Race, Culture and Nation
On Planning the Earth
Economics- From Top Down, or Bottom Up?
is generally credited with having started the worldwide popular environmental
movement now known as the Green Movement with her famous book "Silent Spring",
first published in 1962. It is relevant to quote my contemporary review in Forestry
36 (2) l963:
the President down, "Silent Spring" rocked the U.S.A. in the year following
its publication, which explains the spread of its influence to Europe and thence
through the world. But by the following year the great chemical firms which produce
pesticides had got around to debunking it, especially at scientific conferences,
as 'an unscientific work of advocacy.' Unscientific it is not. It is thoroughly
researched and referenced. A work of advocacy it is, but no more so than much
of the 'orthodox' scientific literature implicitly supporting the accepted use
of pesticides on economic grounds.
One result, when combined with the enormous publicity the book has received ever since, has been largely to obliterate the memory of the early pioneers in constructive ecology. Even the great Sir Albert Howard, the father of the 'organic' movement, is scarcely remembered or known to the younger generation to-day, or Sir Robert McCarrison ("Nutrition and Health") or Dr. M. C. Rayner on mycorrhiza, G. V. Jacks and R. O. Whyte ("The Rape of the Earth"), The Earl of Portsmouth ("Alternative to Death"), H. L. Massingham ("The English Countryman") and many others whose pioneer works are now forgotten in the euphoria of 'Green' politics.
When a powerful emphasis on pesticides and pollution was added to the aftermath of World War II with its 'Atomic' ending, it was not, perhaps, surprising that fear, doom and gloom should have dominated the scene for a while rather than the courage and creative energy which are required for effective remedial action, of which there are now hopeful signs.
Academic Economist in Real World
An important influence towards balance and constructiveness has been E. F. Schumacher's book "Small is Beautiful" (A Study of Economics as if People Mattered) which appeared in 1973, and which summed up and pulled together with common sense and a deeper philosophy based upon religion much of that spate of literature on man and his environment which appeared in the 1960's and early '70's. Nowadays it might be described as the 'Bible' of the sane core of the Green Movement - i.e. that part of it which has not been seduced into party politics. It is something approaching a miracle that an academic economist of such distinction should have been able to enter the real world to the extent that Dr. Schumacher did, but then it is reported of him that he found theorising without practical experience unsatisfying, so he went into business and farming to gain it, and was later President of the Soil Association.
Even so, his 'economics' background placed certain limitations on his distinctive vision of reality. In his first chapter he attributed our evil predicament largely to the universal error in the illusion that "the problem of production has been solved," and that what we need now is " education for leisure" in the "rich" countries, with the transfer of technology to the "poor" countries. He denied that the problem of production has been solved, on the grounds that it is being solved by the expenditure of real capital, such as the fossil fuels, coal and oil, and even more by the destructive expenditure of the living nature around us, and of human lives and energies in doing these destructive things.
is this thinking in terms of economic reality by an economist which makes me marvel.
In the course of a lifetime I have tried to present this viewpoint to economists
of the Left (when resident at Toynbee Hall) of the Right (when a Liberty Scholar
in California) and of the Centre (among University colleagues): but entirely in
Not even Schumacher realised this; though like many others he blamed the seeking of money and money profits as the major cause of the evils he denounced, but did not explain why money must be sought so desperately. Yet he rendered a great service in drawing the distinction between the Earth's real capital and real income, and by initiating the concept of Intermediate Technology (in contrast to High-Tech especially for the Third World). Nevertheless, it is not an illusion that human invention in science and technology has very largely solved the problem of production of almost anything, be it nuclear bombs, space probes, or improved crops.
It has been solved, but wrongly. We do have this enormous inheritance of power which has enabled men by its misuse to squander the earth's capital in the ways he rightly deplores, just as it could, if properly used, enable mankind to abolish unsought penury and live a creative life in harmony with nature.
A Pressure that Induces Destruction
in the broad sense this misuse of our technological powers is due to the wickedness
of man, or as the theologians put it, to his fallen nature, and especially as
Schumacher points out, to the sins of greed and envy, can scarcely be denied;
but that does not take us very far when we are considering .the collective rather
than the individual. It is simply not true that most normal men or women, if free
to follow their own way, instinctively destroy the environment that sustains them.
