In his new enyclical "Caritas in Veritate", Pope Benedict XVI wrote in Paragraph 66: "A more incisive role for consumers, as long as they themselves are not manipulated by associations that do not truly represent them, is a desirable element for building economic democracy."
Scottish engineer Clifford Hugh Douglas (1879-1952), who conceived the Social Credit financial proposals, wrote in "Credit-Power and Democracy": "Social Credit is a socio-economic philosophy wherein consumers, fully provided with adequate purchasing power, establish the policy of production through exercise of their monetary vote. In this view, the term economic democracy does not mean worker control of industry. Removing the policy of production from banking institutions, government, and industry, Social Credit envisages an ‘aristocracy of producers, serving and accredited by a democracy of consumers.’"
Before being known as Social Credit, Douglas’s financial proposals were in fact called "Economic Democracy" (also the name of the first book of Douglas on the subject). Here is an article of Louis Even that explains how a Social Credit system will be true "economic democracy", in which there will be "a more incisive role for consumers", as the Pope wrote.
Major C.H. Douglas, the genius who invented the doctrine and propositions of Social Credit, published his first book on the subject in November of 1919. It was entitled Economic Democracy. It was only at a later period that his philosophy was christened "Social Credit".
However, the two terms are perfectly compatible with the economic theory of Douglas. In fact the entire matter concerns society’s credit (Social Credit), the monetization of which should serve society and its members rather than indebt and impoverish them. But this doctrine also speaks about a true economic democracy.
On the political level, the word democracy sums up the idea of a government of the people and for the people; of a political organization in which the people freely choose their governments. And also a system in which they can make clear to their governments how they expect their public affairs to be administered.
Yet, for a great number of people the word democracy signifies almost exclusively nothing more than the instrument, the periodic elections by which the representatives of the people are chosen for a specific term. For these people, perfect democracy is achieved when universal suffrage is achieved; when everyone (all the adults at least) has the right to vote. Everyone — does this not translate adequately the sense of "demos" (the people)? And when the people choose their own government, is this not proof that they rule "kratein" since they delegate this ruling power?
Now, whether we consider democracy under one or other of the above two aspects — as obedience to the will of the people or as a voting mechanism — if we transpose the term democracy to the sphere of economics we find that it fits perfectly with the doctrine of Social Credit.
The economic sphere
The economic sphere is one of needs, and the goods to fill these needs. Economic activity understands the production and distribution of products and services, both to private individuals and to the community.
In the political sphere the individual is the citizen. In the economic sphere he is the consumer.
In the political sphere the citizen expresses his will and demands results from the government and other public bodies.
In the economic sphere the consumer addresses his requirements to the productive system of his country. From agriculture and allied industries he asks nourishment and from the textile industry, clothing. He asks lodging from the building trade and from doctors and hospitals he requires care for his ailments. And so on with all other branches of industry and commerce.
The productive system is the total of all such activities from which flow goods and services. It is the capacity to produce.
The consumer gets what he asks for when his request is accompanied by the instrument which renders this request efficacious, namely money or purchasing power. Purchasing power is the power to pay.
Productive capacity makes it possible to offer goods and services. Purchasing power makes it possible to obtain these goods and services.
Capacity to pay and produce
If the capacity to produce fails, then the capacity to pay does not mean anything. Even with a sack of gold you can not buy bread at the North Pole, because there is neither bread nor any possibility to grow wheat there.
On the other hand, if the capacity to pay fails to keep in step with the capacity to produce, then production stops as long as goods remain unsold. This occurs even if needs remain unfilled. This is often the case in our country where produce is abundant. Families with no purchasing power must do without goods that they need even if these goods are in the store. The cries of the needy, no matter how loud they are, fall on deaf ears if the poor cannot pay.
So we see that it is not human needs that decide productive activity, but the possession or lack of money.
This is what we call a financial dictatorship.
In economics as in politics, dictatorship is the contrary of democracy. There is no question of economic democracy when the individual, as a consumer, can no longer obtain from the productive system the goods which he has a right to expect. A man cannot feel that he is being treated in a democratic manner when he must go without necessities in front of an immense productive capacity, simply because he is being denied the power to purchase goods.
A country which calls itself democratic and yet accepts the continuation of this financial dictatorship has a curious idea of the meaning of democracy. The tyranny of money weighs down on the lives of individuals and families; all year it is a hindrance to the administration of our institutions and public bodies. The government which permits such a state of affairs to exist in the country over which it has jurisdiction is hardly a democratic government even if it was born with the ballot box. It is a government in servitude to a dictatorship.
Under a Social Credit system the capacity to pay would coordinate with the capacity to produce. One would go with the other.
The capacity to produce would not be stopped or restricted because of the inability to pay. This is because the ability to pay would be adjusted to the facility to produce goods required by existing needs.
We would not continue to have the situation of human needs with all the goods that are available. Production and distribution would not be ruled by money because money would be adjusted to the needs of production and distribution.
This would be true economic democracy. As long as the productive system could meet his demands, the individual consumer would receive all the goods he needs to produce and services to which he has a right in order to live decently.
Furthermore this democracy would be complete; it would apply to all consumers (that is to all citizens) of every age and condition. This would be a universal, economic suffrage, more universal than a political suffrage. It would be a suffrage exercised each day.
