Social Credit Views

Tuesday, 18 September 2018 22:58

Social Credit and Democracy: The Problem - Part Three

Written by
Rate this item
(1 Vote)

     Thus far in this series of articles exploring the relationship between Social Credit and democracy, we have seen that conventional ‘democracy’ suffers from a large number of design faults which vitiate it and render it ineffective. That would be bad enough, but Douglas goes one step further and claims that the ineffective mechanisms of conventional ‘democracy’ provide the best possible cover for the operations of a hidden dictatorship. Not only do they provide the best possible cover, but the same mechanisms which are ineffective from the point of view of fulfilling the true purpose of political association can be rendered most effective (by being cleverly manipulated) for the purpose of fulfilling an alternative policy-objective, one that is imposed by an agency that is external to the elected ‘government’.

     This raises an important question: “... if the real rulers of society are not in the Government, but behind the government, who elected them, what interest do they represent, ...?”[1]

      It is the contention of Social Credit political theory that finance and finance alone is in a suitable position to exploit the failures in contemporary democratic design to impose a self-serving policy on political associations. We will examine the specific ways in which the standard democratic mechanisms can be manipulated in a subsequent article. For now, we will focus our attention on the origin of finance’s political power and on the nature of the overriding political policy which the credit monopoly imposes.


How does Finance Obtain the Political Power Necessary to Impose Policy on Political Associations?

     The recipe for any sort of oligarchy can be reduced to two key ingredients. In the first place, the individual members of an association must be subordinated to the group to an extent that goes beyond the authentic functional necessities of the association in question; i.e., the formal structure of the association must be despotic in character. This renders the individual artificially dependent on the group. In the second place, the group and its activities must be controlled by an elite for its own advantage at the expense of the common membership. Oligarchic despotism of this type necessarily requires that the administrative centre of the group be under the command of that elite.

     Finance alone is in a position to use the defects in the standard democratic mechanisms to impose a self-serving policy as the overriding policy of political association because, given the nature of our contemporary civilization, the normal operation of the standard financial system fulfills the first condition of oligarchy in the deepest and most extensive manner that has ever been realized.

    The artificial scarcity of both producer and consumer credit that is controlled under one type of agency (i.e., private finance), combined with the ever-increasing division of labour embedded in a co-operative and highly industrial productive system, means that it is exceedingly difficult for the lone individual to refuse to subordinate himself to the group in some illegitimate way and/or degree in order to obtain access to the goods and services he needs to survive and flourish. The individual can still opt out of various other despotic associations (whether they be oligarchic or not) without suffering too much loss or inconvenience, but completely opting out of the conventional economic system is exceedingly difficult if not impossible. The consequences of opting out may very well mean homelessness and/or starvation.

     On this foundation of a radical and pervasive subordination of the individual to the group via artificial monetary constraints, finance has built-up its economic power. But a civilization which allows the Monopoly of Credit to determine its overriding economic policy simultaneously delivers tremendous resources in the forms of purchasing power, ownership, and a general control over social and individual policy to the proprietors of that monopoly. These benefits can be actively redeployed by the financial elite to gradually extend their control to encompass all of the other functions of society that depend, directly or indirectly, on the power of money. That is, those who monopolize credit are in a position to monopolize just about everything else. One of these things that can be controlled is political activity and political structures; these can be manipulated in diverse ways in order to achieve various political ends. The chief political end would be to capture as much as possible the coercive power of the state, i.e., its power to make and enforce law, by obtaining control of its government. When the power of finance is directed to the achievement of political objectives in general and to the achievement of this paramount political end in particular, we have entered into the realm of ‘High Finance’:

“Finance as it concerns questions such as national politics is often referred to as High Finance, and I would suggest to you as a definition of High Finance that it is the business, art, or science, of manipulating the money system to obtain political or economic results. Please note that it is not the money system in itself. The money system can accurately be described as a ticket system, and the relations between, for instance, the quantity of tickets issued and those which are automatically recovered through the price system, while of immense and even preponderating importance, since they afford High Finance its opportunities, are not those relations which correctly come under the description of High Finance. They are more or less automatic relations, and High Finance concerns itself with using this price-and-money system as it stands to varying ends.”[2]


The General Nature of Finance’s Power to Impose Policy on Political Association

     Finance’s ability to control, and if not control, then at least to strongly condition political policy refers to both the general or overriding policy of a political association as well as to the various intermediate policy-objectives that an association might adopt: “... the last word on policy is with finance, ...”[3] But centralized control over policy in the hands of a small financial elite means that political sovereignty, i.e., control of the government and hence of the state, is also in the hands of the few. As Douglas noted: “Once it is conceded that sovereignty resides anywhere but in the collection of individuals we call the public, the way of dictatorship is certain.”[4]

