The history of Alberta Alienation and the autonomous farmer worker resistance to
A more significant departure from European experience was the ambiguous state of government
accountability to legislative, and thus elected, power. Though granted ‘responsible government’ in the late
Renewing Canadian Democracy: Citizen Engagement in Voting System Reform
If British Mercantilist Imperialism viewed the 'colonies' of its 'Commonwealth', as the 'hewers of wood and drawers of water', then
British Imperialism was the underlying ideology of
The Banks, the other mercantilist monopoly, would fund the farmers, who would then be in debt to both them and the CPR. And after WWI the farmers would be in debt to
The autodidact social movement of immigrant farmers and workers in
It was in
While Canadian Historians have spoken of the 'two solitudes' between French and English
Social Credit was part of that movement of worker farmer rebellion against the Canadian mercantilist state. Its founder Major Douglas is an example of the autodidactic intellectual trend at the beginning of the 20th Century when socialism begins to diverge into Modernism, being a movement of progressive politics, philosophy, art, and culture.
He first published his ideas about Social Credit in the British Modernist Journal 'The New Age', whose editor was A.R. Orage.
The New Age included modernist writers like T.S. Elliot and Ezra Pound. Orage himself was a Guild Socialist and he was influential on the ideas of Social Credit
“Guild socialism and
The Political Economy of Social Credit and Guild Socialism
Sustainable Economics Volume 12 Number 3 June 2004
the bimonthly newsletter of the Green Economy Working Group of the Green Party of England and Wales
The first public presentation of C H
THE JOURNAL OF THE SOCIAL CREDIT SECRETARIAT Quarterly Volume 82 No. 2 Autumn 2004
The New Age was open to debates between varieties of socialists, including guild socialist, Fabians, anarchists. The writers and thinkers around the New Age developed their own unique form of anti-capitalism that was also anti-socialist. It was called 'distributism'[i], and it would influence
Like Thorstien Veblen,
SOCIAL CREDIT
Part I: Philosophy
CHAPTER V
SABOTAGE AND THE CULTURAL HERITAGE
The early Victorian political economists agreed in ascribing all "values" to three essentials: land, labour, and capital. Without staying at the moment to discuss the unsatisfactory meanings which were frequently attached to these words, we may notice that, the three together being defined as the source of all wealth, the possession of one or the other of them seemed logically defensible as a claim, and collectively, the only valid claim to the wealth produced. But it is rapidly receiving recognition that, while there might be a rough truth in this argument during the centuries prior to the industrial revolution consequent on the inventive period following the Renaissance, and culminating in the steam engine, the spinning-jenny, and so forth, there is now a fourth factor in wealth production, the multiplying power of which far exceeds that of the other three, which may be expressed in the words of Mr. Thorstein Veblen* (although he does not appear to have grasped its full implication) as the "progress of the industrial arts." Quite clearly, no one person can be said to have a monopoly share in this; it is the legacy of countless numbers of men and women, many of whose names are forgotten and the majority of whom are dead. And since it is a cultural legacy, it seems difficult to deny that the general community, as a whole, and not by any qualification of land, labour, or capital, are the proper legatees. But if the ownership of wealth produced vests in the owners of the factors contributed to its production, and the owners of the legacy of the industrial arts are the general community, it seems equally difficult to deny that the chief owners, and rightful beneficiaries of the modern productive system, can be shown to be the individuals composing the community, as such.
* "The Engineers and the Price System."
Douglas is not alone in addressing the crisis of Modernism, which occurs after WWI when Fordist industrialization leads to the very real domination of finance capital and the effective creation of mass consumerism. This creation of the worker consumer concerned Veblen, Hilferding, and other Marxists. A solution to the Modernist crisis of consumption was put forward by the Austrian School of Price and Distributive theory as well as the followers of 'Distributism'.
