JS: I agree that both are necessary (eventually), but I think we put WAY too much emphasis on the dividend and not enough on the price rebate. Like Douglas wrote, ” The latter of the two foregoing alternatives is, I think, by far the more practicable, because it not only delivers the purchasing power at the moment that it is wanted at the moment of purchase but it is also far better adapted to the psychology of the present time.”
The price rebate mechanism is more “practicable” because it delivers “ the purchasing power at the moment that it is wanted at the moment of purchase “ , or as Dean says, Just in time. It is also “far better adapted to the psychology of the present time.” because of Puritan attitudes at the present time.
Me: Yes, I agree with that. In fact one of the things neo-liberal economics/General Equilibrium theory claims and yet doesn’t actually accomplish is a good integration of macro-economics with micro-foundations, and yet there is the discount mechanism smack dab in the middle of the very day to day workings of the costing/pricing system of commerce successfully integrating the economic system and the monetary system in a beneficial way for both the individual and enterprise!!!
Meanwhile the FED only utilizes once removed, indirect and blunt instrument monetary methods like the FED Funds interest rate to steer the economy and even leading economists like Steve Keen or Michael Hudson, being off into abstract theorizing, never actually look at the day to day workings of commerce and so miss this elegant, simple and direct policy mechanism. In fact Keen says that there is no need to look to micro-foundations to explain the problem which he sees as the continual build up of debt and which is half correct because that is the inevitable result of not having the sufficient additional purchasing power provided by the dividend and discount policies!!! When you don’t look at things….you’re unconscious of them. Even a bright and iconoclastic person like Keen hence misses the full solution, and actually becomes unconsciously guilty of a kind of transcendental macro-economic orthodoxy where you don’t have to bother to look at micro-foundations.