No one can remain indifferent to the problems of poverty and hunger in the world today. Every day, an estimated 40,000 children die from hunger and disease simply because there is a lack of money. Over 1.7 billion people sort through garbage heaps in order to survive. Over 100 million children have been abandoned to live on the streets because parents can no longer support them.
The examples abound, but we need not go far to see poverty. The problem exists in developed countries and even in our own backyards. For example, in a large city such as Montreal, Canada, one out of three children go to school without having eaten breakfast.
The Church is not indifferent to problems that jeopardize the salvation of souls, such as world hunger and indebtedness. Since Pope Leo XIII, and his 1891 encyclical, Rerum Novarum, the Church has given us a set of principles known as the Social Doctrine of the Church. Among its many objectives, the Social Doctrine calls for reforms of the financial and economic systems so that they serve the human person. Happiness in every nation would result from the application of these principles.
Successive pontiffs have drawn our attention to similar concerns. Pope Francis condemned the idolatry of money and the rule of the money-god. In a speech at the third World Meeting of Popular Movements, held at the Vatican on November 5, 2016, he said:
"There is a basic terrorism that is born of the global control of money on earth, and threatens the entire humanity… Almost a hundred years ago, Pope Pius XI foresaw the rise of a global economic dictatorship that he called the "international imperialism of money" (Quadragesimo Anno, May 15, 1931, n. 109). That was in 1931! We are in this audience hall named after Paul VI, and it was Paul VI who, some 50 years ago, denounced the "new and abusive form of economic domination on the social, cultural and even political level" (Octogesima Adveniens, May 14, 1971, n. 44). The entire social doctrine of the Church and the magisterium of my predecessors rejects the idolatry of money that reigns rather than serves, which tyrannizes and terrorizes humanity."
Pope Francis ended his speech at the UN with comments taken from his 2013 apostolic exhortation, Evangelii Gaudium (paragraph 202): "As long as the problems of the poor are not radically resolved by rejecting the absolute autonomy of markets and financial speculation and by attacking the structural causes of inequality, no solution will be found for the world's problems or, for that matter, to any problems. Inequality is the root of social ills."
In June 2013, Pope Francis wrote to the president of the G8 Summit, British Prime Minister David Cameron: "Every economic and political theory or action must set about providing each inhabitant of the planet with the minimum wherewithal to live in dignity and freedom, with the possibility of supporting a family, educating children, praising God and developing one's own human potential. This is the main thing; in the absence of such a vision, all economic activity is meaningless."
Other pontiffs wrote similarly concerning the present economic order. For example, in his first encyclical, Redemptor Hominis (March 4, 1979), Pope St. John Paul II pointed to: "the indispensable transformations of the structures of economic life", to "poverty amidst plenty that brings into question the financial and monetary mechanisms" and to the fact that "man cannot become the slave of economic systems."
On the occasion of the 6th UN Conference on Trade and Development, on September 26, 1985, John Paul II said:
"Again, I want to tackle a very delicate and painful issue. I mean the torment of the representatives of several countries, who no longer know how to face the fearful problem of indebtedness. A structural reform of the world financial system is, without doubt, one of the initiatives that seem the most urgent and necessary."
The Church has given us the moral foundation and principles upon which all financial and economic systems must be evaluated. According to the Second Vatican Council, the laity is called to renew the temporal order, bringing it in line with God's plan. We are called to develop concrete solutions to establish an economic system that is faithful to the Gospel teachings and to the principles of the Social Doctrine of the Church.
For this reason, Louis Even undertook to spread the doctrine of Economic Democracy, or Social Credit: a set of principles that were first articulated by Scottish engineer, Clifford Hugh Douglas, in 1918. "Social Credit" means social money, issued by society, versus "bank credit", the money issued by the private banking system. When Louis Even first encountered Social Credit in 1935, he at once understood how its principles embodied Church teachings on social justice. Undoubtedly, the intentions of the pontiffs addressing economic and financial matters would be met in Social Credit.
The Social Doctrine of the Church, confined to the realm of principles, stands above existing economic systems. An economic system can only be 'good' to the extent that it applies the principles of justice taught by the Church. This is why Pope St. John Paul II wrote in his encyclical, Sollicitudo Rei Socialis (December 30, 1987):
"The tension between East and West is an opposition... between two concepts of the development of individuals and peoples, both concepts being imperfect and in need of radical correction... This is one of the reasons why the Church's social doctrine adopts a critical attitude towards both liberal capitalism and marxist collectivism."
