THE PHYSICAL BASIS OF LEISURE
Part One John Fitzgerald's Seminar Paper

Goto Part 2
For the purpose of this paper I will consider the aspect of leisure concerned with man's vital need to establish a correct and just relationship between himself and the physical world in which he is placed. And from our present point of view leisure is the opportunity for freely chosen individual activity, apart and above that necessary to sustain life at an individually acceptable standard.

It will be of undoubted interest, as well as being relevant to our subject, to recall some of the early experiences and line of thought which brought the late Major C. H. Douglas to the conclusions that he reached on matters closely related to the essence of the problem which we are about to consider. These he gave to members of the Canadian Club at Ottawa early in 1923 when in Canada by invitation to lay his views before the Canadian Parliamentary Committee on banking and commerce. *

The story began, he said, when he was in India about fifteen years previously (1908) in charge of the Westinghouse interests in the East. He was surveying for the Indian Government a large district, which revealed a good deal of waterpower. In Calcutta and Simla he asked, what was going to be done about this; to which came the reply, "Well, we haven't any money." At that time manufacturers in Great Britain were hard put to get orders and prices were very low indeed. Major Douglas said he accepted the statement made and, he supposed, pigeonholed the fact and circumstances in his mind.

At that time he dined frequently with the Controller-General of India, a man who used to bore him very much by continually talking about something he called credit. "Silver and gold," said his friend, "have nothing to do with it. It all depends on credit." Douglas remarked that had his friend given him a short, sharp lesson on Mesopotamia it would have been as intelligible to him at that time. Nevertheless, that fact also must have stayed at the back of his mind. He proceeded to say that just before the war he was employed by the government in the building of a Post Office underground railway from Paddington to Whitechapel. There were no physical difficulties, but first he received orders to get on with the job, then to slow up and pay off the men. "And as a matter of fact," said Major Douglas amid laughter "that railway is not finished yet." (1923.) "Then came the war." he said, "and I began to notice that you could get money for almost any purpose." And that struck him again as being curious.

On being sent during the war to the Royal Aircraft Establishment at Farnborough in connection with a certain amount of muddle into which that institution had got itself, he decided that it would be necessary to go very carefully into the costing process. His friend Sir Guy Calthorp suggested that he should make use of tabulating machines, and so after a time Major Douglas began to concentrate very carefully on them. One day he noticed with regard to the figures on the cards emerging from those machines that wages and salaries at the weekend did not represent the price value of the goods produced in the same period. "You might say that anybody would know that, and I suppose they would," said Major Douglas. But to him it followed that, if that was true, it was true every week and in every factory at the same time. Therefore the wage and salary purchasing power each week was insufficient to purchase the goods according to the price each week. Later he confirmed this by talking to his chief accountant, who also told him that the Treasury notes drawn out of the bank each week at Aldershot seemed to come back again. Some of them became quite old friends. When, after his work at Farnborough was completed, and he was immersed in industrial disputes, he found that the best way out of the difficulties with those who were fighting for more wages was to give it to them. "It settled everything," said Major Douglas, amid laughter. Then he went to Richborough, one of the new concrete cities built during the war, and was immensely impressed by the fact that, in spite of the withdrawal of something like seven millions of the best producers to the armed services, plus millions more engaged in the production of immense quantities of materials to be destroyed, leaving behind only the old and the young, they were able to raise such wonderful new concrete cities, and yet everybody in the country was living at least at as high a standard as before the war. These facts also became pigeonholed in his mind. Then his attention was attracted to a persistent propaganda that was being conducted to the effect that "we must produce more." And he began to think what would happen when the whole of this intensive production was diverted in peacetime. The persistent propaganda gained in volume, to be supplemented by a new cry that they were a poor, poor nation, and only hard work would save them from destruction. So he wrote his first article on the delusion of super production, in which he showed that, if things were as represented, then the more that was produced the bigger the problem was going to become. He also knew for a fact that Britain and the United States and he believed Canada also, were chock full of the newest producing plant. Then came Major Douglas' predicted feverish boom, accompanied by a spectacular rise in prices, followed immediately by an equally spectacular slump and sudden mass unemployment. All those wonderful industrial plants began to be broken up and the owners to go into bankruptcy.

