Precisely Billy. Except the libertarian and Austrian puritans are way too much into the moralistic necessity of employment and utterly orthodox thinking to countenance a leisure society which could have been a reality for the last 90 years instead of the veil of tears of almost constant economic slowdowns and war.

You want an economic agenda that integrates the best from both sides of the idiot unimaginative right and left who only know the power game instead of actually crafting policies that free both the individual and the system? Try this:

Implement a universal dividend of at least $1500/mo. to everyone 18 and over. Result? Unemployment and welfare taxes for businesses and individuals immediately become redundant. You could also then rapidly Phase out Social Security and those taxes also become redundant. That would be the biggest tax break to businesses and largest governmental downsize in US history. It would also create more economic democracy than the left ever even dreamed of accomplishing. Oh but I hear minds snapping shut on both sides of the aisle already. With a sufficient dividend the country would be freed from the “necessity” to wring their hands about unemployment and could rapidly re-industrialize in as high tech and robotic a fashion as possible making us a much more robust economy and less dependent on imports. Again this ought to hearten the unimaginative and orthodox on both the left and right.
Then right along with the dividend implement a compensated retail discount based on the total costs of what is consumed in say a month’s time over the total costs of what was produced. This discount is passed on to consumers at retail sale…and then the participating merchants (which of course besides typical retail outlets would include Banks, lawyers, corporations etc….after all their retail products are mortgages, leveraged stock purchases, and legal work) would be refunded every cent of their discounts to consumers so they could be whole on their overheads and margins. This discount is a general percentage for every product based on the formula above…and it is not heavy handed and idiotic price controls at all because each merchant discovers his/her normal price FIRST and then the discount is given to the consumer ….and then rebated back to the merchant.

How much more profit would businesses make with such cuts in taxes and with such a permanent abundance of consumer purchasing power? How much more free flowing would the economy be with such permanent adequate demand and with a mathematical macro-economic equation of the costs of consumption and the costs of production? It’s the perfect integration of the left and right’s agendas. Open your minds to it. Even a chimp like Billy Bonobo can see it 🙂 Don’t be an orthodox and puritan dunce. Bring on the friggin’ robots and lets have a leisure society. Try it, you’ll like it.

Blah, blah response to me

Me:  You’re looking at what I said through the filters of puritanism and orthodoxy. I point that out immediately after I re-iterate that the reason the economy is unstable is because whatever money is created….goes through the processes of the economy…before it gets translated into INDIVIDUAL income, that is less total individual income than total costs and hence prices. The plan I advocate distributes and additional income DIRECTLY TO THE INDIVIDUAL FIRST….thus avoiding the instability of forcing financial outlays through the processes of the economy. If you don’t get that essential distinction…you’re off into orthodoxy that assumes the economy tends toward equilibrium, which in case you hadn’t noticed is in disarray, and rightfully so. Your use of the word “earning” betrays your fallacious puritan beliefs in austerity. Fallacious because as the economy under its current cost accounting rules (the rule is, all costs must go into price) that means that labor costs, i.e. individual incomes are only a fraction of total costs for every enterprise which means that as a flow total costs will always tend to exceed total individual incomes. And that means that without an ADDITIONAL supplementary GIFT of income distributed directly to the individual…the economy will never be in equilibrium…no matter how much orthodoxy idiot theorists on both the right and left regurgitate forever and ever. Did everyone finally get that?

Me: The already disruptive economic and monetary factors of innovation and artificial intelligence are just getting started and will be acceleratingly erosive of aggregate demand. Whether one cares to believe the additional Social Credit insight that the rate of flow of total costs tends to exceed the rate of flow of total individual incomes actually in the hands of individuals and available to purchase production, or not…its policies will need to become the reality for modern technologically advanced economies.

You’re all nascent Social Crediters.

SmackMacDougal: 

Are we back to that Clifford Hugh Douglas flawed theory where he tried to analyze a dynamic system with a static snapshot?

1. B pays workers.
2. The Σ P × Q = Sales of A = Pay of B’s Workers
3. Sales of A at break even covers costs (labor + capital), i.e., net profit = 0

As long as C enters with workers buying B’s ΣPQ of B at prices so B’s net profit = 0 and all transaction is staggered, how do costs exceed individual incomes? Individual incomes are a component of costs.

