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pddf.txt
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1000
A BC OF ECONOMICS
And old type of mentality asks whether this would maintain the
said individual's sense of responsibility, and answers the question very
emphatically in the negative.
I fall back on a profession of faith. The simplest starting-point appears
to me to be the individual's willingness to work four hours a day
between the ages of twenty and forty.
There are doubtless, in modern industry, various directive jobs, etc.,
that need more prolonged attention, but very few in which an equiva-
lent stint would not serve. Ten years at eight hours a day, as propor-
tionate,
Counting money as certificate of work done, the simplest means of
keeping money distributed (in legal-tender credit-slips) is to keep
work distributed. I do not say it is the only conceivable means, but I
definitely assert that it is the most available means, the simplest, the
one requiring least bureaucracy and supervision and interference.
As for over-time.
Let it mean over-time. Let the man work four hours for pay, and if
he still wants to work after that, let him work as any artist or poet
works, let him embellish his home or his garden, or stretch his legs
in some form of exercise, or crook his back over a pool-table or sit
on his ramp and smoke. He would get a great deal more out of life,
and, supposing him to have any rudiments of intelligence, he would
be infinitely more likely to use it and let it grow, and in any case he
would ‘get a great deal more for his money’.
I know, not from theory but from practice, that you can live in-
finitely better with a very little money and a lot of spare time, than
with more money and less time. Time is not money, but it is almost
everything else.
Even suppose that the wage for a four-hour day should be ‘cut’ to
half the wage of an eight-hour day (which is for various simple reasons
unnecessary), but even supposing it were necessary and were done.
The man on that wage, once he were assured of its continuance, once
he had ‘arranged his life’ in accordance, and organised his other four
hours for private activity, could have a damn sight better life than he
now gets.
I say ‘which is for various reasons unnecessary’ because the ‘wage’ is
now measured in currency which is merely a convention, and a bit of
paper with 10 on it is no more difficult to provide than a bit of paper
with 5 or with 20.
There are various credit schemes which could take care of the prob-
lem of leaving the figure 10 on the bit of paper, even though the day’s
work were cut in half.
Douglas would pass out slips to the middleman. I have outlined
a scheme for passing them out via the factory. Neither scheme is
241
CIVILIZATION, MONEY AND HISTORY
necessary. A few months ago the German government proposed
an inflation without, apparently, any control.
‘The ‘need’ of such a scheme is possibly due more to the strength of
habits of mind, to conventionality in the populace’s thoughts about
money, than to anything else.
Freedom from worry, inherent in the reasonable certainty of
keeping one’s job, must be worth at least 25 per cent of any in-
come,
nore that this reasonable certainty can only exist when the necessity
of progressively shortening the working day, pari passu with mechanical
invention, is generally recognised.
No arbitrary number of hours set for 1933 will be valid in 1987, let
alone in 2043.
Over and above which we come upon Major Douglas's equations
re—superstition in costing.
PART THREE
I don't quite see how anyone is going to dodge (for ever) the Major’s
equations.
‘There are various verbal manifestations and various terminologies
and various approaches to the problem.
[have begun with distribution of work. A point at which the Doug-
lasites dislike to begin. 1 have gone on to the demand for justice in
the distribution of credit slips, but that does not invalidate the Major's
contention that under the present system there are never enough credit
slips to deal with the product; to distribute the product; to purchase
the product; to conjugate any of the necessary verbs of sane econo-
mics or of a decent and agreeable life.
The Major has pointed out the superstition in the computation of
costs. The reader can look up the details in a number of contemporary
works.
He will not find a simpler statement than Douglas's: You pay for the
tree every time you buy a bit of the fruit.
Obviously the tree has to be maintained, some fraction over and
above the worth of the fruit must be added, but the computation of
that fraction can and should be free from gross error.
Gross error here could undoubtedly undo the good effects ofa short
working day. As a patient may easily die of one disease after you have
cured him of another.
The requirements so far on our list are:
(1) ‘Money’ as certificate of work done.
(2) ‘Work done’ to be in a sense ‘inside a system’, that is to say, it
must be ‘necessary’ or at any rate it must be work that someone WANTS
242
A BC OF ECONOMICS
done. The product must be what someone lacks. [sic]-I lack half a loaf
of bread daily or thereabouts. I lack a few suits of clothes per
annum, etc.
(3) There must be some way for everyone to get enough money or
common-carrier to satisfy a reasonable number of lacks.
The simplest road is via work, and I suspect any other, This is also the
first instinctive outcry. It is empirically observable that the first thing
men ask for is work; and only after refusal do they cry out for free
food. If this statement indicates a great naive trust in humanity I am
willing to stand the charge.
(4) Fairness in the issuance of certificates. (I think the various
Douglas plans fall mainly under this heading.)
Time is Not Money
Time is not money, but it is nearly everything else. That is to say... .
It is not money, food, raw materials, women or various fundamental
necessities which I cannot at the moment remember, including pos-
sibly health, but it is a very important lever to most of them.
‘Nobody, but socialists’, reads Marx, and there is consequently little
enlightened discussion of either his history or his ‘errors’,
I havenever, sofaras! can recall, seen acontemporary recognition of
the plain fact that a man with a lot of spare time can get a great deal
more out of life with a very little money, than an overworked man
with a great deal. I mean apart from polyana.
Leisure is not gained by simply being out of work. Leisure is spare
time free from anxiety,
Any spare time not absolutely obsessed by worry can be made the
means to a ‘better life’.
Marx deals with goods in the shop window or the shop basement.
The minute I cook my own dinner or make the chair that I sit on I
escape from the whole cycle of Marxian economics. In consideration
of which fact I remain a Jeffersonian republican, and I believe the
present troubles, or at any rate the present U.S. American or English
troubles, can be treated from a Jeffersonian angle.
