Continuation of Social Credit Debate Thread

JT:  Hi Andrew,

I’m afraid I’m going to have to disagree with you on the “two-pronged” approach, and the belief that Social Credit can be furthered by tying in with the Public Bank advocates.  To me, this is just another well-intentioned attempt on our part in believing our best chances lie in playing second fiddle to some group that ostensibly shares our philosophy.  But in reality, doesn’t.

The 100 year history of Social Credit is replete with example after example where this has been tried,  repeatedly ~ and failed.

First it was with the ‘socialists’ of the British Labor Party, to whom Douglas and his colleague, Orage, made their pitch over the future of the British coal industry.  They came close, but the prized breakthrough was still elusive.  Labor rejected them and their ideas in favour of  outright nationalization.  Which, decades later, it finally achieved, but really to no one’s benefit.

Then there was a cozying up to the new borne Fascists, and the idea that if  Mussolini had straightened things out in Italy,  the same could be done elsewhere.  We’d  graft our monetary ideas into their movement, and victory would be ours.  The Fascists had about as much use for actual Social Credit as British Labor had, and pretty soon Oswald Moseley’s Black Shirts clobbered any of John Hargreaves’ Green Shirts that were peddling Social Credit just the same way they’d clobber anyone else.  Two strikes out.

Let’s try elsewhere, there must be some group somewhere we can attach ourselves to.  Let’s try Christianity.  With God on our side, His only given Son, too, and the Dean of Canterbury, (before he went Commie),  and “Bible Bill” Aberhart leading the charge in Alberta, a new day surely will be dawning.  How can we fail?   Great effort, but again, a diffused direction.  So Alberta, and later British Columbia, where I live, got ‘Social Credit’, in name, at least, but the actual substance still proved as largely illusive as the Christianity of which it was supposed to be the ‘practical’ aspect.

But we didn’t stop there.  After the war, when it became clear that Stalin’s Russia didn’t exactly share the same values of western democracy we did, even though we’d fought together to defeat the Axis, we through our lot in with the “better dead than Red” crowd.  Molotov might well have once  made the comment that Social Credit was the one thing the Communists feared, but that didn’t help us put our ideas into practice with these seemingly like-minded political travelers either.  No doubt they welcomed our bodies, to swell their numbers, but not our minds or the philosophy behind our monetary ideas.

Never say die.  Lets try our hand with the Environmental Movement.  It had momentum, and surely a philosophy such as ours would be taken up by those concerned as to why the world had to always do much more than was actually needed to access financially that which was.  But their guiding lights, too, march to the tune of a different drummer.

And now, and I’ve no doubt not given a complete list, here, we’re going to try to co-opt Public Banking.  In my view we’re wasting our time.  Again.  If we’ve got something worth offering then get up on our own two legs and offer it.  Put it in a form that shows what it could do to deal with the very real concerns presently occupying the minds of the public.  REAL concerns, not imagined ones that no one is actually interested in.  Then let any group that wants to come in with us, come to us.  Instead of our always sucking the hind tit trying to get some sustenance from them.  Those are  my thoughts on it anyways.

JS:  Hi Joe,

Your thoughts are bang on, in my opinion.
Let’s add to that mix the anti-usury ideas of Soddy, the economic proposals of Louis Kelso and binary economics, the co-operative movement, and the land reform ideas of Henry George to the mix of ideas that Social Crediters thought woukd further their ends by which they could “further the cause”.
In each case it ended in abject failure, because those other causes are not as nuanced as Social Credit, and it actually takes a great deal of study to understand this issue.  That’s why I’m not even concerned about making it a populist movement.   Keynesian economics, or monetarism, did not get enacted via a populist movement.  We need to reach the “right” people who are intelligent, but not yet corrupted by the system.  Not an easy task for sure.  But, in my opinion, if done right, and coordinated (something us Social Crediters always forget – the increments of association), I believe it is possible.  Now, I do believe there does need to be a populist aspect to it.  I think it has to be on the minds of the general populace at least questioningly, so they can ask the powers that be, why not?  And let them respond, and us rebut them if necessary.
But, back to the original topic of this discussion, I see no value in aligning ourselves with these movements in any meaningful way.  Oliver and I hang around the Modern Monetary Theory Facebook page, but not in an attempt to coordinate efforts with them, but to skim off some thoughtful, well intentioned people who follow that page.   That’s the real problem we face in the information age.  There’s too many ideas out there, and most of them are half baked.

