THE OFFICIAL JOURNAL OF THE SOCIAL CREDIT SECRETARIAT £1- - -LTHE

For Political and Economic Realism Volume 78 No.3 May - June 1999

THE DILEMMA THAT IS UNEMPLOYMENTNational Dividends: A Sensible Solution

BACKGROUND

As 1999 began, the Bank ofEngland suggested that at least amild recession would be inprospect. Other less sanguine economiccommentators, signalled that actually a big"economic freeze" is probably on theway. The prospect was thatunemployment in Europe would fail tofall, possibly increase, and in Britainwould certainly start to rise again.

By February these forecasts werebeginning to be fulfilled on a worryingscale. Manufacturing plant after plant inScotland began to "downsize", close orthreaten to close. BMW announced that,without substantial government financialassistance, they might be forced toabandon production of Rover cars in theWest Midlands and a further 60,000direct and related jobs might be lost. TheBritish government duly responded inMarch with an initial offer of£118million subsidy, which BMWagreed to consider!

inside this issuePAGES 21-23

The Dilemma that is UnemploymentPAGES 24-29

1998 Schumacher LecturesPAGES 29-30

Recurring Crises and SomeCanadian Experience

PAGE 31A Common Agenda

VOLUME 78 PAGE 21

In Europe, levels of unemploymentremain stubbornly high despite strenuousefforts by governments to bring themdown. In Japan one commentator notedthat the economy has gone "ex growth"while only America seems to have aneconomy that is "booming". Yet even inAmerica high levels of employment aresustained, for the moment, by the world'slargest prison population, huge taxpayersubsidies to industry and massive changesin the pattern of work which, on a grandscale, involve working on short termcontracts in low wage, insecure jobs. Thelonger an economic trend lasts howeverthe more certain it is that it will bereversed, and at least one economics guruis sure that in the US economy too,matters "may get better before they getdecidedly worse".

This spectre of massive unemploy-ment is just one manifestation of aninternational monetary system that is onceagain in crisis.

On the world's markets, there is ashortage of purchasing power, and arelated glut of unsaleable goods andservices. Firms are finding it increasinglydifficult to sell their production, realisethe level of profits needed to meet interestpayments due on borrowed capital, andsimultaneously keep their shareholdershappy. They are driven by this imperativeto reduce costs, especially labour costs, byincreasing resort to technology, merger ortake-over, relocation to low wageeconomies, or by all of these. While theproblem of "profits realisation" might betemporarily mitigated in this way, theproblem of gathering internationalsurpluses cannot be s"bsimply solved.

THE HISTORICAL EXPERIENCE

In past crises the solution to this part ofthe problem has been found, eventually,in war on a grand scale. For as Keynesobserved," ... war production is sheereconomic waste, there is never a danger ofproducing too much ... (and) ... In theworld of 1941-5, what occurred was fullemployment, bustling factories and anincrease in the production of usiful as wellas useless things. In real life these were theconsequences of waste ... (and) ... in WorldWar II... the equivalent of the Egyptianpyramids, the medieval cathedrals, and theburied bottles full of money were the tanks,bombers and the aircraft carriers". (1)

So again, in 1939-45, people were putback to work in the manufacture ofarmaments which were destroyed onbattlefields without ever 'coming tomarket. Industry, despite huge numbersbeing re-directed from industrial activityto the fighting forces, boomed asgovernments added massively to theirnational debt to buy the products of thearmaments industry. Purchasing powernow became available to help clear non-military surpluses too and huge profitsaccrued again to financiers andentrepreneurs.

Following the cessation of hostilitiesthe waste of war was repaired, economiesboomed again and system profitability washandsomely restored. But by the early1970s, Europe's economies were introuble again, suffering now from a newphenomenon, "stagflation". Contrary tothe tenets of orthodox theory theexperience now was of simultaneous highunemployment and rampant inflation, and

THE SOCIAL CREDITER

the Keynesian solution to historicaleconomic instability was seen to havefailed. The ground was quickly laid for thecomeback of neo-classical economics, thedominance of "Free Markets" ideologyand a re-run of the old globalisationdream.

This time it was to be pursued throughthe highly secretive Bilderberg group,established in 1954, and reflecting thegrowing importance of Japan, theTrilateral Commission which followed inJuly 1973. Just forty years earlier, beforethe outbreak of World War II A.R.Orage,commenting on an earlier attempt atestablishing world government suggestedthat ... "the difference between a world ofnations in intelligent and voluntary co-operation and a world of functionalgroupings subservient to a Super-Statecomposed of self-selected, all powerfulneurotics, is exactly the dijference betweena harmonious society of free individualsand a society based on slavery andsanctioned byforce". (2)

But history is being made to repeatitself We may also be certain that, despite"free markets" and globalisation, theboom and bust of economic cycles willalso be repeated, with increasing ferocity,until either the current monetary system isreformed or it finally collapses completelywith devastating consequences forhumankind and our environment. (3)

Meanwhile, the internationalmonetary system is once again in thethroes of a great debt-repudiation crisisand the world's people face the prospectof another global economic depression.We must hope that this time, and neveragain, will our politicians be persuaded, asso often before, to try to solve theproblem by resort to war. But we shouldalso recognise that, while massive newsubsidies to industry from the public purse(such as President Clinton's £18billion toresurrect Reagan's Star Wars dream) maybe better than resorting to war, they cangive only temporary relief to the system.

Nevertheless governments increasinglyare asked to find ways of spending money,by adding massively to their national debts,on industrial subsidies and nationalprojects - notably armaments - to create ormaintain employment, help clear currentmarket surpluses and support industry torealise corporate profits.

So, because employment is currently theonly way by which the vast majority of peopleare allowed access to some share of the nation'swealth, governments are driven to try to increaseemployment by public subsidy of industry. And

simultaneously, industry, which must operateprcifttably so that it can pay interest on its loansand provide shareholder dividends, is driven toreduce the level of labour input to the productionprocess! In this matter of employmenttherefore, the interests of Govern-ments and corporations are clearly inopposition and one or other mustexpect failure.

THE LEISURE STATE

Yet there is another, sounder way inwhich the unemployment "problem"might be solved. We should acknowledgethat the major objective of humankind hasalways been to reduce the amount of timedevoted to working for survival, and toextend as far as possible the resultingincrease in time available for the pursuit ofpleasure and spiritual development.

Today, and for some long time past,technology has made real the prospect thatwe might produce, on a sustainablebasis, asatisfactory sufficiency for all the world'speople. Only a relatively small numberneed, for quite short periods of their lives,be engaged in the production process. Ifwe are to exploit this potential however,we must first reform the financial system.Only then might we, at last, be truly ableto choose how to use our increasing"technological" leisure in ways which givemost individual and communitysatisfaction,and spiritual reward.

