Delphi Complete Works of Stephen Leacock, page 682
England fortunately is free from all this bugbear of the impediment of constitutional limitations. Every act of parliament is a good act. They can vote social credit, — as far as voting goes, — in a day. The first need for social progress in America is to get rid of having the courts interpret economic powers. Indicate the field and let the legislatures act: let the central one (Congress at Washington, our parliament at Ottawa) take precedence when they clash. If this is centralization, — as Patrick Henry said of treason, — make the most of it. The present method has no virtue but delay: the legislatures in time can circumvent it: Mr. Roosevelt, not being allowed to “restrict” hogs under the AAA (ruled out by the Supreme Court) now conserves them (keeps them unborn) under the BBB. The Supreme Court under such a system merely turns into the Wicked Fairy forgotten at the christening of the Sleeping Beauty, and emerging from the cupboard to distribute general damnation.
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To kill Social Credit with a Privy Council decision makes a martyr of it. The thing should be decided not on the question of the competence of a legislature but of the righteousness of a law. If it is right that Alberta debt should be cut and cancelled, then cut and cancelled it ought to be: all the Privy Councils that were ever privy can’t make it otherwise.
Many people perhaps will think that if the debt cancellation was wrong, then any way to get rid of it is right. If any stick is good enough to beat a dog, let the ultra vires stick beat the Social Credit dog. Just as Mr. Roosevelt finding the ultra vires declarations in their turn an obstruction is using the senility stick to beat the ultra vires dog.
The whole system is wrong and works evil. You can never persuade the people of Alberta to abandon error by that means. And moreover there is this awkward feature about the situation. If the Alberta acts are invalid then surely a large part of the Saskatchewan debt reduction of 1936, which removed $75,000,000 of debt, must be invalid. If a province cannot cancel a debt against the consent of the debtor (the Independent Order of Foresters of Toronto vs. the Lethbridge Northern Irrigation District), then that gives the same right of protest to the individual debtor, even if a majority have waived their claim. In the case of a collective mortgage (the thing commonly called a bond) the terms of the document itself provide for collective action. The individual bondholder, apart from fraud, must act with the others. But in the case of general farm mortgages, each one a transaction in itself, no amount of agreement among loan companies and mortgages, can constrain the creditor who does not consent. I am no Portia, but that seems to me sound law. Caveat Saskatchewan.
The truth is that this whole instrument of judicial decisions to settle the economic powers of the respective parts of a federal government is out of date. Federal government, — one of the greatest advances ever made by man in its political sense, — is out of harmony with the economic world of today. The present situation in Canada and in the United States has come as one of the unforseen consequences of federal government.
The conspicuous success of federal union in the definite formation of the American Republic in 1789 (a thing impossible without it), its application in Switzerland, in Germany, and presently in British North America, gave to federal government in the nineteenth century a singular prestige. Political philosophers such as Sidgwick, in terms of cold theory, and Tennyson, in the warmer language of poetry, could see foreshadowed in it the “parliament of man” and “the federation of the world”. The peculiar weakness of federal government on the economic side passed unnoticed. The entire stress was laid on the possibility of political union for peace and war, where union under a single government was not yet possible. In any case the economic weakness did not exist in a group of scattered settlements without organic communication. But as these developed into a world of highways, canals, railroads, and telegraphs, and then as there began the epoch of the great corporations, of nation-wide business, of standardized products, and still more when electricity and power production and “radio” annihilated locality and space — federalism in the economic sense became first clumsy, then difficult, and now impossible.
The federated states of the modern world must unite, economically, or break. It is interesting to observe the varying fate that is overtaking them. The United States ultra-federal, i.e., over-separated, under the jealous “States rights” influence of the earlier life, became more and more united in actuality by the decisions of the Supreme Court from the days of Chief-Justice Marshall onwards. What the courts could not do was done by the sword of the Civil War, by amendments written in blood. After the war a progressive series of decisions kept reducing and avoiding federalism, kept extending national power over all the republic. The post-war development carried this process still further, and culminated in the Roosevelt programme of the NRA which passes the steam-roller over the economic rights of the States and of the individual. In dissenting from the Gold Decisions of February 1935, an aged judge cried out, “The constitution is gone”! He was quite right. It is gone — just in time. It would have throttled the republic. The sheltering arm of federalism had changed in a hundred years to a suffocating clutch.
