tag:blogger.com,1999:blog-8479707700970948550.post7222592523526095030..comments2021-10-12T20:59:06.028-06:00Comments on Social Credit: Debt and Living beyond Our MeansSocredhttp://www.blogger.com/profile/03930579002329295431noreply@blogger.comBlogger43125tag:blogger.com,1999:blog-8479707700970948550.post-80470264912414864332013-03-12T12:33:12.474-06:002013-03-12T12:33:12.474-06:00Hi Anon:
Thanks again for your excellent question...Hi Anon:<br /><br />Thanks again for your excellent questions and comments.<br /><br />Banks create credit based upon their ability to monetize the assets of society. Their ability to do this is limited by the demand for credit, and their ability to access reserves. In a Social Credit society financial credit would only be limited by the real credit of society.<br /><br />What Douglas is saying in the quote you reproduce from “Economic Democracy” is exactly what you suggest. Automation SHOULD reduce the amount of effort required to purchase goods and services; however, due to the fact that income is only derived from work, and the fact that the consumer pays all the costs of production, and increasing amount of goods and services are produced which are not necessary, but are ultimately charged to the consumer, even if they are waste.<br /><br />I respond to Christians who quote Paul where he says ““if any will not work, neither should he eat” (Thessalonians 3:10). “ by saying, that this was certainly true at the time and place it was written, but that does not mean that this is a universal truth that holds for all time and all places. Just as Jesus said, “go sell what thou hast, and give it to the poor” (Matthew 19:21), he did not mean that everyone has to sell all they have and give it to the poor. This statement was true for the intended recipient, who valued his material possessions above all else. It was not meant as a universal truth to applicable to everyone. Socredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-17402189702292762972012-06-19T17:46:31.485-06:002012-06-19T17:46:31.485-06:00continuing...
3. In his book 'Economic Democ...continuing...<br /><br />3. In his book 'Economic Democracy', page 121, Douglas writes, "Now, it must be perfectly obvious to anyone who seriously considers the matter that the State should lend, not borrow, and that in this respect...the financier usurps the function of the State". Could you please explain what Douglas meant here by "The State", because sometimes he used the word to descrobe 'the people' and sometimes to describe the official government.<br /><br />To me the context centres on the National Debt (of Britain) and, I suspect, this little gem on p.120, "...who obtained the money to buy by means of the creation...of credits at the expense of the community, through the agency of industrial accounting and bank finance".<br /><br />Am I on the right track? Because when 'the State' is used most folk jump to the conclusion the government (under the control of politicians) should create a country's money supply, which, I believe, Douglas did not support.<br /><br />4. Douglas wrote something along the lines that at the rate things are going we will end up with a Global slave state. Personally, I believe that as of the year 2012 we are already there - a Global slave state. What are your thoughts on the matter?<br /><br />5. I take it you consider the philosophy of Social Credit is Christian? When Douglas writes of SC being practical Christianity, does this mean an affirmation that the philosophy of Social Credit is Christian? And how does this practical Christianity affect the life of the individual in our very materialistic environment?<br /><br />6. In light of the above, should it not be argued that the Douglas analysis and Social Credit should be actively promoted by the clergy of the Christian Church? Why hasn't the church taken up the social credit proposals?<br /><br />7. Would you say that with all the opposition to Douglas and to social credit, Social Credit policies represent a threat to someone? To the money-power? In that SC, being interwoven with Christianity, represents increasing economic and political freedom for the individual; but full employment, export war and hyper-production represent increasing centralised control over the individual and the community? <br /><br />8. Does it constantly amaze you that people - even the well-to-do - simply don't understand the difference between real credit and financial credit? That money in itself is nothing; that money (and therefore modern accounting) are inventions of man? I write this as one reads reports "Europe has no money!", "The country is bankrupt", "China has all the money, therefore we must beg them to lend..." and so forth.<br /><br />Whoops, I have asked and written too much. Sorry. All the best.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-65043805638712751242012-06-19T16:51:47.451-06:002012-06-19T16:51:47.451-06:00Greetings Socred:
1. The mixed ownership model i...Greetings Socred:<br /><br />1. The mixed ownership model is the description given by our ruling political party to the partial selling of crown assets. That is, the government owns a public power company. They now want 49 per cent of the shares in that company to be sold to private investors; thus 'mixed ownership'. <br /><br />It is nothing but the old privatisation policies of the 1980s that occurred in Britain and in this part of the world; and which are still peddled by the World Bank, IMF et al. In other words, our government wants money to "invest" in to the economy - for example, they wish to increase spending on bio-tech and scientific innovation in order for us to export value added product to the world market.<br /><br />So economic orthodoxy tells the government politicians they must either tax to the hilt - or sell what they have. With your knowledge of both economics and social credit, I am sure you would see the nonsense in the argument (just presented) of orthodox economists - who inhabit the halls of government treasury and the IMF!! <br /><br />2. Our local Member of Parliament is a member of the ruling party. Anyhow, in light of government privatisation and taxation policies (refer above), I asked if these policies - designed to create a 'stronger economy' - would a)lead to a much lower cost of living; b)result in the retirement age being lowered from 65 years to 60; c)reduce the average 40 hour working week to, say, 35 hours; d)significantly lower private-sector debt etc to a total of 8 questions. I also asked the question: Could our local MP please explain why we must "boost incomes"?<br /><br />Not one of my questions received an actual or specific answer. I was simply brushed off with "Mr...has outlined his wishlist of hoped-for results of a stronger economy. I would like a stronger economy to result a higher wages...lower unemployment, more money for education and health provision, more money for infrastructure development...". The MP then waffled on about their Budget 2012. <br /><br />See what one is up against?!<br /><br />Interestingly the same stonewalling and inablility to see the economic facts were apparent in the days of C H Douglas.