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Douglas was perhaps the first to recognize that
the
incremental increase to investment for the economy as
a whole is not
now financed from savings but credit.
It is mathematically impossible for it
to be
otherwise. That was in the early 1920s. In the
mid-1930s
Keynes said that savings are a "residual."
So Swanwick 2 is not instituting
a new mechanism but
is recognizing the existing reality so that it
might
be formalized and controlled.
Bill, are you saying the new costs that are created
via savings cannot be cancelled without an increase in credit, or are you
stating that it's impossible for existing credit to be used for investment
purposes?
Take care,
Jim
----- Original Message -----
Sent: Friday, December 09, 2005 5:56
AM
Subject: Re: [socialcredit] Swanwick no.
2
> (Michael wrote:-) If you used it to purchase new
> stock
issue, it would not be any different than if you
> used your earnings for
the same thing; and per
> Swanwick #2 you are not going to do either,
because
> production is not going to be financed that way any
>
more.
> ----------------------
>
> Douglas was perhaps the
first to recognize that the
> incremental increase to investment for the
economy as
> a whole is not now financed from savings but credit.
>
It is mathematically impossible for it to be
> otherwise. That was in the
early 1920s. In the
> mid-1930s Keynes said that savings are a
"residual."
> So Swanwick 2 is not instituting a new mechanism
but
> is recognizing the existing reality so that it might
> be
formalized and controlled.
>
>
> --- Joe Thomson
<thomsonhiyu@shaw.ca> wrote:
>
>> (Michael wrote:-) If you used it to purchase new
>>
stock issue, it would not be any different than if
>> you used your
earnings for the same thing; and per
>> Swanwick #2 you are not going
to do either, because
>> production is not going to be financed that
way any
>> more.
>>
>> (Joe replies:-) This
leads me to ask how do you
>> envision production being financed?
Suppose I
>> decide to expand production in my mill and opt
to
>> sell treasury stock, perhaps to one or more people
>>
who might want to join me and take an active role in
>> the business,
rather than the firm borrowing the
>> funds needed. Are you
saying that such a potential
>> investor could not use his 'savings'
directly to
>> invest, but would have to seek a 'bank loan'
>> instead? If this were the case, are we not back
to
>> another examination of Douglas's 'pound for
pound'
>> letter to Denis Byrne? Beyond that, are we
not
>> imbuing the 'banks' with an increase in their
>>
'monopoly' powers if we interpret Swanwick # 2 in a
>> 'micro-economic'
manner? The decision on whether
>> to grant 'new credit' on
an 'individual' basis is
>> still going to be made by the bank as a
practical
>> matter, (remember, Douglas called the
administration
>> of the banks 'admirable' ~ and if deciding who
is
>> likely to be able to repay a loan or not is not
>>
'administration', I hope you or someone else can
>> tell me what
is.) If the banks decide that 'new
>> credits' are, in THEIR
opinion, not warranted on a
>> particular 'individual' basis, and we
interpret
>> Swanwick # 2 'microeconomically' and the
would-be
>> private investor is forbidden to use his
'savings'
>> directly at HIS discretion, have we not just
further
>> enhanced the 'monopoly of credit'?
>
>
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