The following submission to the Letters Editor
of the Edmonton Journal was offered on August 31, 2005
in response to a featured article (August 12, 2005), ostensibly about
Social Credit, and authored by Michael Payne, Head of Research and
Publications, Historic Sites and Cultural Facilities Branch, Alberta Community
Development. Dr. Payne is also co-editor of Alberta's Centennial
History: Alberta Formed--Alberta Transformed. He is
the author of The Fur Trade in
Canada: an Illustrated History. This letter is
posted for the interest of List subscribers. The original Payne
article published by the Edmonton Journal is attached
in PDF format:
Edmonton Journal, Letters
Editor, Box 2421, Edmonton, AB, T5J 2S6
Dear Letters Editor:
Michael Payne presents a rather convoluted
account of Social Credit in his "Historica" Journal
article of August
12th. The Canadian Encyclopedia account of Social Credit is similarly distorted and
unauthoritative. Students searching for more sound information should search the
Website for the Social Credit School of Studies (Australia) and the Social
Credit Secretariat (United Kingdom). The Canadian edition of the recent book
Major Douglas: The Policy of a Philosophy by British author John W. Hughes deserves mention as a
valuable current reference.
Few people in Alberta, including those supporting the
party which adopted the name "Social Credit", understood Major Douglas’s "A + B
Theorem." Popular support arose primarily from the religious base established
over radio by William Aberhart and the economic privation of the Great
Depression of the 1930s.
Social Credit, as presented by Douglas, is neither
"right" nor "left" wing and regards the political spectrum not as linear but as
circular with extreme manifestations of both leading ultimately to tyranny as
they move around a circle toward convergence. Social Credit seeks balance and
sufficiency through the realistic integration of means and ends.
Douglas said that if you regard the purpose of
economics, espoused by economic and financial orthodoxy, as being creation of
work to provide "employment," the present financial system works almost
perfectly. The existing system has also the potential to destroy civilization
because of the expanding necessity for wasteful and destructive activity,
culminating in war, needed to provide sufficient purchasing power for consumers
to claim the products of industry. The philosophy of Social Credit precedes and
determines its policy which calls not for work but for freedom, abundance and
leisure. This is incompatible with the objectives of economic orthodoxy and
failure of the latter to understand or accept Social Credit philosophy and
policy accounts for its rejection, or inability to comprehend, Douglas’s formal
economic analysis, i.e., his A + B Theorem.
The existing economy fails not because of Douglas’s A
+ B Theorem but because of an inherent failure to provide financial liquidity,
leading to exponential increase in debt–as described by the Theorem. The Theorem
states that the flow of financial prices in a given time period is equal to the
total of "A payments" made by industry plus total "B payments" but only the
former (internal payments) are available to the consumer as as purchasing-power.
While "B payments" (external payments made to other organizations) originally
arose as A payments, they are destined for cancellation via repayment of
production loans issued by the banks. They are not, and never again will become,
consumer income.
To deny the validity of the A + B Theorem is to
assume that industrial work is the end of life and is like saying, ridiculously,
that the population is static because everyone who is born dies–or that, as
everyone alive was born, everyone born is therefore now alive. For the
community’s income to be sufficient to claim, without incurring debt, all
current production, all money values embodied in B costs, originally distributed
as consumer income via A costs, would have to be saved until embodied in the
cost and prices of goods completed months or years later–by which time the
economy would have collapsed and the population would have starved.
Yours sincerely
Wallace M. Klinck
Tel. (780) 467-4885, Fax. (780) 467-7923
E-mail: wmklinck@shaw.ca
Letter to Editor o
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