Yet perhaps the most important fundamental idea which can be conveyed at this time, in regard to the money problem - an idea on the validity of which certainly stands or falls, anything I have to say on the subject - is that it is not a problem of value-measurement. The proper function of a money system is to furnish the information necessary to direct the production and distribution of goods and services. SOCIAL CREDIT CHAPTER VII THE NATURE OF MONEY
This recognition of the 'reality' of the day, the crisis of capitalist overproduction, led to a variety of economic alternatives based not on production but distribution, including Keynes General Theory, which is also a distributive model for capitalist reform. However
Part III: The Design of Economic Freedom
CHAPTER II
SOUND MONEY
It is also vital to notice that, so far from these relationships being in any sense theoretical, they are so automatic and inherent that they exist in a definite form in the world to-day. In spite of all the agitation for what has been called workers' control of industry (an agitation which has been pressed forward in every part of the world) such a thing has never been in effective operation, for the reason that it is against the nature of things. Finance directs, and always has directed, the programme of production. Finance is the technique of credit; and the origin of credit (though not the whole basis of credit) should be the consumer. "Workers' Committees," Soviets, and so forth, are crude credit-distribution societies, whose working is inferior as such to that of the orthodox bank. It is possible to remove every factor from the industrial system, except effective demand, and some sort of industrial system, however primitive in kind (even to the extent of digging for roots and climbing for fruit), will remain; but take away the desire, the need or the belief in the ability to consume, and not a seed will be planted nor a tool employed. It is not for lack of technical ability, but for lack of effective demand, that civilisation today stands on the brink of irremediable catastrophe.
There is, therefore, no room for doctrinaire theorising in regard to the "aims of industry"; the trouble about industry is not that its aims are wrong, but that it fails to achieve them. And it fails to achieve them for a simple reason - the individual is divorced from the credit which is his, and, in consequence, does not duly function as a consumer. It is only necessary to recognise the natural relationships which underlie any sort of functioning of an economic society. If we recognise and admit these relationships, and make our arrangements accordingly, we have a machine which is designed to work in accordance with the only forces which are available to work economic machines, and the result is smoothness and efficiency. If we refuse to recognise these forces, or pretend that they have a direction which is contrary to the facts, or clamour for a change in their nature (a "change of heart"), we are likely to get an economic machine which is about as successful as would be a plough if installed for the purpose of driving an Atlantic liner. We are in the position of a would-be engineer who refuses to accept the principles of thermodynamics, and, instead of endeavouring to improve the steam engine, tries to alter the properties of steam.
The financial relationships which correspond to these principles are fundamentally simple. The credit power which is based on the demand of the community as a whole for goods and services can only be effectively directed in detail by trained technicians, using that description, in the words of the Labour Party, "to include workers by hand and brain." But just as it is in the nature of things that ownership and finance are indissoluble, so, while emphasising the sphere of the technician in production, it is equally certain that his product belongs not to himself, but to the community from which he derives his financial energy. It is the business of the scientist, the designer, and the inventor, to place before the individuals who compose the public the achievements which are considered possible. It, is the business of the public to say in what quantity and in what priority it considers those achievements desirable, and it is the business of the producer, in the general sense of the term, to act in accordance with the verdict, and to hand over the product to the general public - the consumer - of whom alike the producer and the inventor are a part. That is practically what happens at present, with the vital exception that the order system which connects the individual with the producer does not function; whether by accident or design is largely immaterial.
Interestingly
The credit power which is based on the demand of the community as a whole for goods and services can only be effectively directed in detail by trained technicians, using that description, in the words of the Labour Party, "to include workers by hand and brain."
Whether society as a whole can be imagined to have an individuality of its own or not, it may be repeated that Society's individuality is not a prime interest of the human individual. It is an auxiliary interest, and may even be a perversive interest. It is most probably true that there can be no divergence between true Public Interest and any true private interest; if it were so, words would have lost their meaning; but it is certain that no crushing of individuality by Society can ever conduce to the well-being of other individuals. The human individual, under the same conception, contains either in a latent or active form, every function and attribute, although on a minute scale, which can be imagined to reside in a world society. Consequently, although work for its own sake, or employment as an end and not a means, is objectionable when it is purely functional, or to put the matter in everyday terms, since it is plainly desirable to cut down the amount of time necessary to improve the general environment at whatever rate is deemed desirable, work for its own sake may quite easily be essential to the well-being of the individual. The difference is subtle, but it is vital. To knit a jumper or to dig and plough because of the satisfaction of knitting a jumper or of creating a garden or a wheatfield, or even because it is healthy, is one thing, and it may happen as a by-product that the jumper or the wheatfield will be superlatively well done; to knit jumpers, or to dig and plough ten hours a day, six days a week, fifty-two weeks a year, because unless this is done the mere necessities of existence cannot be obtained, is quite another. To dress neatly, comfortably, and suitably, taking half an hour over the process, seems reasonable; to spend the day in dressing is monomania - our forbears called it "possession." When we do things under the compulsion of Society, we are blood-corpuscles, not individuals; we are doing them in the interests of Society primarily, and only secondarily, if at all, in the interests of our own individuality. As society is at present constituted, it is quite definitely to its advantage, and tends to the perpetuation of the present form of Society, that Lancashire mill operatives should work the maximum number of hours at a very dull occupation, with the minimum of change of work, and if individuals had no interests as such, that is to say, if they were Robots, contemporary society would probably work very well, and no difficulties would arise. But
The problem with Social Credit and distributism is that, like the
In order then to identify the source of the crisis of capitalist overproduction, it reduces it to a theory of money, credit, interest and circulation. This means that it does not identify capitalism as the problem rather it identifies a single arena of capitalism as the problem, finance capitalism.
