Neglected Lectures From the Sixties and Seventies

Money & Progress – Q & A

Professor: Dr. R.J. Rushdoony

Subject: Conversations, Panels, & Sermons

Lesson: Money and Progress – Q & A

Genre: Q&A

Track: 21

Dictation Name: RR258B3

Location/Venue:

Year: 1968

[Introduction] Our speaker as most of you know, if a very busy man. I think that he has discovered the secret of life. The way you get more out of it is to put twice as much into it, and think this is what he has been doing this past year. For example, he had, last year, the total number of speaking engagements, 251; letters written exclusive of newsletter mailings, 1,411; books read in full, exclusive of extensive reading and study in various works, 223 (this was just within one year, I don’t think I’ve read that many in my life); he prepared radio talks, 23; a radio series which was used in the Los Angeles area, northern California, as well as in South Carolina; he prepared 17 columns for the California Farmer; his book The Mythology of Science, which was mostly written in previous years. Thee were two chapters written this past year and was published in September 1967, the book Foundations of Social Order, which concerns the creeds and councils of the early church, this was written in 1967, prepared for 1968 publication; the Biblical Philosophy of History was completed in 1967, this is for publishing in 1968, he has prepared film strips, one particular one, The Foundations of Social Order (incidentally, we have used these film strips in some of the church gatherings and I will tell you they are very good and very effective, you might check in on those). He has reviewed an article for the November 1967, concerning Westminster Theological Journal, it is an article on John Witherspoon for Christian Economics, this is to be published in 1968. Then he wrote an introduction for Gary North’s book, Marx Religion of Revolution, and that’s going to be published in 1968, he worked on the manuscripts for seven books in process of writing, including work on a study of Daniel and Revelation, and I’ll tell you, when this comes out on Daniel and Revelation, this is going to stir a few people, and he also has produced a monthly newsletter. So, as I say, this our speaker has been a pretty busy man. The last time he was here, he was speaking on the myth of population explosion.

Now, he had planned on continuing that this evening, but that will be continued next month. However, in the meantime, Money & Progress has overtaken this, the myth of our sound currency has overtaken the population explosion. So, this evening our speak will be discussing Money & Progress, the Reverend Rousas Rushdoony.

[Rushdoony] One of the most commonly asked of questions is this: Why is Washington unable to see the consequences of its actions? Why, having allowed the world greatest silver reserve to go down the drain, do they persist in talking about no silver shortage? Why, after their failure in handling the silver crisis are they repeating the same mistakes as they face the gold crisis? Tonight we shall attempt to answer these questions, but first of all, we shall drop the questions and come back to them by indirection.

Recently, a prominent clergyman, who is semi-retired, a man who is moderately conservative, made the statement that wood would serve equally as well as gold as a monetary medium if everyone agreed upon wood as a replacement for gold. While this man was moderately conservative and would have bridled at the suggestion that he was not a good Christian, he was an atheist in effect. He denied that there is any fundamental law order with respect to economics, and in denying that there is a fundamental law order with respect to economics, he was, in effect, denying it in any other sphere, because God is either totally God or He is not God at all. Either there is a total law order or there in none at all. Total law governs, or no law.

Now, this man, of course, revealed the implicit atheism of his position when he talked about theology as well, because his theological position, and I won’t bother to go into that now, was one of grace without law, but grace without law ends up by denying grace in favor of anarchistic love. It becomes antinomian and anti-God, but this clergyman was not alone in his opinion. On the fifth of December, 1967, William McChesney Martin, chairman of the federal reserve board, condemned gold as a barbarous metal, and he said that the United States, “must not bow down to the idol of gold again. Somewhere you are going to learn to trust the government, for you cannot go on indefinitely relying on gold.” Now, as Martin stated it, it is a question of trusting in gold versus trusting in government. Now, of course, the choice there is a very simple one for us to make. However, the implications of his statement are a little more deep than that.

