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Banker hegemony: Pax Lemmus

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So are the banksters all right after all?

Nope. All there is to show after 400 years is a kind of Pax Hamstera, or better, Pax Lemmus. The horrors of the 19th--20th centuries, now going off the horror chart in the 21st century. We run faster and faster, inventing and marketing ever new gadgets, and the standard of living, we now realize, is plummeting, not so much in dollar terms (that, yes) but in terms of all the ‘external economies’ which come along with those gadgets, and the lifestyle of homo hamsterus.

Keynes gave us a banker’s version of the basic income -- government debt in order to stimulate demand, but to be financed based on taxation and government deficit, not on government-created money, as C.D. Douglas wanted. Bankers do not want to give up their power, and Keynes was their boy. Probably it will take another 1917 to do that, and the prospects are poor, given the fact that the bankers defeated the Bolsheviks in the end.

Reinventing the wheel

But this is intuited by smart politicians, even if they do little to fight back.

America was created out of fiat money created by the colonists. The entire history of the US is framed by the battle over control of money. It was probably JFK’s greenbacks that did him in. The much reviled Nixon was actually the last of the FDR-inspired leaders to try to fashion a ‘capitalism with a human face’. He was planning a Basic Income for the nation* (he didn’t try JFK’s greenbacks -- given his and Lincoln’s fate). Is it possible that this and his detente with Russian and China were his real ‘crimes’, with Watergate a free pass to get rid of him?

In Canada, a 1974 pilot project in Manitoba under the New Democrat socialist government provided a guaranteed minimum income for all the residents of Dauphin. Good results: only new mothers and teens stopped working, the former to spend more time rearing newborns, the latter to study, showing higher test scores and lower dropout rates. There was also an increase in adults continuing education. The period saw a reduction in rates of psychiatric hospitalization, and in the number of mental illness-related consultations.

Ontario’s pilot project, started by the Liberals in 2017, in Lindsay, Hamilton-Brant and Thunder Bay, was shut down midway through its three-year trial by the Conservatives, not interested in giving capitalism a ‘human face’. Initial results were similar, with some participants going back to school, and lots of home improvements, putting the money directly into the local economy.

How many times must we reinvent the wheel? And these experiments could have been conducted without creating any new debt, if the governments were willing to do what they have the right to do, despite the hysteria from bankers fearing they will lose their cushy scam: unearned money from creating and then ‘servicing’ the debt.

The economic crises, especially income distribution, unemployment and the environment are multiplying, and they are all directly caused by our debt system, inducing obsessive ‘growth’ and money-based consumerism. 2008 looked like the moment when the bankers could have been lined up and shot, but instead, they got trillions in “quantitative easing” and million-dollar bonuses.

Then the Panama Papers of 2016, when offshore accounts finally were called on the carpet. Much (most?) of bank profits are whisked to these tax havens, bypassing governments, who gave the banks their money in the first place, and who use people’s taxes to pay the banks for the national debt interest that are the foundation of these bank profits. Wow.

It’s very hard to keep a step ahead of the banks, just as the banks must keep one step ahead of the economy, lending money to keep the economy rolling.

BI - thin edge of the wedge

C.D. Douglas cut through the fog with his theory, muddled though it was, and solution: estimate the gap between current production and necessary demand, and use Basic Income to fill it. Maybe there’s no need for ‘growth’ in the economy, or (heaven forbid) it might be better to have negative overall monetary growth. This is no longer up to the gods. The needs of the economy can be calculated.

Maybe a more demonetized life would be better, with people not bothering to work for a slave wage. How about reviving crafts, getting more education, enjoying more leisure before you’re too old to enjoy it? Use social decisions-making to regulate money, not haphazard forced loans, interest rate fiddling and recession.

Borrowing from Marx again, BI is a kind of death knell (or at least warning) that can put a stake through the capitalist beast, leading the way to government created money and onward to socialism!

It is quite possible to use our own experience over the past four centuries, and that of the 74 years that the Soviet Union survived (with only Cuba and North Korea hanging in), to make a rational economic mechanism, based on debt-free money, created by a government which, while popularly elected, must adhere to international norms (i.e., not destroy the world like the US at present).

