| Subject: | [socialcredit] The Ecosocialism of Fools? | | Date: | Monday, August 25, 2008 09:36:43 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
|
The following autobiographic note from Frances Hutchinson is from the
Secretariat's website. Appended further down is the Derek Wall essay that she
complains about, entitled insultingly, "Social Credit: The Ecosocialism of
Fools." Ms. Hutchinson says, "the quality of the Wall paper was such that I felt
certain it would never appear in a respectable journal." This is certainly true
of the version from the Internet that I've appended. For example it is without
references or footnotes. I have not yet seen the paper in its original
publication. I have been informed that the University of Houston has it in an
electronic version, which I shall see shortly. Apart from his charges of
antisemitism, Wall's analysis and therefore research of Social Credit theory over
all is lamentable. For example, he says this:
"While Douglas argued the economic system is profoundly dysfunctional, his
analysis is flawed. Taken at face value, his description of the A+B theorem is
unsustainable. B payments are paid to individuals and firms in exactly that same
way as A payments, so they are potentially available to buy goods."
This cannot be true from the very definition of A and B payments. B payments
are payments by firms into account balances held by firms, and are therefore
certainly not available to consumers to buy goods. Only the account balances
held by consumers are available to consumers to buy goods.
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An Autobiographical Note
by
Frances Hutchinson
It may be helpful to outline how and why I came to engage in the formal study of
the works of Clifford Hugh Douglas and the history of the Social Credit movement.
After decades of campaigning for peace, co-operation, green politics, women’s
rights, third world issues, education, local government, international
understanding environmental issues, peace and justice generally, at the age of
fifty I became a post-graduate student in the Department of Economics at Bradford
University. I reasoned that although each issue was rich in its own literature,
no substantial changes in policy were forthcoming because one factor overarched
policy-making in each subject area – the economy. I was advised by Dr (now
Professor) Mary Mellor, whom I had met at a ‘red-green’ gathering in
Manchester, to put my general reading onto a more formal footing by enrolling for
postgraduate research at a university.
Having located a tutor – Brian Burkitt, Senior Lecturer in Economics at
Bradford – and paid the registration fees, I was left with a problem. What
should I research? The whole of economics was too tall an order. At the time, I
was standing in local elections as a Green Party candidate. When I discussed
Green Party policies with my elderly neighbour, Tommy Tinkler, he said that
concerns about protection of the environment, notions of sufficiency as opposed
to unfettered economic growth, and basic income were nothing new. It had all been
said before in the 1930s by “Major Douglas and social credit”. Through
University Extra-Mural classes and a local social credit study group which met
weekly, he had studied alternative economics, including social credit in such
detail that he was able, fifty years later, to provide me with an outline of the
basic ideas from memory. He gave me The Monopoly of Credit by C. H. Douglas, some
copies of the national
weekly The New Age, and of a bi-monthly newsletter of the ‘Northern
Greenshirts’*, printed in Keighley. Social credit and its place in the history
of economic thought was to become the subject of my research from then onwards.
Over a lifetime of study of the social sciences, politics and economics, I had
never heard mention of Social Credit. Hence from the very outset of my research
there were unanswered questions. Tommy Tinkler was astounded that I knew nothing
of the subject. Yet when I mentioned it to my father, retired senior lecturer in
economics, and to my tutor, both knew what I was talking about immediately,
though both declared that “all that crank nonsense was over years ago.” Which
it was. Douglas had been dead forty years. Repeatedly, over the years, I was
advised, in a kindly sort of way, not to pursue the subject because it was only
propounded by right-wing, anti-Semitic fanatics. For this reason I at first
avoided contact with known social crediters.
In those pre-internet days obtaining information on obscure topics was tricky.
Through the library system I located three books on social credit published
between 1953 and 1972. All three authors focused on political events in Alberta,
Canada, in the late 1930s, giving virtually no indication of what social credit
economics was about. Since no list of his books appeared, it was clearly assumed
that the reader already knew what ‘social credit’ was about. I collected
copies of all Douglas’ books and articles written between 1918 and 1924. Having
analysed these works I set out the economics and philosophy of social credit. It
all made very good sense. Here was an alternative to business-as-usual, ‘I’m
alright, Jack!’ growth-based, environmentally destructive capitalism and
socialism ‘as-we-know-it'. I went on to study the world-wide debate between
Douglas and leading policy-formers in the early 1930s. And finally I looked at
the events in
Alberta in 1935 when the election of a Social Credit government brought social
credit onto the political arena.
As my research continued, Brian Burkitt met Donald Neale through an anti-Common
Market group meeting which he was attending. Through that contact I met Marjorie
Douglas, Audrey Fforde, Donald Neale and members of the Secretariat in Scotland.
Later, I met Mike Rowbotham at the first meeting of the Bromsgrove Group. Mike
Rowbotham and I worked together for a while, preparing The Grip of Death and What
Everybody Really Wants to Know About Money for publication by Jon Carpenter. Mike
Rowbotham introduced me to Elizabeth Dobbs, sadly after Geoffrey had died. I
spent a weekend in Bangor with Elizabeth shortly before she moved into
residential care. I also visited Don Martin and Jane in Sudbury, and Eric de
Maré. However, I sought to avoid being drawn into the internal ‘politics’ of
the Social Credit movement, seeking instead to research Douglas social credit in
such a way that it could be openly discussed in universities. I discovered that a
number of
career economists had taken their ideas from Douglas without acknowledgement.
Throughout my research I was sustained by the guiding hand of Brian Burkitt, who
is an authority on radical economics in the inter-war years (see Brian Burkitt,
Radical Political Economy Harvester 1984). Nothing would have come of my rambling
researches without his firm discipline, fund of knowledge, constant support and
sparkling sense of humour. Ten years ago, our findings were published in The
Political Economy of Social Credit and Guild Socialism* (Routledge 1997), a
refereed publication.
