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

The Madagascar Experiment

February 2005

Since April 2002 I have been urging on the world social credit community -- in a letter to my fellow directors of the Social Credit Secretariat, in issue after issue of Triumph of the Past, in Bill Ryan's social credit e-mail discussion group, in the concluding chapter of my book on Charles Ferguson, in five talks in Australia and New Zealand in October 2002, and on the Australian League of Rights website -- that we no longer wait but implement social credit immediately at the local level, adapting Douglas's ideas for that purpose.
Last May two representatives of the Pilgrims of St. Michael - full-time pilgrim Marcel Lefebvre and "our good friend of Switzerland, Mr. Francois de Siebenthal consul general of the Philippines and an economist" - visited Madagascar as guests of the Catholic Episcopal Commission on Justice and Peace. The following is the account of this visit published in the Pilgrims' Michael journal for May-July 2004:

Then we went into the bush, driven by the secretary, in the pastor's "4 x 4" vehicle. We were invited by the Secretary General of the Justice and Peace Commission, Mr. Jean Marie, a father of 8 children, who is involved with church activities. He managed to gather all the people of the village to meet us.
We began with the recitation of the Rosary, and then gave a talk on the cause of their poverty, and the way out, by establishing a local money system, like in Switzerland and in Argentine, where they call it "social credits." We told them about the possibility of creating their own figures (money) to develop their area, without waiting for the International Monetary Fund, the World Bank, and all the other money-lenders who exploit them. We founded together the first Social Credit bank, just as the five islanders did in "The Money Myth Exploded." They brought all their belongings to create a fund to start the new bank. It was really moving and impressive to see them bring all they had. They are really good people. Bishop Raymond told us that within a year, there will be 500 small banks like this one in Madagascar.
So where we founded this first bank, we gave a Rosary to every family that enlisted, and made them promise to say the family Rosary every day for the success of this important undertaking. Before founding the bank, Mr. de Siebenthal asked the priest who was accompanying us to confess the Faithful. There will be no interest charged in this bank; on the contrary, dividends will soon be given to every participant. They will develop their own area in an impressive manner.

De Siebenthal gave a presentation about this at the Pilgrims' Annual Congress in September at their center in Rougemont, Quebec. From October-December issue of Michael:

Mr. Francois de Siebenthal spoke to us of his apostolate with Mr. Marcel Lefebvre in Madagascar last May. In a small county in the bush, far from large cities, our two fervent Social Crediters established Social Credit in a simple manner, a bit like the story in "The Money Myth." "Madagascar," Mr. de Siebenthal told us, "is the concrete example of a talk given by Mr. Louis Even. I re-read all the early writings by Louis Even in a small pamphlet. He spoke of Switzerland, of methods, of referendums, and of local banks in Switzerland. We simply applied this project from the 1930's of Louis Even, applied it in Madagascar.

Guest speaker Bill Daly of New Zealand summarized de Siebenthal's presentation as follows:

An experienced banker, now working for a Catholic TV station, he had only a short while before heard of Social Credit. But being a man of action he had earlier in 2004 spent several weeks at Rougemont learning as much as possible and had then gone to Madagascar with a colleague and started a small local credit scheme in one of the remotest and poorest districts. While initially very simple it is intended to introduce other aspects as the scheme develops, such as a national dividend and the compensated price. The Cardinal of Madagascar wants to see such schemes established in every one of his more than 100 parishes.

This exciting idea became a main focal point of the Congress. Again from Bill Daly:

What was evident at Rougemont was the new possibility of such developments emerging within, but not exclusively, the third world. More than one Bishop was present from Mexico and the Philippines and there were a number of priests and lay professional people, some associated with universities. . . . Certainly those attending from Poland, Mexico, Ecuador, Benin and the Philippines only demonstrated great enthusiasm and hope for genuine reform in their own diocese, parishes, towns and countries.

