Attention: John Medaille, Dan Parker and
others.
Thank you, John, for your interesting e-mail
message. I attach some documents re Social Credit for your perusal.
Says's law becomes increasingly invalid with the
introduction of capital relative to labor under the existing system of
banking (money being issued essentially only for production and never for
consumption, except for escalating consumer debt which must be recovered from
future production which is the same thing). This transfers costs from an
earlier cycle of production as a charge against a future cycle with which it has
nothing to do realistically. The physical (as opposed to the financial)
cost of production is fully met when that production is completed and ready for
use. Fortunately, the defect in financial accountancy which leads to an
exponential deficiency of purchasing-power relative to financial cost provides
the the opportunity to address the problem. The issue is the ownership of
credit, the charging of interest on money created as debt and fundamentally
the premature cancellation of purchasing-power in respect of repayment of
capital loans (the reinvestment of saving creates new costs without creating new
purchasing-power and creates a deficiency in a similar matter). The
consumer is charged, rightly, with capital depreciation but wrongly not credited
with capital appreciation. Major Clifford Hugh Douglas dealt with all
these problems beginning as early as 1918. We should be concerned not
about a just wage but about providing sufficiency of income via a Just Price
(jus pretium) a modern interpretation upon which Douglas based
his analysis and prescriptions--a concept upon which the Church has
a locus standi. A number of Catholic thinkers were apprised of
Douglas's "Social Credit" and were strong supporters. The ideal price
level is zero, the ideal employment rate is zero and the Just Price
is financial price times the mean production rate over the mean consumption
rate in a given period. The money issued as debt (created)
by the bankiing system belongs neither to the banks nor the government but
to the community and should be issued (for consumption) without debt in the form
of consumer dividends and compensation to prices. Not everyone is
interested in owning capital--but all should be beneficiaries of the proceeds of
capital which emanate increasingly from an accumulation of factors which we
call the Cultural Heritage. The proposal to finance acquistion of capital
(as per the suggestions of Binary Economics) by issue of more debt in
circumstances which currently already create exponential
unrrepayabale debt hardly seems a realistic way to achieve a self-liquidating
price-system. To repeat, the very operation of the existing price-system
operating under debt-finance creates the deficiency--but fortunately
provides thereby the very opportunity to correct the problem via realistic
financial accountancy.
Your observations are welcome.
Sincerely
Wallace (Wally)
Klinck Tel/Fax (780)
467-4885
P.O. Box 3003
Sherwood Park, AB
Canada
T8A 2A6