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Is Social Credit the Answer?

July 30, 2012

220px-c_h_douglas.jpg(left: Clifford Hugh Douglas, 1879-1952, the brilliant economist who invented Social Credit)

Think of the world as a giant interest-producing debt plantation.

Current events increase both public debt (wars, bank bailouts, social spending) and private debt (cars, houses, credit cards.)

News and "culture" disguise this reality.

Illuminati banking families milk the herd with the help of their Freemasons, dupes and traitors, i.e. our corporate and political leaders.

Is Social Credit an alternative to this deplorable situation?  

by Anthony Migchels

(abridged by

Social Credit is one of the main achievements of the 20th century.

It solves poverty and depression and provides a basic income to all. It reclaims the currency monopoly from the banking cartel, without centralizing power in State hands.

Social Credit was developed by Major Clifford Hugh Douglas, who penned a book by the same name in 1924.

He was the first to see that wages paid by firms were always lower than the value of their production: hence there is an eternal lack of purchasing power and thus depression in the economy. This problem is known as the 'gap'."

Douglas  foresaw a time when many people were no longer necessary in the production process. These people are called the useless eaters by our masters, but Douglas understood that production serves consumption and that the economy exists to feed the people, not the other way around.

To solve the problems, he came up with an eminently practical and simple solution: let the Government print debt-free money to be spent into circulation by the people.

Everybody should get an equal amount of money, whatever their income or asset position. The amount of money to be printed should equal the lack of purchasing power in the economy.

In this way Social Credit is associated with a Basic Income or National Dividend, both of which, incidentally and surprisingly, were supported by Mont Pelerin Alumni von Hayek and Milton Friedman.

Social Credit gained a lot of attention in the 1930′s, throughout the dominions of the British Empire (the white colonies) and the Axis powers.

Ezra Pound favored it, wrote about it (in 'What is Money For', an excellent primer for the un-initiated) and discussed it with Il Duce at some point.

In Japan it was highly regarded and gained a lot of traction. Also the Catholic Church, for instance the Michael Journal, promoted Social Credit as a solution to Usurious Usurpation. However the banker-owned mass media and politicians always ensured that it would never be put into practice.

Social Credit compared to the Greenback

With the Greenback I mean a debt free paper currency spent into circulation by the Government.

Social Credit is vastly superior to the Greenback as a way for Government to provide currency.

The fact that the cash is handed out to the populace to be spent into circulation not only ends poverty and solves the problem of the Gap, it also prevents the massive power centralization with the State that is associated with the Greenback.

When Government can print and spend its own cash, not much good can be expected from it. True, it's much better than letting a private cartel do it, but most people suggesting the State should print its own money equate that with the notion that the people would be printing their own money. This, to my mind, requires an extraordinary leap of the imagination.

Government is not the People. If kept small and in its cage it can be of use. But it is a threat always. It's hard to think of a Government in human history that was not owned lock stock and barrel by the Plutocracy behind the scenes.

The simple fact is that Social Credit is probably the closest we will ever get to the notion of 'the People printing their own money', as they can spend it themselves. It truly is THEIR money.


Anthony Migchels is an Interest-Free Currency activist and founder of the Gelre, the first Regional Currency in the Netherlands. You can read all of his articles on his blog Real Currencies  The complete article can be found here.

Interest-Free Economics

Mutual Credit, the Astonishingly Simple Truth about Money Creation

Reassessing the Greenback and other Alternative Monetary Systems
On Interest

Usury: why we don't build Cathedrals these days....

Scruples - the game of moral dillemas

Comments for "Is Social Credit the Answer?"

Ian said (August 1, 2012):

If the govt is printing inflation is canceled because all households experience the same money supply changes. If it is redistributing from households that accumulate credits in the market, then it is easy to see how social credit dispels profit-incentive production and ingenuity. The solution is to tie debt-free currency to the number of households. The total value of the currency will rise and fall based on production; the real economy will not fluctuate to the currency because the currency will represent the real economy and not a contrived algorithm. If certain households are accumulating great wealth it is because are giving it to them in trade. They have to do something for that money. That already supplied is sufficient for all households. Natural monopolies are state owned, non-natural ones are outlawed, as are central banks. No regulation in lending but liberal bankruptcy laws. That means cautious underwriting.

David said (August 1, 2012):

Social Credit is the answer to human beings funding their basic needs and other 'needs. One, however, must dump current economic philosophy along with the private money printers and usury. One cannot use mainstream economics to judge concepts of social credit.

