Dear Serious Reformers on several mail lists, Your obligation is either to produce a better macro-model, or, to accept Fig4B.Gif at URL <http://www.freespeech.org/darves/bert.html> as the best conceptual framework available for facilitating a dialog on developing our global social policy. But a valid micro-model is also needed to visualize the century old root-cause of our social pathology, and particularly so, because so many of us make our living by catering to the various symptoms of our social pathology, just as Bernard DE Mandeville said we would do in his 1705, FABLE OF THE BEES, Private Vices, Public Benefits. The five replies to my last post "The Global Model III" were, as always, enlightening. Read them and weep for our future. 1, Rob Bradley: DELETE ME FROM THIS LIST ~~~~~~~~~~~~~(WSB: done. Rob Bradley was one of twelve folks of the Libertarian persuasion (read "The Future and its Enemies" by Virginia Postrel) who were added to my list on 99-04-08. Two others followed Mr. Bradley and were also deleted at their request. But nine Libertarians stayed on the list to see what happens next. These nine are serious reformers with open minds, in my book. WSB) 2, Paul Glover: Ithaca HOURS: "please delete this address from your list" ~~~~~~~~~~~~~(WSB: done. No open minds here. WSB) 3, john courtneidge: Capitalism is not the answer - it is the problem. ~~~~~~~~~~~~~(WSB: The U.K. and the U.S.A. have only practiced 50% capitalism on their most expensive and productive assets, their people, who are truly their most important product. It is neither fair nor reasonable to condemn Capitalism for the problems caused by 50% capitalism. WSB) 4, Prof. Yuri Kazepov: "The happy99.exe file is infected!" ~~~~~~~~~~~~~(WSB: off topic? WSB) 5, Ian Woods, Editor: Monetary Reform, "Don't want these messages. Please remove me from you mailing list. ~~~~~~~~~~~~~(WSB: done. No open minds here. WSB) I would suggest to John Courtneidge that the prominent people in the U.K. and the U.S.A. who practice 100% capitalism on their capital assets (90 degrees on Fig4B), can not see their own disadvantage and their own eventual ruin in practicing 50% capitalism on their human assets (270 degrees on Fig4B). This is the grand "FALLACY OF THE COMMONS" which Garrett Hardin, other social engineers, and frequent posters to our mail lists have not yet mentioned. If only a few capitalists pay their employees short wages and raise their employee's tax burden, those capitalists may enjoy a short term national competitive advantage in the global market. But when most capitalists, in any nation, keep the national workforce short of purchasing power, they diminish the national market for their own products and their own investments. In other words, such a willfully, deliberately, and systematically diminished national economy will be perpetually at the mercy of foreign markets and currency speculators, both foreign and domestic. This condition of a national economy is what the post World War II world called the "English Disease," and most of the world's "third world" nations have never known any other condition. At this stage of human evolution, we should know better than to apply one set of rules to the few, to apply another set of rules to the many, and to expect the consequences to be sustainable. In Figure 1 of the global model at URL <http://www.freespeech.org/darves/bert.html>, the U.K. and the U.S.A. are the only two industrial nations investing only 50% (public education) of the first tithe in their children. Notice how the national capital investment rates ( which should average 25% of GNP in a developed economy) correlate inversely on Fig1 with the national 50% investment in children. ~~~~~~~~~~~~~~~ End suggestion to john courtneidge ~~~~~~~~~~~~~~~~ An astonishing change has taken place in the efficiency of the U.S. economy since Figure 2-3, "U.S.Money Supply M1 & M3," was last revised on November 30, 1994, as shown in the following tabulation: 1994 1999 (Feb. 2, W.S.J.) % change Upper curve is M3 $4,250 billion $6,033 billion up 42% Middle curve is DJI ave. 3,750 9,306 up 270% Lower curve is M1 $1,145 billion $1,090 billion down 5% (M1 is the working capital, the medium of exchange, and the only "money" in the U.S. economy. M2, M3, & L are all debt instruments which may be exchanged for money in a transaction, without changing the amount of M1 in circulation.) For lack of a more technical explanation, I would call that change in efficiency the result of a paradigm shift, away from the Keynesian Way, "Federal Deficits are sustainable" (1970-1994), and toward the Third Way, "How in Hell did Congress do that" (1994-'99)? Only the business community or the government can increase/decrease M1 in circulation around the four node loop (between lines A and C) in Figure 4B of the global model. Speaking of Figure 4B, the macro-model, if I had to re-draw it, I would make five changes to facilitate the dialog. : 1, make line C-C a straight horizontal line, to simplify the mid-section of the model. 