| Subject: | Re: [socialcredit] Re: Swanwick Principles: Wally comments | | Date: | Friday, December 10, 2004 03:06:55 (-0700) | | From: | Wallace M. Klinck <wmklinck @....ca>
|
The Social Credit analysis demonstrates that as an economy becomes more
capital intensive and labour is progressively replaced as a factor of
production the flow of financial costs and prices increasingly exceeds the
flow of effective incomes paid to consumers in each cycle of production.
This is due to a financial-accountancy error in the conventional method of
industrial cost accountancy. Douglas formulated his "A+B Theorem" to
demonstrate this deficiency--which under existing financial rules can be
"bridged" only by increasing debt which cannot liquidate the costs of
production but only pass them on as a multiplying charge against future
cycles of production.
The Consumer (National) Dividend and Compensated Price proposed by Major
Clifford Hugh Douglas (founder of the Social Credit Movement) are intended
not only to compensate the deficiency of purchasing-power which is inherent
in the existing financial costing system--but also they will effectively
cancel, or liquidate, the full financial costs incurred in each cycle of
production, leaving no charge against future production. REALISTICALLY, The
PHYSICAL costs of production are met as production takes place and the
financial system should reflect this fact.
Central to Social Credit is the axiom that the true cost of production is
the amount of consumption that occurs in the same cycle of production. The
issue of consumption credits in the form of the Dividend and Compensated
Price is firmly based upon the national ratio of consumption to production
which normally is becoming increasingly less than a numerical value of one
as physical capital accumulates.
Should for any reason the overall rate of production slow in relation to
consumption, the statistical ratio will change and the Dividend will shrink,
as will the Compensation of Prices--giving a clear signal that production
should, if desired, be increased relative to consumption in order that the
desirable tendency to increased purchasing-power and falling prices might be
resumed. This is not, let it be emphasized, the normal tendency of the
economic system, however, inasmuch as the latter is characteristically
driven by ever increasing technological efficiency. There is no question of
any popular demands for increased Dividends which will bring the economic
system to ruin. This is not a political matter. The Dividend and
Compensated Price are determined by mathematics--an independent statistical
determination of the ratio of consumption to production and the ascertained
deficiency of effective purchasing-power.
I agree essentially with Bill's comments below. Social Credit is concerned
to make possible a civilized, leisured, cultural and spiritual society. As
regards the matter of equity, surely to demand that labour qualify as the
only justification for consumption is quite irrrational when labour is
progressively being displaced by capital as a factor of production . I
understand that in the days of Merry England, in some ways a high point in
English history, there were provided approximately 150 holidays per year.
Does the Work State "rat race" of today really represent an advancement in
human affairs? Genuine progress can only be achieved by more refined
process and technology directed not to enslave the individual but to release
him from economic bondage. This involves the application of less effort to
wasteful and destructive activity and the acquistion of increased leisure.
History reveals that some of our most creative and inventive people have
been those of means and leisure--not the "drones" of the production system.
Social Credit places the individual as the most important unit of society
and does not have a view that humans are essentially debased. Indeed, if
individuals do act in a debased manner, we blame the existing financial
system as a prime cause of this phenomenon inasmuch as it tends to degrade
culture and spirituality by making all sectors of society enemies one of the
other in their competitive quest for survival which is made increasingly
financially impossible due to the defect in the financial costing system.
Social Credit posits that society can have not only abundance and
leisure--but that it can have both in the context of freedom. Compulsion is
antithetical to the entire Social Credit metaphysics and philosophy of life.
Sincerely
Wally
----- Original Message -----
From: <william_b_ryan@yahoo.com>
To: <ownership@cog.kent.edu>; <socialcredit@elistas.com>
Sent: Thursday, December 09, 2004 4:12 PM
Subject: [socialcredit] Re: Swanwick Principles
> Unfortunately "Beckham's rule"^ will almost certainly
> kick in and render large sections of the workforce
> not only idle, restless and frustrated but demanding
> ever greater 'social dividend'. Once they become a
> sizable majority then a government could get in who
> will create more dividend than practicable and
> bankrupt the nation while the strivers will abandon
> the country.
> --------------------------------
> -----------------------------
> What a callous opinion you have of your fellow man,
> Timothy. If this is not an elitist position, I don't
> know what possibly could be. Do you realize what you
> are saying? You are essentially saying that the poor
> are poor because they are subhuman compared to you.
> The only way you can justify their existence is to
> make them work so they produce at least the
> equivalent to what they eat. If they produce more
> than what they eat, you--being kind hearted and
> liberal spirited--will allocate some of the surplus
> to them in such a way they do not lose the motivation
> to work. The portion of the surplus you retain is
> remuneration for keeping them in existence. If there
> is a flaw in this logic, please tell me what it is.
> It is the logic of regarding the mass of humanity as
> barnyard animals. It benefits them and you that you
> control them as barnyard animals. How is this not
> the rationale for slavery?
>
> The Social Credit dividend is justified on several
> levels, not the least of which being fundamental
> equity. There is an unearned increment of
> association that everyone deserves a share of. Our
> barnyard animals don't deserve a share of it, but our
> fellow humans most certainly do.
>
> Furthermore, if the financial theory regarding labor
> displacement (A + B) is correct, the increment
> increases for everyone if everyone is paid a
> dividend, because it helps close the cycle of
> production, enabling it to proceed. The assumption
> is that the costs of production equal the incomes of
> the public. The dividend is the accounting
> adjustment that makes the assumption the reality.