"It was not true in 1919 that Britain was a poor, poor country, emphatically asserted Major Douglas. "I know from my own technical knowledge," he said amid applause, "that there is no production problem as such in the world at all." Also, there is something wrong with administration. Socialism is no remedy but only an administrative panacea.

The only way that administration comes into the picture is that it does not control policy. But finance does. Emphasising the position, Major Douglas said that you have on the one hand a demonstrated capacity to produce and deliver goods and services, which is far in excess of any possible demands so long as you don't produce that overwhelming consumer war. Yet on the other side there was an increasing clamour for the bare necessities of life in many places. Obviously something is coming between, and that is the distribution system, which is, of course, the financial or the ticket system.

One of the best ways, in my opinion, of obtaining a clear understanding of Major Douglas' solution of the aforementioned problems and those associated with them is by way of careful consideration of the physical realities involved. It is an axiom of philosophy that we proceed from the concrete reality to generalisations through our power of ratiocination, or inference, or analogy. To put the matter another way, only initially through sense perception do we know anything. Man is not matter alone - materialism; or spirit alone - spiritism, but a mysterious combination of both. The effect one upon the other is mutual. Hence the real importance of our subject.

From the purely physical material aspect man is like a machine performing work by the conversion of energy. Food is his fuel and the primary condition of life will obviously be that the amount of energy obtained from the food shall be sufficient to allow for the expenditure of energy in the searching for and consumption of food. We may imagine a state of life in which the energy obtained from the food just balanced the energy expended in the searching for and consumption of food, allowing also time for necessary sleep. Life must have begun at slightly above this level, for otherwise no progress or other activity beyond this would be possible. Now the difference between the energy necessary merely to sustain life and the total energy directly available represents true profit in its most fundamental sense, and a basic physical reality. Here we have the very beginning of the physical basis of leisure. Individual credit we may call it, and a clear understanding of the principle is vital, for it lies at the very heart of Social Credit.

There are of course, many ways in which the surplus energy may be expended; in various forms of amusement, for instance. One of them, however, is of very special importance, and that is the use of this energy to improve the efficiency of the individual from any energy consumption point of view. The construction of tools, for instance, which allows not only the procurement of basic necessities in less time with less expenditure of human energy, but renders possible processes hitherto impossible. This is the basic physical reality underlying the modern conception of investment. It is the devotion of energy to the increase of efficiency in the consumption of energy, and is intrinsically a multiplier. That is, it multiplies the energy directly available for any given constant expenditure of energy. Notice that it begins in the individual human being and originally benefits him directly. Tools and the knowledge of process utilising the individual's own human energy alone have resulted in a great expansion in the possible results of effort. We have only to think of the changes due to the use of the spade in horticulture. What is also important, of course, is not only the spade but a knowledge of spade practice and the habits of plants, and this principle can be extended over all the fields of man's activities, past, present and to come. Tools commonly outlast the life of their makers and are passed on to a succeeding individual. This we call physical inheritance. Also the knowledge of how to do things, which includes how to replace the tool when it is worn out. In all its wide ramifications we call this the cultural inheritance. This is again a fundamental conception of immense importance, as real as and more important than the longevity of tools and structures, for it not only enables the adequate use of the tool but ensures the possibility of the tool's replacement, as well as simplifying the basis for further possible improvements. We have thus found three basic elements at the very core of our subject. Profit we may define as improved efficiency accruing to the individual; and investment as the application of profit to the increase and enhancement of efficiency. Profit, investment and inheritance especially cultural inheritance, are basic elements of economics, and a correct understanding of them, quite apart from any economic, and particularly financial, theory is vital.

Further factors that enormously extend the effectiveness of individual effort are:
(1) The association of individuals to achieve a common objective.
(2) The introduction of solar and nuclear energy in place of human and animal energy as the basis of work done.
(3) The arrangement of automaticity in mechanical and electrical operations.

In examining the first factor it will be noted that the first result of association is that a given job may be accomplished more quickly and more easily. But not only may two men lift a heavy weight more easily and more quickly than one man, but two men may lift a weight that neither alone could lift.