Douglas’s acolyte in 1930s Alberta, Aberhart, was derided for producing ‘funny money’ but it is our debt-created money that is the joke (on us), not dollars distributed by a responsible government to real people, keeping a balance between production and consumption, passing on the ‘dividend’ of higher productivity to the worker/ consumer. As human labour is increasingly replaced by machines in the productive process, Douglas believed people should be free to consume while enjoying increasing amounts of leisure, and that the Dividend would provide this freedom. Hey, sounds like communism.

I have always be puzzled by the fact that even as productivity has increased many times, we think we are poorer than ever, forcing two parents to work full time, forcing students into debt, where formerly only the father needed to be a wage slave and education was free. Why are we not enjoying more leisure time throughout our lives, not just during the final years when we are too weak and sickly to really enjoy it?

Douglas wanted real money, produced and distributed to buy real goods for real people and real producers. Of course, it must be regulated to avoid inflation or deflation. But the goal is not to produce more jobs, but more consumption, including leisure. The jobs will take care of themselves. It’s not wage-labour that is our economic goal in life anyway, but balanced consumption and production. If anything, we should be aiming for less work, for work that is necessary, useful, not frivolous, harmful, merely there to produce a paycheck.

What about prices? Sure, some jobs will require higher pay, or might be discarded completely. People won’t want to do dreary, meaningless jobs, and will prefer unemployment to meaningless employment. Having a pizza delivered by harried uber cycles will cost more. Fine. Maybe that ‘service’ should cost more, or isn’t necessary at all.

Maybe a lot of frivolous jobs will disappear. What we do in the real world always has environmental costs. Better to do nothing than to do something harmful to yourself, society and nature. In their place, local small scale production, perhaps outside of the monetary system altogether, which benefit society and nature, will grow. .

Peaceful communal living, working, barn raising have always been there, only requiring the social mechanisms to activate this more benign lifestyle. All without money (and its corollary, war), or using community scrips to stimulate local production and consumption.

Reduce the need for money. By turning our economy into a totally monetized, bankified one, we gave banks control over life itself. That is the real ‘totalitarianism’. We become commodities with a price, in a system of wage slavery, no matter how rich the slaves may appear. Yes, per capita income has increased -- at least it did until the 1970s, but what does this tell us, except how monetized our lives have become?

Such figures are meaningless where money is less important, as is still the case in the (less monetized) third world today. Medieval life (at its best) in many ways was better than what followed: an adequate diet, only 5 months work a year, all without money (ok, the odd ‘sovereign’).

The end result of basic income and non-debt money will be less work, less money, less bank power. It then becomes the role of the government to regulate the extent of monetization, to figure out how to keep the economy and environment from exploding/ imploding. For what organization except the government has the social authority to do that? The slogan should not be ‘less government’ but ‘government that serves you’, government as accountant. Sounds like what Marx was dreaming about.

Change Finance

We are get there in fits and starts. The madness that bankster money brings means that the financial economy, which produces nothing, is now three times as big as the real economy. Only 15% of money that circulates in the financial sector is used in the real economy. The other 85% goes into speculation, making money with money. The day the Change Finance coalition of European NGOs in Europe marks each year is September 15, the day that ‘the bank too big to fail’ failed in 2008, sparking the big bang 10 years ago, with the fall of Lehman Brothers. Despite promises by Obama (and Trump), no fundamental change has taken place since.

Their 10YearsOn campaign points to 586 public banks spanning the globe; with combined resources accounting for a quarter of all banking assets, worth some $35 trillion (almost half of global GDP). Governments and communities have historically relied on public banks to channel support to development initiatives.

*Costa Rica’s Banco Popular has facilitated the ‘greening’ of the energy cooperative COOPELESCA, by financing the conversion of all lighting to low-energy LED through a low-cost loan, and by offering a $2 million low-interest loan to support the Juan Castro Blanco National Park.

*Germany’s KfW** has developed a strong green lending portfolio. In 2016, over €35 billion in new low-interest lending was dedicated to environmental and climate protection projects, with a focus on renewable energy development;nearly €750 million went to support the greening of German municipalities, local authorities, municipally owned companies and non-profit organizations via energy-efficient building refurbishment loans.*

It is a bit like an infant learning to walk, moving from swaddling clothes to crawling, and eventually standing on his own feet. No more strollers. The muscles and sense of balance are there. No need for massive, luxurious private ‘financial institutions’ to do what we can do at virtually no cost, if only we dared.

