Re: MONETARY: Monetary Reform -- Reply to "John Medaille"

[John Médaille <john@medaille.com>]

At 01:38 AM 10/25/2002 -0500, William B. Ryan wrote:

> >>[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.
> >
>
> >Okay. How are they written down?
>
>[Ryan]  Will you please restate the question?  I don't understand 
>it.  Generally, I'll say this:  Most numbers written down into account 
>books are quite arbitrary.  Social Credit seeks to rationalize the process.

If you say that the "physical costs" do not correspond to the numbers 
written down by accountants, then I ask what *should* be written down by 
accountants.


> >Everything is free?
>
>[Ryan]  At the theoretical limit, yes, in terms of cost to the end 
>user.  It's related to the engineering concept of efficiency.  We'll never 
>get there, but we can get closer to it than we're at now.

Sounds a bit utopian.


> >>[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.
> >
> >But does the market actually price things in this way? ISTM that it
>
> >works by supply and demand. What am I missing here?
>
>[Ryan]  Again, I don't quite follow the question and would hope that you 
>will restate it.  Also, I'm not familiar with the term "ISTM."  I don't 
>remember seeing it before.

ISTM="It seems to me"


>Here, too, all I can offer is a generalized answer.  Social Credit is not 
>an intrusion or intervention into the market whatsoever.  It is an 
>accounting adjustment - really, a set of adjustment mechanisms - to make 
>it work better.  There's nothing especially novel about the 
>idea.  Accountants make adjustments all the time. They've always done 
>so.   Bookkeepers for firms make adjustments.  The Federal Reserve makes 
>adjustments for the whole economy.  What Social Credit hopes to accomplish 
>is to put the adjustment process on a more scientific footing.

But the question is about your notion of "just price." The market sets 
prices by supply and demand. If SC is not an intrusion into the market, how 
will the just price by reached by the market?



> >>Yes, the Compensated Price is analogous to a reverse sales tax. It
> >>could be a check. There are other possibilities.
> >
> >Okay, but how will it work? Will this be some gov't dept. that fixes
>
> >prices and "consumer dividends"?
>
>[Ryan]  Prices are not fixed.  With certain exceptions, not far different 
>than the exceptions now, everyone can sell whatever they are selling for 
>whatever price they want to sell it, assuming they can find a willing buyer.
>
>The Social Credit adjustments are applied macro-economically, to the 
>economy as a whole.
>
>Presumably, someone will have to determine the rate of price compensation 
>and the amount of the per capita dividend.  That does not necessarily have 
>to be the government, depending on how it is defined.  There are many 
>possibilities.  Nor does it have to be determined exactly.
>
>There should be checks and balances to deter abuse.
>
>Really, the structure is already there.  What needs to be changed is the 
>policy of those in control of the structure.  They have all the tools to 
>accomplish the job.

What "structure" are you talking about? I am having trouble envisioning how 
all this is supposed to work at a practical level.


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