Several priest and bishops who have studied the financial proposals of Scottish engineer Clifford Hugh Douglas — known as Social Credit or Economic Democracy — and then spread by Louis Even in MICHAEL, have become themselves enthusiastic supporters of these proposals. Why? Because they understood that these proposals would be an excellent way to apply the social teaching of the Church.
In 1967, Louis Even wrote the following article, to pay homage to Fr. Edward Lavergne, founder and pastor of Notre-Dame de Grace Parish in Quebec City in 1924. Fr. Lavergne was also a great supporter of Douglas’s economic democracy, which brought him much persecution, which he endured in a most heroic way right up until his death).
But what was it that brought about Fr. Lavergne’s loyalty to the Social Credit doctrines? Was it a result of long dissertations on techniques in matters of finance and economy? — No, and even less, was the idea of seeing emerge a new political party to dispute the powers of each “side”, when (each party) had already successively disappointed the hopes of the entire population. No, it was none of these things! Fr. Lavergne himself told us one day what it was: “What I appreciate in Social Credit is that its application, with its dividend for all, would especially benefit the poor.” Meaning not only the poor of his parish, but also all the poor of the entire country. And further, the example of Social Credit that would be given by our country would bring about the application of Social Credit elsewhere in the world.
Some hold fast to the doctrine of Social Credit, written by Clifford H. Douglas, because of its logic and its perfect conformity to reality, and they are not mistaken to do so. Others maintain this doctrine because they see Social Credit as the best weapon for opposing Communism in the economic and social terrain; and they also are right. But when good Fr. Lavergne says: “Social Credit would especially benefit the poor”, he is speaking from the heart. He is expressing an argument of great veracity. One that is well worth contemplating for it brings into light the true significance of Social Credit.
What then must be done in order for the poor who are deprived of the goods of this world to benefit from this? We can supply them with material goods, this is true, but more importantly we must first deliver them from their humiliating circumstances, being made to feel like social burdens, afflicted and trampled upon…conditions to which they so often feel reduced.
Much progress has been made since the 1930’s for a better social reform and because of the work of MICHAEL, many admit today that, society does not have the right to leave people and families in poverty. Measures have been established, known today as Social Security, which have certainly eased some situations, but it still remains that the recipients remain in a status of assisted. They are subjected to investigations and re-investigations, not to mention the many delays, vexations, restrictions, rationings…those on the receiving end know…and it is pointed out to them often enough, “if you are receiving aid, it is because others have worked to obtain it for you.” This “aid” is drawn from the taxes that are imposed on those who earn an income due to their own contribution to production. In other words, the taxes are drawn from people’s earned wages. The poor then, must be made to know that they are living off of money that was not earned by them, but rather from the work of others, and that society accepts this obligation in order to support them, but that that they (the poor) are nevertheless, all parasites.
Is this how we shall rehabilitate the poor? By procuring for them the “bare essentials”, do we really hope to ever raise them out of their humiliating conditions? Is this really how we will set them free from the crushing realization that they are a burden to society?
But in what way is the Social Credit dividend different from the Social Welfare system if both provide, let us say, the same amount of money to those poor who are without income?
It is completely different, precisely because it is a dividend. A dividend is the income of a capitalist. It is not alms for the poor. Neither is it wages linked to an employment, subject to taking orders from someone else. There is no humiliation attached to a dividend. The dividend is the income of a free man. It leaves complete freedom to the capitalist as to the use of his time as well as the choice of his career.
The dividend as proposed by Social Credit would be completely a social dividend, drawing the income from a “social capital” and giving it to each and every citizen. Every citizen would be recognized as a capitalist and therefore treated as a capitalist. Every citizen, whether poor or rich, earning or not earning, employed or unemployed, healthy or sick, an infant in the womb or the elderly person living out his last days - everyone receiving the same social dividend. Thus, all capitalists on the same level based on a production that is not the result of the work of employees, or from the money of greedy capitalist investors.
Do you think for one moment that good Fr. Lavergne could ever remain insensitive to the prospect of an economy that would begin by ensuring all his parishioners, as well as all the citizens of the country, a capitalist status and the right to a periodical dividend? Without ever having to deal with bothersome preliminary investigations, the dividend check would arrive monthly in the mail, or as a direct deposit to a bank account, as do the Social Security pensions today.
The poor would no longer feel as though they were a “burden” to society, living off the income that has been taken from others. They too would be capitalists, at the same level as even the largest shareholders of the country, receiving their share of the communautary resources through their social dividend.
— But that would still be money that has not been earned!
Yes, precisely. It would be free money. Free because the largest aspect of production is free, especially modern production.