Me:  Integration of truths is wisdom and the pinnacle philosophical concept of wisdom is grace as in an abundant interactive, integrative flow of truths. Schism is the paradigm of science which is fine, but as science is really just a sub mindset of wisdom it will never have the entire and resolving truth that comprehensively resolves. Show the advocates and the mass of individuals how a solution includes and completes the truths they are advocating and it makes it harder for them to argue against the fuller solution.

Integrating the PARTICLES of truth in opposing perspectives aligns with grace, fighting obsessively with their advocates may appear to be aligned with science…but it’s not actually so, at least not good open minded science or with what occurs with scientific breakthrough which is an integration of the scientific method and an aspect or aspects of consciousness.
Merely filling the gap does not align with grace. Abundantly Direct and Reciprocal Monetary Gifting does.

JS:  To be honest Steve, I’m not even sure what that means?

Wisdom is truth.  Integration does not supersede truth, and integrating truth with untruth does not create a greater truth.
Filling the gap is the only reason for “gifting” money.  Any other gifting of money, for its own on sake, is not based in economic wisdom.  It’s just wishful reasoning.

Me:  I agree that truth is wisdom. Actually I should have said that the process of wisdom is integrating ONLY truths in opposing perspectives.

“Filling the gap is the only reason for “gifting” money.  Any other gifting of money, for its own on sake, is not based in economic wisdom.  It’s just wishful reasoning.”
Not correct. That (any other gifting of money) is the reasoning of the now invalidated ruling theory of macro-economics, Dynamic Stochastic General Equilibrium.
And the additional and abundant monetary gifting I advocate is NOT just “for its own sake” but in order to accomplish the “higher ethical monetary disequilibrium” that aligns with the concept of grace as in abundance and the free flowing nature of both grace and the temporal universe.

JS:   So are you saying the government run banks wouldn’t create money as a debt and charge interest?

And if not, how would they create it, and recover the costs of administering it once they created it?

Me:  “So are you saying the government run banks wouldn’t create money as a debt and charge interest?”

They would create loans as debt to enterprise at 0% interest. The central bank/money creating authority would create and distribute all monies for the dividend and discount/rebate policies…as gifts…not debt. And with a 50% discount there would be no possibility of inflation, in fact there would be painless and beneficial price deflation for the consumer AND for the retail enterprise giving the discount.
“And if not, how would they create it, and recover the costs of administering it once they created it?”
With the 50% discount/rebate the publicly administered central bank could fund not only all of the costs of administering the banking system, but basically the entirety of the government itself…..again, without inflation due to the high percentage discount.
The only taxes that are actually necessary would be a much reduced from the present system flat tax for individuals and enterprise of say 5-10%….to establish the sovereign yet graciously benevolent authority OF the government.

JS:  If they create loans at 0% interest, how do they recover their costs for administering those loans?  Do you think there aren’t real costs associated with banking?

How would the price rebate fund banking?  The rebate is paid to consumers, not producers.  Show me the accounting of this, specifically.

Me:  “If they create loans at 0% interest, how do they recover their costs for administering those loans?”

The monetary authority/central bank would do it the same way that the banks create it now….ex nihilo, out of nothing.
“Do you think there aren’t real costs associated with banking?”
Of course there are the costs of the employees of the national banking system as well as any costs associated with offices, equipment etc. So what? The monetary authority would simply pay those costs. The monetary authority would create loans to enterprise and individuals as debt at 0% interest. Micro-economically that would follow the correct value of thrift and macro-economically it would end the glaringly contradictory monopolistic paradigm of Debt Only that private finance enjoys presently, and also, as its policies and disbursement of funds would be rigorously aligned with the philosophical concept of grace, end the human frailty of greed waiting to happen when dealing with the single most powerful factor in any economic system, money.
“How would the price rebate fund banking?”
It wouldn’t
“The rebate is paid to consumers, not producers.”
No, the DISCOUNT is gifted to consumers, and the amount of the discount is REBATED back to producers to make them whole on their overheads and margins of profit.
The accounting entry would be credit to the retailer’s sales account for the sale and an equal amount of credit to that account by the monetary authority for the rebate, and debit to the monetary authority’s national discount/rebate account.

JT:  “My first question is why would there be any incentive on the part of the business to repay the loan if there’s no interest on it?”

