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The retail price of products must include all tributed without being factored into a price and the
costs: wages (A) and other payments (B). So, retail price cannot be less than A + B. The gap remains.
prices must total at least A + B. It becomes obvious If one attempts to increase wages and salaries
that wages alone (A) cannot buy the sum of all the in order to catch up to prices, the wage increases
costs (A + B). There is therefore a chronic shortage will automatically increase prices and nothing will
of purchasing power in the present system. have been gained. In order that all production be
When a finished product goes on the market it purchased, an additional income is needed from a
has an affixed price. But a portion of the price might source other than wages and salaries which will be
have been distributed six months or a year earlier. at least equivalent to B.
Another portion will be distributed only when the This is what the Social Credit Dividend would ac-
item is sold and the merchant receives his profit. complish. This monthly Dividend, provided to every
Another part might be distributed ten years from citizen, would be financed with new money created
now, when worn machinery, which is included as an by the nation. Best of all, it would not be generated
expense in the price, is replaced. by taxation.
Some people may receive money and not spend Without the Dividend as another source of in-
it. This money is included in prices but is not part come there should be, in theory, a growing moun-
of the purchasing power of those who need to buy tain of unsold goods. If goods manage to get sold it
goods. is because we are faced with a growing mountain of
The repayment of bank loans over many years debt! Since there is not enough money in the sys-
and the present fiscal system increase the gap tem, retailers must encourage customers to use cre-
between prices and purchasing power; hence the dit in order to sell their goods. “Buy now, pay later”
accumulation of goods, the rise in unemployment, is the byword. But to delay paying for goods will not
etc. solve the purchasing power gap.
Some may argue that the businesses that recei- Progress Replaces the
ved B payments (those that supplied the raw mate- Need for Human Labour
rial, machinery, etc.) had paid out wages to their own
employees, and part of these B payments thus had The second defect with the present system is
become A payments. This changes nothing. This that production does not provide purchasing power
case simply represents a wage dispersed in another to everyone. It distributes it only to those who are
period of production and this A cost cannot be dis- employed. As productive output is enhanced by u

The Social Credit Dividend would increase incomes without increasing prices, salaries or taxes.

www.michaeljournal.org MICHAEL May/June/July 2020 31