servant, not master

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

Though the Greenbackers and Populists united in 1896
behind the "fusion" candidate William Jennings Bryan,
they derived from quite different schools of thought
regarding monetary reform.

The Greenbackers wanted government to print money and
spend it.  The Populists were for free coinage, which
took government out of the picture except for
supplying the services of the mint.

Some two decades later a third alternative entered
the fray, taking the best from the essence of the
Greenbacker and Populist proposals.

A Social Credit government would print money and pay
it out as dividends.  The problem of concentrating
power in government through unlimited spending power
is thereby avoided.  Also avoided is the
irrationality of free coinage in satisfying the needs
of trade and commerce in a closed system of finance.

As to the fourth branch of government, the Federal
Reserve is already effectively that in the American
system.  Bringing it formally as such into the
Constitution would be a step forward, as business
unfinished from the Revolution.

The central bank would then be "government" to the
financial sector, as the Supreme Court is
"government" to the legal sector; the executive is
"government" to the government, and the legislative
expressing the will of the people with oversight over
the other branches.

It would be recognition by all parties concerned
that finance is servant, not master.



----original message----
Date:  Wed, 28 Jan 2004 08:38:09 -0800
From:  Keith Wilde <keithwilde@xxxxxxxxxxxx>
Subject:  [SOCIAL CREDIT] Social credit in "Lost
Science of Money"?

Topics raised here over the past couple of days
engage themes treated in the book by Stephen Zarlenga
of the American Monetary Institute (AMI).  The
"review" of mine that Bill Ryan posted a few days ago
is really a summary of the main arguments of the book
with very little evaluative content.  It is also too
long for most "review" purposes, but at 15 pages it
is a lot less reading than the 750 pp of the book!  I
hope this will be helpful to people who wish to
comment on the AMI  policy position without having to
read the whole book.

To put it even more succinctly, AMI favors a complete
fusion of central bank powers with those of
government--management of the nation's money should
be a fourth fundamental branch of government.  This
proposal includes government issuance of paper
currency as a money that is "good as gold".  This is
combined with a requirement that banks hold 100%
reserves of this government money for all loans they
make.  The system would be initiated by printing
enough currency to liquidate all outstanding bank
loans; additions to money supply would henceforth be
made via direct government spending to fund its own
activities.

This location of monetary control would obviously
accommodate the social credit technique of
distributing a "dividend" directly to consumers.

Another element in Zarlenga's argument is intimately
related to the theme of some reformers that banks
create money "out of thin air".   The way he treats
it has a flavor that reminds me of a major premise in
Social Credit.  That is, when banks issue credit, the
"thin air" they rely on is very similar to the
"cultural heritage" appealed to by SoCrediters.  The
way Zarlenga treats it sounds to me more like the
idea of "public goods" that used to be a familiar
topic in standard political economy.  He charges that
banks are appropriating the "public good" and getting
rich from compound interest on something that was
never and ought not to be their own property.

Two questions for our Social Credit experts,
therefore:

(1)  How does "cultural heritage" relate to "public
goods" and the AMI proposition that it be taken over
by government for distribution to individuals and
industrial firms as well as to banks?

(2)  What is your reaction to the idea of government
as issuer of money and therefore of dividends as an
incidental part of its management of money and the
government budget?

For more complete explanation of how these questions
arise, see my "book review".

Keith Wilde
--




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