Page 19 - Michael 2024 March

Douglas found defects in the

workings of the financial sys-

tem. He developed principles
to rehabilitate capitalism so
that it would be a servant of

the people and society alike.

Marxism and Fabian Social-
ism are tyrannical forms of
managing economies and

populations, and cannot com-

pete with Social Credit.

several of his assertions. For instance, the gold stan- Credit
dard as a basis for the volume of money is no longer Douglas exposed the defects of the present cap-
considered viable. Another abandoned sacred cow italist system and flaws inherent in the bookkeep-
is the “balanced budget”. Orthodox economists ing of the price system (even when the bookkeeping
advanced this idea as if it was a matter of life and was accurate). He recognized that ends and means
death, but if governments did not have recourse to in the realm of economics were inverted, and illus-
deficit spending, economic life would be choked in trated that these various defects interfered with the
the current system. good functioning of the economy and society. He
When governments are in trouble, they borrow indicated that capitalism could be rehabilitated to
from Douglas’ teaching but marinate the principles make it a servant of individuals and society alike in
in the stew of the extant financial system, such as a system that would liberate all, as opposed to the
in the case of balanced budgets and the head chef, popular models of Fabian and Marxist socialism.
John Maynard Keynes. Consider that the creation of Social Credit would make these tyrannical schemes
community assets, such as infrastructure and public pathetic contenders.
projects, results in public debt: a distortion of reality This article will cite some of the discoveries that
as schools, hospitals and roads are public assets! brought Douglas to the Social Credit proposals.
Students of Douglas’ teachings must acknowledge The first concerned credit. He had been routine-
reality, and not simply accept that a proposal for ly stymied from completing engineering projects
social security measures is a step toward a Social due to a lack of financial credit. These projects were
Credit economy. needed by the population and were physically pos-
A tranquilizer may relieve suffering but it does sible to complete (i.e. manpower and materials were
not cure pain. This is true for the current financial in ample supply) but were halted simply because
system: there may be medicines to relieve an ache money was lacking. Herein, money assumed magic-
or strain in the system but the sickness remains. al proportions. Its absence or presence affected so-
Instead, we must insist on a Social Credit economy. ciety and peoples’ lives, almost as if it were a natural
In 1917, at Farnborough Aircraft Factory, Doug- phenomenon, like weather or gravity.
las determined the problem with the economic sys- Douglas soon realized that virtually all the
tem and established by his Three Proposals how the money upon which economic life depended is
proper ends of an economy could be met. His first only entries in bank ledgers credited to borrowers.
writings were published in 1918 in the form of arti- These credits circulated via cheques and transfers
cles in various journals and in the economic sections with sums moving from one account to another.
of newspapers. In 1919, his book, Economic Dem- Why must society accept a restricted supply of
ocracy, was published. Other books and pamphlets these credits, when they are necessary to mobilize
followed and he had lecture tours in England, Aus- a productive capacity that exists to meet the popu-
tralia, Japan, Sweden, and Canada. Douglas died on lation’s real needs?
September 29, 1952. Not long afterwards, Douglas determined that
the true basis of all money, whether coins, cash or

www.michaeljournal.org MICHAEL March/April 2024 19