Commentary by Roger Erickson
SOCIAL CREDIT
Pay labor enough, so that it can consume everything that it is able to produce?
What a common sense premise! No wonder Control Frauds worked so hard to bury the suggestion. For passive parasites, the alternative is letting the Middle Class leverage all capabilities for exploring emerging options ... and thereby optimizing Adaptive Rate.
Who wants that? :(
5 comments:
OMG Such a simple truth is being rediscovered again.
I got to it by looking those simplistic Hayekian cartoons about free market on an island with capital accumulation trough skill.
Such a croocked simplification was giving me the ideas about true nature of capital accumulation/ saving.
I want to make another cartoon like that in order to promote MMT. These cartoons is how Hayekians spread their stupidity trough universe, i would like to make cartoons to fix that but i have no means no time to do it, so i will give an idea on how that cartoon should look like.
Not paying labor enough to consume what they produced is the key to capital accumulation.
But that is only true with fixed money amount. (not considering inequality of payments of labor and menagement)
Imagine a single factory on an island state with fixed currency and fixed population.
Owner can accumulate capital only by not paying all employees total cost of production. He will accumulate by taxing demand for products he sold. Or in other words, price will be higher then the cost of production which will drain buyers of power to buy the products going from cycle to cycle. There will be growing unemployment with smaller and smaller profit and production.
Enter the owner lending his profit to replace shrinking demand from wages. That will only keep the production at the level PROVIDING that they never have to repay the debts. Workers will have to go into evermore debt.
Now enter fractional reserve banking.
Creation of money by credit solves taking profits while keeping demand PROVIDING there is no reduction of credit. Hence, to keep demand while paying employees less then they produced is possible only with everincreasing debt.
Now there is another issue where some of the employees (management) that are payed more then they can spend becomes another point of capital accumulation (saving) that also have to be counteracted by aditional crediting. Additional savings provide for more crediting.
The problem here is simple; do not allow reduction of credit if you allow for reduction of wages or it will produce reduced demand for employment and such circulation.
Employees in total (not counting inequality of management) are payed all what they produced with aditional crediting. Inequaliti of distribution within employees is another point of contention that needs correction. But, printing new money allows for total spending of production while capital accumulating.
Making all sustainable is wage growth/ inflation that makes repayment burden smaller not to eat into agregate demand.
Jure Jordan - Instead of creating a cartoon to illustrate your outlook in this economic model, maybe you should be thinking about creating an on line game. Think SimCity.
The only Canadian province to default was Alberta, in the 1930s. Why? They had a Social Credit government, and they had non-standard ideas. (Alberta was a poor farming province in those days.) The Federal government threw Alberta under the bus due to their political differences, and forced them to default.
Too bad Alberta didn't stick it out and show the Canadian bankers guild how to really innovate.
They needed Warren Mosler to outfox the foxes, not just Social Credit.
Could have issued their own bonds against their own future taxes.
Just amounts to parallel bookkeeping and tracking their own social credit.
If the rest of Canada had gone away in 1930, would Alberta's only option to commit suicide? Of course not.
We always need people who WON'T cave in to extremists, or hegemony.
"Hegemoney" - now there's a good term to explain orthodox economic theory.
Rombach
I have not played SimCity so i had no idea that they work with such economic model.
If that so, are players learning anything that is coonecting them with the real world?
Post a Comment