It is understandable why the Church condemns communism and marxist collectivism with their goals of destroying private property, the family and religion. Pope Pius XI called this political ideology anti-Christian and "intrinsically evil". But what is the basis for the Church's condemnation of capitalism? Is capitalism not better than communism?
The Church does not condemn capitalism, per se. On the contrary, the Church wishes that private property and free enterprise were universally instituted so that everyone might become the true owners of capital and be true "capitalists". Pope St. John XXIII, in the encyclical, Mater et Magistra (May 15, 1961, nn. 114-115), said:
"The dignity of the human person necessarily requires the right of using external goods in order to live according to the right norm of nature. And to this right corresponds a most serious obligation which requires that, so far as possible, there be given to all an opportunity of possessing private property... Therefore, it is necessary to modify economic and social life so that the way is made easier for widespread private possession of such things as durable goods, homes, gardens, tools requisite for artisan enterprises and family-type farms, investments in enterprises of medium or large size."
The Church finds no fault with private property or with free enterprise. Rather, the fault rests in the present financial system. This system dominates the human person rather than serving, and, in fact, subverts capitalism. Pope Pius XI wrote in Quadragesimo Anno: "Capitalism itself is not to be condemned. And surely it is not vicious of its very nature, but it has been vitiated."
What the Church condemns is the financial system, not capitalism. Paul VI explained the problem is "the calamitous system that accompanies capitalism". In his encyclical, Populorum Progressio (March 26, 1967, n. 26), he wrote:
"This unchecked liberalism leads to dictatorship rightly denounced by Pope Pius XI as producing 'the international imperialism of money'. One cannot condemn such abuses too strongly because — let us again recall solemnly — the economy should be at the service of man. But if it is true that a type of capitalism has been the source of excessive suffering, injustices and fratricidal conflicts whose effects still persist, it would be wrong to attribute to industrialization itself evils that belong to the calamitous system that accompanied it. On the contrary, one must recognize in all justice the irreplaceable contribution made by the organization and the growth of industry to the task of development."
The financial system has been diverted from its goal and does not fulfill its true purpose. Money is rightly a tool of service. But, bankers, by appropriating control over its creation, have contorted money into an instrument of domination. In Quadragesimo Anno, Pope Pius XI stated:
"This power becomes particularly irresistible when exercised by those who, because they hold and control money, are able also to govern credit and determine its allotment, for that reason supplying, so to speak, the lifeblood to the entire economic body, and grasping, as it were, in their hands the very soul of production, so that no one dare breathe against their will."
Since banks only issue money as an interest-bearing loan, we see that all money is created as a debt. No nation can repay its debt under the current system. Further, each loan that is repaid to the bank ceases to exist. The money that formed the loan is withdrawn from circulation.
The fundamental flaw in the system is that when banks create new money in the form of loans, borrowers are expected to pay back more money than the bank created. Banks create the principal amount but not the interest. As it is impossible to pay back money that does not exist, the only solution is to borrow even more money in order to pay the interest on the principal. Thus, unpayable debts accumulate.
Creating money as debt is the mechanism used to impose control, not only upon individuals but on the entire world.
"Among the actions and attitudes opposed to the will of God, the good of neighbour and the 'structures' created by them, two are very typical: on the one hand, the all-consuming desire for profit, and on the other, the thirst for power, with the intention of imposing one's will upon others" (Pope St. John Paul II, Sollicitudo Rei Socialis, n. 37).
If there was only $1 in circulation in the country, it had to have been loaned by a bank. Let us suppose the bank lent $1 at a 6% rate of interest. At the end of one year, $1 must be paid back to the bank, plus 6% interest, or 6 cents. The fact is that only $1 existed in the country, not $1.06. It is impossible to pay back both the principal and the interest as the interest, 6 cents, does not exist; it was never created.
