Introduction to "Economic Democracy"

"There is always a time-lag of generations between the appearance of a seminal idea, and the possibility of its widespread acceptance by minds which can be opened to it, on a large scale, only by the heavy pressure of events which have been correctly anticipated."

INTRODUCTION

by Geoffrey Dobbs, Bangor Wales. May 1974

It is one thing for the teacher to write a foreword to the pupil's work, as C. H. Douglas once did for mine, and quite another, even twenty-two years after the author's death, for the pupil to introduce the master's; but I am glad to undertake this, not only because it is an honour to be asked to do so by the author's daughter and copy-right-holder, but also because some introductory explanation has now become very necessary for a book written in the idiom of fifty years ago, some of which has been changed or even inverted in meaning, although its substance remains singularly up-to-date and critically relevant to the circum stances of the present day.
Economic Democracy, one of the key books of the Twentieth Century, first appeared serially in the pages of The New Age, beginning in June 1919. That is to say, it was published in what is now generally acknowledged to have been the most brilliant English-language journal of the time, and by an editor, A.R. Orage, who has become a legend. The New Age has an undisputed place in the cultural history of the early Twentieth Century, and it was the leading journal of the Fabian Socialists until the founding of the New Statesman in 1913, which marked a stage in that cleavage between the will-to-power and the will-to-freedom (to use Douglas's terms) which inevitably occurs, as the history of politics so clearly shows, in every movement dedicated, at the outset, to the betterment of mankind.

It must be remembered, however, that although The New Age was in contemporary terms a leading 'socialist' or 'progressive' journal - even 'avant garde' in its day - the meaning of those terms has now been changed, sometimes to the point of inversion, after half a century in which the world has been rushing down the other fork of the cross-roads at which Douglas and his contemporaries stood, having ignored the signpost which he set up, and having now discovered, to its bitter cost, that it has taken the wrong path. It is therefore particularly appropriate that this book, long out of print, should be republished, and that signpost set up again,, so that a disillusioned world can realise that there exists an alternative to disaster, though not without a radical change in the sort of thinking which now accepts the centralisation of power as 'progressive', and condemns its distribution as 'reactionary'.

Even before Douglas appeared on the scene, Orage and The New Age had chosen the path of freedom and turned their backs on collectivist State Socialism, that is, on the socialism of the will-to-power, as well as the soul-destroying wage-slavery of Capitalist mass-production. Under the heading of Guild Socialism they were inclined to look backwards to the craftsmanship of mediaeval times, and to reject all science and technology as of the devil. Douglas supplied just what these people lacked. For although The New Age was the forum for the leading literary and political writers of the day, it was then, even more than now, taken for granted that politics and economics were subjects for men of words. It was unheard of for someone with practical knowledge and experience of the actual processes of industry and accountancy to take a hand.

In this, Douglas was as far ahead of his time as he proved to be in other ways. An engineer, with a wide experience of practical responsibility in many parts of the world, including the unique experience of drawing up the plans and specifications for the electrical work on the Post Office Tube (one of the earliest examples of automation in the history of engineering) he had spent the last two years of the First World War as Assistant Superintendent of the Government Aircraft Factory at Farnborough. In this capacity he brought an original mind to the question of the factory's cost accountancy - a mind which thought first in terms of the practical realities of production for use, and then considered the book-keeping or financial arrangements as a secondary convenience, much as a railway engineer might consider the railway ticket system. This might seem obvious, but it completely inverted the accepted manner of thinking which treats the whole industrial process as if it existed for financial ends, whether for profits or for employment and wages. Douglas's first article in the English Review of December 1918: The Delusion of Super-production, would have been still a little ahead of its time if published in 1968; and his recognition of the social responsibility of the scientist and technologist, and of the colossal sabotage and waste of real resources and energy involved in our financially dominated economic system, have yet to receive their due, even now when, at long last, events have begun to move public opinion in this direction.
It is, of course, well known that, during the Great Depression of the inter-War years, Douglas's ideas achieved a considerable following, and gave rise to a Social Credit Movement which has left a small, but indelible, mark on the politics of the British Crown Commonwealth. But only a handful out of all those who called themselves his followers have ever grasped the truly radical nature of his thinking, or the fact that his proposals for monetary reform were quite secondary embodiments of the fundamental policy of the will-to-freedom, which now emerges as the sole alternative to the present domination of the will-to-power. In a world writhing again in the agonies of the money-torture, In a form even more deadly than that which afflicted it in the 1930's, the words of Douglas strike home with a force even greater than they had then, strengthened as they are by the course of events which he predicted.
To those who believe that the pursuit of power- that is, of centralised power to force one's ideas upon others-is the only conceivable course for any movement to take which seeks to better the human condition, it will appear obvious that Douglas and Orage and those that followed them in opposing the trend of centralising Finance-Capitalism merging into State Socialism, had made the wrong choice, and have paid the penalty of defying the course of history. If such power-seekers are satisfied with 'the course of history' they need not trouble to read further. But for those who believe that the truth alone can set us free, though not now until the lesson has been learnt from the consequences of the mass-pursuit of untruth, it may be noted that Douglas's analysis, based on a practical knowledge of modern technology and accountancy, went accurately to the core of the matter, whereas the analysis of Marx and of Lenin, men of words and of word-power, was fundamentally abstract and inaccurate, although surrounded by a vast mass of detail and of repetitive and hypnotic verbiage, in contrast to Douglas's condensed statements.

