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ABC of Economics, Part 5 & Conclusion

2,810 words

[1]Part 5 of 5

Chapter I

Minor Addenda and Varia 

I have never met a gambler with an ounce of intelligence, but the prejudice against lotteries is in the category of superstitions, totemism and taboo. Lotteries can harm only the imbeciles who buy tickets, but these imbeciles appear to be wholly in their own right. As a means of collecting money for state purposes no sound reason has ever been adduced against this sane safety valve.

The instinct has been romanticized, doubtless in special cases it is the only danger some men can incur and the only chance of adventure they get. I doubt if it would greatly survive in a sane commonwealth, but the world has not yet seen such a commonwealth. The prejudice is part of the puritan imbecility, which is at root a disease, begotten of the worst in nature.

There is, however, every reason why the imbecile pastime should be isolated, i.e. confined in its effect to those who voluntarily gamble, and that it should not be allowed to affect the price of foodstuffs and necessities.

The whinings of a Whitney and the yowls of stock jobbers are no better than any other form of gangster’s sobstuff.

The purpose of an act is one of its dimensions; is a component of its specific gravity, and no one ever yet claimed to have sold short, or rigged the stock market, save in the hope of picking other men’s pockets.

There is nothing to be said against any gang of thieves playing poker except that they are playing with other men’s money. When members of a stock exchange play against each other without affecting the food and welfare of members of the community who have no chance of profiting by the play and in any case no voice in the laying of the bets, the said brokers, etc., cannot make much showing as sportsmen.

They have had a fair amount of time to show what they have done for their countries and so far haven’t been able to dig up even a journalist liar to write them a tombstone. As a public utility they are not a success.

It is perfectly easy to dissociate investment from speculation; it is fairly easy to spin cobwebs over the borders of the dissociation. A stock exchange confined to the buying and selling for real investors would doubtless be very very dull, and many of the present practitioners and scoundrels would take to golf and chicken-farming in preference to such ovine tranquillity, but we are not out to guarantee the private amusements of a few hundred or a few thousand barons.

It would be much better from the bono publico standpoint if they were to kill themselves racing motor-boats, get their kicks playing the races, and leave the small fry to roulette and the lotteries. Economics, as a science, has no messianic call to alter the instincts.

Short of an absolute state ownership of all property there will always be plenty of chance for men to ‘make fortunes’ with serious construction in industry. The fewer fake diamond mines, the more likely new inventions and amplifications will be to find support.

NOTE. The printing of fine books improved greatly after the 1914–18 war. Because a great number of people had no confidence in the value of money.

I am aware that I am here in a risky position, and that an attempt to dogmatize might jeopard my credit, nevertheless I should hazard a guess that a definite good or gain occurred because of a definite state of intelligence. The good occurred not because money was unstable, which I don’t think anyone can regard as a desirable state of things, but because these people were freed from the idée fixe of money as the one and only fixed value.

I admit they were only half free and mostly bought de luxe editions because they hoped to be able to sell them later at a profit, but at any rate it was the ‘thin end of the wedge’; they had at least for ten minutes got their eye on to something concrete. A few honest consumers and a few of the better producers reaped a benefit.

Chapter II

Check Up 

The remarks foregoing, even though they are in some cases my own, have no claim to be novelties. Any man reading or re-reading a classic will be affected by what he agrees with, but probably respect the ancient author in proportion as he seems sound or as he seems to have antedated modernity.

Thus in Hume, ‘Prices do not so much depend on the absolute quantity of commodities and that of money which are in a nation, as on that of the commodities which come or may come to market, and that of the money which circulates’ (D. Hume, b. 1711, d. 1776. Essay on Money).

The error of America in the 1830’s was to bull the land market as if unworked land far from railways could ‘yield’.

The analogy in the 1930’s is that the American fool has repeated himself, putting ‘industry’ in the place of land, i.e. stocks, shares in industrial companies which either were not in shape to produce or had no possible market anywhere within dreamable range of the selling price of stocks in New York.

Hume’s reasons for wanting what he calls a prosperous state were manifestly despicable, consisting mainly in the idea that if a state were prosperous some disgusting louse like Louis XIV would be able to pay the dregs of the population (his own or some one else’s) to go kill or rob some one else. But that is no reason for not observing Hume’s intelligence. He already saw through money, saw through coined money at that.

