Page 20 - A Social Dividend: An Income Guaranteed to Each Citizen
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Governments, insead of whipping the people, whip the bankers.
u But when someone comes to the bank and abundance or scarcity of money depends on the
a loan is granted, the bank manager enters the actions of banks.
amount as a credit to the borrower in the cus- 84. Do banks create wealth?
tomer’s bank account. In this case, the borrower No, banks create money, also called finan-
is getting brand new money since the banker did cial credit, but they do not create the basis for
not take one penny out of his vault nor did he money. The basis for money is the product-
take anything from other depositors’ accounts to ive capacity of a nation, without which money
create the approved amount of credit. would be without value.
This is why we say that money is easy to It is this financial credit that allows product-
make. ive capacity to be set in motion and wealth to be
83. Isn’t money made by the government? created. Money does not create wealth per se,
No, money is not made by the government but it allows us to do so.
as most people believe, nor is it made by an in- 85. Does this mean that the creation of
stitution that represents the population. money by the banking banking system is
Money is made by the banks and created wrong?
when a loan is approved. The money is sent “to What needs to be held against this system is
the grave” when loans are paid back, minus the not so much that the banker is authorized to cre-
amount kept as interest fees. ate money since someone has to do it as money
The banker creates temporary money with cannot create itself. What is wrong is that bank-
the use of a pen. The same money will be de- ers have absolute control over financial credit;
stroyed by the opposite process, when the bor- they have the power to impose their conditions
rower pays back his loan. as to who gets money and for how long. What
Only the banker has the privilege of creating is wrong is that the country’s entire economy
temporary money to which he adds his condi- depends on the bankers’ decisions. It is not so
tions regarding its birth and longevity. Thus, the much the bankers’ profits but their power that is
disastrous.
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