When we say that 'Social Credit is the Policy of a Philosophy' we mean that every action we take towards a certain policy is the result of a philosophy. There are two basic philosophies in the world, and, because these philosophies are diametrically opposed to each other, they give rise to conflicting policies. The first philosophy is one which conceives of all power and authority arising from a point EXTERNAL to the individual. The second philosophy conceives of all power and authority from WITHIN the individual. The first philosophy gives rise to policies which necessitate a certain type of organisation in order to IMPOSE certain conditions upon the individual. This philosophy results in the individual being subordinated to the State, the System, or some other abstraction. It can be termed a false philosophy, because it gives rise to policies which conflict with the natural desires of the individual. This false philosophy is helped by many people who may be opposed to one another. For example there is the alleged conflict between Communism and Fascism. We must learn to look beyond labels to find the reality behind the labels.

The second philosophy, which conceives of reality as an environment in which the individual can make the greatest progress towards self-development, gives rise to a social structure in which there is the greatest possible decentralisation of all policies, including financial policies

C. H. Douglas stated:

"Social Credit is the policy of a philosophy. It is something based on which you profoundly believe -what at any rate, I profoundly believe, and hope you will -to be a portion of reality. It is probably a very small portion, but we have glimpsed a portion of reality, and that conception of reality is a philosophy, and the action that we take based upon that conception is a policy, and that policy is Social Credit. It is in fact a policy based upon a philosophy, which is, incidentally, why, in many cases, it is no use arguing with many people about the technics of Social Credit, because they don't agree with your philosophy; often they don't even understand it, and, therefore, what you say in regard to policy and technics sounds like a loud noise to them, chiefly without any sense; and the best thing to do in the circumstance is, of course, to agree to differ."

Social Credit philosophy rests on a perception of reality which embodies the belief in the necessity for both economic and political democracy. In the first instance there should be a democracy of consumers, properly financed to ensure that they have the ability to obtain the results of their association, together with the sanction of withdrawing their support for goods and/or services which do not provide those results. In the second instance there should be a political democracy which allows the individuals in society to obtain the results of policies which they, the people, have determined, together with the ability to apply their sanction of withdrawing their support for the administration to which the people have charged the responsibility of administering their affairs.


C.H.Douglas in the Third Chapter of 'Social Credit ' , says:

"One of the first facts to be observed as part of the social ideal ... is the elevation of the group ideal and the minimising of individuality, i.e. the treatment of individuality as subordinate to, e.g. nationality. The manifestations of this are endless. We have the national idea, the class or international idea, the identification of the individual with the race, the school, the regiment, the profession, and so forth. There is probably no more subtle and elusive subject than the consideration of the exact relation of the group in all these and countless other forms, to the individuals who compose the groups ... The shifting of emphasis from the individual to the group, which is involved in collectivism, logically involves the shifting of responsibility for action. This can be made, it would appear, an interesting test of the validity of the theory.

"For instance, the individual killing of one man by another we term murder. But collective and wholesale killing, we dignify by the name of war, and we specifically absolve the individual from the consequences of any acts which are committed under the orders of a superior officer. This appears to work admirably so long as the results of the action do not take place on a plane which they can be observed: but immediately they do, the theory obviously breaks down. There may be, ex hypothesi, no moral guilt attributable to the individual who goes to war; but the effect of intercepting the line of flight of a high-speed bullet will be found to be exactly the same whether it is fired by a national or a private opponent. Nations are alleged to have waged wars, but the casualties both life and property fell upon individuals. There is no such thing as an effective national responsibility - it is pure abstraction, under cover of which, oppression and tyranny to individuals, which would not be tolerated if inflicted by a personal ruler, escape effective criticism.

" We do not know what is the automatic reaction consequent on the killing of one individual by another, as distinct from the non-automatic and artificial reaction involved in the trial and punishment of a murderer in a court of law. But we do know that over every plane of action with which we are acquainted, action and reaction are equal, opposite and wholly automatic. Consequently, there is nothing to indicate that the automatic consequences of a given action will exhibit any difference if committed under the orders of a superior officer, or not."

The individual is the most important part of society. Without individuals there would be no society.



The Cultural Heritage is the accumulated knowledge of past generations. This accumulated knowledge of how to do this and how to do that, the utilisation of tools, and the use of resources which have been developed over past generations has been passed down from one generation to another, and is a cultural inheritance which belongs to every member of society. No one individual has the right to prior claim. It may be stated that there are two kinds of inheritance which come to man. The first can be described as the natural inheritance which consists of form and structure, such as the natural environment and its natural assets, minerals, etc., and tools etc., and the use to which they may be put. The second is the nurtural inheritance, i.e., the knowledge which has been passed down through generations. The sum of these is the cultural inheritance.