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

DIVIDENDS FOR ALL

While the financial control of industrywhen inaugurated seems definitelyundesirable, certain reservations will occurto the student. Industry has run riot overthe countryside. A population which hasbeen educated in the fixed idea that thechief, if not only, objective of life is wellnamed "business", whose politicians andpreachers exhort their audiences to freshefforts for the capture of markets and theprovision of still more business, cannot beblamed if, as opportunity occurs, it stillsacrifices the amenities of the countrysideto the building of more blast-furnaces andchemical works. Since the control ofcredit is the most perfect mechanism forthe control of industrial activity, its use inthe hands of a representative organisationwould appear to be the best possible way

2

of reducing the chaos which exists, tosomething like order. The bankingorganisation at present existing, even if weare prepared to concede to it an altruismnot particularly noticeable, is by itsexpressed philosophy seriously ~handicapped in dealing with the situation.This philosophy exalts industrial work toan end in itself, and deplores, as one of themajor evils of the time, the leisure whichit labels "the unemployment problem".While it possessesthe power to inaugurateand modernise the plant of industry, andin the process to locate it geographically inaccordance with the best interests of thecommunity, the carrying out of such apolicy must of necessity be entrusted totechnically capable individuals.Unfortunately for the banking system,these individuals cannot be restrained frommaking each successiveplan more efficientthan the last, with the result that a givenoutput requires less and less labour, andthe unemployment problem, as labelled, isthereby increasingly complicated.

Only by a frenzied acceleration ofcapital sabotage, which is now openlyadvocated in many quarters, can thepopulation (which would, so far as thephysical aspect of the situation isconcerned, be free to enjoy the product ofthe plants already existing) be kept at work ~on the production of capital goods.

It would appear, therefore, that eventhis desirable aspect of financial control isrendered ineffective under its presentoperation. Before an intelligent system ofregional planning can be inaugurated withany hope of success, some agreement isnecessary as to whether unemployment is,in its alternative description of leisure, amisfortune or whether it is a release. If it isa release, then obviously it must not beaccompanied by economic, or ratherfinancial, penalisation. If it is a misfortunethen clearly every effort should be directedto restraining the abilities of thoseengineers and organisers who are preparedto make not two, but two hundred bladesof grassgrow where one grew before.

An appreciation of this position isperhaps the shortest way to arrive at aconception of the modifications which arerequired. If we assume that theconstant efforts to reduce theamount of labour per unit ofproduction are justified, and we "-"recognise the unquestionable factthat the genuine consumptivecapacity of the individual is limited,we must recognise that the world,whether consciously or not, is

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working towards the Leisure State.The production system under thisconception would be required to producethose goods and services which theconsumer desires of it with a minimumand probably decreasing amount of humanlabour.

Production, and still more activitieswhich are commonly referred to as"business" would of necessity cease to bethe major interest of life and would, as hashappened to so many biological activities,be relegated to a position of minorimportance, to be replaced, no doubt, bysome form of activity of which we are notyet fully cognisant. In a physical sense thenwe should be living in a world in whicheconomic processes were carried out bytwo agencies, one, as heretofore, theagency of individual effort, and froman economic point of view ofdecreasing importance; and the other,the result of the plant, organisationand knowledge which are thecumulative result of not only thepresent generation, but of thepioneers and inventors of the past.This second agency can, of course, hecollectively described as the real (asdistinct from financial) capital. Now itis quite easy to make out a perfectly simpleethical justification for the proposition thatthe share of the product due to theindividual under such a state of affairswould be (1) a small and decreasing sharedue to his individual efforts, and (2) a largeand increasing amount due to his rights as ashareholder or an inheritor, or if it may bepreferred, a tenant for life of communalcapital. But in fact such an argument is far

less satisfactory than the equally validargument that the communal capital isuseless to exactly the extent that anyproportion of the public is prevented fromdrawing upon it, which is, of course, thegeneral explanation of the vast amounts ofidle real wealth at the present day.

Up to this point the facts must be clearenough to anyone who is content toconsider the matter dispassionately.Proceeding from this stage, andremembering that a satisfactory financialsystem is simply a reflection in figures of astate of affairs alleged to exist in fact, or is,in other words, simply an accountingsystem, it is not difficult to understand thatwages and salaries in relation to dividendsought to become increasinglyunimportant. Production is far moredependent upon real capital than it is uponlabour, although without labour there isno production. More and more theposition of labour, using, of course, thisword in its widest possible sense, tends tobecome the catalyst in an operationimpossible without its presence, butcarried on with a decreasing directcontribution from labour itself

Let us at this point for the sake ofclarity identify the community withthe nation and in so doing be carefulnot to confuse administration withownership. It ought not to bedifficult to see that a situation whichmay truly be described asrevolutionary is disclosed. In place ofthe relation of the individual to thenation being that of a taxpayer it iseasily seen to be that of ashareholder. Instead of paying for the

doubtful privilege of being entitled toa particular brand of passport, itspossession entitles him to draw adividend, certain, and probablyincreasing, from the past and presentefforts of the community of which heis a member. The National Debt,which he did not create, becomes anational credit which he did create.His budget is not required to balancebecause his wealth is alwaysincreasing. He does not require tofight for foreign markets, sinceobtaining foreign markets merelymeans a longer working day. Havingmore leisure he is less likely to sufferfrom either individual or nationalnerve-strain, and having more timeto meet his neighbours canreasonably be expected to understandthem more fully. Not beingdependent upon wage or salary forsubsistence, he is under no necessityto suppress his individuality, with theresult that his capacities are likely totake new forms of which we have sofar little conception.

Notes(1) Robert Lekachman, The Age of Keynes,p130, 1966, Penquin Books Ltd.Harmondsworth(2) A.R.Orage, The New English Weekly,1933(3) The Social Crediter,Vol.77 No.5 p.36(4) C.H.Douglas, Monopoly of Credit,p.107/113, 1979 edt. Bloomfield Books,Sudbury England (emphasis added)(lst.ed.1931)

CO-OPERATION AND CAMPAIGNING: THE IMPORTANCE OF THE VOLUNTARY SECTOR

Inthe July-August edition of The SocialCrediter (Vol.77 No.4), Alex FalconerMEP in his article The Shape of Thingsto Come rehearsed the daunting range ofsocio-economic problems which,increasingly, are adversely affecting theworld's peoples - an unstable internationalmonetary system, poverty and debt,climate change and the threat ofenvironmental collapse etc. He noted thatthe nations of the world are in fact nottackling these problems effectively, andhighlighted the role of the globaleconomic system and the power ofTransnational Corporations, greater thanthat of many nations, which "can take onand win battles even against supranationalinstitutions such as the European Union."

The current "Banana War" suggeststhat he was also absolutely right to assertthat, "The supposed regulators of internationaltrade and finance, such as the WTO, are inpractice captives oj the Transnationals'agenda".

Finally, in referring to a series ofmeetings with the Secretariat and othersto discuss the situation and what can bedone about it, he recounts how "wedecided to concentrate, in the first instance,on building support Jor the idea of a GlobalEconomic Reform Campaign among Scottishorganisations and activists", while alsoreaching out to campaigners elsewherein the hope that we might encouragethe building of a global networkcommitted to radial financial and socio-

economic change.Since that article, there have been a

number of further meetings, involvingother groups and individuals in Scotlandand south of the Border. Liz Ferguson'sessay, A Common Agenda, seems to bevery much in tune with this concept ofco-operative campaigning for GlobalEconomic Reform, by the widest possiblerange of organisations, and especially bythose already making a commitment inthe potentially very influential voluntarysector. It is also consonant with the themerunning through the SchumacherLectures - recognition of the central rolewhich the world's debt-money systemplays in the creation and persistence ofmost of the world's major problems.

