Gerald Grattan McGeer was elected to the Canadian parliament in 1935 after serving as mayor of Vancouver in 1934, and on the British Columbia legislature in 1933. He was later appointed to the Senate by Canada’s Prime Minister, William Lyon Mackenzie King, in 1945. He was reelected as mayor in 1946 and died in office in 1947, at the age of 59.
Gerry McGeer was a populist and maverick of the Liberal Party of Canada, who reformed the police department and suppressed a Communist uprising as mayor. He was most known for packing town halls with his speeches, as he advocated monetary reform, favoring debt-free and commodity-free legal tender, like the Greenback. He wrote a book, Conquest of Poverty, or Money, Humanity and Christianity, in 1935.
Oddly, the Rockefeller Foundation and William Volker Fund economist, Henry Hazlitt, wrote a book with the same title, Conquest of Poverty, in 1975. I wouldn’t waste my time reading funded propaganda by Henry Hazlitt, but I’m sure it promotes freedom for bankers and feudalists to enslave you with land monopoly and gold and debt as money.
As a result of McGeer’s work, Prime Minister MacKenzie King ended the private debt-based monetary system, ran much like the Federal Reserve, which was instituted in the 1920s and 1930s, and instituted a public debt-free and commodity-free legal tender. The debt-free and commodity-free currency worked very well for the Canadian people, though I’m sure under constant attack by the bankers, until the debt-based monetary system returned in the 1970s, during the banker-created stagflation crisis and resulting in an explosion of national debt and 95% of the currency in circulation based on debt.
In Chapter Five of his book, we find that Gerry McGeer believed the bankers killed Lincoln for printing the Greenback. John Wilkes Booth was nothing more than a southern assassin hired by northern, southern, and perhaps even British bankers.
“To orthodox finance, Lincoln became at once ‘a dangerous tyrant’. If he were permitted to put his ideas into practice he would destroy the sovereignty of Money Power.
“Lincoln, released from the problems of the Civil War, following his second election, proceeded at once to free mankind from the burden of unpayable, interest-bearing debt claims. He lost no time in commencing his campaign to free the American people from the slavery of mass usury.
“The oligarchy of high finance saw in the successful Lincoln a statesman enjoying the unchallengeable power of exalted leadership which is the privilege of superior achievement. He was the one man in the world who was willing and able to meet and to overthrow the control over the government which organized finance was seeking to perfect. With the problems of the rebellion out of the way, the bankers knew that Lincoln would devote his undivided attention to developing the monetary system he had proposed to Congress. If Lincoln were allowed to carry out his ideas, the hope that international financiers had of establishing world sovereignty for Money Power would be impossible of fulfillment.” — Gerry McGeer
You’ll also find his biography, Mayor Gerry: The Remarkable Gerald Grattan McGeer, written by a man named David Ricardo Williams, named after the economist David Ricardo, who defined the Law of Rent, which was made popular by Henry George, another advocate of public debt-free and commodity-free legal tender.
More analysis on the Lincoln assassination, referencing multiple sources, is provided by William R. Carr, with his work, Lincoln, Taylor, Kennedy: The Greenback — Truth, Speculation, and Trivia.
I would have to agree with Gerry McGeer. John Wilkes Booth and the bankers ended Lincoln’s most ambitious plan to more permanently free men of all colors from the North and South from the slavery of usury, the Money Power, the money changers, the international banking cartel.
Keith, I’m a Canadian and have run in two federal elections as an independent (independentpartycanada.ca). I was quite aware of the actions of King, but was not aware of the writings of McGeer, or the influence he had upon King. I’ve used Kings comments in my election push before. As I write that though, I wonder if Bill Still makes mention of him in his movie Money Masters. Anyway, great blog, I’ll be bookmarking it. I like your description of “Rejecting Keynes, Mises, etc”, but the problem I’m facing is how to describe what I am for. Social credit was my first choice two elections ago, and I was pleased having found out recently it was practiced in essence in Japan pre WWII, and was likely the real reason for that. But MPE (Mathematically perfected economy) is simpler to implement, and as you say on another page we could utilize existing credit unions to fix the situation. The way I see it, is as we all seem to agree, compound interest has to go. The next step seems to get ambiguous though, and this is where the warring monetary theories heat up. I suggest we do as Montagne says, and issue loans as they are today (minus interest) but spread out the repayment schedule over the average lifespan of whatever is being purchased, as it depreciates. That is the double edged sword, to prevent inflation on the front end by issuing money without interest, then there is none on the back end by paying it off as it depreciates, and eventually ceases to exist. In this way, $20 today will still be as valuable in 20 years as it is today. I’m was at one point quite familiar with Henry George and Silvio Gesell, but am a bit rusty on these things right now, but I believe it is Gesell that gives a treaties on money that has yet to be matched, in the Natural Economic Order, if I remember correctly. Anyway, if anyone knows anyone in Canada who might be interested, we’re recruiting for the next election, but only really independently minded people, free thinkers who understand the real issues, need apply.
