http://www.washingtonsblog.com/2015/07/economic-grace-of-social-credit-national-dividend-and-compensated-retail-prices-to-facilitate-consumer-goods-distribution-in-an-age-of-robotics.htmlEconomic grace of ‘Social Credit’: national dividend and compensated retail prices to facilitate consumer goods distribution in an age of robotics
Posted on July 20, 2015 by Carl Hermanby guest author Wallace Klinck“The unacknowledged, but obvious, truth is that unnecessary work, imposed by either edict or contrived financial legerdemain, is slavery and servitude—totally irrational and immoral. Every engineer worthy of the name is trying to eliminate the need for human effort as a factor of production while every witless or hypocritical politician, pressured by the financial powers above and an insecure and uncomprehending population below, is professing, at least, to promote policies designed to ‘put people back to work.’” (from the below article)
Five minute video of Major C.H. Douglas, founder of Social Credit (1934): https://www.youtube.com/watch?v=gpHJdApvtO0
Because of its deleterious impact on personal freedom and initiative, centralization of both economic and political power is the critical issue facing society. The primary obstacle to reversing this growing concentration of power is an almost universal ignorance of the manner in which the existing financial system renders the price-system increasingly non-self-liquidating, making impossible the recovery of industrial production costs through sales. Institutions and individuals attempt to resolve this problem by resorting to bank debt, thereby obtaining access to the products of industry by the self-defeating expedient of mortgaging our future–i.e., transferring these costs as an exponentially growing debt charge against future cycles of production–and by engaging in an orgy of wasteful and destructive activities, effectively culminating in continuous war.
Their monopolistic proclivities disincline both Finance-Capitalism operating under the Monopoly of Credit and every form of collectivist organization (e.g., socialism, communism or fascism) from grappling with this problem. The solution must entail an appropriate modification of the existing financial-credit and price system so as to properly facilitate distribution of the immense output of modern technology-based industry, in the context of expanding leisure.
Nearly a century ago this emergent challenge was studied in depth by the British engineer Clifford Hugh Douglas, who not only analyzed the defects of the existing price system as it functions under present financial and industrial cost-accounting conventions, but also put forward realistic remedial proposals. Between and for a period after the World Wars, Douglas’s ideas, which he named “Social Credit”, attracted large numbers of adherents and spawned many political movements in countries around the world.
Douglas recognized that life is more than bread alone and that in order to attain his full stature man must be released from unnecessary material concerns in order to make time for matters of the Mind and Spirit. This clearly was inherent in certain much-neglected aspects of the message of Jesus, who explicitly stated that lack of faith is the reason for our obsession with toiling our own way to material survival. Jesus asked how we could doubt that God, who provides for the fish and birds and the beasts, knows our needs and will provide even better for us. On more than one occasion Jesus unconditionally distributed loaves and fishes to crowds that had gathered to hear him. To indicate how reality operates outside of puritanical human notions of morality, Jesus pointed out that his heavenly Father causes the sun to rise on the evil and the good, and lets rain fall
on both the just
and the unjust
An aspect of this divine caring is the ability we have been given to accumulate understanding of natural laws, which has resulted in an endless extension of “mechanical advantage”—termed by Social Crediters the Unearned Increment of Association—from which has emerged our amazing modern technology with its outflow of material abundance. Through learning how to associate effectively in the areas of both human endeavours and material resources, we have multiplied our productive capacity many thousands, if not millions, of times over. The historical aggregation of Unearned Increments has provided the vast Cultural Heritage upon which we all so greatly, if unconsciously, depend.
This is the background of why Social Credit came to be perceived by its leading thinkers as “practical Christianity”. Although Douglas did not set out to design it as such, ongoing development of Social Credit thought has revealed it to be uniquely consonant with and revelatory of the assurances given by the founder of the Christian faith.
This realistic perception of our situation is absent from the major ideologies of our time. For example, Libertarians promote the notion that the individual must “make it on his/her own”. No one today (apart maybe from individuals lost in the wilderness) is doing this; all have the benefit of the Cultural Heritage, which ties us in a web of dependencies not only with our contemporaries but also with previous generations.
Socialism, which calls for State ownership and administration of the means of production—the central planning of the economy and of human activity—similarly endeavors to alienate people from their heritage. Besides specifically attacking the very principle of inheritance, Socialists force the energies of the members of society into mandatory employment in projects prescribed by the State. Suppression of individual initiative is an inevitable result of this constraint of access to the possibilities afforded by the richness of the Cultural heritage. This observation applies to all forms of “socialism”, whether national or international in nature.
Social Credit is the inverse of socialism and a negation of finance capitalism. Many persons have it in their minds that a sharing society necessarily is socialistic; i.e., power centralizing. Presumably they think this way on the erroneous assumption that the sharing will be accomplished by redistributing existing wealth by means of various confiscatory forms of taxation. However, Social Credit, uniquely, stands not for redistribution of earned incomes, but rather for distribution of consumer goods at source as they emerge from the production line.
Douglas enunciated and stressed the truism that production without consumption is sheer futility and waste.
The fundamental task of economic policy is to match and balance the cycles of consumption and production. Producers’ costs cannot be recovered without money received from consumers, whose incomes alone provide business its means to liquidate all financial costs of production.
