|Major C.H. Douglas|
They find the scapegoat in the money supply and the credit monopoly of finance capital. They often “prove” the existence of “the banker’s conspiracy” by exposing the Federal Reserve. They insinuate that bankers deliberately instigate panics and crises. They do pay no heed to credit crunch as a symptom and evidence that the crisis is already under way, instead of being the fundamental cause of its occurrence, and pass over the fact that bankers, like other capitalists, can only invest money where there is the prospect of profit. The financial magnates are as helpless as any other capitalist group to start or stop a general capitalist crisis, although they have induced temporary credit stringencies for their private purposes. They hold a basic belief that money is not (or should not be) a commodity, but a system of worthless tokens (fiat money). They mistake the superficial forms of modern money (its paper dress as currency or its phantom bookkeeping existence as checks) for its inner nature. They completely fail to comprehend the function of money in a commodity producing society, and particularly under capitalism. As the general equivalent of value, money is not only a commodity but the king among commodities, destined to reign so long as capitalism endures.
Nor do these currency cranks fully comprehend that money is subject to all the laws of capitalism. Chief among these laws is the necessity of transforming money into capital, and using capital to appropriate surplus value. The financier accomplishes this by loaning money to the industrialist or the merchant, who, in their turn, appropriate their share of surplus value directly from the working class. The self-same capital is used for exploiting purposes by both groups of capitalists, and yet the new economists condemn the bankers alone. Their position amounts to this: the capitalist may exploit the working class, but the finance capitalist must not exploit his brother capitalists.
At the bottom of it all is the fear of the small businessmen of the Frankenstein monster of the Big Banks. The monopoly of credit is the means by which large corporations exploit the lesser capitalist groups. They charge the banking industry with the creation of debt although that process is only a special case of the continuous transformation of social wealth into private property under capitalism. First, the power of creating credit is to be taken away from the private bankers and vested in the state. Either by nationalization of the banks or the creation of the North Dakota State Bank model. The scheme is utterly utopian. If credit was nationalized, as it is for all practical purposes in many capitalist countries today, it would simply put a more powerful weapon in the hands of the monopoly capitalists who control the state, and be used, as it is in those countries, to protect the profits of national capitalists against foreign competition. It appears radical in form but proves to be reactionary in substance. Its propagandists pander to all the confused prejudices of the impoverished ‘middle’ classes, providing a pseudo-socialist covering for their outspoken hatred of finance capital, their nationalism and, in many cases, their anti-semitism.
The fundamental cause of capitalist crises is to be found in the antagonisms of capitalist production and this cannot be repeated too often until it eventually sinks into the minds of those who want capitalism with a humane face.