Economics, aside from financial conventions is simply the application of energy, human and non-human, to the conversion of material into forms having utility or pleasure for humans. In nature these processes are automatic and simply flow—where nature abhors a vacuum. For example, we speak of the “balance of nature”, of homeostasis in physiology, the principle of sufficiency in engineering. Production and consumption are merely two sides of an equation and neither has any reason for existing without the other—there is no incentive to produce without a prospect of consumption and there is no possibility of consumption without production.
Money is an artificial human construct or system of accountancy and there is no reason automatically to assume that it reflects accurately the relationship between production and consumption. Our money or accountancy system should enable all available production factors to be mobilized as desired and all production to be accessible to the community simultaneously and dynamically as it is completed and becomes physically available. From a macro-economic standpoint the entire society of individuals should have access to the total production in any given production or costing cycle. This is simply a fulfillment of natural law. All organisms have an inherent right in natural law to draw sustenance from their environment. This reality involves no abstract or pseudo-moral considerations.
If we examine the overall flow of industrial costs and prices relative to the flow of distribution of effective incomes capable of liquidating these costs, we observe that the former progressively increases relative to the latter. While it is true that increasing efficiency of production technique may lower unit costs this is irrelevant to the argument which involves an overall ratio revealing an increasing disparity. If nothing intervened to facilitate the purchase of otherwise un-purchasable goods the economic system would simply cease to function because producers could not recover their costs through sales. We know why the system carries on, albeit with repeated alternating high and low activity. We borrow money to fill the “gap”. This money is issued by the banking system as credit in the form of debt that is repayable from future financial earnings derived from future production cycles. In other words we meet the financial costs of today by increasingly mortgaging our future in order to maintain the farce of carrying on. We pay the financial costs of goods produced in the past using incomes derived from present earnings which will appear in prices of goods currently in process but not yet on the market. We pay twice over.
The “disconnect” should be obvious. However, because we operate in accord with an imposed or impregnated Puritanical moral imperative which demands essentially that the earnings of labour should be the only justification for consumption, it is not obvious because of a mental, emotional and false “moral” blockage of rational thought or cognition. Douglas said that modern civilization is based upon a Incarnate Lie, i.e., a false metaphysics—that society is hypnotized and that only a drastic de-hynotization can save it. The various versions of the “labour theory of value” are a manifestation of this delusion. If one could prove that labour produces all wealth the theory might have merit but such a hypothesis flies increasingly wide of the mark. Douglas added to the standard land, labour and capital factors of production the Cultural Heritage, or generalized inheritance, as a fourth and increasingly important factor. It is in this fourth factor that an answer to the modern economic conundrum can, and must, be found.
It is quite impossible to live beyond one’s means. You cannot eat today next year’s crop and to imagine that this is possible is to fall victim to mere numerical legerdemain. Balanced budgets in conjunction with an unbalanced price-system are a delusion—a mathematical impossibility. It is equally foolish to imagine that we cannot live according to today’s means without distraining upon future means.
As to the “perversion” of production policy by the present financial system, I will go much further to brand the policy of full-employment as a bizarre, debased and blasphemous misconception of the nature and purpose of human life—a ruinous and exploitative policy dependent upon mass waste and colossal destruction which results in constant international friction and universalized murder manifest in continuous wars of destruction of human lives and property. The economy of the United States is, I understand, directly and indirectly, approximately fifty per cent. dependent upon the war industry.
There is nothing edifying about such a situation where so much of the population is dependent upon producing the means of mass destruction so that they can provide for the necessities of life readily available, having been produced in a previous cycle and constituting an existing inventory awaiting sale. As Douglas asked, why should we be forced to produce a machine gun before we are allowed to eat a cabbage which is currently available for human consumption. There is no debt in nature and there should be no accumulating residual financial debt in the process of human production and consumption. The banking fraternity has no compassion for mankind which they regard as subhuman work and cannon fodder, ripe for the picking—for the confiscation of wealth and centralization of power. The National Debt is a fraud and should be transferred to the credit side of the ledger as a fund from which National (Consumer) Dividends and Compensated (Retail) prices can be funded. By their iniquitous process of pre-maturely cancelling consumer purchasing-power the banking system has appropriated the communal capital and we, the consuming public, must take effective action to secure its recovery through a means of beneficial (not Marxist or direct) ownership in the form of unconditional rights to consumption as the rightful but currently usurped inheritance of mankind. We must reassert our right to Life.
It would be a misconception to separate the policy of Marx from that of Lenin or Mao. Marx’s erroneous labour-based concepts lead inevitably to a bureaucratic, centralized administrative state and he never explained how this monolith would somehow miraculously dissolve. Such a promise is pure abstractionism and can practically be nothing more than a chimera. Yield unto me all your possessions and your independence—and I will then make you free. Not likely.