The whole economy is not just a consumer production system. There is the
banking system, that produces no consumer products that have not been costed into
industry elsewhere and which nowadays to a greater and greater extent finances
consumption rather than production. There are government agencies, central and
local.
The step, "therefore this applies to the whole economy" is hypothetical, as
evident from the immensely lengthy discussion here, at best difficult to show
deductively, but just plain simple if tested inductively against reality.
As Vic Bridger said, "It has proved itself." Why on Earth do we continue to
confuse ourselves and outsiders with lengthy, tedious, unnecessary argument about
debatable detail?
Refgards. John R.
>From: Triumphofthepast@aol.com
>Reply-To:
socialcredit@elistas.com
>To: socialcredit@elistas.com
>Subject: [socialcredit]
scale in a+b
>Date: Thu, 30 Jun 2005 08:29:27 EDT
>
>"In the industries [Douglas]
studied, final costs were higher than the sum of
>wages, salaries and dividends
paid out. . . . Does this apply to the whole
>economy?" (Rawson, June 25)
>
>A
key point. The "theorem" starts out talking about "a manufacturing
>undertaking."
But the statement "A will not purchase A+B" subtly shifts scale
>because we
wouldn't really expect the employees of a manufacturing undertaking to
>buy all
the product. Rather, the whole economy is now being thought of as a
>consumer
production system, a manufacturing undertaking --
which it is.
>
>The analogy wouldn't be very appropriate if by "manufacturing
undertaking" he
>meant only a single company producing a final consumer good. It
would be
>appropriate if he meant the whole chain of companies that produce a
final
>consumer good -- and indeed he must have meant that because their costs
are included
>in the price.
>
>If one can understand the "theorem" in terms of a
chain of companies, then
>the step to the economy as a whole is an easy
one.
>
>Of course, if one tries to understand the "theorem" that way, the first
thing
>one runs up against is the "threat" that A in that case WILL be able
to
>purchase A+B! I suggest that instead of retreating before this "threat,"
we
>consider UNDER WHAT CONDITION in a chain of companies A will not purchase
A+B.
>Answer: under condition
of improving efficiency -- a theme so central to Douglas
>that its lack of
explicit mention in the "theorem" should have caused remark.
>
>
>If we allow the
norm of improving efficiency as the silent assumption in the
>"theorem," it works
for a chain of companies considered as a manufacturing
>undertaking, and it
equally works for the economy as a whole considered as a
>manufacturing
undertaking.
>
>This is the argument of my contributed chapter to the upcoming
new edition of
>Anthony Cooney's "Social Credit:
Economics."
>
>Michael
>
>
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