If it were so the human race could not have survived. There must be, and manifestly
is, a universal pressure inducing them so to behave, and it is not far to seek,
though never identified by economists, not even by Schumacher.
Now, however, the nature of money has changed radically, but because the change has taken several centuries to reach completion its full implications have never been assimilated into economics. The subtitle to Schumacher's book A Study of Economics as if People Mattered (my emphasis) gives the game away. Why was the 'as if' needed? Why did people not matter, except as numbers, to Economics before Schumacher, and for the most part even more after him, since Big, though not Beautiful, is money-powerful?
Surely because Economics is now entirely dominated by money and is detached from reality. Because money is now no more than a system of book-keeping, of figures representing 'credit,' i.e. debt repayable with interest, and because no such figures reach the public as new spending power without having somewhere originated as such debt. Debt involves spending and consuming in advance of earning and producing, and hence the crime of debasing the currency is now permanently built-in to our monetary system under the name of inflation. This in turn imposes a moral strain upon the whole population - mathematically caught as it is in a trap of collapsing incomes and savings from which it struggles to escape by demanding, whining for, howling for, quarrelling, striking and picketing for, more and more and more money-figures in a futile attempt to make up .the deficiency, or even to get ahead of it.
Debit-Finance Necessitates Waste
At the same time, on
the management side, debt-finance rules completely. Everything must give way to
it. Money-profit must be made at all costs of real waste and squandering of energy,
materials, truth, honesty, common sense, courtesy, even simple, basic, normal
human efficiency. We have become so accustomed to the wild, insane, sub-human
inefficiency of all large, computerised businesses which, from the human point
of view, have not the practical intelligence of a mentally deficient five-year-old
child that we now take it for granted. Only the elderly, who can remember when
this was very much less so, are still aware of it.
True! the correction of our inflationary debt-system would not change human nature, nor result in a Utopia, nor solve all our problems, but it would cast aside an intolerable moral burden, and render their solution possible, which at present is simply, mathematically, impossible. To blame the staggering and retrograde steps of a man trying to climb a hill dragging a useless ton-weight entirely on his weakness, is not the best way to help him recover his strength and will-power.
The tremendous publicity for Green ideas has achieved something in the field of economics. We now have a vogue for 'environmental' or 'ecological' economics which is trying to include money-estimates of the environmental cost of projected schemes in the general financial costing. Perhaps this is better than nothing. At the time of writing the proposal to privatize the power industry has proved impracticable for the nuclear part of it because of the huge, but quite incalculable and open-ended costs and uncertainties of nuclear safety and of waste disposal. When these are included, nuclear power, it seems, becomes quite 'uneconomic'.
never was in real terms ; but it is characteristic of our 'economics' that
there is no realisation of this until an attempt is made to put it in terms of
entirely unpredictable ever-inflating credit-figures. Ironically, this is contemporaneous
with much advertising of the cleanness and safety of nuclear power as compared
with power from fossil fuels, since it produces no Greenhouse gases, So how now
do we calculate the cost in imaginary future interest on imaginary future debt
of the emission of such gases and their problematical effect on planetary warning?
Economics From the Bottom Up
What is needed now is not an attempt to graft the personal quality of caring for people as individuals onto an impersonal, numerical power-system as seen from the credit-creator's and usurer's point of view, but to invert the whole thing, and create an economics from the point of view of the producer and consumer who live in the real world, producing and consuming real things or services, and are the frustrated victims of inflation and debt. Economics from the Bottom Up, it has been called, and it looks entirely different from the accepted Economics from the Top Down.
of all, let us get our nomenclature right. What is commonly called 'credit' is
the moneylender's term. To us its proper name is debt' ; but try that on the academic
economist as the general term for credit-money and you will soon discover from
which side he views it, and regards it, moreover, as a taken-for-granted and immutable
Now what, in our experience, is the chief characteristic of debt? It is to do with time is it not? It is a time-grab. As the advertisements say : Have now, pay later ! It is buying past real production with future money income. That means that there must be a future money income and not only that which we need for a livelihood but also that which has already been spent in advance, plus its cost in usury. Under present circumstances for most people that means 'employment' by a paymaster who is under similar but larger-scale pressure to repay debt as well as keeping his business going, which means in profit.
