| Subject: | [socialcredit] Re: Response to critics of my Carey review | | Date: | , October 16, 2005 09:25:37 (+0200) | | From: | cymric <cymric @.......nz>
|
| In reply to: | Message 2955 (written by Keith Wilde) |
Social credit is a concept of reality that arises from an appreciation of man
and his spiritual and natural birthright.
Those who try to interpret reality on the basis of materialism, usually in the
language of economics, are trying to catch fish by throwing the rod out and
holding the hook and bait.
Douglas composed economic factors and realities of this field in order to bring
to reality the potential inheritance from this point of view that mankind is a
mataphysical reality more than a physical, not just to balance the books. Which
is why Christians belive in life after death.
The more university degrees people have the less likely that the Douglas views
are likely to be appreciated. And I cant think of an worse social environment
than an Eastern European one after more than a generation of the absolute extreme
opposite of the Social Credit conception of reality.
It would be just as easy to make a similar conclusion about democracy as a
future leisure society for the same reason, being that if people are not educated
to understand it or appreciate it and thus in the main havent the ability to take
on the responsibility, then they shouldnt be allowed to. Meaning no one is
allowed to go into water untill they learn to swim.
Dont give a dividend to people in the slums they will waste it.
We went through a bit of a discussion a few months ago about those who
contempsiously believed it was good for man to suffer and it looks like we are
back there again.
Peter H
"Keith Wilde" <keithwilde@sympatico.ca> wrote:
>
> Following is what I sent to the editor of Economic Reform as a response
=
> to criticisms about my review of Democratic Capitalism. He didn't like
=
> it, and chopped out more than half the content. You could have read =
> that part from the COMER website, but I didn't mention it here because =
> it doesn't engage any of your contributions. I infer from very cryptic
=
> comment that it was going too far afield from his central concerns. I =
> did want you to know that I did take the comments seriously, and have =
> responded.
>
> Keith
>
> On Carey and Douglas.
>
> In a well-taken caveat at the end of my commentary on Democratic =
> Capitalism (August 2005) the editor of ER demurred on its implication of
=
> a ratings scale and preference for one man's solution over the =
> contributions of others.
>
> The warning is particularly apt with reference to C.H. Douglas, for =
> there is no reference at all to his name or ideas in Ray Carey's book. =
> Brief mention of some aspects of Social Credit were my initiative, to =
> point up distinctions in Carey's treatment from that other approach =
> which has been receiving increasing and favorable coverage in ER. =
> Brevity (and haste to the deadline) were interpreted as hostility or =
> ignorance by some of my correspondents who are guardians and expositors
=
> of the Douglas legacy. Their comments were predictable and also useful =
> as points of focus on what I perceive to be the intersection of their =
> objectives with the campaign of COMER.
>
> Comments about the Carey review were of three kinds:
>
> Democratic Capitalism as described in the review does not address the =
> primary problem of the economic system as analyzed by Douglas.
>
> Skepticism by a former industrialist who has experience of modest =
> attempts to implement a version of democratic capitalism. He wonders if
=
> a majority of workers can really be converted to a frame of mind and =
> cooperative spirit that lasts when times are bad as well as when they =
> are good. That is, can they accept reductions in their profit share?
>
> Complaints that I was unfair to their side when describing the dynamics
=
> of economic progress and its displacement of labor from productive =
> processes, entailing social and economic adjustments to a world that =
> could be "work-free".
>
>
>
> The first is unexceptionable. Carey does not pretend that he is familiar
=
> at all with Douglas or his political-economic legacy. He does express =
> some faith that the general equilibrium fantasy of neoclassical economic
=
> theorists can be achieved if the abuses of ultra-capitalism were =
> eliminated, but he has not made a deliberate effort to incorporate the =
> situation of monetary shortfall described by Douglas. Both of them =
> nonetheless reject that (neo-classical) theory built up since the 1870s
=
> which tends to justify the distribution of income as a near-inevitable =
> consequence of "the market system" (the marginal productivity of factor
=
> proportions). Carey's approval of economic theorists ends with the =
> classical tradition, especially Smith, Marx and J.S. Mill, and he =
> implicitly repudiates the factor proportions theory in his views on (1)
=
> appropriate compensation and (2) the benefits to all members of society
=
> via higher incomes out of the increased productivity of engaged and =
> motivated "associates".
