Why There are Financial Difficulties in a Technological Age -- And What Can Be Done To Correct Them

L.W. Nicholson

1996

Published in:

Technocracy Digest, 1st quarter 1996, No. 319

Since the technological age became a significant progression on this Continent, the financial system -- designed in the dark ages -- has become increasingly antiquated. With almost every phase of its operations in the U.S., the financial system is indicating ever greater signs of stress. In the past, when a problem developed, it could be corrected, at least, temporarily, by taking money from other areas to fix it. However, in recent years, the problems have developed in so many different areas at the same time that the ability to correct them is becoming almost impossible. Not only do we see declining profits per investment expended, but also increasing bankruptcies, debt, public, private and corporate, all together, adding up to about four times the federal debt alone. We see increasing underemployment; far more production than can be sold; a decline in the value of the dollar; and increasing poverty.

Consumer debt has increased from $296.2 billion in 1980 to $741.1 billion in 1992. Consumers are being squeezed between higher prices and increasing underemployment (decreasing purchasing power.) The federal budget has increased from $45.2 billion in 1945 to $1.09 trillion -- an increase of 18.8 times in the past 50 years.

Never before have such staggering changes occurred in the financial operations of any country on earth. This increasing stress on so many types of fundamental financial operations has no precedent, and clearly indicates financial problems of unusual proportions. To top it off, our money is losing its value: the 1995 dollar is worth less than one- quarter of the 1945 dollar. And the Canadian dollar is worth even less. Since these financial trends are increasing in rapidity toward ever greater heights, one may expect one's present savings, if any, to become worthless in the near future.

It is the people who work -- who have an income of some sort -- who must pay all these debts, plus interest, in addition to supporting their families. In 1992, the federal debt alone was $31,143.97 per employee, and the interest paid on it was another $1,543.09. But this is not all, by any means. The employee's share of the state and local debts is $7,227, plus interest on it. Here, we have only added government debts and the interest thereon. Employees must also pay higher prices to pay corporate debts, and also pay taxes to pay farmers to produce less so prices can be kept up. They must also buy insurance to help pay for medical bills which have gone so high that they can't afford to be without insurance. Can there be any doubt concerning the reasons why poverty is increasing so fast in the land of plenty?

In 1929, these same trends existed but on a far smaller scale. The depression of the 1930s lasted a decade, and was about 30 percent worse than any previous depression. This was a financial depression, and it could be kept from deteriorating into complete chaos only by the application of federal credit on an unprecedented scale.

World War II presented the excuse to increase the debt even faster, which allowed sufficient purchasing power to be distributed to achieve the appearance of economic normalcy. At the same time, with 27 million people withdrawn from normal activities, far more was produced than ever before. So much for technology making more jobs for people! Some might think we had Hitler to thank for stabilizing our financial system, easing for awhile the drastic changes required.

The present financial crisis, with these critical trends many times further advanced than in 1929, would have us into a depression of chaotic proportions if the increasing debt was discontinued. Now, with financial bankruptcy staring us in the face, the politicians must choose between bankruptcy, financial chaos, and a prospect even more dreaded by them: trashing this system of price to install a non-price system. Consider, please, what would happen if either of the first two was allowed to happen.

Our problem is financial, not physical. The physical world continues to operate quite satisfactorily. The sun rises in the east; the application of energy to mass continues to change iron ore, plastic, and glass into automobiles; highways and railroad tracks still allow industrial products to be moved to the areas of use. Our technology is constructed by the use of physical materials and human knowledge concerning those materials. Now, our technology can produce plenty for all North American citizens. But they can't use this plenty because of the restrictions of an antiquated financial system -- a system which only provides the incentive for rendering our planet ininhabitable.

No one can doubt that something must be done about this financial crisis. But what? Everything that has been done so far has failed; not only failed, but the problems continue to grow worse at an ever increasing speed.

Patriotic people will try to help their country, but it can't be done by refusing to admit that corrections are needed. One can't fix a problem one can't, or won't, see. May our country always be correct, but if it's not, let's fix it.

Technocracy's Technological Social Design is the only solution available, so, let's get on with the job.

-- L.W. Nicholson