Poverty Amidst Plenty

The abundance introduced into the world since man discovered the means of transforming energy and of harnessing the forces of nature for his own use, should have reflected itself by economic security for all, by a minimum of comfort in every home, by an era of good social relations among individuals and nations, in joy and in peace.

Unfortunately, in all the civilized countries of the world, the picture that meets the eye is quite different.

In front of an abundance that keeps growing, except when it is destroyed by wars, the lowliest of miseries can be found.

Elevators and warehouses are full to overflowing; store displays, newspapers, radio and sales agents advertise everywhere a wide range of products. All the while, in their homes, people go without food, keep on wearing their rags and using their worn out furniture

“What percentage of our population is merely existing rather than enjoying the use of available and sufficient wealth to live in reasonable comfort? At least three-fourths of our population.” (Rev. Charles E. Coughlin, Money, page 26.)

But quotations are hardly necessary. Most readers only have to examine their personal situation and that of their neighbours. Who can say today that things will be taken care of, tomorrow?

No one doubts that tomorrow, Canada can continue to supply all that is needed in terms of food, clothing, and housing. But how many people are sure that tomorrow, the day after tomorrow, next year, they will have a sufficient share for themselves and their families?

The number of men unemployed, of businesses that had to close, should, logically, point to an overabundance of goods, to consumption having reached its saturation point. It mostly points to sufferings, to destitution, to despair.

The goods are there, with human needs facing them. Why aren't the goods satisfying the needs? What is preventing the economy from reaching its end?

Why can’t the consumers, who have so many unsatisfied needs, draw upon these goods that were prepared for them?

The existence of a widespread poverty, facing production that is now widely available or that could easily be made available by calling upon the huge unused productive capacity, is a terrible accusation against the distribution system.

Never has supply been greater. Is there no demand In front of this supply?

Demand exists. But the title that gives demand a claim on supply is missing; this title is money.

Real demand vs effective demand

One should make a distinction between real demand and effective demand.

Real demand is a demand that ensues from real needs. As long as there are hungry people, there exists a real demand for food. As long as there are people with no proper shelter, there is a real demand for housing. As long as there are sick people, there is a real demand for medication and medical care.

But this real demand becomes effective only when it offers the title to production, money. Effective demand exists only where money and needs are found together.

Under the present economic system, many real demands are commonly observed, but they lack the title that would make them effective. Production, having to recover its costs, looks for those places where there is still a bit of money left, and sets off to create a new demand. This leads to selling under pressure, which no longer answers the consumer's call, but the producer's call.

This is a reversal of the economic order. The consumer becomes an instrument to be exploited and no longer the master to be served.

The humane solution would be to put money where the needs are found and not to create new needs where money can be found; to render real demand effective rather than to create artificial needs where there existed no real demand.

Major Douglas points out that to reconcile the real demand and the capacity to pay, the will-to-power will have to be defeated by the will-to-freedom, and that this reconciliation involves a modification of the distribution system. (Economic Democracy, page 90.)

He adds, with a sound understanding of the end of economics:

“Now if there is any sanity left in the world at all, it should be obvious that the real demand is the proper objective of production, and that it must be met from the bottom upwards, that is to say, there must be first a production of necessaries sufficient to meet universal requirements; and, secondly, an economic system must be devised to ensure their practically automatic and universal distribution; this having been achieved it may be followed to whatever extent may prove desirable by the manufacture of articles having a more limited range of usefulness. All financial questions are quite beside the point; if finance cannot meet this simple proposition then finance fails, and will be replaced.”

Since production exists to satisfy the needs of the consumer, and since, according to regulations generally accepted, the consumer must present money to be able to draw upon that production, the money in the hands of the consumer must be in keeping with his needs and in keeping with the country's productive capacity. Otherwise, money works against the consumer, therefore against man. A change is called for.

Today's monetary system hinders consumer satisfaction. This is why a certain school suggests that money be abolished. The State would seize all of production, except for the part used by its makers, and the State would distribute it to all the members of the community.

This is the Communist solution, and that, no one wants in our country. Yet, we cannot approve of goods and production being immobilized in front of urgent needs.

We will not stop at the dictatorial solution, whereby it is no longer the consumer who expresses his needs, but whereby only one man dictates to everyone what his share will be, and dictates to production what it must do. Canons may grow then at the expense of bread.

There is another solution — the solution which, by placing money in the consumer's hands, in the hands of ALL consumers, gives to the consumer, to ALL consumers, the right to vote for products. The consumers then truly give production its orientation. This is the Social Credit solution. Which lead a sociologist to write:

“And if you want neither Socialism nor Communism, bring Social Credit in array against them. It will be in your hands a powerful weapon with which to fight these enemies.” (Rev. Georges-Henri Lévesque, O.P., in Social Credit and Catholicism.)

But we must study the question of money, to understand where the monetary system fails, and how to make it function and fulfill its purpose.