| Subject: | Re: [socialcredit] in point of clarification | | Date: | Thursday, May 31, 2007 12:09:11 (-0600) | | From: | Martin Hattersley <hattersleyjm @.........com>
|
| In reply to: | Message 4823 (written by Joe Thomson) |
Joe -
Surely, anyone who is familiar with the history of King Midas would realize
that simply to sit on a pile of all the gold in the world is not going to
make a person rich - the only purpose in having money is to spend it on
things that will give us satisfaction in the present, or invest it in order
to gain even more satisfaction in the future.
That being the case, the gold is going to go back into circulation in
investments, in the purchase of real estate, expensive cars, high living,
etc. etc., - though if it goes out in the form of an investment, or a loan
at interest, the idea will certainly be that even more will return to the
owner in due course. If that's a mathematical impossibility, foiled by
bankruptcies etc., our investor will just have to take the loss.
Yes, we do stop this happening by the community going further and further
into debts that will never be repaid, but are made to look sound enough on
the Banker's balance sheet. I doubt if the Third World will ever repay its
indebtedness to the World Bank, but we have to keep the pretence up so that
the house of cards doesn't collapse. Inflation of prices is also a way, now
generally accepted, of reducing the burden of previously incurred debts.
Not really a very satisfactory way of doing business for anyone!
Martin Hattersley
5929 - 189 St.,
EDMONTON AB CANADA T6M 2J1
e-mail: jmartinh@shaw.ca
----- Original Message -----
From: "Joe Thomson" <thomsonhiyu@shaw.ca>
To: <socialcredit@elistas.com>
Sent: Thursday, May 31, 2007 6:37 AM
Subject: Re: [socialcredit] in point of clarification
Hi John,
I am interested in that point (Swanwick principle #2), too. And I think
Bill has answered it, though my attempt to explain that answer obviously
leaves lots to be desired. And may be way off base.
Since the waters are already muddied, I might as well muddy them some more.
If there's going to be confusion, nothing like total confusion!
When most people invest in 'production' I think their object is ususally to
make 'a profit'. A monetary profit. To get back more money than they've
invested.
Douglas, in one of his books, told us that it was impossible for a citizens
of a "closed community", (one that wasn't receiving 'export' credits as
'money' ), to continually do business with one another "at a profit" if
the amount of 'money' within that community wasn't continually increased.
That if we were using 'gold coins', say, as our only money within that
community, and people were transacting business with one another 'at a
profit' using them, eventually the possession of 'gold coins' would become
totally concentrated. (Unless, of course, there were MORE 'gold coins'
being continually introduced ~ something that seems to have bedevilled
'communities' how to do, all through the ages.)
In such a case, what would be the point of the ultimate possessor of 'gold
coins' investing his 'savings', (his accumulated 'profits' in 'gold coins'),
in any new production? He's already got all HE needs. Furthermore, HE can
already determine the 'price' of anything HE wants to 'buy', because HE has
a 'monopoly' of the only thing that functions as 'money', (in the 'minds of
the people', in that 'gold coin' oriented community), Gold coins.
One would think any such community would never put up with such a thing, but
it seems that variants of exactly that have survived quite well.
Now substitute 'new credits' for 'gold coins'. Only 'Credit' isn't limited
by the amount of 'gold' the community possesses that can be made into 'gold
coins'. But the community still desires to have it's citizens conduct
business with one another 'at a profit'. Is 'production' still financed by
'savings' ? (In the overall sense). Or by 'new credits'?
And right now, the bulk of 'new credits', (aside, I think, from the
'debt-free' profits of securities dealers trickling into the economy from
their buying and selling 'repos' to a central bank), are more bank loans.
Regards,
Joe
----- Original Message -----
From: John G Rawson
To: socialcredit@elistas.com
Sent: Wednesday, May 30, 2007 5:51 PM
Subject: Re: [socialcredit] in point of clarification
Joe, I'm interested in this one point, not all the other aspects of
Social Credit. I am well aware of the distinction betwen micro- and
microeconomics, having pointed out, for example, that the A / A+B "gap" is
demonstrable fact in relation to productive industries microeconomically,
but becomes a theory when applied macroeconomically where other factors come
in. Which I am using as an example, not another side-issue for someone to
grasp.
My quibble is simply this, how "That credits required to finance
production shall (I note the imperative, I mistakenly quoted 'should') be
supplied not from savings but ...." can be translated as "savings can be
used to finance some of production".
You have also answered one of Bill's comments to me, in pointing out that
savings reduce purchasing power. That was the basis of my comment that
Douglas, at the time, would have wanted to reduce one of the factors that he
had identified as causing a deficiency in purchasing power.
We are, of course, showing up completely different backgrounds in our
approach. Mine is to take from Douglas what we can apply to make life
better for fellow new Zealanders. For that reason, I tend not to fit in to
this group, whose stated aim is to study the writings of Douglas, presumably
as an academic exercise. The latter approach makes long wordy discussions
appropriate, even possibly desirable. Mine renders them infuriatingly
frustrating. On those grounds, I accept that you are right.
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: Tue, 29 May 2007 22:30:23 -0400
(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 -----
From: John G Rawson
To: socialcredit@elistas.com
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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