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

December 1996: The King's Word

In our St. Michael's Day issue, we defined three interrelated terms in the philosophy of association: social credit, "the condition of faith that alone makes it possible for an association to serve all the individuals who compose it"; increment of association, "the enhanced fruitfulness and eased labor of free people in proximity"; and cultural heritage, "the above considered as a legacy--free for our use and that of our children."
Examining these concepts with the help of Louis Even (1885-1974), author of In This Age of Plenty, we discovered that the end of economics in the association we call the nation is to join goods to needs, that is, consumption.
    Ultimately, of course, man consumes in order to realize a higher and spiritual end; or as Ruskin brightly puts it, "Wealth is the possession of the valuable by the valiant" (Unto This Last 64). But within the limits of economics, the end is simply consumption, and we produce in order to consume. Therefore (we concluded with Even) if the end is to govern the means, it is man the consumer who must give his orders to the producers.
These orders take the form of the king's word, that is, money. Money is simply the king's promise to the nation as consumer, on behalf of the nation as producer, that so much wealth exists and will be delivered as required. When presented at the retail counter where producer and consumer meet, the king's word constitutes a command. In making this promise on behalf of the nation, the king simply expresses the social credit, the increment of association, and the cultural heritage that constitute the nation. (In a republic, it will be some other authority; but we shall simply say king for convenience.)
    Now while wealth is for consuming or otherwise enjoying (the end of economics), the king's word is only a promise. It is made good by the delivery of wealth, and then it becomes superfluous. In other words, other things are for enjoying over time, but the king's word is only for spending. Chaucer's Avarice, whose purse "she hid and bound so strong"

That men must abide wonderly long
Out of that purse ere there come ought
For that ne cometh not in her thought,

is one near dead from hunger, cold, and in rags. The king's word is a social instrument.

An Immense Question

Now let us set the king's word aside for a while and focus our attention on the thing the word signifies--the existence of wealth and the ability to deliver it as required.
    Wealth begins with Creation. The created earth is a treasure house of good things for man's use. They include all things in the animal, vegetable, and mineral kingdoms, supplying an endless variety of products useful to man. They include the air, land, and sea. They include all the earth's various ecosystems: woods, lakes, rivers, swamps, grasslands, rain forests, deserts, mountains, caves, glaciers, and oceans. And they include natural forces, such as wind, waterpower, sunlight, combustion, electricity, gravity, and the power of life hidden in the cell.
Man harvests these products and harnesses these forces to adapt them to his needs. We have in mind here nothing less than the whole history of civilization.
    Consider Europe on the eve of the industrial revolution. The fields are cleared & cleaned; the
marshes are drained and turned into pastures and reservoirs; even the remotest mountain regions are used for pasturing; forests are rid of dangerous predators and cultivated for wood; rivers and streams have been cleared and employed for transport, irrigation, and power; homes and barns have been built convenient to the fields and to one another; flocks and herds of domesticated animals are kept and bred
either for their labor or for the innumerable useful products they supply; a network of roads facilitates trade; villages and towns have sprung up at the nexuses of different interests; cities have grown on rivers and seaports; towns and cities communicate with each other even across natural barriers by means of great bridges, causeways, and canals, miracles of engineering; and in homes is a vast array of commodities, furniture, utensils, clothing, and raw and manufactured articles.

