Let us answer by asking another question. Where did the money come from the very first time it was used in trading when it replaced the more difficult system of bartering? It could not have come from taxation.
Money consists of figures printed on metal, paper or in bankbooks. These figures confer the right to choose freely from products and services available for sale in a country.
Once the right of each individual to a Dividend is recognized, all that will be needed is to issue these figures to each individual.
Men invented money to facilitate the sale of products; the more products there are, the greater the amount of money needed.
Productive capacity increases when the size of the population increases. If the number of people in a region increased from 100 to 10 000 without an increase in the amount of money, exchanges would undoubtedly be paralyzed. An increase in a population warrants the need for more money.
The increase in production due to progress also calls for an increase in the supply of money. Who would argue that the amount of money should not change when the productive capacity increased?
Some may say that money would pile up if a Dividend was issued month after month. This is not the case. The Dividend will be issued regularly, but it will be spent at the retailers, and through the retailers the money will be returned to the National Credit Office. MICHAEL depicts this operation.
The amount of money in circulation should normally increase each year. But for there to be more money in circulation, it must be added somewhere.
It must be noted that the volume of money is increased in order to recognize an increase in productive capacity.
What causes products to be made? Consumer demand. When do consumers give orders or direction to producers? When they have money with which to choose and pay for goods and services.
Increasing the purchasing power of consumers, so that directions to producers might be increased, requires that (new) money be placed directly into the consumers’ hands.
Each time new money is created, citizens will receive a Dividend. This is their share of the common good.
The creation of new money, by issuing Social Dividends to all members of society, can only be done by society itself since it is a common good that must be distributed.
Will banks be the institution that does this for society?
Banks were not established to give grants to consumers. A bank is an institution established to facilitate financial operations by receiving, investing and manipulating money that is already in circulation and it seeks to make a profit while carrying out these operations.
Only the government, as society’s trustee, or an agency it appoints with a clearly defined purpose has the social authority to increase the amount of money in circulation.
An increase in the amount of cash credits in the hands of consumers will be justified as long as maximum productive capacity has not been reached. Their amount and frequency must be decided to prevent sudden increases and inflation while at the same time allowing the productive capacity to be mobilized. How the Dividend is distributed is a matter for technicians to settle. Dividends could be distributed by a simple accounting entry made to the account of each citizen.
Presently, there are obstacles to the satisfaction of basic human needs caused by a financial system that was established by men. As the system was established by men it can be modified. This is the goal of the monetary proposals of Social Credit and its Social Dividend.
To those who ask: “Where will this money come from?” we would like to ask: “Where will the products come from?”
Entering an amount in a bank account is easy to do. It is much easier than making the products that are to be sold in the marketplace. It is easier to distribute a Dividend than to make the goods that the Dividend will purchase. The money issued as Social Dividends does not come from taxation. It is new money that will be added to the bank account of each citizen.
Yes, new money. This is nothing out of the ordinary. Money is created day in and day out. The birth of money takes place in every bank.
Yes. When someone brings money he saved to the bank, the cashier places it in the bank drawer and adds the amount to the customer’s bank account. It is not new money. It is “pocket money” that was turned into “bank account” money.
But when someone comes to the bank and a loan is granted, the bank manager enters the amount as a credit to the borrower in the customer’s bank account. In this case, the borrower is getting brand new money since the banker did not take one penny out of his vault nor did he take anything from other depositors’ accounts to create the approved amount of credit.
This is why we say that money is easy to make.
No, money is not made by the government as most people believe, nor is it made by an institution that represents the population.
Money is made by the banks and created when a loan is approved. The money is sent “to the grave” when loans are paid back, minus the amount kept as interest fees.
The banker creates temporary money with the use of a pen. The same money will be destroyed by the opposite process, when the borrower pays back his loan.
Only the banker has the privilege of creating temporary money to which he adds his conditions regarding its birth and longevity. Thus, the abundance or scarcity of money depends on the actions of banks.
No, banks create money, also called financial credit, but they do not create the basis for money. The basis for money is the productive capacity of a nation, without which money would be without value.
It is this financial credit that allows productive capacity to be set in motion and wealth to be created. Money does not create wealth per se, but it allows us to do so.
What needs to be held against this system is not so much that the banker is authorized to create money since someone has to do it as money cannot create itself. What is wrong is that bankers have absolute control over financial credit; they have the power to impose their conditions as to who gets money and for how long. What is wrong is that the country’s entire economy depends on the bankers’ decisions. It is not so much the bankers’ profits but their power that is disastrous.
This disorder must be corrected and Social Credit would correct it.
A New Economy must be established. We firmly believe that the logic of Social Credit and its proponents’ “love of neighbour” will eventually prevail.
If affluence is absent from our homes, it is because production was wilfully destroyed and abundance shackled. Many are kept unemployed and potential goods that could be manufactured are not. During both periods of war and peace production is torpedoed.
Those who thought they could guide the crowds told them to save their money. Save what? Save bread? But there is too much wheat! Save clothes, shoes? The producers of these goods are unemployed because their products remain unsold.
They wanted us to save money. Our elites are guilty of ignorance or cowardice.
The problems of production and transportation are solved when compared to the problems of distribution. We keep reasoning as though earth was still covered with burls and thorns.
For the last 20 centuries the Word was made flesh. The Church asks the Eternal Father to grant us our daily bread. The heavenly Father gives us an abundance of goods and we insult Him by locking up this abundance behind closed doors.
It is a social economy that we demand; an economy that guarantees that each and every member of society will receive their share of earthly goods.