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Two Volumes by Gottfried Feder

Gottfried Feder, 1883–1941

2,973 words

Gottfried Feder
Manifesto for the Breaking of the Financial Slavery to Interest
Foreword by Rodney Martin
Translated with a Preface by Dr. Alexander Jacob.
(Uckfield, Sussex: Historical Review Press, 2012)

This volume by Feder is the first of a series of small books by the important, albeit now obscure German campaigner against usury. It will be of scholarly interest insofar as Feder was a seminal influence on the early thoughts of Hitler and was a founder of the German Workers Party. It was Feder who gave opposition to usury and a demand for a new banking system, a technical foundation without which the National Socialist economic and financial policies might not have gone beyond a vague enmity towards capitalism because of its identification with Jews. Whatever other experts on the financial system the National Socialist party had (and I am not aware of the others) it was Feder who was the primary authority — analogous, despite the differences, to Social Credit’s C. H. Douglas in the British Commonwealth states.

While an English translation of Feder’s seminal manifesto against usury has been published in the fascinating collection of documents, Nazi Ideology Before 1933,[1] the manifesto is brief. What this HRP/WVF edition includes is Feder’s detailed “Explanation and Justification,” including a section answering objections to the Feder plan.

In his Preface, Dr. Alexander Jacob provides a biographical sketch of Feder that is valuable given his long-time obscurity. He was more than a theorist, and in 1919 formed a combat league advocating his radical proposals, which represented what he called “aristocratic socialism.” It was Feder along with Drexler and Eckart who founded the German Workers Party in 1919, and that year he published this manifesto, although Lane and Rupp mentioned that it might have been written as early as November 1919.[2] What I find interesting is that Feder first sent the manifesto to the Eisner Marxist government but he did not receive a reply. This probably did not surprise Feder, as he mentions throughout the manifesto that Marxism, whether Bolshevism or Social Democracy, fails to make a crucial distinction between industrial capital and finance capital. Recognizing the Jewish element in usury (which was also recognised by C. H. Douglas), Feder opines that the failure of Marxian Socialism to deal with usury might be a reflection of the disproportionate influence of Jews in both. Marx’s onetime colleague and rival, the Russian Anarchist Mikhail Bakunin, made a similar observation, regarding Marx and Rothschild as two sides of the same coin.[3]

Like Douglas, Feder was trained as an engineer and from 1917 on, taught himself finance and economics (Manifesto, p. ii.).

Hitler was instantly fascinated by Feder’s ideas, which he had heard of prior to joining the German Workers Party,[4] as Feder clarified the meaning of the struggle. Hitler attended Feder’s lectures and was taught the difference between loan and industrial capital of which he had been previously unaware.[5] After the first lecture, in which he first heard about stock-exchange and loan capital, he recalled: “I had now found a way to one of the most essential pre-requisites for the founding of a new party.”[6]

Feder with Hitler and Anton Drexler wrote the 25 point programme of the NSDAP in 1920, hence the points on banking stating:

10. It must be the first duty of every citizen to perform physical or mental work. The activities of the individual must not clash with the general interest, but must proceed within the framework of the community and be for the general good.

We demand therefore:

11. The abolition of incomes unearned by work.

The breaking of the slavery of interest

Feder participated in the 1923 Munich Putsch but was only fined 50 marks as his position was briefly that of “finance minister.” In 1924 he was elected to the Reichstag (Manifesto, p. iii.). In 1931 Feder was made chairman of the NSDAP economic council. He was already however being gradually sidelined, as Hitler sought to moderate the socialist program to accommodate industrialists such as Krupp (Manifesto, p. iii.). Hence, when Hitler assumed government in 1933, Feder was only made a State Secretary and soon withdrew from government to become a professor until his death in 1941 (Manifesto, p. vi). In this respect he is similar to Walther Darré, Minister of Agriculture, who was also gradually moved aside due to the contingences of war.[7] However, it would be an error to readily dismiss Feder’s fundamental influence on Third Reich finance and economics, as Anna Bramwell does when she writes that while Darré became an important figure, especially prior to the war, “Feder’s Social Credit died without issue.”[8]

While I am neither interested in nor qualified to debate the fine points of difference between Feder’s and C. H. Douglas’ ideas, I do not agree with the contention that rearmament was the major cause of Germany’s recovery. Whatever one might say about the extent of Germany’s war production, the foundation remained that of state credit issue, and certain significant socialist policies were enacted including the limitation of industrial dividends. In stating that Hitler received the — belated — backing of certain industrialists — a theory that is popular among both Marxists and Libertarians — it is all too easy to obscure a significant fact: unlike most capitalists other than the Japanese, many German industrialists were nationalists who were loyal first to the Fatherland, rather than primarily to what Feder aptly calls “Mammonism.”

One of the closest parallels to the German financial policy was that of the New Zealand Labour Government, which issued 1% Reserve Bank state credit to fund the iconic state housing program, which alone cut the unemployment rate during the Depression by 75%. That was also a great achievement, despite the outrage by the famous Labour Party politician John A. Lee who was dismayed that Labour did not fulfil its complete program of banking reform.

