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Credit Fragments, 2003-2005, Part I
Since January 2003 I have participated in e-mail conversations about social credit, notably in the group hosted by Bill Ryan. The following are excerpts from my contributions to those conversations. My hearty thanks to all my interlocutors whose wit sharpened mine. (Their names have been replaced here with random initials.) I have taken pains in both selection and arrangement to let each fragment set its neighbors singing to create new harmonies. Indeed, creating these new harmonies is the whole purpose of this retrospective - looking back to move forward.
What Can We Do?
Douglas's famous "critical moment" passage may have held out hope when it seemed there was none. But I find the idea breeds a kind of fatalism and passivity that is not good for our movement. If I may paraphrase George MacDonald, the real critical moment is the next five minutes. Or as Douglas put it, too, "The best way to chop down a tree is to chop it down."
I would like to suggest that it is possible to by-pass the state and implement real social credit on a small scale immediately and solve real problems with it. . . . This would create an entirely new factor in the movement of which we are a part. It would (1) provide a working model of social credit solving real problems; (2) be an education in credit for us and give us practical experience handling the tool of social credit; (3) be an education in credit for the public who is watching us and, if successful, generate more positive publicity than a multimillion-dollar advertising campaign; and (4) support our literature by making people want to know how we did it. (beginning and end of a two-page e-mail giving a comprehensive outline of this idea, dated February 13, 2003)
I am more and more convinced every day that the best way to persuade is to give up begging for the attention of the media and trying to yell louder than the next guy and instead put our faith in quiet deeds that will make the media come to us, rather than us having to go to them.
Undertaking a limited objective with sanctions you do possess is the only way to "expose these people."
The most telling way to "expose the conspiracy" would be to try to do what we want.
Be Like Douglas
It would be a new lease on life for this movement if its members could do something for a change. And so I have devoted a lot of time trying to figure out a way a small number of people could get real, economic results on their own. As I see it, this is a "frontier" of the science of social credit. It is boring to me to hear that it is "not social credit" because Douglas didn't think of it. Douglas did quite enough for a lifetime. It's our job to pick up where he left off. It's important to understand Douglas. But in my opinion, he only understands Douglas who has tested the limits of Douglas's ideas - pushed them, pulled them, taken them apart and put them back together again, critiqued them at one level to find them come back at another. Having understood Douglas, we can take up where he left off. Having understood Douglas, the understanding is not going to leave us. We don't have to police ourselves against questioning him further and even going beyond. And what if - suppose the impossible - what if Douglas made a mistake? Do we correct it? Or do we say we can't correct it because that would not be social credit? What would Douglas do?
I have always hated the Holy Text attitude toward Douglas - that social credit is a matter of Douglas scholarship, that we are not to have a living engagement with these ideas, that we are not to change anything. This idea of a ruling Law, a Holy Text, is what Douglas opposes on every page of the book Social Credit. It is what Bacon fought. If ideas are capital, then only a reproductive use of them is worth anything.
Douglas's writing should be thought of as part of our cultural heritage. The Cultural Heritage is not truly appropriated - it is in fact lost - if we allow it to be an Authority. It is truly appropriated when we use it as a Tool, creatively and reproductively. This is the very difference between the "Aristotelian" and "Baconian" modes that Douglas contrasts in Social Credit.
The Christianity That's Never Been Tried
It is obvious that Douglas was a profound reader of the Gospels. It is equally obvious that he was no more orthodox in religion than he was in economics. For Douglas the Old Testament, with its God of Wrath and its truths handed down from Sinai, embodied what he opposed. It is obvious that he did not regard it to be Scripture, and a slighting reference to St. Paul (in Security: Institutional and Personal) suggests no love lost there either. Indeed, I think the very concept of a Scripture - a final writing - was alien to the man. It is alien to the whole spirit of the book Social Credit, which ranges itself against the twin evils of "classicism" and "Mosaism." By the former Douglas means the settlement of questions in theology, law, and politics by appeal to abstract principles, and by the latter, the recognition of a transcendental, external authority in contrast to affirming the immanent, interior authority of the individual person. He read the Gospels as a gospel of this immanent, interior authority and spent his life pursuing the social implications of this. Surely it is significant that in "Whose Service Is Perfect Freedom," he describes Christianity as something that "has never been tried."
