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[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index] MONETARY: RE: "usury" is not the problem
Dan, Of course Douglas was cognizant of the existence of interest. You said, and these are your words, the "effects of interest." That is the phrase I replied to. The operative word you used was "effects." And then you followed with something about the "exponential driver that is compound interest," as if there is something about interest that causes debt to compound. You used the word "usury" with all its historical inference, some of it inevitably Anti-Semitic, whether or not that was your intention. You used the word "evil" in reference to the monetary system and then used the word "evil" in reference to me. The fact is that, in Douglas' A + B Theorem, debt compounds even if the rate of interest is zero. Here, the operative word is "zero." The Theorem is a profound reducio ad absurdum. Debt compounds because of labor displacement, not interest. The effects of interest are non-existent, in the same manner that the effects of profit are non-existent. Interest is not the cause but the reflection of a state of affairs, just like profit. Interest is the effect, not the cause of the effect. It is not a causative factor. In A + B, interest is categorized with B payments; there is nothing special that sets it apart from any other B payment. In that broad sense, it represents the costs of production of the services provided by the financial sector. Some additional comments are inserted below. >From: "Dan Parker" >Theorem nor any aspect of the Douglas theory.' [Ryan] Yes, the "effects of interest." It has nothing to do with the A + B Theorem or any aspect of the Douglas theory. > >To which I replied - The Monopoly of Credit, Fourth Edition. >by C.H. Douglas Appendix I on detailing A+B theorem. p. 143 >"Group B - All payments made to other organizations (raw >materials, *bank charges*, and other external costs)". > >I elaborated on how this book went on to say bank charges, of>course, included interest. [Ryan] Yes, bank charges do include interest. In fact, most bank charges are in the form of interest. Douglas takes note of the existence of interest in his theory. That's something quite different than saying interest has "effects." > >Your response, to being demonstrably wrong, about a very basic >social credit matter, was not to insist on a typo, or even that>you had been mistaken. You had to admit the point, [Ryan] The point is not admitted but adamantly disputed. but then >just sailed along saying the interest part of Douglas' theories>were now unimportant, instead of non-existent. [Ryan] The "effects of interest" are not a part of Douglas' theory. > >On picking up the book Social Credit, and flipping through it, >I almost immediately found this bit on Douglas' description >of the effects of private banks creating most of the money >supply: > >"Now the first point to notice is that the result of this >complicated process is exactly the same as if the Government >itself had provided forty millions, in Currency, with the >*important* exception that the public pays 4 or 5 per cent >per annum on the forty millions, instead of merely paying >the cost of printing the Currency notes." - p 138, 139>Fifth edition, Social Credit by C.H. Douglas. [Ryan] Of course, to such credit worthy governments as the United States or Great Britain, the real cost of the notes or credit provided by private banks is probably far less than 4 or 5 percent per annum. No doubt those governments are being over charged. Compare, though, the cost of extending loans to a government such as the Congo, or, let us say, Brazil. The prospects of getting repaid by those governments are minimal by comparison. A portion of interest is insurance against default. The loans that are being repaid cover the cost of those loans that are not being repaid. That's one reason that interest is higher to less credit worthy borrowers than it is to more credit worthy borrowers. Government could get into the banking business itself, as did the United States during its revolution and later during its civil war. Doing so helped win both wars. Or, a government like the Congo could get into the banking business by printing and spending, or attempting to spend, its own notes. No one wanted them. No one would take them. They were worthless and provided no monetary utility whatsoever. Douglas' example, which you cite above, was in the context of Britain's financing of the First World War. Britain's method of financing left a legacy of debt that required repayment for generations to come, greatly out of proportion to the services received from its financial sector. Contrast that to how the United States financed the Second World War. It was financed by credits advanced by the Federal Reserve directly to the government, bypassing the so-called "open" bond market, at negligible interest rates. The private commercial banks were required to purchase large sums in low coupon rate bonds directly from the government, also bypassing the ordinary bond markets. There were also rationing and price controls. Interestingly, these policies were a significant factor enabling the victory over Germany, which adhered to the most orthodox financial policy of the Western belligerents. Britain was somewhat less orthodox than