Social Credit - A DP Open DiscussionSubmitted by wellington on Sun, 07/07/2013 - 19:17
Please give me your feedback.
I have been thinking and researching ways to offset the collapse of the dollar in my home state. Of course I understand competeting currencies will have to be the number 1 priority, but what about Social Credit?
I got the idea from researching the effects of Lincoln's "Greenback" as a compete ting currency, to be the "Kindle" to start my States economy back up, and use the time for awareness to rebuild.
Engineered by C. H. Douglas,
Individual freedom, primary economic freedom, was the central goal of Douglas's reform.
It was while he was reorganising the work of the RAE during World War I that Douglas noticed that the weekly total costs of goods produced was greater than the sums paid out to workers for wages, salaries and dividends. This seemed to contradict the theory put forth by classic Ricardian economics, that all costs are distributed simultaneously as purchasing power.
Troubled by the seeming disconnect between the way money flowed and the objectives of industry ("delivery of goods and services", in his view), Douglas set out to apply engineering methods to the economic system.
Douglas collected data from over a hundred large British businesses and found that in every case, except that of companies heading for bankruptcy, the sums paid out in salaries, wages and dividends were always less than the total costs of goods and services produced each week: the workers were not paid enough to buy back what they had made. He published his observations and conclusions in an article in the English Review where he suggested: "That we are living under a system of accountancy which renders the delivery of the nation's goods and services to itself a technical impossibility."  The reason, Douglas concluded, was that the economic system was organized to maximize profits for those with economic power by creating unnecessary scarcity. Between 1916 and 1920, he developed his economic ideas, publishing two books in 1920, Economic Democracy and Credit-Power and Democracy, followed in 1924 by Social Credit.
Freeing workers from this system by bringing purchasing power in line with production became the basis of Douglas's reform ideas that became known as Social Credit. There were two main elements to Douglas's reform program: a National Dividend to distribute money (debt free credit) equally to all citizens, over and above their earnings, to help bridge the gap between purchasing power and prices; also a price adjustment mechanism, called the Just Price, which would forestall any possibility of inflation. The Just Price would effectively reduce retail prices by a percentage that reflected the physical efficiency of the production system. Douglas observed that the cost of production is consumption; meaning the exact physical cost of production is the total resources consumed in the production process. As the physical efficiency of production increases the Just Price mechanism will reduce the price of products for the consumer. The consumers will be able to purchase as much of what the producers produce that they want and automatically control what continues to be produced by their consumption of it. Individual freedom, primary economic freedom, was the central goal of Douglas's reform.
At the end of World War I, Douglas retired from engineering to promote his reform ideas full-time, which he would do for the rest of his life. His ideas inspired the Canadian social credit movement (which obtained control of Alberta's provincial government in 1935), the short-lived Douglas Credit Party in Australia and New Zealand's rather longer-lasting Social Credit Political League. Douglas also lectured on Social Credit in Canada, Japan, New Zealand and Norway.
In 1923 he appeared as a witness before the Canadian Banking Inquiry, and in 1930 before the Macmillan Committee. In 1929 he made a lecture tour of Japan, where his ideas were enthusiastically received by industry and government. His 1933 edition of Social Credit made a reference to the Protocols of the Elders of Zion, which, while noting its dubious authenticity, wrote that what "is interesting about it, is the fidelity with which the methods by which such enslavement might be brought about
can be seen reflected in the facts of everyday experience."
Douglas died in his home in Fearnan, Scotland. Douglas and his theories are referred to several times (unsympathetically) in Lewis Grassic Gibbon's trilogy A Scots Quair. He is also mentioned, together with Karl Marx and Silvio Gesell, by John Maynard Keynes in The General Theory of Employment, Interest, and Money (1936, p. 32). Douglas's theories permeate the poetry and economic writings of Ezra Pound. Robert Heinlein's first novel For Us, The Living: A Comedy of Customs describes a near future United States operating according to the principles of Social Credit. While Heinlein's talent was still developing, and the story's rough edges reflect that, Heinlein saw Social Credit as the path to a utopia where poverty is eliminated and we live in a more balanced and less abusive economic and social settlement.
My question is can we issue this in an open competition, knowing the Market will make it obsolete in time.
I think this would give my State (over 50% unemployment) a chance to survive a monetary collapse.
Could this work in an open competition?
Would it be better for full commodity backed banking or fractional reserve?
How would you set the value of the currency?