| Subject: | Re: [socialcredit] Swanwick no. 2 | | Date: | Tuesday, December 13, 2005 04:41:54 (-0800) | | From: | William B. Ryan <w_b_ryan @.....com>
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| In reply to: | Message 3200 (written by Jim) |
[3] If growth is labor displacing, the ratio of B
payments is increasing to A payments. This could be
accommodated by credit expansion into the B circuit;
or, it could be accommodated by reducing A payments,
and diverting these funds into the B circuit. In
neither case could increases in proportional B
payments derive from consumer or manufacturing sector
saving. But the second case would require the
manufacturing sector to sell to the consuming sector
at a continuous loss on a cash flow basis. It is
credit expansion in a growing economy that enables the
manufacturing sector to sell to the consuming sector
at cost, plus profit. For an economy in assumed even
rotation, this should correspond to the real increase
in consumable goods and services. The dilemma is that
while credit expansion into the B circuit is
occurring, the manufacturing sector's market is
contracting due to labor displacement, resulting in a
falling rate of profit.
--- Jim <jschroeder@shaw.ca> wrote:
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>
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