Editor's note: As Pope John Paul II said, there can be no peace without justice. St. Thomas Aquinas defines justice as “to give to each person what is due to him.” Once applied, the Social Credit financial proposals will re-establish every man in his dignity as a human person created by God, co-heir of God-given progress and natural resources. The following lecture was given some time ago, but the principles it includes will never change.

A few useful remarks

Louis Even

It is obviously not possible from listening at a one- or two-hour lecture to grasp the full meaning, scope, and importance of the Social Credit proposals. They are indeed logical and strongly humane, but at the same time, so very different from the financial concepts which are widely and uncritically accepted!

Besides, as with any science, studying this subject requires at least a modicum of time and a great deal of application. It must be approached with an open mind, and not merely with the object of confirming a pre-existing prejudice.

It is not a good idea to isolate a singular principle of Social Credit, and apply it to the existing financial sphere. Nothing is more likely to give a false perspective.

For example, consider these Social Credit principles: everybody gets a regular dividend, untaxed; a reduction in prices, without loss to the producer; automatic financing of production, without inflation. All of this is obviously impossible if there is any pretence of achieving it without first making a major change in the issuance and cancellation of money, and in the monetary policy of the distribution of goods. For the fish that has always lived in water, the idea of flying in the air would have all the appearances of a utopia; but the bird sees this from a different angle.

The study of Social Credit is complicated by the fact that neither Social Credit itself, nor anything approaching it, has ever been put into practice, never mind even tried. It is not therefore a simple matter of explaining or interpreting a practical experience. It is rather a matter of investigating what is possible in an economic system that has not yet been applied, and of which there exists no example in history – an economic possibility which would have no limitations, except those of nature and of things.

To do a good investigation in such a case requires, in some way, a detachment from the isolated economic world which we know, and a rethinking of the primary notions of finance, of economics, and especially of economic philosophy. For Social Credit is a return to logic and to the integration of ends and means, terribly distorted by present-day economics.

Basic postulates

It is impossible to understand Social Credit, without first accepting certain principles, certain fundamental postulates, which pervade the entire Social Credit philosophy. They recur frequently throughout the Social Credit literature. Just to mention a few of them:

1. The earth and its resources were created for all mankind. For ALL, without exception. Therefore, each human being must be able to obtain a part of these resources, at least a part sufficient to meet the needs of his livelihood. To refuse him this much is to deny him the right to life. A system is human or inhuman to the extent that it facilitates or hinders access of each person to these goods.

2. The means must be in accordance with the ends, and not vice versa. For example, the end of economic activity is the satisfaction of human needs. It is therefore to this end that the whole economic system must be directed, including its financial aspect.

The end of industry is to produce goods, and not to produce jobs or work. It is all the more perfect insofar as it produces more goods with less human labour.

The end of industry is not to finance the purchase of goods. Industry no more exists for salaries than it does for profits. Profits and salaries are only means; they act only like an incentive to activate the production of goods.

3. There exists everywhere a jurisdiction of functions. The function of producing belongs to industry (manufacturing, agriculture, etc.). The function of sharing out and distributing the goods belongs to society itself. It is for society to establish a means of sharing out which best meets the goals of economic life, which upholds the ordained right of each person to the goods of the earth.

4. Modern production depends more on processes, techniques, resulting of inventions, applications of science, contributions from individuals, transmitted and perfected, from generation to generation, than on the individual efforts of those hired by production. This factor of production is a common heritage, a social capital, that is more and more productive, and which must thereby enrich everybody, each person being the co-owner of this factor of production. A salary, therefore, which is the reward for individual contribution, should not be the sole claim on the fruits of production.

5. As money is a claim on goods (any good or service offered), its volume can only be socially regulated. How can it be permitted for an individual or private institution (like the banks) to have the right to dictate what these claims will be worth? The total purchasing power must be in step with the total production that answers human needs, since this production exists expressly to satisfy needs.

6. Finance should neither be a system of government, nor a system of reward, nor of punishment; neither should it be a substitute for moral standards, nor a dictatorship over production and needs. It must, on the contrary, serve production, and not place limits on it.

7. The goal of a well-built financial system should be: a) to faithfully finance production that answers needs; b) to efficiently distribute the fruits of production.

It is difficult to repudiate any of these postulates, even if the fourth one (about what production consists of) sounds new and provokes controversy. However, the existing financial system incorporates none of these postulates.

The problem of our day: distribution

W.L. Mackenzie King

In 1918, William Lyon Mackenzie King, who was not yet leader of the Liberal Party of Canada (and future Prime Minister of the country), wrote a book entitled “Industry and Humanity”. In it, he says:

“It is no longer nature, but man, who is now master of the situation. The problem of unlimited production, and in unlimited volume, is already solved. The advance of human intelligence has realized that achievement. It can certainly equally be put up to human intelligence to solve the problem of distribution!”

That very same year, the Scottish engineer, Major C. H. Douglas, presented to the world the Social Credit formula exactly to equitably resolve the problem of distribution.

