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Message 4827
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| Subject: | Re: [socialcredit] in point of clarification | | Date: | Thursday, May 31, 2007 20:44:59 (+0000) | | From: | John G Rawson <johngrawson @.......com>
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In NZ, the Party has taken a somewhat diferent stance, (and you will
disapprove). But I'll give the line of reasoning, all the same.
We would stop completely (eventually, it can't be done immediately) all
Government and Local Govt. borrowing from private sources. That would mean that
superannuation schemes etc. would have to invest elsewhere, and that elsewhere
would have to be industry. And here we agree with just about any political
faith; the wellbeing of the people depends on the real wealth produced for their
enjoyment and use. We are a Party that believes in private enterprise, and also
cooperative enterprise.
And we see nothing wrong whatever with people investing in order to get a
profit. The side we object to is the banks investing at little real cost to
themselves, and taking first priority in any returns. ("The volume of money is
increased ... when a bank purchases an asset ...") I.e. they create money to
invest.
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: Thu, 31 May 2007 08:37:57
-0400
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 -----
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 -----
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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