| Subject: | Re: [socialcredit] Putting it all together | | Date: | Friday, December 30, 2005 15:29:13 (-0700) | | From: | Martin Hattersley <hattersleyjm @.........com>
|
Hi to you also Ken.
Any friend of Vic Hadkins is certainly a friend of mine!
Happy New Year.
Martin Hattersley
1970-10123-99 St.,
EDMONTON AB CANADA
Phone (780)423-4081;Fax(780)425-5247
e-mail: hattersleyjm@interbaun.com
----- Original Message -----
From: "Kenneth Palmerton" <kenpalmerton@cix.compulink.co.uk>
To: <socialcredit@elistas.com>
Cc: <kenpalmerton@cix.compulink.co.uk>
Sent: Friday, December 30, 2005 7:36 AM
Subject: Re: [socialcredit] Putting it all together
> In-Reply-To: <000501c60bee$9fe0a720$de5b22cf@martinh4>
> Hi Martin.
>
> A happy and prosperous new year to you and yours.
>
> I thank you for taking the trouble to write out in some detail your
> present position. I count it a great privilege to be allowed this.
>
> Assuming that you wish to continue the discussion, I have printed off your
> post, and intend to reply in detail when I have given the proper attention
> to what you have written. Though I would like you to know that we are
> essentially in agreement. Only details, that really have little relevance
> in the world of practical politics remain for us money junkies to chew
> over :-)))
>
> I do not expect you to remember me, we met only once and briefly at a
> COMER meeting in Toronto whilst I was at a UNESCO conference there some
> years ago.
>
> Though your roots I know well. I was put on the right path by Vic Hadkins,
> who I am sure you know from his association with your Father in
> Mexborough. It was Vic who bequeathed most of his library to me when he
> eventually decided to cease publishing "Abundance".
>
> The episode of the huge board room table is still spoken of here :-)
>
> Ken.
>
> -------- Original Message --------
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> From: "Martin Hattersley" <hattersleyjm@interbaun.com>
> To: <socialcredit@elistas.com>
> Date: Wed, 28 Dec 2005 13:37:21 -0700
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> Ken -
>
> I'm afraid our discussions on this list cover such a wide range that we
> are likely to get confused over exactly what we are talking about. I
> thought therefore that I'd put together my thoughts on the economic
> situation that Douglas described, as I see it from today's viewpoint. So
> here goes:
>
> 1. Say's law states that the level of prices will be set by a balance of
> the quantity of goods on the market for sale, with the money available in
> the hands of consumers to purchase them.
>
> 2. This proposition has erroneously been used to "prove" that there can
> never be a deficiency of purchasing power in the hands of consumers - the
> price level will always adjust to match the purchasing power that is
> available.
>
> 3. The catch in that argument is that producers cannot in the long run
> sell below cost. Rather than do this, goods are withheld from the market,
> cartels and monopolies (and sometimes wars) are used to raise prices
> through artificial scarcity, and the overall effect is one of poverty in
> the midst of potential plenty.
>
> 4. C.H.Douglas made the observation that, as a matter of cost accounting,
> such a deficiency of purchasing power does exist in the modern economy.
> Initially, his A+B theorem was used to show that, while certain business
> costs (wages in particular) were distributed at the same time as incomes
> to those who will buy the products of industry ("A" costs), certain others
> ("B" and especially capital costs) had to be charged into prices without
> an equivalent amount of purchasing power being distributed to potential
> purchasers at the same time. There was a substantial deficiency, which
> should be covered by a National Dividend payable to consumers, or a Just
> Price - a discount paid to producers from a State agency - that would
> "close the gap".
>
> 5. What this initial expression of the theorem omitted was the fact that
> certain industries distribute wages to their workers, while not putting
> goods on the market for immediate sale to consumers. These are the
> factories that make the tools that workers will later use to turn out
> actual products. While this new capital formation is taking place, its
> distribution of funds to consumers in wages and dividends, particularly
> when financed by newly created bank credit, serves as a form of National
> Dividend that makes it possible for the consuming public to buy all that
> is on the market for sale, without producers being forced to sell below
> cost.
>
> 6. The "new orthodoxy", initiated by Lord Keynes, is therefore to promote
> "full employment" and "economic growth", by encouraging investment
> through lower interest rates, so that projects that would otherwise be
> uneconomic, are financed with new, low interest, bank credit and so
> proceed, distributing wage incomes to workers in the process.
>
> 7. This "new orthodoxy", however, has serious defects.
>
> (a) Promoting exponential economic development in a finite world is a
> recipe for the exploitation and exhaustion of resources, and the
> destruction of the environment.
> (b) Making employment the requirement before consumers can receive
> adequate incomes deprives the unemployed of the value of a "dividend
> income" that would otherwise be theirs as their share of the "cultural
> heritage" (the resources provided by nature and the investments of
> previous generations) that are the inheritance of all.