Douglas himself also argued that production, as such, no longer constituted a problem. He wrote:

“The economic system can be assimilated into a machine with the purpose of meeting the needs of humanity. The producing part of this machine is very efficient, but the distributor part is terribly inadequate.”

Major Douglas did not content himself with the hope that human intelligence would find a solution to the distribution problem: he offered the solution.

Neither Mackenzie King, during his long term as head of the Canadian Government, nor to date any other government charged with an uncontested sovereign power, saw it as opportune to accept Douglas's solution. They preferred instead to suffer economic depressions, depending on wars to reinfuse blood into economic life, concerning themselves with affairs of State, or playing with fiscal policy, producing parsimonious budgetary allocations with conditions attached, accompanied by inquiries and frigid bureaucracy, carefully weighed and calculated to extirpate the source of production.

Douglas's solution does not in any way enlist, confiscate, centralize, dictate nor hinder neither initiative nor private enterprise. It just touches on an instrument that is social by nature: the monetary instrument. Not to take away money from those who have it; not to dictate to those who receive money on how they should spend it; but simply to conform the issuance, volume, and recall (cancellation) of money to a free production and free consumption of goods.

A simple accounting system

The modern money system lends itself particularly well to this purely financial order. If in centuries past, money was an intermediary merchandise, modern money is nothing but number symbols, and finance, a simple accounting.

In the same book already cited, Mackenzie King wrote, with much justice:

“Money is figures inscribed in registers, symbols and numbers imprinted on metal or paper.”

And it is the number symbols inscribed in registers, in bankers' ledgers, in the credits of depositors and borrowers, which serve for 90 per cent of commercial transactions. This is done by simple credit transfers from one account to the other. This is written accounting, scriptural money.

As for bits of metal or paper rectangles, with numbers, symbols, or with pictures, those also are a sort of accounting, non-written, with the number symbols passing from one hand to another, rather than from one account to another. I debit myself with a dollar bill which I pass to my merchant, and my merchant duly credits himself. He obtains credit for it, the same as when he deposits it as a credit in his bank account.

Nobody looks at the intrinsic value of the paper bill nor of the silver or nickel pieces which they receive in exchange for goods, work, or services. It is the confidence which the production system gives in exchange for these number symbols which enables people to accept the paper and metal pieces without hesitation.

The absurdity of a lack of figures

If modern money consists of figures or digits, there is no reason for a lack of them with regard to a production capacity which but awaits orders as expressed by these figures.

In the post-war unemployment years, Mackenzie King would have been put to shame to say to unemployed people that the country lacked number symbols to allow needs to be supplied with goods, and to allow a flow of goods to those in need. Mackenzie King knew better, but, alas, the author-become Prime Minister of his country had lost his wings: he was hamstrung by the office which he held!

So, if modern finance is a matter of accountancy, nothing excuses a false accounting, an accounting that runs contrary to the facts it is there to represent. Nothing can prevent the expression of the value of goods by credit, to the extent of their coming into existence, and their extinction, being represented by an equivalent debit. This mechanism recalls and cancels the number symbols that that credit has discharged.

If finance was what it ought to be, an exact representation of realities, following in every way the movement of wealth, never more would a country that had enriched itself more than it had impoverished itself, thereby express its financial status as a national debt.

And if figures are enough to represent a claim on goods, nothing could be easier than to establish an equitable means of allocation and distribution of wealth. This is what Social Credit means by the periodical distribution to each person, of a certain amount of these number symbols, which are money tokens, and which would at least guarantee to each person the necessities of existence.

It is the least that a member of society, a shareholder, has the right to expect from the society of a country that has arms overflowing with goods.

If modern money consists in number symbols that represent real possibilities, it is inconceivable that public bodies should be obliged to relinquish perfectly feasible projects, for the sole reason that they lack number symbols!

Should we not be master
of our own home, of our own country?

It is unthinkable, also, that as we stand before these rich natural resources, our hands should be tied, while the makers of foreign number symbols want to sign up our workforce to their own use and benefit, receiving in the process tributes of praise from our Government, and taking our riches away with them, extracted and transformed by our home workforce.

This brings us to one of the questions you asked: “How will Social Credit contribute to our economic liberation?”

Under a Social Credit regime, the purely financial problem simply does not exist, and certainly least of all for a community. Everything that is physically possible, would automatically become financially possible, just as fast as the decision was made to carry it out. Every new production would in effect be financed by a corresponding discharge of credit, and the credit thereby put into circulation would be recalled and cancelled only in step with the disappearance (by usage, destruction, or consumption) of the wealth produced.

Not the least need would exist, then, for what is called “foreign capital”, not even for short-term capital, in the current sense of the term, to produce in the country what can be accomplished in the country.

What perspective does that not open up to patriots indignant in seeing their rich country treated as an economic colony by master foreigners!

On this question of “capital”, just as on that of money, Mackenzie King was thoroughly well-informed. He wrote, in the same work cited:

“Money and credit are not in themselves capital. They are only capital by virtue of the right to possess them; they comprise a power of seizure, because they are exchangeable for foodstuffs and services.”

