Opposing the Money Lenders: The Struggle to Abolish Interest Slavery (2016)

By Kerry Bolton – 50 Q&As – Unbekoming Book Summary

This may be the least understood subject of our time.

Far more people today recognize that vaccines are neither safe nor effective than truly understand how our money and financial system operate. Few grasp that the power to “create” money out of nothing—the so-called “money power”—rests in private hands, not in the hands of the public.

This means that private interests also determine the velocity of money—how much to inject into the system and how much to withhold. In effect, private entities control the accelerator of the public economy, allowing them to create booms and busts at will.

Within this broader issue, the concept of “usury” is also widely misunderstood. It is often simplistically defined as any charging of interest, or the charging of very high interest, but that is not the real problem. If someone lends you their capital and forgoes its use, it is entirely reasonable for them to be compensated with interest for that lost opportunity, in a risk-based manner.

The real issue lies in the creation of money out of thin air by privately owned banks, which then collect “real” interest on it from the public. That, in a nutshell, is the root systemic problem—the one that sits above all others.

This book also sheds light on the true nature of the World Wars, particularly World War II. It was not merely a geopolitical conflict, but a war between two competing financial systems.

With thanks to Kerry Bolton.

Opposing the Money Lenders: The Struggle to Abolish Interest Slavery: Bolton, Kerry

Related Posts

1. Financial Vipers of Venice: Alchemical Money, Magical Physics, and Banking in the Middle Ages and Renaissance

2. Debt Money - Lies are Unbekoming

3. The Federal Reserve - Lies are Unbekoming

4. Bitcoin & CBDC - Lies are Unbekoming

5. Understanding Bankers' Wars - Lies are Unbekoming

6. Babylon’s Banksters - Lies are Unbekoming

7. eRupee - Lies are Unbekoming

8. The Rothschilds - Lies are Unbekoming

9. Glafia: The Predators - Lies are Unbekoming

10. The Single Global Mafia - Lies are Unbekoming

Deep Dive Conversation Library (Bonus for Paid Subscribers)

This deep dive is based on the book:

Discussion No.51:

23 deep insights from “Opposing the Money lenders”

Thank you for your support.

Analogy

Imagine a theater that can seat 1,000 people, with plenty of actors ready to perform and an eager audience wanting to attend. Now imagine that instead of the theater managing its own ticket system, a private company has been given exclusive rights to create and distribute all theater tickets. This company doesn't just sell tickets – it creates them out of nothing and lends them to people at interest.

The ticket company decides how many tickets exist at any time, and every ticket borrowed must be returned plus extra tickets as interest. However, since the company is the only source of tickets, and it only creates the original amount but not the extra needed for interest, people must keep borrowing more tickets just to pay back their ticket-debts. Even though the theater has empty seats, talented actors ready to perform, and people wanting to watch, many seats remain empty because people can't access tickets without going into growing debt to the ticket company.

This situation would seem absurd for a theater – we would immediately see that the ticket system should serve the purpose of filling seats and enabling performances, not enriching the ticket company. Yet this is exactly how our money system works. We have the resources, workers, and needs, but the private control of money creation through interest-bearing debt prevents the natural matching of production and consumption.

Just as a theater should control its own ticket system to enable maximum attendance while maintaining orderly operations, a society should control its money system to enable maximum production and consumption while maintaining stable prices. The tickets should be a tool for facilitating the real activity – watching performances – not a means of extracting continuous payment from both theater and audience.

This illustrates why reformers insisted that money creation must serve public rather than private purpose, and why they saw banking reform as the key to enabling society to use its full productive capacity for the benefit of all.

12-point summary

1. The Nature of Money Money is fundamentally a measurement system for facilitating exchange, not a commodity in itself. Like meters measure distance, money should measure and enable the exchange of real wealth (goods and services). Understanding this distinction is crucial because it shows how money should serve society rather than dominate it.

2. The Historical Evolution of Banking The modern banking system originated when goldsmiths discovered they could issue more paper receipts than they had gold in their vaults. This practice, now called fractional reserve banking, transformed money creation from a public function into a private privilege, fundamentally altering the relationship between money and society.

3. The Problem of Interest Interest on money created through bank lending generates an unsustainable system because banks create the principal but not the interest needed for repayment. This mathematical impossibility requires continuous expansion of debt, leading to inevitable economic crises when the debt burden becomes too heavy for the real economy to sustain.

4. The Purchasing Power Gap A fundamental flaw exists in the industrial economy where the money distributed as wages and salaries is always insufficient to purchase the total production of industry. This "gap" occurs because prices must include all costs incurred over time, while purchasing power only reflects payments made in the present production cycle.

5. Public vs Private Money Creation The critical distinction between public and private money creation lies in who benefits from new money. When private banks create money through lending, they earn interest on money created "out of nothing." When governments create money, it can be spent into circulation debt-free for public benefit.

6. The New Zealand Example New Zealand's state housing program demonstrated how public credit creation could fund social programs without generating public debt. By using the government's sovereign power to create money rather than borrowing from private banks, the program provided affordable housing while avoiding interest burden.

7. The Social Credit Solution Social Credit theory proposed addressing the purchasing power gap through a National Dividend distributed to all citizens, combined with a price adjustment mechanism. This would enable consumption to match production capacity while preserving private enterprise and preventing inflation.

8. International Trade Alternatives Bilateral trade agreements showed how nations could conduct international trade through direct exchange of goods without requiring gold or international bank credit. This system, as implemented by Germany in the 1930s, enabled nations to trade based on real goods rather than artificial financial constraints.

9. Cultural Impact of Usury The dominance of usurious banking affects culture by requiring all activities to generate sufficient monetary return to cover compound interest. This transforms art, education, and community life into profit-generating activities, degrading cultural standards and replacing authentic expression with commercial entertainment.

