Establishing the Boundaries of a Biblical Worldview

Social Credit

From the archives. Originally published February, 1992.

In the discussion thus far on The Theology of Social Credit, we have seen that a number of the leading Social Credit advocates hold to what can only be described as a very, very defective view of Christianity. For example, we saw that the founder of the Social Credit movement, the late C.H. Douglas, did not believe that the Old Testament was a Christian document. For him, the Old Testament was “pre-Christian.”[1] Had he been arguing that the Old Testament was pre-Christ we would have less concern over his comments. To say that the Old Testament was pre-Christ would have been to say nothing remarkable. But to suggest that the Old Testament is pre-Christian is to propose a radical change in Christian theology.

What must be recognised is this. It is absolutely necessary for the Social Crediters to hold this defective view of the Bible and Christian theology, for their economic theories are dependent upon this misunderstanding of the Scriptures. The Social Credit perception of the “economic problem” is insufficient purchasing power. Their solution to this problem is obtained by granting a National Dividend to all, not given out on merit, but on the fact that all are participants in the community. They believe that the wealth of the nation can somehow be calculated in terms of money, then this wealth distributed to each member of society. (Well, not quite each person, since they believe some people should miss out on this distribution of the National Dividend.) Their argument for this, however, depends on their misinterpretation of the words of Jesus as recorded in Matthew 6:33.

What I’m arguing is that Social Credit, at the philosophic and economic levels, has nothing to do with Christianity.


Social Crediters, nevertheless, are acutely aware that other parts of Scripture, if they are taken literally and authoritatively as the Word of God, would cause them to change their theory. Rather than do this, however, some Social Crediters have attempted to oppose Jesus’s words given in Matthew with Jesus’s other comments elsewhere in the Bible. Since Jesus is the Second Person of the Triune God who wrote the whole Bible, it is a sign of a very defective theology to try to argue that the words of Jesus recorded in the Gospels somehow have more authority — in fact, overrule — the words of Jesus recorded in the Pauline epistles or in the Old Testament.

Thus, in the first part of this series, I endeavoured to set forth the Bible’s view on how we should interpret the Bible, as well as what we mean by the idea of the authority and canon of Scripture. Then I drew upon quotations from Social Crediters to show the way in which they viewed portions of the Old and New Testaments. In this second part of the series, I’m going to reinforce my arguments showing that Social Crediters have a very, very inferior view of the Bible and a substandard understanding of Christian theology. The arguments I give in this series are the reasons why we have never had a systematic theology from any Social Crediter, nor an attempt to provide a systematic and integrated view of economic theory. What I am arguing is that the theological perspective which undergirds their irrational Social Credit theory does not provide them with a basis for doing this. While they may argue this accusation is unfair, they have only to produce the evidence to silence their critics.

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Footnotes    (↵back returns to text)
  1. C.H. Douglas, Social Credit (5th ed., Vancouver, B.C.: Institute of Economic Democracy, 1979), p. 10.↵back

From the archives. Originally published April, 1992.

IN THE FIRST TWO PARTS of this series, I provided evidence from the writings of the Social Crediters that they

1) don’t have an interpretive approach to the Bible that is derived from the Bible itself. They impose their views upon the Bible and attempt to force it to teach what they believe;

2) don’t understand the relationship between the Old and New Testaments; and

3) have a defective view of the Bible and its teaching on salvation.

From this distorted understanding it is impossible for them to show that their peculiar economic theories somehow fit with the biblical evidence. When I say normal I mean normal in terms of what is generally accepted in conservative Christian thought as being a proper approach to biblical interpretation. Only by misinterpreting portions of Scripture (or to be a little more generous we could say only by reinterpreting portions of Scripture), by making one part of Scripture oppose another, rather than seeing the whole of Scripture as the unified Word of God to man, can the Social Crediters argue that their ideas are derived from the Bible. Consider, for example, the Bible’s teaching about property ownership.

Underlying the defective view of Scripture espoused by the Social Crediters is a defective view of God.

Property Rights: Basis for Exchange

WHAT THE OLD TESTAMENT TEACHES in the laws of Moses — which are, in fact, the laws of God — is that it is wrong to steal. The eighth commandment establishes property rights. This means, private ownership of property, property being the material possessions which Providence grants to each one of us. Any theory of distribution of goods must be premised on this commandment. Thus the distribution of goods is by free exchange. You work and produce something I want. I work and produce something you want. We exchange these goods. This is not rewards and punishments, although the fact that we each have something to exchange is a “reward” for the effort we put in to produce it. In the free exchange of goods we have both come away feeling that our respective wealth is enhanced by the acquisition of the new goods. This, of course, is the real “reward” for effort: the ability to exchange our product for something we desire more than that which we have produced. No doubt, the failure to produce and therefore to find ourselves without the ability to make exchanges is, indeed, a “punishment” — self inflicted in the providence of God.

