[PDF]Product Money A Sequel To Riches And Poverty

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PRODUCT MONEY


CHECKEP 9MAY1959



WORKS BY SIR LEO CHIOZZA MONEY


ECONOMICS, SOCIOLOGY AND POLITICS
British Trade and the Zollvesein Issue
Elements op the Fiscaa Problem
Riches and Poverty
Riches and Poverty (x^ra)

Money s Fiscal Dictionary

Insurance versus Poverty

The Great State (with H G Wells and others)

The Nation's Wealth

The Triumph op Nationalization

The Peril of the White

Can War be Averted ’

VERSE

The Immortal Purpose, and Other Poems
Sonnets op Life



A CALENDAR OF PROGRESS


1710 Newcomen built his Steam Beam-Engine

1730 Abraham Darby smelted Iron with Coal.

1764 Hargreaves Invented the Spinning Jenny.

1769 James Wan patented his Steam-Engine Condenser.

I78S Cartwright Invented the (irti Mechanical Loom

1800 Volta invented the Electric Battery

1801 Syminjtcon built the steamship Charlotte Durtdat

1801 Trevithick built the first Locomotive Engine.

1819 The steamship Sevennob crossed the Atlantic

182$ Steckton-Oarlington Railway opened.

1819 George Stephenson built the RccLet.

1631 Faraday discovered Magneto-Electric Induction.

1917 Ministry of National Service reported (Blutbook.
Cmd. S04, 1920) that for the period Nov I. 1917 to
Oct 31. 1918. ‘out of 2.42S,I84 examinationt of
men of military age . approximately only I in
every 3 had anamed the full normal standard of
health and strength approximately I in every
3 presented marked physical disabilities ' A further
10 per cent found * totally and permanently unfit.'

1932 The Chief Constable of Liverpool reported that m
1932 165 gangs of children, many of tender years,
were engaged in crime, sometimes with the con-
nivance of their parents. Four children, aged 7 to 12,
committed theft in 38 shops In a single evening, their
parents receiving the stolen property.

1933 The War Office standards for new recruits for
Infantry of the Line are • Minimum height, 5 ft. 4 In :
minimum weight, MS lb


PRODUCT MONEY

A SEQUEL TO ‘ RICHES AND POVERTY ’


BY

SIR LEO CHIOZZA MONEY

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^fETHUE ^3 & CO. LTD.
36 ESSEX STREET W.C
LONDON




Fir$l Published tn 19JS



PREFACE


A CERTAIN conception of money, as a ' arculating
medium,’ as something to ‘ make,’ as some-
thing to be dealt in, as something to store, as some-
thing that knows a magical increase unknown to
physical science, as something for which all thmgs,
even men, can be bought and sold, has for ages ruled
the world and its labours

It is a conception that has led many thoughtful
men to hate the word ; to disdain its character and
implications.

In these pages the accepted conception of money is
denounced, as much on material as on moral grounds ;
it is suggested that it is inherently false, and that no
amendment in its practical application can make it
truly economic or tolerable. A new conception is
described and termed Product Mokey, this name
being chosen because the system is one in which the
means of payment is based upon the certification of
product, making every producer a consumer, imme-
diately and automatically, because he has produced.
The present frustration of production is thus avoided.
Here is novel matter lor ^scussion. I cannot hope
to have given consideration to all the points that
might arise in the practical working of my scheme.



PRODUCT MONEY


viii

but I am bound to say that the difficulties seem to
me to disappear as one applies thought to the essential
idea No difficulties seem to arise in any way com-
parable to those we encounter in money as it is.

I invite all those who are interested in the world of
work — and who is not ? — to give impartial considera-
tion to the proposal, and to assist in its development
It is a question in which many may help in matters
of method and detail.