<br /><br />The theme behind my questions was simply that if the prevailing economic policies do not make life easier and better, with increasing leisure time, for the individual; what then is the point of all this economic frenzy, and industrial production and urgency for full employment? Where are we going?<br /> <br />But no, can't get a straight answer from any politician!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-18764409720289248902012-06-16T16:32:05.731-06:002012-06-16T16:32:05.731-06:001) 1) I’m not sure what you’re getting at with the...1) 1) I’m not sure what you’re getting at with the mixed ownership model? Certainly there is no necessity to create employment in order to disburse incomes. Certain services are best delivered by the government (for instance police, military etc…), but I think that if something can be delivered by private industry or the government, I personally believe it should be delivered by private industry, because it’s more efficient.<br /><br />2) I think what Douglas was referring to in terms of a works system must have a definitive objective is something along the lines of goal setting. In order for any system to function efficiently it must have a clearly defined objective (goal). I’m not exactly sure what is meant by this either, because I’d have to see the context. Do you have the exact quote?<br /><br />3) <br />I think that Douglas was saying that so long as “making a living” is a dominant factor in most peoples’ lives, then there will be those who will be able to control and manipulate politics. But as soon as this factor is no longer dominant in most peoples’ lives, and their attention is drawn more towards their political situation, then these people will no longer be able to manipulate politics.<br /><br />4) I’m sure that if a prisoner only knew his cell, he would be happy with his lot in life as well, because he wouldn’t know any better. I think it’s incumbent upon us to show people that life could be much better, and we all could be much happier. There is not shortcut in all this. We are going to hit resistance all along the way. People are afraid of change, and Victor was correct in his assessment. <br /><br />5) I would counter this argument by stating: “Man does not live by bread alone”.Socredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-2832770214108920582012-06-04T16:42:03.250-06:002012-06-04T16:42:03.250-06:00Socred,
Question 4, 5th paragraph, May 31 commen...Socred, <br /><br />Question 4, 5th paragraph, May 31 comment above: "...and contend with their standard of living...". This, of course, should be "...and content with their standard of living...". Sorry.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-72084167200432416732012-05-31T17:09:17.998-06:002012-05-31T17:09:17.998-06:00Continuing...
Further questions:
4. I read a re...Continuing...<br /><br />Further questions:<br /><br />4. I read a recent political article which quoted comments from our Ambassador to the USA.<br /><br />The article also centred on an OECD life satisfaction survey of my country. Essentially the survey concluded that we are one of the happiest countries in the OECD. That is, the vast majority of people are happy and healthy and are satisfied with their lot.<br /><br />Thus, the writer of the article wrote, "The reality is that the world is a far better place today than it was 50 years ago...and it will be better in the years to come. The technological [and industrial] innovations that we are currently experiencing are only the starting point of a revolution that is now underway and is transforming our lives on a daily basis".<br /><br />The article also stated that in 1820 85% of the world's population lived in poverty, today it is less than 20%. And (thanks to science and technology) 1 hours of work today delivers more than 25 times the value than it did in 1850.<br /><br />Therefore this is the question: If people in the Western world today are happy with their lot in life, and contend with their standard of living, and the industrial system is working satisfactorily - where does this leave social credit and the Douglas analysis? Do we waste our time speaking to people on economic matters etc because I remember once being told by Victor Bridger something along the lines that if people prefer the life of a well-fed slave then the system will continue as usual.<br /><br />5. Further to the question and article above, "We should", [said the Ambassador to the USA] "celebrate our success, the great ideas of freedom, representative democracy, freedom of religion, freedom from religion...labour rights, women's rights, the virtue of social mobility."<br /><br />And, "...more wealth has been created over the past 60 years than the rest of human history put together...The darkest places on the planet...are the closed economies".<br /><br />"Those...who predicted the end of democratic capitalism...will be disappointed..." as apparently the global trading system has held (re the recent global credit crisis).<br /><br />Now this Ambassador is a great one for free trade agreements and the WTO. etc (Despite originally being a member of a socilist political party.) <br /><br />Anyhow, this is typical of the economic and political ideology that is parroted in my country constantly. Again, how does one counter this in light of social credit and christian economics? (Rightly or wrongly,I would describe social credit as christian economics, and besides I doubt if the average individual has as much genuine freedom as the Ambassador thinks they do.)<br /><br />Once again, thank you for your patience.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-75156023774738044222012-05-31T16:35:13.823-06:002012-05-31T16:35:13.823-06:00Thank you for your response, Socred. Much appreci...Thank you for your response, Socred. Much appreciated.<br /><br />Further questions:<br /><br />1. Our government has embarked on a policy of partial selling of Crown assets i.e. power companies etc They call it a mixed-ownership model. (In the UK there is the similar Public-Private Partnership model.) <br /><br />Anyhow, the locals are told, "Mixed ownership is a smart policy that will strengthen the...economy. And a stronger economy is the only way we will create jobs, boost incomes, and provide the high-quality public services the people of [this] electorate need".<br /><br />Could you please give a comment on the quotation above. That is, any thoughts as to a counter -argument? <br /><br />(Furthermore we are told the government has to tightenup its spending and stop increasing public debt,hence the partial selling of crown assets.)<br /><br />2. In social credit literature, Douglas speaks of "A works system must have a definite objective". Exactly what is meant by this? And in relation to our daily living? (Excuse my ignorance on the matter.) <br /><br />3. In writing about the surrender to materialism, Douglas wrote, "If you can keep the business of getting a living the dominant factor of life, and so keep your control of politics - just that long, and no longer". Could you perhaps expand on this quote and especially the last bit? I am not quite sure what Douglas meant with "just that long, and no longer".<br /><br />Many thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-24851330527137134082012-05-27T08:34:56.685-06:002012-05-27T08:34:56.685-06:00Hi:
My apologies for the delayed response.