Jason
In my further research, King’s monetary quotes are well-documented, being mentioned in a radio broadcast and in parliament. They were easy to verify online in newspaper articles. There also seemed to be a lot of documentation of Louis Even’s writings and the role of the Catholic church in a social credit movement in Canada during the Great Depression, to rid the institutions of insurance and banking from the sin of usury.
I did see a writing by someone trying to slander the social credit movement as anti-semitism (a writer from the Austrian School of Economics calling it “social discredit”). I saw more evidence that religious leaders were just concerned about poverty, unemployment, and the role of usury in our banking and monetary system during the Great Depression, though I’m sure there were those who did try to place blame on an esoteric agenda of “zionists” and “Jewish bankers,” rather than what it is really about, how usury and our banking and monetary system is the cause of poverty. Christianity, Judaism, and Islam all speak out against usury so there should not be any disagreement between the teachings of the different religions on this issue, which makes the Austrian School of Economics use of Godwin’s Law to discredit MacKenzie King and the monetary and banking reforms proposed by a whole movement in Canada to be quite a stretch, if not a laughable.
There is usually an agreement on the problem. The remedy or the solution is always up to debate how to best address the issue. I tend to favor public monetary expansion as the self-correcting feature with a mild inflation rate, acting like a demurrage to encourage monetary velocity, acting to allow economic growth within a margin of error, and acting as a means to fund the public needs, while using credit unions and commercial banking with a central reserve as a fine adjustment to money supply and means to deal with credit-worthiness and the cost of defaults so you’re not extending free credit to be gamed/abused (including more complex money market manipulation) and socialized as a loss. I don’t see inflation as a problem if it isn’t tied to credit. It does have economic benefits and is a good progressive tax which encourages rather than harms production. I feel there is a natural check of wealthy interests working to lobby against inflation to guard against excessive inflation. The Congress should set a target inflation rate when forming the budget so that the cost of the budget in terms of inflation can be debated, making necessary cuts if there are those who feel the rate is not tolerable. I’m largely in the Zarlenga camp as the right direction to take.
I’d rather see a citizen dividend funded with public monetary expansion than socialized credit.
The system you talk about seems more like the solution found in Islamic nations, where loans are made free of interest with a flexible repayment plan. There is an Associated Press article which summarizes the Islamic solution.
http://createrealdemocracy.blogspot.com/2012/02/monetary-history-calendar-february-13.html
http://www.calbaptist.edu/dskubik/islam.htm
http://www.auburnmountain.com/Wealth/Islamic-Finance.aspx
http://www.prisonplanet.com/islamic-banks-are-surviving-the-financial-crisis-better-than-western-banks.html
You might want to read about Louis Even too.
Good background…
http://www.scribd.com/doc/50928103/5/Comparing-Islamic-and-Christian-attitudes-to-usury
I think the subtle difference is that you want to socialize financial interest, not socialize credit. You eliminate economic rent through the full taxation of economic rent. You eliminate financial interest though public monetary expansion, cancelling financial interest with inflation.
I’m read up on Louis Even, but I don’t know much about Zarlenga, but here is a quote from him off the first site from google: “Over time, whoever controls the money system, controls the nation.” – Stephen Zarlenga,
I respect that quote as true and wholly desirable, and wonder why you do not seem to want to pursue it yourself. The subtle difference is that I see everyone controlling their own credit as controlling the nation — in short I see the democratization of the money supply as the answer: the antithesis of course is a plutocratic money system, which even Social Credit has it’s hands still in.
In allowing everyone to seek loans as they do now (without the interest), the entire system will function as it does now EXCEPT without the huge and totally artificial boom and bust cycles which are just symptoms of the terminal nature of any compound interest system. Mans needs will drive the economy, there is no need to worry about the velocity of money or anything else like that with what I advocate — and how do I know this? Because we’re demonstrating it right now! The system we have is a classic example of all the right ideas, but being inherently flawed, it causes no end of trouble since that flaw is pervasive. Our current system is extremely durable, but will be even more so without the interest. Every good feature will be enhance, certainly not lost! Every undesired feature of the current system will fade away into oblivion because all of those are not problems in and of themselves, but just symptoms of the pervasive and universally toxic nature of the compound interest system.
