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The centenary of Social Credit

Written by Louis Even on Saturday, 30 April 2016. Posted in Social Credit

Douglas conceived Social Credit in 1917

The same year as the Apparitions in Fatima


Clifford Hugh Douglas (1879-1952)Clifford Hugh Douglas (1879-1952)

The Social Crediters of MICHAEL will begin their year of apostolate (2016-2017) at their annual Congress that will be held in Rougemont on July 30-31, 2016. On this occasion, they will celebrate the 100th Anniversary of Our Lady’s Apparitions in Fatima, Portugal, in 1917, and the 100th Anniversary of the Social Credit concept.

It is a man of genius, Scottish engineer Clifford Hugh Douglas, who discovered this brilliant idea. He conceived and grouped together a series of principles that make up Social Credit. They were first published in December of 1918 in The English Review and later, in 1920, in a book titled Economic Democracy. But the work of analysis, synthesis and the writing of his book go back to 1917. The preface, which he wrote, is dated November 1919. In it, he says that the biggest part of the book was written under the difficult conditions of World War I.

For several years now, the Michael Journal has pointed out that the two most powerful weapons against Communism —Fatima on the spiritual level and Social Credit on the temporal level — date back to the same year as the first great political conquest of Communism, its takeover of Russia in 1917.

As regards Social Credit, this date is ratified by the Social Credit Secretariat, an organism founded by Douglas to protect the integrity of his teachings. In an article titled “Social Credit in 1967,” the official publication of the Secretariat, “The Social Crediter”, began its June 3, 1967 edition as follows:

“In 1917 — fifty years ago — there was born an idea which, if we survive the present world crisis, must surely lie at the base of any continuing civilisation based on the ultimate freedom of man.”

Clifford Hugh Douglas, a consulting engineer, who had been in charge of major engineering works mainly in Great Britain and India, was then (in 1917) engaged in a financial investigation at the Royal Aircraft Factory in Farnborough, England. In the course of his investigation, Douglas discovered what any other accountant might have: That the total amount of purchasing power distributed each week to individuals through wages, salaries or otherwise, is always less than the factory’s tabulated cost-prices for the same week.

If this was the case, each week, in this factory, it must be so in all factories. Therefore, the total amount of purchasing power that is distributed during a manufacturing process could not buy that same production. The sale of this production is thus held up, unless the gap is filled by purchasing power to be issued through a channel other than through this production.

There too, any accountant might have reached this conclusion. But Douglas was not only a mathematician, not only an engineer, he was a genius.

Foreseeing the effects of this gap (inherent to the most exact cost-price accounting) between the generating of prices and the generating of purchasing power, and being aware of the existence and harmfulness of these effects, not only for each consumer but for the social body as a whole, Douglas perceived this to be a matter for further study and set out to do so.

He studied the present economic and financial systems, with a philosopher’s and an engineer’s mind.

That of a philosopher, to find out how the means were serving or betraying the ends; how the very ends of the system are or are not motivated by the fundamental aspirations of men as regards the possibilities of their being answered.

Rosary procession in RougemontRosary procession in Rougemont Headed by Our Lady of Fatima

The mind of an engineer, to discover the hindrances and defects of the system, and suggest efficient modifications as remedy. A remedy that would entail a minimum of changes, no revolution, no upheaval, no clashes, no breach to the dignity and freedom of the individual, with no intrusion by governments in the duties that belong to the province, to individuals, to families, to free associations or to local public administrations.

All of Douglas’s teachings testify to an unwavering support to individual freedom, to individual initiative and responsibility bound to one’s duty.

This does not mean that individuals are left to fend for themselves. On the contrary, each one must get his share of the benefits that result from association, whether to smaller groups or within the great national community. The wealth being produced is more and more the fruit of progress, the inheritance of discoveries, of realizations, of know-how that is increased and handed down from one generation to the next, thanks to our living in society. It is a major factor in today’s production. A great and real capital inherited by all individuals, one that must entitle each human being to a claim on that part of the increment of production that results from it.

The present system of distribution does not recognize this right. Governments are forced to intervene, through a heavy and clumsy tax system, to alleviate the effects of the injustice that is committed against all the members of the association, of the national community, against all citizens.

As early as 1917, Douglas offered a brilliant formula that recognizes the right of each individual to a share in the exploitation of the nation’s real credit. From the time they are born, each citizen would receive a social share, inalienable, non-transferable, that would bring him a periodical dividend that would cover his basic needs. And as the amount of production resulted more from progress and less from the producer’s efforts, the distribution of purchasing power would be carried out increasingly through higher dividends and fewer wages.

This is, in short, a conception of society where all members are capitalists. Where income depends less and less upon employment. Where the freedom to choose one’s career increases, in as much as the freedom of others is not undermined.

Capitalism corrected

With an increasing part of income tied to the individual rather than to his being employed, Capitalism would leave no one destitute nor humiliated at having to be assisted by the State after submitting to inquiries and at having to live at the expense of other people. Production would be driven by the efficient demand of consumers supplied with proper purchasing power. We would witness the gradual and no doubt rapid disappearance of the horrifying waste of natural resources, of man’s time and activities — a waste that is owed to the crazy regulation that requires man to be employed at whatever production, even if useless, even if harmful, so as to be entitled to an income.