I'...Hi:<br /><br />My apologies for the delayed response.<br /><br />I'll respond to your questions below:<br /><br />1) I don't think that Douglas was opposed to competition, in fact, he speaks of it as an essential aspect of the private enterprise system. He did say that people working together were far more productive than people working all by themselves. He called this the "unearned increments of association". Cooperation is an important element of a private enterprise system. Any corporation involves people working in association with each other. <br /><br />2. Potential production at current prices must be greater than the income distributed to all individuals in the same cycle of production. No dividend or price rebate would be distributed if total prices were equal to total incomes. The dividend or price rebate would not be distributed based upon monies collected through taxation. The crux of the A+B theorem and Douglas' analysis is that the economy is not in equilibrium. The price rebate and dividend are designed to increase consumers' income in order to bring the economy into equilibrium.<br /><br />3) Yes, the call for "growth" is the futile attempt to distribute income in order to purchase the goods and services already in existence. The problem with this policy is that eventually the production associated with this growth shows up in the cost of some future consumer goods, and the income necessary to purchase these future goods no longer exists. This is the Keynesian solution to the problem, but even Keynes recognized the the absurdity of his own solutions when he said the following in his "The General Theory of Employment, Interest, and Money".<br /><br />“Thus the problem of providing that new capital-investment shall always outrun capital-disinvestment sufficiently to fill the gap between net income and consumption, presents a problem which is increasingly difficult as capital increases. New capital-investment can only take place in excess of current capital-disinvestment if future expenditure on consumption is expected to increase. Each time we secure to-day’s equilibrium by increased investment we are aggravating the difficulty of securing equilibrium tomorrow.”<br /><br />4. If Canada were to adopt Social Credit it would pay for overseas debts the same way it does now- with its own currency. However, with the advent of a Social Credit price discount, Canada's currency would buy more than it does currently.<br /><br />5. Inflation in all countries is underestimated because most companies do not increase their price, but decrease the size of their packaging. For instance, a company can reduce the size of their shampoo from 100ml to 90 ml without increasing the price of the shampoo. Although inflation would not report this as an increase in price, the price actually rose by 10% because the amount of shampoo people receive for the same price is 10% less.<br /><br />6. Interest rates are low because countries around the world are trying to stimulate production through the use of low interest rates. The problem is the liquidity trap. People simply do not want to take on more debt.<br /><br />7. The power to "contract out" means the freedom to choose to associate with others in economic activities. While this power is not "absolute", it is essential to give this freedom increasingly to individuals as capital replaces labour in production. Ultimately, if capital totally replace labour in production, all citizens should be able to "contract out" permanently. We aren't at that point in production yet, and may never be fully, but science and technology are increasingly moving us towards that ideal.Socredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-59955006330489590482012-05-05T16:45:14.997-06:002012-05-05T16:45:14.997-06:00Hullo, Socred.
Many thanks for your reply.