Another speaker, Vic Bridger of Australia, put it this way:

It was stimulating because of the enthusiasm shown by all the delegates from Poland, Mexico, Ecuador, and the Philippines in particular. . . . Each of the Bishops and Monseigneurs [Monsignors] declared that they would be furthering the cause through their pulpits. . . . I left the Congress with the view that it may well be the poorer countries who will give the lead because they have nothing to lose but their poverty.

According to the same issue of Michael, "Fr. Jozef Jakubiec and Doctor Jan Wilk want to found, at the Shrine of the Holy Family in Krakow . . . a bank that lends interest-free money, working along the Social Credit principles." Finally, a recent Pilgrims flyer released in advance of a series of public meetings in New Zealand says: "With the help of local church and community leaders they initiated an exciting complementary currency in an impoverished area of Madagascar. Presently similar projects are planned in Poland, the Philippines and elsewhere."
Actually, the first interest of the Pilgrims in this concept can be dated a little earlier, namely, a conference at Zakopane, Poland in December 2003, hosted by that same Fr. Ja
kubiec. In an e-mail to the Social Credit Action Group, Diane Boucher, who represents the Pilgrims and has a master's degree in economics, states:

The subject of the conference in Zakopane was about practical ways to implement social credit policies. People interested in social credit in Poland do not want to use a top-down strategy but a bottom-up one. That is to say they choose not to implement social credit at the national level, but to create small communities using local monies. . . . People in the Louis Even Institute [Pilgrims] think that the way Poland chose is a good way to begin an implementation of a social credit system.

It is now going on a year since the foundation of the "first Social Credit bank." But not only have we had no progress report, we don't even know what was done in the first place. The sketchy account above is all that has been published. Diane Boucher has supplied a little more information in two e-mails to the Social Credit Action Group:

September 3, 2004: What the villagers did with their belongings was to put a monetary value on them. So the accountant of the Bank was able to write these values to the account of each member of the Social Credit Bank. The credit (positive side) transaction and debit (negative side) transaction . . . are simply written in a small accounting booklet for each member and in the great book of the accountant during each sale. When somebody needs credits to make products, the accountant writes the new credits in the producer's account. So the new credits are created with the new production. Without any interest. The credits are cancelled when the products are sold, that is to say they are cancelled with the consumption of the products. Periodically, new credits are written to the accounts of every member of the Social Credit Bank in the measure where there is social progress. It is the (local) dividend. It is the same way of functioning as in the story of the five islanders. The discount is not implemented yet, because this economy is very simple. When it will become enough complex to have producers of intermediate goods or equipment goods, it will be necessary to implement the discount to consumers with compensation to the producers.

October 5, 2004: Their belongings are their private properties: cows, hens, tools, etc. they can use as producers, plus the communal property: the school being built, for example. They brought these properties together to give a value to the local assets. These assets will grow with social progress and their monetary value will increase. The local dividend will be calculated on the value of the local assets. For example, the school will have a greater value when finished and the dividend will be greater because of this increased value. If a typhoon destroys the school, the monetary value of the local assets will decrease and the next dividend will be lower.
I think that the villagers' belongings are not a collateral: the new credits are created to equal the value of the new products being made by the local producers, not to equate the value of the local assets. For example, the eggs from the hens are new products and have a market value based on the producer's cost: if a child takes care of the hens and the hens feed themselves around, the value of the child labour is the cost of the eggs. The eggs will be used as food and also in an old roman recipe to make cement for building the school. The villagers were unable to finish the building because they are too poor to buy cement.
It is really a social credit experiment on a small scale. The credit of this small community has a value as a productive capacity!

