10What's Wrong with Social Credit?
In 2003 the journal Capitalism, Nature, Socialism published a 24-page paper entitled "Social Credit: The eco-socialism of fools" (Wall 2003). The paper carries 97 footnotes and makes reference to over 80 individuals and their work. However, as is evident at a glance from the title, the paper cannot correctly be described as a piece of academic research. Its use of emotive language, interspersed with assumptions stated as fact, together with non-sequiturs, places it in the realm of polemics. In this article I explore the background to the writing and publication of this curiosity. Plainly, Wall and the editor accepting the article for publication had some purpose in mind.
Presumably the target readership for Wall’s article is people with an interest in economics who might be tempted to read around the subject of social credit. These fall roughly into three categories: ‘social crediters’, ‘conscientious activists’ and ‘general critics of globalization’.
Social crediters often have (with notable exceptions) a tendency to struggle to understand where the ‘outsider’ is coming from. They reject outright economic orthodoxy, alongside communism, capitalism, socialism or any other ‘–ism’ without necessarily being familiar with the key authors and texts upon which mainstream theories are based. Social crediters are most effective when they direct conscientious activists to appropriate material written by Douglas, much of which is now available electronically.
Conscientious activists object to the status quo, being well-versed in the mainstream politics and economics of globalization. Often approaching their work from a faith perspective, they cut through the illusions of orthodoxy so that they can speak and write from a fully informed standpoint. They may include professional academics, who often write outside the subject area of their salaried work. However, a conscientious activist may be anybody at all capable of reading about politics and economics, with the ability to apply their findings to their socially motivated activism. For them, The Grip of Death and The Political Economy of Social Credit and Guild Socialism stand alongside Douglas’ own work as valuable and much quoted resources, enabling them to make a concrete contribution to an otherwise confused medley of isolated ‘good points’.
Meanwhile, the general critics of globalization are so fully occupied with ‘facts’ about the environmental crises, mounting personal, national and international debt, war, poverty, injustice and just about everything that they have ‘no time’ to study social credit. They persistently demand a short answer to the question, "What is social credit?", remaining content with an explanation which is "simple, easy to understand – and wrong" (to misquote Ralph Twentymann). For them, Wall’s article is excellent: they are the target audience. It gives them a good excuse for not studying the analytical work of Douglas or the history of the social credit movement.
One could let matters rest there, leaving a host of general critics of globalization secure in their conviction that they, at least, are ‘doing something’ rather than standing idly by as their pet concerns go to rack and ruin. However, the cultivation of the illusion of the positive nature of their unfocused activity serves the purposes of the pedlars of the status quo admirably. Throughout the 20th century economics ‘experts’ have doggedly paraded their expertise, as O’Duffy demonstrates so delightfully in Asses in Clover. An ‘expert’ is often defined as a paid member of staff of a university. Thus, while orthodox economists may have studied Douglas’ analysis of the economy, using his work to develop their own research, they have had to studiously avoid making any positive references to social credit on the threat of losing tenure.
The early years of the 21st century have seen a dawning realization of the necessity for reform of the relationship between the money system inherited from the past and society at large. It is my firm belief that there is no better starting point for effective reform than the study of the history of the social credit movement. In view of the volume of misleading presentations of the writings of Clifford Hugh Douglas and various social crediters, there is no alternative but for individual readers to ensure that they are fully informed of the historical facts. What was the analysis put forward by Douglas? What actually happened? On the basis of such information, informed activism emerges as a possibility.
A great deal of the essential leg-work on the history of the social credit movement has already been done. In The Political Economy of Social Credit and Guild Socialism books by and about Douglas have been analysed, the findings distilled and presented in readable form. From the research it emerges that the social credit movement of the 1930s presented a worldwide challenge to the growing power of centralised finance. Douglas detailed a range of coherent alternatives to the domination of finance over the everyday lives of people across the world, over employment, production, distribution and decisions in all forms of working relationships between human beings. Throughout the 1930s, right up until the outbreak of World War II, there was a fighting chance that a sane social economics based upon Douglas’ analysis of the financial system might prevail. For the remaining decades of the 20th century, books and periodicals on social credit continued to circulate among constantly dwindling groups of activists. Meanwhile the subject of social credit, if mentioned at all in university courses, was presented as merely a populist reaction to the Depression years of the 1930s, rendered obsolete by the universal prosperity which followed WWII.
