----- Original Message -----
Sent: Thursday, February 17, 2005 3:21
PM
Subject: [socialcredit] Re: in
reply
"Obviously Radu is interested in learning Social
Credit,
or he would not be
here."
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---------------------------
[REPLY]
His very first post, and every subsequent
post has been to refute the
concept. Each of every
one of his arguments have been addressed,
some of
them by you, and he refuses to acknowledge them, but
continues
with the same demonstrably incorrect
assertions. By my count he's
repeated each of them
six or seven times. I don't know why he's
here, but
suspect it's for fun. But there's nothing wrong with
fun, and he's invited to stay, so long as his posts
remain relevant to
the topic of this list.
(reply)
Like I stated previously Bill, do
you think anyone believes they are wrong. Do you think people go around
believing they are wrong and hoping someone will correct them? Radu
believes what he believes for good reason. He just has to read the
examples that Douglas gives in order to understand where his error lies.
It takes time to get an "aha". Pounding someone and insulting them only
drives them away, or increases their resolve to fight your ideas because they
tie Social Credit with you. And because they don't like you personally,
they don't like Social Credit.
"Just because Douglas did not explore the role of
interest in the economy, doesn't mean it doesn't play
a negative, or
important,
role."
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---------------------------
[REPLY]
Doesn't mean it does, either. It's a nutty
proposition that drives
clear thinking people away
from social credit. I mean, the thing
about
abolishing interest rather than controlling it. Of
course,
the proposition does attack the nuts. If you
want a "movement"
that's an aggregation of "monetary
reform" nuts, and no-one else, that's
the way to go.
Inasmuch at it wasn't part of Douglas's theory, it
shouldn't be associated with the term "social
credit." Some
other name should be attached to it.
-
Douglas:
The rapturous iconoclasm of certain groups of
"monetary
reformers" to whom "usury", the sparring-
partner of the bankers
"inflation", is the Scarlet
Woman of Babylon, has had the inevitable
effect of
encouraging the financial authorities to abolish, for
practical purposes, the interest paid on undrawn
current balances, and
deposit accounts. We do not say
they would not have done it anyway--the
one
thoroughly sound feature of the banking system was
its dividends
to shareholders and its interest
payments to depositors which jointly with
the
insignificant mint issues, provided almost the only
fresh
unattached purchasing-power. It is obviously
lost time to beg of our
amateur currency experts to
consider whether they really mean what they
ask which
is the replacement of unattached purchasing power by
loans.
But they must not complain if we, and others
with us, regard them as
propagandists for
totalitarianism.
The Social
Crediter
(Oct. 27, 1945.)
-
We make no apology for recurring to the dangerous
disservice to genuine reform which is offered by many
"monetary
reformers" who mix up certain ill-
understood "moral principles" with
attempts at
practical design. Amongst the objects of their
attack, an
easy first is "usury", which they would
define, if they troubled to define
it, as the taking
or giving of interest upon a money loan.
It should be understood without much difficulty that,
in
a predominantly gold coinage system, if Moses
Finkelstein lends one
hundred gold sovereigns to John
Brown and demands back one hundred and
twenty-five at
the end of a year, and continues that process, it is
only a question of time before Moses owns all the
gold. But if John
Brown makes a deposit in his bank,
and the bank allows him three per cent
interest (no,
Clarence, this is not a fairy story) there is no
available evidence to show that John Brown will come
into possession
of the bank. What has happened is
that John has shared, to a minute
extent, in the
profits of the bank, in return for providing a smoke
screen for the legend that banks only relend money
deposited with
them. Now that this legend is
exploded, John has been informed that he is
no longer
wanted, and his share ceases. In fact, he is charged
for
keeping his account. That is what the usury
hunters have achieved.
But, you may say, the banks "have no right" to create
money to bribe John with a decimal fraction of it.
The only part of
this sentence which makes sense is
the latter. John and others like him
ought to have a
larger "interest" on their deposit (really a dividend
on the money created). The greatest nonsense, of
much, which has been
written about the banking system
is that which attacks their dividends and
interest
paid on deposits. These items are the only fresh
money,
corresponding to the normally increased real
wealth, which comes into the
hands of John Citizen.
The rest disappears into invisible reserves, such
as
those colossal figures which Mr. Dalton will not
disclose, which,
by the acquisition of the Bank "of
England", have now been made a free
gift to Mr.
Barney Baruch, et al.
The Social Crediter
(Jan. 12, 1946.)
-
"He's not talking about A+B
specifically."
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---------------------------
[REPLY]
But he uses it to introduce the terms "double
circuit" and "A+B." I
don't know how more "specific"
you could get. It's the one thing
that makes sense
out of the otherwise bewildering concept. With
that,
the theory is complete, though perhaps inadequately
stated. And he is the originator of the theory, a
work of genius
that will ultimately change the world
for the better. I will do my
best to bring it to the
attention of serious thinkers.
