ECONOMIC SYSTEMS

Otago Daily Times, Issue 24506, 15 January 1941, Page 9

ECONOMIC SYSTEMS

. TO THE EDITOB Sir,—Your correspondent H. Gow said that goods could not be distributed because the means of production were privately owned and, therefore, the product was owned by the producer., The same correspondent now says that' the produce borrowed the money to pay wages and ur raw material from some other capitalist. We are not concerned with capitalists, but with producers, and since all other producers will be in the same position as number one, they also will have tq borrow in order to meet the wage bill and that for raw material, and will consequently have to sell the product to meet their obligations. Money is no longer a commodity, but is now t a ticket system for the orderly dis-< tribution of goods and services. It is, however, issued in the form of a debt. When we borrow from a bank we really exchange our own unknown illegal promise to pay for their wellknown legal promise to pay. This promise" to pay is, however, of the same nature as an 1.0. U. It is meaningless when it returns to the originator. Otfe cannot make oneself either poorer or richer by writing out 1.0.U.'s and putting them in one's safe. If your correspondent will consider this point, she will see that any deposit owned by a capitalist as distinct from the monopoly of credit is in the nature of a" neutralised loan, and is, therefore, the accident and not the rule. The "credit of the community" is not the vague thing your correspondent believes it to be. Just as financial credit is the belief in the ability to supply money where, when and as

required, so real credit is the belief in the ability to supply goods and services where, when and as required, The credit of the community is, then, the belief in its ability to supply goods and services as required, and consequently is the basis on which financial credit rests. —I am etc.. A. G. M. January 14.