One therefore does not have to be a “Nazi” to appreciate such policies, although any mention of the success of similar policies in Hitler’s Germany are met with either silence or outrage from other banking reformers, which is the reason why Ezra Pound, despite the cogency of his pamphlets on banking, is generally repudiated as not being a “true” Social Crediter because of his equal enthusiasm for Fascism. Another state that reached economic heights due to adopting Germany’s banking policies, was Japan, where Douglas Social Credit had also been well received before the war.

What I am still not clear about is whether Feder drew a distinction between the issue of currency or what might be called fiat money, and credit. The two are not synonymous and usually the amount of coins and banknotes in circulation compared to compounding-interest credit is very small. Feder seems to be advocating the issue of interest free currency according to the demands of production. The same policy was advocated by the New Zealand banking reformer A. N. Field and his British precursor Arthur Kitson. However that is not the same as issuing interest free credit.

Nonetheless, the revival of Feder’s ideas is especially vital today. Ironically, at the very time that the flaws of the debt system are coming home to roost, there is now less understanding of or interest in alternatives to the debt finance system than ever; the crucial issue that was once talked about on every street corner and at every bar, shop and factory floor throughout much of the world during the 1920s and 1930s. In this respect, much of the Right has been criminally negligent. There is a tiresome preoccupation with side issues, but nothing can be achieved unless the financial system is first dealt with.

It is not necessary for the Right to reinvent the financial wheel. There is a large corpus of material that was formulated decades ago by keen minds on the subject, and because the financial system has not changed, the relevance of these ideas remains. Those such as Ezra Pound, Charles Coughlin, C. H. Douglas, John A. Lee, and Gottfried Feder, should again become required reading and subjects of discussion. Instead, where there is discussion on finance among the Right it often involves some idiot scheme about a silver or a gold standard. The major cause of World War II was fear of Germany’s new banking system, and also the barter trading system that was allowing Germany to displace the USA, Britain, and others in world trade.

As Feder states throughout his manifesto, currency (or credit) is simply intended as a means of exchange, not as a profit-making commodity via usury. During the Medieval era usurers were executed; now they are regarded as the epitome of respectable business practice.

Finally, the ideals of liberating all of mankind from the slavery of usury is one that can capture the imagination of multitudes of people of goodwill, as it once did during the 1920s and 1930s. It is an alternative that leaves Marxism for dead and demands the utmost idealism, based on the closing words by Feder: “Give me your hands, workers of all lands, unite!” (Manifesto, p. 57).

Gottfried Feder
The German State on a National and Socialist Foundation
(World View Foundations/Historical Review Press, due out December 2012).

Originally published in 1923, this edition translated and prefaced by Dr. Alexander Jacob is the second in a series of publications by Feder. Hitler regarded The German State as the “catechism” of the Party.

What is particularly interesting in Alexander Jacob’s Preface to this edition is that he traces the pre-Hitler origins of National Socialism to the German Workers Party in Bohemia, whose seminal document was Rudolf Jung’s Der Nationale Sozialismus (1919). Jung had joined the Bohemian Deutsche Arbeiter Partei, founded in 1903, in 1909. The Party was renamed Deutsche Nationalsozialistische Arbeiter Partei (DNSAP) in 1918. Like the later party founded by Drexler, Eckart, and Feder, the Bohemian National Socialists advocated what was intended as a German Nationalist alternative to Marxism. It is from Jung that Feder derived the word “Mammonism” in describing the usurious finical system that controls not only the economy but has wider moral, cultural and spiritual implications.

Indeed, the first chapter is on the “moral foundations,” with the “first law” of National Socialism being “the public interest before self-interest.” This is the basis of what Feder called “aristocratic socialism,” and is inclusive of all classes, other than parasites. Therefore, because the underlying problem of usury will be eliminated, private property is not only not in need of nationalisation, but a new banking system would allow for the wider spread of property, something that was also propounded in Britain during the 1930s by G. K. Chesterton and Hilaire Belloc as the doctrine of “Distributism,” often in alliance with Social Credit. There, however, the inspiration was the Catholic Social Doctrine enunciated in the Papal Encyclicals.

However, in keeping with what might today be called the “third position” basis of these ideas, Feder also condemned the capitalist attitude of unlimited acquisition which, as the Distributists also pointed out, leads to something akin to Communism: the concentration of property into few hands. As Feder, Spengler, and others pointed out, Communism does not aim to transcend capitalism but merely to change the owner class: “The reverse side of this Mammonism is the Marxist world-view,” as Feder put it. Therefore, for Feder National Socialism was more than a political revolution; it was a spiritual and moral revolution, eliminating Mammonism by striking at its foundation: usury. Under this new socialism there would arrive a “reawakening of the German soul, in a nationalist state of work and performance in which each will find his own.”

Feder returns to the “economic foundations,” starting with the moral predicate: “In a healthy economic body morality and national economy cannot be separate.” A just economic and social structure ultimately rests on the honour of its citizens; something that is comparable to the guild ethos of the Medieval era. The first concern therefore is not for profit but for the well-being of the common interest.