The reason I am not in favor of a citizen dividend is two fold. First, it is more complicated and difficult for people to understand. It also violates the KISS principle, which is not always the right way to think of things, but it is in this case. Secondly, it adds another social institution where none is required. And as a third side note, I’m not even sure that the A + B theorem is valid, and even if it is, simply continuing to issue loans as we do now but without the compound interest baggage will put us in a situation where we could literally run indefinitely without any further problems.
As for socializing rent, the problem in my mind with that line of thinking is that there is nothing to rent in the first place. The loan does not issue from the bank, the loan issues from the borrower. The bank is just the exchanger — literally the “money changer”. Until people understand this point, they will never see their way out of the box. If that is true, and it is, then we must agree that the option to charge rent on the loan would lie with whoever sourced the loan, which is of course the borrower, who is perhaps more aptly named the “creator” or better yet and legally accurate the “drawer”. No drawer would ever be willing to self surfeit themselves with a debt greater than the value of what they are seeking the loan for, and if they did, it would be a form of artificial inflation, and must therefore not be permitted whatsoever.
So, the created money must equal always equal the value of the item being purchased (does it ever not?), plus a fee for the monetization of that creative process into the currency of the country in which the drawer resides. This could be done by private banks, watched over by regulation, and even could be competitive in the way credit cards compete right now, except with fixed fees added to the sale at the time of the sale (and creation of the debt money). This changing of our individual promises to pay puts us one up on the barter system, and that is all that is needed.
In reality, what I am advocating is actually a social barter system, a cooperative in a sense. This “socialism” is only made possible though by a government that allows it’s citizens to enter into these kinds of contracts with one another, and converse to some solutions like Social Credit, it is passive, and allows government to be the best government — which is that which governs least. In other words, let the citizens and corporations do what they do now, with the government regulating the economy only by determining that the system remains fair, and we could do that by the government itself issuing loans directly. Who can and cannot get a loan would just be a formula: if you can make the payments based on your earnings, you can get the loan. ie. you have to prove your “worthiness” as you do now, which is just linked to your ability to work. This then is the brakes on the abuse of the system from the point view of the people not borrowing millions and millions, but also the liberation, since you are free to earn and keep your earnings. The government would be responsible for ensuring that fees for issuing loans are fair, and would be transaction based — not percentage based, since it is as easy to administer a loan for $10 as it is to administer a loan for $10 million.
Private loans would be allowed, but no interest would be permitted indirectly since that is a form of fraud, and fraud is not permitted. This then would put the creation of all money in it’s entirety under the direct control of the people. Standing taxes would be paid directly out of your account monthly, everyone paying an equal share for equal services — certainly not based on income. Other taxes would be based on consumption, like road taxes built into fuel prices, and so on, very similar to what we have now, but of course no taxes on the persons income since income is nothing more than the monetization of your time in what is the purest definition of “equitable exchange”. Thus, the government will lose all control over the creature, and the creature as an individual will be free, and as a society it will be totally liberated. Where that society goes who knows, but it is the corporations that would need to bend to their collective will, not the other way around.
Any way you look at it, we’re all around the same campfire as you say, debating the details of what to replace the current system with. I am a civil engineer as well, so the simplest cleanest solution seems best to me, with no tolerance to permit any corruption to continue if it can at all be identified at the outset.
I’m highly impressed with your level of understanding and the time you took to respond to my post. Feel free to contact me directly by email if you wish.
i do support zarlenga and am a supporter of the zarlenga plan.
i do want to separate credit and monetary creation to prevent the business cycle.
i do want to end national debt with inflation used to fund deficit spending after necessary monetary expansion to allow for job creation (and encourage investment and savings).
i do want to separate credit markets from interest. i tried to express the idea in my latest article, bridging religions and markets: social interest, not social credit.
we have good monetary velocity now because of inflation. you still need to be concerned about monetary velocity. zero inflation would not only be impossible to measure but to predict, especially if monetary velocity was not maximized. zero inflation would not guarantee ample credit, maximum velocity, and full employment for a growing population. we just need to make inflation tied to public monetary expansion rather than private credit.