When he denied that we can trust in gold, what he was saying is that there is no intrinsic value in gold and there is no objective law order that makes gold and any other economic law with respect to a monetary system objectively true, valid, binding on man. The only kind of order that can exist, Martin was saying, is a manmade order. In other words, wooden nickels and paper dollars, whatever men can agree upon. There is no truth out there. Therefore, to trust in gold is to trust in nothing. Then why not trust in government?

The implication therefore, of Martin’s statement was a manmade order is to be preferred to no order. For us, it would be a manmade order versus a God-given law order. The various countries are making their choices every day. The central governments deny that there is a God who has established an objective law order. They deny, therefore, that there is any validity to economics. This is the jist of the new economics. It varies from economist to economist, and country to country, but all of the new economics are agreed upon this: there is no such thing as an objective economics. There is only a political economy. In other words, whatever particular kind of economic order the political order decrees shall be valid. In other words, there is, for them, to put it in legal terminology, only positive law, statute law, and therefore, statute law alone will work, whether it be in economics, agriculture, or any other sphere of life.

Now this basic lack of faith in an objective law order reveals itself in a great many people who call themselves conservatives, because these people will be funny money advocates. They believe only in a state-created money, rather than in intrinsic wealth. We find such statements emanating regularly from sources that are ostensibly conservative. For example, U.S. New & World Report, just recently, on the first of January, had this statement: “The dollar’s future is uncertain,” but there are two things that are certain. The dollar is weak, yet the rest of the world is afraid to try anything except the dollar for the basis for world business. So, industrial countries are ready to do practically anything to protect the dollar. They don’t want today’s monetary system to collapse. The U.S. must take action itself.

What does the U.S. have to do? First, the U.S. must hold down prices. This means higher taxes and tighter credit. It also means a rise in unemployment to above four percent of the labor force. Second, restrictions may be necessary on the flow of private capital to overseas. Legally, there is no reason why the U.S. must sell gold to anybody for any purpose. Our policy of selling gold is just that. A policy.

A week later, the U.S. News & World Report stated this case even more plainly, “Why not just forget about gold as a measure of the value of the U.S. dollar? If gold no longer were considered a money metal, supported in price by the U.S., some experts think it would be worth less than $10 an ounce, not $35 an ounce. The lower prices, it is said, would be the value of gold to jewelers and industry.” Now this statement, of course, states that there is no value in the gold standard or in gold apart from the activity of the state.

The thesis, which is implied in these two articles in U.S. News & World Report, say in effect, first, value is basically conferred by state action. A monetary system is what the state makes it. Wealth and money are arbitrary creations of the state and of the people. Second, there is therefore no intrinsic value that can sustain a currency or a metal, or some form of wealth apart from state action. Third, the fault in inflation lies essential in labor and capital, not in the state. Wage and price controls are therefore the suggested remedy. Do you get the picture? The essence of this statement in U.S. News & World Report is simply this: freedom is the sickness and controls are the remedy, the cure. In fact, controls are the healthy situation. Freedom is the sickness.

Now why, whether it be in economics or in politics, or in any other area, would you say freedom is the sickness? Only if you deny that there is an objective law order in the universe. It involves a fundamental atheism. If you deny that there is a God, and that that God has created an absolute law order which governs every sphere; physics, chemistry, economics, agriculture, so that what man must do in every sphere of life is to work with these established laws. If you deny this, then you say freedom and economics, or in any other sphere produces anarchy, collapse. Freedom is the sickness. What you need is a controlling power, the state to introduce help.

