War and Economic Control
Monopoly control of the economy and of the money supply along with consistent repetition of specific suggestions through the media are crucial tools used by controlling elites to manage the masses.
"A monopolist could exercise true coercion, however, if he were, say, the owner of a spring or oasis. Let us say that other persons settled there on the assumption that the water would always be available at a reasonable price and then found, perhaps because a second spring had dried up, that they had no choice but to do whatever the owner of the spring demanded of them if they were to survive; here would be a clear case of coercion. One could conceive of a few other instances where a monopolist might control an essential commodity on which people were completely dependent. But unless a monopolist is in a position to withhold an indispensable supply, he cannot exercise coercion, however unpleasant his demands may be for those who rely on his services."[1]
We didn't need to borrow any money from America to finance the economy after the (second world) war, we could simply have printed our own. Which brings us back to the fundamental point - what's the purpose or objective of the economy? If it is to provide people with the things they need for survival then we have the productive capacity to do so without employing everyone, as they could in the 1920's although there was poverty amongst plenty because the people didn't have enough money to buy stuff, and farmers were going bust and their produce being ploughed back into the ground whilst people were starving.
The fact is the way the system currently operates you have to make enough for the export market and earn foreign revenue, money coming in, to cover costs, to keep people employed long enough for them to join in buying. Because the money supply is strictly limited and controlled delivering debt driven compulsion to work to service debt and living costs. Douglas believed the basic income should match the price cost of everything produced so that it could be bought and there would be no waste. What he saw was borrowing from the bank (investment), a period of production, some sale generated, then insufficient money in people's pocket's to buy the other stuff produced. Lincoln, and just about every King and Queen of England, knew that any economy needs money to function. In Britain the King used to provide it and mint it for that purpose - they'd often exchange it direct for goods such as wool to bring it into common currency or charge the wool merchants, etc.
What's changed is giving banks the freedom to create money - through debt, when before this was the privilege of Kings and Presidents. Banks charge interest to provide money as debt into the money supply. Banking in England started around the period of the civil-war between 1642 and 1651. The difference between debt free money and money at interest is substantial across the whole economy. As history has progressed, more and more business has ended up being owned by banks who exercise a monopoly control of the money supply, and allow the rest of us to live, or not. These are un-elected people who can, in many instances dictate spending limits to governments, of their choosing, in the same way they do to businesses and individuals. They have the power to bring down governments too.
The real cause of inflation is not money or its volume but the financial system and its effects on the confidence in money in use. They can, and do, inflict this at will. Douglas was merely pointing out that Government's do not have to give away the right to create debt free money to banks who will charge at every point of need within the system for the same service and that the objective of the economy should be to provide for its people rather than be used as an instrument of control over them.
On 31 May, 1931, the May committee reported, recommending sweeping cuts in unemployment insurance and the salaries of teachers and other public servants. The Labour government resigned. Ramsay Macdonald agreed to make the cuts and formed a unity coalition government with Liberals and Conservatives. This was a change of government enforced by unelected bankers. They secured additonal huge bank loans from New York and Paris on this basis. The medicine of punishing the poor was the same then as now with the IMF/World bank. On Saturday, 19 September, 1931, the game was up and it was decided to suspend the gold standard. The necessary act was pushed through parliament on the 21st. After the first world war they put the country through hell with bankers 'redemption' to pay back some of the national debt and climb back on the gold standard. Unemployment soared in excess of 20%. !925 Churchill, then chancellor, jumped back on, by 1931 it was all over.
To get around the currency problems with both the dollar and the franc (mainly the dollar), they set up an Equalization Exchange Account at the Bank of England. When the Account desired to check a raise on sterling it sold Treasury Bills and offered the sterling proceeds in the market in exchange for gold or foreign currencies (dollar). When it wished to check a fall it reversed the process, selling foreign exchange (dollars) and using the sterling proceeds to take up Treasury Bills. Broadly speaking, the effect was to insulate the domestic money supply from the effects of international influences that would have been felt under the gold standard.
Of course, there was inflationary pressure in the American Civil War and the First World War, but they mostly came from 'outside' of the economy. We did not have spiralling prices because the government introduced price controls by law, but some inflationary pressure still existed. Mostly this stemmed from America selling the pound short and burying it. Such that, when we came to import the materials needed for the war all commodity prices had escalated as a consequence and these feed through to domestic prices and wages. the government just flogged treasury bonds to the tune of 8 billion and chucked them on the pile named 'national debt' for taxpayers to pay off later. These were debts allocated to the banks by the ruling elites, for their wars, for the people to pay back. Every child born in Britainin 1938 was born owing a debt of £150 to these unelected bankers.
The 1931 equalization exchange accounts provided better insulation for the domestic money supply, but they work along the same lines as before. In times of war it is really the outside pressure from other financial markets and currencies that mobilise real inflationary pressure upon your currency and this gambling goes on and tracks the wins and losses of every military engagement.
The need for exports in the way the economy is set up drives the whole process. Without them, as is, manufacturing businesses just collapse and they bring down the supporting service industries. To overcome this with debt free money that the government provides to industry and people would free them of control by the un-elected world bank and IMF, which are largely controlled by American banking interests. It would need careful management, but there is not the political will to do so from any of our current main parties who only spout the mantra of the same facade.
