Dear Wally, The other day I read your brief lesson (that
I shortened and attach after my related comments below.
It offered clear insights into logical improvements to our
way of producing and consuming, etc. Thank you for it
and for allowing me to address you directly, as well as
on the SC list. My ISP and Outlook program both were
half-busted on the weekend -- I was unable to reach
the list or get my mail. Things may have been fixed -- this
message may show it. -- John Gelles on Tuesday
Below are my comments from last Saturday that got hung
up as mentioed above. I've added a bit to admit that the
fault I find in SC is also found in myself.
-------- my comments (Wally's lesson comes after it) --------
As Wally writes it below, it is wise I think to accept that Social
Credit and Douglas's ideas are completely right -- that --
Were consumers paid a measured dividend and
retailers adhered to a measured markup there
would be in each production cycle ample mone-
tized demand for accountants to feel content that
their measures were useful in our struggle to end
poverty, redession and forced loss of wages..
The system we have, which uses consumer debt and the
agony of insolvency, to move from one production cycle
to the next has built great industries, cities and nations. Its
accountants (of which I'm one), politicians, builders,
economists, voters, etc., cannot grasp the step by step
procedure that might take an economy from today's
substantial if peculiar prices and rewards to the greater
promise of a Social Credit model.
WHY IS THAT?
Who is to blame that the model in use could change to
accommodate lend lease and unsold-bond financing to
win WW II -- but has not changed to accommodate
the consumer dividend and controlled retail price that
might have won and still might win the peace that
followed?
It is obviously YOUR fault ! -- not you Wally, but the
collective world of reformers, including Social Credit
reformers and people like me, as well. You and I have
grasped your model and mine but cannot rewrite it and
write a plan to make it available in the minds of the
people for whom it would be a godsend.
Only the voters and all the professionals on whom they
depend can implement the model Wally or I hold in our
heads.
But Wally and SC friends tell these necessary implementers
to read an original Holy literature. It is obvious the literature
lacks a plan to make the SC model digestible. The plan is
clear in Wally's team's minds but it is couched in jargon and
fancy business language that does not paint a picture in
an ordinary mind.
I will admit that our reserve banking system, out consumer
loan industry, our crazy tax laws, our crooked election
financing, are all systems whose written models are not
capable of common understanding. But they evolved and
we are stuck with them until reformers change things.
Years ago Beardsley Rummel (or a similar name) changed
the income tax from pay-later to pay-as-you-go. To do it
his model skipped a whole year's income tax. But he was
able to add to the model (of how to collect taxes) a plan
of how to go from the evolved system to the new system.
It seems to me that SC advocates must try to rewrite
their model to fit a single page. Then they need to write
a long compelling plan of how to get millions of people
to love the model and pressure the power structure to
see the light.
And these advocates should not be purists. If the SC
consumer dividend is close to other entitlements in other
models, common cause with their near-alikes ought to
be attempted. Similarly, the debt-free nature of some
legal tender and the tax reforms in the SC model ought
to be broken out so that alliances with money cranks
and tax cranks can be made.
SC is standing still because its advocates will not see
what's blocking the road ahead.
My own reforms are standing still because although
I see what's blocking the road, I'm unable to present
www.tiea.us very effectively.
John Gelles
============ Wally's Lesson ================
From: Wallace M. Klinck
...
Social Credit analysis approaches economics from the standpoint
of industrial cost-accountancy as it relates to the existing financial
system wherein practically all money is issued by private banking
institutions as debt.
Money spent by consumers includes the cost of the physical
plant or capital involved in production of consumer goods. When
consumer income is spent, it is cancelled when business repays its
bank loan--opposite to the way it was originally created by a bank
loan. The point is, money is taken back from the consumer and so
cancelled in respect of all costs including capital.
But capital physically lasts for a long period of time. The money
reflection of it is, therefore, cancelled long before the physical
capital can be expected to fully "depreciate". One might say, that
the consumer is charged with capital depreciation but not credited
with capital appreciation which is far greater than depreciation.
Now, it is a central concept of Social Credit that the true cost of
production for each cycle is, measured in financial terms, the national
mean rate of consumption divided by the mean rate of production--
always and increasingly a value of less than one.
Surely, in light of these considerations, the enormous degree to
which the present financial system robs the individuals of society
of their very real and potentially increasing inheritance in the
"communal capital" (which could be restored to them via increasing
economic independence, abundance, leisure and freedom) should
be starkly apparent.
Douglas's "A+B Theorem" demonstrates how under existing debt
finance the flow of industrial financial costs swell increasingly relative
to the release of "effective demand" (capable of finally cancelling
financial costs and not merely transferring them as a charge against
future production), i.e., financial income in the form of wages,
salaries and dividends.
Douglas's proposals to make up this deficiency of effective
income incurred in each cycle of production involve an injection
of non-repayable ("debt-free" and interest-free) money from
outside the financial costing system as direct payment to
consumption.
This is to be accomplished by means of a National (Consumer)
Dividend payable to each citizen and a payment to retailers on
condition that they lower their prices to effect a Compenstated
Price. By this means, the citizens would receive their rightful
share in the communal capital (currently appropriated by existing
financial practice)--which would be fully restored, continuously
and dynamically.
The above is an encapsulated statement and does not deal with the entire
subject which is somewhat more complex in detail. To have a Cultural
Inheritance and accumlating communal (not collective or "communist")
capital, society must have the realistic basis for such. This involves
a high and normally increasing "real credit", i.e., capability of
producing goods and services as, when and where required.
Social Credit would ensure that "financial credit", i.e.,
the ability to deliver money as, when and where required
equates to "real credit".
Social Credit becomes, therefore, more applicable to
a modernizing industrial state where capital costs are
increasing relative to labor costs. In primitive economies
where labor predominates as a factor of production, physical
production is severely limited but total financial incomes
earned in each cycle of production more nearly equate the total
financial costs of production. Hopefully, of course, all nations will
continue to modernize through invention and more efficient physical
capital in a positive and beneficial way--making Social Credit
increasingly relevant to all.
The passing on of one's private wealth and receipt of such as an
inheritance would remain an undisputed right in a Social Credit
dispensation.
Scarcity necessitates more group dependence but Social Credit
would enhance individuation--that is more individual creativity and
independence. Human association is central to Social Credit and
results (if realistic principles of association are understood and
practiced) in the Increment of Association. Social Credit aims
to maximize the latter and minimize Decrements of Association.
This involves such things as freedom to contract out of an
unsatisfactory association--which is positively related to
economic independence and security.
======== End of Wally's Lesson (as shortened) =======
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