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|Subject:||Re: [socialcredit] Re: Warning Democracy|
|Date:||Wednesday, August 1, 2007 21:01:38 (+1200)|
|From:||Peter <cymric @.......nz>
I have to disagree with both you and Bill as to what is inferred - that
Douglas didnt prepare his speach. I find nothing in the text that suggests
this even though it certainly wasnt a workshop on financial technical tools
to solve all the main problems. I also find the inference somewhat a slight
on his professional approach to a serious subject which he always displays
in my view.
I have put together some key notes from the main part of this section
covering what he said, which was clearly in the afirmative, with no 'mights'
or 'just may' etc if he was feeling ( dithering) his way and discrediting
his stature infront of the audience.
He said "ultimately....the ONLY solution is ..."
1- ' a properly coordinated system of .. '
(a) 'credit issue'
(b) 'price regulation'.
2- 'One of the first requisits is ( not might be) to deal with the
immobilisation of bank credit in fixed assets'. ( I interpret that to refer
to the crux of the problem he is addressing- that immobilisation is the cost
of the real economy being cancelled through prices, ieg the land, building,
3- 'There are MANY WAYS of doing this. One is writing up the bank credit
of any limited company...' to take this cost out of prices.
4- The effect of this ( by what ever of the several ways chosen) is to -
(a) lower prices
(b) strengthen the hand of the maunfacturer regards the banks present
control over production and industrial policy making the manufacturer
exposed to the increasing power
of the consumer.
(c) This however still leaves the issues of forced exports (even imports
today) and labour displacement to be dealt to by other tools.
I conclude from these details he submitted to the audience that these are as
assertive, catigorical and premeditated as other works and speaches. The
last point (3) was to remind his audience that he has dealt with one issue
only and others were still to be addressed by other tools. This isnt
evidence he had been talking to himself and sorting out his thoughts as he
went along. Shall we dispense with the dividend simply because it isnt a
one stop shop either? That's the same 'logic'.
Credits to industry is obviously another of the several ways to take the
cost of the real economy out of prices and is an aspect of 1 (a) first and 1
(b) second. In the dispute over the discount or credits to industry, the
discount is limited to the (a) and (b) supporting the consumer alone. The
manufacturer remain subject to the banks control. The option of the the
credits to industry is the only one of the two which addresses the issue of
who control production, and it transfers through to the consumer the
benefits of the 'properly coordinated system of credit issue and price
regulation' the 'ultimate' development intended. Also it gets the
industrialist on our political side which is a very significant and powerful
ally. The discount doesnt. It is clearly defective and limited in
I believe you both missed the important point Douglas made in closing, which
reveals the significance he saw in unshackling industry from bank control,
which the discount cant address, and that was " and in so doing would
stimulate the initative of the class which appears to have the right type of
mind for the attainment of a more permanent solution."
This represents a very clear and prepared focus on the
'industrialist/manufacturer' related part of the problems and that they have
an important role to play which tends to be neglected. Even the fact he
said this was one of the first things that needed to be addressed shows he
was making it up as he went along.
Today the cheapness ( discounted) of Chinese made goods has enhanced the
'power' of the consumer theretically but the corporates decide what they
import and their bulk barns have the consumer stymied, like kids at a lollie
sale, forget having control of choice and policy. Credits to industry will
help bring back our economic base and profits that have gone off shore (
decentralise the banking systems global policy).
----- Original Message -----
From: "Wallace Klinck" <firstname.lastname@example.org>
Sent: Tuesday, July 31, 2007 6:35 PM
Subject: Re: [socialcredit] Re: Warning Democracy
>I certainly agree that Douglas was merely reflecting to himself regarding
>a theoretical possibility as regards a "solution" to the defect which he
>uncovered in conventional or orthodox financial cost accountancy. As Bill
>has pointed out, Douglas continued his "discussion with himself" to
>conclude that this theoretical "solutuion" was actually quite inadequate
>from a practical standpoint as a means to fully resolve the full span of
>real economic and social problems which Social Credit policy seeks to
>correct. Social Credit policy is, of course, primarily to strengthen the
>hand of the individual consumer--not that of the producer, the banking
>institutions nor the state. Douglas was merely initiating in his own
>cognition an analysis before following it through to what he concluded was
>a proper solution--as, I think, a reading of the full text should clearly
>reveal. Logical thought is a process which has a beginning and proceeds
>toward a conclusion. For this reason making assumptions before a complete
>reading of Douglas (or any other author) is a hazardous practice which
>can, and often does, lead to misapprehension and confusion.
> On 30-Jul-07, at 11:44 AM, email@example.com wrote:
>> Peter, this is an example of Douglas "thinking out
>> loud," and is not to be taken too seriously in
>> isolation. Douglas is suggesting that the bank
>> credits of the firms could be marked up to correspond
>> to their profit in fixed assets that are depreciated
>> into expense, apparently to negate their depreciation,
>> thereby lowering prices charged to the public.
