Me: Why not make the discount at retail sale 50%? That way both individual potential purchasing power and business revenue will be doubled. And because retail sale is the terminal ending point of the entire legitimate economic/productive process, the terminal summing point for all costs and so prices for every consumer item and finally the terminal expression point for all forms of inflation a 50% reduction in retail price actually painlessly and beneficially integrates price deflation into profit making systems.
Such a policy thus becomes more than a theory it is elevated to the level of paradigm change.
Merely filling the gap statistically goes against Douglas’s observation that balancing the books of the economy is a prescription for recession or depression. I remember Wally saying that Douglas and some of the early social crediters debated what percentage of deficit the gap actually was and some of them thought it could be as high as 90%.
JS: Hi Steve 😊,
The size of the discount needs to be accurately measured, not just determined “Willy nilly”.
Now, of course, economic sabotage plays a big part of it, and youre correct, Douglas said it could be as high as 75%, but I don’t think it’s prudent to do that initially. Many of the goods and services we are producing need to disappear first.
I did a quick calculation for Canada based tool on government stats, and it was around 15%. This obviously could be increased over time, but I think it’s prudent to be cautious initially.
Me: There’s no need to quibble over numbers. You could just as easily make the Dividend $1500/mo with a 33% discount/rebate that would enable everyone to purchase $1995/mo, or make the dividend $1600/mo with a 25% dividend and then everyone can purchase $2000/mo. All of the “knock on” benefits of reduced transfer taxation for the individual and enterprise could thus still be implemented.
Social crediters are far too concerned with what the “authorities” and elites will think and say….and (puzzlingly) do not seem to recognize how politically powerful its message would be if communicated directly to the individual. Politics is simultaneously the strongest and weakest aspect of the financial elite’s hypnotic control of the populace. The boldness of paradigm change is the route to real change, caution only leads to palliative reform. If Christ had said grace was scarce or sparse instead of abundant would he have attracted as large a following? If Luther had said you still had to fulfill 50% of the sacraments with the church because you could only have 50% of a direct relationship with god would The Reformation have even occurred?
JS: Hi Steve,
We shouldn’t even be talking about numbers unless we have the stats to back them up. The Alberta Social Credit Party was a populist movement. Douglas was quick to distance himself from it. And as it turns out his decision was wise. The Social Credit Party embarrassed itself repeatedly, and we are still feeling the sting of that embarrassment to this day. People here still call it the “funny money” party.
Me: Well, good luck getting social credit going without showing large bi-partisan constituencies like workers and businessmen exactly how social credit is going to benefit them.
AW: Hi Steve,
I have to acknowledge that what you say does make a lot of sense at least on paper but I am not sure how it would go in the real world. I am sure there could be a few variables out there that could put pressure on these numbers. I believe the safest and wisest way to approach this would be on more on a scientific basis.
We could do this slowly in a number of increments until we get the magic number that works. Waiting for the result of each increment will give us the opportunity to observe its effect on the economy first so we can act accordingly. If for example we get our figures wrong in these small increments it can be fixed easily without to much damage to our credibility. By going slowly the population will see that the foundation we are working on is strong and that it is credible. The continued rising growth of affordability without excess inflation will do wonders, I’m sure.
There is also the issue of wasteful production Jim has mentioned about. I’m sure we could regulate what products are able to utilise this discount rate on. So in other words blatant wasteful production could be penalised by reduced discount or none at all. I am sure that over a period of a few years the desired changes for quality long life products will be a reality and with it more leisure time and a more sustained environment.
Me: Thanks for replying Andrew. I can understand caution, but the fact remains social credit has gone absolutely no where since WW II started and distracted everyone, Keynes became the fall back position of finance to it and Douglas and social credit got virtually erased from history.
Social credit needs at least a shocking re-introduction and preferably a re-working from the best mere economic theory of the last 90 years into the paradighm change its basic policies could accomplish. I prefer the $1000/mo dividend and 50% discount/rebate policy for that reason alone, but again I’m not one to quibble over numbers. You could also have a $1600/mo. dividend a 25% discount rebate at retail sale for most everyday consumer items and a 50% discount/rebate on big ticket items like houses and cars. The point is to vastly decrease personal/private indebtedness and completely eliminate price and asset inflation which breaks up finance’s paradigm of Debt Only for the sole form and vehicle for the creation and distribution of money/credit.