the a + b theory i believe is just criticism of a credit-based monetary system, the compounded interest which eats away and steals from earned wages.
the point of a citizen dividend is that reality is complex. it would be impossible for any kiss solution to be valid if there isn’t justified compensation for injustice due to over-simplification of reality.
not sure what you mean by the “socializing rent” comment. the problem with the current system is that the bank does originate (and destroy) money supply. the bank would be limited as a service if monetary origination was public. facilitation of the lending process can be done without the profit-motive as well, as credit unions do. i’m guessing you mean the artificial inflation resulting from the current system, the need to borrow to pay interest on loans. this goes back to the a + b theory. i think you mean to describe artificial interest, paying interest on your own productivity where you pay more interest than you pay for the building of a home.
you do hint at the problem of zero-sum monetary systems, that it depends upon negative money (credit). who pays for default? who pays for the negative money? the tax payer, the one with positive money, or one who provides savings pays for the default. it is prone to abuse, resulting in inflation or socialized costs. the market should package credit for different credit markets and bear the costs in the interest rates. it could also be contained within inflation. inflation could be used, writing off the bad debt and paying off the lender with public monetary expansion, rather than have the tax payer or lender pay for the cost of default. which is better is up to debate. interest-free mortgages are a good idea. however, the issue is still about how money originates and how the cost of default is paid.
you seem to get into this idea, again pointing out the details of the islamic system, that fees are paid rather than interest, for the cost of default and the service itself, without inflation. with a 100% reserve system, the a + b theory does not apply. money supply exists to pay for the fees, the fees cover the cost of the default (since the loaned money is still in circulation), and money supply remains constant.
fee-based rather than interest-based banking might be a better solution for banking. however, i don’t like the tax, which would be a demurrage, should be applied to banking accounts. this would just result in the opposite of what you want to do, money under the mattress, either in a paper or coin form of the legal tender, or through the purchase of alternative currency or commodities, which is a waste of commodities and allows the wealthy to create a loophole in the system, holding their wealth in commodities (or alternative currency), driving up the cost of commodities, while the average citizen pays the demurrage. the use of alternative currency would create problems on money markets and cause devaluation of the currency (inflation) with a need to originate new money supply to pay for the loophole.
however, a point is that money supply should not be constant. it has to be expanded as population grows. there is also the concern for velocity (and export of money), among other more minor concerns, such as lost or unclaimed money. i also don’t like the idea of pure digital money supply due to privacy concerns and concerns relating to those in financial difficulty who depend upon charity.
i spoke too favorable of a demurrage compared to inflation in the past. i probably should not have done that. i now see that demurrage places the burden on the poor to lobby against demurrage, while inflation puts the burden on the rich to lobby against inflation since the demurrage can be more easily avoided by the rich in non-productive and harmful ways while inflation encourages productive investment and making money available as credit.
i often describe the zarlenga plan as a public debt-free monetary system. however, it seems that the meaning of debt-free is conflated in the view of mpe. the purpose is not to eliminate debts but to separate private credit from money supply and eliminate national debt, where interest on public finance is privatized. inflation rather than bonds should provide public finance. interest-free bonds would be better though this takes away from the supply of credit.
i am confused of the mpe concept of how money supply is based on the depreciation of products and how it provides interest-free credit. not sure where service falls into all of that either. it seems to create a black box of mythical computations behind the scenes where money supply and credit is somehow managed and provided. it seems to criticize the state and banks while at the same time it implies such a process, in a way that it is asking you to trust the system and something so complex you can’t understand it, to leave it up to the state or some algorithm devised by a central authority.
I think we may have a different definition of inflation. I do not agree that inflation is even possible as it is conventionally described. Inflation is by true definition not an increase in the money supply, but a disproportionate increase in the money supply to what is available to buy and sell. That happens exclusively because of compounding interest, and it is a singular cause.
When I pay $1.40 for bread today and $1.50 next week because someone raised the price for any number of reasons, that is not the inflation I am talking about. It’s inflation, but it is price inflation, and it is allowed, but it is not inflationary. That kind of inflation is of no concern, because I “supposedly”, borrowed that money into existence under my system: ie. it’s all credit. The difference being that it will all be my credit in the future, and none of it will be because of artificially created interest.
Similarly, if we eliminate interest, we eliminate the need for the navel gazing practice of money velocity, and the natural need (and greed) to buy and sell everything we currently do will only be augmented by the fact that there will always be a perpetually full wallet, full to the amount they can bear, at everyone’s fingertips at any given time.
