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That's a very interesting paper, Martin, as are
all your pieces. Thanks. I don't think it hurts to explore some
of the ideas of others in comparison to those of Douglas.
In Soddy I see some similarities with Douglas, but
different terminology and concepts. And objective. Soddy seems to be more
in favour of a 'stable price level' than a constantly 'falling'
one. As Douglas envisioned through an application
of credit enabling all the benefits of continually advancing
technology to be accessed 'financially' by consumers in the provision of
desired product, As well as provision for increased
leisure .
Soddy seems to prefer 'government' creating credit for
spending on infrastructure rather than new debt-free 'consumer' credits to
individuals. Is this a large part of the reason why many find
'government' infrastructure spending in a slump so attractive?
To try to keep up the price level?
I guess it's difficult for many to initially
envision how 'consumer' goods could be sold for less than financial cost
on an ongoing basis without businesses being ruined, Simply
through the employment of a different technique of
credit. But I think true 'consumer' demand made
''effective demand'' would then create renewed economic activity far
more effectively than 'infrastructure spending' pump priming ever
will.
I've nothing against 'needed' infrastructure being
built, but not as 'make work' projects to provide an unnecessary 'moral' reason
for paying people an 'income'. As well as a means of
keeping them 'under control'.
Soddy sounds like a bit of a 'puritan' to me in that
regard~ he seems concerned to keep everyone 'working'. The
goal of a triumph of the individual's 'will-to-freedom' over the
'will-to-power' externally imposed economically on
him, something so prevalent in Douglas, seems to be absent
with Soddy.
I get the impression from what you've written and
quoted he thinks the 'government' knows best. Personally,
I think once we get Douglas completely figured out, Soddy will best
remain remembered for discovering isotopes.
Joe
----- Original Message -----
Sent: Thursday, December 29, 2005 7:02
PM
Subject: Re: [socialcredit] Putting it
all together
I'm attaching a paper I did a while back on the late Professor
Soddy for the
Eastern Economics Association. I think Soddy's description
of the "J curve"
phenomenon essentially describes the problem we have to
tackle.
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: "Joe Thomson"
<thomsonhiyu@shaw.ca>
To: <socialcredit@elistas.com>
Sent:
Thursday, December 29, 2005 9:35 AM
Subject: Re: [socialcredit] Putting it
all together
>I agree with a great deal of what Martin has
written identifying the
> problems, but I do not fully concur with some
of the solutions. This may
> well be due to a lack of knowledge on
my part, or that I'm reading into
> what
> Martin's proposing
something that isn't intended by him. But there are
>
some
> concerns I have with some of what's proposed nevertheless.
I'll come back
> to them later, but for the moment I'd like to comment
on just this.
>
> (Martin wrote:-) > 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.
>
> (Joe
replies:-) There is a quote in one of the early Douglas books
that
> remarks " ....just as the construction of a new railway
bridge raises the
> price of bacon in a village shop." While there
is no doubt that 'newly
> created bank credit' to finance new works
serves as you say, however it is
> also, I think, true what Douglas
says.
>
> He notes that the upper limit of price is governed
roughly by the
> 'quantity
> theory of money'. The lower by
financial 'cost'. If there's 'more money
> about' the merchant is
going to try and get 'more' of it. He has to, if
> he's to
stay in business. Simply because the fact there IS 'more money
>
about' has diluted the purchasing power of ALL money about.
>
> He
is selling in the hopes of making a profit. The same as a bank lends
at
> interest in hopes of the same. But money is variable in what
it will
> 'buy',
> and he has to continually replace and,
if selling more, increase, his
> stock
> in trade. (Just as
a bank has to increase its 'stock', its 'deposits' or
> whatever else
we've been foolish enough to allow it to use as its
> reserves,
>
if it wants to lend 'more'. There is a 'cost' to doing this ~ banks
'pay'
> interest as well as receive it. And 'more' interest when they
want more
> deposits.)
>
> If the stock the merchant buys
has risen in price, what he might have
> taken
> for himself in
profit is diminished. It goes back to fund the new stock,
>
or
> he has to take out a larger overdraft to do so. His sales may
be rising,
> and so in terms of dollars may be his profit. But the
RATE of profit in
> ratio to that increase in sales taken
over time is in continuing
> decline.
> 'Interest' and
'profit', considered in the business sense, are exactly the
>
same. One of the components of 'interest', as we've seen, is allowance
> for
> 'inflation'. One of the components of 'profit'
would likely then have to
> be
> the same. It is why I
believe Douglas noted that "large works on
> completion
> are
paid for by an expansion of credit." The words "on completion"
imply
> there must be a FURTHER expansion of credit beyond that which
took place
> to
> initiate the construction of those 'large
works'. The 'inflation' is
> continuous, and the community pays
for its progress twice. Unless there
> is
> an
implimentation of the SC prescription, whereupon we can finally begin
>
to
> enjoy as consumers the fruits of progress at the proper decline in
overall
> retail prices that capital appreciation should have
brought about.
>
>
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