Understanding the Financial System Reviewed

Understanding the Financial System:
Social Credit Rediscovered.
by Frances Hutchinson,
Jon Carpenter, 2010,
ISBN: 978-1906067090

This book is a real treasure house of information about a historical episode in the battle for a just, fair and well ordered society. The central event is the election of a government with a clear majority mandate to establish a fully overhauled financial system in the Canadian Province of Alberta. Until 1935, anybody would have been forgiven for not having heard of such a place.

As the author explains in the preface, the book is the result of seven years of research she undertook in response to 'a curious event' in 2001 in the Green Party where she was an active advocate of its Guaranteed Basic Income policy. The 'event' itself can be viewed as a miniaturised version of the real history around Social Credit which unfolded over four decades starting in the 1930s.

After establishing that Social Credit is a sound economic arrangement, superior to the prevailing one, the author pursues answers to the question why it was not implemented. The book is also the result of a crisis of collaboration on another book, The Politics of Money, that was precipitated by that 'event' in the Green Party.

We, as readers and beneficiaries of Understanding The Financial System, should be glad that Hutchinson had to do this painstaking research to establish the truth behind the writing of Derek Wall's article', Social Credit: The Ecosocialism of Fools, which claimed that Social Credit was a far-right fascist and anti-Semitic doctrine.

The first two chapters set the scene by presenting 'an overview summary of the changes in farming, society and the financial system from the earliest times, through the development of city states into the corporate world economy'.

In the rest of the chapters, and the numerous documents included as appendices, the book describes the contribution of Social Credit economics to a vision of the world that is well prepared to function as a fully industrialized and developed capitalist system. Interleaved in that story is the documented account of persistent and well-financed efforts of the established order to undermine ordinary people's understanding and trust in the soundness of a Social Credit future.

Apart from the clear presentation of Social Credit as a comprehensive economic philosophy and practice, the great value of Hutchinson's work lies in informing us of the length the established system can go to defend itself against the threat of being overtaken by an advanced alternative socio-economic arrangement.

In one area, however, this work misses the mark. The Douglas Thesis, dealing with the pervasive monopoly of finance, is one half of a solution to the ills that beset 21st century global society. Indicated by a mere aside, the author dismisses the work of Henry George as a 'minnow'. She fails to note the worldwide movement that — by exposing the private monopoly over land and all other natural resources — complements the reforms proposed by Douglas. There is a worldwide movement inspired by the rigorous analysis of George into a socio-economic failure that results in continuing poverty amidst increasing plenty. In addition, it is noteworthy that the solution to land monopoly has received the same treatment over the past hundred years from the defenders of the established order as Social Credit. This is revealed in the research presented in The Corruption of Economics.

Mentioning Henry George in the context of this review should not, however, be construed as pointing to a rival theory of economic reform. On the contrary, students of Douglas and George should find encouragement in the knowledge that a fully worked composite solution is available to heal a society wracked by the private exploitation of two fundamental monopolies.

Janos Abel
Green Christian, Issue 70,
Winter 2010/11

COMMENT: Janos Abel is perfectly correct in stressing the value of Henry George's work. See, for example, my article on the origins of Monopoly, "Towards a Threefold Commonwealth", Published in 
New View magazine, issue 98, Winter 2020-21
www.newview.org.uk] New View