[Marxism-Thaxis] Escaping the Sovereign Debt Trap
Escaping the Sovereign Debt Trap: The Remarkable Model of the Commonwealth Bank of Australia By Ellen Brown URL of this article: www.globalresearch.ca/index.php?context=vaaid=20473 Global Research, August 5, 2010 Web of Debt - 2010-07-03 The current credit crisis is basically a capital crisis: at a time when banks are already short of the capital needed to back their loans, capital requirements are being raised. ? Nearly a century ago, the Commonwealth Bank of Australia demonstrated that banks do not actually need capital to make loans ? so long as their credit is backed by the government. ?Denison Miller, the Bank?s first Governor, was fond of saying that the Bank did not need capital because ?it is backed by the entire wealth and credit of the whole of Australia.? With nothing but this national credit power, the Commonwealth Bank funded both massive infrastructure projects and the country?s participation in World War I. President John Adams is quoted as saying, ?There are two ways to conquer and enslave a nation. ?One is by the sword. ?The other is by debt.? ?The major conquests today are on the battlefield of debt, a war that is raging globally. ?Debt forces individuals into financial slavery to the banks, and it forces governments to relinquish their sovereignty to their creditors, which in the end are also private banks, the originators of all non-cash money today. ?In Great Britain, where the Bank of England is owned by the government, 97% of the money supply is issued privately by banks as loans. ?In the U.S., where the central bank is owned by a private consortium of banks, the percentage is even higher. ?The Federal Reserve issues Federal Reserve Notes (or dollar bills) and lends them to other banks, which then lend them at interest to individuals, businesses, and local and federal governments. That is true today, but in the past there have been successful models in which the government itself issued the national currency, whether as paper notes or as the credit of the nation. ?A stellar example of this enlightened approach to money and credit was the Commonwealth Bank of Australia, which operated successfully as a government-owned bank for most of the 20th century. ?Rather than issuing ?sovereign debt? ? federal bonds indebting the nation to pay at interest in perpetuity ? the government through the Commonwealth Bank issued ?sovereign credit,? the credit of the nation advanced to the government and its constituents. The Bank?s achievements were particularly remarkable considering that for its first eight years, from 1912 to 1920, it did not have the power to issue the national currency, and it operated without startup capital. ?Sir Denison Miller, Governor of the Bank from its creation in 1912 to 1923, was quoted in the Australian Press on July 7, 1921 as saying, ?The whole of the resources of Australia are at the back of this bank, and so strong as this continent is, so strong is the Commonwealth Bank. Whatever the Australian people can intelligently conceive in their minds and will loyally support, that can be done.? This was not just hype. ?In a 2001 article titled ?How Money Is Created in Australia,? David Kidd wrote of the Bank?s early accomplishments: ? ??Australia?s own government-established Commonwealth Bank achieved some impressive successes while it was ?the peoples? bank?, before being crippled by later government decisions and eventually sold. ?At a time when private banks were demanding 6% interest for loans, the Commonwealth Bank financed Australia?s first world war effort from 1914 to 1919 with a loan of $700,000,000 at an interest rate of a fraction of 1%, thus saving Australians some $12 million in bank charges. ?In 1916 it made funds available in London to purchase 15 cargo steamers to support Australia?s growing export trade. ?Until 1924 the benefits conferred upon the people of Australia by their Bank flowed steadily on. It financed jam and fruit pools to the extent of $3 million, it found $8 million for Australian homes, while to local government bodies, for construction of roads, tramways, harbours, gasworks, electric power plants, etc., it lent $18.72 million. ?It paid $6.194 million to the Commonwealth Government between December, 1920 and June, 1923 - the profits of its Note Issue Department - while by 1924 it had made on its other business a profit of $9 million, available for redemption of debt. ?The bank?s independently-minded Governor, Sir Denison Miller, used the bank?s credit power after the First World War to save Australians from the depression conditions being imposed in other countries. . . . By 1931 amalgamations with other banks made the Commonwealth Bank the largest savings institution in Australia, capturing 60% of the nation?s savings.? Harnessing the Secret Power of Banking for the Public Good The Commonwealth Bank was able to achieve so much with so little because both its first Governor, Denison Miller, and its first and most
[Marxism-Thaxis] Reform and social revolution: the new narrative - 1
