In past crises the solution to this part of the problem has been found, eventually, in war on a grand scale. For as Keynes observed, "...war production is sheer economic waste, there is never a danger of producing too much... (and)... In the world of 1941-5, what occurred was full employment, bustling factories and an increase in the production of useful as well as useless things. In real ljfe these were the consequences of waste... (and)... in World War IL.. the equivalent of the Egyptian pyramids, the medieval cathedrals, and the buried bottles full of money were the tanks, bombers and the aircraft carriers". (1)

So again, in 1939-45, people were put back to work in the manufacture of armaments which were destroyed on battlefields without ever coming to market. Industry, despite huge numbers being re-directed from industrial activity to the fighting forces, boomed as governments added massively to their national debt to buy the products of the armaments industry. Purchasing power now became available to help clear non-military surpluses too and huge profits accrued again to financiers and entrepreneurs.

Following the cessation of hostilities the waste of war was repaired, economies boomed again and system profitability was handsomely restored. But by the early 1970s, Europe’s economies were in trouble again, suffering now from a new phenomenon, "stagflation". Contrary to the tenets of orthodox theory the experience now was of simultaneous high unemployment and rampant inflation, and the Keynesian solution to historical economic instability was seen to have failed. The ground was quickly laid for the comeback of neo-classical economics, the dominance of "Free Markets" ideology and a re-run of the old globalisation dream.

This time it was to be pursued through the highly secretive Bilderberg group, established in 1954, and reflecting the growing importance of Japan, the Trilateral Commission which followed in July 1973. Just forty years earlier, before the outbreak of World War II A.R.Orage, commenting on an earlier attempt at establishing world government suggested that... "the difference between a world of nations in intelligent and voluntary cooperation and a world of functional groupings subservient to a Super-State composed of self-selected, all powerful neurotics, is exactly the difference between a harmonious society of free individuals and a society based on slavery and sanctioned by force". (2)

But history is being made to repeat itself. We may also be certain that, despite "free markets" and globalisation, the boom and bust of economic cycles will also be repeated, with increasing ferocity, until either the current monetary system is reformed or it finally collapses completely with devastating consequences for humankind and our environment. (3)

Meanwhile, the international monetary system is once again in the throes of a great debt-repudiation crisis and the world’s people face the prospect of another global economic depression. We must hope that this time, and never again, will our politicians be persuaded, as so often before, to try to solve the problem by resort to war. But we should also recognise that, while massive new subsidies to industry from the pubhc purse (such as President Clinton’s £1 8billion to resurrect Reagan’s Star Wars dream) may be better than resorting to war, they can give only temporary relief to the system.

Nevertheless governments increasingly are asked to find ways of spending money, by adding massively to their national debts, on industrial subsidies and national projects - notably armaments - to create or maintain employment, help clear current market surpluses and support industry to realise corporate profits.

THE LEISURE STATE

Yet there is another, sounder way in which the unemployment "problem" might be solved. We should acknowledge that the major objective of humankind has always been to reduce the amount of time devoted to working for survival, and to extend as far as possible the resulting increase in time available for the pursuit of pleasure and spiritual development.

Today, and for some long rime past, technology has made real the prospect that we nilght produce, on a sustainable basis, a satisfactory sufficiency for all the world’s people. Only a relatively small number need, for quite short periods of their lives, be engaged in the production process. If we are to exploit this potential however, we must first reform the financial system. Only then might we, at last, be truly able to choose how to use our increasing "technological" leisure in ways which give most individual and community satisfaction, and spiritual reward.

Such an arrangement was envisaged by C.H.Douglas (4) in the 1920s and his argument, more relevant than ever today, is best set out in his own words from The Monopoly of Credit:

DIVIDENDS FOR ALL

While the financial control of industry when inaugurated seems definitely undesirable, certain reservations will occur to the student. Industry has run riot over the countryside. A population which has been educated in the fixed idea that the chief, if not only, objective of life is well named "business", whose politicians and preachers exhort their audiences to fresh efforts for the capture of markets and the provision of still more business, cannot be blamed if, as opportunity occurs, it still sacrifices the amenities of the countryside to the building of more blast-furnaces and chemical works. Since the control of credit is the most perfect mechanism for the control of industrial activity, its use in the hands of a representative organisation would appear to be the best possible way of reducing the chaos which exists, to something like order. The banking organisation at present existing, even if we are prepared to concede to it an altruism not particularly noticeable, is by its expressed philosophy seriously handicapped in dealing with the situation. This philosophy exalts industrial work to an end in itself, and deplores, as one of the major evils of the time, the leisure which it labels "the unemployment problem". While it possesses the power to inaugurate and modernise the plant of industry, and in the process to locate it geographically in accordance with the best interests of the community, the carrying out of such a policy must of necessity be entrusted to technically capable individuals. Unfortunately for the banking system, these individuals cannot be restrained from making each successive plan more efficient than the last, with the result that a given output requires less and less labour, and the unemployment problem, as labelled, is thereby increasingly complicated.

