A Primer of Social Credit

There are a few religiously-tinged paragraphs which we here at National Vanguard would have written differently, but this truly excellent introduction to the radical idea that we ought to own and benefit from our own credit and productivity is well worth reading.

by Louis Even
translated from the French by Earl Massecar

Wealth and Want

Ottawa – “A family with four children aged four, three, two and one. Desperately poor. The children, with the exception of the four-year old, have no coats to wear outside. (This is written in the dead of winter, January 10). They have no shoes. The house is not heated from six in the evening until the following morning. The mother has no blankets; she covers the children with old carpets. There are no kitchen utensils…” (Le Droit).

Ste-Rose de Poularies (Abitibi) – “Alfred Aubin, father of six, had his arm amputated at the shoulder fifteen years ago. Still, he managed somehow or other to eke out a living for his family. Today, because of rheumatism, he cannot work. He has asked for the disability pension. The reply: not sufficiently disabled!”

Black Rock, N.B. – “Last Sunday a ramshackle stove set off a fire in a small house where twelve people were sleeping; six were roasted alive. The house measured only twenty by twenty feet. It was constructed of wood. The outside was finished with tarpaper. Inside, the walls were likewise covered with paper. There was a kitchen, two bedrooms (for twelve people), and a small attic…” (L’Action Catholique).

Such instances of extreme misery can be multiplied by the thousands even in such a wealthy country as Canada.

The need for food, clothing, shelter, warmth, medical care and rest, is a temporal need from which no man can escape as long as he is on earth. The Creator Himself built these needs into him. He placed man here on earth. So most certainly He must have provided somewhere here below the means of satisfying these temporal needs.

Earthly goods, true wealth, are the things that satisfy these needs. Food, clothing, wood for heating, blankets, kitchen utensils, medicines – these are wealth, goods. It is with such goods that man is supposed to fill his temporal wants.

Man’s economic activity has but one aim, to bring about a conjunction between these goods and man’s wants. If an economic system does this, then it achieves its end. If it fails to bring about this marriage between man’s necessities and these goods, then it has failed. In Canada, our economic system has failed precisely because it leaves multitudes to go hungry in spite of its wheat; cold and homeless in spite of all its wood; sick in spite of all its medicines. Let us try and illuminate the reason for this failure.

What is Lacking?

Do we here in Canada lack anything necessary to fill the temporal needs of Canadians? Are we without sufficient food to satisfy the hunger of all? Do we lack shoes, clothing? Are we incapable of producing enough goods to meet the general demand? Do we lack railroads and other means of transportation? Do we lack wood and stone enough to construct a good house for every family? Are there not enough contractors, carpenters and other types of workers necessary to build them? Is there an insufficiency of machinery?

As a matter of fact, we have all these things and more. Merchants do not complain that they haven’t enough products to meet demand. Grain elevators are bulging. The number of men able and willing to work is legion. There is any amount of idle machinery on hand.

And still the world is ridden with want! Goods simply are not finding their way into homes.

It is idle chatter to tell Canadians that their country is rich, that it exports enough of its produce to rank third or fourth among the world’s exporters.

What goes out of the country does not go into Canadian homes. What sits idle in the stores does not appear on Canadian tables.

A mother does not feed her children or provide them with shoes and garments by window shopping, by reading the advertisements of products m the paper and listening to enchanting commercials on the radio – or by lending her ear to the bewitching patter of numberless salesmen.

What is lacking is the effective means of laying hands on these goods. You cannot steal them. To get them you must pay for them; you need money.

The produce of Canada is vast and varied. But the right to have this produce, the means of getting these goods, is lacking to a great many individuals and families who desperately need them, because they cannot pay the price.

Do we lack anything but money? Can we reach any other conclusion but this, that the only thing missing in order that goods may move from stores to homes, is money?

Money and Wealth

This is not to say that money is the same thing as wealth. Money is not an earthly good capable of satisfying a temporal need.

You can’t keep yourself alive dining off money. You can’t manufacture a dress or a pair of stockings by sewing together dollar bills. You can’t find relaxation or rest by stretching out on a heap of currency. You can’t cure a sickness by applying silver dollars to the seat of the malady. Education doesn’t come with a scholar’s cap fashioned of money.

No, money is not real wealth. Real wealth consists of all those useful items which satisfy human needs.

Bread, meat, fish, cotton, wood and coal, an automobile on the broad highway, a doctor visiting the sick, the knowledge of a teacher – these are the true riches.

However, in our modern world, each individual does not, cannot, produce all the things he needs. People must purchase products and services from one another. Money is that symbol or token which makes possible buying and selling. It is the token which must be exchanged for the object one wishes to buy from another.

Wealth is the thing; money is the symbol of that thing whether it be product or service. The symbol should reflect that which it symbolizes.

If there are a great many things to sell in a country, then, logically, there must be a great deal of money in order to dispose of these goods. The more people and goods, the more money there must be in circulation, otherwise the flow of goods is choked off.

It is precisely this balance which is lacking today. We have at our disposal almost as great a quantity of goods as we could possibly wish, thanks to applied science, to new discoveries and to the perfecting of machinery. We have a multitude of people without occupations who represent a potential source of goods. We have a large number of useless, even pernicious, occupations. We have occupations whose sole end is destruction.