10. Democratic Governance Private control of money creation effectively limits democratic governance because elected governments must prioritize maintaining banker confidence over implementing popular mandates. True democracy requires restoration of monetary sovereignty to democratic institutions.

11. Scientific Money Management Reform proposals emphasized using price indices and other objective measures to manage money creation scientifically. This would maintain stable purchasing power while enabling full use of productive capacity, avoiding both inflation and artificial scarcity.

12. Reform Movement Legacy Historical reform movements demonstrated both the possibility and challenges of implementing fundamental monetary change. Their analysis of how private money creation affects wealth distribution, democratic governance, and cultural development remains relevant for addressing contemporary economic challenges.

50 Questions & Answers

Question 1: What defines money in its most fundamental form and how has this definition evolved historically?

Money originated as a measured title or claim - a way to avoid direct exchange of goods for goods. Throughout history, money has been anything commonly accepted as a medium of exchange and a store of value. The essential quality that makes something "money" is not its physical form but rather its legal status given by government authority and its acceptance by people as a claim on goods and services.

The evolution shows that while early societies used commodities like grain or metal coins, the key development was understanding that money's value comes from law rather than nature. As Aristotle noted, "Money has value only by law and not by nature." This evolved through Medieval times when paper receipts for stored gold became a convenient substitute for carrying metal, leading to our modern system where money is primarily created through bank-created credit rather than government-issued currency.

Question 2: How did the practice of charging interest on loans evolve from ancient times through the Medieval period?

The charging of interest dates back to earliest civilizations - in Babylonia around 1800 BC, Hammurabi's Code set maximum interest rates at 33⅓% for grain loans and 20% for silver loans. Ancient civilizations like Greece and Rome also established legal maximums on interest rates when excessive debt led to social crises. The Romans' Twelve Tables of 450 BC set an 8⅓% maximum rate after debt bondage threatened social stability.

The Medieval period saw the Catholic Church take a strong stance against usury based on both Classical philosophy and Biblical teachings. The Church prohibited interest entirely among Christians, though Jews were allowed to lend at interest to non-Jews. This created a dual system where Jewish moneylenders served an economic function while facing social persecution. The Protestant Reformation marked a crucial shift, with reformers like Calvin allowing interest in certain circumstances, helping lay the groundwork for modern banking practices.

Question 3: What distinguishes private bank-created money from sovereign state-created money?

Private bank-created money comes into existence as interest-bearing debt when banks make loans, while sovereign state-created money is issued by government directly into circulation debt-free. The key distinction lies in who benefits from the creation of new money - with private banking, the banks earn interest on money they create "out of nothing," while with sovereign money the public benefits as the government spends new money into circulation for public purposes.

When banks create money through loans, they create the principal but not the interest needed to repay the loans, requiring ever-increasing debt to keep the system functioning. In contrast, sovereign money can be issued in accordance with the needs of the real economy without generating perpetual debt. This gives the state greater control over the money supply and eliminates the private tax of interest payments to banks on publicly-used money.

Usury

According to Bolton, usury historically referred to any payment beyond the principal of a loan - that is, any form of interest. This is evidenced in the Medieval Catholic Church's position, where "usury was defined as any payment beyond the principal of a loan." Bolton references this traditional definition through multiple examples, including Aristotle's view that "money was intended to be used in exchange, but not to increase at interest."

However, Bolton reveals a crucial evolution in understanding usury, particularly focusing on what makes modern banking uniquely problematic. The core issue identified isn't simply lending with interest, but rather the practice of creating money "out of nothing" and then charging interest on it. This is highlighted in the goldsmiths' practice that became modern banking - creating loans based on money that didn't actually exist in their vaults.

Bolton emphasizes this distinction through Father Coughlin's analysis: the problem isn't lending existing money at interest, but rather the private creation of money through lending. This is described as a form of "legal counterfeiting" where banks create money through bookkeeping entries and then charge interest on money they never had.

This more sophisticated understanding of usury emerges particularly in the sections discussing monetary reform proposals. The reformers generally didn't seek to abolish all lending at interest, but rather to end private banks' privilege of creating money through lending. For example, under proposed reforms, banks would continue to operate as true intermediaries, lending actual saved money, but would lose their power to create new money through lending.

So while historically usury meant any interest, the book's deeper analysis suggests the real problem is specifically the combination of money creation and interest - what Gottfried Feder called "interest-slavery" - where private banks create money out of nothing and then charge society perpetual interest on it.

This distinction is important because it shows that monetary reformers weren't opposed to all lending or investment returns, but rather to the specific practice of private money creation through interest-bearing debt.

Question 4: How does the concept of money as a measurement system differ from money as a commodity?

Money as a measurement system serves as a way to measure and exchange value, similar to how we use meters for length or kilograms for weight. In this view, money is a social invention - a tool for facilitating exchange and measuring economic value. Its worth comes from its usefulness in this role rather than from any intrinsic value of the material from which it's made.

Money as a commodity, in contrast, treats money as a thing of value in itself, like gold or silver. This view leads to problems because it artificially constrains the money supply based on the availability of particular commodities rather than the needs of the real economy. The measurement concept recognizes that money should expand and contract based on the volume of actual goods and services being produced and exchanged in the economy.

Question 5: What is the relationship between productive wealth and money in an economy?

Productive wealth consists of the actual goods and services that sustain life and enable production - the real physical economy of farms, factories, infrastructure, and human labor. Money serves as the mechanism for distributing this real wealth, but problems arise when the financial system becomes disconnected from the productive economy. The fundamental purpose of an economic system should be to ensure that money flows in a way that enables the distribution of real wealth to meet human needs.

The relationship becomes distorted when financial wealth in the form of interest-bearing debt grows faster than real productive wealth. This leads to the paradox of poverty amidst plenty - where abundant productive capacity exists alongside widespread poverty because the money system restricts distribution. A properly designed money system should maintain a stable relationship between money supply and productive capacity to enable full use of productive resources.

