| Subject: | [socialcredit] Pound, Social Credit, and the Critics | | Date: | Tuesday, April 17, 2007 07:53:19 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
|
Wally Klinck recently sent me this essay written some
years ago by his younger brother, Dennis. For posting
to this list I've converted it into plain text.
------------------------------------
FAIR USE CLAIMED for limited study and strictly
non-profit and non-commercial purposes.
(1976) 5 Paideuma 227-40
DENNIS R. KLINCK
Pound, Social Credit, and the Critics
Criticizing C.H. Douglas's economic analysis and
proposals in *AZBC of Ezra Pound*, Christine
Brooke-Rose asserts: "However, he was never able to
answer the question put to him: what do you do if a
man runs short of money and sells his life's dividends
to a richer man for an immediate loan? The only
possible answer is severe restriction, inconceivable
in a free society."1 The allegation, not documented,
is perhaps the most naive "refutation" of Social
Credit offered in recent years by Pound critics.2 If
anyone (we are not told who) ever did ask Douglas that
question, the answer, implicit in all Douglas's
writings, is explicit in his observation that "the
essence of the National Dividend proposals of Social
Credit technique is to provide for free negotiation
without duress, not contract without penalty."3 Even,
however, in more comprehensive and disciplined
treatments of Social Credit by Pound scholars--notably
Earle Davis's *Vision Fugitive: Ezra Pound and
Economics*4 and William M. Chace's *The Political
Identities of Ezra Pound and T.S. Eliot*5 radical
misunderstanding of their subject brings the authors
to misleading interpretations of it.
Much of the blame for this misunderstanding can be
attached to Pound himself, who in his "moral
indignation"6 was wont to lapse into
inconsistency--perhaps manifesting the tendency he
lauded in Senator Bankhead: "an excessive and
excitable Bankhead, shouting about a half-digested
idea, is worth more to his country than a whole bench
of British ministers, mutton-headed to a man, and
incapable of any ideation whatso damn ever."7 Pound,
outraged by (among other things) "the evil wrought on
the arts by pustulence in the system of money,"8 spent
a good deal of his energy in seeking and elaborating
'anti-usura economics.' Unfortunately, in spite of the
intensity of his concern, many of his formulations on
this topic seem to have been "halfdigested."
He was first attracted to Social Credit as a "working
economic system" which would not only break the
monopoly of the usurocracy but also ensure creative
freedom for individuals: "As for proposed remedies,
C.H. Douglas is the first economist to include
creative art and writing in an economic scheme, and
the first to give the painter or sculptor or poet a
definite reason for being interested in economics;
namely, that a better economic system would release
more energy for invention and design."9 He accepted
the kernel of Douglas's financial analysis--the A+ B
Theorem--and paraphrased it (with embellishments) at
38/190:197: what a factory "pays in wages and
dividends," Pound says,
stays fluid, as power to buy, and this power is
less,
per forza, damn blast your intellex, is less
than the total payments made by the factory
(as wages, dividends AND payments for raw material
bank charges, etcetera)
and all, that is the whole, that is the total
of these is added into the total of prices
caused by that factory, any damn factory
and there is and must be therefore a clog
and the power to purchase can never
(under the present system) catch up with
prices at large...
There is, the A + B Theorem reveals (and Pound
agrees), a discrepancy between the prices created by
the industrial system and the incomes distributed by
it. This discrepancy, presently financed by debt of
various kinds--the technique of the usurer's monopoly,
is the result of the augmentation of the communal
capital over the ages. This communal
capital--epitomized in the terms "unearned increment
of association"10 and "cultural heritage"11
rightfully belongs to the community as a whole. At the
moment, however, it is in the hands of the
manipulators of debt, the usurocracy.
It is on the question of in what sense the social
credit "belongs to the community as a whole" that
Pound seems to have diverged, ultimately, from
Douglas. The problem--one that has plagued not only
Pound and his critics, but most professional 'Social
Credit' politicians as well--is suggested by
Brooke-Rose's comment: "Similarly [Pound's] taking up
of Douglas's Social Credit and Gesell's stamp-scrip
(the latter idea causing Douglas to dissociate himself
from Pound) may seem cranky to orthodox economists
today, but they are only part of his insistence that
credit belongs to the people and not to the banks,
which seems to me perfectly reasonable socialist
theory if not practice" (226). "Socialism" is, of
course, a loaded term: it is usually associated with
'nationalization' of the means of production.12
(Indeed, readers of *The Communist Manifesto* will
recall that one of Marx and Engels' ten points for
'revolutionizing' industrial economies is the
nationalization of banking). Douglas certainly did
not, when he spoke of restoring the social credit
(financially) to the community, mean that the control
of credit was to be exercised by the state:
"Nationalization without decentralized control of
policy," he wrote in Economic Democracy, "will quite
effectively install the trust magnate of the next
generation in the chair of the bureaucrat, with the
added advantage to him that he will have no
shareholder's meeting"13; and, in *Credit-Power and
Democracy*, "...centralized financial credit-control
will break up this civilization, since no man, or body
of men, however elected, can represent the detailed
desires of any other man, or body of men,"14 Besides
the technical or accounting problem, then, there is a
more fundamental political question to be asked: how
can credit-power be distributed to those whose
heritage it is? How can _policy_ be decentralized?