It is not, for instance, the widely held ownership of the means of production by 'private' (i.e. free, independent) people which creates an exploited proletariat and the consequent class struggle. On the contrary, the more 'common' such ownership is, the greater the freedom of the worker in choosing his employer, and the less 'common' the less freedom, until it disappears altogether when the State become sole employer, under the abstract slogan: 'Common Ownership'.
No person of even modest private means is 'proletarianised' by accepting employment; it is the total dependence of the worker upon the employer which opens the door to exploitation, and this has no real or natural economic basis, it is monetary and ideological-a fact which becomes more obvious every year as technological invention increases the productive power of human labour, and the workers organise to 'fight redundancy'.
Money, originating as bank credit, has been described as a license to live: and it was upon the policy of credit-through-the-employer as sole distributor of licenses to live to the bulk of the people that Douglas put his finger. When we consider the total dominance of monetary considerations over our industrial and political life, it is scarcely possible to deny that he was right.

There are two opposite directions in which a movement which sets out to protect and liberate the workers can move from this situation. The will-to-freedom would work towards the elimination of a proletariat through decreasing dependence upon employment, as productivity increases, decreasing the importance of labour as a factor in production; and also with the increasing need to conserve resources and avoid waste through unnecessary employment in the production of unwanted and unneeded products.
Incidentally, this would arrive at an economically classless Society through the abolition of a financially dependent and exploitable class; a state of affairs described by Douglas's title: Economic Democracy.
Alternatively, a Socialism activated by the will-to-power, while retaining the slogans and image of a movement for the liberation of the workers, can move in the opposite direction by identifying itself, not with the people who seek liberation from the proletarian condition, but with their class-status of exploitability through dependence on employment itself. This it can seek to glorify, to expand, and ultimately to universalise as a power-base for socialist politicians.
The aim here is the same as that of the monopoly capitalist, namely the progressive concentration of employer-power over ever-growing masses of workers, which most Socialist Governments discreetly encourage, since they recognise it, as Lenin did, as an essential step towards the socialisation of production and the total dependence of a fully proletarianised population upon a single all-powerful Employer, the State.

