Social Credit and National Policy in Canada

Social Credit and National Policy in Canada R. F. NEILL, c.s.b. Much has been written about the background and development of the Social Credit Crusade in Canada. The excellent quality of this work and the evident close cooperation between experts in the various behavioral sciences that it has involved has been a tribute to the advanced state of political economy in Canada. Nonetheless there is evidence that the theoretical aspect of Social Credit has not been given sufficient attention. A few short criticisms of the "A plus B theorem," written in a relatively derogatory and partisan vein, have appeared in Canadian literature but there has been nothing that could be called a constructive analysis. The implications of this become evident in the light of the fact that the Social Credit Movement was organized primarily to propagate a theoretical economic doctrine. Economic historians have pointed out that Social Credit in Canada began as a Prairie protest against the financial ramifications of the National Policy of 1878. That is to say they have assessed the movement largely in terms of the distribution, or what is the same thing in this context, the control of national wealth. Again this is most surprising in so far as some of the better known devotees of the doctrine, including Major Douglas, claimed to be indifferent to the problem of distribution. It would be quite wrong of course to imply that the historians have failed entirely to consider the place of accumulation in the movement's doctrine and policy, but it does seem that they have not fully explored its importance. To come to the point, analysis of the Social Credit phenomenon, at least in large measure, has run in terms of partisan and sectional differences within Canada. Little if anything has been attempted in the way of pointing out the place of the movement in the development of the nation as a whole. Not only Journal of Canadian Studies has the passage of time and the growing literature on Canadian economic thought1 made such an analysis an easier task at present, but the continuing importance of problems giving rise to the movement makes it imperative to attempt an analysis from this point of view. The conclusion that emerges from the subsequent review of the question in this paper is that in its root theoretical idea Social Credit had much in common with the National Policy. It was in fact simply an alternative scheme for accumulating national wealth, differing from the scheme of 1878 only in its institutional instruments and their implications for the distribution of the results of accumulation. To have said this much, however, is to have said too much too soon; for this conclusion cannot easily be reached with reference to the work of Major Douglas and Mr. Aberhart alone. It requires reference to radical monetary doctrines current in the two decades preceding the formation of the Social Credit Party, and comparison of these doctrines with similar ideas in nineteenth century Canada . To facilitate this reference and comparison it will be necessary to elaborate the idea of national credit presupposed by both the Social Credit and the National Policy schemes in so far as they relate to the problem of accumulation. Credit is a transfer of resources made in the belief that the resources will be returned in due time with interest, that is with a surplus over the original amount transferred. More properly, credit is the liberty to use resources, this liberty in the usual case being based on the confidence of the agent controlling them, the creditor, that their use by the debtor will return a surplus. National credit is the liberty of a nation, taken as an integral unit, to receive and use resources transferred either from its own members or the members of another society. When the nation is taken to be a society social credit (without capitals ) and national credit are identical. The importance of social credit for national policies of economic growth is evident. If growth is to take place resources that are idle or used to produce consumer's goods will have to be incorporated into the producer's goods sector of the economy. This...