| Subject: | Re: [socialcredit] EoK_ to Joe re monoply and growth | | Date: | Saturday, July 1, 2006 12:37:35 (-0600) | | From: | Martin Hattersley <hattersleyjm @.........com>
|
| In reply to: | Message 4215 (written by Keith Wilde) |
Keith -
The problem that Social Credit endeavours to tackle is that one identified
by Douglas in the first place - that in a society that progressively uses
more and more capital in its productive system, the time is progressively
lengthened between when effort is put in (to create the capital and
infrastructure) and when the product is made available and sold on the
market.
Recently, for instance, I read a news story of an Oilsands development in
Northern Alberta, that would employ around 500 workers for about 5 years to
set up a plant, which thereafter would produce oil for at least ten years
with a staff of only 22 persons.
If this capital investment were financed by shareholder savings, then
shareholders would temporarily abstain from consumption, for the sake of big
returns on capital when the plant goes into production. However, today's big
developments are financed by bank lending. This means an enormous inflation
of spending power (and therefore price inflation) when new bank credit is
used to pay the salaries of workers on capital projects, and an enormous
deficiency of purchasing power when construction workers have been laid off,
and the cost of the capital plant has to be repaid to the bank through
depreciation.
In Alberta today, the situation has become almost unreal, with over full
employment, rapidly rising prices, and frantic economic activity, financed
by borrowing and debt (including consumer debt).
Today's economic orthodoxy, as it seems to me, is to do a kind of tightrope
act:
1. We rely on "full employment" to distribute incomes.
2. Therefore, we need a sufficient amount of capital development that
does not place goods immediately on the market to keep everyone working and
therefore provided with an income. (Armaments and wars will do, financed by
National Debt, for want of alternatives).
3. We regulate the amount of such development by controlling the rate of
interest. A higher rate will choke off the amount of capital formation; a
lower one will encourage it - particularly the bank mortgage financed
housing industry.
4. The result is a desperate economic need for ever increasing expansion,
currently running slap bang into the limitaions of a finite terrestrial
ecology.
5. It also results to a "weakest to the wall" economy, where so much
employment is expended on production that does not immediately provide
wealth, that the rich keep getting richer, and the poor continue as poor as
ever.
6. Finally, this system can only survive by continual inflation and loss
in the value of the monetary unit.
Douglas's proposal (which I believe did not particularly propose
modification of the existing banking system), was
1. To provide incomes to all, without the necessity of employment,
through a supplementary income from a National Dividend.
2. To balance the imbalance between effort put in (and wages distributed)
and prices of goods and services reaching the market for sale, through a
Just Price system (visualized as a kind of sales Tax in reverse)
3. To put the process of creation of credit, and so the balance between
production cost and consumer ability to buy, on a scientific and statistical
basis, through a National Credit Office.
It's not rocket science, just common sense!
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: "Keith Wilde" <keithwilde@sympatico.ca>
To: <socialcredit@elistas.com>
Cc: "Michael Caley" <shanshui@shaw.ca>
Sent: Saturday, July 01, 2006 4:34 AM
Subject: Re: [socialcredit] EoK_ to Joe re monoply and growth
Bill, this reaction leaves me more puzzled than ever. (And the point at
issue does not depend on familiarity with the Wojciechowski discussion.) I
hope you (and others) will expand on a couple of your statements below:
That "the era of deregulation has dismantled most of the reforms instituted
by the Populists and Progressives" is undeniable. Among the reactions to
that dismantling are the recent book and movie by law professor Joel Bakan
(The Corporation) and "The Anti-Trust Case Against Wal-Mart" in the current
(July) issue of Harper's Magazine. (If you haven't read the Bakan book, I
have published a review of it which could be posted here.)
The question I have concerns the position of economics rationale on the
issue. I am postulating that there is a "standard economics" view and am
asking whether a Social Credit view differs substantially. If I interpret
correctly, you have said that the question is irrelevant given the political
reality of deregulation. An implicit sub-question is therefore whether the
opinion of "standard economists" has changed or whether the opinion of
economists doesn't really count for much in the prevailing political
climate. My collection of "standard" economics textbooks subject ends in the
early seventies when I left teaching and took a job in government.
