By Helge Nome
Members of the Alberta Social Credit Party, along with invited guests, where treated to a lecture in Social Credit principles at the monthly meeting of the party executive on Saturday, April 25, at the meeting room in Lau's Restaurant in Innisfail.
Economist Jim Schroeder from Edmonton introduced the basic concepts of Social Credit which explains how money is created and cancelled by banks in a modern economy by the extension of credit to customers. The term “Social Credit” was coined by Scottish Engineer Clifford Hughes Douglas shortly after World War I, when he discovered that a chronic shortage of purchasing power, in the form of available income to consumers, tends to develop in a modern economy.
Schroeder pointed out how this shortage, or “gap” between consumers' purchasing power and the cumulative prices of goods and services available for sale arises, and that it needs to be filled with new money made available to consumers in the form of purchasing power. In the modern world this is done by banks that issue loans that need to be repaid with interest added, whereas, according to C.H.Douglas this new money, or credit, rightfully belongs to people collectively, because the expansion of the productive capacity of the economy is due to their cultural heritage and not to the bankers that are merely responsible for handing out the check books and keeping track of the money.
Schroeder explained that the difference between Classical Economics (with its emphasis on Land, Capital and Labor) as factors of production, Socialism (with its focus on Labor), and Social Credit is that a society's Cultural Heritage primarily determines its productive capacity and has to be factored into the equation, in addition to Land, Labor and Capital: The tools at our disposal, like electricity, available at the flick of a switch on the wall, multiplies a person's productive capacity tremendously, compared to that of a pre-industrial age worker.
The Alberta Social Credit Party came into being in 1935, during the Great Depression, when a chronic shortage of purchasing power brought about unprecedented hardships, and prompted William Aberhart of Calgary to challenge the sitting United Farmers of Alberta Government in that year's election. His party was swept into office and stayed there for 35 years.