 Our next lecture is going to be given by Dr. Gary North, who does hold a Ph.D., and he's going to be speaking to us on an unusual topic, the economic underworld of social credit. Gary? I have been speaker now, public speaker for approximately 53 years, and this is the first speech that I have ever given in those 53 years in which I've had some concern about whether I can actually finish this speech. And the reason is I didn't volunteer for this speech. I found out I was to give this lecture only when I saw the sheet on what the lecture assignments were. So this is kind of in college, we used our high school, this was called extra credit. It's not because I don't know the subject because I am, in fact, the world's leading expert in the field of social credit, which means it is that useless within the profession. Nobody has paid any attention to this in about 50 to 60 years, and I'm essentially one of the two who has. And the oddly enough, well, there are a few other academics who have done it in very recent years, but for a long time, certainly in the free market circles, I was the only one. And I'm going to get into discussing why that is as we continue into the speech. Before I begin, however, I want to give some information which perhaps you can take from the speech and from this session that will be more practically applicable than the details that I'm going to impart to you on social credit economics and why it is important not for itself, but for what it represents. I might as well go back five decades to talk a little about what some of you are going to face at some point, and I would really wish that all of you would face it, but generally speaking, people are not generally speaking, and it's about generally speaking that I want to talk to you, the skill, the problems of assembling a speech to make it coherent, to impart a position, to change people's minds, and most of all, not to bore them to tears, which is, as you know, by this stage in your academic career, that skill has not been imparted to a whole lot of the people who you have had to subject yourself to. Public speaking is like anything else, it's a, the Pareto distribution applies, the 2080 principle does apply, about 20% of the people who are faced with public speaking are able to do it, and about 20% of them are able to do it pretty well. So it's always going to be a limited number of speakers who are good, they're only a limited number of speakers you've had at the college level, who you go in on a regular basis and don't skip the class, because you think even if you don't learn anything, it might be an interesting class. That's a limited number of people who do it. If however you are in the position of persuading people of an unpopular position, which those of us in the Austrian school camp have been facing really throughout our entire careers, then you have to begin to gain certain skills which you'd better develop because you're liable to be put in a position where you're called upon to defend the position, because there's nobody else to do it, and you're in, and you better be able to do it. So let me give you three rules, actually I'll give you more than three rules, but I'm going to give you three, the big ones, that if you are called upon to give a speech, you had better get these questions answered before you stand in front of that crowd. And I hope it'll happen to a lot of you, because this is an unpopular position, and yet it's growing in popularity. It's been a, it's been a, in a sense, a kind of underground position for a long time, and now because of the crisis in the economy, because of Ron Paul's candidacy, a lot of reasons. Because of the website of mesis.org, because of lourockbow.com, all of a sudden this unique and yet long ignored position is beginning to gain some traction, and therefore at some point if you identify yourself with this position, you're going to be called upon to defend it verbally. And some of you really are not ready to do this. So here are the three rules that I always accept this time. I always demand that I find out in advance, and you better do this yourself. The first question you ask when you're asked to give a speech is, who is the audience going to be? You want to know the age? You want to know the background? Depending on the circumstances, you want to know the religious background? You need to have some idea of the ability of 80% of the people in the audience to absorb what you're going to try to persuade them of. If you go in blind, you are asking for trouble. The second question you need to ask is, how many are likely to be in the room? Is it going to be a seminar? Is it going to be a relatively small group of people? Is it going to be 50 or 60? Is it going to be 300? Is it going to be 5,000? Your presentation will usually vary to some extent in terms of the number of people in the audience. And you better prepare for that. You better know what you're going to face. And the third question, and this is almost never asked, and amazingly the people inviting you probably forgot to ask it of themselves, but crucial is, what do you want them to do when I'm done? Those three questions. Who's the audience? Who will be in the audience and what do you want them to do when I'm done? If you do that, you will not make serious mistakes in the preparation of the speech. You at least have a running shot at not humiliating yourself in front of the audience. And so I'm going to give another set of rules. I give these to preachers, but it works also, it works extremely well for speakers who are defending an ideological position. I'm going to give you 20 words. Write these words down. Don't deviate from the words. Series of five rules, four words each. First rule, begin with a text. Second rule, stick to the text. Third rule, get to the point. Fourth rule, call them to commit. And fifth rule, give them legitimate hope. I'll do it one more time. Start with a text, stick with the text, get to the