For money to remain in circulation, debts and bankruptcies will and must accumulate. Creating a nation's money as a debt is an absurdity. Worse still, governments persist in borrowing money from private banks; money that a government could create itself, interest-free. This practice forces responsibility for an astronomical debt's interest charges onto an unwitting public. There should be no debt, whatsoever! The first duty of a sovereign government is to create and issue money according to the needs of the citizenry. The greatest betrayal in all of history is the surrender of this primary function to banks, which are private corporations.
Banks do not give money its value. Value originates in a nation's productive potential. The banker produces nothing whatsoever. All he does is create figures, or numbers, that allow a nation to make use of its own productive capacity; its own wealth. Through a Central Credit Authority, the government could just as easily create figures and numbers without resorting to private banks and reaping unpayable debts.
As money is basically a social tool, the Social Credit philosophy holds that money must be issued by society for the common good, and not by private bankers for profit. In Quadragesimo Anno, Pope Pius XI stated:
"There are certain categories of goods for which one can maintain with reason that they must be reserved to the collectivity when they come to confer such an economic power that it cannot, without danger to the common good, be left to the care of private individuals."
The aim of both the economic and financial systems is the service of man, according to Church teaching. The economy of a nation is required to ensure the satisfaction of human needs. Pope Pius XI, in Quadragesimo Anno, further clarified the objectives of an economic system:
"For 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.
"These goods must be sufficient to supply all needs and an honest livelihood, and to uplift men to that higher level of prosperity and culture which, provided it be used with prudence, is not only no hindrance but is of singular help to virtue."
Pope Pius stated that "each and everyone" is entitled to material goods. This statement underlines the Church's social doctrine that states that earthly goods are intended for all.
"God intended the earth and all that it contains for the use of every human being and people. Thus, as all men follow justice and unite in charity, created goods should abound for them on a reasonable basis... The right to have a share of earthly goods sufficient for oneself and one's family belongs to everyone" (Second Vatican Council, Pastoral Constitution on the Church in the Modern World, Gaudium et Spes, n. 69).
The Church faults capitalism because it does not ensure that all human beings have access to a minimum of material goods to allow for a decent standard of living. As well, even in the most advanced countries, there are many who do not sate their hunger. The'universal destination of goods'is not attained. There is an abundance of products, but sadly, the system of distribution fails.
"God gave the earth to the whole human race for the sustenance of all of its members, without excluding or favouring anyone. This is the foundation of the universal destination of the earth's goods... It is a strict duty of justice and truth not to allow fundamental human needs to remain unsatisfied, and not to allow those burdened by such needs to perish" (St. John Paul II, Centesimus Annus, nn. 31 & 34).
The Social Credit Dividend, an income given to each of the country's citizens, would ensure that goods are distributed universally. Each person would be made a true capitalist whose basic needs would be met without either plundering the rich or through taxation. The Dividend is justified on a twofold basis: God gave us abundant natural resources and because we are each beneficiaries of developments in technology shared from one generation to the next.
"Through his work man enters into two inheritances: the inheritance of what is given to the whole of humanity in the resources of nature, and the inheritance of what others have already developed on the basis of those resources, primarily by developing technology, that is to say, by producing a whole collection of increasingly perfect instruments for work" (St. John Paul II, Laborem Exercens, September 15, 1981, n. 12).
The Social Credit Dividend is the logical solution to the fact that human labor is being replaced by machinery. Not implementing Social Credit results in the creation of useless jobs. To justify these jobs, artificial needs are created by persuasive advertising in order that the public buy products that are not genuinely needed. Hence, the term "consumerism" was coined.
Another problem we have noted is the process of planned obsolescence. Goods are manufactured to last only a short time so that more can be made, more sold, and more money gained. This results in wasted natural resources and harm caused to the environment.
Pope Paul VI wrote in 1967 in Populorum Progressio, "More than any other, the individual who is animated by true charity labors skillfully to discover the causes of misery, to find the means to combat it, and to overcome it resolutely."
Louis Even discovered the source of people's misery: the creation and control of money by private banks. He also found the means by which to combat this fraud: the education of the public. That is why he founded the Movement, MICHAEL. Let all those who thirst for justice study and spread the teachings of the Movement to others.
Alain Pilote has been the editor of the English edition of MICHAEL for several years. Twice a year we organize a week of study of the social doctrine of the Church and its application and Mr. Pilote is the instructor during these sessions.
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John Carlisle
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