| Subject: | Re: [socialcredit] in point of clarification | | Date: | Thursday, May 31, 2007 23:39:08 (-0400) | | From: | Joe Thomson <thomsonhiyu @....ca>
|
| In reply to: | Message 4827 (written by John G Rawson) |
|
(John Rawson wrote:-) In NZ, the Party has taken a somewhat different
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.
(Joe replies:-)
Our first 'Social Credit' government here in BC tried to do that. So far
as the Province was concerned, they did stop borrowing 'directly'
very shortly after assuming office. We were supposed to be on a 'pay as
you go basis' from there on in. A lot of needed infrastructure was
financed by transferring 'ownership', to Crown corporations or various
Crown owned 'Authorities' ~ BC Ferry Authority, BC Hydro and Power Authority,
etc.
These 'Authorities'
were set up like a private business. They 'borrowed' the money needed to
build the infrastructure in THEIR name, and the loan was
'guaranteed' by the Province of BC. So seven years after taking office
Premier WAC Bennet could claim the Province was direct debt
free.
For what his various
Crown owned creations were borrowing was on the Province's books as
'contingent liabilities'. The Opposition continuously ridiculed this
idea, since the overall debt obligations of the Government of BC as a whole
continued to grow all through his tenure.
The idea was these
'Authorities, if managed properly, could liquidate their own borrowings from
the revenues they brought in. By and large they did. Some of them,
BC Ferries for instance, on some of its 'non-profitable' routes to various
islands, as well as on its two main 'profitable' routes to Vancouver Island,
received an annual 'grant' from the government equal to roughly what would've
been spent on the upkeep of roads or bridges, had they existed, over the same
distances. This allowed it to keep its fares to the travelling public
quite reasonable, and still make a small profit.
The key was that these
enterprises were quite well-managed in that era, (later on, after the
BCSCL government was voted out, and then still later as a 'Party', came back
in again, such was not the
case.)
It also helps when
you're government in an era when the world is beating a path to your doorstep
for your 'resources'. And you have, as we HAD then, lot of
undeveloped ones to draw on. Some of them, like our best timber and
various minerals then in demand, were very competitive with anything anyone
else had to offer at that time.
There were also a
number of 'artificial' advantages, like the USA's ''Jones Act", designed to
insure there would always be an American merchant marine, but which gave our
BC Coastal lumber producers a tremendous shipping cost advantage in
waterborne cargos over our Pacific Coast US competitors. We could
ship lumber to the US east coast from BC ports using 'flag of convenience'
foreign vessels crewed by 'dog-leg' labour, (Lascars, Phillipinos,
Goans, Greeks, etc.), and the US mills were stuck with using US
registered vessels, with 'unionized' American crews and progressively
disappearing subsidies from the US government.
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.
In regards to
pensions, or 'superannuation' as I guess you call them, I believe Douglas made
the suggestion once that the Bank of England be 'de-nationalised', and its
shares distributed to British citizens as "a basis for
pensions".
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.
But on who's behalf ?
And what happens to 'prices' when that volume of money is increased? You
say you're not going to have your government borrow any more money from
'private banks'. So then you really have only the choice of taxation or
borrowing from your Reserve Bank. Or a 'favourable' balance of
trade. But you've got to be pretty careful there, for your trading
partners will be on the lookout for anything that looks like a 'subsidy' to
producers. And I doubt you're in the same favourable position BC was
once in in regards to our supplying things other countries were lining up to
buy.
What do you have other than
'taxation' to keep this 'new credit' from your Reserve Bank, which you're
going to use to build 'infrastructure', from raising consumer prices? Or
are you thinking like the current crowd that governs BC seems to think, that a
rise in prices must mean 'prosperity'?
Regards,
Joe
.
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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