Money was created for the purpose of keeping products moving. Why, then, does it not find its way into the hands of the people in the same measure as the flow of goods from the production line?

“The industrial system, which makes goods, is not to blame for poverty – it is the financial system.” (Douglas).

Money Begins Somewhere

Everything, excepting the Creator, has a beginning. Money then begins somewhere.

We know the origin of such practical, useful commodities as food, clothing, shoes, books. From the abundance of a country’s natural resources – its true wealth – workers and machines produce all the things we need.

But then what is the origin of money, that money which we lack in order to buy the goods which are not lacking?

One of the principal ideas firmly fixed in people’s heads – one which they obviously haven’t examined too carefully – is that there is one fixed quantity of money, which quantity cannot be affected in any way whatsoever (just as nothing can be done about the weather). This idea is utterly wrong. If there is money in existence today it is because sometime, somewhere, it was made. And if the amount of money is not larger, it is because those who made it did not make more.

Another prevalent belief about the origin of money is that the government makes it. This is another false notion. The government does not turn out money; and it complains incessantly because it hasn’t enough of it. If the government were the source of money it wouldn’t have stood for ten years with its arms folded in the face of one of the most critical shortages of this item. The government taxes and borrows but it does not make money.

Now, we are going to explain where money begins and where it ends. Those who control the birth and death of money also regulate the quantity of money. If they make a great deal and destroy little, then the amount of money in circulation is increased. If over a period the destruction of money exceeds the amount created, this begets a scarcity of money.

The standard of living in a country where there is a shortage of money, is regulated not by the volume of goods produced but by the amount of money available to buy these goods. Those who control the volume of money control our standard of living.

“Those who control money and credit have become the masters of our lives… Without their permission we may not even breathe.” (Pius XI)

Two Kinds of Money

Money may be defined as whatever serves to make payments, to make purchases, whatever is accepted by everyone in a country in exchange for goods or services.

The material substance of money is of little importance. In the past, money has at times been made of shells, leather, wood, iron, silver, gold, brass, paper, etc.

There are at present two sorts of money in Canada. One we can call pocket money, made of paper and metal. The other we shall call book money, and it consists of figures in a ledger. Of the two, book money is by far the most important.

Book money usually takes the form of a bank account. Business operates through the bank account, Whether pocket money circulates or not depends upon the state of business. But business does not depend upon pocket money; it is kept going by the bank accounts of businessmen.

With a bank account we make payments and purchases without touching metal or paper money. We buy with figures.

I have a bank account of $4,000. I buy an automobile worth $1,800. I make my payment by cheque. The dealer endorses the cheque and deposits it at his bank.

The banker then makes changes in the two accounts; to the dealer’s he adds $1,800, and from mine he deducts the same amount. The dealer had $70,000; now he has $71,800. I had $4,000 in mine; the last entry now shows $2,200.

Now, as far as this business deal was concerned, there wasn’t the slightest stir or chink of money to be heard anywhere in Canada. I simply passed some figures to the dealer. I paid with figures.

More than nine tenths of all business is carried on in this fashion. Modern money is book money, the money of figures; its volume is ten times that of paper or metal money. It is a superior type of money since it gives wings to the other. It is the safest kind of money since no one can steal it.

Saving and Borrowing

Like the other types of money, book money had an origin. Since it is embodied in a bank account it comes into being when a bank account is opened without prejudice to any other bank account or to the amount of money in anyone’s pocket.

The amount in a bank account can be increased or decreased in two ways; by saving and by borrowing, There are other methods but they can be classed as variations of borrowing.

A savings account involves the transformation of money. I bring along some money, paper or metal, to the banker. He increases my account by this amount. I no longer have that pocket money but I do have book money in my account. I can get back my pocket money by decreasing the amount of book money in my account. As we said, it is simply the transformation of money.

Since we are trying to find out how money comes into being, the savings account, being merely a simple transformation of money, does not concern us here.

The borrowing account is the account advanced by the banker to a borrower.

I am a businessman. I want to set up a new factory. All I need is money. I go to the bank and borrow $100,000 under security. The banker makes me sign a promise to repay the amount with interest. Then he lends me $100,000.

Is he going to hand me the $100,000 in paper money? Not at all. I wouldn’t want it that way. It’s too risky. Furthermore, I’m a businessman who buys many things at different and widely separated places through the medium of cheques. What I want is a bank account of $100,000 which will make it easier for me to carry on business.

The banker then will set up for me an account of $100,000. He will credit my account with $100,000 – just as if I had come to the bank with that amount in my hands. But I did not bring this money; I came to acquire it.

Is this a savings account set up by me? No; it is a borrowing account established by the banker himself for me.

The Money Maker

This account of $100,000 was made, not by me, but by the banker. How did he set it up? Did the amount of money in the bank decrease when the banker lent me $100,000? Well, let’s ask the banker.

– Mr. Banker, have you any less money in your vault after having lent me $100,000?

– I haven’t gone near my vault.

– Have other accounts been decreased?

– They remain exactly as they were.

– Then what was decreased in the bank?

– Nothing was decreased.

– Still my account has been increased. From where did the money you lent me come?

– It didn’t come from anywhere.

– Where was it when I came into the bank?

– It didn’t exist.

– And now that it is in my account it exists. So we can say that it was created.

– Certainly.