Douglas regarded money as the mechanism of effective
demand: money is simply a very flexible means by which
persons can express their choices. It is these choices
that Douglas refers to when he speaks of the "detailed
desires" of individual persons. The political
significance of money is directly related to its
effectiveness as demand; thus inflation is always an
assault on freedom of choice because it devaluates the
unit of effective demand. Moreover, if a person's
credit--his practical power of choice--is administered
by someone else (the mortgage company or the internal
revenue service) he is less free than if he were
administering it himself. Douglas was unequivocal
about this from the outset: "It is suggested that the
primary requisite is to obtain in the re-adjustment of
the economic and political structure such control of
initiative that by its exercise every individual can
avail himself of the benefits of science and
mechanism; that by their aid he is placed in such a
position of advantage, that in common with his fellows
he can choose, with increasing freedom and complete
independence, whether he will or will not assist in
any project which may be placed before him."15 The
national dividend--an unentailed distribution of free
credit--and the compensated price are the techniques
which Douglas suggested for effecting the policy of
the decentralization of power.
Pound, in spite of his propaganda on behalf of 'the
Just Price'16 and the dividend,17 seems ultimately to
have misunderstood the implications of the
distribution of credit: he appears to have regarded
the transfer of the control of credit from the banks
to the state as a politically effective change;
Douglas saw it as merely an administrative change,
effective power remaining centralized but with
different personnel (or with the same personnel under
different titles).
The ambiguity of Pound's attitude in this matter is
evident at an early date. In 1920, apparently aware of
the central political issue, he observed in
"Hapsburgiania" (New Age, April 22) that "a vast
amount of power, uncontrolled and subject to no
popular influence, resides in banking rings," but that
"with the control of credit distributed, their power
to produce 'representatives of the people' would
diminish" (400). And, in an article entitled "Kublai
Khan and His Currency" (New Age, May 20, 1920), he
wrote: "The real tyranny resided, of course, in the
Khan's control of credit" (37)--an observation
apparently contradicted by some of his later comments
on Mussolini. In "Paris Letter, December 1921" (The
Dial, January, 1922), Pound showed himself to be
primarily concerned with the political implications of
economics:
"Economics are up for discussion not in their
technical, Fabian, phases, but in the wider and more
human phases, where they come into contact with
personal liberty, life, the arts themselves, and the
conditions aiding or limiting their expression. Back
of it all is the Confucian saying 'when the Prince
shall have called about him all the artists and
savants, his resources will be put to full use' "
(74-5), Here, however, is an inkling of Pound's
tendency to acquiesce in centralization of power under
a benevolent or humane dictator--an inkling which
might have been glimpsed earlier in Pound's article
"Masaryk" (New Age, April 1, 1920): "What we hope for
we must hope for because of the intelligence of a few
executive persons" (350). Douglas would, for example,
have admitted neither that artists and savants are
"resources" of the State nor that "reform" can be
effected by 'executive' or administrative action:
"Systems," he wrote in *Economic Democracy*, "were
made for men, and not men for systems, and the
interest of man which is self-development, is above
all systems, whether theological, political or
economic" (18).18
This crucial distinction seems to have become blurred
for Pound, and we find him later making assertions
such as "To say that the state cannot take action or
create something because it 'lacks the money' is as
ridiculous as saying that it 'can't build roads
because it's got no kilometres' "19 and "The state can
lend."20 In a letter to The New English Weekly
(September 29, 1932), he wrote: "It is not to be
supposed that the honest use of public credit for the
benefit of the public will be initiated in either
country; but (from the side lines) it might seem that
Germany will precede England in understanding that
public credit COULD BE SO USED" (579). The question
is, of course, who is to decide how the public credit
is to be used? "Mussolini and Hitler," Pound wrote in
*What is Money For?* (1939), "wasted very little time
PROPOSING. They started and DO distribute BOTH tickets
and actual goods ...."21 But, on what conditions? The
community which trusts a dictator with its social
credit so that the marshes can be drained may find
that the credit is soon being arrogated to the
prosecution of imperialist ambitions of "heroes," or,
to use Pound's term, "super-workers."22 Pound might
have attended more carefully to Douglas's caution in
*Economic Democracy*; his policy, he wrote, "does not
mean anarchy, nor does it mean exactly what is
commonly called individualism, which generally
resolves itself into a claim to force the
individuality of others to subordinate itself to the
will-to-power of the self-styled individualist"
(16-17).
