C.H. Douglas (1879-1952), a Scottish-born engineer, who worked for a number of American and British companies in the early years of the twentieth century, was the founder of the modern monetary reform movement. My own interest in monetary reform dates from discovering Douglas’s ideas through a reprint of A.R. Orage’s articles about them in Orage’s publication The New Age dating from the 1920s.

Douglas pointed out that modern industry can readily produce enough goods to meet the needs of everyone in society, but that the reason we sink further into debt, while at the same time we are driven to produce more and more, is because of the nature of industrial production combined with the monopoly on money-creation held by the banking system.

Douglas elaborated that for various reasons having to do with the process of production over time, there is always a gap in monetary terms between the value of what is manufactured and the purchasing power needed to consume it.

Such factors apply in full to the present state of every developed modern economy, including the U.S. and Canada, which uses bank-created debt as the method to fill the gap between production, as denoted by GDP; i.e., prices, and the available purchasing power to consume it, consisting of income from wages, salaries, and dividends.

Douglas went on to propose that the production/consumption gap should be filled by distribution of a cash stipend called a National Dividend, which would actually be the proper share of individuals in the bounty of the nation’s economy and resources. I believe that Douglas’s ideas merge with those of a basic income guarantee as a measure of economic freedom and justice promoted by many economists and advocates today.

It is said that ideas from the 1930s of achieving full employment by government deficit spending, a policy which can only be achieved fully in a wartime economy, were invented to counter Douglas’s ideas, which fully supported economic democracy and also provided for the elusive "leisure divided" we all know should result from modern technology. Instead, this technology in the hands of finance capitalism, backed by the power of the military imperial police state, increasingly lays waste to the resources of the earth while binding a majority of people to ever-increasing debt slavery, unemployment, and ill health due to stress.

Douglas was the first in modern times to show how technology and economic know-how could serve rather than destroy humanity, without recourse to a totalitarian collectivist society. The Social Credit movement that Douglas founded remains a powerful force in the British Commonwealth but is only starting to be known in the U.S.

Douglas’s ideas are as pertinent today as when they were written, with economic and social conditions becoming as bad in the U.S. and the rest of the world as they were in the 1930s, if not worse-except of course for the rich who control the world’s resources, money, military, educational institutions, and media.

Douglas focused mainly on the private sector economy. In my opinion, overall reform must also involve the public sector, which is why much of the program I have outlined in my articles has to do with infrastructure funding and public policy. This approach also reflects my experience from having spent a lifetime working for the federal government, whereas Douglas was employed mainly by private companies.

Douglas’s ideas have already changed the world by educating several generations of interested people in the British Commonwealth in how we can have a modern economy that still serves democratic ends. Now we need to take a step further in actually implementing his program, along with other reforms.

– from ELECTRONZ – 739
01 October 2007

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