Why these issues now?

In Alberta’s Social Credit Party’s election in 1935, it won 15 seats, almost 50% of the popular vote. It went on to win nine subsequent elections, and governed until 1971, all the time laughed at, called ‘anti-semitic’. Hardly surprising, considered who the traditional bankers are, and that the Socreds were avowedly Christian.***

There were other similar experiments in money creation besides the ill-fated Socreds, some involving not just government creation of money, but local municipal government money, notably the Worgl experiment 1932-3 in Austria, which was a stunning success, creating an island of communal production/ consumption. Basically, taking the money creation process from the banking elites and putting it in local hands.****

Since the demise of the federal Socreds in 2009,***** several small fringe parties have attempted to promote social credit economic policy while not advocating the social conservativism that the Social Credit Party was known for, notably the Abolitionist party of Canada which ran 80 candidates in 1993 on a social credit style economic platform.

So the new experiment in basic income now being carried out in Ontario was rediscovering the wheel for the nth time. And the Conservative Premier Ford quashed the basic income idea -- for the nth time.

I’m not sure about A+B, but Douglas was right about

*a just price is a necessary political economic variable and it is the responsibility of government to make sure prices are just.

*the tendency of demand to lag means there is the need for constant expansion in debt-based money system, which means there is a need for planned obsolescence, and which has fated many of us to meaningless work just to keep the system going.

*government should control overall demand and use taxes on profit to distribute wealth.

*government should, if responsible, also create the money.

Unfortunately, the ‘democracy’ of capitalism still elects the likes of Trump and Ontario's Ford. That means we have now have the worst of both worlds -- a debt-based system and a debased democracy. Oy vey.


*The US came close to instituting a Guaranteed Annual Income in the late 1960s under Nixon, conducting experiments in 1968--1972 in New Jersey, Iowa, North Carolina, Indiana, Washington state and Colorado. They found that workers decreased their labor supply by two to four weeks per year, 13%, mostly wives and children. No lazy bums. That hopeful experiment lapsed with Watergate.

**Reconstruction Credit Institute, founded 1948, 80:20 owned by the German national and state governments.

***In 1945, Socreder Solon Low alleged there was a conspiracy of Jewish bankers behind the world's problems, and in 1947, and a Socred Member of Parliament read excerpts of The Protocols of the Elders of Zion into the parliamentary Hansard. Low did his penance in 1957 following a trip to Israel after which he made speeches supporting the Jewish state and the party’s policy to corral the bankers and end debt-based money creation died out. But, sorry, Low had a point. If we can use Shakespeare’s Shylock as the medieval Jewish archetype, the grasping hoarder of gold, perhaps we should call what’s taking shape in the 21st century as Pax Judaica or at least Pax aurum.

****200 townships in Austria wanted to copy it.  It was at that point that the central bank panicked and decided to assert its monopoly rights.  The people sued the central bank, but lost the case in November 1933. The case went to the Austrian Supreme Court, but was lost again.  After that it became a criminal offence in Austria to issue “emergency currency.”

*****After WWII their economic policies were replaced by social conservatism and ironically, given their implied critique of capitalism, anti-communism. This was an easier sell than their daring to point the finger at world Jewry as part of the bankers’ ‘conspiracy’, which was not a conspiracy at all, given it is done openly, though without anyone questioning it.


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Canadian Eric Walberg is known worldwide as a journalist specializing in the Middle East, Central Asia and Russia. A graduate of University of Toronto and Cambridge in economics, he has been writing on East-West relations since the 1980s.

He has lived in both the Soviet Union and Russia, and then Uzbekistan, as a UN adviser, writer, translator and lecturer. Presently a writer for the foremost Cairo newspaper, Al Ahram, he is also a regular contributor to Counterpunch, Dissident Voice, Global Research, Al-Jazeerah and Turkish Weekly, and is a commentator on Voice of the Cape radio.

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Eric's latest book The Canada Israel Nexus is available here http://www.claritypress.com/WalbergIV.html