We have heard often enough of a national debt, and of taxation to meet the yearly requirements of the debt. But it took Social Credit to turn the whole notion over, and not only to rise against debt and taxation, but to demand dividends for all. What exactly do you mean by a dividend?
A common labourer may ask the question. A capitalist would not. The capitalist knows perfectly well what a dividend is. The worker knows better what wages are.
But dividends do not exclude wages or salaries. And wages or salaries do not exclude dividends. Industry distributes both; and both may be received by the same person.
Mr. Jones has money. He invests $50,000 in a Company to produce, say chemicals. But he is also employed in the Company's plant, as an executive, a manager, assistant-manager, accountant, or even as a simple mechanic. His employment earns him, perhaps, $4,000 a year. The $4,000 is a reward for his work in the plant.
The fiscal year of the company comes to a close with a profit. After allowing for depreciation, miscellaneous charges and a prudent reserve, the company declares a dividend of 6 per cent on all paid investments.
This 6 per cent will bring $3,000 to Mr Jones. The $3,000 is not a reward for his work, but a return on his $50,000 investment.
Mr. Jones gets both: his salary and his dividend, because he is both a worker and a capitalist.
Salaries or wages are tied up with employment. Dividends are not tied up with employment, but with productive capital.
Mr. Jones might choose to be only an investor. He might never put his foot in the plant. He might in fact be resting in Florida, or cruising around the world, while others do all the work in the company's service. These others will be paid wages, not Mr. Jones. But if the operation of the company net the same profits, Mr. Jones will receive the same dividend: $3,000.
That is pretty well known. And in many quarters, this distribution of dividends to the idle rich is severely blamed, when the poor can hardly get a decent living on their hard-earned wages. And now, you, Social Crediters, come with the idea of dividends to all, whether they work or not. Are you serious?
We surely are. And we stand on good ground, too.
Socialists, communists, class agitators, howl against dividends, against capitalists, against the rich, the parasites, who fatten on the sweat of the poor.
Social Crediters view things in another light. They do admit the right of the labourer to an equitable reward for his time and efforts. But they maintain also the right of the capitalist to his dividend.
This stand taken, they go much further, because they have a far wider view of true capital. And they add: Every man is a capitalist; every citizen is owner of a productive capital; and therefore, every citizen, whether employed or not, should receive dividends proportionately to the part of production dependent upon this capital.
While communism tears down capitalists and makes everybody a proletarian, Social Credit raises everybody to the status of a capitalist entitled to dividends.
Do I understand you well? Do you mean that I myself, who never invested one cent in any producing enterprise, am just the same a capitalist entitled to a dividend?
Exactly so. You are à capitalist and should receive dividends. And your wife also. And every child of yours also. Myself too and my wife, my children. And every member of every family. Not excepting the ragged beggar, reduced to live on a crust of bread and a bowl of soup. And if that dejected man received the periodic dividend to which he is entitled, he could wear better clothes, eat better food, and be quite a different type of individual all around.
Wonderful as an Aladdin's lamp! But sounds too much like another tale of the Arabian Nights, indeed...
Not a tale, sir. But a fact. And you will hold the same view if you admit two statements:
Take the case of a farmer. He may possess strength, skill, knowledge and good will. But what can he make out of these assets if he has no farm? Place him on a square of asphalt in a city: his skill, knowledge and efforts won't grow a carrot. But give the farmer a piece of land. This is for him a first capital, and he can begin to produce. Add tools, a plough, a pair of horses. With this much new capital, his production will increase. Bring in electric power, motors, a tractor: our man will produce still more, even with less labour. The capital does the trick.
His capital! Not his money. Money does not plough, does not sow, does not weed, does not reap. Money is just a token which, in the hands of the farmer, would enable him to obtain the capital, the real capital, the means of production.
So much for the notion of capital. And now, what about inheritance?
You know Charlie Kelly, the farmer beyond the bridge that spans the Willow River. His farm was just a stretch of forest a hundred years ago, when the first Kelly came over, felled the first tree, cleared the first acre, put up the first cabin.
The pioneer's son, Charlie's grandfather, enlarged the homestead, raised a herd of cattle, erected barns, built a real house for his family.
The third Kelly improved the fields, the stock and the buildings, leaving the whole to the Kelly you know. Charlie gets from his farm, with even less labour, far more than did his ancestor; he reaps the fruit, not only of his own work, but of a capital built up by three generations of Kellys.
Who will go and tell Charlie: "You are not the one who built up this farm; it is not the fruit of your own labour; it does not belong to you."
