— A social dividend to all? But a dividend presupposes a productive-invested capital!

Precisely. It is because all members of society are co-capitalists of a real and immensely productive capital.

We said above, and we could never repeat it enough, that financial credit is, at birth, a property of all of society. It is so because it is based on the real credit, on the country's production capacity. This production capacity is made up, certainly in part, of work, of the competence of those who take part in production. But it is mainly made up, in an ever-increasing part, of other elements which are the property of all.

There are, first of all, natural resources, which are not the production of any man; they are a gift from God, a free gift that must be at the service of all. There are also all the inventions made, developed, and transmitted from one generation to the next. It is the biggest production factor today. And no man can claim to be the only owner of this progress, which is the fruit of many generations.

No doubt that one needs men of our present times to make use of this progress — and they are entitled to a reward: they get it in remuneration: wages, salaries, etc. But a capitalist who does not personally take part in the industry where he invested his capital is entitled, just the same, to a share of the result, because of his capital.

Well, the biggest real capital of modern production is really the sum total of the discoveries, progressive inventions, which today give us more goods with less work. And since , all human beings are, on an equal basis, coheirs of this immense capital which is ever increasing, all are entitled to a share in the fruits of production.

The employee is entitled to this dividend and to his wage or salary. The unemployed person has no wage or salary, but is entitled to this dividend, which we call social, because it is the income from a social capital.

— This is something new. But it seems logical.

Yes indeed! And it is the most direct and concrete means to guarantee to every human being the exercise of his fundamental right to a share in the goods of the earth. Every person possesses this right — not as an employee in production, but simply as a human being.

“Every man, as a reason-gifted being, has from nature the fundamental right to make use of the material goods of the earth.” — Pius XII (Broadcast of June 1, 1941)

And it is an indefeasible right:

“Such an individual right can in no way be suppressed, not even by the exercise of other certain and recognized rights over material goods.” — Pius XII (Ibid)

The other rights, the right of property, the right of the wage earner, the right of the shareholder, etc., do in no way suppress the right of each one to use material goods.

The Pope duly added:

“It is left to human will and to juridical forms of peoples to regulate more in detail the practical realization of this right.” (Ibid)

That is to say, it is up to the peoples themselves, through their laws and regulations, to choose the methods capable of allowing each man to exercise his right to a share in the earthly goods.

The dividend to all would achieve this. No other proposed system has been, by far, so effective, not even our present social security laws.

It is a good thing to recognize — and no one dares deny it — the right of each person to at least the basic necessities of life. But just try to exercise this right in the present world, when you have neither money nor the means of production — these means being more and more concentrated among fewer hands.

In our modern world, it is impossible for an individual to exercise his right to material goods without presenting money. Money has become a conventional, essential licence for the exercise of a natural right.

The social dividend, a periodical dividend to all, a basic income guaranteed to each one as a birth right, an income sufficient to cover at least the basic necessities of life, is the most social demand of the Social Credit economy. Moreover, as we have mentioned above, it is also the recognition of the undeniable fact that all human beings are co-heirs of the past generations.

— But would not this be giving something for nothing to individuals?

Well, just go and tell a capitalist that he is getting something for nothing, when he is paid a dividend on his invested capital! On the contrary, he will call it an injustice, if he is refused his dividend.

The same is true for each member of society, who is a co-capitalist, a co-heir of a real capital, as we have just explained above — a capital which is more essential than dollars or other monetary signs which have only a representative value.

Then, a strict exchange economy cannot be a human economy, given that more than half of the population has nothing to exchange: it is the case for children, for women and girls at home, the disabled, the sick, the unemployed, the old people turned away by industry, the able-bodied men replaced by machines, etc. A strict exchange economy, an economy of “nothing for nothing” can only be a barbarous economy today. Such an economy sacrifices the individual to regulations set up for money, instead of being set up for the individual.

Treating of the distribution of goods in a socio-economic system which would set up according to the priority due to the individual,  French Thomist philosopher Jacques Maritain reaches similar conclusions:

“It is an axiom for the «bourgeois» economy and the mercenary civilization that one has nothing for nothing; an axiom linked to the individualistic conception of ownership. We think that in a system where the conception of ownership outlined here above (with its social function) would be in force, this axiom could not survive. On the contrary, the law of usus communis would lead to lay down that, at least and above all for what concerns the basic, material and spiritual needs of the human being, it is right to get for nothing as many things as possible...

“For the human person to be thus served in his basic necessities is, after all, only the first condition of an economy that does not deserve to be labelled barbarous. The principles of such an economy would lead to a better grasp of the profound sense and the essentially human roots of the idea of heritage in such a way that every human, upon coming into the world, may be able to effectively enjoy, in some way, the condition of being a heir of the past generations.” (Humanisme integral, pp. 205-206)

— But could one not get the same result by wage increases for workers?

