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Dear Rodney,
I note that in your "critique of binary
economics2", posted yesterday in response to the "Austrian" critic, you have
attributed malevolent motivation to Mr. Terrell but have not addressed a
word to the substance of his argument.
I cannot speak for the subjective feelings of the
critic (lacking your gift of infallible insight), but it is not difficult to see
that his disinclination to endorse the iinstruments of the "binary property
right" is consistent with the Austrian explanation of capital and interest as
the product and reward of "waiting" or restraint from immediate consumptive
gratification. At the same time he has given a full exposition of the Kelso
theory of the independent productiveness of capital, generously supported by
quotations from your book. I do not see how you could fault the accuracy
with which he has represented the Kelso view on that point. That he
disagrees with your analysis of the nature of capital does not directly imply an
opposition to more equalitarian wealth distribution, but it does lead him
into a falsification of your claim that there is no redistributive import
in the binary prescriptions.
Which bears on your complaint below about Michael
Hudson.
We have been over this territory exhaustively
before, both on the independent productiveness and the redistribution issue, but
I pick up on the Terrell critique because he has provided substantial evidence
on the redistributive aspect that is new to me. That is, he quotes from
the last of the Kelso books, about Democracy and Economic Power. This is
where he makes the most telling points against your arguments, and if you want
to counter him it is in the accuracy with which he has represented the Kelsos on
the limitations to capital accumulation in the hands of single persons or
families. I found those passages to be quite stunning, for they seem to
endorse the spirit of Shann Turnbull's prescriptions for time limitation on
ownership rewards--an approach which we are told was vehemently and publicly
denounced by Louis Kelso.
This critic has made the most telling arguments I
have seen against the binary characterization of "free market". I think
his comments merit a studied response from binary economists.
Keith
----- Original Message -----
Sent: Monday, July 14, 2003 4:28 PM
Subject: Re: Spam Alert: [SOCIAL CREDIT]
Fwd: Re: [gang8] The Southwark dimension
Dear Social Credit members,
In previous posts I have dealt sufficiently with
Austrians and replied sufficiently to Gunnar Thompson, all of whom are
determined to let huge rich-poor divisions remain in the world because they
are opposed to the wide ownership of productive capital paying out its full
earnings.
I now refer briefly to Michael Hudson. I
understood that he and had a tacit agreement that he
would stop being deliberately offensive about binary economics -- here
is no transfer function in b.e -- and, in exchange, I would stop pointing out
that he has never read Binary Economics being one of those egregious members
of the gang of 8 who pontificate about things without having read the relevant
books.
Alas, it seems that he has some deep need
to keep providing me with the opportunity to say that he attacks binary
economics without knowing the first thing about it.
Rodney Shakespeare.
----- Original Message -----
Sent: Friday, July 11, 2003 6:16
PM
Subject: Spam Alert: [SOCIAL CREDIT]
Fwd: Re: [gang8] The Southwark dimension
--
--------- Forwarded Message
---------
In a message dated 7/11/03 10:05:46 AM Eastern Daylight Time,
[EMAIL PROTECTED]
writes:
Dear Michael:
First, let me note Krehm underscores
the point which I raised at the outset of exchanges with Rodney
Shakespeare on Gang8 some months ago:
The notion that everybody must
become a capitalist is a morbid one. It stems, I believe, from the
bizarre notion of the Binary Economics people that machinery itself
produces wealth. It doesn’t.
In other words, Capital is
not an independent Factor of Production -
hence Keynes's
'sympathy' for "the pre-classical doctrine that everything is produced by
labour, aided by what used to be called art and is now called technique,
by natural resources which are free or cost a rent according to their
scarcity or abundance, and by the result of past labour, embodied in
assets, which also command a price according to their scarcity or
abundance. It is preferable," Keynes concluded, "to regard labour,
including, of course, the personal services of the entrepreneur and his
assistants, as the sole factor of production, operating in a given
environment of technique, natural resources, capital equipment and
effective demand. This partly explains why we have been able to take
the unit of labour as the sole physical unit which we require in our
economic system, apart from units of money and of time." (General
Theory, Ch. 16)
Now to your comments:
I thought
the key was HOW the economic surplus was to be paid out: as stipulated and
fixed interest payments, or as flexible earnings.
Could the latter reading be what was
meant? If not, SHOULD it be what was meant?
As I see it, the very concept of such "economic surplus"
cannot be divorced from the "bizarre notion of the Binary Economics people
that machinery itself produces wealth."
For if "everything is produced by labour", then "economic
surplus" cannot arise so long as "labour" receives a dollar's income for
dollar's worth of labor.
So what the Binary Economics
people must be talking about is an income transfer mechanism
akin to the interest rate mechanism under contemporary monetary
arrangements whereby the purchasing power of "a dollar's income for
dollar's worth of labor" is diluted so that some may reap where
they have not sown.
The social welfare system is such a
mechanis m and, since it "takes" from some and "gives" to others, people
will hold different views on its adequacy or fairness.
Cloaking
such differences in the jargon of Binary Economics serves no purpose.
Gunnar
Dear Gunnar,
Your point is good that capital is not an independent means of
production. Perhaps the tendency of economists to cut everything apart
reflects their own autistic character, along with the polarized ideas that
economies must be either socialist or libertarian rather than a mixed
combination.
"Capital" like "wealth," has come to mean property claims,
either physical or now, increasingly, financial in character.
Of course,
the essence of Marxism is that a workers does NOT receive a dollar's wage
for the dollar-value of labor. That is where profits are created in the
Marxian scheme.
Even if workers DID receive dollar-for-dollar, they
would still be exploited by rentiers, whose rent and interest claims have no
counterpart in out-of-pocket costs of production and hence are socially
unnecessary.
You are right that Binary Economics cloak s what is in
reality a transfer function, dissolving it into an amorphous social
rhetoric.
Does Social Credit do this too? If so, how would either system
be expressed non-amorphously? As the classical economists would say, what is
the INCIDENCE of these social welfare payments?
And once there is an
incidence of such payments, is there a form of exploitation involved?
Michael
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