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1998 SCHUMACHER LECTURESTHE ECOLOGY OF MONEY

The 1998 Shumacher Lectures weredelivered in the Victoria Rooms, Bristol on27th October. Speakers addressed a capacityaudience oj some 750 people from around theUK, and a number of visitors from abroad,who are deeply concerned about the socio-economic and environmental if.fects of theinternational commitment to the current

global economic/political agenda.The lectures and related seminar/

workshop and plenary discussions were verysuccessful. It was clear that everyone feltgreatly encouraged by the quality of theanalysis and most of the proposals for radicalchange advanced by the speakers.

As a result many, especially those already

active in the voluntary sector, will have hadtheir commitment to action greatly re-enforced.

The following excerpts from the threemain speeches are designed to give the flavourof the arguments which were so well receivedby those attending and which, it is hoped,will act as afurther call to action.

THE ECOLOGY OF MONEY

The crisis of modern society can betraced in large measure to ourpotentially fatal ignorance of twosubjects. One is the nature of money.The other is the nature of life. Thisignorance has led us to create aneconomy that trades away life for money.It's a bad bargain. Indeed, the vocabularyof finance and economics is itself a worldof doublespeak that obscures the realnature and ways of money. For example,we politely use the term investors, whenspeaking of the speculators whosegambling destabilises global financialmarkets. We use the terms money,capital, assets and wealth interchangeably,leaving us with no simple means toexpress the difference between money - amere number - and real wealth - which iscomprised of things of real value - such asfood, our labour, fertile land, buildings,machinery and technology - things thatsustain our lives and increase ourproductive output. Thus we accept thespeculators' claim that they are creatingwealth, when they are actuallyexpropriating it, and honour them withspecial tax breaks and protections. Suchconfusion has led us to establish acapitalist system of world rule by moneythat is literally killing us.

In the 1980s we witnessed capitalism'sheralded triumph over communism. Inthe 1990s we have experienced withgrowing unease its triumph overdemocracy and the market economy.Now we face the question of whetherduring the first decade of the thirdmillennium we may witness capitalism'striumph over life and our own ultimate

D.C. Korten

destruction as a civilised species.For those of us who grew up

believing that capitalism is the foundationof democracy, market freedom and thegood life, it has been a rude awakeningto realise that under capitalism,democracy is for sale to the highestbidder, the market is centrally planned byglobal mega - corporations larger thanmost states, the destruction of jobs andlivelihoods is rewarded as a virtuous act,and the destruction of life to makemoney for the already rich is treated asprogress.

We now live in a world ruled by aglobal financial casino. It is staffed byfaceless bankers, money managers andhedge fund speculators who operate witha herd mentality and send exchange ratesand stock prices into wild gyrationsunrelated to any underlying economicreality. Each day they move more thantwo trillion dollars around the world insearch of quick profits and safe havens.With reckless abandon they make andbreak national economies, buy and sellcorporations and hire and fire ChiefExecutive Officers (CEOs) - holding themost powerful politicians and corporatemanagers hostage to their interests. Whentheir bets payoff they claim the winningsas their own. When they lose they run togovernments and public institutions toprotect them against loss with piouspronouncements about how the poormust tighten their belts and become morefiscallyprudent.

In my own country, the UnitedStates, the corporate-controlled mediakeep the public pre~cupied with details

of our President's sex life and calls for hisimpeachment for lying about ameaningless affair. In the meantime, ourCongress and our President worktogether in an unholy alliance to pushthrough funding increases for the IMF tobailout the banks who put the entireglobal financial system at risk withreckless lending. They are advancingfinancial deregulation that will encourage ~even more reckless financial speculationby recreating the conditions of the 1930s.

As a medium of exchange money isone of the most important and useful ofhuman inventions. However, as webecome ever more dependent on moneyto acquire the basic means of oursubsistence, we give over to theinstitutions and people who control itscreation and allocation, the power todecide who among us shall live inprosperity and who shall live indestitution - even quite literally who shalllive and who shall die.

With the increasing breakdown ofcommunity and public safety nets, ourmodern money system has becomepossibly the most efficient instrument ofsocial control and extraction ever devisedby human kind. The fact that very few ofus think of the money system in suchterms makes it all the more effective as aninstrument of elite rule.

But what of capitalism's claim to be -the champion of democracy, marketvfreedom, peace and prosperity?

Capitalism is the term coined in themid-1800s to refer to an economic andsocial regime in which the ownership andbenefits of capital are appropriated by the

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few to the exclusion of the many whothrough their labour make capitalproductive. While modern capitalisminvolves an unconscionable concentrationof wealth by the few to the exclusion ofthe many, it is more than a system of ruleby human elites. It has evolved into asystem of autonomous rule by money,and for money, that functions on auto-pilot beyond the control of any humanactor and is largely unresponsive tohuman needs and sensibilities.

Contrary to its claims, capitalism isthe mortal enemy of democracy and themarket. Its relationship to democracy andthe market economy is much the same asthe relationship of a cancer to the bodywhose life energies it expropriates.Cancer is a pathology that occurs whenan otherwise healthy cell forgets that it isa part of the body and begins to pursueits own unlimited growth without regardto the consequences for the whole. Thegrowth of the cancerous cells deprivesthe healthy cells of nourishment andultimately kills both the body and itselfCapitalism does much the same to thesocieties it infests.

There is an essential differencebetween a market economy of the typeAdam Smith had in mind when he wroteThe Wealth of Nations and the globalcapitalist economy, which he would haveabhorred. As financial power becomesmore concentrated, power shifts frompeople to money and the institutions ofthe market become displaced by theinstitutions of global capitalism.

In a healthy Market economyenterprises are human scale andpredominantly locally owned. Economicexchanges are shaped and controlled bypeople through the expression of theircultural values, their purchasingdecisions, their democratic participationin setting the rules by which the marketwill function, and their ownership oflocal enterprises. It is a dynamic andinteractive system in which peopleparticipate in many roles and bring theirhuman sensibilities to bear on everyaspect of economic life.

Political democracy and the marketeconomy work well together as means oforganising the political and economic lifeof a society to allocate resources fairlyand efficiently while securing thefreedom and sovereignty of theindividual. When they function properlythey result in self-organising societies thatmaximise human freedom and minimisethe need for coercive central control.

The special magic of the market is itsability to reward those who doproductive work responsive to the self-defined needs of others as they add to thetotal wealth and wellbeing of society.