point, call them to commit, give them legitimate hope. If you will do that when you make a presentation to especially an unfamiliar audience, you're going to find that the response is much greater than if you just go in and present a lot of information that may be interesting to you, may or may not be interesting to them, and then they go home. You want to make it memorable, you want to make them, as I say, make a commitment. Because if what you're presenting to them is not worth the commitment, then why did you waste their time? This won't make you a great speaker if you follow these five rules. It will keep you from embarrassing yourself. And that is one of the great fears of people in public speaking. They don't want to stand in front of a large audience and embarrass themselves. And so they don't speak publicly. And by the way, this is a tremendous opportunity for anybody here because the opposition, the people who don't hold the position, they don't want to speak either in all likelihood. The number of people who are going to want to stand in front of a crowd and make a presentation is really very limited. And so if you get into this field, if you can come across the barrier to entry, which is the fear of making a fool of yourself, you open up many opportunities for yourself that really are not open up to anybody else who has that terrible fear of getting in front of a crowd and forgetting what he had to say or just saying something stupid or just embarrassing himself. Most of the people in this room already have enough knowledge to be more competitive in a public speaking arena than the average person in the university that you attend. And even among Keynesians or people who are interested in economics but hold rival views, you're in better situation now to defend the position certainly than you probably were a year ago. At the end of this one week session you're going to be in a much better position. Now one of the advantages you have, and this is a tremendous advantage, is that you're in a minority position and people don't think you make sense and it doesn't correspond with what they're being told in the classroom. And so in a minority position, you've got to defend yourself and the old days Communist Party training was pretty rigorous and what they did for a new convert, they gave them a pile of the daily worker and they sent them out to sell them. What was that? They weren't making no money on the daily worker. The guy selling a Communist newspaper was in a position of having to defend himself. What are you talking about? What are you? Comming, red, etc. What are you talking about? And the guy is flummoxed. So what does he do? He goes back. He says they're all after me. What do they do? Well, you've got to defend yourself. Well, how am I going to defend myself? Well, we have these training sessions that you're supposed to go in the evening. Well, I'll do it. And so they get them into the training sessions because they were out fighting face to face in the cold reality of the world around them and it made them tougher. And this is what the Austrian school defenders have been facing since about 1936. And now the tide has begun to turn a little bit. So you're going to be called upon from time to time to make a defense of your position if only on a one-on-one basis. And I hope when you're done with this presentation and you're done with these courses that you're taking, you'll be in a better position to defend yourself. Now let's talk a little about speeches. Speeches like this in a setting like this are really effective. Let me tell you why. You can go to a speech where somebody has concentrated on some probably narrow topic that you really don't know anything about. You can go to now, you can go to Wiki, and you can get a kind of summary of it in a semi-bureaucratic form that's pretty accurate and give you some footnotes and reading and so forth. So Wiki is a tremendous tool that didn't exist 10 years ago. But still and all, you don't have a particular angle on it. You don't know exactly why it's important within the context of Austrian school economics. So why are you here and why are you listening to a speech? A well-crafted speech by a specialist in the field who is committed to communicating can do one of two things for you. First thing it can do is excite you, gain your attention, and convince you that you really need to know more about this. You had never heard this before and you probably would not have heard it before if you hadn't heard the speech. And this is something that really interests you and you think this deserves some time. I got to put some time in on this. And besides, I might even get a term paper out of it, a little side benefit. On the other hand, you can come in and hear a speech for an hour, a well-crafted speech for an hour, and think, well, I've never heard that before and I sure hope I never have to hear about that again. Now let me talk about social credit. It's in the second category that this speech is delivered. In all likelihood, you're never going to want to hear about this again. However, I hope that you will find out at the end of the presentation why nevertheless as an example of a particular type of economics, as an example of a particular kind of political movement, that this is representative and there will be others like it and one of these days you're going to have to confront something like it. And in fact, if you look very carefully around you, you already are. So I have said, start with a text. So let us go to what is the equivalent of holy text in our day, John Maynard Cain's General Theory of Employment, Interest and Money, 1936, and the prophet Cain's spake. The great puzzle of effective demand, which with Malthus had wrestled, vanished from economic literature. You'll not find it mentioned even once in the whole works of Marshall, Edgeworth, and Professor Pigou. From whose hands the classical theory has received its most mature embodiment. It