Goods at the service of needs through Social Credit

Here is a summary given by Fr. Felicien MWANAMA G., of the recent week of study held in Rougemont. Fr. Felicien is the assistant secretary-general of the Conference of Catholic Bishops in the Democratic Republic of Congo (DRC). Seven bishops from DRC, three from Cameroun, one from Burundi, besides many African priests and lay specialists from different countries, assisted at this week of study.

The participants of the week of study had assisted first of all, to the closing of the “Siege of Jericho,” organized by the Pilgrims of St. Michael. This event was marked with moments of prayer, penance and Eucharistic celebrations that lasted 7 days and 6 nights, putting God and His grace at the center of the action of the Pilgrims of St. Michael, in order to have success in their apostolate in the social field.

 

 

Their spirituality is based on the four pillars of the social doctrine of the Catholic Church: the human person, the common good, subsidiarity and solidarity. From March 28th to April 5th, 2011, the participants of the week of study followed on a day to day basis, different presentations given by Mr. Alain Pilote. These lessons continue from the book that was placed at the disposition of each participant, entitled: Economic democracy (or the Social Credit proposals) explained in 10 Lessons, viewed in the light of the social doctrine of the Catholic Church.

We present here, in condensed form and in the same manner, an expose of the ideas given in the diverse lessons.

 

Lesson 1: the goal of the economy: that the goods meet the needs

In order to dispel all confusion between the ends and the means, it is supposed here that the final goal of the production of goods is to satisfy the needs. It is unacceptable to assign other tasks to the economy, such as to create jobs, obtain a favorable commercial balance or distribute money to the population. When opting for one or the other of these goals it causes the means to conflict with the ends used. Money is not a material benefit but a means to obtain them.

Man has a grave moral duty to oversee the economic, social and temporal orders, to be sure that they meet their goals. To this end, he needs a minimum of temporal goods to facilitate the practice of virtue. This is what Pope Benedict XV meant when he said: “it is in the economic field that the salvation of souls is at stake.” The person of whom we are speaking is the consumer, for whom the economy should be ordained. This means to all men and to the whole man.

Social Credit could be understood as the policy of a philosophy of association or the common good. Associations could not make sense until they assured the good of each of their associates. In other words, Social Credit means the society at the service of each member; it is politics at the service of each citizen; the economy at the service of each and every consumer.

Henceforth, social credit promotes social life because it is synonymous with faith and confidence. It is mutual confidence that links the members of society together. It follows that without social credit, life in society would be inconceivable and bring fear and mistrust. Social credit, or social trust, is at its maximum where the Christian religion is practised, and at its minimum where it is denied and derided.

 

Lesson 2: Poverty in the face of abundance: the birth and death of money

The abundance of goods and overproduction are incontestable facts today. Unfortunately, poverty endures. The goods are not lacking but families are lacking goods, simply because they do not have the right to appropriate them. So the products are there but men do not have the right to have them or they do not have the permission. This is a problem of purchasing power.

Money is only a sign to facilitate the exchange of products. The quantity of money should correspond to the products so that there is equilibrium; this money should be in the hands of all. We cannot imagine that it is not possible to arrive to a correlation because the quantity of money today is not stable. Money was born somewhere. We can then arrange it to equal the existing products. Alas! Today, it is not the governments that create money, it is the greedy bankers that create and destroy money for their own profit.

 

Lesson 3: Banks create money as a debt

When granting credit, the bank creates money that did not exist before and consents to the loan thanks to a signature passed in favor of the banker, without the financial equivalence of paper money. The bank knows from experience that the financial procedures in creating this loan does not necessarily come from cash or coin money, at least not more than 10% of the loan. The power of the banks to loan more than 10 times the amount of paper money that they have in their safe is called fractional-reserve banking.

This system is even more vicious because the bankers demand interest that was never created in the first place. This is where the accumulated public debt comes from, because the investments of States do not generally produce more and are at the service of the debt. In consequence, it is those who contribute who pay the never-ending debts. There is then, a dictatorship of bankers to individuals and governments, with the consequences of poverty and strangulation of countries because of compound interest. This is the obvious situation in both Canada and the United States, even if they are developed countries.

 

Lesson 4: The solution to the debt problem: money created by society without debt

We have understood: money is not wealth but a sign, a symbol that facilitates exchange and gives a right to wealth. Based on society’s capacity to produce, money also belongs to society. In principle, logically speaking, society should not pay the bankers for usage of its own money. It is the government, the legitimate representative of society, who should directly emit money without going through the bankers. In regards to Social Credit, society should take back this right ceded to the bankers and create its own money.

Money should be brought back to its proper role, that of numbers that represent products, in order to have simple and exact accounting. This should be guaranteed and executed by a Commission of accountants — an independent organism that we could also call the “National Credit Office.” Its role would be to make sure that money reflects, as much as possible, the financial expression of economic reality. Production would be expressed in assets and destruction or consumption in liabilities. We would avoid the risk of inflation, which is the abuse of the power used to print more money than is necessary.