Douglas doesn't accept the [biblical] Canon. This is evinced not only by his hostility to the OT but by his whole philosophy. The very concept of an authoritative Text belongs to the reactionary "Aristotelian" mode that Douglas sought to defeat. A "Baconian Canon" would be a contradiction in terms.
Perhaps the phrase Christ versus Aristotle captures the idea.
Instead of seeing our inevitable, intuitive starting-point as a flaw, we ought to accept it as the precious fact of being a human being, instead of a robot. God made us this way, liable to make mistakes, so that we could participate in our own making, for we are not finished. We learn by bumping into things, and we shouldn't be in horror of it. There are a lot worse things than being wrong. And if we exercise all our force in the effort to avoid being wrong, we will never become the men and women our Father wants us to be. . . . If I follow my own lights and bump into reality, then I'll learn something - exactly the thing I needed to learn. If I follow someone else's lights and am right, I'll never learn anything. Douglas certainly believes that there is an objective reality - he calls it "the Canon" - but not that there is an abstract of it somewhere or that there is any way to become perfect in it except by the inductive way of trial and error, through "expanding individuality."
[That Christianity "has never been tried" means] we can't put "Christianity" into the category of "familiar ideas" and assume that we know what we are talking about. Rather, social credit is pregnant with a new understanding of what "Christianity" really is.
"It would not occur to me to attempt a comprehensive definition of what Christianity is." Why would it not occur to Douglas to define what Christianity is? Because (as he says elsewhere) it's never been tried. It's never been tried; therefore, none of us can know what it will be like. The word "Christianity" is like the word "freedom": you can't say in advance what freedom would be like because such is the infinite potential of human creativity that what people will do with freedom will surpass anything we can imagine.
Douglas found a powerful metaphor of reality in the idea of the Incarnation as against the spirit of abstractionism. He was, after all, faced with a financial science that was an esoteric world unto itself evolved over centuries and had nothing to do with material reality - being imposed on material reality with catastrophic results. The idea of the Incarnation appealed to the instinct of the engineer or the artist, whose "freedom is, like God's, to get into the creation" (I am quoting Charles Ferguson).
T. says, "What is it that has been incarnated? The idea of a sharp, shiny, stainless and springy steel sword, for example?" Well, yes, T., that's right. Douglas quickly moves from Incarnation as a religious doctrine to Incarnation as a universal metaphor. As a universal metaphor it means that spirit comes to its own in things. Just so, a spirit comes to its own in a sharp, shiny, stainless and springy steel sword. When I say "comes to its own," I mean that the sword-making art forges both the sword and the soul. This is the opposite of abstractionism. It is in and through the wrestle with nature to form the stuff of the universe according to the heart's desire that wisdom comes - and gets poured right back into forms again. You can see Christ as standing for this universal metaphor of the Incarnation - the rejection of the vapid nothings and endless discourse of the Pharisees and the incessant call for "fruits" - actual results, deeds, art, service.
Douglas and Ferguson both hail Francis Bacon as a pivotal figure in sweeping away the abstractionist cobwebs and recovering the idea that the spirit comes to its own in things. To ask for knowledge on any other terms is an impertinence. What do you want it for? If you are just greedy for knowledge, you haven't the right to knowledge and won't be given any. If you are creating something, you have a right to the knowledge you can use. Knowledge we can't use is detrimental to us and is not really knowledge at all. The spirit of the Incarnation is really the only spirit in which anything constructive has ever got done or anything beautiful made. Christ lived it and brought it to the surface in a way that invited men for the first time to universalize it, democratize it, and usher humanity into a new era.
If social credit is the "policy of a Christian philosophy," does that mean that first one has to adopt the philosophy, and then one can carry out the policy? If social credit is "practical Christianity," does that mean that first one has to be converted to abstract, impractical Christianity, and then one can make it practical? Aren't the two a unit? Don't they go hand in hand? And so why should social credit wait on conversion of people to a certain abstract philosophy or religion? Missionaries know that quietly healing the sick and helping the poor eloquently carries Christ's message. Social credit does heal the sick and help the poor, therefore it seems an ideal missionary effort. A missionary effort, in this case, for a new vision of what "Christianity" is.
