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Thursday, 10 November 2016 23:16

A Social Credit Proclamation

Written by M. Oliver Heydorn
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The financial system, that is, the banking, cost accounting, and tax systems, can either serve the common good, or else it will serve an oligarchic elite at the expense of the common good.

The present system serves, to a greater or lesser degree, an oligarchic elite. Ever-increasing indebtedness, the rising cost of living, heavy taxation, environmental damage and decay, lack of leisure, poverty and social unrest, physical and psychological ill-health, and incremental totalitarianism are the price we pay for running the financial system as a privately owned, self-serving monopoly.

In order to restore the financial system to its proper place as a humble servant of the genuine interests of the common citizens, it is not necessary to nationalize the banks nor to alter, in substance, the nature of their day-to-day operations.

All that is needed is to prohibit the banks from filling, as they do at present, the economy’s underlying price-income gap with additional debt-money and to fill that gap instead with 'debt-free' credit issued directly (in the form of a National Dividend distributed independently of work status) and indirectly (in the form of a National Discount on retail prices) for the benefit of each citizen.

To this end, Social Credit proposes the establishment of a National Credit Office, free from political manipulation, to monitor and regulate a country’s financial system in line with what would be a truly common and mutually supportive monetary policy.

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4 comments

  • Comment Link Oliver Friday, 16 February 2018 23:21 posted by Oliver

    Hi Jay,

    In the case of food production, any equipment or real capital used in the process (tractors, barns, machinery and tools of all type) would have to be depreciated and included in the cost of production as operating expenses. Presumably, as the farm's raw materials are transformed into more useable forms, the financial value of the food, the cost-price of the food, would steadily increase. Social Credit wants to ensure that the value of the food that is unrepresented by consumer income can be purchased without requiring consumer loans, or additional production and work on unrelated projects, hence the dividend and discount involving the creation of 'debt-free' credit to establish the required balance.

    All of these matters are examined at great length in Social Credit Economics.

    Many thanks for your questions and my apologies for the delay in responding.

  • Comment Link JB Friday, 16 February 2018 23:20 posted by JB

    Thank you for your reply above.

    In relation to the accounting flaw, there is the question of depreciation and financial appreciation. For example: In the production of food, exactly what is being depreciated and where is or what would be the financial appreciation? Modern production process?

    Or is the understanding of such to be found in the book "Social Credit Economics"?

    Many thanks.

    JB

  • Comment Link  Oliver Heydorn Friday, 16 February 2018 23:20 posted by Oliver Heydorn

    Hi JB,

    Thank you for your questions.

    The deficiency which Douglas identified was a chronic, underlying deficiency of the consumer purchasing power distributed in the form of wages, salaries, and dividends in the course of industrial production relative to the price values that are being built up or generated by the same productive processes. Consumer purchasing power in the form of wages, salaries, and dividends is consumer income and so sometimes Social Crediters speak in terms of a deficiency of consumer income. However, since consumer loans involving the creation of new money by the private banks is now used to bolster consumer purchasing power and to make up for part of the gap, it is important to recognize that while all consumer income is consumer purchasing power, not all consumer purchasing power is consumer income. In Douglas' day the practice of extending credit to consumers in the form of loans was not standard practice and so there was no need to differentiate between the two. In a Social Credit commonwealth, there would be no need for consumer loans involving credit creation as the entirety of the price-income gap would be filled via the issuance of 'debt-free' credit in the form of the dividend or the discount.

    As far as your second question is concerned, the accounting flaw has to do with conventional rules of accounting in conjunction with the cycling of credit in and out of existence. Because they are conventional as opposed to natural laws, these conventions can be changed or altered in any way that might improve the functioning of the economy in view of its fundamental purpose: the delivery of goods and services, as, when, and where required, with the least amount of labour and resource consumption.





    Q2. Social Crediters also talk of there being an "accounting flaw". Is this flaw specifically to do with mere "conventions" or "formal rules" of accountancy when costing industrial production?

    Clarification in these two matters would be very helpful.

    Thank you.

    JB

  • Comment Link JB Friday, 16 February 2018 23:19 posted by JB

    Q1. In formal social credit comments on both this blog and another social credit blogspot, social crediters have made mention of there being a deficiency of consumer income; whereas C H Douglas wrote about the deficiency of purchasing power.

    Could Dr Heydorn or Mr Klinck please clarify exactly what deficiency it is - consumer income, or purchasing power? (As we are told the two are not necessarily the same.)

    Q2. Social Crediters also talk of there being an "accounting flaw". Is this flaw specifically to do with mere "conventions" or "formal rules" of accountancy when costing industrial production?

    Clarification in these two matters would be very helpful.

    Thank you.

    JB

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