In this chapter we come to an interesting question which I alluded to above, that of National Socialism supposedly selling out to the big industrialists. My contention is that German industrialists were not necessarily comparable to the plutocrats of today, or those of other states – other than Japan – in their own time. Feder addresses this matter:

The principle for this limitation lies in the sentence: “Public interest before self-interest.” That this limit for property moreover can be raised very high emerges from the fact that National Socialism will not in any way reject even the largest industrial works, so long as they remain in the private possession of the creators (we think of Krupp, Mannesmann, Thyssen, etc.), as contradicting the interests of the whole, especially when the owners of these large works have a feel for and understanding of social questions and are able to find the right limits between appropriate self-gain from production, an adequate pricing for the sales and the fulfilment of demand of the national economy, and a corresponding and worthy form of participation of the workforce in the revenues of the works.

The question is not so much how much money and property one has but what one does with it, and how its accumulation affects the community. One can see here why Feder calls his Idea “aristocratic socialism,” as it is antithetical to the levelling creed of Marxism, whose utopian vision is a drab, grey equality. Feder deals with further questions of trade, and the federation of the distinctive German provinces rather than a levelling centralism, which might seem closer to Otto Strasser’s position than Hitler’s.

Feder is a proponent of the Leader-principle no less than the mainstream of National Socialists. He is no democrat, and is scathing of “parliamentarianism,” which he regarded as a front for plutocracy. He is also in accord with the rest of party orthodoxy in advocating the exclusion of foreign elements from the leadership of the state. A premise is: “Closing of the nation externally with all freedom and diversity internally. This is the correct idea of a German state.”

With Part II of the book we come to a more specific program. The first chapter is “The National and Economic Program of the National Socialist German Workers’ Party,” which is comprised of concise points but is lengthier than the 25 point program. Most significantly this program provides a fuller outline of the financial policies based on the premise: “The task of the national economy is the fulfilment of demand and not as high a profitability as possible for loan capital.” Here the socialist principles are based on the recognition of private property while prohibiting hoarding, and the encouraging of private enterprise while discouraging conglomerates. In point 15 of this section the premise of the future Labour Service program is mentioned: “The introduction of a year of compulsory work for every German,” which was primarily for the purposes of creating national solidarity and transcending class-coconsciousness.

Part II of the program specifies the breaking of interest slavery which includes (17) the nationalisation of the banking system. This part elaborates the specifics of financial policy more thoroughly than the Manifesto for the Breaking of Interest Slavery, which outlines an ideology rather than a policy. Point 18 was enacted by the Hitler regime, namely: “The financing of all large public tasks (development of hydro-energy, roadways, etc.) with avoidance of loans through the issuance of interest-free state treasury vouchers or through a cash-free method.” Such a voucher system for exchange is again being not only advocated but also implemented, on local scales around the world, as local communities by necessity begin to look for alterative local currencies. Point 20: “The creation of a non-profit Construction and Economic Bank (currency reform) for the granting of interest-free credit,” was achieved by the First New Zealand Labour Government in 1935 when it nationalised the Reserve Bank. As mentioned previously, the bank issued 1% state credit to fund state housing, and it would be interesting for an informed New Zealander to read that point 25 of Feder’s program states: “Removal of the housing shortage through comprehensive new housing buildings throughout the Reich by means of the new non-profit Construction and Economic Bank . . .” The final point recommends the reduction of taxation, a recommendation also found in Feder’s Manifesto, as taxation largely serves to pay for interest on loans, as do local rates. Indeed, in this reviewer’s residence of Kapiti, 18% of Council rates revenue goes towards payment of debt.

What is of additional interest is the mention (although lack of elaboration) of a corporatist method of government that is lacking in the 25 point NSDAP program: “Development of professional chambers.” The corporatist model was detailed in an article by Feder published in 1919 in Eckart’s Auf Gut Deutsch, entitled “The Social State.”

Part III of the book offers elaboration of the program set out in Part II, dealing with  “state structure,” in which racial admixture and Jewish influence are the focus of condemnation. In these respects Feder differs little from the orthodoxy of the volkisch movement. There is a standard discussion of the Jews.

However, there are relatively detailed chapters on agriculture and national financial reform, the Versailles reparations, and worldwide debt. In discussing the future of the Reichsbank, Feder declares that “The breaking of interest slavery is by far the greatest task of National Socialism.” That is a premise that should be revived today by the Right, which seldom gets beyond such questions as immigration and multiracialism, themselves symptoms — not causes — of a civilization whose decay is set in course by “Mammonism.”


1. Barbara Miller Land and Leila J. Rupp, ed. and trans., Nazi Ideology Before 1933 (Manchester University Press, 1978), pp. 27–30.

2. Ibid., p. 26.

3. Michael Bakunin, Personliche Beziehungen zu Marx, 1971, in Gesammelte Werke, vol. 3 (Berlin, 1924), pp. 204–16. “Bakunin on Marx and Rothschild,” The Information Underground.