Nevertheless, I got my hands on a currently popular university text, that by
Gregory Mankiw, and find that it still incorporates the chapters on
monopoly, oligopoly and other departures from perfect competition that imply
a role for government. The extent and nature of that role is subject for
(endless) political debate, but the underlying rationale about market
competition and its limitations is still there.
To re-phrase my question, therefore, does the "standard" analysis of
limitations to market competition (involving both the "natural" or
technological aspect of some activities and the evolutionary path of firms
and their internal "instinct" toward growth and dominance even if they are
not natural monopolies) have a place in Social Credit analysis?
When you say that "the 'solution' is not checks and balances, with
government as an essential tool in the process, being itself a natural
monopoly, but the elimination of 'government', whose 'intervention' in the
'market' is the sole and single cause of monopoly, without which they could
never form," are you describing a Social Credit perspective or a "revised
standard" version of economics circa the nineteen seventies and beyond?
Your reference to "they" in the final paragraph is unclear. Who is it that
has no theory of natural monopoly except to say that it is a figment of our
imagination? My question involves an aspect of Social Credit rationale that
remains enigmatic to me.
----- Original Message -----
From: "William B. Ryan" <w_b_ryan@yahoo.com>
To: <socialcredit@elistas.com>
Cc: "Michael Caley" <shanshui@shaw.ca>
Sent: Thursday, June 29, 2006 12:07 PM
Subject: Re: [socialcredit] EoK_ to Joe re monoply and growth
> I'm sorry, Keith, but I've skipped the entire
> Wojciechowski discussion, didn't read it. I don't
> know who he is and have not researched the matter. My
> apology. I am reserving it for a future
> project--perhaps a self-imposed homework assignment.
> But this from your recent posting did catch my
> attention:
>
> "Is it correct to generalize that Social Credit shares
> the attitude toward 'natural monopolies' that is (or
> was) found in standard economics texts? That is, that
> from a physical, engineering perspective, efficiency
> is served by having one power line, one water main,
> one sewer system, for examples, instead of several
> competitors for each? If that is the case, then does
> the Social Credit perspective on regulation of those
> natural monopolies (involving governance and
> government employees) differ in any fundamental
> respects from a "standard" view?"
> ------------------------------------------------
>
> Regardless, it is not now the "standard" view or
> consensus. It perhaps was during the
> Populist/Progressive era, more than a century ago.
> The era of "deregulation" in which we live has
> dismantled most of the reforms instituted by the
> Populists and Progressives, and has done so before our
> very eyes.
>
> The prevailing ideology, beginning with the Carter
> administration and expanded particularly with Reagan
> and Thatcher, is that "government" is the enemy ipso
> facto, rather than centers of concentrated power,
> wherever found.
>
> So, the "solution" is not checks and balances, with
> government as an essential tool in the process, being
> itself a natural monopoly, but the elimination of
> "government," whose "intervention" in the "market" is
> the sole and single cause of monopoly, without which
> they could never form.
>
> They have no theory of "natural monopoly" whatsoever,
> except that they are figments of our imagination.
>
>
>
> --- Keith Wilde <nschwartz@cogeco.ca> wrote:
>
> Reflecting on Joe's comments about consumer power
> (reproduced in full below) prompts two more questions:
>
>
> 1. Is it correct to generalize that Social Credit
> shares the attitude toward 'natural monopolies' that
> is (or was) found in standard economics texts? That
> is, that from a physical, engineering perspective,
> efficiency is served by having one power line, one
> water main, one sewer system, for examples, instead of
> several competitors for each? If that is the case,
> then does the Social Credit perspective on regulation
> of those natural monopolies (involving governance and
> government employees) differ in any fundamental
> respects from a "standard" view?
>
> 2) In respect of this excerpt from Joe's comments,
>
> "There is, however, very much of an 'indirect' bearing
> on the issue. For in receiving the SC 'dividend',
> which allows the financial cost-accountancy cycle to
> come far closer to being completely 'self-liquidating'
> without further 'capital' spending, (or a raft of new
> 'home mortgages' for more new 'developments' of the
> "build it, and they will come" variety), we have taken
> some of the ongoing pressure off the currently viewed
> 'necessity' of never ending 'growth'., ."
>
> I (Keith) wonder if the view of capital spending to
> promote employment via growth has become somewhat
> anachronistic-at least insofar as it is a conscious or
> deliberate outcome of government policy. A principal
> "industry" these days seems to be the shuffling or
> manipulation of papers and figures in the domain of
> financial transactions, plus other activities that are
> straightforward fraud and scams such as theft of
> public resources to 'rebuild Iraq or New Orleans' at
> exorbitant prices compared to what is actually
> delivered.