It reduces the problem of overproduction to the control of the economy by the banking and finance monopolies. Ipso facto the problem then is who invented interest, and who controls the levers of the banking industry.
A CONCEPTION which is closely connected with the theory of rewards and punishments, is that of "Value." In effect, value may be defined, to fit the orthodox conception of it, as that quality which gives to anything maximum exchangeability under present conditions. Rewards and Punishments, Justice, i.e. the assessments of desserts, and "Value," i.e. the basis on which desserts are assessed, may be said to be the corner stones of the Semitic structure of society.
And he relies upon the Protocols of the Elders of
"IN a remarkable document which received some publicity some years ago, under the title of "The Protocols of the Learned Elders of
TAXATION AND SERVITUDE
And while Douglas did lace his Social Credit theory with the economic conspiracy theory of Jewish Bankers, that is not what the United Farmers of Alberta and later Social Credit movements took from his theory. These movements in
Social Discredit: Anti-Semitism, Social Credit and the Jewish Response.
Anti-Semitism in
In the 1930s, Social Credit doctrine made its way from its originator,
To dismiss Social Credit in
And it fails to understand that the original movement from which it originated was 'distributism' whose ideology was adapted by left wing Catholics like Dorothy Day of the Catholic Workers League and corporatists on the right like Ezra Pound[ii] who viewed fascism as the logical outcome of Social Credit distributism.
Aberhart candidly admitted that certain Social Crediters were spouting anti-Semitism. Secondly, even though the premier failed to keep his promise to squelch the anti-Semitism among his followers, the [Canadian Jewish] Congress chose not to make the conversation public. As a result, an opportunity was lost to publicize Aberhart's acknowledgment of the problem and his failure to do anything about it. Social Discredit is full of intriguing episodes, but typically the documentation is more complete on the Congress side than on the Social Credit side. In February 1947 two Congress officials held a two-hour meeting with three Social Credit members of Parliament. One of the Congress representatives summarized the conversation that took place in a lengthy memorandum to the national executive. Unfortunately, there is no record of the impressions of those sitting on the other side of the table.
Social Discredit: Anti-Semitism, Social Credit,and the Jewish Response
Reviewed in University of Toronto Quarterly by James Pitsula
This contradiction is inherent in all distributive economic theories as they fail to deal with the real source of capitalisms dominance; that is the social relations of production. They are in effect an economic theory of consumers/ consumption of the new middle class in the era of Fordist production.
Social Credit is one of many distributive economic alternatives to Finance Capitalism including several current popular micro-economic models for creating an anti-capitalist cooperative marketplace. Local and Interest-Free or Alternative Currencies, Social Credit and Microcredit
The fact is that distributive theories of economics, that is theories of the dominance of finance; interest, rent, etc. rely upon the actual history of usury. Their critique of finance, mercantilism/capitalism is based on the moral repugnance in Christian Europe of usury, this is the source of their argument whether or not one uses the Protocols of the Elders of
It is also the underlying failure of the distributive theory of value, and one which is historically prone to conspiracy theories.
Francis Bacon
1581-1626
Many have made witty invectives against usury. They say that it is pity the devil should have God's part, which is the tithe, that the usurer is the greatest Sabbath-breaker, because his plough goeth every Sunday; that the usurer is the drone that Virgil speaketh of: Ignavum fucos pecus a praesepibus arcent; that the usurer breaketh the first law that was made for mankind after the fall, which was, in sudore vultûs tui comedes panem tuum; not, in sudore vultûs alieni; that usurers should have orange-tawny bonnets, because they do Judaize; that it is against nature for money to beget money, and the like.