2, move the line-break for Imports up to line M1, at the top of the speculative sector, where it can balance the line break for exports in line 0-0. 3, show the Indirect Tax, line D, as subtending only the labor market at 180 degrees on the model. Recall that the late great U.S.S.R. collected 92% of its public revenue from indirect taxes on its capital plant, and only 8% from direct taxes on personal income. Those Libertarians and Neo-Cons who want to abolish the income tax are not patriots, they are either card carrying Communist advocates of One World Government or members of the "Stupid Party." 4, extend the vertical crosshatched symbol for the capital plant up to line M1. Speculators, as well as street-walkers, also need a capital plant (phone and bed) to operate from. 5, move the text on speculative transactions and on purchased material transactions to the left side of the model, to clearly show that only the GNP flow of M1 circulates through the four node loop. Speculative and purchased material flows of M1 circulate only through the two node loop of the world market and the national capital plant. Electrical engineers and mathematical economists might consider the speculative and purchased material flows of M1 as being at quadrature (90 degrees out of phase) with the GNP flow in the four node loop, and therefore, suitable for being neglected. Everyone who has compiled prices for industrial projects, however, will know better than to neglect the cost of purchased material. I am not so sure about the expense of speculation. Now that everything about the macro-model has been made perfectly clear to the innocents and lurkers, we can clean up the micro-model Figure 8. The frequent posters have always been perfectly clear on Figure 4B, they see a future loss of grants and consulting contracts if the public catches on, so they won't talk about my macro-model, and they don't have a more suitable one of their own to offer in place of figure 4B. That response is called the NIH syndrome. To those several groups of public dependents, shown on the left of Figure 8, which are supported by the public revenue, but whose product does not compete in the world market for the after-tax purchasing power of the workforce; we should add the entire defense establishment, both the military and its private sector suppliers. Since World War II, the U.S. defense establishment has provided a substantial measure of stability for the U.S. economy, as documented in the September, 1966, REPORT FROM IRON MOUNTAIN, on the possibility and desirability of peace, by "John Doe," with introductory material by Leonard C. Lewin. There is not, and cannot be, a "peace dividend" from shutting down the defense establishment, until we acknowledge and implement some alternative stablizing flow of M1 that is similar in magnitude to the 5% of GNP we now spend on national defense. I would prefer to keep both expenditures in place, after we figure out what alternative stablizing flow of M1, similar in magnitude to 5% of GNP, has been omitted from our public policy since Thomas Paine identified it in the 1790s and Henry Carter Adams described the defects of its omission in 1887.. One more feature of the micro-model model may be helpful to any anarchists on the lists. Take away all those public dependents to the left of the Y axis, remove the 30% of GNP tax line 0-b, remove the $5,000/year dependent expense lines 1, 3, & 6, and then the radial locus of points (0-a) will show every member of the workforce receiving the full value (in barter or the medium of exchange) for his contribution of value added, measured by ergs, green dollars, beaver skins, or wampum along the X axis, line (0-x). Such a model would be practical for a sub-society of consenting adults who raise no children and recruite their members as adults from the larger society, if the larger society will tolerate such a sub-society. It is written: "Think globally, act locally." Clearly, the path to a sustainable and prosperous global economy requires each of us to act locally to stabilize our own national economy and then the global economy, being only the sum of the several national economies, will be stable and prosperous. But the DDotSQ say, "only over my dead body." Oh well? Kind regards, WesBurt
