It's interesting to consider as an alternative to the false either-or binary between statism (whether capitalist or socialist or a hybrid) and libertarian delusions (which lead to private-corporate dominion). On the one hand, Douglas is not a fool and realizes the improvement technology makes to life (economy of scale). On the other, central planning (whether government monopoly or private oligarchy) destroy the fabric of human life through collectivizing. Instead, Douglas contributes to the original concept of "guild socialism", where the local organizations of daily life are coordinated (not dominated) through a central government. The goal is a form of government that produces bounty, protect freedom, and is conducive to the full development of man. It's in this vein that Douglas rejects "medievalism:
Bearing these distinctions in mind it will be recognised that there are two separate lines along which to attack the situation presented by the dissatisfaction of the worker with his conditions of work, and the not less serious discontent of the consumer with the machinery of distribution ; and these may be called mediaevalism and ultra- modernism.
Mediaevalism seems to claim that all mechanical progress is unsound and inherently delusive ; that mankind is by his very constitution compelled, under penalty of decadence, to support himself by unaided skill of hand and eye. In support of its contentions it points to the Golden Age of the fourteenth century in England, for example, when real want was comparatively unknown, and green woods stood and clear rivers ran where the slag- heaps and chemical works of Widnes or Wednesbury now offend the eye and pollute the air. When arts and crafts made industry almost a sacrament, and faulty execution a social and even a legal offence ; when the medium of exchange was the Just Price, and the idea of buying in the cheapest and selling in the dearest market, if it existed, was classed with usury and punished by heavy penalties.
While appreciating the temptation to compare the two periods to the very great disadvantage of the present, it does not seem possible to agree with the conclusion of the Medievalist that we are in a cul-de- sac from which the only exit is backwards ; and it is proposed to make an endeavour to show that there is a way through, and that we may in time regain the best of the advantages on which the Medievalist rightly sets such store, retaining in addition a command over environment, which he would be the first to recognise as a real advance ; a solution which may be described as Ultra- Modernist.
Douglas agrees with the medievalist that "modernism", and its reduction of life to utilitarian input/output categories (whether marxist, fabian, or liberal) is destructive. And yet the idea of "going back" is out of the question. This fantasy continues to this day, with many reactionary critics attacking "modernism" and all of its peculiarities. Things like the Dreher Option, and revivals of ChesterBelloc Distributism, reflect this valorization of 14th c. England (or "Merry Ol' England"). They revere the small because its a defense of cultural values that the modern seems to run into the ground. Consequently, regimes that deploy this rhetoric but embrace the brutalities of statism tend to win them over. It's not for nothing ChesterBelloc thought highly of Franco. They're attracted to gloss, not substance. They benefit from economies of scale, but wish to "retvrn to tradition" as a form of role-play. They don't grasp the dynamics of capitalism, and thus appeals for Just Price are essentially impotent. And yet the cry for these things reflect the degeneracy of the current system. Hence Douglas appeals to ultra-modernism, or going "through" modernity:
In order to do this, certain somewhat abstract assumptions are necessary, and it has been the object of the preceding pages to present as far as possible the data on which these assumptions are made. They are as follows : —
(1) The existing difficulties are the immediate result of a social structure framed to concentrate personal power over other persons, a structure which must take the form of a pyramid. Economics is the material key to this modern riddle of the sphinx because power over food, clothes, and housing is ultimately power over life.
(2) So long as the structure of Society persists personality simply reacts against it. Personality has nothing to do with the effect of the structure ; it merely governs the response of the individual to conditions he cannot control except by altering the structure.
(3) It follows that general improvement of conditions based on personality is a confusion of ideas. Changed personality will only become effective through changed social structure.
(4) The pyramidal structure of Society gives environment the maximum control over individuality. The correct objective of any change is to give individuality maximum control over environment.
If these premises are accepted it seems clear that the first and probably most important step is to give the individual control of the necessaries of life on the cheapest terms possible.
In other words, Douglas advocates systematic reforms for the defense of the individual. Systematic problems and personal-individual problems are two different things. Thus, to create a better environment for people to flourish, one needs to change the system. The problem with medievalists, and other romantic reactionaries, is that they focus upon individuals. The solitary rebel against the congealed blob of the factory system, the lone man who returns to nature (or God, which may or may not be the same thing for these romantics). While this position might be enchanting, it really does little for most people. In fact, the masters of mankind support these philosophical trends because they're a steam valve for intelligent malcontents. But for Douglas, any real change means a systematic change because systems or economics control the main substances of life (clothes, food, etc.). Therefore, if one wants a free individual who has control over his own surroundings, then one needs a central system that can produce this result.
