Thursday, December 15, 2016

A Dishonest Way to Argue, III: Social Credit . . . Yet Again

Yesterday we looked at the strange case of people who insist on arguing with others by forcing their definitions and principles on others, and then berating those others as stupid, vindictive, or malicious if they stick to their own principles and definitions.
For the third member of our trio (and to complete our series), today we have the even stranger case of someone who tossed in a discussion of “social credit” when it had nothing in particular to do with what we were talking about . . . which was the difference between speculation and investment.  Here’s the commentary just as it came in out of left field (so to speak):
Government controls the economy.
What Social Credit says is that if you tally up all of the wages, salaries, and dividends (however distributed), there is not enough buying power being issued to offset the prices businesses must charge to repay their production loans. Therefore redistributing or distributing corporate profits as you propose does not solve the problem; it does not address the fact that there is a chronic lack of consumer purchasing power in the economy.
There is therefore the need for a supplementary flow of ‘debt-free’ credit to be issued to or on behalf of consumers so that their buying power equals the society’s production power.
Furthermore, SC affirms that the economy does not exist for the sake of providing employment. We don’t need jobs or job opportunities; we need a financial system that will allow us to produce and consume everything we need with the minimum employment required for that production. This means we should see increasing leisure, freedom from work. In a similar vein, the economy does not need to grow as an end in itself but only if people require more goods and services. Growth is only “required” at present because more debt-money needs to be borrowed into existence and spent on additional production (whether needed or not) to balance prices with incomes. Balance price with incomes by monetary reform and there is no longer any need to achieve equilibrium via growth.
Major C.H. Douglas
Notice that (once again) the commentator dives right in to what social credit will, presumably, do, and avoids any discussion of the substance.  Yes, a can of insecticide and a nuclear bomb might get rid of bugs, but the former might not offend (or kill) as many human beings as the latter.  Unless it’s in an aerosol spray can that will deplete the ozone layer.  Then you’re stuck.
So, what is “social credit”?
Social credit is a form of socialism developed by Major C.H. Douglas that spun off from guild socialism, guild socialism being a system developed by Arthur Penty and his mentor and editor of New Age magazine, Alfred Richard Orage (depending on which form of guild socialism you accept, if any).  Both social credit and guild socialism spun off from Fabian socialism, which is in turn an expansion of the agrarian socialism of Henry George to all forms of capital.
Arthur Penty
Social credit and guild socialism differ from their parent Fabian socialism on program goals, not on underlying philosophy.  Fabian socialism holds that everyone must work for an income, “work” being defined as direct production of marketable goods and services.
As a result, members of professions except for medicine, education, and writing tend to be viewed as drones.  Consistent with the Fabian philosophy of attaining a perfect life in this world through vegetarianism, pacifism, and simple living, however, even physicians, teachers, and authors come in for a share of opprobrium if they stray too far from what those in power consider acceptable or are clearly not attaining perfection in the proper way or for the right reasons.
Full employment is the goal of Fabian socialism, something Hilaire Belloc harshly criticized in The Servile State (1912).  Fabian George Bernard Shaw, evidently overcoming his aversion to violence, went so far as to declare once that anyone who refused to work for a living should be killed.  The principle of full employment may have made its way into Fabian socialism from theosophy, in which a person’s level of humanity is determined in part by what he or she contributes to the advancement of the collective.  This surfaced in Nazi philosophy, also influenced by theosophy, as the concept of the “useless eater,” and in Keynesian economics as “the functionless investor.”
Alfred Richard Orage
In contrast, and despite the fact that the Fabians declared that social credit and guild socialism differ from Fabian socialism only on program specifics, not on basic philosophy, both social credit and guild socialism hold that everyone should receive an income, regardless of his or her contribution to production or the collective.  In this, social credit and guild socialism are closer to the communist philosophy of Karl Marx as he expressed it in his Critique of the Gotha Program (1875), “From each according to his ability, to each according to his needs.”
Social credit and guild socialism split over the issue of technology.  Guild socialism took the Fabian goal of simple living to an extreme, eschewing virtually all technology beyond “human scale,” while social credit recognizes that technology produces most goods and services in an advanced economy.
To ensure that everyone has an adequate and secure income sufficient to clear all production, social credit relies on the “national dividend” and the “compensated price.”  The national dividend is a distribution of newly issued money to every individual, while the compensated price is a form of rebate.  The national dividend consists of the value of the additional increment of new production, less whatever is needed to meet the cost of government.  The compensated price consists of an amount over and above a just profit to be reimbursed to consumers.
Most forms of socialism base their proposals on the theory that no individual has the right by nature to own capital, whether land, technology, or both.  Social credit, however, recognizes a natural right of every person to hold title to capital.  Social credit must, nevertheless, be regarded as a form of socialism, because it changes the definition of private property to allow a universal claim to the fruits of ownership.
Where some forms of socialism deny that private property is a natural right, social credit admits that private property is a natural right, but changes what it means for something to be a natural right.  The traditional concept of private property includes not merely the right to possess something and the right to exclude others from the use of what is owned, but the full enjoyment of the fruits of ownership — which last is what social credit denies.
Douglas reasoned that anyone may own and use things.  The fruits of ownership, however, derive from applications of knowledge, and knowledge is the common heritage of all humanity.  Just as everyone owns knowledge in common, then, everyone also owns applications of knowledge in common.  The value of all production should therefore be distributed equitably, once producers have been compensated for their efforts.
Thus, by the simple expedient of changing what ownership means, thereby denying that owners have the right to the full fruits of ownership, social credit can — at one and the same time — claim to respect private property, and make private property completely meaningless.
To clinch the matter, a social credit adherent will insist that because social credit will bring about universal prosperity (which has never been proved) it is necessarily a just system — “Christianity in action,” as Douglas reportedly claimed — thereby shifting the question away from what social credit is, to what social credit does . . .
Which is where we came in at the start of this whole discussion.

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