Capitalism, by contrast, is about usingmoney to make money for' people whoalready have more of it than they need.Its institutions, by their very nature,breed inequality, exclusion,environmental destruction, socialirresponsibility and economic instabilitywhile homogenising cultures, weakeningthe institutions of democracy and erodingthe moral and social fabric of society.Though capitalism cloaks itself in therhetoric of democracy and the market, itis dedicated to the elitist principle thatsovereignty properly resides not in theperson, but in money and property.

The distinction between the marketeconomy and the capitalist economy hasa very practical significance. It meansthere is a simple and familiar answer tothose who claim there is no viablealternative to global capitalism and itspathological consequences. The obviousalternative is to eliminate the capitalistcancer from the body of society to createthe necessary conditions for democracyand a global system of self managedmarket economies and compassionatecultures that honour the needs of life andliving beings.

When a defender of global capitalismdisdainfully asks, "What is youralternative? We've all seen that centralplanning does not work", just respond "Ithink Adam Smith had a good idea. Ifavour a real market economy that is notcentrally planned by either governmentsor corporations." We are often told thatderegulation and economic globalisationare necessary to the free market. In factefficient market function depends onboth regulation and borders. Whatderegulation and economic globalisationactually free are the forces of capitalism'sattack on democracy and the market.Without regulation and borders, financialmarkets merge into a single unregulatedelectronic trading system prone tospeculative excesses; and globalcorporations consolidate and concentratetheir power through mergers,acquisitions, and strategic alliancesbeyond the reach of any state. Savingsbecome aggregated into professionallymanaged retirement trusts and mutualfunds that have a legal fiduciaryresponsibility to maximise financialreturns to their clie~.

The financial institutions that act asproxy owners expect those responsiblefor the corporations over which theyexert ownership control to take a similarnarrow view of their responsibilities.They send a powerful message tocorporate management. A solid profit isnot enough. Annual profits must beconstantly increased at a rate sufficient toproduce the twenty to forty percentannual increase in share price the marketshave come to expect. Corporate CEOsare handsomely paid to give this goaltheir single-minded attention. Theaverage annual compensation of the CEOof a US corporation, much of it in stockoptions, is now $7.5million a year. TheCEO who fails loses credibility with thefinancial community and may invite atake-over bid or ejection by largeshareholders. How the corporationincreases its profits isn't the market'sconcern. As they say at the NikeCorporation, "Just do it".

The global corporation responds byusing its great power to reshape cultures,limit consumer Choices, pass costs on tothe public, and press governments toprovide subsidies and rewrite the rules ofcommerce in their favour. Commonlythe corporation responds in ways thatdestroy the most precious of all wealth,the living capital of the planet and thesociety on which all life and the fabric ofcivilisation depend.• It depletes natural capital by stripmining forests, fisheries, and mineraldeposits, and aggressivelymarketing toxicchemicals and dumping hazardous wastesthat turn once productive lands andwaters into zones of death.• It depletes human ca_pital bymaintaining substandard workingconditions in places like the Mexicanmaquiladoras where they employ oncevital and productive young women forthree to four years until failed eyesight,allergies, kidney problems and repetitivestress injuries leave them permanentlyhandicapped.• It depletes social capital by breakingup unions, bidding down wages, treatingworkers as expendable commodities anduprooting key plants on whichcommunity economies are dependent tomove to lower cost locations - leaving itto society to absorb the family andcommunity breakdown and violence thatare inevitable consequences of theresulting stress.• It depletes institutional capital byundermining the necessary function and

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credibility of governments anddemocratic governance as they payoutmillions in campaign contributions towin public subsidies, bailouts and taxexemptions, and fight to weakenenvironmental health and labourstandards essential to the long-term healthof society.

Living capital, which has the specialcapacity continuously to regenerate itself,is ultimately the source of all real wealth.

To destroy it for money, a simplenumber with no intrinsic value, is an actof collective insanity. Another insanity ofglobal capitalism is the instability inherentin a financial system that sends trillions ofdollars around the world at the speed oflight in a speculative frenzy that hasnothing to do with productiveinvestment. Here again we are blinded byour myths and illusions, including themyth that when we buy a share of stockwe are investing in the creation of newproductive capacity.

Have any of you ever stopped tothink that when you buy a share of stock,unless it is a new issue, not a single pennygoes to anything that might actuallyincrease productive output? After thebrokers take their commission the restgoes to the person from whom youbought the stock. If it is a new issue someof the money goes to productivepurpose, though even here much of it islikely to go to commission, managementbonuses and buying out the shares ofthose who financed the start-up.

In the United States, the bigcorporations are actually buying backtheir stock faster than they are launchingnew issues. This means that the new flowof money from the share markets intoproductive activity is negative. Overallthe stock-market is not a source ofinvestment capital. It is simply a kind ofgambling casino where we place our betson which stock prices are going to riseand which are going to fall.

Unfortunately the rise and fall ofstock prices often do have significant realworld consequences, because banks findit highly profitable to loan large amountsof money to individuals and institutionsthat are leveraging their bets in themarket.

The 1997 Asian financial crisis thatturned Asia's much touted financialmiracle into the Asian financial meltdownprovides a useful illustration of the role ofreckless bank lending in creating thefinancial instability that now plays itselfout so visibly around the world. The

Asian meltdown began in Thailand andrapidly spread through Malaysia,Indonesia, South Korea and Hong Kongas economies collapsed one after anotherlike falling dominoes. The contagionthen moved on to Brazil, Russia and theUnited States. While specifics differed,the experience of Thailand is revealing ofthe underlying pattern repeated incountry after country. During the phasein which Thailand was being touted as aneconomic miracle and a model ofprogressive economic policy byinstitutions such as the InternationalMonetary Fund (IMF) large inflows offoreign money fuelled rapidly-growingfinancial bubbles in stock and real estateprices. The inflated bubbles attracted stillmore money, much of it created byinternational banks eager to profit fromloans to the speculators who secured theloans with the inflated assets. As theforeign currency reserves poured in,imports of consumer goods skyrocketed -creating the illusion of prosperity and abooming economy.

Yet since speculation in stocks andreal estate was producing much higherreturns than were productive investmentsin industry and agriculture, the fasterforeign investment flowed into a country,the faster money actually flowed out ofThailand's productive sectors toparticipate in the speculative frenzy.Actual production stagnated or evendeclined in both agriculture and industrialsectors. As a result foreign financialobligations were skyrocketing while thecapacity to repay those obligations wasdeclining. Obviously such a pattern ofincreasing consumption and decliningproduction was not sustainable. Once thespeculators realised this, the meltdownphases began. The speculators rushed topull their money out in anticipation of acrash; stock and real estate pricesplummeted, banks and other lendinginstitutions were left with large portfoliosof un-collectable loans, which impairedtheir ability to lend and created liquidityshortage as the financial collapseunfolded. The Wall Street bankers andinvestment houses that had helped tocreate the crisis through their speculativeexcesses and reckless lending - inveteratechampions of the free market when theprofits were rolling in - responded intypical capitalist fashion. They ran togovernments and the IMF for publicbailouts. We see in the Asian experiencean all too common reality of capitalism'sability to create an illusion of prosperity

6

by creating a speculative frenzy, whileactually undermining real productiveactivity and setting the stage for collapse.