Quest...Hullo, Socred.<br /><br />Many thanks for your reply.<br /><br />Questions:<br /><br />1.In this part of the world, we are told constantly that we need to be more "competitive", to have a more cmpetitive economy and a more globally successful economy. What would you say to those who hold such a stance?<br /><br />I write this as I remember C H Douglas writing something along the lines co-operation is the key - as opposed to competition. This I believe has something to do with what Douglas described as the increment of association. In other words, we achieve more through co-operation than competition. Again, putting it another way, the emphasis on competition (with other economies) has more to do with flawed concepts within the academic discipline of economics? (Ironically, our government's fixation with free trade agreements sort of gives the thumbs up to 'co-operation'. True?)<br /><br />2. There has been one economist in this country who has called for a National Basic Income for all (adults). Naturally, people criticize this because they think such an income must come from taxation. But to clarify: a) Any industrialised country can create its own financial credit - just in the same manner as the banking system. Correct? b) If people don't work - to some degree, and we know the West could operate on a 25 hour working week - or organise themselves re automation, then no national dividend. Correct? In other words, there must be production for there to be a national dividend or national basic income.<br /><br />(These questions may seem a little childish but you would be amazed at the type of opposition against social credit; hence this clarification of some basics.)<br /><br />3. In this part of the world, in the boom/bust cycle we currently do not see massive unemployment or bankruptcies; but we do see the calls for more production and economic growth. Therefore, I take it the demand for economic growth is nothing more than an attempt to restore purchasing power due to the gap between income and prices?<br /><br />4. If Canada, as a country, were to adopt social credit policies; how would it pay its overseas debts? (Re-negotiate them, more exports?)<br /><br />5. In all English speaking countries, is it true the central banks deliberately under-report the rate of inflation?<br /><br />6. In the likes of Australia, New Zealand, Canada, Britain and the USA, the Official Cash Rate is very low. Why? I mean economically, things are humming along in the first three countries. Banks are now lending at low interest rates for mortgages, thus fuelling another housing bubble (at least in this part of the world).<br /><br />7. In a political sense, what does "the power to contract out", as spoken of by Douglas, mean to you?<br /><br />Thank you for your time.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-62893021670024191042012-05-03T17:34:42.299-06:002012-05-03T17:34:42.299-06:00I forgot to add that Steve Keen also worships the ...I forgot to add that Steve Keen also worships the false god of "full employment" and has not considered that purchasing power needs to be distributed in ever increasing quantity in such a way that it's not tied to work as captial and technology replace labour in production.<br /><br />This is too bad, because I believe he would be a powerful ally, but at this point in time, the philosophical differnces are to vast to overcome. <br /><br />Until he realizes that this dilemma is the cause of increasing debt, he cannot see the correct solutionSocredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-7380824076609470662012-05-03T12:24:09.717-06:002012-05-03T12:24:09.717-06:004)
There are two accounts for trade – the current...4)<br /><br />There are two accounts for trade – the current account and a capital account. Both must balance. In other words, if the current account is in deficit (i.e. the country imports more than they export), then the capital account must be in surplus (i.e. there is net foreign investment into the country by that exact same amount).<br />If the current account balanced, or at least there was a policy of a balancing of the current account, then foreign investment would become unnecessary as it should. We do not need to borrow money from another country when we can create our own.<br /><br />5)<br /><br />I would ask them to be more specific. How is Social Credit too “idealistic”? Why is it not “viable”? These are just ridiculous comments to dismiss the subject without any thought.<br /><br />6)<br /><br />I have heard of the economist Steve Keen. I like his differential equation modeling of the banking system (although he assumes that banks always loan out to their maximum given their reserve requirements, which isn’t always true). I would like to take the time to incorporate that type of modeling into a Social Credit system. I just haven’t found the time to understand it correctly, and then apply it. <br />If you’re looking for another economist who’s thinking is pretty similar to Social Credit, check out Mark Anielski. http://www.genuinewealth.net/<br />Also, don’t forget that Frances Hutchinson, the chairperson for the Social Credit Secretariat, holds a PhD in Economics.<br /><br />Take care.Socredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-58886051665407205532012-05-03T12:23:59.535-06:002012-05-03T12:23:59.535-06:00Hi again,
I'll respond to your questions bel...Hi again, <br /><br />I'll respond to your questions below:<br /><br />1)<br /><br />foreign banks and the IMF? How would it deal with foreign currency exchange rates etc?<br />“Theoretically, exchange works in this way. The price of exchange<br />of the currency of a community is inversely proportional to the<br />price level of the country to which it relates.<br />Supposing you have the exchange level between francs and pounds<br />this week, [of] one-hundred to one. This means that the Frenchman<br />will pay one-hundred francs for every pound sterling. He can buy<br />of English goods for one pound what he can buy in French goods<br />for one-hundred francs. He will not pay for the pound, more or less<br />than this amount.<br /><br />Then suppose that by some process, next week, I reduce the general<br />price level from a price level of one-hundred to a price level of<br />fifty. Immediately, the Frenchman is prepared to pay two-hundred<br />francs for every pound because with one pound he can buy in<br />England what he can buy in France for two-hundred francs.