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The end of economics: To make goods join those who need them

Written by Alain Pilote on Sunday, 30 October 2016. Posted in Economic Democracy (book)

Economic Democracy - Lesson 1

Ends and means

When one talks about economics, one must first distinguish between ends and means, and especially subordinate the means to the end, and not the end to the means.

The end is the goal aimed at, the objective pursued. The means is the processes, the methods, the acts used to achieve the end.

I want to manufacture a table. My end is the manufacturing of the table. I get planks, I measure, I saw, I plane, I adjust, I nail the wood: so many movements, actions, which are the means used to manufacture the table.

This seems elementary. But it often happens, in the running of public affairs, that one mistakes the means for the end, and one is all amazed when chaos results. For example, according to you, what is the end of economics:

  1. To create jobs?
  2. To reach a favourable balance of trade?
  3. To distribute money to people?
  4. To produce the goods that people need?

The correct answer is D. Yet, for practically all politicians, the end of economics is to create jobs: yet, jobs are just a means to produce goods, which are the end; today, thanks to the heritage of progress, goods can be produced with less and less human labour, which leaves people more free time to do other activities, like taking care of their families, or accomplish other social duties. Besides, what would be the point of continuing to produce something when human needs for this production are satisfied? This would be a useless waste of resources. And what about all those who cannot be employed in the production system: the handicapped, old people, children, housewives — should they starve to death? Not every human being is a producer, but all are consumers.

If you think in terms of reality, to have a favourable balance of trade means that you export to other countries more products than you import from abroad, which means that you end up with less products in your countries, thus poorer in real wealth.

Many could have been tempted to answer C, for it seems obvious that money is necessary to live today, unless you produce all that you need yourself — which is the exception in today’s society, with the division of work where one person is the baker, another one a carpenter, etc., each one accomplishing a specific task and producing specific goods.

Money is a means to obtain what is produced by others. Mark you, it is a means, not an end! One does not eat money, clothe oneself with money: we use money to buy food and clothes. First, goods have to be produced, put on sale on the market: if there is no product to buy, any money would be useless. What would be the purpose of having a million dollars if you end up in the North Pole or in the Sahara Desert, with no products to buy? Compare this person with a man without a penny on an island that has all the water and food he needs to live comfortably. Who would be the richer? Again, as we will see further, money is not wealth, but a means to obtain real wealth: products.

Let us not confound ends and means. One could say the same thing about systems. The systems were invented and established to serve man, not man created to serve systems. Then if a system is harmful to the mass of men, do we have to let the multitude suffer for the system, or alter the system so that it will serve the multitude? Another matter which will be the subject of a study in these lessons: since money was established to facilitate production and distribution, does one have to limit production and distribution to money, or relate money to production and distribution?

Therefore one sees that the error of taking the ends for the means, the means for the ends, or of subordinating the ends to the means, is a stupid very widespread error which causes much disorder.

The end of economics

The word economy is derived from two Greek roots: Oikia, house; nomos, rule.

The economy is therefore about the good regulation of a house, of order in the use of the goods of the house.

We may define domestic economy as good management of domestic affairs, and political economy as good management in the affairs of the large communal home, the nation.

But why "good management"? When can the management of the affairs of the small or large home, the family or the nation, be called good? It can be so called when it reaches its end.

A thing is good when it attains the results for which it was instituted.

Man engages in different activities and pursues different ends, in different orders, in different domains.

There is, for example, man’s moral activities, which concern his progress towards his final end.

Cultural activities influence the development of his intellect, the ornamentation of his intellect, and the formation of his character.

In participating in the general well-being of society, man engages in social activities.

Economic activities deal with temporal wealth. In his economic activities, man seeks the satisfaction of his temporal needs.

The goal, the end of economic activities, is therefore the use of earthly goods to satisfy man’s temporal needs. And economics reaches its end when earthly goods serve human needs.

The temporal needs of man are those which accompany him from the cradle to the grave. There are some which are essential, others which are not as vital.

reflection of realityIs the present financial system the exact reflection of reality?

Hunger, thirst, bad weather, weariness, illness, ignorance, create for man the need to eat, drink, clothe himself, find a shelter, warm himself, freshen himself, rest, to take care of his health, and to educate himself. These are all human needs.

Food, drink, clothing, shelter, wood, coal, water, bed, remedies, the school teacher’s teaching books — these are all factors that must be present to fulfill these needs.

To join goods to needs — this is the goal, the end of economic life.

If it does this, economic life reaches its end. If it does not do this, or does it badly or incompletely, economic life fails its end or only reaches it imperfectly.

The goal is to join goods to needs, not only just to have them close together.

In straight terms, one could therefore say that economics is good, that it reaches its end, when it is sufficiently well-regulated for food to enter the hungry stomach, for clothes to cover the body, for shoes to cover naked feet, for a good fire to warm the house in winter, for the sick to receive the doctor’s visit, for teachers and students to meet.

The end of economics is not only to produce goods; these goods must be useful for people, answer their needs. Moreover, the end of goods is not to remain on shelves, but to be consumed by the people who need them. And for this, as we will see further, people need money to buy the goods that are on the shelves of stores.