I know this will bring howls from orthodox social crediters, but IMO private banking will never ever be anything but an unethical and disruptive force and so must be replaced by a publicly administered national banking system and a central bank aligned with the philosophical concept of grace which social credit is based on. It’s simply applying Occam’s Razor to the financial system. Private and public finance are potentially corruptible, but one entity stripped of its profit motive and strictly regulated and aligned with grace as in monetary gifting would be a whole lot easier to handle than a bunch of rogue trillionaires. That and it could also really supercharge the effects of a monthly dividend and a retail discount/rebate policy. How? By extending the retail discount/rebate policy to the point of note signing. In other words a $300k house discounted 50% at point of retail sale by the monetary authority to $150k and then a $150k note at 0% is disbursed to the home building corporation to make them whole on their margins and overheads…and then the public national bank which does not need to make a profit discounts the note 50% to $75k. On a 10 year note thats a $625/mo. payment. 10 years and you’re an actual owner of your home instead of a renter of the Banks for 30 years. Just how attractive might that be to every voter except the bankers???
AW: Thanks Steve,
You are speaking my language. Yes, Social Credit has almost become an extinct tiger that has so much potential. Yet, no one knows this more than the private banking system themselves. They really feel threatened by Social Credit because it has all the tools needed to eventually dismantle them. They have managed to silence us and keep us in check all these years. This needs to change.
As you say just using the National Dividend and The Retail Discount alone it is possible to remove debt, which I believe Douglas intended to do anyway but at a slower rate.
I am in total agreement with you that the private banking system needs to be taken out of the equation and replaced with Social Credit banks or a National Public Bank owned by the people via a central bank aligned with the workings of Social Credit. (We used to have one in Australia)
I believe Social Credit is already workable right now, it just never had the ability show its potential that’s all, but there is nothing wrong in trying to improve it if possible. The action of setting up a network of Social Credit banks in the community could be one of them. The action of removing the private banks right to create money as debt could be another.
But first of all we need to rewrite the description of Social Credit so that it can be easily understood. I believe this should be the first priority as we are losing so many potential people through lack of understanding. Then we need to rethink how we can promote it with social media and other venues. When the people understand how Social Credit Works it will be impossible to remove it from them.
JS: Hi Andrew and Steve,
I want to add my thoughts to your conversation.
Certainly, we need to try a different approach from what we have done in the recent past. That hasn’t worked. I don’t think that writing more books on the subject, or giving speeches to the converted is getting us anywhere. I’m a firm believer that for as much as we talk about new technology, we are the least prone to use it effectively. Nobody reads books anymore, and why should they? I don’t read anymore (or at least I read very little). Most of the information I get is from YouTube. We are not using this medium nearly as much as we should be. We use it for recorded speeches, or talks that nobody listens to. We need to be giving short, animated presentations on the subject. And in such a manner, as you suggest, that is simple enough for most people to understand. I truly believe that is the way we need to market ourselves. And then spread those videos far and wide in hopes that one or a few go “viral”.
In terms of suggesting numbers for a dividend or a price rebate, I believe that exercise is fool hardy unless you have statistics to back it up. Any suggestion of numbers for the dividend and price rebate will be torn to shreds by anyone who’s competent unless they can be effectively demonstrated. I’m of the mindset that we avoid numbers all together, and if we must use them, do so cautiously. It’s very easy to attack a theory if the claims can be demonstrated to be ridiculous. Don’t forget, it’s up to us to prove our theory, not for others to disprove it.
Nationalization of banking really has very little to do with Social Credit. Again, I think this is another point that others will attack. The nationalization of all banking is one of the planks in the Communist Manifesto. Suggestions of nationalization of all banks will bring attacks by those on the right that already may view our ideas as that “socialist credit” platform. There is no necessity to nationalize banking, and doing so only increases the monopoly of credit that they already enjoy. As Douglas wrote, we need to change banking policy, not administration. Policy can be changed by laws. There’s no need for the government to get involved in the banking industry, and this would just be another point of criticism for our adversaries.
I would also suggest that promoting Social Credit as an idea that encompasses much more than mere monetary reform is essential. As Douglas wrote, if Social Credit is merely promoted as a means for monetary reform, then it will follow the monetary reform curve of success (people will be interested when times are tough, and not the least interested when the economy is doing well). I like the fact that Steve has taken more of this approach, even if I’m not in entire agreement with his philosophy, or world view. A big hurdle that Social Credit has to overcome from its critics on the right is this philosophy of salvation through works. It’s a puritanical mindset that has really infected the North American mind.
