Bob:
I agree with 90% of the article, but there are some loose ends; for example, what is to prevent the Anglo-Euro-American banking cartel from using their huge stash of FRN (or printing them) to buy Rubles and Yuans?
Right now, through market manipulation of currency, stock markets, and lower prices (the cartel using its proxy, Saudi Arabia, to do this), the Ruble and the Yuan are devalued versus the dollar. This means that using FRN to buy Rubles and Yuans on the cheap is an excellent strategy for those who own the FRN printing press.
Yes, pumping oil is a huge commodity and is much like printing money ex nihilo (except that it is a limited commodity), but the largest traded commodity is not oil, its still FRNs.
Comments?
Me: Bob,
Your thinking is macro-economically sound, but remember if we are to have a complete micro and macro-economics they must be integrated in order for there to be a third and more unified theory. The ruling theory DSGE/neo-liberalism/the neo-classical synthesis claims to be such but all the leading edge thinking shows us that these are an emperor without any clothes. Micro-economics is ruled by cost and utterly embedded in Time and so is subject to disequilibrium by additional costs like depreciation, extraction and diminutions of income like savings and re-investments and time…lags in such disequilibrium that cannot be equilibrated by the current means of increasing both money and individual income, i.e. ONLY lending and borrowing at interest. Interest is one cost, but not the totality of additional costs and/or diminutions of money/income from the circular flow. This results in there being much more total money in the system…than there is, moment to moment, individual incomes with which to liquidate both the total money costs (principle and interest) and the additional costs of depreciation and the diminutions as per above. This basic micro-economic insight is what is missed by theorists, and is macro-economically resolved by policies of monetary grace/Gifting directly to the individual (the Dividend) and also reciprocally within the system (the rebated back to merchants retail Discount to consumers).
Bob: Steve,
You write: “Micro-economics is ruled by cost and utterly embedded in Time and so is subject to disequilibrium by additional costs like depreciation, extraction and diminutions of income like savings and re-investments and time…lags in such disequilibrium that cannot be equilibrated by the current means of increasing both money and individual income, i.e. ONLY lending and borrowing at interest.”
What you’re describing in a system of accounting developed to justify and account for capitalism, and which has invented all sorts of means for the 1% to avoid taxes. Margrit Kennedy estimated that, given the accumulation of interest, about 40% of the cost of goods and services is attributable to interest. So, I’ve never bought this argument regarding the primacy of accounting. In a capitalist system, accounting is nothing more than a tool for the 1% to maintain control. When I was in high school, my dad (who had Italian partners) explained to me that in Italy they kept five sets of books, and brought out the set that suited whoever it was that was looking at them. Anyone good with numbers can make them sing. Just look at what the cartel does with “government” economic figures.
Me: It’s true the Italians are very “inventive” :), but their compulsion/needs to be so are more a result of the onerousness of the system…brought about by the fact that costs/prices exceed individual incomes as a flow than it is their native criminality.
And remember, I’m not talking about a capitalist system, but rather a Distributive one. Capitalism is about profit, power and control. A Distributive system is a universally abundant system, not an enforced onerous and unstable one like finance capitalism, and, because its underlying philosophy and aligned policies are based on Grace/graciousness it also has a much higher and more refined sense of ethics than does capitalism.
Also, the Dividend and Discount mechanisms release both businesses and the individual from the onerousness enforced by the current cost accounting convention.
John R.: Steve, please explain that comment in detail.
A discount system would require very careful accounting, that would be one of the problems with trying to implelement it, and I don’t see shareholders doing witnout records just because business is a bit more profitable.
That would be on top of the army of inspectors needed to establish “just prices” for every article in every part of the nation.
Me: John,
I said “…the Dividend and Discount mechanisms release both businesses and the individual from the ONEROUSNESS ENFORCED by the current cost accounting convention.” ….not from the the accounting conventions THEMSELVES which are a necessary tool for businesses to assess whether or not they are making a profit.
As for your contention goes that “That would be on top of the army of inspectors needed to establish “just prices” for every article in every part of the nation.”, you must “get over the hump” of conceiving the administration of the Discount as complex. It’s a macro-economic policy, hence its percentage deals with aggregates of costs…like the 40% of costs that represent interest, the large percentage of depreciation costs, the costs of waste and of re-investment…so its not an intrusive individual calculation of the cost of every product or service. That is what every business does anyway, or should do if they want to know where they stand, and then after THEY do that calculating of their best competitive price the Discount looks at the aggregates and assigns an equal (and if we are wise a proactively large) percentage….for each and all products and services.
And remember, Douglas said that balancing the books of the economy and/or the government was self destructive folly. Equilibrium is just another orthodoxy to overcome because there are multiple equilibria possible at varying levels of individual income and at varying levels of prices….because businesses are fully rebated their discounts.
Bob: Yes, Steve, that is what I am saying, that the system is onerous. What I’m proposing is what I see as the simplest way of keeping the system in balance.
We do agree that guaranteed income is necessary in a system where automation is aimed at reducing “work hours,” unlike in a capitalist system, where automation means more profit for the few and “reducing the surplus population,” as Dickens’ Scrooge, a usurer in the City of London put it.
But where we differ is in how we explain the easiest way to keep the system in balance. My view is that in a system in which a public banking network operates without usury, a consumer price index based on an economic bill of rights (food, clothing, shelter, healthcare, education, etc.) would make it easy to measure any inflationary or deflationary trends and adjust the amount of credit available at zero interest in local markets, or by spending base money into local economies, or by taxes and fees (as a last resort).
Me: Okay. It good to see that we have major agreements on ethics and the need for a guaranteed and additional income. I would only say that making private sectors of the economy into public ones (excepting finance which IMO requires it) or getting them to buy into a pricing index scenario would be a very contentious project in itself. And then without a discount mechanism what about the inflationary proclivities of the remaining non-public sectors?
Social Credit/Wisdomics/Gracenomics/ Gracientialism 