Earle Davis genuinely grapples with the question of
what evidence of Social Credit Pound saw in the
Italian Corporate State; ironically, the points he
chooses are precisely antithetical to Social Credit:
"The nation, perforce, assumed more and more direct
power over all parts of the economy, establishing
controls and dictation of production and consumption"
(163-4); "Deficit financing is also easier; you just
order the National Bank to print the needed money or
supply the credit and put the debt on the books. You
also control wages and prices if inflation rears its
traditional head" (165); "If you consider that the
book figures were meaningless and ignore the mounting
problems of interest, Mussolini's fiscal policies meet
some of the Social Credit program." The criterion for
this evaluation has been supplied by Douglas, who
applies a "simple test" to any "legislation": "Does it
centralize power, or does it free the individual?"23
Each of the above-cited measures can only consolidate
the power of the "state."
Nevertheless, Pound did regard the corporate state,
Douglasism, and Gesellism as the "three living
varieties of economic thought,"24 and, as Chace points
out, during the 1930's the poet tried to link Douglas
and Mussolini "without explaining how an attachment to
Douglas is to be reconciled with an attachment to
Mussolini" (57). Indeed, the two are irreconcilable;
however, Pound did try to reconcile them. By 1933, he
felt constrained to defend himself against Orage in
The New English Weekly: "Whatever our editor's
opinion, I believe myself to be an orthodox Douglasite
as far as economics are concerned. Politics might
mean: capacity for getting action on Douglas's ideas"
(October 5, 1933, 398). He accepts, he says, the
Douglas economic analysis, that is, the revelations of
the A + B Theorem. But, in his haste to fill the
purchasing-power gap, he is willing to acquiesce in
"power politics."25 This is one explanation. Pound
offers another in his article "In the Wounds." Orage,
he remarks, "did not care particularly who issued the
tickets, though Social Credit, as formulated, favours,
their control by the 'representatives of the people'
(400); Douglas, as we have already seen, regarded any
representatives as incompetent to control the public
credit. That credit must be distributed
unconditionally; the individual must be free to
exercise his own initiative in applying it. Pound
regarded Mussolini's assembly as "_more
representative_ than the old model Parliament"
(394)26--a more efficient political organization to
administer the public credit. Whether he regarded
dictatorial action as precedent to the reforms he
wanted, or whether he genuinely believed the Corporate
State to be more "democratic," Pound missed the point
of the Social Credit critique: "There is no more
effective claim to totalitarian power than the claim
to the sole right to issue and withdraw (tax) money
and no mere manipulation of monetary technique which
does not resolve and decide this question can do
anything but complicate the problem":27 whether that
power is in the hands of a dictator, a bank director,
or a distant assembly, the effect is the same for the
individual who wants to make his own choices.
Pound's critics, apparently following him, have
generally failed to make this distinction:28 thus, for
example, Michael Reck has written: "In Douglas' view,
both war and scarcity of money were caused by
financier's manipulations-usury--and his panacea was
nationalized credit";29 and Eric Homberger has
summarized the Social Credit position by saying:
"Remove this power [to create credit] from the usurers
Douglas argued, and put it under some form of state
control not necessarily state ownership, and the
pernicious problem of usury will have been dealt
with". 30 These, of course, are summary statements,
and may be ambiguous only because they are condensed.
However, the more sustained discussions of Davis and
Chace reinforce the inference that the critics, like
Pound, incline to the view that Social Credit implies
state control of credit.
Davis, for example, apparently includes Douglas among
"the radical economists who urge state management of
prices, wages, and profits" (23), or those who propose
"social control of the economic credit of the state
for the presumed good of all the people" (31). Again,
the implication seems to be that Douglas proposed
state direction of the economy through its direct
access to the social credit; in fact, Douglas always
insisted that the only legitimate access that the
'state' has to public credit is through the voluntary
subscription of the individual members of society.31
Davis makes the mistake of permitting the government
to bypass the real owners of the communal credit--for
example, again, in his identification of Social Credit
with nationalized banking: "Therefore, says Douglas,
as well as Pound, Jefferson, Jackson, and Lincoln,
there is no real reason why the government should not
do likewise and borrow from itself (through the
ownership, management or control of the banking
system--or by another appropriate means)" (105).
