10   Money: Myths or Facts?

[While I argue for the replacement of all money created by banks, as credit, along with an equal but interest-bearing debt, by credit created and spent into circulation by the State, which is not what Social Credit advocates, I am reproducing below several bits from the latest The SOCIAL CREDITER, Autumn 2008, including the whole of its editorial, as I found them very relevant to the debate on money reform at the recent Green Party Conference. I wish all those arguing against it would read these items, and consider the relevance of their message to our case.Brian Leslie]


Mink and other wild animals will attack poultry by instinct, often killing a whole hut full of hens in the frenzy of their attack, though only one is taken for food. One such attack left us bitterly seeking vengeance against the perpetrators of the crime. The eerie silence which follows violent death, the mangled corpses, the sight and stench of blood lie imprinted on the memory. Through scenes like these, one who has never seen a war zone can grope towards a consciousness of the horror of modern warfare. Despite claims to the contrary, human beings are not naturally belligerent. The wild animal knows no better. Men have to be driven, cajoled and tricked into violence by other human beings.

The old adage that if you want peace you must prepare for war may once, in the distant past, have held true. But such is the nature of warfare as developed in the 20th century, that preparation for war leads to war. In every third world country where fighting ‘breaks out’, modern weapons have been designed, produced and marketed, and youngsters trained to use them. Often the anger generated by previous violence is revived to justify war. Throughout the 20th century memories of violent deaths and heroic deeds, in wars and in the Holocaust, have been deliberately fostered to justify the business-as-usual production of armaments and weapons of mass destruction. Although in reality, 90 per cent of the victims of modern warfare are civilians, if you were to give a young man a gun and tell him to shoot the family next door, he would hesitate.

Wars don’t just happen spontaneously, like mink attacks on a poultry hut. Animals may react instinctively to a trigger situation, but wars must not only be planned and prepared for, they must also be financed. The entire world economy is currently geared up to the production of armaments, military equipment and war. We live in a society where all of us, as cogs in a massive machine, are working together to create wars and environmental devastation on an unprecedented scale. And we do it simply because we do not stop to think about our own role in the bigger picture. As parents, teachers, members of the medical and caring professions, as workers supplying food, clothing, transport and administration, as scientists, engineers and technologists, we work to create a society where generation after generation accept that destruction ‘just seems to happen’.

Throughout the 20th century the work of Clifford Hugh Douglas, Thorstein Veblen and many others has explained exactly how finance operates to determine policy formation in matters of war and peace. Although their work remains as fresh and relevant today as it did when writers first put pen to paper about a century ago, leading establishment figures have recognised that Social Credit and related thinking did not fit comfortably with the agenda of orthodoxy which deemed war a necessary evil. It has been left, therefore, to a handful of people who have had the financial, and therefore intellectual, freedom to preserve knowledge of a movement which did indeed threaten to end war, poverty and wasteful production.

The secret does not lie in a magic formula of monetary reform to be dictated by a master plan. Change will only happen when ordinary people take upon themselves the responsibility to think beyond the necessity to go to work or to war as their paymasters tell them to. Throughout the 20th century, finance has remained the overwhelmingly most significant determining factor in decision-making at all levels of society, from the individual family home to international relations and third world debt. Today, the willingness to take an intelligent interest in the relationship between the institutions of finance and the processes of policy formation in the social, political and economic institutions of our day might be considered the duty of all socially responsible citizens.

When a body of thought like Social Credit is available through introductory texts and more detailed, yet highly readable explanations, it is astonishing to come across the perennial excuses for clinging onto old preconceptions about what makes society tick. In this issue of The Social Crediter we present a collection of introductory material on Social Credit which has appeared over the past nine decades, with the warning that this is truly dangerous material. Had it been mere nonsense, it would never have been attacked, decade after decade, so consistently and so viciously, by orthodoxy. If this material makes sense, the duty is laid upon you to find out more and to spread the message to others. There are no half-measures. Indifference, complacency and inaction give active support to the ‘powers that be’ and their economics of war.


When you have ten million people voting you can be perfectly sure that nine million people are twenty-five years behind the times, and therefore common agreement is impossible….The public will never do anything; you, individually have got to do it. (C H Douglas, Aberdeen, April 28th 1932, published in The New Age of October 11th 1934)


From the preface to In This Age of Plenty, by Louis Even, 1946:

"Old economics" was ruled by the presence of gold or any other rare commodity, when production itself was scarce. But it is to go against progress and logic, to want to keep an instrument linked to scarcity, to confer claims on automated production.

In the first part of this volume, we recall essential and very simple notions that everybody readily admits, but which are almost totally ignored in the present economic organism. The ends no longer direct the means. A short study of the present monetary system shows that money governs where it ought to serve. We present the Social Credit proposals as a remedy, explaining the outlines, without going into the methods of application. The problem, we believe, is not so much to develop a technique of operation, as to reach an agreement on ideas, which seem both too simple and too bold to the minds who are accustomed to losing sight of the ends, and to getting bogged down in the complexity of the means. So, several chapters are especially intended to justify the Social Credit doctrine.


Part of Social Credit in 1962 -- An Introduction for New Readers

Reprinted from The Social Crediter of July 7, 1962.