The discommodities of usury are, first, that it makes fewer merchants; for were it not for this lazy trade of usury, money would not lie still but would in great part be employed upon merchandising, which is the vena porta of wealth in a state: the second, that it makes poor merchants; for as a farmer cannot husband his ground so well if he sit at a great rent, so the merchant cannot drive his trade so well if he sit at great usury: the third is incident to the other two; and that is, the decay of customs of kings or states, which ebb or flow with merchandising: the fourth, that it bringeth the treasure of a realm or state into a few hands; for the usurer being at certainties, and others at uncertainties, at the end of the game most of the money will be in the box; and ever a state flourisheth when wealth is more equally spread: the fifth, that it beats down the price of land; for the employment of money is chiefly either merchandising or purchasing, and usury waylays both: the sixth, that it doth dull and damp all industries, improvements, and new inventions, wherein money would be stirring if it were not for this slug : the last, that it is the canker and ruin of many men's estates, which in process of time breeds a public poverty.
The very real, harsh and brutal impact of the Depression produced the anomaly in
Finance capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc., strengthens the domination of the financial oligarchy and levies tribute upon the whole of society for the benefit of monopolists. FINANCE CAPITAL AND THE FINANCIAL OLIGARCHY
The Modernist ideology that influenced the workers and farmers movements in
It is the limitation of the critique of Monopoly, whether espoused by Douglas, the Cooperative movement, the Distributism movement, Henry George, or even the libertarian Benjamin Tucker, which in its incomplete critique of capitalism allowed it to be adopted by the Left and the Right. Since it is a critique of finance capital it suffers the albatross of being prone to monolithic conspiracy theories.
Once Social Credit became a government and Bible Bill consolidated his power over this popular front movement, the party quickly declined into a Christian evangelical tyranny of the right.
This was the time of not only movements of the left but a rebirth of the evangelical movement in
It is this Christian evangelicalism that reeked of Anti-Semitism, and was rejected by radical workers and farmers, as well as social reformers who had hoped
A Western Canadian Libertarian critic of Social Credit was
Eugene Sydney Woodward
Eugene Sidney Woodward (1880-1970) was the son of a railway clerk of
father's occupation. In 1908 he emigrated to
Woodward joined the Retail Clerks'
Throughout the 1920's he served as an alderman in the city of
He pursued his interest in economics through independent study .
He was particularly influenced by the ideas of the American social philosopher Henry George, and by the German economist Silvio Gesell , founder of the Free Economy movement . [iii]
An original thinker, he was neither left-wing nor right-wing, although much of his ideology might be termed "libertarian" today .
In 1936 Woodward was invited to advise the Social Credit government of Albert a on his economic theories . However, he soon broke with Premier Aberhart and became a vocal critic of Social Credit .
While in
successful career as an editorial writer and columnist for the
radio program "Town Meeting in
in Free Enterprise, published under the pseudonym Gene Ard in 1965 .
Alberta's farmers and workers opposition to the Banks and finance capitalism led them to support the Social Credit movement, but it also led them to form the Cooperative Commonwealth Federation (CCF), and the creation of an anti-capitalist movement in the West and to form the backbone of the Communist Party of Canada.
All three of these movements overlapped in
Today the populist politicians of the right use this deep seated distrust and inherent radicalism to their own ends. They adopt the program of the Post-WWI worker farmer left in Alberta as their own, referendum, recall, proportional representation, criticism of unfair taxation, and a critique of monopoly (in the neo-con's case of state monopolies only).
The Left in
Here, as in Europe, the presence or absence of a strong labour party was key. New Zealand’s Labour party
didn’t emerge until 1916, four years after the majoritarian voting system had been abandoned. By the time
Labour gained power in 1935, its opponents responded by merging into a single opposition party, eliminating
the necessity of voting system reform. By contrast, conservative opposition to Labour in Australia could
not unify their rural and urban interests behind one party. Thus the adoption of the alternative vote in 1918
allowed both rural and urban parties to co-exist without giving advantage to Labour through centre-right vote
splits.Similar dynamics led to its adoption in most Australian states as well. In Canada, the situation
was different again as the key national reform party of the era was organized around farmers, not urban
labourers. Initially, labour led a spate postwar social organizing, culminating in the 1919 general strikes in
Winnipeg, Calgary and Vancouver, and the rise of the radical One Big Union. But by the 1921 federal election,
recession and state repression had thinned their ranks, and labour candidates won just a handful of ridings.