— And what determines that the production is “free”, or that it is “owed” to anyone?
- First of all the natural resources were created by God, without any human contribution. They are a free gift from God, created even before man himself was created, but prepared especially for him as a habitat where he, and all the generations that would follow after him, could live. This is by far the largest and most gratuitous aspect of production: the earth, the sea, the rivers, the forests, the waterfalls, the minerals in the earth and its ores, the rain that waters the crops, the sun to ripen the fruits and the harvests…without these natural resources, what could a laborer ever produce, and to what purpose would the investments of capitalist’s dollars serve?
God is therefore the creator of this abundance of production and He chooses to give it generously and freely to all of mankind, to be at the service of every human being, and not just certain individuals or privileged groups.
- Is this then a condemnation of private ownership of land, or the exploitation of natural resources and means of production when it falls under the category of natural resources’ belonging to the community?
— No, not at all. Simply said, no matter which method or means is used for production, it must always facilitate, and not block, the universal destination of goods. What we call private ownership, along with its privileges and responsibilities, is much more of a management before God and humanity, than an absolute ownership. In keeping with the natural predisposition of the human person, while at the same time contributing to the enrichment of the talents and character of the owner, private ownership of the means of production maintains a social function. Whether the goods come from a private company, a capitalist corporation, a co-operative, or a nationalized institution, it is still the entire community, all the members of society who, in some way must benefit from it.
The method of production is one thing. The means of distribution is another. Both must be ordered according to the same goal: first, to effectively determine and provide the amount of goods needed in order to meet the demands of the consumers; second, to make these goods accessible to the consumer with the least amount of difficulties and without loss to the producer who’s just profit is proportioned with his personal contribution to the maintenance and flow of the products and services.
Isn’t the mere fact that products are offered on the Community Market recognition of this principle, the universal destination of goods? And if there were not a deficiency of purchasing power, and if the purchasing power were guaranteed to all, as with the Social Credit dividend, this universal destination of goods would be carried out, while at the same time permitting the producer to receive his just profit through the sale of his product. In a financial system, this is a simple question of monetary accounting, adjusted for the true purpose of production.
Another free aspect of production – free in the sense that it was not acquired by anyone, not even those who use it today – is the inheritance of those generations now living. It is the “know-how” accumulated and transmitted over the years. All the discoveries made and improved over the centuries, all the progress of technology – all those things without which modern production, even if more time and more effort were put into it, would not be, as we know it today. Even just the mere fact of living in a community, our existence as a society, has allowed for these achievements to be safeguarded, developed and transmitted over the centuries. This too is a free aspect of production.
Thus it is all these things – the gifts given to us from the hands of the Creator and the inheritances received from generations past – all these things which comprise a free contribution to production. A true social capital, not earned by anyone and of which everyone is, to the same degree, co-capitalists and co-heirs. This abundant capital is free to all through a share in the fruits, which are the result from it.
Admittedly, this portion of the natural resources and of progress, though free, is not enough to provide the goods required to meet all the adapted needs of each human being. The ground must still be cultivated, wood must be cut, the ores must be extracted from the earth, a whole series of processes still need to take place in order to arrive at any finished product…and, undoubtedly, none of this can happen without the precious collaboration of producers. But this, in no way, impedes the right of anyone to a Social Credit dividend. Just as the shareholder of an industry does not lose his right to his dividend from his investments, even though it is not he, but the employees who make this capital bear fruit. Everyone is therefore, co-owner and co-heir of the exploited social capital.
As one can plainly see, there is a difference between the dividend and social welfare, even if both are capable of putting the same amount of bread on the table. In the dividend there is a rehabilitation that takes place, a lifting up, so to speak, of the human person, which we do not see in today’s welfare system. But above all, in an economy with the Social Credit dividend there would no longer be anyone deprived of the necessities of life.
With each citizen receiving his own dividend, it would no longer be possible as is with welfare, for anyone to say, “This money that you are receiving was earned by others; it was taken from others to enable you to live.” The Social Credit dividend would not be money that was initially earned by someone else, then taken from them to be distributed in dividends to all. Rather, this money would be the fruit of a free capital. No one having earned it, the dividend cannot be taxed; it is a free dividend, which takes nothing away from anyone. The priority of the dividend is its purchasing power. This is what solidifies the rights of everyone to their share in the gifts of the Creator, and in the inheritances of past generations. Instead of humiliation, it will be a joy to receive this gift touching on our inheritance, a joy that Social Credit would bring to everyone!