     If we combine the centralization of political sovereignty in the hands of a few (i.e., political despotism) with its use to impose an anti-social policy on an association we arrive at tyranny. What I am suggesting is this: as a direct result of the political activities of ‘High Finance’, the economic tyranny of finance invariably becomes a political tyranny:

“... the tyranny of Finance, a tyranny which in itself is technical, ... becomes political by reason of the immense advantages which accrue to its manipulators. There is no more effective claim to totalitarian power than the claim to the sole right to issue and withdraw (tax) money, and no mere manipulation of monetary technique which does not resolve and decide the question can do anything but complicate the problem.”[5]

     Any and all perceptions to the contrary, modern states are subjugated to an external authority to a very great extent. They are, in reality, puppet-states that have been financially colonized. The tyranny of finance is unique, however, in that, unlike other tyrannies, its power and operation is largely hidden from public view. In other words, the tyranny of finance is occult. This involves the undetected separation of the possession and use of political power from political responsibility. Such an arrangement renders the oppression of finance particularly grotesque and reprehensible: “... during the past half century the Government, whatever we may mean by that, has ‘realised the ambition of the harlot throughout the ages – power without responsibility.’ ”[6]

     Now, the general nature of finance’s political power has important implications where the analysis of our conventional ‘democracies’ are concerned. Instead of identifying or classifying political systems in terms of their ostensible or exoteric ideals, slogans, and mechanisms, it is necessary to look beyond appearances in order to classify them in terms of how they really function in practical terms. The esoteric reality (i.e., the hidden, objective reality) might be very different – even diametrically opposed – to the picture that is painted for us by officialdom.

     Let us take as an axiom that whenever and insofar as policy is being imposed on people, whether it be through naked force or deception, we cannot speak of democracy in any meaningful sense. Insofar as the populations living under conventional ‘democracies’ have been subjected to anti-social political polices sponsored by the credit monopoly, it must be admitted that conventional ‘democracies’ are actually, to a greater or lesser extent, de facto if not de jure financial dictatorships, i.e., plutocratic tyrannies. On this view, conventional ‘democracy’ is a not merely faulty, it is also a swindle; the regimes under which we live in the West are best described as financially based plutocracies camouflaged as liberal democracies, or ‘pluto-democracies’:

“... the aims of national Governments are by no means the same things as the aims of the majority of individuals in the countries they are supposed to represent. ... these Governments are far more responsive to influence from financial sources than they are to popular influence. We might even go so far as to say that modern Government is quite insensible to popular influence, and that no serious change in policy is effected by a change from one party to another. This is certainly true where the subject in which such influence might desire to be exercised conflicts with the interests of Finance. ...      It therefore becomes a matter of the first importance to find out what would be the interests of Finance in relation to the apparently conflicting interests of various national Governments, because if we can get any clear idea in regard to this, and we admit (as I have suggested we are obliged to admit) that Finance can make itself effective through any Government, and is common to all Governments, then we should be able to obtain some insight into the probable trends of international politics.”[7]

“At the present time we live in a false and completely ineffective so-called democracy, really an oligarchy of the worst possible kind. Not only is an open and genuine dictatorship preferable to an oligarchy masquerading as a democracy, but it is a sure and certain outcome of it. I do not believe that the people of these islands will tolerate an open dictatorship, but, unless you take action, an open dictatorship will be tried.”[8]

     While ‘an open and genuine dictatorship [is] preferable to an oligarchy masquerading as a democracy’, Douglas is not arguing in this excerpt that dictatorship would automatically solve the problem. Any kind of conventional political system which is forced to operate under the aegis of a credit monopoly will be co-opted to a greater or lesser degree by the financial powers: “... all visible Governments are mere executives of a dictated policy ...”[9]

     We must also be careful not to allow the failure of conventional ‘democracies’ under present circumstances to discredit the ideal of political democracy:

“It can be demonstrated that real democracy is possible; but it must be conceded that a visible dictatorship is preferable to an anonymous tyranny or a manipulated electorate.”[10]


What is the Overriding Political Policy Which Finance Imposes?

    If finance has monopoly or near monopoly control over the policy of our contemporary political associations and if it uses this control to enforce a self-serving policy, the question naturally arises: what is the nature of the particular self-serving policy which finance imposes?

