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One Statement — Two Fallacies

Written by Louis Even on Tuesday, 01 April 1958. Posted in Social Credit

The Canadian Labor Congress, thoroughly aroused by widespread unemployment, especially in the forestry and wood industries, has drawn up a memorial.

If we are to believe what we read in the newspapers (Le Soleil, of Quebec city, among others):

"The brief asks the government to make our economic regime reflect the true purpose of its existence, which is to procure for man the basic means of filling his wants, namely, employment." Now, note the two assertions in this statement:

1. The primary purpose of an economic system is to furnish employment.

2. Employment is the basic means whereby man satisfies his wants.

Whoever authored this statement — the C.L.C. or the journalist — has been guilty of two fallacies.

Let's begin with the second. The basic means whereby man satisfies his wants is not employment. It is the use of things which directly fill those needs. The basic means of satisfying hunger is eating; the basic means of sheltering oneself from the elements is living in a well-built house. You can be employed 24 hours a day, but if you don't eat, you won't ease the pangs of hunger. Needs are filled through consumption, not through employment.

The second assertion is equally erroneous. The primary purpose of an economic system is not to provide employment, but to deliver to men the things they need in order to satisfy their wants. When an economic system delivers enough goods to meet human needs, then, and then only, does it justify its existence. In the words of Pope Pius XI (1931) in a page of Quadragesimo Anno:

"Then only will the economic and social 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.".

"To provide goods for all" is the true end, the purpose of an economic regime.

Douglas, the founder of Social Credit, says, in his preface to Credit-Power and Democracy:

"The business of an economic system is to deliver the right goods to the right users."

But then how does employment come into the picture? If the memorial had used the term "work" (which does not necessarily mean the same thing as "employment"), then it might be argued with some reason that work is necessary in order to produce goods. But even so, an economic system exists to produce and deliver goods; work is only a means of achieving that end.

We might say that an economic regime is the more perfect the less it has to depend upon such a means. And we could amplify by adding that the ideal economic system is that which produces and delivers the goods with the least expenditure of material, labour and energy.

And what of the perfecting of methods and machines, the ever-quickening march towards full automation in the field of industry and commerce? Logically, such progress should make man free, free to devote himself to activities other than the merely animal pursuits of feeding, clothing and sheltering the body. Quoting Douglas again (in Warning Democracy):

"The economic system is simply a functional activity of men and women in the world... Economic organization is most efficient when it most easily and rapidly supplies economic wants without encroaching on other functional activities."

Total employment would seem to tie man down to crassly material things rather than to liberate him from them.

The great and grievous defect of our economic system is, that purchasing power, the financial means of getting hold of products, does not match mechanical progress. Progress tends to throw men out of employment by transferring the work he does, to machines. But instead of taking this quite logical factor into consideration, we cling desperately to a system which makes income depend upon employment.

As this tremendous progress in technique and machinery makes employment unnecessary, it generates in turn the necessity of finding some source of income not dependent upon employment. Such a revenue, Social Credit presents in the form of the dividend. It is a social dividend because progress is what we might call a social capital which is rapidly becoming the chief factor in production. With the dividend, the man now employed at work forced upon him would become the man engaged in freely-chosen occupations.

Now this dividend, this income unrelated to employment, does not automatically write "finished" to that income received by an employee from an employer as a wage or salary. The dividend is a revenue given to each individual, employed or not, by reason of his being a capitalist, a sharer in the heritage of treasures amassed and transmitted from generation to generation through the centuries.

When will the unions — the C.L.C. and all the others — realize and accept this aspect of the economic picture? When will they stop regarding man as a creature meant only to be employed, with the right to live only as long as he is employed? All citizens, regardless of age or condition, are fellow capitalists, having the right to a periodic dividend from a capital which continues to grow and become ever more productive of wealth.

(Translated from Vers Demain by EARL MASSECAR).

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