– Who created it and how?

– I did, with my pen and a drop of ink when I inscribed $100,000 to your credit at your request.

– Then you make money?

– The bank makes book money. That’s the modern money which puts into circulation the other type by keeping business on the move.

The banker makes money, ledger money, when he lends accounts to borrowers, individuals or governments. When I leave the bank there will exist in this country a new source of cheques, one that did not exist before. The total amount of all accounts in the country was increased by $100,000. With this new money I’ll pay the workers, buy materials and machinery – in a word, build my new factory.

Who, then, made this new money? The banker, of course.

The Destroyer of Money

The banker and the banker alone makes this kind of money, this money which consists of figures only, the money which keeps commerce moving. But he does not give it away. He lends it. He lends it for a certain time, after which it must be returned to him. He must be repaid.

The banker claims interest on this money which he has made. In my case, the banker will probably demand $7,000 from me in interest, at once. He will withhold this from the loan and I will leave the bank with $93,000 net in my account, having signed a promise to repay $100,000 in one year.

In building my factory I am going to pay my men, buy materials, and thus spread my $93,000 throughout the country.

But, within a year I must, through the profits I make selling my goods for more than they cost me, build my account up to not less than $100,000.

For at the end of the year I am going to repay the loan by making out a cheque for $100,000 on my account. The banker then will debit my account by this amount; he will take from me the $100,000 I have drawn from the country by selling my products. He will not credit this money to anybody’s account. No one will be able to draw on this $100,000. It is dead money.

Borrowing gave birth to the money. Repayment brought about its extinction. The banker brings money into the world when he makes a loan. He sends it to the grave when he is repaid.

So it is that the banker is also the destroyer of money.

The system so operates that the repayment must be greater than the original loan. The figures symbolizing the death of money must be greater than those betokening its birth; the act of destruction must entail a larger amount than that involved in the act of creation.

Now this would appear to be an impossibility, and, collectively, it is. If I succeed, someone else must go bankrupt, because all together we are not able to repay more money than has been made. The banker creates nothing but the capital sum. No one creates what is necessary to make up the interest, because no one else makes money. And yet the banker demands in repayment not only the capital but the interest as well.

The Public Debt

The government does not make money. When the government can no longer tax the people or borrow from private parties because of the scarcity of money, it borrows from the banks.

It goes through exactly the same procedure to borrow as I do. As guarantee, it pledges the entire country. The promise to pay is the debenture. The loan of the money is an account brought into existence by the stroke of a banker’s pen.

Thus it was that in October 1939, the federal government, in order to order to cover the initial expenses of the war, asked from the banks some $80,000,000. The banks, without taking a cent from anyone, gave the government a new checking account of $80,000,000.

But in October, 1941, the government had to repay the banks some $83,000,000, comprising both capital and interest.

By taxes, the government had to draw from the country as much money as it had spent, namely, $80,000,000. But in addition it had to draw from the country a further $3,200,000, money it had not put into the country, which had not been made by the bankers, which, in fact, no one had made.

Even conceding at the most that the government can find the money which the bankers created, where will it find the money which has not yet been created?

The plain fact is, the government does not find it. It is simply added to the public debt. This explains why we have a debt which grows in the same measure as the country requires more money. All money comes into existence as a debt, through the banker, who finishes by claiming more money than he has actually put into circulation.

So the population of a country finds itself collectively thrust deeper and deeper into debt for its own production of wealth, collectively speaking! This happens when a country gears itself to production for war. And it happens when the country turns to peacetime production in building roads, bridges, water systems, schools, churches, etc.

The Monetary Scandal

The monetary system has become a genuine scandal. All the money in circulation comes from the banks. Even paper and metal money cannot come into circulation until it has been released by the banks.

Now the banks do not put money into circulation except by lending it out at interest. Which is to say that all the money in circulation comes from the banks and must some day return to the banks swollen with the added interest.

The bank remains the proprietor of the money. We are only the borrowers. If some manage to hang on to their money for a long period of time, or even permanently, the others, of necessity, are unable to fulfill their obligations to repay.

The inevitable results of such a system are, multiplication of bankruptcies both for individuals and companies, mortgage upon mortgage, and an ever-increasing public debt.

Clamping an interest rate on money the moment it comes into existence is unjust and absurd, harmful to society and contrary to good arithmetic.

The more a country’s population and production increase the more it needs money. But it is impossible to have new money without contracting a debt which, collectively, cannot be paid.

So we are left with the alternatives of either calling a halt to progress or of contracting an everlasting debt; of plunging into mass unemployment or into an unpayable debt. And it is precisely this dilemma that is being debated in every country.

Aristotle, and after him, St. Thomas, wrote that money does not propagate itself. But the Banker will only put money into the world on the condition that it propagate itself. Since neither governments nor individuals make money, it is obvious that no one makes this “offspring” claimed by bankers as their reward for making loans. Even legalized, such a procedure is both vicious and insulting!

Decline and Degradation

This method of making a country’s money by forcing governments and individuals into debt, results in the establishment of a real dictatorship over governments and citizens alike.

The sovereign government underwrites debts to a small group of profiteers. A minister who represents 19,000,000 men, women and children, signs for a debt that cannot be paid. The banker, who represents a group interested only in power and money, manufacturers the country’s money.