However, at the provincial level, the political threat from the left and their allies had more impact, leading to the adoption of partial PR systems in Manitoba (1920) and Alberta (1924).
Anglo-American discussion of voting system reform, after a brief surge of interest after WWI, slipped from
public discussion throughout the 1920s, and from favour with many previous supporters in the 1930s. Britain
faced the prospect of electoral reform again in 1931 under a minority Labour government but the parties
couldn’t agree on an alternative. Increasingly, left activists everywhere were viewing calls for proportional
voting as a manipulation by their opponents to simply limit their influence or ability to govern. Certainly
British Labour’s unhappy experience in minority government in 1924 and 1929-31, where neither Liberals or
Tories would sanction much of the left’s policy agenda, convinced many that only a majority for the left would
allow them to do much. Indeed, throughout Europe, left parties faced hostile coalitions determined to block
their agenda. New Zealand Labour reversed its historic support for PR in 1934 just as it was on the verge of
power, and the Canadian Trades and Labour Congress dropped PR from its annual list of demands in 1931
after a decade of lobbying for it. Renewing Canadian Democracy: Citizen Engagement in Voting System Reform
APPENDIX
From the horses mouth: Social Credit in Alberta
Social Credit governed
At the same time as the Province of Alberta was established in 1905, the farmers, who made up about 80% of the population, created the two farmer organizations, the Society of Equity and the Alberta Farmers Association, which became the United Farmers of Alberta in 1909 (UFA). The Co-operatives fought to combat the abuse of farmers at the hands of the corporate establishment, and to reduce speculation, waste and market manipulation, with the help of leaders like Henry Wise Wood. Wise Wood taught the farmers how the Co-operative Movement had been established to prevent people from being exploited by the industrialists and business community and to develop enterprises that would benefit the owner/members. These
In 1913 the
After working very hard to influence the Liberal government of 1905 to 1921, under great and constant pressure from the membership, Henry Wise Wood and the
Bevington was constantly in search for someone with a public profile to lead in educating the public on the problems of the relationship with the federal government, the eastern and business establishment, the monetary system and the potential of monetary reform. In 1932 Bevington found just such a vulnerable, high profile candidate.
William Aberhart had been preaching the gospel on the radio since 1925. He was dedicated to the people of
Aberhart started talking about Social Credit on the radio in November of 1932. The request for information came so quickly that the Social Credit League of
The
To kick off the campaign Aberhart declared war on the existing "Poverty in the midst of plenty." Aberhart did not pull any punches and told the people straight, "if you have not suffered enough, it is your god given right to suffer some more."
In keeping with the Douglas Social Credit, Aberhart promised a dividend to all adult citizens of $25.00 each month. (The very next day after the election people lined up at city hall in
The result was a sweep for the Social Credit candidates.
Aberhart now had a dilemma. He was under great pressure to stand for office. The MLAs wanted him to be Premier but he did not want to be in politics. In 1936 Aberhart succumbed to the pressure and when the MLA from Okotoks stepped aside, Aberhart stood for the office and was uncontested and therefore acclaimed.
The war was on with
The Liberal Government in
The banks had closed branches in over 137 communities across
After two and a half years of fighting
The
Social Credit and the Co-operative movement believed in the rights, freedoms and capabilities of the people, democracy, autonomy, local ownership and control, and open and voluntary participation. These philosophies also believed in and propagated the values of self-help, self-responsibility, equality, and the ethical values of honesty, openness, social responsibility, and caring for others. Both Social Credit and the Co-operative movement believed in the power of people working together and the empowering concept of a "hand up."
The Social Credit Party established the four basic principles of the constitution to govern itself and to give it direction in developing its policies and legislation.
These principles combined with the values, principles and philosophies of the Co-operative movement dictated legislation and a philosophy of "community building." The Social Credit government of
The Social Credit government developed a program that was promoted by the
From the very beginning in 1935 Social Credit was committed to developing a public health care system, some of which was introduced in 1935.
Above all Social Credit was committed to the fight against "Poverty in the midst of Plenty." Art Dixon, long time Social Credit MLA and Speaker of the House, always said "Social Credit has always fought for the little guy and stood up to
William Aberhart asked, "Should a worm starve to death because the apple is too big?"
SOCIAL CREDIT PRINCIPLES
An address delivered at Swanwick, November, 1924 .