Within reasonable limits this result can be extended. There is a benefit from association of all kinds far beyond simple arithmetic progression, and this is what is called the unearned increment of association, which really is true profit. A money system, when used, must be made to conform to this physical reality, otherwise it will eventually break up the association in which it is involved. There is nothing that modern man does that does not rest somewhere on this unearned increment of association, the various forms of which are of great complexity. In addition to primary association there is the association of associations, which produces further increments. A notable example is the telephone system. The telephone, itself the result of complex associations, not only increases in usefulness with the number of users but increases the efficiency of the whole of industry and human society; and human society is exactly the same thing as human association. So important is the study of association for those who desire to investigate Social Credit seriously that the first chapters of the Social Credit Secretariat's textbook. "Elements of Social Credit," are entirely devoted to it. It is important to remember that human society is "an association - the most complex association we know: a vast construct, or complex, of separate associations." Society, from the aspect, which concerns this paper, "is a complex of observable phenomena, and phenomena are observed results in nature, and all phenomena (all observed results in nature) appear to arise from some mode of association."Every association has a result, and this is its increment of association. We can divide associations into different classes. Material, mass and energy associations, for instance. The cultural heritage, which increases the power of human beings in association to do things, is the conservation of means of doing things.

The second factor, which incalculably extends the power of human beings to produce desired results, is solar energy, which includes energy stored in the form of wood, coal, oil, and water power derived from the changes in the distribution of water due to the sun's direct heat. It is most important to be very clear that it is energy and not machines as such which we are considering here. Machines are only elaborate forms of tools through which energy is transformed and directed. Their importance lies in the great and easily controllable rate at which they can transform and direct energy, compared with the individual human being. At the present day humanity has at its disposal vastly greater direct sources of machine energy than that of the total manpower of the whole earth's population. Thus an important ratio:

Man time energy units
__________________________
Machine time energy units

ranging from at least fifty to in some cases many hundreds is increasing daily. Add to this atomic power and the still more spectacular possibilities of thermo nuclear or "Zeta" power and the magnitude of the picture may perhaps be glimpsed. In fact, human energy is becoming negligible and as with automation could for the most part be dispensed with entirely. Its importance lies in quite another direction. It is becoming what Major Douglas has described as a catalyst. Now this is an illuminating analogy. The term "catalyst"' is used in chemistry to denote a substance, the presence of which either enables a chemical reaction to take place, or to take place much more readily. The rate of production depends on the rate of transformation of energy. A man may control the speed of a giant machine by the mere energy at his fingertips. The multiplying factor of automaticity via amazing electronic devices is even greater still. Certain functions of human thinking can be performed with incredible speed by certain electronic machines. For instance, in rocket research most complex and vital mathematical calculations that would take more than a year for an individual to complete can be done in minutes by electronic calculators. So far removed is man from mere animal existence that it is all too easy to miss the significance in everyday life of the importance of the foregoing considerations. The very division of labour confuses the total picture and conceals the totality.

Mankind during its history, but especially during the last one hundred years or so, has been engaged in the construction of an industrial machine, the result of which has been to transfer the burden of maintenance of life from the "backs of men to the backs of machines." In Major Douglas' unsurpassed descriptions, "the industrial machine is a lever, continuously being lengthened by progress, which enables the burden of Atlas to be lifted with ever-increasing ease. As the number of men required to work the lever decreases, so the number of men set free to lengthen it increases."
§ This process is of the nature of acceleration and involves the ever greater rate of production of things to make things with; the leverage of real capital.

