Tuesday, December 16, 2008

This Day in Canadian History

December 16, 1976 - Real Caouette passes away

Social Credit -- a political doctrine based on the teachings of Major CH Douglas -- tends to be more widely associated with Alberta. There, the Social Credit party governed for 36 years under the tenures of premiers William Aberhart, Ernest Manning and Harry Strom.

However, it's often overlooked that Social Credit also developed a strong following the province of Quebec.

Real Caouette, the charismatic force behind Ralliement des Creditistes, the Quebec wing of the Social Credit party, was born on September 26, 1917 in Amos, Quebec.

He would discover Douglas' political screed in 1939 and would win election to the House of Commons seven years later.

In 1962, Caouette led the Credistes to win 26 seats in the House of Commons. By contrast, the western wing of the Social Credit party elected only four members, even with the party governing in Alberta and British Columbia.

Interestingly, not only would Social Credit thrive in Quebec, but it would actually outlast its western counterparts.

According to Michael Stein, the Quebec voters who helped Social Credit attain its decisive emergence in Quebec were young and disaffected former Conservative and Liberal supporters, most of whom were voting in their first election.

Social Credit has always been distinguished by a paradoxical place in Canadian politics. Considering that Social Credit doctrine advocates turning loose what it describes as billions of dollars in untapped wealth being held by banks and the government, Social Credit would rely on a suspiciously high level of state intervention in the economy.

It really can't be considered a purely conservative ideology.

Yet Social Credit has, more often than not in Canada, proven to be little more than a haven for disaffected conservatives -- the obvious case is British Columbia's WAC Bennet.

In Quebec, Social Credit made a considerably greater deal of sense. Pre-1970s Quebec politics was often characterized by a preoccupation with English Canadian financial trusts that controlled a significant portion of Quebec's economy.

This is a historical political trend that would also, from time to time, benefit parties like Maurice Duplessis' Union Nationale and, obviously, Rene Levesque's Parti Quebecois.

Ralliement des Creditistes enjoyed the fervent support of its creditors. In 1973, Stein noted that not only were the Creditistes still active in Quebec, but its most active members were spending at least five nights a week on party activities.

Real Caouette, the face of Social Credit in Canada, would pass away in 1976. The movement would not survive him for long.

By 1980, the Fabian Roy-led Creditistes had been reduced to six seats in the House of Commons. The defection of Richard Janelle to Joe Clark's Progressive Conservative government would further reduce that number to five. At the conclusion of the 1980 federal election, they were gone.

While some still envision a Social Credit comeback, its clear that the SoCreds are a spent force in Canadian politics: an enigmatic vestige of Canada's political history long scattered to the four winds.


  1. And a good thing too, although Reform had, at its roots the whole evangelical (Prophetic Bible Institute) anti-semitic sentiments of its forefathes and - how nice - much of that has carried on to the current Conservatives via Stockwell (don't I look great in this stretch lycra?)Day and Stephen (Sure I can be a born-again if it'll get me into the PMO) Harper.

  2. Apparently, you're pretty clueless about the realities of Canadian politics.

    Anti-semitism is largely non-partisan in Canada.

    Which must be a pretty tough pill for rabid ideologues like yourself to swallow.

  3. Social Credit is actually less state interventionalism than is currently being proposed by any political party in Canada.

    Anyone interested in Social Credit can click on my name which is a link to my blog, or read the article at Wikipedia:


  4. You cannot honestly argue that.

    Social Credit doctrine calls for the funds held in reserve by government, banks and business to be released to the people so they can use it for economy-stimulating consumption.

    How, precisely, do you imagine the "reserve wealth" held by banks and business is going to be released to the public? Voluntarily?

  5. Patrick, are you suggesting that we don't have a Central Bank now?

    I think you misunderstand Social Credit. A "National Credit Authority", or Central Bank, would simply be charged with the task of calculating certain statistics (which they do already), and paying a price rebate and dividend based on these aggregate statistics. The means to make the payments would be no more complicated than a simple computer program.

