Salient. Victoria University of Wellington Students' Newspaper. Volume 31 Number 16 July 16, 1968
Social Credit now emerges as an alternative Socialist Political Party. This much is apparent from Mr. Dickson's article which in essence states Social Credit's present policy as being increased credit creation, interest free, by Government, at the expense of private lending institutions. Thus Social Credit like Labour, seeks greater Government control of money.
Mr Dickson points to the action of the I.M.F. in creating special drawing rights as being analogous to Social Credit Policy. But the I.M.F. will only be creating additional international reserves, because world liquidity is considered to be too low in relation to the volume of world trade. This is not inflationary because the new money will be backed by goods. But one of New Zealand's problems since the Second World War has been internal inflation. Any increase in the volume of credit in New Zealand if not backed by an equal increase in production, would only increase inflation and this Mr Dickson acknowledges.
Mr Dickson infers that some economists have actually said that Social Credit monetary theories are valid. Unfortunately he doesn't name any of these economists and I would prefer to rely on the 1955 Royal Commission which investigated monetary, banking and credit systems in New Zealand. Of the submissions of the New Zealand Social Credit Association which were approved by the New Zealand Social Credit Political League. the Commission had this to say. They presented "a distorted picture of the present state of the New Zealand economy and their analysis of New Zealand's existing monetary system was falsely based and seriously erroneous"