A study by McKinsey and Companyfound that since 1980, the financial assetsof the OECD countries have been \.c!Jgrowing at two or three times the rate ofgrowth in gross domestic product (GDP)- a result of inflating assetsvalues throughpumping up financial bubbles. Thismeans that potential claims on economicoutput are growing from two to threetimes faster than the growth in output ofthe things that money might be used tobuy. The distortions go far deeper,however, because an important portionof the output that GDP currentlymeasures represents a decrease, ratherthan an increase, in our wellbeing.

When children buy guns andcigarettes, the purchases count as anaddition to GDP - though no saneperson would argue that this is anincrease in our wellbeing. An oil spill isgood, because it generates expensiveclean-up activities. When a marriedcouple gets divorced, that too is good forGDP. It generates lawyers' fees andrequires at least one of the parties to buyor rent and furnish a new home. Otherportions of GDP represent defensiveexpenditures that attempt to offset the ~.consequences of the social andenvironmental breakdown caused byharmful growth. Examples includeexpenditures for security devices andenvironmental clean - up. GDP furtherdistorts our reality by the fact that it is ameasure of gross, rather than net,domestic product. The depreciation ordepletion of natural, social, human,institutional and even human-madecapital is not deducted. So when we cutdown our forests or allow our physicalinfrastructure to deteriorate, there is noaccounting for the loss of productivefunction. We count only the gain.

Economists in the United States, theUK, Germany, the Netherlands andAustralia have adjusted reported GDP fortheir countries to arrive at figures for netbeneficial economic output. In eachinstance they have concluded that in spiteof substantial economic growth, theeconomy's net contribution to wellbeinghas actually been declining or stagnantover the past fifteen to twenty years. Yet Veven the indices of net beneficial outputare misleading as they do not reveal theextent to which we are depleting theunderlying base of living capital onwhich all future productivity depends. I

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To create a world in which lifecanflourish and prosper we mustreplace the values and institutions

of capitalism with values andinstitutions that honour life, servelife's needs and restore money to

its proper role as servant.

know of no systematic effort to create aunified index giving us an overallmeasure of the state of our living capital.Obviously, this would involve significanttechnical difficulties.

However, what measures we do haverelating to the depletion of our forests,soils, fresh water, fisheries, the disruptionof our climatic systems, the unravelling ofour social fabric, the decline of oureducational standards, the loss oflegitimacy of our major institutions, andthe breakdown of family structures giveus reason to believe that the rate ofdepletion of our living capital is evengreater than the rate of decline in netbeneficial output.

The indicators of stock-marketperformance and GDP that our leadersrely on to assessthe state of the economycreate the illusion that their policies aremaking us rich - when in fact they areimpoverishing us. Governments do notcompile the indicators that reveal thetruth of what is happening to our wealthand wellbeing. And the power holders,whose financial assets are growing,experience no problem. In a globaleconomy their money gives them readyaccess to the best of whatever real wealthremains. Those whom capitalismexcludes have neither power nor voice.

It is time to acknowledge the obviousfact that capitalism is a disastrous failurefor reasons inherent in its values and itsinstitutions. To create a world in whichlife can flourish and prosper we mustreplace the values and institutions ofcapitalism with values and institutionsthat honour life, serve life's needs andrestore money to its proper role asservant. It will involve a great deal morethan eliminating a pathology from oureconomic systems. Capitalism hasbrought us to a defining moment in ourown history and in the evolution of lifeon this planet. The time has come whenwe must accept conscious collective

responsibility for the consequences of ourpresence on the planet. It implies takingsteps to a new level of speciesconsciousness and function. We haveboth the knowledge and the technologyto take this step. The question is whetherwe will awaken to the nature of ourcurrent folly in time to make thenecessary collective choice to recreateourselves and our institutions before wehave proceeded so far down the path ofsocial and environmental disintegrationthat the task becomes impossible.

It is a matter of choice. Those of uswho recognise our collective folly forwhat it is cannot limit ourselves to takingstands against harmful policies andpractices. We must advance awareness ofthe viable and attractive alternatives it iswithin our means to choose. As toeconomic alternatives, the answer is quitefamiliar to all of us - indeed it is theanswer in which most of us alreadybelieve: democracy, market economiesand ethical culture. The self-organisingmarket is structured to respond in ahighly democratic manner to humanneeds and values. We must concentrateon creating the conditions necessary tohealthy market function. Since capitalismis the mortal enemy of democracy,markets and ethical culture, it should notbe surprising that in most instances thismeans embracing policies exactly theopposite of those favoured by capitalism.

Whereas capitalism prefers giantcorporate monopolies with the power toextract massive public subsidies and avoidpublic accountability, the efficientfunction of markets depends on rules thatkeep firms human-scale and requireproducers to internalise their costs.

Whereas capitalism institutionalises asystem of absentee ownership that keepsowners far from the consequences oftheir choices, a proper market economyfavours stakeholders - workers, owners,suppliers, customers, and communities -

Those of us who recognise ourcollectivefolly for what it is

cannot limit ourselves to takingstands against harmful policiesand practices. ~ must advance

awareness of the viable andattractive alternatives it is within

our means to choose.

Whereas capitalism prefers theeconomic man or woman to theethical man or woman, a proper

market economy assumes anethical culture that nurtures in itsparticipants a mindfulness of the

social and environmentalconsequences of their behaviour.

to bring human sensibilities to economicdecision making.

Whereas capitalism prefers theeconomic man or woman to the ethicalman or woman, a proper marketeconomy assumes an ethical culture thatnurtures in its participants a mindfulnessof the social and environmentalconsequences of their behaviour.

Whereas capitalism encourages andrewards the speculator, a proper marketencourages and rewards those whocontribute through their labour andproductive investment.

Whereas capitalism places the rights ofmoney above the rights of people andseeks to free it from restriction bynational borders, a proper market seeks toguarantee the rights of people over therights of money, and honours borders asessential to the maintenance of economichealth.

The time has come to speak theobvious truth that global capitalism is ananti-democratic, anti-market cancer thatfeeds on our forgetfulness of our natureand place as living beings within thelarger web of planetary life. We have theright and the means to eliminate thecancer as we work together to build theculture and the institutions of the just,sustainable and compassionate world ofwhich we all dream.

David Korten is one of the world's clearestcritics of the economic philosophies andpractices that drive our system.He formerlyworkedin Asiafor the United NationsAgencyfor InternationalDevelopment (AID)and theFord Foundation development programmes.He holds a Ph.D. from StanfordUniversity'sBusinessSchool and servedon the facultyofHarvard university's Business school. He ispresident of the People CentredDevelopment Forum and author of WhenCorporations Rule the World (1995)and The PostCorporate World (1999)

VOLUME 78 PAGE 27

THE SOCIAL CREDITER

ETHICAL INVESTMENT

This is an opportunity to talk aboutsocial investment in a wider sense.First and most importantly, I dowant to offer some comments on themacro-economic context and what needsto change, because social investment isoperating within a larger theme andunless we get the macro bit right, it'llnever really come to much. As PatConaty said, this is all about making surethat money is the servant and not the master ofthe human race.