Whatever Pound, Jefferson, Jackson, and Lincoln might
have said, Douglas did not say what Davis attributes
to him. He did say: "... we consider that the demand
under various names for the centralization of
money-creation is the most dangerous activity
extant,"32 and, "Witness the deadly nonsense regarding
the 'sole right of the State to issue Money.'33 How
this position is to be reconciled with Pound's view
(according to Davis) that "Nothing but banks or
banking privileges should be taken over" by the
government (79) is, to say the least, problematical.
"Hitler," Chace observes, "revived Germany by creating
credit and established his powerful military machine
in a country not far from bankruptcy through control
of the currency and the value of money in the
marketplace. So did Mussolini" (80). This seems to be
sufficient indication of the dangers inherent in
allowing "the government to own or direct credit in
order to stimulate business" (102) and justifies
Douglas's condemnation of it. Yet Davis seems to favor
precisely the same arrangement--so long as it is used
by "the modern enlightened state" for social welfare
and education (106).34 The point is that, whether it
is used for making tanks or building schools, if the
public
credit is centralized in the hands of the government
and administered by them, the decentralized control of
policy essential to Douglas's "program" will be
obviated. Douglas put the matter quite unequivocally:
"Consumer control of production is the only possible
basis of freedom; and no method of obtaining consumer
control has ever been tried with success which did not
ban state control of money and credit and include
decentralized individual credit power."35
The extent of Davis's misunderstanding of Social
Credit is further indicated in his implicit
identification of Douglasism with Keynesian economic
techniques. If the government controls the economy, he
suggests, and creates credit for "public works," then
"More business, more jobs, more money to purchase what
is produced" ("all these units of policy fit
theoretically into the Social Credit recommendations
of Douglas and Pound") will follow (157); "Full
employment and fair rewards follow, and freedom is
supposed to come with a greater degree of economic
satisfaction" (112). Anyone vaguely familiar with
Social Credit knows that Douglas regarded "full
employment" as a technique of coercion (and of
perpetuating the deficiency in the price-system), not
of emancipation--as Hugh Kenner has so accurately
remarked: "And as for riches, far from paid employment
bringing riches to a man, employment takes riches
away: for your riches are reckoned by your store of
time and energy and are diminished by any encroachment
upon these."36 Chace, on the other hand, follows
Davis: "Douglas, who thought capitalism the best of
all systems, proposed (as did J.M. Keynes)
governmental control of credit in order that the gap
between selling and purchasing power be closed" (33).
This assertion is doubly false: Douglas proposed no
such thing, and Keynes's "pump-priming" does not
ameliorate the discrepancy between price and
purchasing-power. Here, it is important to note that
Keynes admits the central contention of the A + B
Theorem, namely, that such a discrepancy exists.37 In
his *General Theory of Employment, Interest, and
Money* (1936), he wrote:
"Consumption is satisfied partly by objects produced
currently and partly by objects produced previously,
i.e. by disinvestment. To the extent that consumption
is satisfied by the latter there is a contraction of
current demand, since to that extent a part of current
expenditure fails to find its way back as a part of
net income. Contrariwise, whenever an object is
produced within the period with a view to satisfying
consumption subsequently, an expansion of current
demand is set up. Now all capital investment is
destined to result, sooner or later, in capital
disinvestment. The problem of providing that new
capital-investment shall always outrun capital
disinvestment sufficiently to fill the gap between net
income and consumption, presents a problem which is
increasingly difficult as capital increases."38
Increasing capitalization means that the number of
"objects produced previously" is increasing and
allocation of incomes to meet their costs must
correspondingly increase. Therefore, there is a
deficiency of demand (purchasing power) available to
liquidate current costs. In order to make up this
deficiency, new credit is introduced into the economy
to allow further capital expansion: incomes
distributed in respect of that expansion are used to
meet current prices; however, the capital investment
results in the creation of new costs which will appear
in future prices, for which no new purchasing power is
available. Even further capital investment will be
required to make up this new deficiency, but this will
in turn worsen the situation, as Keynes elaborated:
"New capital-investment can only take place in excess
of current capital disinvestment [that is, expenditure
on consumption] if future expenditure on consumption
is expected to increase. Each time we secure today's
equilibrium by increased investment we are aggravating
the difficulty of securing equilibrium tomorrow."