Once published, the book would, I thought, be snapped up by green campaigners
everywhere. And indeed, the review published in Resurgence (No. 190,
September/October 1998, pp64-65)* indicates, I was justified in my opinion that
we had presented a readable and relevant account of the story of social credit.
However, the book was so highly priced that it disappeared onto the shelves of
university libraries, and nothing more was heard of it in the popular alternative
press.
I continued my researches, writing two more books and working with different
co-authors. In the ten years following from 1993 I gave papers at sixteen
university conferences in ten different countries, and had eleven papers
published in refereed journals. Although I worked with academics, and with
alternative thinkers in the voluntary sector, nobody was prepared to step outside
the mould of conventional economics by entering into a meaningful dialogue on the
subject of social credit. By the time the ‘post-autistic economics’ students
started their enthusiastic attack on the logical inconsistencies of neo-classical
economic theory (c2000/1, see www.paecon.net), I was beginning to lose heart.
Meanwhile, with Brian Burkitt’s help, I put together a module entitled “An
Institutional Analysis of Money” for second and third year economics
undergraduates. Based on the work of Clifford Hugh Douglas and Thorstein Veblen,
it proved very popular with the students. The course contrasted the orthodox
approach to economics teaching, which is ‘institution free’, with the
realities of economic life where economic agents operate within a network of
man-made laws and institutions. Thus for a few years social credit was studied in
a university. When it was suggested that the course could form the basis of a
book, Mary Mellor and Wendy Olsen offered to help with the writing. In due course
The Politics of Money: Towards Sustainability and Economic Democracy was
published by Pluto Press in 2002. Although it received very few reviews, it is
now sold out. Since I am no longer connected with any university, I am not in a
position to bring out a revised
edition.
In 2001, Alan Armstrong gave up the editorship of The Social Crediter, and the
Chairmanship of the Social Credit Secretariat, because he found himself unable to
enlist support for his monetary reform proposals from politicians following
unfounded allegations of anti-Semitism. As I see it, the Secretariat is an
educational rather than a campaigning body. Douglas was firmly opposed to
propaganda. The history of the movement shows that Social Credit spread most
effectively through weekly study groups (See The Political Economy of Social
Credit and Guild Socialism and The Challenger).
However, in writing about social credit I had certainly become caught up in
another agenda. In June 2002, as we were on the point of sending the final draft
of The Politics of Money to the publishers, a draft paper was circulated to the
three of us and to all with whom we were in professional contact. The paper, by
Derek Wall, currently Principal Speaker of the Green Party, entitled “Social
Credit: The Ecosocialism of Fools,” was a collection of untruths juxtaposed
with emotive non-sequiturs. The gist of the paper was that Douglas and all social
crediters were anti-Semitic. Therefore greens and all respectable academics
should drop the subject if they did not want to blight their careers by being
labeled ‘anti-Semitic’. With great difficulty I persuaded Mary Mellor to
continue with the book, promising that I would research the allegations fully.
The quality of the Wall paper was such that I felt certain it would never appear
in a respectable
journal. I was wrong. For whatever reasons, the editorial board of Capitalism,
Nature, Socialism published the paper, under the same title, in September 2003
(Vol. 14, No. 3, pages 99-122).
By now, I was thoroughly curious myself. A body of economic theory presenting a
sane alternative to rampaging consumerism, disseminated through study groups
across the world, was to be studiously avoided because it was - anti-Semitic? It
just did not begin to add up. Were the editors of academic journals, their
referees and the organisers of international conferences on economics playing
with fire when they accepted my/our work for publication and discussion? One
journal, the Political Quarterly, is read by any social scientist and politician
worth their salt. Were its editors failing in their duty to protect the public
from unsavoury material when they published “The Contemporary Relevance of
Clifford Hugh Douglas” by myself and Brian Burkitt, in the October-December
1999 issue (Vol. 70, No.4, pages 443-451)? Would the study of social credit
really lead impressionable people into setting up Nazi-style death camps? I was
somewhat nonplussed.
In the early years of the 21st century, people continue to air their views
and/or campaign on a whole range of single issues: anti-war, anti-nuclear
weapons, animal rights, organic/local agriculture, fair trade, slow/safe food,
debt, poverty, racism, feminism, conservation, ecology, alternative medicines,
education, diseases and disabilities which have struck their own families – the
list is endless. Some pick up on Basic Income, Credit Unions, LETs schemes,
Grameen Banks and the like as ways out of specific pockets of economic disorder.
However, unless and until there is a radical re-think about the operations of the
institutions of banking and finance which now regulate all human co-operative
activity, the over-arching problems will continue to grow at a far faster rate
than individual solutions will be able to solve. Social Credit offers a
starting-point – it was never more than that – for a healthy debate about
ways forward into the future.
Although I advocate the study of Douglas’s writings on social credit, and the
study of the story of the Social Credit movement, I do not claim to be a
‘social crediter’, because labels of this type imply the bigoted advocacy of
an unscholarly collection of dogma. On the same basis, I do not claim to be a
pacifist, ecologist, economist or Marxist. What I do advocate most urgently is
the study of the works of leading writers on politics, philosophy, pacifism,
ecology, economics, including especially Douglas, Thorstein Veblen, Karl Marx and
many others (see my/our published works for introductory comment on the work of
leading thinkers).
Despite the efforts of so many dedicated individuals, at present there is no
public forum for debate of alternative political/economic thought. Recently, open
debate in the Green Party of England and Wales has been suppressed (see “Is
Democracy Dead?” by Brian Leslie). Social credit has been so effectively
‘discredited’ that no voluntary or political organisation dares to take it on
board, neither will individuals work to promote study of the subject for fear of
being discredited themselves. Editors of alternative journals have turned down
contributions even vaguely connected with social credit. All I am able to do is
place material in the public arena for possible study at some later period.