could only live on furtively below the surface in the underworlds of Karl Marx, Sylvia Giselle, or Major Douglas. Now you have all heard of Karl Marx, and for a long time it was the economic underworld. It surely was not the economic underworld in the 20th century. You have not in all likelihood heard of Sylvia Giselle, and you have not heard of Major Douglas. Professor Salerno is an expert in Sylvia Giselle, and I'm not going to get into his turf. I'm going to tell you, however, a little about, and more probably than you want to know about, Major Douglas. Cain's designated this as the economic underworld. Now what was he talking about? The issue of effective demand. Now that's a classic Cain'sian phrase. You grow up on this, if you're in Cain'sian classrooms, effective demand, to which the Austrians says, yeah, well what's ineffective demand? I mean there's demand, what's the difference between effective demand and ineffective demand? And that really is the Austrian critique in a very short response to Cain'sianism. Demand is demand, don't talk about effective. But Cain's wanted to talk about effective demand. Why? Because Cain'sianism is a break with Sey's law, the famous Sey's law. And Sey's law in a very crude form says, production creates its own demand. Now that, if you look at Sey, of course, is a crude, crude summary. But it gets the basic idea across. What he meant was in a competitive market with open entry and free pricing, production creates demand. In other words, if you offer something for sale, that is a form of demand because you're going in wanting money or exchange or something coming back. We usually think of demand as being pieces of paper with politicians pictures on them. But that's not the point, because you can't eat Federal Reserve notes. The point is your productivity, whatever it is you bring to market for exchange does create demand because somebody says, you got it, I want it, I'll trade for you. I'd like to have a piece of that. I think that's a good thing. Now if you produce something that is useless, nobody wants, no, it doesn't create demand. And Sey was not an idiot, he was a sophisticated economist and he wouldn't have said the production of anything at random is going to create demand. He never would have said that. It means in an entrepreneurial sense when an entrepreneur buys productive services to create a saleable product on the expectation that someone is going to demand the product if he brings it to market. Yes, when he brings it to market, if he has been an accurate forecaster, that will create demand. Which means it will find a buyer, which means it will clear the market, which means there is effective demand. It's got nothing to do with money. It's got nothing to do with pieces of paper with President's picture zone. It has to do with the decision of an entrepreneur to forecast the state of a particular market and then bring a product to that market and offer it for exchange. And that's what we do all the time. That's what future orientation is about. That's what all life is about. As Mises would say, it is the exchange of one set of conditions for another set of conditions. That passage from Keynes appears on page 32. Now, how important was it? Let's go almost to the end of the general theory. This begins on page 370 and extends to 371. And after that, there's only one final chapter in the book. So let us go back to a parallel text. Since the war, there's been a spate of heretical theories of under consumption of which those of Major Douglas are the most famous. The strength of Major Douglas's advocacy has, of course, largely depended on orthodoxy, having no valid response to much of his destructive criticism. On the other hand, the detail of his diagnosis, in particular the so-called A plus B theorem, includes much mystification. If Major Douglas had limited his B items to the financial provisions made by entrepreneurs, to which no current expenditure on replacements or renewals corresponds, he would be nearer the truth. But even in that case, it is necessary to allow for the possibility of these provisions being offset by new investment in other directions, as well as by increased expenditure on consumption. Major Douglas is entitled to the claim, as against some of his orthodox adversaries, that he at least has not been wholly oblivious to the outstanding problem of our economic system. Keynes, at the very end of the book, comes to say that Douglas was on target to what he said was the fundamental problem of the modern economic system. Now, if Keynes thought Douglas was that important and that Douglas had at least focused on the issue which none of the orthodox economists could answer, then why have we forgotten about Douglas? Because you've never been taught about Douglas, have you? You have never heard about Douglas. And yet Keynes regarded it not only as so important to mention Douglas, he understood that when he wrote this in 1936, that Major Douglas would be recognized by the readers of this book, and the readers of this book were clearly not the average guys in the street. The readers of this book were graduate students in economics, were professors of economics. By page 371, he's lost about 90% of his audience anyway. If you've ever tried to read the general theory, by 371, there's nothing less but hardcore advocates left of the system. The best cure of Keynesianism is to force a student to read the general theory. But you've never heard of Douglas, have you? And there's no reason in our day why you should have, except in so far as if Douglas was completely off the wall fruit cake nuts, then what does that leave of the Keynesian system? Technicalities, formulas, different, presentation different. But if he was right, if Douglas was right, then Keynes was essentially right. And anybody who defends, say, and market clearing process is wrong, and the most impossibly and stupidly wrong of all the adversaries would have to be the Austrian school