(John Rawson wrote:-) Gotcha, my friend. You have added to
the confusion on this issue. Somewhere we read that the buyer will get a
discount back after the purchase. Here you say the retailer's prices will be
lower if he works the scheme because he gets the payment. (Which is obviously
the way to go if it is to be used.)
(Joe replies:-) These are
two possible separate 'mechanisms' of applying the CPD. Either one would
work, and there are some obvious advantages to both. The effect though
is the same, whichever method is chosen. The customer gets the goods at
a discount. The merchant gets his Sales revenue from two
sources instead of one.
The whole scheme had been clouded by mystic statements, with nobody
prepared to state plainly, step by step, how it would work.
However, I
take it we have established firmly that it will not be a "just price" scheme,
contingent on prices not rising.
(Joe replies:-) Well, I
think it is a 'just price' scheme. Only you have to look at it
'macro-economically', as it applies to the whole economy over
whatever time period is chosen.
That concept has been around as long as I can remember, and I wonder
where this traditional SC term comes in if not here.
(Joe replies:-) It comes in from a
passage in ''Economic Democracy'' where Douglas is describing the relative
merits of "Medievalism" to a modern Industrialised economy. In
pre-Industrial Revolution times a far greater percentage of the cost of any
article was current labor cost. And more fully available
to the craftsman at the end of the process when his product sold to
"..buy more raw material and the product of other men's
labour."
There was not the 'lengthening and
broadening' of the structure of production, labor displacement, allocation of
costs into price, etc.. Which came with Industrialism, and an
economy powered by energy sources other than human muscle. The 'just
price', in Medieval times, was the price that articles could
sell for, and what they could sell for was the 'just price'. That is the
advantage we lost 'financially' with modernization, and what the CPD would
help restore.
But you have not countered my assertion of the danger of price rises
in an economy where all goods etc. can be sold, as opposed to the present one
that forces srtong competition.
All you have done is give an opinion to the contrary without
underlying reasons.
(Joe replies:-) I don't really see
what you're getting at. You'd have more problems that way if your
government 'spent money into circulation' for infrastructure, I
think.
There is still going to be
competition for sales, and price will play a large role, as it does now, in
determining who'll get the business. The price is not 'controlled'
rigidly. The merchant sets it, each one independently using whatever
criteria he takes into account, just as now. The discount does not apply
unless the price is lowered. And it will be
lowered.
One thing we would not want
though, I think, anyways, would be to have large merchants who already
do a high volume of business at a very low profit margin, try to use
the CPD to help 'predatory price' their smaller competitors out of
business. But there are certainly safeguards available that could be
used to prevent that from happening.
Our present experience in this country shows that demand inflation is
possible in one sector even now, in our case housing. While concurrently we
have an increasing number of hungry people. Yes, here.
(Joe replies:-) We've had a
tremendous run up in housing prices here, too. And an increasing number
of hungry people, even amongst many who are working. But simply cannot
meet the cost of living for adequate necessities, no matter how hard they try
to 'economise'. All the more reason for a CPD, I
think.
And all the best for the festive season to ye!
Same to you,
John!
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