|Subject:||Re: [socialcredit] A brief outline of Social Credit|
|Date:||Wednesday, February 28, 2007 11:02:43 (-0700)|
|From:||Martin Hattersley <hattersleyjm @.........com>
|In reply to:||Message 4507 (written by william_b_ryan)|
A really excellent outline. The only area I would work on is the details of
the actual implementation of a Social Credit policy. One point that seems
extremely important to me is that, if dividends and just price rebates are
used by consumers to repay debt, it will lead to a cancellation of much of
the credit in circulation, and so will not lead to inflation.
I think it would be good if any actual proposals made are set out as
possible ways of implementation, rather than as policies carved in stone.
"There's more than one way to skin a cat", and individual freedom implies
5929 - 189 St.,
EDMONTON AB CANADA T6M 2J1
----- Original Message -----
Sent: Wednesday, February 28, 2007 8:41 AM
Subject: [socialcredit] A brief outline of Social Credit
> Regarding my message yesterday on abundance, "ring"
> should have been wring, and "Duneden" should have been
> As to the East India Company flag and its connection
> at least in appearance to other flags, just yesterday
> in The New York Times Online was an article about the
> controversial South African popular song, "De la Rey,"
> the name of the Boer general during the Boer War.
> There was a link to the music video on YouTube,
> I thought it was interesting, in light of our
> discussion, that the Boer battle flag depicted in the
> video has red and white stripes similar to those on
> the U.S. and East India Company flags.
> Incidentally, supposedly it's not possible to download
> videos from YouTube for local archiving and later
> viewing. It's really quite easily done. I'll relate
> the details offlist to anyone who's interested. A
> significant advantage is that you can then see the
> video in full screen with better resolution and no
> Appended below is "A brief outline of Social Credit"
> from Vic Bridger, published a couple of years ago in
> Michael Journal.
> It's quite good but in my opinion does require some
> For example, the outline states: "The retailers would
> then present their authorised vouchers to their local
> banks which could credit them with the discounts
> We've learned in our discussions that Douglas' plan
> was for the vouchers to be given by the retailers to
> their consumers together with their sales tickets, who
> would then present them individually to their banks
> for credit to their respective accounts. For several
> reasons I feel that Douglas' method is the better way
> to do it.
> There are other changes I would like to see.
> I invite comments and suggestions how Victor's outline
> may be improved.
> A brief outline of Social Credit
> Victor J. Bridger
> Many times Social Crediters, when discussing some
> aspect on Social Credit, have been confronted with a
> question such as, "Can you give it to me in a
> Obviously, to compress into a very brief statement
> something that, although not difficult to understand,
> runs counter to many of the accepted ideas that people
> have about economics, politics and social problems, is
> fraught with danger. The purpose of this very brief
> silhouette against a background of a very large canvas
> should be sufficient to show a picture which can be
> understood by those who are quite unfamiliar to the
> thoughts expressed.
> To begin with, it will be seen that to comprehend
> Social Credit that, although there is one main stream,
> there are tributaries that flow from it. To commence
> with, there is the philosophy of Social Credit, and
> following this, is the policy of Social Credit. The
> philosophy contains those beliefs that are considered
> to be a part of reality, those things that are
> considered to be beyond question if we are to accept
> the existence of certain natural laws, and that those
> laws are absolutes in that they cannot be broken by
> The policy of Social Credit contains the positive
> lines of action that must be taken to achieve the
> results or obtaining the objectives bound up in the
> philosophy. Douglas referred to Social Credit as The
> Policy of a Philosophy and as being "something based
> on which you profoundly believe - to be a portion of
> reality." To explain this requires certain definitions
> and some explanation of these.
> Definition of Social Credit
> Sometimes the words Social Credit have provided
> confusion to people who have not considered their
> meaning. It has been said that it sounds like some
> form of socialism, and in fact has been termed by some
> unknowingly as Socialist Credit. Of course nothing
> could be further from the truth as it will be shown
> that Social Credit is the very antithesis to
> socialism. The derivation of the word "social" comes
> from the Latin "socius" meaning sharing, and is basis
> of the meaning of the word association. "Credit" has
> its origin in "Credo - I believe".