We don't have to "make social credit acceptable" to all cultures. It will make itself not just acceptable to but demanded by all cultures once it is established anywhere. "Whose needs would not be fulfilled by the proper application of the Douglas ideas known as Social Credit?" Clearly, no one's. What Douglas meant by "practical Christianity" - the thing, not the label - would be a breath of fresh air wherever it was applied. Instead of saying, "Hinduism lacks the social teaching necessary to establish the right relationship between the individual and the group," we should say, "Social credit could become the great vehicle - the ideal emissary - of that teaching." And we dare not be cocky, for we need such a vehicle here at home, too: Calvinism and capitalism also lack the necessary social teaching.
It's All About People
Between Man and Nature, the cost is borne by Man. The very word "resource" implies a relation to human needs. The cost to Man of the depletion of natural resources is the resulting human suffering -- no more, no less.
Ruskin defines labor as "the quantity of 'lapse', loss, or . . . suffering in effort" and that is the definition to keep in mind when speaking of labor displacement (not something measurable in ergs). In short, productive activities are of varying degrees of unpleasantness. Naturally, greater unpleasantness requires a greater external incentive to induce someone to do a job. Insofar as progress can succeed in making productive activities less unpleasant, less external incentive will be required. A productive activity that is wholly a pleasure to the person performing it is indistinguishable from leisure and requires no external incentive at all. But the same thing occurs in little with every innovation that makes a job less unpleasant. And so all this is really about the state of the human soul.
In the highest sense of the word, wealth is only wealth when it is used. A flute gathering dust is not wealth in the highest sense. A flute in the hands of a flute-player is wealth because it produces a real consumer good - music. And a flute in the hands of someone who can give the soul a voice through it is wealth in the highest sense of the word, because thus a soul touches other souls, and in the last analysis the soul is the only wealth there is.
K.'s reluctance to admit that banks create money seems to me to stem from an unwillingness to separate tickets from their intelligent issuance, a desire to imbue the word "money" with the substance and goodness that really belongs to people, whom money is supposed to serve.
The moment I hear the phrase "purchasing-power," I think of human beings. And the moment I hear the phrase "insufficiency of purchasing-power," I think of human beings unable to obtain what they need. So I am immediately in a moral world.
When it became clear that orthodox finance was a policy, not merely a mistake, [Douglas] no longer presented social credit as morally neutral.
Inductive science begins with a hypothesis in relation to a problem. In Douglas's case, the problem is "the tragedy of human effort," a moral phrase if ever there was one. If there were no "tragedy" -- if everything was as it should be -- there would be no need for an A+B Theorem.
Think what you are saying when you say "insufficiency of purchasing-power" is a "mathematical" problem! Has it, then, nothing to do with human beings? If Douglas stipulated an equal dividend to every man, woman, and child, he did so for a reason, namely, that we are all equally heirs of the cultural heritage. If it were all paid to one person, we could say the mathematical problem was solved: purchasing-power would equate to prices. However, the citizenry would still be robbed of their heritage, and goods would still lie unsold.
Money Is a Ticket
A dollar in your account is a claim to something and is therefore a unit of measure and a contract (ticket) at the same time. It is a unit of measure by virtue of what it claims. A bag of sugar on the shelf is marked with both a weight and a price: weight 5 lbs., price $3.99. The weight is simply a measure. The price, on the other hand, is much more than a measure and not even first and foremost a measure. First and foremost, it tells me that if I transfer 3.99 units from my account to the store's, I can have that bag. It is, as Douglas says, an order system.
If the national dividend is credit, it cannot be said to be the nature of credit that it is a pledge against the future. The nature of credit is that it is a claim on goods and services that exist. Credit functions as a pledge against the future only because it is first of all an effective claim on goods and services that exist. A bank issues credit instruments to the dreamer, let us say. The instruments work because he can use them (1) to claim raw materials and capital and land that exist and (2) to reward workers with claims to consumer goods and services that exist. So the credit instruments are created to mobilize production in respect to future goods and services, but what they are is claims to existing goods and services. Credit is backed by what it buys.
