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Some ideas to consider from the
discussion:
A stable price system might be preferable to a
counterflationary system, in
that falling prices create well-known problems for
wholesalers and others
who must hold inventory. Additionally the
purchasing power shortage causes
problems for the poor due to price 'stickiness'
(i.e. sellers are reluctant
to drop prices). For example, when productive
capacity was rapidly increasing,
yet the money supply was growing slowly in the late
1800's, many suffered from
a shortage of purchasing power, until the gold
strike in Klondike and elsewhere.
Interest would have exacerbated this problem, but
the removal of interest will
not remove the problems caused by the time-lag
between a lower ratio of money
to goods and services available, and price
levels.
Douglasite Social Crediters advocate the
compensated price to eliminate this
problem, but personally I think a less
bureaucratic solution is preferable.
The advocation of the gold standard by many in the
Islamic world fails to
take into account that it was the gold standard
that led us to where we are
today. Alexander de Mar, in his Science of
Money, avers usury was child's
play compared to the propensity of gold to
centralize wealth and power.
Quite often, when it is pointed out that a shortage
of gold can and
will hold back the development of the true,
thermodynamic realities of wealth
creation, it is held that a sliding gold price
level would be put in place. Which
is to say, there is
no standard, and such a process is as open to abuse.
This would account for the Islamic view cited
below that Social Credit money is
fiat money and inflationary in
nature when it is neither. The Socred money issuance
is approximated on
the actual wealth production capability of the
system under
consideration. It is backed by actual wealth
creation capabilities, not some
symbolic representation, which can drift from the reality.
On the other hand,
if an economy is producing 100x of goods and
services, and 100 oz of gold are in circulation, a discovery of another
100oz of gold will
lead to de facto fiat money, and inflation.
the Internet
article Fool's Gold,
by Robert Carroll I think, gives several other reasons
why the gold standard is
undesirable.
Regarding the 'big tent' approach offered by the
uncompromising Seven Steps to
Justice, one could ask whether there should be a
one-size-fits-all solution to the
current monetary problem. Maybe there should
be a multi-level currency, with
variations on national and/or local currencies to
account for local conditions and
preferences. The national currency could hook
into a world currency, which could
be the common ground for international trading. Additionally, if local currencies
become popular, there could be cases where there is
direct trading, as in the
UNILETS system, where LETS proponent world wide
make exchanges. A lot of
this might even go into the 'gifting' catagory, as
a sane monetary system lifts the
caul of a scarcity mentality, along with
poverty, in the midst of plenty. However,
there is no reason that a pure Social Credit
economy could not exist in one country
or region, and interact well with a pure system of
binary economics in the next
country.
In any case, there is lots of room for common
effort for monetary reform, especially
from a 'first things first' perspective. In my opinion, this is building the pressure on
t
he current system to
not only provide the resources needed for researching solutions,
but also to allow *unfettered* experiments to proliferate. I think Manitoba Canada
ran a mincome experiment which showed a guaranteed income resulted in a
single digit disincentive regarding those wanting
to work.
A last point concerns Norm Kurland's comment on
what is politically realistic.
When England abandoned the gold standard (just
before WWI for the first time,
I think), or the U.S. (1971?), they were doing what
would have deemed politically
impossible by most. To rephrase a social
credit saying, I'd say what is physically
possible is politically possible. It wasn't
so long ago, the political reality was
held to be that society would be entering into a
world of liesure, with 20 hour
work weeks, and retirement at 50 years of age. This
was closer to the reality
of what is possible and desirable,
and this concept will come full circle in my
opinion. The current busy-ness is not only
damaging to an individual's psyche,
but to the environment as well.