In order to effect this balance, Douglas recommended that National (Consumer) Dividends and Compensated (lowered) Prices at point of retail sale must be provided and financed by a Government Agency (created or existing, whatever is most efficient and convenient) with funds not derived from taxation but drawn down from a properly constructed National Credit Account. This would be a continuously updated actuarial accounting of the nation’s real credit, being an inventory of all those resources which are available to be used for production and which, if so used, may result in the making of financial prices.
Unfortunately, the public are conditioned to reason from the false assumption that the economic “pie” is limited to the financial incomes paid out in production, and hence they perceive this as the only possible source of funding. This assumption includes the erroneous corollary that the price-system is self-liquidating; i.e., that incomes paid out as wages, salaries and dividends are not only equal to, but available to meet, the total financial costs of production. That this is a major fallacy is readily proved by the enormous accumulation of inflationary private and public debt created as loans by the banking system, which allows goods to be purchased after a fashion but does not liquidate their financial costs of production in a synchronized fashion. As a kind of stop-gap expedient, these loans merely transfer these costs into the future, to be liquidated with income derived from later cycles of production unrelated to the cycles in which they were incurred.
The physical (i.e., real) costs of production are met as production takes place. Obviously, if this were not the case, production could not proceed. This is self-evident and axiomatic. When goods are produced in finished form they are meant to be used and should be immediately available to the overall consuming public in toto
and without entailing any residual financial debt.
This universal piling-up of debt is bogus and is required only because price increasingly includes, as real capital replaces labor as a factor of production, allocated charges in respect of real capital which are not distributed as income in the same cycle of production. Consumer income is cancelled prematurely, leaving a growing deficiency of income relative to the total prices of goods awaiting purchase. In other words, the flow of final prices increasingly exceeds the flow of effective financial purchasing-power. Purchasing-power is prematurely cancelled in respect of still existing real capital, whereas it should be cancelled only at the rate of actual physical consumption or depletion. Money should be issued at the rate of production and cancelled at the rate of consumption.
In the face of this predicament, we can simply forgo acquisition of these goods, leaving the producer no option but to warehouse or destroy them and go bankrupt—making his endeavors a mindless exercise in futility. Or we can ensure that, while required remaining actual “workers” (i.e., recipients of remuneration from others for services rendered) continue to have the benefit of their earnings, all citizens, workers included, have access to the full output of industry by being provided adequate aggregate purchasing-power to make this possible.
Besides being a practical necessity, such an arrangement recognizes the share all have in the almost fantastic Cultural Heritage of Civilization. In a Social Credit dispensation, Inheritance would be generalized.
In stark contrast is the socialist attitude, which is that inheritance is evil and should be abolished.
Social Credit stands most definitely, unashamedly and unabashedly, for a sharing society—and as labor is increasingly reduced by technology it would become more sharing with the passage of time. Unlike Socialism, which in reality has always been more about centralized control than about sharing, Social Credit does not involve State ownership, planning or administration of the economy or of social organization as such. By giving people as individuals full access to the ever-increasing abundance made possible by technology and to concomitant economic independence, it is in fact highly decentralizing.
The rational purpose of technology is to eliminate inefficiency, and “jobs” concocted merely for the sake of distributing incomes are precisely that—mere wasted energy and materials. The solution to the problem of economic insecurity in the modern age of super-production does not lie primarily in “making” work, but increasingly in facilitating distribution. Those who clamor for “jobs” actually visualize a model along the lines of fascist and communist states, which give and demand of everyone endless work throughout their lifetime, in accordance with the rather suspect dictum that “work will make you free”—but not until
The unacknowledged, but obvious, truth is that unnecessary work, imposed by either edict or contrived financial legerdemain, is slavery and servitude—totally irrational and immoral. Every engineer worthy of the name is trying to eliminate the need for human effort as a factor of production while every witless or hypocritical politician, pressured by the financial powers above and an insecure and uncomprehending population below, is professing, at least, to promote policies designed to “put people back to work.”
Frankly, if I desire “work”, then I want to do it by my own choice and at my own leisure, increasingly freed from the enforced conformity and servitude of the existing system.
We should not be striving to provide more, and more, human work but rather more technological productive efficiency with augmented effective consumer purchasing-power capable of eliminating consumer debt and liquidating industrial costs in a timely manner. Let robots do the work. Tirelessly and without complaint, they perform the vast majority of it better than people can.
You want more work? Then let’s have another war—or, better yet, continuous wars until we end up destroying the whole planet or all life upon it.
Indeed, the flaws in the current financial system provide a constant incentive for military war, which normally is just an extension of economic war. Unbalanced international trade is driven by the increasing inherent orthodox need to export—not to receive an equivalent of real wealth in return, but to capture financial credits from other nations to compensate for the internal intrinsic deficiency of consumer purchasing-power that exists in the domestic price-system of every nation.
Anyone who does not understand this compulsive destructive dynamic of the modern financial-economic system is totally unqualified even to comment on our economic position.
The abundance that technology makes possible should set men and women free from physical want, increasingly enabling them to choose independently and without duress their preferred activities in life. As opposed to the ubiquitous Keynesian, cognitively dissonant, counterfeit socialist concept of “economic democracy” as a centralized administrative proletarian Work-State, Social Credit gives real meaning to the concept of economic democracy by favoring a consumer-motivated system of production.