> Some Social Crediters have expressed a meaning to
> Social Credit that it is "the belief inherent in
> society that its individual members in association can
> produce the results they want if the results are
> physically possible." Note that a key phrase has
> entered here - "physically possible." That places a
> limitation upon the results that may be produced.
> Dr. Tudor Jones, onetime Chairman of The Social Credit
> Secretariat defined Social Credit as: "The efficiency,
> measured in terms of human satisfaction of human
> beings in association." He further defined
> "efficiency" with its correct meaning as "the power to
> produce an intended result," and went on to point out
> that it had to be decided upon by anyone wishing to
> understand Social Credit, whether or not people had
> such a power. In other words, is it true that
> individuals associating together to produce a result
> they want was possible or not. If it was not accepted,
> then there was no point in investigating Social Credit
> any further. If, however, it was agreed that people
> working together could achieve a desired result, it
> could then be stated that people working together
> could achieve more than working on an individual
> basis. This brings us to one part of the philosophy
> which is expressed in the term, the increment of
> Since the beginning of man there has been a gradual
> increase in the discovery of tools and materials, and
> ways of using them for mutual benefit. This has
> proceeded to the present day, and the increase in
> technology and the handing down of the knowledge of
> how to use it is referred to as the cultural
> inheritance. It is something that belongs to no one
> particular individual, but all mankind.
> The objective of Social Credit
> When asked to define the objective of Social Credit,
> he replied: "What are we aiming at? What are we trying
> to get? We are endeavouring to bring to birth a new
> civilisation! We are doing something that really
> extends far beyond the confines of a change in the
> existing financial system. We are hoping, by various
> means, chiefly financial, to enable the human
> community to step out of one type of civilisation into
> another type of civilisation, and the first and basic
> requirement, as we see it of that, is absolute
> economic security."
> This quotation from Douglas, together with the
> definitions we have given, gives us a clear idea of
> the concept of Social Credit. The statement that we
> are endeavouring to bring to birth a new civilisation
> establishes three important points:
> 1. That Social Credit is an evolutionary, not a
> revolutionary Movement. It does not destroy to create
> anew; it brings in natural sequence a new birth from
> the old.
> 2. That it is a reform of the existing national
> financial accounting system - a reform that will
> enable a new civilisation to come into being.
> 3. Two objectives of this reformation are the
> provision of economic security and political security.
> A survey of these points confirms the view that, on
> the practical side, Social Credit is described as a
> policy of a philosophy, and this presupposes four
> 1. A belief to work from - i.e. A philosophy;
> 2. An objective to work to - A policy;
> 3. A knowledge of the wrong in the thing to be
> reformed - incorporating both philosophy and policy;
> 4. A means of righting the wrong so as to attain the
> objective. The technical knowledge for implementing a
> The philosophy of Social Credit
> Major Douglas has stated that "Social Credit is the
> policy of a philosophy." This philosophy is
> represented by the beliefs we hold and the
> implementation of the policy to reach the objective.
> This policy embraces the examination of the system we
> wish to correct and the action we take towards our
> conscious and recognised objective.
> What, then, are the beliefs which form the basis of
> Social Credit philosophy?
> Briefly, we can say that it is founded on a belief in
> the supreme value of human personality, and that the
> self-development of the individual to his highest
> possible perfection is the main reason and aim of all
> social organisation.
> It believes that systems are made for men, and not men
> for systems, and that no worthwhile civilisation can
> be developed that does not provide for the fullest
> measure of freedom for the individual.
> Whilst it emphasises the self-development and
> importance of the individual, it also encourages the
> fullest measure of co-operation. But it must be the
> free and willing "co-operation of reasoned assent;"
> the co-operation of inducement, not the enforced
> co-operation of regimentation or legal or economic
> Summed up, it is the belief in the self-development of
> diversified individuals in freedom and security, with
> security as the basis of freedom. It embraces all the
> fundamental freedoms - freedom from want and fear;
> freedom of choice, of action, of speech, of worship.
