Bruce,
Thank you for your reply to mine, and sorry that I have not responded. I'm
still mulling over it.
Jessop
-------------------------
On Sunday 26 January 2003 10:57, you wrote:
> At 09:22 AM 25/01/03 +0200,
>
> Jessop Sutton <[EMAIL PROTECTED]> wrote:
> >Subject: [SOCIAL CREDIT] P. W. Martin
> >Date: Fri, 24 Jan 2003 08:00:37 -0800
>
> From: [EMAIL PROTECTED]
>
> >To: [EMAIL PROTECTED]
> >------------------------------------------
> >You wrote:-
> > <quote> To bring about an influx of new purchasing power in
> > such a way as to offset this deficiency without risk of
> > inflation, some measure of co-operation between the Government
> > and the banking system is required. a possible line of action
> > consists in what might be termed the'special financing of
> > public works.'
>
> ...
>
> >One question arises in my mind: Does it have to be 'new'
> >purchasing power brought about by an incresae in the money
> >supply, or should it be a judicious re-distribution of
> >existing wealth? The tax system should beseen primarily
> >as a means of redistribution of wealth -- the provision of
> >the legitimate needs of the nation which are not provided
> >by 'business' in the normal pursuit of their own interests.
>
> Bear in mind that both Keynes General Theory reasoning
> and the Social Credit reasoning have creditary money
> as a given.
>
> If the assets for final settlement are fiat money,
> as with most modern monetary production economy,
> then the government budget is NOT like a budget of
> a commercial firm.
>
> At the outset, you can imagine a government just
> spending. The limit is not financial, but real:
> if the government spending plus private spending
> cannot be met within current capacity at current
> prices, then something has to give. And since
> pricing is in the hands of commercial enterprise
> in the systems we are talking about, what gives
> is prices.
>
> However, if the level of government spending
> never exceeded the excess capacity of the
> economy, not one iota of taxation would be
> necessary to avoid general price inflation,
> and since businesses would still be net debtors
> to banks, as long as the government regulates
> banks in such a way that they demand "money",
> firms will continue to accept money because
> their creditors accept it, and everyone else
> will accept money because you can buy what you
> want from firms with it.
>
> Taxation, in a monetary production economy,
> permits governments to drain effective demand
> from the system so that private demand and
> social demand may both be accomodated.
>
> Taxation is a "redistribution of wealth", but
> it is important not to be confused about what
> financial wealth is. Financial Wealth is when
> effective demand is swapped with someone else in
> exchange for power within the commercial economy.
> Taxation is a "redistribution of wealth" in the
> sense of reducing the scope for private power
> within the commercial economy at the expense of
> government power.
>
> The liberal ideology is that private enterprise
> somehow exists "over and above" the political
> system, and that it creates wealth that the
> political system appropriates. In reality,
> in most growing economies, economic growth
> is driven by increased resource use and
> by improved technology ("soft" --
> organisational, and "hard" -- technical).
> Resources are not created by commercial
> enterprise, but simply harvested by them,
> and the technological base is a joint legacy
> of our society that cannot conceivably be
> distangled into distinct individual
> contributions.
>
> Just to reach back directly to William Ryan's
> point, the divergence between General Theory
> reasoning and Social Credit is the A+B
> theorem, which Keynes would argues is a
> flawed understanding of inadequate effective
> demand. Up to that point, on the nature of
> money and the importance of effective demand,
> they seem to be in broad agreement. Of
> course, this broad agreement may have been
> masked by the tendency to replace Keynes'
> General Theory reasoning with Samuelson's
> pseudo-Keynesian reasoning after WWII.
>
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