THE Origins of THE Social Credit SECRETARIAT
The Social Credit Secretariat was set up by Clifford Hugh Douglas in 1933 as an educational venture. By then, his major works had been published, "Economic Democracy" (1919), "Credit-Power and Democracy" (1920), "The Control and Distribution of Production" (1922), "Social Credit (1924)", "The Monopoly of Credit" (1931) and "Warning Democracy". Each of them ran to multiple editions, and became the subject of study not only in the UK but also in Canada, the USA, Australia, New Zealand, Japan, Norway and other countries.
Philip Mairet’s "The Douglas Manual" contains extracts from all Douglas’ major works, collated according to subjects. The full text of "Social Credit" is available electronically, as is Geoffrey Dobbs' “Introduction” to "Economic Democracy".
Also available on the site are the early Douglas articles published in The English Review. (See the C. H. Douglas page.)
When the Secretariat was founded, the Great Depression of the inter-war years was at its height. However, Douglas’ writings were not motivated by a desire to restore the business-as-usual growth economics which had already led to one world war, and was predictably well on its way to causing another. Social Credit was firmly set within the broad alternative school of thought which opposed the growing domination of finance over the economies of the developed and underdeveloped worlds. It was equally opposed to economic and military warfare, to wasteful production, the degradation of farming to a commercial activity, and to environmental degradation.
Douglas’ first book, "Economic Democracy" was written in close collaboration with Alfred Richard Orage, the leading guild socialist and editor of "The New Age". Since all Douglas’ basic theories appear in "Economic Democracy", his work cannot be dismissed as a misguided attempt to correct inflation, unemployment or any other of the economic ailments perceived by orthodoxy. He was attacked by orthodoxy because his theories on the origins and circulation of money brought him into direct conflict with the mainstream agenda. However, he cannot be regarded as a lone maverick. Rather, through his mentor Orage, he formed a key element of the opposition not so much to the industrialisation, but to the commercialisation of society. He raised the key question, ‘where does money come from?’ to counter the tautological ‘where is the money to come from?’ being increasingly used to counter common sense solutions to socio-economic and political questions.
The dust jacket of the first edition of "The Monopoly of Credit" (1931) carries the following statement:
“How is it possible for a world which is suffering from overproduction to be in economic distress? Where does money come from? Why should we economise when we are making too many goods? How can an unemployment problem, together with a manufacturing and agricultural organisation which cannot obtain orders, exist side by side with a poverty problem? Must we balance our budget? Why should we be asked to have confidence in our money system, if it works properly? It is hoped that answers to these and similar questions will be suggested by a perusal of this book.”
"The Political Economy of Social Credit and Guild Socialism" (Routledge) sets out the history of the movement founded by Douglas and Orage, setting it within the context of the 20th century economy. The guild socialist background to Douglas’ original work reflects a wide diversity of ideas and ideals, including those of William Morris, Arthur Penty, John Ruskin, G.K. Chesterton, Niles Carpenter, Maurice Reckitt, C.E. Bechhoffer, Hilaire Belloc, G.D.H. Cole and those of other leading figures to be found in the pages of Orage’s New Age.
The Douglas economic philosophy encompasses time and money, sufficiency, good work, the cultural heritage, international trade and alternative approaches to the financing of production. These are set out in full in "The Political Economy of Social Credit and Guild Socialism" by Frances Hutchinson and Brian Burkitt. The book contains accounts of the wide-ranging public debate with leading figures throughout the 1920s and 1930s, the many various and diverse strands of the movement, and an account of the ‘Alberta Experiment’. Douglas died in 1952.
New ideas are difficult to absorb because it takes time to adjust one’s thinking. As Keynes once said (in The General Theory), “Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years ago.”
Keynes frustration at the ‘madmen in authority’ is evidenced by numerous oft-repeated quotes from his speeches and minor works. Today, policy formation continues to be informed by the ‘scribblings’ of defunct economic orthodoxy. However, in the current climate the hunt is on for alternatives to earth-wrecking business-as-usual economic orthodoxy. The books, articles and periodicals introduced under the broad heading of ‘Social Credit’ offer a useful approach to the development of a coherent body of alternative socio-economic thought. The ‘madmen in authority’ are supported by “a well-packaged web of lies sold to the masses over generations” (quote from John le Carré’s Absolute Friends). The only way forward is to question economic orthodoxy from the standpoint of an informed debate.