Frances Hutchinson
June 2007
In addition to having published numerous articles and reviews in academic and
other journals, Frances Hutchinson is the author (with Brian Burkitt) of The
Political Economy of Social Credit and Guild Socialism (Routledge, 1997)
(Reprinted by Jon Carpenter, 2005), (with Andrew Hutchinson) of Environmental
Business Management (McGraw-Hill, 1997), of What Everybody Really Wants to Know
About Money (Jon Carpenter, 1998), and (with Mary Mellor and Wendy Olsen) of The
Politics of Money: Towards Sustainability and Economic Democracy (Pluto Press,
2002). She was awarded a PhD for her published works, and now edits The Social
Crediter.
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Capitalism Nature Socialism
September 2003
Social Credit: The Ecosocialism of Fools
By Derek Wall
*Social credit was attractive to those who recognized the value of intrinsically
satisfying work as a basis for participation in the community.*
*In this new economy socially and ecologically destructive activities would be
neither valued nor justifiable on grounds of economic necessity.*
*Following over half a century of neglect, these texts possess the potential to
provide the basis for a new economics of cooperation.*
*[We] have a campaign which rallies the small business men and bothered
intellectuals; which launches a violent attack on socialism; which attacks high
finance and the banks; which insists on the legitimacy of profits and the
necessity of private enterprise; which organizes a uniformed body of
“Greenshirts,” strictly disciplined and lead. What is this but Fascism in the
making?*
1. Introduction
Economic debate in the British green movement is increasingly dominated by
concepts of “monetary reform” drawn from the social credit philosophy of
Major Clifford Douglas, a Scottish engineer, who developed his ideas in the
aftermath of World War One. For advocates, social credit provides the key to
understanding how economic forces generate ecological destruction, social
injustice and political centralization. Brian Leslie, whose parents were members
of the Social Credit Greenshirts during the 1930s, chairs the Green Party
Economics Working Group. The newsletter, Sustainable Economics, is almost
entirely concerned with social credit and Party economics speaker Molly Scott
Cato advocates monetary reform. Green critics of globalization, including some
from outside the UK, such as Herman Daly, Richard Douthwaite and David Korten
acknowledge the value of Douglas’s ideas. David Icke, an ex-UK Green Party
national speaker, has been a militant supporter
of social credit monetary reform. Social crediters also court the anarchist
oriented direct action movement in the UK. Ecosocialists too are advocates of
social credit. Frances Hutchinson, a former member of the Green Party left
grouping, the Association of Socialist Greens, has revived the Douglas Social
Credit Secreteriat. Social credit, for historical reasons, has never been big in
the US but in the UK it is impossible to discuss green economics without coming
across the topic.
Academics have taken an increasing interest in social credit, noting Douglas’s
importance as an advocate of a national income scheme, seen by some as a
“capitalist road to communism.” In earlier decades commentators as varied as
Galbraith, Keynes and Mumford praised Douglas’s contribution to economic
debate.
Politically, social credit has deep roots in the UK. During the 1930s, working
class activists in the Coventry League of the Unemployed and the Kibbo Kift Kin,
a bizarrely named socialist scouting body, came together to found the Social
Credit Greenshirts. Social credit has also been politically significant in
Australia and New Zealand. Indeed, the New Zealand Labor Party is said to have
won a general election on a social credit program. The philosophy took root most
strongly in the Canadian province of Alberta, where the Social Credit Party won a
stunning election victory in the 1935 provincial elections.
Wilfrid Price, a member of the Greenshirts in the 1930s, joined the Ecology
Party (now the Green Party) in the early 1980s and powerfully spoke for social
credit as a form of green politics. He introduced Frances Hutchinson to social
credit. Hutchinson, arguable the most energetic advocate of Douglas’s legacy
today, sees social credit as the most sophisticated product of Britain’s Guild
Socialist movement, which originated within the ecosocialism of such luminaries
as William Morris. To his followers, Douglas was a prophet of considerable power
whose thought demands critical attention.
In contrast, this essay argues that far from being a link to an historical
ecosocialism, Douglas’s philosophy functioned as a tragic episode in its
disintegration. Social credit has ominous parallels and shares elements with
traditions of anti-semitic populism. The danger that social credit, along with
other right wing political economies, presents within the anti-globalization
movement is examined. The case of social credit indicates why ecosocialism has
the potential to degrade into ecofascism and how such degradation can be fought
as part of a vitally important hegemonic battle within the anti-globalization
movement.
2. Social Credit
Douglas argued financial forces had increasingly centralized political power,
yet a leisure state was achievable because technology, even in 1918, had so
massively increased potential production. Scarcity was artificially produced to
maintain economic activity. Because purchasing power was too low to buy all of
the goods produced by industry, it was necessary for the community to manufacture
money to mop up excess supply. Thus, crisis could be avoided, banks would lose
their monopoly of credit, and “economic democracy” would result.
Douglas’s analysis of chronic economic under-consumption is based on his A+B
theorem. He found while working for a Royal Air Force Factory at Farnborough that
the income yielded by production was insufficient to buy the output created at
the plant. The income generated in the form of A payments included salaries and
dividends paid by the plant; B payments were made up of additional elements such
as bank charges. The cost of the goods produced included A + B, yet purchasing
power was leaking away in the form of B payments, leading to an acute drop in
economic activity.
Douglas saw money as socially constructed and of symbolic value only.
Despite its lack of “reality,” money, rather than being a neutral fluid that
allowed economic development to take place, could distort production,
distribution and consumption. Banks created credit, increasing the money supply
and partially allowing the leakage of B payments to be overcome, so as to
maintain economic activity. Yet, credit created by bankers has to be paid back,
enslaving both producers and consumers with debt; 97 percent of the money supply
in the UK at present is made up of debt money that must be paid back with
interest.
Douglas boldly argued that cultural inheritance is a forgotten and all-important
factor of production. Wealth is generated by ideas, which give rise to
technological innovation. Rather than being the unique product of particular
inventive individuals such cultural capital was produced by the community, which
should be rewarded for its collective intellectual labor. Douglas argued that
society could pay individuals a dividend as a result of such cultural capital.
Taxation could be avoided because the community could directly generate money and
an age of plenty would ensue.