Inflation a Mortgage on the Earth
Is it not manifest that continual inflation of costs, which is from our point of view the debasement of our money, is mathematically and inescapably built-in to our economy as it is to our experience ? That this places a vast burden upon human nature in the form of temptation to all the vices of avarice, greed and envy as well as fear, despair and puritanic condemnation, is sadly obvious, but even apart from that the imposed necessity of 'have-now-pay-later' cannot help expressing itself materially in that constant mortgaging of the planet's future of which we are at last becoming aware.
Top-Down Economics is irrevocably committed to the maintenance of a totalitarian interest-bearing credit-money (in our terms debt-money) as a means of government and control for which it is quite openly used by all governments on the advice of selected economists. The various 'devices' for 'fighting' the consequent built-in inflation such as making money-lending outrageously greedy in terms of interest, thus increasing the cost of everything bought on credit (notably houses) or limiting wage-incomes thus increasing consumers' need for more borrowing while scaring them off it, are quite insane from the Bottom-Up view-point. But from the Top-Down viewpoint they all increase the money-control which is the essence of the modern form of slavery. Since our present credit-economy with its positive feed-back would automatically proceed to hyperinflation and total breakdown unless throttled from time to time, and likewise to breakdown through recession if the throttling were too violent or prolonged, this stop-go manipulation of our economic lives has become a major part of the art of government.
consequence of Top-Down economics is the progressive centralisation of production
and supply, and so the economy becomes more and more completely 'supply-led' with
money-return becoming more and more the sole consideration as to what is produced,
and therefore either wasted or consumed at a price which includes the wasting.
Consumer's Interest Sacrificed
Only those with longish
memories can realize the extent to which the consumer's interest, economy, convenience
and time are being progressively ignored by the supplier and producer in favour
of their own short-term, monetary consideration, whether as managers or wage-earners.
Examples are innumerable, almost universal.
it or not, once in London and other large cities a letter or post card posted
in the morning would be delivered the same day. The postage stamp for the current
letter rate, whatever it was, was always red, and colours were clearly distinguishable,
not as now. Passenger's heavy luggage sent 'luggage in advance' by rail would
be delivered at the address about when they arrived themselves.
Sabotage of Lives, Energy, Resources
Every reader will have experienced the innumerable trivial wastes and interruptions of life which are imposed upon us all : each trivial perhaps in itself, but when multiplied by millions they give us a glimpse of the immense sabotage, both of our lives and of the world's energy and resources, which is being carried out in the name of money-profit, and of money-slavery called 'employment.' If the hiring of labour were required only for the work of supplying people with what they want, as efficiently as possible in real terms, the amount of employment could be reduced to a fraction - far less than half what it is now -and with it the expenditure of energy and of the earth's resources.
is no exaggeration ; if anything an understatement. How often nowadays is a job
done promptly and properly, first time off? How often does an enquiry lead us
straight to someone who knows his business as most tradesmen or craftsmen used
to ? Most large organisations are less than quarter-witted in dealing with the
individual customer. They can deal only in standard forms and we all have ghastly
stories of the waste of energy and fury necessary to batter a way through to someone
who can use some intelligence and responsibility.
the commercial use of the computer, which is increasingly being used, not so much
to relieve the human mind of purely mechanical calculations but as a substitute
for human properties of common sense, intelligence and consideration for others,
so that these properties are noticeably disappearing from people in the commercial
scene. They are being mentally 'pithed' by being hired for non-use of their faculties.
Qualitative Intelligence or Quantitative Operation ?
It goes far deeper than is generally realised. Debt has always existed since money existed, but the rapid (in historical terms) transformation of money from a real metal coinage of intrinsic value to a symbolic accountancy system based entirely on interest-bearing debt - a transition which has been completed only during this century - was a necessary condition for the equally and excessively rapid revolution in those industrial arts which have replaced qualitative human intelligence, care and attention with a witless and incredibly wasteful, quantitative, mechanical operation.
It is indeed true that many of the
benefits of our civilisation have been grabbed too soon and out of context through
mortgaging the future by means of 'credit,' and we should now be hard put to it
to do without them. It is also true that the present scale of waste and destruction
would be quite impossible without 'credit,' and the monstrous scale of those orgies
of massacre known as World War I would have been out of the question.
