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Increased Automation, Blessing or Calamity?

Written by Louis Even on Sunday, 15 July 1962. Posted in Social Credit

Progress through the centuries

A beaver building his hutFor centuries, beavers have built their dams using the same technique. They do so by instinct, not by intelligence. Man, in contrast, has improved his production techniques over the centuries.

We admire, and rightly so, the marvelous work of the beaver, the bee, the ant, and many other animals which seem to be endowed with an astonishing know-how.

But if we had lived 50,000 years ago, we would have seen the beaver building his dam in exactly the same fashion as he builds them today. We would have seen the bee going from flower to flower gathering the materials with which to make its honey, and storing it away in a hive — exactly as it does today. And so with the other animals. Their accomplishments may seem marvelous to us; but they are no more marvelous than they were 50,000 years ago. Success, yes; progress, no.

Such is not the case with man. Since his creation, man has constantly striven to increase the efficacy of his labours, to obtain the same result, or even greater results, with less labour and less expenditure of time. For centuries he has learned to use tools, to perfect them, to combine them into machines of all sorts, machines which with time have become ever more ingenious. He has learned to make use of the muscular power of horses and other animals; to harness the force of streams and waterfalls to turn his mill stones, and the force of the wind to set machines into motion machines or to enable him to conquer the seas.

This progress has been greatest in the past three centuries, transforming energy from diverse sources and applying this energy in a thousand different ways with greater success. The energy derived from compressed steam, from electricity obtained by transforming the power of falling water into electrical power, the energy from fossil fuels, with the invention of the internal combustion engine. We have now arrived at the age of computers and robotization.

Mankind went from the age of the tool to the age of machinery; then from mechanization to motorization.

Towards automation

Up until recently, machines, endowed with energy other than human, while they considerably eased man’s labour, still required man’s presence and his actions to direct them, to supervise them and control their different operations. The applications of a new science, electronics, caused progress to make a further step forward, by introducing machinery that would supervise and control the machines that produce.

The era of automation has arrived; it is already here and progresses rapidly, dismissing the work done by man in production, Absolute automation would mean production without the need for any employee. Examples of this already exist. Progressive automation means total production that requires fewer and fewer hands.

Not welcome — why?

By freeing man, automation should be hailed as a blessing. Yet, the working world regards it with apprehension. Public figures are also worried by the prospect of the possible effects that automation might have on employment.

Why then this cold reception, this hostility towards manifest progress in the field of production. In all logic, shouldn’t the response be the exact opposite?

Housewife doing laundry1950’s publicity for a brand of automatic washing machines

Let us say that Mr. Smith buys his wife one of these automatic washing machines. The weekly laundry will now take up only one-quarter of a day instead of a full day as before. And not only that, Mrs. Smith is freed from the task of standing by and supervising the machine. Once she has placed the clothes in the machine, put the soap in the soap compartment, adjusted the controls for the hot and cold water, the machine will do the rest. Automation will do the rest. The machine goes from soaking to washing, to rinsing to wringing, and will automatically stop when it is time to take the clothes out.

Is Mrs. Smith likely to be saddened because she has more free time for herself? Or will her husband find her new tasks to perform in the name of “full and universal employment”? Obviously not. Neither he nor she is quite so stupid!

We might ask ourselves why the advent of automation in industry was not received with the same joy and relief as it was by Mrs. Smith?

Why? — Because common sense still reigns in home economics, in matters having to do with the home; whereas in the economic affairs of society, idiocy reigns supreme.

An outdated financial system

One could argue that Mrs. Smith should rejoice since automatic appliances decrease her workload and give her more leisure time without punishing her, while automation in industry penalizes those it liberates. For the employees who are replaced by automation, this is not a vacation, it is a dismissal. It is unemployment with the loss of their salary. How will they buy bread for their families?

This question highlights the stupidity of the system. Machinery, automation, reduces employment, while maintaining or increasing production. Yet, men are required to work before they are allowed to share in this production.

It is this condition, this regulation that contradicts progress. On the one hand, through progress, an attempt is made to free men. On the other hand, and at the same time, we want men to be employed to earn money to make a living since we have to pay for the products we ourselves do not make.

Whether goods be the result of human labour or the result of automation, the fact is they exist. These products were made to satisfy human needs. They must therefore be made to answer needs. If products are to reach their end, if they are to be distributed, money must be distributed with respect to available products, and not only in respect of the existence of work.

Everyone needs money since everyone has needs. Everyone, all individuals, not only those who are still employed in production.

The silliness of the system lies in our insisting that money be distributed only through employment. The system by which money is distributed is out of sync with progress. While tremendous progress has been made in production, little progress has been made in the financial system. The production system is modern. The financial system is outdated, suited only to a beaver’s static economy, but hardly suitable to a progressive economy of reasonable men.

