C. H. Douglas

Last updated

C. H. Douglas

C H Douglas.jpg
C. H. Douglas in Edmonton, Alberta, Canada, 1934
Clifford Hugh Douglas

(1879-01-20)20 January 1879
Died29 September 1952(1952-09-29) (aged 73)
Nationality British
Spouse(s) Edith Mary Douglas
Institution Institution of Mechanical Engineers, Institution of Electrical Engineers
Field Civil engineering, Economics, Political science, History, Accounting, Physics
School or
Social credit, Distributism, conservatism, Toryism, Christian Democracy,
Alma mater Pembroke College, Cambridge
Contributions Cultural heritage as factor of production, Economic sabotage, Unearned increment of association, Money as means of distribution of production, A + B theorem, National dividend, Practical Christianity
CH Douglas Signature.svg

Major Clifford Hugh "C. H." Douglas, MIMechE, MIEE (20 January 1879 – 29 September 1952),[ citation needed ] was a British engineer and pioneer of the social credit economic reform movement.


Education and engineering career

C.H. Douglas was born in either Edgeley or Manchester, [1] the son of Hugh Douglas and his wife Louisa Hordern Douglas. Few details are known about his early life and training; he probably served an engineering apprenticeship before beginning an engineering career that brought him to locations throughout the British Empire in the employ of electric companies, railways and other institutions. [1] He taught at Stockport Grammar School. After a period in industry, he went up to Pembroke College, Cambridge at the age of 31 but stayed only four terms and left without graduating. [2] He worked for the Westinghouse Electric Corporation of America and claimed to have been the Reconstruction Engineer for the British Westinghouse Company in India (the company has no record of him ever working there [2] ), Deputy Chief Engineer of the Buenos Aires and Pacific Railway Company, Railway Engineer of the London Post Office (Tube) Railway and Assistant Superintendent of the Royal Aircraft Factory Farnborough during World War I, with a temporary commission as captain in the Royal Flying Corps. [3]

His second wife was president of the Women's Engineering Society Edith Mary Douglas.

Social credit

While he was reorganising the work of the Royal Aircraft Establishment during World War I, Douglas noticed that the weekly total costs of goods produced was greater than the sums paid to workers for wages, salaries and dividends. This seemed to contradict the theory of classic Ricardian economics, saying that all costs are distributed simultaneously as purchasing power.

Troubled by the seeming difference between the way money flowed and the objectives of industry ("delivery of goods and services", in his view), Douglas set out to apply engineering methods to the economic system.

Douglas collected data from more than 100 large British businesses and found that all except those becoming bankrupt, paid less in salaries, wages and dividends than the costs of goods and services produced each week: the workers were not paid enough to buy back what they had made. He published his observations and conclusions in an article in the magazine English Review where he suggested: "That we are living under a system of accountancy which renders the delivery of the nation's goods and services to itself a technical impossibility." [4] The reason, Douglas concluded, was that the economic system was organized to maximize profits for those with economic power by creating unnecessary scarcity. [5] Between 1916 and 1920, he developed his economic ideas, publishing two books in 1920, Economic Democracy and Credit-Power and Democracy, followed in 1924 by Social Credit.

The basis of Douglas's reform ideas was to free workers from this system by bringing purchasing power in line with production, which became known as social credit. His proposal had two main elements: a national dividend to distribute money (debt-free credit) equally to all citizens, over and above their earnings, to help bridge the gap between purchasing power and prices; also a price adjustment mechanism, called the "just price", to forestall inflation. The just price would effectively reduce retail prices by a percentage that reflected the physical efficiency of the production system. Douglas observed that the cost of production is consumption; meaning the exact physical cost of production is the total resources consumed in the production process. As the physical efficiency of production increases, the just price mechanism will reduce the price of products for the consumer. The consumers can then buy as much of what the producers produce that they want and automatically control what continues to be produced by their consumption of it. Individual freedom, primary economic freedom, was the central goal of Douglas's reform. [6]

At the end of World War I, Douglas retired from engineering to promote his reform ideas full-time, which he would do for the rest of his life. His ideas inspired the Canadian social credit movement (which obtained control of Alberta's provincial government in 1935), the short-lived Douglas Credit Party in Australia and the longer-lasting Social Credit Political League in New Zealand. Douglas also lectured on social credit in Canada, Japan, New Zealand and Norway. [7]

In 1923, he appeared as a witness before the Canadian Banking Inquiry, and in 1930 before the Macmillan Committee. [8] In 1929 he made a lecture tour of Japan, where his ideas were enthusiastically received by industry and government. His 1933 edition of Social Credit made a reference to the Protocols of the Elders of Zion , which, while noting its dubious authenticity, wrote that what "is interesting about it, is the fidelity with which the methods by which such enslavement might be brought about can be seen reflected in the facts of everyday experience." [9]

Death and legacy

Douglas died in his home in Fearnan, Scotland. Douglas and his theories are referred to several times (unsympathetically) in Lewis Grassic Gibbon's trilogy A Scots Quair . He is also mentioned, together with Karl Marx and Silvio Gesell, by John Maynard Keynes in The General Theory of Employment, Interest, and Money (1936, p. 32). Douglas's theories permeate the poetry and economic writings of Ezra Pound. Robert Heinlein's first novel For Us, The Living: A Comedy of Customs describes a near future United States operating according to the principles of social credit.

