| Subject: | Re: [socialcredit] The Mechanics in a Few Words on the Financial Workings of Social Credit | | Date: | Tuesday, April 8, 2008 10:28:37 (+1200) | | From: | Jamie Walton <eurojamie @.....com>
|
Hi Martin,
Good paper. It seems a lot of Soddy's ideas are along similar lines
to much of the 'New Economics' ideas of that time.
There is one glaring
error/omission in it: Ernest Rutherford was a NEW ZEALANDER!!
Cheers,
Jamie.
On 02/04/2008, Martin Hattersley <jmartinh@shaw.ca>
wrote:
Hi, Robert -
I have always regarded Douglas's proposals as an incomplete
solution to the
problem he identified, leaving the existing banking system
unchanged, but
instituting countermeasures to mitigate its ill effects.
The problem identified, particularly I believe in the "Monopoly of Credit",
is that when bank credit (new purchasing power) is created to finance
industrial
expansion, the wages paid to those who carry out the expansion
will be spent before new products resulting from this expansion come on the
market. Hence a period of inflation (more purchasing power chasing an
existing
quantity of goods, or even chasing a supply of goods that has been
reduced by the physical demands of the expansion).
When the goods produced
from the expansion finally reach the market, the
incomes that should buy them
have already been spent. Consequently, the "Can
produce but cannot sell" phenomenon we are all so familiar with. Orthodox
economics tries to solve this with even more capital expansion, with public
and
private debt, and with wars (which provide employment and distribute
incomes without requiring payment for products).
Douglas proposed a "Just
Price" mechanism, whereby a National Credit Office
would determine the extent of
the need for purchasing power in the economy
to cover this "gap", and cause it to be inserted into the economy either by
a
subsidy to reduce prices, or a "Dividend" to all citizens, so balancing
supply
and demand.
I believe that when Douglas first identified the way in which
typical
businesses create more costs to be charged into prices than the wages,
salaries and dividends they pay out to potential consumers, he did not think
of
the many businesses which (because they are engaged in capital
production) distribute incomes to potential consumers without placing
consumer
goods on the market - which, of course, is what creates the "gap"
in the first
place. Consequently, he envisaged a National Dividend far
greater than it would in fact be credible to anticipate. This has bedevilled
the whole Social Credit movement ever since.
I attach a paper I gave some time
ago on the thoughts of Professor Soddy
(who sympathized with Douglas, without
agreeing with him) on the whole
subject. And, of course, there's no reason why a National Dividend could not
be paid to all citizens, through some device such as Henry George's "Single
Tax", or the taxation scheme that Soddy proposes in this paper. This would
reverse capitalism's existing technique of "enclosing the commons" and
leaving
the proletariat with nothing to live on but what they can earn in
exchange for
their labour.
Martin Hattersley, 5929-189 St.,
EDMONTON AB CANADA T6M 2J1
Phone & Fax: (780) 483-5442
e-mail <jmartinh@shaw.ca>
----- Original Message
-----
From: "robert searle" <dharao4@yahoo.co.uk>
To: <socialcredit@elistas.com>
Sent: Tuesday, April 01, 2008 7:52 AM
Subject: [socialcredit] The Mechanics in a Few Words on the Financial
Workings
of Social Credit
Dear All,
I know I am probably asking the impossible but
here
goes.
Can anyone explain in simple English, and in a few
words the
financial workings of Social Credit (ie. the
Dividend, Just Price,et cetera).
Ofcourse, I understand what they are but
HOW DO THEY
WORK? Presumably a certain about of debt-free money is
involved
along with some earned money via taxation
etc....
R.Searle
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