| Subject: | [socialcredit] Replying to John Rawson | | Date: | Wednesday, October 19, 2005 08:50:25 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
[Rawson] "The volume of money must be decided by the
Credit Authority. I think we are all agreed on that."
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No, we are not all agreed on that. Firstly, the
Credit "Authority" was John Hargrave's term, not
Douglas'. Douglas' term was the National Credit
"Account," an entirely different concept analogous to
the capital account within a coherent set of books,
from which dividends might be paid.
Secondly, the "volume of money" was never the variable
to be controlled by the administration of the National
Credit Account (which reflects fallacious "quantity
theory of money" type thinking held by many social
crediters and apparently yourself). In the analysis
specific to Douglas, the variable to be controlled or
augmented is effective demand in respect to the costs
of production flowing to the point of retail
accomplished through the dividend and retail price
compensation (discount) programs.
Furthermore*, inflation is the exponential phenomenon
where the costs of production are increasing in
respect to the flow of goods and services, whereas
exponentially increasing debt is the phenomenon where
the costs of production are increasing in respect to
effective demand.
Both phenomena occur simultaneously (explainable by
recourse to the A+B theorem with its labor
displacement underlying premise) and are therefore
interrelated, as reflected empirically (though
misdiagnosed) by the Keynesian practitioners of the
Philips Curve. So the answer to each phenomenon must
be coordinated with the other for economic stability.
The exponential increase to debt is addressed most
effeiciently by the dividend and discount.
The exponential increase to costs is addressed most
efficiently by increasing bank reserve requirements
and lowering permissible interest rates, since both
measures would have the effect of reducing the flow of
bank credit in respect to the flow of goods and
services** (which will work wihout economic
contraction or collapse if and only if effective
demand is concurrently augmented to allow the increase
to the rate of profit available for investment to
compensate for the decrease in available bank credit.)
-
* See Part II Chapter II of Social Credit
http://www.geocities.com/socredus/compendium/chap2part2.txt
.
** Inasmuch as the scope for "credit-worthy" customers
for bank credit is reduced.
-----------original message-----------
Subject: Re: [socialcredit] Re: Extrapolating A+B Part
1To John Hermann
Date: Tuesday, October 18, 2005 02:31:43 (+0000)
From: John G Rawson <johngrawson@hotmail.com>
In reply to: Message 2965 (written by Joe Thomson)
Greetings, Joe. I am willinmg to go off on this side
issue provided it does not obscure my request for
someone to elucidate the MECHANISM by which they would
take away from the banks the right to create money.
Particularly, anything propounded by Douglas, if he
ever did.
The volume of money must be decided by the Credit
Authority. I think we are all agreed on that.
I suppose that, at the moment, creation is controlled
by producers and speculators, because banks can not
create credit (except when they purchase assets)
without willing borrowers to take it.
For purposes of infrastructure, I see Govt. deciding
how much of total available money should go to that,
as it does today.
My own personal (accent that word personal) approach
is to envisage the CA deciding how much new money
should be put into circulation at any given time and
going on to decide how much should be used for
(national dividend etc), how much should be allocated
to the banks to lend on to supply industry, and how
much for Govt. use. (Or should our elected
Representatives cxarry out this step?) Being a
personal opinion, that is wide open to correction,
provided it is done logically.
While dealing with side issues to the subject I
brought up, I note Henry's quote from Bridger that all
new production must be financed by new credit. My
understanding of this ("Swanwick principle") is that
Douglas used the term "in respect of", i.e. that
sufficient consumer purchasing power should be created
to ensure the goods were available to the public. I
would be very startled if Douglas, with his philosophy
of the rights of the individual, advocated complete
abolition of private enterprise and decisions on what
should be produced centralised in either the banks or
the Credit Authority. Financing of all production
from a central authority was the worst economic aspect
of the Russian Communist regime, because consumers had
no variety to choose from. It would of course also
mean that insurance funds as we know them would have
to be abolished because such companies would have
nowhere to place reserve funds. Or has someone a smart
mechanism to overcome this problem too?
Regfards. John R.
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