This is one striking aspect of that decline of power of which the Pope has spoken; governments have surrendered their noble functions and have become the servants of private interests.

The government of Canada, instead of being the pilot of the ship of state, has become a mere collector of taxes. A large share of the revenue from taxes, a “consecrated” portion, a portion about which no discussion is ever allowed, is that which goes to pay the interest on the public debt.

Furthermore, a major part of legislation consists of taxing people and erecting everywhere restrictions to liberty.

There are very strict laws to ensure that the money makers are repaid. There are no laws to prevent a human being from dying of misery.

As for individuals, the scarcity of money develops in them the mentality of wolves. In the face of a superabundance of products, only those who have that rare symbol of goods, money, have the right to draw on that abundance. Hence we have competition, the tyranny of the “boss,” domestic strife and countless other economic, social and domestic evils.

A small group preys on all the others. The great mass of the people lie prostrate, many groaning in the most degrading misery.

The sick remain without care; children are poorly or insufficiently nourished; talents go undeveloped; the young cannot find their place in the world or set up a home; farmers lose their farms; families just barely manage to exist – and all because of this unreasonable, this unjustifiable lack of money. The pen of the banker enslaves the government and lays a mighty burden of hardship upon the people.

Restoration and Redress

It was St. Louis, king of France, who said: “The first duty of a king is to make money when it is necessary for the sound, economic life of the people.”

It is not necessary, nor even to be recommended, that banks be suppressed or nationalized. The banker is an expert in accounting and investing; he may well continue to receive and invest savings with profit, keeping for himself a just share of the profit for his services. But the making of money is an act of sovereignty which should not be left in the hands of a bank. Sovereignty must be taken out of the hands of the banks and returned to the nation.

“Book” money is a modern, beneficial invention and should be retained. But, instead of it proceeding from a private pen in the form of a debt, these figures, which serve as money, should come from the pen of a national organism, in the form of money destined to serve the people.

Consequently there is no need to disturb the field of ownership or investment. There is no need to suppress the money we have today and replace it with other kinds of money. All that is necessary is that a state monetary organization add to the money already in existence enough of the same kind of money to keep pace with the needs of the country and the potentiality of its resources.

There is no need to suffer from want when there is enough in the country to bring comfort into every home.

The amount of money should be measured according to the country’s productive capacity and the demand of the consumers for all wanted goods that can be produced.

Consequently, it is the sum total of producers and consumers – society – which, in producing goods to meet needs, should determine the amount of new money that a commission of accountants, acting in the name of society, should put into circulation from time to time in accordance with the rhythm of development in the country.

Thus the people would recover their right to live full lives in accordance with the natural riches of the country and the tremendous possibilities of modern production.

Who Owns the New Money?

Money, then, should be put into circulation according to the rate of production and as the needs of distribution dictate. But then who would own this new money coming into circulation in Canada?

This new money does not belong to the government which is only the custodian and not the owner of a country’s wealth; nor to the accountants of the national monetary commission, who perform a social function and are paid, according to law, by society for their services. This money belongs to the Canadians and to them alone.

To what Canadians? To all Canadians. This money is not a salary. It is new money injected into society so that the people as consumers may obtain goods already produced or immediately realizable and awaiting only sufficient purchasing power for them to be produced.

We cannot for one moment imagine that the new money coming gratuitously from society belongs exclusively to a few individuals.

In strict justice, there is no other way of putting this money into circulation than by distributing it equally among all citizens without exception. Such a sharing also makes it possible to derive the maximum benefit from the money since it reaches into every corner of the land.

Let us suppose that the country’s national accountant finds it necessary to issue another 95 million dollars in order to meet the latest needs of the country. This issuance will initially take the form of book money, the inscription of figures in ledgers as the banker does today.

Since there are 19 million Canadians and 95 million dollars to share, each citizen will get $5. So the accountant will inscribe $5 in the account of each citizen. Such individual accounts can easily be looked after by the branches of the post office which appertains to the federal government, or by the bank of Canada, which is likewise the property of the nation.

This is the national dividend. Each Canadian would have $5 more to his credit; and this money would have been created and put into circulation through these accounts by a national monetary organization. Such an organization could be the Bank of Canada or any body especially created for this work by parliamentary legislation.

To Each the Dividend

Whenever it might become necessary to increase the amount of money in a country, each man, woman and child, regardless of age, would have his or her share in this increase the moment it became a reality. Each would benefit from the latest progress made by the country, a progress necessitating this new money.

This is not payment for a job done but a dividend for a share in a common capital. If there is private property there is also community property which all possess with the same rights.

Here is a man who has nothing but the rags on his back. He lacks food and hasn’t a nickel in his pocket. I can say to him:

“My friend, you think you’re a poor man, don’t you? Well, the fact is, you’re really a capitalist with very considerable wealth, by virtue of the same title I and the Prime Minister of the country hold. The waterfalls of the country, the crown forests, are yours as well as mine and these riches could very easily bring you in an annual revenue.

“Society makes it possible for a community to bring forth immeasurably more goods than could isolated individuals. Well, you’re a member of society just as I am and you should be able to derive the same benefits as I do from this unearned increment of association.

“Science, which makes industry able to multiply production almost without human labour, this science is a heritage passed on to each generation, a heritage that is continually growing; and you who are a member of this generation just as I am, should have a share in this legacy just as I do.