4. Adolf Hitler, Mein Kampf (London: Hurst and Blackett, 1939), p. 187.

5. Ibid., p. 180.

6. Ibid., p. 181.

7. Anna Bramwell, Blood and Soil: Walther Darré and Hitler’s Green Party (Buckinghamshire: The Kensal Press, 1985).

8. Ibid., p. 5.



  1. Proofreader
    Posted November 20, 2012 at 7:27 am | Permalink

    By a remarkable coincidence, two of Gottfried Feder’s works have been published in French translation this year, apparently by two different publishers: Manifeste pour briser les chaînes de l’usure, and Critique nationale-révolutionnaire du capitalisme spéculatif.

  2. Deviance
    Posted November 20, 2012 at 11:09 am | Permalink

    There is a lengthy reference to Gottfried Feder in Alfred Rosenberg’s 1945 memoirs (a book that CC may be interested in reediting).

    Taking along my own spoon, I now went daily to the soup kitchen. On the corner of Theresienstraße and a cross street to Kauffingerstraße many stepchildren of fate sat quietly, shoulder to shoulder, eating cabbage soup with dumplings. This helped stretch my means, Occasionally Dietrich Eckart paid for my articles, but not enough to safeguard me for any length of time. That was the situation shortly after I met Eckart. At about the same time a man appeared on our horizon who later acquired some influence, the engineer, Gottfried Feder. He maintained that the great economic crises were entirely due to what he termed interest slavery into which every nation in the world had gradually fallen because of mobile loan and finance capital. He made a clear distinction between that and the earth-bound industrial capital whose protection, he said, was definitely one of the tasks of the state. How could money multiply itself? How could capital increase without working, merely through the endless accruing of interests? To save, yes, that was the result of work. But coupon-clipping, no! Hence, gradual reorganisation, and the eventual end of interest slavery and the entire system of interest economy. In these unsettled times such an idea intrigued a great many people. Some of his theories were indubitably correct, and in fighting usury we had, after all, no intention of doing away with a national industry. Eckart took them up with enthusiasm and proclaimed the idea of government control of the entire credit system, saying if anybody protested that this would cause the collapse of the entire world, well, then let this world collapse. Feder himself spoke at many meetings of an organisation, founded by him to abolish interest slavery, and later made contact with the growing National Socialist German Workers’ Party. Like many others who concentrate on a mere symptom of the totality of events, Feder’s development was rather like that of a sectarian who considers himself the very hub of things. In later years his unfortunate conceit got quite out of hand, inasmuch as he came to believe his program was the very core of National Socialism. This conviction went hand in hand with an unpleasant tendency to make a good thing out of it by not only asking large fees for his speeches, but by insisting upon payment in advance, something which the embattled and frequently broke National Socialist German Workers’ Party considered, to say the least, somewhat strange, and which gradually lost him all sympathy.

    But Feder’s ideas turned out to be not entirely original when someone produced a copy of Theodor Fritsch’s Hammer, a magazine containing verbatim, and as early as 1917, much of what Feder later promulgated, without bothering to mention his source. In any case, these thoughts were stimulating enough to cause the examination of quite a few other theories, even though, in practise, no clear differentiation could be made between the various capitalistic systems. Still, there were tangible values inseparably bound up with the people and the soil, and others that were much more mobile. That government supervision of the latter was necessary seemed obvious to many of us. These talks spurred Eckart on to public action of his own. He published a leaflet, To all workers, in which he called them to arms against usury, and which he signed with his full name and address. He printed quite a large edition, and hired two taxicabs from which we scattered them on the streets of Munich. Since many such pamphlets were printed and distributed in these days of revolutionary fermentation, Eckart at first had no difficulties. In fact, when he was about to be arrested during the Räterepublik (the short-lived Communist regime in Munich), and placed among the hostages, this pamphlet may very well have saved his life, for his own janitor and the men who came to arrest him declared with one accord that the author of such a leaflet could not possibly by a reactionary. He went free.

    While Feder rightly identified systematic usury in financial relations as a problem, he failed to see that usury was not “stealing” per se, and that inflationary central banking was actually a far bigger problem than usury. He also had some pretty left-leaning views on private property, Strasser-like, which may be the reason Hitler parted with him when he came to power.

    Before someone accuses me of being a libertarian in disguise, or a Jewish troll… let me explain what my ideal banking system would be like.

    – A new currency (let’s call it the omega) is launched by creating a fixed amount of it. The nominal number does not matter, except for aesthetic and practical purposes. I would create 1 000 000 omegas. After this initial launch, no supplementary unit will ever be created. This is Murray Rothbard’s ideal currency, meaning, a fixed one, a dead one. It annihilates all risks of inflation and redirects the economy toward the natural state of deflation.

    – The banks are under total State ownership, simply to make sure that the interests of such powerful agents are compatible with the interests of Aryans. Simply to make sure that the CEO is called “Heinrich Himmler” rather than “Jerobodah Jerusalem”.

    – The banks can then practice capital lending at a price (usury), with a contract (islamic banking), or at no price (social lending), depending on their desired social function and their personal greediness. It is not necessary to interfere.

    – Fractional banking is totally forbidden, ostensibly to prevent banking crises.

    I believe in all honesty that such a system is, under the light of economic science and history, simply the best.

    • Greg Johnson
      Posted November 20, 2012 at 5:41 pm | Permalink

      Deflation is just as bad as inflation. Credit and currency should be increased at the same rate as economic growth to keep prices stable.

