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Subject:Re: [socialcredit] Summarising
Date:Sunday, January 27, 2008  00:14:14 (-0500)
From:Joe Thomson <thomsonhiyu @....ca>
In reply to:Message 5216 (written by John G Rawson)

Hi John,
 
I'll come back to your Summary and respond in 'green' beneath yours below:-
 
(John Rawson wrote:-) I believe it is time to summarise key points that have emerged over the course of long discussions:
A+B ANALYSIS.
In terms of Douglas analysis of individual businesses,  this must be taken as factual.  Were it not, someone would have shown the data to be fallacious long ago.
When it is applied to the whole economy, because other factors may come it, the model becomes theoretical. But many points of evidence suggest it is more correct than the orthodox theory, none the least being the fact that  banking systems in modern times have increased money supplies comparatively astronomically without causing the equivalent disastrous inflation that orthodox theory would predict.  It has only occurred at a lesser level.
 
I thought we had established that A+B was a 'macro-economic' accounting theorem, in the manner of a complex 'reductio ad absurdum'.  One that helps illustrate what happens, for various reasons, when A is diverging in ratio to A+B over time in the economy as a whole. 
 
 That when total incomes are falling in ratio to the total costs of production coming forward into prices at the point of final retail, Profit from Sales will be declining and increasingly unable to fully amortize existing loans.  Which won't be renewed, ultimately pinching off potential production short of existing plant's actual capacity. 
 
That the 'correction' was to restore and maintain A+B in constant ratio to A by augmenting A with sufficient 'new credits' not 'costed' into production.  Allowing the community as a whole a fuller access to the potential goods and services that would be 'physically' available otherwise, but are 'financially'  denied us through insufficient 'effective demand'.
 
EFFECTS. Douglas predictions that the tendency towards a deficiency of purchasing power would cause periodic financial collapse, struggle for markets and even war appear to have been justified.
 
Well, the conditions necessary to try to maintain a sufficiency of purchasing power under the current arrangements cause those things to occur.

REMEDIES PROPOSED.
1. A system of national accounting for each country, to determine how much new money would be required over a following period carried out by a government agency, (note small "g"), a national credit authority, independent of political institutions, which would also create the necessary credits and distribute them as:
a. Subsidies (if this word grates, please provide an equivalent within present accepted lantguage) to reduce the cost of all comsumer goods (?and services), local or imported, at retail point, without any price control mechanism, and,
 
It doesn't grate on me, but Douglas used the word 'rebate' in his testimony before the MacMillan Commission, and that's probably a closer description of the idea than 'subsidy', since that latter is usually thought of as something coming from taxation.  In one of the suggested CPD mechanisms, the customer would indeed be receiving a 'rebate' after first having paid the regular price.

b. A national dividend, its value obviously dependent on the state of the economy as per the national balance sheet, to be paid equally to every adult citizen. 
Presumably the authority would decide the proportion to go each way.
 
Presumably.

It is accepted that no retailer will raise prices to higher levels, despite the fact that they would continue to be subsidised at any level. (Because we say so, presumably.)
 
If the retailer's costs increase he might well raise his prices, might he not?   But I think we're assuming that 'competition' will contine to make the lower limit of price the ruling one.  And there's no reason for us to assume otherwise, so far as I'm aware. 
  
It is also accepted (I believe reasonably) that sufficient people will desire to better themselves by working to produce goods etc., or will simply work for the good of the community because they enjoy so doing.
 
Most people, given a free choice, WANT to work at something.  Maybe not as much as they work now, in terms of hours.   But that doesn't necessarily always mean that they'll be any less productive.  Sometimes they might even be more productive, and take a renewed interest in their work.  And that's something any manager should embrace with open arms.   People HAVE to do something, most of us, anyways.  We'd be bored to death otherwise.  But there's a big difference between 'forcing' someone to work by making it impossible for him to live unless he does, and work that is undertaken because the worker feels he is doing something he wants to do, that "in some way", (maybe not 'monetarily', or maybe so), is profitable to him.
 
No new credits will be issued to central or local government agencies, which will continue to rely on present methods of finance:
1. Taxing, i.e. taking back from the people money distributed as above, and/or,
 
But taxing is not as now.  Something which presently makes the 'gap' between prices and purchasing power ever wider.  Something which has a lot to do with trying to keep money scarce in the hands of the public, to install in us firmly the conception that we can't 'afford' to do anything for themselves.  But rather must rely on 'government' to do it for us.   Under SC we're closing the 'gap' between earned incomes and prices first, and then, for what taxation is necessary, only opening it a bit.  That's my interpretation of it, from the example Douglas gave in his testimony in Ottawa, and mentioned elsewhere later, (like the "Draft Plan for Scotland" for instance.)
 
Regards,
Joe

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