[unclear: Li] deserves full marks for pushing [unclear: If] But just what is it pushing? Kathy [unclear: Hpa] reviews the recent Social Credit [unclear: rence].

[unclear: he] leadership claimed it was the most [unclear: jflnt] conference yet, and the media [unclear: ed] it up. From a publicity point of [unclear: teh] that's a good claim to make and [unclear: al] Credit does it well: the claim has [unclear: i] made every year since 1974 and it will [unclear: be] to be made for at least another two [unclear: s] yet.

[unclear: sking] in the glory of a small-vote, [unclear: ll] lead over National in the not-even- [unclear: ran] stakes of a safe Labour seat, the [unclear: gue] elected its youngest ever President [unclear: rd] its youngest ever speaker. It also [unclear: lucted] the conference at the Avondale course, a home of (one of) the oldest Sessions in the world.

[unclear: jt] it's not gambling that Socred want [unclear: o] engage in. Quite the contrary. The NZ [unclear: al] Credit Political League's publicity [unclear: hine] has made a subtle leap forward, have been told for some time now that the only party with a real programme the future. This used to be because Nail and Labour are both the same.

[unclear: ow] look at the rhetoric. It's good, and [unclear: popular] Socred joins with National to [unclear: id] Labour an "apology" for "State [unclear: dism]", and echoes Labour's claim that [unclear: onal] espouses "priveleged and elitist [unclear: rprise]". Implication: with these [unclear: rrences], Socred is the middle, sensible, [unclear: rcssive] party to unite New Zealand. [unclear: ial] Credit is not Right or Left, but [unclear: rd,]" as the League's research Officer Hunter claimed.

[unclear: wrds] or Backwards

[unclear: xriil] Credit has always tried to avoid normal forms of political [unclear: acterisation.] As recently as two years a League spokesperson told Vic [unclear: ents] at a forum that Socred did not [unclear: be] a unified coherent social policy. This because, as a League, the common [unclear: Dr] in the membership was fidelity to the [unclear: all] policies. League members covered a [unclear: range] of political and social thought, [unclear: vert] told.

[unclear: s] a viable political force, Socred doesn't end that anymore. Every candidate who [unclear: i] ever stood in Wellington region has noted reactionary ideas: the unions [unclear: lid] be made to realise that the interests [unclear: usiness] are their interests; the state [unclear: ild] only help those who help themselves [unclear: beneficaries] by definition do not help [unclear: nselves]); abortion is a crime and the [unclear: lan's] place is in the home, etc, etc. [unclear: y] leader Bruce Beetham and the [unclear: istchurch] Central candidate in the by- [unclear: tion], Heffernan, share these views.

[unclear: xred] draws it support, in town and [unclear: itry], from small business people, [unclear: pkeepers], small farmers, the people are being squeezed out as the New [unclear: iland] economy gets further [unclear: lopolised]. In other parts of the world, [unclear: i] parties have come to prominence in a of severe economic repression, and [unclear: e] tended to fall prey to those on the [unclear: rne] right wing.

[unclear: nice] Beetham is no Adolf Hitler. Far [unclear: n] it. But the promises of overcoming the [unclear: nglehold] of monopolies, keeping the [unclear: 5ns] in their place, and making life [unclear: an] again for the people caught in the [unclear: die] are all too familiar. There was a programme shown on West German television recently, in which people reminisced about exactly these things that had attracted them to the Nazi Party.

Fiscal Foolery

Social Credit has stopped trying to explain its monetary policy. It proclaims that people aren't fooled by cries of "funny money" any more. The idea is that if this proclamation is kept up loud and long enough people will forget there ever was anything to be fooled about in the first place. Now that Socred has drafted the "New Zealand Credit and Currency Bill" everything is supposed to look respectable and foolproof. As if any financial system will mechanically work well just because it exists.

Beetham stated at the conference: "The new confidence the country want can only come with financial reform and that will only come with Social Credit." What does this reform involve? To start with, Socred takes a convenient premise: "Economic laws are usually conventional laws and therefore can be altered if required" (RSJ Rands: The Problem of Money.) This is patent nonsense. If it was actually true, couldn't we just make up economic laws to get us out of the crisis? Yet that is exactly what Socred wants to do.

There are several different strands to the Social Credit economic theory, which have been given varying importance at various times. The strands have two features in common. One, they all assert that somehow or other there is a permanent shortage of purchasing power in the economy. Two, they fail to grasp the realities of modern monopoly capitalism.

"A $ B Theorem"

The "A $ B Theorem" was invented by Major Douglas during WW1 as a means of explaining a "gap" between incomes distributed to consumers and cost incurred by businesses in running production. According to Douglas, firms nave to make two types of payments: salaries, wages, etc (A); and raw materials, depreciation, tax, rent, etc (B). "...everv business has to recover A $ B costs from the public, but distributes only A incomes," claims a NZSC publication, The Problem of Money.

This is easily exposed if one considers that all the "B" payments also represent income to other people: raw material producing companies, banks, transport companies, etc. These people spend the money in their turn, and, since every cost to one person is income to another, production will be balanced throughout the whole economy.

Economic crises occur because of the many conflicting interests and the anarchy they cause in capitalist production, not as Socred supposes. If the A $ B Theorem was correct, there could never be a boom, and in fact capitalism could never have developed out of feudalism!

The Creation of Money (or How to not Control Inflation.)

Social Credit claims that the amount of money in circulation (the monetary base) is decreasing, while its circulation is becoming more rapid, largely due to the operations of financiers who cream off a huge profit in interest on loans, "Under modern conditons," the NZSC pamphlet Cause and Cure argues, "a further reduction in the monetary base makes inflation worse." The Social Credit solution is to increase the money supply, while slowing its rate of circulation, and simultaneously to eliminate financial exploiters.

There are two faults in this reasoning. Firstly, it is incorrect to say that the amount of money in circulation has decreased in relation to the real output of goods and services (GNP) in the economy. Money has become relatively more plentiful over the last 20 years; so to maintain a stable price level it would be necessary to increase the supply at a slower, not faster rate than at present.

Secondly, it is wrong to assume that there is any definite relationship between the size of the money supply and the rate of inflation. In 1975/76, for example, the money supply increased in relation to the GNP, and there was a drop in the rate of circulation. Under Socred logic, inflation would not have decreased, yet it jumped to 15.7%.

Social Credit identifies financiers as the root cause of economic crises, and seeks to fiddle the financial superstructure to overcome such crises. It does not appreciate that the monopoly capitalist class as a whole must be attacked. This cannot be done by changing the economic laws: the class itself must be forbidden from using those laws to its own advantage.

As the economic crisis worsens. Social Credit could appeal more and more. In the words of one commentator, it is "a well-founded, though necessarily confused, cry of protest raised by the remaining independent producers against the ever growing domination of the great monopolistic capitalist groups." It pretends to be able to preserve capitalism for the small producers. A dangerous, but for them, necessary, fallacy.

Kathy Jamieson.