By George Crowell,
The issue that I wish to stress is the need to communicate the insights of COMER to ordinary people. It’s essential that people at the grassroots level come to understand the potential power of monetary policy to turn our economy around. It’s not enough for politicians to know about it. It’s important that they know. But even if they were fully committed to COMER’s program on their own, without support from people it would be very difficult for them to stand up against the tremendous pressures that can be exerted by the financial and corporate community against any who would want to change the present system.
I was told, when I launched out into trying to understand and explain the monetary policy – that that issue is far too esoteric and dull and boring and complicated for ordinary people. I accepted that as a challenge and it’s my view that it can be made very arresting and can get people’s attention. I don’t think I’m especially charismatic personally, but I think there’s something about the content of what’s at stake here that can really grab people’s attention.
We Depend on Social Programs
First of all, people are very concerned about their social programs at present; they are under heavy attack. A great many people are already suffering or stand potentially to suffer as these programs are cut. The first message that one can get across is that these cuts are not necessary. Even without raising taxes it would be possible through the change in monetary policy for us to continue to finance those programs and even to improve them.
It’s not surprising that most of us have little understanding of monetary policy. It’s outside our direct experience. Our experience with family and individual economics supports the argument that we have to cut spending. From our experience, when we go into debt our choices are very limited. We can either increase our income or reduce our spending or practise some combination of both. This fact makes us very vulnerable to the propaganda that, “taxes are already too high and therefore the only thing that’s possible is to cut spending.”
The fact is that governments, especially at the national level, have an additional economic tool, and that is monetary policy. Monetary policy, it seems to me, is intrinsically, extremely intriguing. Monetary policy has to do with the creation of money out of nothing! You start talking about that, and people pick up their ears.
The fact is that our banks create money out of nothing every time they make loans. They can do this more easily than if money could be picked off trees. You have to grow the tree and there’s only a limited supply of leaves, but all the bank has to do is write an entry in a book or even in a computer. Whoever benefits from the creation of new money has the same advantage as counterfeiters who have succeeded in passing off money that they have managed to print up, with much less trouble and considerably less risk.
We Permit the Banks to Profit
It’s unavoidable that somebody must benefit from the creation of new money. That’s an inescapable reality. The question is, “Who?” It seems to me it’s obvious, since we’ve agreed together that money is necessary to facilitate economic life, that we should benefit together collectively from the advantages of the creation of money. At present, however, our banks are creating 98% of our new money supply and they’re charging interest at current rates that have been quite high. They are enjoying this advantage. We are allowing them to do that.
It would be possible for the Bank of Canada to take over the creation of new money in our society – part, or all of it. That could be $22 billion or more, if our economy expanded as we need it to at this point. It could be more than that $22 billion. In effect, it would be as simple as if the Bank of Canada simply wrote a credit to the account of the federal government and the federal government spent that money into existence providing a free benefit.
All of these things are an indication of the enormous power in monetary policy. Paul Hellyer says that monetary policy is the most powerful of all economic tools. Most of us have completely overlooked this.
The question then is, after you’ve worked out the content of your message, how do you get it distributed? I have published in The CAUT Bulletin. That’s the Canadian Association of University Teachers, which has a circulation of thirty-five thousand. I have no idea whether anybody read this material. There was no comment whatsoever on the startling proposals that I presented there.
I said it’s totally unnecessary to cut spending for the university but there was no response whatsoever, not even from the economists, 90% of whom – or more – must have disagreed with the position that I was taking.
As a result of this, though, Cy Gonick of Canadian Dimension asked me to publish an article in their journal. I did get good response from that, as one would expect, because it’s an audience that’s open to that. I’ve now published in the Windsor Star and am getting some interesting response from that.
It seems to me that we’ve got to get our message out in a variety of ways. We are up against an extremely powerful media that is not getting out that message. It’s getting out the contrary message very potently. We need to take advantage of every opportunity to counteract that message.
Monetary Policy is the Key to Change
The Council of Canadians: Jordan Grant and I went to their 1994 annual meeting and Jordan worded and I seconded a motion to make, as part of their mandate, a resolution, which passed, to educate people on monetary policy. I’ve seen no indication – virtually no indication. Just lately the last Canadian Perspectives with an article by Duncan Cameron based on Ten Deficit Myths began to deal with that. But the Council of Canadians sends out frequent letters requesting funds to tens of thousands of people. These letters would be an opportunity to point out that the cuts are not necessary because a change in monetary policy could do that.
I urge all of you to use your connections with any organization whatsoever to urge them to get across this message that the funding cuts are not necessary. A change in monetary policy can turn things around.
When we become sufficiently loud to be heard they will try to ridicule us, to laugh us out of court. They may eventually enter into serious debate and if they do that, if they even try to ridicule us, that’s a good sign that they know that we’re something to be reckoned with. If they enter into serious debate, good! We can expect that, if we really become effective, there will be all kinds of threats: the Canadian dollar will drop; we’ll lose jobs; and so on. Things could get even worse.
I say this in order to emphasize again the extreme importance of having as many ordinary people as possible understanding monetary policy to the extent that they can not be pushed around by the media, so they are not influenced by the attempts of the media to refute our views.
COMER appreciates all that you’re doing along these lines, for we have a great deal of work ahead of us.
George Crowell was Associate Professor of Social Ethics (retired) in the Department of Religious Studies at the University of Windsor.
He devoted his retirement to the COMER cause – speaking, writing, and working to enlist others in the struggle for monetary reform
He was one of COMER’s most staunch and effective supporters.
Indeed, the last time I saw him, he was on his deathbed – earnestly, deeply and clearly engaged in discussion of monetary policy and COMER’s way forward.
Thank you, George.