Me:  Simple. Contracts law.
JT:  “the one thing that has broken more good businesses than any other is their failure to secure a needed second loan when there’s still an outstanding balance on the first one.”
Me:  That’s only if they can convince the bank that the additional loan is for a well founded business purpose….AND they’ve faithfully paid the first loan in a timely manner. That would not change with the publicly administered bank.
JT:  “So if you were to say that the ‘incentive’ in repaying the first loan would be a refusal to grant a second one, it seems to me you’ve got a problem.
Me:  No, a contract is a contract…..on the first, second or 15th loan. And precisely like now, if your business plan is faulty, your profits are nil and you’re in arears on your present loans….good luck. The monetary authority would be exquisitely aware of mal-investment….the same as it is now.
EB:   Banks create the national money supply. Private banks have a mandate to maximize profits for their shareholders, which means they are not for the most part redirecting those funds back into our local communities or into the productive economy where they are available for the repayment of the loans that created the money. Our state and local governments deposit and invest their money in Wall Street institutions; but Wall Street is not redirecting our money back to us. Not to mention, of course, the sizable profits they are removing from the productive economy into offshore tax havens, speculative casinos, etc. Public banks have a mandate to serve the local community. They funnel the profits into public goods.

JS:  Hi Ellen,

Public banks have a mandate to serve the local community?
We have a public bank in Alberta called the Alberta Treasury Branch, and it’s mandate is not to serve the local community.

Me:  I’ll let Ellen respond as well, but I would simply say that it was a public bank….in name only. A public bank’s charter, however can direct it to do what is in the interests of the public.

My only objection to State/Provincial public banking is that it’s reformist instead of paradigm changing and violates Occam’s Razor where a national public banking/central banking system guided by the philosophical concept of grace does not. A national public banking system and the new paradigm of Monetary Gifting integrated into it…is the complete solution. 5000 years is long enough to be enslaved by the paradigm of Debt/Burden/Additional Costs Only.
JS:  The real question is policy, not administration.  A change in bank policy can be derived through licensing finance in the example I gave previously.  There’s no necessity for the government to run banks.

Me:  Thrift is always a valid economic consideration, as is structural competition. And paradigmatic competition is even more essential with an overweeningly powerful and essential factor like money creation and its distribution.  Finally, given its 5000 year old unethical track record monopoly power over the money creating ability must end and monetary grace as in gifting must be integrated into it in order to end it. Finance can intermediate loans of already created money under such a system IF they also are guided by the concept of grace in any of its ethically unimpeachable aspects, but all new money creation is a sovereign right guided by grace of course.

Occam’s Razor is the integrative and correct solution to argumentation regarding the efficacy of private or sovereign money creation.
JS:  Nationalized banking has a good track record?  I suggest you look at the records of the Soviet Union, Mao’s China, and other communist countries.
Me:  Oh, I’m completely aware of the history of nationalized banking. Comprehending the paradigm of finance no matter whether it is private or publicly administered and transforming it by aligning its purposes with grace
Let me amend my previous post:  ….Given its 5000 year old unethical track record the MONOPOLY PARADIGM of THE POWER of Debt/Burden/Additional Cost ONLY must end and monetary grace as in gifting must be integrated into it in order to end THAT MOMOPOLY PARADIGM. Finance can intermediate loans of ALREADY CREATED AND SAVED money under such a system IF they ALSO are guided by the concept of grace in any of its ethically unimpeachable aspects, but all new money creation is a sovereign right, GUIDED BY THE VARIOUS ASPECTS OF GRACE OF COURSE.
Finally, Occam’s Razor is the integrative, correct AND WISELY PRACTICAL AND ETHICAL solution to argumentation regarding the efficacy of private versus sovereign money creation.
AW:  (In response to JS)

The government could create debt free money in the same way at no cost to the government for future loans to individuals. To all purposes this money it is a debt to the individual but it is positive money loaned out to represent real wealth not debt. All of this money at the start and end of loans when paid off stays in circulation. It is not destroyed.

JS:  Let me ask you this?  Why do we need to pay off all the debt at any time?

All the debt doest come due now.  Its call payable over time.
The reason Money is created as debt that needs to be repaid is that this creates a COST in the productive system.  Production, even production of government services are not free.  Costs, and their consequent prices and taxes generated are then charged to the consumer.  This is a signal to the producer and consumer and allocates resources accordingly.
Personally, I think that people that talk about “free” government services created through debt free financing don’t really understand the repercussions of their policies, and the economics behind costing, prices and taxes.
As far as a “service fee” goes, an interest rate and a service fee are the same thing.  They are just different mathematical ways of expressing the same thing :  the price of the loan.   And any service fee can be recalculated as an interest rate and vice versa.

Me:  “Why do we need to pay off all the debt at any time?