And what could the supporters of a socialist or communist regime hold against a system that would efficiently answer the needs of the whole population? What influence would the economic theories of Communism have upon a population whose every citizen would be a capitalist by birth, assured of being one until they die, with the guarantee of an income conditioned only by the physical possibilities of providing goods and services that are required by needs?

Empty handed

As temporal matters go, are we not right in saying that Social Credit, as conceived and defined by Douglas, offers a powerful weapon against the invasion of Communism? (See editor’s note at the end of this article.) For this, we pay homage to Douglas. But we also give thanks to Divine Providence whose designs, have singled out this man of genius, at a time when the world needed him most to foil the plans of Communism. To this day, no government in the free world has adopted Douglas’s proposals. This is why Communism continues to gather followers. Without Social Credit, Communist propaganda is only faced by men of the right who are empty handed.

Nowadays, individuals are subordinated to the group more so than ever before. Governments dominate and dictate to the citizens, while their true duty is to serve, to remove the obstacles that they alone can remove, so that individuals, families and free institutions might carry out their own affairs.

All of our political life is afflicted by this economic disorder. Financial dictatorship over the economy leads to State dictatorship over the people. Under the pretext of the common good, they centralize, they plan and they enroll. First, on a national scale, in each country. Then, always under the guise of the common good — this time, the international common good — they lead us towards a world government, with a world police force that will inevitably be in Communist hands, by virtue of majority rule, since already half of the world population is under Communist control. And the plague keeps spreading.

Applied Christianity

Since Pope Pius XII and his 1941 radio-message, all the Popes have defended the common good principle: The right of all individuals to a share of the earthly goods. This principle has been stated by the Popes, but Douglas’s Social Credit allows for the concrete application of this principle. And that is why some authors have defined Social Credit as being “applied Christianity”: Christianity applied to the relations between men. In an address he gave to a group of Social Crediters on March 7, 1936, later published under the title of An Approach to Reality, Douglas pointed out that:

“Social Credit fundamentally involves a conception of the relationships between individuals and their association in countries and nations, between individuals and their association in groups.”

In their encyclical letters, the Popes have insisted upon the right of all people, even the people in developing countries, to a share of the earthly goods. This is a matter of justice. Some people openly profess this. But how can you expect this to be understood by all developed and affluent countries, when none of them has yet concretely applied this philosophy in a policy pertaining to its own population?

As we celebrate the 100th anniversary of the “birth” of Social Credit, all those who have understood and who appreciate the value and extent of its discovery must join us in Rougemont, for our annual Congress, on July 30-31, 2016, to pay an homage of glory and gratitude to its author, Douglas.

We will revive our determination and zeal in spreading so beautiful a doctrine and in having it prevail in the minds and hearts of our fellow men, a prerequisite to its implementation.


Editor’s note: This article was originally written by Louis Even in 1967. Since then, we have witnessed the fall of Communism in Russia and Eastern Europe, but one must not forget that the 1917 Bolshevik Revolution in Russia was financed by the bankers of Wall Street, with the goal of showing in a single nation an example of what their dreamed-of dictatorial world government (or New World Order) would be, no longer nation-wide but world-wide. Nor must we forget that the socialists of the Fabian School in the United Kingdom, like Sydney Webb and George Bernard Shaw, the founders of the London School of Economics, shared the same ideas as Karl Marx on Communism, but disagreed with him on the way to achieve it: Marx advocated its implementation through a violent revolution, whereas the Fabians advocate a step by step approach, the gradual day by day implementation of socialist and centralizing laws.

Peter Coffey, Doctor in Philosophy, Professor of Metaphysics and Logics at Maynooth College, Ireland, wrote the following to a Canadian Jesuit on March 23, 1932:

”The difficulties raised by your questions can be met only by a reform of the financing system of Capitalism, along the lines suggested by Major Douglas and the Social Credit school of Credit reform. It is the accepted financing system that is at the root of the evils of Capitalism. The accuracy of the analysis carried out by Douglas has never been refuted, and his Reform proposals with their famous price-regulation-formula, are THE ONLY reform that will go to the root of the evil.

“Personally I am convinced that capitalist finance must inevitably breed wars, revolutions and artificial starvation of millions in a world of potential plenty. I have studied the whole subject for 15 years, and I believe that such a financial reform as proposed by Douglas is essential to the reinstatement of a Christian economic system of widely diffused ownership, and is therefore the only alternative to a revolutionary violent and Godless Communism.

”As to whether the constructive Proposals for reform advocated by Douglas are possible in the concrete — with the mass-psychology of a doped public and all the propagandist power of the Capitalist Press against them — that is in the lap of the gods! Only — as I see it — the alternative to their adoption is the chaos of Communism. All the intent of the tragic transition from Capitalism to Communism now centers exclusively in finance.”

Alain Pilote, editor

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