Social Credit and Australia

on Friday, 01 October 2004. Posted in Congress, Social Credit

Here are excerpts from the address prepared by Mr. Vic Bridger of Australia for our Congress in Rougemont, Canada, Sept. 4-6, 2004:

Credit-card debt and other

You will note that the title of the address is not Social Credit in Australia, but Social Credit and Australia. To draw a picture of Social Credit in Australia would be to draw a blank picture. The comparison between Social Credit and Australia is to show the comparison between what is Social Credit policy and the policies that are directing the Australian people.

Perhaps we might start with the very problem that confronts those who are dedicated to bringing about a Social Credit society. That problem is debt. The analysis by C.H. Douglas of the economic financial system produced the famous A+B Theorem, which indicated the deficiency between purchasing power distributed and prices generated in any one period, also indicated how that deficiency was being met. To put it briefly, the answer was through bank lending which, because of its very nature, are loans, and such loans create debt. Australia is in a position comparable to all western nations. Third World countries have a debt problem arising from different causes, but with the debt increasing for the same reasons.

To go further, it must be recognized that we are referring to debt as consumers. Whilst the situation of debt by consumers was negligible in Douglas' day, his predictions have been vindicated by the enormous increase in consumer debt that exists in Australia today.

In Australia, because of the tremendous increase in imports and the consequent record foreign debt, it has been said that many current-day consumers are living beyond their means, spending more than they earn, or consuming more than they have produced. Whilst on the surface this may seem very logical, it is far from the truth. In the first place, it is quite illogical to make such an assumption, and it is a physical impossibility to consume more than has been produced. It is only possible to consume that which has already been produced.

Much confusion exists in recognizing the difference between physical realities and financial reality. Whilst physically it is an impossibility to consume more than is produced, monetarily the mirage is created that gives a false appearance that it is possible. Through the process of borrowing, people do consume more than is possible on their current income, but it is not possible to consume more than has already been produced. What we say is that the income generated in any period of production is less than the prices generated in the same period. To meet the prices of the goods that have already been produced and for which incomes have been distributed, it is necessary for people to go into debt to obtain money to buy goods already produced. It certainly does not mean that by borrowing, people can consume more than has been produced. This is nonsense, and reflects the mind confusion between reality and the black magic of finance.

To put this into a pragmatic observation, it is only necessary to offer some figures relating to the changes in consumer debt in Australia, and rely only on the figures that relate to credit card-debt without even considering all the other forms of debt such as personal loans, mortgages, etc., that people enter into. These figures are taken from statistics provided by the Reserve Bank of Australia.




In other words, in the nine-year period, although the number of accounts have doubled, the cash advances have nearly tripled. The value of purchases by credit card have increased from $1,615 to $12,376 million, an increase of approximately 670 percent.

To these figures, we can add loans and advances by banks. These figures would not include just personal loans, but loans to businesses and overdrafts. The two latter figures would eventually find their way as payments to individuals as wages and salaries at some future date. Without these business loans and overdrafts, the deficiency in purchasing power would be even greater and vindicate the assertion of C.H. Douglas that a form of purchasing power has to be distributed outside the normal distribution of wages and salaries and dividends.

In March of 1995, loans and advances by the banks amounted to $246,791 million. By March of 2004, the figure amounted to $724,515 million. This represents an increase of $477,724 million in the nine-year period, or approximately 200 per cent.




The two graphs above, which relate to the economy of the United States of America, are shown to illustrate that there is no difference with regard to the growth of debt.

It can be clearly seen that the escalation of debt is occurring in all spheres of economic activity. Although 1971 is taken as the base, it does not take much imagination to consider what the graph would be if 1951 or 1921 was taken as a base.

All of this vindicates C.H. Douglas and Social Credit claims that the people are mortgaging their future incomes to purchase products of the past for which incomes were distributed. Social Credit is most definitely not operating in Australia. In fact, it is going in the reverse direction.

Employment and consumerism

The Australian Government, in introducing the extension of the retirement age, believes that it is desirable to keep people working. This view is shared by some newspaper journalists who have actually stated that, "apart from national security, the next most important job of the Australian Government is to keep the population in gainful employment."

The idea that the Government should give priority to employment is not a most important job. This is an indication of how far Social Credit has not permeated into the Australian society. As we know, Social Credit policies would work in the opposite direction. The aim is to reduce working hours and lower the retirement age to allow for the maximization of leisure time to allow for self-development of the individual.

At election time in particular, in Australia and in line with other western nations, there are always promises by politicians not based on reality and which are never kept. The point is that never is there a suggestion to allow people to share in the real wealth that is available as a result of THEIR efforts in association and as part of THEIR cultural heritage.

