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.
Enjoy.
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