What kind of systematic change defends the local and individual? Douglas abhors fabianism and soviet-style collectivization, which does nothing to repair man's enslavement to his environment. In contrast, he advances central control of credit:
Before he gets to the solution, Douglas elucidates the problem. The way the capitalist system is organized is the exchange of time/labor for wages. Men need access to basic goods to survive and have a decent life, and thus they're born into a state of debt-bondage (you have needs, and thus you are forced to pay off the debts acquired to simply exist). The goal of government must be, for Douglas, to maximize man's free-time, limiting the level of his debt for survival. If a man is forced to work 7 days-a-week for over 70 hours (as it was in the early 19th c. in Britain), man is no better than a slave. In this sense, slavery must be understood not as an ontic-juridical state, but a sliding scale. The more time one has, the freer one is. If Douglas' Britain was to be a free society, it must involve itself in this problem. But the current solutions (which are the same for us today) are all equally flawed:
What are these terms ? What is the fundamental currency in which the individual does in the last analysis liquidate his debts? A little consideration must make it clear that there can be only one reply ; that the individual only possesses inalienable property of the one description ; potential effort over a definite period of time. If this be admitted, and it is inconceivable that anyone would seriously deny it, it follows that the real unit of the world's currency is effort into time — what we may call the time-energy unit.
Now, time is an easily measurable factor, and although we cannot measure human potential, because we have at present no standard, it is, nevertheless, true that for a given process the number of human time- energy units required for a given output is quite definite, and therefore, the cheapest terms on which the individual can liquidate his debt to nature in respect of food, clothes, and shelter, is clearly dependent on process ; and by getting free of this debt with the minimum expenditure of time- energy units of which his individual supply varies, but is, nevertheless, quite definite at any given time, he clearly is so much the richer in the most real sense in that he can control the use to be made of his remaining stock. But, and it is vital to the whole argument, improved process must be made the servant of this objective, that is to say, a process which is improved must, by the operation of a suitable economic system decrease the time-energy units demanded from the community, or to put the matter another way all improvements in process should be made to pay a dividend to the community.
There is a disposition on the part of certain idealistic people, and, in particular, in quarters obsessed by the magic of the State idea, to decry the necessity of any organised incentive in industry at all.First, Douglas rejects the idealism of communism as ridiculous. Either one builds a giant "machine" system that bends men into obedience or one expects a system where people work to express their creativity. Douglas quite understates the first, which would be nightmarish and the essence of idolatry (basically a machine-god). And the second is simply not practicable because much work in this world is unpleasant but necessary. Romantics may coo about how every job is an output for creativity, but there are many things mankind does (such as handling trash or sewage) which no one who does them would do them unless they had to (or were compensated). To rely upon an ideological fiction of man's creative energies underestimates the ugly banality of many earthly tasks.
They seem to suggest either that the problem is merely one of designing a huge machine of such irresistible power that no incentive is necessary because no resistance is possible, or, alternatively, that the mere creative impulse ought to be sufficient to induce every individual to give of his best without any thought of personal benefit.
In regard to the former idea, it may be said that quite apart from its fundamental objection it is quite impracticable ; and in regard to the latter that it is not yet, nor for a very considerable time, likely to be practicable to satisfy the creative impulse through the same channels as those used for the economic business of the world. Under existing conditions there is much necessary work to be done which cannot fail to be largely of a routine nature, and the provision of an incentive external to the performance of the immediate task seems both practically and morally sound.
First of all, some consideration of the defects of existing incentives is necessary in order to meet the difficulties so exposed.
Broadly, remuneration, or the system by which the amenities of civilisation are placed at the disposal of the individual, is of three varieties ; payment by financial manipulation (profit), payment by time (salaries and time-rate wages), and payment by results (piecework in all its forms), and it should be noticed that only the first of these combines possession of the amenities with opportunities for their fullest use.
Payment by financial manipulation, whether through the agency of profit (other than that earned by personal endeavour), stock manipulation or otherwise, is quite definitely anti-social. It operates to neutralise all progress towards real efficiency by diluting the medium of exchange, and by this process it will quite certainly bring about the downfall of the social order to which it belongs, largely through the operation of the factory economic system already discussed.
