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Subject:Re: [socialcredit] What is the actual "gap"?
Date:Wednesday, February 6, 2008  23:11:14 (-0500)
From:Joe Thomson <thomsonhiyu @....ca>
In reply to:Message 5241 (written by william_b_ryan)

(Bill Ryan wrote:-) "I do not recall that in *Credit Power,* or elsewhere,
that Douglas said the discount should be an astounding
seventy-five percent.  I may have missed it.  Perhaps
someone more familiar with Douglas' work than I am
will cite exactly where he said it."

(Joe replies:- )  I lay no claim to be more familiar with Douglas's work
than you are, Bill, but one place that the 75% figure is mentioned is in
"Control and Distribution of Production" , pages 47-49.   That  passage can
also be found in "The Douglas Manual", by Phillip Mairet, pages 92-93.

As quoted in  the "Douglas Manual" it reads:-
"In order, then, to acquire public control of economic policy, we have to
control the whole mechanism of effective demand ~ the rate at which its
vehicle, financial credit, is issued, the conditions on which it is issued,
and take such measures as will ensure that the public, from whom it arises,
are penalized by withdrawal of the vehicle to the minimum possible extent.
It must be obvious that the real limit that the rate at which something
representing purchasing power could be issued to the *public* is equal to
the maximum rate at which goods can be produced, whereas the 'taking back'
through prices of this purchasing power should be the equivalent of the
fraction of this potential production which *is* delivered.
Let us imagine that wages, salaries and dividends, added together, were
issued via the productive industries at a *rate* representing the maximum
possible production of ultimate products, and the actual consumption was
only one quarter of potential production.  Then, clearly, the community
would have only exercised one quarter of its potential demand.  But the
whole of the *costs* of production ~ the issue of purchasing power through
the agencies of wages, salaries and dividends ~ would have to be allocated
to the *actual* production as at present, and if we charge the public with
the whole cost of production their total effective demand is taken from
them.
But if we apply to the ascertained cost of production a fractional
multiplier equal to the ratio of actual consumption to potential production,
then we take back in prices that portion of the total purchasing power which
represents the actual energy draft on the productive resources of the
community, and the price to the actual consumer would be, in the case above
mentioned, 75% less than commercial cost."

I remember seeing another piece from the early 1920's  where I believe
Douglas mentioned he was trying to determine the 'gap' more precisely, but
that he felt  (un-discounted) prices were at least "five times" more than
they should be.  Perhaps Wally or someone else may remember just where that
was.  I haven't been able to find it again tonight  yet.


----- Original Message -----
From: <william_b_ryan@yahoo.com>
To: <socialcredit@elistas.com>
Sent: Wednesday, February 06, 2008 12:51 PM
Subject: [socialcredit] What is the actual "gap"?


> Wally Klinck has just circulated a paper from 1924 by
> Francis L. Leet, L.L.D, a negative review of Douglas'
> *Credit Power and Democracy,* where he makes the
> following claim:
>
> "...we are informed by Major Douglas that our own
> Government is to print Treasury notes to the extent of
> the value approximately of three-fourths of our
> national output of commodities we feel how good the
> assurance is that no inflation can or will result.
> Also, as this is, beyond all question, the vital point
> in his system, we cannot doubt that Major Douglas and
> his collaborators have tested its soundness and
> genuineness with scientific care and accuracy."
>
> This is referring to the retail discount program.  I
> do not recall that in *Credit Power,* or elsewhere,
> that Douglas said the discount should be an astounding
> seventy-five percent.  I may have missed it.  Perhaps
> someone more familiar with Douglas' work than I am
> will cite exactly where he said it.  It has, however,
> been used from the very beginning to ridicule the
> Social Credit concept profusely.  You might remember
> that we had a discussion a couple of years ago about
> Frank Ramsey's paper, which was much admired by
> Keynes, where Ramsey made the same claim, which I then
> characterized as a straw-man type of argument--the
> setting up of a ridiculous version of the theory, to
> knock down.
>
> I was therefore astonished to read in another paper,
> which Wally circulated a few days earlier, the text of
> Orage's BBC address from 1934, given, I think, a few
> hours before he died, where he claims:
>
> "The stream of Price-values to the shop-window moves
> much faster than the stream of Money-tickets to the
> shopping public, with the result that the annual
> collective shopping tickets of the nation, called its
> Income, are insufficient to meet the collective annual
> Price-values created in its shop. Now this is a matter
> of fact and not of theory; and it can be proved by
> simple arithmetic. Our shop-keeper, for instance, has
> told us that, at a rough estimate, our annual output
> of Price-values is ten thousand million pounds and
> probably more. And our taxing officials tell us, more
> accurately, that our annual Monetary Income is about
> two thousand five hundred million pounds. As four is
> to one, so is our output of Price-values to the
> Money-tickets with which to meet them. The nation's
> means of Consumption measured in Money-tickets, in
> short, is at least no more than a quarter of its means
> of Production measured in Prices."
>
> It is indeed a matter of simple arithmetic, but where
> the numbers appear to be quite arbitrary on Orage's
> part.  I would have thought that in more than eighty
> years of political agitation, someone would have put
> meat behind the numbers, in determining what they
> actually are.
>
> My guess, and it's just a guess, is that the actual
> "gap" between "prices" and "purchasing power" is no
> more than two or three percent.
>
> Which is actually very profound and economically
> significant, in its compounding effect over time.
>
> It is counter-productive to overstate the case.
>
>
>
>
>
____________________________________________________________________________
________
> Never miss a thing.  Make Yahoo your home page.
> http://www.yahoo.com/r/hs
> ---------------------------------------------------------------------
> Some introductory materials to the discussion topic of this list are at
> http://www.geocities.com/socredus/compendium
> You're subscribed to this list with the email thomsonhiyu@shaw.ca
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