the journal of the social credit secretariat issn:0037 ... · fit into this gloomy picture? in the...

------------------ THE SOCIAL CREDITER

THE JOURNAL OF THE SOCIAL CREDIT SECRETARIAT ISSN:0037-7694 £1.50

The SOCIALCREDITER

For Economic Democracy Quarterly Volume 83 No.2 Summer 2007

EditorialOur China correspondent informs us thatthe world economy is changing the face ofChina. I Only a decade ago, most Chinesepeople managed with very little money.Make, do and mend was the order of theday. Now the money economy has arrived.As massive factories and huge cities areerected, farming families are swept offtheir land into destitution, forced to selltheir labour for money. Corruption is rife.The resultant socio-environmental mayhemis nobody's responsibility. Western shopsare filled with all manner of consumergoods, made 'cheaply' in China, as themountainsides are stripped of trees, the soilblows away in the wind and rivers and theair itself are contaminated.

As the 'developed' world exports itspollution it also exports out-datedeconomic dogma on the relationshipbetween work and income. Economics is apopular subject for Chinese students at UKuniversities, the fees paid by students fromoverseas being a major source of funds tomaintain departments of economics. Thislearning of outmoded theory merelycompounds the senseless practice, wherebypeople do things for money, and neglectdoing other things for lack of money. In themeantime, young people in the 'developed'world find themselves chasing a dream ofincome security, while having to face theharsh reality that the best they can hope foris an income on terms dictated by a globalcorporatism which is quite simply wastingvast resources of human talents.

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The situation in China is as it is becausecitizens of the developed world are earningtheir 'living' by working for firms whichexport new technologies and infrastructureto China, import from China all manner ofconsumer goods, sell the products, or workin education, training employees to work inthe firms. The need to obtain an income isthe dominant consideration, so that social,ethical and environmental issues become atbest secondary considerations. In this issuewe continue to explore the potential foropening up debate on the adoption of aguaranteed income.

Calls for a guaranteed income scheme havebeen many and varied. They include thequest for poverty relief, economic growth,full employment or an end to the wagessystem. Only the latter, however, is inaccord with the Douglas social creditphilosophy. For this reason, Douglas socialcredit seemed incomprehensible toorthodox economists and the man-in-the-street alike. When poverty andunemployment appeared to be the majorproblems, economic growth appeared to bethe logical solution. Proposals to getpeople back to work, to drive ahead witheconomic growth, seemed to make mostsense.However, as Vic Bridger observes, aNational Dividend based on Social Creditprinciples is not at all the same thing as aBasic Income funded through the taxsystem. Often the latter includes a workfareelement.

For Douglas over-production, or 'super-production' as he termed it in 1918, led towaste, war and environmental devastation.As he observed in the early decades of the

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20,h century, citizens were increasinglyallowing finance to dominate decision-making in all aspects of their lives. Asindividual households, producers of goodsand services and organisers of social andcaring provision, people increasinglylooked to finance to determine their policydecisions. A guaranteed income for allwould offer the potential for individuals tojump off the finance-driven treadmill, sothat non-financial considerations could beprioritized.

Time has in no way lessened the force ofDouglas' main argument. However manyfairly traded products individuals maydecide to buy on ethical grounds, all areinextricably interlinked with the massivenetwork which is the global economy.Today, Douglas would doubtless argue thata guaranteed income, paid on thephilosophical basis of a NationalDividend? but initially introduced as aBasic Income, would enable an increasingnumber of individuals, firms andeducational establishments to reconsidertheir relationship with finance-drivenemployment. It can be argued that workingfor money is degrading to the human soul.If this is a possibility, it is worthy of seriousdebate, since it has major implications forthe conduct of all aspects of human affairsfrom local to global levels.

1 On concern re the impact of economicactivity upon the Chinese, see article "China'sEnvironmental Suicide, Andreas Lorez, http://www.opendemoc rae y. ncr/ debates/artie le- 3-83-2407.jsp originally published in the Englishedition of Der Spiegel.

2 See Hutchinson, Frances and Brian Burkitt,The Political Economy of Social Credit andGuild Socialism, Jon Carpenter 2005.

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The Basic Income Guarantee (BIG) and Monetary Reform:A Tale of Two Ideas

Richard C. Cook

While I am new to the US BIG Network,my interest goes back a long time. When Iworked at the Carter White House, I wasorganizing a study group on monetaryreform, which was to include incomepolicy, when Carter was voted out of officein favor of Ronald Reagan in 1980.

The election of 1980 was a watershed inUS history. It was a takeover of the policyapparatus of government by the politicalright-wing, and it affected every aspect ofAmerican politics and culture. Those of uswho remained in government but stillbelieved we had a positive role to play insupporting the progressive aspirations ofthe American people thereafter kept a lowprofile. Even the Clinton administrationmade many accommodations to theconservative attitudes which had enteredpublic life with the Reaganites and againwith the Republican takeover of Congressin 1984. Democrats tend to romanticize theClinton years, forgetting that the economicrecovery of the 90s was fueled by foreigncapital and ended with the bursting of thedot.com bubble and a stock market crash.From the standpoint of overall governmentpolicies, we have now lived in anatmosphere dominated by the conservativeideology for a full generation.

This period has been difficult for mepersonally because I would call myself aleffersonian-FDR democrat. But I believewe are beginning to see the pendulumswinging back in the direction of moreprogressive policies as the conservativeideology runs out of steam. What it has left

us with are economic, ethical, and fiscaldisasters, along with a state ofperpetual warfare in the Middle East.

My experience long ago led me to theconclusion that the most importanteconomic issue facing our nation and theworld today is income security and thatit is the job of the federal government,acting as the custodian of thecommonwealth of Americans as definedin the preamble of our Constitution, to dosomething about it.

I said income security, not job security.People in this room know the world ofdifference between the two, as few othersdo. As many have come to realize,real job security is extremely difficult toachieve in an era where technology hasmade so many jobs obsolete and where therapid pace of change has destroyed thetypical career patterns of a generation ago.Lately I have been reading articles by aman named Marshall Brain who says thatby 2030 robots will take over fifty percentof the jobs in the US economy, and Iagree that the potential is certainly there.

So a basic human right to income securitycannot and should not be linked with animperative that everyone be engaged inearning a living all the time. While morecan always be done to foster job creation,it will never entirely solve the incomesecurity problem. Welfare-to-work is notthe answer.

I believe that the right to income security

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must be viewed as an absolute. This right, Ibelieve without apology, is ultimatelybased on a spiritual value, that everyhuman being who comes to live on theplanet has a right to a minimally secureexistence, which governments exist toensure. I believe that income security iswhat people must first have to express theirrights to "life, liberty, and the pursuit ofhappiness."

These values are being threatened intoday's political, economic, and socialenvironment as never before in US history.Since the negative income tax wasproposed in 1969, our nation has marchedresolutely backward in maintaining acommitment to income security due to theconservative ideology. Conservativeswanted us to believe that eliminatingmuch of the social safety net in favor ofunbridled economic license would "lift allboats" and allow individuals to prosper inways not possible under the shelter of thewelfare state. This has obviously nothappened.