<br />The fly in the ointment of this theory is that the Exchange<br />Brokerage is a closed corporation. If you want to buy a large<br />number of francs you will come ultimately to six or seven people<br />all of whom are international brokers and have control of the<br />exchange. They can raise or lower exchange, or refuse it altogether<br />in which case an impasse is reached very shortly.<br />If they raise the exchange of a country, e.g., England—if they put a<br />premium on sterling, they would penalise our products, but at the<br />same time it enables this country to buy a great many imports much<br />cheaper. These two things off-set each other to the extent that we<br />make the necessary arrangement to absorb imports without creating<br />an internal economic situation.<br /><br />If they take the opposite line—to hammer the exchange down—<br />immediately they create a tremendous pressure on export and if any<br />change in the economic system occurs at all we are put in a very<br />advantageous position to capture foreign imports. People can buy<br />sterling at a low rate and therefore can buy British products at a low<br />rate. This is a very serious problem to exchange brokers.”<br />http://douglassocialcredit.com/resources/resources/major_douglas_to_the_council_4th_oct_1933.pdf<br /><br />2)<br /><br />All exports should be a form of barter. The problem is that countries are forced to pursue a policy where they export more than they import. This is due to the accounting flaw Douglas recognized in his A+B theorem. I would suspect that nations would become more “self-sufficient” in a Social Credit system, but there would still be international trade.<br /><br />3)<br /><br />I don’t consider politicians to necessarily be part of the “educated class”. Anyone who believes that banks loan other people’s deposits, or that deposits have anything to do with savings does not know enough about banking to comment on it intelligently.Socredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-31867390381019726252012-05-02T21:12:16.841-06:002012-05-02T21:12:16.841-06:00Hi:
Sorry, I've been very busy over the last f...Hi:<br />Sorry, I've been very busy over the last few weeks. Nothing you said upset me, I just haven't had time to look at this blog, and now I won't have time to respond to your questions until next week.<br /><br />Sorry for the delay, and don't ever feel that you've offended me if I don't respond right away. I actually feel bad that I haven't had time to respond to your thoughtful questions.<br /><br />Take care.Socredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-38250491492448259722012-04-22T15:50:50.860-06:002012-04-22T15:50:50.860-06:00Dear Socred,
Posted a number of questions on abou...Dear Socred,<br /><br />Posted a number of questions on about April the 10th, but no response. I'm not sure, but perhaps some of my questions/viewpoints may have upset you?<br /><br />If so, please accept my apology. As I have written before, I have been very grateful for your answers. <br /><br />Thank you.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-17686707562005062702012-04-10T14:53:14.112-06:002012-04-10T14:53:14.112-06:00continue...
Q4: Another example of the thinking o...continue...<br /><br />Q4: Another example of the thinking of the political leaders from my country. <br /><br />Our politicians now ""...want more two way investment with China, Foreign Affairs Minister...says.<br /><br />"We believe there is room for an increase [in Chinese investment] to match our growing trade relationship."<br /><br />The article continued on about bringing together political, business and cultural leaders etc. The usual thing. Anyhow, Socred, what exactly is foreign investment all about? What is foreign investment from a social credit perspective?<br /><br />(I remember you once stating China won't save anyone. Alas, we are here dealing with politicians!)<br /><br />Q5: I have been told by some of the well-to-do that social credit proposals are "too idealistic", or simply not "viable". How would you answer such criticism? <br /><br />Q^: Have you heard of Australian economist Professor Steve Keen? Although he still adheres to orthodoxy, at least he is one economist who acknowledges that financial debt is a major problem and that the academic subject of economics leaves a lot to be desired. Are there any other economist or businessmen like Irish investor Christopher Quigley, who question current economic thinking? There is at least one economist in my country who has called for something similar to a National Dividend for all adults - although not quite as Douglas proposed. (You still get people who ask very loudly, "Where will the money come from?")<br /><br />Thank you very much for your time. All the best.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-5340566573251014742012-04-10T14:33:03.003-06:002012-04-10T14:33:03.003-06:00Greetings. My apology for this late response, but...Greetings. My apology for this late response, but one has been busy with a number of things. <br /><br />Re question 4 in the previous post:<br /><br />Q1: If Canada, for example, adopted a social credit dispensation, how would it deal with the likes of foreign banks and the IMF? How would it deal with foreign currency exchange rates etc?<br /><br />Q2: Under social credit, I take it exporting would not be a priority and that a social credit economy would only export what it could not produce i.e. a form of barter, as in coal for aeroplanes, or food for high tech equipment. Correct?<br /><br />Q3: Previously, you mentioned that social crediters need to convince the 'educated class' as opposed to the 'majority'. In my country, we have a Minister for Finance who insists commercial banks only lend what people have saved with those commercial banks. Therefore people need to "save more" so that the banks can lend more money to producers, so that we can have "economic growth". Furthermore, we have a Prime Minister (a former foreign echange banker)who understands that the American Federal Reserve cranks out the printing press, so-called, and creates money out of thin air, but "we" shouldn't do that because it will lead to inflation. Our prime minister however seems not to understand the greater implications surrounding 'money creation' (e.g. any shortage of money is entirely artificial) or that inflation can be neutralised; and that a country neeed not "import" so-called capital as a debt from overseas banking entities.