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Dear Diamanti:
I believe that Bill Ryan was saying essentially
that a creditary system of accountancy is most suited to the requirements of the
modern economy. I insert some comments offered recently to another
correspondent. Social Credit is concerned with a much deeper issue than that of
interest--an issue which unresolved is primarily responsible for any inequitable
or exploitative aspects of interest and, being resolved, would essentially put
an end to these latter undesirable features of the economy through the
elimination of compounding unrepayable debt. In the process, an automatic
dispersion of the goods and services flowing from the modern economy would be
effected--ensuring an increasing income by right of inheritance to
all citizens as capital makes an increasing
contribution to production relative to labour. We do not want to
hack at the branches of economic evil while ignoring it root. Here are my
comments:
Dear .........
Primarily
Social Credit is concerned that sufficient purchasing-power is in
the hands
of consumers to claim all goods and services flowing from the economy in each
production cycle--and to liquidate all the financial costs of production in that
same cycle. This takes into account the total flow of costs generated
and incomes distributed in each cycle of
production. Interest is
considered to be of significance only inasmuch as
it is ONE of the costs of
production--one of the "B" costs (i.e., payments of a firm
to other
organizations) of industry. "A" payments are incomes paid to individuals
within
the firm, i.e., wage, salaries, dividends, etc. Like profits,
interest can
be made a distributed cost. Social Credit does not regard
exploitative aspects of interest as the
central economic problem but
rather a result of a much more fundamental
cause. To regard it as
central would be to beat the bushes while ignoring
the root of the problem,
i.e., the charging of the consumer with capital
depreciation while failing to
credit the consumer with capital appreciation.
Consumer prices cancel credit
prematurely inasmuch that they call in credit
in respect of capital far
before capital has been physically depreciated or
consumed. Social
Credit policy is to provide the individual citizen with an
increasing
beneficial (not administrative) share in the communal capital.
This is to be
done with an injection of consumption credits (the Consumer
Dividend and
Price Compensation to retailers) in order to provide the means
of
access to total production (the cost of capital is included in
consumer
prices) and the means to liquidate the entire financial costs of
each
production cycle. The deficiency of purchasing power grows
exponentially
because of the increase of B costs due to the increase of
capital as a
factor of production relative to labour--and this would occur
quite
independently of the practice of charging interest. We have here
been
discussing costs and incomes in industry. If, because of
sufficiency of
income, the consumer has no need to contract debt--obviously
the whole
question of interest on consumer debt is effectively
eliminated. According
to Social Credit policy credit must always be
available for any desired and
physically possible project and the consumer
must always be able to
liquidate all costs of production generated within the
same cycle. All
production loans would be credited to a National Credit
Account which would
form a fund from which money could be drawn for the
Dividend and Price
Compensation--which together comprise what Douglas called
the Just Price.
The Just Price is determined by multiplying the Financial
Price (as
presently calculated) by the ratio of national consumption to
national
production--a ratio which always under normal circumstances tends
toward
less and less than a value of one. The true (physical cost of
production)
normally falls and so should the financial price. The
present bias toward rising prices should be reversed. Inflation is a
violation of the natural law of cost.
I am attaching several PDF
documents on Social Credit which I hope may be of
value. If you have
further comments or questions, please do not hesitate to
correspond in
return. There exists a voluminous literature on Social Credit
going
back to the First World War.
Yours sincerely
Wally
Klinck
----- Original Message -----
Sent: Tuesday, August 31, 2004 3:54
PM
Subject: [socialcredit] nothing we can do
to alter interest - Re: [socialcredit] P.S. Re: [socialcredit] CFEPS -- Write
off loans?
Dear Mr.Ryan & Mr.Sutton
You are quite right, there is nothing we can do
to alter the rotation of the earth around the sun but there IS plenty we can
do - & certainly at least TRY to do - concerning, making the availability
of money, more equitable & less exploitative. Sages throughout the ages,
from numerous places & times around the world - Christianity & Islam
included - have rightly, condemned interest as an unsustainable, unhealthy,
inequitable & so unwise system of recording productivity, effort,
creativity & facilitating trade.
Remember Fractional Reserve banking, with money
lending at interest, was only instituted in Great Britain, in the latter half,
of the last Millenium after Scotand's John Law persuaded the Bank of
England.
Sincerely - Diamantis.
===========================================
----- Original Message -----
Sent: Tuesday, August 31, 2004 6:24
PM
Subject: [socialcredit] P.S. Re:
[socialcredit] CFEPS -- Write off loans?
P.S. The best metaphor I have seen that conveys the
concept
is from Michael Lane: his comparison of the
Social Credit
adjustments to leap year adjustments to
the calendar. There is
nothing we can do to alter
the rotation of the Earth about the
Sun.
There is probably nothing we can do to alter the
fundamental
concatenation of double entry accounting
beyond refinement. The
"reformers" who attempt to
alter (through schemes to abolish "interest,"
"100%
reserve banking" etc.) what is probably the best of
all
possible accounting methods are doomed to
failure, and belittlement for
their efforts.
Jessop Sutton
<sutton@kingsley.co.za> wrote:
[snipped]
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