I've attached below pictorial renditions of the standard circular flow model and Douglas' model of the double circuit, which are archived at http://www.geocities.com/socredus/compendium .
Both are divided into three primary sectors: financial (B), firms (M) and consumers (C). I direct your attention specifically to Douglas' model. All models are simplifications; in this case there is the additional simplification in that it omits consumer credit. In Douglas' time there was little consumer credit. It is not difficult to integrate consumer credit into the model, however. In the Douglas model banks are manufactories of credit, in contrast to the standard model in which banks are the intermediaries between savers and investors. The flux from banks in the form of loans is designated L. The reflux in principal plus interest payments is designated R. The flux from firms for salaries, wages and dividends is designated W. The reflux from consumers in purchases of goods and services is designated P. Note in the Douglas model that interest (i), profit (p) and saving (s) are homologues. In terms of cash flow in steady state, L = R and W = P, so it would seem that net interest, profit and saving must be zero. But what about during the period of expansion, in which L > R and W > P; where is the scope for interest and profit, for it would seem they must be negative numbers? A further observation: Socialists concentrate on the "evil" of profit. Gesellists concentrate on the "evil" of saving. Monetary cranks concentrate on the "evil" of interest. So they respectively attack profit, saving or interest. As we get further into our discussion I'll demonstrate how Douglas' analysis was on a higher plane. ____________________________________________________________ Get advanced SPAM filtering on Webmail or POP Mail ... Get Lycos Mail! http://login.mail.lycos.com/r/referral?aid=27005 ==^================================================================ 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 ==^================================================================
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