>
> An extreme example of the currently conventional doctrine was provided =
> by one of my correspondents, John Medaille, who is not a student of =
> Douglas but does teach political economy from the perspective of Roman =
> Catholic social thought. He cited a "very popular textbook used at the =
> University of Dallas, The Economic Way of Thinking, now in its 10th or =
> 11th edition (by Heyne). The book does indeed have a chapter on =
> distribution, but only to show that distributions are automatic and =
> beyond the reach of any human intentionality. "Because income isn't =
> really distributed by anyone, it can't actually be redistributed. No one
=
> is in a position to apportion shares of the social product." Although =
> the text is characterized as "Austrian", Medaille notes that the =
> rationale of making wages automatic is really not that far from the =
> mainstream. "After all, wages are just another name for the price of one
=
> particular commodity, labor. If labor is a commodity like any other, =
> then its price must be computed in the same way as any other commodity.
=
> Wages, unlike profit, are the automatic result of supply and demand =
> curves, beyond the ken or control of any human. Only production is =
> interesting to the authors of this text, and I think they are not alone
=
> among economists in thinking this way."
>
> Medaille went on to affirm an implicit point in Carey's treatment, that
=
> J. S. Mill said that while the laws of production "Partake of the =
> character of physical truth," the laws of distribution are "of human =
> institution solely" and could be made "different, if mankind so chose".
=
> Medaille then added that "the problem of distribution goes back at least
=
> to Aristotle, who said that distribution will vary from culture to =
> culture depending on their idea of merit; it will be different in =
> democratic, aristocratic, and monarchial
> societies. The same principle underlies the Medieval idea of just price,
=
> which is the basis of the just wage."
>
>
> Whereas Carey builds on these observations to propose a managerial =
> perspective on making distribution different, Medaille complains that =
> economics is defective in not having a more "scientific" approach to it.
=
> Both of these writers might find it useful to consider that Douglas did
=
> propose such an approach-and that he also seems to have manifested an =
> affinity to Catholic social teaching. Thus a further potential linkage =
> here is that Carey acknowledges a strong Irish-Catholic background and =
> education in a Jesuit college before a counter-cultural exposure to (and
=
> graduation from) Harvard Business School. "At Holy Cross.I majored in =
> Business Administration. .Most of the courses were in Philosophy, =
> Ontology, Epistemology, Cosmology and other ambitious subjects that =
> Jesuits love to teach." Near his retirement from an active business =
> career, Carey records that he wrote to the then Dean of Harvard Business
=
> School to describe HBS as "a soulless institution with opportunities =
> lost. [T]he reputation of capitalism is sinking, the reputation of =
> Business Schools in general is sinking, the standing of HBS is declining
=
> [relative to others], and the performance of some HBS graduates in =
> corporate scandals such as Enron is an embarrassment."
>
> Douglas emphasized the absurdity of the factor proportions theory in =
> pointing out that it is impossible to isolate individual contributions =
> to the productive process, for it is an ineluctably social product, =
> involving not only many contemporary contributors but also the legacy of
=
> centuries of productivity improvements-a "cultural heritage". It is =
> consequently absurd to conceive that when individuals meet in a market =
> that they are exchanging "the fruits of their individual labors". That =
> could only conceivably happen in a rude barter exchange where, for =
> example, hunters brought meat into a meeting place to exchange with =
> bananas offered by gatherers. (I have seen anthropological reports of =
> just such a system.) In modern systems, all exchange is effected through
=
> money prices. To suppose that retail prices and the incomes that =
> consumers are able to pay to meet them is the seamless reflection of a =
> circular flow of mutual contributions and fully effective compensation =
> for same is manifest nonsense. (As Carey points out, Henry Ford was also
=
> onto that principle.) That is because, in the ongoing processes of =
> production, part of the effort must go into maintenance of the =
> productive environment and equipment and into its improvement and =
> replacement. Thus the payments left over for consumer incomes can't =
> quite be equal to the full costs of production. The shortfall must be =
> made up in some way if the flow from production to consumption is to be
=
> maintained. But the process also means that productive capacity has been
=
> increased. If all that is thenceforth produced is to be consumed, =
> therefore, there must either be reductions in prices or some expansion =
> in the money supply. For it would be unfair to expect producers to ask =
> for less than the money costs they incurred, similarly for retailers. =
> So, how does the money supply get expanded? Fundamentally, as students =
> of the financial system know, through the extension of bank loans. This
=
> engages the vehement complaint of money reformers of all stripes that =
> the system is exploited by the monopoly powers granted to its players, =
> resulting in an accumulation of ultimately unrepayable debts that =
> eventually reaches a breaking point in financial panic, meltdown and the
=
> massive redistribution of individual wealth positions. Douglas proposed
=
> a solution for that via the distribution of credits (essentially new =
> money) to both retailers and consumers to account for the real increases
=
> in productive capacity.
>
> This comment engages issues of social and individual psychology that =
> cannot be ignored in any realistic analysis of the contemporary scene =
> and its implications for the future of society. The commentator =
> obviously believes that the Douglas system of distributing new credits =
> is a more reliable way of effective product distribution and keeping the
=
> productive system humming. Once that improved system is in place, =
> problems of industrial harmony would be immensely mitigated, if not =
> eliminated.