Question 6: How did goldsmith bankers transform the practice of money creation?

Goldsmith bankers discovered that depositors rarely withdrew all their gold simultaneously, allowing them to issue more paper receipts for gold than they actually held in their vaults. This practice of fractional reserve banking essentially allowed private bankers to create money "out of nothing" while earning interest on their loans. The goldsmiths found they could issue receipts for up to ten times the amount of gold they held, since only about 10% of depositors would request their gold at any given time.

This transformation moved money creation from a sovereign right of government to a private privilege of bankers. Instead of money being created and spent into circulation by the state, most new money came to be created as interest-bearing bank debt. This shift, which was legalized with the establishment of the Bank of England in 1694, created the foundation for our modern banking system where private banks rather than sovereign governments control most money creation.

Banking and the World Wars

According to Bolton, particularly in Father Coughlin's analysis, World War I was viewed as "one organized and operated for commercial purposes and commercial gains. Every cannon forged, every shell exploded was trade-marked with the sign of decadent capitalism. It was a war fought to make the world safe for Wall Street and for the international bankers."

Regarding World War II, Bolton presents an economic conflict between two opposing systems. Germany had developed an alternative economic system that challenged international banking control. This included:

1. Bilateral trade agreements with 25 countries by 1938, allowing nations to trade directly without requiring international bank credit or gold

2. The creation of debt-free state money instead of relying on international banking

3. A move away from the gold standard toward a system based on productive capacity

Bolton particularly highlights Hjalmar Schacht's comments about this period. While initially working within the international banking system, Germany increasingly moved toward economic independence. Schacht noted that this bilateral trading system "created much ill-feeling in countries which were not part of the system. These were precisely those countries who were Germany's main competitors in world markets."

An important point emerges from Schacht's testimony: the countries participating in bilateral trade were "predominantly agrarian, and had hitherto scarcely been touched by industrialization. They utilized the bilateral trading system to accelerate their own industrial development by means of machines and factory installations imported from Germany."

Bolton suggests that this alternative economic system, which allowed developing nations to industrialize while bypassing the international banking system, created significant tension. According to Schacht's own writings, he opposed these autarchic (economically independent) policies because they challenged the international financial system.

However, it's important to note that Bolton doesn't present these economic factors as the sole cause of either war, but rather as a crucial underlying factor that is often overlooked in conventional historical accounts. Bolton suggests that the conflict between national economic sovereignty and international banking control was a significant, though not exclusive, factor in the lead-up to World War II.

The book presents this as part of a larger pattern where attempts to establish economic independence from international banking control often met with significant opposition. This is discussed not just in relation to Germany, but also in the context of other countries' attempts at monetary reform, though Germany's case was the largest-scale challenge to the international banking system.

Question 7: What role did religious institutions play in shaping attitudes toward usury?

Religious institutions, particularly the Catholic Church, provided the main moral and intellectual opposition to usury throughout much of Western history. The Church's position was based on both Biblical prohibitions and Classical philosophy, particularly Aristotle's argument that money should not breed money. Through Canon law and Church councils, usury was defined as any payment beyond the principal of a loan and was considered a serious sin that could result in excommunication.

However, the Church's stance became increasingly complicated as commerce developed. While maintaining theoretical opposition to usury, various exceptions and workarounds were developed, such as allowing Jews to serve as moneylenders and permitting certain forms of investment and partnership that provided returns without technically being interest. The Protestant Reformation marked a crucial shift, with Protestant thinkers providing religious justification for charging interest in certain circumstances, helping enable the rise of modern banking.

Question 8: How did World War I change international banking and monetary systems?

World War I transformed international finance by creating enormous government debts that reshaped the relationship between states and private banking. Rather than governments creating their own money for the war effort, they borrowed from private banks at interest, creating massive national debts. In Britain, for example, the initial use of government-created "Bradburys" was replaced by bank-created money at interest, establishing a pattern of private profit from public necessity.

The war also disrupted the international gold standard and created huge shifts in global financial power. The United States emerged as the world's leading creditor nation, while European powers accumulated massive debts. The attempt to restore the pre-war gold standard in the 1920s, combined with the burden of war debts and reparations, created financial instability that contributed to the Great Depression. This period demonstrated how private control of money creation could turn national emergency into private profit through interest-bearing debt.

Question 9: What economic conditions during the Great Depression exposed the problems of private money creation?

The Great Depression starkly revealed the paradox of poverty amid plenty - where abundant productive capacity existed alongside widespread poverty because the money system restricted distribution. Banks' control over money creation meant they could contract the money supply just when it needed to expand, turning a financial crisis into an economic collapse. The sight of unsold goods being destroyed while millions went hungry demonstrated that the problem was not one of production but of distribution.

This period saw unprecedented public discussion and understanding of monetary issues as people questioned why a financial system breakdown should prevent the use of abundant productive resources. The contrast between idle factories and unemployed workers on one side, and unpurchased goods on the other, made clear that the private banking system was failing in its essential function of facilitating exchange between producers and consumers. This recognition sparked widespread interest in monetary reform movements.

Question 10: How did international banking practices contribute to economic crises between the world wars?

International banking practices between the wars created a system where debt and monetary contraction reinforced each other. The attempt to restore the pre-war gold standard at pre-war parities forced deflationary policies that made war debts and reparations more burdensome in real terms. Banks could move gold between countries to force compliance with their wishes, using their control over international payments to influence national policies.

The Bank for International Settlements, established ostensibly to handle German reparations, became a mechanism for private international bankers to coordinate policies across national boundaries. This international financial system prioritized maintaining the value of financial assets over maintaining economic activity and employment. When crisis hit, banks' response of restricting credit and protecting their gold reserves turned local problems into international crises through a process of competitive deflation.

