In addresses delivered at Winnipeg, Toronto and Montreal, which were given considerable publicity in newspapers all across the land, Mr. James Coyne, governor of the Bank of Canada, reproached Canadians with living far beyond their means.
"Live within your means" is not new advice by any stretch of imagination. It has been given many times, and wisely, by persons of experience to those unbridled individuals who have no idea of how to put a limit to their expenditures. But it has also become a very handy catchphrase for the rich, who lack nothing, to throw at the poor who lack everything.
In this particular case it is a person of some distinction who is handing out this advice; none other than the governor of the Bank of Canada. And he is giving this bit of wisdom to an entire people, namely, the Canadian people.
According to him, then, it is the Canadian people, collectively, who are living beyond their means. Now this charge certainly deserves very close study. To begin with, just what "means" are the Canadian people living beyond?
The means of living, of satisfying human needs, are the services, products and goods which go to fill these needs. We nourish ourselves with food, clothe ourselves with clothing, build homes to live in, gather wood, coal, and other combustibles for heat, we use automobiles, buses, trains, airplanes, etc., for travelling and for hauling material.
Now, it is hard to see just how Canadians have been living beyond these means. How can they consume food which has never existed, worn clothing which has never been available, lived in houses, as yet unbuilt or bought automobiles which haven't been put on the market?
Obviously our banker cannot be thinking of real, concrete means when he so advises us. Those who produce such real concrete goods — farmers, industrialists, merchants never find that there is too big a demand for goods or that public demand for goods is greater than the production's ability to meet such a demand.
But Mr. Coyne is not a producer of goods to fill human needs. Mr. Coyne is a banker. His field is money and credit. And when he is giving us advice on living within our means he is speaking of financial means.
To live within our means in this sense means not buying more than we can pay for. It means keeping out of debt. It means not getting what was produced yesterday when we shall be unable to pay for it until tomorrow. It means leaving aside all those goods which production can mass produce in a few hours because it will take us a year or so to pay for them.
When it is Mr. Coyne who scolds Canadians and demands that they be satisfied to live within their financial means, there are two observations which we cannot help but express. First, it cannot be too difficult for our preacher to live within his financial means since he is drawing a nice fat salary of $50,000 a year from the Canadian people. Secondly, it would not be too difficult for the ordinary Canadian to follow his advice if his (the Canadian citizen's) financial means were not restricted and rationed by the system of which this same Mr. Coyne is the accredited regulator here in Canada.
It is hardly likely that Mr. Coyne is trying to form moral qualities within us when he demands that we live within our "means". The money or banking system has not for its end the deciding of what is good or bad in what concerns our spiritual salvation. The financial system has another purpose which it fills very inadequately indeed, with the result that a great many people are having a difficult time of it attaining the final end which God has laid down.
But many of us have been sort of hypnotized into a state where we are inclined to pass moral judgments according to financial criteria, or at least, we are influenced in such judgements by financial circumstances.
For example: Roger is a worker who needs a salary in order to live. Unfortunately, Roger doesn't give the same good service that the boss is accustomed to receive from other employees. When the boss finds it necessary to cut down on overhead Roger is the first to go. Those associated with Roger are probably going to say: "Roger had it coming to him; he was lazy!" And there certainly is a degree of truth to justify what they say, in part at least. Roger was a bit slack in his work.
Now, lets consider the case of Jules. He's the same age as Roger, has the same physical condition. But Jules is rich; he lives off the interest of the stocks and bonds left to him by his father. He passes his time lolling about on the beach idling and going out to parties every night. He does nothing useful, except to keep his money in circulation. We might with some justification reproach Jules with hardness of heart if he does nothing to help his less fortunate brethren. But we can hardly accuse him of a crime in being lazy even though it is a far greater laziness than that of Roger.
We must absolutely cast off a certain spell which the commanding influence of the financial system seems to have cast over us a spell which can seriously distort our judgements.
