The following article is written by Mr. Victor J. Bridger, a long-standing Social Crediter of Australia, who passed away last year. Mr. Bridger — an excellent teacher who popularized Social Credit — had been involved with the Social Credit idea for over 50 years. He had attended our Congress in Canada in September, 2004.
by Victor J. Bridger
Many times Social Crediters, when discussing some aspect on Social Credit, have been confronted with a question such as, "Can you give it to me in a nutshell?"
Obviously, to compress into a very brief statement something that, although not difficult to understand, runs counter to many of the accepted ideas that people have about economics, politics and social problems, is fraught with danger. The purpose of this very brief silhouette against a background of a very large canvas should be sufficient to show a picture which can be understood by those who are quite unfamiliar to the thoughts expressed.
To begin with, it will be seen that to comprehend Social Credit that, although there is one main stream, there are tributaries that flow from it. To commence with, there is the philosophy of Social Credit, and following this, is the policy of Social Credit. The philosophy contains those beliefs that are considered to be a part of reality, those things that are considered to be beyond question if we are to accept the existence of certain natural laws, and that those laws are absolutes in that they cannot be broken by man.
The policy of Social Credit contains the positive lines of action that must be taken to achieve the results or obtaining the objectives bound up in the philosophy. Douglas referred to Social Credit as The Policy of a Philosophy and as being "something based on which you profoundly believe — to be a portion of reality." To explain this requires certain definitions and some explanation of these.
Definition of Social Credit
Sometimes the words Social Credit have provided confusion to people who have not considered their meaning. It has been said that it sounds like some form of socialism, and in fact has been termed by some unknowingly as Socialist Credit. Of course nothing could be further from the truth as it will be shown that Social Credit is the very antithesis to socialism. The derivation of the word "social" comes from the Latin "socius" meaning sharing, and is basis of the meaning of the word association. "Credit" has its origin in "Credo — I believe".
Some Social Crediters have expressed a meaning to Social Credit that it is "the belief inherent in society that its individual members in association can produce the results they want if the results are physically possible." Note that a key phrase has entered here — "physically possible." That places a limitation upon the results that may be produced.
Dr. Tudor Jones, onetime Chairman of The Social Credit Secretariat defined Social Credit as: "The efficiency, measured in terms of human satisfaction of human beings in association." He further defined "efficiency" with its correct meaning as "the power to produce an intended result," and went on to point out that it had to be decided upon by anyone wishing to understand Social Credit, whether or not people had such a power. In other words, is it true that individuals associating together to produce a result they want was possible or not. If it was not accepted, then there was no point in investigating Social Credit any further. If, however, it was agreed that people working together could achieve a desired result, it could then be stated that people working together could achieve more than working on an individual basis. This brings us to one part of the philosophy which is expressed in the term, the increment of association.
Since the beginning of man there has been a gradual increase in the discovery of tools and materials, and ways of using them for mutual benefit. This has proceeded to the present day, and the increase in technology and the handing down of the knowledge of how to use it is referred to as the cultural inheritance. It is something that belongs to no one particular individual, but all mankind.
The objective of Social Credit
When asked to define the objective of Social Credit, he replied: "What are we aiming at? What are we trying to get? We are endeavouring to bring to birth a new civilisation! We are doing something that really extends far beyond the confines of a change in the existing financial system. We are hoping, by various means, chiefly financial, to enable the human community to step out of one type of civilisation into another type of civilisation, and the first and basic requirement, as we see it of that, is absolute economic security."
This quotation from Douglas, together with the definitions we have given, gives us a clear idea of the concept of Social Credit. The statement that we are endeavouring to bring to birth a new civilisation establishes three important points:
1. That Social Credit is an evolutionary, not a revolutionary Movement. It does not destroy to create anew; it brings in natural sequence a new birth from the old.
2. That it is a reform of the existing national financial accounting system — a reform that will enable a new civilisation to come into being.
3. Two objectives of this reformation are the provision of economic security and political security.
A survey of these points confirms the view that, on the practical side, Social Credit is described as a policy of a philosophy, and this presupposes four things:
1. A belief to work from — i.e. A philosophy;
2. An objective to work to — A policy;
3. A knowledge of the wrong in the thing to be reformed — incorporating both philosophy and policy;
4. A means of righting the wrong so as to attain the objective. The technical knowledge for implementing a policy.
The philosophy of Social Credit
Major Douglas has stated that "Social Credit is the policy of a philosophy." This philosophy is represented by the beliefs we hold and the implementation of the policy to reach the objective. This policy embraces the examination of the system we wish to correct and the action we take towards our conscious and recognised objective.
What, then, are the beliefs which form the basis of Social Credit philosophy?
Briefly, we can say that it is founded on a belief in the supreme value of human personality, and that the self-development of the individual to his highest possible perfection is the main reason and aim of all social organisation.
It believes that systems are made for men, and not men for systems, and that no worthwhile civilisation can be developed that does not provide for the fullest measure of freedom for the individual.
