This theorum breaks down when one considers the second and third level breakdown of B. In every B, there is an A + B. The equation can be thus stated
A1 + (A2 + (A3 + (A4 + 0))) where A4+0 = B3 and A3 + B3 = B2, etc. Eventually, only households get the money, if only as a journal entry in an enterprise where stock is held. Theoretically each transaction can be broken down to a household level. Second, allow me to point out something I mentioned in dialogueing with Norm Kurland on Capital Homesteading: as long as any person is working, they will resent all of those who draw income by not working. This results in the proposition that if any person is working, everyone must work. Now work can take many forms, including being paid for training to ones full potential (provided that this training leaves one able to work). The challenge of the future is find ways to have more and more people, especially the socially disadvantaged, be trained to their full potential, as given the ever increasing thirst for technology and advancement, everyone's potential is needed. Even with production becoming more and more effient (although not too terribly efficient to use Chinese slave labor or peasant labor at pennies a day), there is much work to do. The challenge is to train everyone to do it. It would seem that schemes to merely distribute either ownership or income fail to put in that needed incentive. Michael Bindner In a message dated 2/19/2003 11:37:10 AM Eastern Standard Time, [EMAIL PROTECTED] writes: > > > Douglas wrote very tersely. The books were short > with tiny pages. You can't get the big picture by > looking at one chapter out of one book, or one book > out of the context of the entirety of his public > career spanning more than thirty years. Even when > looking at all of it (and I've had access to only > some of it) it is difficult stuff. > > Social Credit came after Credit-Power and Democracy, > which came after Economic Democracy. Interspersed > were a number of addresses and articles in various > journals. There is also his mostly unpublished > private correspondence. > > The deflation-inflation scenario in Social Credit > Part II Chapter II is predicated on the changing > ratio described earlier in Credit-Power and > Democracy: > > "The industrial machine is a lever, continuously > being lengthened by progress, which enables the > burden of Atlas to be lifted with ever-increasing > ease. As the number of men required to work the > lever decreases, so the number set free to lengthen > it increases." > > Douglas used a similar metaphor in his address to the > King of Norway: > > "The correct picture - the incontestably exact > picture of the modern production system - is, to my > mind, based upon a kind of typewriter with a > decreasing number of operators who are tapping the > keys, and, by tapping these keys, fewer and fewer > operators can produce all that we require. Through > the power of the sun (oil power, steam power and so > forth of what is generalised as solar energy) the so- > called curse of Adam is being transferred from the > backs of men to machines, so that a small number of > persons operating on this machine of industrial > 'production' can produce all that is required for the > use of the population. And the problem is not to > exchange between the number of the population, who > are less and less required to push keys, but it is to > draw from this central pool of wealth by means of > what can be visualised as a ticket system." > > It was in Credit-Power and Democracy that Douglas > introduced the mathematical form of the A + B > Theorem: > > "A factory or other productive organisation has, > besides its economic function as a producer of goods, > a financial aspect--it may be regarded on the one > hand as a device for the distribution of > purchasing-power to individuals through the media of > wages, salaries, and dividends; and on the other hand > as a manufactory of prices--financial values. From > this standpoint its payments may be divided into two > groups: > > "Group A--All payments made to individuals (wages, > salaries, and dividends). > > "Group B--All payments made to other organisations > (raw materials, bank charges, and other external > costs). > > "Now *the rate of flow of purchasing-power to > individuals is represented by A, but since all > payments go into prices, the rate of flow of prices > cannot be less than A + B. The product of any > factory may be considered as something which the > public ought to be able to buy, although in many > cases it is an intermediate product of no use to > individuals but only to a subsequent manufacture; but > since A will not purchase A + B, a proportion of the > product at least equivalent to B must be distributed > by a form of purchasing-power which is not comprised > in the descriptions grouped under A.* It will be > necessary at a later state to show that this > additional purchasing-power is provided by loan- > credit (bank overdrafts) or export credit." > > An alternate term often used by Douglas for A + B is > the "double circuit." > > The "A" circuit: Banks -> Firms -> Consumers -> > Firms -> Banks > > The "B" circuit: Banks -> Firms -> Banks > > That is to say, there are balances that are > accumulating in both the consumers and firms sectors. > Their effects are not necessarily the same. > > Keynes thought in the simplistic terms of Silvio > Gesell: Balances are balances. Spending is > spending. So he could see no difference between > "investment" and consumer spending in regard to > effective demand. > > The Douglas method results in similar conclusions to > the Keynesian method assuming either steady state > (dynamic stasis) or quasi steady state (steady state > growth). > > Douglas introduced labor displacement into the > analysis, where balances held by the firms sector are > increasing differentially at a greater rate than > balances held by consumers. The ratio of A is > decreasing to B. Effective demand for the products > of industry is the reflux to A, not A + B, though the > totality of A + B is charged against production for > consumption through the mechanisms of double entry > accounting. So A must be increasingly augmented to > keep the ratio constant. > > -- > > On Wed, 19 Feb 2003 10:06:24 > Dr. Bruce R. McFarling wrote: > > > >>This points to the difference between the Douglas and > >>Keynes approaches to analysis. Douglas aggregates > >>salaries, wages and dividends. Keynes aggregates > >>salaries, wages and profits. > > > >Its not either or, is it? So-called "Earned Income", > >which simply means income as the liabilities of firms, > >is equal to aggregate final expenditure. Only a > >portion of that earned income finances final expenditure. > >The difference is saving. For profit income, corporate > >savings is deducted from earned income at the same > >time that net transfers are added in, to reach disposable > >income, and an additional share of the distributed profit > >income will be devoted by small business owners and > >shareholders to wealth accumulation, which the more saving > >that comes out of profit income. > > > >Under the logic described in _Social Credit_ (2nd ed.), > >it would seem that with no net saving there would still > >be a shortfall of effective demand. > > > > > > _____________________________________________________________ > Get 25MB, POP3, Spam Filtering with LYCOS MAIL PLUS for $19.95/year. > http://login.mail.lycos.com/brandPage.shtml?pageId=plus&ref=lmtplus > > ==^^=============================================================== This email was sent to: [email protected] EASY UNSUBSCRIBE click here: http://topica.com/u/?a84IaC.bcVIgP.YXJjaGl2 Or send an email to: [EMAIL PROTECTED] TOPICA - Start your own email discussion group. 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