> -
>
>
>
> --- Timothy Carpenter <timbeau_hk@yahoo.co.uk> wrote:
>
>> Hi Bill.
>>
>> 1. Although I have seen discussions wishing to
>> discount the influence of
>> consumer credit, if (as) people were paid before
>> goods were sold right down
>> the line would this not close the gap significantly?
>> Would it not be
>> possible to use credit at zero interest to bridge
>> the gap even further at
>> point of sale?
>>
>> I raise this as...
>>
>> 3. Unfortunately ³Beckhamıs rule²^ will almost
>> certainly kick in and render
>> large sections of the workforce not only idle,
>> restless and frustrated but
>> demanding ever greater Osocial dividendı . Once they
>> become a sizable
>> majority then a government could get in who will
>> create more dividend than
>> practicable and bankrupt the nation while the
>> strivers will abandon the
>> country. Is there some other way to inject liquidity
>> into the market without
>> giving away Omoneyı which will almost certainly be
>> resented and taken for
>> granted?
>>
>> I can see that exporting has been used to find a
>> home for output and I agree
>> with you that this cannot be relied upon if one
>> considers the global
>> village.
>>
>> ^ = Beckhamıs rule is when rules and systems
>> introduced to control behaviour
>> alter it so that the original purpose of the system
>> is distorted, bypassed
>> or neutralised or it encourages the wrong sort of
>> behaviour, e.g. High
>> charges and low fines encourage non-compliance.
>> Payments and fast-track
>> housing to unmarried mothers increases the number of
>> unmarried mothers.
>>
>> Rgds
>> Tim
>>
>>
>> On 6/12/04 7:57 pm, "william_b_ryan@yahoo.com"
>> <william_b_ryan@yahoo.com>
>> wrote:
>>
>> > 1. That the cash credits of the population of any
>> > country shall at any moment be collectively equal
>> to
>> > the collective cash prices for consumable goods
>> for
>> > sale in that country, and such cash credits shall
>> be
>> > cancelled on the purchase of goods for
>> consumption.
>> > ----------------------------------
>> > --------------------------------
>> > The key phrase here that alerts us to the proper
>> > interpretation is "at any moment." It is from
>> > calculus and refers to the instantaneous
>> measurement
>> > of rates of flow. The context is retail sales.
>> > Prices (in the way that Douglas uses the term) do
>> not
>> > mean actual sale prices but the flow of accounted
>> for
>> > costs of the totality of production to the point
>> of
>> > retail. Cash credits (in this context) refer to
>> > effective demand concurrently flowing to the point
>> of
>> > retail from consumers. He is saying that the flow
>> of
>> > costs and the reciprocal effective demand shall be
>> > equal. Contrary to the orthodox assumption (Say's
>> > Law) they do not automatically equal now. They
>> are
>> > consciously made equal in the Social Credit
>> program
>> > through the consumer dividend and retail discount
>> > paid to the credit of consumers. Remember, that
>> > without the consciously applied Social Credit
>> > adjustments, effective demand tends to fall in
>> > respect to the costs of production for two
>> reasons:
>> > 1. With labor displacement (an increasing ratio of
>> B
>> > to A) purchasing power (in the form of salaries,
>> > wages and dividends) is tending to fall in respect
>> to
>> > the costs of production being impressed to the
>> point
>> > of retail; and 2. Spending from consumer income
>> for
>> > retail goods and services is tending to fall in
>> > respect to consumer income with increasing wealth
>> > (decreasing "propensity" to consume). The first
>> is
>> > addressed through the consumer dividend. The
>> second
>> > is addressed through the retail discount. These
>> > should be thought of as macroeconomic accounting
>> > adjustments rather than "funny money" schemes.
>> > -
>> > 2. That the credits required to finance production
>> > shall be supplied, not from savings, but be new
>> > credits relating to new production.
>> > ----------------------------------
>> > --------------------------------
>> > He is referring to saving from income that has
>> been
>> > costed into production. New production means
>> > increase to the flow of production. A constant
>> flow
>> > of new goods is not new production in this
>> context.
>> > In this respect, new production is presently
>> financed
>> > by new credits relating to new production through
>> > conventional loans. The problem is that these new
>> > credits cannot be amortized from income that is
>> > falling in respect to the spending of these new
>> > credits. In respect to producers that income
>> derives
>> > ultimately from sales over the retail counter.
>> The
>> > solution is to implement programs that sustain
>> sales
>> > such that sales remain proportionate to the costs
>> of
>> > production through time. Orthodoxy would do that
>> > through the export market, which Social Credit
>> > regards as irrational in that it is unsustainable.
>> > Moreover, such a program requires that real goods
>> be
>> > exported in exchange for foreign credit
>> instruments
>> > used merely to close the "gap" between domestic
>> > "prices" and "purchasing power." The gap is more
>> > rationally closed through the domestic
>> "production"
>> > of credit instruments distributed through the
>> > consumer dividend and retail discount. Such a
>> > program would contribute toward the more efficient
>> > division of labor between the nations, enabling
>> them
>> > to more closely approximate their natural
>> comparative
>> > advantages to the benefit of all.
>> > -
>> > 3. That the distribution of cash credits to
>> > individuals shall be progressively less dependent
>> > upon employment. That is to say that the dividend
>> > shall progressively displace the wage and salary.
>> > ----------------------------------
>> > --------------------------------
>> > This is actually happening erratically and
>> > inadequately now (pension plans, mutual funds,
>> etc.)
>> > The Social Credit program would rationalize this
>> > natural process.
>> > -
>> >
>>
>
>
>
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