Forty years had passed since Rerum Novarum's release in 1891. The encyclical by Leo XIII had done much good. The principles it reaffirmed regarding social issues helped foster and develop a more humane and Christian spirit in relationships between employers and workers.
World War I may have redirected industrial activity toward the production of goods useless to human well-being, leaving behind mainly ruins, but the same sophisticated techniques developed for war purposes would later be applied with equal efficiency to a peacetime economy.
Post-war recovery was swift. In developed countries, living standards surged feverishly until the financial thunderclap that plunged these same nations into the depression of the 1930s. The depression was a crisis that defied logical explanation as massive productive capacity stood idle while human needs cried out everywhere. This could not be attributed to natural disasters, a lack of skill, nor to a refusal to work. Everyone uttered the same phrase: We have no money! Consumers lacked purchasing power and producers lacked financial credit.
Undeniably, something had taken place in the financial sector and economic and social life was suffering. This was no longer about the oppression of workers by employers. Employers and employees alike were caught in the same web.
Yet, during the four decades following Rerum Novarum, some had turned their attention toward a mysterious sector of the economy — money and credit. Discoveries were made and discussed. Although they were not yet universally known or accepted, neither were they without conclusive evidence. The most distinguished among these was a man of exceptional intellect who not only identified the problems but explained their causes and offered a remedy to make the financial system a flexible servant instead of a harsh master.
That man was Clifford Hugh Douglas, author of the Social Credit proposals — his name and system are regularly discussed in our literature.
On May 15, 1931, 40 years after Rerum Novarum was published, Pope Pius XI released an encyclical titled Quadragesimo Anno. He noted that since the time of Leo XIII, "economic conditions have changed drastically." Indeed they had and not necessarily for the better, nor only for those involved in production. The entire social fabric was affected. Pius XI wrote:
"In the first place, it is obvious that not only is wealth concentrated in our times but an immense power and despotic economic dictatorship is consolidated in the hands of a few, who often are not owners but only the trustees and managing directors of invested funds which they administer according to their own arbitrary will and pleasure.
"This power becomes particularly irresistible when exercised by those who, because they hold and control money, are able also to govern credit and determine its allotment, for that reason supplying so to speak, the lifeblood of the entire economic body, and grasping, as it were, in their hands the very soul of production, so that no one dare breathe against their will."
These are powerful words, well appreciated by the Pilgrims of St. Michael. Douglas distinguished between the possession of wealth and the power to control the lives of others. It is not so much the massive profits made by individuals and institutions that corrupt the economic order, but rather the control of credit — the control of the bloodstream of economic life. In a world of abundant resources, the harm lies not in the large share taken by some, but in the non-distribution of the vast share that accumulates in warehouses, is destroyed, or remains unrealized — because of a lack of purchasing power in the hands of families whose needs are far from met.
The very existence of such a control — one capable of pushing the world from a feverish crisis to a crisis of anemia — creates countless undeserved miseries. Thus, Pius XI could rightfully say:
"All economic life has become tragically hard, inexorable, and cruel."
What can we do when governments themselves obey the dictates of the financial powers? What does the Pope say about this abdication of public authority?
"To these are to be added the grave evils that have resulted from an intermingling and shameful confusion of the functions and duties of public authority with those of the economic sphere — such as, one of the worst, the virtual degradation of the majesty of the State, which although it ought to sit on high like a queen and supreme arbitress, free from all partiality and intent upon the one common good and justice, is become a slave, surrendered and delivered to the passions and greed of men."
When the country entered the Second World War in 1939 the financial crisis disappeared overnight. This clearly illustrated that the so-called scarcity of money was an artificial phenomenon imposed by those in control who could end it in 24 hours if they chose. There could no longer be any doubt that this was a criminal and diabolical dictatorship.
The same credit monopoly still reigns today. The system is clever enough not to let economic conditions fall to such extreme levels that might provoke revolt — especially from a now less-ignorant population but it is cunning enough not to surrender any of its power.
