Me: Soddy was correct about the love of money, but C. H. Douglas was correct about BOTH the love of money AND the integrative infrastructure tool of double entry bookkeeping within which monetary policy could temporally resolve the deepest problem of economics….the monopolistic paradigm of Debt Only as the sole vehicle for the creation and distribution of credit/money. That is, his solution was INTEGRATIVE and so by definition WISE as in having both a philosophical and a policy component, an empirical and meta/philosophical component, BOTH an abstract AND a temporal analysis.
The thing that Douglas didn’t have was a knowledge of quantum mechanics and an analysis of the concept of paradigms and their signatures both of which came later. Finally, he didn’t do a complete natural philosophical analysis of the wisdom concept of grace which is the concept behind the new monetary and economic paradigm of Gifting and which is the concept behind Wisdomics-Gracenomics which extends and innovates Douglas’s theory.
You are quite correct in pointing out the importance of cost accounting which economists have virtually no knowledge of and especially have no knowledge of its significance. They rely upon fallacies like the quantity theory of money and the velocity of its circulation. They forget that all money actually re-circulating within the economy is business REVENUE which must be expensed against gross profit before any of it becomes anyone’s actual individual income, and then against all other expenses before net profit is determined. Gross profit might be 30% while net profit might actually be 3% or less. The velocity of money has absolutely nothing to do with increasing total INDIVIDUAL income and is actually merely a measure of the ability for enterprise to meet their expenses and still profit, and the velocity of money has been dropping for many years.
The way to increase total individual income is to take rational, universally beneficial, ethical and unobtrusive control of the point of final retail sale with a digital 50% discount/rebate monetary policy that enables people’s purchasing power and business’s potential revenue to double and also to transform modern economy’s chronic problem of inflation into beneficial price deflation.
“Many members of humanity have taken the wrongheaded interpretation Adam Smith’s views of “unrestrained commerce” as the basis for society. So, how we cure this false notion of the humanity, commerce, ecology, and the planet? I’ve seen little indication that the calls for grace will fix this.”
It’s called Wisdomics-Gracenomics for a reason. Wisdom is the superior human mental discipline and thorough goingly integrative of every other relevant -ology in addition to economics like finance, human psychology, anthropology, history, political science, etc. etc. Hence it by definition cannot be some shallow analysis or simplistic “fix”. Grace is the pinnacle concept of Wisdom and hence cannot be but well considered either. Grace is the calculus of Wisdom as it is love in action/a dynamic, interactive integrative flow continuously applied….and its policies reflective and effective of such when they are considered in the light of ethics. That’s why I have mentioned numerous times here that an essential aspect of implementing the policies of Wisdomics-Gracenomics would necessarily be a cooperative effort on the part of the helping professions, the clergy, the educational system and the government to acculturate the many aspects of grace. Did you miss the half dozen times I have posted this?
And as far as ecology is concerned I have also mentioned before that the policies and structural changes to finance of Wisdomics-Gracenomics would enable full funding for any research and innovations that might enable more production with less resources as well as the off planeting of the wasted energy of production…so what are we waiting for???
“On Craig’s seeing C H Douglas as behind the times, I would like to suggest seeing money as merely an accounting device is just one way of devaluing it, but in practice it leaves banks interpreting both credits and overdrafts in our accounts as gifts to them.”
First Douglas was and still is way ahead of virtually all present day economists in that his philosophy of monetary gifting was wiser and his policies were more insightfully, strategically and effectively implemented at the triple power point of retail sale.
Second you must have missed the several times I mentioned that the money creating power in a Wisdomics-Gracenomics economy would be taken away from PRIVATE finance and a publicly administered national bank and central bank guided by the philosophical aspects of grace would distribute its loans and monetary gifting policies. This is good economics in that cost cutting is always a valid economic consideration and the public bank not needing to make a profit in a directly distributive economic/monetary system can distribute 0% loans created by the central bank. It is also Occam’s Razor in that it is easier to administer, regulate and control a single entity instead of many whose purpose is other than systemic stability and an ethic like grace. Also macro-economics being a very recent body of knowledge and macro-economists not necessarily being good at seeing beyond their present mental and paradigmatic horizon miss the fact that giving private finance a monopoly power over the primary factor in a monetary economy is not wise, is not a legitimate business model especially for big ticket items because it is post retail sale…and that a publicly administered banking system funded directly by a sovereign government could then costlessly be dovetailed into being the NEW final point of retail sale as the 50% discount/rebate policy to mortgages, autos, etc. Thus stabilizing the economy and resolving the conundrum of Douglas’s A + B theorem and Steve Keen’s re-discovery of same with his statement that when the rate of change in debt falls the economy will go into recession and yet if it must ever increase the continual build up of debt will also inevitably out strip the ability to service that debt….with the policies of the new monetary and economic paradigm of Free Gifting.
DT: It seems to me that, by not defining your terms, you are missing most of the story here, Craig. What most people think of (wrongly) as “the economy” includes not only business but usurious money-lenders, bookmakers and speculators gambling with other people’s money. As Aristotle defined the terms, that is not economics but chrematism, and the amount of money circulating in that is about twenty times as much as circulates in the real economy. The real economy being dependent on the chrematists for money and as a whole paying interest as well as repayments to it, this contributes but a tiny fraction of the money circulating in chrematism, where the faster the money circulates, the higher are the incomes of the “1%” who are banking and bookmaking. The net drain of borrowed money from real business may be negligible in terms of chrematic circulation (the point of the “disappeared” Citigroup report) total, but it has been a lot in terms of the real economy, leading to bankrupt businesses off-loading their unrepayable “debts” to their customers, who are now not only suffering “austerity” and being forced into debt but being deprived of their houses. Perhaps you have not noticed emptying roads and decaying infrastructure indicating just how dramatic has been the reduction in monetary circulation within the real economy?
Wisdomics-Gracenomics (and any other truly insightful and sane economic theory) …would not allow private banks to create money/credit any more because the publicly administered national banking system at the behest of the new monetary authority/central bank would now be the only entities doing that. Hence there would be nearly no speculation by the national banking system and any used for those purposes by private banks with already distributed and saved money that did not pan out would be entirely the responsibility of the investors, never be able to be used to extort bail outs and would never rise to the systemic point of being :too big to fail”.
Publicly administered banking can do all of the good things and more that private banking can do and not do all of the things that private banks have historically repeatedly done that is destructive, dominating and inhumane.