Chapter 46 – The Monetization of Progress
article of Louis Even, published in the April 15, 1945 issue of the Vers
monetize something is to coin it into money, or establish it as legal
tender. For example, monetizing gold or silver is to take gold or silver
and strike out of them pieces of money, accepted by the countries who
recognize pieces of gold and silver as legal tender.
modern business, the money which moves the most goods is not the gold or
silver money, but the bank's simple bookkeeping money, the monetized
credit, which moves from one account to another and is of use in
transactions without moving the metal or paper money.
fact of recording these credits for the first time into an account, from
where they will pass into circulation, therefore has all the effect of
real monetization. And when this credit disappears, by cancelling it
totally, when a repayment is made to its issuer, it is a real
destruction of the medium of exchange.
The necessary money increase
one calls money all that serves to pay, buy, clear from debt or taxes,
one must certainly recognize that the more a country's production
increases, the more the money in circulation is a must; otherwise,
production accumulates and the producers stop working.
country's production increase denotes progress for that country. This
progress can perhaps be due to an increase in the population capable of
producing. Usually it is due much more to new and more effective means
of working the soil, the subsoil, the motorized forces, and all of the
country's other resources.
and how does money increase?
can money in circulation increase when progress increases production?
Only one way: by new issues of money or what serves as money.
all these new issues enter into circulation only in the form of loans,
by the banks, to the governments or entrepreneurs.
do not talk here about simple loans of money already in existence: this
would not increase the total circulation at all; it would be a simple
transfer of money from one person to another, from one institution to
we talk about a money increase to match a production increase, it can
only be about new money added to the old, putting into circulation money
which was not previously in circulation. This money can perhaps be of
metal or paper, or the simple crediting of accounts at the disposal of
industrialists or governments — it is of no great importance, so long
as it is willingly accepted in payment for goods or services.
and how is the increase made? The borrowing industrialist pledges his
acquired properties, but this is not enough. He must envisage a
profitable development from money that he borrows. He must show, to the
banker's satisfaction, a production increase, the sale of which will
allow him to repay the lending bank. The guaranties are in the banker's
hands, it is true: but the bank does not wish at all to seize the
pledged properties. This does not interest the bank; it only happens as
a last resort when the borrower's project goes wrong and he can not pay
back his loan. What the bank wants is money, because its business is a
it is really progress, envisaged as very realizable, which is the real
determinant of the loan.
make this loan, the bank records the amount to the credit of the
borrowing industrialist. The cheques written on this credit will pay for
the manpower and the industrialist's other disbursements to establish
new means of production in the country.
increase in the means of payment, made through this recording of credit
in the borrower's account, is therefore purely and simply a monetization
of progress. Without progress in production, this monetary expansion
would not be possible; or it would really be nothing but inflation, and
inflation, instead of increasing the real purchasing power, decreases
the purchasing power of everybody.
The agents of progress
going any further, let us see to whom is attributable this progress that
the banker monetizes to lend to the entrepreneur.
is the outcome of many things: not only does it stem from the
industrialist's personal initiative or his collaborator's work, but
also, and perhaps above all, from the application of inventions, from
the scientific processes, which constitute a real common cultural
heritage. No one can proclaim himself the sole owner of the new
improvements: they are a new link in the chain of progress, but a new
link which would be impossible without the previous ones.
entrepreneur's initiative and the activities that he will recruit
certainly bring a share to progress: this share is private and must give
a reward to its authors, in the form of profits or wages and salaries.
But the share that society itself brings into progress is more and more
what share does the banker bring into it? The banker only ratifies the
evaluation of progress. He agrees or refuses to monetize the progress
that the borrower plans to put into concrete form.