See also


  1. 1 2 Martin-Nielsen, "An Engineer's View of an Ideal Society", p. 97
  2. 1 2 Pottle, Mark. "Douglas, Clifford Hugh". Oxford Dictionary of National Biography (online ed.). Oxford University Press. doi:10.1093/ref:odnb/32872.(Subscription or UK public library membership required.)
  3. "No. 29448". The London Gazette (Supplement). 21 January 1916. p. 977.
  4. "The Delusion of Super-Production", C. H. Douglas, English Review, December 1918
  5. Martin-Nielsen, "An Engineer's View of an Ideal Society", pp. 97–99
  6. Martin-Nielsen, "An Engineer's View of an Ideal Society", pp. 99–100
  7. Martin-Nielsen, "An Engineer's View of an Ideal Society", p. 100
  8. Stamp, J. C. "The Report of the Macmillan Committee." The Economic Journal , Vol. 41, No. 163, September 1931, pp. 424-435. doi : 10.2307/2223900.
  9. CHAPTER VI Taxation and Servitude Archived 9 February 2010 at the Wayback Machine

Related Research Articles

Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, a price system, private property and the recognition of property rights, voluntary exchange and wage labor. In a capitalist market economy, decision-making and investments are determined by every owner of wealth, property or production ability in capital and financial markets whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.

In economics, factors of production, resources, or inputs are what is used in the production process to produce output—that is, finished goods and services. The utilized amounts of the various inputs determine the quantity of output according to the relationship called the production function. There are four basic resources or factors of production: land, labour, capital and entrepreneur. The factors are also frequently labeled "producer goods or services" to distinguish them from the goods or services purchased by consumers, which are frequently labeled "consumer goods".

In economics, a free market is a system in which the prices for goods and services are self-regulated by buyers and sellers negotiating in an open market. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority, and from all forms of economic privilege, monopolies and artificial scarcities. Proponents of the concept of free market contrast it with a regulated market in which a government intervenes in supply and demand through various methods such as tariffs used to restrict trade and to protect the local economy. In an idealized free-market economy, also called a liberal market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy.

A market economy is an economic system in which the decisions regarding investment, production and distribution are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.

Social credit is an interdisciplinary and distributive philosophy developed by C. H. Douglas. It encompasses economics, political science, history, and accounting. Its policies are designed, according to Douglas, to disperse economic and political power to individuals. Douglas wrote, "Systems were made for men, and not men for systems, and the interest of man which is self-development, is above all systems, whether theological, political or economic." Douglas said that Social Crediters want to build a new civilization based upon "absolute economic security" for the individual, where "they shall sit every man under his vine and under his fig tree; and none shall make them afraid." In his words, "what we really demand of existence is not that we shall be put into somebody else's Utopia, but we shall be put in a position to construct a Utopia of our own."

<i>For Us, the Living</i> Science fiction novel by Robert A. Heinlein

For Us, The Living: A Comedy of Customs is a science fiction novel by American writer Robert A. Heinlein. It was written in 1938 and published for the first time in 2003. Heinlein admirer and science fiction author Spider Robinson titled his introductory essay "RAH DNA", as he believes this first, unpublished novel formed the DNA of Heinlein's later works.

Causes of the Great Depression

The causes of the Great Depression in the early 20th century in the USA have been extensively discussed by economists and remain a matter of active debate. They are part of the larger debate about economic crises and recessions. The specific economic events that took place during the Great Depression are well established. There was an initial stock market crash that triggered a "panic sell-off" of assets. This was followed by a deflation in asset and commodity prices, dramatic drops in demand and credit, and disruption of trade, ultimately resulting in widespread unemployment and impoverishment. However, economists and historians have not reached a consensus on the causal relationships between various events and government economic policies in causing or ameliorating the Depression.

Economic system System of ownership, production and exchange

An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within a society or a given geographic area. It includes the combination of the various institutions, agencies, entities, decision-making processes and patterns of consumption that comprise the economic structure of a given community.

