TOWARD A NEW DEFINITION OF PROGRESSIVE
BY MARK EVANS
The United States today is in the throes of severe institutional
crisis. The S&L bail-out, phase 2 of the biggest bank robbery in history,
was rubber-stamped by our elected representatives and accepted without whimper
by the people. Budget shortfalls at every level have gutted many necessary
social services. Our civic, county, and state governments must raise property
taxes, excise taxes, fees, and fines. The federal government also is in
hock and has been running an annual deficit in excess of three hundred billion
dollars. The people also, for the most part, are mortgaged for life. Meanwhile,
millions of homeless people-no one knows the actual number-wander the streets
of cities, sleeping in alleys, doorways and under bridges. Massive layoffs
at domestic plants of General Motors, IBM, Texas Instruments, Sears, and
many other corporations, impell hundreds of thousands of high skilled blue
and white-collar workers close to the same fate, while these same corporations
shift their operations to Mexico and other Third World nations. At the same
time, prisons-the new "growth industry"-are being built at a phenomenal
rate.
Prisons, however, are black holes in space, incredibly expensive to build
and run, and add substantially to the state and federal debt. Even after
jobbing the prisoners out to work as slave-labor for corporations (involuntary
servitude and highly illegal under the Constitution), prisons still run
in the red. The only people besides the staff and guards who benefit are
the bond-holding class who own the debt.
What is the problem? We are told that capitalism is synonymous with democracy.
We are told that the system we live under is "free enterprise"
when in fact it is a form of usury-finance, monopoly capitalism. We are
told that the "free market economy" (read stock market) is the
greatest system ever devised by the mind of man. We are told that the proof
of this is that communism and socialism have been "proven" to
not work. Yet the fabric of our society continues to unravel. The final
phase-the Reagan phase of the Cold War, an enormous scam and boondoggle-may
or may not have been the straw that broke the back of the Soviet Union,
but it most assuredly bankrupted the American economy. We are now the greatest
debtor nation on earth.
Where are the Progressives?
In the midst of this fundamental institutional crisis in capitalism, what
is the progressive movement doing to make this country a better country,
this world a better world? Does the current "progressive movement"
even have an agenda, a plan, or any clue as to what to do to address the
serious systemic flaws in our social and financial institutions?
In Berkeley, California, the supposedly radical Berkeley Citizens Action,
which ran the city for years, has been at the vanguard of instituting creative
new ways of exploiting the people in order to raise moneys for the civic
bureaucracy. That city now preys on citizens by dividing the city into lettered
zones and requiring mandatory residential parking registration of vehicles.
In order to obtain a designated letter-sticker to be able to park for more
than two hours in any zone, one must be able to prove residency in that
zone. Accidental "offenders" under this system must pay an exhorbitant
price for being in the wrong place at the wrong time. Apart from the highly
questionable constitutionality of such devices, which clearly infringe on
the freedom of the people (especially those among the homeless who still
possess vehicles), this phenomenon is just one more sign of the institutional
crisis of capitalism.
Usury is a Form of Class War Few people realize that the cities, counties,
and states are experiencing their budget shortfalls precisely because the
government(s) under capitalism are not allowed to create fiat moneys in
the name of the people. Instead, they must issue interest-bearing bonds
and borrow "money" from banks. The state, then becomes the instrument
by which the bond-holding class-the owners of the banks-extort and oppress
the people in order to receive back their pound of flesh-the interest on
their bonds, payable either in taxes, fines, fees, levees, or bail.
The contemporary "progressive movement," unlike the Farmer-Labor
movement and the Progressive Party of Robert LaFollette in 1924, is not
addressing this fundamental issue. We must get back to the root of the problem
if we are ever to achieve an egalitarian society and eliminate the systemic
means that perpetuate class oppression. We must learn the basic realities
(not the academic-establishment version) of economics.
A good place to start is the Federal Reserve Bank, the institution that
functionally oversees the process described so aptly by Elsa Peters Morse
in The Key to World Peace-and Plenty (1960):
Few people understand how a dollar bill is issued into circulation-as debt.
Nor have they been informed how the billions of dollars of the national
debt are set up on the books of the private banks under capitalism as a
loan to the nation-at no financial cost to the banks-and yet drawing interest
. . .
The system of pump-priming the economy through debt, otherwise known as
credit expansion, is technically called deficit-financing. Deficit-financing
through government spending or borrowing by increasing the public debt is
now necessary to subsidize the whole profit-system economy-the economy of
the entire capitalist world . . . The servicing of the public debt, or the
paying of the interest charge (profit to the banks or other bond holders)
on the capitalist nation's state, city, or country bonds, is reflected in
higher and higher tax rates as the debt load deepens. The injections of
debt-credit money are steadily increasing through the entire capitalist
world . . ."