But there is a limit to the amount of capital goods that can be utilised usefully, and barring unlimited export into outer space we are approaching this limit ever more rapidly. In case anyone should point to large numbers of people in under-developed countries it must be emphasised that our capacity to produce capital goods - things to make things with - is far greater than actual capital goods in existence. Something of the possibilities can be gauged by considering the magnitude of our effort when financial and other restrictions are relaxed. An interesting example of what I mean is given by Nicholas Murray Butler of Columbia University. The money cost of World War I is reputed to have been 400,000,000,000 dollars. This is estimated at 1914 valuation to have made the following possible. For every family resident in U.S.A., Canada, Australia, England, Wales, Ireland, Scotland, France, Germany and Russia this could have provided a 2,500-dollar house with 1,000 dollars' worth of furniture, and placed it on a five-acre block of land worth 100 dollars an acre. Each city of over 20,000 people in all these countries could have been supplied with a 5,000,000 dollar library and a 10,000,000 dollar university. From the balance, 5 percent interest would pay for all time salaries for 125,000 teachers and 125,000 nurses. From that which was left over, everything - farms, churches, homes, railways and the public utilities, etc., of France and Belgium - could have been purchased.

*An Outline of Social Credit, by H.M.M.

Introduction to Social Credit, by B. W. Monahan.

THE PHYSICAL BASIS OF LEISURE
Part 2 Extracts from John Fitzgerald's Seminar Paper

The ultimate meaning of true industrial progress is that the amount of work necessary in order to sustain a very high standard of living is steadily decreasing. In the words of Major Douglas, "the primary fact on which to be clear is that we can produce at this moment, goods and services at a rate very considerably greater than the possible rate of consumption of the world." This, then, is the physical and realistic basis of leisure. Quite clearly only either leisure or "employment" outside useful production can dispose of the so-called "unemployment problem". All problems of economics and politics are absolutely conditioned by the physical realities described. Short of sabotage or cataclysm the progress of the situation is inexorable. Anyone perceiving what is involved will see through the confusions, which result from the wrong posting of problems. If employment is regarded as the problem then the result will be increasingly artificial employment. ⁽¹⁾ As a result of obvious and deliberate policy together with the working of a long outmoded economic and financial system "full employment" is made to appear to be the legitimate object of the economic system. "The modern machine with its marvellous capacity for utilizing power is capable of releasing man from much of his human labour and for providing for his economic independence so that he can be set free from other ends. Yet people's ideas have been so perverted that they have become slaves of the machine, ever more definitely riveted to an invisible slavery."

The proper objective of the economic system is not employment, but the production of goods and services, as, when, and where required with the minimum of labour and inconvenience. (C. H. Douglas in The Approach to Reality.)

In order to see clearly how the institutions of society can be made to minister to the true welfare of man spiritually, materially, individually and socially, we will need to take a careful look at some important enunciations contained in Social Credit.

The first of these is that the cost of production is consumption. This is a real natural and fundamental law of economics, being expressed more fully in the statement that the real cost of production is measured by the consumption incurred in that production. Put another way, we can say that the true cost of a given programme of production is the consumption of all production over an equivalent period of time. Cost is only the natural penalty or condition paid by human beings in reaping the results of increment of association, one aspect of which is the fruitfulness of the earth. For instance the real cost of a crop of wheat is measured by the amount of wheat consumed as seed. If the planters of the seed ate only wheat as food to supply the energy for them to plant the seed, then the real cost of that crop of wheat is the seed wheat plus the food wheat, plus also, of course, unavoidable wastage. The ratio of wheat consumed to wheat produced is always a fraction less than one. The difference between that fraction and one represents true profit in the most fundamental sense.

Take another simple example. Imagine an isolated island upon which a small population lived on the coconuts, which grew there. The pulp, let us say, provided the food, the shells houses, and the fibre, clothes. Supposing for a given population working a given number of hours twice as many coconuts were produced than sufficed for consumption. This would mean that the penalty or condition necessary for producing two coconuts would be one coconut. A notable result, for this means that it is possible in certain circumstances, for the cost of a volume of goods to be a fraction of itself. This makes nonsense of the oft-repeated statement that "you cannot get something for nothing." If the islanders had been "rewarded" for the production of coconuts with a piece of paper - a money unit - for each coconut, then the money cost under present orthodox money rules would, if, say, one hundred coconuts were produced, be one hundred money units. "The true cost of a programme of production is in general not the money cost, but considerably less than the money cost, and a given programme of production can only be distributed to the buying public if sold at its true cost." Why? In the case of coconuts, one hundred money units represents the monetary cost of one hundred coconuts, whereas one coconut represents the real cost of two.

