| Subject: | [socialcredit] Re: underconsumption fallacy | | Date: | Friday, August 31, 2007 07:17:06 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
|
Thanks for the reply. I have inserted some comments
[COMMENT].
Bill
-
Bill,
You get the wrong end of the stick in several areas:
1) bank are not just like other firms; they are the
only ones who can create credit. This is why banks are
special. All other firms (financial and nonfincial)
use existing liquidity, and do not create new money
(money is one form of credit).
-------------------------------------------------
--------------------------------------------------
[COMMENT] It is not true that banks are the only firms
which create credit. As a statistical matter all
firms create credit together with their customers and
suppliers, in a great number of varieties. Banks are
very important specialists in the firms sector, who
exchange their fungible credit instruments in the form
of deposits and notes for the individualized credit
instruments of their customers, which have been
submitted to them, making the competitive market
possible. That is to say, members of the general
public are not required to shop in their particular
employer's company store.
-
2) spending in advance of income, i.e. providing
(trade and other) credit, occurred already in
Mesopotamia, historians tell us. It was credit that
then evolved into money. It was not invented 800 years
ago.
-------------------------------------------------
--------------------------------------------------
[COMMENT] Which is not the assertion. Double entry
accounting was not invented until about eight hundred
years ago, before the invention of which the modern
industrialized economy in mass production was
impossible.
-
3) profit of banks does not come out of double
bookkeeping conventions - it is the sum of their
interest margins, money manging fees net of costs, etc
-
-------------------------------------------------
--------------------------------------------------
[COMMENT] You are of course listing double entry
bookkeeping conventions.
-
...and their outlays are not necessarily bigger than
their revenues. There is no reason why.
-------------------------------------------------
--------------------------------------------------
[COMMENT] In the hypothetical condition of a normally
expanding economy, all firms as a statistical matter
are disbursing more than their receipts yet are
booking a profit. The behavior and experience of
individual firms may vary. I am looking at the matter
from a macroeconomic perspective.
-
best,
Dirk Bezemer
--- Dirk Bezemer <d.j.bezemer@rug.nl> wrote:
Bill,
You get the wrong end of the stick in several areas:
1) bank are not just like other firms; they are the
only ones who can create credit. This is why banks are
special. All other firms (financial and nonfincial)
use existing liquidity, and do not create new money
(money is one form of credit).
2) spending in advance of income, i.e. providing
(trade and other) credit, occurred already in
Mesopotamia, historians tell us. It was credit that
then evolved into money. It was not invented 800
years ago.
3) profit of banks does not come out of double
bookkeeping conventions - it is the sum of their
interest margins, money manging fees net of costs, etc
- , and their outlays are not necessarily bigger than
their revenues. There is no reason why.
best,
Dirk Bezemer
Dirk J Bezemer, Ph.D.
Assistant Professor
Faculty of Economics University of Groningen Landleven
5, 9747 AD Groningen, The Netherlands
phone/fax +31 (0)50 3633799 / 7337 e-mail
d.j.bezemer@rug.nl web site
www.rug.nl/economics/faculty/medewerkers/bezemerdj/index
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Re: underconsumpti
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