| Subject: | [socialcredit] Re: productive capacity | | Date: | Saturday, August 6, 2005 08:33:18 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
A very extreme exemplification of the "gap",
presumably based on deep slump conditions and
certainly not applicable to today.
This is one of the Douglas concepts which, taken out
of context, lead SCers to promise the moon without
foundation.
John R.
-------------------------------
And you completely miss the point, don't you? The
major point Douglas is making in the excerpt I
supplied is irrelevant to the specific ratio that he
suggests "we imagine." He is asking that we engage
with him in a thought experiment. The specific
numbers in the experiment are not important.
Would it have offended your fine sensibilities so much
if he had said, instead, "let us imagine" that actual
consumption was only "nineteen twentieths" of
potential production, and that "clearly" the community
would only have exercised "nineteen twentieths" of its
potential demand?
If you find that ratio more amenable to your easily
offended sensibilities, then by all means substitute
it in your mind when you think the matter through. Do
make the effort to get beyond the mental blocks,
please!
The change in perspective represented by Douglas now
nearly a century ago is radical and revolutionary.
Notice I say this in the present tense. It's not just
"economists" who don't get it, "social crediters" like
you don't get it either. I am merely stating a fact.
Economists in the classical tradition had said that we
trade goods for goods, and that goods that we
individually produce in the division of labor are the
demand for goods that others produce. Money is merely
an intermediate good in a process that is essentially
barter.
Money as effective demand is an entirely different
concept.
If not only goods are produced, but increasing
productive capacity is also produced -- money is not
simply an intermediary but an _independent variable_
in the process. That is to say, it is definitely
itself a factor or tool of production in the fullest
sense of the word. Understanding it is understanding
an element of critical technology.
--------------------------
The following is from Chapter X of *Credit-Power and
Democracy.* :-
...it must be obvious that the _credit-value of
production -- the amount by which the work of a
community during a given period of time increases the
correct estimate of the capacity of that community,
with its plant, culture, and labour, to deliver goods
and services_ -- is enormously in advance of the
actual consumption. Every single telephone instrument
installed, every improvement in transport, every new
process for producing nitratic fertilisers, only to
indicate the principle by a few trivial examples,
clearly increases this real credit at compound
interest.
Financial credit, even now, is issued roughly against
all forms of real credit. _The only sane limit to the
issue of credit for use as purchasing-power is the
limit imposed by ability to deliver the goods for
which it forms an effective demand, providing that the
community agrees to their manufacture._
Consequently, if as the result of six months' work the
capacity to deliver goods and services has been
increased per unit of time, it would appear to be
simply common sense, with the foregoing proviso, to
distribute the means which make it possible to draw on
this potential production, without forced export.
When the Capitalist system takes back from the public
the whole of the costs incurred in production, it
takes back the whole of the financial credit, and the
purchasing-power covering the period of activity in
respect of which that credit was distributed, whereas
the _real_ credit of that period includes the
overwhelmingly important unearned increment of
association during that period. To take the most
elementary of examples: if we consider a factory,
engaged only on one article, during the second six
months of its first year of existence, it will
probably increase its output very considerably beyond
that possible in the first six months.
If, however, of the financial credit, or
purchasing-power, which we distribute during the first
six months we only take back in prices that portion
represented by the ratio of the actual consumption to
potential production, we can, _if we so desire,_
produce up to the limit of our capacity during the
second six months in the assurance that an effective
demand awaits us.
It is vitally necessary to be clear as to the
difference between what actually takes place under an
economic system based, essentially, on currency, and
the position which would result from the modification
to the financial system which we are discussing; which
would be based, essentially, on the capacity of
society to achieve its desires...
Financial wealth can only be placed on a solid basis
by selling something to the public -- it is, for
instance, no use owning a factory only suitable for
the manufacture of high-explosive shells if the public
taste for high-explosive shells has completely
departed.
But further than that, even if the public wants
nothing but high-explosive shells in the largest
quantities (which, from the behaviour of its
"representatives," seems highly probable), it would be
necessary that an effective demand -- that is to say,
a demand backed by "money" -- should be forthcoming
from the public. Now, _the value of our hypothetical
shell factory would vary from zero when there is no
effective demand to infinity when there is no demand
for anything else, and no other means of supply._
That is to say, to drop the metaphor, the capital
value of the plant of civilisation is as much
dependent for its value on the existence of an
effective demand for its product as it is on its
capacity to meet that demand. If this is grasped, it
will be clear that the distribution of the
_credit-capital,_ the power to draw on the resources
of _real capital_ (the leverage of civilisation on the
work of society) increases the value of capital by the
ratio which the new output bears to the old output, a
proposition which clearly has nothing to do with the
administration of the plant itself. The only way,
therefore, to get that increased production of the
things which individuals really want, which as here
defined everyone may agree is desirable, is to get
increased effective demand, which, as we have seen, we
do not get under the present financial and price
system by any general increase in manufacturing.
-
__________________________________________________
Do You Yahoo!?
Tired of spam? Yahoo! Mail has the best spam protection around
http://mail.yahoo.com
|
Re: productive cap
Reply to this message