Since the second war particularly, people have been fed the benefits of a consumer society. Once there was no such thing as hire purchase, leasing, or lending by banks for consumption purchases. As a matter of fact, as far as individual consumers were concerned, there was no lending for investment, let alone for consumption. Today we have bank lending through Bankcard and a multitude of other lending for consumption purposes. ALL OF THIS IS DEBT. The masses have been deceived into believing that the goodies offered to consumers are a sign of prosperity. This is blatantly not true.

On the one hand, there was and is a demand for the individual to be submerged into a collective controlled by the State, which in turn is controlled by a few. On the other hand, there is the feeding of "cake" in the form of mass consumerism with its corollary, the rape of the earth's resources. This is being achieved together with the control of the masses by a few, through increasing debt, on the premise that mortgaging the future is the only way to prosperity. Thus control is complete with the necessity for "employment" to earn money to meet the debt.

The continuing efforts by the Australian Government, like all other nations, Conservatist or Socialist, to pursue a policy of full employment and their repeated claims that the unemployment rate is being reduced and that so many extra jobs have been created, is a realization of the very futility of such a policy. It is a sham that denies reality. Labour displacement is a continuing process, and the persistent adherence to a policy of full employment flies in the face of reality. It is also an affirmation of a policy to ensure that employment is a necessity to obtain money for a living. Any extra jobs created are of a casual or part-time nature, and dependence upon these means is a continuing control over the individual. Dictatorships and militant Communist and Socialist countries control the people with guns. In Conservatist countries, control is by money.

Outsourcing of production and servicing work

All those who are familiar with the policy of Social Credit will know the attitude to the question of exporting goods and services to earn money to pay for domestic consumption, both in consumer and capital goods. The latest trend is in exporting jobs. This is occurring at an alarming rate in the information technology industry, and has been occurring in the manufacturing sector for many years. The result is that many factories have gone offshore to take advantage of cheaper labour rates whilst denying secure incomes for the local population. It has now commenced in the accounting field where even Australian Taxation Returns are being prepared by companies overseas, particularly in India.

An economist may call this comparative advantage, but this is a myth. In Social Credit accounting, exports are regarded as a physical loss, and imports, a physical gain. Confusion again reigns between the physical and the financial aspects. Under current accounting, it is regarded as a gain when exports exceed imports because the figures are measured, not in physical terms, but financial. Assuming the current accounting method to be correct then, it follows that if a country exported everything produced, and imported nothing, it would be exceedingly better off. This is nonsense, and a little reflection and study would reveal the truth to those prepared to think about it. The simple truth is that the inability to assess the difference between physical cost and financial cost is a factor that cannot or will not be accepted by economists and politicians.

To argue on the basis of "comparative advantage", an orthodox economic concept is adhering to a false assumption. The real advantage is not based on the real physical resources, but on the labour cost per man-hour. Whilst there is a disparity between labour-rate costs into exports, which are imported into a country with higher labour costs, it is not an advantage as a result of efficiency or productivity. Australia's current deficit has reached record figures, and the majority of the imports are from cheap-labour countries. Whilst this situation continues, the whole concept of "free trade" is a farce.

The essence of control

The emphasis on consumerism is an increase in the acceptance of materialism in contradiction to what may be referred to as an increase in the quality of life. People have been blindly and willingly led into an acceptance of those things which they mistakenly believe are signs of prosperity, much the same way as one could expect of well-fed slaves. The individual in society has accepted the need to work longer hours and the need for a two-income household. We say individual, because that is the reality. It is not society that has dictated the rules. It is that someone or a collection of them have dictated the terms, and it is the individual collectively in society who has accepted these terms.

In Programme for the Third World War, Douglas wrote:

"Now, once you have surrendered to materialism, it is quite true that economics precedes politics, and dominates. It is neither in Bolshevism, Fascism, the New Deal and P.E.P nor the London School of Economics Fabian society that we shall find the origins of what we are looking for. These are ostensibly political systems, and derive from, rather than give birth to, economics. While this is obvious and axiomatic, it is not so obvious, although equally axiomatic that the principle works both ways. That is as much as to say, if you can control economics, you can keep the business of making a living the dominant factor of life, and so keep your control of politics — just that long, and no longer."

No one would seriously argue that at the present time the "business of making a living is not the dominant factor of life." How did this situation arise? Who is responsible for the economic conditions that prevail that forces farmers off farms, or that create the necessity for "downsizing", or to put it very simply, removing the means of obtaining a living by reducing employment? We are not here arguing on the necessity for employment, but rather the control that is exercized through the reality that, under our existing economic and financial system, employment is the only means available to the masses to obtain money that is required for living.