Question 11: What were the core principles of Social Credit theory as developed by Major C.H. Douglas?

Social Credit theory identified a fundamental flaw in the industrial economy - that the money distributed as wages and salaries was always insufficient to purchase the total production of industry. Douglas demonstrated this "gap" mathematically, showing how prices must include all costs incurred over time, while purchasing power only reflects payments made in the present production cycle. This chronic shortage of purchasing power meant the economy required either continuous expansion of debt or recurring economic crises.

The solution proposed was a "National Dividend" distributed to all citizens to bridge this gap between prices and available purchasing power. This would be combined with a price adjustment mechanism ("Just Price") to prevent inflation. The dividend represented the cultural inheritance of technological progress and would enable consumption to match production capacity. Unlike socialism, Social Credit did not advocate nationalizing industry but rather nationalizing credit creation while preserving private enterprise.

Question 12: How did Catholic social doctrine influence economic reform movements?

Catholic social doctrine provided a moral framework for critiquing usury and financial exploitation based on centuries of theological and philosophical development. The Church's traditional teaching that money should not breed money, combined with its emphasis on the common good and just distribution of wealth, gave religious legitimacy to demands for monetary reform. This was particularly influential in movements like the Pilgrims of St. Michael in Quebec and Father Coughlin's National Union for Social Justice in America.

The papal encyclicals Rerum Novarum (1891) and Quadragesimo Anno (1931) articulated principles of social justice that rejected both capitalism and socialism while advocating widespread property ownership and just economic relations. These teachings inspired movements like Distributism, which saw monetary reform as essential to achieving a more just social order. The Catholic emphasis on moral economics provided an alternative to both Marxist materialism and liberal individualism.

Question 13: What distinguished Social Credit from orthodox socialist approaches?

Social Credit identified the monetary system, rather than private ownership of production, as the root cause of economic problems. While socialists focused on nationalizing industry, Social Credit advocates argued that democratizing money creation while preserving private enterprise would achieve better results. They saw the problem as artificial scarcity created by the banking system rather than exploitation through private ownership of productive resources.

This analysis led to very different solutions - instead of class struggle and state control of production, Social Credit proposed monetary reform through a National Dividend and price adjustment mechanism. This would enable private enterprise to serve public benefit by ensuring adequate purchasing power for consumers. The movement attracted many who rejected both capitalism and socialism, seeing monetary reform as a "third way" that could preserve individual initiative while ensuring just distribution.

Question 14: How did John Hargrave's Green Shirt movement attempt to implement monetary reform?

The Green Shirts combined dramatic street activism with sophisticated economic analysis to bring monetary reform to public attention. Through marches, demonstrations, and publicity stunts like throwing green bricks through bank windows, they broke through the media silence on monetary issues. Their tabloid newspaper Attack and public meetings explained Social Credit principles to a mass audience, while their military-style organization and uniforms projected strength and discipline.

Hargrave transformed the Kibbo Kift woodcraft movement into a militant campaign for monetary reform, recognizing that outdoor activities alone could not address the economic crisis. The Green Shirts saw monetary reform as essential to preserving democracy and preventing fascism. Their tactics influenced other movements, showing how dramatic action could overcome establishment opposition to discussing monetary issues. Though ultimately suppressed by the Public Order Act banning political uniforms, they demonstrated the potential for radical monetary reform movements to gain mass support.

Question 15: What were Father Coughlin's key proposals for reforming America's monetary system?

Coughlin advocated nationalizing the Federal Reserve System and returning money creation to Congressional control as mandated by the Constitution. His National Union for Social Justice called for abolishing the private Federal Reserve Banking system and establishing a government-owned central bank that would issue money debt-free. This would enable the government to create money for public purposes without generating perpetual debt through borrowing from private banks.

His program included specific mechanisms for maintaining price stability and preventing inflation through careful regulation of the money supply. He proposed that money should be issued based on the productive capacity of the nation rather than arbitrary gold reserves or private bank decisions. Coughlin emphasized that money should be a public utility serving the general welfare rather than a private monopoly serving banking interests. His radio broadcasts educated millions about monetary issues and demonstrated mass support for fundamental banking reform.

Question 16: How did New Zealand's state housing program demonstrate an alternative to debt-based financing?

New Zealand's First Labour Government used Reserve Bank credit to fund a massive state housing program, demonstrating how public credit creation could enable social investment without generating public debt. By using the government's sovereign power to create money rather than borrowing from private banks, the program provided affordable housing while avoiding the burden of interest payments. This practical example showed how monetary reform could translate directly into improved living standards.

The success of the program in both social and financial terms challenged orthodox claims about the necessity of private bank credit creation. By creating money debt-free through the Reserve Bank, the government avoided the paradox of paying interest to private banks for using the nation's own credit. This demonstration of practical monetary reform helped maintain support for the Labour Government's broader economic program and showed how public credit creation could serve social needs.

Question 17: What practical mechanisms were proposed for implementing a National Dividend?

The National Dividend would be distributed to all citizens as a birthright share in the cultural inheritance of technological progress. The amount would be calculated based on the gap between total prices and distributed purchasing power, ensuring sufficient demand to clear the market without causing inflation. This would be combined with a price adjustment mechanism that would reduce retail prices by a calculated discount factor, with merchants reimbursed by the national credit authority.

The technical details were worked out by engineers and accountants who showed how modern accounting systems could track the relevant economic statistics. The dividend would vary with national productivity, expanding and contracting to maintain price stability. Unlike welfare payments, it would be universal and unconditional, recognizing every citizen's stake in the common cultural inheritance. The mechanism would enable consumption to match production capacity while preserving market principles of consumer choice.

Question 18: How did bilateral trade agreements function as an alternative to international finance?