of economists. Because that is the position we have always maintained. That is that the markets clear when there's open entry and that entrepreneurship is the basis of profitability and that ineffective entrepreneurs are removed from the scene because of the losses that they produce. So if Keynes was right, if Douglas was right, then of all the groups of economists found anywhere in the modern world, the Austrian school was wrong, which means Mises was wrong. And yet Keynes wrote this in 1936. And by that time, Mises had written the theory of money and credit. He had written socialism and many, many smaller books and articles to defend his position. And Keynes had a problem. He didn't read German. And he actually admitted in one reference to Mises. He said, my German was not so good. And really, I couldn't understand any idea I had previously not been able to understand if the new idea was presented in German. If it was new, and I'd never read it before, I couldn't really understand. I mean, he really went into print and said that. So what is Douglas all about? What was Keynes talking about? If that was so important, then why have you never heard of this? Douglas was definitely part of what we would call the underground. And Keynes called it the underground. And Giselle was part of it, too. What were these people? Douglas began writing during World War I, about 1917. And he continued to write through about the time that Keynes wrote this passage. He was still cranking out an occasional book. He was an engineer of sorts, self-trained mainly, never graduated from engineering school, but had certain engineering jobs. He had been associated with wartime production. And he came up with an idea. And his idea was basically the idea that all of the critics of Austrianism ultimately come to, and that is markets do not clear by means of open entry and competition and free pricing. Markets don't clear. That's the heart of it. Marks talked about it. Giselle talked about it, who again was a kind of a strange, extremely strange character in European history. Surely Douglas talked about it, and finally Keynes talked about it. This is the issue. It is a form of underconsumptionism or a variation, if you want to say, of overproductionism. It means that somebody has brought something to market and it didn't sell. And it didn't sell and didn't sell and didn't sell. A lot of people keep bringing things to market and they don't sell, they don't sell, and they don't sell. So the moment you have an economy like that, people start asking, why doesn't it sell, including labor? Because the people who have produced the stuff that isn't selling are now unemployed, thousands of them, and then millions of them. And then tens of millions of them, which is what the situation was in 1936. Why is it that the market doesn't clear? Now the Austrian begins to say, OK, let's look at laws against price cutting. Let's look for government laws restricting entry into a market. Let's look for tariffs that have been put on which raise the cost of imported goods. Let's look at all kinds of price floor interventionism. And that's what Murray Rothbard did in America's Great Depression. I recommend the book. I think it's one of the classic books ever written. I think you sit down and read it. Rothbard wrote it. It's clear. You can understand it. And it all focuses on what are the government interventions that prevent markets from clearing? This is the orthodox response. And it was Mises's response. What Douglas looked at and what, of course, Cain's later looked at was the fact, certainly by the mid 1930s, that for five years the markets hadn't cleared. And this created demand. This created demand, my friends. And John Maynard Cain's was one of the great academic entrepreneurs in history. If he saw a new demand coming down the line, he'd change his tune overnight. He'd switch positions without hesitating. And he liked to say, well, what do you do when you find new facts that don't agree with your older position? That was his response. It wasn't new facts that didn't correspond to his older position. It was entrepreneurial opportunity. And he'd switch. And his classic switch was from his treatise on money in 31 and then coming to the general theory in 36. And it was so much of a switch that when he and Hayek, who were friends, talked about it. And Hayek went in two long articles critiquing the treatise on money line by line by line. Took him 18 months, he said, to really do it right. And there was the exchange between him and Cain's. Finally, Cain's confronts him personally and said, it doesn't matter. I've dropped the whole thing. You've got to read my new book. That really happened. And you know what happened? Hayek didn't write a response. And that lost the war. Greatest, single, strategic, academic air, I believe, in the history of modern economics. Because Hayek was known by every one of the time to be the most cogent, well-informed advocate of the free market position in the English-speaking world. And the world looked to him, the academic world looked to him to give a response to the general theory. And he did not write it. And that set us back. Because what we had in the 1930s was a crisis of faith in the free market system, the manipulated free market system, the government intervention-controlled free market system, which was not clearing itself of goods and services, in which unemployment in the United States was at 25%, just astronomical unemployment in 1933, 34. And the world was looking for a solution. And the world did get answers, but the world, the academic world didn't like the answer. Above me is the name Lionel Robbins. In 1934, Lionel Robbins wrote a wonderful book called The Great Depression, which is basically Austrian-slash messesion in its analysis. And The Great Depression so completely broke his resistance that, within a decade, he'd repudiated the book. Later said he wished he'd never written the book and became an