In Australia we have politicians continually boasting about how many jobs have been created, which are, in the main, only part-time or casual jobs. We have politicians continually calling for the creation of new jobs. Yet, not one politician has declared the necessity to accept technological advancements or increases in productivity and have the benefits passed to those who have been sacked, fired from their jobs, or "downsized", to use the euphemism. Emphasis is on the need to work for the "dole" which is a means to have the community divided against itself because of the fiction that it is the 'employed' who are paying taxes who are keeping others on the dole. It is a very neat philosophical approach to "kill two birds with the one stone," as the saying goes. On the one hand, the unemployed have no option but to accept the handouts and the conditions that go with them. On the other hand, the employed are continuing their efforts to maintain the business of making a living and paying their taxes, which is an added penalty, and which places further constraints on their ability to live.

In Australia, together with politicians who give vent to the need to provide employment, with an almost fanatical fervour, we have the retailers offering to sell on NO DEPOSIT – NO REPAYMENT - INTEREST FREE FOR 36 MONTHS in order to attract further sales. Such sales require people to mortgage their future incomes and, at the same time, place themselves in bondage to ensure they work to obtain an income. This feeds the waste in planned obsolescence and the orders to keep producing and the need for employment.

It has been completely overlooked, or possibly not even thought of, by those advocating employment as a top priority that it is only a means to obtain another means, i.e. money. Money is only a means by which people can obtain the necessities of life, and so long as there is a control over those means of both employment and money, there is a control over the lives of people.

Australia, in its economic operation, is far removed from the policies advocated by Social Credit and, unfortunately at the present time, appears to continue along present lines for some considerable time.

Money as an instrument of policy

There is absolutely no room for arguing against the statement: "money is an instrument of policy." Without money, it is not possible to live unless through charity. In Australia we have scenes, particularly in Sydney, where volunteer workers provide the homeless with food every morning. I am not saying that this is the norm, but the situation does exist and, no doubt, exists in other areas of Australia but without any publicity.

There is a clear indication by Douglas that the money system was and is being used as a tool of policy and as such is in direct contrast with Social Credit policy. It is therefore as clear as night follows day that this policy must be governed by a philosophy which also is in direct conflict of Social Credit philosophy. It is based on a philosophy long since discredited as being an incorrect interpretation: "If they will not work, neither shall they eat."

In Australia there is an incessant cry for more jobs, to retrain people made redundant in the work force either through increased technology, or the loss of their jobs because companies have re-located overseas. Our leaders in Australia are blinded by orthodoxy to the extent that they cannot or will not accept reality. They do not acknowledge what is the real objective of economic activity nor the policies that would realize these objectives. Self-development of the individual for them is to ensure that people are trained and retrained for work, not for leisure. Social Credit policy places the priority on self development to enjoy leisure and to utilize the abundance that has been provided without the necessity to work for money.

It is in this grey area between philosophy and policy that many, including those who would genuinely support the philosophy of Social Credit, become confused. They place the emphasis on the priority of taking control of the money system above that of recognizing the objective. This objective is contained in the philosophy in the relationship between individuals in association, and recognition of the cultural inheritance and the increment of association as being part of the right of every individual. These are above that of the group; the institution; the organization; and all of those abstractions such as the nation, the people, or society.

Consumers and their choices

Although we live in a world of abundance, and Australia is abundant in natural resources, not only is that abundance denied to those who participate in the production process, but it also denies the existence of potential abundance, which would be of benefit to millions in underdeveloped countries. The denial takes the distinct form of restrictions based on orthodox assumptions of scarcity, and the restrictions of the availability of money and how it is distributed. In Australia there is little understanding of the question of restrictions, although many know that they do exist, but do not understand why.

The vital problems that need to be addressed can be stated as a true freedom of consumer choice accompanied by an effective demand together with the false policy of "full employment", which is one of the causes of the wastage of natural resources. In one sense, the consumer is restricted because of a lack of purchasing power, and makes choices based on that lack. On the other hand, goods that are chosen as a preference, are chosen because those goods were available to commence with and represent not so much a preference in the correct sense, but because the consumer has a restriction in the way of a limitation on the money available to spend. The goods purchased are not so much a preference in the first order, but rather a second or third preference. The eagerness of the seller to meet the demands of the consumer is just not a reality. The seller is selling goods that have been produced prior to any demand. The demand is created through advertising, marketing, and other devices to lure the consumer into buying. There exists in Australia a barrage of advertisements on TV, offers of buy now, pay later, interest-free offers to purchase now, and offers of free gifts or money back offers.

Vic Bridger

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