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Social Credit then as theory is moonshine. Social Credit in its full legislative sense has not been enacted and is not likely to be. Mr. Aberhart’s statements, as from March 1st, seem to make that clear. And the legislation actually put on the books by the Social Credit party has been brought to a full stop.
But the real achievement of Social Credit, I say it openly and fairly, lies elsewhere. The Social Credit movement, more than any other factor, compelled all Canada to turn its mind to the debt question. Government, and ours at Ottawa especially, for we live in peace, is apt to grow complacent in office: alternating from a decorous ministry to a decorous opposition, keeping the tariff, and the annual deficit, and the railway muddle as a joint heritage or stock-in-trade: soothing as best they may the sobs of the Maritimes, tabulating the weather, taking holidays at Geneva, and holding, every now and then, a Royal Commission on the Solar System. Would that such halcyon days were forever possible!
From all this, “Social Credit” woke us up, as Thomas Jefferson said of the slavery question, “like a fire-bell in the night”. The election of 1935 swept the Province of Alberta cleaner than ever any province of the size was swept: or if this is not correct, it can’t be far wrong: 56 out of 65 seats is pretty clean sweeping.
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I found everywhere, even in the other provinces, a great deal of sympathy with the Social Credit movement, often in the most unlikely places. Retired colonels of Victoria, dozing off to sleep in the sunset: college students with nothing to lose and willing to repudiate everything: people tired of poverty, worn with hard times: young people full of hope, and old people filled with despair, — found in it a vague sort of gospel. I never met anybody who understood it. They expected me to do that because I was an economist. But the feeling that there “was something in it” was widely spread and deeply rooted.
It is impossible to foretell just what will be the final upshot of this legislative session at Edmonton. A section of the Social Credit party have attempted, not exactly to bolt, but to shove from behind. They want to make Mr. Aberhart “get a move on”. They want him to bring in Social Credit, the real thing. They want to bring over an English expert and let him try. Mr. Aberhart won’t move. “No living boy shall carry me,” said Mr. Pickwick, and no living English expert can shove Mr. Aberhart.
Meantime half measures fail to soothe the rioters.
The Marketing Bill presented to the legislature in March 1937, will have no particular consequences. It empowers the executive government to buy Alberta produce and sell it in other provinces and abroad for “real money” and to buy outside and foreign goods and sell them in the province for Alberta credit. But this will not make the outsider (the word means a fellow Canadian) or the foreigner pay a penny more or take a cent less. It will merely interpose the added cost of delay and risk: Alberta goods will be swapped for outside goods just as they are now with the added friction of Alberta credit. Private sale cannot be prohibited (even provincial power must end somewhere) and the bill therefore will be ineffective as far as changing the social system is concerned.
The truth is that neither Mr. Aberhart nor any one else who might replace him can, or will, bring in “Social Credit” in the sense of a monthly cash dividend paid to each resident, — the plain, obvious sense of the original platform. Mr. Aberhart used this lever to turn out the old government: others may use it on him. But the lever once used is thrown away.
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Up to the moment when this book is written, the spring session of the Alberta Legislature leaves Social Credit still suspended like Mohammed’s coffin. The attempt of some of the party to bolt, — or rather to shove Mr. Aberhart from behind, — has not succeeded. That is apparently not the way to get at Mr. Aberhart. The new debt legislation, referred to above, cutting principal instead of interest, will get into the courts and stay there. A commission, — with power to hear; and even to think, and to go anywhere, — is to “organize Social Credit”. In other words, is to do exactly what Mr. Aberhart has been wanting to do, — and can’t do, — for two years. The Dominion, it now appears, has been advised not to lend money to the province.
