| Subject: | [socialcredit] Replying to John Rawson 2 | | Date: | Thursday, October 20, 2005 08:45:31 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
[Rawson] "And, of course, if we take the (to me
ridiculous) point that there will be no savings..."
-------------------------------------
Who has made that ridiculous point, John?
-
[Rawson] "And sorry, within limits, I believe all
practical monetary reformers, including all Social
Crediters, see the volume of money as important, even
if it is modified by velocity of circulation."
-------------------------------------
By this definition you will have to exclude C. H.
Douglas from the list of "all Social Crediters," who
most certainly did not agree with the Quantity Theory
of Money, which includes the "velocity of circulation"
as one of its factors.*
-
[Rawson] "I also think it is obvious that the A+B
model implies that too much money does not, again
within certain limits, cause inflation."
-------------------------------------
In the Douglas theory, "too much money" does not in
fact "cause" inflation. Inflation is the exponential
increase to the costs of production (A+B) in respect
to the flow of goods and services to the retail
counter.
The same "quantity" of money might be created by
either of two methods: 1) The present method, where
all money** is introduced through A+B (in the form of
bank loans or their equivalent); or 2) the reformed
(or refined) method, where the flow of loans is
proportionately reduced--while at the same time
dividends (and dividends in the form of price
compensation) are commensurately increased, charged or
"debited" against the National Credit Account.
The first method is inherently inflationary; the
second: counterinflationary.
The second is by the way fully consistent with the
advanced school of academic economics called Post
Keynesian.
-
[Rawson] "Did Douglas propound a practical method of
removing from the banks the right to create money, or
not? If so, what was it?"
-------------------------------------
The simple answer is that Douglas did not advocate
removing from the banks the right to create money.
Not only did he not advocate it, on several occasions
he argued against it; for example, in a 1933 letter to
his colleague Byrne
http://www.geocities.com/socredus/compendium/douglas-byrne-1933.txt
.
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* See for example
http://www.geocities.com/socredus/compendium/alberta-march-1945.txt
** The exception is consumer credit, which represents
the transference of debt from the firms to the
consuming sector.
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----------original message----------
Subject: RE: [socialcredit] Replying to John Rawson
Date: Wednesday, October 19, 2005 21:38:22 (+0000)
From: John G Rawson <johngrawson@hotmail.com>
This was a complete aside to my main points, and
therefore I was imprecise. "The volume of new money
to be created" would have expressed it better. And, of
course, if we take the (to me ridiculous) point that
there will be no savings, then it equates exactly to
new purchasing power.
And sorry, within limits, I believe all practical
monetary reformers, including all Social Crediters,
see the volume of money as important, even if its is
modified by velocity of circulation. I also think it
is obvious that the A+B model implies that too much
money does not, again within certain limits, cause
inflation. Hard data from the time of our credit
squeezes here shows strongly that marked reduction in
the money volume did not reduce the inflation rate,
which actualoly increased.
Anyway, I'm prepared to concede (temporarily) all
sorts of silly little points like this to get answers
to my main question. Did Douglas propound a practical
method of removing from the banks the right to create
money, or not? If so, what was it?
Regards. John R.
-
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