<br /><br />The point I am getting at is this: the two examples cited above are part of the educated class. They would have IQs above the average. Now how would one penetrate the thinking of such individuals? Apart from the fact such individuals live in a world of their own. It is a bit difficult for the average person to even have a personal conversation with the "decision-makers". Besides, the educated class are doing very well for themselves, financially speaking. The system serves them very well; in other words, they don't want to know about any accounting flaw or genuine freedom for the individual (except themselves). I don't mean to sound negative. I am just pointing out a few realities of how things stand - at least in my country. No wonder Douglas talked in terms of the people needing to be de-hypnotized.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-86916891817581735232012-04-05T14:41:15.665-06:002012-04-05T14:41:15.665-06:00Hi again, I'll respond to your questions below...Hi again, I'll respond to your questions below.<br /><br />1)You may repost any of my responses, or use any information that I have given. I’m not doing this for money. I’m hoping to reach enough people to affect change.<br /><br />2) Probably both.<br /><br />3) The theory of deposit expansion is a myth. Reserves do not create deposits. The causation is the exact opposite. Banks create deposits through loans, and then go about finding the reserves necessary to maintain liquidity. The essential point to remember in terms of money creation is that every loan creates a deposit, and every repayment of a loan destroys a deposit. <br /> <br />Most money has always been credit. The idea that money was at some time all gold or some other commodity is another myth. See Alfred Mitchell Inness’ book “What is money”<br /><br />4) Could you elaborate?<br /><br />5) Wealth can come from imports or domestic production. Exports are the export of wealth.<br /><br />I would also like to add that the word wealth derives from the Old English word for well being (wela). I would argue that production that does not increase our personal well being is not wealth.<br /><br />6) We are charged for capital depreciation, but not credited with capital appreciation. The financial system does not balance at all. Increasing debt is the proof that it does not balance.<br /><br />In a letter to Aberhart, Douglas stated:<br /><br />"This seems to be a suitable occasion on which to emphasise the proposition that a Balanced Budget is quite inconsistent with the use of Social Credit (i.e., Real Credit – the ability to deliver goods and services 'as, when and where required') in the modern world, and is simply a statement in accounting figures that the progress of the country is stationary, i.e., that it consumes exactly what it produces, including capital assets. The result of the acceptance of this proposition is that all capital appreciation becomes quite automatically the property of those who create and issue of money [i.e., the banking system] and the necessary unbalancing of the Budget is covered by Debts."<br /><br />7) Tell them that we must then destroy all technology. This will get everyone working hard again.<br />Improvements in process reduce the need for labour in production<br /><br />Soren Kierkegaard was a Christian. The reference for the quote is his book “Either/Or”Socredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-80106324451792866672012-04-01T16:02:21.530-06:002012-04-01T16:02:21.530-06:00continue...
6. The accounting flaw discovered by...continue...<br /><br />6. The accounting flaw discovered by Douglas. Essentially we consumers are charged with the likes of depreciation, but not credited with appreciation? In other words we are forced to operate with a financial accounting system which does not balance without incurring debt? Correct?<br /><br />7. I often come across many people who glorify in "working hard". The insist if someone is not "working long and hard", they are not contributing to, say, national wealth. These people seem to think it is better for a person to work (for money) 60 to 70 hours per week, and , furthermore, they totally reject any thought of a country operating on a 30 hour working week as impractical and too idealistic. What would you say to such people?<br /><br />Incidentally, I enjoyed your essay touching upon the subject of "leisure" and finishing with the quote by Kierkegaard. Do you have a reference source for that quote? (I presume Kierkegaard was a Christian?) <br /><br />Once again, many thanks.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-84676833985126053672012-04-01T15:39:09.883-06:002012-04-01T15:39:09.883-06:00Thank you for your answers, Socred.
Questions:
1...Thank you for your answers, Socred.<br /><br />Questions:<br /><br />1. What is the situation with all the answers you have given me in regards to copyright. Are any readers allowed to use the information in your answers? (For example, writing public letters.)<br /><br />2. Over in Western Europe, the bankers and politicians have apparently created a $1 trillion "firewall" - presumably to stop the Greek contagion, so called. Is this just a stop-gap measure, a last ditch attempt to 'save the day'? Or is it another "rip-off" by the banking system?<br /><br />3. In 'Money and Banking' by Hoyle and Whitehead, we read, "Consider a deposit of $100, of which only $8 is likely to be required to meet the customer's needs, and the balance of $92 is available. The banks did not regard this as $92 available to lend to customers, but as the cash ratio for loans to a much greater sum. Of what sum is $92 eight per cent? [The answer being $1150.] In theory the bank could...$1150. The customer has borrowed the money to spend, so let us pretend that in the eighteenth century he bought the herd of cattle for $1150. The vendor of the cattle would not know that the money was a pure invention, and would pay the cheque for $1150 into his account, but the...probability was that he would only then ask for 8 per cent of it, i.e. $92 - the exact sum which the bank has available...The whole process is usually called the creation of credit..."<br /><br />And yet, in chapter 1, the authors write, "Despite the risky nature of local banking in the eighteenth century bankers did much to foster the growth of industry...They collected funds from the prosperous agricultural aristocracy and lent it to the new industrialists in the North [of England]..."