| Subject: | [socialcredit] Re: productive capacity--Lane | | Date: | Tuesday, August 9, 2005 04:19:06 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
| In reply to: | Message 2420 (written by Triumphofthepast) |
We are discussing the excerpts at
http://www.geocities.com/socredus/productive_capacity.txt
[Michael Lane] Douglas asks us to imagine that costs
have been incurred for maximum possible production of
ultimate (consumer) products but not that these
products have actually been produced...
-----------------------------------
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[Reply] No. He is referring to the costs of
productive capacity (or capital) that are expensed
into consumer production regardless of the rate of
production, not total expense if the factories are
actually operated at full capacity.
For example, depreciation schedules do not accelerate
if a factory operating a single shift adds a second or
third shift. So, in terms of depreciation, output
doubles or triples per dollar expensed.
But if a second shift is added there are additional
expenses for energy, materials and labor required to
operate the factory that was previously idle during
those hours; but, inasmuch as depreciation schedules
do not accelerate, factory output may increase at a
ratio greater than the increase to expense.
-
--- Triumphofthepast@aol.com wrote:
In the same sense in which Douglas quotes H. L. Gantt
that American industry was 5% efficient, yes,
productive capacity means more. It means the EASE
with which we can produce stuff, and the easier we can
produce stuff, the more we can be gainfully
disemployed.
Take 1. Since Douglas asks us to imagine that costs
have been incurred for maximum possible production of
ultimate (consumer) products but not that these
products have actually been produced, he must mean
costs of capital goods and services that will go into
future consumer products.
Take 2. Since Douglas asks us to imagine that costs
have been incurred for maximum possible production of
ultimate (consumer) products but not that these
products have actually been produced, he must mean
that part of those costs have been wasted. If an
economy is 5% efficient, then "maximum possible
production" is 100%, actual production 5%, waste 95%.
You don't charge people for waste.
But Take 2 runs into trouble because the waste is, any
way you look at it, a dead loss to society. It
violates the integrity of money as an order system to
leave money in people's hands when there is nothing to
order with it. Therefore,
Take 3. Since Douglas asks us to imagine that costs
have been incurred for maximum possible production of
ultimate (consumer) products, he must mean that these
products have actually been produced. Then if only a
quarter of them are consumed, the consumer should only
have paid a quarter of the costs and have 3/4 of the
money left over to spend at his leisure. It would
constitute a signal to production to SLOW UP and allow
that leisure to operate.
Michael
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