Payment by time fails for two practical reasons ; it is based on the operation of the fallacy that the value of a thing bears any relation to the demand for it, and the assumption that money has a fixed value. Because of the first reason it clearly penalises genuine initiative (because there is no demand for the unknown), and because of the second, it fosters aggression. The policy of Trade Unions in regard to time rates of pay has simply been successful to the extent that it has used its organised power for aggressive action ; and while such a policy may be sound and justifiable under existing conditions it clearly offers no promise of social peace.
Payment by results or piecework may be considered as the final effort of an outworn system to justify itself. Superficially, it seems fair and reasonable in almost any of its many forms ; actually, it operates to increase the individual time-energy units expended, while decreasing through diluted currency the exchange value of each time- energy unit, and crediting to the banker and the financier nearly the whole value of increased efficiency. If this contention is questioned, a reference to the much greater purchasing power of labour in the Middle Ages admitted in such books as " The Six Hour Day" must surely confirm it.
In actual practice piecework neither does nor can take into consideration that, just as there is no limit to progress either of method or dexterity, so is there no fundamental relation between money and value as at present understood.
However, if man is incentivized, each system currently existing has flaws. There are three options: usurious stock-trading, wages, or pay-per-product. The first is simply immoral and breeds the financial parasitism that is, currently, gutting the modern US. It is not a sustainable form of wealth for anyone, only enriching the few at the expense of the many. The second option creates fundamental antagonisms that tear at society. The problem is that value and labor/time do not correlate. The results are socially deleterious. A factory may see its fortunes flag as its products are worth less and less, and thus need to produce more to make up for losses. But overproduction means more markets, and thus factory owners will support imperialistic wars to force new markets open for these goods. On the other end, decreasing profits may see wages cut, which then harms the lives of the workers. Organized, trade-unions will demand higher wages and benefits. In some cases, reduction may simply be a product of greed, but in other cases, trade-union antagonism threatens to put the entire company under (hence smaller firms are so hostile to unionization). As part of a deal with management, trade-unions (or at least their leadership) may cut a deal to support similarly imperial policies so the wealth moves through the whole. Thus, under the system of wages, instability is the norm. It either threatens to tear apart the fabric of society or it is exported globally.
Finally, the system of individual pay for productivity is superficially attractive but exploitative. Ideally, the worker is encouraged to spend his creative energies in production. In reality, this system prods the worker towards shoddy craftsmanship as he seeks to make more in less time. And if he works very hard, the scale of profit goes into the owner's profit (i.e. if x receives $1 for every widget which makes $10 profit in total, then if x makes $100 dollars from widget production, corporate earns $9,900 in profit). This solution feeds off romantic delusions to further subjugate workers. An alternative to these failed options depends upon the following concepts:
we desire to produce a definite programme of necessaries with a minimum expenditure of time-energy units. We agree that the substitution of human effort by natural forces through the agency of machinery is the clear path to this end ; and we require to co-relate to this a system which will arrange for the equitable distribution of the whole product while, at the same time, providing the most powerful incentive to efficiency possible.
The general answer to this problem may be stated in the four following propositions, which represent an effort to arrive at the Just Price : —Douglas' vision of guild socialism requires a few radical transformation. First, the system of rent (not so much in land qua home, but land qua resources) must be nationalized. Second, workers do not have to work to survive (but have a guarantee from birth). That doesn't mean people won't work, but the incentive to work is not life or death. Third, inventors/engineers must have their work incentivized by increase productivity, encouraging innovation as their work. And finally, labor should not be economized. Douglas lays these four propositions out, not as "political economy" iron laws but justice. In this way, what Douglas advances (and the goal of any true socialism) is to humanize society. Mankind is not a slave of natural forces, but to have freedom. To live under the dictates of the market is simply to be a slave to nature, no different than pagans who cowered at thunder storms and the roaring ocean. That doesn't mean there aren't problems, but problems that technology has ameliorated or put under human control. Human inventiveness has, for example, put lightning under control; gone are the days where any house could be struck by lightning and burnt to the ground. Instead, the understanding of electricity and the invention of lightning rods has severely diminished this problem to the point of nonexistence.
(1) Natural resources are common property, and the means for their exploitation should also be common property.
(2) The payment to be made to the worker, no matter what the unit adopted, is the sum necessary to enable him to buy a definite share of ultimate products irrespective of the time taken to produce them.