“If you are poor and naked, my friend, it is because your share has been stolen from you and put under lock and key. When you have no food it is not because the rich eat all the grain in the land; it is because your share is still lying in the grain elevators. You have been deprived of the means of getting that grain.

“The Social Credit dividend will ensure that you get your share, or at least a major portion of it. An administration free of the influence of financiers and able to cope with those exploiters of men, will see to it that you get the rest.”

Price Regulation

The dividend, added to salaries and other sources of revenue, goes to make up purchasing power.

But there are people who do not need all their money for purchases and prefer to save or invest it. This cuts down on the total of effective purchasing power. Only money which is channeled into buying makes up effective purchasing power.

For this reason and for others, the balance between prices and purchasing power cannot be maintained solely by giving a dividend to everyone. However, Social Credit provides for this balance by a regulating procedure which, while respecting the liberty of each one, makes the savings for the more fortunate beneficial to all, and, at the same time, prevents any tendency towards inflation.

This bit of financial machinery is the adjusted price (but by no means a fixed price); it is also called the compensated price or the compensated retail discount. There is nothing artificial or arbitrary about it. It reflects exactly the facts about production and the consumption of real wealth.

If, for example, the national accounting shows that in one year the country’s total production has reached a value of 30 billion dollars and that during the same period national consumption of all sorts (depreciation included) figured at 24 billion dollars, what can we conclude? We must conclude that while the population has dissipated some 24 billions of dollars of wealth through consumption and depreciation, it has produced some 30 billion dollars worth of goods. So the production of some 30 billion dollars worth of wealth has, in reality, cost collectively only 24 billion dollars.

The real price is lower than the accounting price. In order that the population may fully reap the fruit of its production it must be given a discount of 6 billion dollars; that is, pay only 24 billion for what is down in the books at 30 billion.

To this end the national monetary office will decree a general discount of 20 per cent on all retail sales for the coming period. If I buy an object marked at $10 I will pay only $8.

But, in order to stay in business the manufacturer and the merchant must still recover all their expenditures. For this reason, the same national money authority will compensate the merchant by creating the necessary amount of money. For the $10 article I paid $8. Upon presentation of his sales vouchers to the local branch of the national office, he will receive the $2 which was discounted.

Thus the consumer gets products which without this procedure would have remained unsold. The merchant gets his price. And the creation of this money has in no way caused inflation since, on the contrary, it is tied in with the lowering of prices for the purchaser.

Now, regarding profits; the compensation given the merchant which favors merchant and buyer alike – may be linked by appropriate methods to certain conventions. These conventions, while in no way affecting the cost price, would provide for a profit. This profit would lie within defined percentages, agreed upon as being adequate for the various fields of commerce.

An Objection: Gold

– But we must have gold as a basis for our money!

– Money gets it value from production and mutual confidence. Wipe out every last vestige of useful production in Canada, leave the land a barren desert; of what use would gold or paper money be? Contrariwise, consider Canada as it is, producing every possible type of goods and services and suppose it to have a corresponding amount of money, in paper or merely as figures in a ledger; this money would certainly be accepted and would serve to purchase any product up for sale.

– But then what about the gold standard?

– The gold standard is a definition of the monetary unit of each country, formulated to permit comparisons between the monies of countries. If we say that the Canadian dollar is worth fourteen grains of gold we mean that you can obtain for one dollar, 14 grains of gold or the equivalent in merchandise. Even if the gold is not there you can still obtain the other goods, if they exist, for your dollar.

– But money without gold to back it up – will it be recognized in other countries?

– Money is strictly national in character. The dollar does not circulate in France nor does the franc circulate in Canada. The French buyer or merchant is not interested in the quantity of dollars in circulation. They want to know how much a dollar can buy. If production doubles and the number of dollars doubles at the same time, isn’t the dollar worth exactly what it was worth previously? In fact this is the only way to preserve stability in the purchasing power of the dollar, a factor so vital in international commerce.

Since May 1, 1940, the Bank of Canada hasn’t increased its store of gold to correspond with the increase in the amount of dollars. But is the dollar any less acceptable to foreign producers, who sell us their goods, than it was on April 30, 1940?

The myth of gold is a fetish kept alive by the masters of credit and money in order that they may more easily carry out their designs. Isn’t it rather silly to condition a man’s right to eat – and to have the other things necessary to live – by the amount of gold in existence rather than by the amount of food available?

An Objection: Indolence

– Social Credit will make people lazy.

– Why?

– Because it wishes to increase the amount of money, and money makes people lazy.

– Oh, but the facts are quite the contrary. When there is money in circulation, products sell; when products sell, industry is able to supply work to employees. It isn’t work, but condemnation to inaction, which tends to make a man lazy.

Furthermore, laziness is a vice, a capital sin like pride, lust and the others. Finance is not a means of regulating morals; it is not supposed to take the place of religion and education.

– Yes, but money for nothing!… and guaranteed to everyone!

– This is not a matter of money for nothing. It is revenue from a capital that belongs to everyone. And it is money for purchasing available goods.

The assurance of the minimum revenue necessary to live does not make a man lazy; rather it places him in a position where he is able to select a line of work in accord with his taste and ability – which ultimately works to the greater good of the community.