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From the archives. Originally published December, 1991.

According to Henry Van Til, culture is religion externalized.[1] This is simply another way of saying what the Bible affirms: “For as he thinks within himself, so he is” (Prov. 23:7). Religion is inescapable. Everyone has a belief about God, about man, and about law (or morality). Even the atheist has a belief in these things. It is what is believed about these things that distinguishes Christianity from all other religions.

Armed with this understanding, it is relatively simple to analyze any belief system by its underlying theological structure. An analysis of that body of teaching known as Social Credit, an understanding of the basic theological edifice of the Social Credit movement, is indispensable if we wish to determine whether or not we can agree with Social Credit theory. It is not necessary to pursue every detail of theology to do this; but an understanding of how the Social Crediters view the Bible and the redemptive work of Christ on the cross, for example, become key elements to help us assess their claim that Social Credit theory is applied Christianity.

Why analyse Social Credit theory? Social Crediters in Australia, as elsewhere, are a small, but vocal, group of dedicated folk who believe they have the answer to Australia’s economic problems. They offer these answers in the name of Christianity. Yet, followers of C.H. Douglas’s Social Credit theories have never given us a systematic textbook on economic theory. More importantly, they have never provided a textbook on systematic theology showing how their particular views of the Bible, as well as their peculiar economic theories, have a basis in Holy Scripture. Citing proof texts, as they are prone to do from time to time, is not systematic thinking or systematic exegesis of Scripture.

Social Credit theory is, on the surface, quite attractive to those who are untrained in economic theory or those who fail to think critically and analytically. Social Crediters appear to have an explanation for the present economic system and an answer to the dilemma which many people recognize. It is also appealing to Christians, since Social Credit theory is presented in an apparently Christian framework, complete with quotations from the Bible.

Social Crediters claim that their theory is not an option. It is applied Christianity, and anything but an application of Social Credit theory and practice is a denial of Christianity. For example, the Intelligence Survey of November, 1988, carried this advertisement under the heading Investing in the Future: “Once again we draw our readers’ attention to the fact that the future of Christian Civilization depends upon an extension of the Social Credit Movement in all its aspects, into the future.”[2] Bryan W. Monahan, in his booklet, Why I Am a Social Crediter, claimed that “Social Credit is the way to take Christianity seriously.”[3]Elsewhere he argues that “Social Credit as a policy is the only hope left to us.”[4] Social Crediters leave us in no doubt that their ideas are applied Christianity. According to Dr. Geoffrey Dobbs, “Social Credit is an attempt to apply Christianity in social affairs.”[5]

While it is fair to say that the Social Crediters have never provided us with a detailed analysis of Christian teaching and doctrine, they do claim that Social Credit theory is in keeping with the fundamental teachings of Christ as portrayed in the gospels. What they do provide us with, though, is evidence for the following:

1) that they have a defective view of Christian doctrine, and

2) that the economic programs of  Social Credit are not based on the teachings of Christ.

Essential to any debate over economic theory is our understanding of the place of the Bible as the revealed and wholly inspired written Word of God. A defective view of the Bible can easily lead to a defective view of economic theory supposedly based on it. It is my contention that the Social Crediters do indeed have a defective view of the Bible, and from this comes their defective Social Credit philosophy and all that it entails as policy for economic reform.

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Footnotes    (↵back returns to text)
  1. Henry R. Van Til, The Calvinistic Concept of Culture (Grand Rapids, MI: Baker Book House, 1959).↵back
  2. Published by the Australian League of Rights, 145 Russell Street, Melbourne, VIC 3000.↵back
  3. North Curl Curl, NSW: Tidal Publications, p. 11.↵back
  4. Monahan, An Introduction to Social Credit (London: K.R.P. Publications, 1967), p. 109.↵back
  5. Geoffrey Dobbs, What is Social Credit? (Sudbury, Suffolk: Bloomfield Books, 1981), p. 15.↵back

From the archives. Originally published October, 1988. Social Credit theory gained little foothold in the USA. But in Commonwealth countries, it has its promoters. Thus, 26 years later, this commentary on the Social Credit theory of C.H. Douglas, is still relevant. I subsequently obtained my Ph.D. in 1994 by writing a comprehensive analysis of the economic and biblical issues involved in Social Credit as a worldview project.