Bilateral trade agreements allowed nations to conduct international trade through direct exchange of goods without requiring gold or international bank credit. Countries would maintain clearing accounts to track trade balances, settling any differences through additional goods rather than scarce foreign exchange. This system, as implemented by Germany in the 1930s, enabled nations to trade based on real goods rather than artificial financial constraints.

The success of bilateral trade demonstrated how international commerce could function without subjection to private banking control. By focusing on the exchange of real goods rather than financial claims, nations could trade to mutual benefit while preserving economic sovereignty. This practical alternative to the gold standard and private banking control over international payments showed how monetary reform principles could be applied to international trade.

Question 19: What methods did various nations use to create debt-free money?

Different nations experimented with various forms of debt-free money creation through public institutions. These included state-issued paper currency, government credit through public banks, and mechanisms like Germany's MEFO bills that enabled state financing of economic development. The common principle was that money would be created and spent into circulation by public authority rather than loaned into existence by private banks.

The success of these experiments challenged orthodox monetary theories and demonstrated practical alternatives to private bank money creation. Public credit creation enabled nations to mobilize real resources for reconstruction and development without generating perpetual debt through borrowing. These examples showed how sovereign money creation could serve public purpose while avoiding the burden of interest payments to private banks.

Question 20: How did different countries approach the problem of 'poverty amidst plenty'?

Nations adopted varying approaches to address the paradox of poverty amid abundant productive capacity. These ranged from public works programs and state credit creation to more fundamental reforms of the monetary system. Some focused on expanding purchasing power through public spending or credit creation, while others attempted more systematic reforms of money creation and distribution.

The common recognition was that the problem was not one of production but of distribution - specifically the failure of the financial system to enable consumption to match productive capacity. Different political and institutional contexts led to varying solutions, from New Zealand's state credit creation to Germany's work creation programs. These experiences demonstrated both the possibility and the political challenges of implementing monetary reform to address the distribution problem.

Question 21: How did Arthur Nelson Field's analysis influence reform movements internationally?

Field's writings, particularly "The Truth About the Slump" and "All These Things," provided a comprehensive analysis of how international banking controlled national economies. His work was particularly influential in Australia through the Australian League of Rights and among British monetary reformers like A.K. Chesterton. Field demonstrated how banking reform was the key to economic sovereignty, arguing that without control of money creation, political independence was meaningless. His analysis connected historical events to banking influence, showing how financial power shaped political decisions.

Field's influence stemmed from his ability to explain complex monetary issues in clear terms while documenting the historical development of banking power. His work in New Zealand demonstrated how even a small country could challenge international financial control through sovereign money creation. His analysis influenced movements across the English-speaking world, providing a framework for understanding how banking reform could address both economic and social problems. His emphasis on banking reform rather than property redistribution offered an alternative to both capitalism and socialism.

Question 22: What was John A. Lee's contribution to New Zealand's monetary reform?

John A. Lee played a crucial role in implementing practical monetary reform through New Zealand's First Labour Government. As Under-Secretary of Housing, he demonstrated how state credit creation could fund social programs without generating public debt. His writings and speeches educated the public about monetary issues, showing how banking reform could translate into improved living standards. Lee insisted that Labour's election mandate required fundamental banking reform rather than mere adjustment of the existing system.

Lee's conflict with more orthodox Labour figures like Walter Nash highlighted the ongoing tension between radical monetary reform and accommodation with existing financial interests. His criticism of partial reforms and his insistence on full implementation of Labour's banking platform helped maintain pressure for genuine change. His detailed analysis of how private control of money creation undermined democratic governance provided a practical framework for understanding the importance of monetary sovereignty.

Question 23: How did Ezra Pound connect cultural degradation with banking practices?

Pound argued that usury corrupted culture by transforming art into mere commodity and subordinating creative values to financial ones. In his view, the dominance of usurious banking led to cultural decay by making money the measure of all things. His famous Canto XLV "With Usura" detailed how interest-bearing debt corrupted craftsmanship, art, and cultural creation. Pound saw monetary reform as essential for cultural renewal, arguing that honest money was necessary for honest art.

Through his support of Social Credit and other monetary reform movements, Pound demonstrated the connection between economic and cultural reform. His work showed how the transformation of money from measure to commodity affected all aspects of society, including artistic creation. His analysis influenced other cultural figures who saw monetary reform as essential for preserving cultural values against commercial degradation. This cultural critique of usury added an important dimension to purely economic arguments for monetary reform.

Question 24: What were the key differences between Gottfried Feder's and Hjalmar Schacht's monetary theories?

Feder advocated complete abolition of interest-bearing debt and return of money creation to state control, while Schacht sought to work within the existing banking framework while expanding state direction of credit. Feder saw interest as inherently exploitative and called for fundamental reform of money creation, while Schacht developed techniques like the MEFO bills to enable state financing while preserving private banking. This difference reflected their divergent views on the role of international finance - Feder sought economic independence from international banking, while Schacht tried to maintain connections with the international financial system.

Their approaches produced different results - Feder's ideas influenced the initial radical economic programs that helped end unemployment, while Schacht's more orthodox methods later constrained economic development. The tension between their views represented the broader conflict between fundamental monetary reform and attempts to modify the existing system. Schacht's eventual opposition to autarchic economic policies highlighted how monetary reform connected to broader questions of international economic integration.

Question 25: How did Major Douglas develop his ideas about social credit?

Douglas's engineering background led him to analyze the economy as a physical system for delivering goods and services. His work as an engineer showing how factory cost accounting created a gap between prices and purchasing power became the foundation of Social Credit theory. By examining the flow of money through the production system, he demonstrated mathematically why the current financial system could not distribute the goods it was capable of producing.

This technical analysis led to his proposals for a National Dividend and Just Price mechanism to balance production and consumption. Unlike many reformers who focused on moral arguments against usury, Douglas provided a mathematical foundation for monetary reform. His engineering approach to economic problems helped overcome traditional objections to monetary reform by showing how modern accounting systems could implement new distribution mechanisms.