Instead, "trickle-down" economics hastotally failed. We have more than forty-fivemillion people without health insurance,thirty-five million without enough to eat,increasing poverty, and a decliningstandard of living for all but the mostwealthy. After a period of decline, violentcrime, especially robbery but also murder,is increasing. The housing bubble has burst,leaving millions of people facing possibleloss of their homes. The federalgovernment, with a current debtapproaching $9 trillion and $44 trillionin unfunded liabilities, has been declaredbankrupt by economists close to theFederal Reserve. Their solution? Sell more

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US assets to China. In the last several yearsthe dollar has lost a third of its valueto the dismay of foreign investors likeChina who have funded the Treasurydeficit. Meanwhile, our publicinfrastructure is crumbling, with amaintenance deficit approaching $2 trillionaccording to the American Society of CivilEngineers.

After a generation of conservative rule, andin spite of three years of a balanced budgetat the end of the Clinton presidency, publicfinance in the United States today is incrisis, if not total collapse. A quartercentury of politics devoted to thedismantling of social welfare programs,privatization of public assets, huge tax cutsfor the wealthy, continuing export ofmanufacturing jobs, deregulation of thefinancial industry, and huge expenditureson the war machine have eroded the abilityof the federal government to do anythingmeaningful about income security.

If you set this crippling of governmentagainst such facts as the $53.4 million 2006bonus given to the CEO of Goldman Sachslast December and the ongoing attempt bythe Bush administration to conquer theMiddle East by military force, you get avivid impression of a society racing over a


cliff. The article by Paul Krugman, theNew York Times' economics columnist, inRolling Stone magazine last Decemberentitled "The Great Wealth Transfer,"portrays a society that has fallen from itsstatus as the world's greatest industrialdemocracy to one that is beginningto resemble a banana republic oligarchy,with a ruling class that is unbelievably richand a population that is sinking toward astate of debt slavery and economicpeonage. The facts are undeniable andwell-documented.

So where does the basic income guaranteefit into this gloomy picture? In the near-term, Congress, having returned toDemocratic control, may raise theminimum wage a dollar or two an hour.The ongoing fall of the dollar will promoteexports and so be a factor in job creation,though those jobs will be low-payingand have few benefits. If a Democrat iselected president in 2008, we may seesome new federal job creation programs ortax incentives. But BIG is not on thehorizon.

Yet I don't believe the situation is hopelessin the long LUn.We have some examples topoint to that over time could get people'sattention. One is the Brazilian experiment.

The other ray of hope is that the direeconomic situation can act as a stimulus forprogressives to begin challengingeconomic fundamentals. Here is whereI think the BIG movement could benefit bylooking at what is going on in monetaryreform, because any push to enact BIGthrough income redistribution is likely toface insurmountable difficulties. We aresimply not going to get middle-class

citizens to give up their mortgagededuction, for example, so the poor can geta break when they know that what LouDobbs called "the war on the middle class"is real and that it threatens their ownfinancial existence.

Also, most Democrats are looking to theClinton years of relative fiscal austerity asa model. The federal budget is likely to beslashed, some of the taxes on the upperbrackets may be restored, and taxbreaks for higher education may increase.But even if the Earned Income Tax Creditis enhanced or other types of tax creditenacted for the lower brackets, that isobviously not BIG in its full potential.

So where can the monetary reformmovement enter into the picture? First, itchallenges the assumption that the onlyways government can get money todisburse are through taxes and borrowing.Second, it challenges the assumption thatthe wealth of a nation is a relatively fixedquantity-the GDP plus whatever growthrate is measured or assumed - and that thepolitical process must decide how wealth isto be divided, with certain groups gettingmore and others getting less.

But it has long been recognized that fiscaland tax policies can have a profound effecton levels of investment and economicactivity. It has also been understood thatGDP growth can be influenced bymonetary policy, interest rates, and theavailability of money. What has changedsince the 1980s has been that theconservative revolution has greatly limitedthe ability of government to apply thesetools while shifting more economic powerto the private financial markets.

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The thrust of the monetary reformmovement, at least that segment of it notdevoted to the introduction of localcurrencies, would be to shift the power ofinfluencing the creation of wealth backto the government. One way to do thiswould be to create a federal authoritycharged with rebuilding the nation'sphysical infrastructure through long-termlow-interest loans. The Kucinich bill for afederal infrastructure bank similar to theNew Deal Reconstruction FinanceCorporation is an example. It would allowfor the insertion of money and investmentat the state and local levels and would alsocreate new jobs.

On the side of money and credit, theFederal Reserve System has long operatedby alternately stimulating and slowing theeconomy through its regulation offractional reserve banking and throughactions affecting interest rates, but never inways that have proved truly effective. Thisis because attempts to use liquidity tomanipulate economic growth are alwaystied to the creation of credit that must berepaid with interest.

In my opinion, it would be much moreeffective for the Federal Reserve simply togive away money, as it went a long waytoward doing with the slashing of long-terminterest rates leading to the recent housingbubble. Hundreds of billions of dollarswere pumped into the economy, but nowthe bill is coming due because of theenormous inflation of housing pricesthat has left society as a whole much worseoff than when the bubble began. But thebubble can be viewed as an incomeprogram for homeowners and speculatorswith a substantial multiplier effect for the

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entire economy. According to investmentanalysts, fifty percent of US economicgrowth in 2005 was due to the stimulationof the housing market.

As I indicated, it would have been simplerif the Federal Reserve, or the US Treasury,simply gave away money, and what I wouldlike to suggest is that we begin to thinkabout issuing a BIG without charging anycost at all to the federal budget throughwhat has been called a National Dividend.

This is not a frivolous suggestion. It wasproposed by Major C H Douglas and theSocial Credit theorists of the 1920s andstarted a political movement which hascontinued through to today in GreatBritain, Canada, and New Zealand. Thiswould be money creation at its simplestand most direct, similar to the Greenbackslegislated by Congress during the CivilWar. Then, Congress authorizedexpenditures in the amount of $450million, and the government simply spentthe money into existence.

It was a system that worked remarkablywell, one which the bankers havepropagandized against ever since.Greenbacks still made up a third of the UScurrency into the early years of the 20thcentury. Few people know that FDR alsohad Greenback authority though he neverused it. It was money supposedly createdout of thin air, a true fiat currency, and ifpeople tell you that the Greenbacks causedinflation, they are wrong. What is trulyinflationary is debt-based money created bythe Federal Reserve. In fact, since theFederal Reserve came into existence in1913, the dollar has lost over ninety-fivepercent of its value.


I would strongly recommend that BIGproponents study the Social Credit ideascarefully. This is what first got meinterested in monetary reform back in thelate 1970s. What C H Douglas was sayingwas that in a technologically advancedeconomy, production is always ahead of theincome available for consumption. He saidthat there is no way that the population of anation can ever earn enough money topurchase what industry can produce. Thereis lag time and many inefficiencies in thedistribution system. Also, there must beprovision for household and businesssavings.