The best workers are those who freely choose their own work; not those who have been chained to a job, tied to a profession arbitrarily thrust upon them.

The dividend makes purchasing power with which to pay for products. Consequently it presupposes the work of men and machines to meet this demand. It is obvious that if production comes to a halt no amount of money can be considered purchasing power since there simply won’t be anything to purchase. The creation and distribution of money under such circumstances would be no reflection at all of the real state of production.

A dividend for everyone will be a stimulant for production, just as are the salaries and wages of the workers, since it will grow with production.

The universal dividend will have no effect upon the salaries or wages of those employed in production. There will still be a difference between a man having dividend-and-salary and a man having only the dividend.

An Objection: Communism

– Giving everyone the same amount of money will place everyone on an equal footing; that’s Communism!

– The dividend will not make incomes equal. Peter has $100,000. Paul has $100. If I give each of them $5 will they be equally wealthy? Each is better off than he was before; but the poor man is more aware of the improvement in his finances.

– Something for nothing. That’s Communism!

– Not at all. What does Communism want? When Communism demands an equal status for all, it is making a huge mistake. But when we ask for each human being the right to the necessities of life on the grounds that God created material wealth for all humans indiscriminately, this is not Communism but Christian sociology. It is the “usus communis” law, stating the right of every human being to the use of temporal wealth.

But if the Communists are the cause of this law being recalled to the minds of men, then so much the better for men. The other law, that of private property, is equally just, and capitalists are right in adhering to it, just as Communists are wrong to deny it.

Communism would enslave the world to the State. When Social Credit guarantees enough to buy the necessities of life, it permits men to choose the work suitable to their aptitudes; in making production profitable it frees the citizen from the necessity of continual recourse to the State for intervention, for grants, which intervention eventually leads to the cancellation of liberty.

Furthermore, a commission of theologians, appointed by bishops, studied Social Credit in 1939 and were unanimous in declaring that in Social Credit there was no tinge of the Socialism or Communism condemned by the Church. This body’s report even made some interesting comparisons between the encyclical of Pope Pius XI and the monetary propositions of Social Credit.

Opposition: Who and Why?

Has Social Credit its adversaries? Yes indeed, and here are some types of these adversaries.

The bigwigs at the head of the banks and the trusts formed about the banks, are opposed to Social Credit. They see in it an end to their precious monopoly and their exploitation of the public. The political parties have not made Social Credit an integral part of their programs because they hear only the voices of those supplying them with money, and because the body of the citizens is not sufficiently educated to make its voice heard.

Those in charge of patronage are generally opposed to Social Credit; if the people have money then patronage is of little consequence.

Certain of the newly rich are opposed to Social Credit because they wish to have the poor about in order to accentuate their own “superiority.” They also fear that once the public has no need to crawl for the right to live it will start to judge men by their moral qualities and not by the size of their wallets.

Then there are numerous types of ignorant people who are against Social Credit. Some know nothing at all about it, yet condemn it from sheer spite or prejudice. Others interpret it wrongly and imagine that their fortunes are going to be confiscated.

There are those who believe that the majority of men should be poor for their souls’ good. Of course they claim that they themselves are quite capable of handling a fortune with no danger to their morals; but they regard their next door fellow men as professional sinners to whom, consequently, the bankers are doing a spiritual work of mercy in keeping them poor and thus saving their souls!

Then there are still others who are so married to their own pet beliefs that they refuse, either through pride or narrowmindedness, to believe that anything outside these beliefs can have any merit.

Note well that these adversaries offer no proofs to back up their affirmations and denials. Sometimes they distort the picture of Social Credit so as to be able to attack it. One such critic, the ex-Dominican Thomas Lamarche, has even indulged and infused into them his own meanings. Such conduct goes beyond ignorance and becomes malice.

A Consequence: Order

According to us, what would be the consequences of the establishment of Social Credit?

First of all, in a general fashion, order would be restored in the domain of money, and through money in economics – with a resultant improvement in the political and social spheres.

Man, in the order of superiority among created things, comes immediately after God and the angels. Money, like every non-intelligent thing, comes after and is under man.

Today, money, born from a banker’s ledger, comes into this world as a debt owed by man. Money, at its birth is master. Man, on the other hand, is born indebted to finance. With reference to money, he comes into this world a slave.

With a Social Credit finance, money would still originate from a ledger but it would come forth as the servant of men. Each child would have at its birth a right to a dividend; money would immediately be on hand to serve him.

The reestablishment of order in the field of economics. The end, the goal would guide all economic activity. Goods would be produced to fill wants. The accumulation of money would cease to be the commanding aim of industry.

The standard of living would be regulated by the amount of products available since the amount of money would be regulated by the amount of goods.

Money would become what it should be, an instrument to insure the steady flow of goods, not a weapon to confer power on individuals.

Being considered just as a token of wealth and a claim on goods, money would be an exact reflection of real wealth, of available useful things. It would never be out of step with human wants. For production requiring labour, money would come through wages; for easy production, easy money; abundant production, abundant money; automatic production (without human toil), free money; production receiving its impetus from a common capital, through the factor of organized society, money coming from a social source and distributed to each and everyone. Such would be the chain of cause and effect.

The development of a country would no longer be marked by debt but by an increase of common prosperity, shared alike by all.

