Economics and similar, for the sleep-deprived

A subtle change has been made to the comments links, so they no longer pop up. Does this in any way help with the problem about comments not appearing on permalinked posts, readers?

Update: seemingly not

Update: Oh yeah!

Friday, March 14, 2003

A Quick One, While He's Away

Recent lack of activity here has been a result of my fucking cable service not working, again. Sorry. Anyway, for that reason, this is a rather quick hit-and-run post, because I'm using a computer other than my own.

  • I hereby claim dibs on being the first person on the entire Internet to adopt the currently wildly fashionable political position of being a Balking Hawk; someone who would basically be in favour of war in Iraq, but who has been pushed onto the anti side because they don't trust the Bush administration not to fuck it up. Unless you know different, this post from October of 2002, sets out exactly this view as the official foreign policy of D-Squared Digest. Thank you all very much. If there are any other major political issues upon which you need advice in formulating a suitably ineffectual and fence-sitting viewpoint, my rates are reasonable.

  • On a similar note, I have been troubled greatly over the last few days by the following thought; although it is obvious that the USA has an incredible advantage over Iraq in terms of men and materiel, you have to admit that if you were picking a team of leaders to lose this war, you wouldn't be able to do much better than Bush, Cheney and Rumsfeld. Ignorance - check; Hubris - check; Ability to alienate allies - check; Tendency to ignore unfavourable information - check. It's like having Saddam Hussein's fucking fantasy football team in the top job.

    Fortunately, however, being sensible, I don't regard the fact that I came up with an idea as being a good reason in and of itself to discuss it as if it were a realistic possibility. Nine tenths of good generalship is battle selection, and to take an opponent over which you have already rather more than twice the "full Monty" (the five to one advantage in men and materiel which Field Marshall Viscount Montgomery regarded as ensuring victory), and then insist that they get rid of their remaining weapons before you attack them, is about as good combat selection as you can get.

  • And a correspondent passes on to me the following comments on the subject of Social Credit. I said I'd post them without editorial comment and so I will. If anyone else has any extended comments they'd like to see posted on the front page, it's not too difficult to track down my email. I must say I'm feeling quite uncomfortable with the promise of "no editorial comments" when posting ideas I disagree with, but then that's probably a good thing. So I'll just mention that my correspondent is not connected to the Alberta Social Credit Party.

I'm following up the social credit discussion. I'm not claiming to be an expert on the subject. I am a legal scholar by trade, and generally tread into the economics field with caution. I have however found social credit theory to be an interesting diversion of late. If I can get around to it I'll provide you with a more detailed response. I think the following points might put social credit theory into its proper context:

(a) Intellectually it is an off-shoot of the Veblenian rather than the Marxian critique of capitalism. More precisely it is closely connected to the guild socialism of the early Labour movement as laid out in the works of Alfred Orage and others. Nowadays it has some support within the environmental movement, but is largely forgotten. This may be because it is a nutty idea, but is rather, I think, because of the emergence in the aftermath of 1917 of the view that a centralised state economy was the only alternative to capitalism. Unfortunately this divide continues to poision most contemporary political and economic discourses. History shows us that it is quite possible that good ideas can be lost for generations - Aristotle's works were lost to Western Europe for most of the Dark Ages!

(b)You are correct to say that Douglas' starting point was that new money should not be created as debt by private interests. He turned the capitalised money (debt) concept on its head and said that money should only be created as credit for the community as a whole. He saw two basic forms of money creation: (i) Consumers' credit - the allocation of money to consumers in the form of a "national dividend" on the strength of the universal claim to a share in the common cultural heritance and knowledge base of society (a very Veblenian notion) and; (ii) Proucers' credit - a system of money creation based on the concept of a "just price". Instead of selling at a cost that factored past production, debt finance and profit, producers would sell at a price calculated in accordance with the "A + B theorem". A + B theorem is based on a critique of the circular flow equilibrium model, because of its failure to account for the effect of time in economic production. You may know more about this than me.

(c) Social credit theory does not demand the nationalisation of banks. It proposes two basic financial institutions - (i) Producer's banks - they can issue financial credit in line with the creation of real credit created by industry, (ii) Clearing house - a national system that statutorily endorses the Producer Banks' credit. It is also a facility for the government to fund the national dividend and other public expenditure programmes.

I have no doubt provided a misleading and certainly an incomplete account of social credit. It is of course premised on a decentralised model of social ownership of the means of production. I'm not competent to assess whether it really offers a viable model, and I can see it having major problems in the context of international trade. I do however believe that an economic model that doesn't demand permanent economic growth and that directs resources towards the production of useful rather than harmful things will become a pressing need as the 21st Century progresses. It could be a start?

0 comments this item posted by the management 3/14/2003 12:51:00 AM

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