THE ABC OF SOCIAL CREDIT

     “If Industry’s objective is more efficiently carried out by the use of machinery, automation and now robots, than by the use of man-power, then we must expect a progressive increase in unemployment.” 
That was understood in the early years of the 20th century.
 
     What about now in the early years of the 21st century?  The issues have become more pressing. Elizabeth Holter published a little book in 1934 explaining in simple terms what she understood as “The ABC of Social Credit”.  As she explained in the Introduction, the past few hundred years have seen the transformation of the world.  Before James Watt invented the first practical steam engine, the struggle for existence required all man’s time and energies and scarcity and want was never far removed, and always to be reckoned with.  And then ‘scarcity in an age of plenty’ loomed large because mankind had not grasped the dramatic changes that had taken place and his systems/institutions were based on policies originating in an earlier age.

     But we are now in the early part of the 21st century and with the Robotic Revolution and the growing Precariat (precarious unemployed and ever-growing personal and national debt)) there are those who are putting forward ideas on how to provide a Basic Income, and/or Positive Money for all citizens.

     I here present Social Credit ideas on the subject from Elizabeth Holter’s book The ABC of Social Credit.  Bear in mind it is based on a traditional Christian philosophy:

Is Unemployment a Disease or a Symptom of Health?
     Considering the question in the light of the way it is being treated today, unemployment would seem to be a very grave disease that must be cured at all costs. From the Social Credit viewpoint, it is quite the contrary—a very decided symptom of health. If our Nation is capable of producing in abundance all those things which we need and desire, through its industrial equipment, with less and less effort on the part of man, we are clearly getting nearer the day of increased freedom from manual work. Present unemployment is a lap on the way, and is in itself, apart from its ugly associations, far from being an evil.

     The only difference between leisure and unemployment is that one is paid and the other is not.

The Distribution of the National Dividend
     A National Dividend and a ‘Retail Discount price’ or as it is also known as, The Just Price.

     Social Credit proposes to turn unemployment into leisure, by the distribution of the National Dividend.
It is obvious that the discount on retail price would not benefit those who had no money at all, and the necessity for some direct payment to the increasing number of individuals for whom there literally is no work, becomes apparent.
(Please bear in mind the figures quoted are for British pounds at a 1930’s level.)

     This national dividend would be based on a very small fraction of the estimated real wealth of a country (its natural resources, factories, manpower, etc.) and at a conservative figure this might amount roughly, to 6.50 a year per person.

     From time to time the dividend could be increased, of course, within the limits of our productive capacity.  It would be issued to every citizen, whether he were employed or not.  Why those with money and those without it, rich and poor alike, are equally entitled to such a dividend will presently be seen, but first let us answer the question which will undoubtedly occur at this point.

     The National Dividend has none of the implications of the “dole”.  The “dole” is paid only to the man who is unemployed, and ceases as soon as he obtains work.  This amounts to penalizing him for contributing to national production, and by doing so, the State is providing him with an incentive to remain unemployed.  This, in itself, is an inconsistent procedure, but the situation becomes still more curious when one considers where the funds that are “doled” out come from.

     Those who have been successful under the present system are required to support those for whom the system has failed in short, the successful must pay through taxation just to the extent that the existing system has worked for them.

National Dividends not Financed by Taxation
     This dividend, distributed direct to consumers will not be paid for through taxation.  It will be financed by the same method as the “just price”, namely, through the National Credit Account.
Distributed at stated intervals in cheque form, through the banks, every citizen will be eligible to a definite sum of purchasing power. As this new money is issued in conjunction with the discount on retail prices the total amount cannot produce the inflationary effect of raising the price level.

     At the present time, according to statistics, the financing of the National Dividend would require the monetization of only an exceedingly small percentage of the amount of real wealth which stands to our credit. The totality of the money expended for the National Dividend and the Retail Discount will at no time exceed the country’s income, because the amount of the National Dividend issued during any period will always appear as consumption in determining the retail discount for the next period.

Retirement of New Money
     Should a time ever come when our debt-burdened country reaches a degree of opulence that would necessitate the retirement of this new money, efficient machinery for this purpose is at hand. There is nothing to prevent the Government from cancelling credit out of existence, as is done by the banks today, the only difference being that the Government’s cancellation of credit would be in accordance with the needs of the community, instead of in the interests of the private owners of the credit. There are many ways by which this could be put into effect.
Probably the simplest and most practical method would be the imposition of a universal sales tax, which might take the form of a reversed retail discount, by adding to the cost of an article instead of deducting from its price.

     This taxation, however, would only be expedient if, at any time, in the far future, a day came when consumption had caught up with productive capacity, and there were more than the required number of tickets in existence.

Our Cultural Inheritance
     While many agree that it is becoming increasingly necessary to support those individuals to whom no way of earning money, through work, is open, they will in all probability be startled at the Social Credit proposal that the National Dividend should be distributed to poor and rich alike.

     For this, however, there is both practical and moral justification. We have come to consider Industrial Production as compounded of three factors—Capital, Labour and Land. There is a fourth factor which is equally, if not more significant, namely, OUR COMMON CULTURAL INHERITANCE.

     This term comprises the vast heritage of discovery and invention, of culture and learning, of organization whether social, political or industrial, of education and religion, of aspirations and ideals which have been handed down and developed by generation after generation from the dim beginnings of the race. Collectively these form the Common Cultural Inheritance of humanity, or more shortly, Civilization. 1

     What Labour can accomplish without Capital is relatively little, and Capital without Labour is actually powerless. These considered together, but excluding our Common Cultural Inheritance, are practically impotent.  Both Labour and Capital are subject to private ownership, but our cultural inheritance is a communal possession.  Who, for instance, has the right to claim an idea, conceived originally by some one, long since dead, whose name is now forgotten?  From such origins the inventions of civilization in their manifold forms are developed and handed down. The legacy belongs to the whole community in the way that inventions do when their patents expire. It is not subject to the appropriation of the individual. “They are no more the owners of it than a stenographer who types a scientific treatise on a typewriter can be said to be the owner of the scientific treatise.” 1

1 This Age of Plenty, by C. Marshall Hattersley, op. 232.

     Through co-operation and organization applied to real capital, an unearned increment of production is obtained. This increment, which has been made possible by our cultural inheritance, is a major feature of the machine age, and belongs equally to every member of the community.

     The distribution of old-age pensions serves as an example on a small scale of the recognition of human beings, not as workers, but as members of the community.  If you reduce the age limit enough, you have the National Dividend.

     Perhaps such an idea would be more clearly comprehended by considering our country as a great Corporation, bearing the title of Great Britain Ltd., and every citizen in it an equal, shareholder for life in the Corporation’s dividends, based on the increment of production that has accrued in the past.

     No one is receiving the money equivalent of this increment for present work done, but because, be he producer or consumer, he is an heir to our common cultural inheritance.  If the community as a whole, however, lets its inheritance lie fallow, there will be no more dividends to the country’s shareholders.

     “The National Dividend, then, is not ‘something for nothing’. Rather it is the interest on the Capital which the race has accumulated for itself since it became conscious of itself, and this interest is payable for as long as we cherish our inheritance and keep it bright. 1
 
1 From The Evolution of Finance, a lecture delivered by Major C. H. Douglas on April 23rd, 1934 in New York.

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