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Brief comment
interspersed in text in blue.
----- Original Message -----
Sent: Wednesday, July 27, 2005 9:39 PM
Subject: Re: HOMESTEAD: Rabbit trick or elegant
solution?
> At 08:57 PM 7/27/2005 +0100, Rodney
Shakespeare wrote:
> >John,
> > 1. Your
email sends a contradictory message -- on the one hand you
> > refer
(with pejorative implicaton) to a "financial rabbit trick" whatever
>
> that means) but, on the other, you say (with positive implication)
"It
> > was an elegant solution that vaulted Taiwan from an
agrarian, feudal
> > society to an industrial powerhouse in only one
generation."
> >
> > So which is it --
"rabbit trick" or elegant solution? (I am asking
> > you
separately for your Taiwan paper).
>
> Cannot a rabbit trick be
elegant? It certainly was in this case. The
> Kuomintang sold land it
didn't own for money it didn't have and used the
> proceeds to finance
industry that didn't exist. That fits my definition of
> both the rabbit
trick AND economic elegance.
>
This is
gobbledy- gook. You can't sell something you don't own -- you can only
purport to do so. You don't sell something for money you don't have, still
less you don't receive -- if you do, you haven't sold it. If you
don't have the money you don't have the proceeds. I will read your Taiwan
paper when you send it.
> >
> >2. As
far as I can ascertain, you are missing the point that binary
>
>economics uses interest-free issuance (ultimately coming from the central
> >bank) to enable capitalless people to purchase newly-issued
shares.
>
> But the question is the price of those shares. If (and
I keep asking this)
> the returns to capital should be a lot higher than
they are, as your
> "productiveness" theory asserts, won't prices for
those equities also be
> higher?
>
The newly-issued shares represent the cost of the expansion expected to pay for
itself over usually five to seven years. As I keep saying, the
shares (with full payout) can be expected to become more valuable
>
> A worker's earnings or those of a binary beneficiary, are not
used for
> > the purchase. Yes, those shares will eventually
become very valuable.
>
> Right, the earnings are used to pay off
the original owners (or the bank),
> which means that the earnings are
not available for expansion of the firm
> and have to be borrowed. There
simply is no way around this.
You are not
addressing the main binary mechanism which relates to newly-issued shares.
As I keep saying a new stream of interest-free issuance is used. A firm
can always get interest-free money for expansion if it promotes wide
ownership. Full pay-out of earnings means that large corporations in
practice cannot use retained earnings for investment but must use the wide
ownership route.. Full payout is required to enable the loan to be quickly
repaid and to enable beneficiaries to obtain substantial capital income and is
also needed by the economy to achieve sustainable growth and dsitributive
justice on market principles. >
> >
> >
3. You say that the use of interest-free issuance is
expropriation
> > because only one group gets the use of the
money. The present system
> > is expropriation
because it enables the existing holders of capital to
> > deny others
their right to own capital.
>
> The fact that the current system is
expropriation doesn't mean that your
> system isn't also expropriation.
Mind you, I don't mind it being
> expropriation, I just think we ought to
call that spade by its real name.
>
> > Binary economics
stops that expropriation.
> >
> > You
either agree with a genuine wide ownership (not least to turn
> >
Say's Theorem into Say's Law) or you do not.
>
> That's not the
issue. Everybody here agrees with wide ownership, but we all
> have
different ideas on how to achieve that. Because you say a plan will
>
work doesn't mean it will work. I am still baffled as to why an increase in
> returns would not lead to an increase in price.
>
>
>
> > The use of interest-free issuance has
been extended to public sector
> > capital projects, small/start-up
businesses and green capital projects.
>
> You mean like the SBA
loans? In fact, there has been a lot of corruption
> and inefficiency in
that program, no?
The
corruption, or absence of it, will be the same as now, except that in the binary
economy there is an extra layer of review before investment. Collateral
has to be provided, loans repaid.
>
> >
>
> If members of this elist (or of Ownership) are not
unequivocably bent
> > on an extension of capital ownership, I
am wasting my time in engaging
> > in corrspondence.
>
>
But everybody *does* want more capital ownership. Disagreement with you is
> not disagreement on this principle. Why don't Binarians get
that?
So why don't
you say precisely how your proposals will, in practice, achieve wide
ownership for all individuals in the economy? And say,
if you can, how they will achieve more wide ownership than the
binary ones.
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