Me: The truth is no matter what numbers one puts out or doesn’t put out at all the orthodox and consciously opposed to monetary gifting are going to try to slam it. That’s precisely why you need to make short pungent videos and use obviously self interested numbers to grasp the populace’s attention and keep it. Even advise people to ignore the contrarily self interested protestations of the economic and financial elites. Does everyone need to have a full intellectual understanding of social credit? Of course not. And when they say social credit is socialism just point out that re-distributive taxation is the essence of socialist economic policy and that a sufficient dividend and discount/rebate would enable us to get rid of the great deal of such for both businesses and individuals, and retort that “Freeing both enterprise and the individual from socialist re-distributive taxation….that’s a funny kind of socialism/communism….wouldn’t you say?” Boldness, the willingness and ability to look at and strategically utilize illogic as a means of exiting the hypnotic effects of orthodoxy and old/current paradigm thinking are in facr signatures of imminent and accomplished paradigm change. We need to go for it!
DM: I think we ride the coattails of the UBI push and add the thought that our approach provides the mechanism to pay for it without having to incur public debt and kick that can down the road too.
As for the CP, it is a critical component too because it provides the needed money at exactly the point it is needed. Who can’t get behind the idea that we collect a sales credit instead of paying a sales tax, and that this actually betters – not worsens – our collective weal? If we convince them of the existence of a gap, then this point won’t be resisted either.
The only comment I will make is that perception is reality – even if it is not the truth. We can’t argue the simple fact that again and again, the canards keep getting thrown at SC. If a frontal assault doesn’t work, go guerilla. That is why I say ride the coattails of Public Banking. It is like Warburg told his cronies at Jekyll Island, “Don’t worry, we’ll fix the rest of it later.” It took the bastards half a century to unwind Glass-Seigel but they were patient. Walk, crawl, run. That’s what I say.
Me: I would suggest that Public Banking and Social Credit integrate their efforts, but that we keep in mind that Social Credit is the deeper, more pragmatic program and point of view. Not for any egotistical reason, but simply because Public Banking is only dealing with the major structural problem while Socail Credit or an innovated and even more synergistically powerful version thereof deals with both the more underlying and encompassing aspect of the problem, namely the the current monopolistic paradigm of Debt/Burden/Additional Costs Only. Structural reform is good. Paradigm change is a rare, utterly significant and permanently progressive historical event.
DM: And there is another factor. People today are radically different from those half a century ago. We are all much more stressed and therefore intolerant. We also no longer trust politicians or our institutions. The mindset today is much more selfish. We need to emphasize “what’s in it for me?” because that is what people generally think. We’re already on the cusp of what Plato told us was the weakness of democracy; that eventually it devolves to us all voting ourselves some free money. After TARP and bankster bailouts, how could it be otherwise? I want my bailout too! That’s what people think so USE IT!
Just where are you suggesting this “boldness” in the manner you’ve proposed take place? The USA, Canada, Australia, New Zealand? Where? Who’s going to go first? I personally can’t see the citizens of any of the latter three realms responding favorably to being that ‘bold’. And that’s based on observing historical precedent of the ‘on-the-ground’ experience with Social Credit in each of those latter three countries.
As Jim has mentioned, the good people of Alberta once bought in to the leader of a well-organised SC group preaching a similar “boldness”, back in an era where it seemed much more appropriate than it might today. His sermon sounded real good back then ~ $ 25 a month dividend, at a time when a good wage for many would be around $ 3 a day, and many made far less than that. If they still had any income at all. And a restriction on prices, too. Many had nothing to lose ~ they’d already lost it, or were on the verge. But the leader of that group, one William Aberhart, found on taking office that he not only couldn’t deliver, but he really didn’t have a clue how to deliver either. And he had the one real expert ‘on tap’ ~ Douglas himself. Whose advice he couldn’t understand, nor see how he could reconcile what he’d promised with it.
Since that time there have been numerous other calls for “boldness” in Canada. I still have a somewhat dated mail-out from the “White Berets” , a Quebec based Catholic Social Credit advocacy group~ one of many I’ve seen that used to go out to every household in Canada. It called on the then Canadian government, headed at the time by Jean Chretien, to immediately initiate a National Dividend payment of $ 800 a month to every Canadian.
Prior to that, the old Social Credit Party of Canada, which actually once had a considerable presence in the Canadian Federal Parliament, often used to make similar “bold” proposals, albeit of a lower figure, but relevant proportionally to the incomes of the times. It all came to naught. Undoubtedly to an ever shrinking minority, what was proposed “sounded good”. To everyone else it sounded, well, simply goofy.
People just couldn’t see how you could pay everyone a dividend without taking what you’d be paying from someone else. It just sounds too good to be true ~ and you can tell them all the stories about Jesus and his ‘loaves and fishes’ you want, and ‘grace’ and all that, and even if they go around proudly ‘wearing’ their Christianity, when push comes to shove they’re still not going to believe you.