<br /><br />In the words above, do we see the genesis of modern day credit creation? That is, a development from actual real commodity money i.e.gold, for example, to money being blips on a computer screen?<br />Do we also see in the words above an element of present day confusion as to why people think banks only lend what people deposit with the bank? i.e. they only lend other people's money, the example of money from the farming aristocracy being given.<br /><br />Sorry for all this verbiage, but I'm trying to understand the gist of why people still think banks are merely intermediaries of money, and not manufactories of money as revealed by Hoyle and Whitehead.<br /><br />4. If a country adopted social credit policies, how would it deal with what is described as international banking? For example, the American Federal Reserve; and the IMF; and foreign exchange rates?<br /><br />5. We are told wealth and propsperity can only come by export/imports, in other words by global trading. Is the basis for prosperity international trade? or the invention and application of science and technology?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-56023011852265470192012-03-28T07:35:34.088-06:002012-03-28T07:35:34.088-06:003) Commercial banks lend money to one another. Cen...3) Commercial banks lend money to one another. Central Banks are the “banker’s bank”, and commercial banks obtain reserves from them.<br /><br />There is absolutely no necessity to acquire money “overseas”. Money is created by commercial banks every day. There is no limit to the amount of money that the banking industry can create. In other words, if someone tells you that money is scarce, they are either a liar or a banker.<br /><br />4) I always had my doubts about debt and how we could be falling further into debt. I was also very interested in monetary economics, but found orthodox theories about money and its role in the economy lacking. Once I discovered Douglas and his ideas, I realized that someone had come upon a real solution to this dilemma. Further, his Christian philosophy also struck a chord since I am one myself. I believe that Social Credit is the incarnation of Christian principles in our economic life.<br /><br />5) I’m not aware of any connection between the Chicago school of economics and the Austrian School. I have studies Milton Friedman when I was in university. Austrian economics is merely re-hashed classical economics, and really makes no distinction between macro-economics and micro-economics. At least Keynes recognized the distinction.<br /><br />6) I assume that once Asia fully “capitalizes” it will have the same problems as the western world.<br /><br />Most economists dismiss the accounting flaw discovered by Douglas because they claim that B payments (payments to other firms) are income to those firms. These economists do not understand the difference between revenue and income. B payments are revenues to other firms, but only a small portion of those payments are actually distributed as “income” to individuals. Most of that money is used to repay debts or replace working capital. Economists generally have a poor understanding of accrual accounting and how it relates to income and prices. <br />There are currently labour shortages because government and the banks pursue a policy of full employment. Sometimes this policy leads to “more than full” employment, because they do not have as much control as they would like to think. Much of this “production” is waste. I’m surprised Green Peace has not picked up on Social Credit. This production is designed to give consumers income so that they can purchase the goods and services they truly need and desire. It’s production for its own sake. Take oil and gasoline for example. Most of the gasoline I consume is going to and from work. Of course, this consumption creates more jobs for those producing oil and gasoline. It’s a viscous circle of ever increasing economic “growth” necessitated from an accounting flaw Douglas discovered almost a century ago.Socredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-90663438644595107442012-03-28T07:32:26.741-06:002012-03-28T07:32:26.741-06:00Hello again. Like I stated previously, I enjoy an...Hello again. Like I stated previously, I enjoy answering these intelligent questions.<br /><br />1) I’ve had this discussion with a professional economist, and see it daily as a purchasing professional. Companies tend not to raise their prices; they decrease the quantity you receive for the same price. This is effectively a rise in prices, but is not recorded as inflation. For instance, assume that you once paid $1.00 for a 100ml shampoo, and they decrease the size of the shampoo from 100ml to 90ml for the same price. The price of the shampoo is still $1.00, but the size is 10% less. This is effectively a 10% increase in price, but is not recorded that way by government statisticians.<br /><br />We are being fed false inflation data – not necessarily purposefully, but due to cost and time constraints. Further, prices are kept somewhat lower through the importation of goods and services from countries with low salaries.<br /><br />Currency inflation is the rise in the quantity of currency coupled with a rise in prices. It is the “classic” definition of inflation by orthodox economists, but I would argue not the primary cause of inflation (see my article “Costs and Time”)<br /><br />2) Cheap labour countries are using more and more technology, but technology replaces labour in production. This tends to increase the supply of labour relative to demand which, ceteris paribus, reduces the return on labour (wages) relative to capital. As long as people are reliant on work for income, this will result in fierce competition for fewer and fewer jobs. The government and the banks must then employ a full employment policy to maintain political stability, and this policy results in wasteful production and inflation.<br /><br />Douglas stated "By an accounting method of analysis, the conclusion is reached that the value, at the current retail price-level, of goods produced far exceeds the flow of purchasing-power from permanent sources. In other words, recurring periods of business depression are shown to be the result of present financial and business policies."Socredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-5800331690261836242012-03-27T14:19:28.916-06:002012-03-27T14:19:28.916-06:00cont...