As a result, there is nothing more dangerous from the standpoint of such a person than a free market, an uncontrolled price, and so as they face the silver crisis, the one thing they will not trust in is that there is any objective, economic law that is creating this situation. No, the problem is due to a lack of controls. If we get the right combination of regulations, we can then control the silver crisis, and the gold crisis, and so their answer at every point involves some kind of regulation that will somehow to the trick. In other words, an atheist cannot be expected to trust in God. It’s ridiculous. It would involve schizophrenic contradictions. Now, can you expect a consistent atheist to believe that there is a God-given law order in the universe? Or an atheistic state to believe very long in an objective economic law? The statist believes, not in objective law, but in positive law, that is, state-created, statute law, and as a result, in every crisis, he looks to the right combination of statist laws, statist regulations, executive orders, proclamations, to solve the situation. For them to return to a conservative economics, is a return to anarchy, because there is no God, no law out there, just nothingness. The function of the state is to create law, as a remedy for the sickness of this anarchy; freedom.

Now in terms of these contrasts, of those who believe in objective law and those whose faith is in statist law, let us look at the relationship of money and progress. Now social progress comes with the accumulation and development of wealth, and the first thing we must say as we look to that perspective which believes in an objective law order, is that wealth in such a free economy comes as a product of work and thrift. In short, of character. Now, there are many civilizations where work exists to a degree that is almost unimaginable to us. For centuries, the Cooleys of China have labored in a fearful way, and the peasants of India have labored fearfully, but is has not been productive of health, because work in itself is not sufficient. There has to be, with it, thrift. Thrift that might lead to the accumulation of capital, and the person who is thrifty is the one who foregoes present pleasures, present necessities sometimes, in order to accumulate funds, capital, in terms of future plans. It take character to do that. Thus, the first aspect of progress is wealth created by work and thrift, the development of capital through character.

Second, the capital of wealth is accumulated by inheritance. Now, the Bible said long ago, it was Solomon who said it in Proverbs 13:22, “A good man leaveth an inheritance.” Now, an inheritance is an important thing to social progress. When you have inheritance, it leads, of course, to an accumulation of wealth if the children, and their children, and the great-grand children have the character of the founder, and they not only inherit that wealth but develop it further. Now this accumulation of inherited wealth lead to social power, and as you have across country a vast accumulation of social power in the hands of independent parties here, there, and everywhere, you have a decentralization of power that leads to progress, and it means that not all the wealth of society is concentrated in every venture as it is when the state ventures its wealth. Thus, inheritance is important to progress, because the inheritance is always risked in terms of ventures which lead to progress, and it created a decentralized power that is productive of inventiveness, of investment that is fruitful in the development of society.

Now the third aspect of a free, a godly, a biblical economy is that property is freed from the restrictions of the state and placed under the restrictions of the family and a religiously-oriented community. One of the vast differences between a biblically-oriented economy and a statist-oriented economy is that the biblical law, the law of Moses, does not permit a property tax, and because this country was established by men who took the Bible very seriously, there was no property tax until the Unitarian element began to introduce it, and it was pretty well resisted in much of the country until after the Civil War. You can understand now the old battle cry, and declaration of the pre-revolutionary war days: “A man’s home is his castle.” If a man cannot be touched in his property by any tax that can confiscate it, it is his castle. He has an immunity from the power of the state. In fact, when the first continental congress invited Canada to join them in their stand against Parliament and England, one of the prime reasons they cited was the danger of taxes on property, if they stayed with Parliament.

In Biblical law thus, there is no property tax nor inheritance tax, and so there is social progress because wealth and power are decentralized and a person is given immunity from the state, and he can plan in terms of the future with confidence.

Fourth, the monetary basis of a free economy is gold and silver. I need not remind many of you that Isaiah in his denunciation of the southern kingdom, cited, in the first chapter, the twenty-second verse, as one of the evidences of their decay and of the necessity of divine judgment upon them was this: your silver has become dross. Your coinage is debased. You now have slugs, in other words, and therefore, the judgment of God will be upon you.