Our greatest challenge - and it iscertainly a challenge for everyone in thisroom - is to connect, to reach out to thewider public to communicate that simpleobjective of how we should relate tomoney . We should connect tocommunicate green economics, to getpeople inspired about it. We shouldconnect with determination to overcomethe barriers of ignorance, vested interestsand the clamouring, competing interestsin the media and politician's minds. Weshould connect in terms that people don'tfind off-putting - not like city financiersor the traditional economic community.G7 leaders, the Central Bank governorsand their economic gurus have beenmeeting - they met in New York, theyalso met in Washington - and they aregoing to keep meeting because there isone hell of a problem, and they don'tknow what to do about it. The news

Tessa Tennant

networks are following those meetings.suggest that this Washington Consensus(as it's known) that has driven the WorldBank, the IMF, the whole of the globalcapital markets is essentially the Emperorwith no clothes and no one's recognisingthe fact. Now the real opportunity for us- going back to connecting andcommunicating - is to mobilise some sortof TOES (The Other EconomicSummit), Task Force or Posse, that is atevery one of those meetings, ready to talkto the media. To say look, these are someof the things our leaders of economicpolicy should be talking about.

Let us call our message the BristolConsensus. Its immediate focus should beabout re-invigorating the locality andlocal enterprise. It should be aboutstopping the worst excesses of the globalmarket and redirecting the behaviour ofglobal institutions and organisations, sothat they foster what we in this hall want.

It should lead us to taxation ofspeculative capital - the Tobin tax; tonew regulation of hedge fund activitiesrelating to disclosure and reserves, and toa social tariff or other penalty aimed atrepressive regimes and the maintenance oflabour rights and environmental standardsbetween trading parties.

Moving on from tax ideas, the BristolConsensus should be about reform of theterms of trade to ensure fair ground rules

apply to corporate subsidies. In the~Scottish Borders an electronics companyemploying a thousand people is closingdown - because a few miles down theroad in Newcastle the government isgiving grants for the setting up ofelectronics facilities and the internationalcompany in the Borders is relocating ,benefiting from taxpayer's money whilecreating excess capacity and waste.

The Bristol Consensus should also beabout ensuring a greater balance betweenexporting nations. It should support thedrive for debt forgiveness for developingcountries; the repeal of the MultilateralAgreement on Investment; action to dealwith global over supply of goods andservices; insist on arrangements to ensureaccess to credit and wider ownership ofcapital.; take action to ensure a base underacceptable labour standards and develop alink between social investment and thenotion of a social dividend.

TessaTennant is Director of NPI GlobalCareInvestments and has pioneered ethical~"';investment in the UK. She is on thegovernment's advisoryboard on businessandthe environment, and is a former chairmanofthe Social Investment Forum. In 1994 shereceivedone of the first SchumacherAwards.She is alwayslooking for new approachestomaking money work for sustainabledevelopment.

PROBLEMS AND SOLUTIONS

Iam excited about the opportunitiesthat current problems in the worldsystem are presenting us with, but inmy stomach, I am also very much afraid.Weare going through one of the turningpoints of history over the next few years,and a lot of people are going to get hurt.

So I am looking forward to the futurewith mixed feelings, but this turningpoint does give us a chance to break thelogjam. Something exciting is happeningat present - people are beginning at last totalk about money, about where it comesfrom, who issues it, what basis it has andwhether it represents anything real. Whenwe think about money we have to ask

Richard Douthwaite

questions about it - questions that ajournalist might ask - for example, Who?What? When? Where? Why? and How?

We should ask about the presentcurrency system: who is issuing it? 97% ofall the money that gets into circulation iscreated by the banking system - it doesn'tcome from government at all. And Why?Of course, to make a profit. And How?

Well, its done on the basis of debt. Inother words 97% of money in circulationhas been created by debt. Supposing justconfidence is lost - what happens then?The whole system begins to unwind,because as the system is based on debt andthe payment of interest, the only way

8

businesses can make a profit with whichto pay interest on the loans they havetaken out, is if the stock of money incirculation in the economy goes upduring the course of a year. So unless westeadily get further and further into debt,people who have borrowed are not goingto be able to generate profits in theirbusiness to be able to service their bankloans. So we get a credit implosion andthe amount of money in circulation falls.VSo what's wrong?

Well one of the things is that ourinternational monetary system is based onnothing at all.

Money is a great invention, and this is

VOLUME 78 PAGE 28

THE SOCIAL CREDITER

why it is almost impossible to managewithout it. So we need to ask, "Where isthe money coming from?" If it is comingfrom outside, if it is imposed bysomebody else, then we have to do thingsfor whoever is generating the money thatwe use for exchanges amongst ourselves.So an essential part of building sustainablecommunities is that they must have theirown money systems. LETS does take astep towards this, but we have got todevelop an effective currency system thatenable us to interact with each other onthe basis of a group that is rather largerthan is workable with a LETS system.

The way I see the future developing,is that we conceive of a sustainable world,not being produced by a One WoddInternational Agreement, and having aOne World currency - a mono culture inwhich all live in the same way andconsume the same things and

consequently compete for the samenatural resources. I don't think thatinternational free trade can ever be madesustainable. I envisage a future in whichthere will be a myriad of micro -economies which have adjusted to livewithin the limits of their own place. Eachwill have its own currency, yet there willalso be multinational currencies andprobably a world currency too.

I see money moving from first of allbeing created by the rulers as a method oftaxation and exploitation, to being createdby the banking system for its own benefit,to moving to a state in which the users ofthe money create the money. Created onthe basis of mutual credit it can be issuedinterest free. The importance of this isthat it doesn't impel economies to growyear after year, because if you are lendingmoney at interest, as I said earlier, therehas to be an expansion of the economy.

Richard Douthwaite has raised the discussionon sustainablelocaleconomiesto a new level.His books The Growth Illusion and ShortCircuit, have become essential reading forthose concerned with developing a neweconomics and creating local economicstability.Richard was government economistfor the islandof Montserratin the West Indies;he is now a writer and journalist, living inCounty Mayo.

The shorter excerpts are by the editor Jrom thespeeches oj Tessa Tennant and RichardDouthwaite. The extended piece Jrom DavidKorten's speechis reproduced,with permission,Jromthe March/April 1998 edition oj Resurgence, themagazine / journal of the Schumacher Society. Alloj the speeches were delivered at the SchumacherLecture held in Bristol in October 1998. Fulltranscriptsof these speechesand details oj Resurgencemay be requested Jrom the Schumacher Society,Foxhole, Dartington, Devon TQ9 6EBTel. & Fax 01803865051E-mail, schumacher@gn.apc.org

RECURRING CRISES AND SOMECANADIAN EXPERIENCE

What should make these"Schumacher" speeches evenmore interesting, is therecognition that those current anxietiesand problems - poverty, debt, social andenvironmental breakdown - on whichthey focus are by no means new. Theyare clearly the product of a monetarysystem which absolutely ensures that theywill recur, period by period, until thatsystem has been radically reformed.