> The beliefs we have mentioned also indicate the
> objective of Social Credit. That objective is a new
> civilisation. a civilisation based on economic
> security, a civilisation in which all the fundamental
> freedoms are realities, a civilisation of prosperity,
> culture, happiness and peace.
> It is the civilisation visualised by the prophet Micah
> 2,000 years ago. "They shall beat their swords into
> ploughshares and their spears into pruning hooks;
> nation shall not rise up against nation, neither shall
> they learn war any more; but they shall sit, every man
> under his own vine and under his own fig-tree, and
> none shall make them afraid."
> The policy of Social Credit
> Let us now turn to the policy that arises from this
> philosophy of Social Credit, remembering always that
> policy is action directed towards a conscious and
> recognised objective.
> When we quoted Douglas as saying that the first and
> basic requirement of a new civilisation was absolute
> economic security, it must be evident to us, that in
> demanding a new civilisation, we must be profoundly
> dissatisfied with the present one, and that, in
> stating its basic requirement as "absolute economic
> security," we must be experiencing economic
> As we are convinced that we do not have economic
> security, we have to ask WHY? And so we must commence
> from this point. This immediately puts us into the
> realm of economics, and gives direction to our policy
> to achieve our ends.
> What, then, is economic security? It is the
> possession, or the means to possession, at all times
> for all people, of adequate food, clothing, shelter
> and the amenities of modern civilisation. Without
> this, there is no economic security and only a
> restricted freedom.
> The CAPACITY to give absolute economic security
> resides in the immense powers of production made
> possible by science and invention. The TITLE to
> absolute economic security resides in the possession
> of a sufficient income at all times to buy the goods
> and services that make it possible.
> As we live in a monetary economy (and there is no need
> to change this), economic security resolves itself
> into the possession of sufficient money incomes for
> everybody at all times, irrespective of employment.
> This being so, we have next to ask -where do incomes
> come from? The answer is quite simple. All incomes as
> purchasing power are distributed into the hands of
> consumers through the operations of industry. All
> purchasing power arises in production.
> It takes the form of wages, salaries and dividends
> paid directly to individuals engaged in industry or
> indirectly from them, through services and taxation,
> to those not so engaged. There is no other form of
> purchasing power in the community than this.
> Industry and banking
> Now let us go a step further. If industry distributes
> all incomes as purchasing power, where does industry,
> in its turn, get the money to do this? A brief
> examination will show that industry is financed from
> savings or from loans or overdrafts from the banking
> But as savings, which are really unused purchasing
> power, had their origin from previous bank loans to
> industry in other cycles of production, it is correct
> to say that industry functions almost entirely on
> loans from the banking system.
> It must be remembered that the banks have
> discretionary powers to call in loans and overdrafts
> even before the goods they brought into existence have
> been sold, and they sometimes exercise this power with
> disastrous effects on the community.
> The banks only lend money as a repayable
> interest-bearing debt, with number one priority over
> the assets of the borrower, so it is clear that the
> banks entirely control production in this way.
> We have already seen that the money flowing through
> industry is the only source of purchasing power, so it
> is also clear that the banks, in controlling
> production, automatically control consumption as well.
> That is to say, the whole economic system is dominated
> by the banks and, consequently, they dominate the
> lives and destinies of the people, and dictate the
> policies of governments. History proves this
> Now let us go still another step further and ask where
> do the banks get the money they lend to industry, and
> which gives them control of the community.
> The answer is again quite simple: THEY CREATE IT. In
> the terse phrase of the English economist, Hawtrey,
> "They create the means of payment out of nothing." The
> money so created is called bank credit.
> Banks do not lend the money deposited with them by
> their clients as most people suppose. Every bank loan
> or overdraft is an absolute creation of new credit and
> this credit functions as money.
> When cheques are drawn against this credit, they come
> back into the banking system and form deposits.