To exploit our wealth through “foreign capital” is literally to invite foreign seizure of that same wealth.

Number symbols issued by our country itself, based on wealth achieved through the industry of our people with our own natural resources, would thoroughly well serve our economic growth. They would recompense the abundant work, and they would as well obtain for the workers the goods available from the other producers of the country.

The real capital is the natural resources given by God and the capacity to exploit them, which resides in the brains, industry, and acquired skills of the people. The rest is nothing but number symbols. These are the number symbols which must be made to conform to the real possibilities, and not the other way around.

Clifford Hugh Douglas

This is why Major Douglas wrote, the same year as Mackenzie King, in 1918:

“Every new production must be financed not by the savings coming from the payment of past production, but by new credits. And these credits must only be withdrawn to the extent that there is consumption or depreciation of wealth.”

Douglas was not content with writing tracts and giving definitions: he was interested in practical applications. That is why his teachings are so dynamic. Put into practice, his principles would change the face of economics, without injuring anyone, except the exploiters who paralyse and indebt humanity through their dictatorial control of money and credit.

With an economy of “full income” instead of “full employment”, with the unhindered flow of goods in response to needs, with the necessary long-term guarantee that the productive system can respond, Social Credit would introduce into the world an element unknown until now: economic security for all.

It is economic security, not vast wealth, which truly constitutes temporal riches, because it is the spirit, freed from the incessant and wearying material cares of today and tomorrow, that freely leads us towards more essentially human values.

Freedom can only properly base itself in the satisfaction of want. Heroism is to prefer freedom above life's necessities. It cannot be sustained by large numbers of people over a long duration of time. On the other hand, enslavement to the gaining of possessions over and above one's needs is a degrading form of materialism practiced by too many fawning lackeys seeking political patronage, an outlook clearly to be held in contempt by patriots who want to liberate their country and their brothers.

How to gain political freedom?

You ask if Social Credit brings with it an amount of political freedom. This implies the existence of political dictatorship: party dictatorship, patronage dictatorship, dictatorship of bestowal with strings attached (“tyranny?”), aristocratic dictatorship of privileges, etc.

The first condition for political freedom is to have at least an elite of citizens with the mentality of free men. Then to bring that mentality out in the rest of the population.

The present economic system in no way contributes to this condition. Where are the likely liberators amidst the masses who are swallowed up every day in larger and larger factories, performing the repeated actions on command, producing without knowing for whom or for what, devoid of everything, even of the tools they handle, always living in fear of layoff, and at the mercy of conditions over which they have not the glimmer of a hope of controlling?

Under a Social Credit regime, material progress would not diminish the person. Methods of production would continue to flourish, but production would no longer be dictated nor conducted by a money aristocracy, by a plutocracy contemptuous of humanity. As enterprises would no longer require the contribution of financial capital, it is competence and responsibility that would drive initiatives and management.

The modern system of serfdom (that is), the salaried class, would not take long to pass into history.

The basic necessities of life guaranteed through a dividend to all, would make free men, as we shall shortly see. Free men are not the stuff of slaves or serfs. The entrepreneur would be quick to recognize the need to change his plan, and find himself some partners rather than hirelings. He would have competent and interested partners, and not employees who have to accept the offered conditions of the job, or face the perils of starvation. The salaried class would rapidly give way to a partner class.

People thus economically liberated would not allow themselves to be politically enslaved. What dignity could be given to political party lackeys by people who no longer would have to grovel for a living?

An essential part of the Social Credit technique, the adjustment of prices – which it would take too long to explain at this meeting – would bring every citizen, every housewife shopping at the stores, up to the minute (with information) about the economic situation of their country. Regular publication of the price co-efficient would be a veritable synopsis of (price) appraisal, directly comprehensible to anyone buying an article from the retailer.

Each citizen would know the exact composition of what led to the price he is about to pay, of what proportion belongs to production costs, of what proportion of the price comes from his public services (sector of the economy). The labyrinth of countless fiscal factors would not be there to defeat his understanding (of the price).

From this economic democracy and political democracy, there is only the distance between the eye that sees and the tongue that speaks.

If you want to have an idea of what the citizen of tomorrow will be under a Social Credit regime, cast a glance on the White Beret Social Crediters who step lively along the roads of Canada and other countries. They are not yet economically liberated, but are already giving allegiance to the bonds of their vision of a Social Credit world. There they go, too enlightened, too inflamed by the worth of their ideal, to slavishly trouble themselves with propaganda or military stripes.

Having barely won a living for their families, they joyfully give up the pursuit of further gain, working instead to win liberty for all.

Through its singular philosophy, without even being put into practical application, Social Credit already makes for free citizens, with a heightened sense of individual responsibility in the building of a temporal city, dignified by civilized people and Christians.

It is with such people – and not with hordes of beaten dogs, of the perpetually frightened, or of the “let someone else do it” mentality – that it may be hoped to free a country from all those who in letting live the existing economic and political order, weigh heavily and uselessly on the life of their country's families and citizens.

This article was published in the January-February, 2002 issue of “Michael”.