Douglas was an economic utopian:
“The strength of the appeal, which Major Douglas makes to his followers is
that his theories promise something for nothing. Consumers are to receive
credits; dividends are to be issued to all; taxation will become unnecessary and
no one will be called upon to pay the cost.”
Douglas can be seen as a minor under-consumptionist advocate of proto-Keynesian
economics with little to say to radical greens. Keynes famously described him as
“a private” rather than a general in an army of economic radicals challenging
the bankrupt orthodoxy of liberal thought.
Indeed, his emphasis on technological advance as a source of Promethean human
development would seem to be antagonistic. Yet, social crediters argue that
environmental problems can only be seriously analyzed and dealt with using
“monetary reform.” Green social crediters contend that ecologically
destructive economic growth is explained by the creation of debt-money that
forces us to produce and consume more and more. Douglas noted in the 1930s that,
“Industry has run riot over the countryside. A population, which has been
educated in the fixed idea that the chief, if not the only, objective of life is
well named 'business,' whose politicians and preachers exhort their audiences to
fresh efforts for the capture of markets and the provision of still more
business, cannot be blamed if, as opportunity occurs, it still further sacrifices
the amenities of the countryside to the building of more blast-furnaces and
chemical works.”
In 2001 Alain Pilot, a prominent social crediter from Quebec, echoed such
sentiments arguing:
“The basic cause of the pollution of the environment, of the waste of
resources of the globe, is the chronic shortage of purchasing power, which is
inherent in the present financial system.”
The great car economy has been seen as one particular consequence of the debt
system. Douglas powerfully criticized the notion that human wants were unlimited
and growth must therefore continue infinitely. He saw wants as constructed by
forces of finance to maintain accumulation. He also believed that “the genuine
consumptive capacity of the individual is limited, [therefore] we must recognize
that the world, whether consciously or not, is working towards the Leisure
State.” In Douglas’s alternative future, business:
“would of necessity cease to be the major interest of life and would, as has
happened to so many biological activities, be relegated to a position of minor
importance, to be replaced, no doubt, by some form of activity of which we are
not yet fully cognizant.”
Supporters within the UK Green Party have argued that social credit produced by
the community rather than banks could be used to fund expensive policies without
massive tax rises. Alternative energy systems, home insulation, recycling
schemes, land reclamation and measures to end poverty could be funded by
debt-free money produced by the community.
In turn, the national dividend is a form of basic income scheme, which would
decommodify labor, encouraging individuals to work share and allowing unpaid
creative and necessary social labor to be undertaken. Jobs that were unnecessary
and ecologically destructive could be swept away, thus removing the opportunity
cost of environmental destruction as the price of job preservation. The building
blocks of conventional economics, infinite wants, scarce resources, and
opportunity cost would be removed by the Douglas revolution. Scarcity is a
particular target of Douglas’s ire:
“The world is obsessed, or possessed, by a scarcity complex. While at the date
of writing Great Britain is preparing for another war, she still has a million
unemployed, farms going out of cultivation and agricultural products being
destroyed because they cannot be sold, publicists still inform us on the one hand
that the situation is due to over-production, and on the other hand that
sacrifices must be made by everyone, that we must all work harder, consume less,
and produce more.”
Social credit is an obvious solution to the global debt crisis and provides a
way of tempering globalization. Globalization is conceptualized as a product of
demands for increased free trade as nations struggle to export surplus goods that
are unsold because of the chronic loss of purchasing power. Organic agriculture
has been conceptualized as another positive by-product of a debt-free world.
Green demands for grassroots democracy can be promoted by decentralizing credit
creation to local communities. Social justice will be built by de-monopolizing
credit creation so as to create prosperity for all. Social credit can be seen as
providing three key framing tasks noted by social movement theorists describing
successful mobilization. Thus it identifies a source of political ills, poses a
solution and prescribes a course of action.
Douglas has even be described as practicing a practical green lifestyle,
“When he lived in an old water mill in Hampshire he used the water wheel to
turn a dynamo which lit and warmed the house as well as providing power for
lathes and other tools. Later, when he moved to Scotland, many of his friends and
followers remember helping to build his small hydro-electric power house, sited
on the local burn, which ran through his land. Since decentralization of economic
power was of the essence of his teaching, it should be put on record that he
practiced what he preached.”
3. Social Discredit
While Douglas argued the economic system is profoundly dysfunctional, his
analysis is flawed. Taken at face value, his description of the A+B theorem is
unsustainable. B payments are paid to individuals and firms in exactly that same
way as A payments, so they are potentially available to buy goods.
Either A or B payments can be saved or spent. During the 1930s, critics of
social credit often foolishly invoked Say’s law to attack A+B. Say argued that
the circular flow of income meant that all factor payments provided income that
would generate equilibrium balancing consumption. Galbraith, Keynes, Marx and a
constellation of economists have challenged the notion that income must equal
consumption. Yet if incomes are saved and such saving does not lead to an
equivalent balancing increase in investment, this does nothing to justify
Douglas’s approach to “under consumption.” If we save more either category
of payment can fall; there is no essential qualitative difference between A and B
payments. If consumer spending or investment falls because of a loss of business
confidence, recession may result, but this has little or nothing to do with A+B.
Critics and advocates of A+B have spilt much ink refining Douglas’s scheme so
that it makes greater sense. Typically five or six alternative scenarios are
entertained and worked over, generating much tedious detail. After much
intellectual labor it is possible to interpret A+B as a system that suggests that
in a growing economy there will be a gap between rising productive capacity and
income. Damning Douglas with faint praise, Metha, who is hailed by social
crediters, argues that he dimly “foreshadows the Harrod–Domer idea that for
equilibrium, investment, in absolute terms, will have to increase at an
increasing rate.” Douglas’s analysis suggests under consumption is chronic,
while classical economists found it difficult to explain depression, Metha notes
his “theory implies that industry never faces boom conditions.” Rather than
making goods cheaper, investment in capital increases their price so purchasing
power is not great enough to
absorb them. Douglas simply provides at best a garbled and grossly simplified
version of Marxist and/or Keynesian approaches to growth and crisis. In turn, any
notion of exploitation or injustice driven by forces other than finance is absent
from Douglas’s work:
Douglas’s account of banking does seem a little stronger than the A+B theorem.