Some of his propositions are still valid, and possibly unsupercedable.

You will probably find nothing more valid inside its own scope than the statement that prosperity depends not on the quantity of money in a country but on its constantly increasing.

This was before the term inflation was in daily use.

DISSOCIATE. Inflation, first used as a derogative term and now (1932) advised as policy ‘all over the place’.

DISSOCIATE inflation from steady increase. The term inflation might be limited to mean disproportionate and faked augmentation of the amount of paper currency, and augmentation having no relation to fact, or having a faked relation to fact.

INCREASE or proper augmentation.

As certificate of an increasing productivity, increase of product, increase of means of production there SHOULD be an increase in the printed certificates of value (circulatable certificates).

But here again one must distinguish, and here in particular one can learn from history and in particular the American history of the 1830’s. At that time there was a land boom. Fools bought land and boosted the sale price regardless of the fact that the merchandise (land) wasn’t producing, wasn’t being worked, couldn’t be worked at once or for a considerable time, and there were crises and panics, etc.

‘Worthless’ land was just as worthless then as worthless machinery and factories are now.

To need certificates of value the product (of land or of factory) must be wanted by someone, and there must be means of getting it to them.

There are four elements; and it is useless trying to function with three:

1. The product.

2. The want.

3. The means of transport.

4. AND the certificates of value, preferably legal tender and ‘general’, in the sense that they should be good for wheat, iron, lumber, dress goods, or whatever the heart and stomach desire.

And (repeating an earlier proposition), everybody must be able to get a certain number of these certificates on what might be called decent conditions, i.e. without torture and without excessive worry.

Preferably on ‘fair terms’, namely that the conditions for getting them must not be violently different in the cases of A, B and C.

For the nth time, I repeat that the straightest road to such a desirable condition is via the formula: a small amount of work for everyone, with a certificate of work done as the consequence.

The brains of the nation or group to be used to discerning WHAT work is most needful, what work is less necessary and what is desirable even though not strictly necessary.

Such work should be paid. It would not fill up any man’s day.

The rest of his day he could employ in expressing his difference of opinion with the majority, and in such ‘work’ or activity as he (as distinct from the brains of the country officially organized) might consider proper, necessary or desirable.

Ultimately your credit board or your bank scoundrels or whoever is the financial and economic executive would have one main function and would be judged intelligent or imbecile according as this was performed with competence. They are there to determine, and so far as possible to keep steady, the rate of increase in the printed certificates of value.

And their motivation should be the bonum publicum, the commonweal and not the shifting and shaking the sieve for the benefit of a few highly-placed crooks, scoundrels and exploiters.

The most opportune citation is from a Spaniard whose name is not, in my source, printed, debating the new constitution, he observed that where the financial influences had been too strong and uncontrolled, freedom had suffered.

THE BASES OF ECONOMICS are so simple as to render the subject almost wholly uninteresting.

The complication of the subject is hardly a complication, it arises

A. from the extreme difficulty of foreseeing what will be wanted;

B. from the rascally nature of certain men, from selfishness of exploiters and those in ‘favoured positions’ who fear to lose an ‘advantage’.

The best system of government, economically speaking, is that which best balances the four elements listed above, be it republic, monarchy, or soviet or dictatorship. In future it will probably be a republic save in special cases, but republic or soviet, the government which best manages this balance, which manages it with the least bunk and blah and the greatest honesty, will and should probably prevail ‘as a system of government’.

Chapter III

Dictatorship as a Sign of Intelligence 

Popular fancy and Ludwigian cheap-jackery show the dictator as man of the hour, force of will, favoured of fortune.

The phrase ‘intelligence’ is more interesting. Mussolini as intelligent man is more interesting than Mussolini as the Big Stick. The Duce’s aphorisms and perceptions can be studied apart from his means of getting them into action.

‘We are tired of a government in which there is no responsible person having a hind name, a front name and an address’.

‘Production is done by machines but consumption is still performed by human beings’.

Chapter IV

Also his Perception of the Dimension Quality 

It is something, it was indeed a bright day when some ruler perceived that there was a limit to the dimension quantity in the nation’s productivity, I mean a limit to quantity of production that could be advantageous either to a given nation or to the world, but that there is no limit to the dimension quality. There have been attained maxima, vide my criticism of arts and letters for cited examples, but these attained maxima are not ineluctable limits. Nothing forbids us to desire a better art than that of the Quattrocento. We may be or may not be damned unlikely to get it, but there is no harm in trying. At any rate, in the dimension QUALITY there is ample field for all human energy, no one need feel cramped at having only four hours a day for paid work.