The Pope did not speak only of the control of credit. He offered numerous recommendations that would restore economic and social order, such as revitalizing the practice of justice and charity and the reform of morals in society. Rerum Novarum made practical suggestions for redistributing material wealth in a way that, without infringing on legitimate private ownership, would allow everyone to enjoy a decent standard of living. The Pope reaffirmed the true purpose of an authentically human economy:
"For then only will the social and economic 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. And these goods ought indeed to be enough both to meet the demands of necessity and decent comfort and to advance people to that happier and fuller condition of life which, when it is wisely cared for, is not only no hindrance to virtue but helps it greatly."
Wise use of goods is a personal responsibility. But the adequate distribution of those goods — whose volume today is more than sufficient to provide an honest living for all — depends on the social organization of economic life.
In our modern world, distribution occurs through sales and purchases. For everyone to access enough goods for a decent livelihood, everyone must have enough purchasing power to buy them.
Like Leo XIII before him, Pius XI demanded just wages for the working class. He acknowledged that setting the right level was difficult: too low, and families suffer; too high, and businesses might collapse or lay off workers, or force families to move or separate.
Everyone also knows that wage increases quickly become price increases. The problem goes deeper: it's not merely about a fair split between capital and labor. The sum of wages and profits is not equal to the sum of prices, despite what economists claim. Moreover, purchasing power and prices do not enter the market at the same time.
The Pilgrims of St. Michael know all this. But governments — and their economists, financiers, sociologists, and even philosophers — have rejected Douglas Social Credit. As long as they continue to do so, the problem will worsen. It will worsen through inflation — caused by the endless race between wages and prices. It will worsen with technological advances and automation, which increase output while reducing the need for workers.
Douglas Social Credit offers everything needed to adapt the financial system to all modern production realities. But the model is rejected. Instead, we get patchwork fixes that strip freedoms, demean the dignity of the poor, bankrupt small businesses under the weight of taxes, and drag government bureaucracy into every aspect of life — bringing us socialism.
The state intrudes into production, commerce, insurance, and education — always justifying this by claiming that families or local organizations lack the financial capacity. This is true — because the financial system, which only the government could reform, is failing. Rather than fixing the system, the government insists on doing what families could do if only they were properly empowered.
The Pope rightly stated that a sincere return to Gospel teachings would lead to social renewal, cooperation between classes and the end of class warfare. The oppressed would no longer cling to socialism as the answer. But the domination of national and international credit monopolies obstructs justice and charity. Class struggles have continued and intensified as industrial giants and labor unions grow ever larger, infiltrating public services, government agencies, and educational and social institutions from top to bottom.
We saw that 23 years after Rerum Novarum, all the Christian nations of Europe were at war with one another. And just eight years after Quadragesimo Anno, the bloodshed resumed — more brutally, for a longer time, with greater force and deeper hatred.
Of course, this was not because of the encyclicals — but because so little attention was paid to them. And how could they be heeded, when the credit monopoly was regarded as sacred and untouchable, when all economic life was subject to the dictatorship of money, and money became the first and last purpose of all human activity?
We do not hesitate to say it. The rejection of Douglas Social Credit — which is the rejection of a human-centered philosophy of distribution fully aligned with the norms recalled by the Popes, has perpetuated needless suffering, disorder, and upheaval. It is a criminal refusal, especially in countries like ours where political, educational, and media leaders cannot plead ignorance.
The consequences of this refusal are immeasurable, even in the spiritual realm. Not that Economic Democracy is a sacrament, but because it would remove obstacles and guarantee that everyone shares in nature's and industry's abundance — ensuring an honest livelihood, sufficient "to meet the demands of necessity and decent comfort and to advance people to that happier and fuller condition of life which, when it is wisely cared for, is not only no hindrance to virtue but helps it greatly."
Louis Even
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