Germany, but more orthodox than the U.S., which explains a lot about the relative viability of each into the post war era. The point is that interest should be regulated in the manner of the profit of a natural monopoly. That monopoly can be administered privately or publicly, or both. In either case there should be independent oversight. That is to say, checks and balances preventing abuse. > >Now I've just pulled a quote proving you are wrong about >the unimportance of interest in Douglas' theories as well,>where he *specifically* says it is *important* [Ryan] Certainly interest is important; it is the effect, not he cause of the effect. . I don't expect >any straightforward admission from yourself that you were >wrong again, even though its right there, from the horse's >mouth, so to speak. > >I have a copy of a letter by genuine socred expert Wally Klinck >here as well, where he states that both interest-free money, and>some debt free money are necessary for a proper money system. [Ryan] These are not phrases used by Douglas. In principle, the adjustments called for by Social Credit can be accomplished without money per se. They could in principle be accomplished through bookkeeping adjustments. >The letter to the editor is about the A + B theorem. Or here >from another letter he had published > >"..a false economy which cannot function without unrepayable >debt, as receiving agencies to accommodate the debt mongering>*and usury* of the banking system.." [Ryan] Social Crediters should avoid using the term "usury." It conveys the wrong message. > >Or "the money supply injected...on an interest-free basis" >And Soddy "(the banks) have corrupted the purpose of money from an >exchange medium to that of interest-bearing debt" - These last two >are from the top issue of The Social Crediter in my pile of research>(Volume 77, no. 6). Interest is a major concern of social credit. [Ryan] It was not a major concern to Douglas. Regardless of Soddy's assertion, modern money is not primarily an exchange medium but more in the nature of a ticket against a share of industrial production, a point that Douglas made repeatedly. >I don't even have to dig for the references to it. It's everywhere, >a central concern, as it should be according to basic math and>common sense. [Ryan] And here is another example where basic math and common sense fail. It was common sense, and is common sense to most people today, that the speed of a falling object is proportional to the distance it has fallen. That common sense was expressed in the theory of "impetus." It took the experimentation of Galileo to disprove it. The A + B Theorem cannot be understood without using concepts from calculus. The concepts, that is, not necessarily proficiency in computation. The "ten can't repay eleven" arguments about the supposed compound effects of interest are in the category of fallacies exposed by Zeno's paradox of Hercules and the Tortoise, from 2500 years ago, where Zeno "proved" with the math available in his time, that Hercules could never catch up to and pass the Tortoise.
Yet you clearly stated the effects of interest had >nothing to do with Douglas' theory, then backed off and said it was>unimportant when I proved you wrong. [Ryan] Again, the "effects of interest" have nothing to do with Douglas' theory. > >I really don't know where you are coming from. That >you would send me an attachment with a e-mail of insults>and expect me to open it seems strange. [Ryan] Maybe I did insult you, but I didn't call you evil. I did not intend to insult you. I intended to instruct you. That email was in reply to an email from you that called me evil. > >The following is about disinformation tactics in general, >and this exchange can serve as an example. I do not know >the William's motivations, whether his mistakes and credibility >led him to follow the same procedures as a disinformation agent,>or if this was his intention from the start. [Ryan] This is a paranoid response. It is the typical response of the true believer. Faith transcends reason. It is faith, however, in a false god. > >In any case, in the interests of making lemonade out of lemons, >this exercise is instructive for those who have not yet run into>the inevitable disinformation agent. [Ryan] Everything's got to be a conspiracy, doesn't it? > >It's worthwhile to point out that much of the disinformation falls>along the lines of the big lie. [Ryan] The technique of the Big Lie was perfected by Joseph Goebbels, as I remember, who ranted on about "usury" and "the Jews," over and over and over and over. Instead of making a misstatement >about some obscure part of a theory, a central tenet will be >misrepresented. > >This can be done while affecting the attitude of the expert, and >accusing someone who understands the basics of being completely >ignorant of the subject matter. > >The big lie can be effective, because most people have elemental >standards of decency that they project onto others. Consequently, >they cannot imagine anyone repeatedly misstating basic concepts, >while pretending to be an expert, and admonishing someone >giving the correct information, as being someone who hasn't the >foggiest idea. I used to be susceptible to the big lie, but no>longer. [Ryan] I'm afraid you've become a believer of your own big lie. > >So if there is something positive to come out of this entire >sorry affair, it is that those working for the good have hopefully>gained some immunity from the tactics of those who champion usury. [Ryan] "Working for the good" against "those who champion usury"! With that mindset you can justify any kind of action against those who you perceive to be your enemies. I am not your enemy. I'm merely trying to instruct you so you might see the light. Perhaps I'm wrong. I think I'm right. But I don't see this as a conflict between good and evil. I see this as a discussion over technical matters, such as discussion whether a steel frame, considering the circumstances, is better than poured concrete. Or about the comparative attributes of plastic. With the mindset you are expressing - remember, we are talking about good against evil - you can justify anything at all. I'll leave it at that. The historical record for such an attitude speaks for itself. > >In stating 'The "effects of interest" have nothing to do with the >A + B Theorem nor any aspect of the Douglas theory', William misstated >a central concern of social credit. In saying it was a minor part of>Douglas' theory [Ryan] It's not a minor part of the theory, it's not a part of the theory at all. when I proved him wrong, he was not coming clean. >In saying I haven't the foggiest notion about social credit, William is >again grossly mistaken. > >The proof is above, and everyone that received these e-mails has >the proof that William clearly misstated a very basic part of social>credit. This is a done deal. It is not something under debate. [Ryan] Not a matter under debate for one with a closed mind. > >And it isn't just Douglas or social credit that expounds on the>obvious effects of usury. [Ryan] Douglas never expounded on the "obvious effects of usury." > >"As a result of fractional reserve banking over 90% of our money >supply is loaned into existence by commercial banks and thus must >grow by enough to at least pay the interest on the loan by which>it was created. [Ryan] This is a complete fallacy. This gives a basic growth bias to the economy. [Ryan] It does not. There is indeed a growth bias that is explained by the A + B Theorem. >Fractional reserve banking also transfer to private hands the >state's traditional right to issue money, and does so in a way>that increases the cyclical instability of the economy. [Ryan] No where did Douglas advocate the abolition of fractional reserve banking. The >corrective call for 100% reserve requirements has been made >periodically not only by so-called 'monetary cranks'(Frederick >Soddy), but also by economists of impeccable reputation such as >Frank Knight and Irving Fisher." Prof. Herman Daly, co-author>of For the Common Good, former economist World Bank. [Ryan] One hundred percent reserve banking is unworkable. To the list might be added Milton Friedman. Typically, what is advocated is the requirement that one hundred percent reserves be kept against demand deposits, and something less than one hundred percent against time deposits. Which is, when considering the totality of deposits, fractional reserve. They are playing with words. A bank required to keep one hundred percent reserves could not make loans, period. In a very real sense any institution making loans is operating on the basis of fractional reserves. It is a variation on the concept of insurance. C. H. Douglas never called for one hundred percent reserve banking. > >Again, I apologize for any unpleasantness, but in recognizing how >the big lie works, monetary reformers are less likely to be led >down the garden path, by those who intentionally or unintentionally >adopt such tactics. > >dp > >-----Original Message----- >From: William B. Ryan [mailto:w_b_ryan@hotmail.com] >Sent: Monday, October 21, 2002 10:14 AM >To: dan.parker@telusplanet.net; monetaryreform@cog.kent.edu >Subject: Re: "usury" is not the problem > > >Yes, the syndrome of the self-inflicted lobotomy. See the attachment. > >I take consolation in the fact that you yet haven't accused me of being >a member of Al-Qaida, lurking from a cave. > >My intention is not to address the gaggle of "monetary reform" cranks, >but those who have been tempted but not yet seduced by their claptrap. >And there are some. > >The "usury" thesis is demonstrably false. > >By refusing to hear the arguments why this is so you are exhibiting the >characteristics of ideological paranoia. > > > >From: "Dan Parker" > >To: "'William B. Ryan'" , > >CC: ,,,,,,,,,,,,,,,,,,,,,,,,,,,,, > >Subject: RE: "usury" not the problem > >Date: Sun, 20 Oct 2002 22:54:24 -0600 > > > >William, if you are not a plant in the service of the evil > >that constitutes our current usury based monetary system, > >you are doing a very good impression of one. > > > >Please remove me from your future e-mailings. > > > >Thank you > > > >Dan Parker > > > >-----Original Message----- > >From: William B. Ryan [mailto:w_b_ryan@hotmail.com] > >Sent: Sunday, October 20, 2002 3:25 PM > >To: monetaryreform@cog.kent.edu > >Cc: dan.parker@telusplanet.net; > >Subject: "usury" not the problem > > > > > >[Dan Parker] "Removing the exponential driver that is compound interest > > >from the system is also absolutely necessary in order to have a good > >money system." > >---------- > > >[cut] >Surf the Web without missing calls! Get MSN Broadband. Click Here
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