So in order to consume the production baseand keep the nation's workforce employed,the government must introduce purchasingpower. The simplest way to do it is to issuewhat Douglas called a National Dividend atthe start of each year to everyone, withoutmeans tests, without distinction as towhether you work or not. It is a BasicIncome Guarantee. Remember, this wassuggested in the 1920s. In fact, Douglashad succeeded in reconciling the capitalistsystem to principles of economicdemocracy in a way that all previousEuropean thinkers had failed to do,including Marx.

Douglas's ideas also had a strong ethicalunderpinning in that they postulated thatthe production of wealth was not just aresult of the utilization of private resourcesor capital but of the brainpower and laborof the entire nation. People make things ina social context. All members of societycontribute in some small way to the culturalfabric within which wealth is generated. Soall should share in the benefits of a

National Dividend. This went well beyondMarx's labor theory of value where it wasthe worker who ultimately created wealth,to encompass every single person of past,present, and future generations. Of courseSocial Credit was opposed byconservatives of every stripe whose highestvalue was private property, privateownership of everything of value, and theexclusive claim to the profits from privateenterprise.

As time went on and the conservativeattitudes of the time resulted in the GreatDepression, economists realized thatsomehow money had to be generated onthe side of demand if nations were tosurvive, and this led to Keynesianeconomics. It was done through high taxescombined with government deficitspending. Again, to fully examine how allthis worked is beyond the scope of my talktoday, as is a discussion of howKeynesianism gave way to monetarism.This is the system we are all too familiarwith which is basically the Federal Reservetrying to regulate the economy throughraising and lowering of interest rates.

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Suffice it to say that monetarism has failedmiserably, the latest fiasco being theaforementioned housing bubble. Reagan-era supply-side tax cuts, along with thoseof George W Bush, were an attempt tocompensate for the failure of monetarism toboost demand, but the problem again wasthat there has not been sufficientpurchasing power except throughincreased household debt, a fact everyeconomist recognizes. This is why retailsales are watched so closely atChristmastime, to be sure consumers aredutifully running up their credit cardcharges. It's incredible that grown-upsreally seem to believe this is a sign ofeconomic health.

So I would conclude by suggesting to theBIG community to look seriously atmonetary reform, especially the SocialCredit ideas, for a theoreticalunderpinning of BIG proposals that Ibelieve can take us farther than any systemthat looks like income redistribution. AgainI mention the writer Marshall Brain, whoadvocates a $25,000 annual stipend forevery citizen as their share of societalwealth. That would certainly be one way todo it, likely a very good way. WhatDouglas teaches is that such a stipend doesnot have to be raised through taxes orincome redistribution. It can simply beissued to individuals as a credit or voucheragainst future production. It would be asimple, effective way to introduce liquidityinto the economy, far better than the debt-based system of fractional reserve bankingthat leads mainly to profits for the banks atthe expense of everyone else.

At the same time, it is important to keep the

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pressure on Congress and the politicalsystem to think about BIG when they thinkabout income and tax policy. Any progressin this direction is worthwhile. It is alsocritical to work toward making BIG part ofthe progressive political agenda. See, forexample, an article in The Progressive afew months ago by editor MatthewRothschild entitled, "Our Sinful Economy."It is essential to have workable proposalsready as our economy continues to stumbleinto the crises that are inevitable given thehuge problems that exist with incomemaldistribution, the continuing decline ofthe social safety net, rising crime statistics,and the collapse of the ability of the federalgovernment to meet the needs of the nationthrough the budget process.

What I am really trying to say is that themonetary reform movement can show thatBIG is not only ethically and spiritually thecorrect attitude of society but that it is alsoan economic necessity. Two books on thesubject which I strongly recommend areThe Lost Science of Money by StephenZarlenga, head of the American MonetaryInstitute, and The Grip of Death, a Study ofModern Money, Debt Slavery, andDestructive Economics by the Britishauthor Michael Rowbothan.

Books such as these can provide help forthe badly needed progressive consensus ofwhat coherent alternative we can offer tothe disastrous state of the nation and theworld today. We are clearly witnessing aworldwide class war, where, as USbillionaire Warren Buffet has said, "If thereis a class war, my class is winning." Ibelieve that BIG, combined with monetaryreform, shows this war to be totallyunnecessary.


One final note. You might reasonably askwhy haven't such monetary reformconcepts as Social Credit and the NationalDividend been adopted or even seriouslystudied by mainstream economics? Theanswer is obviously political. Mainstreameconomics is dominated by conceptsfavorable to control by the private financialindustry. The last thing the bankers want ismoney in the hands of the rank-and-file ofsociety that is not tied in some way to amonetary debt.

There have been times in American historywhen people were bolder and understoodmuch better the consequences of our beingwhat President Martin Van Buren called a"bank-ridden society." Jefferson sawcontrol of the economy by banks as thedeath-knell of freedom. During the lastthird of the 19th century we had thePopulist and Greenback parties whichfocused on monetary issues. There wasWilliam Jennings Bryan's "Cross of Gold"speech when he ran for president in1896. But with the passage of the FederalReserve Act of 1913 the door of monetaryprogressive politics was slammed shut andhas remained tightly fastened for almost acentury. Progressives everywhere should beprising that door open again if notresolutely kicking it down.

Presented at the USBIG Network AnnualConference New York, February 23,2007. Richard C Cookis the author of Challenger Revealed: How theReagan Administration Caused the GreatestTragedy of the Space Age (Thunder's MouthPress). He was the NASA whistleblower whodisclosed the history of the flaws in the solidrocket booster joint that were the technicalcause of the disaster.We are most grateful to BillDaly from New Zealand for bringing thisspeech to our attention.

Something for Nothing?CHDouglas

I have heard innumerable cases of furiousresentment against the grant of what is soimproperly called 'the dole' (which is, ofcourse, a form of contributoryunemployment insurance, to which theworkman himself contributes), and thesedenunciations, proceeding from normallykind-hearted persons of both sexes, areusually accompanied by remarks on thedemoralizing effects of money receivedwithout working. If you enquire, as mildlyas possible, of such people, if by chancethey receive any dividends which enablethem to exist without working, you will, ofcourse, be very unpopular, and you will betold that that is different, and if you suggestthat a generalization of the dividend systemif it could be obtained (and it can) wouldbe desirable, you will be called'Socialistic', a Parliamentary epithet fordangerous. (Warning Democracy 7)r·:,;;.:§,..., +!;_¥"'$':"i't\~"'~J(~

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An Outline of MoneyFor a generation of economists during the 1940s and 1950s, Geoffrey Crowther's An

Outline of Money was the standard text on the subject. First published in 1940, it carriedan Appendix on Social Credit running to 13 pages. It was reprinted in 1941,1942,1943,

1944 (twice), 1945 (twice), 1946 and 1947. Subsequent editions dropped the Appendix onSocial Credit, indicating that by then Douglas social credit was no longer perceived as a

threat to the status quo. Crowther's condescending attack on the general public forstudying alternatives to the business-as-usual capitalist growth economics echoes the manysimilar attacks from mainstream orthodoxy (See O'Duffy's Life and Money, and Frances

Hutchinson and Brian Burkitt The Political Economy of Social Credit and GuildSocialism). Crowther takes issue with the very existence of an alternative political

SOCIAL CREDITeconomy.

