The end of economics: goods must meet the needs of individuals

Since 2006, study sessions are organized in Rougemont on economic democracy (or social credit), seen in the light of the social doctrine of the Church. This teaching is given by Alain Pilote, who used the writings of Louis Even to make a summary of the financial proposals of C.H. Douglas in a few lessons.

The lessons of these sessions are reproduced in the book "Economic Democracy", which can be ordered from our office, and is also available on our website. Here are excerpts from the first lesson:

by Alain Pilote

Ends and means

When one speaks of economics, one must first distinguish between ends and means. Furthermore, means are to be subordinated to ends, and not the opposite.

However, in the running of public affairs, means are often mistaken for the end. And we find ourselves amazed by the resulting chaos. According to you, what is the end of economics:

A. To create jobs?

B. To reach a favourable balance of trade?

C. To distribute money to people?

D. To make the goods that people need?

The correct answer is D. Yet, for most politicians, the end of economics is to create jobs. But jobs are just one means to make products, the objective sought, the true end of economics. Today, thanks to the heritage of progress, goods can be made with less and less labour, leaving people with more leisure time to invest in other activities such as taking care of their families or accomplishing other social duties.

Besides, what would be the point in continuing to make a given good when human needs for this good have been satisfied? This would lead to a useless waste of natural resources. And if we insist on full employment, what will become of those who cannot be employed in the production system: the handicapped, the elderly, the children, the housewives—should they all starve to death? Not all human beings are producers but all are consumers.

With respect to B: If you submit the following expression to a reality check, you will see that a favourable balance of trade, where you export to other countries more products than you import from them, means that you will end up with fewer products in your country and therefore be poorer in real wealth.

Many may be tempted to answer C, for it seems obvious that money is a necessity of life in a modern society unless you be self sufficient in all things— which is the exception in today's society, with its division of labour where one person is the baker, another the carpenter and so on, each one accomplishing a specific task and producing specific goods.

Money is a means of acquiring products made by others. Take note: It is a means, not an end! First, goods have to be made and put up for sale on the market. If there are no products for sale, money would be worthless and of no use. What would be the purpose of having a million dollars if you end up at the North Pole or in the Sahara Desert with no products to buy with your million dollars? Now, compare this situation to that of a man, without a penny, but who lives on an island that has all the water and food he needs to live comfortably. Of the two, who is the richer?

Let it be said once more, and later explained, that money is not wealth but a means to obtain real wealth, i.e products.

Let us not mistake ends for means. The same can be said of systems. Systems were invented and established to serve man, not man created to serve systems. Therefore if a system is harmful to man, must we allow the multitudes to suffer for the system, or should we alter the system so that it will serve the multitudes?

Since money was established to facilitate production and distribution, do we have to limit production and distribution to money, or do we need to relate money to production and distribution?

From whence we see that the mistaking of ends for means and means for ends, and of subordinating ends to means is a gross and widespread error that causes much disorder.

The end of economics

The word economy is derived from two Greek roots: oikia, house; nomos, rule. Economy is thus concerned with the good administration of a home, with the orderly use of its possessions.

We may define domestic economy as good management of domestic affairs, and political economy as good management of the affairs of the larger communal home, the nation.

But why "good management"? When can the management of the affairs of the small or large home, the family or the nation, be called good? When it reaches its end.

A thing is good when it attains the results for which it was instituted.

Man engages in different activities and pursues different ends, in different orders, in different domains.

There are, for example, man's moral activities, which concern his progress towards his final end. Cultural activities influence the development of his intellect, the ornamentation of his mind, the formation of his character. In partaking in the general good of society, man engages in social activities.

Economic activities deal with temporal wealth. In his economic activities, man seeks to satisfy his temporal needs.

The goal, the end of economic activities, is therefore the use of earthly goods to satisfy man's temporal needs. And economics reaches its end when it places earthly goods at the service of human needs.

Man's temporal needs are those which accompany him from the cradle to the grave. Some of which are essential, others which are not as vital.