The real purposes of living have been preempted by the use of predatory Economics using competition, competitive advantage, concepts of marginal utility, market forces, supply and demand etc. That blend is the 'voodoo' economics we all want to avoid.

Man is a spiritual being and he needs to get his basic needs easily so he can focus on his spirituality. The current paradigm makes you spend lifetimes chasing basic needs and beyond. You never get the chance to be any except economic beings.

Those who excel in this competitive system have the competitive advantage by being among the founders and operators of the system. God does not own any banks and there is no earthly reason to keep an economic system that empowers evil tribes and people, while preventing people from living lives in the spirit.

There is no need for a philosophy in Social Credit. Since ALL money that is invented is absolutely devoid of intrinsic worth, all worth ascribed is by popular consent. Gold and silver have better uses in health and technology! Everybody deserves all the things they need in life. There is no reason why they should not get it. Of course, personal greed and other evil traits will have to be trammeled! Personal accumulations will have to revert to the general pool on death. Children won't need it because they have their own credit to draw on.

Everything can be devised to maximize the human spiritual experience. So, goodbye to the Bankers and the chosen money-printers. Their gambit for Global rulership will run into a tiny obstacle called God!

Anonymous said (July 31, 2012):

I used to really respect Anthony Migchels, but now its been lost. He shows his real colors here. J.Q Adams was Lincoln's direct mentor, Adams being the major supporter of the National Bank, a bank for the people and by the people. Lincoln had massive opposition to his greenback by the banking establishment and he even fought a financial war against the city of London during our Civil war. When Lincoln took office the USA was totally insolvent and facing a civil war with England and France threatening to enter the war on the side of the fascist South.

In 5 short years in spite of tremendous opposition Lincoln turned the USA into the world's economic power house.
Imagine "Social credit" being given out during the Civil War, the total chaos, the war would have been lost and our freedom given back to the slave masters in the City of London.

Anonymous said (July 31, 2012):

It is surreal to see people defend the financial system that was created to enslave all to the banking class. It is my observation that men who have not yet been crushed by this system are clinging to it and blaming those who have been crushed for the insurmountable debt -- ignoring the obvious: the system was designed to reach a terminal point from its inception.

A point at which international finance would own all and the average man would quake in fear of them calling in the debts and closing the casinos to ever growing numbers of broken people. Oh, at least men can feel good (pride) knowing those homeless and destitute people are the blame for the financial catastrophe while international finance moves forward with more control of peoples daily lives and creating an even more tyrannical financial system where they can decide who is permitted to participate in commerce -- No man may buy or sell save for those who have the mark...

-----signature line:

"The Matrix is a system, [] That system is our enemy. But when you're inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inert, so hopelessly dependent on the system that they will fight to protect it." The Matrix

Anthony2 said (July 31, 2012):

t's really amazing Henry, how people will defend Usury. Just like that Doug character. I deal with it all the time, it's so deeply engrained in our psyche, it's really a great feat of propaganda. Only 500 years ago it was totally anathema. People just don't see the enormity of the thing, both in a moral sense and in the sheer scale of the wealth transfer, nor do they understand that it is a wealth transfer from poor to rich per definition.

Even when they understand Fractional Reserve banking (like Doug), they don't come to the simple and automatic conclusion that if we can create credit for nothing we should get it for nothing.

The slave mentality is really very deeply entrenched. And people don't worry over the slavery itself, the only thing they hope is to become a master one day themselves, which they never do, of course.

Anthony Migchels said (July 31, 2012):

I have a few short answers to some of the comments:

@ Menno:

1. Douglas had another view: the goal of production is consumption. That which is not consumed, has been produced for nothing.

2. You miss a third alternative: going into debt to buy up the production, with ever mounting debt/interest as a result.


"Usury is OK because if I earn my money and I lend it to someone who wants to start a business then I deserve something to underwrite my risk of losing what I earned."

That is the basic hoax: all the money the bank loans us has been created the moment we borrow it. So there is time issue. There is no real service.

A $200k mortgage costs $300k interest over thirty years. The real cost (there is no risk, the house is collateral) for managing this loan cannot be much higher than $20k.

Menno said (July 31, 2012):

OMG, there are so many things wrong with this socialist fairyland fantasy. Here are a few of the main ones that come to mind:

1) Overall prosperity in any society ultimately comes down to values produced vs. values consumed. The greater the excess of values being produced than are being consumed or destroyed, the greater the overall prosperity. When more values are consumed and/or destroyed than are being produced, prosperity diminishes. As far as I can tell, all other economic principles are secondary to this basic law. To extend a monetary gift (credit is an erroneous term here) to anyone, independent of that individual's productivity, flies in the face of this basic law.

