| Subject: | Re: [socialcredit] Re: Swanwick Principles: Wally comments | | Date: | Saturday, December 11, 2004 10:02:36 (+0000) | | From: | Timothy Carpenter <timbeau_hk @........uk>
|
| In reply to: | Message 343 (written by Wallace M. Klinck) |
Dear Wally,
As always you provide most interesting, lucid and enlightening information.
I would like to put forward some points:
1) A+B and giving social dividend to the poor are in my view separate
components, but so often seem to be wedded. A+B Theorm demands that
liquidity is injected. This is all fine in itself and a matter for economic
debate. What confuses the picture is when the need to inject HAS to be to
somehow give each person a fixed social dividend/universal payment as
suggested by Bill. Why not inject that liquidity in the pursuit of something
USEFUL like a hospital, a road, a water purification plant or even to allow
people those 150 days off a year? As I hinted at with Joe, how about
injecting it to provide sales tax relief to local companies - you improve
spending and give support to local production (for what is the POINT of
stimulating overseas production?!)
I will exhibit some of that cynicism again in that I do believe that many
people start with social dividend in mind and reach for A+B because it
allows it to happen and supports it. Indeed I began this way, fyi, as I was
looking at a simple way for taxation and to remove the indignity and
intermittent fraud of claiming social security. A flat income for all by
right which workers would use to offset their tax obligations. No shame. No
fraud. No queues. Alas, I do now see a problem with human nature if the
injection of liquidity is done this way.
I am rather concerned that the "slowing production vs consumption = lowering
dividend" will trigger recession as people react to higher prices by
consuming less, so producers do not want to overproduce. Maybe I
misunderstood you?
Regardless, I do not consider humans as essentially debased, but the road to
hell is paved with good intentions and I am concerned that humanity could
become debased by policies which render people, if not 'barnyard animals'
then 'lap dogs'. See how a good person can be wrecked by drugs - the drug of
a free ride, an idle slothful existence can destroy equally as well, as can
be seen in the upcoming generations in developed countries.
Tim
On 10/12/04 10:06 am, "Wallace M. Klinck" <wmklinck@shaw.ca> wrote:
> 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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