LEO CHIOZZA MONEY

May 1933



CONTENTS


Proem Sc^E^cE to Society . . . xv

I. Introductory —

I . Product Money simply Stated . >

a Monetary Revolution . . ■ • i

II . Making Goods and Making Mo.vbv—

1 The Failure of Corrency . - • 7

s. Money as ' lUusioQ * • .10

j. ‘ Hereby did Barter grovf Sale ' • * J

4 The Marginal Lile . .16

5. ■ Limitation of the Vend ' . -23

HI. The Manufacture of Currency—

j. Material Money . . . -29

2 Sloney of Faith . . . . -30

3. Bank Deposit Currency . . -34

4. Cuirency ndthout Cold Basts . . .40

IV’. Poverty Market —

1. Poverty Market not due to ‘World Crisis ’ . 44

2. Poverty Market in 1930 . . .48

3. Only One in Three a Producer . . 49

4. Humility in Consumption . ■ - Si



PRODUCT MONEY


V Mass Production for Masses unable to Boy —

1 The Poor EanuDgs of 19J1 • • .60

2 The Eiror of Distnbution • .68

3 Death Duty Revelations 7 i

VI Product Money A Non-Circulating Order
UPON Production —

I A New Meaning for Supply and Demand . 79

3 Product Money and the Seller - • 83

3 Product Money and the Buyer • ^5

4 The Form of Prodnct Money ■ •

5 Product Money and Services . • -91

6 Product Money and Taxation ■ • 95

7 Product Money and Capital Saving . • 97

vn National Guilds and Product Money —

t National Guilds charged with Production ■ 103

3 Practicabibty of the Guild State .

3 Equation of Supply and Demand . • *^4

4 The Abolition of Unemployment •

5 Ending the Trade Cycle . . • 122

Vm Standard of Value and Just Price —

1 The Election of a Standard of Value 126

2 The Conception of Jnst Price . . • 127

IX National Planning in the World War—

1 A Successfully Planned Economy . ■ 132

2 Fewer Producers bnt Greater Product • *35

3 The War Manufacture of Money . .136



CO>JTENTS


xi

X. The ORC\T 5i2Et) State atjd the Individual —


1 Liberty as it Is . . . .1^9

a. The Gospel o{ Earned Leisure . .143

3. To Increase Property-Owning . . -MS

4. Escape from the Petty Life . . • 147

XI The Relation or Product Money to Inter-
national Trade —

I. Trade IS Mainly Home Trade . • Jj*

2 Gold Valuation . . . -154

3. Product Money and EicportuJg Power . i6i
4 TbeRe|eiierabonoflDtemabona\Trai 5 e . 163

BlSLlOCRAPHY ...... 167

1G9


Index



LIST OF ILLUSTRATIONS


Sir Leo Cmo^^^ Money, iq^2 . . Ffont\sp\ece

\Fr9m j by &aii 4 »> Lli ^


A Legacy op Pre-War • Prosperity ' . Byrom

Terrace, Liverpool, ih 1933 , . .46

(Rr^rai».f 4 by ^rrnxsxM •/ lU • O^tty Hmld’i


A Study in Mass Consumption . London School
Children in St James’s Park
IP raai • pkyatfiph by Ctnttal Pr/ti PAowti


62



PROEM


Science to Society

I GAVE you power, and you have made men weak ;

1 gave you engines, and you made them master ,
I broke up earth and rock that you might seek
The good of men, and you have wrought disaster ,
I gave great harvest, and you hoard or burn it
\STule scores of millions cry to heaven for bread ,
1 showed the way to plenty and you spurn it :

How else you use me ask the war-time dead '

The steel I give may serve for sword or share ,

My engines deal alike with good or ill ;

Your guns, your tenements, yoiu’ rubbish, bear
The black sign-manual of perverted will
The instruments are mine ; what have you done
That men should fear the knowledge I have won >

— Sownels of Ltfe


PRODUCT MONEY


CHAPTER r
INTRODUCTORY

I. Product Mosev Simply Stated

I T is here suggested that it is necessary to make
a complete revolution in our conceptions of the
functions and emplojTnent of money.

Product Money is not money as now commonly
understood and employed. It is essentially not a
‘ circulating medixim,’ and it is part of the argument
for its adoption that it possesses a virtue that no
money of circulation could possibly possess
Product Money is thus defined ' Non-circulating
money, /»ncfi’oni«g as an order upon production, issued
to producers upon certification of approved product by
a suitable authority.

Thus representing the approved work of producers,
Product Money liberates production by enabling each
producer to command the work of other producers.
Each producer becomes an effective consumer ; each
consumer, therefore, an effective absorber of produc-
tion. Thus we get a liberated Producer-Consumer,
furnished wdth a means of payment which increases



PRODUCT MONEY


automatically \vith the advance of modem scientific
production

A unit of Product Money is an order upon productive
power, earned by virtue of the act of producing. It
does not cuculate, for it loses bu5dng power when
spent When the order is used, the unit ceases to
exist, for it has done its work — its great and beneficent
work of enabling a producer to become a consumer.

Therefore the term ‘ mflation/ so familiar in current
monetary discussion, becomes obsolete and meaning-
less m relation to Product Money There can be no
inflation of Product Money, because only certified
product IS translated into money

With Product Money, the greater the product the
greater the issue of money That is its essence and
virtue The more prolific the machines, the greater
the exertions and fruitfulness of labour, the more
Product Money there is to spend, because it grows
with output

The certification of Product Money in an industry
makes those who work in that industry customers
for the products of other trades Product Money
creates demand m certifying that output has been
made

Buymg and Selling thus assume new connotations

Buying becomes the use of Product Money to
command whatever product is needed and available,
whether produced by the spending producer or by
other producers No longer does the mass of pro-
ducers consist of poverty-stricken consumers unable
to buy freely what they themselves make or what
other producers make.