To this small cache of evidence we can add the passage alluded to from "The Money Myth Exploded," by Louis Even, founder of the Pilgrims of St. Michael. The pamphlet is an illustration of economics on a desert isle, such as economists have been making for centuries. There are five castaways: a carpenter, a farmer, an animal breeder, an arborist, and a metallurgist. The relevant passage is in the words of Tom, the metallurgist:

I open an account in the name of each of you. In the right hand column are the credits which increase your account; to the left are the debits which subtract from your account. Each wants $200 to begin with. Very well. We write $200 to the credit of each. Each immediately has $200. Frank buys some goods from Paul for $10. I deduct $10 from Frank leaving him $190. I add $10 to Paul and he now has $210. Jim buys from Paul to the amount of $8. I deduct from Jim $8 leaving him $192. Paul now has $218. Paul buys wood from Frank for $15. I deduct $15 from Paul leaving $203. I add $15 to Frank's account and it goes back to $205. And so we continue; from one account to another in the same fashion as paper banknotes from one man's pocket to another's. If someone needs money to expand production, we issue him the necessary amount of new credit. Once he has sold his products he repays the sum to the credit fund. The same with public works; paid for by new credits. Likewise, each one's account is periodically increased but without taking credits from anyone, in order that all may benefit from the progress society makes. That's the national dividend. In this fashion money becomes an instrument of service.

We have to make the best here of very scanty information. I submitted it to Tom Greco, an expert in alternate currency systems, and he concurred: "The details in that account are insufficient to make a proper assessment." We don't know the name of the village. We know nothing about its size, ethnicity, language, history, manners and customs, social structure, or civic life. It appears to be a Catholic village. We know nothing about its diet, clothing, shelter, sanitation, health care, natural resources, distance from a road, distance from a town. We don't know what it produces besides milk and eggs. We don't know where it gets its tools.1 We don't know what products it most needs from outside itself. We don't know if is in debt.
I think we can assume that money is so scarce there that it is virtually a moneyless economy. The school building project was halted because the village was too poor to buy cement. The people probably made their own bricks by pouring mud into wooden forms and baking them in the sun, but the mortar to hold them together would have to come from outside.2 They have plenty of eggs, so if they can make a cement from eggs, they can be more self-sufficient.
Each member3 was provided with a "small accounting booklet," and the "accountant of the Bank" keeps a "great book." The villagers physically brought their "cows, hens, tools, etc they can use as producers" to one place, the accountant put a value on them in the new unit (we aren't told what it was called), and that became their initial account balance both in their own booklets and in the great book. This was not a loan but the representation, in figures, of what they already owned. The village thus took a step forward from a moneyless economy to a money economy. The villagers now had a simple way to trade around their cows, hens, and tools according as each had need and opportunity to make use of them. The assessment provided a basis for prices: people knew what a hen was assessed for and would not expect to pay more unless there were a reason.
In addition, anyone with a good plan could have his account written up in advance on the strength of the goods he was likely to produce. This would be a loan, signifying the village's faith in him as a producer. To use Boucher's example, you could get an advance from the Social Credit Bank to pay your next-door neighbor's child to take care of your laying hens. You could then sell those eggs to someone or to the community to make cement for the school and repay your advance, all by means of these ledgers.
"The same with public works; paid for by new credits," says Tom. In other words, the village council will also have its own account, which will be credited with the budgeted amount for the school. This would be expended on eggs to make the cement and perhaps also on labor if the labor is not a share-and-share-alike undertaking. This money would be recouped, I would guess, from parents' paying new credits to send their kids there. Is it anticipated that the school will serve neighboring villages as well and, if so, how will they pay?
So far, this describes a change from a moneyless economy to a money economy but without any specifically social credit features. Boucher states, "These assets will grow with social progress and their monetary value will increase. The local dividend will be calculated on the value of the local assets." She also implies that the initial booklet entries included a share to each of the value of the partially completed school building and that the completed building would generate a monetary dividend in every member's account booklet.
I fear this is not sound. There is no justification for writing up people's money accounts merely on the basis of increased local assets. In fact, there is no justification for writing up people's accounts initially on the strength of their "private property: cows, hens, tools, etc. they can use as producers, plus the communal property." Their accounts should only be written up for new goods and services that they can buy.4 And why are milk and eggs - more likely to be sold than hens and cows - left out of the account?
There seems to be confusion as to whether the new credits issued to the egg producer and the school represent the eggs and education it is hoped they will produce or (as it should) an allocation of the things they or their paid workers will buy with them immediately. It cannot be both at the same time. And what will be the consequence of issuing new money on the strength of goods yet to be produced without regard to what exists to buy with it?
Dividends will be payable as the village economy succeeds in producing the same sufficiency with less and less loan money. Less money/time required for production means more money/time freed for consumption.
Both Bishop Raymond and the cardinal of Madagascar hope to found other banks along the same lines. Will they all use the same unit, or will each use its own? The Pilgrims hope to found other banks along the same lines in other countries. What problems have arisen in the operation of the village bank, how were they addressed, and with what success? Has this experience enabled the Pilgrims to make any improvements to their model?
I call on the Pilgrims of St. Michael to issue a thorough report on the "first Social Credit bank" so that other communities can benefit from the experience of this Madagascar village and create similar institutions for themselves to help raise themselves out of poverty!