The Fed operates beyond public scrutiny and enjoys a mystical reputation
for positively controlling the American economy. The Fed can and does create
and destroy "credit money" at will.
The myth that "inflation" is caused merely by the overproduction
of printing-press money is a fatal misunderstanding. At the present time,
cash is actually being gradually taken out of the system. The real problem
is the manipulation, i.e., the periodic inflation and subsequent restriction
of "credit money" by the Federal Reserve and the banking system
as a whole.
A distinction must be made between "inflation," defined as an
expansion of cash money in the system, and "inflation," defined
as the artificial creation and manipulation of "credit money"
by banks. The one is good for the middle-class, the small business people,
and the working poor. The other is good only for the bankers.
Thirty-five to forty percent of the federal budget (government agencies
"cook the books" and the figures are highly nebulous) is currently
channeled just to service the interest on the debt. Consider what this enormous
expenditure could do for the nation and the body politic if it were channeled
in other, more productive directions! For example, homelessness could be
elminated, and millions of presently unemployed people could be put to useful
work. The Democratic Party, however, is just as committed as the Republican
Party to the principle that government spending should return a tidy profit
in interest to the banks and the bond-holding class.
The Progressive Alternative To really eliminate first the deficit, and then
the debt altogether, the government should cease the practice of borrowing
money at interest from the private banking system. This was the thrust of
the Farmer-Labor Party platform in the twenties and thirties, and of Robert
LaFollette Sr.'s Progressive Party of 1924. To do this, the federal government
would have to purchase back the capital stock of the privately owned Federal
Reserve Bank and cease issuing interest-bearing bonds, notes, and securities.
The 1932 Farmer-Labor platform began with Article 1, Section 8, Clause 5
of the U.S. Constitution and called for legislation to abolish the Federal
Reserve Banking System-private ownership of the currency system-by repealing
the present unconstitutional banking laws and then placing the currency
system in the hands of federal, state, and local governments, so that the
profits, if any, would accrue to them, thereby preventing panics, depressions
and crises and private control of money.
The platform called for non-interest-bearing U.S. notes to be issued as
Fiat money by the government in the name of the people and for the mints
to be opened to the free coinage of gold and silver. The coins, however,
were not to be stamped in dollar denominations, but rather according to
their weight and the fineness of the metal (e.g., one ounce, .999 fine),
circulating as a commodity money alongside the Fiat paper money.
Historically, former progressives knew these things and had an agenda to
address the issue. In the 1920s the entire spectrum of the American left
addressed the issue of nationalizing the Federal Reserve, the Central Bank,
and eliminating usury. Their chief differences were of a tactical nature.
The Farmer-Labor, Progressive, and Socialist Parties believed that it could
be done through the electoral process, by the ballot, while the Communist
and Socialist-Labor Parties advocated revolution. Today, even most of the
"revolutionary" elements no longer address this issue, at least
not to a degree proportionate to its importance.
The process by which the American left was coopted and decimated to the
point that it abandoned the struggle to reform the government along the
lines of nationalizing credit is easily the subject of several long articles,
if not a book. In a nutshell, the left has had to give up on this issue
because it has become dependent upon money from the tax-exempt foundations.
The problem, however, has not gone away; it has only increased. The words
of the Minnesota Farmer-labor platform of 1934, which advocated nationalization
of credit and of the Central Bank, still ring true:
. . . the United States has the most wonderful resources, great factories,
machinery of production, steam power and electric power and the millions
of capable workers and farmers ready and able to produce food, clothing
and shelter in great abundance for all. At this time when all of us could
live in prosperity and happiness we find that there are millions of working
men and women in poverty, want, and degradation and that there are also
hundreds of thousands of farmers, business and professional people who have
become poverty-stricken and bankrupt and millions of people in all walks
of life are compelled to eat the bread of charity. Palliative measures will
continue to fail. Only a complete reorganization of our social structure
into a cooperative commonwealth will bring economic security and prevent
a prolonged period of further suffering among the people.
We, therefore, declare that capitalism has failed and immediate steps must
be taken by the people to abolish capitalism in a peaceful and lawful manner,
and that a new sane and just society must be established: a system where
all the natural resources, machinery of production, transportation and communication
shall be owned by the government and operated democratically for the benefit
of all the people and not for the benefit of the few.
Unless the current "progressive" movement moves to address the
issue of money and credit and to present and advocate genuinely progressive
solutions to the current crisis in capitalism, it will continue to find
itself as a disengaged wheel, spinning in space, and the American people,
the workers and the middle class, will continue to be easy prey to right-wing
charlatans, demagogues and "friendly fascists" like H. Ross Perot.
Mark Evans
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