Thanks Wallace. I am well aware that, when the discussion is pinned down as I have done, someone miraculously discovers the "just price" concept, i.e. some form of price control. (Except that, for some reason, the control concept offends them.)
You go further in saying that: 1. The discount will be paid to the retailer, and 2. that he will not get it unless his prices are "just".
But the moment I point out the necessity for a swarm of bureaucrats to establish "just prices" for every article and service in every part of the country, I am howled down and told it does not work that way. That the purchaser will receive a rebate by taking his sale docket to his bank manager, regardless of price, leaving it open to the retailer to increase his prices wherever the opportunity exists. Then we start round the circle of the discussion all over again.
And incidentally, that quote from Douglas completely ignored the primary producers who are price takers, not price makers like manufacturers. The background to Douglas' thinking seems (understandably) to be firmly rooted in the manufacturing industries. Yes, I know he promoted resuscitation of British farming etc. That was another aspect where his wisdom was vindicated, during WW2.
Frankly, I feel it is a disaster that Social Crediters are prepared to risk the credibility of Douglas' brilliance in other ways by seizing on one aspect that may have been suitable for the particular conditions he was involved with at the time but can be demonstrated as at best problematical and at worst completely unworkable in modern economies. However, I am open to being corrected. But it has to be done a lot more logically than anything I have seen so far.
Regards.
John R.
From: wmklinck@shaw.ca
To: socialcredit@elistas.com
Date: Sun, 14 Dec 2008 01:02:26 -0700
Subject: Re: [socialcredit] Finance: Credit "Crisis" and "Depression"
This debate seems to be deviating from Social Credit in a fundamental manner. In a balanced price system advocated by Social Credit the consumer is fully empowered to access all final production and the seller is fully empowered to sell all product at a price which permits continuation of the production process. There would be both a seller's and a buyer's market. The price of goods in a Social Credit dispensation is not determined upon what they will fetch. Price is determined by conventional financial cost plus agreed margin adjusted periodically by the national ratio of overall national consumption to national production over time. In debating with Professors Robbins and Copeland in The New and the Old Economics, Douglas states, "it would be more true to say that the whole of my views are based on certain fundamental propositions, of which, for the purpose of Professor Copeland's criticisms, the three following are the most important : (a) That financial credit pretends to be but is not a reflection of real credit as defined in (b); (b) Real credit is a correct estimate or if it be preferred, belief as to the capacity of the community to deliver goods and services as, when, and where required: (c) That the cost of production is consumption. With these fundamental contentions, which are basic to my views neither Professor Copeland, nor Professor Robbins, deals. Under the heading "The Just Price and the Price Factor", Douglas continues: "There is a method, however, of looking at the matter which arises from the more fundamental proposition that while in the modern world consumption is less than production, under the existing financial system it is necessary for the producer to recover costs and prices from the public at a greater rate than he makes disbursements. This means that the consumption rate represented by prices is greater than the production rate presented by direct costs, and is a direct reversal of the physical facts. Nevertheless, it is an essential to the producer who Is bound by the conventions of the financial system, otherwise he would make a loss on a years work, having issued more money than he recovered. the greater part of the surplus production is capital production, and we have to find a method of restoring his money to the producer of capital goods as soon as they are produced, while only charging a consumer for them at the rate at which they are used up. The justification for this of course is that real credit is a measure of the rate of production. so that, if total production equals (B) capital goods + (A) consumption goods, production costs are A+ B., but true consumption costs are (A + B/X) where X is the average life of real assets, and if we are only going to charge the consumer true costs, we have to pay the producer B-B/X representing the value of the capital goods, to enable him to carry on his business. But if, in addition, he recovered the whole of his costs eventually from the public in prices, he would have recovered his cost twice over, therefore it is necessary to reduce the price to the public by the same amount B-B/X that we repaid to the producer of capital goods, that is to say, retail prices must have the same ratio to total costs that consumption does to production."