Hunger, thirst, bad weather, weariness, illness, ignorance, create for man the need to eat, to drink, to clothe himself, to find shelter so as to warm or cool himself, to rest, to take care of his health and to educate himself: Needs, all of the above are needs.

Food, drink, clothing, shelter, wood, coal, water, bed, medications, a teachers'lessons, book: Each is a good to satisfy a particular need.

To allow goods to satisfy needs — this is the goal, the end of economic life.

If it does this, economic life reaches its end. If it does not do this or if it does it poorly or only partially, economic life fails to reach its end or reaches it only imperfectly.

In everyday language, it could be said that economics reaches its end when it is sufficiently well regulated for food to enter the hungry stomach, for clothes to cover the body, for shoes to cover naked feet, for a good fire to warm the house in winter, for the sick to receive the doctor's visit, for the meeting of teachers and students.

Morality and economics

Although economics is responsible for the sole satisfaction of man's temporal needs, the importance of sound economic practices has been stressed, time and time again, by those in charge of souls. Saint Thomas Aquinas reminds us that a minimum of temporal goods are normally required to foster the practice of virtue. We have both a body and a soul, both material and spiritual needs. As the saying goes: "Words are wasted on a starving man." Missionaries in poor countries know this. They must first feed the hungry before preaching the Good Word. Man needs a minimum of material goods to accomplish his short pilgrimage on earth and to save his soul. A money shortage can cause inhuman and catastrophic situations.

This led Pope Benedict XV to write: "It is on the economic field that the salvation of souls is at risk."

And Pius XI: "It may be said with all truth that nowadays the conditions of social and economic life are such that vast multitudes of men can only with great difficulty pay attention to that one thing necessary, namely their eternal salvation." (Encyclical Letter Quadragesimo Anno, May 15, 1931.)

In the same encyclical, Pope Pius XI summarizes the social and very human end of the economic order:

"Only will the economic and social organism be soundly established and attain its end when it secures for all and each those goods which the wealth and resources of nature, technical achievement, and the social organization of economic affairs can give."

ALL (individuals) and EACH (individual). THOSE goods that nature and industry can provide.

The end of economics is therefore the satisfaction of the needs of ALL of the consumers. The end is consumption. Production is but a means to reach an end.

Limiting economics to production only is to cripple it. Economics must not finance production only; it must also finance consumption: Production is the means, consumption is the end.

A truly human economy is social: it must satisfy ALL men. It must allow all men, ALL and EACH, to give their orders to the production of goods — at least until their basic needs are satisfied, for as long as the productive system is capable of answering these orders, i.e until it has reached its capacity.

The policy of a philosophy

Social Credit is not an utopia, but it is based on a proper understanding of reality, on the proper relationship between man and the society in which he lives. In Clifford Hugh Douglas' words: "Social Credit is the policy of a philosophy."

A policy is the actions we take to attain a goal, and this policy is based on a conception of reality, that is, upon a philosophy.

Social Credit proclaims a philosophy that exists since men have lived in society, but which is totally ignored in practice, more so now than ever.

As old as society itself, and therefore as old as mankind, this philosophy is the philosophy of association. Or as the Church's social teaching would put it: The philosophy of the common good.

The philosophy of association is therefore: The association of all the associates for the benefit of all of the associates, of each associate. Social Credit is the philosophy of association applied to society as a whole, to the province, to the nation. Society exists for the benefit of all of its members, for each and every one.

Social Credit is the doctrine of society for the benefit of all citizens. This is why Social Credit is, by definition, the opposite of any monopoly, whether it be economic, political, for prestige, or for brutal force.

The aim of Social Credit is to "bind back to reality" or "express in practical terms" in today's world, and especially the world of politics and economics, those beliefs about the nature of God, of man and of the universe which constitute the Christian Faith as handed down to us by our ancestors, and not this new version, altered and perverted to suit modern politics and economics.