Question 26: What is the distinction between consumer goods and producer goods in monetary policy?

Consumer goods are directly used up in sustaining life - food, clothing, fuel - while producer goods like factories and machinery are used to produce consumer goods. This distinction is crucial for monetary policy because producer goods generate costs that must be included in the price of consumer goods, but the money paid for producer goods is not immediately available for purchasing consumer goods. This timing difference creates a systematic shortage of purchasing power under the current financial system.

The challenge for monetary policy is ensuring sufficient purchasing power to buy the consumer goods while enabling investment in producer goods. Social Credit theory proposed addressing this through the National Dividend to provide consumer purchasing power while preserving business investment through normal financial channels. This approach recognized how the different roles of consumer and producer goods affected the flow of money through the economy.

Question 27: How does the 'just price' concept relate to monetary reform?

The just price concept, derived from Medieval economic thought, holds that goods should exchange at prices reflecting their real cost of production rather than what the market will bear. In monetary reform proposals, this translated into mechanisms for adjusting retail prices to reflect the real cost of production without the burden of unnecessary financial costs. The goal was to enable consumers to purchase the full production of industry while ensuring producers recovered their costs.

This concept was particularly important in Social Credit proposals, which included a price adjustment mechanism to reduce retail prices while compensating merchants through the national credit authority. The just price would be calculated based on real production costs, eliminating artificial scarcity created by financial charges. This mechanism would enable full distribution of production while preserving market choices about what to produce.

Question 28: What role do price indices play in monetary reform proposals?

Price indices provide objective measures for managing money creation to maintain stable purchasing power. Reform proposals used price indices to determine when to expand or contract the money supply, providing a scientific basis for monetary management. Rather than relying on gold reserves or bank decisions, money creation would be governed by the need to maintain stable prices for both basic commodities and finished goods.

This scientific approach to monetary management was central to proposals for national credit authorities. By monitoring multiple price indices, authorities could ensure sufficient money for full production while preventing inflation. This use of price indices would enable monetary policy to serve public purpose rather than private profit, maintaining stable purchasing power while enabling full use of productive capacity.

Question 29: How does the velocity of money affect an economy?

Velocity - how quickly money moves through the economy - affects the relationship between money supply and economic activity. Higher velocity means each unit of money supports more transactions, while lower velocity requires more money to support the same level of activity. Reform proposals like Gesell's stamp scrip aimed to maintain adequate velocity by preventing hoarding of money.

Understanding velocity was crucial for designing mechanisms to maintain stable purchasing power. Rather than focusing solely on the quantity of money, reformers recognized the importance of keeping money actively circulating. This led to proposals for mechanisms to encourage regular circulation while preventing both hoarding and excessive speculation.

Question 30: What is the relationship between productive capacity and money supply?

The fundamental principle of monetary reform was that money supply should expand and contract with society's ability to produce goods and services. Unlike the gold standard or bank credit creation, money would be created based on real productive capacity. This would enable full use of productive resources while maintaining stable prices, avoiding both inflation and artificial scarcity.

This relationship between money and production was central to proposals for scientific monetary management. By monitoring both productive capacity and price levels, national credit authorities could maintain sufficient money for full production while preventing inflation. This would enable society to use its full productive capacity while maintaining stable purchasing power.

Question 31: How do central banks differ from commercial banks in their creation of money?

Central banks, whether privately or publicly owned, have the unique power to create the monetary base of an economy, while commercial banks create money through lending against this base. The fundamental distinction lies in the scale and scope of money creation authority. Central banks can potentially create money without limit, while commercial banks are constrained by reserve requirements and access to central bank funds.

The relationship between central and commercial banks creates a hierarchical money system where commercial bank money depends on central bank money for its validity. This system gives central banks significant power over the economy through their control of interest rates and reserve requirements. However, private ownership of central banks, as seen with the Federal Reserve System, raises questions about whether this crucial public function should be controlled by private interests.

Question 32: What is the significance of fractional reserve banking in the modern economy?

Fractional reserve banking allows banks to create money by lending out multiple times their actual reserves, effectively multiplying the monetary base created by central banks. This system evolved from the goldsmiths' practice of issuing more receipts than they had gold in their vaults, becoming institutionalized as the foundation of modern banking. The practice enables banks to earn interest on money they create "out of nothing," while requiring ever-increasing debt to maintain the money supply.

Through this mechanism, private banks rather than governments control most money creation in modern economies. The instability inherent in this system arises from the fact that banks create the principal of loans but not the interest needed to repay them, necessitating continuous expansion of debt. This creates periodic crises when the debt burden becomes unsustainable relative to the real economy's ability to service it.

Question 33: How does debt-based money creation affect economic cycles?

Debt-based money creation generates inherent instability in the economic system because the need to repay loans with interest requires continual expansion of debt. During economic upswings, banks readily create new money through lending, fueling expansion. However, when confidence falters and loans are called in or not renewed, the money supply contracts, forcing liquidation of assets and triggering economic downturns.

This pro-cyclical nature of bank lending amplifies both booms and busts. The expansion phase creates apparent prosperity through debt-fueled growth, while the contraction phase causes unnecessary hardship through forced liquidation and bankruptcy. The system's dependence on continuous debt expansion makes periodic crises inevitable, as the burden of compound interest eventually overwhelms the real economy's ability to generate sufficient income for repayment.

Question 34: What alternatives to private banking were proposed by reformers?

Monetary reformers proposed various systems of public banking and money creation to replace private bank credit creation. These ranged from fully nationalized banking systems to hybrid systems maintaining private banks but restricting their money-creating powers. Common elements included government creation of money free of debt, mechanisms for maintaining price stability, and systems for distributing purchasing power to enable consumption of available production.