Social Credit is concerned with the voluntary association of individuals to achieve the objectives they desire. If the Individual is not obtaining from any association the objectives he desires, he must be free to leave the association. He must be free to contract out. Under totalitarianism the individual is not free to contract out from undesirable associations. The Philosophy which conceives of all power as external to the Individual results in compulsion of the Individual. (see You and the Law) The basic agenda of any election is the increase of government power, under the guise, these days of increased efficiency or greater competence. Society is conceived not as a mutually beneficial association of individuals, but as a semi-military organisation geared for the maximum production, irrespective of the nature or destination of that production. Production for an export surplus - now being transmuted into production for aid to under-developed countries - is pure economic loss. Accelerated capital development is the sacrifice of present generations for the hypothetical benefit of succeeding generations; or, as Douglas put it, the chief effect of improvement of process is not to shift the burden of work from the backs of men to machines, but to enable the worker to do more work. And as national capacity for production outstrips the national capacity for consumption, the problem becomes international, calling for World Government. Just as all federations of States lead inexorably to domination by the Federal Government over the States, so the emergence of the organs of World Government will lead to the end of national sovereignty.

C.H.Douglas summarised the basics of Social Credit philosophy very succinctly in November 1924 as follows:

"The financial system, in its control over production, stands to the works or factory system of the world, considered as an economic unit, in the same relation as the planning department of a modern factory does to that factory."

The distribution side of the financial system exercises a function no dissimilar to that of the progress department of a factory.

No discussion of the financial system can serve any useful purpose which does not recognise:

(a) That a works system must have a definite objective.

(b) That when that objective has been decided upon it is a technical matter to fit methods of human psychology and physical facts, so that that objective will be most easily obtained.

In regard to (a) the policy of the world economic system amounts to a philosophy of life. There are really only three alternative policies in respect to a world economic organisation.

The first is that it is the end in itself for which man exists.

The second is that while not an end in itself, it is the most powerful means of constraining the individual to do things he does not want to do; e.g. it is a system of Government. This implies a fixed ideal of what the world ought to be.

And the third is that economic activity is simply a functional activity of men and women in the world; that the end of man, while unknown, is something towards which most rapid progress is made by the free expansion of individuality, and that, therefore, economic organisation is most efficient when it most easily and rapidly supplies economic wants without encroaching on other functional activities.

You cannot spend too much time in making these issues clear to your minds, because until they are clear you are not in a position to offer an opinion on any economic proposal whatever.

In regard to (b) certain factors require to be taken into consideration.

1.  That money has no reality in itself. That in itself it is either gold, silver, copper, paper,  cowrie shells, or broken tea cups. The thing which makes it money, no matter of what it is made, is purely psychological, and consequently there is no limit to the amount of money except a psychological limit.

2.  That economic production is simply a conversion of one thing into another, and is primarily a matter of energy. It seems highly probable that both energy and production are only limited by our knowledge of how to apply them.

3.  That in the present world unrest two entirely separate factors are confused. The cry for democratisation of industry obtains at least 90% of its force from the desire for the democratisation of the proceeds of industry, which, is, of course, a totally different thing.

This is assisted by the objective fact that the chief controllers of industry get rich out of their control.

"I do not, myself, believe in the democratic control of industry any more than I should believe in the democratic control of a cricket team, while actually playing, and I believe that the idea that the average individual demands a share in the administrative control of industry is a pure myth.

"The present world financial system is a Government based on the theory that men should be made to work, and this theory is considerably intermixed with the even stronger contention that the end of man is work. I want you to realise that this is a statement of fact, not a theory. More than 95% of the purchasing-power actually expended in consumption is wages and salaries.

"It will therefore, be seen that there are two standpoints from which to examine its mechanism. The first considered as a method of achieving some other political end - for instance, the third alternative already mentioned.

"Considered as a means of making people work (an aim which is common both to the Capitalist and Socialist Party Politics) the existing system, as a system, is probably nearly perfect.

"Its banking system, methods of taxation and accountancy counter every development applied science, organisation, and machinery, so that the individual, instead of obtaining the benefit of these advances in the form of a higher civilisation and greater leisure, is merely enabled to do more work. Every other factor in the situation is ultimately sacrificed to this end of providing him with work, and at this moment the world in general, and Europe in particular, is undoubtedly settling down to a policy of intensive production for export, which must quite inevitably result in a world cataclysm, urged thereto by what is known as the Unemployment Problem.

"To blame the present financial system for failing to provide employment is most unfair; if left alone it will continue to provide employment in the face of all scientific progress, even at the cost of universal world-war, in which not only all possible production would be destroyed, but such remnants of the world's population as are left, will probably be reduced to the meagre production of the Middle Ages.

"Considered as a mechanism for distributing goods, however, the existing financial system is radically defective. In the first place, it does not provide enough purchasing power to buy the goods which are produced.

"And the second feature of equal importance is that considerably less than the available number of individuals, working with modern tools and processes, can produce everything that the total population of world, as individuals, can use and consume, and that this situation is progressive, that is to say, that year by year a smaller number of individuals can be usefully employed in economic production.

"To summarise the matter, the principles which must govern any reform of the financial system, which will at one and the same time avoid catastrophe, and re-orientate world economic policy along the lines of the third alternative, are three in number:

1. That the cash credits of the population of any country shall at any moment be collectively equal to the collective cash prices for consumable goods for sale in that country, and such cash credits shall be cancelled on the purchase of goods for consumption.

2. That the credits required to finance production shall be supplied, not from savings, but be new credits relating to new production.

3. That the distribution of cash credits to individuals shall be progressively less dependent upon employment. That is to say, that the dividend shall progressively displace the wage and salary."