You can throw in Confucius and Van Buren, but you must dis-
tinguish between 1820 and 1930, you must bring your Jefferson up to
date. T. J, had already seen that agriculture would in great measure
give way to manufacturing, ete.
~ All American and republican principles were lost during the damn-
able reign of the infamous Woodrow, but even Woodrow did not
favour the xvitt amendment. Despite ‘liberty unions’, etc., it is almost
impossible to discover any sense of American principles in contempor-
ary American writing, apart from editorials in one or two newspapers
which naturally are not read by highbrows.
One commissioner of labour whose name I have forgotten, did
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CIVILIZATION, MONEY AND HISTORY
definitely advocate a shorter working day. No one has raised any
coherent or even publicly avowable objection.
No one has ventured to say that a shorter day would not decrease
the number of totally unemployed.
No one has claimed that it would lead to the creation of more
‘bureaus’ and more bureaucrats, and more sassy typists to take notes
of vacuous commissioners and sit on their obese laps in government
offices.
Naturally there is no very clear outcry for shorter hours from the
workmen themselves. The labour party in America is not rich in
economists. You can’t arouse any very fiery passion on the bare plea
of less work. It spells less pay to most hearers,
By simple extensions of credit (paper credit) it would probably be
possible to leave the nominal pay exactly where it is, but it requires
an almost transcendent comprehension of credit to understand this.
The plain man cannot in any way comprehend that the accelerated
movement of money when everybody has a little means greater com-
fort than the constipated state of things when a lot of people have
none.
The fiery labourite wants the unemployed paid out of the rich man’s
pocket. The rich man’s pocket happens to be a mere pipe and not an
inexhaustible upspringing fountain.
Naturally all men desire to pass the buck. The immediate effect of
distributing work, under the present system, means that working men
would have to divide with working men. It cannot, therefore, be a
very popular cause.
The benefits of a shorter day would be diffused, everyone would in a
few months receive them, but it would take probably longer to rer—
ceive them, Annoyances strike more quickly than comforts.
Tell any man that he can live better on 40 shillings a week and an
extra two hours per day to himself, than he can on 50 shillings without
the two hours and see how little he believes you.
The idea that prices would come down sounds like a pipe dream,
Prices have always adjusted themselves to the current spending
powers of the general public, but that again is a general idea.
Two hours more per day to loaf, to think, to keep fit by exercise of
a different set of muscles, as distinct from overwork and the spectacle
of several millions in idleness... !
Tam an expert. I have lived nearly all my life, at any rate all my adult
life, among the unemployed. All the arts have been unemployed in
my time.
Free Trade
Free Trade might be possible between two countries if they had for
each other a full and wholly enlightened good will,
244
A B C OF ECONOMICS
provided they had first attained an almost perfect adjustment of
their own internal affairs.
It need hardly be said that for the last century or more, the practice
of governments has been to neglect internal economy; to commit
every conceivable villainy, devilry and idiocy and to employ foreign
affairs, conquests, dumpings, exploitations as a means of distracting
attention from conditions at home, or to use the spoils of savages as
palliatives to domestic sores or in producing an eyewash of ‘prosper-
ity’, In the sense that such prosperity is useful as ‘bait’; as spectacular
fortunes; as ‘the chance’ of getting rich.
Malthus
In practice it has been shown that families who do not overproduce,
that is, who beget no more children than they can support, have been
able to maintain decent standards of living, and that other families do
not.
It is probably useless to propound theories of perfect government
or of perfect economics for human beings who are too demnition
stupid and too ignorant to acquire so rudimentary a perception of
cause and effect.
Objections to this system are raised and are conceivably raisable on
the score of national greatness, etc. ... Nevertheless we are told that
Holland has maintained decent standards of living, etc., by not over
populating herself. The system is supposed (for wholly arcane rea-
sons) to work for a small nation and not for a large.
It would work. The only objection to it is that curtailment of the
philoprogenitive instinct may not be necessary. Or possibly on practi-
cal grounds, that the present state of bigotry and idiocy prevent the
curtailment, and that the inadequate progress of education is not
able to achieve it. Yet sparsely populated districts are not necessarily
the most prosperous. The remedy is to be recommended only at close
range for the individual family living in a bad economic system. It
cannot be made the backbone of enlightened economics on the grand
scale. Such economics, now, being little more than a study of how we
can USE our resources, not how we can refrain from employing them.
Until we have decent economics the sane man will refuse to over-
breed. And pity for the large poor family will continue to be pity for
idiotic lack of prevision.
It may be that all, or most, sciences start from suffering or from pity;
but once a science is started these emotions have no place in that
science.
Give a people an almost perfect government, and in two generations
they will let it run to rot from sheer laziness (vide the U.S.A. where not
one person in ten exercises his rights and not one person in ten
thousand has the faintest idea of the aims and ambitions of the
245
CIVILIZATION, MONEY AND HISTORY
country’s great founders and lawmakers. Their dung has covered their
heads.). s
It is nevertheless one’s duty to try to think out a sane economics,
and to try to enforce it by that most violent of all means, the attempt-
ing to make people think.
Proof of this last statement is very obscure, I suppose the only
warrant for it is the capacity to think and the sense of obligation
thereby conferred.
Self-Help
The foregoing is not mere nihilism, or mere in-vain-ism or mere
quietism, nor is it so far off the subject as it might seem; the point is
that No one in any society has the right to blame his troubles on any
one else, Liberals and liberal thought so-called have been a mess of
mush because of this unacknowledged assumption, and a tendency
to breed this state of mind.
The law of nature is that the animal must either adapt itself to en-
vironment or overcome that environment-soft life and decadence.