>
> Hurdles to implementing the Douglas solution remain immense, however, =
> and advocates of Social Credit might serve their cause by welcoming =
> Carey as an important ally, especially in respect of his analysis of =
> ultra capitalism and his impatience with the failures of academic =
> political economy and its intellectual hangers-on.
>
> The comment on worker motivation and industrial organization bears on =
> the third criticism of my review, to which I now turn.
>
> It was pointed out that Douglas never said that workers would be =
> replaced by mechanical robots. Instead, he made the more general =
> observation that manual labor is progressively displaced in the =
> trajectory of human progress by the harnessing of non-human (ultimately
=
> solar) energy sources. My characterization was therefore crude. The =
> displacement of labor and its implications for behavior and social order
=
> nonetheless remain as the problematic element in concepts of nirvana =
> that look increasingly suspect as time passes from the days when Douglas
=
> was doing his most focused thinking.
>
> Some critics suggested that I infer unorganized voluntarism from the =
> increased leisure made possible by labor displacement. That is not the =
> case. In the 21st century it is no longer necessary to beat on the theme
=
> that physical labor is a thing of the past. (Although I am relieved to =
> see civilian conscription to some essential services prescribed in a =
> Social Credit text.) The burgeoning array of "service industries" =
> (including the financial "industry") is certainly amenable to =
> productivity improvements and hence further displacement of "persons". =
> But do all of the unmet needs lend themselves to modest entrepreneurial
=
> endeavors? Technological progress seems so far to entail progressive =
> urbanization, and that in turn to require greater collectivization of =
> service activities. Sanitation, water supply, power and communications =
> networks, education, public health, transportation, police, border =
> protection and warfare all seem to be most effectively and efficiently =
> taken care of by large-scale organizations involving public finance, =
> taxation and bureaucracy.
>
> I do have a sensation that Douglas and other Social Credit writers view
=
> the "leisure society" through rose-tinted lenses. By the time of my =
> encounter with the notion, in the early sixties, the bloom was already =
> coming off the rose (Ellul, Mumford, etc.), and I was perplexed by =
> economistic attitudes and practices that emphasized maximum short-term =
> pecuniary gains regardless of the implicated beneficiary and of impacts
=
> on non-monetary aspects of general welfare. Those concerns brought me =
> into the company of like-minded, multi-disciplinary scholars ranging =
> from psychiatrists and psychologists through physicists, ecologists, =
> public health specialists, engineers and humanists with whom I explored
=
> for a couple of decades the impacts of rapidly expanding technological =
> prowess on the world around us and on ourselves as the human animal. A =
> seminal thinker in this endeavor was an engineer turned philosopher of =
> science (also proudly Roman Catholic as a compatriot of John Paul II) =
> who built an international reputation on the theme of knowledge as a =
> serious problem for the future of humanity. His shorthand, diagrammatic
=
> exposition of the dilemma may be viewed in a refereed electronic journal
=
> at
>
> http://trumpeter.athabascau.ca/archives.html
>
> (From that archive, select Volume 20.1, 2004 to get a table of contents
=
> and select there the article by Wilde and Caley. The diagrammatic =
> exposition starts after the sixth page.) It has only been in more recent
=
> years that I have had the time to turn my attention to a long-standing =
> but unexplored hunch that monetary phenomena are a key element. "Ultra =
> capitalism" is a manifestation of the disease I sensed in economic =
> doctrines. And it feeds in turn a social disease described at the =
> following website:
>
>
> Dr. Sam Vaknin is a specialist in eastern European affairs generally but
=
> has focused on gross and apparently endemic misbehaviors. These make it
=
> doubtful that post-industrial societies can make a return to concepts of
=
> civilization as understood in the Western tradition. The site provides =
> links to several other of Vaknin's wide-ranging topics in economics and
=
> politics, which are so abundant that I might have dismissed him as =
> inevitably lightweight were it not for the recommendation of a highly =
> esteemed colleague (a professor of political philosophy with ancillary =
> specializations in anthropology and psychiatry). The disease he =
> describes is endemic to bureaucracy, but also to incomes unlinked to =
> responsible effort (my uneasy suspicion).
>
> Concerns of the foregoing paragraph link the second of the criticisms =
> above with my conjecture that the potential and dimensions of the =
> "leisure society" as conceived by early Social Credit writers may be in
=
> need of some serious re-thinking.
>
> But the Japanese may have found a way out. Readers with an interest in =
> Democratic Capitalism will be enlightened by Robert Locke in "Japan, =
> Refutation of Neoliberalism", Post-Autistic Economics Review, issue no.
=
> 23, 5 January 2004, article 1.
>
>
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