Inflation in a Social Credit economy cannot occur simply because it is not permitted. The retailer is offered consumption credits on condition that he lowers his price according to the currently established rate. If he does not adhere to the agreement his allocation of credit will be terminated and he will no longer be able to compete with those venders who are subscribed. If he engages in fraud he will be subject to legal penalty. If he simply refuses to participate he will not be able to compete, so the likelihood is that retailer participation would be almost universal. The advantages are that the producer will always be guaranteed a sale for his product at a profitable rate of profit on turnover should consumers find the product desirable--and consumers will always be able to fully access production without resorting to debt. No restriction is put on producers' income insofar as it is based upon increased volume of turnover. Price regulation is not possible under the existing financial conventions because of unavoidable increasing costs on the production side which can only be met by increasing future inflationary issues of money as debt. Even a cursory reading of Douglas should establish beyond all doubt that regulation, or "compensation" (not, be it noted, "setting") of prices in a Social Credit dispensation is in no way contemplated for individual goods. It would apply as a percentage to the prices of all goods over the entire economy. Because the price-level would be falling, industrial wage rates would no longer be subject to upward pressure. Because in the aggregate consumers would no longer be required to contract debt, this cost which currently has to be recovered from future production, would no longer be a factor. With the increase of production efficiency and elimination of the necessity for superfluous production and the release of large numbers of people from necessary participation in production while yet enjoying economic security demands upon labor would be reduced. In the context of a falling price level there would be a negative incentive for consumers to contract debt even if they contemplated doing so.
I have not seen evidence that John Rawson recognizes or excepts the validity of the above-mentioned factors relating to the just Price which Douglas declares to be the central aspect of his analysis and recommendations. If memory serves correctly John has spoken in a dismissive way about the concept of "just prices." If he rejects, as he appears to do, the central tenets of Douglas's analysis and proposals one wonders why he involves himself in matters relating to Social Credit. Douglas clearly stated that the task of applying discounted retail prices is relatively simple and it is my understanding that in Australia the practice was applied even under the existing financial system with considerable success to maintain low food prices during the last World War. I think that this sort of thing just demonstrates the soundness of Douglas's warnings about the dangers of attempting to promote Social Credit via the avenue of political party power politics.
Sincerely
Wally Klinck
On 13-Dec-08, at 9:28 AM, Joe Thomson wrote:
How do you define a "seller's market", John? Is it a market in which there is a genuine shortage of some particular commodity, or commodities, for which there's a real demand? Or simply a market where there's an illusion of that because prices, in general, are rising due to an increase in the overall quantity of money?
If it's the former, if you needed, say, a 110 foot long solid Douglas fir 30x30 inch square timber, you're going to find there's very much of a so-called "seller's market" in supplying one of those nowadays!
To my knowledge, there's only one mill left in all the world that could even cut such a thing, if it could find, and still access, a suitable tree from which to do it. That mill, (which is a steam powered relic of a by-gone era, located in central Oregon), can name its price for such an item, and you either pay it or go without.
But even in that situation the mill cannot profit unless the buyer is willing to buy. So there's still a limit to that price, set by the BUYER, on what he will pay. The 'competition' in such a so-called "seller's market" comes from substitute products. One reason why the laminated beam manufacturers have reduced the suppliers of such a large, long solid timber to just one.
More later.
Regards,
Joe
----- Original Message -----
Sent: Friday, December 12, 2008 10:39 AM
Subject: RE: [socialcredit] Finance: Credit "Crisis" and "Depression"
Simply because you have never explained how any inflationary effect could be countered, Joe. All you do is aver that it won't be necessary. You have never shown how competition would work in a sellers' market. Or do you suggest that, when people have the purchasing power to buy all production, it would not become a sellers' market?
Give us some solid reasoning, and maybe you'll convert me.
Regards.
John R.
From: thomsonhiyu@shaw.ca
To: socialcredit@elistas.com
Date: Thu, 11 Dec 2008 21:18:48 -0800
Subject: Re: [socialcredit] Finance: Credit "Crisis" and "Depression"
Hi Bill (McGunnigle),
John Rawson and I have had many "a word" on the Compensated Price Discount, Bill. Both on this List and off. I haven't been able to convince him of its workability. Yet. Or how it might be presented simply to a sceptical electorate. Though I think that latter might be a lot easier to do than to try and explain some of the NZ Democrats current policies, if anyone asked about their likely effect on 'prices'.
As far as the electorate goes, it seems all the remaining "Social Credit" Parties are unable to make much headway on their current course. I think that if I were trying to proceed that way, I'd seriously consider a drastic change of strategy.