We find it creeping into the phrase "living within one's means". Going into debt does not render an act immoral, nor does the fact of staying within the limits of our income render another act good.
Take the case of a father who lives far out in the suburbs. He is far from work and far from Church, far from the shopping district. Who can blame him for buying a car, even if he has to go into debt to some finance company? Yet, he is acting contrary to Mr. Coyne's advice. He'is not doing his part in keeping a tight rein on credit. But his act in no way affects morality.
On the other hand we have a young boy who works in a factory next door to his home. He's getting good wages. In order to have a good time he buys a car and spends his leisure time away from home, perhaps drinking and carousing with companions of ill-repute. He pays cash for the car, mind you. Does the fact of paying cash for the car — which is the instrument of his degradation — make his purchase a good, moral act?
No, Mr. Coyne is not a spiritual director. He is giving his views on the Canadian economy. He treated of this subject also in his report to the government on the operations of the Bank of Canada. And even in this report his ideas and recommendations are dubious and have been the subject of considerable criticism across the country.
Perhaps it has occured to you, as it has to us, that if the sources of private and public production were able to get credit more easily they would employ more people and produce more wealth. Well, Mr. Coyne doesn't hold this view. Oh, he wants full employment, but his formula is: spend less, save more, lend less.
If Canadians spend less they will buy less. If they buy less, products and goods will pile up in stores and warehouses. And if products pile up industry will employ fewer people. This seems logical enough, doesn't it? But there you're all wrong! For Mr. Coyne's superior judgement says that employment will increase.
Mr. Coyne is extremely nervous about borrowing, especially from abroad. Naturally! But if production hasn't any money — as is too commonly the case — how can they carry out their work without borrowing? And if work is not carried out unemployment is bound to rise.
As for borrowing abroad, we can certainly sympathize with Mr. Coyne's grief. But he is the one who restricted credit and forced private and public bodies to go to the American market for money where, for the moment at least, lenders, are more willing and interest rates lower than here.
Social Credit flatly rejects financial dictatorship. For us, financial means should at all times correspond to real, physical means. That is to say, money should be forthcoming in the measure that production is capable of producing all the goods and services necessary to meet the needs of the people both in the private and public order.
As for what production should turn out, that is a matter to be decided by the consumer and not by the lords of finance; something to be commanded by individuals and families and private and public corporations. To this end, the financial system ought to finance the consumer to the extent of the goods and services offered by production to meet his needs.
Social Credit opposes outright all waste, all production that is useless or harmful. Social Credit does not preach the unbridled satisfaction of every appetite. But it is for the school and the church, not for banks and financial institutions, to form the conscience of men and the morality of society.
Social Credit would leave people perfectly free to save as much as they freely desire to put away. But it would make certain that purchasing power, which is diminished by saving, was in no way responsible for blocking the flow of products from producer to consumer. Purchasing power would be returned to the consumer through the compensated price. The savings of one would profit all.
Let us point out one other fact about "saving". The virtue of thrift does not take its essence from the fact of putting our money in a bank. Rather it lies in the moderation of appetite and desire which is signalized by the act of not expending all the money one may have. If a salaried man, after having bought all he needs and satisfied his obligations, spends or dispenses the remainder of his money on charitable works (the foreign missions, for example), who can deny, the very great merit of his act even though he may not be "saving money" in the strict sense of the word?
The formula of the Social Credit school certainly is not "to live within one's means", especially when those means in no way correspond to real, physical means. On the other hand, Social Credit does not advocate "living according to one's passions and appetites". No, it is rather a policy of:
Living in such a way as to satisfy the normal needs of a human being inasmuch as the productive capacity of the country can meet these needs.
Now obviously, the fulfillment of such a policy requires an adaptation of the financial system; on the one hand with respect to financing production, on the other with respect to financing consumption. The financial propositions of Social Credit would effect such an adaptation in comformity with what is logical and humane.