advocate of government intervention in multiple fields. It's sandbagged him in the back. Gottfried von Haberler, Harvard, abandoned the Austrian theory of the trade cycle in the 1930s, abandoned the position on the gold standard. Is Fritz Maklop up there? Fritz Maklop. Same thing. Mesa's student, just like Haberler, Mesa's student, just like Robbins, Mesa's student, Maklop abandoned the gold standard. Said it was impractical. And after that, then he got his appointment to Harvard. Gottfried Haberler got the appointment before in the 1930s and basically openly, not openly, but in effect, abandoned the messesion system. And those are the only two so-called Austrians who ever got a tenured position at any of the Ivy League universities. And the cost was real clear. You abandoned the position. And they abandoned the position. Keynes leveled the attack on the free market based on the inability of the market to clear itself. And that was what Major Douglas had said from the beginning, beginning in 1917. Now, I will not bore you with the extreme detail that I am capable of doing to you. And the reason why I'm capable of doing it to you is I wrote the critique of Douglas called Salvation Through Inflation, that 18 years ago. You can get that online if you use tiny URL. It's tiny URL slash social credit. You can get a free copy of it. It's in PDF form if by some stroke of entrepreneurial self-destructiveness you want to spend the next two months reading about salvation through inflation and all of the support materials. You probably won't. But let me tell you what it was about. At least you can get the materials if you want it. You can get the line by line refutation if you need it. He came officially in the name of Christian civilization. That was how at least he presented this as a Christian civilization answer to the breakdown of modern economics, which he felt was caused by a mistake in the distribution system. As with virtually all of the underconsumptionists, if you follow them at some point, they get to the banking system. At least all the ones I've ever heard. They always get to the banking system. And they say there's some fundamental flaw in the banking system which does not produce enough money or does not produce money in the proper quantity. And because the banking system is not effectively meeting demand, then it creates some kind of economic stagnation. And if you don't think that's the universal view today, you haven't spent enough time in a program of economics in any major accredited university because that is the position. That's Friedman's position. That's the monetarist position. That's the Keynesian position. If push comes to shove, you're gonna find that it's the position of the supply ciders. It's not the position, obviously, of most of the Austrian. But it's the position of modern economics. At some point, they all say we've gotta have a central bank, we've gotta have some kind of banking system producing fiat money, we've got to abandon the gold standard. It's another way of saying that markets do not clear based on private voluntary contract. That's what all the underconsumptionist positions are. Or if you wanna go the other side, all of the overproductionists, they always say the same, the markets will not clear, and they always try to find some aspect of the banking system. That is the cause of the problem. His position was basically this. That the laborer is not paid the full value of his output. And if you know Marxian history, you know that was Marx's position. But he was not a Marxist accord. But the laborer is not paid for the value of his output. That somehow the free market does not reward a factor of production according to what that factor of production is really worth. And since labor was not able to buy back all of its output, therefore some of the output could not be sold, therefore there would be unemployment of resources, unemployment of labor, and continual decline into economic stagnation, and then contraction. That's the Douglas position. There are variations of this. There are lots of groups that hold variations of this, but they're all essentially unified in some version of this explanation. That is somehow a factor of production, namely labor is not being rewarded according to the value of its output. That's absolutely hostile to the position of the Austrians, going back to Bon Le Vert. And then they look to see, well, what's the reason? Well, his position was finance capital. They usually always get there. And the issue of finance capital was when you can have a loan and the loan goes out and somebody starts production and they increase production, when the loan is paid off, then that takes money out of the economy and the public can't afford to buy the new production because the loan has been contracted, the loan is gone, the money is gone, so the markets won't clear. That's basically the social credit position. Now what's the answer? Well, his answer was you need government statisticians to calculate the total value in one nation of all of the productive assets of the society and get an index number somehow of this total value of production. And then the government has to take over the banking system and the government then in a regular period of time prints enough money and sends it on an active basis to everybody in the society except the very rich so that they can go out with the new money and buy up the production that has come into existence because of the previous loans. There's no reason for me to go into details on the index number issue and who gets the money and the political battles over who's gonna get what percentage of the money and who's gonna control the distribution of the money and what basis are you gonna have for hiring the technicians because he says you gotta hire technicians to do this because the common man is not capable of doing it. Then he goes on to say, and this is called the national dividend, and then he said, but you gotta