-
Can anyone explain the economic concept of social credit, and
-
Can anyone explain Canada’s Social Credit Party?
Fact sheet from the Alberta Social Credit Party.
I’m amazed this is still around, actually. Here in NZ, the Socreds had a policy of making the economy even for all. All very fluffy, and which led to them being a spent force by the middle of the 1980s. Can’t explain the gobbledegook, sorry.
I think I’ll start with the same admonition that my prof in Canadian Political History gave to the class when he broached this topic:
“Social Credit is an economic theory invented by an military engineer in the British Army in his off-hours. Just think about the implications of that statement for a moment.”
Thought about it? Right, then, here we go. (And bear in mind that it’s been a while since I studied this, so my apologies to more knowledgeable economic types who might wander by.)
Social Credit was an economic theory that flourished in Canada during the Great Depression. The Depression was a period of severe deflation, as opposed to inflation: too many goods, but not enough money. Prices kept falling, but people just didn’t have the money to buy things.
At heart, Social Credit theory posed a sensible answer to the problem: the government should expand the money supply to “prime the pump.” However, the underlying theory in support of this solution was, well, wonky. According to Social Credit theory (and I use that phrase loosely), the capitalist system does not accurately reflect the inherent credit of our society - it measures everything in terms of stocks and bonds, money in the bank, etc. It doesn’t take into account the great value of the public domain, such as Crown lands, nor does it take into account the ability of people to work, and so on. That untapped potential is society’s “credit”, and it’s the role of government to unleash it.
So, the government should issue social credits to every man, woman and child, which can then be used to pay debts, buy stuff, etc. After a particular credit has been used in a certain number of transactions, it’s recalled by the government, and the last person holding it gets a real dollar in exchange for the credit. By this means, says Social Credit, there will be an expansion in purchasing power, the economy will recover from deflation, there’ll be food on the table, and golden apples will grow on the chokecherry bushes. (Okay, I made up that last one.)
Now, as I noted at the beginning, the basic idea of Social Credit has some resemblance to Keynesian theory, and other aspects of the theory have parallels in other economic concepts. For example, the idea of the unrecognized work potential of individuals bears some similarity to the labour theory of value. The idea of expanding the money supply by fiat is the underpinning of modern banking theory. The populist strain in Albertan Social Credit certainly has respectable antecedents.
Unfortunately, the overall approach was tainted by some, well, let’s call them idiosyncracies. First, it was pretty unsophisticated economic analysis. As well, the populist strain merged with the ongoing economic crisis to produce a deep-seated distrust of banks, which while understandable in Western Canada in the Dirty Thirties, ensured that the key financial players in the economy were seen as enemies.
As well, the prophet of the Alberta Social Credit movement was a fundamentalist radio preacher, “Bible Bill” Aberhart. He proselytised for both Christ and Social Credit on his radio shows, so the political Social Credit movement grew up with close overlaps with Protestant fundamentalism. Nothing wrong with Protestant fundamentalism, except that the intertwining gave the whole Socred movement a strong messianic, religious tone, and contributed to the feeling that anyone who opposed it was part of the great conspiracy, which was run by the bankers or Satan (which weren’t considered all that different). This background also contributed to a very authoritarian mind-set, and in some individual members, a hankering for anti-Semitism.
But, you can see why they’d get elected during the Great Depression: at bottom, they promised that the Government would give money to every man, woman and child in Alberta. And so in 1933 (I think it was), Bible Bill swept to power. And then the fun really started.
In addition to a lack of economic sophistication, the first Socreds lacked a fair bit of constitutional knowledge. It apparently never occurred to them that their principal plank, a monetarist policy of expanding the money supply, could only be implemented by a government that had jurisdiction over such matters. Sadly, in Canada the provinces have no such jurisdiction. Coinage and currency, legal tender, bills of exchange and promissory notes, banks and banking - they’re all matters of exclusive federal jurisdiction.