In the meantime, the average person survi...cont...<br /><br />In the meantime, the average person survives as best they can; and the economic system continues as before. Victor bridger once wrote that at the rate things are going, it may be the 22nd century before Douglas is discovered! After all, there has to be a reason why social credit policies are deliberately suppressed and mocked by academics, bankers and politicians. Personally, I link it to an Anti-Christian philosophy which rules the day.<br /><br />Many thanks, Socred, for both your help and your patience with my many questions.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-46403851611328247422012-03-27T14:08:39.529-06:002012-03-27T14:08:39.529-06:00Greetings. Thank you very much for your answers. ...Greetings. Thank you very much for your answers. Truly most helpful.<br /><br />Further questions:<br /><br />1. Douglas wrote, :...that a continuous rise in the cost of living absolutely must take place, apart and above that represented by currency inflation..." In the English speaking world, we are told inflation has, since the 1990s been kept very low - for example in my country, since the year 2000, annual inflation has been 3.7% p.a. How can inflation be kept relatively low, yet living costs keep rising seemingly higher than official inflation? Are we being fed false data by governments, or is a low cost of living being maintained by cheap imports? Also, what is meant by "currency inflation"?<br /><br />2. Douglas continues, "[cost of living] palliated by...more efficient productive methods, but leading along a path of cumulative fierce competition and harder toil to an absolutely inevitable breakdown." In this day and age, would those more efficient productive methods include the use of cheap labour countries? Do modern technologies employed in manufacturing also help reduce costs, to some degree? Would you say the term "inevitable breakdown" is something inferred to be a 'oncer' or do such breakdowns occur frequently and are known as recessions?<br /><br />3. Do commercial banks lend money one to another? Do these commercial banks obtain funds from central banks? (In this part of the world, the banks are now fuelling another property bubble.) I often hear people say in this part of the world, we can only get money from borrowing overseas and banks get this money by borrowing on international money markets. So, who controls these international money markets? Social Credit says banks create money out of thin air. Therefore, what is the link between this money creation process and intl. money markets?<br /><br />4. I understand you are a manager with a degree in economics. What was it that attracted you to the Douglas analysis and social credit? What was it that made social credit seem "right" in comparison to economic orthodoxy?<br /><br />To me, unless someone can come up with a better explanation, C H Douglas seems to have hit the bullseye with his mathematically based analysis. Not only so, but the reaction he got from the powers that be is, to me, proof positive, Douglas was on the right track. Also, social credit fits in much more with the Bible and Christianity than this free market, excessive capital production, hyper economic growth philosophy we are forced to operate with.<br /><br />5. Did the Austrian School of Economic Thought, feed or morph in to the Chicago School of Economics? (Which peddles 'free market', deregulation, privatisation etc.) Are they both conncted? <br /><br />6. You mention the situation in Western Europe and the United States of America. Will such financial chaos eventually - sometime in the future - occur throughout Asia? We are told that this market is so big, it can keep the banking/financial system going for a very long time.<br /><br />7. Headlines in our local newspaper, Socred. "Worker shortage may curb...growth". Apart from the fact there have always been complaints of labour shortages since the advent of the industrial revolution, this fixation on "growth" is a result of the disparity between incomes and prices? In other words, we are being forced to run ever faster on a treadmill? Incidentally, there are people who dismiss the accounting flaw as discovered by Douglas. How would you respond to such people?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-68361974543510544622012-03-23T09:35:33.120-06:002012-03-23T09:35:33.120-06:00I'm not sure why it says there is one more com...I'm not sure why it says there is one more comment than actually posted. Maybe one was spam that I deleted? I have not had the opportunity to answer you yet, but will now.<br /><br />1)Increases in the productivity of labour means that it takes less labour to produce a unit output. Or put another way, the same amount of labour is capable of producing more output through increases in productivity. Productivity is generally increased through the use of technology. <br /><br />2) I claim it’s incorrect to assume that natural resources are “scarce” relative to our psychological demand for them. This is a “tricky” subject, because while coal may have been depleted, the real “resource” that people were seeking is energy. Energy cannot be created nor destroyed, merely transformed. <br /><br />Further, it’s important to note that while all resources are finite, that does not necessarily make them “scarce”. Look at my analogy of fresh drinking water for people floating on a boat on Lake Superior. The fresh water is less than infinite in supply, but it’s not scarce in terms of drinking water for people floating on a boat. One has to remember than a lot of our current production is “superfluous” and is designed to distribute income, not increase “wealth” in the true sense of the word.<br /><br />3) You can increase the population to as large a number as you want, but this still does not deny the truth that production not meant for consumption is waste.<br /><br />4) The physical cost of production is complete when that production is finished. The “real” cost of World War II was when the last bullet was fired. There is no such thing as a “debt” in nature. <br /><br />Read my article on costs and time. The only time that exists is the present. You cannot defer real costs to the future. All real costs are current costs. The A+B theorem explains why there needs to be exponentially increasing debt to make the economy “function”.<br /><br />5) I agree. <br /><br />6) The statement about the 25 hour work week is more true now than it was when Douglas wrote it. We have been duped into believing we have to consume more and more products. And companies are producing more and more “shoddy” products in order to maintain a customer base. Read my article on economic sabotage. Much of our current production is designed to be wasteful.<br /><br />7) I’m not so bold as to attempt to predict the future with absolute certainty. I do however see the situation getting worse. Look at what’s happening in the U.S. and Europe. These crises will be used to centralize the power of finance even further, and the power of the individual will become ever diminished. This policy derives from an Anti-Christian philosophy.Socredhttps://www.blogger.com/profile/03930579002329295431noreply@blogger.comtag:blogger.com,1999:blog-8479707700970948550.post-31195974958745196252012-03-21T14:23:45.303-06:002012-03-21T14:23:45.303-06:00Socred,
Greetings. On your main page, 19 comment...Socred,<br /><br />Greetings. On your main page, 19 comments are listed, however when one opens the comments,only 18 comments (the 18th being my questions) are actually published. Did something happen to the 19th comment? (Which I presume may be your answers.)Anonymousnoreply@blogger.com