    Even more remarkable are the inhabitants of this remarkable country. They possess a subtle and versatile language, gentle manners, and intelligent work habits, enabling them to live in regular and frequent association without mishap. Many of them, moreover, have acquired, and improved, many useful arts and sciences; framed just laws and serviceable civil institutions; printed books and opened schools, universities, and libraries to preserve and enhance knowledge. Others have developed arts of navigation and traversed the globe, unlocking commerce, both material and cultural, with far-off lands.
    "What an immense accumulation of means of well being!" exclaims Destut de Tracy in his Treatise on Political Economy (1816). "What prodigious results from that part of the labours of predecessors which has not been immediately necessary to the support of their existence and which has not been annihilated with them! [Yet] of these wonders that which strikes our attention is not the most astonishing; it is, as we say, the material part. But the intellectual part, if we may so express ourselves, is still more surprising. It has always been much more difficult to learn, and to discover, than to act in consequence of what we know. The first steps, especially in the career of invention, are of extreme difficulty. The labour which man has been obliged to perform on his own intellectual faculties, the immensity of the researches to which he has been forced to have recourse, that of the observations he has been obliged to collect, have cost him much more time and pains than all the works he has been able to execute in consequence of the progress of his understanding" (pp. 12-13).
    But now consider the industrial revolution itself and its effects. James Watt in the 1780s turned the power hidden in coal into rotary motion driven by a piston--the steam engine. By 1874 machines in the British textile industry did a quantity of work that would have required six hundred million adults a century before. "Thus," sighs Robert Dale Owen in Threading My Way, of that year, "in the aid of the manual labour of seven-and-a-half millions of human workmen, Great Britain may be said to have imported . . . six hundred millions of powerful and passive slaves [that] outnumber the human labourers who direct their operations as eighty to one. What is the result of this importation? If we shut our closet doors, . . . we shall probably say that the inestimable aid, thus sent down from Heaven as it were, to stand by and assist man in his severest toils, must have rendered him easy in his circumstances, rich in all the necessities and comforts of life, a master, instead of a slave, a being with leisure for enjoyment and improvement, a freeman delivered from the original curse which declared that in the sweat of his brow man should eat bread all the days of his life" (pp. 217-18).
    By around 1936, Boulder City, Colorado, housed the whole work force of the Hoover Dam plus women, children, hotel staffs, and sightseers--a total of seven thousand people. The dam put out 1,800,000 horsepower, equivalent to the unaided labor of eighteen million people, or twenty-six hundred times the work force.
    Since then, we have had a second industrial revolution--in computers and robotics--every bit as earthshaking as the first. This editor has toured an egg farm that includes fifty-six nine-acre henhouses, from each of which flows a river of eggs--14,800 per day--all washed, dried, candled, weighed, and packed by size electronically, with the aid of 360 employees!
    The huge optimism of the early years of the industrial revolution was not misplaced. Far from it! It was a sober recognition of physical facts. We stood on the brink of a new Golden Age made possible by machines. C. H. Douglas (1879-1952) founder of the social credit movement, expresses the same thought in a lovely metaphor: "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 set free to lengthen it increases" (Credit Power and Democracy, p. 20, our italics). It was naive to hope to merit this life in abundance without a return to the Faith; yet the physical possibility was, and is, there.
    It is not difficult for a civilized society to produce a surplus. Medieval Europe produced a surplus but experienced sporadic famine due to inability to get the surplus quickly where it was needed. An industrial nation easily produces more wealth than the people it employs can possibly consume at their most prodigal and more than the whole nation can consume short of consumption by war.
    Now: a question so simple and yet so immense that our entire civilization hangs on the answer and whether we are to continue to enjoy and enhance the estate husbanded for us by countless generations or descend into a frightening Dark Age. Here is the question: Is the whole history of civilization, from the point of view of its production of wealth, to be understood as an immense inherited cost--a net loss that we must continue to labor to make up--or, on the contrary, an immense inherited credit earning us, even before any labor on our part, a dividend?
    An example may bring the question into focus. Suppose an apple orchard is planted on land that was once swampland, reclaimed by Roman slaves, and that a road runs through the orchard following the course of an old Roman road, also built by slaves. [A poor example, since slavery itself is a social decrement. M.L.] To eat an apple, do you have to rent Roman slave labor? Or does that labor entitle you to an apple a week free?
Does the labor of past generations save us labor or cost us more labor to compensate it? Are we born to a fortune or born in debt?