(This Appendix reprints a series of fourarticles on Social Credit which appeared inthe News Chronicle in May 1934 .... )

Those who take an active interest in eitherpolitics or economics have been well awarefor some time past of the Social Creditmovement. It has grown from a theoryprofessed by a small band of enthusiastsinto a full-fledged 'movement,' completewith its papers [meaning weeklypublications, Ed.], its organizations, itsuniforms and its banners.

Why it should have a particular appeal tothe general public I do not know. SocialCredit deals with the extremely difficultand technical subject of monetary theory,which one would not expect to have a widepopular appeal. Moreover, the writings ofits adherents are marked by obscurity

rather than clarity, by ambiguity rather thanprecision. The magnitude of its claimswould be, one would think, a deterrent tomany people; one is naturally suspicious ofa theory which promises 'the abolition ofpoverty, the reduction of the likelihood ofwar to zero, rapidly diminishing crime, thebeginning of economic freedom for theindividual, and the introduction of theleisure State' - and all by means of simplebookkeeping.

As Crowther wrote the original articles, theeconomy was just starting to be geared upto producing the armaments necessary forphase two of the World War, as predictedby Douglas to be the direct result oforthodox economic policies. With hindsightdrawn from the subsequent history of the20'h century, a study of Crowther's text onSocial Credit could be most illuminating.

The Forgotten LanguageErich Fromm

If it is true that the ability to be puzzled is thebeginning of wisdom, then this truth is a sadcommentary on the wisdom of modern man.Whatever the merits of our high degree ofliteracy and universal education, we have lostthe gift for being puzzled. Everything issupposed to be known - if not to ourselves thento some specialist whose business it is to knowVOLUME 83 PAGE 182

what we do not know. In fact, to be puzzled isembarrassing, a sign of intellectual inferiority.Even children are rarely surprised, or at leastthey try not to show that they are; and as wegrow older we generally lose the ability to besurprised. To have the right answers seems all-important; to ask the right questions isconsidered insignificant by comparison.


The Difference between National Dividend & Basic IncomeVic Bridger

National DividendA National Dividend as proposed in SocialCredit Policy has been stated as a means bywhich the disparity between Incomes andPrices may be equalised in part, in a givenperiod of production.

" ... without interfering with themanagement of industry in the country, it ispossible for Great Britain Ltd, to issuepurchasing power in the form of a nationaldividend, not by taxing its shareholders,but by creating the money in exactly in thesame way that the banks create credit at thepresent time, and to such an amount as willensure that all goods which are producedcan be bought" (Extract from an articleentitled GREAT BRITAIN LTD. By MajorC.H. Douglas, in London Daily Herald).

The concept of the national Dividend wasset out by C.H. Douglas in several of hisbooks. It is evident to me that it isnecessary to follow Douglas's suggestionfor the implementation of a correct set ofNational Accounts as indicated in hisMonopoly of Credit and establishing thecorrect relationship between Productionand Consumption, Incomes and Prices andReal Credit and Financial Credit. To do sowould provide the information forestablishing a basis for the issue of newcredit based upon the results obtained. Thisnew credit (money) would be issued via theReserve Bank on those accounting resultsbut would not be subject to governmentinterference. The new credit would beissued both in the form of a NationalDividend directly to the people in a mannerto be determined (The Draft Mining

Scheme offers one suggestion),accompanied by a distribution in the formof a Compensated Price reimbursement.This would be necessary to overcome anyinflationary tendencies that may occur.

Basic IncomeThe use of the term basic income inconjunction with the Social Credit proposalfor a National Dividend can result inendless confusion if the terminology is notthoughtfully explored.

There is no reason why, under currenteconomic and financial conditions, thereshould not be a 'Basic Income' paidthrough taxation, i.e. as a transfer ofexisting incomes. A Basic Income is arecognition that people should be paidsufficient income to ensure that they are notbelow what may be called "The PovertyLine".

However, a further distinction must bedrawn between a 'Basic Income' and a'Basic (or Minimum) Wage'. Normally, a'Basic Income' is defined as anunconditional payment which is not meanstested and not work-related. It is payableby right of citizenship, and in this respectcomes close to the notion of a NationalDividend, although the accountingexercises for the introduction of the two areentirely different.

The idea of a Basic or Minimum Wage hasbeen recognised in some countries fordecades and in Australia it has been knownas the "Basic Wage". It is a level belowwhich it is illegal to pay wages.

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Nevertheless this has been breached withthe influx of immigrants from low wagecountries who are prepared to accept awage lower than the legal limit and ofwhich some employers take advantage. TheBasic Wage is the lowest limit and otherwages are subject to awards and these varyfrom industry to industry and are in somecases well above the Basic Wage.Employers invariably object to increases inthe Basic Wage (a recent decision by therevamped Industrial Commission increasedthe Basic Wage by $27 per week).

Whilst this Basic Wage may exist itprovides a problem in relation to the pricestructure because when there is a legalincrease awarded employers increase theirprices to maintain existing profits, albeit insome circumstances, particularly the banksand large corporations, which can only bedescribed as exorbitant. Such instances addto what is referred to in orthodox circles as"Cost push inflation". The end result doesnot offer any increased benefit to theemployee. The Basic Wage must not beconfused with a National Dividend.

Outside of the industrial arena there isanother type of "Basic Income". These arethe Old Age, Disability and War pensions.In fact all welfare payments which are paidby the government can be included in thiscategory. Whilst these payments do not adddirectly to prices they do affect the incomesof the employed and the employers throughthe medium of taxation. If the governmentwere to accept the responsibility forproviding a Basic Income for everybody itwould still need to be financed by taxation.Financing by borrowing would not be aviable exercise. Hence it would exacerbatethe situation because the debt incurred

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would be to the private banking system andthe capital borrowing plus the interestwould be recovered through taxation.Nevertheless, the extension of pensions andwelfare payments to form a Basic Incomefor all has been under serious considerationin Ireland and elsewhere since the 1990 'so

In all the suggestions that I have seen forthe implementation of a Basic Income thereis never any detailed outline as to where themoney would come from as distinct fromthe Social Credit proposals for a NationalDividend. There is one exception. A recentpaper entitled "A SANE Approach toSocial Security", prepared by the SouthAfrican New Economics (SANE)Foundation does at least mention, howeverinaccurately, the worldwide Social Creditmovement.

I have no argument against a Basic Incomeunder the current system because untilemployment under the current system isseen for what it is, it is necessary to at leastattempt to raise people above the povertyline. I do not consider it will solve theproblem but at least attention can be drawnto the inequities in that people are notreceiving their just benefits.