have just prices for business. Well, now you can see where that's headed. Price controls set by government agents. No more private banks. Then he said, and again, I'm just throwing this in, you can't have any more voluntary real estate transactions, no more exchange of real property. Okay, so they didn't put him in a straight jacket and keep sharp implements away from him, but they should have. Okay, it's crack pottery. It is just sheer crack pottery. That is, it's Keynesianism with no equations because this is the Keynesian position too, but much more sophisticated. The Keynesian position is, well, you keep the bankers, but you've gotta have massive deficit spending by government planners in order to create effective demand so that the public can buy goods and services that are not otherwise being purchased. You gotta have effective demand. And that was the position of Major Douglas. I went to Wiki 72 hours ago, approximately. What do they got on social credit? And I read this thing, and there's an entry on social credit. What isn't there an entry in Wiki? There's an entry on social credit, but here's the curious thing. It was written by a social credit advocate. It was clearly a one-man show. It was faithful representation of the original position. That is, it was totally incoherent. And it was locked. It was locked. You couldn't make an edit. And he mentioned me in it. Didn't mention the book, the Scoundrel. I don't even get any royalties out of it. He wouldn't mention the name of the book, but he mentioned that I've said that the position is inflationist. And he has some reference. There are some references in it to later books that have been published in the last 10 or so years on social credit. There's some interesting books that some academics finally paid some attention to the thing. So I contacted Wiki. I just said, look, this is clearly a one-man operation and he got somebody to lock it up. And I went back this morning, they've unlocked it. The edits are now possible. So it's an indication that Wiki actually does pay attention. I don't know how the guy got the thing locked up, but it is no longer locked up and now it's gonna change. I guarantee you it's gonna change. Now, having said this, you have in this tradition, this under-consumptionist, over-productionist tradition, this critique of market clearing and the call for some kind of monetary reform. The curious thing is, I really did find this curious, up until the time that I wrote the book, there was only one other scholarly critique of the position and that critique was written by Louis Spadaro. Now, most of you don't know the name Louis Spadaro. Louis Spadaro was one of the four men granted a PhD by Ludwig von Mises. And in 1955, Spadaro wrote a book called Salvation by Credit Reform that I thought was so terrific that I basically stole the title except I substituted inflation for credit reform because that's what it was. And he covered Solve and he covered Douglas and a couple of others. I was never published. You have to get it through, I guess Ann Arbor, the university microfilms, I did get it. And it was a legitimate academic insufferably boring critique of Douglas. And it was worth giving a PhD to. I thought it was a good dissertation, not something you normally wanna read, but it was a good dissertation. The Austrians ignored it except for Spadaro. And then I picked it up and the reason I picked it up is some guy, some social credit guy that I'd been arguing with by letter. You remember letter? No, you don't. It's pieces of paper and they have these stamps and you send them back and forth. Ancient technology, I'd been arguing with this guy and he sent a manuscript and I put some notes in the manuscript and what do I know? The guy creates a book, puts all my notes in the manuscript as part of the book and then refutes me line by line and then I didn't bother to respond because I got a feeling if I put any more notes in the margin I knew what was gonna happen. So I ignored him and then another head of the social credit party down in Australia said, well, North ran for cover. It is not a good idea to say that in print. Sometimes I do one book, sometimes I do two. Occasionally I'll do three. In this case, I wrote salvation through inflation. It took about six weeks. I had it in the print within three months and then I basically said, if you don't respond, this is the end of the argument and then of course they never responded. Now I was targeting a specific audience because this movement now operates in, again the underground, but it has some political traction. In Canada, in Great Britain, in Australia, in New Zealand, there are social credit political parties that are committed to however they understand this. They don't get many votes, but they exist to the extent that they can fund a political campaign. So the thing has never really died except that it never gets enough traction to get into the public view, but it does exist. And it tends to appeal to conservative Christians. Now why? Why conservative Christians think it would be a good idea to create a national board to send out free money to everybody in the society except rich people and that real estate shouldn't be allowed to be transacted. Why that becomes a great Christian commitment I can't figure out, but I'm in those circles and so I wrote the book to deal with Christian people who would pick this up thinking that in some way this is a biblical position. And I thought, well, that's good enough. Well, astoundingly I'm in the halls out here. Guido Holstman says, oh, I gotta give a speech on social credit and I'm stunned. Why would anybody wanna speech on social credit? Other than, of course, you. And he said, well, there's some conservative Catholic group that he works with in Europe and they're a pre-sinit and people with some educations and he said all of a sudden there's somebody in the movement who's infiltrating it passing out social credit literature and it's