What Douglas says on the matter is
true; however, I will say this: Interest acts like an accelerator in the
double circuit of money. Increase the interest rate, and you increase
the rate at which money starts to flow back to the banks. This of course
has a definite effect on A+B as it guarantees that more and more loans find
their way back to the bank before the consumer good has hit the market.
And this fact, as Douglas states, causes disequilibrium. In fact, this is
confirmed by Douglas in "The Monopoly of Credit" when he states:
"It is also clear that the longer
the average period over which money is collected i respect of the creation and
destruction of a capital asset (which corresponds to the "life" of an asset,
and the shorter the average period over which money is collected for day to
day living on the part of the community (which corresponds to the "life"
of consumable goods), the greater the discrepancy between purchasing power and
prices."
Do I need to demonstrate that
raising interest rates shortens the average period over which money is
collected for day to day living? And "ceterus-paribus" increases the
discrepancy between prices and income?
"The crux of A+B is the fact that money is created as
a
debt, and has to be
repaid."
--------------------------
---------------------------
[REPLY]
How in the world do you conclude that? You
refuse to recognize labor
displacement, which Douglas
himself used to introduce the concept.
Nowhere in
the tautology that immediately follows did he use the
words
"debt" or "banking." I ask you to support your
claim that Douglas
said that the crux of A+B is "the
fact that money is created as a debt"
that "has to be
repaid." In fact, Douglas did not oppose "loan
credit," per se, which he differentiated from "cash
credit."
I state that debt created money,
and of course the fact that costs are capitalized, are the crux of A+B.
I have mentioned the fact of cost capitalization before, and now added the
final element to the core of the analysis. I will quote Douglas from
"The Monopoly of Credit":
"This proposition may be
generalized as follows: Where any payment in money appears twice or more in
series production, then the ultimate price of the product is increased by the
amount of that payment multiplied by the number of times of its appearance,
without any equivalent increase in purchasing power.
With this fundamental proposition
in mind we are in a position to take a more genearlized view of the defect in
the price system which is concerned with the double circuit of money in
industry known as the A+B theorem."
Again, you will notice no mention
of "labour displacement". The essential things to keep in mind are that
certain costs are "capitalized", and the "double circuit of money" which is
due to the fact that money is created as a debt, and that at any point in time
a certain amount of money is on it's way back to the bank instead of on it's
way out to the consumer. I will quote Douglas again a few pages further
when he says:
"The essential point is that when a
given sum of money leaves the consumer on its jouney back to the point of
origin in the bank it is on its way to extinction. If that extinction
takes place before the extinction of the price value created during its jouney
from the bank, then each such operation produces a corresponding disquilibrium
between money and prices."
You will notice Bill that he says
"the essential point", and you will also notice that there is absolutely no
mention of "labour displacement". This is summed up nicely in his "A+B
for Bankers" when he states:
Now suppose at any stage of the proceedings
asset No. 3 is used to buy or cancel asset No. 1; then clearly there is a
disparity between the figure value of asset No. 2, which is not affected by
this transaction and the figure value of the other two assets, i.e., the bank
debt and the purchasing power.
This is exactly what happens when any
portion of the loans concerned in any stage of the production of an article is
repaid to a bank before the articles, into the cost of which they enter, has
finally and irrevocably been sold to its ultimate consumer. In order either to
resell it (in addition to normal trade in new articles) or to use it in such a
way that it forms a cost in production, a fresh loan has to be granted upon
it.
Again, no mention of "labour
displacement". Let's look at what Douglas does say about labour
displacement further on in "The Monopoly of Credit":
"Although this is an extreme case,
the constant, and in one sense desirable tendency is for direct charges to
decrease and for indirect charges to increase as a result of the replacement
of human labour by machinery."
In other words Bill, B will GROW
relative to A because of "labour displacement", and this will most likely
result in an INCREASE in the inbalance between prices and income which is
caused by bank loans being paid before the final cost of a product is
extinguished by a consumer.
C. H. Douglas, *Economic Democracy* Chapter V.
*A careful consideration of these factors will lead
to
the conclusion that loan-credit is the form of
effective demand most
suitable for stimulating semi-
manufactures, plant, intermediate products,
etc, and
that "cash"-credit is required for ultimate products
for real
personal consumption...*
-
I don't know why you always are trying to suggest
that
Douglas did not attack the nature of banking,
and the way money is created
as a
debt?
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[REPLY]
Then it is incumbent on you to demonstrate
where he did. He most
certainly did attack the
POLICY of banking and bankers, a quite different
thing than "the way money is created as a debt."
-
I cannot find it right now, and will certainly return
to this point, but my time is limited. Suffice it to say that Douglas
states something along the line that the fact that banks create money as a
debt means they account for the credit of the community as if they own
it. When in fact the credit of the community belongs to the
community. I will find the exact quote later, but I'm pressed for time,
and not sure exactly where it is.