More and more we are seeing social capital taking prevalence over human labor when it comes to production. There would be even less labor except that a major part of the economic activities today consists in producing perfectly useless products that are non essential to man. This is exactly what prompted the founder of Social Credit, engineer Clifford H. Douglas, to establish that, “more and more the purchasing power should come from dividends and less and less from wages.” Especially as we see productivity increasing, without any increase, and even in a reduction of human labor.
If this conception of economy were understood and adopted, wages would actually have decreased rather than increase because of the reduced hours of labor, but the Social Credit dividend would increase considerably. This would be satisfactory to everyone, since the sum of both (wage and dividend) would ascertain that production would be distributed, and that all needs would be met. Instead, because the Social Capital has been ignored and a social dividend refused to all, producers, wage earners and capitalists have gone from conflict to conflict, always finishing by raising their own respective remunerations, and incorporating into their own salaries and their own profits what should legitimately have been distributed as dividends to all. This thievery – because, in reality, this is what it is – this robbing of the dividend that is due to everyone, their own dividends included, transforms into cost, what should actually be given in gratuity to the people. An ever-increasing inflation, which satisfies no one, not even the thief, even less those being robbed.
Many other defects of the current financial system could also be gradually, and quickly corrected by an economy providing a dividend to all. The current concentration of producing power, just to mention one, that is in the hands of only a few powerful people, has brought about the development of vast industries, which have drawn the masses into crowded cities. Family life has been nearly destroyed. Night shifts have workers working around the clock. Sundays have become an average workday. All this, despite the fact that machines have facilitated the work of men! Is it no wonder then that workers in these conditions become irritable, robotized, depersonalized? A dividend to all would release these slaves of the present system, making it possible for them to even consider forming their own smaller, more personalized companies, working towards making of today’s progress, a servant to all instead of the giant “ogre” that it has become.
But, for the establishment of a dividend economy it would be necessary, first of all, to eliminate the moral defects of the current financial system. To work in support of a flourishing new economic climate that would be favorable to men, encouraging good relations between them.
Would the wealthier classes of society also have a social dividend? Absolutely, since they too, like the rest of society, are joint owners and co-heirs of the social capital.
Obviously, the dividend would be of greater service to the poor, as Fr. Lavergne understood so well… “What may seem as a crumb for the rich person, is a whole loaf of bread for the poor.”
But we might add that the fact that the rich would receive the same dividend as the poor may possibly do them some good. It could even lead them to correct their errors of judgment, a fault that is so common among those of their class – this is a different kind of poverty that wealth in dollars risks worsening.
In order to better understand this, let us say that the dividend for everyone would be $1000 per month, or $12,000 per year, and that Mr. Dupont’s large industrial investments bring him about one hundred times this amount per month, therefore about $1,200,000 per year.
Well, despite Mr. Dupont’s considerable personal income, he would still only receive, though ridiculously insignificant to him, the same dividend per month as his poorest neighbor. Before that, Mr. Dupont probably would not have hesitated to allot to himself all the merit of his profits. Maybe even musing: “I have done well for myself in life, I have succeeded. I have gained much. I skillfully placed my profits. This good fortune which I enjoy I only owe it to myself and I will surely continue to succeed.” It is easy then for Mr. Dupont to completely forget that a good part of his accomplishments were initially due in fact, to the preliminary existence of the natural resources created by God, and through processes of production which continued to improve over the ages and which were handed down through the generations by our predecessors, and all of this through no merit of his own.
But if our Mr. Dupont, though rich in dollars, has not completely lost all capacity to reason, receiving this humble sum of $1,000 per month just might cause a new note to sound in this hymn to his fortune: “I did not earn this $1,000 any more than any other member of the community. It is as much for me, as for the poor Joe up the street. It is a gift from God, a legacy of the past, to which I have not contributed at all. In fact, and this is something that I have never thought of before, it may be more than just my own merits that have gone into this annual nest egg of $1,200,000, to which I have been gratified. What would I have today if it had not initially been for the wealth of natural resources created by God for all men? And what if there were no ordered and established society allowing for a division of work, and the acquired competence of others to cause my investments to bear fruit?”
The social dividend is capable of bringing about an amazing conversion on the part of Mr. Dupont, whereas his large annual “nest egg”, worth considerably more, was only making of him an egoistic social blind-man, totally unaware of just where this was leading him in his life.
In a sense this demonstrates that the Social Credit dividend encompasses a kind of “sacredness”, by means of the material relief, which it brings to the poor, and by the salutary effect it can evoke in the hearts of others.
In any event, this dividend, based on the production that it represents and given freely to all without reference to any social status or acquired fortune, does it not remind you a bit of a common table, around which all may sit as brothers and receive with thanksgiving, what we were taught by Christ himself to ask our Heavenly Father for: “Give us this day, our daily bread”? (Matt. 6:11)