C.H. Douglas Out of Print ...... Mondo Politico
Social Credit, by
Major Clifford Hugh Douglas
CH Douglas
Major Clifford Hugh Douglas

About the Author

Clifford Hugh Douglas was born in 1879. He was educated at Cambridge University, and was an engineer. Douglas developed a view of the role of money, and a monetary system, which he called Social Credit. He presented his ideas to the Canadian government in 1923 before the Committee of the House of Commons on Banking and Industry in 1923.

His books, including "Social Credit", influenced the Farmers Co-operative (the UFA) in Canada, to which Douglas became a financial advisor in 1927. From those beginnings, the Alberta Social Credit Party was formed in 1935, with popular educator and radio preacher William Aberhart as its leader. That party came to power and, in 1935, Major Douglas became the chief reconstruction adviser to Premier Aberhart. Differences between Douglas' views and the party's policies resulted in Douglas' resignation as advisor. Douglas published many books on his views concerning money, banking, and the globally influential and powerful. His other books include Economic Democracy (1920), The Monopoly of Credit (1931), The Use of Money (1935), and The Alberta Experiment: An Interim Survey (1937). Douglas died in 1952.

About the Book

This is the 1933 Revised version of "Social Credit", the first edition of which was published in 1924. It is an important book for inclusion at Mondo Politico for a few reasons.

First, it is difficult to find copies of this book anywhere. Students both of monetary theory and of political history should find this Mondo Politico presentation of "Social Credit" useful.

Second, many economists have rallied against the fractional reserve system of banking that prevails in the industrialized world (e.g., Irving Fisher, Lloyd Mints, Henry Simon, Murray Rothbard, Milton Friedman and most economists of the Austrian School of economics [see, for example, the Ludwig von Mises Institute]). But few, if any, other authors have explained that as productivity increases year after year, who benefits from that increased productivity is determined essentially by money and banking policy. Specifically, Douglas explains (particularly in Part 2, Chapter 2) that, if the money supply is not increased, dollars/pounds become more valuable, such that prices drop. But, if the money supply is increased just enough, the value of each dollar/pound - hence prices - can be left unchanged. Finding it desirable to keep prices unchanged in this way, Douglas then explains that, essentially, a decision has to be made about who gets the additional dollars/pounds. Under our current fractional reserve system, the banks do, by creating and lending out extra credit. Under a "social credit" system, the extra dollars would be divided up and given to all citizens in equal portions as a "dividend". His rationale: that increases in productivity - resulting as they do from innovation and technological advancement over time - are a "cultural heritage" that belongs not to banks but to all members of society. His message is clear: the citizenry are prevented from benefitting from their own cultural heritage, and this leaves them increasingly indebted to banks, and unable to reduce, over time, the portion of their lives that they spend working and simply trying to survive. Under social credit, Douglas foresees a decrease in work and an increase in leisure or, at least, the opportunity to work less if one so chooses.

Third, "Social Credit" clearly has had a major impact on the direction of politics, particularly in the Commonwealth for decades. For example, but for Douglas' works on Social Credit, Canada quite possibly would not have a Conservative Party of Canada today. Before entering politics, "Bible Bill" Aberhart opened a bible school in Alberta. The school's first pupil was one Ernest Manning. Aberhart was drawn into politics primarily after finding, in Douglas' Social Credit, what he saw to be an answer to the "poverty amidst plenty" that he saw in 1930's Alberta. Ernest Manning was at his side, spreading the Social Credit word and helping to grow the Social Credit party in Alberta. Alberta's several attempts to implement some form of Douglas Social Credit failed when the Supreme Court of Canada repeatedly held that Alberta lacked the constitutional authority to implement such monetary and banking laws: those, it held, were laws that only the federal government had the authority to make. When Aberhart died, Ernest Manning took over as premier. Owing largely to investments in the Alberta oil industry, the province received such abundant revenues that implementing any form of Social Credit mechanism was unnecessary: Social Credit lived on in Alberta (and later, in British Columbia) only as a name for what became a mainstream conservative party. Arguably due to his father's involvement in politics and his father's experience as premier of Alberta, Ernest Manning's son, Preston, later was the chief architect of one of the most quickly successful federal political parties in Canadian history, the Reform Party, which was comprised chiefly of so-called "blue tories" from the Progressive Conservative party that had lost its popularity - and most of its seats in Parliament - by the time of the federal election of 1993. Despite its meteoric rise, the Reform Party chronically found insufficient support east of Saskatchewan, Canada. In 1999, it decided, in effect, to re-unite with whatever "blue" Tories might remain in the Progressive Conservative party, but under a new party name with newly voted-upon policies: the Canadian Reform Conservative Alliance ("CA"). As of March 2002, despite the effort, the so-called CA still had not been able to gain sufficient support east of Saskatchewan to form a government. In October of 2003, the leaders of the CA and of the still quite withered PC party agreed in principle to merge the parties, effectively reuniting "blue Tories" with "red Tories" and undoing the split that had occurred when PC members left the party in the late 80's and early 90's to form the Reform Party. The memberships of the parties ratified the agreement in principle in December of 2003, and the party was registered the "Conservative Party of Canada" in January of 2004. In March of 2004, the most recent leader of the CA became the leader of the Conservative Party, leaving many to argue that the Conservative Party was just the CA with a different name. Time will tell but, arguably, none of the ride that led Canadian conservatives to split and later reunite would have happened but for the onset of the Social Credit party in the 1930s.

Finally, to this day, there remains a considerable interest in Douglas' Social Credit monetary theories, particularly in Australia, Canada and the UK and among monetary reformers the world over.

For these reasons, and perhaps a few others, Mondo Politico is proud to make this presentation of Major C.H. Douglas' "Social Credit" available to you.