Social Credit does not advocate aguaranteed level of income based uponpolitical or theoretical economicconsiderations, which usually involvestaxation. An income and price adjustmentmechanism which recognizes the rightfulinheritance due to all based upon physicalreality and a correct financial system iswhat Social Credit proposes. This involvesan understanding of the current financialsystem relating to debt-finance, theproblems associated with cost-liquidating


income as a result of capital intensificationin the production process

It is doubtful if people can be educatedsufficiently to understand the problem butif it is possible to get the message throughabout the Monopoly of Credit creationthere may be some hope. In 1942 Dr. TudorJones quoted Douglas in a conversation assaying, "I am always looking for someonein authority with an urgent problem, never,nowadays, for someone to convert".Perhaps this is a line we should be taking. Ido not believe that we will find thosepeople in Universities, unless there is aproblem with financing but certainly not inthe teaching area, or in the banking systemor CEOs in large corporations, but maybein Trade Unions, small businesses and evensome politicians given the right strategyand tactics.

National Dividend - Welfare Benefits: ARight or a Privilege?

There are many obstacles with whichcertain individuals find themselvesconfronted that are associated with someaspects of Social Credit understanding. Itmay seem surprising to some, but it appearsthat there is a problem in distinguishingbetween numbers and things, such asfinancial symbols and the things that theyrepresent. Then there is the same dilemmawith the mind and things, such as ideas orthoughts and the same things in a realphysical sense. It is akin to the reflectionin the mirror as being as real as the objectbeing reflected.

C.H. Douglas brought to our attention theconcept of money as being 'psychological inthe sense that if it can be "any medium ...",

according to Professor Walker'sdefinition, 1 then in that sense the only limitto the amount of money is the limit ofacceptability. In reality however, the reallimit on money, if it is to perform itsfunction of facilitating exchange of goodsand services is the availability of goods andservices. No goods and services, norequirement for money. If there are goodsand services and they have been "costed"and "priced" with money symbols, thenmoney must be available to equate withthose prices to form an effective demand.

Douglas discovered and elaborated on theflaw in the accounting system that gavepriority to the concept of "scarceresources" and applied that thinking to theuse of the symbols. It is the transformationof a myth into virtual reality. The questionis whether or not individual members ofsociety receive the benefits bestowed as aresult of both the natural physical assetsavailable together with those that have beenobtained by their mutual association.People working together are able toachieve a greater benefit than by workingalone. Add to this the benefits inknowledge that has been handed down overcenturies. Although these are real benefitsexpressed in different real terms such asbeing able to produce more, increaseefficiency, increase leisure time, as well asparticipate in the sharing of those benefits,etc., these benefits are not being receivedequitably.

Why is this so? Because of the neglect andin some cases an outright refusal torecognise (a) that there is a flaw in themethod of accounting, and (b) the blindstumbling of politicians, economists,

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business people and many others who cannot or will not take the trouble to learn andunderstand that there is a means wherebybenefits can be bestowed, (c) the generalignorance and apathy of the population torely on those people in (b) to look after itfor them. A perfect example of this apathyis in the blind acceptance ofsuperannuation and the limited knowledgethat each and every superannuant has of hisor her fund, what is happening to theirmoney and the numerous changes that takeplace in the rules of the game. With aproperly constituted accounting system thiswould be a right, not subject to political or

government whims. It would not be a hand-out that has been confiscated fromsomeone else, nor could it be changedaccording to the mental aberrations ofsome political or economic idealist. Therewould be no need for enforcedsuperannuation.

I Money, Trade and Industry

Vic Bridger has been a Social Creditscholar and activist for many years. Heedits The Australasian Social CreditJournal.

Dropped in it: The West's Debt CrisisAnn Petti for

Growing domestic and international debthas created the conditions for global andfinancial crises. And it is easy to foresee atime - in the not too distant future - whenthe so-called First World will be mired indebt crises like those that have wreakedhavoc on so-called Third World economiessince the 1980s.These looming debt crises will affect

millions of ordinary borrowers - "debt-spenders" - who are largely ignorant of thecauses of the crises, and who are innocentof the responsibility for it. They will have agrievous impact on the poor, in richcountries as well as in poor countries.The dislocation caused by the coming FirstWorld debt crisis will be in need of a new,global jubilee of debt amnesty, of debtcancellation.There are rising student debts: debts

mortgaged against property and otherassets: corporate debts mortgaged againstfuture income: debts of healthcare systems,such as the NHS; vast, seeminglyunpayable debts owed to future pensioners:

VOLUME 83 PAGE 186

and sports club debts mortgaged against thegamble of future wins (for exampleManchester United).Above all, there are enormous private and

governmental, domestic and foreign debtsof countries considered rich: Iceland,Turkey, New Zealand, Japan, South Korea,Australia, the UK and the USA, as well asthose of many low-income countries. Thesedebts are mortgaged against the futureassets, livelihoods, and lives of their people- and against the asset that is the ecosystemas a whole.The world is truly living on "borrowed

time" as the Bishop of Worcester, Dr PeterSelby, said in an address at St FrancisCentre in Denver, in July 2000: "TheUniverse, this planet, is being used as aunique credit card which has no credit limitand no repayment date on it. And we alllike credit cards like that."

Ann Pettifor is executive director of AdvocacyInternational and a senior associate of the NewEconomics Foundation. She co-founded andwas director of Jubilee 2000.


A Road-Sweeper's TheologyPatrick Daly

Anybody who looks through the jobs pagesof any London newspaper should befamiliar with the following advertisement:"Urgently required Street Sweepers/Dustcart Drivers .. .immediate start .... allareas .... good rates .... telephone .... " I amone of those who made the call.

A bit of my own story first. I am Irish. Icame to London in July 1995 to be with mypartner, a student. Previously I had workedfor three years in Ireland with travellersand gypsies, helping them to develop theircommunities. I was influenced byliberation theology and inspired by peoplesuch as Ivan Illich, critic of centralisedpower and Paolo Freire, educator of thepoor.

I hoped to find a similar niche for myself inLondon. That did not work out, however,and by October 1995 I was on thetelephone enquiring about work as a streetsweeper. There were a variety of reasonswhy I chose street sweeping, many ofwhich I don't fully understand: a love ofthe outdoors, a gut feeling that it wouldbring me in contact with "fishermen" ofthis world, the space it might provide mewith, and so on.

Until about five years ago road sweeperswere employed directly by councils toperform the vital work of street cleansing.In recent years, however, governmentpolicy has been pushing strongly for the"privatisation" of a variety of publicservices and utilities. We are all familiarwith the arguments: increased efficiency;better consumer choice; more competition;

improved service; new investment, etc.

When the road sweepers started workingfor their privati sed employers, the firstchange they noticed was a reduction of £50a week in their weekly wage packet. Newwork practices were introduced under thewatchful eye of a layer of new supervisorswho had been drafted in to directoperations. By the time of my arrival inOctober 1995, privati sed road sweepingwas well established; the transition hadbeen completed. There was little talk of theold council days; few people remainedfrom that time.

As a privatised road sweeper my name is"mate"; I don't have an opinion, or if I dohave one I had better keep it to myself; Iam not responsible, and need continually tobe told what to do.