A Consequence: Security

The first thing a man seeks in the temporal order is security, the preservation of his life. And it was for his greater protection from his enemies – wild beasts, hunger, cold – that he formed a society with his fellow men.

He is even prepared to sacrifice a degree of his liberty in order to have at least a minimum of economic security.

What stands in the way of economic security today? What inspires in a man that fear for tomorrow? for his old age? Consider Canada again. Is there a single Canadian who fears that tomorrow, or in several years, Canada will be unable to produce enough wheat, enough food to satisfy the hunger of every citizen in the land? Who is afraid that Canada will ever be unable to furnish enough clothing, shoes, enough construction material, enough fuel, etc.?

No, that which prevents us from feeling secure about tomorrow is our fear of not having enough money to buy that share of available goods necessary to us. Today we have no guarantee of this money.

If money were to keep in step with production, if it were distributed in sufficiency and in such a manner as to guarantee by law that each had enough to ward off want, we should immediately witness the birth of economic security in a country which, materially, lacks nothing.

Well, the monetary system of Social Credit would guarantee this security for each and every citizen.

There would be enough to ensure a continual flow of goods, a minimum revenue guaranteed to each one – any further revenue to be determined by a citizen’s contribution to production. And that minimum revenue would increase in the measure that machinery, applied science, inventions and technological improvements diminished the amount of labour necessary to maintain production.

A Consequence: Liberty

From this very security is born liberty, a liberty so precious to man that, once guaranteed the necessities of life, he will prefer to keep it rather than trade it for luxuries.

But this freedom is a hollow mockery if, in order to retain it, a man must resign himself to starvation.

He who must slave to keep body and soul together has no liberty. The tyranny of money allows no freedom, Even those who become rich, “often by violence or by the complete absence of scruples of conscience,” cannot enjoy their success in complete freedom, because that peace of mind so necessary to true liberty is incompatible with the particular type of fratricide they practice. More than that, the free enjoyment of material goods, even when legitimately come by, seems out of place in a world where so many of our fellow beings are, without any justification, in complete misery from want.

For the first time man will find himself free from the bonds cast about him by other men who exercise their power through money. If this deliverance by itself doesn’t give him true liberty, then he has only to regulate his own life himself in order to enjoy it.

There will be freedom to express one’s thoughts, which liberty, though admitted in principle today, has been reduced to almost nothing for a great numbers, because of their dependance on party government or upon big companies who use their power to intimidate their employees.

There will be liberty to choose one’s career in a world where the doors to success will no longer be closed because of the lack of money.

A man will be free to marry, to build a home, when he has been assured the necessities of life and the chance to find his place in the world in a normal fashion.

With a regular dividend coming in to each member of the family and helping to defray the ever-increasing expense of supporting a family, we shall be free to give our children a proper upbringing.

When progress will mean a wealth of leisure with no curtailment of income – instead of spelling unemployment as it does today – man will be free to develop his capacities and to exercise his creative talents.

A Consequence: Government

If governments today do not, in fact, govern, it is because they have become the servants of private interests. They obligate themselves and the people for debts to the bankers who manufacture money. Even the most capable men, when they form a government, are helpless to resist these creators of debts.

In place of governing the country according to the real potentialities of the country, they must govern by a regime based on the principle of the scarcity of money. The pilots of the ship of State stand before the helm handcuffed.

Those forms of government closest to the people, such as municipal governments, find themselves completely baffled by the problem of trying to find money where there is none.

The governments at the very top should have no other task than to watch and coordinate the various organisms under them, those social bodies arranged one above the other in hierarchical order, forming in a most natural manner the true State. But, alas! all of these social bodies, these corporations, even the most fundamental of them all, the family, have become empty institutions without any true life of their own. So there remain only individuals or groups of individuals, jostling and wrangling over the pennies the government is snatching from those who still have a few.

Social Credit would restore to governments their proper functions. It would put back into circulation money, “the life blood of our economic body.” Individuals would be free to form their own professional bodies. These groupings, these various corporations, would become financially capable of regulating those problems lying within their jurisdiction, thus removing a considerable burden from the higher governments.

Once liberated from the nightmare of utterly impossible budgets, and independent of the money powers, the government would be in a better position to intervene whenever the security of our social order were menaced by the modern robber barons of finance.

A Consequence: Reform

We believe that Social Credit would be a powerful factor in reforming our economy and our public life.

Political reform – Once Social Credit were established, politics would no longer be a race for favors since the fullness of life could be realized in some other way than in being employed by the government. Patronage, that source of injustices and venality, would no longer have a reason to exist. The party spirit which exercises so evil an influence among us, would also find the wellspring of its being cut off. The government, its hands no longer manacled, could administer the country for the common good. The universal dividend is a safeguard against political dictatorship.

Economic reform – Under a regime in which money is never anything more than a means of distribution, where amassing it no longer confers the means of domination over others, economics would be able to attain its just end; to furnish goods, useful articles, in proportion to the needs of consumers. With money in their pockets the people would better be able to express their desires, their tastes, and would be in a position to guide production. Food being the most important of all needs, agriculture would become the most important element in our economic life; and then would come the industries concerned with clothing, shoes, construction, furniture, medicine, education, recreation. Exportation, armaments, and those other vast industries so out of proportion to their real importance, would cease to hold the place of honor. With its true purpose thus clearly established, economics would also come to be reformed in its methods. Techniques, applied science, professional training, genuine competence, would shine forth in production, transportation and commerce; the result would be a maximum of efficiency with a minimum of effort.