Decline of the American type, often bewailed! First the pioneer,
then the boob and the soft-head! Flooding of peasant type, without
peasant perseverance and peasant patience in face of low return!
Ability to think, part of the adaptation to environment!
Laziness of whole generations! All the back-bone of Jefferson's
thought and of Van Buren’s forgotten! Benefits of the latter, lost
in civil war and post civil war finance!
All of which is not wholly alien to my subject.
All questions of how measures can be taken, how enforced, are
questions of politics,
ECONOMICS is concerned with determining wHat financial measures,
what methods or regulations of trade, ete., must be taken, or can most
advantageously be taken or decreed by government whatever its
nature, or by whatever elected or haphazard or private or dictatorial
bodies or individuals control trade, credit, money, etc,
Certain things are wise, let us say, for the governors of the Bank of
England (a private corporation) and wise for the U.S. Federal Board,
appointed by an elected president, and would be equally wise or equally
foolish for a body directly elected by the people.
England, as we have remarked, gave herself to a gang of bankers
ages ago. No one remembers why. It is no concern of a foreigner.
The British wished it or at least some British wished it, and now the
rest don't, apparently, mind.
All these things are part of politics. Economics is concerned with
what should be done, not with how you are going to get a controlling
group of men to carry out an idea; but with the idea, with the proper
equations, As you might say the Baldwin Locomotive Works are con-
246
A BC OF ECONOMICS
cerned with making engines that will pull trains, not with which
direction they are to run.
Good economics are as sound for Russia as for the U.S.A.
There may even be several economic solutions to any problem. Gasoline and coal
both serve as fuel.
PART FOUR
Politics, A Necessary Digression
Science or no science an economic system or lack-of-system is bound
to be affected by the political system in which or beside which it
exists, and more especially by the preconceptions or prejudices or pre-
dispositions and attitudes implied in the political system.
The preconception of democracy, let us say at its best, democracy
as it existed in the minds of Jefferson and Van Buren, is that the best
men, kaloikagathoi, etc., Witt. TAKE THE TROUBLE to place their ideas and
policies before the majority with such clarity and persuasiveness that
the majority will accept their guidance, i.e. ‘be right’.
The preconception of let us say the Adamses, or aristodemocratic
parties is that privilege, a little of it, will breed a sense of responsibility.
The further Toryism is that the best should be served.
In practice it is claimed that the best get tired or fail to exert them-
selves to the necessary degree.
It seems fairly proved that privilege does Nor breed a sense of re—
sponsibility. Individuals, let us say exceptional individuals in privi-
leged classes, maintain the sense of responsibility, but the general ruck,
namely 95 per cent of all privileged classes, seem to believe that the
main use of privileges is to be exempt from responsibility, from respon-
sibilities of every possible kind.
This is as true of financial privilege as of political privilege.
The apparent exception seems to occur at the birth of any new
privileged class, which amounts to saying that any new governing
class is bound to be composed of exceptional men, or at any rate of
men having more energy and being therefore more fit (apt) to govern
than their fellows.
The dross of the intelligentsia, lacking the force to govern, con-
stantly try to spread the belief that Tiny are the ‘best’, the agathoi,
ete.
Obviously no best, no even good, governing class can be spineless;
this applies even to an administrative class, or people administering
economics. The term ‘good’ in either case must include a capacity
for action; some sense of relation between action and mere thought
or talk.
A lot of rot is talked and written on the assumption of political and
economic laws existing in vacuo.
1 go on writing because it appears to me that no thoughtful man
can in our time avoid trying to arrange those things in his own mind
247
CIVILIZATION, MONEY AND HISTORY
in an orderly fashion, or shirk coming to conclusions about them, i.e.
as man living perforce among other men, affected by their actions,
and by his aang them.
To separate ideas that are not identical and to determine their
relations.
As to the history of the subject, a fig for that history save in so far
as it applies to the present and to the day after tomorrow.
A democracy, the majority which ‘decides’ in a democracy function-
ing as such, would presumably choose sound economics shortly after
it had learned to distinguish the sound from the unsound. Subjects of
an autocrat would obey, and continue obeying the economic decisions
of their ruler or rulers as long as the orders were economically sound,
and for a considerable period after those orders were unsound.
Various durations of patience in intermediate forms of government.
A break, revolution, chaos, need not imply any new discovery or
ambition or new form of soundness; it is, nevertheless, usually en-
gineered in the name of some form of justice, or some social belief
with economic implications.
The point is that the orders of an omniscient despot and of an
intelligent democracy would be very much alike in so far as they
affected the main body of the country’s economics. Whether as in-
dependent citizens, individuals, etc., or as pack animals, the nutrition
of the population would have its importance.
For any particular country, the most immediate road thereto has a
good deal to be said in its favour, and that road would start From the
conditions in which the said country finds itself at the moment.
The present moment, the moment under consideration,
Capital is generally considered as perdurable, eternal and indestruct-
ible, This is probably an error. Gold coin in circulation wears down,
whence paper currency, to save attrition. Paper has to be renewed.
The expense is trifling but mathematically extant,
Jewels might seem to be property and not capital. They or precious
metal can be buried in cellars, Whence they work as a magnet.
Observe the magnetism of a man reputed to be wealthy. The force
of this rumour on those about him,
Observe the force of the wildest and mildest hopes of profit, and
consider the imponderabilia that enter into any consideration of
credit (‘the expectation that the other man will pay’).
A further point is that not only particular masses of credit may
rot, but that the credit of any economic system, qua system, may
rot.
Not only may a year’s crop fail, but the tree itself may.
There have been so-called systems based not on any sound thought
or equation but on nothing more than a temporary accident; as say
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A BC OF ECONOMICS
the chance of swapping glass beads to the heathen, or the monopoly
of a trade route, or the willingness of Indians to swap forty square
miles of land for a rifle.