Now it is obvious that the estimation of the efficiency of a system, that is "the power to produce the result intended," cannot be correct if it is based upon a wrong standard. The productive system is producing the result intended only when it is producing goods and services with a minimum of trouble to those participating in the system. Therefore, the degree to which production can be expanded without increasing consumption does not by itself increase efficiency. Consumers may not require or desire the increased production. An index to efficiency - the power to produce the result intended - must include "a minimum of inconvenience" clause. To measure money costs does not establish "efficiency." A falling money cost indicates nothing more than the degree to which the consumers attached to industry can be reduced without reducing the volume of production. (2) Quite clearly in order to make the minimum of inconvenience requirement effective we need to know the degree to which the power of a community to produce had been advanced not by addition of workers but by the increase in powers per man, or production capacity. This is generally revealed by the rate of real capital appreciation and quite clearly there is a correct ratio of production of the means to produce, which is real capital, to the production of consumer requirements, which can only be attained through a mechanism reflecting the real need or desire of the community of consumers. Any other arrangement is not only the thief of leisure but increasingly subordinates man to economic activity, profoundly upsetting the balance of nature and man's true relationship thereto, a fact which was inferred in my opening remarks. Major Douglas has defined this production capacity as the ability to deliver goods and services, as, when, and where required, and is called by him the real credit of the community. This most important factor modifies the fundamental law previously stated, namely, that the cost of production is consumption, and the important ratio:

consumption
__________
production

is affected by it. Two interesting facts amounting to revelations emerge from the foregoing considerations. Firstly neither individuals nor the community of individuals can go into "debt" for true cost. If cost is consumption, it is "discharged" on consumption. Cost is properly measured as a ratio, in which production potential, the denominator is increasing much more rapidly than actual consumption, the numerator: therefore real costs are falling. Prices, however, based on rules of orthodox accounting are rising. Secondly we can see that the poor are not poor because the rich are rich, they are poor, or are enslaved to the industrial and productive system, because of the operation of the money system. But "class war" is founded on the delusion that profiteering is the cause of poverty and "class war" is the foundation of Marxian socialism.

Two factors, a widespread ignorance of the nature of money and of inheritance, especially the cultural heritage, have operated powerfully to obscure reality. "The possibility of meeting the requirements of society for goods and services in a small and decreasing fraction of the man hours, or time energy units, which society has at its disposal comes from improvements in the industrial machine as a whole. If there is one thing more certain than any other in this uncertain world it is that the industrial machine is a common heritage, the result of the labours of generations of people whose names are for the most part forgotten, but whose efforts have made possible the triumphs of the past hundred years." Writing in The Fig Tree of September 1936, Dr. Tudor Jones says: - "The magnitude of the cultural inheritance is but dimly apprehended by individuals. At best each is directly aware of only a fragment of it. This fact can readily be demonstrated by directing one's own attention to any small collection of objects in sight at any time, and asking oneself to explain how they got there, in sufficient detail as to suggest that one could secure their reappearance, by the same means ab initio, if they should be destroyed. Simple as it is, and few as the objects may be, provided they are products of civilised life and not merely natural objects, this experiment leads to the startling conclusion that no one has enough knowledge to satisfy the conditions. Indeed, the knowledge possessed collectively by all the individuals living in our time is not nearly enough to achieve the end required, since the historical development of human abilities is known only fragmentarily . . .

"The colossal power of modern man is an increment of association derived from his unconscious co-operation with the legions of the dead. It is not a measure of his own intellectual stature . . .

"The total result of human association, receives contributions from two sources, the effort of living individuals applied to instruments which are largely the creation of past generations. We have an association between the present and the past yielding an increment which is present; and relatively to one another the past is enormously the more effective element in this association. (3) The misapplication of St. Paul's words has resulted in the doctrine that if a man will not work in all situations, neither shall he eat. This "completely denies all recognition to the social nature of the heritage of civilisation, and by its refusal of purchasing power except on terms, arrogates to a few persons selected by the system, and not by humanity, the right to disinherit the indubitable heirs, the individuals who compose society."