beginning to be taken seriously. So he's gotta go in and give a talk. Now again, it's the same problem, who's in the audience? How big is the audience? What do you want them to do when they're over? When you're over with the speech. I mean, these are the questions you have to ask. You have to tailor the presentation to the audience. It's gonna be tough for him to do that because the Catholic Christians speak a somewhat different Christian language from the Protestants. I was writing for the Protestant fundamentalists who picked the thing up. There is a peculiarity within certain Christian and conservative circles to pick up strange doctrines that are passed on as being some way Christian. Now there's another group that is much more American, much more traditional, much larger base and growing in popularity. They used to be called the Greenbackers. There was actually an American Greenback Political Party in the 1880s and they believed that central banking is wrong and I'm standing around applauding and they think fractional reserve banking is wrong and I'm saying, yay, that's a great idea but they wanna turn all control over money to Congress. This is not a good idea. And they have operated, they used to operate really on the left, the old populist labor farm alliance left of the 1880s and 90s. But since the creation of the Federal Reserve, the groups have operated and they tend to operate in conservative circles, sometimes conservative Christian circles and they're coming back because of the crisis of the Federal Reserve. That there's clearly a crisis going on. We know it, some of you are maybe here because of it indirectly. There is a major monetary crisis and it is worldwide and it is the result of 60 years of Keynesianism and it is central bank created and it does have to do with enormous problems generated by unpayable debt and we're in the middle of this thing and people are getting concerned, they're getting frightened and they have a legitimate reason for getting frightened and so now under these circumstances, just as in the 1930s, there is new demand for someone to come with an answer that says, what's the problem, we've got the solution. Now here's what I'm gonna warn you about. Anybody who presents you with a universal solution to the whole banking problem, a universal cure-all is peddling some kind of a magic pill. Whether it's a matrix type pill, I don't know, but it's a magic pill. There is no one cure. There are multiple cures and they're based on contract. It's based on volunteerism. It's based on voluntary exchange and open access to markets and all the 800 and some pages of Rothbard's Man economy and state, but that book is not a magic pill and Austrianism is not a magic pill. It's a complex problem because society is complex and there's no one area of life that is supremely and uniquely the cause of all the problems that we got except the one big one, which is called the human heart. And that's where the problems come from and there's no universal pill that any politician is gonna give you that gets greed out of men's hearts. And so you have to let society create institutional arrangements that control the greed or make the greed productive and that lead to the substitution of voluntary contract for violence. But that's not done with a magic pill. That's a comprehensive program of reform that goes on for generations. You don't want a revolution. There is no magic pill, but these guys want a magic pill and it's usually associated, as I've said, with banking. Now Keynes was not, he didn't go down that road. His was, he wanted fiscal policy reform with central banking and banking monetary policy on the side as a supplement to fiscal policy reform. That's the Keynesian revolution. But most of the under-consumptionist groups, they're always looking for banking reform, banking restructuring, that's going to restore productivity in the society. Now let me warn you about an aspect of this. It's not probably going to be a problem with you, but it is a problem in the broad circles of conservatism. And sometimes even liberalism, but mostly conservative. When you say it is a banking problem, then moves to a bankers problem, which then moves to a Jewish bankers problem, which then leads to the international Jewish banking conspiracy. And with each move, the group gets smaller, but with each move, the group gets more fanatic. And within the Greenbacker movement, in by the late 19th century, it was, there were not all of it, but there were parts of it that were beginning to move in the direction of anti-Semitism. I have had to deal with this, you have not, I have had to deal with this almost my whole adult life, because I, like a madman, decided I was going to deal with this problem, because nobody else was dealing with it. So I wrote a piece years ago, and Mises has republished it called, it's now called, because you can remember better, at least for my generation, it's called Gertrude Kugin's Bluff. And Kugin was another one of these. She was a Greenbacker of the mid-30s. Same pitch, we need government money, we need Congress issuing pieces of paper with President's pictures on them, that's gonna save the society. And she was popular. She became popular in the 30s. And in an underground sense, she was still going on in the 60s, and you can still find her books. Now, the latest incarnation is a lady named Ellen Brown, whose book is called The Web of Debt. And you can find my analysis of her book on the Lou Rockwell site. I spent over 100 hours. I felt like Hayek dealing with Keynes. I spent 100 hours refuting this woman. And finally, she gets to the point, she offers a series of refutations on the historical facts. All of her refutations are wrong. I responded, and she said, I'm not even gonna bother with answering the 21 economic criticisms, and off she goes. She's gaining a following. She's all over the web. You search for Ellen Brown. I'm telling you, Google lights up. She is all over the