Douglas criticized classical economics because many of the theories are based upon a barter economy, whereas the modern economy is a monetary one. Initially, money originated from the productive system, when cattle owners punched leather discs which represented a head of cattle. These discs could then be exchanged for corn, and the corn producers could then exchange the disc for a head of cattle at a later date. The word "pecuniary" comes from the Latin , originally and literally meaning "cattle" (related to , meaning "beast"). Today, the productive system and the monetary system are two separate entities. Douglas demonstrated that loans create deposits, and presented mathematical proof in his book Social Credit. Bank credit comprises the vast majority of money, and is created every time a bank makes a loan. Douglas was also one of the first to understand the creditary nature of money. The word credit derives from the Latin , meaning "to believe". "The essential quality of money, therefore, is that a man shall believe that he can get what he wants by the aid of it."