Each one's share
what is the result of monetization for the various parties involved —
the borrower, the public, the banker — under the present system?
us begin with the banker. It is really he who is the first beneficiary
of a progress to which he personally does not contribute, and on which
he has no more claim than the other members of the community.
us point out that the banker actually fulfills a double function in the
described operation. He monetizes progress; then he lends the fruit of
he monetizes progress, he carries out a sovereign act. He does it by
virtue of a charter that the Federal Government has granted to him. He
acts as the sovereign, through a simple delegation of power — a power
that rightly resides in the Sovereign Government. Therefore the fruit of
this act must be a social fruit, a common good.
nothing of the sort actually occurs. Hardly has Mr. Jones, the
sovereign, monetized progress, when he makes this money the property of
Mr. Jones, the banker. And our artist, who becomes again a simple
banker, actually lends, to the profit of the bank, the money that he has
just monetized when he fulfilled the role of sovereign through a
delegated power existing for the common good.
same person, sovereign to monetize and banker to lend, therefore takes
advantage of the first role — the role of sovereign — to pass to the
lending banker what must legitimately belong to the people.
is a despoilment, stemming from corrupt practices. And not only is the
banker the first and principal beneficiary of the monetization of
progress, but he is also the best-protected beneficiary. He can not
lose, even if the borrower fails in his undertaking, since he has
guaranties in his hands on the borrower's past acquisitions, and these
acquisitions exceed always in value what the banker has lent.
is the borrower's share? He will also be able to benefit from the
monetization of progress, provided, in the first place, he manages to
establish the means of production planned; secondly, provided he is
clever or violent enough to extract from the public more money than he
puts into circulation.
borrower's profit is less ensured than the banker's. If he fails in his
undertaking, he comes out of it poorer, since the banker grabs the goods
that the borrower has pledged.
the public? The members of society, whose common cultural heritage
perhaps forms the most considerable share in progress, have as such no
share from the monetization of this progress. They have none, because
the sovereign, who has monetized progress, has forgotten the people and
thought only of the banker.
who work are paid wages or salaries, thanks to monetization; but
collectively, they must, as consumers, pay more for the product of their
work than they draw in wages and salaries, since the entrepreneur must
take out all the money that he lets go, plus his strongly legitimate
personal profit, plus the repayment to the banker who appropriated the
fruit of monetization from the very beginning.
this repayment, to be complete, must be greater than the loan, and as it
is collectively impossible to bring in more money than goes out, there
will necessarily be bankruptcies somewhere, or ruination, or
accumulation of private or public debts.
these things oppress the community. The ruin of a few is a burden for
the whole. The private debts are paid only by placing surcharges on the
prices for the buyer. The public debts, or the interest on the growing
public debts, are paid only by overtaxing the taxpayers.
of a public that benefits from progress, one has therefore a public
crushed under a growing load as progress is expressed by debt-money. In
such a case, if putting into circulation the monetization of progress
causes a temporary well-being, this temporary well-being is short-lived;
the very conditions of this issue of money impose unpleasant and
us add that bankers have around them a clientele of borrowers who are
more and more welcome, because these borrowers have proved themselves
effective at fleecing the public. These are the unscrupulous ones of
whom the Pope (Pius XI) spoke. Though not very pleasant to God and His
angels, to the bankers these unscrupulous borrowers are the cream of
humanity. And this is the way that, around the sovereign and lending
banker, are grafted the powerful monopolies which strangle all
competition and poison the economic atmosphere.
monetization of progress, such as we have, is therefore an injustice, a
theft, an illogicality, a concentration of wealth, and a manufacture of
A more social monetization
is the Government which, in the name of society, ought to monetize
progress. As the country's production increases, it is the Government
itself which ought to increase the money, or the credit-money, and do it
for the good of all members of the community.
Government ought to act in this way for the good of each and every one,
by distributing freely to each and every one, in the form of a social
dividend, the claims on the country's progress.
entrepreneurs and workers would have their rewards, through the sale of
their products or their work, thus made easier. Finance would come, debt
free, through the consumers, whom the monetization would have benefited
directly, instead of coming in the form of a debt through the banker,
who grabs the fruit of monetization.
if the Federal Government does not want to free the people in this way
from the yoke of the sovereign banker, the Provincial Governments can do
it more gradually, but just as effectively, through a Provincial
Financial Mechanism which the citizens would use freely, instead of
clinging to the banks' spoliating system.