> Practically all deposits are created in this way.
> Instead of deposits being used bv the banks to create
> loans, as is generally believed, the loans make the
> The actual creation of bank credit is an almost
> costless operation as it consists merely of written
> entries in bank ledgers or computers, and made
> effective by written entries in cheque books, or
> credit cards. Banking, is mostly bookkeeping. Finance
> is mostly accountancy, and money is mostly figures.
> Though bank credit is supposed to be issued against
> the security of the borrower, it is really issued
> against the productive capacity and the real or
> "social" credit created by the community as a whole.
> The banks, however, treat this community credit as
> though they are the sole owners, and are thus in the
> unique position of being able to lend something they
> do not own, and of being well paid for it.
> As banks have the sole privilege of creating and
> issuing money in this way, they thus constitute a
> monopoly of credit that functions as money which keeps
> the whole community, to whom the credit rightly
> belongs, in subjection through debt. This monopoly of
> credit or money creation is the greatest power ever
> vested in any institution in the history of the world.
> Effects of the monopoly of credit
> Let us now examine the effects of this monopoly of
> credit on Industry and the community. We find that
> industry performs three functions:
> (1) It produces goods and services.
> (2) It distributes the purchasing power to buy its
> (3) It establishes the prices at which its products
> are sold.
> Industry, to be successful, must get back from the
> public in the prices of its goods more than it pays
> out to the public in the course of their manufacture.
> Otherwise, it could not make a profit.
> Now prices consist of all money costs of production,
> plus the percentage loaded on as profits. Amongst
> these costs are such items as interest paid to the
> banks on overdrafts, and money set aside as
> depreciation on plants and buildings.
> Though these costs, representing profits, interest and
> depreciation, are all loaded into prices, the money to
> liquidate them is not distributed to the public
> neither as wages, salaries, nor dividends.
> Therefore, prices are, and must always be, greater
> than the money available to buy them. In other words,
> there is always a disparity between the flow in the
> generation of purchasing power and the generation of
> prices in any one productive period. As can be seen,
> this is due to accounting all costs into prices
> without making provision for liquidating all of them.
> This is the flaw in the finance-economic system, and
> is the main cause of all the economic troubles in the
> world. It is directly traceable to the use of debt for
> money and to the policies and practices of the
> monopoly of credit. Under the present financial
> system, there is no sound means of bridging the gap
> between purchasing power and prices.
> The disparity between purchasing power and prices is
> further accentuated by SAVINGS. If money distributed
> as purchasing power is not so used, but is saved and
> re-invested to produce more goods, its function as
> purchasing power is lost; it becomes capital.
> The disparity thus becomes greater than ever, and this
> disparity is represented by goods unsold, or goods
> that have to be sold by another form of purchasing
> power than that released in their production.
> As a matter of fact, the surplus represented by this
> disparity can only be sold by one means, and that is
> by mortgaging future purchasing power; in other words,
> by DEBT.
> There are several ways of doing this.
> (1) Increased borrowing from the banks for new
> (2) Time payment, hire purchase, cash orders, bills,
> promissory notes and other similar devices.
> (3) Spending by governments of loan monies on public
> All these methods are based on debt to the banking
> system, and lead to intolerable burdens of public and
> private debt and ever-increasing taxation. They must
> eventually culminate in the breakdown of the economic
> system and the moral of the community.
> We agree with Douglas when he states: "There is no
> single cause operating in the world today which is of
> such importance and is so fraught with the possibility
> of world disaster, as is the disparity between
> purchasing power and prices."
> Let us follow logically the results flowing from this
> disparity. It must be evident at the outset that in
> every cycle of production a proportion of the goods
> must remain unsold.
> As further cycles are completed, the unsold portions
> must pile up till it is useless and dangerous to
> produce more for the time being, so banks restrict
> credit, production slows down, and men are laid off.
> When men are laid off, wages cease, purchasing power
> further diminishes, less goods are sold, credit is
> further restricted or called in and cancelled. There
> is a rush to sell below cost and bankruptcies occur.