Until the early 1990s, students of economic thought were taught that the only viable alternative to global corporate capitalism was ‘socialism’ in the form of communist state control of the economy. Hence ‘social credit’, when occasionally given a brief mention, was presented as a form of ‘socialism’ which appealed to fascists. Most regrettably, since the early 1990s the history of economic thought has been all but wiped clean out of the curriculum in university social science courses.
Under these circumstances, The Political Economy of Social Credit and Guild Socialism was published in 1997, the result of several years of full-time research into the history of social credit, in collaboration with Brian Burkitt. The publishers, Routledge, produced the book as a refereed hardback research text, varying the price between £45 and £65. Although well reviewed, the book failed to reach the activist readership for which it was intended, remaining instead on the shelves of university libraries which have become increasingly inaccessible to the general public. As the publishers adamantly refused to bring out a paperback version, I embarked on the writing of What Everybody Really Wants to Know About Money, subsequently published by Jon Carpenter in 1998. The title is a play on the 1933 book edited by G.D.H. Cole entitled What Everybody Wants to Know About Money. Cole’s book was one of an incredible number of attempts to divert people from social credit and towards the economic orthodoxy which had, in the UK, been adopted by all sectors of the political spectrum. My book sought to explain how it was that finance had come to be a dominant controlling factor in the lives of individuals and society as a whole.
As I embarked on the writing of the Jon Carpenter book, Michael Rowbotham asked me to read an early draft of the The Grip of Death. As a student in Bangor he had been introduced to social credit by Geoffrey Dobbs, a colleague of Douglas. For a while we worked together. I introduced Rowbotham to my publisher, and the two books were published in 1998. The Grip of Death has been reprinted this year (2007) for the third time, with endorsements by Ed Mayo of New Economics Foundation, Rt. Rev. Peter Selby, Bishop of Worcester, Richard Douthwaite, author of The Growth Illusion, and the following:
"An essential self-education tool for anyone interested in creating a world that works, pushing the issues further and posing implications more bluntly than I have seen anywhere else." David C. Korten of When Corporations Rule the World.
"A trenchant analysis of the current arrangements for credit creation, a powerful indictment of their baleful consequences, and a persuasive case for reform." Prof. Bryan Gould, Vice-Chancellor, University of Waikato.
"Michael Rowbotham’s forceful discussion is a welcome revival of an issue that has been too long dormant." Prof. Herman Daly, co-author, For the Common Good.
"A radical, shocking and eye-opening exposé of how our monetary system really works." New Internationalist.
"A work to be cherished ... stands out not only for the quality of the research and the writing, but for the compelling vision that it unfolds." Economic Reform.
"Essential reading for social and environmental reformers. It fills a major gap in accepted theory." The Ecologist.
In his "Ecosocialism of Fools" article Wall notes that Korten and Daly had endorsed The Grip of Death, but fails to clarify why such distinguished authorities should have done so. Instead, Wall presents a muddled medley of confused statements of what he comprehends from his reading around the subject of social credit. Having failed to comprehend Douglas’ analysis of the
relationship between finance and the processes of production and distribution, he dogmatically states as fact his personal view that Douglas’ "analysis is flawed". Why, one wonders, did Wall feel it necessary to present the academic world with his flawed understanding of social credit? Surely the intelligent reader can read Douglas’ work if they want to make a reasoned judgement, just as they are free to read the work of Henry George and E.F. Schumacher? In my researches I have found plenty of attacks on Douglas and his work, but so far none on any other ‘alternative’ economist. Normally, heterodox economists are simply ignored. Wall’s article raises a great number of, as yet, unanswered questions.
– from The Social Crediter, Winter 2007