What will happen is probably this. The sunshine will break out again over sunny Alberta. The wheat will wave and the price will jump. Of course the Dominion will lend money, — Ottawa was never cruel, — and anyway if it is true that the province doesn’t need it, then they are just the people to lend it to. The Commission will report on Social Credit, — say half a million words. No one will read it because on the day it comes out there’ll be a ball-game between Edmonton and Lethbridge, or a stampede at Calgary, or a three-headed calf born at Wetaskiwin and Social Credit will be off the front page.
CHAPTER EIGHT
THE PURE THEORY OF SOCIAL CREDIT
THE ANCESTORS OF Social Credit — Thorstein Veblen and Frederick Soddy — The Technocrats and Life by the Erg — Major C. H. Douglas — Banks and Bunk — The Social Heritage and Dividend — The A+B Theory.
Everywhere in the West I found what are called “thoughtful” people — it means people who can’t think, — anxious to ask me whether “Social Credit” could really work and what was the “theory” of it. “Come”, they said, “you are an economist; explain it to us.”
But when I said, as economists always do,— “To understand Social Credit we must go back a century and a half,” they said, “Let’s keep it over till Friday.”
So I never had a chance.
Now that it comes to cold print I get my opportunity.
I am quite convinced that Social Credit in its proper sense, with “dividends” and a “heritage” will never come into being in the West or anywhere else. Mr. Aberhart’s “eighteen months” will be as slow in maturing as the Greek Kalends. At the same time it is altogether likely that a “Social Credit party” is here to stay, at least for some time. It will be a people’s party of radical reform, having about as much to do with social credit as the Liberal party has to do with liberalism, or the Conservative party with conservatism. This is always the way with parties. “Socialist parties” become bourgeois as they have in France, “labour parties” quit work and wear evening dress and “clerical parties” go to the devil.
But meantime each keeps a sort of tradition of its origin. So it will be with the “Social Crediters”. They will preserve a imaginary background, a sort of sacred ideal which they are supposed to represent, too holy for current use. Thus in the South Sea Islands the natives have a god so exalted they must not even pronounce his real name. He’s just called Oom. Social Credit is going to be the Oom of the Canadian West.
So it is proper to examine just what are the imaginary, ideal doctrines on which the party bases its existence. If they are once for all unattainable, like liberalism, it is just as well to know it.
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Social Credit did not spring from the soil of the West. It blew in on the wind from outside, like the locust and the potato bug and the rust on the wheat. It traces its doctrines back to the books of certain well-known writers just as new families trace their descent from the Plantagenets.
Of these writers the first is Thorstein Veblen (1857-1929), author of the Theory of the Leisure Class (1899), The Theory of Business Enterprise (1904), The Engineers and the Price System (1921) etc. I knew Veblen well. He taught me at Chicago thirty-eight years ago when I was a graduate student in economics. Veblen had a beautiful and thoughtful mind, free from anger and dispute, and heedless of all money motive. As a lecturer he had no manner, but sat mumbling into his lap, scarcely intelligible. But the words which thus fell into his lap were priceless, and after all Malthus had a hare-lip, Demosthenes stuttered and Oliver Cromwell choked. The ideas of the lectures were gathered later into Veblen’s books. The central point of his thought is that human industry is not carried on to satisfy human wants but in order to make money. The two motives do not work, thinks Veblen, to a single end as Adam Smith and John Stuart Mill had thought they do. They fall apart. Hence a lot of people get too much money. These have to find ways of spending it in “conspicuous consumption”. This is the “leisure class”, a sort of flower on a manure heap.