The origin of the movement, now world wide, which is known as the Social Credit movement was an article entitled The Delusion of Super-Production by Major C H Douglas in The English Review for December 1918. (The article was republished in the twenty-first anniversary number of The Social Crediter on December 23, 1939)

A brief history

Before the 1914-18 war, the operation of the financial system was shrouded in mystery. The greatest mystery of all surrounded the famous Bank of England, which was not even referred to by name in the Press on many occasions. Finance was believed to operate according to a set of laws, which could, like the laws of physics, be discovered, and made use of, but not altered.

Partly as a result of his work during the war Major C H Douglas discovered certain facts about the operation of the financial system, and these discoveries explained in turn a number of hitherto puzzling economic phenomena. At that time it was hoped that those administering the financial system would appreciate the importance of these discoveries. As time passed, it became increasingly clear that such was not the case. This state of affairs required explanation.

We do not propose to examine the technical aspects of finance here; there is now an ample literature available on the subject. From the historical point of view, the important fact is that Douglas’s investigations had established the paramount importance of the creation of financial credit, or bank credit, by the banking system, and he showed that the industrial system was dependent for its continued operation on the continuous creation of this fresh money—for bank credit operates as effectively as money of any other form (legal tender).

Now this crucial importance of bank credit obviously implies the importance of the banking system which provides it, and the importance of the banking system means the importance of the individuals controlling that system. Investigation soon showed that some banks are more important than others. As well as ordinary banks, there are central banks, which bear much the same sort of relation to ordinary banks as ordinary banks bear to industry. And just as the ordinary banks form the banking system of a nation, so the central banks form an international banking system of the world.

In 1930 the key-stone of the system was set in place; a super-central bank, the Bank of International Settlements, was founded, and now a World Bank is in operation: control of Finance (of money) is centralised. A full examination of this world system of finance may be studied in The Monopoly of Credit by C H Douglas.

In 1920 Douglas published his first book, Economic Democracy. It is a condensed and technical analysis of the economic system; but also it demonstrates clearly the key position of finance in this system and shows how the rules of finance operate to produce ever-increasing centralisation of control—concentration of control in fewer and fewer hands. [……]

The concentration of control brought about by the operation of the financial system is a concentration of power, and it means, of course, that a small number of men have come into possession of enormous power on a world scale. There are two possible ways of looking at this matter. We may say that the financial system has more or less accidentally evolved, and that those in control of it have more or less accidentally become powerful. This way of looking at it places the emphasis on the system as such. The other way places the emphasis on the action of the individuals, and regards the system as the outcome of the efforts of individuals to gain, extend, and concentrate power over others.


Money and the Price System

Excerpts from a speech delivered at Oslo on 14 February 1935, to H M The King of Norway, HE The British Minister, The President, and Members of the Oslo Handlesstands Forening (Merchants Club). by C H Douglas

Definition of Inflation

Now there are two ways by which purchasing power can be increased. In Norway, not very far from both Russia and Germany, I feel that the idea of what is called inflation is one which could very easily have great terrors for you. This word inflation is one which is always raised by bankers and those whose interests are with bankers, when any question of modification to the money system is raised. It is a kind of bogey-bogey, which unfortunately at once frightens everybody, and there has been good reason why they should be frightened. The first thing to realise is the true meaning of inflation. Inflation is not an increase of purchasing power, it is an increase in the number or amount of money tokens, whether paper or otherwise, accompanied by an increase in price, so that both the money-to-spend side is, in figures, raised and the price side is also, in figures, raised. That is true inflation. It is simply a multiplication of figures without altering the relation between money-to-spend and price, and, of course, is a tax on savings.


Let me give you one instance in my own experience. In 1921 the American Buick car, with which you are quite familiar in Oslo, I think, took 1,100 man-hours to produce in the Buick works. In 1931, ten years later, a much better car with many greater refinements took 90 man-hours to produce. The fall in the man-hours of production in ten years was over 80 per cent, and while that may be an extreme instance, similar things are going on everywhere. A friend of mine, an airship builder, approaching this matter from a totally different angle, said that, if we continue in the same way in Great Britain as we are doing, by 1940 we should have 8,000,000 unemployed. There are said to be 12,000,000 employable people in Great Britain, yet all the goods required could be produced by about 3,000,000 people. That state of affairs, the result of effort which has everywhere been made by our best brains for fifty years, is always referred to as an unemployment problem, as if it were a catastrophe!

Whether it is a catastrophe or a magnificent achievement depends purely on how we regard it, because so long as people demand of us that we must solve the unemployment problem—while our best brains are, in effect, endeavouring to increase the unemployment problem—it is obvious we shall get nowhere. From our point of view, the point of view of those who share my views, we say this is a magnificent achievement. The so-called unemployment problem is really a problem of leisure, and the only thing, which differentiates, let us say, myself from one of the unemployed, is that I happen to be fortunate enough to have a certain amount of purchasing power, whereas the unfortunate unemployed has not.

The problem really is a problem, first of the distribution of purchasing power to those who are not required, and will decreasingly be required, in the industrial system, and secondly, of ensuring that the total purchasing power distributed shall always be enough to pay for the goods and services for sale. To meet these conditions we have put forward a number of tentative proposals, none of which, at any rate so far as I have myself any responsibility, is claimed to be final, rigid or unchangeable.