> Standards of living now fall rapidly; there is further
> unemployment; dole conditions and acute depression
> appear; governments start relief works, and the banks
> readily lend them the credit they refuse to industry.
> Debt and taxation grow apace.
> Still much of the surplus goods remains unsold, and we
> have starvation and poverty in the midst of abundance.
> Goods are wantonly destroyed by deliberate sabotage,
> and production is forcibly restricted. With mass
> unemployment everywhere, we are told to work harder,
> save more, and spend less.
> Parallel with these manifestations is the struggle to
> find markets abroad for the goods that cannot be sold
> at home. As all nations are doing the same thing, and
> are in the same economic plight from the same cause,
> this leads to commercial hostility, international
> friction, and finally and inevitably, to WAR.
> The sum of all these results of the disparity between
> purchasing power and prices culminating in war is the
> world disaster foreseen by Douglas. Only the accuracy
> of the Douglas analysis could make such a prophecy
> possible, and only the results could so confirm the
> The Social Credit remedy
> Having examined the system and discovered the flaw in
> it, what is the Social Credit remedy? The remedy must
> be capable of application, and is based on the fact
> that the powers of production are now so efficient
> through science and mechanism that we have emerged
> into an age of potential plenty that will give a very
> high standard of living to all.
> That is to say, it is physically possible to provide
> the things that will ensure absolute economic security
> to all. This being so, the factors to be considered
> are as follows:
> 1. That the power to produce must be balanced with the
> power to consume.
> 2. That the monopoly of credit must be terminated, and
> the right to issue and control all money and credit be
> vested in a statutory body as representing the people.
> 3 That savings shall not be diverted from their proper
> function, i.e., purchasing power.
> 4. That money and credit be a means of distribution
> only, and not a commodity to be bought and sold at
> 5. That provision of purchasing power must be made for
> those not employed or displaced from industry by
> labour-saving machinery.
> With regard to the last factor, Social Credit is
> convinced that science and invention will continuously
> reduce employment. It welcomes this development
> because it ushers in an age of leisure that will
> stimulate culture and self-development.
> To resolve these factors, Major Douglas has laid down
> three embracing principles of social and economic
> reconstruction having an universal application, and
> out of which can be evolved practical proposals suited
> to the needs, conditions, and social organisation of
> each country that decides to adopt them.
> Broadly stated, they are:
> 1. That there must be at all times an equation between
> purchasing power and prices, and that credit must be
> recalled only as goods are consumed.
> 2. That industry must be financed by credits created
> for that purpose, and not by savings.
> 3. That a social dividend shall progressively replace
> wages and salaries as men are progressively displaced
> from Industry.
> The application of these principles
> It will be seen that these principles cover the
> defects in the existing system, and that within them a
> solution is provided that is both preventive and
> remedial. How can we put this solution into practical
> The first step will be the establishment of a National
> Credit Authority to take complete control of the money
> system and put the affairs of the nation on a proper
> accountancy basis. This would restore money power to
> the people and do away with the monopoly of credit by
> private interests.
> The National Credit Authority would then ascertain
> from all available sources the financial and economic
> position of the nation as a business concern, and draw
> up a correct Trading Account and Balance Sheet of the
> As we are a progressive people, with national wealth
> continually increasing, there would be a considerable
> credit balance in every accounting period,
> representing the profit of national appreciation of
> wealth over national depreciation.
> Credit would be issued against the profit balance to
> establish an equation between purchasing power and
> prices, pay a social dividend, or meet any commitment
> deemed necessary for the safety or welfare of the
> people of Australia.
> Once we have established the control of our national
> credit, the power to do things would no longer be
> determined by money conditions. Under Social Credit,
> "what is physically possible is financially possible."
> Now let us indicate more definitely how this credit
> will he used. It is essential that it must be used to
> prevent inflation, and that it will be applied in the
> spirit of co-operation. Douglas made certain
> suggestions for implementing a Social Credit policy,
> and whilst these are shown here, there may be other
> ways of accomplishing it.
