A Petition Concerning the Resolution of the Economic Crisis

By Arian Forrest Nevin, J.D. – Created on 07-22-2009

1. As a nation’s scientific and technological capabilities increase, so too should the leisure time and the wealth of the nation increase. Yet, the United States is progressively becoming poorer and sinking deeper and deeper into debt.

2. The current global economic crisis has no physical cause. We have not run out of resources, factories, people, or suffered a cataclysm. All over the world, the unemployed are willing and eager to work, but are prevented from earning a livelihood because they cannot find work.

3. Economists claim to understand the economy. Our leaders in government claim to know what they are doing. But, if economists and politicians truly understood the economy and knew what they were doing there would be no economic crisis.

4. Many obstacles to human progress stem from natural causes over which man has little or no control. Other obstacles result from man’s ignorance, stupidity, superstition, and greed. Human made obstacles once recognized can be overcome. The economic crisis is a human made obstacle which any intelligent and honest government, if it really desired, could overcome.

5. While the government clearly does not understand what is wrong or have an effective solution to the economic disaster, it makes no attempt to truly understand the problem or to solve it. If the government really desired to resolve the economic crisis it would thoroughly explore every possible avenue which promised salvation.

6. Since the government does not understand the crisis or have a solution, it should seek outside advice. It should offer a reward to anyone discovering the means to resolve the crisis. If it is profitable for private firms to offer prizes for inventions that overcome technical difficulties in their business, surely it would benefit any government to discover a panacea for the economic crisis.

7. Regarding the monetary system Nobel laureate Frederick Soddy wrote: “I thought that, as a scientific man, I ought to know something about economics. So I studied the money system for two years and could make nothing of it. Then, one day, the truth dawned on me. What I was studying was not a system, but a confidence trick.” A confidence trick is a scam, a racket, a rip off, a con. The trick is our double-money system. Rather than have one kind of money, we have two. In addition to cash there is electronic money, which exists solely as data entries in the computers of banks. Cash is insignificant in amount relative to electronic money. Nearly all money is electronic.

8. Soddy called the double-money system a system of “fictitious credits” and distinguished between genuine and fictitious credit. Genuine credit is when “the lender gives up and goes without what the borrower receives and pays interest for,” while fictitious credit is when “the lender gives up nothing whatsoever, but creates new money which his borrowers owe him and pay interest upon.” There is a fundamental difference between genuine and fictitious credit. Fictitious credit allows banks to get something for nothing at the expense of the whole community. If we had government-made money that was spent into existence, rather than bank-made money that is lent into existence, we would have far less debt in our society.

10. Soddy said the double-money system “could not have succeeded but for the cooperation of the verbally educated economist and his imaginary ‘economic laws’ arising from the inverted importance he has given to money.” Money is simply a human convention and does not in any way contribute to the production of wealth. Wealth consists of anything physical that is of benefit to human life such as cars, stoves, houses, and clothes.

12. While money and debt are forms of property and can be exchanged for each other, and money exchanged for wealth, neither are in and of themselves wealth. They are not incorporated into a physical product such as a house. Houses are made of bricks, wood, and metal. Money and debt form no part of their structure.

13. A nation is made wealthy through the production and consumption of wealth, not through finance and banking.

14. Soddy likened wealth to a river constantly flowing. Every day humans are creating new wealth: cars, houses, crops, and clothes. An increase in the flow of wealth makes us wealthier, and a decrease in the flow of wealth impoverishes us. While individuals can save money and investments, it is impossible for the nation as a whole to be idle and live on its savings. We must constantly produce wealth, or we will starve, and the lights will go out. As Soddy said, “Only a camel can live on its hump.”

15. The worldwide economic crisis we face today is caused directly by the dishonest and unsound money system. What is physically possible should be financially possible. Today we are prevented from putting our people to work and producing and consuming wealth to the maximum by false economic ideas and the system of double-money.

