— Why criticize and denounce the present financial system?

Because it does not fulfill its end.

 — What is the end of a financial system?

The end of a financial system is to finance. To finance the production of goods which answer needs, and to finance the production of these goods for them to reach these needs.

If the financial system does this, it fulfills its role. If it does not do it, it does not fulfill its role. If it does something else, it goes beyond its role.

— Why do you say that the present financial system does not fulfill its role?

Because there are goods – public goods and private goods – that are requested by the population, that are most certainly realizable physically, but that stay in nothingness because the financial system does not finance their production. Moreover, there are goods offered to a population which is in need of them, but which some individuals or families cannot get, because the financial system does not finance consumption. These are undeniable facts.

— What is production or consumption financed with?

With means of payment (cash credits). These means of payment (cash credits) can be made up of coins, paper money, or cheques drawn on bank accounts.

All these means of payment (cash credits) can be included under the term “financial credit”, because everybody accepts them with confidence. The word credit implies confidence. You accept with the same confidence four quarters, or a one-dollar note from the Bank of Canada, or a one-dollar cheque on any bank where the maker of the cheque has a bank account. You know, actually, that with either of these three means of payment (cash credits), you can pay for labour or materials for the value of one dollar if you are a producer, or consumer goods for the value of one dollar if you are a consumer.

— Where does this “financial credit”, these means of payment (cash credits) draw their value from?

The financial credit draws its value from the “real credit”. That is to say, from the country's production capacity. A dollar, of whatever form, has value only because the country's production can supply goods to match it. One can call this production capacity "real credit", because it is a real factor of confidence. It is a country's real credit, its production capacity, which causes one to have confidence of being able to live in that country.

— To whom does this “real credit” belong?

It is a good of society. There is no doubt that individual and group capacities of all kinds contribute to it. But without the existence of natural resources, which are a gift from Providence and not the result of an individual competence, without the existence of an organized society which allows the division of labour, without services such as schools, roads, means of transportation, etc., the global production capacity would be much weaker, very weak actually.

This is why we speak of national production, national economy, which does not at all mean State-controlled production. It is in this global production capacity that the citizens, each citizen, must be able to find a base of confidence for the satisfaction of his material needs. Pius XII said in his Whitsunday Broadcast in 1941:

“The national economy, the fruit from the activities of men who work together in the national community, tends towards no other thing than securing, without interruption, the material conditions in which the individual life of the citizens will be able to fully develop.”

— To whom does the “financial credit” belong?

At its source, the financial credit belongs to the collectivity, in the same way as does the real credit where it draws its value from. It is a good of the community from which must benefit, in one way or another, all the members of the community.

Like the “real credit”, the financial credit is, by its very nature, a social credit. (It belongs to all the members of society.)

The use of this community good must not be subjected to conditions which hinder the production capacity, nor which divert production from its proper end, which is to serve human needs: needs of a private and public nature, in their order of urgency; the satisfaction of the basic needs of all, before the luxury requests of a few; also before the splendour and the pharaonic plans of the public administrators, greedy for fame.

— Is it possible to get from the economy, in general, the respect of this hierarchy of needs, without a dictatorship that plans everything, imposes production programs, and administers the distribution of goods?

It is certainly possible, with a financial system that guarantees to each individual a share of the financial credit of the community. A sufficient share, so that the individual can himself order, from the country's production, enough to satisfy at least his basic needs.

Such a financial system would not dictate anything. Production would take its programs from the orders coming from the consumers, as far as private goods are concerned; and it would take them from the orders coming from the public administrations, as far as public goods are concerned. The financial system would thus serve, on the one hand, to express the consumers' will; and on the other hand, it would be in the producers' service to mobilize the country's production capacity in the direction of the orders thus expressed.

For this, of course, it is necessary to have a financial system that submits to reality, and not one that does violence to it. A financial system that reflects facts, and not one that is at variance with it. A financial system that distributes, and not one that rations. A financial system that serves man, and not one that degrades him.

— Is such a financial system conceivable?

Yes. Its outline was given by Clifford Hugh Douglas, the master and genius who expounded to the world what is called Social Credit (not to be mixed up with the prostitution of political parties which invest themselves with this name).

Douglas summarized in three propositions the basic principles of a system that would fulfill these ends and, moreover, be flexible enough to follow the economy in all its developments, up to any degree of mechanization, motorization, or automation.