The power-socialist views with even greater hostility than the power-capitalist the possibility of an increasingly independent worker, capable of making his own bargain with the employer, and with no need to surrender the control over his labour to a Union Leader. In consequence the Big Unions have grown into labour monopolies with far more terrifying powers over the workers than the employer holds; and have now become armies, organised to demand money with menaces, not merely against the employers, but, ironically enough in the 'public' sector, against the whole community-a strange outcome from a socialism that used to talk about working to serve the community and not for gain.
In 1918 Douglas could see great hope in the shop steward, or rank-and-file movement in industry, to reverse the centralising tendency of the Unions, in that it was decentralised, with the control of policy coming from the shop-floor upwards instead of, as in the Unions, from the top downwards. Insofar as this is still true, it is probably still an important factor tending towards industrial peace and efficiency, due to the understanding and settlement of genuine grievances. But in the meantime this movement has been the particular target for penetration by communists whose policy is the ultimate centralisation of power through the final merger between employer power and Union power, money power and bureaucratic power, legal power and police power-all concentrated in the all-powerful Work-State under the slogan 'all power to the workers' and under the sign of the clenched fist of mass-intimidation.
There can be no doubt that the socialist movement, nowadays, has rejected the will-to-freedom (except for lip-service) and is wholly dominated by the will-to-power. Neither is this sort of socialism limited to the Labour Party or the 'Left'. Was it not Baldwin who said, as long ago as the 1930's: "We are all socialists now", and since then, the line between 'Big Business' and socialism has become still more tenuous.
The hope lies in that its disastrous objective, the Socialist State, is at last becoming widely recognised for what it is: the end-position of monopolistic Finance-Capitalism, or, as the young people of the New Left are inclined to call it, with greater emotional than historical accuracy: the Fascist Police State.

Unfortunately, some of them do not recognise the anarchy of 'continuous revolution', which they have been led to suppose will avert this State, as an essential part of the fear-mechanism which is used to introduce it. It is necessary to be far more radical; to get down to the real causes; and to take the rejected path to freedom with Douglas.
One of the difficulties in this re-thinking is the change in the meaning of words and phrases brought about by their continual use in the propaganda of power, so that parts of this book may be completely misunderstood if taken in their current and corrupted meanings. This applies particularly to words which refer to people and to property or ownership, which, in the idiom of State Socialism which has become the accepted idiom of the day, are abstracted from their real meanings and taken in a collective or exclusively monetary sense.
Thus, in any political appeal 'the people', 'the community', 'Society' always starts by meaning the actual people-you and me and everyone else-considered collectively, and Douglas always used such terms in this sense. Now these words refer to some vague, collective Moloch whose 'interest' is directly opposed to that of actual people, now called 'private persons'.
'Common property or ownership' used to mean our property or ownership; and the appeal of the word 'democracy' lay in the opposite of financial monopoly or centralised government, namely in the idea of maximum distribution of political and economic power to everyone, as a person, not as a unit in some mass. Property is something which is 'proper' to a person, and ownership applies to something which can be his 'own'. These words refer to men and women, not to abstractions, and they imply the right to possess, to enjoy, and to 'exploit' in the wholly beneficial sense of 'to make full use of, to get value from' as well as to dispose of to the owner's advantage.
So long as the monetary transactions correspond to these realities they are merely a very useful convenience. It is not until the book-keeping becomes the main objective, and the monetary sense usurps the real sense of the words that their meaning can become inverted, and 'exploitation' can come to mean the misuse or waste of resources for monetary ends and the failure to get value in real terms from them.

'Property' having now become 'the right to get money from' and 'the people' a collective mass represented by the Government, the way is now open for the complete inversion of 'common property' to mean the expropriation of all actual people, while the real powers of ownership pass to the ruling oligarchy and its dependent bureaucracy.
These explanations have now become quite essential for most readers of Economic Democracy whose memories do not go back to the time it was written. For instance, Douglas's statement in Chapter 8 that: "Natural resources are common property, and the means for their exploitation should also be common property," will inevitably be taken, nowadays, to mean that natural resources should be expropriated by the Government, and that property in them, far from being common, should be abolished. It will be quite hard for many people to grasp the strange idea that he meant exactly what he wrote: that 'common' meant common; 'property' meant property, and 'exploitation' meant enjoyment and use by actual human beings.

Perhaps some examples will be helpful. Air, for instance, is a 'natural resource' which is unique in being common property in the most complete sense-available to everyone, everywhere, at all times, since all have the means for its exploitation in their lungs. If it were to become 'common property' in the State Socialist sense, it would, of course, be vested in the Government, and everyone would lose the right to breathe freely, exploiting for their own personal gain the property of 'The People'.
This is, I hope, far-fetched, but the same principles are already being applied to water, which has some of the essential and universal properties of air.