      • Deviance
        Posted November 20, 2012 at 7:53 pm | Permalink

        Respectfully: no. The idea that price decrease (deflation) is bad is a very modern idea, mostly pushed by leftists, proponents of central banking, and keynesians. Deflation itself is a neologism.

        The world economy used to run in a deflationary mode from Ancient Egypt to the rise of inflationary central banking in the end of the XVIIIth century. America was in mild deflation from the 1600s to 1913. Check it, I’m not kidding you. Deflation has happened for decades on computer parts and transistors, and it resulted in an improved access to technology for consumers.

        There’s also no such thing as “adjusting the money supply to economic growth”. It is impossible to do when the problem is posed in such terms. What is economic growth, anyway? How does one measure it? Think deeply, and you will start understanding that this candid question is in fact a very serious and troubling one.

        I insist on reading the book The Mystery of Banking. This is a reference, a bible in monetary matters. Ignore the fact it was written by a libertarian Jew; the work is very neutral, and is composed mostly of technical aspects and logical demonstrations. A Communist could read it and still agree with its demonstrations. It begins with an analysis of the money problem, notably its beginning in prehistoric ages. The argument that we should worry about deflation is very quickly destroyed.

        I have read your article Money for Nothing, Greg, which summarizes your economic views. I find it bold, futurist, and likeable. But it remains very elusive, perhaps for the best, as you admit yourself economics are not your strong point.

        • Greg Johnson
          Posted November 20, 2012 at 8:04 pm | Permalink

          You are conflating a very elementary distinction between (a) currency deflation (i.e., the rise in the value of a currency viewed as a commodity vis-a-vis other commodities, which appears as falling prices) and (b) falling prices in general (which can come about because of increased productivity due to technological progress, among other factors not related to currency deflation).

          This is what I said about the harm of monetary deflation in the “Money for Nothing” thread:

          Hoarding money does harm others, particularly when gold is the standard. Imagine that you are a farmer who takes out a loan in gold to buy farm equipment, and you mortgage your farm to do it. Your loan is denominated in gold coins. Let’s call them Paultards.

          You don’t have any problem meeting your first year’s payments. But each subsequent year, it gets harder. Gold, you see, is becoming more expensive. The easily mined gold has already been mined, so with each passing year, the same amount of bullion costs much more to produce in terms of capital expenditure and work. And people who like bits of shiny metal tend to take gold out of circulation every year, thinking that one day it will be worth a lot more when a predicted economic crisis will occur.

          So money gets scarcer and scarcer. That means that the a crop that might have brought in 100 Paultards a ten years ago, now bring in 40 Paultards today. But one’s one’s principal and interest do not change. One has to pay 40 Paultards a year for so many years, and when one’s entire crop goes to paying interest and principal, one loses one’s farm and becomes a pauper.

          When that happens to enough small farmers and businessmen and homeowners, the nature of society changes. One has just as much “economic” freedom as before, but there is much less real freedom, because more and more people work for big landowners, corporations, etc. and face all sorts of pressures to conform to the opinions of their bosses. Republican government, however, depends upon private property widely distributed and securely held. Preserving republican government therefore requires an economic system that prevents the destruction of the middle class through usury and currency deflation.

          If you want to look at the gold standard at work, look at western Europe after 220 AD, when the Romans repudiated the silver denarius and went to a complete gold standard. The deflation and devastation (including the enslavement and enserfment of whole peoples) lasted more than 500 years, until Charlemagne created the pound sterling (literally a pound of silver) as the new monetary unit. Silver being more plentiful and less liable to hoarding than gold, it is less deflationary as a currency.

      • Kerry Bolton
        Posted November 21, 2012 at 2:33 am | Permalink

        There’s nothing like the banking question to cause a reaction of total nincompoopery from Rightists, racists and retards. What nonsense Alfred Rosenberg wrote about Feder and banking. As to the question of Feder being unoriginal, of course he was – that’s no bloody revelation. Much of the world was discussing such concepts. Feder was presumably the most avid for Germany, like C H Douglas in the British Dominions, John Hargrave in Britain, Coughlin in USA, John A Lee in New Zealand, et al.

        The NZ Labour Govt. – as I keep bloody saying time and again – funded the state housing project with 1% Reserve Bank state credit, that one project alone dealing with 75% of the unemployed during the 1930s. Y’all think it’s goddamn magic? It’s common sense financial policy.

        Many states operated on state credit, some such as Canada, until quite recently. It was tried and worked. What can’t some people get?

      • Andrew Ralston
        Posted November 22, 2012 at 1:37 pm | Permalink

        “Hoarding money does harm others…”

        Whether we call it saving or hoarding, removing money from circulation does not harm others.

        The saver forgoes present consumption. This is his right. To the extent he holds money in reserve, he does not compete for goods and services and does not bid prices upward. This benefits consumers.

        You could argue that the farmer may get a lower price for his wheat than otherwise. But you could also say that his wife can buy more groceries than otherwise.

        • Greg Johnson
          Posted November 22, 2012 at 3:44 pm | Permalink

          Money is a means of exchange, so taking it out of circulation does harm the public, because it makes money scarcer, which is deflationary.