Hiskett and Franklin, in an otherwise strongly critical account of social credit,
note,
“The attempt which is sometimes made, by orthodox defenders of the banking
system, to show that banks do no more than lend the money which is deposited with
them, is based on a specious argument which tries to prove too much.“
“The indisputable fact is that, by action of the banks, £1,000 of new cash,
deposited with the banking system, is built up into a total of £10,000 deposits
by the addition of £9,000 of credit money.”
Money is clearly socially created and is no longer linked to anything of
intrinsic value. It can be seen as a source of damaging debt, and could in the
short term, be created by the community. Douglas’s fallacies should not be used
to close down all discussion of the role of debt within capitalism.
Yet, money cannot be created at the stroke of a pen as a utopian lever.
Money, even if it is made in a debt-free form will fuel either growth or
inflation. If the community “prints” more money and spare productive capacity
is present, more goods will be produced, creating more potentially destructive
economic growth. If banks simply produced unlimited amounts of money at the
stroke of a pen, their legitimacy would fall and their deposits would cease to be
seen as “good.” Socially constructed money is still likely to follow
Gresham’s law that accepted credit will be driven out by that with less
legitimacy. To make money work appropriate rituals have to be performed. In turn,
bankers cannot be seen as the source of all evils, as wicked magicians who commit
the evil of usury to gain dominance over creation. Douglas’s beliefs have more
to do with medieval theology than any imagined new economics. His calls for the
de-commodification of money, the ultimate commodity, act only to erect an obvious
oxymoron.
Marxists are criticized for advocating economic reductionism, and the project of
journals such as CNS has been to provide more nuanced approaches that articulate
economic, ecological, and social forces. Social Credit is not merely economically
reductionist, but apparently reduces economic processes to a single cause. Far
from exploring the second contradiction of capitalism many monetary reformers
revert to an economic prehistory by erecting a monocausal account of political
economy. Debt creation and speculation may accelerate ecologically destructive
accumulation but the monetary forces articulate with a host of other processes.
both economic and cultural. Instead of seeking to embed economic forces within
the social, Douglas advocates a fiscal technical fix.
The more closely you study Douglas’s writings, the more apparent it becomes
that his ideas are based on anti-semitic conspiracy theory, with the economics
fitted in almost as an afterthought. As early as 1922 he concluded,
“the International Financial groups who precipitate these struggles [world
wars] do not really care how frequent they are — the cost of them is simply
passed on to the public in prices, and the real authors of them not merely go
completely untouched by the repeated tragedies, but from villas on the Riviera or
elsewhere 'glut' their love of power by contemplating the writhings of the world
they have enslaved.”
In Social Credit he observed,
“In a remarkable document which received some publicity some years ago, under
the title of 'The Protocols of the Learned Elders of Zion,' a Machiavellian
scheme for the enslavement of the world was outlined. The authenticity of this
document is a matter of little importance; what is interesting about it, is the
fidelity with which the methods by which such enslavement might be brought about
can be seen reflected in the facts of everyday experience.”
It was explained in that treatise that the financial system was the agency most
suitable for such a purpose; the inculcation of a false democracy was
recommended; vindictive penalties for infringements of laws were advised; the
Great War and the methods by which it might be brought about were predicted at
least twenty years before the event; the imposition of grinding taxation, more
especially directed against Real Estate owners, was specifically explained as
essential to the furtherance of the scheme.
Douglas’s racism became more bizarre over time, and by the 1940s he was
arguing that Hitler was funded by Jewish conspirators, that the Holocaust was a
hoax and that a new world order was being created to advance the plot. His
closest supporters were purged from the Social Credit Party (SC) in Alberta in
part because of their anti-semitism. In 1983, Alberta was rocked by the Keegstra
affair, when a schoolteacher was sacked from his job for informing pupils that
the Holocaust was a hoax and that a Zionist plot was driving global power
politics. James Keegstra, a vice-president of the Social Credit Party in Alberta,
used propaganda produced by Ron Gostick.
Gostick, in turn, was a former school student of SC Premier Aberhart and the son
of Edith Gostick, SC MLA from 1935 to 1940 for Calgary. He created the Union of
Electors as anti-semitic rival to the official SC in 1946 and “eventually
became one of Canada’s most notorious anti-Semites, leader of the Canadian
League of Rights….established in 1968,” which publishes Canadian Intelligence
Service and On Target. Louis Even, leader of Quebec Social Credit until the late
1950s, created “two extreme right-wing groups, Les Pelerins de Saint-Michel and
Les Berets Blanc.” Members of the Australian League of Rights, a sister
organization to the Canadian group, have backed Pauline Hanson’s racist One
Nation Party that has helped fuel the current persecution of asylum seekers in
the country. The League, founded by Eric Butler to promote social credit ideas,
published The International Jew: The Truth about the Protocols of Zion in 1946.
Douglas assumed that bankers seized the B payments and refused to spend them.
The A+B theorem means little without a bankers’ plot, which deliberately
engineers crisis by removing purchasing power from the system.
The bankers are aliens!
Major Douglas really appears to hold the view that, although the banking system
is administered by individual members of the community, it is in effect run as
though it were being administered on behalf of the inhabitants of another planet.
He believes that debt is continually being incurred to those imaginary
proprietors — who claim the ownership of all creation of new money — a debt
which accumulates, and is never fully discharged, but which involves that
purchasing-power is drained away from the community whenever loans are repaid and
money is retired.
Anti-semitism, rather than being contingent, is necessary to Douglas’s
economics. Bob Hesketh, after making an extensive study of Douglas’s writings,
observed,
“My research has convinced me that Douglas’s conspiracy-based understanding
of the world, rather than his monetary and political theories hold the secret for
comprehending his ideas […] He created social credit specifically to undo the
power of the conspiracy as revealed in the Protocols. His monetary and political
theories were tactics for defeating Finance.