Land, on the other hand, is a resource of a different nature, In that it is fixed and local, it is also a 'mixed' resource; in part a universal essential, but in part also a form of capital of no direct use per se, but only as a vital factor in the production of necessities such as food, clothing and timber. As common owners of the land we all need to be able to walk upon it and to traverse it for purposes of travel and recreation, wherever this does not infringe more important forms of ownership. We also all need to dwell and to make our homes upon a particular piece of land, and it is here that the contrast between the aims of the will-to-power and the will-to-freedom is at its most obvious.
Ought the land to belong to the people-for instance, ought freehold home ownership to be as common as possible? Or ought it to belong to 'The People', with the actual powers of ownership exercised, through its agents, by one great Absentee Landlord, the Government?
Land as productive capital is quite another matter. There is no case for common ownership here (in the sense of administrative control) by anyone who lacks the skill or the will to produce from it; though the Englishman's love of his garden is a sign that this skill and will is quite common, even among town-dwellers. But for the non-producer it is not the land, but its produce which he needs to own.

The same applies to coal, oil, or minerals in the earth's crust. What use could most of us make of a coal seam, a copper deposit, or oil or gas under the North Sea? To talk of common ownership of these in the real sense is meaningless nonsense. We cannot exercise the rights of ownership until they have been converted and made available to us in usable form. Exactly the same considerations apply to the ownership of the capital equipment of industry required for the processing of these resources for our use. What real (not monetary) use could we make of a coal mine, an oil rig, or a steel mill?
It is most important, however, to realise that, financially and collectively, we have to buy these capital
equipments, and also their intermediate products, in paying their cost in the consumable goods they eventually produce; and in this sense they may be termed 'common property'. The financial system ought, therefore, to enable us to meet their cost without mortgaging the future.
As Douglas makes clear, production is the conversion of matter or energy from an unavailable form to one in which it is available for the use of mankind. The efficiency of this conversion depends primarily upon usefulness of the end-product. Usefulness to whom, who is to be the judge of it? Douglas says these resources are common property; which means that they ought to be made available for our use, and we are the judges of that use. And that means consumer control of production: Economic Democracy; which is incompatible with a system which distributes goods and services only through the process of producing more goods and services, thus giving a clear incentive to produce useless, unwanted or superfluous things, and to create a 'demand' for them.

We are said to live in a 'Consumer Society' suffering from the disease of 'consumptionism' due to the greed of the common people as consumers. But this puts things upside down. 'Productionism' or 'employmentism' would be better names for the disease, for we are passing increasingly under producers' control, the consumers, whose greed is much exploited in the process, being force-fed with the by-products of an industry which is primarily concerned with the provision of work and the distribution of money.
This aim is opposite to, and incompatible with, that of production for use with minimum cost and waste of energy and resources; and its end position of 'workers' control-the dictatorship, not of one class over another, but of Man as the hired agent of others over the same Man as free Agent-is incompatible with economic democracy.

The necessity for consumer control of production is the necessary background for an understanding of Douglas's monetary analysis and proposals, and much confusion has been caused by critics who have not grasped this, but who used to maintain that he had mistaken a temporary shortage of purchasing power due to deflation for a permanent deficiency in the system. In fact, Douglas never said that our producer-dominated credit distribution system could never distribute money to buy the goods wanted, but that it could not do so without producing what was not wanted, and with accelerating waste and sabotage.
If work accomplished, priced to cover an accumulation of costs over an indefinite period, can be distributed only through work in progress (to be piled onto the accumulated costs of work completed next year) then we have the recipe for our modern predicament-the necessity for continuous 'economic growth', with ever-growing squandering of energy and resources, as technological advance increases the product per man-flour. Unless inflationary producer credits, supplemented by consumer credits mortgaging future wages, are poured out faster and faster, then we can buy less and less of what we have already produced.