It should be clear that net profits > 0 can arise only if some firms go out of business. Thus, it should be quite clear that protectionism by legislators increases net profits for some and thus bankruptcy for others.

As long as true wages rise or true costs fall or some combo thereof along with new entrants from an ever growing population, what is the problem?

Economies aren’t static. Douglas’ balance sheet view suffers from trying to measure something dynamic (e.g., flow) with something static (e.g., length).

Me: Labor costs/Individual incomes are only a fraction of total costs….for every enterprise and at all times by cost accounting convention. Your math is GIGO because it does not factor in that
pervasive, ever present and consequently flowing through time DYNAMIC FACT.

SmackMacDougal:

Saying so doesn’t make it so.

See the math above. Good luck!

Me:  It’s an obvious fact. The micro-economy is ruled by cost, and individual incomes i.e. labor costs which is the only thing that can liquidate a cost, are only a fraction of total costs. The well known libertarian phrase “There ain’t no free lunch!” correctly points this out. The problem with libertarian theory is, being believers in general equilibrium, they don’t recognize this most basic destabilizing fact and so use the above phrase as an answer to systemic disequilibrium theorists instead of understanding it as the lament it actually should be.

SmackMacDougal: 

Even at rest, your body burns energy to achieve homeostasis. You won’t die if you aren’t taking in food every second of your life.

In spite of your Douglas-induced prejudice, all costs don’t arrive at once for any producer.

If Douglas were right, how is it that mankind has engaged in modern commerce over the last 465 years?

Good luck!

ps. Equilibrium is a static concept.

Me:

It’s not a prejudice it is cost accounting conventions and calculus. You are the one not confronting/including in your analysis the cost accounting.

Equilibrium, as is any goal, is static. The system in its normal operations is in a continual state of disequilibrium. The “holy grail’ of economic theory is (correctly) to attain economic equilibrium. Hence crafting policy to attain and maintain equilibrium is the correct, adult and responsible thing to do.

Me:   “No one in neoclassical economics has ever claimed equilibrium is a goal. You don’t seem to know what you are talking about.”

Oh they regurgitate it all the time in almost everything they say and offer up as policy…or lack thereof…because as you point out yourself they (incorrectly) think the economy tends toward it. These sophist tricks are meaningless.

As for explaining how commerce has survived for the last however many years…it has “rolled” fitfully and occasionally limpingly along, especially since the last depression, because of Keynesian palliation of the fact that the rate of flow of costs/prices tends to exceed the rate of flow of individual incomes. Keynes was a contemporary of Keynes and his palliative policies were the fall back position for the more aware Financial powers which knew that with them they could maintain their control of the system and ignore/morph those palliative policies while profiting stupendously. Stimulus that is meager, indirect and does not challenge the paradigm of Debt is pansy-@$$ed, but it does kick the can down the road.

Billy Bonobo: When debt is capital, anything is possible in the narratives of Life.

Me:   Actually Billy, make that: When Debt is the only monetary paradigm, disequilibrium, unnecessary suffering, disguised enslavement and ultimately chaos are the inevitable narrative. But your head is in the right place and your eyes are wide open.

Post to RWER blog in response to a question of how a dividend would not make housing prices rise:

Barney,
You accomplish that by applying the second monetary mechanism of Social Credit the compensated retail discount wherein the total cost of consumption over the total cost of all production produces a percentage which participating merchants apply at retail sale (after they have discovered their own price so it is not some idiotic heavy handed and intrusive price control/production quota) and the merchant is granted/rebated back, the totality of his discounts so that he can be whole on his overheads and margins. Generally housing prices, even during the recent now exploded bubble, rarely if ever rose at a rate of 10% per month and most of the estimates for this discount have been from 14% and up. And if a house building firm, even after having been guaranteed/granted the above gift, inflated their prices more than the discount rate to the consumer the intelligent systemic thing to do would be to then tax such inflationary merchants for the percentage above the discount rate. Gifting balances and equilibrates the system and actually transforms it, and rational and ethical reforms can then be utilized in a straightforward fashion after the clarity of equilibrium and individual economic freedom is accomplished by the other of Social Credit’s mechanisms the universal dividend.