Yet Keynes's proposals for deficit spending are merely
a perpetuation of this disequilibrium. He admits the
central contention of Douglas's analysis--namely, that
the price system is not self-liquidating--and then
proposes to aggravate the situation. Since
"pump-priming" depends upon ever-expanding future
consumption, the tendency of the economy is to become
directed towards waste production--the ephemeral, the
pollutant, the destructive. War, which consumes men
and materials appallingly, is the logical outcome of
Keynesian economics: it stimulates full employment; it
distributes incomes; it co-opts human time-energy to
the production of what will never be "wealth." At the
same time, its alleged financial benefits are a lie
and a deception: it leads to debt, expanded costs, and
inflation. Hitler and Mussolini "stimulated" their
respective economies by 'controlling credit', by
encouraging 'public works' and 'capital investment';
they were merely applying Keynesian economics.
Again, to correct this 'disequilibrium' revealed by
the A + B Theorem and tacitly admitted by Keynes,
Douglas proposed the infusion of new
credit--non-debt-bearing credit--into the economy. To
be free of debt (an obligation to pay at some future
time) it cannot be regarded as a "loan"; nor can it be
applied to capital expansion (public works or
whatever) for the reason explained by Keynes that this
merely creates new costs and defers payment for them
to the indeterminate future.
Davis asserts that "The [A + B] proposition has
nothing to do with Douglas's proposals for remedy, but
merely insists that profits and bank changes [sic.] on
loans for production cost more than the money actually
put into circulation in wages and dividends..."(24).
There is more than one inaccuracy in this statement,
but the major one is the contention that Douglas's
analysis has nothing to do with his solutions: it has
everything to do with them. In fact, Douglas
attributes the purchasing power deficiency to the fact
that the community is not credited with the
appreciation of the communal capital; at the same
time, it is the appreciation of that capital which has
minimized labour as a factor in production and,
therefore, wages and salaries (even dividends on
investment) as forms of income. The appreciation of
the communal capital is largely the result of the
cultural heritage and the increment of
association--"costless" factors in production, to a
share in which each member of the community has an
unconditional right. This is crucial: if the
discrepancy between purchasing power and prices has
some other cause (for example, "profits," as the
Marxists suggest) the remedy must be radically
different.
Davis and Chace, then, not only misconstrue the
political implications of the Social Credit analysis;
they misunderstand the technical analysis. Davis, for
example, quotes from Douglas's *The New and the Old
Economics* five possible sources of the discrepancy
between price and consumer purchasing power (74);
however, he bases his discussion upon only one of
these, namely, "profits" and their concomitant,
interest ("profit on an intangible"). He totally
ignores the two which are at the heart of Douglas's
analysis: reinvestment of savings and premature
cancellation of credit. Thus, he is able to equate
Douglas somehow with Marx: Douglas, he says, "made his
own diagnosis from the Marxian beginning, and in the
process somewhat complicated it" (73); he speaks of
"the original Marxian-Douglas diagnosis, the idea that
profits must either be used to purchase commodities,
or eliminated, or else extra money must be
supplied...to make up for the subtraction of profit
from the purchasing potential" (l0I).39 Profit, in
fact, is disposable income; shareholders' dividends
are 'profit' and are included on the income side of
the A + B Theorem; their elimination (or
redistribution) as the Marxists suggest will not
change the situation which Douglas describes.
Similarly, "interest" is a relatively minor aspect of
the question: while it is indisputable that the
charging of interest on money created "out of nothing"
by the banking system is a questionable practice,
Douglas himself wrote that all, that "the usury
hunters" had achieved was the deprivation of "John
Citizen" of the interest paid on his deposits.40
Chace is similarly confused about the Social Credit
technical analysis. He says, for example, that "'Real
Credit'...should replace 'Financial Credit'" (24):
what Douglas maintained was that financial credit
ought to reflect real credit. Elsewhere, Chace writes:
"The price of a commodity would logically, then, be
the sum of these two parts or A + B. But, Douglas
argued, it never is. Somewhere along the line, money
is taken out of circulation and the entire system, off
balance, is thrust toward collapse. Purchasing power
slowly dies" (26). This--in spite of its interesting
use of metaphor ("The entire system, off balance, is
thrust toward collapse"; "Purchasing power slowly
dies")--is both vague and inaccurate. Douglas, in
fact, observed that price is generated as the sum of A
+ B, but that incomes available to liquidate price in
any period of production are only A. He proposed that
price should not be A + B, but less than this sum in
accordance with the formula:
price = financial cost X consumption/production
Like Davis, Chace compares Douglas's analysis with
that of Marx, alluding to two "interesting and
essential" similarities. First, he points to their
agreement on "the degree to which economic
developments condition all the rest of life" (32),
which is only ambiguously true. Douglas certainly held
that finance/economics constituted media of political
control; nevertheless, he was not an economic
determinist and maintained that policy (the expression
of will) and not 'trends' or the "environment" is the
determining influence in the direction of affairs. "A
second point of agreement," Chace writes, "is rooted
in the belief that one part of society fattens itself
on the labor of another" (32). This is entirely
misleading: Douglas was concerned not with the
monopoly of labor, but with the monopoly of credit--
the control of the social credit by a few persons
through financial techniques. The employment system,
certainly, is one aspect of this control insofar as it
represents (as Kenner has observed) constraint of
human energy.
