Great article Ellen. But remember you also need the Discount mechanism because it will catch and compensate for BOTH the inherent cost inflation of the system itself AND the inevitable price inflation that merchants will tack onto their prices as they see increased demand becoming available. This is also why the Discount percentage must exceed by a goodly percentage, the actual rate of inflation. This latter phenomenon is missed by the otherwise accurate theorizing of guys like Steve Keen and MMTers mostly because they’re very smart but a little too caught up in abstraction and so miss some of the temporal possibilities of a very (too) complex system. In order for the economy to work and remain stable it must have both mechanisms/policies.

The Dividend and Discount policies/mechanisms are the component parts and definition of economic stability and equilibrium, and reflect the + and – of the money system and the stock/flow consistency of debits and credits in accounting/double entry bookkeeping.

If you or anyone wants to see some of the chapters of one of my books Grace: The Aspects and Economic and Monetary Relevance they can see them on my blog here:

wisdomicsblog.com

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Me:  I believe you have asked me these questions before John. I think you have a misunderstanding that there are two types of discount policies. There is only one that makes any sense in a monetary economy and that is retail discount. The “just price” is kind of carry over language and thinking from the original non-monetary Distributists like Hillaire Belloc and G. K. Chesterton who although they are philosophically in attune with Social Credit were advanced and surpassed in monetary and economic thinking by Douglas. Douglas, despite the fact that he saw things much more clearly than anyone else in the early 20th century and today’s economists are only now coming back to partially re-discover his insights, was at the very beginnings of what is considered macro-economic thinking. Macro-economics is concerned with aggregates, aggregate numbers and their effects on the stability of economies. Douglas was brilliant and insightful, but, being at the beginning of that new way of looking at economics I don’t think even he actually had a clear idea of what the macro-economic tool of the Discount could have. Everyone lives within the horizon of their own culture and times. Not even Douglas could completely stepped outside of this or see the effects of the new discipline of macro-economics.

I have done as thorough an exegesis as I currently can of the core concept of Social Credit, namely Grace/Self Awareness/Consciousness (these three are synonymous) and as only a part of that exegesis shown the logical and reflective philosophical alignments between them and the classical goals of economics and economic theory. Douglas correctly pointed out that all policy should align with its philosophical counterpart. I’ve just taken it a couple of integrations higher as I have also integrated linguistics and trans-personal psychology/spirituality into that study.

As for how would I stop merchants from tacking some more onto their prices, that is one of the reasons why I advocate a large price deflationary discount percentage in order to compensate for that possibility/inevitability as well as to reverse the entropic/cost inflationary nature of the economy.

And as for the rich getting the larger numerical benefit…..such socialist envy is irrelevant if the individual is guaranteed a relatively abundant, satisfactory middle class income level as well as increasing leisure time to pursue his own interests and/or self development. So I don’t trouble myself with it.

I remember it being said on the Google group that Douglas speculated that the Gap was possibly as high as 90%. That undoubtedly included waste, fraud and reductions of income from the circular flow as well as excess costs a la A + B,….but Gap is still Gap whether it is excess costs or diminutions from the circular flow. It all contributes to the moment to moment gap in real time….which is the actual relevant Gap.

And again, if we are ever going to overthrow the monopoly powers of coercion by the Banks/private finance we’re going to have to use the Discount as the powerful macro-economic tool that it is and use it to reverse the problematic ratio and flow of costs/prices exceeding the flow of individual incomes. That is what I refer to as “The Higher, More Ethical Disequilibrium.”

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Saving, unlike debt, is not problematic because the individual has control over it. However, even in a Social Credit economy you would probably want to limit/regulate the interest rate allowed on savings deposits/bonds by both private bankers and the public banking structure to 1-2% just to guard against unbalanced financialization occurring. Euthanasia of the rentier and all of that.

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This is what I believe.

1) The Gap is real

2) Unless we the people take control of the banking system as per my tri-level banking system that aligns philosophically and policy-wise with Grace as in sovereign control by and for the people and Grace as in monetary Gifting and

3) The Dividend and Discount are used as true macro-economic tools to reverse the unstable ratio of income scarcity and cost inflation into stable relative income abundance and price deflation, and

4) If we don’t do the above then the Banks will still remain in control of the money system and the individual will at best be “freed” into a pecuniary welfare level of income and inflation will still erode the purchasing power of the individual and the profits of business.

Now if we decided to just declare the definition of full time work as 15-20 hrs/week, the numerical levels of Dividend and Discount could be somewhat, emphasis somewhat reduced, but the vector of the economy and money system must be toward increasing individual economic freedom and increased systemic free flowingness. Grace aligns with freedom, solutions and Wisdom, not enslavement, palliatives of enslavement and the folly that the individual is less than sovereign and is worthy of anything less than primary ethical consideration.

Nothing is going to change or work until we get an integrated/integrative kind of monetary reform that wrests control of the money system from private finance whose monopolistic insistence on their loan only paradigm while innovation and AI are ever more rapidly destroying aggregate individual income. An integrative reform could accomplish BOTH a roaring and yet humane profit making system AND price deflation.