July 10, 2000
At the beginning of the last century conditions were tough: agriculture, industry, resource exploration and manufacturing meant heavy manual work. Small business people worked long hours doing accounting and distribution by hand. Shipments were going by cartoon, not by containers. Sales were mostly local. Markets were small. Home conditions were also tough: heating and cooking was by means of wood, coal or oil, no running water, no electric appliances. However, one salary, usually the one of the father, took care of the whole family. Families owned their own home.
One hundred years later: Global markets have allowed for mass production and a ten-fold decrease in prices. We are not so much affected by local agricultural misfortunes. Lower prices and electricity allow for a better standard of living: cars, fridges, stoves, microwaves, small appliances, lawn mowers, hot showers, etc. More mobility allows people more choice of what to do for living. Modern tools have increased productivity ten-fold (being very conservative): computers are used in all business processes: planning, design, manufacturing, sales, distribution, etc. Machinery for industry has replaced heavy manual labour. Advances in health-care and individual health awareness allow the work force to be generally healthy. More knowledge means higher productivity. Better education allowed many people to advance from blue-collar work to office or home-office work.
What is the economic and social reality?
It is more difficult to make ends meet. More family members are working and working longer hours. We spend less time with our children. We have smaller families. We pay much higher taxes and governments are in debt. We witnessed a leveling off of salaries, more robberies and more suicides. We owe a mortgage on our homes and we have credit card debts and loans.
How can the economic situation of families be worse off today than fifty or a hundred years ago, when all indicators and objective conditions are many times better? Where is the wealth generated by human labour and ingenuity?
The short answer is: It is going into fabricated public debt owed by all governments to financial institutions and into ever increasing interest payments.The wrong decision, in 1913, was for the federal government to delegate the creation of money to the Bank of Canada and a restricted set of chartered banks.