     The Social Credit answer to that question runs as follows: whenever the Monopoly of Credit is employed to achieve a political end, the credit monopolists invariably transfer, whether consciously or not, the same underlying philosophy from the economic sphere to the political. In other words, finance’s overriding political policy is directly analogous to the policy which it pursues in its economic activities. That policy is what we might term ‘the Monopoly of Power’ or the political centralization of effective sovereignty (i.e., the monopoly of power over policy and of power over the resources needed to implement policy) to the greatest degree possible (i.e., without imperiling the continued existence of the host association) in the hands of an oligarchic elite:

 “To put the matter quite shortly, transfer of power almost certainly means transfer of policy. We have seen the transfer of power. What is the policy? Whose is the policy? The policy is MONOPOLY.”[11]

     As a policy, the Monopoly of Power consists in the usurpation of the unearned increment of political association in the service of vested interests. As I explained in my book, Social Credit Philosophy, it is in the nature of oligarchy to artificially control and limit the unearned increment of an association and to then misdirect the resources and activities of associations so that, in exchange for increased access to the unearned increment of association, the interests of an elite group can be served at the illegitimate expense of the common individual members. In the case of political associations, the Monopoly of Power imposes artificial restrictions on the effective sovereignty of the individual over his own affairs and then attempts to harness the energies and resources of individuals by directing them towards aims which disproportionately serve the power monopolists in exchange for increased access to effective sovereignty for the individual.

    This comes, however, at a heavy price, for it is this centralization of the control over effective sovereignty in the hands of a few – beyond that which is required by the authentic functional necessities of association – which lies at the very heart of the common individual’s dissatisfaction with political association: “... centralised sovereignty is at the root of the world’s ills; ...”[12] The flip side of centralised sovereignty is servility, to wit, the Servile State:

“The danger which at the moment threatens individual liberty far more than any extension of individual enterprise is the Servile State; the erection of an irresistible and impersonal organisation through which the ambition of able men, animated consciously or unconsciously by the lust of domination, may operate to the enslavement of their fellows.”[13]


The Logical End-Point of the Monopoly of Power

     There are inherent limits with respect to the degree to which effective sovereignty can be centralized without severely undercutting or destroying the political association upon which any group of power monopolists depend. In order to transcend these limitations, it is possible for the oligarchic elites to further increase the degree of centralized political power which they hold by expanding their jurisdictions to incorporate more people and more resources.

     Taking present circumstances into account, the greatest centralization of political power conceivable would consist in a one-world totalitarian dictatorship, i.e., a single government imposing on the entire globe a general policy of the unlawful subordination of the individual to the group (and hence to those controlling the group) to the greatest possible extent. This is the end towards which the inner logic of an international banking system, ever eager to consolidate and increase its political power, must tend. In keeping with Lord Acton’s law of power and corruption, those who have acquired illegitimate power over others are eager to use their power in order to increase the kind and degree of self-serving power which they can wield. Unlawful power feeds an insatiable lust for domination.

     The aim of centralizing power to an ever-greater extent might also be pursued in order to consolidate and protect the advantages which the present regime affords its beneficiaries. Just as thieves are often compelled to continue stealing in order to safeguard or make use of previously acquired ill-gotten goods, and just as liars are often obliged to continue lying in order to keep past deceptions covered-up, so too are the plutocratic elites constrained to follow the policy which has placed them at the pinnacle of the social hierarchy. Regardless of the ultimate motive, every illegitimate increase in the concentration of power moves us, by necessity, in the direction of tyrannical despotism:

“As at present constituted, finance is the pre-eminent agent of policy, and financial control of the world would mean control of the policy of the world; in other words, a world dictatorship.”[14]

     It must be granted that since an international financial system already exists, an emerging, but presently esoteric, world government is already in place:

“There is, in fact, at the present time in full operation an international government of the world operating through the economic system of every country, not elected, not subject to removal by any of the ordinary mechanisms which we apply to political government.”[15]

     This world government does not yet have full control over the traditional governing bodies of the various nation-states. The movement towards the elimination of these governments and their gradual replacement by transnational power blocs such as the EU are undoubtedly an intermediate objective in the pursuit of the final goal:

“... it is to be remembered that the financial system is a centralising system; it can only have one logical end, and that is a world dictatorship. There seems to be little doubt that the temporary headquarters of this potential world dictatorship have been moved from country to country several times during the past five or six centuries. At one time it was in Italy and specifically Genoa, then in the Low Countries and Lombardy, from whence came the Jewish Lombards who gave their name to Lombard Street. During the eighteenth and nineteenth centuries it has unquestionably been in London, but there is every indication that a change of headquarters to New York is contemplated.”[16]


World Government and ‘Conspiracy Theories’

     At this point it would be opportune to address a common objection to the preceding narrative, namely, that it cannot be true because it seems to imply some sort of ‘conspiracy theory’. The public, especially in the United States, has been well-trained to believe that any recognition of a hidden conscious intent behind the flow of events is somehow inherently irrational. Nothing happens by ‘conspiracy’; everything is either an accident, a democratically selected outcome, or else the product of blind forces.