The proposals emphasized maintaining money as a public utility serving the general welfare rather than a private monopoly serving banking interests. Different reformers focused on different aspects - some emphasizing local control through state or regional banks, others advocating centralized national systems. All sought to end private profiting from money creation while establishing mechanisms to ensure stable purchasing power and enable full use of productive capacity.

Question 35: How do international banking systems influence national sovereignty?

International banking systems can effectively override national sovereignty by controlling access to foreign exchange and international payments. Through their control of international lending and payments mechanisms, private banking interests can force compliance with their policies regardless of democratic decisions within nations. This power became particularly evident in the interwar period when international bankers could trigger economic crises by withdrawing gold reserves or refusing credit.

The Bretton Woods system institutionalized this private control over international finance while appearing to establish national controls. Nations found their domestic policies constrained by the need to maintain international banking confidence, effectively subordinating democratic governance to financial interests. This demonstrated how control of money creation and international payments could override formal political sovereignty.

Question 36: What methods were proposed for transitioning from private to public money creation?

Reform proposals typically included carefully planned transition periods to prevent economic disruption while shifting from private to public money creation. Common elements included gradual assumption of money-creating powers by public authorities, mechanisms for maintaining price stability during the transition, and systems for ensuring adequate credit for legitimate business needs. The goal was to achieve the benefits of public money creation while avoiding disruption of essential economic functions.

Specific proposals varied in their timing and mechanisms but generally sought to maintain stability while implementing fundamental reform. Some advocated immediate nationalization of money creation while maintaining private banks as lending institutions. Others proposed gradual assumption of money-creating powers through parallel public banking systems. All emphasized the importance of maintaining public confidence while implementing systemic change.

Question 37: How would price adjustment mechanisms work in a reformed monetary system?

Price adjustment mechanisms would maintain stable purchasing power by monitoring price indices and adjusting money supply accordingly. These would operate through national credit authorities with power to expand or contract money supply based on objective measures of price levels. The goal would be to maintain stable prices while enabling full use of productive capacity, avoiding both inflation and artificial scarcity.

Technical proposals included systems for calculating just prices based on real production costs, mechanisms for compensating retailers for price adjustments, and methods for monitoring multiple price indices. These would enable scientific management of money supply to serve public purpose rather than private profit. The emphasis was on maintaining stable purchasing power while enabling full distribution of production.

Question 38: What role would banks play in a sovereign money system?

Under proposed reforms, banks would continue their legitimate functions of safeguarding deposits and facilitating payments but would lose their power to create money through lending. They would become true intermediaries, lending only money that had been saved or created by public authority. This would restore banking to its proper role while ending private profiting from money creation.

Banks could still earn legitimate returns from providing valuable services but would no longer earn unearned income from creating money. Their role would focus on efficiently allocating existing money rather than creating new money through lending. This would maintain useful banking functions while ending the private tax of interest on publicly-used money.

Question 39: How would international trade function under monetary reform proposals?

Reform proposals emphasized direct exchange of goods through bilateral agreements and clearing mechanisms rather than dependence on private international banking. Nations would trade based on real goods rather than artificial financial constraints, maintaining clearing accounts to track trade balances. This would enable international commerce while preserving national economic sovereignty.

The system would focus on facilitating actual trade rather than financial speculation, with international payments handled through public clearing mechanisms rather than private banks. This would maintain necessary international commerce while ending private control over international payments. The emphasis would be on real economic exchange rather than financial manipulation.

Question 40: What mechanisms were proposed for controlling inflation in reformed systems?

Reformed systems would control inflation through careful monitoring of price indices and adjustment of money supply to maintain stable purchasing power. National credit authorities would have power to expand or contract money supply based on objective measures of economic activity and price levels. This would enable scientific management of money supply while preventing both inflation and deflation.

Technical mechanisms included systems for monitoring multiple price indices, adjusting retail prices through compensation systems, and maintaining stable relationships between money supply and real production. The emphasis was on maintaining stable purchasing power while enabling full use of productive capacity. This would prevent both inflation and artificial scarcity through scientific monetary management.

Question 41: How does private money creation affect social class structure?

The creation of money by private banks establishes a fundamental division in society between those who can create money through lending and those who must borrow to access money. This system naturally concentrates wealth among banking interests who earn compound interest on money they create, while the productive classes must continuously pay interest on the money supply needed for economic activity. Over time, this creates an increasingly stratified society where financial wealth grows faster than productive wealth.

The compound interest mechanism ensures that an ever-larger portion of society's productive output flows to those controlling money creation. This affects not just individuals but entire industries and regions, as access to credit becomes the determining factor in economic development. The result is a society where financial power trumps productive capability, creating artificial hierarchies based on control of money rather than contribution to real wealth creation. This monetary mechanism underlies many apparent class divisions that are often attributed to other factors.

Question 42: What is the relationship between monetary systems and democratic governance?

Democratic governance requires control over monetary policy, as private control of money creation effectively limits the scope of democratic decision-making. When private banks control money creation, elected governments find their policies constrained by the need to maintain banker confidence, regardless of democratic mandates. This creates a fundamental contradiction between democratic governance and private control of the monetary system, as seen when governments must abandon popular programs to satisfy financial markets.

The historical development of democracy has been intertwined with struggles over monetary control. While nations gained formal political democracy, the retention of private money creation power meant effective sovereignty remained with banking interests. This explains why democratic governments often seem unable to implement popular policies - their formal political power is undermined by private control over money creation and credit allocation. True democracy thus requires restoration of monetary sovereignty to democratic institutions.

Question 43: How do banking systems influence cultural development?

Banking systems shape culture by determining which activities receive funding and thus which values and practices can develop. Under usurious banking, activities must generate sufficient monetary return to cover compound interest, favoring short-term profit over long-term cultural development. This affects everything from architecture to education, as cultural activities must increasingly justify themselves in commercial terms rather than cultural value.