Economics has an end of its own: to satisfy men’s needs. The fact of eating when one is hungry is not the final end of man; no, it is only a means to aim better towards his final end, which is to see God face to face in Heaven for eternity.

But if economics is only a means to the final end, if it is only an intermediate end in the general order, it is nevertheless a distinctive end for economics itself.

And when economics reaches this distinctive end, when it allows goods to join needs, it is perfect. Let us not ask more of it. But let us ask this of it. It is the goal of economics to achieve this perfect end.

Morality and economics

Let us not ask of economics to reach a moral end, nor of morality to reach an economic end. This would be as disorderly as to attempt to go from Montreal to Vancouver in the transoceanic liner, or from New York to Le Havre, France, by railroad.

A starving man will not appease his hunger by reciting his Rosary, but by eating food. This is in order. It is the Creator who wanted it this way, and He turns from it only by departing from the established order through a miracle. He alone has the right to break this order. To satiate man’s hunger, it is economics therefore that must intervene, not morality.

Similarly, a man who has a sullied conscience cannot purify it by eating a good meal, or by consuming copious libations. What he needs is the confessional. In that case, it is religion’s place to intervene; it is a moral activity, not an economic activity.

There is no doubt that morality must accompany all of man’s actions, even in the domain of economics. But morality does not replace economics. It guides in the choice of objectives, and it watches over the legitimacy of the means, but it does not carry out what economics must carry out.

So when economics does not reach its end, when things stay in the stores or are not produced, and needs continue to be present in the homes, let us look for the cause in the economic order.

Let us blame of course those who disorganize the economic order, or those who, having the mission to govern it, leave it in anarchy. By not fulfilling their duties, they are certainly morally responsible, and fall under the sanction of ethics.

In effect, if both things are truly distinct, it happens nevertheless that both concern the same man, and that if one is immolated, the other suffers from it. Man has the moral duty to make sure that the economic order, the social temporal order, reaches its proper end.

Also, although economics is responsible only for the satisfaction of man’s temporal needs, the importance of good economic practices has time and time again been stressed by those in charge of souls, because it normally takes a minimum of temporal goods to encourage the practice of virtue, as Saint Thomas Aquinas put it. We have a body and a soul, spiritual and material needs. As the saying goes, "words are wasted on a starving man", and even the missionaries in poor countries know this; they have to feed the hungry before preaching to them. Man needs a minimum of goods to live his short pilgrimage on earth and save his soul, but a money shortage can cause terrible and inhuman situations.

This is what brought Pope Benedict XV to write, "It is in the economic field that the salvation of souls is at stake."

And Pius XI: "It may be said with all truth that nowadays the conditions of social and economic life are such that vast multitudes of men can only with great difficulty pay attention to that one thing necessary, namely their eternal salvation." (Encyclical Letter Quadragesimo Anno, May 15, 1931.)

The social and very human end of the economic organism is summed up in this sentence of Quadragesimo Anno:

"Only will the economic and social organism be soundly established and attain its end when it secures for all and each those goods which the wealth and resources of nature, technical achievement, and the social organization of economic affairs can give."

ALL and EACH must be secured with all the goods that nature and industry can provide.

The end of economics is therefore the satisfaction of ALL of the consumers’ needs. The end is consumption; production is only a means.

To make economics stop at production is to cripple it. Economics must not finance production only; it must also finance consumption. Production is the means, consumption is the end.

In an order where the end governs the means, it is man as a consumer who is in charge of all of the economy. And since every man is a consumer, it is every man who contributes to orienting the production and distribution of goods.

A really human economy is social, as we said;

be able to give their orders to the production of goods — at least to satisfy their basic needs, as long as production is in a position to respond to these orders.

The policy of a philosophy

Social Credit is not a utopia, but is based on a right understanding of reality, on the just relationship between man and the society in which he lives. As Clifford Hugh Douglas said, Social Credit is the policy of a philosophy.

A policy is the action that we take, and it is based on a conception of reality or, in other words, a philosophy.

Social Credit proclaims a philosophy which had existed as long as men have lived in society, but which is terribly ignored in practice — more than ever in this day and age.

This philosophy, as old as society itself — therefore as old as the human race — is the philosophy of association. The social teaching of the Church would say: the common good.

The philosophy of association is therefore the joining together of all associates for the good of the associates, of each associate. Social Credit is the philosophy of association applied to the general society, the province, the nation. Society exists for the benefit of all the members of society, for each and every one.

It is for this reason that Social Credit is, by definition, the opposite of any monopoly: the economic monopoly, the political monopoly, the prestige monopoly, the brutal-force monopoly.

Let us define Social Credit as a system of society at the service of each and every one of its members, in which politics is at the service of each and every one of the citizens, and economics is at the service of each and every one of the consumers.

Now let us define monopoly: the exploitation of the social organization at the service of a few privileged individuals, in which politics is at the service of clans called parties, and economics is at the service of a few financiers, of a few ambitious and unscrupulous entrepreneurs.

