Social Credit is an economic doctrine that for a time was influential in Canada as the touchstone of a significant political party. Its principles were formulated by an English engineer, Major C.H. Douglas (1879-1952), who argued that economic hardships resulted from an inefficient capitalist economy which failed to provide people with sufficient purchasing power for them to enjoy the fruits of a well-developed productive capacity. 

He advocated the distribution of money, or "social credit," so that people might purchase the goods and services readily produced by capitalist enterprise. He believed that the total wages paid to individuals who produced goods (which he called "A") would always be less than the total costs of production ("B"). This meant that, without social credit, there would be insufficient money in the community for the purchase of all the goods and services produced. This was known as the "A plus B theorem."  

Douglas's doctrine had little political impact elsewhere in the world and likely would have remained relatively unknown in Canada, except that in 1932 Alberta evangelist William ABERHART became converted to it. He used his radio program to encourage other Albertans to adopt social credit as the means of rescuing the province and Canada from the drastic effects of the GREAT DEPRESSION. 

In 1935 Aberhart led the new Social Credit Party to victory in Alberta, capturing 56 of 63 seats with 54% of the popular vote. Social Credit, first under Aberhart and then, after his death in 1943, under Ernest C. MANNING, won 9 successive elections and governed the province until 1971. This remarkable success was purchased in part by the replacement of social credit fundamentalism with conservative financial and social policies that even bankers could applaud. Success was also purchased by the judicious use of massive oil revenues that flowed to provincial coffers after 1947.  

In 1952 a Social Credit government under W.A.C. BENNETT was elected in British Columbia. Bennett paid no attention to social credit doctrine but combined a mixture of conservative financial policies with aggressive development schemes. He governed BC in the name of Social Credit for 20 years, and his son, William R. BENNETT, became premier in 1975, succeeded by William VANDER ZALM as  "Socred" premier in 1986. During the 1950s and early 1960s, the party was successful also in sending a few members to the Saskatchewan and Manitoba legislatures.  

In 1935 the federal Social Credit Party won 17 seats in the House of Commons - 15 from Alberta, where it received 46.6% of the popular vote. The federal party's support gradually declined in Alberta until 1968, when it became insignificant. During the 1950s and early 1960s the party won a handful of federal seats in BC. 

Under the Québec leadership of Réal CAOUETTE, the federal Social Credit Party obtained 26 seats from that province in the 1962 general election. The national leader, Robert THOMPSON, was responsible for a scant 4 more seats from English Canada including his own. Tensions created by this imbalance among the MPs and exacerbated by the party's pivotal position in a minority Parliament led to a split in 1963 with Caouette forming his own group, the Ralliement des CREDITISTES. This party, in regional and federal guises, continued to have representation in Parliament until 1980.  

Social Credit  weakened as a viable political force by the 1990s, though it remains a registered political party in Alberta. In the 1993 Alberta general election, Social Credit ran 39 candidates without success. The BC party continues to use the name, but has severed its links with "Socreds" in the rest of the country and remains a relatively mainstream conservative party.  

AUTHOR: J.T. MORLEY  

Courtesy The Canadian Encyclopedia