For the next week of so I will ask that we confine our discussions to the specific points in Michael's paper on "municipal social credit" recently posted to this list. For reference it has been archived at http://www.geocities.com/socredus/lane-03-27-03.txt . I think the discussion will help us to focus on what is and what is not social credit. In the interim any messages not specifically addressing Michael's paper will be stored for future distribution to the list.
1. Michael's proposes to replace the current banks with a new "municipal" bank which grants loans not at interest but for a percentage of "earnings." It seems to me that this concept will find more textual support in the writings of Lenin and Trotsky than those of C. H. Douglas. I will take the term "municipal" to be the metaphor for any geographically defined political entity however small or large asserting its financial independence. Michael divides existing loans into two groups: those who lent their own money and those who lent money created for the purpose. The second group is declared to be spurious and lent under false pretenses. The municipality confiscates these loans without compensation to the present creditors. I challenge anyone to provide textual support for this from Douglas. From my reading Douglas said that it is a matter of philosophy and policy: Bankers regard the credit they lend as their own property rather than the public's. That prevents them from granting the non-repayable credits that would be required to implement social credit. 2. As to the matter of interest versus percentage of earnings, I again challenge anyone to find textual support from Douglas. First, regardless of whether or not this has support from Douglas--which it doesn't, why would this be necessary? Second, while it is possible in concept to replace interest in this manner, it would be an enormously complicated endeavor compared to the simple contract for the payment of interest. How do you even define earnings? It isn't as easy as you might think. At the very least it would require a host of bureaucrats and auditors (as with the income tax) that are not required under the current method of banking. 3. "The municipal credit office, in conjunction with businesses, to create a schedule pricing various goods and services at various percentages above cost (cost as defined in the quarterly report). This schedule to include capital goods and services, as well as consumer goods and services." How does this differ from Soviet communism? Where is the market? Where is independent management? How does this differ from central planning? 4. "This is not really "lending," for if the business fails, there is no debt, while as long as the business succeeds, the "loan" is indefinitely renewable." Under the current method there is no debt. If the business fails before the loan is amortized the loan is written off and that's it. A loan that is "indefinitely renewable" where the lender "municipality" is guaranteed a percentage of earnings in perpetuity is just another name for taxation. 5. "While the present proposal follows the usual social credit prescription of half dividend, half compensated price, the above consideration makes me think that as long as the pricing schedule is preserved, it would be better to release 100% of the new credits as dividend, and none as a price discount." This is not Douglas social credit. Douglas never proposed "half" dividend, "half" compensated price. Both are required and both are complementary but in what ratio depends entirely upon circumstances. The dividend is to compensate for A payments which are falling in respect to "price values." The retail subsidy is to compensate for spending from A payments which is falling in respect to A payments. _____________________________________________________________ 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. FREE! http://www.topica.com/partner/tag02/create/index2.html ==^================================================================
