A Short History of Parity in the U.S. Economy

● Since the beginning of our country and throughout the 19th century, analyzing economic phenomena was part of the citizen conversation.  There were trial-and-error attempts to work out the economic system.  In the last half of the 19th century, farmers started to organize for public money (not bank-created money) and for economic treatment of their labor that would allow them to get out from under the bank debt.  They organized the Greenback Party, the Greenback-Labor Party (which included support for industrial workers), and the Farmer’s Alliance, which became the Populist Party.

● In the 1920s, the farm organizations moved the fight for a parity economy to Congress. Twice during this decade, Congress passed a parity law, but both times, President Calvin Coolidge vetoed it.

● During the Great Depression of the 1930s, a group of farmers, businessmen, engineers, and a federal statistician joined together and called themselves the “Raw Materials National Council.”  They analyzed why a bushel of wheat could be sold by a farmer in 1929 for $1.88, but in 1933, the same raw material could be sold by that same farmer for $.33.  Their analysis, working together over three years, proved that the basis of any parity economy is the production of raw materials.  All industries need raw materials to start their production line.

● The Raw Materials National Council proved a natural law of economics.  The researchers did a factual analysis of the economic record of the United States, using government statistics kept by federal bureaus, such as the USDA Agricultural Yearbook, the U.S. Bureau of Mines, and the U.S. Department of Commerce. In these records, they found evidence that raw materials production is the foundation of the national economy. This raw materials production had to be parity priced based on the actual costs of production, or the national income (which includes all sectors of the economy) would be crippled.

● The Raw Materials National Council educated all the State Commissioners of Agriculture about how our NATIONAL INCOME (our economy) is based on the production of raw materials.  They explained that when raw materials enter trade channels at prices in balance with the prices of labor and capital in the rest of the economy, THE ENTIRE COUNTRY can operate on an earned-income basis with no buildup of public and private debt.  They proved that, in a parity economy, $1 of farm income results in $1 of labor wages plus $7 of total national income.  This is a picture of prosperity for all laborers.

● When the U.S. entered World War II, the State Commissioners of Agriculture and the Raw Materials National Council went to Washington to educate the Congress.  And they did.  In April 1942, a parity bill was passed by Congress.  With this in place through 1953, the entire economy could function without debt.

● After 1953, however, federal farm policy was controlled by international traders and corporations, aligned with the banking power. These forces slowly reduced the prices in place for our major raw material producer – the farmer. Between 1950 and 2020, we averaged 920 farms lost per week! This is a total loss of approximately 3,363,162 farms. As of 2020, approximately 2,000,000 farms remain. Both the Great Depression of the 1930s and the decades since the post-World War II period have pushed farmers off the land and into the cities, impoverishing rural communities.

● However, corporate agribusiness farms, with their GMO seeds and concentrated animal feeding operations (CAFOs), grew and replaced these family-run farms.

● Parity policy is not strictly for agriculture.  It is for the ENTIRE ECONOMY — an economy where farmers can keep their farms without losing them to debt, where industrial businesses can pay solid wages and run a profitable business, and where retailers can have customers with money in their pockets to buy what they need.

Today, with the control of federal economic policy in the hands of the financial sector, money flows to financial elites.  They understand that a parity economy feeds the real economy of goods and services where citizens live and that the same parity economy would eliminate their hidden advantage.  They serve only their interests and not those of our country.