No Limit to Figures on Paper
nature of this change from the real (if inapt) to the unreal is fundamental and
quite radical. There is a natural limit to 'real money,' whether it is of gold
or even paper and figures if they correspond in amount to real wealth ;
there is so much, and when that is used, there is no more. But there is no limit
to figures on paper issued at will on criteria related only to the recovery of
more figures on paper, let alone in a computer.
The price, though, will be real (i.e. non-monetary) and cumulative, and totally outwithall monetary computation. And it is no earthly use making appeals to religion or ethics or care or reason or other human qualities to numerical units of the money-controlled mass, whether as units of money-grab or money-spend, for they are not being treated as people, but as dehumanised extracts of humanity.
Historically the transition from metal coinage to paper credit is understandable. It was becoming intolerable that the productivity of a growing technology should be limited by the availability of gold, silver or other coined metals. The substitution of paper promises to pay them was convenient, but provided no more money until the crucial step was taken with the issue of more such promises than there was 'real money' backing them - nowadays referred to as 'fractional reserve banking.' This open fraud which liberated people from the stranglehold of gold was generally welcome to those who were financially aware, but it has never been mentally accepted by the bulk of the population who simply take whatever is 'officially' given them as 'money' now that its purported promise to pay 'real money' is generations past. Now even the 'fractional reserve' itself is a matter of credit at a Central Bank, so that the whole thing has become detached from any basis in reality.
Fraudulent Claim to Ownership
The fraud here lay not in the substitution of a paper and book-keeping accountacnt system for the unsatisfactory metal one, but in basing it 'fractionally' on gold and then claiming ownership by the issue of extra claims to wealth so created at small cost, an ownership not extended to the physical and capital real wealth of the debtor if unable to repay it.
This is the point : not that lending and borrowing, i.e. investment, are necessarily bad in themselves ; but that the debt is generated in such a way that it can be repaid only by more debt. It is an unstable system with a positive feed-back towards breakdown. Moreover, with such a fraud at its base, its maintenance depending on public 'confidence' (i.e. credulity) that the 'real money' was there, monopolisation was built into it. In earlier days there were 'runs' on the smaller banks of depositors demanding their 'money.' Larger and remoter banks then had to take them over, until that process (but not the centralisation) ended with the 'moratorium' on the Bank of England in 1914, mentioned above, finally removing the last trace of meaning from the 'promise to pay' on the bank note, which by then had served its purpose of substituting bank paper for anything real.
The change to a total debt economy was essential for the frantic acceleration of real (non-monetary) expenditure which is now threatening the earth ; but without it there is no reason to doubt that many of the beneficial improvements in our lives which we now enjoy despite their poor quality and evil accompaniments, could have arrived more slowly, more selectively with more care and attention to real effects and with much less damage and waste. For instance, normal farming methods, now called 'organic' - a fad for the better-off - would have continued 'to pay,' as would decent, now called 'quality,' goods generally. The huge additional costs of energy, transport, fertilizers, pesticides, and for rapid replacement of shoddy goods and 'built-in obsolescence, would have ruled them out in price.
Time is the Essence
Time is the essence of this matter. It was the rate at which this grabbing from the future has been accelerated that has vastly increased the time-lag between most of the incomes paid out in production and the appearance of the product on the market, which can then be bought only by generating future debt. This, in any case, is inherent in the lengthening and complication of the processes of production, but is magnified by the grossly over-complex development of modern industry under debt-finance.
we still use coins and notes as 'cash' it is not widely understood that these
are no longer 'money' in the old sense, but are now merely tangible units of bank-accountacy.
My £1 coin or £5 note when paid in becomes a change in the shape of
an arabic numeral, while the reverse takes place when the bank hands it out to
someone else. Since money now has no material existence outside our minds, it
is what we think it is, and can be made to serve such purposes as we wish. At
present it is what the money-lenders have chosen to make it - a form of government
- and its nature is as defined by the experts on finance and on debt-economics,
Finally, to return to that rare economist E. F. Schumacher - this sort of economics cannot be applied 'as if ' people mattered. It needs to be turned completely upside down, because, in reality, as he knew well, people do matter, as does the rest of the living world in which we live.
Published by the Australian League of Rights, Box 1052. G.P.O. Melbourne 3001.