Contrasted with the “money makers” are the “engineers”, that is men who make things not money, — the “real boys”, so to speak. They could satisfy all our reasonable wants if they guided industrial society. But they don’t. The money getters, with their leisure class women and their “honorific expenditure”, have entrenched themselves as “Vested Interests”, — and there you are! What did Veblen propose to do about it? Nothing, so far as I remember. They “let him out” of Chicago University: he taught in New York at the New School for Social Research from 1918 till his death in 1929. His writings, brilliant though they are, are too abstruse for popular reading, and not abstruse enough to be unintelligible and rank as gospel, like the Social Credit of Major Douglas.
Veblen’s classes were small, only four or five of us. He used to lecture also on the Primitive Economics of the Navajo Indians. Why we needed to know about them I can’t remember. Perhaps people distressed over the modern world turn to the forgotten quiet of primitive life, as moralists turn to the simple ecstasy of early Christianity. The Navajo Indian class was very quiet. After a few minutes you could hear its deep breathing. I sat behind a pillar, the only one in the room. Veblen, not usually unfair, refused one man his “credit”. He told me afterwards the man had slept in his class. I said I hadn’t noticed it. Navajo is pronounced Navaho: I got that much out of it anyway.
With the name of Veblen goes the far more celebrated one of Frederick Soddy. Like Hamlet and Yorick, I knew him well. We began work together as junior lecturers at McGill in 1901. He was promoted to higher spheres, was taken and I was left. He was awarded the Nobel Prize in 1921, is now Professor of Chemistry at Oxford, and his name ranks second only to that of Lord Rutherford, — another McGill man, — among British physicists. The distinction about old McGill is the men who are not there.
Soddy, a physicist and a chemist, began writing economics on the side: in fact, he wrote one-sided economics and for that reason his writings caught on. His Money Versus Man (1931) went all over the West. Soddy, like Veblen, shows that science and machinery can easily supply all our wants. But the devil in Money Versus Man who spoils our paradise is not Veblen’s capitalist but Soddy’s Banker. This economic snake, by using his power to “create money” with a pen and ink, by making entries in a ledger, — in other words,— “coining credit”, — this reptile steals our fortune as we make it: or, if you like, this skunk sucks society’s eggs as she lays them. The invention of the cheque system, says Soddy, has “resulted in the banks, not indeed coining money as that is quite unnecessary, but creating money, without even the issue of printed notes, which they lend at interest to those who will pay interest on the pretended loan.... The issuer of money who first puts it into circulation cannot help getting something for nothing.”
Soddy proposes to “make a total end of the system of fictitious credit”.... “The replacement of national money of the two thousand or more million pounds sterling issued by the banks (Soddy presumably means issued in cheques) is an act of tardy justice to the community.”
If a banker is an honest man, up to your standard and mine, Soddy has much to answer for. If a banker is a social parasite, to be sprayed to death like a prairie potato bug, Soddy ought to have a statue.
I always feel that Soddy is quite mistaken in his view. Banking is an honest trade. It needs regulating but so does every other. Personally I’d sit down and eat with a banker any time, — even go into his house, — if he had any liquor in it.
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Then came the “technocrats” and for a moment made a noise all over America. When I was lecturing in Alberta, an anonymous correspondent, anxious to insult me, sent me one of the little manuals on Technocracy on which he had written, “Don’t read this; you might learn something.” He was mistaken. I had read it, and I had learnt a lot.
“Technocracy”, of which the valuable part is now embedded in the Social Credit theory, contained a lot of truth; and what is more it taught it to the world. It “got over” to the public things that plenty of inarticulate economists had mumbled for fifty years. It showed that our enormous increase in machine power gives us the means to satisfy, and oversatisfy our wants. But when the “technocrats” turned from destructive criticism to the attempt to reconstruct society, their ideas became ridiculous. Their notion was to replace money prices and wages by the measure of the “ergs”, — or units of physical energy, — put forth in work. One asks at once how many “ergs” is a stenographer “erging” when she pounds a typewriter: how many “ergs” does a clergyman “erg” in the pulpit, a poet, how many! and, most unhappily, an engineer? But the village blacksmith comes into his own: he’s the real technocracy boy.
