(Martin Hattersley wrote:-) My own view is that, far
from being an economic downer, capital investment financed by savings is in
fact a very sound way of going about things.
(Joe replies:-) I agree. I don't think it would
be either desirable or rational to forbid individual investment of
savings. If there was any condemnation of savings from Douglas I
believe it was restricted to the conception of needless 'doing without'.
Of unnecessary financial 'thrift' being of some great virtue in an
age of increasing physical 'plenty'.
(Martin continues:-) If we spend, say four years in
building the "Titanic", we distribute incomes to workers and suppliers for
that four year period, so withdrawing other goods and services from the
market, without putting any product of value on the market. If financed by new
credit, that is an inflationary thing to do. If financed by savings, it simply
means that consumer buying power in total has been redistributed from the
investor to the workers and suppliers, with no inflationary
effect.
(Joe replies:-) I have a feeling it will lead to 'new
credit' being created regardless of whether the ship is financed from 'loans'
or 'savings'. Not necessarily to pay for the 'Titanic', considered in
isolation. Not if the White Star Line's owner's 'savings' built
it. But overall, in the economy as a whole, would an
expansion of credit in general not be necessary in some way to
accomodate the cost of the ship and ever allow it to operate at a
profit?
(Martin continues:-) The moment that the "Titanic"
sails (and assuming that it doen't sink on its maiden voyage), there's
increased goods and services available to the public (including laid-off
shipbuilders), which is every justification for increasing the money supply
through a debt free National Dividend.
(Joe replies:-) In that case, by which I think
you're confirming what I'm asking above, there 'shall be', in the
economy as a whole, financing of 'new production' through 'new
credits'. I think what Douglas is saying in Swanwick 2 is
simply another version of principles 1 and 3. It is that the aggregate
effect of the individual investment of savings must be accomodated through the
ND and CPD
(Martin continues:-) If the "Titanic" sinks, of
course, assuming it has been financed through savings, all that happens is
that its investors (or their insurers) lose their money.
Comments?
(Joe replies:-) Considered in isolation, yes.
Re: [socialcredit]
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