Now, of course, the purpose of such a state-created coinage is an obvious one. A very interesting book was published just recently entitled, Money and Conquest: Allied Occupation Currencies in World War 2, by Vladamir Petrov, published by the John Hopkins Press, and Petrov, in the course of his study, makes this point. When the allies moved into various areas, and they wanted with their occupation troops to exercise complete control, what did they do? “Military currencies offered a very effective means of regulating monetary circulation, and the power to issue these currencies in many instances proved to be much more effective means of regulatory the economies of occupied countries than decrees and regulations, which were often difficult if not impossible to enforce.” The implications there are tremendous. Instead of instituting all kinds of regulations and all kinds of controls, inspection squads, a Gestapo in other words, all they had to do to have total control on the economy was to issue occupation currencies, and ban every other kind of money. Through the occupation currency, a state-created money, totally worthless apart from the fact that it was forced on the peoples at gunpoint, they had total control of the economy. At any moment, by revoking the currency, they could bring it to its knees. At all times, they had total control of the economy because the economy could not have any real or independent wealth. All it had was the paper money that the allies created. This was their instrument of total control, and why is it therefore, that they institute paper monies for us? The same purpose.

Charles Rist, one of the outstanding authorities on gold, in his book The Triumph of Gold, has said, “In reality, those theoreticians, that is, of the new economics, dislike monetary stability because they dislike the fact that, by means of money, the individual may escape the arbitrariness of the government. Stable money (and by this he means gold and silver) is one of the last arms that remains at the disposal of the individual to direct his own affairs, whether it be an enterprise or a simple household. It is certain that nothing so facilitates the seizure of all activities by the government as its liberty of action in monetary matters.”

Now we have been analyzing the concept of social progress from the perspective of an objective economics, that is, a free economics that believes in an objective law that governs economies, an objective law that depends upon a God-ordained order, but the state is concerned with progress also. In fact, the state can say that it plans for progress, that it is more concerned with progress than any free economic system, and in a sense this is true. For a free economy, progress is a byproduct. For a state economy, progress is the central purpose of economic planning.

Now, the more ambitious the plan for progress, the more total the plan, and as the state plans for progress, it needs wealth to institute its plan for progress, and so, as the state thinks in terms of progress, wealth becomes the fuel. Wealth is the fuel to feed the furnaces of the state to create progress, but in a free economy, each individual, as he seeks wealth, creates progress because to gain wealth, he needs to be productive.

Now, how does the state bring about progress? First of all, the state taxes. The more ambitious the plan for progress on the part of the state or central government, the heavier the tax. There must be funds to further the plan, and as the plan progresses, the scope of taxation increases. Property is taxed, income, production, sales, inheritance, investments, everything, and the result is progressive confiscation, and the state grows larger and larger the closer it gets to total planning for progress. Just a few days ago, the California Department of Employment newsletter was issued, and it gave the statistics for 1967, the third quarter, California employment statistics. The largest employer in California is manufacturing. Manufacturing employment averaged, during the third quarter of 1967, $1,642,000. However, the second largest employer in the state of California to industry is government, where employment advanced to a third quarter average of $1,251,000. The highest rate of increase in the third quarter with respect to employment was in government, and at the present rate of increase, the government will soon be the major employer in the state of California. It is a very close second to industry, and how will government pay its employees? By taxation, and so as the state works towards it goal, social progress, it does it by treating wealth as the fuel to be consumed.

Now the second thing the state does is to borrow. In order to achieve social progress, the state not only taxes, it borrows money. Now after this program of borrowing reaches a certain point, the state creates a bank, a bank which it owns and controls. This will have different names in different countries. Here, it is the Federal Reserve Bank, and the purpose of this central bank is simply to borrow from the banks. Ostensibly it is to control banking to ensure the welfare of banking, to protest the depositor, but what does it do? It takes your deposit money out of the banks and replaces it with IOU notes; bonds. Now, these bonds pay a lower rate of interest. They are not really to the bank’s advantage, but the bank is told that for its safety, it must have a certain ratio of its liquidity in bonds, so the law compels the bank to hold bonds. Now, of course, the bonds are paying a low rate of interest, and perhaps the bank is paying you or the savings and loan 5% interest, and the bond is paying the bank 4%. Now how can the bank give you 5% on your money when there are bonds there paying less interest than you’re receiving. Well, of course, the answer is an obvious one; on loans. The bank, in other words, is going to have to penalize the public that is already paying the taxes in order to make up the difference on the interest that it pays out to depositors, and the federal government is going to come around the tax the depositors in order to pay that interest on their deposits. So, the state, to bring about social progress, not only taxes the people, but it borrows their wealth.