Too often, those who condemn monopolies stop at specified industrial monopolies: the electric monopoly, the coal monopoly, the oil monopoly, the sugar monopoly, etc. They ignore the most pernicious of all monopolies in the field of economics: the monopoly of money and credit; the monopoly that changes a country’s progress into public debts; the monopoly which, by controlling the volume of money, regulates the human beings’ standard of living, without any relation to the realities of production and the needs of families.

The aim of Social Credit is to "bind back to reality" or "express in practical terms" in the current world, especially the world of politics and economics, those beliefs about the nature of God and man and the Universe which constitute the Christian Faith, as delivered to us from our forefathers, and NOT as altered and perverted to suit current politics or economics, which stem from a non-Christian source.

Men live in society, in a world submitted to God’s laws: the laws of nature (the physical laws of creation), and God’s moral law (the Ten Commandments). The acceptance and knowledge of these laws implies recognizing the consequences of violating them.

To accept Natural Law is to recognize that is inescapable reality, and that all people, as individuals or collectively in society, are subject to Natural Law. Every event which occurs on the physical plane are innumerable illustrations of the laws of the physical universe. For example, if a man jumps out of an airplane, he does not break the law of gravity… he just illustrates it, proves it. That observation is applicable to all natural laws.

These laws are beyond the abrogation of man — they cannot be disobeyed — the sanctions which enforce them are irresistible.

The chains (agreement associations, man-made laws) which individuals in society have forged for themselves — are optional, whereas the Natural Law and its consequences are inescapable.

For example, money is a man-made system, not a system created by God or nature: it can be changed by man. The equilibrium of the environment, however, has been created by God, and cannot be broken without consequences. If we produce goods without respecting the environment, if we pollute and waste the resources given to us by God, we have to suffer the consequences.

The social credit: the confidence that binds society together

Geoffrey DobbsGeoffrey Dobbs

In his booklet What is Social Credit?, Geoffrey Dobbs wrote: "The social credit (without capital letters) is the name of something which exists in all societies but which never had a name before because it was taken for granted. We become aware of it only as we lose it.

"‘Credit’ is another word for ‘faith’ or ‘confidence’, so we can also call it the faith or confidence which binds any society together — the mutual trust or belief in each other without which fear is substituted for trust as the "cement" of society... Though no society can exist without some social credit, it is at its maximum where the Christian religion is practized, and at its minimum where it is denied and derided.

"The social credit is thus a result, or practical expression, of real Christianity in society, one of its most recognisable fruits; and it is the aim and policy of social crediters to increase it, and to strive to prevent its decrease. There are innumerable commonplace examples of it which we take for granted every day of our lives. How can we live in any sort of peace or comfort if we cannot trust our neighbours? How could we use the roads if we could not trust others to observe the rules of the road? (And what happens when they don’t!)

"What would be the use of growing anything in gardens, farms, or nurseries if other people would grab it? How could any economic activity go forward — whether producing, selling, or buying — if people cannot, in general, rely upon honesty and fair dealing? And what happens when the concept of the Christian marriage, and the Christian family and upbringing, is abandoned? We see, do we not? — that Christianity is something real with desperately vital practical consequences, and by no means a mere set of opinions which are ‘optional’ for those to whom they happen to appeal."

One could add that without this respect of the social credit, of the laws ruling society, any life in society would become impossible, even though you put a police officer on every street corner, since you could not trust anybody.

Social discredit

Mr. Dobbs continues: "Just as there are social crediters, conscious and unconscious, trying to build up the social credit (the confidence that we can live together in society and benefit from it), so there are others — social discrediters — trying to destroy it and break it down, at present with all too much success. The conscious ones include the Communists and other revolutionaries, who quite openly seek to smash all the links of trust and confidence which enable our society to function until the Day of the Revolution dawns... But it is the unconscious social discrediters who are responsible, in the West, for the present success of the conscious ones....

"Why do the shops and the manufacturers foist upon us so many shoddy, rubbishy, throw-away things, at outrageous prices, and trick us into buying them with clever packaging and advertizing? Why are most repair services so scandalously slow, expensive and inefficient, and so many small services which made life easier now unobtainable? And above all, why do millions of decent working people of all classes take part in strikes deliberately designed to damage services to their fellow men? What on earth can make normal decent people descend to this spiritual level? We all know what it is. There is one common factor running through all this destructive and discreditable action: the compulsive need for more money to meet the ever-rising cost of living.

"So now at last I have come to the question of money, which is what some people think that Social Credit is all about; but it isn’t! Social Credit is an attempt to apply Christianity in social affairs; but if money stands in the way, then we, and every Christian, must concern ourselves with the nature of money, and just why it stands in the way, as it surely does. There is a dire need for more people to look deeply into the operation of our monetary system, though that is not everyone’s job. But when the consequences are so desperate, everyone can at least grasp the outline of what is wrong, and could be put right, which will enable them to act accordingly..."

  Next chapter -

About the Author

Alain Pilote

Alain Pilote

Alain Pilote has been the editor of the English edition of MICHAEL for several years. Twice a year we organize a week of study of the social doctrine of the Church and its application and Mr. Pilote is the instructor during these sessions.