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Hi Michael:

I will again respond in red.

----- Original Message -----

From: Triumphofthepast@aol.com

To: socialcredit@elistas.com

Sent: Thursday, June 30, 2005 2:02 PM

Subject: [socialcredit] a+b and what makes Douglas great

Dear Friends,

Jim has been telling me about thirty times that intervening factors such as unnecessary capital production can potentially bridge the gap -- which I already knew anyway.

That is quite possibly true, but if you knew it already, then why the argument? The gap can be "hidden" by capital production (and by capital production, I'm also referring to unfinished goods, or raw materials).

One wouldn't say, however, that normal and necessary capital production is "bridging a gap."

It can! But that's not the point. The point of my argument is that capital production becomes superflous when it's necessary in order to consume what was produced today.

I shouldn't HAVE to grind corn in order to produce consume bread today. If I WANT to grind corn, that is a completely different matter. The point of the rebate and dividend is to give control of the productive process to the consumer. When the consumer has to produce capital goods which provide future consumption goods in order to consume what is produced today, then the consumer does not have control over production. Production has control over the consumer.

Rather, it's just a normal part of purchasing power. Hence, by introducing A' I am not "robbing Peter to pay Paul," I'm merely allowing for the normal possibility that the two As could be different quantities.

All of A' is necessary to consume the product that A' produces. Yes, if A' is produced in perpetuity, then the gap may never be "exposed" with the exception that the tail is wagging the dog. Now it becomes NECESSARY to keep producing A' in perpetuity. Not because people necessarily want it in the future, but it's future production is necessary to consume what was produced today.

If we allow that possibility, Jim can't show that A is less than A+B without a further assumption.

Actually, I can show that A is less than A+B without any further assumptions. I'm just stating that A'+A>= A+B. But that is irrelevant. Douglas never stated that A'+A can't be >= A+B. And the last assumption is something that I think you and Bill have added, unless you are prepared to give me a direct quote from Douglas to the contrary.

I think it's very important to note that "A will not purchase A+B" is NOT the self-evident tautology that it appears to be.

It's quite self evident if you are not confused by capital production that takes place simultaneously.

"It is irrelevant that in the modern world all of these five processes are taking place simultaneously and that the product can be found in any of the five stages at any moment. It is still true that you cannot bake bread with corn which you are simultaneously grinding." (The Monopoly of Credit)

Jim's preferred assumption is the investment of savings, mine and Bill's is improved efficiency. Jim backs up his assumption with quotes from Douglas, which I don't dispute. But the assumption of improved efficiency is even better justified from Douglas's writings.

How is it better justified when I can make my case via explicit quotes from Douglas, when even you have to admit that your interpretation relies on "implication".

Jim won't deny that the "form of purchasing power which is not comprised in the description grouped under A" mentioned in the "theorem" means the dividend

It also means the price rebate, which is probably the most important aspect of Social Credit, and often neglected.

,* and all social crediters know that the dividend is a dividend of technology.

It's a dividend of cultural heritage, and can include "processes". But I guess you can broadly say it is a dividend of "technology" admitting that the root of the word technology comes from techniqe. I certainly don't want to quibble over semantics.

If I must produce a quote, here are two familiar ones that popped into mind:

"The dividend shall progressively displace the wage and salary."

True, but exactly how does this quote demonstrate that the dividend is tied to increasing technology, or B growing relative to A?

Why should it, except because technology is progressively more efficient?

I don't feel your conclusion follows from the statement.

"The industrial machine is a lever, continuously being lengthened by progress, which enables the burden of Atlas to be lifted with ever-increasing ease. As the number of men required to work the lever decreases, so the number set free to lengthen it increases."

Yes, technology lifts the burden of Atlas, and increases the productivity of labour, but where does Douglas say this is necessary for the gap created in his A+B theorem.

I could provide all sorts of quotes about the primacy of individuals, and the doctrine of Incarnation, of which, we will both agree to be true, but neither of us believe have anything to do with Douglas' A+B theorem.

How are they "set free" to lengthen it? By the dividend, of course!

Here are two good reasons to prefer the technology assumption to the investment-of-savings assumption:

1. That people need purchasing-power to make up for investment of savings is almost a trivial observation.

Certainly wasn't trivial at the time of the discovery, and the fact that Keynes ripped it off (although in a cruder form) demonstrates the fact. Also, the persistence of the idea of most "laymen" that monetary savings has an equivalent physical counterpart is almost universal. The fact is that most people today don't understand money or savings.

Also, you're right in observing that it's obvious. It's obvious to anyone who reads Douglas that savings is the primary culprit in creating the gap between purchasing power and prices (although there are others). Douglas' own words demonstrate this fact, and there is nothing "implied" about it. In fact, he was quite specific.

The point could easily be made without an A+B Theorem, not to mention a whole series of books. On the other hand, the analysis based on the effect of technology over time is profound and goes to the root of economics.

And it is the reason why the gap will get progessively worse. I have never denied it. What I deny is that it's NECESSARY for the gap to even exist.

2. Technology is progressive and cumulative, hence the wage can be eclipsed by the dividend. The investment of savings can rise and fall with fashion and therefore cannot promise this result.

The increase in the dividend and price rebate will only come about by the increase in the gap, which is brought about by increasing technology. Again, I have never denied this fact. However; technology does not have to be increasing for the gap; and hence, the price rebate and dividend to exist.

Why then would Douglas entertain both these ideas? Deep, dark secret: he is not always consistent.

He is not always consistent. And this is my biggest criticism of Mr. Douglas - he is a very poor writer in my opinion. I blame his editors to a large degree, but he's a typical engineer. He does not express himself well. But the cost/savings creation of the gap in A+B is so explicit that I'd have to think you never read his works to deny what he stated in that regard.

Far from finding this a blemish, I think this is what makes Douglas great: he is not too proud to allow us to entertain ideas with him. He scorns to turn back and impose a pedantic consistency on his own work. Rather, he lives by choice at the edge of his idea, pushing it a little farther, and letting us witness the process and engage in the adventure beside him. In the "theorem" he is trying to formulate in mathematical language an idea he had already formulated in literary form. He is reaching for something; for it is evident ON ANY SHOWING that something has to be supplied that is not explicit in the wording of the "theorem."

There has been quite a bit of debate amongst "Social Crediters" with regard to the A+B theorem.

I'm sorry, but I will never believe that B growing relative to A is NECESSARY for the gap created in Douglas' A+B theorem. He never said it.

I will admit the natural tendency is for B to grow relative to A, and for this to make the gap ever worse. But it's not NECESSARY.

It's not a necessary condition. And this is where I certainly oppose the ideas of Mr. Ryan, and certainly yourself if you also believe this to be true.

"My interpretation allows for the existence of the price rebate and dividend even when technology is not advancing." (Jim)

As does mine. When I raised a question about this, it was with the purpose of provoking thought. I also implied that I had an answer to it but wanted to hear from others first (which I still do).

"I don't like calling it 'my' interpretation, I just prefer to call it Douglas' interpretation." (Jim)

Well, we all like to think that.

I certainly didn't make that statement as a statement of arrogance. I meant to say that I defer all claim to it being "my" A+B. I simply refer to it as Douglas' A+B. That's what I meant by that statement.

Cheers,

Jim

Michael

*and compensated price

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