“In Social Credit, Douglas links the plot by finance to absorb money in
retained profits to violent threats and the plots of a racial elite.
“Apart from any more subtle explanation, even great banks hesitate to
distribute their true profits for fear of attracting too much attention.
“Corner sites are potential key positions. It may be stressing the theory a
little too far, to use it as an explanation of the fact that a recently built
bank in Cleveland, U.S.A., has machine-guns mounted at each corner of it. A
polite intimation that his overdraft must be reduced, is a more effective
argument to the average man than a threat by a machine-gun. But the idea is no
doubt dissimilar.
“An organization can only grow powerful at the expense of those involved in
it, just as a tree can only grow at the expense of its soil. Corner sites,
granite and marble buildings, only two of the more tangible signs of growth in
the banking organization, represent undistributed profits.
“Undistributed profits are simply cancelled credits; they are “savings” by
an institution. They are credits transformed from a visible form represented by
deposits, into a potential form such as […] the security for loans or
mortgages. Every credit cancelled in this way, whatever forms the cancellation
may take, simply represents so much purchasing-power destroyed.”
As a result,
“It still further restricts the money and purchasing-power at the disposal of
individuals and concentrates this money power in financial institutions. If the
process is allowed to proceed without interruption, and it remains true that the
possession of money is the only claim to the necessaries of life, then it is not
difficult to see that within a short space of time, that condition of universal
slavery to which the writer of “The Protocols of Zion” looked forward with
such exultation will be an accomplished fact.”
In an essay entitled “British Politics” he argued that,
“a serious depression stretched from the time of the Crusades to the beginning
of the Renaissance and is explainable, I think, far better by the fact that the
English nobles were all mortgaged to the Jews as a result of the Crusades, than
in any other way.”
He called for intense struggle against the bankers: "If there is a spark of
virility left in this country, the day the next war breaks our the local
representatives of Finance will face a firing party in the Long Gallery of the
Tower."
Anti-semitism based on economic grievances directly led to the Holocaust and was
literally murderous. Douglas’s anti-semitism should not be dismissed or
excused. It is frightening to find social crediters who are moved by the fact
that M4 of the money supply is growing, but show only the mildest concern over
their prophet’s murderous hatred.
4. From Ecosocialism to Ecofascism
Douglas, for his advocates, is the prophet, anticipating Galbraith, Gorz and a
host of green thinkers. Price, describing activists within the Social Credit
Greenshirts during the 1930s, observed,
The various aspects of ecology had their specialists in the Party. Edgar Saxon
[…] was a prominent food reformer and a champion of compost growing. […]
Ashley Lewis, produced a pamphlet and lectured on how Britain could feed herself
by a proper return to the soil of organic waste. He later gave up a well paid job
in London to work as an agricultural worker at about a quarter of his former
salary. John Hargrave, the Kibbo Kift Kin leader, advocated the formation, as a
leisure activity, of a voluntary forestry corps of young men and women to look
after our forests and wild life. Eric de Mare, an architect, wrote “Britain
Rebuilt” showing how people could be properly housed without ribbon development
and spoiling the countryside. […]
Thus, one attraction for advocates of Douglas is his supposed role as an early
pioneer of green ideology. Hutchinson, who observes, “the anti-globalization
and environmental movement did not start with Rachel Carson, still less with
Seattle,” believes that Douglas, despite his racism, can be used to show that
concepts such as ecological economics and anti-globalization have deep roots.
Yet, we need not rely on Douglas’s dubious legacy in seeking historical
examples of radical green thought. The supposed rediscovery of social credit is
not an act of remembering, but a way of forgetting Emma Goldman, William Morris,
Edward Carpenter, Mary Shelley, Marx (of course!) and many more.
Even a superficial examination of key elements of green politics suggests that
there is a deep and diverse history to be discovered. Typically, in 1906 writing
in her journal Mother Earth, Goldman attacked a productivist, ecologically
destructive capitalism:
“Whoever severs himself (sic) from Mother Earth and her flowing sources of
life goes into exile. A vast part of civilization has ceased to feel the deep
relation with our mother. […] Economic necessity causes such hateful pressure.
Economic necessity? Why not economic stupidity? This seems a more appropriate
name for it.”
There is considerable evidence for the existence of a historic ecosocialist
tradition in Britain, which Peter Gould has described as the Early Green
Politics, when radicals such as Edward Carpenter, William Morris and Peter
Kropotkin linked socialist and anarchist themes with environmental concern in the
period between 1880 and 1900. Ecological thought was important in the British
socialist movement in this period and the boundaries between socialism, ecology
and anarchism were porous. The earliest Marxist group in Britain, the Social
Democratic Federation, which included both William Morris and Engels, was
sympathetic to ecosocialist perspectives. In turn, British ecosocialism can be
seen as a node within a global network which linked radicals in the US, Russia
and Western Europe.
Between 1905 and the 1930s, this network weakened and fractured with many
advocates eventually moving towards either Stalinism or fascism. The Social
Credit Greenshirts are a powerful example of this process. They evolved out of a
socialist scouting movement, inspired by the writings of Ernest Seton Thompson
into the Kibbo Kift Kin. Hargraves, the leader of the Kin, was introduced to
social credit by Rolf Gardiner and transformed the movement into the Social
Credit Greenshirts. Gardiner went on to become one of Britain’s most important
far right ecological activists; he corresponded with Hitler’s agriculture
minister Darre and enjoyed close links with European Nazis who advocated a blood
and soil philosophy.
Douglas wrote some of his earliest work in the guild socialist journal The New
Age. Arthur Penty coined the term guild socialism in his book The Restoration of
the Gild (sic) System, yet became an advocate of fascism by the 1930s. Equally,
the alternative political economy of Chesterbelloc (or distribution) moved from
guild socialism to fascism. Hilaire Belloc became convinced, like Douglas, that
the “future was in the hands of Jewish bankers and financiers” and became a
supporter of Mussolini.
