SOCIAL CREDIT CRITICISED

Press, Volume XCI, Issue 27586, 17 February 1955, Page 14

SOCIAL CREDIT CRITICISED

Views Of Treasury Secretary MONEY THOUGHT OF AS WEALTH (New Zealand Press Association) HOKITIKA, February 16. Strong criticism of the principles of the Social Credit movement were expressed by the Secretary of the Treasury (Mr B. C. Ashwin) when speaking at the opening of the annual conference of the Associated Trustee Savings Banks of New Zealand at Hokitika. A great deal of confused reasoning appeared to stem from thinking of money as wealth, said Mr Ashwin. In essence money was only a receipt for contributions to the flow of goods and services and the right to acquire from that flow other goods and services of equal value. Give a few more money affd they can buy more goods, because the effect on the flow of goods is too small to be noticeable,” he said. “Hand out extra money to everyone and keep on doing it as proposed in the Social Credit national dividend, then the available supply of goods must run out or prices be driven up so that, on the average, no-one will get any more goods than previously. “Otherwise, where would the extra goods come from at a time when we have no unemployed and the present available supply is all being used? When there is nothing to buy money is worthless,” said Mr Ashwin. Value of Work “Another Social Credit principle is that the right to live should not depend on work, which limits freedom. If work were optional, it is safe to say that a lot less would be done and the shrinkage in the flow of goods and services would entail a drastic fall in the standard of living. "The right to work for a reasonable standard of living is inherent in full employment policies, and the young and fit must also support the aged and infirm. “But a right for the young and fit to be idle in comfort is impossible,” said Mr Ashwin. Savings and its counterpart, debt, were condemned by Social Creditors because they thought saving reduced purchasing power, while the idea that capital was dependent on saving was claimed to be fallacious. It was proposed that capital works be financed on the free issue of credit. “This is nonsense because, if the works proceed, the labour and other physical resources used in such works would lessen the resources available for producing or importing consumable goods, so that the community would be deprived of them in any Case. “At this time, while struggling with their income tax payments, many people may agree with the Social Credit claim that taxation is a great social evil,” said Mr Ashwin. “But if the aged and infirm are to be cared for, and if State activities continue with the aid of costless credit instead of taxes, the rest of the community will be no better off than at present. More money would be left in their pockets, but there would be no more goods and services available for consumption.” Prices would be higher and the community would continue to be taxed indiscriminately by a progressive lowering of the value of money. The most outstanding claim of Social

Credit advocates was that purchasing power in the hands of the people was short by no less than £190,000,000 a year. They proposed to close this huge gap by issuing credit to pay off maturing loans, create public works, establish a retail discount to allow goods to be sold below cost, pay a national dividend to the people, and anything else justified by their needs. Through these channels money would be poured into the hands of consumers to give them, it was claimed, full and plenty for all and absolute economic security. “Gap” Denied “If purchasing power were as short as is claimed, one would expect to find either a veritable mountain of unsold goods with prices falling steeply, or a large number of unemployed because factories would not make goods that could not be sold,” said Mr Ashwin. “In fact, we have none of these things. “Factories cannot get as many workers as they want, which is proof that all that can be made with the available labour force is flowing into use. “In these circumstances the most that could be done would be to clean out*the trading stocks in shops and warehouses and exhaust the reserves of overseas funds. "The community would get no real benefit out of air the extra money. The standard of living depends on the production of goods and services and it cannot be increased by issuing more and more money to consumers. “Far from giving economic security, the process would produce economic chaos. If one wanted to wreck an economy it is doubtful if a more effective way of doing it could be found.”