A Word on Taxation

“Modern taxation is legalized robbery,” has written Major Douglas, the originator of Social Credit. Of course, as Douglas also remarked, “Public services require a provision both of goods and human service, and the mechanism by which these are transferred from private enterprise to the public service must in its essence be by a form of taxation.”

The evil in the existing system of taxation, is that it makes taxation bear on the money distributed for production made, instead of making it bear on the capacity of supplying goods and services.

Whether taxation, as we have it, be imposed on property, or on wages, or on profits, it exacts money. This money can only be taken from an income. All taxation therefore robs the taxpayer of his earnings: a downright robbery, even if legalized.

A Social Credit economy would do away with this raid on the citizens’ acquisitions. Public services would not be met, by a levy upon financial incomes, but would be a charge against the total national productivity, much of which is unutilized. Financial credit – money – would be issued at the rate of new production, and withdrawn at the rate of consumption through the adjusted and compensated price mechanism. The government’s consumption, added to the individual and business consumption, makes up the total consumption. But likewise, the government’s production (public developments) is added to individual and business production to make up the total production. The retail discount would vary according to the relation between total consumption and total production.

An influential economist of his time and the first to grasp the value of Douglas’s great discovery, A.R. Orage once said: “The ultimate ‘collateral’ upon which banks create and issue new money is the difference between actual consumption and potential production. And by doing exactly what the banks do when they issue loans, make overdrafts, and buy gold or securities – namely, create money upon the ‘collateral’ of the nation’s unutilized productive resources, – the Treasury could finance public expenditures without calling upon its citizens individually to sacrifice a penny of their present incomes.”

The Social Credit Movement

Many great minds have criticized the money system which serves humanity so poorly. But it was Major Douglas, a Scottish engineer, who first, in 1918, formulated a body of principles called Social Credit. This system was the one most in harmony with modern progress; it was the most democratic; it was the only one which placed money directly at the service of men, of all men; it alone stipulated that the income of a family should increase as the family itself increased.

The study of its propositions set on foot a movement whose purpose was to demand and bring about the establishment of this system. The Social Credit movement spread to all English-speaking lands, even as far away as Australia and New Zealand; but it took its firmest grip in Canada, primarily in Alberta where it first took root.

In 1935, Alberta cast a majority vote in favor of this system. However, the furious opposition of the banks, supported by the federal government, blocked its immediate establishment.

In Quebec and in all parts of French Canada, the movement, inaugurated in 1935, grew to imposing proportions, instilling in the people it touched, the habit of studying political matters.

The Social Credit movement radiating from Quebec is directed by the Institute of Political Action, with its headquarters formerly in Montreal, now in Rougemont (Rouville), P.Q. The Institute publishes and circulates a French organ, “Vers Demain,” which appears twice a month, and various pamphlets and booklets in French, and also some in English. For a list of {…}

To obtain results from the governments, the Institute of Political Action recommends political pressure, which can be done at any time, whereas electoral action can only be incidental. The Institute believes in uniting electors behind demands on which they agree, rather than dividing them under conflicting party labels. Hence, its political formula: the Union of Electors.

An Apostolate of Education

The way to realize Social Credit is obviously to form a public opinion sufficiently enlightened and motivated to make a successful demand for it. So there is no question of an electoral campaign but rather a campaign of education.

This is the surest guarantee for the future of Social Credit. Only a well-informed citizenry can exercise that vigilance necessary to protect the common welfare against attempted sabotage on the part of unscrupulous or incompetent politicians.

In an economy of Social Credit there would be no financial problems, only problems of education, of orientation, of proper evaluation. You cannot discuss these matters with a people nailed down to the grim reality of material want and endowed with an outlook a little above that of slaves. So it is that study and widespread propagation of the habit of study has become so necessary in order to realize Social Credit and develop the mentality necessary to meet and cope with new problems.

This propagation of study among the mass of the people requires the devoted efforts of numerous apostles who are not afraid of ridicule and sacrifice. Here again we have the re-establishment of order. The present lack of order springs from egoism and pride, from the stifling of the social spirit, from the spirit of the pharisees which reigns among the intellectual classes, from the listless apathy of the masses which is the very kiss of death. All these disorders must be corrected.

The surest and only way of advancing the cause of Social Credit is that method which begets study and devotion. Such is the method adopted by the Institute of Political Action.

In its periodic papers and in the other literature which it edits, the Institute reduces to the simplest terms those over-inflated, unnecessarily complex ideas of politics, economics, sociology and even philosophy. And then, through the zeal of its members, the Institute carries to families and individuals the teachings thus made understandable to the average reader.

The Institute also brings its members together in assemblies, holds study-days open to all, trains the citizen to personal initiative, to personal responsibility, to act together with others in the pursuit of the common welfare and to demand results from the various governments and other elected public bodies.

PUBLISHED BY THE INSTITUTE OF POLITICAL ACTION
This booklet Primer of Social Credit is translated from
the French Syllabaire du Crédit Social
September, 1963

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Source: Liberty Bell magazine, May 1983; transcribed by Racial Idealism