          Now when people put money in savings accounts, that is not really taking money out of circulation, since it is lent out to others. But when money consists of precious metals, there is a constant drain from circulation as it is hoarded by gold bugs, turned into jewelry, employed in industry, used to adorn temples and palaces, etc.

          “Forgoing present consumption” is just a fake capitalist virtue that allows moneylenders to sleep at night. To say it is a “right” is almost an admission that it is contrary to the common good.

          Since money is a medium of exchange, the best form of money would have no intrinsic value, could not be commodified (loaned out at interest, inflated, or deflated), and would expire if not used (like a coupon or frequent flyer miles) thus could not be saved.

    • Axon
      Posted November 21, 2012 at 9:37 am | Permalink

      The omega system is in effect just a “paper” version of the gold standard. It limits the amount of currency available in the system. If you allow usury in such a system the result of the compounding effect of usurious debt would be:
      1) money that should be circulating in the system to keep the economy running is squeezed out to repay debt. Overtime this would lead to an increasing scarcity of money -> resulting in depression for the many, plenty for the usurers.
      2) objects of real worth (land, property, etc) are transferred from the borrower to the usurer when a loan is defaulted upon.
      Both results arise from the fact that usury demands more money back than is available if the system is to run optimally. Remember money is not subject to natural increase – therefore the promise to repay money is wholly different from promising to give an extra calf or barrel of apples next year for the use of the same this one!

      Now as you point out deflation should make money available for debt repayment, and though Greg offers a negative case for deflation, in theory it may be possible to manage the situation if the overall amount of debt is strictly limited, so that ‘total debt’ <= 'total deflation'. That is, the extra money resulting from cheaper prices allows the debts to be cleared. What seems highly improbable however that deflation would ever independently act as the inverse function of debt! Consider: could macro deflation ever happen accidentally in the same exponential manner as debt compounds? There is a fixed mathematical rule governing how debt compounds, whereas deflation will be a high-order effect having no simple input/output rule.

      Furthermore any explanation of America's growth under deflationary conditions from 1600-1900 (if, as you say, that was the case) should probably look more to population increase, technological advancement, increases in the amount of gold & other likely factors. A situation which has probably more or less held since ancient Egypt… In which case Rothbard's argument is erroneous, possibly misleading.

      A quick illustration of what is meant:
      1) The wealth accumulation of a single man is linear over time.
      2) Population increase has been roughly exponential over time.
      3) Therefore the wealth accumulation of a growing population is exponential.
      4) Exploiting the labour of growing population therefore counteracts the worse effects of usury & deflation in a system with a limited money supply.

      Other factors which would have modulated wealth accumulation over time are clearly increasing technology & the accumulation of know-how.

      Lastly the economic incentive to exploit the labour of increasing populations may account far more for mass-immigration than alternative explanation – something to be considered anyway.

      • Andrew Ralston
        Posted November 22, 2012 at 12:06 pm | Permalink

        “A quick illustration of what is meant:
        1) The wealth accumulation of a single man is linear over time.
        2) Population increase has been roughly exponential over time.
        3) Therefore the wealth accumulation of a growing population is exponential.
        4) Exploiting the labour of growing population therefore counteracts the worse effects of usury & deflation in a system with a limited money supply.”

        Is this what you meant or what Rothbard meant?

        Not sure whether your overall point is affected, but…

        WRT #1, some individuals have accumulated wealth exponentially by such means as business expansion, market speculation, or more commonly the compounding effect of interest reinvested in principal.

        WRT #2, exponential population growth on one planet with finite resources cannot continue forever.

      • Axon
        Posted November 22, 2012 at 5:14 pm | Permalink

        Rereading my last comment it does seem somewhat rushed & unclear…

        WRT 1) The wealth accumulation of a single worker is linear averaged over time. If a man can realistically make 4 wheels in a day by way of his own labour, he will on average make 4 wheels everyday over his working life. A worker cannot work with ever increasing productivity, making 4 wheels one day, 8 the next, 16 the next, and so on. Clearly technological advances & increases in know-how will increase his productivity, but they are external to the actual accumulation of the worker himself. A new tool may allow him to make 5 in a day, but without other external changes it will continue to be 5 on average everyday. Again the accumulation is linear.

        Yes individuals can accumulate wealth exponentially (or perhaps better non-linearly) by way of the things you describe. However the wealth they are gaining is not from a simple 1st order relationship of a worker to their work. One example should illustrate what was meant. Imagine the individual (I use this name to make clear he is not a worker) replacing 10 men with a machine that can do the work of 20 for the cost of 5! Here the work is still being done, but by the machine – not the individual. The increase in productivity & reduction is outgoings is wealth that flows to the individual due to his business ‘acumen’ but not directly from a simple relationship of a worker to his work.

        All other ways an individual accumulates wealth non-linearly should easily be analysed in a similar fashion.

        WRT 2) Yes, there’s only so far it can go, which is why searching for alternatives is important.

  3. Bryan Sylvian
    Posted November 20, 2012 at 11:12 am | Permalink

    Guillaume Faye thought that one of the ideological mistakes that the Nouvelle Droite made was not to have an economic doctrine.

