The Marketplace

Peter Lock

The Great Social Questions
There are two fundamental questions arising from marketplace situations which are the concern of social morality and justice.

The first can be stated as The Great Social Question: Who is the rightful owner of the financial credit or monetized estimate of the real wealth of a community or nation? Does it not belong in justice to the people by whose toil of mind and body, sweat and tears, real wealth was produced? Have they not an intrinsic title to its ownership? Or does it belong to the banking system by whose virtually costless signature the money or make-believe ticket entitlement to real wealth is begotten out of nothing and put into circulation as their very own price-inflated debt-commodity and their monopoly in the distribution of all wealth?

The second fundamental question relates to the attitude and way the banking system itself operates in the marketplace. The banks have usurped the business function of both monetizing and also demonetizing the real wealth of the community. In claiming that the money they beget out of nothing is their own and must be repaid to them, they are perpetrating a fraud.. In demanding repayment, they are holding both industry and the community to ransom. In taking possession of the real wealth goods of others in default of the payment of debt-money loaned and begotten out of nothing, do not banks become legalized robbers?

Bank loans should reflect the community’s capacity to produce and deliver consumable goods and services. Banks thwart production and consumption by charging the community interest for the community’s use of its own real basic wealth and turn the true credit of the nation into debt.

The Fear of Poverty

Much has been written last century about Social Justice. However, it is one thing to expound logically consistent ideas which validate hypotheses like that of Gaia. It is another thing to predict how they will be implemented. But one thing is certain. An over-populated and debt-enslaved world is on the brink of ecological and economic disaster.

Socialism has not succeeded in its goal of a new social order of equality. At the very opposite extreme, a laissez faire capitalist economy with to-day‟s financial system, is a sure recipe for social inequality. It ensures those enslaved by poverty and debt will increase until ordinary people find out how the banking system really works.

Reward and punishment have been, and still are, the positive and negative motivating forces for an infantile popular morality. Getting something for nothing, legally or illegally, is still the fundamental consideration of banks, robbers, usurers, counterfeiters and pickpockets. Retired people, living off either their superannuation or other interest-bearing capital investments, and also the aged and unemployed living on doled out pensions (as is the author), are all living at the community’s expense. Honourably or dishonourably, proudly or humbly, they all get their something for nothing.

Some people have more business acumen than others and commercial success comes easily to them. However, it denigrates human nature to say that all people are worshippers of Mammon and that most business folk are unscrupulous money-grabbers. The fundamental, if not the sole cause of much apparent selfish activity is the fear of poverty and the consequent inability to provide for one‟s dependents. Financial insecurity is brought about by the abuse of the role of money from being a costless, interest free, vehicle for the exchange and distribution of the community’s real wealth of goods and services.

Financial anxiety will only be banished from a society whose members are guaranteed a modest yet adequate income-dividend by right of their being shareholders in the community’s common wealth. Superannuation funds will then become obsolete and unnecessary and the mere hoarding of money, as contrasted with savings for future spending, will become a socio-economic evil. As the means of exchange and distribution of the real wealth throughout society, credit-money would be created to be spent and once spent will be removed from circulation to achieve a steady state economy.

Henry George and Land Ownership

It is over one hundred years since Henry George, a US economist, wrote his book Progress and Poverty. His theories on wealth and taxation, unlike those of most of his contemporaries are still vigorously debated. He advocated abolishing all forms of taxation except land tax. In essence, Henry George argued that the introduction of a single tax based on unimproved land values would allow the lifting of all other taxes and solve the recurring problems of poverty, unemployment and recession.

The survival of Henry George‟s ideas says something about their appeal, particularly since his radical views appear to strike at the very roots of the private ownership of land. Support for George’s views were far from socialistic. The philosophical base for his economic views was simply that a landholder had no more right to charge rent for land that he did not create than he would have to monopolise the air and charge others for the right to breathe it.

“It is not necessary to confiscate land: it is only necessary to confiscate rent.” The rent to be confiscated was the amount the owner could collect by renting out unimproved land, or if he had improved or built on it, that part of the rent attributable to the land alone. George argued that the owner should not be taxed on the improvements because they were the products of his own efforts. Thus society would recapture the land values society itself had created and the owner would be forced to put the land to its best use or give it up, since hoarding land would no longer be profitable.

The Purpose of an Economic System

Any properly functioning economic system has as its purpose the provision of goods and services for a community. It is putting the cart before the horse if the money supply is allowed to govern production. The financial needs of production and distribution should determine the money supply. However, money is treated erroneously as a commodity and its additional intrinsic interest cost impairs its effectiveness at its very source. It is not the actual use of money in bank-functioning that is the root cause of the problems, but rather the usurious abuse of debt-money in the bank-owned monopoly of credit and the resultant enslavement of the community with increasing debt.

Ecology and Growth

Most industrial expansion is now only achieved by the mindless expansion of an economy which uses the limited resources of the planet. There is no greater misconception blocking progress towards a just and sustainable world order than the notion that all socio-economic problems can be solved through economic growth. In the short term an increase in economic turnover promises more employment but this is only temporary if it is at the expense of the planet‟s finite resources. Sooner or later the destruction of the earth‟s non- renewable resources will bring economic growth to a standstill. A stable zero growth economy does not preclude progressive innovative techniques and social improvements. A truly sustainable economy envisages growth in the quality of life for all, rather than a mere increase in the quantity of possessions and power over others by a selfish few.

Continued reliance on economic growth is justified on the basis that it is needed to create wealth. Yet the definition of wealth, which has always been the touchstone of economic understanding, after centuries of effort still eludes most people. Aristotle tried to clarify the issues by defining wealth as all things whose value can be measured in money. The Roman jurists, in their practical fashion, followed suit in defining wealth as what can he bought and sold with money.

As a means to an end, money must not be allowed to become an end in itself. As long as money is treated as a commodity, periodic chaotic crises of bankruptcy and insolvency will result. In a sense money must be priceless for there is nothing in Nature analogous to the interest-burdened debt which destroys national economies like terminal cancer. There can be no adequate understanding of the suicidal or survival alternatives facing humanity, without a proper perception that it is the abuse of the role of money which is the root cause of economic evil and of most of the social disorders which threaten the future of society.

[ Extracted and edited from Ch 7 of Peter Lock’s latest book All Things Anew ]