Some of these systems have lasted for at least three hundred years.
Nile tolls are at the beginning of history. Kublai understood paper
currency. The Mantuans in the quatrocento considered a cloth pool
on the lines of the Hoover government's buying of wheat. There is
probably no inventable scheme or measure that can't be upholstered
with historic background.
In 1933 Where are We?
For civilised countries the problem of production is solved. There are
doubtless particular products not producible in particular geographic
areas, and particular uncivilised areas where industrialisation, im-
proved methods of production would solve the local troubles, but for
the ‘great powers’ etc., the problem is not production.
2. The shortening of the working day (say to five or four hours)
would so aid the general distribution in all civilised countries that they
could carry on without other change for a considerable period.
3. But this would not in the long run permit them perpetually to
dodge the problem of a fair and/or adequate distribution of credit
slips. Called the problem of money or of the fiduciary system.
That is the main question and the overwhelming question of eco-
nomic science. It is, I should assert, open to permanent solution.
Scientific solution.
4, But a permanent and scientific solution of it would still leave us
with the necessity of practising the aut of economics; that is to say,
we should still have to exercise constant vigilance with the same
caginess that the peasant shows in selecting his next crop. There is no
way of dispensing with the perceptive faculties. Five year planners, ten
year planners, clever men, etc., will for ever have to guess and to
try to guess right re-what is to be produced and how much and
when,
Make fair the distribution of paper slips certifying work done, keep
the work distributed among a sufficient proportion of the people, and
you still must have constant caginess not to find yourself in October
with nothing but wheat, or nothing but aluminium frying pans.
And toward this end, there is probably no equation other than the
greatest watchfulness of the greatest number of the most competent.
One man asleep at a switch can very greatly discommode quite a
good railway.
In a world of Kreugers and Mellons you might say the switch-boards
are enveloped (on purpose) in darkness. What I am getting at is, that
with all the solvable problems solved, clear and in the open, there will
still be ‘opportunity’, there will still be need to use wits.
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CIVILIZATION, MONEY AND HISTORY
Inflation (Science as possibly distinct from art in economics)
Inflation was said to be ‘understood’ in Germany after the war. There
are now almost universal cries for inflation (Germany, U.S.A., and
elsewhere),
‘There are very few demands for control of inflation.
Inflation is perhaps the ambiguous or camouflaging homonym for
a dozen or more manocuvres.
Dissociate what we can. For many people it means merely abandon-
ing the gold standard. Merely having certificates for something other
than precious metal,
‘The banks (the bogy men) inflate and deflate at will, or appear to.
We are told that the tariffs on money are too high, and the tellers
are answered that the bank rates on overnight money are almost mil.
So that is not the real crux. The banks possibly use their freedom to
inflate and deflate to their own disproportionate advantage.
TWO sorts of nations exist: those which control their fmances and those which ‘are
There are, I take it, intermediate degrees, nations that try more or
less to control part of their finances, or that exercise a semi-conscious
control over their finances, or have an unconscious influence on
them.
The American (U.S.) treasury was ‘freed’ about a century ago, It was
somewhat confused by the civil war, etc.
Once again we are not even concerned with How a people or nation
is to get control of its economics but with wHar it ought to do with
them if it did get control.
Another form of the question is; what price should it insist on get—
ting from the present controllers if it continues to tolerate their
control, i.e. what is the minimum (or maximum) of intelligence and
of intelligent measures it should demand of its ‘owners’ or financiers.
We have stated at least part of this in the formula.
ADEQUATE (and more or less just) distribution of credit slips
(certificates of work done, etc.).
I have put ‘apequate’ in capitals and ‘just’ in lower case because
that is the order of their importance.
There is a very great margin of error, a very great coefficient of
injustice possible in a quite workable and quite comfortable economic
system. The Miller of Dee and the rest of it, Once a human being is
comfortable, even tolerably comfortable, without actual suffering
and free, more or less, from 1MMEDIATE worry, he will not bother (to
an almost incredible degree he will refuse to bother) about economies.
But an inadequate distribution of credit slips will upset the whole
system, any system; it will heap up obstacles before anyone is aware,
it will heap them up all over the place and without ascribing responsi-
bility to anyone in particular, and without offering handy solutions.
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ABC OF ECONOMICS
‘Adequate‘ with Queries about Solutions
The Mahometans ran on a share-out system.
I forget whether every fanatic got an equal share. It don’t much
matter, it was so long ago, but at any rate they had national dividends,
at least as long as they continued to conquest.
Tt is difficult to conceive national dividends in our day and in our
countries without a noisome increase in bureaucracy,
National dividends have worked in the past, Undoubtedly most
people would like to receive ten guineas a month in crisp bills from
the postman or other trusted minion of officialdom,
Tt sounds so easy, so casy that hardly anyone (including the author)
can believe it.
It Seems as if the recipients ought at least to go through the motions,
or to hold themselves ready to do something useful in return for the
bonanza, or at least to keep awake and make sure that something was
being done, that the greenbacks or Bradbury's or whatever, meant
and continued to mean something other than greenbacks.
Iseem to remember a time when Major Douglas wrote books without
mention of national dividends.
I am now making simply a catalogue or list of offered ‘solutions’.
Iam inclined to leave the national dividendists to show How they will
insure the perennial delivery of needed goods against distributed
greenbacks. I am not denying the possibility. 1 merely await fuller
enlightenment.
As nearly as I can recall Douglas's early expositions, he claimed that
in the present system a certain proportion of the credit-slips, or what
should be the quantity of same, were sucked up or absorbed or caused
to disappear.