Selling becomes the delivery of product to the



INTRODUCTORY


3


order of eSective Producer-Consumers armed by the
act of certified production with ample means to buy
products. With Product Money, to produce to
approval is to be paid. When the producer has
received for his approved product pa5rment in Product
Money, the transaction is closed so far as he, the
producer, is concerned as a ‘ seller ' ; it is then his
duty to deliver his goods on receipt of Product Money
issued to other approved producers. The Product
Money in the hands of a buyer comes to the producer
as a legal and certified order to supply goods for
which he himself has been already paid in Product
Money ; the order executed, the Product Money which
entitles a producer (seller) to become a consumer
(buyer) is audited as proof of delivery and cancelled.

Trade thus changes its character Now it is a
struggle for marginal gains (termed ‘ profits ’), narrowly
limited by petty buying, and fluctuating with the
vicissitudes of a monetary system so imperfect as to
be beyond scientific control, and so variously under-
stood that its chief practitioners differ widely upon
the details and methods of its management. The
Product Money system equates Supply and Demand,
and gives these terms a new and beneficent meaning.


2. Monetary Revolution

T he abandonment of ' currency ' as inherently
inadequate for the liberation of scientific produc-
tion, and the substitution of Product Money, amounts
to a complete revolution in the process of exchange.



PRODUCT MONEY


WTiat I propose should be examined on its merits
as an invention, and every prejudice and prepossession
should be swept from the mind

It will not disturb me in the least if a critic urges
that to make the great change from Currency Money
to Product Money may cause difficulties of transition.
No originator can be properly reproached because his
conception renders an existing article, office, institu-
tion, or service obsolete It is the very nature and
function of useful invention to cause change, and it is
merely stupid to complain of it. The locomotive-
engine dispossessed the mail coach, but it enlarged
the hfe, the knowledge, the movement, the feeding,
the supplymg. of hundreds of millions of people. He
who would have suppressed, as many would have
suppressed, the locomotive, was not a friend but an
unconscious enemy of mankind. Britain affords not
a few examples of railway lines deliberately con-
structed m the wrong places because of the opposition
of men of power, authonty and wealth, who ruled
the means of transport through the possession of that
great social factor, area.

Product Money is a conception of far-reaching
importance, proposed and calculated to change the
entire face of industry and society. In all its implica-
tions it must cause a sea-change in affairs as we know
them It amoimts to a complete break with old
traditions It is claimed that by virtue of its inherent
excellence it would not merely enlarge production
out of all present knowledge, but, what is fully as
important, change the atmosphere, the motives, the
morale of all work. It would automatically in-
crease the activities of usefulness while diminishing



INTRODUCTORY S

and finally abolishing the many existing activities of
uselessness.

The terrible, the degrading, and humiliating aspect
of work as we know it is that it makes the individual
unable to give of his best. Necessarily our hands are
subdued to the colour vre work in. How many of us
can honestly assert that in all the conscious activities
of our lives we have done the things we wanted to do,
made the things we wanted to make, or developed
those quahties in us most respected by that fearful
thing we call a conscience ? In what I have termed
the Marginal Life, no mote than a fraction of our
existence is exploited ; too often the fraction we
most despise. Society owes much to the beneficent
thought, the philanthropic endeavours, the kindly
offices of men and women removed by good fortune
from the need to struggle in a commettiaV world.
Given a system of production liberated by money
which at once certifies useful output and enables it
to be freely exchanged, we should offer every working
individual the psychic elevation enjoyed in the past
by a favoured few. That, of course, is not to say
that every individual would either seek or attam
elevation ; it is, however, to assert and to claim, in
defiance of the cjmic. that thus to transform the
motive and character of labour would unconsciously
work upon the nunds of men and develop in freedom
the wings now drooping within economic bars.

IVhile I am not called upon in these pages to defend
a new proposal merely beaiuse it causes change. I am
glad to be able to add the expression of a conviction
that, upon the lines I have indicated in Chapter VII,
there need be no considerable hardship in the transi-



PRODUCT MOKEY


tion to Product Money. I do not believe for a moment
that the cases of hardship caused by the change would
be nearly as great as now anse continuously from the
denials, the frustrations, the speculative f^ures, the
chicaneries which are common products of our society
Few are the families among us that can claim to be
free from economic trouble, and I have never yet
heard of any family, high or low, without members
who have suffered sheer economic disaster. The great
majority are oppressed by a poverty, scientifically
obsolete, which science, absorbed in the study of
physical reality, has faded to trace to the ultimate
process of exchanging products
The growing movement towards catastrophic change
should not surpnse us. Rather it is cause for surprise
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