp.
113-114:

"The general principles required of any financial system sufficiently
flexible to meet the conditions which now exist and to continue to
reflect the economic facts as these facts change under the influence
of improved process and the increased use of power, are simple and may
be summarized as follows:

"(a) That the cash credits of the population of any country shall at
any moment be collectively equal to the collective cash prices for
consumable goods for sale in that country (irrespective of the cost
prices of such goods), and such cash credits shall be cancelled or
depreciated only on the purchase or depreciation of goods for
consumption.

"(b) That the credits required to finance production shall be supplied
not from savings, but be new credits relating to new production, and
shall be recalled only in ratio of general depreciation to general
appreciation.

"(c) That the distribution of cash credits to individuals shall be
progressively less dependent upon employment.  That is to say, that
the dividend shall progressively displace the wage and salary, as
productive capacity increases per man-hour.

"It seems quite possible that the form of organisation which would
easily adapt itself to the embodiment of the foregoing principles
would be that of the limited company.  'Great Britain Limited' as a
beginning for the 'British Empire Limited' might form an organisation
in which natural-born British subjects would be bond-holders.  An
elaboration of this conception would enable a transition to be made
without shock and without any alteration in the existing
administration of industry."

Bill Ryan: http://www.geocities.com/CapitolHill/Senate/7018



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