Science of the Social Credit Measured in Terms of Human Satisfaction
Christian based service movement warning about threats to rights and freedom irrespective of the label, Science of the Social Credit Measured in Terms of Human Satisfaction

"All that is necessary for the triumph of evil is that good men do nothing"
Edmund Burke

Science of the Social Credit Measured in Terms of Human Satisfaction
Thought for the Month:


Extracts From Mr. W. R. Browning's Seminar Paper

A bank loan is of worth only if the community has already produced wealth and services, which it can buy. Therefore the only natural limit to the creation of credit is the ability of the community to honour that credit. From this angle, the whole resources and wealth of the community may be considered as assets against which all money and credit are a liability. Whatever is physically possible is financially possible. From every angle, the community is therefore the ultimate owner and creditor of all credit created by the banks.

This moral relationship should be legally expressed. Just as the borrower is in debt to the bank, so the bank should be indebted to the public and this relationship should find expression in a system of National Bookkeeping.
The banks, whether private or Commonwealth, should be indebted to the Treasury for every loan granted, and released from that indebtedness when the loan is repaid. By this means both the Commonwealth and the Trading banks would become agents of the Government on behalf of the public, and the financial sovereignty of the government firmly established. The present method of Special Deposits by the trading banks aims at this relationship, but the situation would be more satisfactorily dealt with by an automatic indebtedness rather than by time-to-time decisions by the Central Bank to increase or decrease the lending power of the banks.

Insofar as a relationship accords with natural law, the less the necessity for arbitrary interference.

Such a bookkeeping system would free the banks from all suspicion that they were counterfeiting the credit of the nation and would establish the responsibility of the Central Bank to the government on a more satisfactory basis. But these things would not of themselves enable the government and the people to judge whether credit were being created at a desirable rate. That would be possible only if the rate of credit recall were based on a natural law, and the application of this law would necessitate the compilation of the data of production and consumption, which would also permit the compilation of a Balance Sheet of the Nation.


From the physical angle, the cost of making or producing anything is the amount of wealth, raw materials and energy used up and consumed in its production, including the food, clothing and shelter of those producing it. The natural law is therefore that the cost of production is consumption. The cost of all production over a unit of time is the total consumption over that unit of time. This law may be expressed financially in the following way; the price of production should bear to its total cost the same relation that consumption bears to production. This is somewhat similar to the principle that if society produces five units of wealth and capital, only three of which are available for consumption (the other two being capital production such as factories) only three-fifths of the money paid away in production should be charged for the three units of consumption, the remaining two-thirds remaining available to buy the output of the machinery at the rate at which depreciation charges are included in the prices of future consumption.

At present, when the lowest level of prices is the cost of production, while the highest is the maximum that can be taken from the public, there is never sufficient money to liquidate the depreciation charges of capital production when they are included in prices. The principle of the rate of credit recall is illustrated in a water system in which one ticket is issued for every gallon of water entering the reservoir and one ticket collected for every gallon consumed or evaporated. There will always be sufficient tickets to buy all the water no matter how large the reservoir. But if some tickets were collected where the water enters the reservoir, all the water could not be bought. The reservoir would continually expand but the people would never be able to buy it all. A similar premature collection of tickets occurs when credit is recalled before the goods it has helped produce are available for consumption, when prices vary with the amount of money on the market, and when money is saved and invested.
The natural law of costs could be applied to industry in the simple way of a reservoir only if every person were employed and if no savings took place. Neither of these conditions is possible nor desirable. We must all save unless we are to live from hand to mouth, and the development of electronics and automation brings closer the day when a decreasing number of persons will be able to find employment in industry. Yallourn is a foretaste of the industry of the future. Manpower has been more or less replaced by machinery and wages constitute but a small portion of the cost of production.

There is an inherent incompatibility between the real objectives of industry and the accepted theory of Full Employment. The ideal factory is one in which machinery has completely displaced manpower-the machine secreting unemployment as the body secretes sweat. The accepted ideal of both capitalists and workers is maximum employment. Both have a financial interest in finding or making work. Both are ultimately interested in preventing the machine from completely displacing human labour, because, for the worker this would mean the loss of money with which to buy the necessities of life, and for the capitalist the drying up of profits if the great bulk of the people are without wages to buy the output of industry. This incompatibility of objective is the result of the retention of pre-industrial modes of thought regarding industry and finance.

An electronic, scientific industrial age is irreconcilable with an unscientific, pre-industrial financial system operating on the moral principle that a man shall not eat unless he works. Unless the electronic age is deliberately impeded, industry will very quickly replace human effort with machinery and it will be possible for the community to enjoy a degree of leisure undreamed of in the past.

These facts have to be borne in mind when applying the natural law of prices. Simply to reduce prices to their scientific level would be of little avail to the man without money. Whether the price of food was high or low would be of only theoretical interest to the man without an income. The problem must be faced from a community angle rather than a financial-industrial one.
The industrial system is the Highway to Plenty. It supplies the physical means of a better and fuller life.

The natural law of cost can be applied to present-day society only if it be based on the principle that all members of society are entitled to participate in the benefits resulting from the Cultural Inheritance and the Increment of Association, and that these benefits, like the profits of a company, can be distributed only if they are monetised. While the natural law of prices indicates the level at which goods should be sold it does not involve us in any one way of applying this principle. Let us consider the fundamentals of the problem. Workers are disemployed because machines are substituted for their labour. An unscientific rate of credit recall prevents the community from buying goods at their financial cost of production, because money equal to depreciation has already returned to the banks.
This condition is intensified by savings and investments, which increase costs without increasing the amount of money in the hands of the people.

Industry can remain financial only so long as producers and the government are increasingly constructing new capital works or armaments, and when the nation and the individuals are getting deeper and deeper into debt. All producers can make profits only when there is an increase in the national debt because under our bookkeeping system profits made by one are balanced by losses made by another. Therefore, the products of farms and industry, which cannot be sold at home, must be exported abroad, or rot. This forced competition for foreign markets is the primary cause of war between the industrial nations.

These evils can be cured only by recreating the prematurely recalled credit and distributing it to the public directly, or indirectly by subsidising producers to sell their goods at prices from which the overhead charges have been removed, these charges being rebated by the government.

For two major reasons, the subsidising of prices should be employed to only a minor degree. By making the subsidy and the issue of credit conditional on a prior reduction of price, the government could remove any inflationary danger from the issue of credit, but if this method were employed exclusively only those who were employed would benefit from the system, and it would leave the problems resulting from automation unsolved.
Secondly, such a policy would give the government control of industry and the community by its absolute control of financial policy, and the aim of all reform should be the granting of control of financial policy to the community.
Therefore the compensation in the rate of credit creation and recall should be directed to the granting to every member of the community of a National Dividend, which eventually would become the major portion of the income of even those who worked in industry.

The workers and capitalists would receive a National Dividend in addition to their wages and industrial dividends, while the public would receive just a National Dividend.

We shall not go into the national bookkeeping by which a Balance Sheet may be devised and a dividend granted, but simply point out that the freedom and sovereignty of the individual can be maintained only by a National Dividend, and that only such a financial system, based on natural law and operating in a society in which organisation, power and social relations are based on natural law, can rightly be considered constitutional.