FIXING THE MONEY SYSTEM

Lets consider the forest industry -- or any industry for that matter. Consider the men and women in that industry, the LABOUR, who with the power of their union lobby for higher wages. With their collective force, they get those wages that they want! How great is that, since now they can use that extra money to go out and buy more of what they need and want! But is it really so, or are we being deceived? Are the working men and women of our society getting further ahead each year, or are we falling behind?

Now consider the machines that the forest industry uses to bring lumber into production for all mans needs from homes to furniture and so on. Consider the time saved by the chainsaw, the bulldozers and graders used to make the roads, and the massive trucks that transport the lumber out of the woods and into the mills. This is what we call CAPITAL.

If we call the cost of labour "L", and the cost of machines and tools (and other overhead charges) to be "C", then we have the total cost of production to be L + C. Notice that every time there is an improvement in the capital (the machines) that are used in production, the cost of production goes down -- over time. This is why we often refer to machines as making mankind "more productive". This results in the "Real Cost" of production falling over time. As a result, prices should also fall with the progression of time. This is in fact the primary reason some products fall in price over time. Certainly prices do not fall because labour costs fall, unless the jobs are lost to predatorial overseas slave rate and sweatshop wages.

But what about "L"? The cost of labour is forever rising, and every time the union goes to the employer to demand a raise, the cost of production goes up even more. It is like a dog chasing his tail. So what is going on? Why do the workers want a wage increase anyway? Why are they feeling the pinch?

It is simple. If the forest worker produces one unit of wood product at a total cost (L+C) of $75 and that same unit of wood product retails for $100, there is a discrepancy of $25. How can that worker ever afford to purchase his own output? The answer is that he cannot. He may purchase up to 75% of the output, and the remaining 25% remains on the market unsold. In a large national and world economy, the net effect is the production of a mountain of goods and services that cannot be purchased because there is not enough money in the market to buy them. But this is not a problem of over production, it is a problem of lack of money. This is an inherent problem that is impossible to overcome under our current system without going into the perpetual and ever increasing debt trap.

What is the solution? The solution is to use the existing Bank of Canada, which we Canadians own, direct the National Credit Office to pay the buyer of the unit of wood the difference of $25 in the form of a dividend. Or, supply the factory with the rebate of $25. Either way, the factory get's the $100 it wants, and the consumer gets what he wants as well. The buyer is getting what he can afford, and the factory is getting the money they want for making that product.

So how was it that the forest worker was able to produce product of a greater value than he could purchase in the first place? Simple. He used machines.

The machines and technology and "know how" man uses to produce everything are part of the "communal capital" of not just the nation, but the world. Every tool, technology, and method we use to produce has built into it a few millenia of human progress. Even as we all benefit from man's collective progress, so we should all be rewarded for it. No one single person can dig the ore needed to smelt the iron to make a car, for where will he get a shovel to dig the earth with? No single person can drill a well to get the oil from the ground needed to make the gasoline for the engine of the car, or to make the rubber tires.

So the reason our forestry worker can produce more than he can purchase is not because of what he as done, but because of what everyone who has lived before has done. This forestry worker (and everyone else) has an inheritance from the moment he is born, a greater and increasing inheritance today than at any other time in history.

The only question is how to share the benefits from this collective know how to everyone equally. The answer is to establish a National Credit Office to manage the function of refunds and dividends that need to be pumped into the economy to ensure an total balance between production and the ability to purchase that production. This then is the end purpose of economics -- to ensure that mankind has the ability to supply his wants and needs, and once having his wants and needs supplied, to engage in life -- individuality, and not merely subsistence from paycheque to paycheque.

Now to answer two common questions about the National Credit Office and Social Credit. Some will argue that this sounds like socialism. It is not. Socialism is to take from one, against his will, and give to another. Socialism is false philanthropy. Socialism is what we currently have right now. We should move away from it, and give the power back to the people.

Social Credit is neither false, nor philanthropy. Social credit is to create money to fill the gap in man's purchasing power created by mans hard work and ingenuity. If you wish to defeat Socialism and Communism once and for all, you must employ the Social Credit money system against them. The Social Credit money system is diametrically opposed to socialism.

One other common objection is that Social Credit creates inflation. First, let us define inflation. Inflation is when the purchasing power of a unit of currency is diminished over time. If Joe can buy a home for $50,000 in 1960, but the same house costs $350,000 in 2008, we can safely say that the purchasing power of one unit of currency is now 1/7th of what it was in 1960. This equates to about fourteen cents of a dollar. This is a good example of what inflation is. However, if the same house still costs $50,000 in 2008, then one unit or one dollar of currency still has the power to buy what it had the power to buy 48 years ago. In this case, inflation is zero because the purchasing power is not diminished. Social Credit will not cause inflation because it only adds money to the money supply to match production. Currently, the money system regulates production, and this causes inflation. Under Social Credit, the money system is controlled by production the way the wheel of a car is controlled by the engine -- not the other way around. This means inflation is not possible under Social Credit, but clearly inflation is clearly a fact of life under our current corrupted money system.