This economic democracy would be exercised through the medium of true economic ballots. By means of these ballots the consumer would select, not the candidate of his choice, but the goods of his choice. These economic ballots are called dollars in Canada.
Each dollar is a ballot allowing the bearer to vote for one dollar’s worth of products or services according to his choice. The more of these economic ballots (dollars) that he has in his pocket the wider the range of products open to him.
And in order that this economic suffrage may be universal, each individual as a consumer must possess these ballots which permit him to vote for such-and-such goods.
Social Credit achieves this end because it gives revenue to each individual irrespective of age, sex, occupation, skin color, or religious and political beliefs.
This basic revenue, this primary right to draw on the productive capacity of a country should be, at the very minimum, sufficient to procure the necessities of life. It is inadmissible that any citizen should want for the necessities of life in a country of overabundant production.
In the Social Crediter’s vocabulary, this basic revenue that is granted on the sole condition that one be a member of society is called the "social dividend." It is national or provincial, depending on whether the system extends to the nation or to the province. This dividend is the real instrument of universal economic suffrage.
Dollars earned as salaries, fees, profits, or industrial dividends are economic ballots also, but they are conditioned by the circumstances under which they are earned. Salaries are tied up with employment. Not everyone can be employed. Children, for example, cannot work in a factory. This includes also the sick, the old people, homemakers, and others who could be employed but have been replaced by machines. These machines produce goods more efficiently and in greater quantity than it is possible for humans.
The universal dividend is the only economic ballot which is truly democratic. Therefore, Social Credit is the most advanced theory of economic democracy.
What is more, this system takes nothing away from private initiative or enterprise. The economic ballot demands results — goods which will meet needs. But it leaves the productive system free as to the manner of producing these goods. The modern technique of producing goods is efficient, but it would do even better were it not for financial hindrances. If it were not for the lack of these economic ballots (dollars), the goods would flow freely to meet the demand. Distribution would be as efficient as production. And would not this ideal be as efficient and greatly desired, by the producers and consumers alike?
It is wrong to blame private enterprise for something which is the fault of finance and not production. Instead of seeking to change the productive setup, steps should be taken to revise the financial system. The financial system should be socialized, not the productive system — for the good reason that money by nature, is social. It is only by an act of perversion that money has become the instrument of abuse.
Social Credit then, would replace the present financial dictatorship with a true economic democracy in which the consumer (who is after all, the reason why production exists) would be the real master of any program of production — of the program, not the methods, of production. The consumer would decide what to produce, not how to produce it. Production would obey the consumer, desiring nothing but to be allowed to meet his demands.
The efficiency of this economic democracy would surpass all that has ever been experienced as regards to political democracy.
Since we have made the comparison between the current political democracy and the economic democracy that is Social Credit, between the political ballot and the economic ballot of Social Credit, it would be interesting to compare the efficiency of political and economic ballots.
We will leave aside the question of quantity or frequency. Obviously, the citizen gets only one political ballot and that he receives at election time when he must choose one of a number of aspiring candidates to represent him in the government. Between elections, if the citizen doesn’t get what he expected from the government, he cannot have recourse to a vote. He must seek other means which as yet he does not know how to use. For this he must wait, chagrined, until the next election when he can trip himself up again.
But with the economic ballot it is the contrary that takes place. He should have it or them every day, since he has needs to fill every day. But he does not get the products to fill these needs until he deposits his ballot (dollar) on the merchant’s counter.
The chief difference, however, is in the efficiency. When you put your political ballot in the ballot box, it is marked with a cross indicating the candidate of your choice. But it can very easily happen that on election night, you get the candidate that you do not want.
You asked for Peter to be your deputy, and Paul got elected. Or if you do get Peter, then the people who voted for Paul are not happy.
But your economic vote always gives you what you want providing you have an economic ballot. And it gives your neighbour what he wants even if it’s something contrary to what you want. There is a diversity of products to answer to a diversity of tastes and every taste is satisfied when the economic ballots are available to everyone.
If you take your ballots (dollars) out of your wallet and say to the shopkeeper "this is for butter", then he will not give you jam. If your neighbour takes out his ballots (dollars), and says "jam please", the merchant will not hand him butter.
Your vote is thus always effective: for black or brown shoes, a pair of trousers, a trip on the railway, a TV set or a coffin.
There’s no question of a winning majority or of a losing minority. Your economic ballot gains for you what you want, what you as an individual choose.
And when you have picked out something, the merchant replaces it by ordering it from the producer, either industrial or agricultural. And industry makes the products that are in demand, not the products for which no one votes.
In this fashion, your choice determines what is to be produced but not the manner of producing it. Your choice tells the farmer and the industrialist what to produce without any mention of "how". The "how" is not your business; it is a matter for the producer. Moreover, modern production could be in no way embarrassed to produce anything that might be demanded of it.
And so everything depends upon whether or not we have these ballots, or dollars. He who does not have them possesses nothing. He cannot vote for produce. He exercises no influence on the production of his country. He does not live in a state of economic democracy. And under these conditions, political democracy has little meaning for him.
Men and women, citizens who are deprived of economic ballots and remain at the mercy of charity — such is the case for many under our present dictatorship of money. But such a condition would not exist under a system of true economic democracy, under the organization of a Social Credit democracy.