     Now, it is undoubtedly true that many of the negative things which occur in the world (as well as some of the positive ones) are due to accidents (i.e., being in the wrong place at the wrong time), or to blind natural forces, or else to the ignorance, stupidity, pride, and/or concupiscence of human beings. On the other hand, an honest examination of the history of the world clearly reveals that, in both public and private life, some terrible things do happen because individuals and/or groups worked together in secret in order to make them happen. Perhaps the most glaring amongst recent examples of the reality of conspiracy as a causal agency is the set of events which took place on September 11th, 2001. Everyone agrees that what occurred on that day in New York City, Washington, D.C., and over the skies of Pennsylvania was not an accident, the effects of blind natural forces, or the results of a referendum, but was due instead to a conspiracy. Accordingly, the U.S. government’s authorized explanation for what occurred on that day is itself a ‘conspiracy theory’. Disagreement concerning the nature of the attacks is only to be found when it comes to determining whether or not the officially sanctioned conspiracy theory is the most plausible amongst the available alternatives and therefore the most likely to be true.

     As far as public life is concerned, it is commonplace for influential individuals to work together behind closed doors (i.e., in secret) to protect, consolidate, and increase their hold over political, economic, and cultural power at the expense of the common individual. Whenever public policies are being determined or implemented without the full knowledge and agreement of the public and against what is truly in their best interests, a political ‘conspiracy’ is at work. Conspiracies such as these have existed at all levels of the social hierarchy and continue to exist. In particular, the hidden operation of what we might refer to as the International Money Power is a political phenomenon which goes back several millennia.[17]

     As we have already noted, the exercising of illegitimate power over others very quickly becomes a sort of drug which requires ever increasing ‘doses’ to maintain the metaphysical thrill attached to power-wielding. In the words of Lord Acton “All power tends to corrupt and absolute power corrupts absolutely.” It is not at all necessary to posit extraordinary, i.e., implausible or immensely complicated, ‘conspiracy theories’, in order to admit the existence of secret policy-makers as a major factor in world affairs. It is simply an aspect of the way the world must operate when there is no effective method available by means of which the proper orientation and limits can be imposed on the administrators of social power by the general membership of society:

“At this juncture I should like to meet a probable criticism in advance. I can imagine someone saying ‘This is another Hidden Hand theory.’ Do not allow such an idea to affect your judgment of the facts one way or another. Every theory of events which has any soundness must at the present time be a ‘Hidden Hand’ theory, because events are not controlled by Voting or Parliamentary Debate, but by Finance. A theory is neither more nor less likely to be true because it appears to be romantic, nor does it necessarily involve conscious turpitude on the part of, e.g., Statesmen. If you train a man from youth, you can make him honestly believe anything, and I can assure you that there are very few ‘accidents’ in the rise to power of public men. If you consider the influence of such men as the late Sir Ernest Cassel on the London School of Economics and the care taken to see that high permanent officials have an orthodox training, you will see how subtle this influence may be.”[18]



[1] C.H. Douglas, The Control and Distribution of Production (London: Cecil Palmer, 1922), 107.

[2] C.H. Douglas, Warning Democracy, 3rd ed. (London: Stanley Nott, 1935), 50-51. Cf. C.H. Douglas, Money and the Price System (Vancouver: Institute of Economic Democracy, 1978), 8: “The monopoly of the control of the money system is the great over-riding monopoly of the world as it is worked at the present time. ... it has not merely an economic or mathematical side, but also a side which penetrates into the very highest politics, ...”

[3] Cf. C.H. Douglas, Credit Power and Democracy (Melbourne: The Social Credit Press, 1933) ,7. Cf. C.H. Douglas, The Brief for the Prosecution (Liverpool: K.R.P. Publications Ltd., 1945), 25: “... Finance always controls Policy.”

[4] C.H. Douglas, The Tragedy of Human Effort (Vancouver: The Institute of Economic Democracy, 1978), 3.