The commodification of culture through banking mechanisms transforms art, education, and community life into profit-generating activities. This process, described eloquently by Ezra Pound, gradually replaces authentic cultural expression with commercial entertainment. Traditional craftsmanship declines as everything must be measured by immediate financial return rather than lasting cultural value. The result is a degradation of cultural standards and loss of cultural continuity as monetary values dominate all aspects of life.

Question 44: What role does monetary reform play in national sovereignty?

Monetary reform is essential for genuine national sovereignty because control over money creation determines a nation's ability to implement independent economic policies. Without monetary sovereignty, political independence becomes largely symbolic as nations must conform to international banking requirements regardless of domestic needs. True national sovereignty requires the ability to create and regulate money in accord with national purposes rather than international banking interests.

The experience of various nations shows how private control of money creation effectively limits national sovereignty even when formal political independence exists. Nations that attempted monetary independence, like New Zealand's state housing program or Germany's bilateral trade agreements, demonstrated how monetary sovereignty enables greater political independence. This reveals monetary reform as a prerequisite for meaningful national sovereignty rather than just one policy among many.

Question 45: How do monetary systems affect wealth distribution?

Monetary systems fundamentally shape wealth distribution through their mechanisms for creating and allocating money. Under private bank money creation, new money enters circulation as interest-bearing debt, ensuring wealth flows continuously from borrowers to lenders. This creates a structural transfer of wealth from the productive economy to financial interests, independent of productive contribution.

The compound interest mechanism ensures exponential growth of financial claims while real economic growth remains arithmetic, creating an increasingly unequal distribution of wealth. This process operates independently of individual merit or productive contribution, as control over money creation rather than economic productivity becomes the primary determinant of wealth accumulation. Reform proposals sought to address this through mechanisms ensuring money served public purpose rather than private accumulation.

Question 46: How do historical monetary reform proposals relate to modern economic challenges?

Historical reform proposals addressed fundamental issues that remain relevant today - the contradiction between private money creation and public purpose, the need to maintain stable purchasing power, and the challenge of ensuring sufficient distribution to enable consumption of production. While technological changes have altered some specifics, the basic problems of reconciling money creation with democratic governance and economic stability persist.

The analysis developed by reformers provides valuable insights for addressing current economic challenges. Their understanding of how private money creation affects wealth distribution, democratic governance, and cultural development remains highly relevant. While specific mechanisms might need updating for modern conditions, the fundamental principles they identified - the need for public control of money creation and mechanisms ensuring stable purchasing power - remain essential for addressing contemporary economic problems.

Question 47: What lessons can be drawn from past attempts at monetary reform?

Past reform attempts demonstrate both the possibility and challenges of implementing fundamental monetary change. Successful examples like New Zealand's state housing program show how public credit creation can enable social investment without generating public debt. Failed attempts reveal the power of established financial interests to resist change and the importance of maintaining public support through clear explanation of reform principles.

The historical record shows the importance of combining technical expertise with popular education and political organization. Successful reforms required both sound technical proposals and broad public understanding of monetary issues. The experience of various movements highlights the need to maintain focus on fundamental principles while developing practical implementation strategies adapted to specific conditions.

Question 48: How do digital technologies affect traditional banking power structures?

Digital technologies potentially enable new mechanisms for implementing public money creation and distribution while reducing dependence on traditional banking structures. Electronic payment systems could facilitate direct distribution of publicly-created money while maintaining detailed records for scientific monetary management. However, the same technologies could also enhance private banking power through increased control over payment systems.

The key issue remains control over money creation rather than technical mechanisms of distribution. While digital technologies offer new possibilities for implementing monetary reform, they don't automatically solve the fundamental problem of private versus public control of money creation. Reform proposals must address this core issue while utilizing new technologies to enhance implementation possibilities.

Question 49: What principles from historical reform movements remain relevant today?

Core principles identified by reform movements - the need for public control of money creation, mechanisms ensuring stable purchasing power, and systems enabling full distribution of production - remain fundamental to addressing current economic challenges. Their analysis of how private money creation affects wealth distribution, democratic governance, and cultural development provides essential insights for contemporary reform efforts.

The emphasis on combining technical expertise with public education and political organization remains crucial. Historical movements demonstrated the importance of clear explanation of monetary principles while developing practical implementation strategies. Their understanding of the relationship between monetary systems and broader social issues provides valuable guidance for current reform efforts.

Question 50: How do historical monetary reforms inform modern alternatives to debt-based systems?

Historical reforms provide practical examples of alternatives to debt-based money creation, demonstrating how public credit creation can enable social investment without generating perpetual debt. Examples like state housing programs, bilateral trade agreements, and various public banking initiatives show how monetary sovereignty can serve public purpose while maintaining economic stability.

These experiences offer valuable lessons for developing modern alternatives, showing both possibilities and potential pitfalls. The technical mechanisms developed for maintaining stable purchasing power and enabling full distribution of production remain relevant, while historical movements' emphasis on public education and political organization provides important strategic guidance. Their comprehensive analysis of monetary issues continues to inform understanding of how alternative systems could function.

I appreciate you being here.

If you've found the content interesting, useful and maybe even helpful, please consider supporting it through a small paid subscription. While everything here is free, your paid subscription is important as it helps in covering some of the operational costs and supports the continuation of this independent research and journalism work. It also helps keep it free for those that cannot afford to pay.

Please make full use of the Free Libraries.

Unbekoming Interview Library: Great interviews across a spectrum of important topics.

Unbekoming Book Summary Library: Concise summaries of important books.

Stories

I'm always in search of good stories, people with valuable expertise and helpful books. Please don't hesitate to get in touch at unbekoming@outlook.com

For COVID vaccine injury

Consider the FLCCC Post-Vaccine Treatment as a resource.

Baseline Human Health

Watch and share this profound 21-minute video to understand and appreciate what health looks like without vaccination.