M. OLIVER HEYDORN writes at the Clifford Hugh Douglas Institute for the Study and Promotion of Social Credit:

At the very heart of the modern economy we find this thing called ‘finance’. Finance is to the economy what an operating system is to a computer. For it is the financial system which allows an economy’s ‘hardware’ (i.e., its raw materials, labour, machinery, etc.) to be actualized in the service of specific ‘software applications’ (i.e., production programmes). As far as the formal economy is concerned, it is true to say that finance is the essential interface and animating principle.

But the financial system, i.e., the banking and cost accountancy system, is also a purely human artefact composed of institutions, laws, and conventions. This means that it can function more or less adequately. If it is properly designed, it will serve the common good in an effective, efficient, and fair manner. If it is not properly designed, it will tend, instead, to serve the vested interests of those who own and operate the financial system, thus transforming financiers (both national and international) into an economic and political oligarchy.

Social Credit holds that the conventional financial system is not properly designed and that, in consequence, it has become impossible for any economic association operating under its rules to fulfill its true purpose (i.e., the delivery of those goods and services that people can use with profit to themselves with the least amount of labour and resource consumption) to the extent that such a fulfillment is physically possible. In other words, because there is a ‘bug’ in the economy’s operating system, the economy’s hardware is artificially constrained and its activity is misdirected. Chronic dysfunction in the form of poverty, servility, the recurring cycle of boom and bust, constant inflation, heavy taxation, economic waste and sabotage, forced economic growth, ever-increasing indebtedness, and the centralization of wealth, privilege, and power in fewer and fewer hands is the inevitable result.

In general, a financial system may be described as a system of double-entry bookkeeping involving both money values and money. It is a system of numerical representation that is meant to measure our physical economic assets on the one hand and the calls that we make on those assets on the other.

The basic design fault with the conventional system is this: it is not an honest system. That is, it is not designed to provide an accurate representation of our physical wealth, both potential and actual. Instead, it systematically underestimates our wealth, always making it appear, in financial terms, that we are poorer than we actually are in physical terms.[1] [cont.]

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