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Major Douglas in Alberta

An interesting situation has arisen in Alberta with the acceptance by Major Douglas of post as adviser to the Government. The Government in the province is in the hands of the Party known as the United Farmers of Alberta, whose hold on the electorate has been seriously undermined by the rapid growth of a local Social Credit League run by a Mr. Aberhart. Fearful of being defeated at the next elections the Government, in the words of the Canadian correspondent of the Economist, “hit upon the idea of importing Major Douglas himself, the parent of Social Credit, to confound Mr. Aberhart” (Economist, June 29th).

Major Douglas and Mr. Aberhart have said some harsh things about each other, and each claims that his particular scheme is the genuine article, so that it seems highly probable that the move of the Alberta Government will succeed in splitting the Social Credit vote. Major Douglas is not giving his aid for nothing. He is to have a “generous fee.” According to the Vanguard (Toronto, June 1st, 1935) he gets a retaining fee of 5,000 dollars and a further payment of 2,000 dollars for every visit to Alberta.

He has recommended the formation of a coalition Government which shall seek a mandate for the following four “fundamental objectives” (Economist, June 29th).

A drastic reduction of taxation, particularly upon property.

A maintenance dividend as of right, probably small at first, and graded so as to be at the maximum after middle age.

Measures designed to produce a low price level within the Province with adequate remuneration to the producer and trader.

Development of internal resources based upon “physical capacity rather than upon financial considerations.”

It will be noticed that these objectives might be accepted easily by any Liberal-Labour Party anywhere. Where they are definite they are in line with capitalism. Where they are vague they are good vote-catching devices.

What is important about the Alberta episode is that it exposes the real nature of the Douglasite gospel. Major Douglas and his followers are most emphatic that their scheme is not inflation of the currency, but that, in fact, is precisely what it is. The whole Douglas theory is based on an ancient myth about a supposed deficiency of purchasing power. There is no such deficiency, and consequently the issue of Social Credit in the form of the payment of an allowance to all citizens, since it is not to be provided by increased taxation, could only be done by inflating the currency and thus causing the price level to rise. Major Douglas is most anxious to deny this because experiences of inflation in France, Germany and elsewhere have shown how useless that is except for the problems of certain sections of the capitalist class. Now we find him acting as adviser to the United Farmers of Alberta, one of the planks of whose programme, adopted at a conference two or three years ago (see Canadian Annual Review, 1933), is inflation of the currency to bring the dollar down to the level of the wheat-producing foreign competitors of the Alberta farmers! Like certain English economists who have been prepared to give conditional support to the Douglas scheme, the Alberta farmers will be willing to do so simply because it involves currency inflation which they believe will help to reduce the burden of their indebtedness to the Canadian banks, mortgage companies and' insurance companies.

Douglas - Defender of Capitalism

Before leaving Major Douglas it may be worthwhile to remind those misguided workers who support him how essentially capitalistic is his movement. He is himself an unrepentant anti-Socialist. In his Monopoly of Credit (Chapman & Hall, 1931) he describes the relationship between capitalism and workers as “a perfectly equitable arrangement” (p. 34) and in his Draft Social Credit Scheme for Scotland he emphasised that there was to be no " interference with existing ownerships, so called," and there would continue to be profits, wages and capitalist ownership (see appendix to Social Credit, revised edition, 1933, Eyre & Spottiswoode). He constantly puts forward the absurd theory - but a very useful one to the industrial and commercial capitalists in hoodwinking the workers - that capitalists and workers are both exploited and impoverished by their common enemy, the banker. One of the journals which espouses his cause, the New English Weekly, tells us (May 26th, 1932) that Douglasism could be introduced only under two forms of government

“A dictatorship … or a Patriotic largely and predominantly composed ‘Tory aristocrats’…”

On January 26th, 1933, the same paper had the following frank admission about the aims of the Douglas movement:

“... if by capitalism is understood the system of competitive production for profit, it can be said that the required change would not involve its destruction but only its regulation.”