>
> This observation implicates a question about the
> sources or impetus to growth. Are we not in a
> situation these days where we are stumbling over
> ourselves to cope with the consequences of past
> "growth"? It is true that governments and politicians
> of all stripes pay lip service to economic growth as
> the essential guarantor of comfortable incomes for
> all, but I wonder if that is not an obsolete leftover
> from Depression-Era thinking-one that is shared with
> special emphasis or urgency by admirers of Major
> Douglas?
>
> The alternative view suggested by the Wojciechowski
> concept is that knowledge in its ecological
> integration with human impulses has become the driver
> of growth. To use an old bit of inflation analysis as
> metaphor, growth has become "demand-pull" rather than
> "cost-push". This is a clear contrast with the view of
> capital spending as deliberate effort to keep
> activities moving. Does a change of perspective on the
> impetus to growth have implications for the
> effectiveness of the Social Credit prescriptions?
>
> Keith
>
> ----- Original Message -----
> From: thomsonhiyu
> Sent: Thursday, June 22, 2006 11:40 AM
> Subject: RE: EoK_back to Joe
>
> (Keith wrote:- ) "Joe's response (below) to my
> question about how the citizen/consumer would cope
> with certain kinds of public spending decisions under
> a social credit system is that it would be much the
> same as now. It's a highly plausible answer. Had I
> thought the answer to be so obvious I would not have
> asked the question-which suggests that I have had a
> faulty impression of social credit attitudes to
> governance and the appropriate functions of government
> agencies and natural monopolies.
>
> "I had formed the notion from exchanges on this list
> and a modest amount of reading in social credit
> literature that the ideal is to minimize the scope and
> size of government and of bureaucratic agencies.
> Institutions would be altered in ways that made
> democracy much more direct than it is now. Not only by
> assuring a more representative _expression of consumer
> interest via distribution of spending power but also
> through an emphasis on non-monetary means such as
> initiative and referendum."
>
> (Joe replies:- ) I believe the 'notion' you say you
> have formed above is largely correct, Keith. But the
> "non-monetary means such as initiative and referendum"
> are simply two of many methods by which citizens might
> make their wishes known to 'government', (or
> 'industry') as regards to what they want. Or even
> more likely now, do NOT want.
>
> There are other 'methods' already in existence now
> that are equally effective, if and when people
> concerned about some particular issue wish to use
> them. Governments still do 'yield to pressure', if
> that 'pressure' is actually applied. I personally
> don't really see 'formalizing' the initiative and
> referendum process as being the great panacea it's
> often made out to be by many Socreds. As being
> something that's vitally necessary to impress our
> 'will' upon 'government'. It still comes down to
> whether or not there IS a 'common will' to be
> impressed on some issue. And if there is, and it's
> strong enough, it's my own opinion it will be
> impressed anyways.
>
> If we go back to the "consumer and her dividend" it is
> unlikely that any 'consumer', whether they receive
> their income from a 'dividend' or any other source,
> could individually determine whether future electric
> power generation will come from nuclear, hydro, wind,
> thermal, geo-thermal, tidal, or any other means.
> What's she going to do? Refuse to pay her power bill
> because, say, the new nuclear plant's power is
> 'tainted', in her opinion?
>
> While it's certainly a possibility that consumers
> opposed to some new choice of generation might
> organize and all refuse to pay their power bills, or
> even threaten to disconnect en masse from the
> transmission system (just as they might do if those
> bills continue to keep rising ! ), one individual
> 'consumer and her dividend' protesting in this manner
> would simply find she was without electric power. So
> I don't really see how receiving part, or even all, of
> one's income via the 'dividend' really has much of a
> direct bearing in instances like this.
>
> There is, however, very much of an 'indirect' bearing
> on the issue. For in receiving the SC 'dividend',
> which allows the financial cost-accountancy cycle to
> come far closer to being completely 'self-liquidating'
> without further 'capital' spending, (or a raft of new
> 'home mortgages' for more new 'developments' of the
> "build it, and they will come" variety), we have
> taken some of the ongoing pressure off the currently
> viewed 'necessity' of never ending 'growth'.
>
>
>
>
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