(John Rawson wrote:- In terms of "what Bill has now written", I'm still
waiting with bated breath to get the difference between "New production should
be financed, not by savings ..." and "New production should not be financed by
savings .."
Hi
John,
I think Bill has already
explained what you're waiting for. Lets go back and look at what he wrote,
and I'll try to clarify the first part of it, as I understand it anyways,
and, hopefully, do so correctly. If I misinterpret what he means, he
can set us both straight. Or write us both off as hopeless ! The
latter part, I'm just going to ask him a few questions on, since it's not that
easy to grasp.
Bill wrote:- "This is what Douglas said at
Swanwick:
"The credits required to finance production shall
be supplied not from savings, but be new credits relating to new
production."
>
Firstly, I don't see anything here about the
"banning" of the use of savings for investment.
(Joe replies:-) I believe we have the same problem here
we have with correctly understanding the 'Just Price' as Tudor Jones described
it, and the way you still seem to think it is. It is the difference
between what is 'macro-economic', what takes place in the economy
as a whole, and what is 'micro-economic', what takes place
amongst the individual participants in it.
In any rational financial system, and Social Credit is certainly
quite 'rational', in my opinion, it would be as ridiculous to
''ban'' savings from financing 'production' as it would be to "ban" savings
entirely.
Your 'savings' are yours, and what you do with them is your
business. And if you want to 'finance production' with them, that's
exactly what you do. In whatever way you want to do that.
But on a 'macro-economic' basis, which is what
I think Douglas is discussing here, (and Bill, too), "savings" have
to be accomodated in any reform of the financial system, (as do their
homologues, 'profit' and 'interest'), because 'savings', as either complete
'abstention from spending', or as to their 're-investment', are listed
as two of the five main causes of a shortage of purchasing power. And
we want to 'rationally', in the economy as a whole, and thus through
that to the individual participants in it, correct that 'shortage', (by means
other than the perverted ones presently employed.)
(Bill
continues:-) An increase in the rate of saving for the economy as
a whole would have a depressing effect on production
inasmuch as
it would reduce sales over the retail
counter in respect to the costs
of production being impressed to the point of retail by the conventions
of double entry accounting, thereby reducing the rate of
profit
and the incentive to produce--if that were all there was to
it.
(Joe:-) Here I believe he's simply telling us if you're
'saving' your money, you aren't 'spending' it on personal 'consumption'.
Japan once, (maybe still), had a very high 'savings' rate, and it seems their
domestic economy suffered because of it. So I've read, anyways, though
like many things there may be quite a bit more to it than
that.
Your dollar can't be in two places at once. The 'savings'
you've put away in a jar or deposited in your bank, or bought some Company's
shares with, etc., have already appeared in the 'cost', and thus
the price, of some good or service somewhere.
But because you, and a whole lot of other people whose 'savings'
have also already appeared in product prices, have 'saved' instead of
'spent', there is another cause of the 'gap' between
overall 'costs' coming forward into prices at the point of retail,
and overall 'money' that's going to be available (without anyone
incurring any further debt), and spent to liquidate them.
Accordingly, Sales of goods and services are reduced, and the
'profit' that would've come form those Sales, from which Firms would repay their
Bank loans, just doesn't materialize to the degree necessary. When the
Firms see they aren't getting anything out of what they've been
doing, they either don't do it, or their banker cuts them off. We enter
'hard times'.
(Bill continues:-) But it isn't all there is to
it.
The credits required to finance production are not
now supplied from savings, if by finance production we mean the
financial facilitation in the increase to the rate of production.
(Joe:-) I believe he's talking
'macro-economically', about the economy as a whole here
now.
Read the following very carefully. This
is not easy to grasp.
(Bill continues:-)
Our theorem is that loans create deposits, which applies to the financial system
as it now exists, and will continue to exist under social
credit.
(Joe, to Bill:-) There seems to be some
disagreement from some quarters with what "... will continue to exist under
social credit." But I, at the moment, believe you're
correct.
