French flagpolish flagspanish flag

A monthly dividend for each citizen

Written by Louis Even on Thursday, 01 October 1959. Posted in The Social Dividend

Among the financial proposals of Social Credit there is one which arouses much enthusiasm among some and positively scandalizes others; namely, that a regular dividend be issued to each and every member of society. It is this dividend which generally comes to the fore when the topic of Social Credit comes up between people who know anything about Social Credit. And, in 1935, when Albertans voted for a provincial Social Credit government, they voted for a dividend of $25 a month for each citizen of Alberta.

Salary and dividend

The founder of Social Credit, Major Douglas, proposed:

"That the distribution of cash credits to individuals shall be progressively less dependent upon employment. This is to say, that the dividend shall progressively, displace the wage and the salary."

A salary is a sum of money paid by the employer to his employee in recompense for work furnished by the latter.

The idea of salary, then, implies both work and employment.

And the dividend? The dividend is a sum of money paid to a capitalist in acknowledgement of invested capital become productive. As far as the idea of the dividend is concerned there is no implication of the idea of either work or employment on the part of the one receiving the dividend. The invested capital has served to initiate and accomplish production. But it is not the capitalist who actually put it to work; that is done by those who work on the actual process of producing. This, however, does not prevent the capitalist from claiming, and this right is commonly acknowledged, a recompense for his capital; namely, a dividend. He gets this dividend by the same right that the employee gets a salary for his work.

Why did the founder of Social Credit say that the dividend should progressively displace the salary? Because the volume of production is coming to depend less and less upon the effort put forth by employees and more and more upon progress, upon applied science, the perfecting of machines and techniques, upon the application of energy other than human, such as electricity, steam, petrol, etc.

These things which are replacing more and more the employment of human energy in production, are in fact, a true capital. Not a money capital, it is true, but a capital of things which are more essential to production than is money.

It is often said that money capital without work produces nothing. But it is equally true to say that money capital plus human labor will not produce a fraction of the production which is brought forth by machines, motors, inventions, the perfecting and application of techniques and all those things which have been handed down from one generation to another as a common heritage which is continually growing.

If salary is the recompense for human effort, it has come to count for less and less in modern production; if the salary is intended to pay for the result of this effort, then it is less and less capable of paying for a production which is something far beyond the result of human labor.

Furthermore, it is true that salaries, even if doubled and tripled in the course of the last fifty years, are quite unable to keep up with prices. That is simply because the price includes more than the cost of salaries; it includes the expenses of machinery, the cost of progress, and many other things. And the more automatized industry becomes so much the less can salaries pay for production.

If automation becomes complete in industry and all production is automatic without the use of human effort, where will salaries come from? There'll be plenty of production but what of salaries with which to buy it? How then will the individuals be able to share in this production unless some new form of income other than the salary is introduced? It is quite true that automation will probably never reach the point where it will exclude all human activity. But progress is tending in that direction and it is the aim of science to exclude as much as possible the use of human effort in industrial activity. This process is going ahead with ever quickening acceleration. But no move has as yet been made to introduce some compensation for the salaries that are disappearing in the same measure that automation takes over in production. That is the reason why we have the growing problem of how to keep products flowing from production to consumer.

Social Credit says: "The dividend must progressively displace the salary." Progressively means, and again according to Douglas, in the measure that production increases in relation to the number of men and hours necessary to effect it. For a long time, now, this process has been going on and as yet we have found no corresponding means of increasing purchasing power except by increasing the salaries of those who work on production. But an increase in salaries means an increase in prices; which simply cancels out the intended effect of increasing purchasing power. Furthermore it involves commerce in a contradiction, for the easier and the more quickly production can be effected, the lower the prices should be.

The dividend — money not tied to employment — consequently becomes a necessity if we want the total purchasing power of the population to correspond to the amount of production being offered to the population.

Who should get the dividend? When we speak of salaries, no one asks: "Well, who should get salaries??" It is obvious that the salary, which is a recompense for work, should go to the employee.

When we speak of the dividend, it is equally obvious that the dividend should go to the capitalist, to him who has capital active in production.

Since the total amount of salaries to employees, plus the total amount of dividends to those who have invested money in production, is not enough to meet the total sum of prices, to whom should that money, which is necessary to make up the lack of purchasing power, go?

Crediters answer without any hesitation: To everyone!

To everyone, first, because it is not money which is paid out for work, nor is it money which is a return on an investment. Hence it does not pertain more to employees or investors than to the rest of the population. To issue this extra money to one section of the people and not to the rest would be rank injustice.

This extra money should go to everyone for another reason. Progress is a heritage passed on by, and added to by, one generation after another. It is a common good which has become the greatest and the most important factor in modern production. Each and every individual is an heir to the same degree in this inheritance.

For a dividend of $25 a month

And how much should the dividend be? It should increase progressively, Douglas says; it should increase in that measure in which employment, inversely, plays less and less a part in the volume of production accomplished. That is, as employment becomes less a factor in production, the dividend should increase and the salary should become less and less a part of purchasing power.

We do not hesitate to claim the amount originally claimed by the Alberta government in 1935, namely, $25 a month for each citizen, since the fraction of progress-capital, of which we have been speaking, is still far greater than the fraction of production which would equal the total amount of money representing a $25 monthly dividend paid to each and every citizen of Canada.

$25 a month is $300 a year. 17 million Canadians makes 51 million dollars a year in dividends, less than a fifth of the total annual production. But the progress-capital accounts for considerably more than a fifth of modern production. Take out this capital and production wouldn't be a tenth of what it is.

$25 a month to begin with, then, is a very modest amount, especially if you consider that this increase in purchasing power will increase production still further, especially the type of production which meets the immediate needs of families and individuals.

The term, progressively, used by Major Douglas is quite appropriate. Once a beginning has been made, two factors come into play to determine the exact nature of this "progressively":

1. The increase in the volume of production relative to the amount of human labor needed by producers;

2. The progress made in the social thinking of the people, in their mentality, which will bring the producer to find as great an inducement to produce in the universal dividend as in the financial recompense which he receives for his work. As for the first factor, material progress will continue to increase without cease, always providing some gigantic catastrophe does not plunge man back into his primitive beginnings. As for the second factor, social progress, Social Credit education has already made great contributions, and a Social Credit financial regime will cause a gradual development in this new outlook and way of life.

With reference to this latter element, Major Douglas remarks that the modern producer finds two stimulants in his work: remuneration for his work and the pleasure he finds in transforming raw materials into finished products. With the advent of Social Credit, he says, the first stimulant decreases in importance, and the second become increasingly important, especially where you have workers or producers who are engaged in work which they have freely chosen. In the measure that progress makes employment of individuals less necessary, to that degree will competence and ability predominate in production. But the others outside production will still benefit from the fruits of production. What will result from this condition of society has been aptly stated by Major Douglas:

"The essential nature of a satisfactory modern co-operative State may be broadly expressed as consisting of a functionally aristocratic hierarchy of producers accredited by, and serving, a democracy of "consumers."

The consumer, that is, all society, will be the true master of production programs through the demands, which he makes by his purchases, upon the production system. It will be the consumer, the economic democrat, who will dictate what shall be done; it will be the producer, the expert, the aristocrat of service, who will place his ability to execute, at the service of the consumer.

These are the new horizons which Social Credit opens to society, a vision which, even before it has been realized, will have the effect of tranquilizing the dog-eat-dog economy to which the existing financial system has driven us.

About the Author

Leave a comment

You are commenting as guest.

Your Cart

Latest Issue

Choose your topic

Newsletter & Magazine



Go to top
JSN Boot template designed by