If you don’t believe me, then ask yourself how many ever see the irony in how any government that supposedly has to borrow money from banks to function can turn around and bail out those same banks when they get in trouble? How many of the general public could explain that, or even understand it?
Now I’m not completely discounting the idea of “boldness”. For I do think something ‘bold’ is going to be necessary to ever get the foot of Social Credit back in the public’s door. And that something, in my opinion, could be the Compensated Price Discount. Getting something started like that alone is going to take considerable “boldness”. But it has a chance. And no real competition. And I think it’s going to be far more marketable alone than trying to peddle the whole works all at once initially. Because it addresses the primary problem that those politically active on both the ‘left’ and ‘right’ are increasingly complaining about. AFFORDABILITY.
If we go that other route, pushing the same old kick we’ve been on about for years, and it, by some miracle, ever does catch the attention of a large body of the public again , I believe we’re going to find we’ll quickly run into a great many obstacles we’ve so far ignored.
Ones that will prove collectively almost impossible to overcome while trying to hold the fleeting attention of our erstwhile supporters. If you go back and read Douglas’s “Draft Plan for Scotland”, you’ll notice some of them, I’m sure. To wit, the ‘land issue’, for one. Try to sell that notion to people who have convinced themselves the secret to financial success is to buy (a house) low and sell it high. Or anything else, for that matter. That’s not something you can accomplish instantly.
And then there are other problems. Perhaps not so much in the USA, because you have a large domestic market that can already absorb a lot of your own production. But in the three Dominions mentioned above? They do NOT.
The vast majority of their production is destined for export, and the physical ‘plant’ in each of them has been scaled up for that purpose. In a overwhelming number of instances what exists now simply couldn’t be operated practically on a smaller scale. How are you even going to sell the notion that it could to the owners and operators of that plant? That may not seem important to you, but even if we had a government with a knowledgeable, beneficent, absolute dictator at its head, that’s going to be an enormous challenge. Your ‘paradigm shift’ won’t be well received by those currently controlling finance internationally. Nor if it can be caused to fail by them.
The citizen’s of Canada, Australia and New Zealand as a whole would be unmistakably better off with the kind of dividend and discount/rebate policy I’ve talked about. There can be no argument about that. That in and of itself would increase their domestic consumption which would be good for their producers, and if large and populace nations like the USA re-industrialized in order to make their economy more robust and cut the wasteful costs of globalized production as I’m sure they would that would undoubtedly enable the producers in the AUS and NZ areas to group together and create a mutually acceptable trading block. The concept is subsidiarity and it not only works it’s a lot more sane than everyone trying to become an export platform.
A new paradigm has to be thoroughly visualized by its leaders and intelligently communicated to the general populace, and the nay sayers simply need to be ignored…..particularly by its leaders. The battle may be a pitched one, but the vision must be held forth…until the obvious dominating self interests of the elite re-inforcing it….is recognized by the many.
If we don’t do that, then I commend you to your separate counsels of despair.
JS: Actually, Steve, you don’t know if they’d be better off with the type of discount and rebate you’ve discussed because you have nothing to support it.
If the size of the discount and dividend is too high, you could end up with massive shortages and inflation. If that happened, people would not be better off, and Social Credit would end up in the dust bins of history.
I like a lot of what you write, but I completely disagree with arbitrary assumptions about the size of the discount or dividend when they seem outrageously high.
Me: Not correct. You’ve apparently forgotten one thing I got from the social credit group here when I first came acrossed it 8 years ago. And that is that retail sale is the terminal ending point of the entire economic/productive process. So if you implement the 50% discount/rebate policy at that point it will absolutely invert inflation into deflation. Put that together with the fact that competition IS in effect between and within business models throughout that entire process and so “garden variety” inflation will not and competitively cannot excede a relatively low single digit number, and also understand that hyper-inflations do not and CANNOT occur without certain prior disastrous circumstances like a war which destroys most of the means of production and a central bank that is compliant in leveraging up speculators who short the currency which kicks off the actual hyper-inflation…so a 50% discount AT THE END of the entire process at retail sale….WILL ELIMINATE INFLATION and WILL MATHEMATICALLY INTEGRATE BENEFICIAL PRICE DEFLATION INTO PROFIT MAKING SYSTEMS. Of course you’ll need sin taxation and the threat of expulsion from the discount/rebate program to discourage the greedy, anti-social and unappreciative businessmen who will try to commit creeping inflation or extreme price deflation on the part of monopolistic enterprise, and perhaps tax encouragements for businesses not to inflate their prices except for genuine increased costs….no system is perfect not even one that has experienced a new paradigm, but the reality that the new paradigm creates UNMISTAKABLY IN THE TEMPORAL UNIVERSE…cannot be denied BECAUSE EVERYONE EXPERIENCES IT….like the ability to purchase twice or thrice as much with the same level of income as they did the day before the new paradigm occurred.