2) "...wages paid by firms were always lower than the value of their production". What kind of malarkey is this? If this were true, there would be only two possible outcomes: Either goods and services are getting to market at a lower price than the market will bear, in which case the lower cost of living balances out the low wages, and there is no problem to begin with; or, the profit and "missing" purchasing power is accumulating in someone's pocket other than the producers, in which case this notion of "social credit" does nothing at all to correct the perceived imbalance: All it accomplishes in either case is higher prices for everyone.

David said (July 31, 2012):

Ezra Pound was a huge and vocal advocate of Social Credit in his lifetime. One of the reasons he was thrown into St. Elizabeth's mental institution and held there without trial for 13 years through the machinations of Sen. Herbert Lehman.

Doug said (July 31, 2012):

Social Credit is very close to the Canadian Action Party (CAP) idea of having the government print and spend money into circulation through paying people to provide government services.

The existing system under use doesn't pass rational logic in its most basic form. The existing system has money printed then lent into the economy. The only thing that makes our money worth anything is the fact that we work for it, so after its printed its not really money until someone earns it.

Under the existing system it must be paid back after it is earned (made into real money out of the paper). This is how our wealth is stolen.

(I explained this to a crowd when I ran for federal politics under CAP a few years ago. Lets just say that certain members of the audience did NOT like me bringing this little piece of rational thought to light.)

Usury is OK because if I earn my money and I lend it to someone who wants to start a business then I deserve something to underwrite my risk of losing what I earned.

I don't see a problem with fractional reserve banking either - it creates money for a growing economy, as long as what the bank takes in and fractionalizes is at the beginning earned money. The bank takes a risk when fractionalizing capital - they may get a run on the bank, that risk is underwritten by the interest collected on loans. Its the central banks that are destroying us because they profit in the gap between printed and earned money. Taxation of the banks could control the amount of currency in the economy and thus keep us competitive in international markets.

My problem with social credit is that the money isn't really earned before it comes into existence - so people get free-bee's - if its possible it sounds good but then you get a class that just sits around, smokes pot, drinks, reproduces, and watches TV all day- ultimately at the working populations expense. I have not yet made the time to really understand social credit.

Under the CAP system, government does not directly control the money - ie print it off for nothing and give the populations nothing. Every dollar that gets printed benefits the populations directly. I'm not against charity - I believe in it, but we must not encourage living off the kindness and generosity of others by certain classes that are so inclined.

Robert said (July 31, 2012):

Dick's description of Social Credit [below] is so far off the mark (of the policy that Major Douglas enunciated) that I can only recommend that he should recommence his "research". Should he wish to consult authoritative writings on the subject, a number of these can be accessed as "External Links" at the end of the Wikipedia article entitled "Social Credit".

His suggestions that Fabian Socialism has promoted Social Credit and that the "Austrian" School and Social Credit share an abhorrence for government betray his complete ignorance of the histories of these movements.

Dick said (July 31, 2012):

I recently did a blog post criticizing social credit (and similar
doctrines) for some of the aspects for which Mr. Migchels praises

My basic thesis is that social credit is promoted (in this case by
the Fabian Society) to confuse and promote in-fighting among those interested in economics. From my research and some interesting arguments in the blog's comments, I have two basic thoughts about social credit:

1. It is based on the assumptions of; a) "the gap" as Mr. Migchels
calls it – the idea that economic value simply erodes under some
thermodynamic process, and b) the related notion that technological progress is a net destroyer of the value of human labor.

This is bad accounting at best and Malthusianism at worst.

2. It presumes, as does the Austrian school, that "the state" can
do nothing right, so proposes to put purchasing power directly into the hands of Joe six-pack.

Mr. Migchels says, "When Government can print and spend its own cash, not much good can be expected from it." With national banks and greenbacks, the USA managed to turn from a wilderness into the world's industrial powerhouse with that very approach in about 150 years, despite repeated interruptions from those who, like Andrew Jackson, would sooner have "the people" manage their own currency via "local" banks.

I tried to give a fuller explanation in the blog. Though I believe
Anthony is more vigorous in his defense of social credit than I am in my critique, I think it's clear that it is an impossible
solution based on false premises.

Al Thompson said (July 30, 2012):

This is an important article and it shows that there are other ways to provide for a financial system; especially one that does not offend the laws against usury. This solution makes sense--and it is refreshing to see someone like Anthony offer such intelligent information. I thoroughly enjoyed this article, and I hope to see more like this one.

Henry Makow received his Ph.D. in English Literature from the University of Toronto in 1982. He welcomes your comments at