The Fruitful Estate

This question (for it is all one question) must be foremost in the king's mind as he considers how to make sure his word regarding wealth is both just and true. If he is a wise king, he will discern that the kingdom is beneficiary to an immensely fruitful estate, an estate belonging equally to everyone and in which even he, as a son of his country, possesses a common share. The living continue to labor on this estate to maintain and enhance it--for which, being free, they require sufficient personal incentive--but their labor would count for little if the estate were not there. Indeed, even the most valuable laborer is richer as an heir of the estate than he is on account of his labor.
    But merely to dwell on the estate is not automatically to partake of its fruit. The king has to make a true assessment of the surplus that remains unclaimed after the laborers have taken their agreed reward, entrepreneurs a reasonable profit, and the king what is necessary to carry out his functions-and order a just distribution of it among the members of the association. This sum equals the fruit of the estate as received, apart from any labor expended on it or any risks taken to enhance it. It must be a considerable sum; and as long as civilization progresses, this distributable portion becomes larger and larger. If it is thus distributed, everyone becomes richer in proportion as the value of the estate is increased; everyone becomes freer to labor or not and to name the reward for his labor.
    There is one aspect in which the legacy of civilization entails a debt: it entails a debt of gratitude to the generations who bequeathed it to us. This is a debt that it is good to have and that we can repay in only one way--by transmitting the estate intact and untarnished to our children. The saints in Heaven and the assured in Purgatory have no use for any compensation we could offer for their labors on earth; nor could they rejoice merely in seeing us toil. But our gratitude does mean something to them, and to us.
    The king's word is a promise of wealth and an order for wealth. As he considers how to give his word currency in every corner of the realm, the king, if he is wise, will make sure that his word is predictable--that it always and everywhere conveys the same value. "The proof of the pudding is in the eating"--the value of wealth is in the consuming of it. My pig will feed me just as well if my neighbor has one, too. And if one pig will feed twenty, a million pigs will feed twenty million. Wealth does not lose its value the more there is of it (apart from envy); nor must the king's promise. Goods a-plenty mean a dividend of leisure; the king's word must mean the same.
    Since the king's word is not a promise of pigs or onions but a general promise of wealth, it must also be a yardstick against which pigs and onions and everything else can be compared in respect to their value in consumption. The yardstick must be pretty finely calibrated, so the king's word is issued in pennies. However, we shall call them pennyworths, because it helps us remember that they are promises.
    Now the promiser doesn't lend promises, he gives them. For as soon as a promise is honored, it is cancelled. He may, however, want the cancelled promise back for purpose of accounting. It is a receipt, proof the wealth has been delivered as promised.
The king cannot do all this himself, so he employs an agent, who acts always in the king's name and the king's authority and answers to the king.
    Enhancing the common estate depends, first of all, on bright entrepreneurs; and these require wealth to work with, as well as wealth for an incentive. So the king's agent gives them pennyworths. The entrepreneur, in turn, depends on laborers, so he gives them pennyworths in exchange for their labor. And just as the laborer's reward is negotiated between the laborer and the entrepreneur, so the entrepreneur's reasonable profit (varying with the character of the enterprise) will, if the king arranges wisely, be negotiated between the entrepreneur and the king's agent--the king being the only source of money, which is created in the first place as a social good.
    Now the king's word is a promise of wealth; and as soon as it is honored, it is cancelled. The moment the entrepreneur conveys the pennyworths that were his profit across a retail counter to purchase goods for himself and his family, those pennyworths become mere receipts, and must return to the king's agent, the king being the only source of money. Likewise, when the laborer spends the reward of his labor, those pennyworths are cancelled, and they, too, must find their way back to their source. When the entrepreneur conveys pennyworths to a vendor to purchase the wealth he needs for his business, those also return; but note that their promise has not yet been fulfilled in consumption.
    The entrepreneur cannot be independent of the king, because he requires the use of the authority that only the king's word, emanating from the social credit of the nation, can confer. We call their relationship (the way money is issued) "lending," but it is not really lending. The words lending and borrowing suggest a thing that exists both before and after the business; whereas a promise is created in the giving of it and perishes as it is claimed: only the receipt returns to the king.
    The king's word can be likened to a token that is broken in two--one half given to the nation as producer, the other to the nation as consumer. The producer waits at the retail counter for the consumer to come with the matching half; and when the two halves fit together, the promise is made whole, and a purchase can be made. The half the consumer holds is called money; and the half the producer holds is called prices.
    Prices are images left by all the promises spent by the entrepreneur on behalf of his business (i.e., his receipts), plus the profit agreed upon between him and the king's agent. Money is the promises paid out by the entrepreneur as a reward for labor, plus the entrepreneur's profit.
But that means that the wealth the entrepreneur required to work with, purchased with a draft on the social credit authorized by the king's word, appears only on one side of the equation!
    And what was that wealth? If the entrepreneur's profit and the laborer's reward represent the enhancement of the estate thanks to their risk and labor (and the king takes an interest in it for no other reason), then the wealth obtained by the entrepreneur to carry out his enterprise represents the fruit of the estate as received.
    Therefore, the equation cannot balance and the promises represented by prices cannot be matched by the promises represented by money until the king finishes what he began by commanding a distribution of the fruit of the estate as received. Otherwise, the surplus remains unclaimed, and the king is made a liar.
    In short, cumulative knowledge as a factor in production is free, not a cost. This is grounds, after allowing the producer a reasonable markup, for either a price discount across the board (retailers being credited with that sum) or a general dividend.
    The fruits of the estate as received will buy the surplus, because they are the surplus. And these fruits can be released either as a credit to retailers or a dividend to consumers.
    These are the items known in the social credit movement as the compensated price and the national dividend. We leave readers to tote up the pros and cons of each; and it may be that the use of the two in tandem would be wisest.
    Since the fruit of the estate as received indubitably exists, the compensated price and the national dividend are indubitably possible. They only seem impossible when we forget that the king's word means--and can only mean--money and prices meeting.
    They only seem impossible when we imagine that since money loses its value the more there is of it, wealth must, too. But if we start by observing that the proof of the pudding is in the eating and it is good for a lot of people to eat pudding, we will come to the true conclusion that neither need money depend on scarcity for its value, but unstable prices just make it seem that way.
    We found the solution to this dilemma in the entrepreneur's having to negotiate his permissible markup with the king (or his agent) as a condition for making use of the authority possessed by the king's word and derived from the social credit of the association called the nation. This seems eminently reasonable and fair and is really the only way the king's promise can have any meaning at all. For what does a pennyworth mean apart from what a penny will buy?
    This is, so to speak, the moral case for the social credit movement. We believe that the moral case speaks for itself and proves the quality of the idea and the soundness of it. The idea speaks with greater force this way than it would if presented merely as a technical fix that would work. Social credit is not a clever idea, for which the next man may find an equally clever refutation. Rather, it is a development of the principles of association that are part of our heritage and, as such, commands respect.
    The social credit movement is represented by centers in Auckland, Belfast, Calgary (High River),
Edinburgh, Liverpool, London, Melbourne, Montreal (Rougemont), Warsaw, and Columbus.