It is difficult to calculate this power of heritage origin. Thorold Rogers says that in 1495 an Englishman could support himself and his family in comfort by working 15 weeks in the year. English industrialists, Lord Lever-hulme for instance, have said that they need not ask more than two weeks work from each of their employees per year. Between 1913 and 1945 in England, average man-hours per unit of production, including transportation and distribution have roughly decreased in the ratio of about 100 to 15. On the basis of true cost therefore, the 1946-pound sterling would be worth £6/12/- instead of 8/4. A very large English manufacturing organisation in the whole field of electronics are now producing 60 million radio and television valves much more highly elaborate and diverse in design, for every million produced during the war. There is now in existence machinery, which can produce entirely automatically all the components, and wire and assemble complex radio and television equipment.

The present world economic system rests on the financial perversion of the true law of supply and demand. With this is fostered the delusion that in some way money is inherently connected with "value." It is probable that this difficulty is associated with the classical idea that money is a medium of exchange. It may have been once, a long time ago, but ever since division of labour and process began, and with the advent of the credit debt banking system it has never been any such thing. In any case money as a "medium of exchange" has nothing to do with the inherent nature of money.

The whole world is deeply indebted to the transcendent genius of the late Major C. H. Douglas for his revelations concerning the nature of money and the money system. Their importance more than doubles when we come to consider the nature of the "just price," with implications so profound for the whole foundation of Christian sociology. In his book Social Credit he writes: - "Now the distinguishing feature of the modern co-operative production system, depending for its efficiency on the principle of the division of labour, is that the production of the individual is in itself of decreasing use to him, as the subdivision of labour and process is extended. A man, who works on a small farm, can live (at a very low standard of comfort and civilisation) by consuming the actual products of his own industry. But a highly trained mechanic, producing some one portion of an intricate mechanism, can only live by casting his product into the common stock, and drawing from that common stock, a portion of the combined product through the agency of money."

"There are some deductions of major importance which can be made from these premises. The first is that money is nothing but an effective demand. It is not wealth, it is not production, and it has no inherent and indissoluble connection with any thing whatever except effective demand. That is the first point, and it would be difficult to overrate the importance of a clear grasp of it. It lies at the root of the question as to the true ownership of credit-purchasing-power. The second point is that, so far as we can conceive, the co-operative industrial system cannot exist without a satisfactory form of effective-demand system, and the result of an unsatisfactory money system (that is to say, a money system which fails to function as effective demand to the general satisfaction) is that mankind will be driven back to the distinguishing characteristic of barbarism, which is individual production. And the third point, and the point which is perhaps of most immediate importance at the present time, is that the control of the money system means the control of civilised humanity. In other words, so far from money, or its equivalent, being a minor feature of modern economics, it is the very keystone of the structure." Money is the starting point of every action, which requires the co-operation of the community or the use of its assets.

"Yet perhaps the most important fundamental idea which can be conveyed at this time, in regard to the money problem - an idea on the validity of which certainly stands or falls, anything I have to say on the subject - is that it is not a problem of value -measurement. The proper function of a money system is to furnish the information necessary to direct the production and distribution of goods and services. It is, or should be, an "order" system, not a "reward" system. It is essentially a mechanism of administration, subservient to policy, and it is because it is superior to all other mechanisms of administration, that the money control of the world is so immensely important." (4)

The wealth of a country, and therefore the basis of its financial credit, is not so much in the things that it actually possesses as in the rate at which it can produce them. Now, the rate at which it can produce them is a composite thing, because side by side with production we always have consumption, so that we can say that the net rate of production is the gross rate of production minus the rate of consumption, and it is also possible to say that the absolute cost of all consumption is the rate of consumption divided by the rate of production. Every improvement of process, machines, and the application of power to industry increases the rate of production without necessarily increasing the rate of consumption. So that the rate at which we can issue additional credit is easily seen to be dependent upon the rate of increase of productive capacity.

The apparent failure on the part of orthodox economists to perceive or to act upon the fact that the whole economic system is dynamic, not a series of static stages is one of the root causes of the world's troubles. Hence the lack of appreciation of the real importance of Major Douglas' definition of real credit as the rate or dynamic capacity at which a community can deliver goods and services as demanded. Real credit is a measure of the reserve of energy belonging to a community.

