My Life

My Life - Oswald Mosleygoes into the right hands. . ..'The ordinary method employed by our banks when theydesire to expand credit is also a direct incentive to an inflationary result. The methodis to lower the bank-rate and let anyone borrow who can give reasonable prospect ofprofits. The ordinary lowering of the bank-rate is not in itself an expansion of credit.It operates through the encouragement of borrowing, and it encourages the leastdesirable kind of borrower.. . . Most of it remains in the hands of speculators and newrich classes.... The new money would then be employed for definitely anti-socialpurposes and would result in precisely those evils of inflation which our monetaryreformers so deplore and which some of them have the audacity to impute to ourproposals.'We propose, in fact, to expand credit in a novel, scientific and socialist manner; tosend our new emission of money direct to the spot where it is most required and willbe used for the greatest economic and social advantage. As Socialists, we select forour medium of credit expansion the necessitous areas of poverty, and propose to emitour new money in the shape of consumers' credits. These credits are an emergencymeasure to break the vicious circle of destitution and unemployment. The suggestionthat they replace producers' credit is, of course, an absurd travesty of the plan.Producers' credits will naturally also be necessary for the production of the goods forwhich consumers' credits create the demand now lacking. Consumers' credits are aspecial expedient in time of industrial stagnation and collapse to stimulate effectivedemand in the right quarter and to re-start the dormant mechanism of production. . . .'We propose to constitute an Economic Council vested with statutory powers. Thebusiness of this Council will be to estimate the difference between the actual andpotential production of the country and to plan the stages by which that potentialproduction can be evoked through the instrument of working-class demand. Theconstant care of the Economic Council must be to ensure that demand does notoutstrip supply and thus cause a rise in price.'It is evident that the new money must be issued gradually and that industry must begiven tune to respond to the new demand... . The Council would feel their waygradually to the maximum production. . . .'When the maximum production of the nation is nearly reached, no new money mustbe created or inflation will follow. A point must be fixed at which all payments by theState must be balanced by taxation. Under the further machinery of these proposals,prosperous industry, producing to full capacity, must then shoulder its own wage bill,without further assistance for this purpose from State credit. . . .'Let me now deal with the actual machinery by which our Economic Council woulddirect the major operation of creating fresh working-class demand to evoke ourdormant capacity to produce. Alternative methods present themselves.'I stated my preference for the following: 'The Economic Council would fix from timeto time wages which individual firms or amalgamations were to pay. The State bankswould then grant overdrafts for the payment of these wages until the EconomicCouncil directed that the industry could shoulder its own wage bill by reason of itsincreased prosperity. No additional overdraft for wage purposes would then begranted.152 of 424