This point deserves elaboration. Marx's analysis is
based on the so-called "labour theory of value"--the
notion that labour produces all wealth. Douglas
repudiated this notion, as Kenner points out: "Not
only does the 'cultural inheritance' confer value, it
abridges effort, allowing Douglas to designate 'the
fallacy that labour produces all wealth, whereas the
simple fact is'--he spoke as an engineer--'that
production is 95 per cent a matter of tools and
processes, which tools and processes form the cultural
inheritance of the community.' Of the community,
moreover, 'not as workers but as a community'" (311).
In view of Douglas's insistence upon the necessity of
a recognition of a new criterion of value, it is
curious that Chace should regard Marxism as "a more
radical economics" than Social Credit (34). The
purveyors of the labour theory of values--be they
libertarians declaiming that only 'producers' have the
right to live or Maoists advocating the removal of
mountains by peasants with tablespoons or liberal
politicians proclaiming "full employment"--are in fact
propagandists for a system of organized servility.
Both Davis and Chace demonstrate in other ways that
they have failed to grasp the meaning of Social
Credit: Davis, for example, while acknowledging no
'debt' to any competent Social Crediter, nevertheless
asserts: "Some Social Credit economists have suggested
that the nation should have its own bank, have a
monopoly on all money created beyond capital...(103).
These "Social Credit" economists are, however,
unnamed. Elsewhere, regarding the dividend, he says,
"The control of inflation looks difficult..." (104).
Social Credit, with its advocacy of the compensated
price as the accurate reflection of true cost, is in
fact the only effective antidote to inflation (short
of the elimination of money altogether and its
replacement by cruder and more "direct" forms of
demand--for example, the machine gun). Pound himself
answered the question "Why isn't it (Douglas
economics) just persistent never-ending inflation?"
with a quotation of A.R.Orage: "Would you call it
inflation to issue tickets for every seat in a
theatre, regardless of the fact that the theatre has
until now been always two-thirds empty simply because
no such number of tickets was printed?"42 Chace
alleges that Douglas was "solely concerned...with
monetary rather than larger economic issues" (32). As
we have seen, from his first book onwards Douglas's
primary concern was with the question of "economic
democracy": he was interested primarily in policy;
finance (monetary "reform") is merely a technique.
Chace also claims that "it has been said of Douglas in
retrospect that he gives the impression of being more
of a skillful politician than a humanitarian or an
earnest truth-seeker or a man truly concerned with
righting the injustices of society" (36). Again, no
documentation. By whom has this been said? To whom
does Douglas give this impression?
One could go into more intensive detail in pointing to
the erroneous conceptions of Social Credit that have
been purveyed by the Pound critics. However, these
misconceptions resolve themselves into two areas: a
failure to understand the A + B Theorem--the question
of technical accuracy, and a distortion of the
political criteria of Social Credit proposals. Pound
grasped the first of these more firmly than his
explicators have done--perhaps he was an 'orthodox
Douglasite with respect to economics'--up to a point;
but politically, he was not "essentially a
Douglasite," although Chace suggests that he was.
Chase, apparently, is not competent to make that
judgement; nor is Davis to suggest that Social Credit
(which he does not understand) is "suspect" (69).
It may be argued that Social Credit is interesting
only insofar as it was an influence (for better or for
worse) in Pound's thought and art, and that therefore
the Pound scholar should concern himself only with
Pound's interpretation of the "theory." To do so,
however, is not only to conceal the poet's own faulty
understanding of a doctrine he ostensibly espoused,
but also to perpetuate the misrepresentation of it
occasioned by that misunderstanding.