By Major C. H. DOUGLAS
(Revised,* January, 1954)
The financial system, in its control over production, stands to the works or factory system of the world, considered as an economic unit, in the same relation as the planning department of a modern factory does to that factory.
The distribution side of the financial system exercises a function not dissimilar to that of the progress department of a factory.
No discussion of the financial system can serve any useful purpose which does not recognise:–
(a) That a works system must have a definite objective.
(b) That when that objective has been decided upon it is a technical matter to fit methods of human psychology and physical facts, so that the objective will be most easily obtained.
In regard to (a) the policy of the world economic system amounts to a philosophy of life. There are really only three alternative policies in respect to a world economic organisation:–
The first is that it is the end in itself for which man exists.
The second is that while not an end in itself, it is the most powerful means of constraining the individual to do things he does not want to do; e.g., it is a system of Government. This implies a fixed ideal of what the world ought to be.
And the third is that the economic activity is simply a functional activity of men and women in the world; that the end of man, while unknown, is something towards which most rapid progress is made by the free expansion of individuality, and that, therefore, economic organisation is most efficient when it most easily and rapidly supplies economic wants without encroaching on other functional activities.
You cannot spend too much time in making these issues clear to your minds, because until they are clear you are not in a position to offer an opinion on any economic proposal whatever.
In regard to (b) certain factors require to be taken into consideration.
(1) That money has no reality in itself. That in itself it is either gold, silver, copper, paper, cowrie shells, or broken tea cups. The thing which makes it money, no matter of what it is made, is purely psychological, and consequently there is no limit to the amount of money except a psychological limit.
(2) That economic production is simply a conversion of one thing into another, and is primarily a matter of energy. It seems highly probable that both energy and production are only limited by our knowledge of how to apply them.
(3) That in the present world unrest two entirely separate factors are confused. The cry for the democratisation of industry obtains at least 90 per cent of its force from the desire for the democratisation of the proceeds of industry, which, is, of course, a totally different thing. This confusion is assisted by the objective fact that the chief controllers of industry get rich out of their control.
I do not, myself, believe in the democratic control of industry any more than I should believe in the democratic control of a cricket team, while actually playing, and I believe that the idea that the average individual demands a share in the administrative control of industry is a pure myth.
The present world financial system is a Government based on the theory that men should be made to work, and this theory is considerably intermixed with the even stronger contention that the end of man is work. I want you to realise that this is a statement of fact, not a theory. More than 95 per cent of the purchasing-power actually expended in consumption is wages and salaries.
It will therefore be seen that there are two standpoints from which to examine its mechanism. The first considered as a method of achieving its political end of universal work, and the second as a means of achieving some other political end–for instance, the third alternative already mentioned.
Considered as a means of making people work (an aim which is common both to the Capitalist and Socialist Party Politics) the existing financial system, as a system, is probably nearly perfect.
Its banking system, methods of taxation and accountancy counter every development of applied science, organisation, and machinery, so that the individual, instead of obtaining the benefit of these advances in the form of a higher civilisation and greater leisure, is merely enabled to do more work. Every other factor in the situation is ultimately sacrificed to this end of providing him with work, and at this moment the world in general, and Europe in particular, is undoubtedly settling down to a policy of intensive production for export, which must quite inevitably result in a world cataclysm, urged thereto by what is known as the Unemployment Problem.
To blame the present financial system for failing to provide employment is most unfair; if left alone it will continue to provide employment in the face of all scientific progress, even at the cost of a universal world war, in which not only all possible production would be destroyed, but such remnants of the world’s population as are left will probably be reduced to the meagre production of the Middle Ages.
Considered as a mechanism for distributing goods, however, the existing financial system is radically defective. In the first place, it does not provide enough purchasing-power to buy the goods which are produced.
I do not wish to enter at any great length into the analysis of why this is so, because it is always a matter of some heated controversy. I have, however, no hesitation whatever in asserting not only that it is so, but that the fact that it is so is the central fact of the existing economic system, and that unless it is dealt with no other reforms are of any use whatever.
And the second feature of equal importance is that considerably less than the available number of individuals, working with modern tools and processes, can produce everything that the total population of the world, as individuals, can use and consume, and that this situation is progressive, that is to say, that year by year a smaller number of individuals can usefully be employed in economic production.
