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Monday, 23 March 2020 18:01

Social Credit and a Coronavirus UBI

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In the wake of the financial and economic fallout caused by the Covid-19 pandemic, several countries, including the United States, Canada, and New Zealand, are seriously considering the implementation of some kind of universal basic income to both stimulate the economy and to provide an extended safety net for the citizenry. As things are at present, many people stand to lose their jobs or will have to close their businesses as lockdowns progressively engulf the world. Former presidential candidate, Andrew Yang, may see his ‘freedom dividend’ brought to fruition. While it is tempting to view any such UBI innovation, if it is indeed introduced, as the beginnings of a Douglas Social Credit financial and economic order, there are important reasons for maintaining a healthy scepticism.

    First of all, it is not at all clear, just how, exactly, such a coronavirus UBI would be paid for. Most conventional UBI proposals seem to involve some novel use of a federal or national government’s fiscal policy-setting powers: borrowing and taxing, etc. These ‘fiscal’ UBI’s could be contrasted with a ‘monetary’ UBI which would involve the Central Bank, or a National Credit Authority in the Social Credit scheme of things. The Central Bank, having a responsibility for a country’s money supply, could create new money in one form or another and, through whichever intermediaries, inject that money into consumers’ pockets. Since the monetary UBI would represent an even greater innovation in the economic life of a nation than a fiscal UBI, liberal democratic governments would probably shy away from the more ‘radical’ experiment.

    Even if a monetary UBI of some sort were attempted, it seems unlikely that it would involve the creation of fresh ‘debt-free’ credit in the exact sense that Douglas intended, i.e., credits created against a physical surplus of assets in the national inventory (as determined by a National Profit and Loss Account) as opposed to treasury assets in the form of securities or government debt entitlements. The purpose, after all, of the dividend money is to help cancel out once and for all existing debt-claims in the chain of production for which insufficient income has been distributed. When the debt-free credit meets the excess production debts or costs, the two cancel each other out. 

     This brings me to a second technical matter: there seems to be no widespread recognition of an existing price-income gap in the economy and therefore there would also be no recognition of the necessity of eliminating all of the current methods we employ in order to fill that price-income gap. If one is going to introduce additional money to the economy in the form of a monetary UBI, consumer loans involving the creation of new debt-money from the private banks, ‘favourable’ trade balances, excess government and private sector production to maintain ‘full employment’ as an end in itself, etc., would all have to be regulated and eventually eliminated in order to ensure that a monetary UBI does not cause demand inflation. If this part of the puzzle is ignored, there is a risk that an ever-increasing deflation in the value of the currency could destabilize the economy while simultaneously unfairly discrediting monetary UBI approaches and Douglas Social Credit along with them.

     From a Social Credit point of view, the more ‘radical’[1] experiment of a monetary UBI that is properly conceived and executed is, of course, essential for restoring an equilibrium between the flow of costs/prices on the one hand, and the flow of associated consumer incomes on the other, and hence for the achievement of an optimal economic functionality. It is the key to solving the whole economic riddle. Only thus can the true purpose of economic association: the delivery of goods and services, as, when, and where required, with the least amount of human labour and resource consumption, be fulfilled to the extent that this fulfillment is physically or objectively possible.

     The greater concern, however, with a Coronavirus UBI lies - as might be predicted - at the level of over-arching policy rather than that of mechanics.

      In line with Douglas’ social philosophy, of what might be termed ‘anarchistic functionalism’ or the idea that the right use of legitimate authority is a prerequisite for maximizing the legitimate freedom of individuals and families within the context of association or society, the National Dividend was to be distributed to all citizens as an unconditional right, as a due recognition on the part of the state that they, and they alone, are the true heirs to the cultural heritage of society and the rightful owners of society’s real credit. The dividend was not to be dependent, in any way, on work, whether past, present, or future, nor was it conditional on any other set of terms. What this means is that the dividend could not be withheld because of particular political opinions, or philosophical disagreements, or religious inclinations, or medical decisions, etc. Even prisoners would receive it, though, in that particular case, the state would also be justified in charging the prisoners for their upkeep (since they would then have a secure income with which to pay at least some proportion of the associated incarceration costs).