RECURRING CRISES

European economies have frequentlybeen in crisis. In the crisis of 1816/1817some "90 issuing banks went bankruptbetween 1816 and 1817" and in the crisisof 1825126, "70 private issuing banks hadto suspend payments when holders of banknotes tried to covert their notes into gold." (1)In 1866, had the British government nottemporarily suspended the Bank ofEngland's cover regulations (the ratio ofgold cover to notes), the bank wouldagain have "had to deny the British economycredit when it was most needed." (2)However, the financial system's need forgrowth in order to survive, ensured

Alan D. Armstrong

continued economic expansion, despitethese periodic crises. Related total debtand interest on debt therefore also hadgrow, and recurring crises became evermore serious. Eventually the world'sfinancial system was rocked to itsfoundations by the Wall Street Crash andits continuing impact throughout the1930s.

During this time, many experimentswere made with the intention ofproviding alternative and more stablecurrencies. "Local currency was introducedin Scwanenkirchen in Bavaria ... By 1931the "Freiwirtschajt" (free economy) movementhad succesifully spread throughout Germanyuntil it was finally blocked by the CentralBank in November 1931. In Austria, themayor of the town of Worgl decided to copySwanenkirchen' 5 example and subsequently ...No less than 200 cities decided to imitateWorgl! That is, until the Central Bank ofAustria also "felt threatened in itsmonopoly of currency emission andblocked the extension of the system." (3)

In America the idea of "stamp scrip"was advocated by a number ofprominent economists. Dean Acheson,Assistant Secreta~ of the Treasury

"decided to have the whole concept verifiedby ... the highly respected Professor RussellSprague, of Harvard university. The answerwas that indeed stamp scrip would workperfectly economically. By then the stampscrip movement had spread to 450 citiesaround the United States". (4) In March1933, Roosevelt announced the NewDeal and "emergency currencies" wereprohibited.

Then in 1947, Thomas Robertson,(5) referred to "a remarkable piece ofevidence" which had been published in1939 by the Canadian government. Itwas in the form of Minutes of proceedingsand Evidence of the Standing Committee onBanking and Commerce, which had takenevidence from, amongst many others,the Governor of the Bank of Canadaunder cross examination byMr.G.McGreer K.C. Because itremains such a powerful and stillrelevant indictment of our currentmonetary arrangements, based onthe central role of private banks inthe process of money creation, it isappropriate to rehearse a few of thekey parts of the evidence quoted byRobertson. (emphasis added)

VOLUME 78 PAGE 29

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THE SOCIAL CREDITER

BOOK-KEEPING ENTRIES

Q. Ninety-five per cent of all our volumeof business is being done with what wecall exchange of bank deposits - that is,simply book - keeping entries in banksagainst which people write cheques?Mr. Towers: I think tha t is a fairstatement.

ISSUE OF CURRENCY

Q. Twelve per cent of the money in usein Canada is issued by the Governmentthrough the Mint and the Bank ofCanada, and 88 per cent is issued by themerchant banks of Canada on reservesissued by the Bank of Canada?Mr. Towers: Yes.Q. But if the issue of currency andmoney is a high prerogative ofgovernment, then the highprerogative has been transferred tothe extent of 88 per cent, from thegovernment to the merchantbanking system?Mr. Towers: Yes.

CREATING NEW MONEY

Q. When $1,000,000 worth of bonds ispresented (by the government) to thebank a million dollars of new money orthe equivalent has been created?Mr. Towers: Again assuming that therehas been no decrease in its otherinvestments or loans.Q. I mean at the time, at the moment?Mr. Towers: Yes.Q. Is it a fact that a million dollars of newmoney has been created?Mr. Towers: That is Right.Q. Now, the same thing holds true whenthe municipality or the province goes tothe bank?Mr.Towers: Or an individual borrower.Q. Or a private person goes to abank?Mr. Towers: Yes.Q.When I borrow $100 from thebank as a private citizen the bankmakes a bookkeeping entry andthere is $100 increase in the depositsof that bank, in the total deposits ofthat bank?Mr.Towers: Yes.

BANK ISSUE OF SUBSTITUTEMONEY

Q. When you allow the merchantbanking system to issue deposits ... with

the practice of using cheques ... youvirtually allow the banks to issue aneffective substitute for money, doyou not?Mr. Towers: The bank deposits areactually money in that sense.Q. As a matter of fact they are notactually money but credit, book - keepingaccounts, which are used as a substitutefor money?Mr.Towers: Yes.Q. Then we authorise the banks toissue a substitute for money?Mr.Towers: Yes.

POWER TO CHANGE THEBANKING SYSTEM

Q. Will you tell me why agovernment with power to createmoney should give that power awayto a private monopoly and thenborrow that which Parliament cancreate for itself, back at interest, tothe point of national bankruptcy?

.Mr. Towers: We realise, of course, thatthe amount, which is paid, provides partof the operating costs of the banks andsome interest on their deposits. Now ifParliament wants to change the formof operating the banking system,then certainly that is within thepower of Parliament.

INCREASE OF DEPOSITS ANDINFLATION

Q. So that with the increase of $500million of bank deposit money (from1934 to 1938) we have not had anyinflationary result?Mr. Towers: We have not. Thecircumstances of the times have notencouraged it.

FINANCE IN WAR AND PEACE

Q. So far as war is concerned, to defendthe integrity of the nation there will beno difficulty in raising the means offinancing whatever those requirementsmay be?Mr. Towers: The limit of thepossibilities depends on men andmaterials.Q. And where you have anabundance of men and materials youhave no difficulty, under our presentbanking system, of putting forth themedium of exchange that isnecessary to put men and materialsto work in defence of the realm?

10

Mr.Towers: That is right.Q. Well then, why is it, where wehave a problem of internaldeterioration, that we cannot use thesame technique ... in any event youwill agree with me on this, that so'long as investment of public funds isconfined to something that improvesthe economic life of the nation, thatwill not of itself produce aninflationary result.Mr.Towers: Yes, I agree with that, butI shall make one further qualification,that the investment thus made shall atleast be as productive as some alternativeuses to which the money wouldotherwise be put.

PHYSICALLY POSSmLE ANDFINANCIALLY POSSmLE

Q.Would you admit that anythingphysically possible and desirable canbe made financially possible?Mr.Towers: Certainly.

Throughout so much of that evidenceit is possible to see the tremendousinfluence of C.H.Douglas. The lastquestion and answer is an especiallypowerful reflection of the essence of hisposition and of the potential at the heartof the Social Credit analysis andprescription for radical socio-economicchange.

Once that is acknowledged, thecall for a broadly based GlobalEconomic Reform Campaign,referred to on page 23, shouldincreasingly make sense and attractsupport, especially from those in thevoluntary sector who are strugglingto ensure some resolution of thegreat range of problems whichclearly flow from the operation ofthe current monetary system.