Douglas alone has analysed the situation correctly and shown us the way out; and events have proved him to have been right, and his critics wrong. Distribution, he pointed out, should be a function of work accomplished, not of work in progress. That means that the people, collectively, ought to be able to meet the accumulated costs of all the goods they want as they come on the market, without mortgaging the future.
Douglas defined 'purchasing power' as "the amount of goods of the description desired which can be bought". It is not satisfying consumption which is waste; in fact, that is the sole purpose which justifies production. It is non-Consumption, or unwanted, or forced, or hypnotically induced over-consumption which is waste.
The processes of increasing technological efficiency which go on in industry ought to be resulting in a continuous fall in prices, but this is more than offset by the charging of all waste and inefficiency to the consumer. It was he also who defined 'real credit' as "a measure of the effective reserve of energy belonging to the community" which ought to be reflected in the financial system. These considerations, put forward in 1918, can now be ignored at our dire peril.

It must be remembered that Economic Democracy was Douglas's first book; the prentice effort of a mind already mature, but which was to grow in depth and incisiveness for another thirty years. It is certainly his most 'difficult' book; it is incredibly condensed, and it took a mind of the calibre of A. R. Orage's to grasp its significance when it was written. Douglas once told my wife that Economic Democracy was the last of his books that he wanted to see re-published, and he is understood to have had thoughts about re-writing parts of it, notably Chapter 8 with its 'purely idealistic' scheme at the end, which was admittedly not practicable at the time, in contrast with the proposals for redistribution of the National Debt in Chapter 9, and for the Just Price in Chapter 10. These may be seen as early examples of proposals embodying the principles of consumer control, produced under First World War conditions of centralisation, for application in the post-War situation.
The later development of Douglas's financial analysis and proposals may be found in The Monopoly of Credit (1931); but he was always capable of producing, ad hoc, a precise set of monetary proposals for any given situation; and these were never intended as any sort of permanent plan or programme.

Here, then, are some of the reasons why I have thought that this first book now needs an introductory Chapter to put it into the background of the late Twentieth Century, and to dispel some of the garbled versions of Douglas's ideas which have been put about in the meantime. The Delusion of Super-Production, Douglas's first article, published in the English Review of December 1918, has been added as an appendix. It is difficult to imagine anything more prophetic or relevant to the situation of the 1970's. (Now the 2000s.)

There is always a time-lag of generations between the appearance of a seminal idea, and the possibility of its widespread acceptance by minds which can be opened to it, on a large scale, only by the heavy pressure of events which have been correctly anticipated. It appears that this time is now approaching for the opening of minds to Douglas's ideas. In the 1920's and 1930's many people could see their application to the situation of 'poverty amid plenty' through mass-unemployment among unsold goods and unused productive power. But most people could see no further when, as Douglas so frequently predicted, this 'problem' was 'solved' by the vast super-production of War, and Keynesian economics brought in the era of accelerating super-production via continuous inflation and 'employmentism'.

At long last it is being realised that this cannot go on indefinitely; that even this rich planet with its continual shower of energy from the Sun, cannot endure without impoverishment, the wasting of its resources at an accelerating rate upon purposes other than the precise requirements of the people who live on it - purposes such as the distribution of book-entries and money-tokens, or the imposition of the will of a handful of controllers of production. Already the environmental Movement has become a 'bandwaggon' which has been taken over by producer interests concerned to exploit (and often to exaggerate) the scarcities they are making, so as to tighten still further the dictatorship of the producer and distributor over the people they are supposed to serve. In conclusion, it may be said, literally and solemnly, that no efforts to deal with this economic dictatorship, or to avert the environmental crisis which it is bringing about, can hope for success on the scale necessary to avoid disaster, unless and until prejudice is laid aside, and the fundamental revolution in ideas which was inaugurated by this book is accepted and put into effect.

ABOUT THE AUTHOR… OF ECONOMIC DEMOCRACY

The late Clifford Hugh Douglas, M.I.Mech.E., M.I.E.E., consulting engineer, economist, author, and founder of the Social Credit Movement, was born in 1879 and died in 1952.
Among other posts which he held in his earlier years were those of engineer with the Canadian General Electric Company, Peterborough, Canada; Assistant Engineer, Lachine Rapids Hydraulic Construction, Deputy Chief Electrical Engineer, Buenos Aires and Pacific Railway; Chief Engineer and Manager in India British Westinghouse Company; Assistant Superintendent, Royal Aircraft Factory, Farnborough (England). During the First World War he was a Major in the Royal Flying Corps and later in the R.A.F. (Reserve).
After retiring from his engineering career, he and his wife ran a small yacht-building yard on Southampton Water for several years. The combination of beauty with functional efficiency in a successfully designed racing yacht had a special appeal for him. When he lived in an old water mill in Hampshire he used the water wheel to turn a dynamo which lit and warmed the house as well as providing power for lathes and other tools.
Later, when he moved to Scotland, many of his friends and followers remember helping to build his small hydro-electric power house, sited on the local burn which ran through his land. Since decentralisation of economic power was of the essence of his teaching, it should be put on record that he practised what he preached.

