| Subject: | Re: [socialcredit] Re: Replying to Radu | | Date: | Monday, February 7, 2005 06:54:32 (-0800) | | From: | Radu Seserman <radudelona @.....com>
|
William,
Thank you for your time, I just cannot agree with you.
If it is my lack of understanding that be it.
You are right, English is not my main language. I am
Romanian and I lived in Romania for 30 years before
moving to the US. Though I think I understand pretty
well the difference between transfer and offset.
The theorem A+B, as I understand it, states that
income from production (wages, dividends, profits)
cannot purchase/offset the results of production
(goods, services). This is because o portion of retail
price includes capital costs (as tools for
production).
Is is right or wrong?
If A+B is true, how would you calculate the imbalance?
--- william_b_ryan@yahoo.com wrote:
> "You insist on separating retail purchases from
> business purchases, that is completely wrong to me."
> ---------------------
> --------------------
> [REPLY] Radu, if you want to criticize the theorem,
>
> you assume an obligation--that I shall impose as
> list
> moderator--to make some effort to understand what
> the
> theorem is trying to say. I will do my best to
> assist you in that regard.
> The theorem relates the costs of production being
> impressed to the point of retail to the purchasing
> power concurrently being placed into the hands of
> final consumers.
> When a firm purchases something from another firm to
>
> use operationally in the production of goods and
> services, a cost is heading toward the point of
> retail to be charged against retail sales. It is a
> matter of accounting. On the other hand, when a
> final consumer purchases from a firm, a cost heading
>
> toward the point of retail is offset by a retail
> sale. We are looking at the firms sector in its
> relationship to final consumers from the premise
> that
> the purpose of production is consumption.
> Do you understand the difference in meaning between
> "transfer" and "offset"? I ask this because English
>
> does not seem to be your first language. We want to
>
> be clear on our definitions.
> From the perspective of the theorem, retail
> purchases
> and business purchases are totally different things
> though the term "sale" applies to both. It is
> confusion that arises from imprecise language.
> (Incidentally, J. M. Keynes also conflated the
> concepts, as you do, in his theory of "aggregate
> demand." He said that what counts is "aggregate
> demand" or sales in general and not specifically the
>
> level of retail sales.) Keynes thereby displayed a
> profound ignorance of the basic concepts of cost
> accounting.
> Even if you do not agree with the labor displacement
>
> premise to the theorem, you will have to admit that,
>
> for the sake of argument, IF consumer income is
> falling tendentially--for whatever reason--in
> respect
> to the costs of production being impressed to the
> point of retail, the costs of production will never
> fully cancel or "amortize" in reflux to that income.
>
> You will have to admit that as a matter of pure
> logic. Another way to look at costs that will never
>
> fully cancel or amortize in reflux from tendentially
>
> falling consumer income is debt that is increasing
> "exponentially" in respect to real production and
> consumption. The theorem gives an analytical
> explanation to what appears to be indeed the case
> empirically.
> -
> "You reject the process of saving/accumulation as a
> cause to the imbalance between purchasing power and
> goods available."
> ---------------------
> --------------------
> [REPLY] I think you said it was the "cause" of the
> "problem." You have what I should call the "naive"
> or "crude" underconsumption theory, that consumers
> tend to not spend all of their income, but tend to
> "hoard" it. From this it appear the "solution" is
> to
> take steps to encourage "spending." Silvio Gesell
> would do that through a "tax" on money, inducing
> people to spend it faster to avoid the "tax."
> Notice that this theory has the effect of diverting
> attention from imperfections in the banking system
> itself, or the incompetence or malfeasance of its
> administrators. It shifts the blame to the
> psychology of final consumers.
> That same J. M. Keynes, whose theory you emulate,
> whether you realize it or not, said this in 1930 in
> a
> radio address to the people of Britain:
> "Therefore, O patriotic housewives, sally out
> tomorrow early into the streets and go to the
> wonderful sales which are everywhere advertised. You
>
> will do yourselves good - for never were things so
> cheap, cheap beyond your dreams. Lay in a stock of
> household linen, of sheets and blankets to satisfy
> all your needs. And have the added joy that you are
> increasing employment, adding to the wealth of the
> country because you are setting on foot useful
> activities, bringing a chance and a hope to
> Lancashire, Yorkshire, and Belfast."
> http://www.geocities.com/socredus/keynes_saving.txt
> This advice might well have gotten the world out of
> the Great Depression if saving by housewives was
> what
> got the world into the Depression.
> -
> "...prove without any doubt that Douglas considered
> savings a problem for the economic cycle."
> ---------------------
> --------------------
> [REPLY] You completely miss the point that Douglas
> was making. Saving is not a "problem" but
> reasonable
> behavior a rational financial system should
> accommodate. In a sane world it is not the "cause"
> but the "effect" of increasing prosperity.
> -
> "In recent post you expressed A+B theorem in
> mathematical form..."
> ---------------------
> --------------------
> [REPLY] You're quoting Tim Carpenter, I believe,
> not
> me. The algebraic manipulation is his, not mine.
> -
> "Also 'today earnings in the market' are for most of
>
> the time (excluding deflationary periods) HIGHER
> than
> the total price of goods available today."
> ---------------------
> --------------------
> [REPLY] Then how do you explain exponentially
> increasing debt? That question was Douglas's
> "inductive" as opposed to "analytical" argument for
> A+B. It is in his address to the King of Norway of
> 1935. Please read it. That address is a very good
> introduction to the subject of Social Credit.
> "It is not too much to say that the whole economic
> and financial system in its present form stands or
> falls by the contention that the present price
> system
> is self-liquidating, that is to say, that no matter
> what price is charged for an article, there is
> always
> sufficient money distributed through the production
> of that or other articles to buy the article and
> therefore there is nothing inherent in the system,
> so
> far as the price system is concerned, to prevent the
>
> process going on indefinitely.
> "Now I am not going into the analytical proofs of
> the
> fact that this belief is not true, although rigid
> proofs to this effect exist, but I will ask you to
> consider the quite indisputable inductive proofs. I
> will ask you to consider what you see in the world,
> which leads you to assume that the price system is
> not self-liquidating..."
>
http://www.geocities.com/socredus/compendium/money_and_the_price_system.txt
> -
>
=====
Sincerely yours,
Radu Seserman
"You must be the change you wish to see in the world." Gandhi
"Life is meant to be fun!"
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