Third, in order to institute progress, the state creates wealth by printing more money and by debasing the coinage, and this is so obvious and we have discussed it to such great extent on previous occasions, there is no need to go into it further.

Now, here we have two contrasting approaches to the problem of social progress, the relationship of money to progress. Both have their penalties. The complaint against a free economy that is so often made by statists is a valid one. They say that it penalizes the less capable and the less provident, and this is true. Every social order has its penalties. It is impossible to create any kind of social order without someone being penalized. The only question is, whom shall you penalize? The free economy penalizes the less capable, the lazy, the improvident. The statist economy penalizes precisely those who are provident and hardworking, those who have accumulated and want to pass it onto their children. There is a social penalty on both sides. Choose your penalty, you can’t escape it.

Now, what happens as the statist economy begins to roll? The statist economy begins to debauch the people. Since the statist economy does not believe in an objective law order, the total impact of its educational system as well as its entire policy is to debauch morality, to destroy religious faith, to deny that there is an objective law order out there, to create, as it were, a situation ethics, and so what happens? It creates a kind of people to match its economics.

Now, we are hearing the statement commonly made today, that if devaluation does come, it will have no impact, because after all, we had devaluation at the beginning of the New Deal when the price of gold was raised from $20 an ounce to $34 and then $35, and it had basically very little affect on the people, and of course, it will have very little effect, similarly, we are told, if we have devaluation tomorrow. Well, the answer to that is a very obvious one. The situation is entirely different. Basic to inflation, and an inflationary devaluation is larceny. It involved a double larceny. First, the state is bent on defrauding the people. Since it prints the money, it always has an advantage in that it gets the best price with the cheap money every time it prints it.

Second, the people have to get this same fever of defrauding someone for inflation really to roll. Now, in 1934, how many people in the United States were ready to contract debts? If anything, they were afraid of debts. They had a bad experience from 1929, and so when you had devaluation, did it increase indebtedness? On the contrary, people were afraid of debt. They refused to inflate their personal economy, and it wasn’t until after World War 2 that the average citizen began to catch the inflationary fever, and figure, “I can buy a house and sell it five years from now, and pay off my debt and realize something. In fact, I can make a killing here.” It’s an advantage to be in debt. Now, this involves larceny. You’re going to steal from somebody else because you know a little more than he does. Debt therefore, has become now a way of life. Everybody has credit accounts for everything.

As a result, because now debt is a way of life, everyone including 90% of those who call themselves conservatives, are inflationary in their personal economics. So that, if tomorrow they face a squeeze as we are beginning to feel now, a credit crunch. They will begin to scream as they already are, for more inflationary policies so that they will not be wiped out. So that you have an accelerated demand for inflation, and devaluation will have an instantaneous effect.

Earlier British devaluations did not have the drastic effect this did. Within two or three days, prices had gone up, and had gone up proportionately. When everybody is involved in inflation, the effect on money is instantaneous.

Well, as result, today you have, perhaps 99% of the population dedicated to inflation, demanding it, even if they profess otherwise. Since any abatement of inflation leads to their collapse, men who live in debt and who live in terms of debt, favor inflation every time when the chips are down. They are therefore socialists, whether they like the word or not. For them, wealth involves living off another man’s providence and profit. It involves paying off good debts with bad money, and as a result, the statist concept of progress and the statist concept of money lead progressively to the inflationary spiral and total collapse. A statist economy consumes. A free economy produces, and today the economy of our country, as well as of the world, is one of consumption. A free economy protects capital and uses it wisely, but the statist economy is like a man with $100 bills, using them to light his cigars. There’s no real economic sense to it.