In the case of a just debt that represents a true expense on the part of the borrower, justice requires that he reimburse only the capital. Debts created at the stroke of a pen (by the commercial banks) should not exist and should be erased. The demand for justice, formulated during the Jubilee of the year 2000 by John Paul II to abolish the public debts, is more than intelligible and pertinent.

In this context, money cannot produce interest; “it does not produce young” (Aristotle). On the other hand, if the investment brings about an augmentation of production, the part due in capital would be determined through intent and according to equity, such as in the use of a dividend.

We know that the Lord rose up against interest when he chased the money changers out of the Temple (Matt 21, 12-13; Mk 11, 15-19); the teaching of the doctors of the Church (St. Thomas Aquinas) and the Magisterium of the Church is always firm in the condemnation of interest (ref. Vix Pervenit of Benedict XIV). We must then have the courage to affirm that interest is immoral.

 

Lesson 5: The chronic lack of purchasing power; the dividend

Financing production is not enough. The products must also reach those who need them. Unfortunately, there is a deficiency in the purchasing power. This means that those who are in need are generally incapable of buying the goods produced. This is because of the lack of purchasing power, even though the production distributes money in the form of salaries, profits, dividends.

Only those who receive a salary, profits and dividends have a certain purchasing power. No-one else. Even then, salaries do not suffice to buy the all the products necessary: we must find a solution to the problem. This solution is Social Credit that would give a dividend to all, including the employees who will always receive an insufficient salary. This is because the prices of goods will always be superior to the salaries distributed. This is according to the theory of the Scottish engineer, Clifford Hugh Douglas, who stated that A cannot buy A plus B.

In fact, A represents the salary, which is only a constitutive part of prices, which are made up of other costs of production (B) such as materials to build with, taxes, banking fees, the upkeep and destruction of machinery, benefits, etc. The sale price (A+B) will always be superior to the salary (A). Even if we raise the salaries, prices will also reflect this growth so that the salaries will never reach the same level as prices. In order to buy production, there must be supplementary revenue outside of salaries, at least equal to B. This is what the dividend of Social Credit would do. Neither selling on credit (a consequence of the lack of purchasing power), hiring in jobs that distribute salaries without augmenting the products (public works, the production of armaments, etc.), or the favorable commercial balance of countries can be a solution to the chronic lack of purchasing power.

Purchasing power cannot be linked to salaries because there will be less and less remunerated employment through technology. Even so, the goods of the earth are destined for everyone. How will we get to this point, if it is only the salary that distributes the money necessary to attain the wealth of the country?

Full employment is not necessary in a highly industrialized society such as today when machinery replaces man with hardly any effort. In today’s society we create artificial needs and produce goods that last for only a brief time, creating a mentality of materialism and consumerism. The dividend would permit people to replace salaried work with activities that are more freeing and useful for men, especially for family life.

The dividend is the solution that guarantees purchasing power. It comes from Social Credit and constitutes a fundamental right that each man is the co-heir of the natural resources and technology or invention of those who preceded him.

 

Lesson 6: Money and prices — the dividend

The dividend causes the money of the country to augment when necessary and places this money directly in the hands of the consumers. In order for this operation to be beneficial, the purchasing power of the consumers must be strengthened. Purchasing power depends on two factors: the quantity of money in the hands of the buyer and the price of the products for sale. If the price diminishes, the purchasing power augments; if the price rises, then the purchasing power diminishes.

Purchasing power cannot be increased with wage increases, since these increases in salaries are included into prices. The national dividend does not enter into prices because it is new money distributed by the government, independently of the workers’ salary.

However, when there is more money in society, there could be a tendency towards raising prices, causing inflation. The government cannot impose price fixing, because that would discourage production. Hence the Social Credit proposal to fight inflation through its technique of the “adjusted price” or compensated discount.

The just price is the real cost of the product, of the riches that have been consummated in order to have this product. The consumer will then pay the price of the riches consumed and, so that the seller will not lose, Social Credit would pay the difference between the marked price (sale price) and the just price or the cost of the riches consumed in order to have the product. This difference is called the “compensated discount.”

There exists then, three fundamental principles in Social Credit: money issued without debt by society, a monthly dividend granted to all citizens and the compensated discount. We have remarked that in the Social Credit system, money remains an exact reflection of reality; it is created when a new product is made and disappears when that same product disappears or is consumed.

Social Credit is really economic democracy as the consumers are assured an adequate amount of purchasing power and plays a decisive role in the choices of the goods to produce, or rather decide what will be produced by the usage of their monetary vote.

 

Lesson 7: The history of banking control in the United States

The history of the USA comes down to the battle between the voracious bankers and those fighting to save the sovereign power of the government to create money. These bankers wished to install a fraudulent system of debt-money, of dishonest money to the detriment of an honest money system freed from the control of the financiers; this system that should remain the work of the government.

This history of this battle in the United States attest to the courage and perspicuity of certain people who distinguished themselves in the battle against the iniquitous system of the bankers: most notably, Benjamin Franklin, Andrew Jackson and Abraham Lincoln. The Constitution of the United States of America in 1787 states in Article 1, Section, Paragraph 5 that the right to regulate and create money belongs to Congress.