Of course, not all of these elements embraced the far right to the same extent.
Equally, some figures maintained an ecological politics of the left; for example,
G.D.H. Cole continued to propagate a guild socialist message in the mainstream
labor movement. In turn the Labour governments of 1945 to 1951 realized a little
of the ecosocialist vision when they introduced Britain’s first national parks.
Nonetheless, Douglas’s legacy is one of defeat for radicals, part of a story of
dispersal, disillusionment and movement towards the right. The growth of
Fabianism and Stalinism within the British Labor milieu marginalized ecosocialist
concerns. Such marginalization encouraged movement to the right. In turn
anti-capitalist political economies such as those of Douglas that rely on
conspiracy as an explanation of ecological and other ills open the door to
fascist potentials. Douglas is not a figure that ecosocialists should celebrate,
but one that we should
learn from.
Douglas and distributism were quite consciously used by activists in Britain’s
neo-nazi National Front to construct a “third positionist” politics, which
rejected capitalism and communism and blamed Jewish financiers for environmental
damage. The National Front’s founder and first chairman, A.K. Chesterton, was
also a former socialist who in the 1930s had embraced fascism in the form of
Oswald Mosley’s British Union. Chesterton, cousin of G.K. Chesterton, drew upon
social credit to construct the ideology of the Front. The National Front created
a surrogate environmental group Greenwave and attempted to recruit activists on
the left. The two third positionist groups that have succeed the National Front,
the Third Way and the International Third Position, both continue to promote
social credit.
The Third Way has even re-published an academic article from Burkitt and
Hutchinson.
5. Anti-Semitism and Populism
Rather than being an original and important economic theorist, as his supporters
imply, Douglas parallels a wider tradition of anti-semitic populism which has
been particularly important in the US and Canada.
Populism is confusing because in its call to hear the voice of the people, it
combines features from left and right. Social justice is mixed with scapegoating,
religious fundamentalism and nationalism with calls for direct democracy. Like
socialism or fascism its manifestations can be heterodox.
Populism need not be anti-semitic, but a major strain of populism argues that an
elite of bankers has conspired to enslave “ordinary folks” using the tool of
“usury.” Indeed, an important feature of US populism that stretches back to
the Populist Parties of the 19th century is an obsessive joint concern with money
and conspiracy. In 1873, the de-monetization of silver was condemned as a crime
perpetrated by a “cabal” of English, Jewish and Wall Street bankers. In turn
the creation of the Federal Reserve in 1913 fuelled populist paranoia. In the
1920s, Henry Ford criticized Jewish bankers and called for workers and
manufacturers to make a common cause against finance. In 1935, Father Dennis
Fahey published The Mystical Body of Christ in the Modern World, which reinforced
the ideas that an international Jewish financial conspiracy was working to
dominate the world.
The most important US populist of the 20th century and the closest equivalent to
Douglas was Father Charles Coughlin, the radio priest of the Depression era.
Coughlin was a radical who rallied millions of ordinary Americans to his crusade
to rid the US of poverty caused he argued by corrupt politicians, corporations
and arrogant bankers. He started firmly on the left as an advocate of
Roosevelt’s New Deal but frustrated by his inability to influence events moved
to Fascism during the 1930s.
Coughlin was yet another under-consumptionist who believed that currency reform
could be used to boost the economy. Between 1933 and 1934, he produced proposals
to increase the money supply and to base money on “real wealth” instead of
precious metals. He argued that the US government should sack the private bankers
who ran the Federal Reserve. Coughlin, contrasting productive capitalism with
parasitic finance, argued:
"On the one side tenaciously clinging to the past were the speculative bankers,
the credit inflationists, the gamblers with other peoples’ money.
"Opposing them were the battalions of the exploited — the deceived investors,
the small depositors, the anxious industrialists, the hard pressed merchants, the
laborer and the farmer."
Coughlin is a key figure for third positionists and his 1934 slogan that
declared that both capitalism and communism “are rotten!” continues to
inspire modern neo-Nazis. By 1938 his newspaper Social Justice was defending the
Kristelnacht pogrom and re-publishing The Protocols of the Elders of Zion.
From the 1950s, Willis Carto, inspired by the ideas of the American Nazi Francis
Parker Yockey, used his journal the Spotlight to argue that Jewish financiers
were part of a conspiracy with the Bilderburg group and the Trilateral Commission
to dominate the world. A.K. Chesterton’s title, The New Unhappy Lords, suggests
the conspiracy has been used to destroy the British Empire, drawing upon
Coughlin, Carto, and Fahey and as we have already noted, Douglas.
The British League of Rights established Bloomfield Books, which has promoted
Douglas’s books along with Holocaust revisionist titles, the Protocols, a
massive range of populist conspiracy texts and even Mein Kampf. The League of
Rights also encourages supporters to subscribe to Spotlight. The Bromsgrove
Group, an alliance of varied monetary reformers, contains the Christian Ecology
Group, Green Party Economics Working Group, as well as right wingers such as Don
Martin from the League of Rights and Alistair McConnachie. James Gibb Stuart acts
as convener. His book The Lemming Folk is a conspiracist’s bible, which
promotes once again the populist message that the “money power” links
capitalism and communism with its plan for world domination. The book, which has
been promoted by the far right British National Party, also praises apartheid,
“it means separate development — not racism, or repression, or
institutionalized violence, or the eternal social and economic subjugation of one
race by another. It was adopted in South Africa some thirty years ago because a
white minority saw it then as the only means by which they could preserve their
culture and their identity.”
During the 1970s Stuart supported Rhodesia’s white government who he saw as a
target for the conspiracy because of their financial independence. His associate
Alistair McConnachie, suspended from the UK Independence Party, an anti-European
Union group, after writing to the Scotsman newspaper to question the Holocaust,
edits Prosperity, a social credit/monetary reform newsletter widely promoted in
the green movement. McConnachie, who was a member of the Douglas Secretariat
during the 1990s, and remains active in monetary reform circles, is reported to
have stated, “I don’t accept that gas chambers were used to execute Jews for
the simple fact there is no direct physical evidence to show that such gas
chambers existed.”