No, no, absolutely not, since wage increases reach only wage earners, and give nothing to the unemployed. Moreover, all wage increases go into prices, therefore not correcting the gap between prices and the purchasing power.

An individual income not linked to employment — like the social dividend to all — is something which is more and more imperative as productivity increases: more production with less workers. With complete automation, how would the supporters of employment as a condition to get an income manage to distribute production when there would be no more employees? Without having reached this stage, we have, all the same, reached a point where goods come out more plentifully with less employment. The distribution of purchasing power must reflect this situation.

Wage increases, to increase the total of purchasing power, is not a solution in conformity with justice. If wage is the reward of work, it must, on the contrary, decrease when work decreases. These wage increases are a theft of the dividends which should be given to all.

There would be much to write about on this question of the dividend to all, which stuns so much those who have never made the effort of rethinking notions accepted without examination.

And what is worth the objection of those who persist obstinately in seeing immorality in “non-earned” money? Do they see immorality in the inheritance bequeathed by a father to his child who has never contributed to creating this inheritance? Do they see immorality in the dividends paid to millionaires who most certainly have not earned their millions? Do they see any in the copious salaries given to civil servants who do absolutely nothing for the people who pay these salaries by their taxes? And how many other questions of this kind could we fling at those who are against dividends?

— So, in the financial system advocated by Social Credit, which you say is sound and effective, purchasing power would reach the consumers in two ways: one through wages, salaries, and other  forms of remuneration linked to employment in production; the other, through dividends not linked to employment.

Yes. Besides, this is just the case today. Those employed by production are paid, but capitalists receive dividends on their capital, even if they are not at all employed in producing. If the capitalist is employed, he gets his income in two ways: through money linked to his job, and through money linked only to his dollar-capital.

It would be the same thing under a Social Credit financial system, with this difference: that all citizens being, simply as members of society, the co-owners of the biggest production factor, all would receive a periodical dividend on the production due to this real common capital.

— But if the total sum of both, rewards to employment and dividends to all, draw together on the total of goods, what share must go to wages, and what share must go to dividends?

It is the same question which causes frictions today between the share due to the capitalists, and the share due to the workers. The capitalists say: “Without our money, there would be no jobs, and therefore, no production.” The workers say: “Without work, there would be no goods.” Both, capital and labour, are actually production factors, and, in general, it is admitted that the biggest share of distributed money must go to the workers who, besides, are more numerous.

Under a Social Credit financial system, it is the capitalists (all members of society) who would be more numerous. In Canada, there are about 12 million wage earners — out of 30 million Canadians. Therefore, 12 million workers and 30 million capitalists.

Moreover, production is due more and more to real capital, which belongs to the 30 million people, than to the work that comes from the 12 million employees. For a purchasing power strictly planned on the proportion of the production resulting from progress — which is a common capital — and the proportion resulting from the efforts of those who take part in production, the grand total of the social dividends would obviously have to be much greater than the grand total of the wages and salaries.

— But it would mean giving more to those who do not work than to those who work. It would encourage laziness!

Do not jump to conclusions which, besides, are unfounded.

First, it is wrong to say that the individual not required by production to work would get more money then he who is employed in production: both would have the same dividend, but the emp1oyee would have his wage or salary on top of the dividend.

Therefore, there would still be the same difference as before between the both of them: the amount of the wage or salary. But instead of being a difference between zero and the wage or salary, it would be the difference between the dividend, on the one hand, and the dividend plus the wage or salary, on the other hand. The stimulation of a wage or salary would therefore still be there. And in addition to this, there would be the stimulation of a dividend to all, of which the importance would increase as the social sense of the wage earners would develop.

A dividend based on the dominant part that the real community capital occupies as a modern production factor, would therefore be a generous amount.

One can understand that the transition from a diet of exhaustion to a vigorous diet requires a certain measuring out. One does not go from an unhealthy diet to a healthy diet without going through a recovery diet.

Therefore, wisdom can recommend a graduation in the amount of the periodical dividend to all.

However, from the outset, the principle must be put into application. One must come straight to the spirit of a plentiful economy and dividends to all, instead of the spirit of a rationing economy and income restricted to employment.

— What did Douglas say on this subject?

Douglas expounds, as follows, the third of three principles of which he says the application would allow a system in conformity with the facts:

The distribution of consumer money (cash credits) to individuals shall be progressively less dependent upon employment. That is to say that the dividend shall progressively displace the wage and salary, as productive capacity increases per man-hour.

Therefore, it would be a question of an increasing proportion of purchasing power coming from dividends, and of a decreasing proportion coming from employment.

