We’ve been
looking at a few problems with social credit, but today we’re going into the
matter in a little more depth.
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| "They create a wasteland and call it 'peace'." — Tacitus |
Social credit
assumes that concentrated private control over the creation of money and credit
leads to concentrated ownership of the means of production. In this, there is no contradiction between
social credit and traditional Catholic social teaching (or Marxist socialism,
for that matter). To remedy the
concentration of power over the creation of money and credit in private hands,
however, social credit would put control over money and credit in the hands of
the government.
To support the
claim that they are not advocating socialism, adherents of social credit deny
that the government would have any real control. This is a little difficult to understand in
light of Baron Rothschild’s possibly apocryphal statement that if you gave him
control over money and credit, he did not care who made the laws. It is, frankly, hard to interpret
government-created money as being anything other than “control” over money and
credit.
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| Right. Making the government the banker is a "good idea"? |
Placing “a
scientific control of money and credit” (George-Henri Levesque, O.P., Social Credit and Catholicism, Hawthorne,
California: The Christian Book Club of
America, 18.) in the hands of “a commission of experts possessing an extensive
autonomy” (Ibid. Cf. Henry Simons’s “Chicago Plan.”) puts such
a commission into the place that most central banks hold today. Most central banks started out independent of
government. Many (such as the Federal
Reserve) remain nominally so, although in practical terms are under the direct
control of whatever administration is in power. (Harold G. Moulton, Financial Organization and the Economic
System. New York: McGraw-Hill Book
Company, 1938, 416-417.)
This is because
where the government is dependent on one major source for financing its
programs, it soon finds ways to control that source. (Ibid.) This is apparent in the way that, regardless of the official
autonomy of most of the institutions, governments generally control central
banks, one way or another. (Ibid.,
418-433, 472-483; Moulton, The New
Philosophy of Public Debt.
Washington, DC: The Brookings Institution, 1943.)
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| Free money for everybody in the National Dividend!! |
In a social
credit arrangement, people would be assured of a “private and secure income”
simply by having the government print the money and distribute it as a
non-repayable grant — a “national dividend.” This would transfer wealth from owners and
producers, to non-owners and non-producers.
The private wealth of the nation is treated as if it were a common fund
(without the permission of those who currently hold the wealth), against which
the government issues claims in the form of newly created money (bills of
credit) — the “national dividend.” (Major C. H. Douglas, “Dividends for All,” The Monopoly of Credit, Sudbury,
England: Bloomfield Books, 1979, 100-101.) As Douglas stated,
In place of the relation of the
individual to the nation being that of a taxpayer it is easily seen to be that
of a shareholder. Instead of paying for
the doubtful privilege of being entitled to a particular brand of passport, its
possession entitles him to draw a dividend, certain, and probably increasing,
from the past and present efforts of the community of which he is a member. (Ibid., 112-113.)
Social credit
thus violates several basic tenets of both sound monetary theory and
morality. Creation of fiat money that is
simply spent into circulation for consumption purposes is purely inflationary,
an indirect and hidden tax. It causes an
illegitimate redistribution of wealth from the people whose assets are measured
in terms of monetary units, to those receiving the government largesse, and from
producers to non-producers.
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| Belloc: social credit ignores private property. |
Like chartalism,
social credit therefore constitutes theft, as it diminishes or eliminates the
property rights of some for the benefit of others. Additionally, it places immense power in the
hands of the government as the result of effective control over the creation of
money and credit. With the government as
the source of people’s consumption income, the government gains direct power
over every aspect of the lives of its citizens.
As Belloc pointed out,
To control the production of
wealth is to control human life itself.
To refuse man the opportunity for the production of wealth is to refuse
him the opportunity for life; and, in general, the way in which the production
of wealth is by law permitted is the only way in which the citizens can legally
exist. (Hilaire Belloc, The Servile State. Section 1, “Definitions” Indianapolis,
Indiana: Liberty Fund Classics, 1977,
46.)
It is necessary
only to substitute “income” for “the production of wealth” (virtually
synonymous in any event, as Say’s Law of Markets acknowledges) in the above
quote to perceive the dangers of social credit, which Belloc himself disparaged
for ignoring property and focusing solely on income. The basic assumption of many of today’s
commentators, that Catholic social teaching and social credit are complementary
(if not identical), is clearly unworkable.
The basic principles of one directly oppose those of the other.
If, as the
commentators maintain, Catholic social teaching and social credit are
inextricably linked, we have a sound reason why Catholic social teaching has
been relegated to the sidelines in the debate between capitalism, socialism,
and the search for a viable third way.
The attempt by latter-day commentators to include disparate elements in
their amalgam only leads to ridicule or rejection of the system by those who
can see or sense the contradictions.
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| "We stand for the value of a single human life." |
The bottom line,
however, is that even if social credit could do everything it claims, even if
it is a “beautiful” system and “Christianity in action” and there are no
theoretical flaws, it would still put total power over the lives of people into
the State. The State would be able to
say who lives, and who dies.
For example, would
everyone receive the “national
dividend”? After all, every cent that
goes to someone deemed “undeserving” means less for you. Should immigrants get it? What about illegal immigrants? Criminals?
Someone with too many traffic tickets?
What about the wrong attitude towards the government? The wrong religion? Someone who is going to die anyway? Useless eaters? Someone who already presumably has sufficient
income? The “Banksters”? Someone who pissed off the local bureaucrat in
charge of distributing the dividend and determining who is eligible? Anyone with a bratty kid?
Social credit
advocates need to keep one thing in mind: Power corrupts. Absolute power corrupts absolutely.
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