However, not to be deterred by legal quibbles, the Socreds started passing laws to implement their program. Inevitably, them damn courts got involved, purely out of a spirit of meddling, according to Bible Bill, and problems resulted.[ul][li]The Alberta gov’t passed a law to create “social credits”, quickly dubbbed “funny money.” The courts struck it down as beyond provincial competence.[/li]
[li]The gov’t passed a bill imposing extremely high rates of taxation on banks, for the expressed purpose of driving them out of the province. The courts struck it down as beyond provincial competence.[/li]
[li]The gov’t passed a bill depriving all officer and employees of civil rights (literally, that was the name of the Act.) So, if you were a janitor for a local bank, and got knocked down by a rampaging Socred in his flivver, you had no standing to sue. The Socred could sue you, though, for the damage caused by your body impacting on his flivver, and you had no right to file a defence. Guess what - them damn courts struck that down, too.[/li]
[li]People started criticising the gov’t for all its unusual policies - so the Gov’t passed a “Press Accuracy Bill” requiring the papers to publish the gov’t’s views. And of course, the courts struck it down.[/li]
[li]The gov’t passed the first “recall” legislation in Canada, to allow citizens to unseat their elected representatives if they weren’t happy with their performance. It was one of the few pieces of Socred legislation the courts didn’t strike down. They didn’t even get the chance - the first petition to unseat a member was aimed at Bible Bill himself, so the Legislature promptly repealed the recall act, rather than let him be unseated.[/ul]Eventually, things tamed down and the Socreds sort of evolved into a socially conservative, right-of-centre party in Alberta. They stayed in office until the early 70s, when they got turfed out by the Progressive Conservatives, a more moderate, but still right-of-centre party. (Alberta’s political spectrum is a bit on the narrow side. :rolleyes: )[/li]
But that wasn’t the end of Social Credit in Canada. In the fifties, it crossed the mountains into British Columbia. A relatively charismatic conservative fellow, W.A.C. Bennett, saw its potential as a way to “unite the right” in B.C., so the B.C. Socred party took over the turf of the Conservatives and Liberals, and Premier “Wacky” Bennett was in office for 20 years. As far as I know, he never tried to implement Social Credit economic policies.
And, at the federal level, the Socreds had some success in the 50s and 60s, peaking in membership in the early 60s, during the Pearson minority governments. The bulk of their support came from Alberta and, curiously, Quebec, which had its own wing of the party, the Ralliement créditist, under Réal Caouette. They gradually petered out in the 70s, last electing members in the 1979 election. (And if only Joe Clark had courted them, maybe he would have stayed in power…)
The B.C. Socreds were turfed out of office in the 1991 election, and lost all their seats, if I recall correctly. The Alberta party’s gone into a similar decline. I don’t think there are currently any elected Socreds in either province.
Just to expand on Northern Piper’s excellent post. In Québec, they were mostly localised in the Abitibi and Beauce regions (both at the provincial and federal levels). Everywhere else they were (and still are as far as I know) the butt of jokes. Today, these guys (think francophone Catholic fundies) are the only one who still believe in their theory.
Don’t you just love it (and sort of feel a bit embarrassed about it too) when the board introduces you to a topic of which you’ve never ever heard anything?
I feel enlightened.
It’s even more embarassing when someone on the boards explains something in your own country that you’ve never understood before.
Of course, my grandparents came from Saskatchewan, so they were farmer-socialists (and therefore NDP supporters) instead of Socreds. Just think… if Grandpa had moved to Edmonton instead of Regina everything would have been different… 
In BC the Socred movement under WAC Bennett basically consisted of the government never going into debt for anything as much as possible. If the govt couldn’t pay cash upfront, it wouldn’t do it. This was only made possible by having the Premier also be minister of Finance.
Once WAC passed on the mantle by losing an election (in the early 70s?) the Socreds changed quite a bit, and no longer kept such a strict line on deficit financing.
In an unrelated matter, Bennett also thought alcohol should have been banned. When his party won elections, all MLAs came over to his house for tea and cookies made by his wife. Champagne was a no-no.
The B.C. Socreds were turfed out of office in the 1991 election, and lost all their seats, if I recall correctly. The Alberta party’s gone into a similar decline. I don’t think there are currently any elected Socreds in either province.
[/quote]
While there is no one officially elected as a Socred in BC right now, there are quite a few current MLAs who used to be Socreds. They’re now calling themselves “BC Liberals”, which should be read as “neoconservatives trying to sell off every money-making asset in the province to cover short-term debt.”
“Is nothing Socred any more?”
– overheard on CBC Radio
According to the British Columbia Elections web site (sorry, I can’t link to save my soul), the SoCreds won 6 or 7 seats in the 1991 provincial elections. 1996 was when they were completely destroyed.
And, in the trivia section, former PM Kim Campbell was once a SoCred MLA, and Preston Manning’s father, Ernest, was Alberta’s Premier for around 25 years, and served a few more in the Canadian Senate, as a SoCred.
That’s not so far-fetched as you might think, Sunspace - there were some Socreds elected to the Saskatchewan Legislature in the 30s - all from areas on the Saskatchewan - Alberta border that were within the broadcast range of Bible Bill’s radio show, which was based out of Calgary, I think. He was obviously a very charismatic guy, one of the first politicians in Canada to use the new electronic medium with such success.
Ah, that’s right. Sorry - it was getting late and my post was already too long.
detop - I’ve occasionally seen the bulletin of that Quebec créditiste group, “The Michael”, in coffee shops out here, so there’s obviously a few Socreds still scattered around.
When Paul Hellyer set up a new party in the 1997 election, his stuff also looked like it was Social Credit, especially when it talked about the banks expanding the money supply and taking control of the economy.