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Hi Dan! (and others)
I'm falling a bit behind, but here are some
comments:
1. Silvio Gessell: The eary Alberta
"Social Credit" government tried their stamp script scheme as a completely
corrupted form of "Social Credit." For obvious reasons, people did not
accept it well. Who would want their (monetary) assets to arbitrarily
depreciate merely by holding them? It was a forced spending scheme and is
contrary to freedom of choice and economic democracy. Consumers should not
feel compelled to spend their money by some outside coercion. I believe
the brief Alberta Gessellian "experiment" was the brainchild of Lucien
Maynard--it was certainly not Social Credit! As one Social Crediter (H.E.
Nicholls) once correctly told me, "The problem with the present orthodox
financial system is that it already cancels money at too great a
rate."
2. I haven't just recently read Thoren's
material but as I recall it was based upon the added costs of interest. It
did not deal with the consumption/production ratio and the real cost of
production, nor with the premature cancellation of purchasing power and the time
element as per Douglas's A+B Theorem. No question of crediting the
consumer with the appreciation of capital as against capital depreciation ever
came up in Thoren to the best of my knowledge. Nor was it a comprehensive
philosophical, socio-economic body of thought in the Social Credit sense.
This is not to say that Thoren is not worth reading.
3. Re Kelso and Adler, et. al: This
scheme I read years ago and I had a continuing debate with a farmer out Jasper
way who had become a fervent advocate. Again, the so-called "binary
economics" relied, as I recall, in issuing loans to citizens (workers) so that
they might in time aquire industrial/commercial shares from which dividends
would be received to augment their earned incomes. It seems to me that
this assumes a fundamentally self-liquidating price-system in accord with
orthodox financial accountancy and does not deal with the true cost of
production. That is, it seems that these incomes would all register as a
cost through the financial price-system--instead of of originating from outside
the costing-system to compensate and cancel financial costs which according to
realistic accountancy should not be passed on the the consumer. Again, as
you commented, the rationale, justification and basis of the debt-free money
issued by Social Credit to compensate a fundamental flaw in the price-system,
i.e., the Unearned Increment(s) of Association and resulting Cultural Heritage
(plus some theological and metaphysical considerations) are not all so obviously
a part of the Kelso (Second Income) proposals. I see nothing in the scheme
which envisages anything like the lowered price-level that the Douglas proposals
would effect. Incidentally, Social Credit definintely does not seek a
stable price-level. The ideal price-level is zero. To do so would
deny society the real benefit of genuine increased techological production
efficiency and would violate the Social Credit concept of price according to
natural law. As a matter of incidental interest, with a drastically
reduced price-level the economy would not necessarily require an increasing
volume of money to function in the way that it does at present.
Social Credit has nothing against wide ownership of capital and would certainly
result in the efflorescence of creative enterprise and action by those who wish
to engage in commercial production and invention and also in the area of
creative leisured activity. However, the main concern of Social Credit is
that the results flowing from the production system are accessible to the
consuming public on the broadest level. There is no reason to assume that
everyone wants, or should want, to own capital--but by general inheritance all
are entitled to benefit from the wealth that flows from it.
4. So far as usury (interest, compound
or otherwise) is concerned, Social Credit would balance all costs with
effective income. But there being no further need for consumer bank loans
to clear the market and with the Social Credit methods of financing production
(all from new credits, emphasis on equity investment, the establishment of a
National Credit account, etc.) financial credit will always equate with real
credit and no monetary shortage can exist. The centralising and
exploitative problems associated with usury (interest, as such) should die
a natural death.
5. The "Gross National Product": it was
inherent in the Douglas proposals from the beginning that the present system
forces society to engage in all manner of projects and activities which can in
no rational manner be regarded as socially desired, desirable or beneficial to
humankind. See "The Delusion of Super-Production" (The English
Review: December, 1918). The theme was consistent thereafter.
But what is desirable or not is a subjective matter and Social Credit leaves
that to the individual (consumer) in a context of economic democracy wherein
there exists a consumer-motivated economy. Under these circumstances, the
legitimacy of gross production has to be accepted as a genuine expression
of consumer citizens casting their money-votes according to their own
desires. There is no way for the state to determine what is socially
beneficial in this particular area and to attempt to do so would be resorting to
something akin to central planning and imposition of state policy in the area of
social values and economic production policy. Dangerous!
Totalitarian! Contrary to Christian values! (Social Credit
is supposed to be the incarnation of the Christian policy of genuine
freedom in our practical or organic relationships, i.e., displacement of the
metaphysical doctrine of salvation through works by the doctrine of salvation
through grace--Dividends, "something for nothing!") Of course in the
area of state services and capital spending, these must be subject to electoral
approval.
6. I see much merit to a flat tax on
commercial bank clearings should it be required for whatever need, perhaps
including adjustment of the money supply if ever necessary. The whole
nightmare of the present tax system would be effectively eliminated--the
complexity, the massive administrative structure with its expense, litigation,
accountancy costs, intimidation and fear--and plain waste and sabotage of human
effort would be terminated. By the way, in 1944 Canadian consumer debt was
about five percent of annual income and is now well over one-hundred percent
with bank issued consumer loans being the main feature of this debt. How
can the establishment orthodox experts sanely conclude that it makes sense to
add a further burden such as the General Sales Tax on consumption when it is so
obviously and endemically underfunded already?
7. The Compensated Price: Discussion to
be pursued at another time.
Sincerely
Wallace (Wally) M. Klinck
----- Original Message -----
Sent: Sunday, October 13, 2002 6:29
PM
Subject: Re: MONETARY: Discussing the
unjust monopoly
I am not in favour of Thoren's model per se, but
used it
to point out his math about taxation. I
believe he advocated
private production investment through the private
banks
(which would lend money to industry that it
had borrowed
from the government at a 'wholesale'
rate); and direct government
spending of the money it created on public
production
investment. Again, I don't find this a
leading model,
just an illustration of the math that was worked
out
regarding taxation possibilities. His
books are still
available on the Internet I believe, for those
who are
interested.
I have only read outlines of binary
economics. I think social
credit has the potential to be a more complete
solution than
binary economics, in that it focuses on the
effects of
automation and the resultant free time available
for the
individual. Capital is bequeathed to the
population as a
whole, rather than just those that are working in
the money
economy. The concept of the Cultural
Heritage is used
to justify this, in that the improvements by
innovators and
inventors long dead belong to the community as a
whole;
not just an elite, nor workers who comprise
the other 1%
input into production.
I find the compensated price aspect of social
credit to be
an area in need of improvement, but I haven't had
time to
investigate other possibilities here yet.
In any case, the
compensated price
is one mechanism by which capital is
transferred to the
general population (through purchases
that are increasingly subsidized, as automation and
production improves).
For a brief introduction to social credit
see
Regards
Dan Parker
----- Original Message -----
Sent: Sunday, October 13, 2002 5:45
PM
Subject: Re: MONETARY: Discussing the
unjust monopoly
Dear Monetary Reform members,
Dan Parker rightly refers to the need to remove
compound interest from the system.
He also refers to Theodore Thoren's idea
of government creation of money. Did Thoren want this money to be just
spent on consumption (which is what Social Credit tends to favour) or does
it also address production investment? Did Thoren have any concept of
wide capital ownership? I point out to Dan that binary economics most
certainly does address actual wealth creation. Has Dan read Binary
Economics -- the new paradigm?
Rodney Shakespeare.
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