Page 16 - Michael 2024 January

u arise abuses in certain places, there is nothing to a reasonable profit in establishing the accounting
prevent the inserting of protective clauses in the price. The sanction could be the loss of the privil-
procedure. This compensation is instituted to favor ege of the discount, which would have the effect of
society, the merchant as well as the buyer. Society, branding those guilty, in the eyes of the buying pub-
therefore, can demand that the beneficiaries of the lic. v
compensated discount should retrict themselves to Louis Even

A cannot buy A + B “B” payments (those having supplied the raw ma-

Producers must include all their production terials, machinery, etc.) pay wages to their own em-
ployees, and that part of the “B” payments thus be-
costs in their prices if they want to stay in business. comes “A” payments (wages). This does not change
The wages paid to his employees—which Douglas the truth of what has been said earlier: it is simply
calls “A payments”—are only part of the cost of pro- a wage distributed at another stage of production,
ducing the product. The producer also has other and this wage (A) is not distributed without entering
production costs that are not distributed in wages, into a price, which cannot be less than A + B. The
but which he must include in his prices: payments gap always exists.
for materials, taxes, bank charges, machine main-
tenance and replace-
ment, etc. Douglas calls Poor donkey! A longer pole won’t bring the turnip closer!
the payments made to
others “A payments”.
Douglas calls the pay-
ments to other organiza-
tions “B payments”.
The product’s sell-
ing price must include
all costs: wages (A) and
other payments (B). The
product’s selling price
will therefore be A + B.
Clearly, then, wages (A)
cannot buy the sum of
all costs (A + B). There is
therefore a chronic lack
of purchasing power in The Social Credit dividend would increase incomes
the system. without increasing prices nor salaries nor taxes.
When the finished product is offered to the pub- Even if we try to raise wages to catch up with
lic, it comes with a prize. But some of the money prices, the rise in wages will automatically be in-
in that price was distributed perhaps six months, a cluded in prices, and nothing will be settled. (It’s like
year or more ago. Another part will be distributed the donkey chasing the turnip in the cartoon.) To be
only after the product has been sold and the dealer able to buy all the production, therefore, we need
has used his profit. Another part, perhaps in ten additional income outside wages, at least equal to
years’ time, when the machine, whose wear and B. This is what the social credit dividend, granted
tear is included in the price, is replaced by a new every month to every citizen of the country, would
one. And so on. do. (Mind you, this dividend would be financed by
Then there are people who receive money and new money created by the nation and not by taxpay-
don’t use it. (They save it.) This money is in the ers’ money, which would then come from wages).
prices; it’s not in the purchasing power of those Without this other source of income (the divi-
who need the products. dend), there should theoretically be a mountain of
Repayment of fixed-term bank loans and the unsold products in the current system. If the prod-
current tax system further accentuate the mismatch ucts are selling just fine, we’ve got a mountain
between prices and purchasing power. Hence the of debt instead! In fact, since people don’t have
accumulation of products. Hence unemployment enough money, merchants have to encourage cred-
and the rest. it sales to sell off their merchandise. (Buy now, pay
later... in 36 instalments!) v
Some may retort that the companies paid by the A. Pilote

16 MICHAEL January/February 2024 www.michaeljournal.org