Social Credit- A Simple Explanation

by Oliver Heydorn Ph.D. — ( Jan 28, 2015

The founder of the Social Credit movement, Major Clifford Hugh Douglas 1879-1952

The founder of the Social Credit movement, Major Clifford Hugh Douglas 1879-1952

Social Credit refers to the ideas of the brilliant Anglo-Scottish engineer, Major Clifford Hugh Douglas (1879-1952).
Douglas identified what is wrong with the industrial economy and also explained how to fix it.
The core problem is that there is never enough money to buy what we produce. In essence, people don’t earn enough to afford the plethora of available consumer goods and services.
This gap is caused by many factors. Profits, including profits derived from interest on loans, is only one of them. Savings and the re-investment of savings are two others. The most important cause, however, has to do with how real capital (i.e., machines and equipment) builds up costs at a faster rate than it distributes incomes to workers.
The economy must compensate for this recurring gap between prices and incomes. Since most of the money supply is created out of nothing by the banks, the present financial system fills the gap by relying on governments, firms, and consumers to borrow additional money into existence so that the level of consumer buying power can be increased.
As a society we are always mortgaging our future earnings in order to get enough purchasing power so that we can pay present prices in full. Whenever we fail to borrow enough money, the economy stalls and the government may even start a war to reboot it. To the extent that we succeed in bridging the gap, we contribute to the building-up of a mountain of debt that can never be paid off.
Filling the gap with debt-money is also inflationary, wasteful, and puts the whole society on a production-consumption treadmill. It is the prime cause behind social tensions, environmental damage, and international conflict.
All of this dysfunction is tolerated because the banks profit from it. Compensating for the gap transfers wealth and power from the common consumers to the owners of the financial system.


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