First of all, let me say that I'm not advocating 'debt-free money', nor am I under any illusions that's what CH Douglas was calling for. I believe if he wanted that he would have clearly spelled it out, and I have never seen it clearly spelled out. Of course, I haven't read ALL of the vast volume of work he's written either. But I have read enough to get some feeling of what I think he believed, and interest simply as a way of remunerating the costs involved in the provision of financial services, and a reasonable profit thereon, doesn't seem to have drawn his fire. But clearly he did, in my view, draw a distinction between 'usury' and 'profit' under the current system that I hardly think he'd want perpetrated in a 'social credit' system. I cannot explain this from the perspective of an economist dealing with theories. Because I'm not an economist, nor do I wish to theorise that which I have not the competence required to do. But I can touch on it as it realtes to those of us like myself, an 'independent producer', the type of 'capitalist' Social Credit offers hope to for a continued existence. Under our current system, I do not believe it is not entirely correct to infer that interest is merely the bank's profit, and equate it simply to any other business's profit. If I, as a lumber producer, encounter a period of slow sales for my product, I can do several things. All of them are essentially an effort to try to reduce costs. I can slow my production, by laying off staff, or even close completely. My 'A' payments, if we want to express things in Social Credit terms, can be reduced or cease entirely. Similarly most of my 'B' payments can be radically curtailed. If I'm not producing as much, or anything, I need not make the expenditures I'd normally make for logs, hydro, mill supplies, diesel fuel, gasoline, etc. I can even assume the risk of catastrophe myself, and cancel fire insurance, or public liability coverage. Provided I'm not bound by any debt covenants to maintain the former. But there are two things I cannot alter, no matter whether I'm producing lumber or not. One is property taxes levied by some division of the Crown, which accrue over a period of time. The other, if I'm in debt to a bank or other finance provider, is interest. The interest doesn't cease just because my activities to meet it are restricted, or temporarily terminated. It goes on, unabated. It is based on 'time', and 'time' alone. Now the banks, if they are so inclined, may allow me to forego those payments. It is entirely at their discretion ~ their 'policy'. Unlike an unpaid bill, which may also attract interest, theirs is secured by a mortgage, or possibly a debenture. If there's a general depression in lumber sales, there may be no point in their foreclosing, if what may be recovered from the sale of my assets isn't immediately attractive. But regardless of what they do the possibility of loss of their 'intangible' is far and away less than the actuality of loss of my 'tangibles'. Continued to the extremes that faced the Alberta farmers in the first seven years of the Great Depression, one could find oneself having the original debt double through compound interest, the farm foreclosed and sold at the first sign of the bank's chance to do so, and then being presented with a garnishee on future income for the balance! It is a 'grip of death', not a simple profit on the provision of a necessary service. Of course we can say that under 'social credit', with the correct application of credit as Douglas envisioned, the problems of 'bust', such as I've just described would be mitigated. But at the present time, 'interest' in the sense of 'usury' is still a part of the problem. There is no denying 'labour displacement' is the crux of the issue for 'social crediters' today. But even in times antecedent to the Industrial Revolution, the development of 'fractional reserve' banking, or even any formal banking as we know it today, the question of interest was always a source of trouble. We need to be very certain when we deal with this issue that we do not inadvertantly introduce something into Social Credit that leads back to the 'centalization' we are trying to get away from.
Joe==^^===============================================================
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