Is money backed by what it buys, or is it backed by future productive potential? How can it be both? The former is what money is, the latter is only the terms on which it is commonly issued as loans to production.
There is a serious flaw in the assumption that the money paid out in the course of producing a consumer good is the money that is "supposed" to buy it when it is available [Say's Law]. That would mean that current product is already spoken for (the tickets for it have already been distributed) and that labor is paid out of future product, as if by postdated checks. Instead of assuming that the money paid out in the course of producing a consumer good is the money that is supposed to buy it, we assume that money paid out currently is supposed to buy the goods currently coming onto the market.
What I now understand C. to be saying is that production stands ready to produce, and we should have the money to order all that it can produce. There are a few ways of looking at this. (1) We might in general have the capacity to produce all sorts of things that nobody would want. But since nobody wants them, we are not organized to produce them. If such a demand materialized and a company organized to produce them, only then would we want the money to order them. (2) C.'s concept is easiest to understand if one thinks in terms of services or in terms of custom production. Suppose the printer stands ready to print so many invitations per month, but this month the public only orders - and the printer only prints - half that amount, that does not mean that the printer's unused half-capacity the first month can "roll over," enabling him to produce at 1 1/2 times capacity the second! Therefore, since the public already has enough to buy half his capacity, they only need enough more to buy the other half. Furthermore, if this reduced demand becomes a permanent trend, the printer must take it as a signal to reorganize to produce less. In that case, no. 1 above will apply, and the public will certainly not receive money to order invitations in amounts that demonstrably no one wants merely on the grounds that producers could organize to produce it if it was wanted. (3) Now consider the situation in which goods are produced readymade and put on the shelf. Production responds to consumer demand not directly, as in no. 2, but after the fact. Radio Shack, let us say, puts so many electronic gizmos on its shelf in one month. The public should have enough money that month to buy all the goods put on the shelf that month, not all the goods that might be put on the shelf. The way the public orders more goods to be put on the shelf is by buying faster: if a month's stock consistently disappears in two weeks, production has received an order to double output. Then and only then should the public have the money to buy the increased output. [Furthermore,] productive capacity would have to be figured on the assumption of full employment, would it not?
The equity in capital production that the community wants and needs is precisely a claim to the consumable goods produced by means of the capital goods.
The advance of technology over time means that an increasing percentage of production should be free to the consumer. That is exactly what the National Dividend is about.
The point of a consumer production system is to provide goods and services to the consumer on the best terms possible. If I can get goods on better terms today than yesterday, that means some of my own time is freed up. That means I am "disemployed" to that extent. I might choose to employ this extra time to increase my standard of living, or I might decide that other things are more important. That's a personal choice, and I make no assumptions about it. But it is the purpose of the economy in a free society to give me that choice to the greatest extent possible.
"Investment" means something "tied up." It is the exact opposite of disemployment. Technology has the capability to free up consumer goods and services, which is the same thing as freeing up the individual by disemploying him; and you churn it back into production, release it again as wages for created jobs, churn it back in again, and so on, and call that progress! In the words of Douglas's great predecessor John Ruskin, it is "bulb issuing in bulb, never in tulip" (Unto This Last 4.73). That is the tragedy of human effort. The only sane purpose of investment is to reap dividends, that is, to consume, to be disemployed. Money at its point of creation should be regarded as a social investment, an allocation and investment of the cultural heritage, and should pay a dividend to every man, woman, and child. And with artificial poverty abolished and many people gainfully disemployed, I think, saving, private investment, and consumer borrowing will all become obsolete.
There is a fundamental contradiction in saying that as people become richer and richer by means of the national dividend and their need to buy more and more stuff slows, they will invest in capital instead. To what end? To make more money for them not to spend? As the need to buy more and more stuff slows (and goods are of better quality and last), the need for producers and employment (and investment) to produce the stuff decreases accordingly. This is a good thing: it's called Leisure.
Foregoing consumption would be a signal to production to slow up. Foregoing consumption to finance new production sends a mixed signal.