Social credit
"[2] Douglas said that Social Crediters want to build a new civilization based upon "absolute economic security" for the individual, where "they shall sit every man under his vine and under his fig tree; and none shall make them afraid.
Prominent economist John Maynard Keynes references Douglas's ideas in his book The General Theory of Employment, Interest and Money,[7] but instead poses the principle of effective demand to explain differences in output and consumption.
He claimed that one of the factors resulting in a misdirection of thought in terms of the nature and function of money was economists' near-obsession about values and their relation to prices and incomes.
This perfectly simple reason is the explanation of the increasing necessity of what has come to be called economic sabotage; the colossal waste of effort which goes on in every walk of life quite unobserved by the majority of people because they are so familiar with it; a waste which yet so over-taxed the ingenuity of society to extend it that the climax of war only occurred in the moment when a culminating exhibition of organised sabotage was necessary to preserve the system from spontaneous combustion.
In January 1919, "A Mechanical View of Economics" by C. H. Douglas was the first article to be published in the magazine New Age, edited by Alfred Richard Orage, critiquing the methods by which economic activity is typically measured: It is not the purpose of this short article to depreciate the services of accountants; in fact, under the existing conditions probably no body of men has done more to crystallise the data on which we carry on the business of the world; but the utter confusion of thought which has undoubtedly arisen from the calm assumption of the book-keeper and the accountant that he and he alone was in a position to assign positive or negative values to the quantities represented by his figures is one of the outstanding curiosities of the industrial system; and the attempt to mould the activities of a great empire on such a basis is surely the final condemnation of an out-worn method.
Douglas suggested that this is the reason why deflation is regarded as a problem in orthodox economics because bankers and businessmen were very apt to forget the lower limit of prices.
"The A + B theorem has met with almost universal rejection from academic economists on the grounds that, although B payments may be made initially to "other organizations," they will not necessarily be lost to the flow of available purchasing power.
Douglas defined democracy as the "will of the people", not rule by the majority,[32] suggesting that social credit could be implemented by any political party supported by effective public demand.
Traditional ballot box democracy is incompatible with Social Credit, which assumes the right of individuals to choose freely one choice at a time, and to contract out of unsatisfactory associations.
Douglas also opposed the secret ballot arguing that it resulted in electoral irresponsibility, calling it a "Jewish" technique used to ensure Barabbas was freed leaving Christ to be crucified.
Whether we look on this Trinitarianism under the names of King, Lords and Commons or as Policy, Sanctions and Administration, the Trinity-in-Unity has existed, and our national success has been greatest when the balance (never perfect) has been approached.
The editor of that publication, Alfred Orage, devoted the magazines The New Age and later The New English Weekly to the promulgation of Douglas's ideas until his death on the eve of his BBC speech on social credit, 5 November 1934, in the Poverty in Plenty Series.
It was while he was reorganising the work at Farnborough, during World War I, that Douglas noticed that the weekly total costs of goods produced was greater than the sums paid to individuals for wages, salaries and dividends.
Troubled by the seeming difference between the way money flowed and the objectives of industry ("delivery of goods and services", in his opinion), Douglas decided to apply engineering methods to the economic system.
Douglas collected data from more than a hundred large British businesses and found that in nearly every case, except that of companies becoming bankrupt, the sums paid out in salaries, wages and dividends were always less than the total costs of goods and services produced each week: consumers did not have enough income to buy back what they had made.
He published his observations and conclusions in an article in the magazine The English Review, where he suggested: "That we are living under a system of accountancy which renders the delivery of the nation's goods and services to itself a technical impossibility.
In order to accomplish this objective, he believed that each citizen should have a beneficial, not direct, inheritance in the communal capital conferred by complete access to consumer goods assured by the National Dividend and Compensated Price.
[22]: 4 : 108 Douglas thought that consumers, fully provided with adequate purchasing power, will establish the policy of production through exercise of their monetary vote.
[22]: 4–9 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".
[42]: 127 A book by Maurice Colbourne, entitled The Meaning of Social Credit, had convinced Aberhart that the theories of Major Douglas would facilitate for Alberta's recovery from the Great Depression.
[citation needed] Aberhart sought orthodox counsel with respect to the Province's finances, and the correspondence between them was published by Douglas in his book, The Alberta Experiment.
The result of the acceptance of this proposition is that all capital appreciation becomes quite automatically the property of those who create and issue of money [i.e., the banking system] and the necessary unbalancing of the Budget is covered by Debts.
But early attempts to pass social credit legislation were ruled ultra vires by the Privy Council in London.Drawing on the monetary theories of Silvio Gesell, William Aberhart issued a currency substitute known as prosperity certificates.
These scrips intentionally depreciated in value the longer they were held,[45] and Douglas openly criticized the idea: Gesell's theory was that the trouble with the world was that people saved money so that what you had to do was to make them spend it faster.
In 1938, Aberhart's Alberta Social Credit Party had 41,000 paid members, forming a broad coalition ranging from those who believed in Douglas' monetary policies to moderate socialists.
"[54] Douglas said that social crediters want to build a new civilization based upon absolute economic security for the individual – where "they shall sit every man under his vine and under his fig tree; and none shall make them afraid.
Douglas believed that if people were given the economic security and leisure achievable in the context of a social credit dispensation, most would end their service to Mammon and use their free time to pursue spiritual, intellectual or cultural goals resulting in self-development.
In his book Social Credit, he wrote that, "It is not too much to say that one of the root ideas through which Christianity comes into conflict with the conceptions of the Old Testament and the ideals of the pre-Christians' era is in respect of this dethronement of abstractionism.
Names associated with social credit include C. M. Grieve, Charlie Chaplin, William Carlos Williams, Ezra Pound, J. R. R. Tolkien, C. S. Lewis, T. S. Eliot, Flannery O'Connor, Dorothy Day, Thomas Merton, Herbert Read, George Orwell, Aldous Huxley, Ray Bradbury, Denis Ireland, Storm Jameson, Eimar O'Duffy, Sybil Thorndike, Bonamy Dobrée, Eric de Maré and the American publisher James Laughlin.
In his novel The Trick Top Hat, part of his 1979 Schrödinger's Cat Trilogy, Robert Anton Wilson described the implementation by the President of an alternate future United States of an altered form of social credit, in which the government issues a National Dividend to all citizens in the form of "trade aids", which can be spent like money but which cannot be lent at interest (in order to mollify the banking industry) and which eventually expire (to prevent inflation and hoarding).