The city of London is not a mirage. The bankers' beak wetting is considerable. Brown took housing out of his new version of RPI because he knew if he left it in, continued bank deregulation policy and the drive for debt driven growth, the inflation figures in the whole economy would be considerable. As it is, they sit there and lie with straight faces and tell us its only around 2 per cent. They talk about the housing market as if its something separate from the economy - its not - everyone needs somewhere to live and the only money most people get is through distributed wage incomes. Which have suffered around 70% real price inflation in relation to housing since the 1960s. You won't hear that on the BBC.
They tell us we have record levels of employment and growth with 29 million people in work, from an adult population of 42 million. Then they tell us only 1.5 million people are unemployed. They ridicule, stigmatise and lampoon the unemployed in the most callus manner at the same time as urging greater productivity which increase the number of unemployed.
When Douglas explained his ideas to a parliamentary committee, they understood what he was saying. But they have been educated to elevate money above people in real value terms so his ideas were just unacceptable, even if what he was saying was true. It would free the people from the monopoly and centralised control of money and to them that's not acceptable because they're bent and driving growth, debt and waste for money instead.
Perhaps I should clarify that when governments use the National Debt to create money by issuing treasury bonds there's two important points: firstly, they are simply mortgaging future earning power of the nation to bankers who make a profit by buying the bonds, at interest, by creating money out of thin air, which the government then spends - and this comes back to the banks as deposits. Secondly, the lengths they will go to NOT to create there own money is really quite extraordinary, the Pound Sterling gives details of these measures. The government simply creating its own money would save enormous costs and they already create their own coins and notes now, although at 3% compared to 21% of the money supply in the 1960s.
Douglas understood what was going on well. He saw it as a battle between the will-to-power and the will-to-freedom, essentially centralised social control through a pyramid structure or decentralised power where people had true liberty and freedom. The monopoly on financial control goes to the root of social control.
Professor Walker, in his book Money, Trade & Industry, defines money as "any medium which has reached such a degree of acceptability that no matter what it is made of, and no matter why people want it, no one will refuse it in exchange for his product," p.6, or his labour for that matter.
The difficulties came with needing to re-mint the coinage due to damage from clipping and lost weight and the need to raise cash for wars. International mints were in competition over charges to attract scarce bullion so this led to clipping and smelting and export of coinage for sale, so diminishing the supply as well. Bankers really got going about the time of the civil war. They'd started off dealing in precious metals, the goldsmiths, buying and selling on the bullion markets abroad. They started to cash in on the different types of coin in circulation - paying sorters to sift through people's money and digging out the old coin that was more pure. This could then be melted down and sold on in the bullion markets at Antwerp etc., for profit. They also paid people short-term interest to go through their coin.
They advanced huge sums, at interest, to Cromwell to pay for minting new coin and he'd just secured a massive pay-off from the French for the return of Dunkirk. The bankers got involved and offered to help him get this all re-minted to new coin, due to the bad state of coin at that time. He agreed on condition of a large advance to fund his ongoing battles. The bankers delivered this to the mints, and because it was re-minted at below bullion price, when it came out they just melted it down and sold it abroad again, as fast as the mint could make it.
Charles II got into terrible debt and money problems and the bankers exploited this as well. In 1667 parliament granted Charles additional aid to cash raised through taxes and on tallies in the form of exchequer orders. Paper orders or assignments of revenue were issued to those who advanced money or supplied goods, and these were registered in a treasury book in the order of issue. They were exchanged for cash in strict rotation according to the book as taxes came in, and they were negotiable and passed by endorsement. Each head of department used them to raise money or settle bills with goldsmiths. £1, £2, and £5 pound becoming common and they were the first issue of government paper money in England. Had Charles II not been so foolish with money the entire history of our money might have been different.
War with Holland was declared in 1672 and expenditure was about 2.5 million ahead of revenue. Charles then ordered a 'stoppage' of the exchequer, which put the bankers, mainly goldsmiths, in dire trouble. Had he not done this government would have maintained control of the money and its quite likely things would have developed differently. The BOE was created in 1694, independent of monarchy and in private hands but with the ability to create credit from the start.
And as parliament gradually assumed authority from the King, things have remained that way around since.
Source: The Pound Sterling - It is reliably sourced from official records and papers but it does need a certain level of interpretation as Sir Albert Feavearyear was an establishment figure, and E Victor Morgan, who re-wrote some of the later chapters, was as well, besides being a professor of economics at Oxford.
National Statistics on Inflation since 1750
Medialens Post
"The greater fear in Asquith's cabinet before the first world war was not war with Germany, but siding with Russia, whose bolshevik revolutionaries were articulating the promise of genuine political liberty for the masses, something our ruling elites, including Churchill, very much opposed. Burns, Morley, Simon and Beauchamp all resigned from Asquith's cabinet over it.
