Page 21 - Michael 2024 March

Most economists think in terms
of money. Douglas, trained as

an engineer, thought rather in

terms of realities. Money is the
symbol that should reflect real-
ity. The human person comes

before money.

son is entitled to a share in the material goods that a be collectively equal to the collective cash prices for
nation’s economy can provide. The Dividend, issued consumable goods for sale in that country, and such
to each citizen to ensure the basic necessities of life, cash credits shall be cancelled on the purchase of
is an apt “juridical form”. goods for consumption.”
The Dividend is not conditional. It harms no one. Before Douglas’ forumulation, orthodox econo-
Consider the alternative to a Social Credit economy: mists, parroting Say’s Law, said: “Sir, it is so, and it
governments imposing every manner of taxation on has always been the case; the price of any good is the
the population to cope with the festering wounds of sum of the money spent during its production, so the
the present system. total amount of the money distributed to the consum-
Prices ers is always equal to the total of the prices.” Econo-
Douglas wrote that any financial reform that ig- mists have been saying that for over a century, but
nored the issue of prices was doomed to fail. Would facts have shown the contrary for just as long.
reforms that increased consumers’ revenue be bene- Conventional economists do not bother with
ficial if prices also increased? facts; they only repeat axioms. To the contrary,
Purchasing power has two components: money Douglas reviewed the facts and then applied reason
in consumers’ pockets and retailers’ prices. The ratio to construct an explanation. He sought a way to cor-
between these two is important with 1 as the ideal, rect what was correctable. Douglas conceived a tech-
wherein Means of Payment and prices are equiva- nique to prevent inflation, which was caused by price
lent. Douglas’ 1st proposal reads: “The cash credits increases called the Compensated Discount. This will
of the population of any country shall at any moment be the topic of a future article.. v
Louis Even

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Economic
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Seen in the Light of The
Social Doctrine of the Church

Pius XI Pius XII John XXIII Paul VI John Paul II
A study prepared by Alain Pilote
Published by the Pilgrims of St. Michael, Rougemont, Canada

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www.michaeljournal.org MICHAEL March/April 2024 21