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):
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| 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.
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| 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.
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| 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.”
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| 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.
#30#