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1933 Chicago Plan

Can any of the economists here direct me to a reasonably concise account of the Chicago Plan and how it was co-opted and side-lined by the oligarchy in the 1930s?

Comments

Submitted by MontanaMaven on

and I love this guy. He is the head of the American Monetary Institute.

He went to U of Chicago in psychology. I think in the 1950s. In his twenties he "built the U.S. distribution network of the then leading American mutual fund concentrating in gold shares. As a member of the New York Futures Exchange ( a subsidiary of the New York Stock Exchange) he specialized in trading the complex CRB futures index for several years."

So IMHO he is more interesting than economists since he has theoretical and practical experience. He wrote the fantastic "The Lost Science of Money", a 700 page history of money that is easy to read and chuck full of history not theory. Michael Hudson considers his chapter on the Greenback to be hugely important.

Anyway, the American Monetary Act is based on the work of the Chicago Plan and has been introduced in Congress by Dennis Kucinich as HR 2990.

The 1930s Chicago Plan

First there was no understanding or support for the proposal among the electorate. Only Irving Fisher seems to have understood the necessity for popularizing the matter.

Simons himself got cold feet and shied away from promoting the plan, desiring to remain on a level of professorial discussion. He even threw a wet towel on Fisher who was promoting the reform suggesting that Fisher avoid popularizing the idea!

Simon was demanding perfection from his own proposal and was being overly cautious. The proper goal was not perfection, but should have simply been substantial improvement that the Chicago Plan clearly represented. Instead Simons became obsessed with how banks would evade the reforms.

Second the Plan was mishandled politically.

Cutting appears to have misunderstood his own bill, and incorrectly said in interviews that credit as well as money creation was also to be a sole function of government.

Third, the bill suffered a major setback when Senator Cutting died in an Airplane crash in May 1935 while being forced to defend his election results in New Mexico by challenges from the Roosevelt Administration which was then held responsible for his death.

There's much much more in this article.

Submitted by Alcuin on

You wouldn't believe the number of books I have lying about with bookmarks in them - not finished. One of them is The Lost Science of Money, bookmarked at page 251. Sigh ... if only I had more time! Maybe when I retire. Thanks for the link to the AMI article - I'm on the e-mail list, but this one is from before I signed up. Kucinich and Zarlenga have been tight for a number of years, but Zarlenga gets flack from Thomas H. Greco, for reasons unknown to me.