All the debt doesn’t come due now.”
Correct, and no one is saying it has to be.
“The reason Money is created as debt that needs to be repaid is that this creates a COST in the productive system.  Production, even production of government services are not free.  Costs, and their consequent prices and taxes generated are then charged to the consumer.  This is a signal to the producer and consumer and allocates resources accordingly.”
No one is denying the reality of costs, and recognizing grace as in monetary gifting, which is the concept behind Social Credit, doesn’t either. Rather, if given in an abundant fashion, it simply ends the present MONOPOLY paradigm of Debt Only…by INTEGRATING monetary gifting into the debt based money system…and in so doing creates the new PRIMARY paradigm…NOT monetary gifting ONLY, which would be just another monopoly.
As I have posted before there would be taxes (albeit lowered) because sovereignty is an aspect of grace as in the right to act with power and yet benevolence, and without them in an inevitably flawed world, businesses and individuals would simply decide not to pay them.
So there is no lack of understanding here regarding “the repercussions of their policies, and the economics behind costing, prices and taxes.”

JS:  Hi Steve,

My email was in response to Andrew, and his suggestion that the government be financed by the creation of debt free credits that are not reclaimed in taxes, and his suggestion that banks be financed through service fees.
My only objection to what you’ve written is lack of supporting statistics for a 50% rebate and the size of the dividend.  Theses things were never meant to be enacted based upon a hunch.  There’s scientific principles behind their necessity, and  these principles determine their size.

Me:  That’s fine Jim and I see that now. My answer as it turns out was the correct one for Andrew.

My reasoning for the 50% discount/rebate is based on much more than a hunch. It’s based on an exegesis of the natural philosophical concept of grace and its many aspects like abundance, integration of the truths in opposites to the point of thirdness greater oneness and free flowingness, the latter of which also happens to be a description of the temporal universe within which the economy is completely embedded. Thus the free flowingness of the economy can only actually be attained with an abundant overflowingness of the gap as opposed to a static/statistical equililibrium which in fact is a full stop and violates the nature of the temporal/time universe. Grace being love in action, that is in the temporal universe, not only does not violate the laws of the temporal universe it integrates love into it which has the power to redeem whatever it is applied to from economics to oneself.

Jim and Andrew,

Interest is not the operant problem with money. It is the paradigm of Debt/Burden/Cost Only. The misconception about the solution to the money as Debt/Burden/Cost Only problem is the difference between advocating a statistical/static/dogmatic “solution” as opposed to a dynamically ongoing one that aligns with the reality of the natural/temporal universe that ITSELF is gracefully free flowing, and whose natural laws we must obey while we are incarnate….and  if we want to be REAL as opposed to dogmatic. A statistical filling of the gap is a good, a better THEORY. An abundantly over flowing/free flowing filling of it that continually inverts scarcity into continual abundance is the signature of PARADIGM change. The theory of Social Credit has gone no where since WW II.  It needs to become the paradigm change it can be.

JS:  Well, I wouldn’t say Social Credit went nowhere since WWI.  They did elect a Social Credit government in Alberta and BC, and it was an official opposition party federally for many years federally too.  Now, it could be argued that much of the Social Credit parties were Social Credit in name only, and to a large extent that would be true, but I think it’s incorrect to say Social Credit went “nowhere” after WWII.  I think the political Social Credit parties were the nail in the coffin, because once they devised, so did Social Credit largely.

Social Credit is indeed a paradigm change, and I think, given time, the structure of our economic system would be radically altered – over time.  It’s not going to happen overnight.

Me:  It’s no where. I never heard of it until I was in my late 50’s ….and I was interested in economics and looking for something like it.  And it’s a better theory than any of the others out there, but as presently understood by those who have studied it it IS NOT a paradigm change. Otherwise why would I be countering what you and others here are advocating.  I’ve studied wisdom and historical paradigm changes and they are basically the same study and quality of change, namely personally deep and  systemically and pattern-wise transformational to the point of the inversion of old realities…NOT statistical tweaks.

Social Credit and Public Banking suffer from the same malady. They’re good theories and reforms, but as presently thought of NOT paradigm changes.
JT:  Jim’s reply to Andrew says it best:- “Money is the lifeblood of the economy,  but we need to understand it’s role and the mechanisms behind it’s creation before we start talking  about radically altering them.   Otherwise, when we meet people who are opposed to our views, but understand money better than we do, we will get entirely discredited.”

We, in Canada, have seen this happen time and time again.  And it’s happened in your country, too, with other supposedly  far greater ‘paradigm shifting’ monetary movements.  Like Lincoln’s Greenbacks, and William Jennings Bryan’s  ‘Free Silver’ Democrats, to name but two of the better remembered instances.  There’ve been a plethora of others, as forgotten now as the current hot air tempest-in-a-teapot  ‘Public Banking’ soon will be.

Me:  Well, again, I commend you all to your respective counsel’s of despair and deaths by a thousand past cuts.


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