The policy of full and universal employment is totally at odds with progress, for the latter has as its end and effect to liberate men from the necessity of being employed in production.

A social revenue to all

What we need then is not full employment but a full revenue. We do not need to have everyone employed in production; but we do need to have everyone endowed with a revenue, whether they work or not. Of what avail is it to strive for employment for everyone when the production system has no need of everyone being employed? But we do need money for everyone, since everyone needs purchasing power in order to live.

But, you will object, if everyone, unemployed as well as employed, are in possession of a revenue, who, then, is going to want to work?

The question is not asked properly. As long as automation has not replaced man completely in the field of production, there is no question of everyone having equal revenues. Those who are employed in production will always have the right to a reward for the work they do. They will receive this reward, their salary or wages, in addition to what they and everyone else will receive for being entitled to the fruits of progress.

In other words: the distribution of a periodic dividend to all added to the employees’ salaries — the sum of the two will make up the total purchasing power with which to draw, effectively, upon the total production. This is the Social Credit formula. (It is important not to mistake confuse the Social Credit doctrine with political parties that usurped the name.)

That part of purchasing power which is made up of salaries will be distributed by employers just as it is today. The part made up of dividends will be distributed by a National Credit Office, representing society.

Society would distribute to all its members a share in the fruits of progress. This is fair since progress is not bound to employment, a fact proven by automation which increases production while it decreases the need for employment.

Progress is a common good. It results from the accumulation of the know-how, of the discoveries, of the techniques that were developed and perfected by past generations. It continues to grow and is passed on from one generation to the next. It is an inheritance that belongs to everyone as co-heirs.

The financial institution that would distribute the dividend in the name of society could either be the Bank of Canada or a National Credit Office established for this purpose. A Provincial Credit Office could also be set up in each province.

Keeping up with progress

This method of distributing purchasing power would be in complete harmony with progress, whatever degree of progress might be achieved in production.

Let us imagine, for a moment, that all production in Canada is made entirely by automation leaving only one man to push the buttons that would activate electronic machinery. Would anyone maintain that only he be entitled to receive money? How would the other millions of unemployed individuals go about obtaining a share of these products which are necessary to life?

We would have to rely on dividends: The universal distribution of a periodic amount of money that would allow individuals to choose what suits them. This sum of money would be used to tell the push-button production what it must produce: goods that answer freely expressed needs.

As the money comprising these dividends was spent, it would be cancelled out as purchasing power and it would be returned to the financial office from whence it came. And the operation would be repeated periodically. This issuance of dividends would in no way obstruct the payment of a special reward, a large one at that, to the only remaining employee.

Automation to this extent will never come to pass. But we are possibly half-way or quarter-of-the-way there, or maybe closer. Salary as the only way to distribute money no longer corresponds to the reality of the productive system. The distribution of purchasing power already needs to follow two paths: salaries for the employed and dividends to all.

The more progress and automation exempts us from work, the greater the part played by the dividend as compared to the total purchasing power.

Douglas conceived the principles of Social Credit in 1917. The first book he wrote on the topic was published soon after WWI, in 1919, under the title of «Economic Democracy». His analysis of the financial aspect of the economy, and his proposals to adapt finance to reality, have since come to be known as Social Credit.

If at that time (in the 1920’s) an attempt had been made to introduce the dividend at the rate progress was taking place, instead of relying on wages only, on repeated wage increases that will not catch up to the price increases, a great deal of conflict between worker and employer could have been avoided.

The rise in the cost of living could have been avoided also since the social dividend is not included in cost-price accounting. Salaries would have remained the reflection of the effort made by the workers, and dividends would have increased as progress increased.

Total income would have increased so as to reach total production capacity. People in dire need would no longer suffer from a lack of purchasing power. All of the socialist tax measures that were put in place to rescue the needy would have been unknown, and better results would have been attained. We would have an economy that relates to every man’s needs and to the increased capacity to satisfy these needs.

The refusal to recognize: Social Credit — by politicians, by trade unions and other groups, has led humanity to all kinds of disorders, among which the Great Depression that preceded the war, the war itself, and other crises that made life unbearable while material progress, made possible by increased production, should have made our lives more serene, and should have removed the unceasing worry for our daily bread, and encouraged better relations between men.
With a dividend to all, growing at the rate of progress, progress becomes a blessing for all. Without the dividend, confusion, difficulties, clashes and chaos remain.

Honoré de Balzac“The final battle for Christianity will be over the money problem, and until that is solved, there can be no universal application of Christianity.” — French novelist Honoré de Balzac (1799-1850)

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