I respond only to criticism; praise would bedeadly poison. I am lazy and am alwayslooking for an opportunity to "doss". I haveno story that matters beyond whether I amon the right street at the right time or not. Iwork when I am told to, even if that isduring my lunch hour or after work issupposed to end. I am not to be paid forthis overtime. I am not to talk to otherpeople about my work but I am to referthem to my responsible superiors. I will beinstantly dismissed when the responsiblepeople deem I should be and I will have nocome-back because my contract says I havenone.

Work stripped of dignity is what I've foundin north-west London. As one person put it

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to me: "They have taken the soul out of mywork". That's privatisation. My frienddidn't mention the £50-a-week wagereduction or the fact that there has not beena pay rise in five years (since the last payreduction); he spoke of "the soul" -thedignity.

I have not been in Britain long, so I am inno position to judge the past. No doubtthere were serious problems that needed tobe addressed. I do have experience,however, of the solution adopted:principally a strategy aimed at cheapeninglabour by taking all responsibility awayfrom workers. Money is only a small partof the issue; a minimum wage will addressfew of the problems faced by roadsweepers. It will take more than money torestore the dignity to work. Workers' rightsand worker representation equals unionsequals trouble equals "Loony Left": that'show many people see it. When the politicalmud-slinging really gets under way, oneside accuses the other of being "pro-union". Did the unions never have apurpose?

As Christians we need to ask ourselves: isthis the road we want to travel? And theroad is widening-health services,railways, water, electricity, education.Profit is becoming king, efficiency isbecoming God, competition the law,consumer choice the way. Children willgrow up with parents who are not beingtreated with dignity or respect at work, i.e.for 8-9 hours a day, 5-7 days a week. Is thisthe sort of society we want to create, wherewe work solely for the money it gives us,work having no other value?

Work is fundamental to human dignity.

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Work can tap our wells of creativity; it cannourish the very depths of our being. Theroad sweeper, the artist and the teacher caneach express their inner beauty andcreativity through their work.

Lord, I was efficient when you asked me tobe generous.

This article first appeared on 3 May 1997 inThe Tablet www.thetablet.co.uk and is reprintedhere by kind permission.

The Challenger 1935We have recently come across copies ofThe Challenger, incorporating The GreenShirt Review. Published monthly, from aneditorial office in Keighley, Yorkshire, UK,at a cost of 1/6 per annum, the January1935 issue carried an extract from Douglas'Economic Democracy and, in the EditorialNotes, a comment on 'Japan andYorkshire'. The two pieces are reproducedbelow. The copies we have are full ofperceptive contemporary comment oneconomy and society. Although theexamples may have changed with thepassage of time, the basic principles remainthe same. If you know of any similar localpublications dating from the 1930s, wewould be most interested to see copies(Contact details on back page).

Japan and YorkshireNot long ago we were told that Australiahad recovered its prosperity because ofincreased sales of wool to Japan, Naturally,the banks had spread this tale, havingprofited by financing this trade.

In the first half of last year Japaneseexports of woollen textiles increased by(continued on page 194)

http://www.thetablet.co.uk


Working for Moloch(after reading Adrienne Rich)

Note: Moloch was a deity worshipped by the people of Jordan in Old Testament times (seeLeviticus 20: 2-5). The chief feature of such worship was the sacrifice of children to

secure power and riches.

trhe cl~aners are scrubbing the InstitutelavatorIesbecause women are supposed to do that

the girls are typing in the Institute officesbecause women are dedicated and careful

the women are assembling printed circuitsbecause women are good at delicate workand women's eyes are expendable

the young men are doing their PhD'sbecause young men are obedient andambitiousand someone wants warheadslaser rangefindershunt and destroy capabilitiesmultichannel night seeking radarand science is neutral

back home the wives of the PhD studentsare having babiesbecause women are maternal and lovingand who else can have children butwomen?

at the top of the tower the old men and themiddle aged menand sometimes one woman professormeet to form plans; cadge funds and runthe place

because obedient young men turn intoobedient old menand it's all for the good of the countryand defence funds are good for scienceand science is neutraland no one notices Moloch

the women bring themclean toiletscups of coffeetypescriptsmicro circuits oh so neatly assembledand children

and it's hard to see Moloch because he isboth far away

andeverywhereand no one asks to whom they are allobedient

and they say, "Who's Moloch? Never heardof him"as out in the dark Moloch belchesand grows redder and redderand fatter and fatteras he eats the children

by Mary McCann, published inPomegranate, Women's Writing Group,Scotland, 1992, pp. 64-65.

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THESOCIALCREDITER-------------------------------------

The Nature and Origin of MoneyCH Douglas

Editor's Note: In the Spring 2007 issue of The Social Crediter, we published an extraet from TheDouglas Manual (Ed Philip Mairet, 1934) on the National Dividend. Our intention now is to reprintthe whole of the book in instalments, starting with Part 1 on 'The Nature and Origin of Money'.This is central to Douglas' analysis of the relationship between the real economy of goods and

services, and finance.Distribution of Cooperative ProductionThe distinguishing feature of the moderncooperative production system, dependingfor its efficiency on the principle of thedivision of labour, is that the production ofthe individual is in itself of decreasing useto him, as the sub-division of labour andprocess is extended. A man who lives on asmall farm, can live (at a very low standardof comfort and civilization) by consumingthe actual products of his own industry. Buta highly trained mechanic, producing someone portion of an intricate mechanism, canonly live by casting his product into thecommon stock, and drawing from thatcommon stock, a portion of the combinedproduct through the agency of money.(Social Credit 131)

Looked at from this point of view, money issimply a ticket. A railway ticket is, in thetruest sense, a limited form of money anddiffers from any other sort of money in thatthe owner of it only believes, and is onlyjustified in believing, that he will receive inreturn for it a particular form of service, i.e.transportation. (Warning Democracy 15)

Money is only a mechanism by means ofwhich we deal with things; it has noproperties except those we choose to giveto it. A phrase such as 'There is no moneyin the country with which to do such andso' means simply nothing, unless we arealso saying 'The goods and servicesrequired to do this thing do not exist andcannot be produced, therefore it is uselessVOLUME 83 PAGE 190

to create the money eqUivalent of them.'For instance, it is simply childish to saythat a country has no money for socialbetterment, or for any other purpose, whenit has the skill, the men and the materialand plant to create that betterment. Thebanks or the Treasury can create the moneyin five minutes, and are doing it every day,and have been doing it for centuries.(Control and Distribution of Production 9-10)

In order to meet the primal necessities, menwork for money, having always at the backof their mind that so much moneyrepresents so much satisfaction of primalneeds. It should be particularly observedthat it is this faith, this credit, which givesmoney its value, and it is therefore true tosay that all money is, or is fundamentallydependent upon, credit. (These PresentDiscontents and the Labour Party and SocialCredit 8-9)