If your Democrats are like our remaining BC Socreds, and those in Alberta, too, continuing to try to elect people to a parliament or legislature is currently an exercise in futility.
Neither of the Canadian parties could even attract a full slate of candidates in their respective last Provincial elections.
Even if they did ever manage to elect a member or two, they'd still really be nothing more than a background noise in the overall course of events. Might be better to 'narrow the focus' onto a few key Social Credit issues and use your existing Party apparatus more like a 'lobby group'. But what do I know, not being much of a political animal myself?
Regards,
Joe
----- Original Message -----
Sent: Thursday, December 11, 2008 4:53 PM
Subject: Re: [socialcredit] Finance: Credit "Crisis" and "Depression"
Hi JOE
HAVE A WORD with JOHN Rawson JOE he will have a very good idea about that. I know that both he and I are advocates of that policy as a matter of course, but, as yet, we are still working on getting it accepted as full scale policy. It has got supporters in the NZ SC political arena. We feel it is one of the few avenues that would make sense to the generally financially unaware NZ general population,who, at present, still blindly follow the ridiculous assurances of our two main political Parties, and their associates. Our present Prime minister is a self made millionaire who made hjis money by currency speculation. Not a very helpful scenario for those of us who want monetary reform. We have a prime minister who made his fortune by gambling on the stock exchange. Men like that dont want angy change in the present corrupt financial system where they can "make millions" simply by trading in currency exchanges and strock market fluctuations. Indeed I believe that such speculators are ablew to do so only by insider trading. The present prime minisater under the previous goverrnment, as leader of the opposition, held a large num,ber of shares in NZ railways which were rapidly going under until a government bailout to repair all the deferred maintenance under private ownwersahip. THe shares he owned rspidly revalued overnight. I feel sure he used his knowledge of government intentions about the railways to "make a Killing" on the share prices. Of course anyone suggesting that the PM elect would stoop to such a trick casts grave doubt on his integrity, and, of course, attracts intense critism from government circles and the press. but to supporters of parties other than the two main ones the idea is quite acceptable. Personally my experience of those two parties is very sceptical having fought some seven campaigns agsinst the establishment machined, and seen what appears to be definite "gerrymandering " of electoral boundaries in favour of the two major political parties in the electoral seats, who have managed to establish themselves representatives on the electoral commission boundaries revision committee. The only two political parties having such positions. This gives them an unprecedented influence on electoral boundaries, and certainly one that appears to work against other politrical parties when boundaries are revised. I can relate several other incidents where the major political parties have used their own control of government expenditure to further their own political agendas at election time, seemingly getting around the limitations on party political spending for elections according to the electoral committeee on spendig at elections. While this is OK for the two major political parties, minor parties get hammered if there is even the slightest discrepancy. Talk about hints od corruption, but I suppose you have similar incidents in your elections too so I am not talkinh about something that is particyuilarly scandelous by international standards, which are very poor on the whole, especially when some governments have got provable criminal connections.
regards
BIll Mc Gunnigle
----- Original Message -----
Sent: Tuesday, December 02, 2008 8:12 PM
Subject: Re: [socialcredit] Finance: Credit "Crisis" and "Depression"
Has anyone in New Zealand "Social Credit" political party circles ever campaigned for office promoting the concept of a Compensated Price Discount for consumers?
Regards,
Joe
----- Original Message -----
Sent: Monday, December 01, 2008 6:19 PM
Subject: RE: [socialcredit] Finance: Credit "Crisis" and "Depression"
Thanks Martin. That's the same answer I usually get.
But I want someone to show me how competition would work in a sellers' market.
We have seen all sorts of booms and bubbles on the rare occasions when people get enough money to buy houses etc. And have a look at prices in tourist destinations. Usually plenty of competition there too, but the prices are always higher than down the road a bit. Why should goods be different? And also, why use of the term "just price", if nobody is going to determine what just prices are? There has to be some reasoning behind that term that is relevant, but when I enquire I get a definition of justness of price(s), not any mechanism to achieve it.
I'm really scared of this one, and always have been, because I would be unable to defend it against someone making the sort of objections I am raising now. And often we have to be caught out on one point only and people then think the whole fabric is rubbish.