     In other words, the Social Credit dividend was never conceived as something that the state condescends to grant its citizens; it is something that the citizens have a strict right to as shareholders in the common enterprise. The state is to play the role of an administrator here, the role of a servant who merely monetizes what the people already have a right to in natural law and delivers it to them. What individuals do with that money is, within the confines of the rule of law and the essential requirements for a functional social order, completely at their discretion. Indeed, the only ‘conditionality’ attached to the dividend was functional or inherent: its size would be dependent on the size of the price-income gap and would increase or decrease depending on the volume of ‘surplus’ goods and services that needed to be distributed at any given rate of production.

     The social power of an unconditional and not just universal dividend lay in the fact that it gives the citizen the widest possible scope for ‘contracting out’ of jobs or other economic arrangements with which he does not agree or does not wish to support. How often does it occur that people fail to speak out or ‘rock the boat’ regarding ethical, political, cultural, and social issues, or even just corruption in business and government because they are completely dependent on a job for their livelihoods? How often do those who have something important to say or something important to contribute hold back because offending human respect might cost them a job or a promotion, etc.? In a word, an unconditional dividend is critical if neither ‘Big Government’ nor ‘Big Business’ - or indeed any government or business - is to exercise undue or unjustified coercive power over individuals in society. An unconditional dividend is critical for any kind and degree of economic, political, and cultural freedom that is fully worthy of its name. It is the death-knell to any kind of totalitarianism.

     The great danger, therefore, with a Coronavirus UBI is that, while it may be introduced sans conditions initially, the state, or rather the powers that control the state, might eventually decide to make all sorts of demands on UBI recipients. They may require vaccination, for example, as a condition of receiving it, or specific community services in exchange for it, or the surrender of privacy and other civil rights. The tying of any such stipulations to a UBI or a National Dividend would be completely at odds with the Douglas Social Credit vision for society and must be vehemently opposed on that basis by freedom-loving people everywhere. A conditional UBI would not lead to greater freedom in the long run, but only to less freedom, perhaps even to much less freedom than we enjoy at present, depending on the nature of the conditions the state imposes and their scope. In the limit, we can imagine a society in which a UBI is granted in exchange for total state-direction of people’s lives:

“The abolition of poverty in the midst of plenty, important as that is, is not the core of the problem. It is conceivable that people might be provided for as well-fed slaves.”[2]

 “… the primary characteristic of the slave is not bad treatment. It is that he is without any say in his own policy.”[3]

 

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[1] ‘Radical’ should be understood here in the sense of ‘going to the root of things’ rather than as ‘extreme’.

[2] C.H. Douglas, “The Approach to Reality”: http://socialcredit.com.au/uploads/6463625994.pdf.

 

[3] C.H. Douglas The “Land for the (Chosen) People” Racket: http://www.yamaguchy.com/library/douglas/land.html

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4 comments

  • Comment Link Oliver Sunday, 21 May 2023 18:06 posted by Oliver

    You're most welcome, Pedro!

  • Comment Link Pedro Thursday, 11 May 2023 10:33 posted by Pedro

    Thank you Oliver for clarifying this doubt !

  • Comment Link Oliver Tuesday, 09 May 2023 03:23 posted by Oliver

    HI Pedro,

    Thanks for your question. Yes, the dividend is to be an unconditional right once the DSC system is fully up and running. Douglas' statement that one must accept employment was attached to the initial transitional phase of his draft scheme for Scotland. He was concerned, I believe, that antagonistic forces might try to sabotage the transition by encouraging too many people to not work. Thus, you should take Douglas' stipulated condition as a temporary condition which would eventually be unnecessary and be lifted. The final intent is for the dividend to be an unconditional right of citizenship.

  • Comment Link Pedro Monday, 08 May 2023 12:15 posted by Pedro

    Hi Oliver.

    You said that the dividend should be given to all citizens as an unconditional right, but Douglas wrote in his book called Social Credit:

    "MUST ACCEPT EMPLOYMENT, OR -

    For a period of five years after the initiation of this scheme, failure on the part of any individual to accept employment in whatever trade, business, or vocation he was classified in the last census, under conditions recognised as suitable to that employment (unless exempted on a medical certificate), will render such individual liable to suspension of benefit in respect of the national dividend."

    https://mondopolitico.com/library/socialcredit/appendix.htm

    Doesn't that mean that the dividend would become a conditional right ?

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