Definition of MoneyMoney in its various forms of cash andfinancial credit, so far as they areconvertible, has been defined by ProfessorWalker in his Money, Trade and Industryas any medium which has reached such adegree of acceptability that no matter whatit is made of, and no matter why peoplewant it, no one will refuse it in exchangefor his product. So long as this definitionholds good, it is obvious that thepossession of money, or financial creditconvertible into money, establishes anabsolute lien on the services of others in


direct proportion to the fraction of thewhole stock controlled, and further that thewhole stock of financial wealth inclusive ofcredit, in the world, should by thedefinition be sufficient to balance theaggregate book price of the world'smaterial assets and prospective production.(Economic Democracy 28)

WealthandMoneyIndependentlyProducedHaving got it firmly fixed in your mindsthat while to the ordinary man there is nowealth without money, and yet that thereexist actually or still more potentiallyenormous quantities of wealth, for whichthere is no equivalent amount of money, Ishould like to bring to your attentionanother simple, apparently obvious, butvery frequently overlooked fact, and that isthat you do not make money by makinggoods. In other words, the industrialsystem, which makes goods, is not to blamefor poverty - it is the financial system.(Warning Democracy 128)

Purchasing power is not, as might begathered from the current discussion on thesubject, an emanation from the productionof real commodities or services much likethe scent from a rose, but on the contrary, isproduced by an entirely distinct process,that is to say, the banking system.(Monopoly of Credit 23)

There is extant in the world, a common, ifsomewhat nebulous, idea that whoever, forinstance, grows a ton of potatoes, growsthereby in some mysterious way, thepurchasing-power equivalent to a ton ofpotatoes .. .If I grow a ton of potatoes andexchange those potatoes for five currencynotes of one pound each, held at the

moment by my neighbour next door, allthat has happened is that I have five poundswhich he had before. My ton of potatoeshas not increased the number of pounds,although it may have, but probably has not,increased the purchasing-power of eachpound. If we imagine this five pounds to bethe only five pounds in existence, andmoney to be the only effective demand forgoods, no one will be able to exchange anygoods until I part with, at any rate, aportion of my five pounds. (Social Credit130-131)

If you will bear this simple but veryimportant idea in your mind you willrapidly get a much clearer idea of the realnature of money, and I think that forordinary purposes the simplest and mostsatisfactory conception of money is that itis simply a ticket which enables the holderto obtain goods and services upon demand.(Warning Democracy 129)

MoneynotaMeasureofValueThere are few people who would claim thatthe money systems of the world are perfect,and the number of such persons isdecreasing daily. But when asked to definethe various defects in the money system, itis quite remarkable to notice with whatmonotonous regularity the ideas of 'justice'and 'value' are paraded. It is claimed thatmoney is defective because it is not anaccurate measure of value, or that it resultsin an unjust 'reward' for labour, but whensuch critics are asked to suggest a methodby which the relative value of a sunset, and,say, the Venus de Milo might be assessed,on the one hand, or, on the other hand,what is the 'just' return for a given amountor variety of labour, their answers are notusually very helpful from a practical point

VOLUME 83 PAGE 191

of view. (Social Credit 60)


Perhaps the most important fundamentalidea which can be conveyed at this time, inregard to the money problem-an idea onthe validity of which certainly stands orfalls anything I have to say on thesubject-is that it is not a problem ofvalue-measurement. The proper function ofa money-system is to control and direct theproduction and distribution of goods andservices. It is, or should be, an 'order'system, not a 'reward' system. It isessentially a mechanism of administration,subservient to policy, and it is because it issuperior to all other mechanisms ofadministration, that the money control ofthe world is so immensely important.(Social Credit 61-62)

Moneyisproperlythe agentofDistributionThe analogy of the 'Limited' railway ticketis for all practical purposes exact, a railwayticket being a limited form of money. Thefact that a railway ticket has money-valueattached to it is entirely subsidiary andirrelevant to its main function, which is todistribute transportation. A demand for arailway ticket furnishes to the railwaymanagement a perfect indication (subject,at present, to financial limitations) of thetransportation which is required. It enablesthe programme of transportation to bedrawn up, and the availability of a ticketissued in relation to this programmeenables the railway traveller to make hisplans, in the knowledge that thetransportation that he desires will probablybe forthcoming. (Social Credit 62)

The measurement of productive capacitytakes place, or should take place, in regions

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other than those occupied by the ticketoffice, or its financial equivalent, the bank;and the proper business of the ticketdepartment and the bank is to facilitate thedistribution of the product in accordancewith the desires of the public and totransmit the indication of those desires tothose operating the industrial organisation,to whom is committed the task of meetingthem. They have no valid right to any voicein deciding either the qualifications oftravellers, or the conditions under whichthey travel. (Social Credit 62)

TheRemedyfor ShortageofMoneyWe have to realise that there exists, and isbeing exercised for anti-social purposes, amonopoly of the ticket supply, withoutwhich distribution cannot be carried on.That monopoly has to be broken. How it isto be broken is a very serious problem, aproblem which has got to be faced andsolved, or the civilisation with which weare acquainted will shortly cease to exist.(The Breakdown of the Employment System 9-10)

You will no doubt be anxious to know theremedy for this situation. There is such aremedy. It is not the easy one which mightat first occur to you of merely printingmore bank notes, since unfortunately that isa method which defeats its own end. Themethod is a technical one. It consists in asimple adjustment, by the use of thetechnique of credit, of the relation betweenthe average price level and the availablepurchasing power; and this, under existingconditions, the responsibility for makingthis adjustment most undoubtedly restswith the banking system. (Warning

Democracy 133)


The Proper Objective of FinanceCHDou_g_las

Now if there is any sanity left in the worldat all, it should be obvious that the realdemand is the proper objective ofproduction, and that it must be met fromthe bottom upwards, that is to say, theremust first be a production of necessitiessufficient to meet universal requirements;and, secondly, an economic system must bedevised to ensure their practicallyautomatic and universal distribution; thishaving been achieved it may be followed towhatever extent may prove desirable by themanufacture of articles having a morelimited range of usefulness. All financialquestions are quite beside the point; iffinance cannot meet this simple propositionthen finance fails, and will be replaced. Ithas been estimated that two hours per weekof the time of every fit adult between theages of fifteen and forty-five would providefor a uniformly high standard of physicalwelfare under existing conditions, andwithout endorsing the exact figures it isperfectly certain that distribution and notmanufacture is the real economic problemand is at present quite intolerablyunsatisfactory. (from EconomicDemocracilExtract from Fez: City of Islam

Titus BurckhardtI knew a comb-maker who worked in thestreet of his guild, called Abd al-Aziz(slave of the Almighty). He obtained thehorn for his combs from ox skulls, whichhe bought from butchers. He dried the hornskulls at a rented place, removed the horns,opened them lengthwise, and straightenedthem over a fire, a procedure that had to bedone with greatest care, lest they shouldbreak. From this raw material he cut combs

and turned boxes for antimony (used as aneye decoration) on a simple lathe; this hedid by manipulating with his left hand abow which, wrapped around a spindle,caused the apparatus to rotate. In his righthand he held the knife, and with his foot hepushed against the counter-weight. As heworked he would sing the Koranic suras ina humming tone.