-------------------------------------------------------
1 London: Faber and Faber, 1971,226.
2 Examples of earlier misleading criticisms of Social
Credit are Horace Gregory's remark in Poetry (August,
1935) that Douglas neglected labour as "an integral
factor in the determination of money values" (XLVI,
284) and Charles Norman's attempt to avoid the issue
by shifting it onto other (psychological) grounds:
"Social Credit was to draw to its ranks, on both sides
of the Atlantic, men with visions of a better world,
and the forlorn of both sexes, the misfits with
private frustrations and hatreds, all those who needed
the bolstering shoulder of a 'cause' " (Ezra Pound,
[New York: Macmillan, 1960),226).
3 The Social Crediter, July 24, 1948.
4 Lawrence: University of Kansas Press, 1968;
hereafter cited as Davis.
5 Stanford University Press, 1973; hereafter cited as
Chace.
6 In his article "In the Wounds," The Criterion, XIV
(April, 1935), Pound says: "He [A.R.Orage] prized the
moral indignation of his contributors. I don't know
that it helped the clarity of our writing" (400);
hereafter cited as "In the Wounds."
7 "Stamp Script," The New English Weekly, IV: 2
(October 26, 1933), 32.
8 Guide to Klilchur (London: Faber and Faber, 1938),
149.
9 "Murder by Capital" (1933), quoted in *Impact:
Essays on Ignorance and the Decline of Civilization*,
ed. Noel Stock (Chicago: Henry Regnery, 1960), 90;
hereafter cited as Impact. Pound made the same point
in a letter to The Criterion (January, 1935):
"Douglas was the first economist to postulate a place
for the arts, literature and the amenities in a system
of economics" (299).
10 A group of men acting together can, in some
circumstances, achieve more than the sum of the
possible attainments of the same hundred men acting
each on his own. The difference between these sums, is
the 'increment of association'" ("In the Wounds,"
395-6).
11 "When men associate not only with other live men.
but with the aggregate of all acquired skills and
inventions, the increment of association with all
these skills and inventions adds another dimension to
the 'increment of association', an increment so
enormous that popular imagination is still incapable
of understanding it, and many people are still scared,
as of a bogey man. This new increment is the 'cultural
heritage' of Douglas's economics" (Ibid., 396).
12 See Douglas's article "The Only Real Socialism",
*Warning Democracy, third edn.* (London: Stanley Nott,
1935), 21-36, where he points out that 'socialization'
of the means of consumption is necessary to the
distribution of power in society.
13 Fifth edn. (Hawthorne: Omni Publications, 1967),
first published in book form in 1920; hereafter cited
as *Economic Democracy*. The book was not written by
Orage, as Davis claims: "Orage's most helpful book is
*Economic Democracy*... " (ix).
14 Revised edn. (London, 1933).57.
15 *Economic Democracy*, 17. See also Douglas's later
comment: "What we appear to have forgotten is that the
money system exercised the most perfect control by the
individual over institutions which has ever been
devised" (The Social Crediter, February 17, 1945).
16 Douglas preferred the term "compensated price"
since this obviates the suggestion implicit in the
phrase "just price" that price can be established on
the grounds of abstract 'moral' considerations.
17 In Canto 46, Pound claims to have suggested the
idea of dividends to Douglas; later, however, he did
express reservations regarding this technique of
injecting credit into the economy: in *ABC of
Economics* he says that he "dislikes" "the idea of
national dividends" (2nd edn. [Tunbridge Wells: The
Pound Press, 1953], 59).
18 This is precisely opposite to "the essentials of
Fascist doctrine," which, Davis points out, are based
upon the idea that the individual exists for society,
not society for the individual" (162).
19 Impact, 49.
20 Ibid., 52.
21 (London: Peter Russell, 1951), 7.
22 See "The Revolt of lntelligence" (IX), New Age,
XXVI: 19 (March 11, 1920): "As the usurer's
propagandists confuse, for the sake of argument, the
superworker with the Capitalist, so they confuse, for
purposes of propaganda, civilisation with
exploitation" (301).
23 The Social Crediter, March 13, 1948 .
24 "In the Wounds," 392. See also his letter to The
Criterion (January, 1935), in which he castigates
those who cannot see "the convergence of the live
systems," namely, "the Corporate State, Douglas,
Gesell" (299). Pound sometimes added a fourth to this
unlikely trinity: "The Four active domains, or the
four expanses of thought that the truly curious reader
shd. look into are Gesell, Douglas, the Canonist
doctrine of economics, wherein interest is treated
under the general head of just price, AND the actual
practice and achievement in the corporate states of
our time" (Guide to Kulchur, 173).