In this story, we can see that the battle was very tough. Obtaining the complete monopoly of control of credit in the US is linked to the ignorance of the population on the issue of currency, of its nature, credit and circulation. It is obvious that in order to destroy this iniquitous system; the people must be educated and formed. The strength and victory is found then in formation, in order to create an informed and organized public opinion.

During these exchanges, the participants were astonished that this state of affairs continues to our day. The most revolting aspect, they realized, is this interminable debt that was paid many times over by the poor countries in Africa. Certain people among the group expressed the wish to see that Social Credit become the theme for a synod; others promised to use their moral authority so that the information will reach the people; one economist was amazed to never have heard these analogical teachings during his academic studies and proposed (in order to attain a larger audience), that the Pilgrims of St. Michael create a movie. Another stated the necessity to educate the people “en masse” in Africa and to translate the book, Economic democracy explained in 10 Lessons in the light of the Social Doctrine of the Church, into the African languages. What would be even better, would be to introduce this theme into the schools.

 

The ultimate goal of the financiers is a world government with a global currency

The bankers have a diabolical project to impose their will on others. How? They proceed with a debt-money system, using money that does not exist and that causes unpayable debts. They create crises and revolutions, social friction in which they can intervene to impose their solution and attain their objective: to rise up a one world government with a global currency. That will sound the death-toll of the sovereign states.

The shrewdness and accuracy of the foresight shown by John Paul II in Sollicitudo Rei Socialis were indisputable. He underlined how the desire for profit and thirst for power, the self-imposition of will on others are elements of the structures of sin. The Pope invites us to give of ourselves, to do apostolate work for the good of others.

 

Lessons 9-10: Social Credit and the Social Doctrine of the Church

The question of the dignity of man and his destiny is not unknown to the solicitude of the Church. Through her social teachings, the Church wishes to impregnate society with the Gospel. To this end, the Church makes a call to the lay faithful to bring the Gospel into the temporal order and work to renew the earth so that it may correspond to the Gospel.

Social Credit as promoted by Louis Even is inscribed in this effort. It employs us to rigorously respect the four basic principles of the social doctrine of the Church. Let us re-read them: the absolute respect and primacy of the human person; the common good; subsidiarity and solidarity. This helps us to understand that all systems should be at the service of man. In consequence, neither capitalism nor communism can pretend to incarnate the social teaching of the Church. In either one or the other, there is a list of grievances attached to their perversion and limits.

Communism is anti-Christian, intrinsically perverted, a destructor of private property, of family and religion. Capitalism does not condemn the system of production (meaning free enterprise and private property) as much but is defective as a system of distribution; it has been made stale by the financial system. It submits to the dictatorship of money. Its great vice is the creation of debt-money. Through accumulated interest it approves the finality and attains its objective: to impose its will. We then agree with St. John Chrysostom that “nothing is more shameful or as cruel as usury.”

Once again, in this context, cancelling or writing off the debt shows an imperious and moral necessity. There is only the reimbursement of the capital that is just. It is what is overcharged that is immoral. Here appears with crystalline clarity, the pertinence of the objective of Social Credit: that society, through an organism of national accounting, is the only one who creates money for the nation. That it stops to borrow from the banks in order to permit the economy to attain its objective, to be at the service of man, of the whole man and his essential needs.

The present contradiction between the overabundance of both production and poverty in the world is unacceptable. It calls us with greater urgency to the reformation of the financial system that Social Credit teaches, that the primacy of the human person will be rigorously respected and that the goal of the economy is that the products meet the needs of the human person. The call of John Paul II at the 6th Conference of the United Nations on Commerce and Development in Geneva in 1975 is pertinent: “A structural reform of the world financial system is without a doubt one of the most urgent and necessary initiatives.”

We also see in that in respect of the principle of subsidiarity that it denounces all centralization in its most extreme expression and that the world government rejects the inherent competence of natural and intermediary societies in favor of one State.

The principle of solidarity translates, in the social domain, the duty of love that encompasses each person towards the other. This is why Benedict XVI spoke about the globalization of love.

The conclusion of the study of the Commission of the nine theologians mandated in 1939 by the bishops of the province of Quebec in Canada, on Social Credit of the Church, clearly understood that this philosophy is in tune with the social doctrine of the Church. It is a technique to attain and guarantee to each person in society, an earthly joy, a foretaste of the eternal joy with God. It is the mission of the Church in society, in the name of God, for the salvation of all men.

On April 5th, 2011, all of the archbishops, bishops, priests and laity who participated in the seminar also participated in the Eucharistic celebration in the parish church in Rougemont; the closing was presided over by Most Rev. Francois Lapierre, bishop of St. Hyacinthe. At the end of the Mass, the bishops had an exchange with their colleague from St. Hyacinthe in the House of St. Michael and shared a meal with the pastor of Rougemont, Fr. Gerald Ouellette.

Fr. Felicien MWANAMA G.

Reporter of the seminar