1. When I was in the Peace Corps in Sierra Leone, the village blacksmith made tools out of scrap metal from Datsuns.
2. In Sierra Leone, the people in my village made bricks in exactly this way for a school, but the U.S. government donated the cement and also zinc pan for the roof.
3. Who is a member? Every person? Every adult? Every household?
4. Greco comments, "When credits are created [for the people] to pay for capital projects, like building a school, those credits should not be available for spending until the capital project begins to produce goods or services, then those credits should be paid for the goods or services."

The Case Against Income Tax
By Anthony Cooney, Editor, Liverpool Newsletter

The following has been sent to the leaders of the Conservatives. If there is no reply, or it is unsatisfactory, it will be sent to journalists.

Some years ago the Inland Revenue introduced "self-assessment" of income tax together with draconic measures to enforce compliance. The latest of these, reported in the press in January of last year, are fines of 100 pounds per day for those who have failed to send in their self-assessment returns. The Inland Revenue have had recourse to "dropping out" those whose income position is unlikely to change from year to year, so adding to the confusion of the old and the "return-illiterate."
This should tell us something very important -- namely, that the Inland Revenue experienced increasing difficulty in assessing what amounted to almost the entire adult population of the country; and their solution to the problem, "self-assessment," has not been successful in easing the situation.
It might be argued that "self-assessment," with penalties, also violates three fundamental principles of equity and law, namely, that no man is required to "accuse" himself, that it is for the Crown to request and collect a tax, and that draconic penalties for default offend against the principle that the punishment should fit the crime.
These considerations are, however, but a beginning of the case against income tax. Let us list the practical objections.

1. The cost of assessing and collecting it, of pursuing evasion, and of framing new rules to thwart avoidance probably totals hundreds of millions of pounds per year.
2. Probably hundreds of millions of pounds are "lost" by successful evasion and avoidance.
3. An unknown amount of expertise and time is diverted from useful work into efforts to either evade or avoid the tax.
4. Income tax penalizes the honest, who would be required to pay less if the tax did not reward the dishonest. Because of this, income tax destroys national morale and is socially divisive.
5. Income tax is not only, or even primarily, a method of raising revenue. It is a system of state control and of state espionage, especially in the hands of an ideological government, intent upon

To smash this sorry scheme of things entire
And remould it nearer to the heart's desire.

"New Labour," although skillfully camouflaged, is probably the most highly ideological regime of the past four centuries.