> (c) Financing economic growth from lending by the commercial banks gives
> immense and unwarranted profit and power to those who in this way have a
> "license to print money". This power includes the power to influence the
> political process by appropriate donations to political parties,
> receiving appropriate government policies and appointments in return.
> (d) Private investment, ownership and savings, and the incomes to be
> received therefrom, are discouraged in favour of the acquisition of assets
> by borrowing from the commercial banking system.
> (e) Every dollar created by the commercial banking system is matched by a
> dollar of debt owed either by persons, business or governments. The
> interest burden of this debt, particularly on third world countries and on
> the poorer classes everywhere, is ruinous.
> (f) The system runs "on a wing and a prayer", swinging uncontrollably
> from boom to depression depending on the amount of bank financed capital
> development taking place. This leaves openings for speculation and fraud
> that in no way increase the real wealth of the community.
> (g) Inflation, (the loss of purchasing power by the unit of currency) is
> a built in consequence of the arrangement.
> (h) The efficiency of the economy is reduced, because of immense costs in
> advertising and sales, overgrowth of the "financial sector", restricted
> production to maintain prices, and lack of consumer effective demand.
> (i) There is an ever growing gap between the "haves", who have some
> control of the system, and the "have nots", forced by the "iron laws of
> economics" to work for the minimum wage that will keep body and soul
> together. Cut throat competition (led by Wal-Mart) leads the whole
> economy, producers and consumers alike, into a frantic "race to the
> bottom".
>
> 8. To deal with this situation, the following would appear necessary:
>
> (a) Management by government of the quantity of purchasing power in
> circulation on a statistical basis, to balance goods for sale at a
> reasonable margin of profit with available purchasing power in the hands
> of consumers.
> (b) Supplementing incomes from employment with a universal unearned
> "dividend" income, paid either from new credit, or if necessary, taxation,
> which could easily replace many of our chaotic current systems of welfare.
> (c) Balancing consumer demand with potential supply, by a "retail price
> discount" (inverse sales tax) paid to producers on the price of their
> products when these are sold.
> (d) Creating the nation's money supply by a process that does not involve
> the creation of debt to private interests.
> (e) Control of private entities (banks in particular) producing
> substitutes for legal tender money, either by requiring 100% legal tender
> backing for bank promises to pay, or some form of taxation that will give
> the community the benefit of the profit that comes from their creating
> units of purchasing power.
>
> 9. Some other matters that may need to be discussed:
>
> (a) Abolition of lending at fixed interest.
> I am strongly in favour of equity investment, where the investor, not the
> borrower, takes the risk of loss if his project does not pay off. Just
> the same, I do not consider it essential to a working economy that fixed
> interest lending be outlawed.
> (b) Interest free lending for public works.
> I regard the "public credit" as an asset of the community as a whole. I
> have no objection to using it to pay for government infrastructure
> projects, so long as the community itself makes the political decision
> that this is how it wants its "dividend" income to be spent. Otherwise,
> not.(c) Abolition of taxation.
> Government costs money, and taxes pay for government. I believe it is
> dangerous to allow a government to avoid responsibility for how it draws
> on the resources of the community by spending money, by allowing it to
> either borrow or create new credit to finance itself. Remember that in
> Canada, some 30% of federal spending is now to make payments on the
> National Debt - something that makes the Government a tax collector for
> the commercial banks, an avoidable expense.
> (d) "New Credits for New Production". (Swanwick principle #2)
> I find it difficult even to understand what is meant by this, and I
> believe it is a matter of policy adopted before the A+B theorem was fully
> developed. My own view is that new production nowadays depends on
> investing labour and resources in capital assets well ahead of products
> reaching the market. To finance such investment with new credit increases
> consumer effective demand, without any increase in product while such
> investment is taking place, causing inflation. This is balanced by a
> shortage of effective demand when products come on sale, the workers
> creating the investment have been laid off, and depression. Using new
> credit, rather than private savings, to finance capital development is a
> primary cause of this cycle between boom and depression, and is unsound.
> (e) Henry George's "Single Tax" on land and natural resources.
> I regard this as an important issue, particularly since the current
> banking system makes it easy for the rich to accumulate the resources,
> leaving those without property to pay for their homes in rents and
> mortgages out of their meager earnings from employment. Nevertheless, it
> does not deal with the problems caused by the defects in our current
> financial system, and therefore is not a complete answer to current
> problems.
>
> Lots to discuss!
>
> And a happy new year to all on the list!
>
>
> Martin Hattersley
> 1970-10123-99 St.,
> EDMONTON AB CANADA
> Phone (780)423-4081;Fax(780)425-5247
> e-mail: hattersleyjm@interbaun.com
>
>
>
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