>> Douglas himself qualifies this suggestion by stating:
>> "It [meaning this suggestion] would undoubtedly
>> strengthen the hand of the manufacturer, and in itself
>> would do little to meet the twin difficulties of
>> forced exports and decreased human labour per unit of
>> production, both of which are vital to a comprehensive
>> The comprehensive and quite practical solution that he
>> pushed throughout his thirty-year public career was
>> the dividend and retail discount.
>> Chapter XVI, The Starting-Point of Money
>> ...Supposing for the moment that this process goes on
>> uninterruptedly, a time must inevitably arrive in
>> which the concern in question, while its accounts show
>> a profit, yet has no money, i.e. liquid bank credit.
>> There are only two courses open to it; it can apply to
>> the public for more money, that is to say, it can
>> increase its capital, which of course is merely a
>> preliminary to the repetition of the process and
>> further depletes its available market, or it can go to
>> the bank and obtain a loan on the security of its
>> fixed capital.
>> The meaning of this requires the most careful
>> attention, because it is the core of the industrial
>> Money, using the word in its most comprehensive sense
>> to include amongst other things bank credit, is an
>> effective demand for goods and services. The
>> undertaking which we are considering borrows from the
>> bank bank-money in exchange for a lien on its own
>> At the cost of labouring the point, let it be repeated
>> that a lien on the fixed capital is given in return
>> for a loan of bank credit.
>> It is now well understood that in such a case the bank
>> is not lending money deposited by other people; it is
>> lending credit which it has created by a process of
>> book-keeping, and which costs it nothing. The thing
>> which is lent is in essence of the same nature as a
>> printed bank or Treasury note, the intrinsic cost of
>> which was that of the printing and paper. So that we
>> have the situation, that in return for something of
>> which the bank has the monopoly, but yet which cost it
>> nothing, the physical assets of the undertaking have
>> become mortgaged.
>> Further, and taking the industrial situation as a
>> whole, the mortgage can never be paid off, because the
>> mortgagee is in possession of the only medium, i.e.
>> bank credit, by means of which the mortgagor can
>> obtain release.
>> It will at once be seen that this situation is
>> intrinsically bound up with the fact that effective
>> demand starts from the banks and is regarded by them
>> as their property.
>> A little consideration further, however, will make it
>> clear that any possible justification for this
>> situation must rest on the assumption that the bank
>> system is a governing system possessed, either by
>> common consent or inherent virtue, of supreme economic
>> Now, as is fairly well known, this is not my view. But
>> it is not very much use holding such a view if the
>> situation is inescapable as, of course, it is not.
>> Ultimately, a properly co-ordinated system of credit
>> issue and price regulation, which will in effect place
>> the point of issue of purchasing power with the
>> consumer, from whom fundamentally it arises, and to
>> whom in essence it belongs, is the only solution of
>> the difficulty, but it is clear enough that we are
>> approaching, and that fairly closely, to a situation
>> threatening the productive system itself.
>> With a view to meeting this situation one of the first
>> requisites is to deal with the immobilisation of bank
>> credits in fixed assets.
>> There are many ways of doing this, and perhaps one of
>> the simplest would be the automatic writing up of the
>> bankcredits of any limited company to correspond with
>> the increase in its fixed assets, as certified by a
>> chartered accountant during a given accounting period.
>> The effect of this, so long as the result was not
>> defeated by rings of prices, would be to lower prices
>> by enabling competitive concerns to get a proportion
>> of their overhead charges out of prices charged for
>> their product.
>> It would undoubtedly strengthen the hand of the
>> manufacturer, and in itself would do little to meet
>> the twin difficulties of forced exports and decreased
>> human labour per unit of production, both of which are
>> vital to a comprehensive solution.
>> But it would at any rate deliver us from the
>> mismanagement of the financial hierarchy, and in so
>> doing would stimulate the initiative of the class
>> which appears to have the right type of mind for the
>> attainment of a more permanent solution.
>> ------------original message--------------------
>> The section in Warning Democracy, entitled "The
>> starting point of money", I have referred to
>> previously. This explains the issues behind the policy
>> of the 'just price mechanism' and brings out a the
>> obvious comparison between credits to industry and the
>> alternative many support and believe is the policy
>> Douglas puts along side the Dividend.
>> The option of credits to industry is that it breaks
>> the control of industrial policy which the banks
>> current hold where as the discount merely increases
>> the power of consumer demand. The pertinant part is
>> the 'writing up' of the fixed assets so they arent
>> included in the price of goods produced. Thus the
>> price goes down increasing the power of the consumer
>> and reducing the leverage of banks on industrial
>> Naturally the dependance of regular new debt into the
>> system via both consumers and industry reduces.
>> Just as an aside after the last subject of banks
>> creating new credit to pay overheads, I expect they
>> still passed these costs onto the consumer. Here we
>> have a Douglas scheme whereby new credit is awarded to
>> industry in order to eliminate costs in prices they
>> shouldnt be paying and increasing the liquidity of
>> industrial businesses.
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