So that even when the two economies work towards the same goal, they do it with totally different effects. To illustrate. Atomic power. Now, perhaps atomic energy for electrical purposes is practical economically speaking. We don’t know. Of course, we do have atomic power now, and there are some communities getting their electricity from atomic power, but it is not the product of a free economy. At every stage, it has been as a result of government subsidies. It is quite possible that free enterprise could have given us economic use of atomic power for electrical purposes. It’s possible, but the way we are getting it is through subsidies that have cost us at every step, and there’s no remedying that. It is costly beyond our imagination. It has involved debts that cannot be paid, they will only be paid in the inflationary spiral and collapse. It has been too costly, in other words. Here is progress, yes. Statist progress. Atomic power, but at a difference price than a free economy gives it to you. It doesn’t meet the demands of a free market economy. It doesn’t meet the necessities of profit and loss.

As a result, a statist economy is sooner or later in trouble, and when the crisis comes, it blames some foreign power. Walter Heller, for example, as he faced the crisis of today, made a statement the other day to the newspapers which I think is most revealing. Walter Heller said (he invited incidentally, the whole world to get all the gold at $35 and ounce, because the sooner we got rid of it, the sooner we would be down to the economics facts of life, the state has to handle the situation), “Perhaps also,” he said, “the United States should invite the world to come and get it as a demonstration that the dollar is not only as good as but better than gold. Perhaps we also need to expose gold speculators, both official and unofficial, to downside risks. One approach would remove our pledge to buy gold at $35 an ounce, while maintaining our pledge to sell at that price. Finally, we need to think about the unthinkable, our dollar devaluation, if only to show why it is unworkable. Even if not unthinkable, even if we wanted to devalue, which we clearly don’t, who would let us? As country after country matched our devaluation, the upshot would be simply to raise the price of gold to the delight of gold hoarders and gold producers. How much more rational and equitable it would be to activate and expand our new reserve asset, the SDR’s, and at last, free the world economy from its gold bondage.”

Now, the SDR’s, the Supplementary Drawing Rights, which were proposed at the Rio IMF meeting, are referred to by Heller as this new money, this new wealth. This is an interesting statement, because the implications and intent of Heller’s statement is a far-reaching one and full of errors, but the errors are basically two-fold. First, the SDR’s are far from adoption, and second, the SDR’s are simply another form of credit or loan available to member nations if and when the whole thing is adopted. Moreover, the SDR’s are a Supplementary Drawing Right, that is, an additional form of loan to member nations who are bad credit risks and can’t get credit anywhere else. Now, since when is debt an asset?

Our problem is too much debt, a product of inflation, a product of the statist concept of progress. The answer is the SDR’s will cure everything. More debt is the answer. This is like telling an alcoholic his problem is he doesn’t drink enough, and this is precisely the intent of the new economics. Tell the alcoholic he needs to drink more. Tell the state it needs more paper money, more SDR’s, more loans, more credit. Well, basically the wealth it is consuming is our western civilization, and the Christian West is being replaced by a new pseudo international culture for which consumption is an ultimate value, and one of the champions of this new order, Jean Amare{?}, a Frenchman, has said, consumption can certainly also be an ultimate value, and he says as he describes this new civilization that it has, “Only one point of reference, consumption.” And he says further, “In contrast to this, in the art of our contemporary mass civilization, everything as a matter of principle, is permitted. Art is free. Valuations of it can no longer be derived from any basic principles. It is pledged to no idea, no ideology. Its boundaries are determined solely by the market, which during prosperous times, has a powerful capacity for absorption, and to a lesser degree, by a few communities of taste whose members declare themselves to be experts.”

