SOCIAL CREDIT.

Evening Star, Issue 22144, 26 September 1935, Page 16

SOCIAL CREDIT.

TO THE EDITOB. Sir, —We were advised last week in a leader to read Professor Murphy’s article on ‘ Costless Credit,’ in the ‘ Financial Times.’ I did so, and found that in addition to being a clear statement, as the leader said, on credit generally, it gave vent to the usual muddled and inaccurate statements on the Douglas views, which, unhappily, we are now accustomed to expect from almost all orthodox opinion, and —no doubt as a consequence of this—in almost all popular Press opinion. Would you permit me to explain? Professor Murphy expressed the opinion that the Douglas scheme would not play a direct part in forthcoming New Zealand political controversy, and gave several reasons, each of which, if the professor really believes in them, and was' not just writing journalese, assumes that Douglas opinion is on a par with the current political opinions of any party, and proceeds from the same sort of half-used intelligence. So far as the ordinary person can judge the position in New Zealand, it is impossible either to agree or disagree with the opinion that directly the Douglas scheme will not enter into political controversy; but the reason why the Douglas scheme does not enter directly into politics is because it has never been refuted—while in Australia confirmed —that economic power precedes political power. In practice this means that until a majority of electors understand the differences of technique of the proposed and the present economic mechanism, any political action is futile. Consequently the responsible and keen advocates of a Douglas mechanism leave politics and politicians simmering in their own hotchpotch stew; in fact, few of them at present have made up their minds for whom to vote. A large section of Douglas opinion thinks that a change to a Douglas mechanism will most quickly come from mass pressure, and use the argument that crowds feel and do not think. Since, both as a matter of ethics and as a matter of freedom, it is a tenet of the philosophical side of the Douglas ease that whether in health or sickness, whether participating in organised toil or not, the individual should have economic security, and since it is upon this point that mass feeling should be aroused, the matter of accumulating such a feeling has been left largely to thft organised religions. As expected, they are in many cases responding, and it is always possible that the result may be a sudden call for political candidates pledged to institute a Douglas mechanism, instead of pressure being brought to bear upon one or other of the existing parties. Professor Murphy also said that many radical proposals were apparently in harmony with the broader contentions of the Douglas mechanism, as, for example, the guaranteed price scheme of the Labour Party. Immediately afterwards he denied any precise meaning to the Douglas scheme. In regard to the first, a plain denial is best, and if any Labour M.P. could be induced to say what Douglas advocates have told him about the price scheme, the denial can be confirmed. In regard to the lack of precision, the best answer is that if Professor Murphy were to allow it, I would use the body of the article that deals with costless _ credit, and with a minimum of alteration (probably none) plus introductory and final paragraphs, and under the title ‘ Offensiveness of Bank Credit Mechanism,’ or, alternatively, ' The Impossibility of Costless Credit,’ could submit it to one American and two British Douglas journals, guaranteeing that none would reject it on the score of technical inaccuracy from the Douglas aspect. An alternative answer is that most of Professor Murphy’s technical statements could be found in much the same words in Douglas’s books. As an example;— The fundamental object of the scheme is ‘ to obtain purchasing power that will enable the State to take from others, and concentrate in its own hands a pull over productive resources of the country. This is a basic function of credit . . . it is not a direct creation of wealth.” Finally, as a comic relief for Douglas readers, may I quote this; — “ Most schemes are indifferent as- to •whothor new supplies of i costless credit ’ are issued to producers, constimers, or both . . , au abseure problem now being subjected to scientific analysis by economises.” —I am, otc>) C. H. Chapman. September 25.