No, of course. The heir's rights are still recognized in our civilization, even if today's governments are prompt to filch a portion of the earthly wealth left by the industrious man who is laid in the grave.
All that is O.K. But I do not see how every body owns capital, even what you rightly call real capital, a factor in production. And how then can everybody claim dividends?
Come with me into this processing plant.
You see some men at work. But you see also quite an array of machinery.
And those machines, which turn out production unceasingly and untiringly, are not run by hand. Not even by horses. You see the motor by each one: rather small, but how powerful!
Motors are capital, here, just like horses on the farm. And the machines also are capital. A productive capital. Some of those machines do the work of ten, fifteen, even twenty men, without resting for meals or for sleep.
Machines are capital. Very well. But they are the property of the company. They are private capital. They do not belong to you, or to me, or to the whole community.
We all agree on what I would call the material element of the machinery.
But in this machine, in this motor, there is the application of acquired knowledge. Without that knowledge, you might assemble pieces of metal, get a heap of steel, but no useful device.
The company has bought and paid for the machine. But it never paid for the scientific development without which none of these machines would have been possible.
This knowledge is an enrichment, ever growing, transmitted from one generation to the next. It is a common inheritance, from which all living persons of the present generation should draw some benefit.
***
This motor is kept running by an electric current generated from a waterfall. Who made the waterfall? Who feeds the water from the sea back to the mountain, to keep the waterfall in action? This waterfall is capital, permanent capital; and it is surely a common capital. In Canada, waterfalls are natural resources of the Provinces. So, each citizen of the province should have a share in the production derived from this common capital; without denying the reward to labour and other factors contributing to render this capital productive.
Speaking of the waterfall, why is a waterfall capital today, whereas it was just an obstacle to the canoe traffic of our ancestors?
The waterfall is capital today, because, some 125 years ago, men, learned to transform the power of a falling mass of water into electric current.
This was not discovered without previous scientific acquisitions. Nobody was starting from zero...
Of course, the work of engineers and labour is required to install the hydro-electric plant and generators. And this work is compensated for in salaries and wages. But what of the part played by the accumulated scientific knowledge involved? Who can say that this factor belongs to himself exclusively?
***
Modern possibilities of production are enormous, compared to the possibilities of only a few decades ago. This is, by far, more the result of progress than the result of increased skill or efforts on the part of labour. Oh! surely, the contribution of labour is still here, but the contribution of progress is a bigger factor. Now, progress is not private capital; progress is a common inheritance, common capital.
This common capital, an increasing factor in production, must earn some dividends for all, since it is a common good.
We cannot conceive of a child being materially neglected in a rich family. Why should any citizen be totally neglected in an age and a country where goods are abundant?
But is it not the task of every one, through his own efforts, to draw for himself a share of the fruits of progress?
Say that to the increasing number of those whom the modern methods of industry leave without any means of production of their own. You might as well advise a man without a square inch of land to avail himself of the fertility of the soil.
The fact that modern means of production are more and more concentrated in ever larger units, entrusted to a decreasing percentage of the population, gives more weight to the demand of a dividend for all.
Mass production is a fruit of technical progress. If this mass production does not favour the distribution to all of the means of production, a redeeming element is proposed under the form of a dividend to all, granting to all, a claim on a share of the products. i
Such a novel idea! But it looks logical enough, the way you put it before me.
And I might well bring other arguments to support the demand of a dividend to all?
You will admit that the Earth and its riches have been created for all men. Not for some only. Not for a class only. For all men.
But God, the Creator of all goods, leaves to men themselves the care of devising the means to allow every one his share of the goods.
In our present economic order, not all have means to get their share of goods created for all men.
Without upsetting anything, Social Credit introduces this effective device: a dividend to all.
Who has ever offered anything better, covering the demands of all without exception?
***
There are perhaps people who will deny the right of every one to a share of earthly goods, to at least the necessities of life. They will admit this right for the prisoner, not for the man at liberty.
Well, even outside of this consideration, the dividend to all comes as the only solution to a modern problem: How to distribute mass production which wages, salaries and industrial dividends cannot buy? It is a fact that the sun of wages and salaries cannot buy the sum of prices. And if you increase wages and salaries, you increase the prices, leaving the problem unsolved.
Some other source of income has to be distributed without adding to the prices. This means additional money not attached to employment.
Such money, not being the reward of employment, cannot go to some in particular. It must of necessity go to all.
The Social Credit dividend to all solves the problem.
More will be said on this interesting subject in future issues of this paper.