The rate of production is practically proportionate to the energy applied to it. The energy output of machines, not the input, applied directly to the production. If one unit of human labour with the aid of mechanical power and machinery produces ten times as much production as the same unit working without such aids then either output will increase ten times or only one-tenth of the amount of labour will be required for the same original output. As production per man increases either requirements must increase, or the number of men required in production must decrease. When overall production increases beyond individual requirements as the ratio

Machine Time Energy Units
-------------------------------------
Human Labour Time Energy Units

rises towards near saturation level and very few men would receive wages and salaries to purchase the product, then price, per unit production would have to fall so that the smaller amount and area of wage distribution would purchase the total product, some of which would otherwise remain unsold. Note, however, that even so the automated or near automated production beyond the largest requirements of the relatively few wage and salary earners would not be purchased, and displaced labour would have no purchasing power to purchase. Therefore both pragmatically and ethically owing to the social nature of the cultural heritage the distribution of a social or national dividend is demanded.

Between the two extremes of individual and totally automated production there is a correct ratio of dividend to wage and salary to reflect the true physical situation; the only way of providing genuine opportunity for true leisure. The true physical situation makes progress towards this status inexorable unless catastrophe supervenes.

The nature of the cultural heritage and its operation increasingly through co-operative machine production is making producer and consumer increasingly interdependent. The natural born inhabitant of a country is becoming inherently less a wage earner and (but not in practice) more of the nature of a shareholder in his country. The original conception of the classical economist that wealth arises from the interaction of three factors - - land, labour and capital, was a materialistic conception which did not contemplate and, in fact, did not need to contemplate, the preponderating importance which intangible factors have assumed in the productive process of the modern world. The cultural inheritance and what may be called the "unearned increment of association" probably include most of these factors, and they represent not only the major factor in the production of wealth, but also a factor, which is increasing in importance so rapidly that the other factors are becoming negligible in comparison.

It is both pragmatically and ethically undeniable that the ownership of these intangible factors vests in the members of the living community, without distinction, as tenants-for-life. Ethically, because it is an inheritance from the labours of past generations of scientists, organisers, and administrators, and pragmatically because the denial of its communal character sets in motion disruptive forces, threatening, as at the present time, its destruction. If this point of view be admitted, and I find it difficult to believe that anyone who will consider the matter from an unprejudiced point of view can deny it, it seems clear that the money equivalent of this property, which is so important a factor in production, vests in and arises from the individuals who are the tenants-for-life of it.

In conclusion it must be re-emphasised that the only true, sane origin of production is the real need or desire on the part of the individual consumer whomever he may be. If we are to continue to have co-operative production then the system must be subject to one condition only -- that it delivers the right goods to the right users. If any man or body of men by reason of their fortuitous position, attempt to dictate the terms on which they will deliver the goods, (not be it noted the terms on which they will work) then that is a tyranny. Revolution, agitation, and reformism are merely symptoms of a grave and possibly fatal disease in the world's social system and unless an adequate remedy is administered there will be an irreparable breakdown.

"The prevalent assumption that human work is the foundation of purchasing power has more implications than it is possible to deal with here. It is the root assumption of a world philosophy, which may yet bring civilisation to its death grapple. It consists in the domination of a system over all effective individual dissent. The steps to that end consisting in depriving the individual of economic independence either by vesting physical control in the state (conscription) or by "Nationalising" through grinding taxation, or otherwise the means of production, and abolishing all purchasing power not issued, on terms, by the state." "Against this, mere physical force is powerless, leading but to that which it would destroy. There is, never the less, a weapon to hand, that faith, that credit based on the unity-in-diversity of human needs, which in sober truth has moved mountains, without which the Panama Canal would never have been cut, or the St. Lawrence spanned. Into the temple of this faith the money changers have entered, and only when they have been cast out will there be peace." (4)

(1) B. W. Monahan in An Introduction To Social Credit.

(2) Elements of Social Credit.

(3) Elements of Social Credit.

(4) C. H. Douglas in Credit Power and Democracy.