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COG
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Monetary Reform Discussion |
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[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index] Re: MONETARY: Monetary Reform -- Reply to "John Medaille"
[Ryan] I will not presume to speak for Wally Klinck, but will insert my
comments below
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>From : John Médaille <john@medaille.com>
Reply-To : monetaryreform@cog.kent.edu
To : monetaryreform@cog.kent.edu,COG Monetary Reform
<monetaryreform@cog.kent.edu>
Subject : Re: MONETARY: Monetary Reform -- Reply to "John Medaille"
Date : Thu, 24 Oct 2002 09:03:09 -0500
At 12:44 AM 10/24/2002 -0600, Wallace M. Klinck wrote:
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)
[Médaille] I've heard this several times. Could you distinguish for me
"physical" vs. "financial" costs.
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[Ryan] There are real costs in terms of labor and resources actually utilized
in the process of production. In this respect "real costs" are "physical
costs." They do not necessarily correspond to the numbers written down by
accountants or economists.
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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 p
rescriptions--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.
[Médaille] Could you be more specific about this last point. Which "Catholic
thinkers" would you recommend?
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The ideal price level is zero,
[Médaille] Really? Why? I certainly don't want to sell my services for nothing.
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[Ryan] Wally's point here is not Social Credit, strictly speaking, but it is
not necessarily inconsistent with Social Credit. He is speaking of the
effective price to the consumer in the hypothetical future where robotic
production has displaced human labor in its totality at the theoretical limit.
You would not have to sell your services for nothing. If you sell your
services for X, the price to the consumer is zero if the compensated price
rebate paid to you + the consumer dividend = X.
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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.
[Médaille] What are the mechanics of this? For example, is there a gov't
agency that sets "just price"? Or is this just a theoretical paradigm? And how
are these "mean" rates computed?
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[Ryan] The Just Price is just to the producer and just to the consumer. This
means that the producer can recover his costs of production and the consumer
can purchase all that the producer can reasonably produce. The absolute
numerical value assigned to the price is determined by the market. The mean
production rate and mean consumption rate are brought into equality through the
Compensated Price and Dividend.
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The money issued as debt (created) by the banking 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.
[Médaille] Again, how exactly does this work? Is is like a reverse sales tax?
Do we get a check in the mail (from whom?)?
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[Ryan] I don't like the term "without debt." It infers that money is
something physical that circulates perpetually. Real money is a contract that
disappears when its terms are fulfilled. That is the ticket or "chartal"
concept of money.
Yes, the Compensated Price is analogous to a reverse sales tax. It could be a
check. There are other possibilities.
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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 acquisition of capital (as per the suggestions of Binary Economics) by
issue of more debt in circumstances which currently already create exponential
unrepayabale 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.
[Médaille] BTW, I see my name in the subject line, but I can't recall posting
anything but a brief comment to the monetary list. What post are you replying
to?
John C. Médaille
"A dead thing can go with the stream...
but only a living thing can go against it."
-G. K. Chesterton
http://www.medaille.com/distributivism.htm
john@medaille.com
--
On Thu, 24 Oct 2002 09:03:09
John Médaille wrote:
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