To summarise the matter, the principles which must govern any reform of the financial system, which will at one and the same time avoid catastrophe, and re-orientate world economic policy along the lines of the third alternative, are three in number:–
1. That the cash credits of the population of any country shall at any moment be collectively equal to the collective cash prices for consumable goods for sale in that country, and such cash credits shall be cancelled on the purchase of goods for consumption.
2. That the credits required to finance production shall be supplied, not from savings, but be new credits relating to new production.
3. That the distribution of cash credits to individuals shall be progressively less dependent upon employment. That is to say, that the dividend shall progressively displace the wage and salary.
I may conclude by a few remarks on the position of the banks, in respect of this situation. It is becoming fairly well understood that the banks have the control of the issue of purchasing-power to a very large extent in their hands. The complaint which is levelled at the banks is generally that they pay too large a dividend. Now curiously enough, in my opinion, almost the only thing which is not open to destructive criticism about the banks is their dividend. Their dividend goes to shareholders and is purchasing-power, but their enormous concealed profits, a small portion of which goes in immensely redundant bank premises, etc., do not provide purchasing-power for anyone, and merely aggrandise banks as banks.
But the essential point in the position of the banks, which is so hard to explain, and which is grasped by so few people, is that their true assets are not represented by anything actual at all, but are represented by the difference between a society functioning under centralised and restricted credit and a free society unfettered by financial restrictions.
To bring that perhaps vague generalisation into a more concrete form, the true assets of the banks collectively consist of the difference between the total amount of legal tender, or Government money, which exists, and the total amount of bank credit money, not only which does exist, but which might exist, and which is kept out of existence by the fiat of the banking executive.
END
[i] Now almost forgotten, Distributism was a composite of several social and moral theories first articulated by Gilbert Keith Chesterton (1874-1936) and Hilaire Belloc (1870-1953) in the pages of volume 2 of The New Age. The initial concepts arose from the four-way (and more) argument among H.G.Wells, George Bernard Shaw, Belloc and Chesterton over modernity that began with Belloc’s "Thoughts on Modern Thought" (02:108). Although probably initially stage-managed by Orage, the debate became a messy, two-year-long wrangle that engaged many readers until the discussion petered out in 1909.
That discussion, now known as "the Chesterbelloc" contoversy, helped Belloc and Chesterton develop a rationale for equitable distribution of property and restoration of worker control in commerce, agriculture, and industry. This cluster of ideas, soon called "Distributism," was based on the two men’s look back, to European history, as well as their concerns about the present and the future of mass industrial society. Their ideas were not especially daring or innovative, but rather were built on what they felt had worked in the past. Calling for a return to the Christian social conscience, Distributism warned against the trend toward dehumanizing state control of society and for the efficacy of the self-contained organic community.
This restoration of society to a human, organic scale was to be accomplished through a return to a social system not unlike medieval guilds -- small units organized according to natural economic classes and productive functions. The idea was to create a balanced or mixed economy of independent farmers and small industries owned and operated by the workers themselves, thus creating a sort of peasant-worker state. The Roman Catholic Church was to provide whatever federal and international control might be needed. Independent, small farming was to be the backbone of this society based on decentralized control, self-sufficiency, and rural reconstruction.
This new/old society was definitely not to be imperialist. Things were to be decided by the people in small groups, negotiated by personal interaction. Anarchism’s belief in no coercion of cooperation was a major tenet, and the Distributist ideal was not far from that described by Kropotkin. Distributism was anti-Utopian and did not offer a blueprint, as would have H. G. Wells or the Fabians, gladly, for a future society. Belloc and Chesterton refused to be tied down to specific proposals, believing that any social outcome needed to come from individual human desire and conditions, rather than from planning imposed from above.
