This
message was sent to the Alberta Social Credit Party by someone who wants a
response from the Social Credit perspective. I thought it might be
interesting to see what the list might have to say about it.
Chick
-----
Original Message -----
From: Robert
Stafford
To: [EMAIL PROTECTED]
Sent:
Thursday,
September 04, 2003
3:57
AM
Subject: Critical
comment
Hi!
Having
recently visited your website, I am sure you will be interested to read a
critical examination of social credit. The essay in question, Major
Douglas rides again, appears below and is taken from the September 2003
Socialist Standard.
Needless
to say, any feedback would be much appreciated.
Yours for
a world without money,
R
Internet
Department
[EMAIL PROTECTED]
www.worldsocialism.org/spgb
Major
Douglas rides again
In the
course of our nearly one hundred years of socialist activity, one of the ideas
that we have had to deal with from time to time has been currency crankism � the
idea that economic and social problems are caused by some flaw in the monetary
system and that what is required to put things right is not to get rid of the
profit system that is capitalism but mere monetary reform (of one kind or
another, depending on which particular school the currency crank belongs
to).
Between the wars the most popular school of currency crankism in
Britain was
Social Credit, based on the ideas of Major Douglas (as he was known). His
explanation for the slump � of poverty amidst potential plenty, of unmet needs
alongside idle factories and widespread unemployment, of piles of unsold goods
being destroyed � was simple, not to say simplistic: it was due to a lack of
purchasing power, to people not having enough money to buy what they needed or
to constitute a market worth catering for. The solution, too, was simplistic:
distribute purchasing power free to people in the form of a "social dividend"
paid by the government.
Douglas believed
that banks could "create credit" by the mere stroke of a pen, but that they
deliberately kept money scarce so as to be able to charge a higher rate of
interest. Hence his solution that the banks should be taken over by the
government and their supposed power to create credit exercised but in the
general interest, as "social credit".
In fact, there is no chronic
shortage of purchasing power. Sufficient to buy the product is generated as
wages and profits in the course of production; slumps are not caused by an
absolute shortage of purchasing power but arise when, because of falling profit
prospects, capitalist firms choose not to spend all their profits on fully
renewing or on expanding production. Nor can banks "create credit"; they are
essentially only financial intermediaries, borrowing money at one rate of
interest from people with cash to spare and lending this at a higher rate to
those needing money to spend or invest, their profits coming from the difference
between the two interest rates.
This being the case, the main result of
applying "social credit" would be roaring inflation. All the other problems of
capitalism, including periodically re-occurring "poverty amidst plenty", would
continue unabated. They will only end when the means of production are brought
into common ownership and democratic control so that they can be oriented
towards directly satisfying people's needs � when banks, money and all the rest
of the buying and selling system will have become redundant.
Normally,
lack-of-purchasing power currency crank theories flourish in times of slump.
However, according to an article by Derek Wall, "Social Credit: The Ecosocialism
of Fools", in the June issue of Capitalism, Nature, Socialism, the modern-day
followers of Major Douglas are well ensconced in the Green Party:
"Brian
Leslie, whose parents were members of the Social Credit Greenshirts during the
1930s, chairs the Green Party Economics Working Group. The newsletter,
Sustainable Economics, is almost entirely concerned with social credit and Party
economics speaker Molly Scott Cato advocates monetary reform . . . Frances
Hutchinson, a former member of the Green Party left grouping, the Association of
Socialist Greens, has revived the Douglas Social Credit Secretariat . . .
Wilfred Price, a member of the Greenshirts in the 1930s, joined the Ecology
Party (now the Green Party) in the early 1980s and powerfully spoke for social
credit as a form of green politics."
Currency cranks find it easy to
infiltrate the Green Party because of the tendency amongst its members and
supporters to blame "big banks" and international financial institutions for
ecological problems and the ravages of capitalist globalisation. The Green Party
has, for instance, lined up alongside the Tories, the UKIP and other
reactionaries in the "defend the pound" camp because it sees the euro as an
international (in the sense of anti-national) currency.
Derek Wall's
article concentrates on the political side of Social Credit rather than on its
economic fallacies (though he recognises these), in particular on the
anti-Semitic position it took up between the wars. The title of his article is
taken from August Bebel, a pre-WWI German Social Democrat, who once quipped that
"anti-Semitism is the socialism of the fool", by which he meant the
anti-capitalism of the fool. And it is, of course, a short step between
denouncing "global finance" for causing problems to blaming "international
Jewish bankers" or some other supposed international conspiracy or cabal. It was
a step that Douglas himself took. Wall quotes him as writing in Social Credit
(1933):
"In a remarkable document which received some publicity some
years ago, under the title of 'The Protocols of the Learned Elders of Zion', a
Machiavellian scheme for the enslavement of the world was outlined. The
authenticity of this document is a matter of little importance; what is
interesting about it, is the fidelity with which the methods by which such
enslavement might be brought about can be seen reflected in the facts of
everyday experience."
Wall � a Green Party member who describes himself
as an "eco-Marxist" � recognises that Social Credit doesn't have to be
anti-Semitic and that its supporters in the Green movement (with one exception)
are not. His concern is to warn the Green Party and the anti-globalisation
movement against embracing monetary reform as a quick-fix solution but also of
the dangerous company they risk falling into if they continue down the road of
blaming "global finance" for ruining "national" � and local � economies.
