Social Crediters are dedicated because they understand the importance of the reform they preach. The implementation of Social Credit would mark a milestone in history. Social Credit lays out a new conception of finance, of the monetary system. Social Credit would liberate society once and for all from purely financial problems. Social Credit would make every human being benefit from progress; it would turn every citizen into a shareholder and heir to a part of his country’s production.
Production financed automatically
Today, when money is lacking, we stop producing, even if there are urgent needs. People are laid off. Everything stops.
Today, when money is lacking, municipalities set aside urgent works asked by the people, even though there exists all that is needed, men and materials, to carry out these works.
Today, when money is lacking, construction slows down or stops even if there are homeless families and even though bricklayers, carpenters and plumbers are waiting impatiently for a job.
Social Credit changes all of this radically. Social Credit rejects this subjection to finance. It proclaims to the whole world:
It is money that needs to be issued according to actual and potential production, and not for production to be limited by money.
Real things make up production: houses, food, clothing, shoes and transportation. There are also: water systems, sewers, streets, sidewalks, as well as schools, hospitals and churches.
But what is money? It is an abstraction and not something real. Money is numbers on a metal disc, or on a square piece of paper, or in a bankbook. Numbers that are accepted as a means of payment.
Since they are a means of payment, if one wants production to go ahead, these figures must be issued according to products, and not products be limited by the lack of figures.
Lacking workers or materials to make things may be understandable. But lacking figures to mobilize workers and materials is both incomprehensible and inadmissible in a society made up of intelligent beings.
Turning money into a servant
Social Credit takes the sacredness out of money. It turns money into a simple servant. No longer a master, a god that dictates, permits, or forbids.
Social Credit maintains that: All that is physically possible and legitimately required, must be made financially possible.
If it is possible to build houses, to build roads and aqueducts, it must be made financially possible to pay for the work and materials needed to build these things.
Otherwise, it is the financial system which rules over men, instead of men who rule over the financial system.
And since money consists of nothing more than engraved or printed numbers, or figures written in a bank ledger, it is more than absurd, more than senseless, it is criminal to let families go homeless, towns without public utilities, simply because of a lack of figures.
A sound financial system
Under a Social Credit system: All new production would be financed by new credits and no longer by production that has already been made. And the credits thus issued according to the rate of production would be withdrawn and cancelled at the rate of consumption.
In other words, the money system would be a mere bookkeeping system, but one that is precise, in keeping with facts. Money would come into being as production is made, and money would disappear as production disappears.
Thus, under a Social Credit system, there could be no public debt. What a country provides is real wealth: why then should this wealth be represented as a debt? How is it possible for a country to be burdened with debts for such production, unless its roads, its aqueducts, its sewers and public buildings were built by a foreign country?
Depressions, privations in front of possibilities, are the fruits of a false financial system which dominates instead of serving. And these bad fruits would disappear under a sound financial system, under a Social Credit system.
Financing distribution adequately
Financing production is not enough. Goods and services must also reach those who need them. In fact, the only reason for the existence of production is to answer needs. Therefore, products must be distributed. How are they distributed today, and how would they be distributed under a Social Credit system?
Today, goods are put up for sale at set prices. People who have money buy these goods by handing over the required sum. This method allows those who have money to buy the goods that suits them.
Social Credit would not upset this method of distributing goods. This method is flexible and efficient provided, of course, that individuals who have needs also have the puchasing power to choose the goods that answer their needs.
Purchasing power in the hands of those who have needs: This is precisely where the present system fails, and this is the defect that Social Credit would correct.
When production is financed, it functions. When it functions, it distributes money which is used to finance it.
The money thus distributed as wages, profits and industrial dividends, constitutes purchasing power for those who receive them.
Price adjustment
But, In the first place, industry does not distribute purchasing power at the same rate that it generates prices.
When a finished good is put on the market, it comes with a price attached to it. But part of the money included in this price was distributed perhaps six months or a year prior, or even more. Another part will be distributed only once the good is sold, and the merchant takes his profit. Another part will perhaps be distributed in ten years time, when worn machinery — which wear is included as an expense in the price — is replaced by new machinery, etc.
Then there are those individuals who receive money, and who do not spend it. This money is included in the prices, but it is not in the purchasing power of those who need goods.
The repayment of short-term bank loans, and the present fiscal system, increase further the gap between the prices and the purchasing power. Hence the accumulation of goods, unemployment, and all that ensues.
Well, Social Credit would bring order to this chaos. Since it considers money as a bookkeeping system, it would constantly adjust the sum of the prices and the sum of the purchasing power, so that they would balance. This would involve simple accounting procedures, so that a balance can be achieved.
A dividend to buy the fruit of progress
And in the second place, the production system does not distribute purchasing power to everyone. It distributes it only to those who are employed in production. And the more the production comes from the machine, the less it comes from human labour. Production even increases, whereas required employment decreases. So there is a conflict between progress, which eliminates the need for human labour, and the system, which distributes purchasing power only to the employed.
Yet, everybody has the right to live. And everybody is entitled to the basic necessities of life. Earthly goods were created by God for all men, and not only for those who are employed, or employable.
That is why Social Credit would do what the present system is not doing. Without in any way disturbing the system of reward for work, it would distribute to every individual a periodical income, called a “social dividend” — an income tied to the individual as such, and not to employment.
And the more progress would free people from employment, the greater the part of the dividend to total purchasing power. The dividend would allow everyone to enjoy the fruits of progress. All citizens would be considered as shareholders, being entitled to a share of the abundant production resulting from progress — which is a common capital — and no longer resulting from individual labour, which is rewarded by wages and salaries.
From this would stem freedom, the freedom for individuals to develop as human beings, without being constantly obliged to seek employment, to produce superfluous goods, or to make those things which serve to destroy, as in the war industry.
It would also put an end to the perpetual worries about the next day, in a country where one is certain that goods will be as abundant tomorrow as they are today. What a relief in the lives of individuals and families!
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