THE DOUGLAS CREDIT THEORY

Otago Daily Times, Issue 21598, 19 March 1932, Page 14

THE DOUGLAS CREDIT THEORY

TO THE EDITOR Sir, —In reply to your correspondent Mr Chapman, I would point out that my understanding of economic science led me from the first to look with suspicion on the nature of the objective of the Douglas credit theory. Your correspondent’s reply to my questions serves only to confirm such suspicions. He says that “ the supporters of Douglas credit do not advocate community ownership.” The authority for my statement is to be found in the following quotation from the pen of Mr Chapman himself: “The Douglas theory says in effect that the present system demonstrably breaks down. Its cure, the control of credit by a community instead of by individuals or corporations.” Replying to my question as to the object of the Douglas theory, your correspondent says “the theory has no objective.’ Whoever heard of a theory existing without an objective? Your correspondent will be saying next that the theory exists without a cause. Again, in view of the claims put forward by the of Douglas credit, would it be false for me to state that the practical application of the theory, as seen by the institution of a system of community ownership of credit, has for its objective the abolition of the contradictions existing in capitalist society to-day? If your correspondent had said that the Douglas theory does not presuppose the ownership in common of the means of production that would be true; but when he sees fit to assert that a system or mode of production for consumption—i.e., for use—does not presuppose or require for its consummation the ownership in common ot the means of life, etc., that is false and contrary to known truths, as revealed by an understanding of economic science itself. A study of economic science or historical development on the part of the supporters of the Douglas theory would serve to show them that the breaking down of the money system is not caused by any delect in that system itself, as Douglas would have it, but is the logical outcome ot the mode of production and exchange itself. Monev or finance is not a cause of the present system; it exists only as an ettect or attribute of such system. 1 would say that the Douglas theory exists as a move on the part of the middle or petty bourgeois class, comprised of small traders a,,,! producers, against the ever-growing big financial interests. The consumma-

tion of capital has for its effect .the centralisation of capital or industries into ever fewer and fewer hands, which centralisation results finally in the total elimination of the small class of petty traders and producers. Capitalism exists, however, on a relationship existing between the owners of the means of life on the one hand and the propertyless workers, owning nothing but their ability to work on the other hand. Any solution of present difficulties requires for its object or result the abolition of the present existing relationships. —I am, etc., ' Greg.

[The above letter has been extensively abridged.— Ed. O.D.T.]