[5] C.H. Douglas, The Brief for the Prosecution (Liverpool: K.R.P. Publications Ltd., 1945), 65.

[6] C.H. Douglas, The “Land for the (Chosen) People” Racket (London: K.R.P. Publications Ltd., 1943), 12.

[7]. C.H. Douglas, Warning Democracy, 3rd ed. (London: Stanley Nott, 1935), 63-64.

[8] C.H. Douglas, Dictatorship by Taxation (Vancouver: The Institute of Economic Democracy, 1978), 11

[9] C.H. Douglas, The Big Idea (Bullsbrook, Australia: Veritas Publishing Company, 1983),  . Cf. C.H. Douglas, The Control and Distribution of Production (London: Cecil Palmer, 1922), 106: “... the ostensible Government[s] … are mere tools in the hands of the real Governments, ...”.

[10] C.H. Douglas, The Brief for the Prosecution (Liverpool: K.R.P. Publications Ltd., 1945), 68.

[11] C.H. Douglas, The Brief for the Prosecution (Liverpool: K.R.P. Publications Ltd., 1945), 6.

[12] C.H. Douglas, The Brief for the Prosecution (Liverpool: K.R.P. Publications Ltd., 1945), 64.

[13] C.H. Douglas, Economic Democracy, 5th ed. (Sudbury: Bloomfield Books, 1974), 42.

[14] C.H. Douglas, Major C.H. Douglas Speaks (Sydney: Douglas Social Credit Association, 1933), 43. Cf. C.H. Douglas, “Whose Service is Perfect Freedom” (Bullsbrook, Western Australia: 1983), 2: “I should like to state unequivocally that it is my conviction the centralisation is being fostered everywhere and from the same source and with the same object – world dominion.” Cf. C.H. Douglas, Major C.H. Douglas Speaks (Sydney: Douglas Social Credit Association, 1933), 43. “... a world dictatorship ... has always been the objective, whether conscious or not, of high finance.”

[15] C.H. Douglas, Major C.H. Douglas Speaks (Sydney: Douglas Social Credit Association, 1933), 60.  

[16] Cf. C.H. Douglas, Social Credit, rev. ed (New York: Gordon Press, 1973).

[17] Cf. David Astle, The Babylonian Woe (Toronto: Harmony Printing LTD., 1975).

[18] C.H. Douglas, Warning Democracy, 3rd ed. (London: Stanley Nott, 1935), 54.





Last modified on Wednesday, 19 September 2018 01:16

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

Latest Articles

  • Problems with Taxes
    Relying on bank credit, indirectly through taxation or directly via borrowing, to fund a Universal Basic Income (UBI) scheme is untenable. A fundamental reform of the financial system is the only viable means to ensure a future in which sustainable purchasing power is in the hands of the Canadian consumer. There is no need to take from Peter to give to Paul. Not one penny of anyone’s income would need to be redistributed. There is enough for everyone to have an income, a UBI, under a corrected financial system as advocated by Douglas Social Credit.
    Written on Tuesday, 16 July 2019 14:59
  • Living Beyond Your Means
    We are often told that people should not ‘live beyond their means’, that is, that no individual person, nor any corporate entity like a business or a government, should spend more money during a given period than they take in as income or as revenue. Doing so is judged to be profligate, irresponsible, and only setting oneself up for pain in the long run. For countless centuries, if not millennia, the balanced ‘budget’ has been regarded as the sine qua non of fiscal prudence and ‘sound’ finance. And yet, if we look at our economies over any given period of time, it is quite normal for individual consumers, considered in the aggregate, to spend more than they receive in income, for governments at all levels to spend more than they take in viataxes, and even for businesses, considered again as a whole, to spend more money (thanks to long-term capital…
    Written on Monday, 15 July 2019 13:21
  • Why Overt Monetary Financing of a UBI Need Not Result in Demand Inflation
    When one explains to the common person the proposal of a National Dividend as a state created and distributed monetary gift given to all as a credit for the nation’s total production, there is one very common objection or concern that people often raise. They think that there is a danger that this will result in inflation or a devaluing of the nation’s currency, a devaluation that may even been as bad as the hyperinflation that has recently taken place in Zimbabwe or Venezuela as a result of severe political corruption, incompetence, or foreign interference. But before one can understand why a 'debt-free' 'basic income' is not inflationary, or need not be inflationary, one must first understand something of the economic and monetary theory upon which this suggestion is based, namely Douglas Social Credit.
    Written on Monday, 08 July 2019 14:09