Douglas described Social Credit as "the policy of a philosophy", and warned against viewing it solely as a scheme for monetary reform. He coined this philosophy "practical Christianity" – the central issue of which is the Incarnation. Douglas believed there was a Canon which ran through the universe, and Jesus Christ was the Incarnation of this Canon. However, he also believed Christianity remained ineffective so long as it remained transcendental. Religion, which derives from the Latin word religare (to “bind back”), was intended to be a binding back to reality. Social Credit is concerned with the incarnation of Christian principles in our organic affairs. Specifically, it is concerned with the principles of association and how to maximize the increments of association which redound to satisfaction of the individual in society – while minimizing any decrements of association. The goal of Social Credit is to maximize immanent sovereignty. Social credit is consonant with the Christian doctrine of salvation through unearned grace, and is therefore incompatible with any variant of the doctrine of salvation through works. Works need not be of Purity in intent or of desirable consequence and in themselves alone are as "filthy rags". For instance, the present system makes destructive, obscenely wasteful wars a virtual certainty—which provides lots of "work" for everyone. Social credit has been called the Third Alternative to the futile Left-Right Duality.
Although Douglas defined social credit as a philosophy with Christian roots, he did not envision a Christian theocracy. Douglas did not believe that religion should be thrust upon anyone through force of law or external compulsion. Practical Christian society is Trinitarian in structure, based upon a constitution where the constitution is an organism changing in relation to our knowledge of the nature of the universe. "The progress of human society is best measured by the extent of its creative ability. Imbued with a number of natural gifts, notably reason, memory, understanding and free will, man has learned gradually to master the secrets of nature, and to build for himself a world wherein lie the potentialities of peace, security, liberty and abundance." Douglas said that social crediters want to build a new civilization based upon absolute economic security for the individual—where “...they shall sit every man under his vine and under his fig tree; and none shall make them afraid.” In keeping with this goal, Douglas was opposed to all forms of taxation on real property. This set social credit at variance from the land-taxing recommendations of Henry George.
Social credit society recognizes the fact that the relationship between man and God is unique. In this view, it is essential to allow man the greatest possible freedom in order to pursue this relationship. Douglas defined freedom as the ability to choose and refuse one thing at a time, and to contract out of unsatisfactory associations. If people are given the economic security and leisure achievable in the context of a social credit dispensation, Douglas believed most would end their service to mammon and use their free time pursuing spiritual, intellectual, or cultural goals leading to self-development. Douglas opposed what he termed "the pyramid of power". Totalitarianism reflects this pyramid and is the antithesis of social credit. It turns the government into an end instead of a means, and the individual into a means instead of an end – Demon est deus inversus — “the devil is God upside down.” Social credit is designed to give the individual the maximum freedom allowable given the need for association in economic, political and social matters. Social Credit elevates the importance of the individual and holds that all institutions exist to serve the individual – that the State exists to serve its citizens, not that individuals exist to serve the State.
Douglas emphasized that all policy derives from its respective philosophy and that “... Society is primarily metaphysical, and must have regard to the organic relationships of its prototype.” Social credit rejects dialectical materialistic philosophy. "The tendency to argue from the particular to the general is a special case of the sequence from materialism to collectivism. If the universe is reduced to molecules, ultimately we can dispense with a catalogue and a dictionary; all things are the same thing, and all words are just sounds – molecules in motion."
Douglas divided philosophy into two schools of thought that he labeled the "classical school" and the "modern school", which are broadly represented by philosophies of Aristotle and Francis Bacon respectively. Douglas was critical of both schools of thought, but believed that "the truth lies in appreciation of the fact that neither conception is useful without the other".
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