    “In order to re-establish an effective ideological corpus, it is essential to possess an alternative economic doctrine. This means a return to concrete problems and social issues that affect people’s lives: urbanism, transport, fiscal policy, the environment, energy policy, health care, birth rates, immigration, crimes, technology, television, etc.”

    (Archeofuturism p. 43)

    It is reassuring to see the NANR addressing these issues.

  4. Axon
    Posted November 20, 2012 at 12:13 pm | Permalink

    Excellent & informative article!

    “Aristocratic Socialism” is a perfect appellation. For what could be more aristocratic, more chivalric, more noble & high-minded than to put the common-good before selfish greed & egoistic pursuit of material abundance? There are many claims to the aristocratic amongst those who see themselves as being ‘on the right’ that tend to be bound in absurdity. Pretending to a taste for the nonchalant, disdainful & cruel, such buffoons imagine themselves to be so high above the common-folk that one suspects their ‘blue-blood’ may actually be caused by some psychosomatic deprivation of oxygen induced by the delusion of dwelling at such rarefied heights!!!

    As the author notes economics is the most important issue of all. So it is surprising that so few ‘on the right’ are really addressing this crucial issue with the intensity it deserves: there’s absolutely no point even contemplating displacing one evil elite if the instruments of oppression are quickly taken up & wielded by others of ill intent. So it’s great to see CC not only ‘on the right’ but also ‘in the right’ in regard to this issue. And being ‘in the right’ is requisite here, for destroying usurious debt enslavement is a clear & unambiguous moral imperative. Thus it should be more than just another ‘issue’ of concern – it should be a blazing banner held high and aloft to rally the hearts of all ‘right-thinking’ men!

  5. Herman
    Posted November 20, 2012 at 12:22 pm | Permalink

    From my father, I inherited two booklets which he had bought when he was a student of economics. One has the title “Arbeitsbeschaffung durch produktive Kreditschoepfung” (occupation by productive credit creation), 80 pages, price 70 Pfennigs, the author is Heinrich Draeger; the other booklet’s title is “Verstaatlichung des Giralgeldes” (nationalisation of bank-created money), 66 pages, price 80 Pfennig, the author is Arthur R. Herrmann; both booklets were published in 1932 in a series which was edited by Gottfried Feder. The “Arbeitsbeschaffung” was interesting reading for me; I have good foundations in economic theory, but don’t know much about banking. The “Arbeitsbeschaffung” is pure Keynesianism, four years before Keynes’ “General theory” was published. It is written in a popular style, but nevertheless a sound scientific text, entirely without too apparent political tendency. Other economists are quoted with respect and without polemics, among them Keynes’ “A treatise on money”.
    There were some 45 such booklets edited by Gottfried Feder, proof of a rather productive think-tank around him. The other political parties in Germany did’nt have anything comparable, as far as I know.

  6. me
    Posted November 21, 2012 at 5:51 am | Permalink

    Speaking of interest/usury, here’s a better way of charging for a loan:

  7. Simon Lote
    Posted November 21, 2012 at 3:46 pm | Permalink

    Deviance I’ve read the Mystery of Banking by Rothbard it is a good read and gives the best summary of fractional reserve banking and its pitfalls,but it suffers from libertarian blindspot which refuses to even consider the possibility that the market will fail to deliver the desired outcome. In fact it is heresy for libertarians to even ask that question.

    So when farmers end up getting squeezed by deflation and bankers foreclose on their property. There’s nothing to see here, free market in action, its all for the greater good – move along Folks.

    I really don’t know how far gold retarded economic development in the West. Its kind of hard to say especially since Bankers have been engaged in swindling their depositors since the get go and there has been no full reserve gold standard.

    It may well even have been the case that despite the chronic instability of the fractional reserve system the fact that it allowed the money supply to expand may well have been preferable to a full reserve gold standard given the massive defaltionary effects it would have had on the economy. Ancient Rome was not saved by implementing a full reserve gold standard, indeed, as Greg argues it may have been a key reason for the collapse of the empire.

    I suggest you read what I’m reading ‘Political Economy of Social Credit and Guild Socialism’ to consider the other side of the debate as well.

  8. Posted November 22, 2012 at 11:43 am | Permalink

    Any future Aryan State should integrate its welfare state with its agricultural base. At least 7% of the population should be working in agriculture and ranching. The welfare state should care for individuals and families on hard times, but in return, labor to the soil will be expected.

    The current White underclass (who some people call “white trash” or “trailer trash”) that currently work in fast food, soulless retail & service jobs, and/or the chronically unemployed will be transferred into agriculture (fast food and bog box retail will be outlawed). This class of people will return to having dignified lives raising food for the folk. GMO foods should be outlawed. Family farms will provide the state with a number of workers they need for labor purposes and the state will build living quarters for the workers and their families near by.

    All able bodied people will work. The children of such workers will be educated. Those people who have no motivation to move up out of agricultural work can stay in agricultural work their whole lives. They will have living quarters and healthcare but WILL WORK. There will be no welfare queens who do nothing but collect a check. During off seasons these workers will clean up trash, shovel snow, and help maintain their communities.