1am purposely putting this the ‘other way on’ to see whether the
idea is sufficiently well constructed to stand being joggled about.
In the ‘present industrial system’, work is done, goods produced, and
the manufacturers, owners, traders, etc., demand from the public
more credit-slips than the work is worth, or at any rate more credit-
slips than the governments and banks will permit to be available
against that work.
And the effect is cumulative. There are constantly more goods and
constantly fewer and fewer valid certificates, which same leads to
constipation.
And again, if 1 remember rightly, Major Douglas explained how the
wangle was wangled. According to him, if I translate correctly, a
certain part of the credit-slips received by the entrepreneurs was wormed
down a sort of tube, i.e. instead of equalling the cost of the thing made
and given for it, it equalled that cost plus part of the machinery used
in producing the article (part of the plant),
And nothing was done against this amount of credit taken in from
251
CIVILIZATION, MONEY AND HISTORY
the public and hidden. It flowed continually down into the ground,
down into somebody's pocket.
Result-~-constantly more and more goods for sale~constantly fewer
certificates of work done,
So that to keep things even, one would have either to print more
slips, or to compute the cost in some other way, i.e. to distinguish
between real costs and costs according to the traditional book-keeping.
According to traditional book-keeping the Major's requirements
would have meant that impossible thing: sales under cost. But he
figured that they would not be less than the real cost, and that the
radox was all on paper.
All of which requires a bit of thinking.
Manifestly we have seen companies building new plants out of
‘profits’. Manifestly we have seen crises.
The foregoing is perhaps very confusing. [state in one place the maker
ought to get a certificate of work done, a fair certificate equivalent το
the work done.
Then I appear (to some readers) to say that he gets too much. When
I ought apparently to say that he gets too little.
There is no contradiction. He gets too much, or asks too much for
some of his product, and is unable to get anything for the rest.
Let us say he makes one million brooms that really cost him 3d.
each.
He asserts (in accordance to inherited beliefs of his accountants)
that they cost him Sd. and must be sold for 6d.
He sells 400,000 for 6d., has 600,000 left on his hands, and ultimately
goes bust, Despite the fact that five hundred or seven hundred thou-
sand people could use the brooms.
That is an ‘impossible case’, Or rather it is a crude statement, and
there are various intermediate conditions.
Say he drops his price to Id. and sells his six hundred thousand spare
brooms, and thereby ruins some other manufacturer, ete.
My imaginary example is merely to show that high price needn't
ensure perpetual success, and needn't be the best possible commerce.
The issue of credit (or money) must be just, i.e. neither too much
nor too little.
Against every hour’s work (human or kilowatt hour), an hour's
certificate. That can be the first step. That can be scientific, Ultimately
it must be scientific.
But it will not get you out of the necessity of using intelligence re-
what and how much you produce.
What? can be answered by ‘Everything useful or desirable’.
And the how much can be answered by ‘all that is wanted’ with
allowance over for accidents.
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A B C OF ECONOMICS
That may sound very vague, but it is nevertheless reducible to
mathematical equations and can be scientifically treated.
The equations (algebraic equations) will not mean merely any old
quantity turned out haphazard.
Their answer will govern the length of the working day. By which
I still mean the number of hours’ work per day for which a man is
paid. Over and above which, he can paint pictures on his wall, stuff his
armchairs, breed fighting cocks, buy lottery tickets, or indulge in any
form of frugality or wastefulness that suits his temperament (so long
as he confines his action to his own property (vide definition in Part T).
So long as his action is confined to his own home and front yard.
Digression Perhaps Unnecessary
Personally I favour a home for each individual, in the sense that 1
think each individual should have a certain amount of cubic space
into which he or she can retire and be exempt from any outside
interference what so damn ever.
From that I should build individual rights, and as they move out
from that cubicle or inverted trapezoid they should be modified by
balancing and counterpoise of the same-sprung rights of others, up to
the rights of the state or the congeries,
Parallels political and economic.
Economics
There would seem to be the following kinds of error or crime in the
issuance of credit-slips against work.
1. The issuers may refuse to issue any slips, or adequate slips against
the work.
2. They may issue too many.
3. They may issue them in such a way that for products produced
and distributed in a complicated manner too much of the credit goes
to some, or some kind of the labour, and not enough to some other.
The terms ‘labour’, ‘work’, throughout this discussion apply to the
man with a shovel, the clerk, the transporter, the entrepreneur, etc.
Everyone who acts in the transposition of the article from mother
earth to the eater (eye of beholder, hand of user).
I know of no alphabetic or primer simplification of the questions of de-
and inflation. | mean nothing easier to comprehend than the history
of some particular instance, say the story of Van Buren versus Biddle in
the 1830's,
Atthe other end of the scale, Doughty's Arabia Deserta or Leo's history
of the eighth and ninth centuries can illumine the reader re-what
occurs when there is No production.
The point is that in any system, in any conceivable system, there
arise similar problems, whether under Soviet or Florentine Banker,
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CIVILIZATION, MONEY AND HISTORY
The goods needed,
The transport,
The use or consumption. The necessity of motion, which means
both of goods and of the ‘carrier’,
Monetary carrier.
The clarity of mind that understands that one hundred gallons a
minute through an inch pipe at one speed can equal one hundred
gallons through a different pipe at another speed-the bigger the
slower, the faster the smaller, etc.
A small amount of ‘money’ changing hands rapidly will do the
work of a lot moving slowly, etc.
Asin mechanics some sizes of machine are found fit for some work,
etc., detailed applications without change of principle. Fruits of ex-
perience as to detail: ideas as to main causes.
This looks like a mare’s nest or like wilful confusion! What the
Major said fifteen years ago matters less than getting a valid and clear
statement.