If the rate in the flow of loans is increasing in respect to
their reflux, it cannot mathematically be the case that that the flow
is being funded by an equal and contemporaneous abstention in spending by
the recipients of that flow. New credit is being created through
the assistance of the financial system.
(Joe:-) So if there were 'new
production' being added and financed from 'savings' then the ongoing 'reflux'
from existing loans must be declining relative to the ongoing 'flux'?
Since what is being invested in the 'new production' is obviously not
being spent on Sales of existing 'consumer' goods coming forward to the point of
retail?
And if ongoing overall Sales are falling, then
the ongoing rate of profit from which that 'reflux' will come must be falling
too?
But if this is the case, (and I'm not
sure now that it is ~ maybe I'm off the track completely in all of this
here), it really doesn't seem very logical to 'invest' savings in 'new
production' ~ how is it ever going to 'pay'? Unless there is 'new credit'
coming in it wouldn't ever pay. Is this the 'new credit' that comes in now
as a result of the Fed's and Bank of Canada's 'open market'
repos?
What "saving" really means in the modern creditary economy is
that the recipients of income, with increasing wealth, are increasingly
purchasing securities of one form or another, or holding on to the
dollars they are receiving, which are already securities, rather than
purchasing consumer goods and services with those dollars.
>
>
Social Credit would simply rationalize that natural
> process through
accounting adjustment.
> -------------------------------
>
>
1. 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.
>
> 2. The
credits required to finance production shall be
> supplied not from
savings, but be new credits relating
> to new production, and shall be
recalled only in ratio
> of general depreciation to general
appreciation.
>
> 3. The distribution of cash to individuals shall
be
> progressively less dependent upon employment. That is
> to say
that the dividend shall progressively displace
> the wage and
salary.
>
----- Original Message -----
Sent: Tuesday, May 29, 2007 5:08 PM
Subject: Re: [socialcredit] in point of
clarification
Thanks, Joe.
In terms of "what Bill has now written", I'm still waiting with bated
breath to get the difference between "New production should be financed, not
by savings ..." and "New production should not be financed by savings .."
Regards. John
R.
From: Joe Thomson <thomsonhiyu@shaw.ca>
Reply-To:
socialcredit@elistas.com
To:
socialcredit@elistas.com
Subject:
Re: [socialcredit] in point of clarification
Date: Mon, 28 May
2007 22:04:00 -0400
Hi
John,
(You wrote:-) I think what you
are referring to is the socialist concept of a Universal basic income,
committed at a fixed rate, and paid out of taxation if necessary on the
assumption that the "big bad business exploiters" could carry the
cost. These people seem blissfully unaware that costs like this get
passed on to the mug consumer like you and me. And them. And
while I would normally hesitate to speak for Don, who may well read this,
I can assure you he doesn't agree with this idea! A national
dividend would depend on the state of the economy, as determined by a
national credit authority.
I wouldn't want
to infer that Don does agree with that idea, John. I've never seen
anything he, himself, has written that advocates
that. Even though the booklet itself was part of a package of
supposedly 'Social Credit' literature distributed by
him.
I would
think it would be simply to increase awareness of the need for some
changes. While that is always laudable, it is unfortunate, but
probably unavoidable, that some people's ideas that have certain
similarities to Social Credit are likely to be picked up and labelled as
'genuine' Social Credit by many people introduced to the subject this
way.
Sometimes it's
pretty hard to shake some of those erroneous ideas loose, once they've
been implanted in someone's mind. (That's the "Voice of Experience"
(of an admitted holder of sometimes 'erroneous ideas' myself), speaking
here! Best to try to keep an 'open mind' until we are certain how
all the pieces of the puzzle fit together. Lots of 're-thinking'
necessary, but that's what we were given brains
for.)
On the other hand, you
still have missed my point. The public would have the means to buy
all the Fords and all the Toyotas. Many, many less twenty or
thirty year old cars on Kiwi roads!
Well, I think
we're both missing each other's point. And maybe the 'real' point,
too, when I read what Bill has now written. So far as I'm
aware, the CPD would apply to all goods for retail sale,
your own production and also imports.
Regards,
Joe
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