    In a Social Credit society, there would be no need for transfers payments, which means less taxation and less interference in the economy.

  6. And where do you imagine that money will come from?

    If the central bank is paying out the "reserve wealth" being held by banks and business, it will either have to collect those funds from the insitutions in question, or pay the money out while accruing debt through the sale of government bonds.

    So, under Social Credit, the government either interferes in the economy to an unprecedented degree, or runs itself into debt.

    Haven't you ever honsetly wondered why none of the Social Credit governments in Canada have ever paid out the promised Social Credit Dividends?

  7. Now I see that you do completely understand Social Credit.

    The money will be created as it's created now.

    Are you familiar with how money is created now? Are you familiar with the term "deposit expansion"?

    Below is a link to a Federal Reserve workbook on deposit expansion and how money is created now.


    In a Social Credit society, the gap between income and prices would be bridged by new monies created by the Central Bank and distributed directly to consumers in the form of a price rebate and a dividend. The government wouldn't borrow this money from the banks, it would create it through the central bank as it is capable of doing now.

    A good introduction to the subject of Social Credit can be found at Wikipedia.


    The reason any Social Credit government didn't pay out dividends is twofold.

    1) Under Aberhart, who was the only real "Social Credit" government, the federal government ruled all attempts to introduce Social Credit "ultra vires".

    2) Manning sold Social Credit down the river by claiming it was a form of conservatism, and then upon retirement taking a position with the Canadian Imperial Bank of Commerce. Bennett and others followed Manning, and didn't even understand, or attempt to implement Social Credit.

    I've been involved with the Alberta "Social Credit" Party. I doubt there's one person who's involved with the Party who has even attempted to understand Social Credit. Party politics is all about power. And anyone with $10 can buy a membership in a "Social Credit" Party and claim they are "Social Crediters".

    Douglas deplored the idea of a Social Credit Party. Again, all these issues I addressed in the article at Wikipedia. If you read the article at Wikipedia, I also address Douglas and antisemitism.

  8. I'm fully aware of how money is "created" now.

    The problem with Social Credit has always been that the expansion of the wealth supply and the expansion of the money supply are not the same.

    Simply issuing additional currency through a central bank -- and the establishment of an Albertan currency and an Albertan central bank most certainly was ultra vires -- does not increase the wealth supply. If anything, it devalues the currency.

    Which is the biggest problem with Social Credit. First off, it very much does require unprecedented intervention in the economy. Secondly, it has never stood up to even a rudimentary economic analysis.

    The notions espoused by Social Credit doctrine are a nice little dream, but I'm sorry to have to be the one to tell you that they are nothing more than that.

  9. Money is not wealth. You are correct. Financial credit should be a representation of the real credit of the community, which is the ability of the community to deliver goods and services when, and where, they are required. In other words, whatever is physically possible, should be made financially possible. Finance should never dictate production and consumption, but production and consumption should dictate finance.

    As to your suggestion that Social Credit never stood up "rudimentary economic analysis" is completely wrong. What credentials do you have to make this assessment? The chairman of the Social Credit secretariat, Frances Hutchinson, has a PhD in economics.


    What qualification do you posses to make such a claim?

    Douglas responded to many critics, in which the criticisms were so rudimentary in their approach that they almost seemed comical. The following pamplet is a reply to J.A. Hobson's criticisms of the Douglas theory.


    I hate to be the one to tell you, but if the problem identified by Douglas is not rectified, we are going to see ever increasing debt, and continuing business cycles.

  10. Listen, I understand that you're a true believer, and that you can't be convinced.

    It doesn't change the fact that social credit doctrine has been extensively disproven by virtually every credible economic analysis available.

    Even if that's every credible economic analysis save one, that's still every credible analysis but one.

    It doesn't even operate under sound fiscal or economic principles.

    I'm not going to tell you that you aren't entitled to your beliefs. But I'm not going to say you're right either -- your belief aside, you simply aren't.


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