The manufacturer is ‘paid’ in two ways under the present system,
He gets ‘money’ or ‘is owed’ money for what he sells, and he gets
ability to borrow from banks, i.e. his action and potentiality to produce
enable him to get credit as well as payments (cash and deferred) and
the banks get more credit than they give mi, i.e. he has to hand
part of it back to them, and for the part he hands back he gets no
direct credit, though he may get the ability to have more (on similar
terms).
Perhaps the only value of these statements is a test value. 1 mean that
Tam merely saying 5 and 2 make 7 in place of the other economists’
statements that 2 and 5 make 7, to see whether either they or their
readers understand their previous statements,
After all, this is a very rudimentary treatise.
By the time the banks have got more credit than they gave the
manufacturer, the potential consumer hasn’t enough credit to pur-
chase the needed goods, Where would he get it? The banks will al-
ways give him less than he has to give them, They are not there for
their health,
The book-keeping cost of the goods is the cost (real) of the goods
plus the cost of the money, or the rent of the money,
I take it that in the perfect economic state the cost of the money is
reduced almost to nothing, to something like the mere cost of postage,
and that this cost is borne by the state, i.e. distributed so as to be a
burden on no one in particular.
Once that end is attained, the general intelligence can apply itself
to the problem of what and how much to produce,
The state conceived as the public convenience. Money conceived as
a public convenience, Neither as private bonanza.
254
A BC OF ECONOMICS
Novelties
The possibility of novelties in economics is probably somewhat
exaggerated. Hume by 1750 is already talking of paper credit and cites
someone or other to the effect that the great amount of gold coin in
Athens seemed to be no use to the Athenians save in facilitating
arithmetic.
Twenty years ago we were asked to think that someone was
being a ‘modern’ with a large ‘M’ economist because he ‘left out
money’.
Some know and many fail to state or keep clearly in mind the need
of money, which is the need of a common denominator FOR THE SAKE
OF ACCOUNTING, so as not to send book-keepers crazy with columns of
ten horses, twelve cows, nine locomotives. Consider the chips in a
poker game, more convenient than to have each man betting his shirt,
watch and cuff-links.
A GRAVER FAILURE to dissociate: is in the nature of wealth, Crises in
the sheik and sheep trade seldom occur. I mean that the primitive
grazer counts his property in sheep and is not continually worried if
he cannot sell out his whole herd.
Half the modern trouble is the mania or hallucination or idée fixe of
MARKET and market value. The fundamental difference in wealth is
that of animal, vegetable and mineral kingdoms.
All manufactured articles partake of the main property of the latter,
namely, they do not increase and multiply.
The shepherd's sheep multiply, the crops that are sown multiply,
and neither requires much work, 1 mean the shepherd sits around,
with a boy and a dog. The dangers from bears and wolves and other
incidents of primitive shepherd’s life have been diminished. In legend-
ary countries he may still do odd jobs of knitting.
The sheep supply clothing (Jefferson’s calculation was that one
sheep per person gave sufficient wool). The meat is disagreeable but
nutritive. There is no question of keeping theshepherd rutiy employed,
Crops demand work (too much) at special seasons.
But with a minimum of care crops and sheep multiply.
Your possessions and mine do not multiply. Your tables, pianos,
etc,, remain set as a mineral, but you can't get more by digging up the
floor of your cellar.
Hume already saw that ‘the increase and consumption (italics mine)
of all the commodities, which serve to the ornament and pleasure of
life, are advantages to society; because at the same time they multiply
those innocent gratifications to individuals, they are a kind of storehouse
(italics his) of labour ... which in the exigencies of the state, may be
turned to the public service’,
Hume might have served as a warning; for his ‘exigencies of state’
are mainly war, which fact ought to have made people think a bit
255
CIVILIZATION, MONEY AND HISTORY
more deeply. I suggest that it didn’t, for the simple reason that they
didn’t in the least understand his first proposition.
No book can do att a man’s thinking for him. The utility of any
statement is limited by the willingness of the receiver to think.
The practices of rent and interest arise out of the natural disposition
of grain and animals to multiply. The sense of right and justice which
has sustained the main practice of rent and interest through the ages,
despite countless instances of particular injustice in the application, is
inherent in the nature of animal and vegetable.
There is no need to postulate any greater perversion than natural
indolence, and that in itself is insufficient as postulate. There has
always been a supply of lackers, members of less civilised tribes, or
non-possidentes ready and glad to watch sheep for part of the wool.
The impulse of the French in our day to get work out of the Congo is
wholly traditional and ‘normal’.
As for selling children into servitude, ete., the whole problem is no
longer~but at many periods of history has been hardly more than-the
duration of mortmain, How long shall the dead hand rule, and to
what extent?
The two extremes: superstitious sacrosanctity of ‘property’ versus
Jefferson's ‘The earth belongs to the living’, which was part dogma,
and part observation of a fact so obvious that it took a man of genius to
perceive it.
It led Jefferson to the belief that no nation has the right to contract
debts not payable within the lifetime of the contractors, which he
interpreted to mean the lifetime of the majority of the contractors
who were of age at the date of contract. So that from a first estimate
of thirty-five years, he finally fixed on nineteen years as the limit of
validity of such debts.
By the light of his intelligence American economics improved from
the time of the revolution till the confusion of the U.S. eivil war.
No system of economics can be valid unless it take count of this
inherence in yegetable and animal nature (which inherence includes
or extends to overproduction).
aon ‘over-production’ usually means ‘more of a thing than
will sell’.