The pacifist Jean Jaures tried to unify the people through socialism not to fight each other and to ignore the manipulations of controlling elites and their top-down pyramid control through suggestions through the media. So they had him shot. "
"If the pacifist Jean Jaures had been successful in 1914 and convinced the people not to fight and kill each other just because their leaders and media were telling them to, then the First World War could not have taken place for the people must be induced by their leaders and media to kill each other. The desire amongst ordinary people to kill one another is created by leaders and the media - it does not exist on its own."
The debts created can then be imposed on future generations and they can be compelled to pay them through increased taxes, inducing poverty, through the application of monopoly control of the money supply. This is one method that those who buy power use to control the masses and entrench their power over people, and why they remain genuinely opposed to political liberty for the people.
"This reflects the importance of the strategic objective always being within the context of the political purpose, in order to ensure both coherence and its continuous contribution to the purpose."
Because money is created in the same way (selling treasury bonds to bankers at interest) the money to make a bomber, a tank, a bullet, shell or missile all adds to the bankers wealth through debts assigned by the ruling elite for the people to pay off. Although almost all of the material objects created in this way may be destroyed almost immediately through conflict, the debts incurred to make them are not destroyed but remain to enrich the ruling class elites who create them.
The arms manufacturers reap initial huge profits from increased production. The bankers from creating the money needed through debt at interest. And if the resulting domination of others through systematic state sponsored violence is successful, the material resources and manpower of the target country can also yield huge profits by exploitation of those resources through 'reconstruction contracts' and beneficial access to natural resources through the imposition of new laws which places ownership and control of those resources in the hands of dominating elite groups.
Domination of the target country and its resources creates profits for the ruling elite group as does domination of the domestic population to achieve these political objectives. The debts created for the domestic population may be used to restrict and control them through restrictions and controls applied directly to the economy, rationing for example, or more indirectly by imposing artificial limits on public sector pay, or enforced reduction in welfare provision with national debts to bankers cited as the reason the country cannot 'afford' decent pensions, education and welfare for the masses of the population. Of course, monopoly control of the money supply and control of the aggregate supply levers of the economy afford many other opportunities for ruling elites to exploit the productive capacity of the population to the benefit of controlling elite groups.
Also worth noting is that western democracies who normally advocate 'free markets' and 'laissez faire', in terms of free market decisions about what, how and for whom the economy as a whole should produce, in times of war return to centrally planned economies as advocated by communist states.
In the first world war ruling elites directly controlled over fifty percent of the whole of the British economy and in the second world war this proportional direct control was even greater.
Marx noticed it was the rich and wealthy elite class who ended up with the most wealth when free markets handle the 'for whom' question. He believed that government should address the inequity through central planning. Similarly, Marx noted that 'the what' question for economic output created a few millionaires with mansions when left to the markets, but left millions homeless and in poverty.
The market allocated massive resources to consumer consumption but left public needs understaffed and underfunded. Marx advocated central planning of the economy to overcome the apparent failures of free markets. In times of conflict British ruling elites applied control by central planning in both world wars. An unthinkable ideological construct in times of peace if current ruling elites are to be believed.
But whatever economic constructs ruling elites choose to apply in times of war both the strategic objective and political purpose is to enrich themselves by the domination of others through violence.
“Some background on special forces covert operations: statecraft.
Military goals and operations exist within a wider political framework.
When General MacArthur wanted to go 'nuclear' during the Korean war, he was relieved of his command for fear of escalating the conflict to all out nuclear war. In fact he was dismissed for insubordination in April 1951 by president Truman.
"Faced with the prospect of defeat, MacArthur's proposal was to use his technological advantage to attack the sources of the Chinese manpower and prevent them entering the battle (Korean War). However, doing this would in effect have altered the theatre and changed the strategic objective - thereby removing it from the political purpose. It was therefore not a viable option, and was rejected by Washington. This reflects the importance of the strategic objective always being within the context of the political purpose, in order to ensure both coherence and its continuous contribution to the purpose. In this case the strategic objective being proposed by MacArthur, the destruction of China's ability to intervene in the Korean peninsula, did not match the political purpose."[2]
Sir Robert Peel's[3] deflationary reform Act of 24 May 1819 was another attempt to get back to a true gold standard due to disparity between the value of the pound in paper and gold. The result - an unnecessarily large reduction in BOE credit caused a heavy fall in commodity prices, grave distress in many industries, and widespread unemployment. William Cobbett returned from America in 1819 and began to tour England. He noted the depressed condition of agriculture and attended some distress meetings of farmers. He told them that the fund holders who, under Peel's Act, were to receive full payment of interest and principal in an appreciated currency, even though the producer might be bankrupt.
They petitioned parliament, from all over the country, but there was no money for them under the Peel Act, but fat profits for Peel and his chums on induced changes in the commodity market. Peel was not even a member of the government at the time. He introduced his committees proposals in a series of resolutions to the House. Peel's resolutions, and the Bill based upon them, were passed without a division, or unanimously. Later on, Peel entrenched monopoly control of the money supply in British law under the Bank Charter Act of 1844.[4]
1. The Constitution of Liberty, Hayek, p.120
2. The Utility of Force, General Rupert Smith, p.201.
3. wiki on Sir Robert Peel
4. wiki on Bank Charter Act 1844
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