(John Rawson:-) Joe, if people can buy all goods available, how
does competition work? Or do we have to postulate a system where there in
NEARLY enough purchasing power, so that inferior goods remain unsold and
competition does occur?
(Joe replies:-) It works just the same as
now. You're confusing people 'collectively', with people
'individually', I think. It, (the CPD) is one embodiment of
a 'macro-economic' accounting correction.
It doesn't mean that you, or anyone else 'indvidually',
automatically always have in YOUR OWN hot little hands enough
money to buy everything your little heart desires anytime you want
to go shopping. As if you've just won the lottery, or
something.
You still have to save-up, or go into hock, for things
beyond your immediate means. You still shop for the best price, just as
you do now. And merchants still compete to get your business. The
decisision what to buy, whether to buy, and where to buy it is entirely
yours.
It simply means that in any given cycle of production
there will be enough money, or 'effective
demand', available to consumers in the economy AS A
WHOLE to more fully liquidate the costs of production AS A WHOLE coming
forward into prices at final retail. That you don't any longer have to
''make a machine gun, before you can sell a cabbage."
Aside from all that, just because people
'can' do something, doesn't mean they 'will' do something. If you won a
lot of money, several million dollars in a lottery perhaps, and finally had
enough to buy whatever you'd long said you wanted, does that
automatically mean that you would? It's like my old dad used to say, "If
good Scotch whiskey ran out of the kitchen tap instead of water, nobody would
want to drink it." His theory has never been tested, but there's
probably a fair bit of truth in it, I think.
(John:-) Frankly, I don't think all this has been fully thought
through, and that is why so many put forward the controlled "just price"
version.
(Joe:-) I think the ''controlled just price''
version is something that originated with Bill Aberhart's initial
mis-understanding of what Douglas was getting at. He certainly didn't
"fully think it through" before promoting his own idea of
it publicly in print and on the radio. There's no doubt his
imagined, but unworkable, version was an idea easier to put across
to the public than Douglas's was, since it attacked profit from price
spreads. And especially to a desperate,
Depression-weary public that didn't have any more conception
of what was really wrong than he did, except they suspected it
had something to do with 'money'.
(John:-) And would you like to get
into public debate on an idea like this that can only be defended by saying
"Yes, it will work" without explaining how? Not for me. I like to
attack the enemy, not defend.
(Joe:-) Well, isn't that just about the position
the Democrats for SC are in right now? With the 'costless'
infrastructure proposal financed by the 'magic money'? The big problem
with attacking the enemy is to identify the real enemy first. And right
now, some of the things proposed by many ''Socreds'', ones not by any
means exclusive to your country, indicate they may well be their own
worst enemies.
Date: Sat, 22 Dec 2007 22:59:19 -0500
From: thomsonhiyu@shaw.ca
To:
socialcredit@elistas.com
Subject: Re: [socialcredit] John Rawson's
Questions
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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