To play with the problem of finance, merely by nationalising the Bank of England which for all practical purposes is nationalised already, is only worthy of the make-believe of a Labour Party which has no serious intention of putting any of its theories into practice, and resists in principle the power in Government by which alone finance can be subordinated to the nation. We do not propose, by nationalising the banks, to substitute for financial ability a miscellaneous collection of civil servants and party hacks to play with intricate problems of which they have little understanding. We propose, by the exercise of ruthless power in Government, to make those who understand finance do what the people want done, and to let them know in plain fact what will happen if they do not do the job the nation commands.
Within such a system the supply of credit must be adequate to a system of greater production and greater consumption. The credit system will rest on certain clear and basic principles: that British credit created by the British people shall be used for British purposes alone; that British credit shall be no monopoly in the hands of a few people, and often alien hands at that, but shall be held in high trusteeship for the British people as a whole; that British credit shall be consciously used to promote within Britain the maximum production and consumption by the British of British goods; that the credit system shall maintain a stable price level against which the purchasing power of the people is progressively raised in the development of higher wages.
Tomes could be written on credit policy, and have been written, with infinite diversity in particular if with broad agreement from modern minds in general. The writer in earlier years has contributed to these diverse studies of one of the most fascinating subjects that can engage the modern mind. But experience brings some lessons, and one lesson is that the creative urge of modern man to build a modern credit system, that serves the people and not the financier, may well be lost in the desert sands of diverse detail. The broad principles of action are agreed by most thoughtful and modern minds. The full details must await the vast resources of a Government armed with power, and a full mobilisation of the finest intellects of our time to evolve the final pattern. But the principles here stated shall stand, and a new credit system shall be opened by the key of revolutionary Government entrusted by the people with real power. To play with credit problems, in the absence of real power, is merely to court the classic inflationist disaster of an impotent reformism.
The problem of taxation is lifted naturally by the general economic policy of British Union. Taxation depends upon revenue, and revenue in turn depends upon national wealth production. A lesser burden of taxation can produce a larger revenue, if based on a greater national production of wealth. Therefore a system which is designed to evoke the maximum wealth production of the nation automatically lifts the burden of taxation. We rely for greater wealth production not only on the absorption into productive industry of those now unemployed or working short time, and not only on the maximum production of all present machinery; the elimination of redundant middlemen, and the great network of purely parasitic occupations which have grown up of recent years in the decline of productive industry, will release great new forces for wealth production, in addition to the labour of those unemployed or on short time. Any analysis of the swing over from staple productive to distributive industry, and still more redundant quasi-luxury occupation in service of the profiteering rich, will yield the most startling figures.
In a civilisation in which the rich profiteer can buy too little of the essential, a disequilibrium takes place in the national economy, and hundreds of thousands are drawn from productive to non-productive industry. The elimination of overlapping and redundant distributive services, and the re-absorption of such labour, together with labour employed in ultra-luxury trades, back into productive industry, in response to the people’s new demands for “real” goods, will increase the productive power of the nation in almost incalculable degree. The proportion of the people actually engaged in real productive processes is small to the point of being one of the outstanding anomalies of the system. This phenomenon is created by the low purchasing power of the mass of the people and the extraordinary purchasing power of the ultra-rich. Consideration of the latter category belongs to the next chapter, but here we may note that the release of workers, from redundant distribution and ultra-luxury occupations, will enable the new economy vastly to increase the nation’s wealth production. From this it follows that revenues will greatly increase and taxation, despite the extension of service to the people, can be greatly lightened.
Oswald Mosley – The Economic System : What is Wrong 1938