Salvation Island
Let's assume that those of us here this afternoon are shipwreck survivors, and that we are stranded on a deserted island. Our only means of survival are to help each other by each doing those things that are necessary for the betterment of our new community, until we can be rescued. One of us becomes a farmer, one a fisherman, one a carpenter, and so on.
Each of us has his own role to play for the survival of the community. No one has any money, and at least for the time being, there is no need for money, All are contributing equally, and all are on the same economic level. We are satisfactorily exchanging our goods and services by barter. But gradually, as the community evolves, it becomes apparent that money will be necessary. Bob already has a house, and the carpenter doesn't need another hundred pounds of fish. But we do need to associate, cooperate, and continue to contribute to the community. There needs to be an acceptable and equitable means of exchanging our goods and services...
Then one day, as the community is sitting on the beach, talking about their problem, we notice another raft approaching the island. All are happy to see a new face, and we greet the new arrival warmly. As we continue to talk, someone in the community tells the vew arrival about our dilemma, about how we started the community, developed it, built it through cooperation, and advanced to the point where we now need some form of exchange to help make the community grow and flourish. The new arrival's eyes light up. "I have the answer to your problem," says the new arrival. "I'm a banker. I'll set to work right now to print you some money."
The next morning, the whole community meets in front of the banker's new house. As the banker distributes the money, he reminds us that the money belong to him, and that we do not "own" it, but that we can only "borrow" it, and that we must pay a small fee for the privilege of borriwing it. We can pay that at the end of the year. And he requests that each person sign the agreement to pay 5%, which is certainly not excessive interest.
The first year goes by. The community functions and prospers during the year; then at the end of the year we return to the banker, to pay him back what we had borrowed. But we find, to our dismay, that we cannot repay the loan, because we do not have enough money. We find that we now owe all that we had borrowed, plus 5%, which is the interest. The $1,000 that we had borrowed has now become $1,050. Since there is obviously no way to pay back the $50, which is the interest, the banker suggests that we leave the loan on the books as a $1,000, leaving a lesser amount of $950 for each of us to operate on for the next year. Seeing no other real answer, the community agrees to the new terms, and attempts to operate with less money for another year.
At the end of the second year, the community faces a similar, but greater, problem. In buying down the loan, we find that our operating capital has now been cut by 10%, to $900. We realize that if the plan is allowed to continue, the banker will own the island, in its entirety, having contributed nothing but the paper and ink (bookkeeping) that was used to monetize the community's real credit in the first place. Some of the islanders protest.
But the banker has now had a couple of years to prepare for this day. To counter the objection that is inevitable, he has taken evasive steps. He has used the time to develop credibility in the community to educate us as to how valuable his service is, and what a fine contribution he has made to the community. He established colleges and universities majoring in economics, and teaches our children and our educators all about his money system. He ensures that few, if any, in the community are aware that there is another way; and he encourages the community to discount as ridiculous any suggestion that there could be a better way to finance a community...
Then one day, one of the islanders decides to take a walk along the beach and deliberate upon what has happened to the community. As he strolls along, head down, thinking, he notices what appears to be the corner of a book sticking out from the sand. He kneels, and picks up the book and brushes it off. The title, though tarnished from time, wind, and tide, is still readable - "The Meaning of Social Credit." The islanders had never heard of this before, but he has not had a book to read for a long time, so he sits down on the beach to read it. A nd as he reads, he becomes more and more interested and excited. He realizes that this book holds the real answers to his island's financial problem. The book describes how a community can function very well by simply creating a Balance Sheet, a system of debits and credits...
He runs back to relate the exiting news of his discovery to the rest of the community. As he gathers the islanders to discuss his find, the banker watches with concern. Is his jug up? Has he been found out? Is the community finally ready to take back its property, and reconstruct it, and once again have prosperity and cooperation?
Friends, only you can answer these questions, because the island I talk about is your country, and the community I refer to is all of us.