    This program will return stability and community to the White underclass. It will bring dignity and purpose back to the members of our folk who need it the most. And it will produce quality food for the folk. Extra food not bought by the folk will be exported.

    • Greg Johnson
      Posted November 22, 2012 at 3:28 pm | Permalink

      This is all interesting, but I wonder about your assumption that farming is the best work for the current white underclass. I think you are buying into Jewish stereotypes about “stupid peasants.” Farming requires intelligence, foresight, imagination, and hard work. The farmers I know are bright, college-educated, ecologically aware, socially-responsible people. That is not the profile of the white underclass.

      • Posted November 22, 2012 at 5:15 pm | Permalink

        I’m talking about the actual field work. Field work only requires the ability to work hard and listen to orders. The actual farm owners and managers would be as you describe (bright, college-educated, ecologically aware, socially-responsible people). All the underclass would have to do is report to work each day and follow orders. Instead of illegal mestizos doing the work on corporate farms, it would be the White underclass. The state would provide housing and healthcare, they would just have to pick crops or do other agro-labor. Some of these people would rise ahead and become managers and start their own farms. They would also be offered technical training to learn trade work. But for the percentage that don’t have the desire or ability to move past field work, they could lead respectable lives as part of an organic community providing food for the folk.

    • Axon
      Posted November 23, 2012 at 8:10 am | Permalink

      It’s a likeable & appropriate idea because most of the current underclass will comprise of people descended from those who have done this type of labouring for many, many generations: so one suspects that, hidden beneath appearances, the type of natural abilities they possess will probably be very suitable to this type of task. Furthermore no sick, leftist-style ‘social-engineering’ programme would be required to ease transition other than the lifestyle itself. Simply removing them from modern pollutants such as fast food, ‘hip-hop’, TV & the Cultural Marxist education system will physically & spiritually detoxify them more than enough.

      It’d also be nice to see one day a week military training instead of work for men between the ages of 14 – 44; access to hunting & fishing; and some effort to re-establish vernacular traditions that tie blood to soil in a pleasing, organic manner.

      To really rebuild community though, worker villages similar to the Cadbury’s Bournville or Port Sunlight idea should ultimately be built (or established within existing nearby habitations.) Lot’s depends on the location of course… The architecture for example would be within the tradition of the local vernacular, not necessarily in the Victorian English idiom of the 2 places mentioned above, as long as it’s clean & pleasant with an overall positive aesthetic it should be fine.

      Whatever the details though the essential idea of re-rooting the deracinated underclass back into the land by providing them access to work & decent living conditions is great. That is of course unless the desire is to introduce a more brutal, authoritarian regime, perhaps on the perverse misunderstanding that such represents something more vital or masculine in character? In which case one suspects it wouldn’t hold together for very long…

      • Posted November 24, 2012 at 12:31 am | Permalink

        “That is of course unless the desire is to introduce a more brutal, authoritarian regime, perhaps on the perverse misunderstanding that such represents something more vital or masculine in character?: (Axon)

        I certainly couldn’t advocate a “brutal, authoritarian regime,” as I tend to believe that fear is the greatest killer of creativity. But like Plato I do see it necessary to place certain controls on public art and aesthetics. What people did in their homes should not be interfered with, unless it involved the harming of children, but the public space would display the highest expressions of Aryan civilizational form. The main mission of any future White states, communities, or polities should be the constant amelioration of the physical, psychological, and spiritual health of the folk (which my agricultural/social welfare policy is well suited for). That which interferes with this will not be permitted, regardless of how “profitable” it may be. BUT, this will need to be balanced with considerations for personal and civil liberties.

    • Posted November 24, 2012 at 12:50 pm | Permalink

      Also every summer graduating high school students will be required to spend their summer assisting in the farm work (regardless of social class). Waivers will be given to individuals who join the military.

  9. me
    Posted November 23, 2012 at 1:06 am | Permalink

    Greg Johnson wrote:

    Now when people put money in savings accounts, that is not really taking money out of circulation, since it is lent out to others.

    Uhm , no. In practice, banks do not lend people’s deposits. Instead they create credit.

    According to a slideshow by a retired banker, there’s about $1.25 in the FDIC for every $100 in insured deposits. So if a bank loans a customer a huge amount, say, $1.4 million. The bank really doesn’t have that much cash in its vaults. The FDIC that insures deposits won’t let the bank take the money out of another person’s account to make the loan.

    Irving Fisher said it the best (in 1930’s): “Our national circulating medium [i.e. dollars] is at the mercy of loan transactions of banks, which lend, not money, but promises to supply money they do not possess.”

    Speaking of hoarding and money supply. According to FED stats, there’s actually about $1 trillion in paper notes circulating. About 70% of that money is overseas. That means there’s about $300 billion in cash in USA. That’s less than $1K for everyone in USA. Vast majority of transactions involve credit/debit cards and checks, very little in paper notes.

    • Greg Johnson
      Posted November 23, 2012 at 1:22 am | Permalink

      What you are saying does not contradict what I said. Just because banks create credit, that does not mean that they do not also loan out deposits.

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