(3) The payment to be made to the improver of process, including direction, is to be based on the rate of decrease of human time-energy units resulting from the improvement, and is to take the form of an extension of facilities for further improvement in the same or other processes.
(4) Labour is not exchangeable ; product is. No attempt will be made to prove these propositions since their validity rests on equity.
It should be noted particularly that none of these points has any relation to systems of administration, although a recognition of them would radically affect the distribution of personnel in any system of administration.
While the distribution of the product of industry is fundamentally involved, and the inducements to vary the articles produced are clearly modified to a degree which would profoundly alter the industrial situation, no extension of bureaucracy in the accepted sense is implied or induced.
The above is what Douglas means by "ultra-modernism". The term is actually somewhat deceptive because the original "modernity", the synthesis of past (antiquity) and present (modern) towards the future, was oriented towards humanizing. And yet, at the same time, it carried in it the seeds of bondage and enslavement. The science of political-economy began as a means to understand dynamics of trade, war, and politics to run a society more fairly and with more stability (as freedom depends upon a certain level of security). Scientific inventiveness was to make human life more free through greater understanding and control. Of course, these pursuits could be malevolent and dabble into the inhuman and immoral (which was what Shelley's Frankenstein was about). But it was precisely this cross-roads which led towards the dehumanization of modernity. Man (or "modern prometheus" as Shelley saw her character Dr. Frankenstein) wanted to become a machine, submitting humanity under its new inventions and systems. Economies of scale were turned against the workers, who became a race of sub-humans (or merely humans) ground up in the gears of industry. Capitalism was the development of this system into Babylon, literally the "gate of the gods". The new gods of this age (or new demons per Jacques Ellul) remystified the cosmos. The goal of socialism (whether motivated by Christian or secular/atheist republicanism concerns) was to reassert humanity, whose collective telos was to be a race of priest-kings (what being made "the image of God" means in context). For Douglas, many forms of socialism simply continue in this idolatry (or are too utopian to be conceivable).
It was from the above that Douglas advanced the concept of "social credit". Rather than government monopoly over all the mans of production (and thus the abolition of property), Douglas advances government monopoly of credit and distribution. If the government can gain control of the money-supply (which MMT theorists have done a lot to prove, against neoclassical zealots), then it can accomplish the above goals. It can distribute the necessary work for a society to thrive (a factory system not driven by profit and wages). Access to credit can unleash human ingenuity, pursuing innovation to make life more tolerable and human. When shackled to profits, innovation only operates in spurts and sometimes actively harmed (no incentive to innovate if profits are higher in an inefficient system).
Additionally, Douglas' vision opens up the relation between central power and local power that checks aristocracy. Guild socialism does not promote individualism or collectivism, which puts the naked individual-citizen before the god-like powers of the state. Instead, local organizations of human life (the family, the guild, the parish, etc.) allow the fullness of human potential to thrive. Central power prevents the local from becoming feudal, where increasingly barons will try to control access to the goods of life. The totalizing potential of these local institutions are removed to their betterment. Churches don't become Romanized prince-bishop clerical dominions. Families don't invoke pater potestas, where fathers (or parents in general) have life or death control over their children. Guilds (or places of work) cannot strip someone of the very means of survival. Churches mutate into papacies, families mutate into baronial clans, and guilds can mutate into corporations. The role of central (democratic) government reins in these impulses lest they become oligarchical. And yet, these social organizations are what it means to be human and offer the formative elements that allow free subjects to participate as equals in government. They can't be abolished, as forms of radical republicanism (like Jacobinism or Leninism) often advocates on behalf of the commonwealth-state. And yet the commonwealth can't be allowed to deteriorate into a figurehead, manipulated or held hostage by the forces of oligarchy. It is only public government, the commonwealth, which holds back the masters of mankind.
The only way out is through. Douglas attempted to bring about his political theory throughout various Commonwealth countries to little success. Nevertheless, it remains worthy of consideration for these times. Neoliberal TINA (There Is No Alternative) has become more vulnerable, as the apoliticization and anti-ideolgy (which is really domination by a ruling-class and hyper-ideology) of the 90s has eroded. Identity politics is the irrational ideology that desperately tries to mystify the problems. Guild Socialism (whatever the terms) remains a means to critique this idolatrous valorization of the inhuman (the Market and Consumption). Social credit is not only rational (contra medievalism), but just.
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