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I've had some further thoughts on what's written
below after going back and re-reading what Tim has written. I had
envisioned he was getting at something a little different than I now think
he was. Sorry, Tim. While I don't think my 'cherries' in the example
given is going to affect the purchasing power of currency enough to even be
noticed, what Tim has said about 'margins' needs to be looked at again.
Also, it occurs to me that an 'increase in
productivity' on a large enough scale might be likened
to the 'costless cherries', only likely to have quite an effect on the
purchasing power of the 'money' unit.
Joe
----- Original Message -----
Sent: Friday, December 30, 2005 1:14
PM
Subject: Re: [socialcredit] Swanwick
2
Tim, look at this for an example. My
neighbour has a large cherry tree, but seldom picks any cherries.
Usually they fall on his lawn or the birds get them. If he said to me,
"Joe, you can have those cherries for the taking if you want to pick them.",
and I do just that, I have 'created' a product that doesn't have any
'financial' cost.
If I eat the cherries or my wife makes a pie out
of them, all that has happened is that we've enjoyed them
as cherries. If, on the other hand, I have a distaste for
cherries and cherry pie, but think I might be able to 'peddle the product of
my labours', and put a 'price' on those cherries and offer them for sale, and
someone else accepts my offer and pays me some money for them, what has
happened?
The previous possessor of that 'money' didn't use
it to buy something else he might have exchanged it for. He bought
cherries, and presumably ate them. End of story as far as cherries are
concerned. I now have a sum of money I didn't have before, and instead
of him using that money to buy something else with, I do.
While in one sense I have gotten something for
nothing, because the cherries, to me, were 'financially' costless, in
another sense my 'profit' and my 'wages' for the effort I expended,
which my customer paid me in money for my part in the production of
cherries, are one and the same. Money in quantity has neither 'grown'
nor 'shrunk' because of this, since the process by which money is 'made' (and
'destroyed'), is entirely separate from the process by which 'goods' are made
or 'services' are provided. (Including my cherry picking.) Nor
have any of the 'costs' which the creation of money enabled been liquidated,
because there has been no sale of any product which any of this money was
'costed' into when I sold the cherries.
Joe
----- Original Message -----
Sent: Friday, December 30, 2005 8:42
AM
Subject: Re: [socialcredit] Swanwick
2
Joe,
If you enter the world and
offer for sale an item newly created you compete with others for finite
spending – that could be said to be deflationary and so it does matter who
consumes the costless but priced (via margin) product. If you consume it
yourself (without buying it) then no effect, but if it is up for sale and
sold it affects the price of other products.
If that sale price does
not comprise entirely of previously spent money of wages and costs (i.e. It
has margin added) then it will have an effect different than if it were sold
at cost.
I use the costless product here to ‘cut the rope’ from the
impact of previous cycles.
It might be said that every person begins
the process by working/supplying for a margin then uses that income to spend
on goods, save or invest can be seen as the beginning of the
spiral.
Investment unspent is the same as savings. Margin has a
similar effect in that it absorbs the market spending power temporarily. So
too does latency.
Investment and savings are unspent margin. If it
were not margin but unsettled/due cost, then it is latency.
I doubt
we need to ensure that we have sufficient money to enable ALL margin and
latency present in the market* to be covered. Why do I say this? It is that,
IMHO, will cause inflation in quality items which will absorb a
disproportionate amount of the injected liquidity and thus not resolve the
issue of unliquidated costs in those items that are left on the shelf, thus
not serving the stated intention of liquidating all
costs.
*margin in the market is the sum of all margins on all
products offered for sale, wanted or not.
Tim
On 30/12/05
08:12, "Joe Thomson" <thomsonhiyu@shaw.ca> wrote:
Some
comments inserted below in 'green'.
(Tim wrote:-) My apologies,
Joe, I think I may have not made myself clear (clumsy wording).
No
apologies necessary, Tim. My own wording is far from
perfect, and understanding most likely worse than that! Lets look
at it further.
(Tim:-) When I say it takes money OUT of the economy, I
mean it increases the range of items to absorb demand and the value of
products “out there”, therefore if this product entered the market it
could/would create a ‘shortfall’ in money vs product, but that shortfall
would be restored once the creator re-spends the earning from that
product. This is different from costs, which are disbursed first then
recovered. Again, it is a matter of timing.
I think you are saying that once the
'costless' product has been purchased and 'consumed', and its producer
has spent the money he sold it for on something else, and consumed that,
everything's back as it was. He could have consumed his own
creation. Instead he let someone else do that, in exchange for the
money they possessed, and thus he enabled himself to then consume some
other product the buyer of his product otherwise might have. There was
no new money that entered the picture when the 'costless' product was
created, so no money will leave the picture when that product ceases to
exist. Actually, would it have made any diference if the person
who consumed the 'costless product' was the costless producer or the one
he received payment for his product from? Somebody still got
something for nothing.
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