Economic Democracy was conceived in 1917

Every year on September 29^th we remember C. H. Douglas, the founder of the school of thought known as Economic Democracy. Douglas passed away in 1952 on this feast day of Saint Michael the Archangel.

Douglas, an engineer and economist, who developed the financial system named Economic Democracy died at his home in Fearnan, Scotland at the age of 73.

Who was Douglas and how is it that he addressed the issues of money and credit?

Born in Scotland in 1879, he graduated from Cambridge University with an honours degree in mathematics, and made engineering his profession.

For a period of time, Douglas worked for the Westinghouse Company in the United States. Later he was sent to India, then a British colony, as Chief Engineer for the English branch of the company. He would later work in South America as Assistant Chief Engineer for the Buenos Aires & Pacific Railway.

Upon returning to England, he became Chief Engineer for the construction of the Post Office's electrical tube railway in London. During World War I, he was Assistant Superintendent of the Royal Aircraft Factory in Farnborough, England.

After the war, Douglas ran a small yacht-building yard in which he was helped by Mrs. Douglas, who was also an engineer.

Throughout his career, Douglas tackled and solved problems of a physical nature. However, he observed that even when there was a solution to a physical problem, many projects were halted because of purely financial considerations. That realization brought his engineer's mind to the study of financial questions.

In an address to members of the Canadian Club in Ottawa in 1923, Douglas explained how he was led to explore why and how a financial system could act like a very sick patient or an accomplished criminal.

While in India around 1908, the government asked him to survey the hydro-electric potential of a large territory. He found a great potential for water power, reported his findings, and asked what must be done next. Good, they said. But nothing was done, as there was no money!

Douglas found that conclusion unacceptable. This was at a time when manufacturers in Great Britain were finding it hard to obtain orders, and machinery was affordable. It was also a time when India needed electrical power. But the reasoning that the country had no money to develop its potential was a perfect example that something that was physically possible and desirable was paralyzed by limitations that were only financial.

Around that time, Douglas dined frequently with J.C.E. Branson, India's Controller General. Branson often discussed something he called "credit". Treasury officials in both India and Britain persisted in melting down and recoining rupees according to the "quantity theory of money". Yet, insisted Branson, silver and gold had nothing to do with the situation; it was almost entirely dependent upon credit. Douglas subsequently remarked that had he been given a short lecture on Mesopotamia, it would have been, at that time, just as intelligible. Nevertheless, Branson's ideas were pigeonholed in his mind.

Shortly before the First World War, Douglas was hired by the British government to build a railway in London for the Post Office from Paddington to White Chapel. There were no physical difficulties in realizing the project. All went well until he suddenly got the order to suspend work and pay off the men. Always for the same reason: insufficient money.

During the war, he was sent to the Farnborough Royal Aircraft Works to sort out an accounting muddle. It was not long before he determined that each week the cost prices of the goods produced were greater than the income distributed to workers in the form of wages and salaries. Prices were not in accordance with purchasing power! If this were the case in all industries, as he soon found out, how could the sum of wages pay for the prices of production?

Douglas also identified that once war was declared, there no longer existed a lack of money. He concluded there was nothing sacred about money. Money could appear all of a sudden, and all that was physically possible could indeed be made financially possible at all times, as was the case during the hostilities.

Douglas decided to articulate the defects of the financial system and formulate principles to fix it. Hence, the monetary reforms known as Social Credit [a term now co-opted by the CCP], or Economic Democracy, was developed.

An efficient weapon against communism

It is not my purpose to explain here the system that Douglas devised. In recalling his memory, I would like to show how Providence used him to give the world an efficient weapon to fight against communism and socialism in the temporal realm.

Communism is the most terrible plague mankind has ever experienced. It shows no respect for any value. For it, God does not exist. For it, the soul does not count. For it, man is nothing but a tool to be exploited and done away with. Communism rejects the right to property. It abolishes every freedom, tramples the right to life, as well as all rights and moral values while it pursues its ends.

It was in 1917 that, through a revolution, communism seized power in Russia: not to confine itself there, but with the intention of taking over the whole world by any means, whether legitimate or not, hypocritical or violent.

Against this conspiracy, God, in His goodness, and despite the sins of today's world, deigned to give us, from the start, a sovereign remedy. It is in that same year, 1917, that Our Lady brought her message to the three children of Fatima, ordering them to pass it on to the world: Stop offending God; pray many rosaries; do penance while observing the duty of one's station in life; consecrate oneself and the world to the sorrowful and Immaculate Heart of Mary and receive Holy Communion in reparation on the First Saturdays. If her message was answered, Mary promised that Russia would be converted. If not, the errors that dominated Russia would spread throughout the world.

This is the transcendent message which, had it been put into practice, would have saved the world from the vast expansion of communism in the past century, especially since the Second World War.

But in the temporal realm, Heaven deigned likewise to put into our hands, through Douglas, new knowledge that would be used to answer the economic and social arguments of the communists when they denounce existing evils in order to serve us their poison.

It was in 1917 that Douglas completed the observations and studies needed to finalize the system he described in his first book, titled Economic Democracy.

Douglas did not aim his study expressly against communism; he simply sought to correct what was wrong and tyrannical in the present financial system. But the implementation of the principles of Economic Democracy in economics and finance would replace an error by a truth and slavery by freedom. It so happens that truth is the means by which error is destroyed, and freedom the means to escape tyranny. Communism is a lie and a tyranny, and Economic Democracy strikes it head on.

The very guarantee of a Dividend to each individual, not bound to employment nor to any other condition, would render the forced recruitment of the communist economy impossible.

Besides, communism uses the struggle between classes and the denouncing of capitalism to win over the working classes. But Economic Democracy considers that everyone is a capitalist: all people are co-owners for life of the natural resources God placed on the earth, the true capital without which neither dollars nor manpower could produce anything. We are each co-heirs of the discoveries, inventions and technological improvements that were developed and passed on from generation to generation.

All would be entitled to the Dividend of a capitalist, on top of what they could earn by taking part in the exploitation of this huge common capital. What kind of class war, what kind of communist propaganda could survive a society where everyone is a capitalist, where everyone can access their generous share of the fruits of production?

If Economic Democracy has not yet prevailed in our economy it is because those who are in command, the dictators of finance, do not want to lose their power of domination. It is because a whole series of lackeys and footmen, politicians, elites, people with cushy jobs, with titles, Mammons of all kinds, hang on to what they have more than others who are less privileged. And they grovel to keep their advantage rather than stand up and demand the correction of a system that is hardly less odious than communism.

Fatima and Economic Democracy

But, welcomed or not, the light of Economic Democracy goes on shining. And the MICHAEL journal continues to form patriots and apostles to spread the truth. They are too aware of its possibilities to minimize its value.

In no way does this prevent the Social Crediters of our Movement from ranking Mary's message at Fatima first. Although they are of a different nature, Fatima and Economic Democracy go well together. Both answer a need for our times. With Fatima, it is Heaven which speaks to us directly; it is Mary who tells us what she wants of us; it is Mary telling us what she will obtain if we are faithful to her requests. This does not free man from the duty to resort to the knowledge and truths that are available to his mind. Economic Democracy is one of these great lights, one of those key ideas which, once acknowledged and put into application, can greatly contribute to the sound progress of civilization.

Anyone who studies Economic Democracy with an open mind and is open to the truth, feels more at ease with it than with the contradictions, distortions, falsehoods, and more, of the teachings which now prevail in our universities regarding finance and the distribution of goods that answer human needs.