* After the last war Henry Ford as more than the ruins of Aigues Mortes
an experiment broke up a number of or Carcassonne.
armoured vessels. He made no money Yes, they occupy space. You don’t
profit, he μος back what it cost him, want 'em in Piccadilly Circus, I have
and he was left with a great number of also seen a sign translatable as:
engines, which, for all | know, he still ‘Mountain to let, capable of enalping
has. There is no reason to suppose 30,000 muttons.’ There ts still room to
that these engines do any harm, any breathe and walk about the face of the
planet.
A BC OF ECONOMICS
Dissociate Permanence from Permanence
Dissociate the perdurability of granite from the perdurability of grain
or of a species of animals. Some people seem to demand the same kind
of durability from a germinating organism as they do from the lump
of rock.
At the other end of the scale they say: A bank manager need know
nothing save the difference between a bill and a mortgage. Several
‘great financiers’ and prize-receiving ‘economists’ in our time fail to
make this distinction.
Economic habits arise from the nature of things (animal, mineral,
vegetable). Economic mess, evil theories are due to failure to keep the
different nature of different things clearly distinct in the mind.
The economic ‘revolution’ or an economic revolution occurred
when raw supply ceased to be limited to static mineral matter (plus
animal and vegetable increases).
The minute work began to be in great measure ‘raw supply’ the
need for a change in economic concepts arose.
The minute you have practically unlimited stores of work at your
disposal, (by the simple device of letting water run down hill through
a pipe onto a turbine, or any other device), you have got to begin to
readjust your mental derivatives.
Not only will sheep go on begetting each other, without much
attention from the shepherd, bur lights will shine, stoves give heat,
trains move, etc., while a couple of men watch a dynamo,
The cattle drover fed his family. The turbine can work for the
group. Even the idea of national dividends (which I dislike) seems less
goofy from this angle.
It is as idiotic to expect members of a civilized twentieth-century
community to go on working eight hours a day as it would be to
expect the shepherd to try to grow wool on his sheep by hand; the
farmer to blow with his own breath on each buried seed to warm it;
the poulterer to sit on his hens’ eggs.
People are so little used, or shall we say the readers of books and papers
are so little used to using their eyes, or so little travelled as never to
have seen simple phenomena,
Has the reader ever seen women at a well curb, or at a public spigot
or pump?
Kitchen plumbing, the spigot in the home, means half an hour's
idleness (or leisure) per day to every female member of the com-
munity. (Civilized community as compared with the savage and
with many very far from savage communities.)
Thisis not a theory of the leisure class. It is a fact of leisure humanity
(i.e. civilised human life).
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CIVILIZATION, MONEY AND HISTORY
PART FIVE
Minor Addenda and Varia
I have never met a gambler with an ounce of intelligence, but the
prejudice against lotteries is in the category of superstitions, totem-
ism and taboo, Lotteries can harm only the imbeciles who buy tickets,
but these imbeciles appear to be wholly in their own right. As a means
of collecting money for state purposes no sound reason has ever been
adduced against this sane safety valve.
The instinct has been romanticised, doubtless in special cases it is
the only danger some men can incur and the only chance of adven-
ture they get. I doubt if it would greatly survive in a sane common-
wealth, but the world has not yet seen such a commonwealth. The
prejudice is part of the puritan imbecility, which is at root a disease,
begotten of the worst in nature.
‘There is, however, every reason why the imbecile pastime should be
isolated, i.e. confined in its effects to those who voluntarily gamble,
and that it should not be allowed to affect the price of foodstuffs and
necessities.
The whinings of a Whitney and the yowls of stock jobbers are no
better than any other form of gangster’s sobstuff.
‘The purpose of an act is one of its dimensions; is a component of its
specific gravity, and no one ever yet claimed to have sold short, or
rigged the stock market, save in the hope of picking other men’s
pockets.
There is nothing to be said against any gang of thieves playing poker
except that they are playing with other men’s money. When members
of a stock exchange play against each other without affecting the food
and welfare of members of the community who have no chance of
profiting by the play and in any case no voice in the laying of the bets,
the said brokers, etc., cannot make much showing as sportsmen.
They have had a fair amount of time to show what they have done
for their countries and so far haven't been able to dig up even a jour-
nalist liar to write them a tombstone, As a public utility they are not
a success,
It is perfectly easy to dissociate investment from speculation; it is
fairly easy to spin cobwebs over the borders of the dissociation. A stock
exchange confined to the buying and selling for real investors would
doubtless be very very dull, and many of the present practitioners and
scoundrels would take to golf and chicken-farming in preference to
such ovine tranquillity, but we are not out to guarantee the private
amusements of a few hundred or a few thousand barons.
It would be much better from the bono publico standpoint if they were
to kill themselves racing motor-boats, get their kicks playing the races,
258
A BC OF ECONOMICS
and leave the small fry to roulette and the lotteries. Economics, as
science, has no messianic call to alter the instincts.
Short of an absolute state ownership of all property there wi!
always be plenty of chance for men to ‘make fortunes’ with seriou
construction in industry. The fewer fake diamond mines, the mor
likely new inventions and amplifications will be to find support.
nore. The printing of fine books improved greatly after the lat
war. Because a great number of people had no confidence in the valu:
of money,
lam aware that I am here in a risky position, and that an attempt t
dogmatise might jeopard my credit, nevertheless I should hazard ;
guess that a definite good or gain occurred because of a definite state
of intelligence. The good occurred not because money was unstable,
which I don’t think anyone can regard as a desirable state of things,
but because these people were freed from the idée fixe of money as the
one and only fixed value.
I admit they were only half free and mostly bought de luxe editions
because they hoped to be able to sell them later at a profit, but at any
rate it was the ‘thin end of the wedge’; they had at least for ten minutes
got their eye on to something concrete. A few honest consumers and
a few of the better producers reaped a benefit,
Check Up
The remarks foregoing, even though they are in some cases my own,
have no claim to be novelties. Any man reading or re-reading a classic
will be affected by what he agrees with, but probably respect the ancient
author in proportion as he seems sound or as he seems to have ante-
dated modernity.