Through contact with far right monetary reformers former Green Party national
speaker David Icke has been advancing populist conspiratorial ideas complete with
accounts of Jewish bankers funding both the Bolshevik revolution and Hitler’s
regime.
Icke notes:
“Some research I have seen claims that of, 388 members of the Russian
Revolutionary Government in 1918, only sixteen were Russians by birth. All but
two of the rest were Jews from elsewhere, mostly from New York.”
In turn he suggests:
“if you control the financial system, undermining a country to prepare the
ground for revolution is no problem. The 1929 Wall Street crash in the United
States was similarly engineered. The Brotherhood bankers created inflation and
encouraged the stock market to overstretch itself, so making a crash
inevitable.”
The bizarre nature of Icke’s message makes it easy to dismiss, yet he has
attracted large audiences on his global tours. Icke is an heir to Douglas and
both show the dangers of anti-semitic conspiracy. The bankers’ conspiracy is a
stable of far right politics on a worldwide scale and the term “usury” has
been used to justify pogroms for centuries.
6. Towards an Anti-Capitalism of the Right?
With the possible exception of Tony Gosling Social Credit advocates in the UK
Green Party do not promote anti-semitism, yet green social crediters ignore the
racism of Douglas and advance a philosophy that contains numerous links to the
ultra right. Social credit has the potential to provide young militants with an
alternative right wing anti-capitalism that provides network connections to
virulent racists. Today’s anti-globalization movement is already being targeted
by the far right. The British National Party magazine Spearhead in a review of
one of David Icke’s books notes how anti-globalization can be fitted to a
“nationalist,” i.e., neo-Nazi agenda.
Free trade, GATT, the European Union, United Nations, Club of Rome, Trilateral
Commission and the sinister Bilderberg Group all come under the microscope,
fitting together like pieces of a jigsaw in a global vision of a nightmare world
of asset strippers, political spivs, thieves and liars of cataclysmic
proportions. Readers on the idealist liberal-left will lose their rose tinted
spectacles when ingesting the full horror to which world events are rapidly
moving.
In Europe the radical Dutch group Fabel de illegal pulled out of the
anti-globalization movement in protest at the International Forum on
Globalization connections with the far right. In the US, Ralph Nader made links
with Buchanan, who tapped into populist resentment with a politics based on
exclusionist resistance to the New World Order. In Canada, Will Offley has shown
how third positionist inspired journals including The Radical have
“systematically courted sectors of the left, the greens and anarchist
currents” with some success.
Naiveté on the part of anti-globalization activists puts the movement at risk.
For example, Amory Starr, who claims to be a radical opponent of globalization,
has called for alliances with the religious “nationalists,” observing “the
militias subscribe to conspiracy theories that are not only not anti-semitic but
differ little from left-wing analyses, emphasizing the Trilateral Commission, the
New World Order and GATT.” She sees religious nationalism, including the
militias, hard line Zionists and the Hindu fundamentalist BJP, as potential
resources for those who seek to re-embed local economies so as to resist global
corporations.
While Starr provides a particularly worrying example of how progressive politics
can shift towards the right she is far from unique. Indeed, mainstream Green
politics and even ecosocialism contain fascist potentials.
Conspiracies are seductive because they frame the complexities of capitalism in
personal terms. Instead of examining abstract notions that show that accumulation
is functional to capitalism, they generate a personal enemy with a human face who
can be challenged. Personification need not lead to racism but it often does.
Equally, there is a powerful strain of populism in green anti-capitalism that
looks back with nostalgia to a falsely imagined era of the free market and small
business. Greens often focus on corporations and argue that an ecological economy
based on localized markets can replace “bad” multinational corporations with
“good” community based businesses. Good people can tackle the bad economic
structures and social forces may remain invisible. In turn, Marxism has all too
often been vulgarized into an assault on a conspiratorial capitalist elite.
Kovel, who challenged Nader as Green Presidential candidate in 2000, has noted
that such approaches always risks articulation with prejudice: Populism builds on
resentment and anger against abusive Power […] The politics of resentment can
easily turn into the politics of exclusion, scapegoating and demagoguery. That is
why, along with the many virtuous people who have marched under the populist
banner, have come more than a fair share of dubious characters who […] combine
populist virtues with various malignant tendencies […] So long as [activists]
remain populist, they cannot rise above the implications of its basic method,
which is to personalize politics. The racism and scapegoating can be restrained,
but the need to focus upon some personification of evil remains.
Most populists are not racists and criticism of finance is not necessarily
anti-semitic; yet the uncritical celebration of Douglas’s ideas is dangerous.
An honest admission of his anti-semitism and a clear rejection of racist elements
in his thought by his advocates seems necessary. Without criticizing the dark
side of Douglas there is a clear danger that racial conspiracy will be
legitimized within supposedly radical discourse. Green movements with unpleasant
right wing connotations have on rare occasions rehabilitated themselves. In the
UK, Earth First! (EF) explicitly broke with conservative and Malthusian forms of
deep ecology and have helped launch a vigorous anti-capitalist movement. EF'ers
in the UK have been on the militant edge of the anti-racist movement, physically
disrupting the construction of prisons being built to house asylum seekers and
throwing pies at racist politicians. There is little evidence that social
creditors are making
similar efforts.
There is a clear danger atavistic right wing green political economies such as
social credit will gain hegemony and displace alternatives. The components of
right wing anti-capitalism are ready for political entrepreneurs to fashion and
frame into more solid discursive wholes. Unless eco-Marxists, social ecologists,
anti-racists and other radicals work to educate, agitate and organize,
anti-capitalism could become the plaything of a ghoulish right that many of us
may wrongly have felt had been buried long ago.
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