And to God Us

Asked whether it was lawful to pay tribute to Caesar, Jesus asked whose image was on the coin. When they replied, "Caesar's," he told them to give Caesar what was his and God what was His.
    Lord Acton declares that these words "gave to the civil power, under the protection of conscience, a sacredness it had never enjoyed, and bounds it had never acknowledged" ("History of Freedom in Antiquity").
Since Caesar has rather a bad sound to our ears, we might well substitute the word king. And the king's image is on the coin because it is his word.
    Louis Even reserved one of his most important chapters for this exchange. He notes that as the coin bear's the king's image, we bear God's. "The rights of the king are limited by the prior rights of the human person," he observes. "It is not the king who is at the top; it is the human person. The human person therefore does not belong to the king; it is rather the king that must belong to the human person, who must serve him by exercising his function of guardian of human rights" (pp. 257, 279, with the king for Caesar).
    The coin bearing the king's image represents precisely his promise before God to serve his subjects as regards wealth.
"Our Lord," Acton continues, "not only delivered the precept, but created the force to execute it," namely, the Church, who is charged to be the king's conscience and the advocate of the human person; for her master glorified the human person for all time by becoming one.
Yet how many of her servants are not ashamed to appeal from God to the king, who may then indeed become a Caesar!
    A good servant acts nimbly, not making a burden of his own presence. The king, that is, the government, must be the same. In a healthy society in which the king kept the promise of his coin, his
remedial work would be correspondingly lessened and government made, as it should be, light and cheap.
    The wherewithal the king needs to carry out appropriate service can scarcely make a dent in the fruit of the common estate, so great is it. Bounty remains besides, and this means that taxation is no longer necessary. One doesn't ration water on Lake Superior. Nor need one ration wealth in this rich association called the nation, rich from centuries of labor expended on its improvement.
    In order that we may be valiant enough to consume wealth well, Triumph of the Past calls for a return to the Faith--not merely the faith of inward belief but full-blooded Christendom. "There is no Wealth but life," declares Ruskin (Unto This Last 40, 77), and "the true veins of Wealth are purple."