Reform and social revolution: the new narrative Marxism contains a language, a set of words and terms accepted as short cuts. Problems arise with words and terms given different meaning. Reform, concession, social revolution, and reformism are such words. When these terms are detached from the materiality of the object being examined, the shortcut becomes the long way around. The dictionary states that reform is an improvement or amendment of what is wrong. Reform means to restructure. Restructuring changes existing relations between and within classes. These production relations express and correspond to material relations of the economy and ultimately find its center of gravity in the division of labor. Reform is alteration of a material relation within and between classes in connection with means of production. Reform and concession is not the same. Reforms are more durable and cannot be taken away based on political will alone. Something must change within the object, structure of society for reform of the system to unravel. Reforms do not change the property relations. Wrestling greater shares of the social product and expanded political liberties from the state or employer is the content of most social struggle. Concession is yielding to a demand based on political will. Concessions do not alter the structural relations within and between classes. Concessions can be taken away based on political will. The Republic Window and Door workers in Chicago (Local 1110) won a concession package compelling their employer to give them back pay. The settlement totals $1.75 million. It provides the workers with: oEight weeks of pay they are owed under the federal WARN Act, oTwo months of continued health coverage and, oPay for all accrued and unused vacation. Reform as shortcut means change in relations between and within classes, without changing the property relations. The impulse for reform of the system arises from the spontaneous quantitative development of the building blocks of economy: means of production. II. Society is the totality of the relations between classes and groups in a community. The creation and form of wealth depends on the state of development of the productive forces. The means of production develop as incremental quantitative inputs until a qualitative leap is underway. The unity and strife of primary classes defining (re)production is the flesh and blood compelling society to advance through the progressive accumulation of productive forces. As involuntary promoter of industry, the bourgeoisie and privileged ruling classes, economic and political layers in society evolve a stake in keeping the system the same because that is how their wealth, power, privilege and life experiences are realized. As the means of production evolve, a corresponding deepening change and contradictions widens with the static immobile property relations expressed as corporations, political organizations, entrenched self interest of groups of all kinds and their civic structures. As favorable condition emerges the social struggle riveted to primary classes ends with a quantitative leap in the social relations, which brings a reformed society more into correspondence with improved means of production. III. The impulse for reform arises from the spontaneous quantitative development of means of production. The impulse for social revolution arises from the spontaneous qualitative development of means of production. The former merges with the latter only under conditions of leap to a new technology regime, as was the case of the industrial revolution. Our generations have witnessed, lived and recorded the epochal movement of a mode of production and how it reformed itself until all the space - boundaries, in the industrial system was exhausted. At each juncture - (quantitative boundary of our developing industrial production relations), the subjective question of political revolution emerged as an issue for the most farsighted revolutionaries. Henry Ford and the system of Fordism expressed the continuation of the industrial revolution. Henry Ford's factory system accelerated restructuring of production relations and changes the in the form of the working class destroying the structural basis of craft/skilled labor of the historic artisan. Assembly line production restructured the industrial work process driving transition from craft to industrial trade unionism. This motion logic was genuine reform of the system. America assembly line auto production nail the coffin shut on the company town and laid the basis for suburbia; expanded the cement and housing industry and fifty years later resulted in our nationwide Interstate system. There are thousands of incremental changes to society brought about by the Henry ford system. The growth of the industrial union
[Marxism-Thaxis] Ron Glotta's commentaries
http://www.glottaassociates.com/commentaries.html COMMENTARIES Workers in this country do not have a voice. The corporate media repeats the mantra of free speech incessantly but they control the content. We, the people, own the airwaves but we have no access to them. The commentaries on this CD represent an attempt to provide an alternative voice to the corporate speak that defines and limits all programmatic discussion. The commentaries have a twofold purpose: to provide a programmatic analysis for which workers can fight and to speak to progressives so that we can avoid the traps of marginalization. In other words, the commentaries are an invitation to dialogue. In that way, they represent an alternative to my book, The Road to Hell is Not Paved With Good Intentions. I invite the reader/listener to enter the dialogue and join the struggle to change the world. Yours in Struggle, Ronald D. Glotta ___ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