Distributism claimed to be much more than a political theory; it was a philosophy or way of life firmly founded on religious principles. Belloc, born in
Distributism critiqued both socialism and capitalism. Capitalism was called a denial of property because capitalism denied its limits. Communism was termed the unnatural child of this mother, capitalism, and was predicted to eventually consume its parent. It has been called the forerunner of the "
In 1926, the Distributist League was founded, mainly in order to help the G.K.’s Weekly’s finances. (Sewell, "Devereux" 141) The Distributist League had two objectives:
- preservation of property, in order that the liberty of the individual and family could be independent of oppressive systems,
- and better distribution of capital by individual ownership of the means and instruments of production, which was the only way to preserve private property
Distributism constituted a revolutionary response to the conformity of the modern industrial age by its critique of a collectivist-plutocratic state. The mainspring of the neo-Thomist revival in Catholic intellectual circles, it profoundly affected a generation of Roman Catholic writers in
[ii] Like Yeats, Pound’s concepts of esotericism and culture brought him against liberal and democratic doctrines. Pound saw in Fascism the fulfillment of Social Credit monetary policy which would bread the power of plutocracy. He considered artists to form a social elite "born to rule" but not as a part of a democratic mandate. "Artists are the antennae of the race but the bullet-headed many will never learn to trust their great artists." The war, as he saw it, had been caused by the rivalries of international capitalists. He thought he had found a solution to the evils of unchecked capitalism, one especially favourable to the arts, in the Social Credit theory of Major C. H. Douglas, who argued that a system of state credit could increase purchasing power in the population at large, thus promoting creativity and removing power from bankers and financiers. Pound embraced the Social Credit theory with enthusiasm. Here was the means by which the Money Power which corrupted culture, could be overthrown. During the 1930’s and 1940’s Pound wrote a series of booklets on economics and politics, including his first "Social Credit: An Impact"(1935), "A Visiting Card" (1942), and in 1944 "Gold and Work", and "
[iii] Silvio Gesell, Argentinean/German businessman, farmer, and reformer proposed another form of money known as stamp scrip. Frank Lloyd Wright thought of Gesell's proposals as the application of Wright's principles of design to the world of finance.
Gesell pointed out that virtually all other goods tend to either deteriorate or incur cost for storage. Money should be no different. If it does not deteriorate, it becomes subject to manipulation through withholding from circulation for speculative reasons.
Gesell's stamp scrip, is money which needs a stamp affixed to it each month in order to maintain its value. Gesell proposed a 1% stamp each month. The money thus pays for itself in a little over eight years. It is paid into circulation by the government for services rendered. It was tried in
(Gesell's theories on interest are highly appreciated by Keynes.)
[iv] The
Larry Hannant
IN AUGUST 1935 THE PEOPLE of
McCrory, Jamie. "My Dear Friends, Rain..." Scarcity, Socialism and The Words of My Roaring." AgorA: Online Graduate Humanities Journal. 1.2 (Spring 2002).
Calling the Social Credit Party of Alberta a socialist response to the Depression may seem strange, but it is not an inaccurate descriptor of the party under Aberhart's leadership. As both David Elliott and Alvin Finkel have written, Aberhart's Social Credit--which rarely coincided with the conservative theories of Major C.H. Douglas, the founder of the movement--had several links to socialist political groups of the 1930s. Correspondence between Aberhart and Co-operative Commonwealth Federation (CCF) MP William Irvine regarding possible affiliation between the two parties (Aberhart, 84), the assistance of Communist campaign workers on the successful election of a Social Credit candidate in a 1937 by-election (Finkel 69), and the co-authoring of the anonymous "Yellow Pamphlet" of 1933 by Aberhart and H.B. "Hilly" Hill, a self-professed Communist ("In Search" 14), suggest, if not a sympathy toward socialist politics, at least some common ground with it. An editorial in the September 24, 1934 edition of the Social Credit Chronicle, the party's official journal, reveals fairly significant overlap between socialism and Social Credit: "Let the supporters of Social Credit stand firm on this issue, let Alberta take the lead in showing the country that the people have broken away from the old yoke of the capitalistic system" (qtd. in Finkel 72). The distinction between Social Credit and socialism is to be made, for Aberhart, in the former's foregrounding of the individual and the latter's focus on the common good (Aberhart 57). Despite its reluctance to align itself with socialist political movements, however, the Social Credit Party can perhaps be safely characterized as taking part in a broad and active anti-capitalist discourse of the 1930s that, in the context of a larger project, I have chosen to call socialism.
Social Credit's contributions to that discourse were frequently presented as responses to empirical observations. In the Social Credit Manual, prepared for the 1935 election, Aberhart defines his party's project as follows: "It is the duty of the State through its Government to organize its economic structure in such a way that no bona fide citizen, man, woman, or child, shall be allowed to suffer for lack of the bare necessities of food, clothing, and shelter, in the midst of plenty or abundance" (5). He goes on to demonstrate with statistical evidence
The dislocation of wealth and productivity from rural
[v] Alvin Finkel documents in his work The Social Credit Phenomenon in
