(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!