Notes(1) K.E.Born International Banking in19th.&20th. Centuries, 1976, Berg Publishers Ltd.,Warwickshire p.7(2) Ibid. p.9(3) J.M.Griesgraber & B. Gunter, TheWorld's Monetary System, 1996, Pluto Press,\"..ILon. & Chicago p106(4) Ibid. p.l07(5) Thomas Robertson, Human Ecology - theScience of Social adjustment, 1975 Reprint,Christian Bookclub Cal.USA.

VOLUME 78 PAGE 30

THE SOCIAL CREDITER

A COMMON AGENDA

Globalisation is usually a negativeterm - suggesting facelesscorporate monsters devouringthe diversity and dignity of

cultures world-wide and transforming usall from citizens into consumers,connected and controlled by aninternational market, which makes therich wealthier and the poor even poorer.Yet globalisation could be somethingpositive.

The shrinking of the world throughincreasing interdependence, over-whelming common problems andmodern communication systems presentsus with unprecedented opportunities,which could be of advantage to us all.

Sead (Scottish Education and Actionfor Development) is about to celebrate21years of highlighting what people inScotland and worldwide have incommon. Sead has long believed thatpeople throughout the world need tocome together to tackle the systemswhich increase poverty and destroy theIenvironment. By learning from eachother and taking action we have theability to become citizens again.

The power of "ordinary people"should never be underestimated.Iniquitous, intimidating and (to mostpeople) incomprehensible they may be,but the international monetary system,and transnational corporations are shapedby people. They did no descend from asuperior planet. People create theseinstitutions that control so many lives, andpeople can dismantle them with thepower and the will.

Residents of Easterhouse, Glasgow,initiate an anti-dampness campaign tobuild sustainable housing in one ofEurope's most deprived areas; an illegalcommunity radio station is started under ahospital bed in a South African township;the crofters of Assynt reclaim their ownland; people on Nicaragua's Atlantic coastdecide through consultation to reject anunsustainable deforestation project whichwould have created jobs in an area of highunemployment. These are just a few ofthe many examples Sead's work hasdiscovered of people taking control andmaking change.

Sead's concept of "Mutual Solidarity"is a valuable process of people world-wide

Liz Ferguson

learning from each other, sharinginformation, expertise and ideas. Not onlydoes this offer scope for direct action andpractical outcomes but also mutualconfidence building, encouragement andinspiration. Mutual is the important wordhere: long gone are the days of theimpoverished "Third World" learningfrom the "developed" world. Mutualsolidarity is a two-way involvement: aprocess of learning and exchange. We'reall in this together and we can benefitgreatly from other's experience.

For several years Sead has organised avisitors programme of communityactivists from countries such as SouthAfrica, the Philippines, Tanzania, India,Hungary, Brazil, to meet with theircounterparts in Scotland. In 1997 a groupof Scots went to South Mrica to discoverhow South Africans were tackling socialproblems at the dawn of their democracy.

This year a community filmmakerfrom the Dominican Republic visitedScottish communities using film andvideo to enhance the voice of thecommunity. Next year Scots from urbanand rural Scotland will travel to theDominican Republic to visit communitygroups there.

So, where do we start to shift thebalance of power in favour of the unheardmajority?

Firstly, we need to start thinking in aglobal context, realising that our actionscan affect people on the other side of theworld, and vice versa. We need to findout more about like-minded people inother countries (and within our own) toshare information and ideas. The nextstep is to utilise every means at ourdisposal, including moderncommunication systems, to link withindividuals and groups throughout theworld.

Traditional structures are beginning tobe broken down: Scotland's Parliamentwill hopefully lead the way to a moreaccessible and accountable system ofgovernance here in Scotland. TheScottish Civic Forum launched on 20th.March; will offer the opportunity forpeople from every sector of Scottish lifeto have their say in governance.

Sead's work over the past two decadeshas shown that peof~e are given strength

and inspiration by recognising the worthof their own experience and expertise.This is further enhanced by meetingindividuals and groups from throughoutthe world who share similar experiences.With more input from people at all levelsof society, hopefully the national andinternational agenda can be divertedtowards improvements in housing, health,education, employment, all the elementswhich improve quality of life, anddiminish the rush for unsustainableeconomic development which benefitsonly the few. The world has a wealth ofskills, talents and experience, which mustbe utilised for the benefit of all.

"It's this kind of mutual support thatpeople across the world must build so thatwe can build a nation, in an internationalworld that cares about its people. "

(Lynn Brown - Member of theWestern Cape Provincial Parliament, anda recent Sead visitor)

As an organisation, Sead is small: themore people we can involve in our workthe better. We currently have a strongand diverse membership which includescommunity activists, adult educators,religious groups, academics, aid agencies,environmental groups, and anti-povertygroups. Scotland and the world share acommon agenda. Together we can makeglobalisation something positive.

Liz Ferguson is Information and MembershipDevelopment Officer, Se ad : (ScottishEducation and Action for Development)

Copyright © 1998. Permission granted forreproduction with appropriate credit.

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THE SOCIAL CREDITER

The Social Crediter is the official journalof the Social Credit Secretariat. It

promulgates the analysis and prescription

for radical change to the current

financial/ economic system developed by

C. H. Douglas in the 1920s. At the

centre of our concern is the need for

radical reform of the international

fractional reserve, debt-money system.

Only then might other major socio-

economic changes, including the

introduction of a National Dividend,

follow and to help ensure that all of the

world's people have the potential to

enjoy economic sufficiency, while

simultaneously living a full and satisfyinglife in harmony with each other and the

natural environment. It is our

conviction that whatever is physically

possible and socially desirable CANbe made financial possible. This should

be everyone's concern and radical

reform, so that this potential might be

realised, is urgent.

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Recommended Reading--Books by Major C.H. Douglas THEMONOPOLY

OFCREDIT

Social CreditThe Monopoly of CreditEconomic DemocracyWarning DemocracyCredit Power and DemocracyThe Control and Distributionof Production

CIALII

CREDIT C. H. DOUGLAS

by C.H. DOUCLAS

Alan D. ArmstrongTo Restrain the Red Horse*The Urgent Need for RadicalEconomic Reform (1996)

INSf'IIt/NO SOtV'r!ON 1'0 TJ.l!~SOC1~1. AND ¤Q:}NO,\fJC (..'RlSl,s

Eric de MareA Matter of Life or Debt

A MATTEROFLIFBOR DEBT

EriCdCNtare

Books and booklets on the subject of Social Credit are available from Bloomfield Books,26 Meadow Lane, Sudbury, Suffolk, England COlO 6TD.*Also available from Towerhouse Publishing, 32 Kilbride Avenue, Dunoon,Argyll, Scotland PA23 7LH.

SOCIAL CREDIT ON THE INTERNET http://www.scss.gil.com.au

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SECRETARIAT

Chainnan and Editor Alan D. Armstrong BA (Hans) Ecan

Deputy Chairman and-Treasurer J. A. MurraycMcGrath FcOptom, DCLPSecretary Ronald Macintyre BSc (Hons)

ResearchOfficer ; Alister Lawrence

Correspondent to Anthony S::?