In the main lines of an outlined and proposed plan for an application of his principles in Scotland, Douglas considered that, as a beginning, one could allocate in dividends, to each man, woman, and child, a grand total equal to one percent of the country's total assets, evaluated in money. He added:

The dividend thus obtained might be expected to exceed three hundred pounds per annum per family.

Douglas wrote this in 1933, when the price of the pound was at par — which would mean in dollars, an annual amount of $1,450 per family, that is to say, $121.50 a month; or (with an average close to a family of 5), a $25.00 monthly dividend to every man, woman, and child of Scotland.

If this amount could be judged reasonable in 1933, it certainly ought to be at least $800 a month today, seeing that the cost of living has increased more than ten times since, and also seeing the increase which has taken place in the production capacity, which gives more goods to distribute per person.

This was, in Douglas's mind, an initial dividend, a dividend which ought to increase afterwards as the production capacity would increase per man-hour.

In any case, with Canada's present productive capacity, the periodical social dividend ought to guarantee immediately to each citizen of the country at least something to satisfy his normal needs. This would simplify and debureaucratize considerably, while making more effective, all of our social security system. Social sense and personal responsibility would find a better climate for their development.

— What is the meaning of “increase in the productive capacity per man-hour”?

A hypothetical example will make you understand:

Let us suppose that, in a year's time, a productive workforce of 100,000 men gives an output of 100,000 production units. Then, the following year, twice the workers, 200,000 men, give a twofold output, that is to say, 200,000 production units. The productive capacity per man-hour is exactly the same in both cases.

But if, in the second year, one gets this two-fold output, 200,000 production units, with the same workforce as the first year (100,000 men), then the productive capacity per man-hour has doubled.

Or if the second year gets the  same output as the first year (100,000 production units), but with a workforce reduced by half (with only 50,000 men), there again, the productive capacity per man-hour has doubled.

In practice, the productive capacity per man-hour increases each year in all industrialized countries. One can reduce the number of employees, reduce the number of working hours, without reducing the total production; or, while keeping the same number of workers and working hours, get a more considerable production.

It is obvious that this increase does not come from the workers putting in more efforts, but comes from the advanced machines and techniques — all in all, from progress — of which everybody is a co-inheritor, a co-owner, as we have just explained. Therefore, it is only fair that it be these owners, these inheritors, all the citizens, who benefit from this increase by a larger monthly dividend.

— But this would mean a reduction in the workers' current wages!

Not necessarily (although it would be justifiable for several reasons with the coming of a Social Credit financial system). But even in leaving wages at their present figures, an increase in the monthly dividends to all, as the country's productive capacity increases, would reduce the proportional share of the total wages in the total purchasing power.

It is quite necessary, in any case, in a system which wants to be in keeping with the realities of the economy, to take this similarity into account in the distribution of the purchasing power.

Here is, for example, a factory employing 100 men, 40 hours a week: This makes 4,000 man-hours a week. If the output of this factory is 8,000 production units, this gives an output of 2 production units per man-hour.

Let us say that, by the introduction of more advanced machines, through certain automation measures, this factory now only needs 70 men, working shorter hours, only 30 hours a week, while producing more: 10,500 production units during the week.

This now makes 70 x 30 = 2,100 man-hours (instead of 4,000). And since the production of these 2,100 man-hours has gone up to 10,500 production units, this gives an output of 5 production units per man-hour (instead of 2 units as before).

The productivity that went from 2 units to 5 units per man-hour is certainly not the fruit of more labour, since, on the contrary, the working week is shortened. It is due to advanced techniques and to progress, which are the work of several generations, and a community capital that is more and more considerable, more and more productive.

To whom ought the fruit of this increase in productivity go, if not to the owners of this community capital, namely, to all? To this social capital must be associated a social dividend.

3 production units out of 5 are due to the application of progress in the modernization of the factory. If it can be fair to leave to the producers (employers and employees) a reward corresponding to 2/5 of the production, all the community (producers and non-producers) ought to share out a dividend corresponding to 3/5 of the production.

This is only a hypothetical case to make one understand Douglas's proposition: progressively, as the output increases per man-hour, the percentage of purchasing power distributed in dividends must increase, and the percentage in wages and salaries must decrease.

If this proposition of Douglas had been adopted 40 years ago, the development of the economic situation would have been quite different from what we have seen. Instead of wage and salary increases to employees who are less and less engaged in work, one would have seen bigger and bigger dividends to all, including the workers, their wives, and their children.

We would have seen less inflation. All being provided with purchasing power, production would have answered better the needs of all.

Similarly, in other respects, the purely financial hindrances would have been eliminated, the volume of realized and distributed production would have been more considerable, the limit being imposed only by the limit of the physical production capacity, or only by the limit of orders from a saturated consumption.