Whilst it emphasises the self-development and importance of the individual, it also encourages the fullest measure of co-operation. But it must be the free and willing "co-operation of reasoned assent;" the co-operation of inducement, not the enforced co-operation of regimentation or legal or economic compulsion.
Summed up, it is the belief in the self-development of diversified individuals in freedom and security, with security as the basis of freedom. It embraces all the fundamental freedoms — freedom from want and fear; freedom of choice, of action, of speech, of worship.
The beliefs we have mentioned also indicate the objective of Social Credit. That objective is a new civilisation. a civilisation based on economic security, a civilisation in which all the fundamental freedoms are realities, a civilisation of prosperity, culture, happiness and peace.
It is the civilisation visualised by the prophet Micah 2,000 years ago. "They shall beat their swords into ploughshares and their spears into pruning hooks; nation shall not rise up against nation, neither shall they learn war any more; but they shall sit, every man under his own vine and under his own fig-tree, and none shall make them afraid."
The policy of Social Credit
Let us now turn to the policy that arises from this philosophy of Social Credit, remembering always that policy is action directed towards a conscious and recognised objective.
When we quoted Douglas as saying that the first and basic requirement of a new civilisation was absolute economic security, it must be evident to us, that in demanding a new civilisation, we must be profoundly dissatisfied with the present one, and that, in stating its basic requirement as "absolute economic security," we must be experiencing economic insecurity.
As we are convinced that we do not have economic security, we have to ask WHY? And so we must commence from this point. This immediately puts us into the realm of economics, and gives direction to our policy to achieve our ends.
What, then, is economic security? It is the possession, or the means to possession, at all times for all people, of adequate food, clothing, shelter and the amenities of modern civilisation. Without this, there is no economic security and only a restricted freedom.
The CAPACITY to give absolute economic security resides in the immense powers of production made possible by science and invention. The TITLE to absolute economic security resides in the possession of a sufficient income at all times to buy the goods and services that make it possible.
As we live in a monetary economy (and there is no need to change this), economic security resolves itself into the possession of sufficient money incomes for everybody at all times, irrespective of employment.
This being so, we have next to ask — where do incomes come from? The answer is quite simple. All incomes as purchasing power are distributed into the hands of consumers through the operations of industry. All purchasing power arises in production.
It takes the form of wages, salaries and dividends paid directly to individuals engaged in industry or indirectly from them, through services and taxation, to those not so engaged. There is no other form of purchasing power in the community than this.
Industry and banking
Now let us go a step further. If industry distributes all incomes as purchasing power, where does industry, in its turn, get the money to do this? A brief examination will show that industry is financed from savings or from loans or overdrafts from the banking system.
But as savings, which are really unused purchasing power, had their origin from previous bank loans to industry in other cycles of production, it is correct to say that industry functions almost entirely on loans from the banking system.
It must be remembered that the banks have discretionary powers to call in loans and overdrafts even before the goods they brought into existence have been sold, and they sometimes exercise this power with disastrous effects on the community.
The banks only lend money as a repayable interest-bearing debt, with number one priority over the assets of the borrower, so it is clear that the banks entirely control production in this way.
We have already seen that the money flowing through industry is the only source of purchasing power, so it is also clear that the banks, in controlling production, automatically control consumption as well.
That is to say, the whole economic system is dominated by the banks and, consequently, they dominate the lives and destinies of the people, and dictate the policies of governments. History proves this conclusively.
Now let us go still another step further and ask where do the banks get the money they lend to industry, and which gives them control of the community.
The answer is again quite simple: THEY CREATE IT. In the terse phrase of the English economist, Hawtrey, "They create the means of payment out of nothing." The money so created is called bank credit.
Banks do not lend the money deposited with them by their clients as most people suppose. Every bank loan or overdraft is an absolute creation of new credit and this credit functions as money.
When cheques are drawn against this credit, they come back into the banking system and form deposits. Practically all deposits are created in this way. Instead of deposits being used by the banks to create loans, as is generally believed, the loans make the deposits.
The actual creation of bank credit is an almost costless operation as it consists merely of written entries in bank ledgers or computers, and made effective by written entries in cheque books, or credit cards. Banking, is mostly bookkeeping. Finance is mostly accountancy, and money is mostly figures.
Though bank credit is supposed to be issued against the security of the borrower, it is really issued againat the productive capacity and the real or "social" credit created by the community as a whole.
The banks, however, treat this community credit as though they are the sole owners, and are thus in the unique position of being able to lend something they do not own, and of being well paid for it.
As banks have the sole privilege of creating and issuing money in this way, they thus constitute a monopoly of credit that functions as money which keeps the whole community, to whom the credit rightly belongs, in subjection through debt. This monopoly of credit or money creation is the greatest power ever vested in any institution in the history of the world.
Victor J. Bridger
(In the next issue, Part 2: the effects of the monopoly of credit, and the Social Credit remedy.)