Social Credit Views

    "The money creation process employed by the Bank of Canada is quite simple and mirrors the money creation process which, through the private banking system, is responsible for the greater majority of our money supply.[1]Contrary to what many people assume, banks are not borrowers and lenders of pre-existing money, but are rather creators and destroyers of the money that they issue in the form of bank credit. The same holds true for the Central Bank. Whenever an auction of new government securities is held, the Bank of Canada buys a certain percentage of these securities by creating digital accounting entries in the Federal Government’s deposit account with the bank. This deposit is recorded as a liability of the bank, while the newly purchased security is recorded as an asset on the Bank of Canada’s balance sheet."

The making of markets in its broadest sense, i.e., the facilitation of existing trade, as well as the opening, invention, and conquering of new markets, is often presented as one of the prime advantages and chief features of ‘capitalism’: people with money invest in schemes to make more money by commercializing an ever-greater portion of our lives, as markets expand and offer to do more and more things for us that we were once able to do for ourselves, or didn’t even ‘know’ that we ‘needed’.[1]This results in more, and sometimes even better, and sometimes even cheaper goods and services for the consumer, and thus we all derive some benefit. And indeed it so: the breadth and depth of what is on offer in the market of the typical Western industrialized country, and of more and more non-Western countries to boot, is astonishing and would dizzy the heads of our ancestors to no end. One feels hard-pressed to object to all of this ‘market-magic’, even if one does not personally care much for many of the particular goods and services that the market puts on offer. I submit, however, that, as with many things in life, there is a dark side to market-making. Whether, and to what extent, the ‘shadow’ of the market-making phenomenon in its present form or manifestation exceeds its genuine wonders I’ll leave it for the reader to decide.

C.H. Douglas was a British engineer who, in the 1920s, founded an international movement for monetary reform centred on his ideas which were known as "Social Credit".

Aujourd’hui je vais vous parler un petit peu de C.H. Douglas, et de ses idées pour la réforme financière et économique.

Pour commencer, je vais vous donner un peu d’historie.

C.H. Douglas était un ingénieur britannique qui, durant les années vingts, a fondé un movement international pour la réforme monétaire autour de ses idées qui s’appelait “Le Crédit Social”.

     Lately I have been reflecting on the views of the conventional economic ‘right-wing’, as represented by ‘neo-liberals’, adherents of the Austrian school of economics, ‘capitalists’, economic libertarians, and so forth. It seems that whenever someone suggests that radical changes need to be made to the reigning financial or economic model – a suggestion which, in essence, must be a plea for some kind of intervention on the part of the public authority – those who are more or less satisfied with the existing system and find themselves on the ‘right’ of the economic spectrum regard the suggestion quite reflexively as an intolerable attack on the free market and an affirmation of ‘socialism.’ I have found this attitude, and the rhetoric which often accompanies it, curious for four major reasons, reasons which I will want to outline in this article. The fourth critique that I will present is the most significant from a Social Credit point of view, but the first three are by no means unimportant. By unnecessarily muddying the economic debate, free market rhetoric often obstructs the rectification of the economy’s structural problems.

     In a recent paper entitled “The Scales and the Dam: Static and Dynamic Conceptions of the Economy”, Arindam Basu has introduced a brilliant metaphor that can be adapted in various ways to explain both how the economy functions under the existing financial system and how it would function under Social Credit: “A typical run-of-river hydroelectric dam, which uses a flow of water to generate a flow of electricity, may serve quite well as a metaphor for an economy that converts a flow of money into a flow of goods and services.”[1] As Arindam notes, this analogy can be developed further in a variety of ways.

Thus far, we have looked at the whats and the whys of the financial domination of liberal democracy. It is now time that we turn to a more detailed examination of the hows.

    Let us begin with the general observation that, in a society operating under the Monopoly of Credit, organized political activity, like most other activities, is largely dependent – directly or indirectly – on Finance. Money, both in the form of producer credit and in the form of income, is maintained in a state of artificial scarcity, and Finance will naturally be inclined to ration it to those who do its will and to punish those who resist by denying them access to the life-giving credit. Credit, in turn, is a necessary means for obtaining most of the material and human resources required for political action. In this way, Finance can condition political activity to the point of completely controlling it.

Introducing the first-ever animated presentation of the Douglas Social Credit economic diagnosis and remedial proposals.

Please spread wide and far!

     "If one wishes to do full justice to reality – regardless of the topic that is being investigated - it is of the gravest importance to neither underestimate nor overestimate the phenomenon in question. Accordingly, whenever this particular question of ‘conspiracy’ becomes the subject of reflection, the thoughtful individual will seek to follow a sensible middle-path in accordance with the available evidence and in full knowledge of his cognitive limitations. This will allow him to scrupulously avoid the error of those who become irrationally suspicious, i.e., paranoid, while, at the same time, avoiding the mistake of those who, by preferring to be complacently sceptical, refuse to call a spade a spade. To deny the reality and indeed even the possibility of conspiracy as an explanatory factor behind much of our socially-induced discontent is just as irrational, therefore, as to think that every negative thing that occurs in the world must be due to a conspiracy." 

    Thus far in this series of articles exploring the relationship between Social Credit and democracy, we have seen that conventional ‘democracy’ suffers from a large number of design faults which vitiate it and render it ineffective. That would be bad enough, but Douglas goes one step further and claims that the ineffective mechanisms of conventional ‘democracy’ provide the best possible cover for the operations of a hidden dictatorship. Not only do they provide the best possible cover, but the same mechanisms which are ineffective from the point of view of fulfilling the true purpose of political association can be rendered most effective (by being cleverly manipulated) for the purpose of fulfilling an alternative policy-objective, one that is imposed by an agency that is external to the elected ‘government’.