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Hi John
While
your argument with respect to credit cards is basically correct i.e. in
Douglas's time the concept of a "credit card" had yet to be promulgated, there
had been for a considerable time especially in the USA the concept of "time
payments" and "hire purchase" which were in vogue from the late 19th century.
Furthermore the principal of buying on credit against future harvests or
manufacturing potential had been the mainstay of the US economy from its
foundation as an independant republic.
In making this observation I am
simply pointing out that even as early as the 18th century the issuing of credit
by banking organisations was an essential part of all commerce, and it was only
by the expansion of the credit facilities via the private banking system that
much of our present industrial developement took place.
It seems to me that the credit
expansion extended to the manufacturing sector to increase industrial output has
never been matched by a similar credit expansion to the consumer sector to match
that expansion in production. Am I right in my conclusion that Douglas was
always making the point that the two should go hand-in-hand otherwise the
whole system is unstable? and if this is so the whole point of Social
Credit philosophy is to ensure that this takes place
without incurring an impossible debt burden on future generations which is the
outcome of the way our present system operates. I would appreciate feed-back
from Bill, John and any other interested parties on this issue
Bill McGunnigle
----- Original Message -----
Sent: Friday, February 08, 2008 10:27
AM
Subject: RE: [socialcredit] What is the
actual "gap"? Addendum
Hi Joe.
The theoretical "gap" is, by definition, between
existing costs and existing purchasing power. While potential production
is a nice safeguard to contemplate if a SC system ever allows more money than
needed into the system, you can't take it into account in this context.
If
the five to one ratio is accepted, we must also acept that four fifths of
goods either remain unsold or are sold by mortgaging future earnings. I
doubt if the present credit card racket has reached those proportions, and it
didn't exist in Douglas' time.
Which raises the point, are we considering
the "gap" nett of money borrowed for future production, or are we taking it as
it actually affects consumers in the present economy?
And while we are
thinking of vast payments to consumers, are we taking into account Douglas'
(to me utterly impracticable) Swanwick dictum that ALL new production must be
financed by new credits? What proportion of the "gap" would be filled by this
means in a strict Socred system, requiring whatproportion of the new credits
created?
It's a pity you are not in a strictly consumer industry, or you
might be able to give us some indications from your own business. But,
of course, a lot of your production must go into capital goods, with their
costs being fed again into the system per depreciation
etc.
Regards.
John R.
> Date: Thu, 7
Feb 2008 08:05:24 -0500
> From: thomsonhiyu@shaw.ca
> To:
socialcredit@elistas.com
> Subject: Re: [socialcredit] What is the
actual "gap"? Addendum
>
> Hi Bill (Ryan),
>
> The
pages I quoted where that passage can be found in the "Control and
>
Distribution of Production" were what Mairet listed as his source in
"The
> Douglas Manual". In the edition I have, it will be found on pages
36-37.
>
> Later, in that same edition, (which I think is the one
you have), on page
> 60, Douglas states:-
>
> "I t is a
little difficult to state with any accuracy what the proportion
> of
cost prices ought to be because of the distorting effect of waste,
>
sabotage, and aimless luxury. I am making some rather tedious
>
investigations into this, and I can only say that I am convinced that
even
> now prices are five times too high, and that with proper
direction of
> production this figure would be greatly
exceeded."
>
> "Credit Power" was first printed as a book in
1922. In the preface it
> states that certain chapters were previously
delivered as lectures at Oxford
> and before the National Guilds League,
while others had appeared in "The New
> Age", or the "English
Review".
>
> Considering that, and that there would have been an
enormous increase in
> British manufacturing capacity built up during
the World War One years, much
> of which must have subsequently been
available for 'civilian' uses at the
> cessation of hostilities; plus
the fact that on de-mobilization there would
> have been a huge increase
in the available workforce, the potentialities of
> production of
"ultimate products" must have been prodigious indeed.
> Douglas did note
elsewhere at how rapidly the destruction wrought by four
> years of war
was being overcome, so the capacity to produce was obviously
> there at
that time. Maybe that's why the 'gap' figure used was so high
>
then?
>
> Regards,
> Joe
>
>
>
>
----- Original Message -----
> From: "Joe Thomson"
<thomsonhiyu@shaw.ca>
> To:
<socialcredit@elistas.com>
> Sent: Wednesday, February 06, 2008
11:11 PM
> Subject: Re: [socialcredit] What is the actual "gap"?
>
>
> > (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
> > >
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