The Mobilization of Credit for Production

Credit

It is, in fact, largely a common property: and this must be taken into account in deciding who has the rights to the fruits of that production which exploits this real credit... Thanks to life in society, certain territories acquire a very great real credit; for without this factor they would repulse human habitation rather than attract it.

Take for example that territory which has come to be known as New Quebec in the northern tundra lands. No one would dream of settling there if he had to live off the riches particular to that bit of the world. The territory abounds in iron ore. But you can't eat or wear iron ore! Today, if there are towns springing up in this forbiding land, it is because other lands can use this iron ore; and those who dig it out and export it can get from these other lands all that they need in order to live decently and comfortably.

The real credit of a country grows in the measure that the knowledge and development of motor power increase and the techniques of production are perfected. It increase also with the widening and deepening of the flow of wealth among the groupings of the human family. This increase is also a communal attainment in which all the members of society have a right to share, receiving dividends according to the rythm of the flow of this wealth...

In the Canada of 1959 the real credit is certainly incomparably vaster than was that of the Canada of 1609 when Champlain founded the first town at Quebec. Its riches are proving to be more and more abundant. Its population, its farms, its industries are making of it a country which produces to meet any demand and not merely a country of potential production, It's systems of communications and its relations with other countries make it possible for it to share its production with, and share in the production of other countries. Its schools, laboratories and institutions of all sorts, its endless variety of services, far surpass any dream of the founding fathers; far surpass that first promise upon which they based their confidence."

The real credit, that confidence which a country inspires in those who live in it or wish to live in it, is, in effect, its potential productive capacity. It is the degree of facility with which it can furnish the products and services required, when and where they are required to meet the public and private needs of its population.

This capacity to produce is bound to real things; to human labor, to natural resources, to mechanical force, to inventions, to progress in science and techniques, to life in common all of which are goods in which all citizens are co-heirs, and hence, of which all should have a share in some manner...

Financial credit

But it is precisely the social character of these realities and the interdependence of all economic activities which necessitate a system which will order and partition the fruits of these realities.

This system is the financial system. It should have no other purpose than to make possible the most efficient mobilization of the means of productions and an adequate distribution of products...

The financial system has not of itself any value. We can imagine a productive system doing without products."

Nevertheless, considered as an instrument in the service of economy; and in the measure in which it fulfills this role, the financial system is a marvellous thing which we should have to invent if it did not already exist. And the more production must broaden it's activities in order to maintain and increase the flow of its goods,: the more it has need of such an instrument.

A man who has an acre of land, a plow, a horse, and the desire to cultivate his land has no need of this financial instrument to begin his work. His decision is sufficient.

But the industrialist who makes the plow can not proceed without getting materials, labor, machinery. To gather all this, his decision alone is not sufficient. Suppliers of material; transport companies, workers, hydro-electric companies, all will willingly collaborate providing they have the means of getting compensation which will permit them to have, not necessarily a share in what will be produced, but something equivalent which they will pick at will from the common market.

This compensation takes the form of monetary units. It is given to the supplier of materials, to the workers, the transport company, and the electric company in the form of money.

Money: it is a form of figures, made of metal or paper or in the shape of a cheque, which will permit him who presents it to obtain a corresponding quantity of produce or services, which in turn are evaluated in terms of monetary units according to established convention. Money is not wealth. It is not work nor material, nor a finished product. It is only a title to a certain amount of wealth; and if that wealth did not exist, this money, this symbol, would be worth nothing in the hands of him who presented it.

Money is not the productive capacity of a country. Its value is in that it makes it possible to mobilize this productive capacity by transferring the title to its products to those whose collaboration is necessary in the work of production. Money then, is not real credit; it is only a symbol of it. It is only financial credit, invented to make possible the passing of commands to real credit, to the productive capacity of the country country.

Financial credit might be said to be the button which one presses in order to set in motion the wheels of production. Or again, it is the control lever which one uses to direct production as one wishes...

... And here the big question presents itself:

Who will direct the lever? Who has the right to press the button? Who should possess financial credit, the key to placing production at the service of needs?

If real credit is in fact a community good, a social credit, how does it happen that the population does not have control of the button? How does it happen that the productive capacity of the country remains in part, immobilized in the face of crying needs? How does it happen that the population is taxed and plunged into debt in order to have permission to make use of that which rightfully belongs to it?

Who should have the right to tell the productive system what it should produce to meet private needs? public needs? How should that will be expressed? These questions will be discussed in a future article.