Everything as a matter of principle is permitted. There is no law out there. Therefore, art is what the artist says it is, and what the people will buy. Economics is what the state says it is, and therefore, nothing else is valid because there is no law out there. Everything is permitted.

Thus, the issue with respect to money, with respect to gold, is an issue more centrally with respect to God. Is there an ultimate and absolute order and does God’s sovereign law establish an inescapable law order with respect to every sphere, so that transgression of that law order brings social penalties and decay? Or is humanism true? Is the only value man and his desires? His pleasure and consumption, in display and expression? Is everything permitted?

The monetary crisis simply reflects a cultural and a religious crisis. A sound mon3etary policy rests on the framework of absolute law on God, and the issue is basically this: who is God? The God of the Bible or the state? Is it “In God We Trust?” or as William McChesney Martin says, “Trust in the government.” The hatred of gold that Charles Rist described in The Triumph of Gold is as he said more than a matter of economics. It is a religious principle with these men. Similarly, our hatred of unsound economics must involve more than economics. It must be grounded on a love of freedom on a religious faith, in biblical principles.

[Audience] I don’t think there’s a soul in here who would really enjoy having any of his money taken away from his by force or coercion, but conservatives just enjoy doing things on a voluntary basis. So now, on a voluntary basis, we would like to help our speaker with some of his normal expenses, and after that, I’m sure he will field some of your questions. Thank you.

[Audience] A question was asked, do you take paper? [laughter]

[Rushdoony] Yes?

[Audience] During when President Roosevelt was the president of the United States, {?} do you feel should {?} taking us off the gold standard?

[Rushdoony] The question is how should President Roosevelt have handled the situation other than taking us off the gold standard? First of all, there was no need for a rise in the price of gold at that time. This was purely arbitrary and inflationary, and as a result, it was an artificial price. $20 an ounce was a good and healthy price for gold. At $35, it was overpriced. What it did do, of course, was to bring gold into the treasure, because for the next few years, the gold flowed to the treasury because there was a lot of profit in it. However, because of the inflation that was created by government spending and war time spending, the natural price of gold began to go up and by 1942, it was probably $42, uh, $35 an ounce, and of course, since then, gold being controlled, has been undervalued. Now, President Roosevelt’s concept of social progress was exactly that which I described; the statist answer. It was to bring about progress through state spending, and therefore, his step was a very logical one. He had to begin by government controls, by inflationary policies, because it was through taxation, through borrowing, and finally, as a result of the things, he began a debasing of the coinage and the printing of more paper money, which began in his day, that financed his concept of social progress. He either had to abandon that concept or do precisely what he did, and he was very logical. Another question? Yes?

[Audience] I’m supposing you’re {?} to discuss the stock market, and also do you have {?} discuss {?} do to offset these {?}

[Rushdoony] Yes, we have gone into these questions and I do deal with them in one of the pamphlets, “Preparation for the Future,” but basically all you can do now is to protect yourself, because the economy has, as I indicated tonight as well, past the point of no return. So it is basically now a question of personal protection. Yes?

[Audience] There has been an institute {?} also when the government {?} I hadn’t heard much discussed {?} the other thing is {?} potential {?} actually increased the cost of that money {?} it has to, the whole thing slows down, one of the reasons Roosevelt had his policy {?} inflation {?} was because {?}

[Rushdoony] Yes, that’s a very good point. The reason why money is not available for investment in new enterprises and loans to business to develop is because it’s already been mostly borrowed by the federal government, and borrowed at a compulsory rate of interest which is markedly lower, so that when industry borrows money, or when a businessman borrows it, he has to pay a higher rate of interest, and it’s harder for him to get it. Now, we have a credit squeeze underway right now. It’s not at all surprising. It’s because we’re having a vastly increased federal budget. The federal expenditures are so great, money is going to be scarce because there’s only so much on deposit at the banks, so who’s going to get it? The state says, “We’re going to get it. You’re not.” This is the jist of it.

End of tape