Various currency paper banking and finance money savingsIt is said that where there are five economists there are six opinions about economics. This serves to highlight the diverse opinions which exists within the economic community. How, then, does the layman determine which theory he ought to follow?

There is one fact which ought to remain constant in any answer, and that is this. Any theory of economics should explain the reality of what exists. The more reality a theory explains the more useful it is in providing an analytical tool. Let’s take an example to illustrate this. Some economists argue that the amount of labor which goes into a product determines prices. This theory, the labor theory of value, seems quite natural. The only problem with it, however, is that it does not explain certain economic phenomena. It doesn’t explain, for example, why a Stradivarius violin sells at a higher price than a Chinese violin. Some economists therefore sought for a better explanation of how prices were determined. The result was the ’subjective theory of value’, the idea that prices are determined subjectively by people acting in the marketplace.[1] This theory alone explains why there are such diverse prices for goods which have a similar labour content. Thus any economic theory ought to explain the world before us, not some hypothetical world which may, or may not, exist.

There is one economic theory receiving support in Australia which radically fails this test. It is called Social Credit. In this form, the theory owes its origin to a British engineer, Clifford Hugh Douglas (1879-1952). Generically, Social Credit has a longer history under other names.[2] Mr. Douglas offers a scientific theory which highlights what he perceives as the economic problem. From this apparently scientific observation, he then makes certain policy recommendations to solve this economic problem.

The A + B Theorem

C.H. Douglas noticed that in the books of any firm the sums of money paid out in wages in any given period are less than the money prices of the goods offered for sale during that period. That is, selling prices include factors other than wages, such as the prices to be paid for raw materials, profits for the owners of the company, etc.[3] Mr. Douglas, being an imaginative thinker, extended this observation to the economy as a whole and made a similar conclusion. In any given time period, the sums paid out in wages (as distinct from other goods and services) are less than the money prices being asked for goods. The result must be, according to Mr. Douglas, a deficiency in purchasing power, that is, a shortage of money, which leads to unsold goods.

From these observations Mr. Douglas developed a theorem. A is equal to the wages, salaries and dividends paid out in any given period. B payments are those which constitute the remaining money paid out for capital goods, raw materials, bank charges, and other external charges. Since selling prices cannot be less than A + B, and since income received is only equal to A, there is, apparently, insufficient money available to buy all the goods which are produced. There must be, according to this theory, unsold goods in the market.[4]

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Footnotes    (↵back returns to text)
  1. Carl Menger, Principles of Economics (New York: New York University Press, 1981).↵back
  2. See, for example, E.F.M. Durbin, Purchasing Power and Trade Depression: A Critique of Under-Consumption Theories (London: Jonathan Cape, 1933); Louis M. Spadaro, Salvation Through Credit Reform: An Examination of the Doctrines of Proudhon, Solvay, and C.H. Douglas (1955), an unpublished dissertation presented in partial fulfilment for a Ph.D. degree at New York University.↵back
  3. These items are commonly referred to as costs, but since Social Crediters use the word cost to mean something else, I’ve refrained from using the word. cf. Bryan W. Monahan, An Introduction to Social Credit (London: K.R.P. Publications, or Sydney: Tidal Publications, [1947] 1967), p. 44.↵back
  4. C.H. Douglas sets forth the ’authoritative exposition’ of the A + B Theorem in The Monopoly of Credit (Sudbury: Bloomfield Books [1931] 1979), especially chapter 4.↵back

“Today, as everyone knows, our productive plants are only operating at a fraction of their capacity, and still are producing goods that cannot be claimed by the amount of purchasing power available to the consumer.”

You could be forgiven if you thought this was a line out of John Maynard Keynes or one of his followers. But it isn’t. This quote is from a small booklet by E.S. Holter, The A B C of Social Credit. Social Credit is the name of a “theory” of economics developed by a British engineer, C.H. Douglas. My Ph.D. thesis was an analysis of Social Credit theory from an economic and biblical viewpoint.

Men would rather propose nutty economic models than pick up their Bible and apply the instructions God has given them to live by.

This quote makes very clear the ‘engine’ that drives all economic theories that are not Bible-based. That’s just a ‘theological’ way of saying ‘property based’. The very clear insight of von Mises is that he saw all economic theories turn on the issue of property rights—a moral and therefore theological issue.

Like Keynesian economics, the Social Creditors have a missing link: price theory. So instead they come up with fantastic statements such as that quoted above, then make their conclusion: The reason you don’t have enough money to buy all the available production is because someone (the Bankers, the Jews, the IMF, the government) is not creating enough money. Or if they are producing enough, then they are not distributing it equitably. If they just produced more and shared it around, then you and everyone else would have enough money to buy all the goods produced.

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