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Hi John,
Well, I don't really see how there couldn't be
competition, the same as there is now. Because the discount
doesn't increase anyone's purchasing power until AFTER the sale has
been made. No one gets any money from it unless something sells
first. And that would be true in the application of either of
the two mechanisms cited.
Now if you contrast that with having your Government, or
its Reserve Bank, ''spend money into circulation for infrastructure" to
try to bridge the 'gap', you don't get an increase in the purchasing power of
each dollar that way, you simply get access to more dollars. It's
not in any way tied to a reduction in consumer goods prices. And that
increase in the number of dollars will most likely raise prices of
consumables.
Under the CPD the merchant does still have to compete for
sales, same as now. He has fixed costs which go on month by month whether
he sells anything or not. And his only source of revenue to meet these
expenses is from sales. He competes, or he loses out.
Regards,
Joe
Sent: Saturday, December 22, 2007 4:51
PM
Subject: RE: [socialcredit] John Rawson's
Questions
Thanks, Joe. OK, we're down to the crunch point.
Competition, you say, will apply. I say it won't and never has in times
of sufficient purchasing power to buy all goods available. Next
question: how can we find out who's right?!!
Happh New Year too.
John R.
Date: Fri, 21 Dec 2007 19:59:07 -0500
From: thomsonhiyu@shaw.ca
To: socialcredit@elistas.com
Subject:
Re: [socialcredit] John Rawson's Questions
Hi John,
I'll add some comments below
yours below.
(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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