Only by a frenzied acceleration of capital sabotage, which is now openly advocated in many quarters, can the population (which would, so far as the physical aspect of the situation is concerned, be free to enjoy the product of the plants already existing) be kept at work on the production of capital goods.

It would appear, therefore, that even this desirable aspect of financial control is rendered ineffective under its present operation. Before an intelligent system of regional planning can be inaugurated with any hope of success, some agreement is necessary as to whether unemployment is, in its alternative description of leisure, a misfortune or whether it is a release. If it is a release, then obviously it must not be accompanied by economic, or rather financial, penalisation. If it is a misfortune then clearly every effort should be directed to restraining the abilities of those engineers and organisers who are prepared to make not two, but two hundred blades of grass grow where one grew before.

An appreciation of this position is perhaps the shortest way to arrive at a conception of the modifications which are required. If we assume that the constant efforts to reduce the amount of labour per unit of production are justified, and we recognise the unquestionable fact that the genuine consumptive capacity of the individual is limited, we must recognise that the world, whether consciously or not, is working towards the Leisure State.

The production system under this conception would be required to produce those goods and services which the consumer desires of it with a minimum and probably decreasing amount of human labour.

Production, and still more activities which are commonly referred to as "business" would of necessity cease to be the major interest of life and would, as has happened to so many biological activities, be relegated to a position of minor importance, to be replaced, no doubt, by some form of activity of which we are not yet fully cognisant. In a physical sense then we should be living in a world in which economic processes were carried Out by two agencies, one, as heretofore, the agency of individual effort, and from an economic point of view of decreasing importance; and the other, the result of the plant, organisation and knowledge which are the cumulative result of not only the present generation, but of the pioneers and inventors of the past. This second agency can, of course, be collectively described as the real (as distinct from financial) capital. Now it is quite easy to make out a perfectly simple ethical justification for the proposition that the share of the product due to the individual under such a state of affairs would be (1) a small and decreasing share due to his individual efforts, and (2) a large and increasing amount due to his rights as a shareholder or an inheritor, or if it may be preferred, a tenant for life of communal capital. But in fact such an argument is far less satisfactory than the equally valid argument that the communal capital is useless to exactly the extent that any proportion of the public is prevented from drawing upon it, which is, of course, the general explanation of the vast amounts of idle real wealth at the present day.

Up to this point the facts must be clear enough to anyone who is content to consider the matter dispassionately. Proceeding from this stage, and remembering that a satisfactory financial system is simply a reflection in figures of a state of affairs alleged to exist in fact, or is, in other words, simply an accounting system, it is not difficult to understand that wages and salaries in relation to dividends ought to become increasingly unimportant. Production is far more dependent upon real capital than it is upon labour, although without labour there is no production. More and more the position of labour, using, of course, this word in its widest possible sense, tends to become the catalyst in an operation impossible without its presence, but carried on with a decreasing direct contribution from labour itself.

Let us at this point for the sake of clarity identify the community with the nation and in so doing be careful not to confuse administration with ownership. It ought not to be difficult to see that a situation which may truly be described as revolutionary is disclosed. In place of the relation of the individual to the nation being that of a taxpayer it is easily seen to be that of a shareholder. Instead of paying for the doubtful privilege of being entitled to a particular brand of passport, its possession entitles him to draw a dividend, certain, and probably increasing, from the past and present efforts of the community of which he is a member. The National Debt, which he did not create, becomes a national credit which he did create. His budget is not required to balance because his wealth is always increasing. He does not require to fight for foreign markets, since obtaining foreign markets merely means a longer working day. Having more leisure he is less likely to suffer from either individual or national nerve-strain, and having more time to meet his neighbours can reasonably be expected to understand them more fully. Not being dependent upon wage or salary for subsistence, he is under no necessity to suppress his individuality, with the result that his capacities are likely to take new forms of which we have so far little conception.