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SW Saskatchewan | But the whole concept of social credit was that when a product was produced, the farmer, laborer or miner was paid X amount. But when the product was sold the merchant added an amount Y that equaled profit. Thus for the product of the economy to be all purchased, X+Y amount of money was required. It was the governments responsibility to provide this extra Y amount of purchasuing power.
When I studied economics at the Uof S back in the 60's, Social Credit was enough of an economic "theory" that a certain economic professor made it his "duty" to debunk it at every chance he could. It didn't help the about this time that Raoul Caouette was the charismatic leader of Social Credit in Quebec and would go on TV and give his X+Y lecture using a blackboard to demonstrate his point. He had enough success that for several years he elected a third of the Quebec MP's to Ottawa and prevented either Lester Pearson or John Diefenbaker from gaining a majority government. A clear and present danger.
This young graduate student/instructor at the Uof S later moved to the University of Calgary, was a contemporary of a certain Stephen Harper and became an adviser to the Reform Party.
The prosperity certificates were an attempt by the Alberta Provincial Government to increase the money supply and also increase it s "velocity" and thus increase purchasing power. PP=M x V .
The newly minted Bank of Canada did not want anyone else playing in their playpen so the Supreme Court ruled that the Alberta exercise was "Ultra Vires" under the BNA act and brought the little experiment to an end.
Professor Brown's argument against Social Credit and favoring for Keynesian economics was that Social Credit demanded a constant increase in the money supply. About this Professor Brown's Keynsians soon developed the same habit and he dropped them as well
Unfortunately, a half century later when we have fallen into the Keynsian "Liquidity Trap" and expansion is the appropriate prescription, Professor Brown's disciple as PM is busy saying, as Grant Devine warned us not to, "Whoa" in a mud hole!
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How does an economy with no inflation/deflation function?