web. Greenbacker, mass inflationist is the position. And finally, with QE3 last November, after all this web of debt, after all of this pitch against the evils of central banking, she says, boy, Bernanke's really doing the right thing. She's got interest rates down to zero. This is terrific. This is the position. And you think these people are crazy, but then they're cheering the position of the Federal Reserve System, which means these people are crazy. What we found is that with footnotes and Keynesian formulas and with mathematical precision, the Federal Reserve System has finally come to the position that is essentially the same as the Greenbackers, free money. That's what we need is free money and that's somehow gonna get employment back up only it isn't working. Now I'm not recommending that you spend a whole lot of time studying Greenbackers, except really in a sense, if you can get a term paper out of it, that might be interesting because it's not something that normally any of your peers would have turned in. It is a curious movement. It is in our day right wing, in earlier days it was left wing. It is underground, it is inflationist and it appeals to people who don't understand the economy, who want a simple answer and the simple answer is it's the bankers. And part of it, of course, it is the bankers and central banking is a bad idea and fractional reserve banking does lead to the problems that these people are critical about. They're right, but the fact that they're right on a kind of superficial analysis of how the system works does not mean that turning the banking system over to Congress is going to work, nor does it mean in the case of Major Douglas, that if you create a committee, a statistical committee, that will issue paper money and send a national dividend out to everybody in the society that that is a conservative answer to the problem of underconsumption. This is what they want. They want status answers. They want status pills usually associated with fiat money. The Bible has the phrase return like a dog to its vomit. That is what modern man does with respect to fiat money. You get different varieties, you get different analyses, you get different people's pictures on the pieces of paper, but all cures that we find today ultimately lead back to the Bank of England, which by the way was not Jewish. It was not Jewish. It all leads back to a cartel of a central bank which is set up to protect the largest participants of fractional reserve banking to protect them from bank runs. That's what it's all about. That's what it has always been about and to make a few bucks on the side. Now I will say, I will give them credit. They don't like that word, I'm gonna give them credit. They did do one good thing. There were two real crackpot monetary greenbackers. They were not social credit people, but they were greenbackers in Congress in the 1940s. One was Jerry Voorhees and you never heard of him except he was famous in one respect. He was the guy in 1946 that Richard Nixon defeated for Congress and the other was Wright Patman who was out of Texas and he was the head of the banking committee for a long time and the two of them got together and they got a law passed and the law passed said that all of the money that the Federal Reserve System takes from interest of American Treasury debt could no longer be kept by the banks of the Federal Reserve System who had invested in it and it would all have to go back to the government out of after operating costs and that cost the banksters more money than any other piece of legislation in the history of the United States and so in that respect, give them credit where credit is due. However, you're gonna deal with simple people who say well the banks are bad and you're saying yeah, they're bad. Well I understand this fraction of words. They create money out of it, yes they do. Well the Federal Reserve is, it's a big cartel of bankers, yes it is. Well what we need to do and at that point get ready to have an answer because what we need to do is always the same somebody's got to print more fiat money and our position is clear. I hope and if it isn't clear to you yet it should be clear at the end of the week and that is voluntary contract, private use of exchange, money developed by the market process, no government intervention on the money side of it, government out of the banking business, government out of the regulation business, government in the enforcement of contract business and that's it. That's the answer, freedom is the answer, volunteerism is the answer, decentralization of power is the answer. The destruction of government created monopolies and cartels, that's the answer, one by one. Evil cartel by evil cartel, we defund them, we take away their money, that's the answer. Now having said this, when you go back out I don't expect people to immerse themselves in what we like to call monetary cranks. I've got the cover though, I love to do covers. I got the cover, Joe Salerno's gonna write a book and it's gonna be called monetary cranks, it's the right title, I said I got the cover, you gotta have a picture of an old time printing press spewing out money with a crank on it because that in one picture is what the answer that these people have, that is their answer. Like a dog to its vomit, modern man wants to go back to fiat money as the solution to its economic problems. We are opposed to it, the Austrian position more than any other position has always maintained you can't trust monetary policy, you cannot trust it to government or any government licensed cartel, that's the answer. Don't trust the government. If we can get this answer across in this time that we're facing over the next 10 or 15 years, there's gonna be monetary crisis after crisis. We have to have, I hope, the same answer, get government out of the money business if we want to defend freedom and productivity for modern society. With that gentlemen, the profit north has ended.