Anarchist economics is the set of theories and practices of economic activity within the political philosophy of anarchism. Anarchists are anti-authoritarian, with anarchism usually referred to as a form of libertarianism, Anarchists support personal property and oppose capital concentration, interest, monopoly, private ownership of productive property such as the means of production, profit, rent, usury and wage slavery which are viewed as inherent to progressivism.

Technocracy movement A non-political social movement popular in the United States and Canada in the 1930s

The technocracy movement is a non-political social movement which arose in the early 20th century. Technocracy was popular in the United States and Canada for a brief period in the early 1930s, before it was overshadowed by other proposals for dealing with the crisis of the Great Depression. The technocracy movement proposed replacing politicians and businesspeople with scientists and engineers who had the technical expertise to manage the economy.

Criticism of socialism is any critique of socialist models of economic organization and their feasibility as well as the political and social implications of adopting such a system. Some critiques are not directed toward socialism as a system, but rather toward the socialist movement, parties or existing states. Some critics consider socialism to be a purely theoretical concept that should be criticized on theoretical grounds while others hold that certain historical examples exist and that they can be criticized on practical grounds. Because there are many models of socialism, most critiques are focused on a specific type of socialism and the experience of Soviet-type economies that may not apply to all forms of socialism as different models of socialism conflict with each other over questions of property ownership, economic coordination and how socialism is to be achieved. Critics of specific models of socialism might be advocates of a different type of socialism.

The Efficiency Movement was a major movement in the United States, Britain and other industrial nations in the early 20th century that sought to identify and eliminate waste in all areas of the economy and society, and to develop and implement best practices. The concept covered mechanical, economic, social, and personal improvement. The quest for efficiency promised effective, dynamic management rewarded by growth.

The history of economic thought was the philosophy that dealt with different Chapris and theories in the subject that later became political economy and economics, from the ancient world to the present day in the 21st Century. This field encompasses many disparate schools of economic thought. Ancient Greek writers such as the philosopher Aristotle examined ideas about the art of wealth acquisition, and questioned whether property is best left in private or public hands. In the Middle Ages, scholasticists such as Thomas Aquinas argued that it was a moral obligation of businesses to sell goods at a just price.

Throughout modern history, a variety of perspectives on capitalism have evolved based on different schools of thought.

Monetary reform is the process of fundamentally changing policies regarding money. It can include changes to the money creation process, fractional-reserve banking, financial institutions, financing of the economy and social credit among other things.

Economic democracy is a socioeconomic philosophy that proposes to shift decision-making power from corporate managers and corporate shareholders to a larger group of public stakeholders that includes workers, customers, suppliers, neighbours and the broader public. No single definition or approach encompasses economic democracy, but most proponents claim that modern property relations externalize costs, subordinate the general well-being to private profit and deny the polity a democratic voice in economic policy decisions. In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalism's inherent effective demand gap.

Types of socialism include a range of economic and social systems characterised by social ownership and democratic control of the means of production and organizational self-management of enterprises as well as the political theories and movements associated with socialism. Social ownership may refer to forms of public, collective or cooperative ownership, or to citizen ownership of equity in which surplus value goes to the working class and hence society as a whole. There are many varieties of socialism and no single definition encapsulates all of them, but social ownership is the common element shared by its various forms. Socialists disagree about the degree to which social control or regulation of the economy is necessary; how far society should intervene and whether government, particularly existing government, is the correct vehicle for change.

Market socialism Economic system aiming to create socialism through supply and demand

Market socialism is a type of economic system involving the public, cooperative, or social ownership of the means of production in the framework of a market economy. Market socialism differs from non-market socialism in that the market mechanism is utilized for the allocation of capital goods and the means of production. Depending on the specific model of market socialism, profits generated by socially owned firms may variously be used to directly remunerate employees, accrue to society at large as the source of public finance, or be distributed amongst the population in a social dividend.

Socialist economics comprises the economic theories, practices and norms of hypothetical and existing socialist economic systems. A socialist economic system is characterized by social ownership and operation of the means of production that may take the form of autonomous cooperatives or direct public ownership wherein production is carried out directly for use rather than for profit. Socialist systems that utilize markets for allocating capital goods and factors of production among economic units are designated market socialism. When planning is utilized, the economic system is designated as a socialist planned economy. Non-market forms of socialism usually include a system of accounting based on calculation-in-kind to value resources and goods.

The socialist calculation debate, sometimes known as the economic calculation debate, was a discourse on the subject of how a socialist economy would perform economic calculation given the absence of the law of value, money, financial prices for capital goods and private ownership of the means of production. More specifically, the debate was centered on the application of economic planning for the allocation of the means of production as a substitute for capital markets and whether or not such an arrangement would be superior to capitalism in terms of efficiency and productivity.



Further reading