I said if the dividend and price rebate are can create massive shortages and inflation.
The rebate is only a ratio. If all prices increase, they will still increase with a price rebate mechanism. The rebate mechanism doesn’t fix prices,
Further, if the rebate is too high, then you could also end up with massive shortages where there is too much demand for companies to keep up at that price.
Nowhere does Douglas, or any economist, claim that the supply of goods and services can be met at any price.
What Social Crediters are seeking is equilibrium between aggregate incomes and aggregate prices. There’s absolutely no guarantee that the size of the dividend and price rebate you suggest will bring about that equilibrium.
Me: “What Social Crediters are seeking is equilibrium between aggregate incomes and aggregate prices. There’s absolutely no guarantee that the size of the dividend and price rebate you suggest will bring about that equilibrium. ”
Yes, they are. And that’s part of the problem. Douglas’s A + B theorem makes him the first DISEQUILIBRIUM theorists. I’ve been trying to communicate that fact to the best present day economists for years. Douglas was against the idea of balancing/equilibrating the books because the system was inherently cost inflationary. Merely filling the gap is just an extension of balancing the books when what is required to have a truly freeing and free flowing system is to create waht I call “the higher disequilibrium”.
“The rebate is only a ratio. If all prices increase, they will still increase with a price rebate mechanism. The rebate mechanism doesn’t fix prices,”
No they won’t. It’s NOT JUST a ratio. Again you forget that retail sale is the terminal ending, summing and expression point for costs, prices and any and all forms of inflation. How can it be anything but so….as it is the terminal ending point for all items and services….where production becomes consumption? And I already explained how any inflation that might occur before and throughout the entire process can only be a very small single digit number so that if there was 3% inflation you’d still have 47% price deflation, and technically you could just make the discount 53% and voila!, everyone’s purchasing power is immediately doubled!
“Further, if the rebate is too high, then you could also end up with massive shortages where there is too much demand for companies to keep up at that price.”
No there wouldn’t. In the first place doubling purchasing power does not necessarily equate with a doubling of consumption. (and part of my program would try to further acculturate the always relevant factor of thrift and other economic virtues in the interest of being free from the enslavement of debt) In the second place you’ve already recognized that we’re over producing in order to attempt to fill the gap so we’ve got plenty enough productive capability to meet any upping of consumption.
“The higher disequilibrium” is a much more stable flow than the A + B or mere book balancing the gap economies.
JS: Douglas was not against balancing the books. He said they can’t balance under the current accountancy. His solution, which involves a dividend and price rebate created with debt free credits, would balance the books, thus creating equilibrium.
“And I already explained how any inflation that might occur before and throughout the entire process can only be a very small single digit number so that if there was 3% inflation you’d still have 47% price deflation, and technically you could just make the discount 53% and voila!, everyone’s purchasing power is immediately doubled! “
That’s right! And a 50% discount might very well end up being a 15% discount if the discount creates 35% inflation.
The fact of the matter us you don’t know, and you have no statistics to back your claim of a 50% discount. That’s the issue! And issuing the discount in that fashion is reckless, in my opinion.
“In the first place doubling purchasing power does not necessarily equate with a doubling of consumption.”
I never said it did! But doubling purchasing power either doubles consumption, ceterus paribus, or it also causes inflation. Those are the two options.
Me: “But doubling purchasing power either doubles consumption, ceterus paribus, or it also causes inflation. Those are the two options.”
ceterus paribus is just another errent orthodoxy. Money is not the actual or the most basic cause of inflation. Its most basic and relevant cause is commercial agents existing in an economy of scarcity of individual income and hence business revenue seeing more money coming into the system and thus deciding to inflate in order to garner more revenue. If you provide a better, more rational, beneficial and more profit making alternative to that reality like the 50% discount/rebate the smart businessmen will embrace it.
Ceterus paribus is just Latin for “all things being equal “. It doesn’t have anything to do with economics itself. In fact, scientists do experiments in labs so that they can keep other variables, ceterus paribus.
Me: It’s still irrelevant to the fact that a sufficiently high percentage discount/rebate monetary policy at the point of sale would accomplish a paradigm change in economic and the money system. Full stop.
And doubling POTENTIAL purchasing power does NOT mean that everyone will consume twice as much mashed potatoes, bed sheets, dog food and lipstick. They will undoubtedly save a lot more and probably pay down debt with the 50% savings they get at whatever they purchase at retail sale.