25 See Davis: "Pound thinks that prosperity and fair
dealing are most likely to occur when a strong but
benevolent leader either takes charge and dictates
social betterment or serves as a director for the
needs of economic fortune affecting the whole society"
(32). Douglas, on the other hand, distrusted
"leaders": "We think it was Sir Patrick Hastings," he
wrote, "who said that every great leader had been a
curse to the human race" (The Social Crediter, May 28,
1949).
26 See also page 401: "Only within the past few months
has a new kind of 'representation of the people' been
offered in competition to the very seedy and out at
heels Mother of Parliaments or the assembled employees
of the Standard Oil and other great American companies
gathered in Washington." Pound comments: "This
mechanism is a matter of politics." As we have seen,
Douglas's conception of the political issue was
radically different.
27 *The Brief for the Prosecution* (London: K.R.P.
Publications Ltd., 1945), 65.
28 Hugh Kenner, in his chapter "Douglas" in *The Pound
Era* (Berkeley: University of California Press, 1971),
seems unique among Pound's critics in seizing the
spirit of Social Credit. His suggestion, however, that
Mussolini might have "understood these notions" is
highly unlikely.
29 *Ezra Pound: A Close-Up* (New York: McGraw-Hill,
1967), 34.
30 "Introduction," *Ezra Pound: The Critical Heritage*
(London: Routledge & Kegan Paul, 1972), 9. On the same
page, he says: "Douglas ... was a latter-day Henry
George"--scarcely an accurate identification.
31 See, for example, The Social Crediter, July 28,
1945: "The one fact which becomes clearer daily is
that the value of the Parliamentary system depended
almost entirely on the fact that in the days of
metal-coinage money systems, the central Government,
whether it was King or Prime Minister, had to get its
finances from individuals."
32 Loc. cit.
33 The Social Crediter. December 31, 1949.
34 Davis also sees similarities between Roosevelt's
"New Deal" and the type of social reform Pound
favored: "The T.V.A., the bill which curbed the
formation of holding companies, social security acts
of various kinds, all follow a pattern which Pound
liked in the Italian system" (191). Compare Douglas,
who says of Roosevelt's 1933 Inaugural Address that
anyone who heard it "must be pardoned for believing,
as so many Social Crediters did believe, that here was
Social Credit enthroned in the seats of the mighty. No
attack ever made in this country was half so violent
as that upon bankers (neither the system nor the money
power) by the late Franklin Delano Roosevelt. The
closest attention was directed to this speech by
qualified Social Crediters, and the conclusion was
reached that it was a centralizing speech--a
conclusion soon confirmed by everything connected with
the New Deal, including its personnel" (The Social
Crediter, October 17, 1948). For a discussion of the
T.V.A. from a Social Credit point of view, see C.G.
Dobbs, *On Planning the Earth* (London: K.R.P., 1951).
35 The Social Crediter, November 16, 1946.
36 *The Pound Era*, 304. See also, for example, "In
the Wounds," where Pound quotes Orage: "You cannot
cure unemployment. Unemployment is not a disease"
(401).
37 See Douglas: "...the Keynesian Proposals for
Deficit Spending, by which the under-distribution of
purchasing-power disclosed by the A plus B Theorem,
and rather cleverly admitted by Keynes, was paralleled
by money issued to finance Public Works which were not
for sale...were a brilliantly devised trick to put the
population permanently to work for Lord Keynes's
employers" (The Social Crediter, March4, 1950).
38 Quoted by R.L. Northridge, "The A + B Theorem," The
Fig Tree, No. l (June, 1936), 45.
39 Charles Norman also erroneously identifies
Douglas's analysis with Marx's: "...all the ideas, and
fragments of ideas, all the formulae, found in Douglas
and Gesell-hence, in Pound--and even their particular
manner of phrasing them, come from Marx's Capital"
(Ezra Pound. 347).
40 The Social Crediter, January 12, 1946. Davis's
quotation of Ricardo in this regard is revealing: "It
is evident, therefore, that if the Government itself
were to be the sole issuer of paper money, instead of
borrowing it of the Bank, the only difference would be
with respect to the interest--the Bank would no longer
receive interest, and the Government would no longer
pay it; but all other classes in the community would
be exactly in the same position in which they now
stand" (105). Precisely.
41 See, for example, Douglas's address "The
Application of Engineering Methods to Finance"
delivered to the World Engineering Congress (Tokyo,
1929): "In other words, the true cost of a programme
of production is in general not the money cost, but
considerably less than the money cost, and a given
programme of production can be distributed to the
buying public only if sold at its true cost."
42 "In the Wounds," 403.
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