"It's going to be even more dead if people like you
keep
driving others away from
it."
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[REPLY]
Well, the nuts need to be driven away, and
disassociated from the term
"social credit." I am
specifically thinking right now of people like
a
certain clown who goes around with an "engineer's"
hardhat.
There are many others. (I know who you are
talking about, but is there any reason to refer to him as a
"clown"?) I am interested in
reviving the thought of C. H.
Douglas, not the
degenerate form that the movement that purports to
operate in his name has become. In this category I
include the
Secretariat. Let the "interest is the
root of all evil" cranks fly
their own flag.(I agree that they are not "Social Credit"
and should not say that they are linked to this term. That I absolutely
agree with.) And
it's difficult to revive his thought when so
much of
it is hoarded, and remains inaccessible. If the
social
crediters really believed in it, all of it
immediately would go on the
Internet. Why not? For
profit in selling pamphlets; to
suppress opinions
contrary to their own--whatever. Regardless, it's
an
utter and complete disgrace. The rest of it in its
totality
would be searched out and placed on the
Internet--the many, many articles
in the New Age, The
Fig Tree, The Social Crediter, the New English
Review, etc. There must be reams of it. I've been
at this,
for what, five or six years now? Only a
fraction of it has been made
available to me, even
now. I still haven't seen the Ottawa and New
Zealand
parliamentary presentations. With every scrap of it
that
comes into my hands, I learn more about the man
and his thought, and how
diametrically different it
is from the image held by most "social
crediters" as
well as their opponents. The most recent is the 1934
presentation to the Alberta legislature, which Wally
graciously
circulated the other day. I thank him.
I've already learned
some wonderful new things from
Douglas, knowledge which is enhanced with
every
rereading. I'll be commenting as time goes
on.
-
Regardless Bill, your debate style is driving people
away, and that is not a good thing. You're lucky I'm
a stubborn
Kraut, or I would have moved on a long
time
ago.
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[REPLY]
My "debate style" is intended to help us
learn things, not necessarily to
persuade. (You cannot learn without
persuasion) It's
called the Socratic Method. (I am quite familiar with the Socratic Method, and
frankly, that's not your debate style. Socratic method is the use of
questions meant to teach. You simply resort to ad-hominem attacks
when someone doesn't agree with you, and that's a TERRIBLE "debate"
style. Philosophy is my true "passon", and I've read alot of
Socrates, along with his greatest fan Soren Kierkegaard, and your "style" does
not resemble them in any manner. In fact, it's quite arrogant, and
Socrates and Kierkegaard were the antithesis of this.) I recognize
I am
conversing with people with hardcore opinions,
whatever they
might be, for example, Radu, and
yourself, who will be difficult if not
impossible to
persuade to change their minds on anything. But if
they can't take the heat, they need to get out of the
kitchen. I
think you did that once, then returned,
and were welcomed. Remember,
as list moderator, I
have approved all your messages for distribution from
day one, because I believed they had something to
contribute, if only
as a sounding board for
discussion relevant to the topic of the
list. I do
not require agreement but relevancy. Many messages
from others I have declined to approve over the past
two years the
list has been functioning, on Elistas
and Topica. They were mostly
from people who just
wanted to toot their own horns, the reinventors of
the wheel, inadequate and incompetently designed
ones, at that.
Too arrogant to read and consider
what others said before them, for
example, Douglas,
and build upon that, in the manner of
science.
-
"Bill, it can easily be both. We can discuss Social
Credit and other ideas without resorting to simple
insults. We
can respect each other, and be nice to
each other. That being said,
I apologize for the
confusion, but wish you'd apologize to Radu for the
insult. And I certainly hold no grudges. Let's just
move
on. Ok?"
--------------------------
[REPLY] Radu, with his
repeated false assertions, is
insulting our intelligence. If saying
so is an
insult to Radu, so be it.(It is a personal
attack, and there is no need for it.) To you, I've made several
arguments that can make sense of the aspects of
social credit which
make no sense to ordinary people,
including ordinary people who are
economists. It is
insulting to me that you won't respond to them or
take them seriously. Both you and Radu, in my
opinion, have an
equally false understanding of
Douglas's thought. (I believe you are the one with a false understanding of Social
Credit, but I don't go around insulting you. There's the
difference. I back up my assertions with logic, not ad-hominem
attacks). The difference--and it IS
significant--is that you
come down rhetorically on
the side of social credit, and he doesn't.
But your
arguments--many of them--are just as fallacious, of
course,
in my opinion. If you take my saying so to
be insulting, then,
again, so be it. You are most
welcome to continue posting. I
encourage you to do
so. But you may be assured I will continue to
express my personal opinion, as always.
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