Regards
Dan Parker
----- Original Message -----
Sent: Monday, October 14, 2002 4:59
PM
Subject: Re: MONETARY: Discussing the
unjust monopoly
Dan,
You ask if there has been a calculation as to
what the guaranteed income is likely to be. In the Seven Steps two basic
incomes are possible. The first basic income is from binary wide
ownership. There has been much debate on the amount of income it would
provide. Thus for reasons to do with the nature of binary economics and
its associated prescriptions, share payouts could be as much as eight or nine
times what is paid out at present (but people whose minds are fixed in the
existing paradigm never seem to understand this). Moreover, there are
questions e.g. as to what point in time it is wished to assess the income
and how long it would take to fully implement the binary economy (while a
non-binary sector continues). Furthermore, there are questions as to the
assumed pace of technical advance etc etc etc
Those things said, I expect
that most binary economists would generally agree that a substantial
income of, say, $15-25,000 per adult per year would easily be obtainable
after 15 years or so of binary policy (and children would have their own,
but smaller, income, even a small income at birth, sufficient to cover
basic need). In another posting to this Group, Norm Kurland says that
$30,000 is achievable by the age of 65. Go to the Center for Economic and
Social Justice website at cesj.org and have a look at, for
example, Norm's A New Look at Prices and Money (this paper is also an appendix
in the Seven Steps book). I also recommend the cesj website for other
matters e.g. the Capital Homestead Act and Norm's Saving Social Security paper
(in another posting to this Group)
Now a crucial point about
binary economics is that it brings in all the new productive investment that
is required, balances supply and demand, creates new, more powerful
consumers from the previously capitalless AND does this with
interest-free (repayable) money and, in practice, removes the practice of
taking interest from large sectors of the economy (among other things,
interest is a big factor in causing inflation) Thus new assets and
consumers are brought into being money while the original money is paid
back AND is cancellable.
This creates a healthy economy
with deeply COUNTER-INFLATIONARY forces in the sense that there will be
more wealth, more wealth-creating capital, but a LOWERING of
prices.
At this point, Norm Kurland,
for example, and other binary economists, understandably prefer
simply that there be the binary counter-inflationary situation. However, Peter Challen and I with others
realised that if, instead, a STABLE level of prices is preferred, then
the way is open to introduce the Social Credit proposal to balance the binary
counter-inflationary effect. This means that debt-free money can be
issued as the second basic income sufficient to keep stable the level of
prices. However, my view is that there has to be the binary
counter-inflation first (or, at least, beginning to
happen) before there can be debt-free
issuance.
Dan, you are right in referring to the
Huber and Robertson debht-free issuance proposal and the relationship between
the binary aspect and the Huber/Robertson aspect is expected to be
greatly discussed at a conference near Birmingham (UK) next week (I believe
James Robertson will be present). There is a very important
point here -- the Seven Steps are intended to provide a format within which
most (if not all) groups who understand monetary reform, basic income etc can
find a home and create a situation in which, by supporting the Seven Steps,
they will achieve their goals much more easily than if they continue (as at
present), thinking that their own proposal is absolutely right and everybody
else is absolutely wrong.
There is no compromise in the
Seven Steps but -- quite remarkably -- it allows Social Credit and Binary
Economics to co-operate (assuming that social crediters and binary economists
wish to co-operate), accepts the reality of market-driven economies and, even
more remarkably, should be acceptable to the Islamic world. The recent
conference in Malaysia (called by PM Mahathir) was highly significant because,
although nine tenths of the speakers were crying out for gold as national
currency there are problems with that (not least because gold proponents have
no solutions for poverty, rich-poor division, position of women etc).
(Significantly, PM Mahathir has ruled out gold for the national
currency). BUT Peter and I could claim (and, by golly, we did!)
that the binary aspects of the Steps are counter-inflationary thereby
INCREASING the value of money (that shook an Islamic conference that did not,
at first, understand that fiat money, (if made repayble and
cancellable and directed at capital investment), can INCREASE the value
of money).
I should add here that
at the recent Malysia conference (concerned with the gold dinar and a
stable and just monetary system), NO proponent of debt-free money alone
(e.g. Social Credit) was invited and it was inconceivable that they would have
been because debt-free (non-repayable) money is viewed by Islam as both fiat
and inflationary. Peter and I (plus Bernard
Lietaer with his well-conceived terra based on a basket of
commodites (rather than gold alone) for valuing and settling international
trade) were the ONLY Westerners to be invited (with the exception of the
leader of the British Islamic party and Tarek el Diwany, the excellent author
on the banking system and interest). Peter and I generated much interest
among the academics of the International Islamic University who hosted the
conference and we were kindly received by the Prime Minister's special adviser
on finance at a meeting of well over an hour.
In summary, the Seven Steps
allow binary economics AND Social Credit AND Islam AND a lot of other groups
and lines of thinking to co-operate together. Assuming, that is, that
they wish to co-operate as opposed to continue to fight each other. As
Norm says, control over money and credit is the key to economic independence
and all who understand that (and that interest is largely unnecessary) should
pull together.
I ought to add that the Four
Demands paper (sent to this Group a year or so ago) was at the early stages of
thinking and the Seven Steps book was massively developed
thereafter.
Rodney
Shakespeare.
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