Ellen:  The part I never understood though with the A+B theorem is why all the costs paid by a business aren’t money that is available to buy the products the business produces. The money went somewhere; aren’t the recipients capable of buying products with it? Even if it went for earlier costs, it’s out there in the system where it could be used to buy products. It could be but isn’t, because some of it is “saved” or “reinvested” or “relent.” This is true whether it’s money paid as wages and salaries or money paid as earlier costs, no?

Me:  Ellen,

Even Keynesian economists recognize that at all times there are diminutions/extractions of individual income/money from the circular flow of the economy which tend to destabilize it. As the Gap consists of both these diminutions and additional costs like depreciation/obsolescence which are currently not accurately accounted for and that must be factored into prices as “all costs must go into price” if you want to be economically honest and accurate, then how can you not comprehend A + B?

If a business borrows $1 million to build productive facilities and begin production and those facilities and means of production cost $600k then they are going to have to charge $1.6 million in incomes/garner $1.6 million in business revenues not even including the costs of interest….just to break even. And this is the case for virtually all enterprises which makes it a cumulative systemic condition. And presently the only way to keep the economy from promptly going into a deflationary depression is to borrow more and more money from the Banks…which unfortunately incurs an additional cost….so the problem persists….not just because of the interest itself, but because interest is an additional cost that is added to a system already plagued by ADDITIONAL/A + B costs.

This all results in the accurate Social Credit insight that, even under ideal conditions, in the normal and unfettered operation of the economy the rate of flow of total costs exceeds the rate of flow of (possibly spendable) total individual incomes. And this systemic condition hamstrings both businesses and individuals  while benefiting only the Banks whose virtual monopoly on credit creation remains unchallenged.

World2steven:   It is past time to challenge what appears to be the whole wonkish essence of Social Credit head on.  Starting out with the undeniable phenomenon of technological unemployment produced by automation, Social Credit advocates (IMHO) get wrapped around the axle in a ‘cost-accounting’ swamp of ‘gaps’, etc – all in apparent defense of so-called ‘free markets’ that didn’t exist when Douglas penned his theories and most definitely don’t exist now.  The whole movement appears to reflect the belief that problems like FINANCE-induced (i.e. rampant credit creation to buy financial toxic waste NOT life’s necessities) business cycles, imperialism and militarism will go away if we just print more money – A.K.A. a Social Credit, and give it to the 0.001 (and shrinking)% so ‘the people’ can go on buying whatever it is they (the 0.001%) are selling these days and the 0.001% can go on accumulating yet more money (as debt).  Apparently $20 trillion or whatever it is these days isn’t enough for them.

As long as we have a market economy (arguably a good thing) SOME money may be a necessity for the growing numbers of those of us who haven’t the training or temperament to produce GENUINE WEALTH, the kind the world needs and future generations can afford.  But I favor Michael Hudson’s ‘backdoor socialism’ approach of providing as much free or reduced public infrastructure as possible instead of money / a Social Credit.  For one thing, the approach emphasizes a basic fact about life and the social nature of wealth – we don’t ‘own’ the world.  We are just custodians with an obligation to pass it along in at least as good shape as we found it.

Me:   If you’re willing to trust a largely reactionary and non-empirical economic theory like socialism for an empirical one like Social Credit then you’re obviously operating out of an agenda rather than a true concern for economics which is inextricably involved with costs and their assessment.

I actually don’t disagree with the idea that some social crediters (and all neo-liberal economists) make a fetish out of economic and monetary equilibrium and mere numbers. That is why Wisdomics/Gracenomics focuses instead on the aspects of the philosophical concept of Grace and policies that are reflectively aligned with its (Grace’s-Consciousness’s) aspects. Wisdom is the integrative process of combining only truths, workabilities and applicabilities. That way it is the most refined integration of both the empirical data (the important aspect of capitalist economics) and human ethical intention (the most valid part of socialism). Anything less than the intention of Trinity-Unity falls back into mere Dualism and will eventually degenerate into obsessive conflict which is the all too human tendency as we humans love our problems more than we desire their solutions. This is usually because most humans are bored if they don’t have problems to chat about, meanwhile the world goes to hell in a hand basket. If they contemplated more lofty things both problems AND solutions would be interesting. You never lose anything of worth contemplating Wisdom and its pinnacle concept Grace.

John R:  Hi Ellen.

You wrote that you can’t understand why all the costs paid by industry aren’t available ……

I wonder if the confusion here doesn’t stem from the totally incorrect statements made by some Social Crediters that the A+B model indicates somewhere a diminution of the money supply?

Me:  John R,

If you’re referring to me I made the distinction between A + B (extra costs) and the Gap (diminutions of income/money from the circular flow AND A + B/extra costs). The diminutions can be handled by government spending on infrastructure etc. but will not resolve A + B because any money injected into the system first instead of GIVEN directly to individuals and businesses with the dividend and discount….will simply result in A + B being re-initiated. That is the meaning of an inherent systemic condition which is what A + B actually is.

The solution, as is virtually always the case, is Wisdom, i.e. an integration of truths.

Please try to read my posts thoroughly and interpret them accurately

Please note that I also don’t always get into the minutiae of explaining A + B, but rather try to stress clarity of thinking/philosophy necessary. As all conscious actions are preceded by a thought/philosophy that is actually the scientific process. I also stress looking at the most significant economic trends (efficiency)and their philosophical logics that will effect the monetary problem we face, and that will make the specific policies of Social Credit/Wisdomics-Gracenomics necessary….whether one comprehends A + B or “The Gap” or not.

Wisdom is an integration of science and spirituality (not religion).

John R:  Steve, our experience here when we had over 20% public support for Social “Credit showed that it came largtely from small to medium businessmen, including smaller farmers.

These tend to be hard-headed people who react to hard facts and strong arguments.

I guess that, in our society, they outnumber those who prefer a philosophical approach by about a thousand to one.

Me:  John,

Good. That’s why I generally stress the empirical/depreciation/facts, the thinking/philosophy behind it and even if they don’t want to relate to the first two approaches, the hard headed and inevitable trends that will necessitate the policies. And then if that fails I simply show them how if they are either a businessman or an individual they have a shared interest in having more money in their hands and lower prices with the dividend and discount. And if all that fails, I generally chalk it up to them having a separate agenda that in some way inhibits their willingness to see and sign on to the truths presented….and then at the next opportunity I just re-state the case.

Don’t you think such an integrative, inclusive and comprehensive approach is worthwhile?

John R:   In regard to this, Steve, there is experience in NZ to go by, and any government adopting monetary reform of any type should be aware of it.  Our first Labour government was faced in the beginning with a staged “flight of capital” to try to scare them back into line.  Fortunately they had enough bright people to work out what was going on and to clamp curbs on exchange going overseas.

Unfortunately, as we got better off than most of the rest of the world, they had to maintain these indefinitely.

Me:  Capital flight is a “paper tiger”. Not only could capital controls be utilized, but with the dividend and discount policies in effect and if the dividend was big enough there wouldn’t be a single producer domestic or international that wouldn’t move heaven and earth to sell theire products in the US. And as I said with a sufficient dividend and deflationary discount re-industrialization could rapidly make us not only nearly completely self sufficient, but also more technologically modern and efficient self sufficiency than any other country as well.

And if anyone wanted to move their production over seas….let the idiots go.