One of his most interesting jobs, just before the 1914 War, was that of conducting preliminary experimental work and preparing plans and specifications for the electrical work on the Post Office Tube in London, with later supervision of the installation of plant in what was to be one of the earliest examples of complete automation in the history of engineering. While there were no physical difficulties about the work, he used to get orders from time to time to slow it up and pay off the men. When the War came, however, he noticed that there was no longer any difficulty about getting money for anything the Government wanted.

It appears that he was sent to Farnborough in 1916 to sort out 'a certain amount of muddle' in the Aircraft Factory's accounts, so that he had to go very carefully into the costing. This he did by introducing what were then known as 'tabulating machines' - an approach which anticipated the much later use of computers, and which drew his attention to the much faster rate at which the factory was generating costs as compared with the rate at which it was distributing incomes in the form of wages and salaries. Could this be true of every factory or commercial business?

Douglas then collected Information from over 100 businesses in Great Britain, and found that, in every case except in businesses heading for bankruptcy, the total costs always exceeded the sums paid out in wages, salaries and dividends. It followed that only a part of the final product could be distributed through the incomes disbursed by its production, and, moreover, a diminishing part as industrial processes lengthened and became more complex and increased the ratio of overheads to current wages.
Unless this defect in monetary bookkeeping were corrected (which in his view was perfectly practicable) the distribution of the remainder must depend increasingly on work in progress on future products (whether wanted or not) financed by loan credit, export credits, sales below cost leading to bankruptcies and centralisation of industrial power, or by consumer borrowing. The result must be predictably disastrous - in fact, the modern dilemma between mass-poverty through unemployment and growing inflation, debt and monopoly, with waste of human effort and the earth's resources to maintain 'full employment', requiring continuous economic 'growth' and economic warfare between nations leading towards military war.

This original engineer's approach, which regarded the monetary system much as Douglas, a former railway engineer, had regarded the ticket system, as a mere book-keeping convenience for the efficient distribution of the product, was completely alien and unacceptable to the economic theorists of the day. Only one Professor of Economics (Professor Irvine of Sydney) expressed agreement with it, and he resigned his post shortly afterwards.
This general condemnation by the economists was, however, along two different and contradictory lines, viz.:
1. that the cost-income gap was an illusion due to Douglas's failure to realise that the costs all represented sums paid out at a previous date as wages, salaries, etc.- ignoring the time factor which was the essence of his analysis; and,
2. that it was, on the contrary, a glimpse of the obvious, of no significance whatever, since this was the immutable way in which the monetary and economic system must work for the stimulation of new production and the maintenance of the level of employment - i.e. ignoring Douglas's radically different objective of production for the consumers' use and not for 'employment' or other monetary objectives.

When the Great Depression of the 1930's grimly confirmed Douglas's diagnosis and gave him a world-wide reputation and following, his critics explained that he had mistaken a temporary lapse for a permanent defect in the monetary system; but subsequent events have, by now, so continuously fulfilled his predictions that this criticism is no longer credible.

Despite rejection by the Economic Establishment of the day, Douglas was called upon to give evidence before the Canadian Banking Enquiry in 1923 and the Macmillan Committee in 1930, and undertook several World Tours in which he addressed many gatherings, especially in Canada, Australia and New Zealand, and also at the World Engineering Congress in Tokyo in 1929.
In 1935 he gave an important address before the King of Norway and the British Minister at the Oslo Merchants' Club, and in the same year he was appointed Chief Reconstruction Adviser to the 'United Farmers' Government of the Province of Alberta, Canada, which later in the year elected the first Government to bear the title 'Social Credit'.
The Canadian Federal Government, however, frustrated all attempts to implement Douglas's advice by disallowing the legislation, some of which was passed, and disallowed, twice; after which, although the Party remained in power for over 30 years, it progressively abandoned the principles on which it was first elected.