Thus in Hume, ‘Prices do not so much depend on the absolute
quantity of commodities and that of money which are in a nation, as
on that of the commodities which come or may come to market, and
that of the money which circulates’ (D, Hume, b. 1711, d. 1776. Essay on
Money).
The error of America in the 1830's was to bull the land market as if
unworked land far from railways could ‘yield’,
The analogy in the 1930’s is that the American fool has repeated
himself, putting ‘industry’ in the place of land, Le. stocks, shares in
industrial companies which either were not in shape to produce or
had no possible market anywhere within dreamable range of the
selling price of stocks in New York.
Hume's reasons for wanting what he calls a prosperous stage were
manifestly despicable, consisting mainly in the idea that if a state were
prosperous some disgusting louse like Louis XIV would be able to pay
the dregs of the population (his own or some one else’s) to go kill or
rob some one else. But that is no reason for not observing Hume’s
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CIVILIZATION, MONEY AND HISTORY
intelligence. He already saw through money, saw through coined
money at that.
Some of his propositions are still valid, and possibly unsupercedable.
You will probably find nothing more valid inside its own scope than
the statement that prosperity depends not on the quantity of money in
a country but on its constantly increasing.
This was before the term inflation was in daily use.
pissociATE. Inflation, first used as a derogative term and now (1932)
advised as policy ‘all over the place’.
DISSOCIATE inflation from steady increase. The term inflation might
be limited to mean disproportionate and faked augmentation of the
amount of paper currency, an augmentation having no relation to
fact, or having a faked relation to fact.
INCREASE or Li 2 augmentation,
As certificate of an increasing productivity, increase of product,
increase of means of production there sHoutp be an increase in the
printed certificates of value (circulatable certificates).
But here again one must distinguish, and here in particular one can
learn from history and in particular the American history of the 1830's.
At that time there was a land boom, Fools bought land and boosted the
sale price regardless of the fact that the merchandise (land) wasn’t
producing, wasn’t being worked, couldn’t be worked at once or for a
considerable time, and there were crises and panics, etc.
‘Worthless’ land was just as worthless then as worthless machinery
and factories are now,
To need certificates of value the product (of land or of factory)
must be wanted by someone, and there must be means of getting it to
them.
There are four elements; and it is useless trying to function with
three:
1, The product.
2. The want.
3. The means of transport.
4. AND the certificates of value, preferably legal tender and ‘general’,
in the sense that they should be good for wheat, iron, lumber, dress
goods, or whatever the heart and stomach desire.
And (repeating an earlier proposition), everybody must be able
to get a certain number of these certificates on what might be
called decent conditions, ie. without torture and without excessive
worry.
Preferably on ‘fair-terms’, namely that the conditions for getting
them must not be violently different in the cases of A, B and C.
For the nth time, I repeat that the straightest road to such a desirable
condition is via the formula: a small amount of work for everyone,
with a certificate of work done as the consequence.
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A B C OF ECONOMICS
The brains of the nation or group to be used in discerning wiat
work is most needful, what work is less necessary and what is desirable
even though not strictly necessary.
Such work should be paid. It would not fill up any man’s day,
The rest of his day he could employ in expressing his difference of
opinion with the majority, and in such ‘work’ or activity as he (as
distinct from the brains of the country officially organized) might
consider proper, necessary or desirable.
Ultimately your credit board or your bank scoundrels or whoever
is the financial and economic executive would have one main function
and would be judged intelligent or imbecile according as this was
performed with competence, They are there to determine, and so far
as possible to keep steady, the rate of increase in the printed certificates
of value.
And their motivation should be the homm publicur, the commonweal
and not the shifting and shaking the sieve for the benefit of a few
highly-placed crooks, scoundrels and exploiters,
The most opportune citation is from a Spaniard whose name is not,
in my source, printed, debating the new constitution, he observed
that where the financial influences had been too strong and uncon-
trolled, freedom had suffered.
‘THE BASES OF ECONOMICS are so simple as to render the subject almost
wholly uninteresting.
The complication of the subject is hardly a complication, it arises
A. from the extreme difficulty of foreseeing what will be wanted;
B. from the rascally nature of certain men, from selfishness of
exploiters and those in ‘favoured positions’ who fear to lose an
‘advantage’.
The best system of government, economically speaking, is that
which best balances the four clements listed above, be it republic,
monarchy, or soviet or dictatorship. In future it will probably be a
republic save in special cases, but republic or soviet, the government
which best manages this balance, which manages it with the least bunk
and blah and the greatest honesty, will and should probably prevail
‘as a system of government’,
Dictatorship as a Sign of Intelligence
Popular fancy and Ludwigian cheap-jackery show the dictator as man
of the hour, force of will, favoured of fortune.
The phase ‘intelligence’ is more interesting, Mussolini as intelligent
man is more interesting than Mussolini as the Big Stick. The Duce's
aphorisms and perceptions can be studied apart from his means of
getting them into action.
‘We are tired of a government in which there is no responsible per-
son having a hind name, a front name and an address,’
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CIVILIZATION, MONEY AND HISTORY
‘Production is done by machines but consumption is still performed
by human beings.”
Also his Perception of the Dimension Quality
It is something, it was indeed a bright day when some ruler perceived
that there was a limit to the dimension quantity in the nation’s
productivity, | mean a limit to quantity of production that could be
advantageous either to a given nation or to the world, but that there
is no limit to the dimension quality. There have been attained maxima,
vide my criticism of art and letters for cited examples, but these attained
maxima are not ineluctable limits. Nothing forbids us to desire a better