11) Why Poverty Exists; With Help From Benjamin Disraeli - 2

Benjamin Disraeli

Disraeli, as a Conservative, was happy to attack the opposition party, which was the Whigs, and he pulled no punches. In Sybil: Or The Two Nations, he wrote:

“It could no longer be concealed, that . . . . power had been transferred from the crown to a parliament, the members of which were appointed by an extremely limited and exclusive class, who owned no responsibility to the country, who debated and voted in secret, and who were regularly paid by the small knot of great families . . . .  Whiggism was putrescent in the nostrils of the nation.”

He was also willing to challenge the accepted view of a critical moment in British history. The moment when power was taken from James II by his nephew, Prince William of Orange, who then became William III.

The name given to this event is ‘The Glorious Revolution of 1688.’

In her 2017 BBC series ‘British History’s Biggest Fibs’, TV historian Lucy says ‘The Glorious Revolution of 1688.’ was far from glorious and definitely not a revolution.

https://www.bbc.co.uk/programmes/b08cgp55#:~:text=The Glorious Revolution,-British History's Biggest&text=In this episode, Lucy debunks,the Catholic King James II.

Benjamin Disraeli exposed the fib in 1845 and went on to show the true impact of the event.

“The real cause of this invasion was financial.”

Financial?

That has to be interesting when we are investigating poverty.

So, was the invasion really about finance?

According to Disraeli the Prince of Orange wanted to be able to pay for his war against France. Disraeli quotes the prince as saying:

"Nothing but such a constitution as you have in England can have the credit that is necessary to raise such sums as a great war requires."

So Disraeli  says: ‘The prince came and used our constitution for his purpose: he introduced into England the system of Dutch finance.”

Disraeli claims that the system of Dutch finance was “pursued more or less for nearly a century and a half, has ended in the degradation of a fettered and burthened multitude.”

Certainly, Whitechapel in 1888 was packed with a fettered and burthened multitude.

Disraeli said it wasn’t just the poor who suffered.

He said that there were “demoralising consequences of the funding system on the more favoured classes.”

And those ‘demoralising consequences’ have arisen because this Dutch financial system “has made debt a national habit.”

The overall impact on society at large is “that the moral condition of the people’s been entirely lost sight of.”

That was still true 43 years after Disraeli wrote those words. But this was not just true in 1888 but in 2024 when I wrote this post.

The new government is wringing its hands at the disastrous situation Britain is  now in.

It has to be worth exploring this Dutch financial system, which is still at the heart of our current financial system.

So, what was the Dutch financial system?

When William and his wife Mary arrived with their well-funded army, a usury law was in place. A law that limited the maximum interest rate that goldsmiths, bankers or any other moneylender could charge.

That interest rate was 6%. Getting rid of that law would, of course, benefit all those who made a living by lending money. Which was a reason many in the world of finance in Great Britain supported the invasion.

In 1694, six years after ‘The  Glorious Revolution of 1688’, the Company of the Bank of England was founded.

The Bank was given the monopoly right to create the British government’s money.

The government created pieces of paper, which were called bonds. They were given to the Bank of England.

The Bank of England created pieces of paper, which they called money. They were given to the government.

The British government then agreed to repay all the money plus 8% interest.

It would have been simpler for the British government to create bits of paper and call the bits of paper money. Then, use that to pay for what was needed to run a healthy society. The government would be creating money that would circulate in the economy. The kind of money that economists call debt-free money.

Now, Disraeli made it clear that the Prince of Orange did not invade England so that he could create a healthy society. He invaded to allow him to be more successful in his war against France.

A healthy society would not want war. A healthy society would mean a population that produced enough food for everyone, homes for everyone, schools, hospitals, libraries, and roads. Not difficult - but not what was wanted.

What William wanted was an army, a navy, and a population that would be highly motivated to supply that fighting force with all that it needed.

William achieved his goal through the use of Dutch finance. Indeed, did it so efficiently that the system continued, and Britain’s military might was such that over the next century and a half, Britain built the biggest empire the world had ever seen.

There is, of course, no such thing as a free lunch. So, as Disraeli observed, the system of Dutch finance that was “pursued more or less for nearly a century and a half ended in the degradation of a fettered and burthened multitude.”