God's laws and human laws

Men live in society, in a world submitted to God's laws: The laws of nature (the physical laws of creation), and moral laws, given by God and inscribed in our hearts (the Ten Commandments). The acceptance and knowledge of these laws implies recognizing the consequences of violating them.

To accept Natural Law is to recognize an inescapable reality: That all people, individually or collectively, are subject to Natural Law. Every event that occurs in the physical realm is proof of the existence of physical laws that regulate the universe. For example, if a man jumps out of an airplane, he does not break the law of gravity… he only proves its existence. This observation applies to all laws.

These laws of nature, created by God, may not be abrogated by man; they cannot be disobeyed. We cannot avoid the sanctions that occur from their violation.

The chains individuals have forged for themselves (agreements, associations, man-made laws) are optional, whereas Natural Law and its consequences are inescapable.

Money is a man-made system, not a system created by God or nature: it can then be changed by man. The equilibrium that exists between all living things, the environment, cannot be broken without consequences. If we make products without respecting the environment, if we pollute the planet and waste the resources given to us by God, we have to suffer the consequences.

Social Credit: the confidence that binds society together

In his book entitled What is Social Credit?, Geoffrey Dobbs wrote: "The social credit (without capital letters) is the name of something which exists in all societies but which never had a name before because it was taken for granted. We become aware of it only as we lose it.

"'Credit' is another word for 'faith' or 'confidence', so we can also call it the faith or confidence which binds any society together — the mutual trust or belief in each other without which fear is substituted for trust as the 'cement' of society... Though no society can exist without some social credit, it is at its maximum where the Christian religion is practised, and at its minimum where it is denied and derided.

"The social credit is thus a result, or practical expression, of real Christianity in society, one of its most recognizable fruits; and it is the aim and policy of social crediters to increase it, and to strive to prevent its decrease. There are innumerable commonplace examples of it which we take for granted every day of our lives. How can we live in any sort of peace or comfort if we cannot trust our neighbours? How could we use the roads if we could not trust others to observe the rules of the road? (And what happens when they don't!)

"What would be the use of growing anything in gardens, farms, or nurseries if other people would grab it? How could any economic activity go forward — whether producing, selling, or buying — if people cannot, in general, rely upon honesty and fair dealing? And what happens when the concept of the Christian marriage, and the Christian family and upbringing, is abandoned? We see, do we not? — that Christianity is something real with desperately vital practical consequences, and by no means a mere set of opinions which are 'optional' for those to whom they happen to appeal."

In Paragraph 32 of his Encyclical Letter Caritas in Veritate, published in 2009, Pope Benedict XVI used the words "social capital" to describe this confidence that binds together all the members of society: "Social capital, that is to say, the network of the relationships of trust, dependability, and respect for rules, all of which are indispensable for any form of civil coexistence... This calls for a new and deeper reflection on the meaning of economics and of its finalities."

One could add that without this respect of the social credit, of the laws ruling society, any life in society would become impossible, even though you put a police officer on every street corner, since you could not trust anybody.

Social discredit

Mr. Dobbs continues: "Just as there are social crediters, conscious and unconscious, trying to build up the social credit (the confidence that we can live together in society and benefit from it), so there are others — social discrediters — trying to destroy it and break it down, at present with all too much success. The conscious ones include the Communists and other revolutionaries, who quite openly seek to smash all the links of trust and confidence which enable our society to function until the Day of the Revolution dawns... But it is the unconscious social discrediters who are responsible, in the West, for the present success of the conscious ones....

"So now at last I have come to the question of money, which is what some people think that Social Credit is all about; but it isn't! Social Credit is an attempt to apply Christianity in social affairs; but if money stands in the way, then we, and every Christian, must concern ourselves with the nature of money, and just why it stands in the way, as it surely does.

"There is a dire need for more people to look deeply into the operation of our monetary system, though that is not everyone's job. But when the consequences are so desperate, everyone can at least grasp the outline of what is wrong, and could be put right, which will enable them to act accordingly..."