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Social Credit: Exact, Logical and Humane

by Louis Even Money without Inflation
Social Credit operates with realities. It refuses to The present financial system is vulnerable to in-
be hypnotized by ‘the halo’ with which finance has flation. Inflation means that prices increase.
been surrounded. As money is only created when a loan is issued,
The economic realities are, on one hand, produc- thereby creating a debt, it is essential that ways be
tion (not only the existing production, but the produc- found to extract from the purchasing public more
tion immediately possible; the capacity for produc- money than was initially put into circulation, in order
tion) and on the other hand, human needs. to repay the original debt plus the interest on the debt.
Social Credit gives priority to the realities over Taxes are added to prices which serve to diminish pur-
the financial representations that are not realities. chasing power. Prices are increased all the way down
The financial representations must faithfully conform in the productive process because not only the money
to the realities. Social Credit accomplishes this feat. to pay for manufactured goods must be recouped, but
also the interest on loans must be conjured.
Real Credit and Financial Credit Social Credit would suppress this cancer, this
This is why Social Credit distinguishes between ‘tumor on prices’, since production results in an in-
two terms: Real Credit, the reality, and Financial crease in wealth, and not in an increase in indebted-
Credit, the representation. ness.
The word ‘credit’ comes from the Latin word Prices paid by purchasers would be lowered. The
‘credere’ and carries the idea of confidence. Even in basis for this feature is that the community must only
everyday language, when we give credit to someone pay for what is consumed; not for all that is produced.
are we not saying we have confidence in that person? For example, if the consumption of the entire popu-
Social Credit states that the Real Credit of a nation lation was only equal to three-quarters of that which
is what inspires confidence in that nation; confidence was produced, purchasers would only pay three-quar-
that one can live there without too much difficulty. ters of the accounting prices. The National Credit Office
The Real Credit of a country is its productive capacity, would take responsibility for financially compensating
which is described as the ability to produce and de- producers so that their entire price was paid.
liver goods to meet the needs of the population. This means that the amounts included in prices,
Social Credit expects that Financial Credit will but which have not reached the hands of the public,
exactly represent Real Credit. It is therefore the pro- or have been placed either in savings or investment
ductive capacity that must determine and drive the rather than toward the purchase of the production,
movement of finance. It is absolutely not correct that would be replaced or compensated by the National
finance either commands, paralyzes or limits the cap- Credit Office to the benefit of consumers. This sys-
acity for production. tem would prevent the accumulation of products in
This is why Social Credit demands the establish- the face of a population’s unmet needs. Additionally,
ment of an Office of Credit which would keep an ac- the mechanism would reduce prices and therefore
count of national (or provincial) credit. Any produc- eliminate any inflationary pressure.
tion, whether of consumer goods or capital goods, A Dividend to Everyone
would be recorded as an increase in wealth. All
consumption (including destruction and deprecia- The periodic Dividend distributed to each person
tion) would be entered as a decrease in wealth. The in the nation is a central Social Credit feature. It, too,
change in the nation’s or province’s wealth would conforms with economic realities.
be calculated by a simple calculation: Production - The abundance of modern production is in-
(minus) Consumption = Net Wealth. creasingly the result of applied science, inventions
There are exceptional cases in which a country and improvements in production techniques. These
lives at the expense of another. Generally, however, factors constitute a community good: a heritage in-
production surpasses consumption and nations be- creased and transmitted from one generation to the
come more prosperous over time. It is therefore il- next. Modern production is less and less the result of
logical to say that a nation is ‘going into debt’. Public the labour of one individual.
debts are an absurdity. Expecting to distribute the ample production by
When a country is increasingly prosperous, its way of the wages of human labour is therefore con-
citizens must certainly benefit. Social Credit recog- trary to the facts. It is impossible. The money distrib-
nizes this when it advocates a Dividend to all instead uted as recompense for work will never buy the prod-
of debts and taxes to everyone. ucts whose prices contain other elements. u

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