16. The subject of economics occurs to most people as hopelessly complicated, but it is not. It only appears to be. As Soddy said, “Straightforward problems described by cork-screw terms demand for their apprehension cork-screw minds, whereas if described in plain terms they are hardly problems at all. There is today no problem in real economics unsolved.”

17. The economic problem is simple. The real economy, consisting of agriculture, mining, and manufacturing, is engaged in producing and distributing goods necessary for human existence and comfort. Thanks to science, discoveries, and inventions we are able to produce goods of all types in abundance and with little effort. Yet these goods, which we are capable of producing in such abundance, cannot be sold. Wealth-producers have always had greater difficulty in selling goods than in producing them. We have vast amounts of unsold goods and an even larger amount of unused productive capacity. Yet great numbers of the populace are in want of these very goods, which cannot be sold. This is the paradox of poverty amidst plenty.

18. The employment of labor and productive machinery depends on constant supplies of raw materials, energy, and, most importantly, on the ability of the public to purchase goods as fast as they are produced. If the rate of consumption falls below the rate of production, a decrease in production and employment will result. The ability of the public to purchase goods primarily depends upon wages, salaries, and dividends which are paid in the process of producing goods. Any reduction in the rate of production must therefore tend to reduce the effective demand for goods.

19. The limiting factor to production and effective demand is money. Money is ultimately the means by which we distribute the wealth produced by the nation. It is also an artificial human construct that has no intrinsic value, but has tremendous value as a means by which we all agree to exchange goods and services. The creation and flow of money is not directly controlled by the government, but rather by the private financial industry.

20. The main reason we cannot distribute the wealth of the nation and are in economic crisis is not due to a reduction in the nation’s ability to produce and consume wealth. It is in our inability to distribute wealth, i.e., a constriction in the flow of money. Unfortunately, the creation and flow of money is in the hands of private financial interests. Hence, private financial interests have inordinate power over the economy. The government can either confront these interests or protect them.

21. Since we have the best government money can buy, the government protects them at the public’s expense. And the traditional economic schools of thought are based on the current system of private financial control. Therefore, neither the government nor the “experts” will ever develop or adopt a solution to these recurring economic crises that are caused by a constriction in the flow of money.

22. It must not be forgotten that the consumption of goods is essential to production and should be regarded as equally important to the economic system as production itself. Since science and technology have enabled the efficient, production of wealth, the non-physical social aspect of distributing our great productive capacity should be a small effort in comparison. Thus, the real economic problem is to discover a method of selling and consuming goods as fast as they are produced.

23. It is towards this end that all nations, governed by traditional economic theory, are clamoring to capture new markets. It is for this reason international commercial competition is so fierce. This creates a situation where companies, not guided by concerns over national economics, utilize outsourcing and other techniques to reduce their cost of labor and thereby create job losses. Job losses result in a decrease in the standard of living for the affected countries. Since this happens globally, the war over markets leads to a global race to the bottom of the standard of living. Unless a correct solution is found and adopted, the race to the bottom to reduce cost and future wars created to sustain traditional economic interests are inevitable.

Whereas, the economic crisis is solvable and stems from manmade rather than natural causes, it is necessary that the government take effective action to end the crisis.

Therefore, we request that Congress immediately form a commission to inquire into what reforms, mechanisms, controls, and oversight ought to be introduced into the economic and monetary system to resolve the economic crisis and enable society to take full advantage of science, technology, and invention so that poverty may be abolished and taxation reduced. We request that Congress direct the commission to call and hear in person within 1 year all responsible persons and representatives of organizations who claim that such reforms, mechanisms, controls, and oversight are possible. We request all relevant facts be brought into consideration which the testimony of such persons and representatives shows to be relevant to the Inquiry. We request that all testimony be made publicly available and that the findings of the commission be publicly presented.

We request that based on the Inquiry and its findings Congress enact plausible solutions to the economic crisis until an effective solution is adopted.