I learned that as a result of an eye diseasewhich is common in Africa, he was alreadyhalf blind and that, in view of longpractice, he was able to 'feel' his workrather than see it. One day he complained

. to me that the importation of plastic combswas diminishing his business: 'It is not onlya pity that today, solely on account of price,poor quality combs from a factory arebeing preferred to much more durable horncombs,' he said; 'it is also senseless thatpeople should stand by a machine andmindlessly repeat the same movement,while an old craft like mine falls intooblivion. My work may seem crude to you;but it harbours a subtle meaning whichcannot be explained in words. I myselfacquired it only after many long years, andeven if I wanted to, I could notautomatically pass it on to my son, if hehimself did not wish to acquire it-and Ithink he would rather take up anotheroccupation. This craft can be traced backfrom apprentice to master until one reachesour Lord Seth, the son of Adam. It was hewho first taught it to man, and what aProphet brings-for Seth was a Prophet-mustclearly have a special purpose-bothoutwardly and inwardly. I gradually cameto understand that there is nothingfortuitous about this craft, that eachmovement and each procedure is a bearerof an element of wisdom. But not everyone

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can understand this. But even if one doesnot know this, it is still stupid andreprehensible to rob men of the inheritanceof Prophets, and to put them in front of amachine where, day in and day out, theymust perform a meaningless task.

(continued from page 188)100%. [emphasis original]When Japanbecomes really efficient, what is going tohappen to the West Riding [of Yorkshire]?Over twelve months ago we warned ourreaders of this danger to their livelihoods.

It is of no use complaining that it isimpossible to compete against the lowwages of Japanese workers. The evenlower wages and much worse workingconditions of the Bombay mill-workers donot enable the Indian cotton manufacturersto undersell the Japanese in India in spiteof an enormously high tariff barrier.

The truth is that Japan has learnt a fewthings from Douglas. One is that theNational Credit can be used to excuseproducers from repaying bank loans. InEurope this would lead directly to anunbalanced budget and a "crisis." But themilitarists rule in Japan and it would beunsafe for a financier or a politician to saythat money should not be under the controlof the State.

If we had Social Credit in England, allimports from 1apan would be regarded asan increase in real wealth and the resultantunemployment as a welcome increase ofleisure. The National Dividend for workersand unemployed would keep up thestandard of living. When will the workersof the West Riding realize their danger anddemand the National Dividend?

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The Political Economy of Social Creditand Guild SocialismFrances Hutchinson and Brian BurkittIon Carpenter Nov 2005£12.99 pb 212 ppISBN: 0-9549727-5-9

It is sixty years since Social Credit hadany political significance in Britain. Themovement could easily be dismissed as aninter-war curiosity with its associated"Green Shirts" and concern for monetaryreform. Guild Socialism seems remoterstill: a footnote to Labour party history, itsmediaevalist nostalgia brushed aside by theprogressive forces of Fabian collectivism.Hutchinson and Burkitt stimulatingly

challenge these stereotypes, arguing thatthe two movements provided "an earlyexploration of the potential for acooperative, local, 'steady-state' economyin which industrial production, the arts,scientists, politics, learning and the caringprofessions are freed from the artificialrestrictions of capitalist finance." Theylook particularly at Social Credit's socialistcontext, suggesting that its monetaryproposals make sense only within the GuildSocialist framework which originallyencouraged their development.The key figures in the history of these

movements are Major C H Douglas,engineer and monetary theorist, and A ROrage, whose journal The New Ageprovided a forum first for Guild Socialismand subsequently for Douglas. Orage hadedited The New Age for a decade beforemeeting Douglas in 1918, and during thattime had formulated Guild Socialist ideaswith such figures as A 1 Penty and theeconomist S G Hobson. All three wereFabians who grew disillusioned with theWebbs' utilitarian social philosophy. Their


rival form of socialism drew inspirationfrom Ruskin and Morris and from Frenchsyndicalists. By 1920 it was challenging todominate the Labour Party, but Orage'sdecision to adopt Douglas's economicssplit the movement.Guild Socialism was concerned to abolish

the comodification of labour; to encourage,through decentralization, responsibility anda sense of vocation; and to see workers aswhole people, with mental, moral andspiritual faculties. Hutchinson and Burkittdeny that Guild Socialists were idealisticand impractical; on the contrary, they "hadappraised the philosophies of capitalismand labourist socialism, finding both to beunsustainable in social and environmentalterms."The authors demonstrate that Social

Credit attracted considerable supportduring the micl-1930s. One of Douglas'smost appealing ideas at a time ofwidespread economic insecurity was theNational Dividend, "a non-work-related,non-means-tested income [for] every adultcitizen", and a policy based on the beliefthat all have a right to share in a nation'scultural inheritance. Douglas found thatbeneath the Labour Party's objections tothe scheme lay dislike of a guaranteedincome not in some way related toemployment.

Ultimately, the argument was not about

issues within the science of economics, butabout the very concept of an "economy"and money's role in human life. At the rootof Douglas's thought was his opposition to"the obsession of wealth defined in termsof money". He belonged to the traditionwhich draws attention to the origins of theword "economy" in the idea of caring forresources. Eighty years ago Douglasidentified "The production of armaments[as] the supreme example of wastefulproduction being deliberately fosteredbecause of its financial profitability." AsHutchinson and Burkitt point out, it can beargued that war saved the 1930s economicsystem from complete collapse. Labour'svictory in 1945 ensured the dominance ofcollectivist policies and Social Creditdwindled away."Mass unemployment, Third World

poverty and world-wide environmentaldegradation were predicted by the Douglas/New Age texts," write the authors. As wereach the end of the century and findarmaments manufacturing, internationaltrade, the Protestant work ethic and theidea of "prudent finance" as powerful asever, we can thank Hutchinson and Burkittfor directing us to a neglected source ofalternative values.Philip Conford is Honorary Research Fellow inthe department of History, University ofReading. Review originally published inResurgence 190 Sept/Oct 1998

VOLUME 83 PAGE 195


Recommended ReadingFrances Hutchinson & Brian Burkitt

The PoliticalEconomy of SocialCredit and Guild

Socialism(Jon Carpenter

£12.99)

Frances Hutchinson, Mary Mellor &Wendy Olsen

The Politics of Money:Towards

Sustainability &Economic

Democracy(Pluto £16.99)

Frances HutchinsonSocial Credit? SomeQuestions Answered

(KRP£5.00)

Frances HutchinsonWhat Everybody

really wants to knowabout Money

(Jon Carpenter£12.00)

H J MassinghamThe Tree of Life

(Ion Carpenter £13.99)

Eimar O'DuffyAsses in Clover(Ion Carpenter £5.00)

Copyright 1998. Permission granted for reproduction withappropriate credit.

If you wish to comment on an article in this, or the previousissues, or discuss submission of an essay for a future issue of

The Social Crediter, please contact the Editor, FrancesHutchinson, at the address on the left.

(It would be very helpful if material were submitted either by e-mail or on disk if at all possible).

VOLUME 83 PAGE 196

the journal of the social credit secretariat issn:0037 ... · fit into this gloomy picture? in the...

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