In short, income tax is an expensive, inefficient, perverted, unfair, and out-of-date method of raising revenue. It ought to be replaced by a tax that is inexpensive to collect, cannot be evaded or avoided, does not reduce the efficiency of industry and commerce, and does not infringe the privacy and rights of the subject. Is such a tax possible?
In 1955 two members of the Upper House proposed, and defended in a series of contributions to the Daily Telegraph, the replacement of income tax by a tax on all sums passing through the banking system, that is, a Financial Transaction Tax or, more simply, a debit tax. Basing their calculations upon the circulation velocity of the pound at that time, they argued that the tax might be as little as 1 1/4% (3d in the pound). The circulation velocity of the pound has probably increased since then. Their case was never refuted -- merely ignored.
It was considered of the first importance that this tax must not be passed on by the banking system to its customers in the form of increased banking charges. It was to be paid to the Crown, via the Bank of England, by crediting the Treasury with the calculated amount of the tax.
No one now, I think, denies the simple fact that the point of origin of all money is the creation of credit by the banking system. Even if there are those who deny it, they must admit that the greater percentage of money and credit (let us say 95%) passes through the banking system. Income tax can therefore be replaced by the "debit tax," levied on all sums passing through the banking system. It would be inexpensive to collect: a junior executive with a computer could calculate it from the banking system's own records of daily transactions. It would be evasion- and avoidance-proof. It would not inform the Inland Revenue of anyone's business except the Bank's. It would release the initiative and energy presently devoted to avoiding tax. But most important of all, it would be a truly Tory tax, getting the state off our backs and setting the people free. It is therefore essential that is should not be unveiled before the run up to the election, giving "New Labour" minimal time to misrepresent it.
The replacement of income tax by a "Financial Transaction Tax" would, of course, be bitterly opposed by "New Labour" for many reasons. The most important of these, though carefully unstated, is that income tax is essential to socialism and was proposed as such by Karl Marx in The Communist Manifesto. There is also the fact that "New Labour's" Marxist/Marcuse ideology effectively prevents its theft of the idea. "New Labour's" opposition, however, would expose the real purposes of income tax -- namely, espionage, control, and power.
It might, more understandably, be opposed by civil servants, unless they were assured of no redundancy and redeployment -- they could be given the task of tracking down the earnings of crime.
This is the policy that will win the Conservative party the next general election and save Great Britain. Consider it and seek the views of the "right-wing" think-tanks, but don't be in the least surprised if "New Labour" "experts" declare it "unworkable." They would, wouldn't they?


The Chancellor-of-the-Exchequer, Mr. Gordon Brown, has called for the cancellation of Third World debt. Does this mean that the lenders, whoever they may be, will lose "both loan and friend"? Has anyone ever had a letter from their bank manager to say that he shrewdly loaned the money they deposited with him, but now the debt has been cancelled and their deposit account, like their cupboard, is bare? Of course not! But how can a debt be "cancelled" without anyone -- nation, corporation, or private person -- being the loser? If the debt can be consigned to nothingness, it must have come from nothingness, that is, it was created by the banking system and not by the "loan" of invested funds. The banking system can meet the payment of the "Financial Transaction Tax" in exactly the same way and without passing it on to their depositors.
The Daily Mail of 12th March, 2004, reports that Gordon Brown was "targeting" thirteen billion pounds lost to "tax avoiders." Yet defenders of income tax claim it is both efficient and fair. How much, one wonders, was lost to tax evaders?
Mark Davis of the Australian Financial Review (3 October 2003) has pointed out that the "Income Tax Assessment Act" is now 7,000 pages long -- "It is already Australia's longest, most convoluted and single most unpopular piece of legislation." The same paper reports a speech by commission chairman Gary Banks in which he states that at 7,000 pages, the act is now nearly sixty times longer than the 120-page version that did the job when it was first introduced in 1936. He also said that federal agencies employed 30,000 staff to administer "regulatory functions."
Replace nineteenth-century income tax with something in keeping with the twenty-first century and the computer age. Something fairer, something simpler, something evasion-proof, something collectable by Treasury computer must be possible? The party that abolished the quill-and-ink (income) tax for a twenty-first-century tax will win the next general election.

I now believe there is an overall plan by the Government to ensure the middle-classes are kept in their place and that it ultimately wants to own both us and our money and deprive people of any individual choices.
Geoff Wynne, Daily Mail, 11 November 2004