Regards.
John R.
> From: jmartinh@shaw.ca
> To: socialcredit@elistas.com
> Date: Mon, 1 Dec 2008 15:18:21 -0700
> Subject: Re: [socialcredit] Finance: Credit "Crisis" and "Depression"
>
> I have always regarded the "Just Price" concept as being a percentage
> discount from the price that would otherwise be charged to the consumer, as
> businesses often do today. the difference being that the discount would be
> paid by new credit issued from a National Credit Office, in accordance with
> the needs of the economy, in order to balance financial demand for products
> with available supply. It would be calculated on a macroeconomic basis, and
> would not have to contain any element of price control of individual
> products.
>
> I see no difficulty in adapting existing sales tax mechanisms to reverse
> themselves and pay such a discount - certainly likely to be a very popular
> move.
>
> The normal processes of competition should serve to prevent profiteering by
> any particular business.
>
> Martin Hattersley, 5929-189 St.,
> EDMONTON AB CANADA T6M 2J1
> Phone & Fax (780) 483-5442
> e-mail <jmartinh@shaw.ca>
>
> ----- Original Message -----
> From: "John G Rawson" <johngrawson@hotmail.com>
> To: "Socred elistas" <socialcredit@elistas.com>
> Sent: Monday, December 01, 2008 12:46 PM
> Subject: RE: [socialcredit] Finance: Credit "Crisis" and "Depression"
>
>
>
> This discussion is purely with the mechanism of paying it, for which I see
> no problems and several solutions, but:Martin uses the term "just price"
> which implies conmditions for its payment, i.e. a means of containing price
> inflation. How do we establish "just prices" for a multitude's multitude of
> items, each in different parts of a country each with different transport
> costs, local taxes, etc?
> Others insist that it shall be a discount of a certain percentage of the
> price, whatever it is. Which, to me, in the sellers market that SC would
> establish, would lay the situation completely open to profiteering.
> A bureaucratic nightmare to beat all socialist efforts anywhere, or
> uncontrolled inflation?
> If someone can answer these points, I too will faour the system. But I've
> been asking for these answers for decades now.
> John R.> Date: Mon, 1 Dec 2008 07:07:10 -0800> From:
> william_b_ryan@yahoo.com> To: socialcredit@elistas.com> Subject: Re:
> [socialcredit] Finance: Credit "Crisis" and "Depression"> > It would be
> equivalent to a "Goods and Services Tax" in reverse, but I would be
> reluctant to accept a commingling of the tax and dividend systems. Too much
> of an incentive to increase the tax rate to offset the dividend due the
> people.> > At the very least money created by the Mint would need the
> cooperation of the banks. During and after the Civil War, the banks refused
> to accept deposits of Greenbacks, which greatly limited their acceptability.
> The banks achieved complete victory with the passage of the Specie
> Resumption Act, which mandated that the Greenbacks be redeemed by the
> government in gold. This greatly enriched the speculators who had amassed
> Greenbacks at steep discount.> > Legal tender status is not sufficient to
> guarantee acceptability. The Greenbacks had legal tender status that was
> eventually approved by the Supreme Court. Legal tender status did not
> require the banks to accept them for deposit. It only required that
> creditors accept them in payment for debt. But Alberta didn't even have the
> legal authority to convey legal tender status to its notes.> > All money is
> debt by its creator to its bearer. That will always be the case. It is a
> subset of the more general concept of contract for future performance, which
> fits very well with Douglas' "ticket" metaphor. See the Innes papers at >
> http://www.geocities.com/new_economics/innes/> > > > > --- On Sun, 11/30/08,
> Martin Hattersley <jmartinh@shaw.ca> wrote:> > Yes, I'm certainly in favour
> of a "Just Price", which in Canada could easily be achieved through making
> our "Goods and Services Tax" mechanism go into reverse as a subsidy on
> prices, so introducing money into the economy in a way that actually
> reverses inflation, that money being created by the Mint rather than the
> banking system. > > The one essential thing we have to do is to create our
> money supply without creating debt at the same time, and there's certainly
> no sense in spending money on infrastructure (or wars) if what we get from
> it all isn't anything we need. > > Martin Hattersley> > >
> > --------------------------------------------------------------------->
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