A Hamiltonian Credit System for Development

re posted from                              EXECUTIVE INTELLIGENCE REVIEW

This article appears in the May 29, 2020 issue of Executive Intelligence Review.

[Print version of this article]


A Hamiltonian Credit System for Development

We will generate the investment credit necessary to carry out the job creation program outlined in this proposal through the American System of economy, rather than continuing with the suicidal policy of trying to bail out a $1.8 quadrillion speculative bubble with endlessly increasing quantitative easing and other bankers’ bailouts at taxpayers’ expense.

The American System was founded on the knowledge that human invention and creative ideas are the source of wealth; they represent the human capacity to understand the laws of the physical universe and to act on them, more powerfully with every new discovery of those laws. The American System of economy appeared as early as the 17th Century Puritan colonists of the Massachusetts Bay republic. It directly opposed the British free trade system which destroys us today, which teaches that wealth comes from advantage in trade (buy cheap, sell dear) and financial speculation; the Physiocratic system, which peddles the superstition that wealth is simply ownership of land; and the socialist idea that wealth comes simply from physical labor.

No, said the brilliant first American Treasury Secretary Alexander Hamilton: Wealth is the product of human invention which has been provided with credit to become new machinery, a new form of power or chemical process, a new tool. Hamilton’s idea that the purpose of banks is to “put the savings of the nation in the hands of those able to use it most productively,” created commercial banking in America. His creation of national banking enabled a bank, acting between the government and private banks, to leverage the savings of the nation for years into the future, as national credit for manufactures and infrastructure. Hamilton’s Report to Congress on Manufactures was the first appearance in America of the full intention that the United States would become a great manufacturing nation, not a playground where European financial speculators prey upon impoverished American farmers.

British monetarism inculcates the idea in the credulous that money has a value in itself. The modus operandi is to corral the power to create money in central banks, controlled by private banks and private financial concentrations, which can use that power to indebt not only entire industries, but governments as well. And when private debt speculations collapse, print large volumes of money to paper over the losses, and thereby further indebt the population. When a large speculative bubble collapses, the central bankers’ job, in a British monetarist system, is to inflate the next, larger speculative bubble. They’ve been doing it for centuries wherever they’re allowed to.

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