The frequency with which money is created and destroyed will be totally irrelevant. It is purely an artifact of this broken system we have right now, and will disappear with the problem that created it.
right, monetary expansion does not necessarily result in inflation if it increases economic activity. of course individual prices does not necessarily reflect inflation or deflation, just changes in the supply and demand of a particular good, sector, significant parts of the economy because of dependence on a particular good, or commodities as a whole due to international trade.
i suppose it doesn’t matter if the money sits there or not if all money is put into the supply for lending, as part of the total calculation of money supply. if there is no inflation, there is no need to risk wealth through the purchase of commodities or alternative currency. the credit is made available to whomever demands it and is qualified. i’m not sure if such a situation would result in no inflation or the economic consequences of such a system. i haven’t thought about it enough. i am concerned about when people don’t spend, and the economic stagnates, causing unemployment. whether inflation is being measured correctly and deflation actually results even though technically the supply looks good because there is money in accounts and money is available for lending. meaning that monetary velocity is important, that just making a system where credit is free, that everything is going to work out happily.
it would definitely not work out happily if economic rent is not captured. the well-qualified would monopolize land. even if the land issue is adequately addressed, you still have the situation where people risk their credit rather than their savings, resulting in mal-investment and inflationary effects. if credit is for nothing, why spend your earnings? those who spend their credit end up living off the backs of those who spend their earnings. if they run out of credit, they then start to spend their savings. what if they spend their credit and savings and end up defaulting on the credit. the cost of credit is being socialized rather than the cost of interest.
you might be right. you might be able to address concerns and things could work out better with such a system. i’m just being skeptical and because i’m just not sure how things would work with such a system.
now that you brought it up, if a commodity, such as oil, has supply problems, prices would increase throughout the economy dependent upon the cost of oil and have system-wide effects, causing an equal reduction in land values and wages since it isn’t a money supply/macroeconomic issue but a microeconomic issue. the dutch tulip boom/bust was evident how a single commodity can cause system-wide effects. inflating the money supply would naturally just increase the cost of the commodity that much. if credit is for nothing, people would extend their credit to meet the price, which would drive everyone to push their credit, rather than the proper response of limiting demand and markets readjusting to alternative products and services. under a monetary system like zarlenga’s, the citizen dividend would help people deal with the economic consequence while not just favoring those with good available credit and those who manage to keep their jobs. the inflationary response, monetary expansion, would be through public projects and the citizen dividend rather that through the credit of the well-qualified. such a solution is more of a utilitarian, pragmatic, and keynesian response, unless the citizen dividend is funded with law-made property, such as land and legal tender. it would be more of an economic insurance than a social credit in that regards. things don’t always fit neatly in a simple model and is why i try to design features which deal with such complexities which don’t fit neatly in a simple model. the zarlenga model would also have difficulty adjusting to such a situation where the free market causes systematic unemployment out of the reach of money supply issues. people who have available credit under the zarlenga would also extend credit to survive, but it would be more measured in individual decisions. in addition, the real need for credit would be in investment. while public projects can employ people, the extension of credit for investment would be important in such crisis for employment. while the zarlenga system doesn’t direct towards investment, it is more suited for encouraging investment. if the government response is increasing the money supply, the increase in monetary expansion and resulting inflation, since it isn’t a money supply problem but a market problem, would encourage such investment. while neither would work perfectly in such a situation, the zarlenga system i believe would work better.
Keith, a quick note regarding some of your links:
http://www.auburnmountain.com/Wealth/Islamic-Finance.aspx
“Condemnation of Interest
If there is any thing that draw consensus in Islam among the Ulema (educated class of Muslim legal scholars) it is the condemnation of Interest. Yet all vibrant and growing economies use interest as a tool to attract money and capital.”
The second sentence is false. It is not interest that attracts money and capital, interest destroys money and capital. The article itself states that the islamic no interest model is a “Fast Growing Segment In Global Financial System”.
We all know what happened to Gaddaffi though, these guys are ruthless. These money masters will drag you out in the street and shoot you like a dog, or in an convertible, or in a theater, whatever the case might be.
the links were just to describe the islamic system. i do not necessarily agree with the ideas put forth in the links.
Aha! Didn’t think so, but thx for them anyway, I did enjoy reading them. I was just taking the opportunity to bash mainstream thinking / propaganda. :)