It should be placed on historical record, as a precedent, that two 'provincial dividends' of little more than token value, were nevertheless paid at one period to the citizens of the Province, and that, while still acting under the advice of Douglas's representative, the province paid its way without further borrowing, and drastically reduced the Provincial debt.
This diversion of Douglas's ideas into the dead-end of Party politics has received far more publicity than the original and experimental approach to politics which is signposted in his later speeches and writings from 1934 onwards, notably in his five major speeches in England:
The Nature of Democracy, The Tragedy of Human Effort, The Approach to Reality, The Policy of a Philosophy, and Realistic Constitutionalism.

In 1934 a Social Credit Secretariat was formed under his Chairmanship, which started an Electoral Campaign involving the use of the vote for purposes desired by the electors rather than by Parliament or the political Parties. This was followed by a highly successful Local Objectives Campaign along similar non-party lines, and a Lower Rates and Assessments Campaign which saved the British ratepayers many millions of pounds without loss of services, by reducing loan charges.
The Second World War put an end to these activities on an organised national scale, and dispersed them, with the Social Credit Movement, into a decentralised force, better adapted to the present crisis of World centralisation.

In the final phase of his life, roughly from 1939 to his death in 1952, Douglas consolidated his ideas in depth, contrasting very clearly the philosophy which underlies them with that which activates the Monopoly of Credit. Although the best known of them, which have already exercised considerable influence in the World, lie in the economic sphere: the concepts of real credit, the increment of association and the cultural inheritance, and the proposals of the National Dividend and the Just or Compensated Price-his political ideas, though as yet little known, are if anything of greater importance. They were always worked out with a characteristic practicality, taking account of the feed-back from the course of events. No one else has thrown so much light on the true nature of democracy, as distinct from the numerical product of the ballot box; on the need for decentralised control of policy and hierarchical control of administration; on the freedom to choose one thing at a time, on the right to contract out, on the Voters' Policy and the Voters' Veto. In his last address, given in London to the Constitutional Research Association in 1947, he put forward his last proposal for the rehabilitation of democracy: the Responsible Vote, in which the financial consequences of his open electoral choice would be, for a time, differentially paid for by the voter in proportion to his income-a literally revolutionary suggestion which demands an inversion of current ideas about anonymous, irresponsible, numerical voting.

Hugh Gaitskell, a former Leader of the Labour Party, once sarcastically described Douglas as 'a religious rather than a scientific reformer'. Perhaps he was more right than he knew!
It may be that Douglas's thinking on the subjects of philosophy, policy and religion, and the special meaning he gave to those words, will turn out to be his most valuable contribution to the restoring of the link between religious belief and the principles which govern Society.

In his view, a 'philosophy', i.e. a conception of the universe, always expresses itself as a 'policy'-a distinctive long-term course of action directed towards ends determined by that 'philosophy'.
'Religion' (from the Latin religare, to bind back) is not just a set of beliefs such as are expressed in the Christian creeds (which constitute a 'philosophy') but is precisely the 'binding back' of these ideas to the reality of our lives, not only individually, but in the political and economic relationships of our society.

The policies of centralisation and monopoly now being imposed upon the World through the closely related agencies of Finance-Capitalism and Marxist Socialism derive from a 'philosophy' fundamentally different from, and opposed to, that of Trinitarian Christianity, which was, however imperfectly, expressed in our Constitution, our Common Law, and the progress towards personal freedom which had been made, especially, in Britain and the Commonwealth.
At the time Douglas first put forward his ideas and proposals for carrying forward this traditional policy to its next stage, its Christian basis could be taken for granted as mere 'common sense'. Now, that can no longer be taken for granted, and it has become necessary consciously to distinguish the policies at work in our Society, and to relate them to the fundamental beliefs which gave rise to them. In this sense, therefore, 'Social Credit' is the social policy of a Christian 'philosophy'; and before the end of his life, its founder made this explicit, rather than, as in its beginnings, implicit.