> To ensure this co-operation, businesses would be
> invited to register with the National Credit Authority
> to trade on mutually agreed margins of profit
> according to the nature of the business concerned.
> The profit would be high enough to encourage ample
> production, but not high enough to permit
> This arrangement would control prices in a more
> scientific way than the present method of price
> fixing, but, in addition, the technique of Social
> Credit provides a regulating factor that makes price
> control absolutely effective.
> This factor would ensure that the money or credit
> issued against the profit balance in the nation's
> books would not only increase purchasing power, but,
> at the same time, reduce prices.
> An example will illustrate how this could be done.
> Supposing the price of an article was $8, and the
> purchasing power available was $5. The disparity is
> $3. Credit could be issued to reduce the price by
> $1.50 and to increase the purchasing power by $1.50.
> Purchasing power and prices would then be $6.50, and
> the required equation would be made.
> The money to reduce prices would be in the form of a
> discount known as the Just Price or Retail Discount
> (like a sales tax or GST in reverse), and the money to
> increase purchasing power would be in the form of a
> social dividend to individuals and paid irrespective
> of employment. Both would come from the national
> profit already mentioned, and would provide the means
> of economic security.
> The Just Price or Retail Discount would apply only to
> ultimate consumable goods sold by retailers. At every
> accounting period, the National Credit Authority would
> publish the discount rate, and retailers, after
> charging all their costs into prices, would then sell
> their goods, less the amount of the discount. They
> would actually sell them at less than their
> established selling price.
> The retailers would then present their authorised
> vouchers to their local banks which could credit them
> with the discounts allowed. The banks, in their turn,
> would be reimbursed by the National Credit Authority
> out of the national profit. The banks would be
> adequately compensated for the services rendered.
> A portion only of the national profit would be used in
> this way; the balance would be used to pay the social
> dividend and any other services considered expedient.
> By this method of selling below the normal selling
> price, the consumer's money would have increased its
> buying power, and all goods could be sold without loss
> to the producers. Inflation would be impossible, and
> all the economic uncertainties of boom and slump
> incidental to the present "trade cycle" would
> disappear, The economic system would be stabilised.
> Under Social Credit, borrowing for national purposes
> would be unnecessary; public works could be
> constructed without debt. The national debt could be
> gradually paid off, and taxation, as a means of
> revenue, eliminated.
> The most effective "planning" in the world is adequate
> money in the hands of consumers. Having effective
> demand in this way, they could give the necessary
> orders, and industry would be enabled to function to
> the limit of producer capacity or to the limit of
> consumer demand, whichever occurred first. The
> standard of living would thus rise to untold heights.
> With economic security assured, the struggle for
> markets abroad and the conditions that lead to
> depressions at home would be ended, and the new
> civilisation of freedom, peace and prosperity would
> be, at long last, brought to birth.
> The application of science and technology to
> production now enables mankind to ensure a reasonable
> sufficiency of material needs to all, without
> continuing economic servitude. But the existing
> financial system is fundamentally flawed. It is
> endangering the planet through ruthless exploitation
> of its limited resources in pursuit of financial
> profit and the will for power.
> Competition between ever-growing trade blocks backed
> by military might threatens global destruction. At the
> heart of this complexity of interrelated problems lies
> the monopoly of credit creation by the international
> banking system.
> The prerequisite to resolution of these problems is
> the elimination of this monopoly of financial power,
> and its control by national governments through a
> properly constituted statutory authority, a National
> Credit Authority, answerable to parliament but immune
> from political manipulation. This Authority would
> maintain the national accounts of production and
> consumption in both physical and monetary terms (as is
> already done by the Bureau of Statistics in
> calculating gross Domestic Product and Gross National
> Product), and regulating the issue of credit in
> accordance with the performance of the economy. It
> would operate in the interests of the citizens, and
> with compatible arrangements for mutually
> complementary international trading.
> The means to that end are known and available. There
> is growing international recognition that such change
> is necessary.
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