The wage earners would not have lost anything; they would have become like the capitalists, people getting more in dividends than in wages.

— How would this monthly social dividend be distributed to each and every one of the members of society?

In the way which would be considered more practical: the one requiring the least bureaucracy, the one which would necessitate the least addition to the present transfer mechanisms of the means of payment.

For example, Old Age Security pensions and the various allowances (for the blind, disabled, etc.) are paid by a cheque sent monthly to each eligible party. The same thing can be done for the monthly dividend to all.

We can also, there again, use the channel of the commercial banks, each citizen having to register with a bank in one's locality. Each month, the commercial bank would simply credit each of these accounts with the amount decreed for the monthly dividend. In this case, as in the case of the operations which we spoke about to cover the production costs by interest-free credits, the commercial bank would get from the Central Bank, upon request and without costs, the necessary amounts for the monthly dividends that it thus would have put into the accounts within its jurisdiction. And for the costs of these services, the commercial bank would be paid by the Central Bank in accordance with suitable agreements.

The monthly dividend could also very well be an accounting operation using the service of the post office. It is even the method that Douglas advocated in his scheme for Scotland: “The dividend shall be paid monthly by a draft on the Scottish Government credit, through the post office.”

With the electronic computers and other ultramodern techniques which are introduced more and more into the large accounting offices, it would not be difficult to choose a method that is fast, sure, accurate, and effective as well, for the distribution of a monthly dividend to each person. It is something all the more easy, as the collaboration of the fellow capitalist would be much more eager than that of the fellow taxpayer.

— Would not this distribution of money to the consumers, through the dividends, be inflation, which everybody fears?

It would be an increase of money in the consumers' wallets, and I do not think that such a thing ever made the one who benefits by it complain. It is not when your income is raised that it hurts you. Have you ever heard one complain about a raise in one's income? It is when prices rise that everybody complains.

— But would not this distribution of money through the dividends make, in fact, prices to go up?

Cost prices would not be affected by one cent. As the social dividends are not being paid by the producers, they would not go through industry, like the wages, salaries, and dividends to the greedy capitalists; therefore, they would not go into the cost price. They would come directly from the source of the financial credit, which is a good of the people.

In the present system, which puts restrictions where none are needed, and which do not put any where some are needed, the increase of consumer money could give rise to an unwarranted increase in the retail price. But in a Social Credit system, the cost price remains in keeping with the accounting expenses during production, and the retail price is kept in check by the methods of the adjusted and compensated price, established in keeping with the first of the three principles expressed by Douglas.

— Would the dividend subsist, even during the years when the country's production would not increase?

Most certainly! Whatever may be the production volume, there is always a percentage of this production which is due to the real community capital. It is only in the case where production would fall to zero that the base of the dividend would disappear, and then the base of wages and salaries would also disappear, since there would be no production made.

Obviously, when production is low, the total purchasing power must be low to be in keeping with reality, and in such a case, the three parts — dividends, wages, and salaries — can understandably be lower than during a plentiful production. One can only distribute what exists.

But, in their writings or speeches, some Social Crediters have wrongly presented the dividend as being only the distribution of the growth of the annual production. This growth can justify an increase in the dividend, as we have said before. But, whatever may be the volume of production, let us repeat it, there is always in this production a part due to the use of the social capital — therefore, a part of production that always justifies a social dividend to all.

Others said that the dividend would be the distribution of the amount of money missing in the purchasing power to be equal to the prices level. This is not correct either. The dividend certainly contributes to filling the gap between prices and the purchasing power, but its base is not there. And even if there were no gap between prices and the purchasing power, each citizen would yet be entitled to his dividend, for the reason we have just recalled in the preceding paragraphs.

To ensure the dividend to all is one of the functions of a sound financial system (Douglas's Third Principle). To establish or keep the equilibrium between the total sum of the prices and the global purchasing power is another function (Douglas's First Principle). The Social Credit technique fulfills both, without one being harmful to the other, through simple accounting operations applied to a social financial credit in relation with the country's real credit.

Social Credit and private enterprise

The producer, while fully retaining his private enterprise, all the same is, in a way, an agent of the community to make use of the real credit, the country's production capacity.

The banker, while retaining the private ownership of his banking enterprise, all the same is, in a way, the agent of the community for the channelling, the back and forth movement, of the financial credit based on the country's real credit.

The retailer, while completely retaining his private business and running it without hindrances, all the same is, in a way, an agent of the community for the distribution of goods.

Social Credit is a firm defender of ownership and private enterprise. But any private enterprise has a social function to fulfill, which would be automatically accomplished by a financial system in keeping with the propositions expressed by Douglas.