After that, the problem of civilization is pretty well outside the domain of the economists. Neither the billionaire nor the whole howling populace can bribe, coax or bully the artist into surpassing his own qualifications.

Five hundred people can get any kind of civilization they like, up to the capacity of their best inventor and maker. But all they can do for him is to feed, clothe, and give him leisure and space to work in.


Within twenty-four hours of writing the above I find that R. H. C. (in New English Weekly for June 16, 1932) has at last found an expression simple enough to be understood by almost anyone, save possibly Maynard Keynes or some paid mouthpiece of British Liberalism.

‘Would you call it inflation to issue tickets for every seat in a hall, despite the fact that the hall had never before been filled, or more than a fourth of the seats sold, because of there not being enough tickets available?

‘Inflation would consist in issuing more tickets than there are seats’.

That is the foundation stone of the New (Douglas) economics.

Keynes may have found it out by now; he was incapable of understanding it in 1920, and until he makes public acknowledgment of the value of C. H. Douglas, I shall be compelled either to regard him as a saphead or to believe that his writings arise from motives lying deeper in the hinterland of his consciousness than courtesy can permit me to penetrate.

‘. . . and they adopt a hundred contrivances, which serve no purpose but to check industry, and to rob ourselves and our neighbours of the common benefits of art and nature’.

David Hume: The Balance of Trade.


Or a Postscript in the Spring

1. An economic system in which it is more profitable to make guns to blow men to pieces than to grow grain or make useful machinery, is an outrage, and its supporters are enemies of the race.

2. The immediate problem is distribution.

3. National dividends are possible.

4. The moment you conceive money as certificate of work done, taxes are an anomaly, for it would be perfectly simple to issue such certificates of work done for the state, without wasting effort in re-collecting certificates already in circulation save at a rate proportional to the destruction of goods. The gesellite stamp can be considered either as tax or as cancellation of excess currency.

This doesn’t mean that the state should buy just anything it fancies. There would be a rush of ‘gold-diggers’ the moment such a concept began to function, but there should also be an aroused sense of proportion in values TO the state.

There would be no miserliness in regard to sanitation, healthy houses, medical and dental services. England now wastes three million lives in peace time for every million lives spent in the war.

5. The popular instinct against taxation is sound. I repeat that national dividends are possible, but I doubt their immediate necessity, and in any case the first step toward them, whether you regard it as proved right or as experiment, could (? should) be made by this direct payment in newly conceived money for work publicly needed. This might very possibly provide the just proportion of increase in circulating medium needed to keep exchange healthy.

‘Prosperity comes of exchange’ (meaning exchange of different goods, regardless of the steps, book-keeping, etc., which may intervene).

6. A lot of rot is talked because of failure to dissociate different meanings in the term ‘gold standard’.

Gold could serve as measure even with the new and newest fancy brands of economics, so long as the issuance of money (needed for exchange) isn’t ham-strung or exploited by people who happen to have the gold at a given moment.

It is perfectly easy to increase the volume of money in circulation without debasing its value.

7. If any of the author’s opinions are wrong he will be only too glad to change ’em on proof being adduced to their contraries, but he will not alter them merely to please gunmakers’ touts or subsidized economists who for twenty or more years have done nothing save their utmost to wrap up the subject in tissue paper, and to involve it in mystery. Their opinions are suspect because of probable motives, and they never meet open statement by open statement but solely by avoidance or by running off at a bias.

I personally heard one of the chief and most despicable fakers describe himself as an ‘orthodox economist’. ‘Orthodox’ and subsidized physicists condemned Galileo.

Political bearing 

Both in England and in America the new party should be a MATERIAL PARTY with three parts to its platform:

1. When enough exists, means should be found to distribute it to the people who need it.

2. It is the business of the nation to see that its own citizens get their share, before worrying about the rest of the world.

(If not, what is the sense of being ‘united’ or organized as a state? What is the meaning of ‘citizen’?)

3. When the potential production (the possible production) of anything is sufficient to meet everyone’s needs, it is the business of the government to see that both production and distribution are achieved.

E. P. Feb. 12, anno XI dell’ era Fascista.