Someone passed to us the text of a motion put forward by a school commission, asking that The Bank of Canada be administered by a cabinet minister instead of being administered by civil servants.
It is not difficult to sympathize with the thinking which inspired this proposal. However, the fact remains that it is an ill-conceived proposition. For it confuses functions. The members of parliament, the ministers, the members of the government are the representatives of the people. Their function is to represent the people; to act in those matters in which the people would act if they were able to be present all together in the parliament.
We are the people — you, me, your neighbor, my neighbor; the other fellow and the other fellow's neighbor. Now we are capable of knowing quite well what we want. We also know where to go to get what we want, or to whom to pass our requests for what we want. But very few amongst us are competent to actually get, by ourselves, the things we want.
For example, you know at which company to get the particular make of an automobile you want; you can specify the color, the number of doors, etc. But, like the majority of people, you are probably incapable of constructing any thing even remotely resembling on automobile. Nor would you think of journeying to the car factory and telling the workers how to make the various parts of the auto and how to assemble them.
In other words you are quite competent to say what you want, but incompetent to decide how this is to be accomplished. You can decide what, but not how. As far as the objective is concerned, the decision is yours; but the execution of this decision should rightly be left to the experts. The expert is not there to force you to accept anything he may decide upon. No, he is there to give you exactly what you want. But the choice of means whereby you are to be given your desire, is his business.
What we have said above in general, holds true for politics in particular. Our representatives and the cabinet ministers do not have to be, and generally are not, experts in banking, rail-roading, commerce, agriculture, mining, etc. There competence lies in being able to know and transmit the legitimate and feasible demands of the people to the right people. The members of parliament standing there in our place are expected to know what we want; the government is expected to see to it that those competent get the results we want, not to achieve those results itself.
Objectives are the business of the government; attaining those objectives is the business of the specialists — bankers where banking matters are concerned; engineers in construction, transportation companies when it comes to transport, etc.
When you elect a representative to parliament you don't elect a specialist in commerce or banking or engineering. You elect a man whose business it is to see that what you want is accomplished by economists, engineers and bankers.
That's democracy; to get results, not to meddle in matters that concern the experts alone. It is needs which logically give rise to demands. These demands are transmitted from above, down. But the activities necessary to fill these needs, logically begin with organizations qualjfied to produce what is needed. The orders starts with the chief and proceed on down, through the ranks until all the machinery has been set in motion and production gets under way.
In what concerns money and financial credit, you and I or anyone, for that matter, regardless of how slight our education, can quite easily understand that the basis and foundation of credit lies in the community. Consequently, money from its birth should not be the exclusive property of a privileged few who use it to exploit the community. It should be placed at the service of all without exception; it should aid and stimulate the economic life of the community. It should leave its source and return to that source with but one purpose — the financing of production and consumption. Now since the Bank of Canada is a national institution it is quite in order for us to ask that it be ordered to see that money does serve us to this end.
Note that we say: "the bank should be ordered" — in other words, the government passes the necessary directives to the Bank. The ministers and members of the government don't plunge into the technicalities of banking to see that we get this result. This is a matter for bankers, since, in effect, it is banking. And bankers don't come forth from the ballot box.
Furthermore, ministers are transient beings, here this election, gone the next. Or at best, minister of mines this year, minister of fisheries next, without being an expert in either mining or fisheries. If the various departments of the government had to be shaken up each time a minister changed you can easily comprehend what a mess would ensue. Ministers come and ministers go, but the departments of the government continue to function smoothly, thanks to the years of accumulated experience residing in the officials who have given their lives to a particular service. These individuals know well how to get, expertly, the results demanded by any particular minister or cabinet of ministers. Let us stress this point again: it is the business of the government, acting in our name, to require certain results; but it is the business of the particular and competent organizations to work out these results, to achieve the ends sought.
In seeking to outline the desirable monetary organism, we can think of no better an example of how such an organism should operate than the functioning of the established judiciary system. The government in no way assumes any of the functions of the court or of the judges. The government, with parliament, makes the laws. The government appoint's the judges. The judges. then make their judgements, and decisions, not according to the dictates of the government or the minister or of this or that particular portion of the parliament, nor even according to parliament as a whole, but according to the facts examined in the light of existing legislation. The judges are the authors of neither facts nor laws. The government is the author of laws, but is the author of neither facts nor judgements. There can, it is true, be errors in judgement, especially in regard to the evidence offered, the proofs. But is is difficult to imagine a better system for the administration of justice here on earth than the one that is presently in operation. The hearing of cases is not in secret but in public where the people can judge the fitness of judgements and the competency of judges and through applied pressure on the government, see to it that suitable men are appointed to the bench.
It is somewhat after this system that we conceive of the ideal monetary system. The government would lay down the objectives according to what has been approved of by parliament in our name. It would appoint the officials charged with realizing these objectives, that is, adequate financing of production and consumption. But the government would not decide how much money was to be put into circulation or how much was to be retired from circulation. That would be for the appointed officials to decide, according to the facts presented by production and consumption. And neither the government nor the officials would be authors of these facts; they would proceed from free producers and free consumers. There would be nothing mysterious or mystical or elaborate about such a system — no more so than statistics, additions and subtractions. Public balance sheets would make it possible for anyone to see exactly how the operations controlling the floodgates of credit were being carried out.
Such a system would be according to the principles of Social Credit as set down by Douglas.
We haven't as yet attained such a system, either in Canada or anywhere else. If you can imagine a judicial system in which the most aggressive individuals elbowed their way by sheer force or by all manners of devious scheming into the positions of judges, and then used these posts to their own profit and for no other reason; then you will have a fair idea of the state of our financial system.