Michael I'm afraid you'll need to explain a bit further because I can't see how this is how economy works -- at least, not in the way I interpret my own experience.
If we do a Standstill at Time 0 :- I am paid at Time 0 I go across the road and buy a chair at Time 0 The chair was completed in a factory at Time -1 The boards were planed at Time -2 The trees were felled at Time -3 The chair arrived at the dealer, and was price-marked at Time 0 The time of my wages and the time of setting the price is the same - Time 0. All pthere events in the production-distribution chain took place at lower levels in the wages cycle. We could also make the case of expenditure on short-life perishable goods which accounts for a large proportion of my wages. Cabbages picked in the field this morning are moved by cold-chain to arrive on the shelves this same day -- Time 0. I take my Time 0 wages across the road and stock up my fridge for the week. There is no time lag -- goods are harvested at wages of Time 0, distributed at wages of Time 0, bought at wages of Time 0. In either scenario, the time of my wages (Time 0) and the time of pricing the goods is the same. Therefore any discrepancy in my buying power is not due to any lag between the two events. However, there is a factor which accounts for part of it: My wages have been pegged for twelve months whereas the price of the chair is influenced by a flow of time for Time -3 to Time 0, the least of which influence is defrayment of capital expenditure on machinery. The chief causes will have been other price increases in the production-distribution line: bank charges, service charges, shifts in tax rates, social responsibility/donations to charities, theft, waste, and mark-down compensation factors, and -- more often than not -- a stroke of the accountant's pen bringing the article to 'market related prices.' The latter is easy to do at producer level where there is no single purchase price with which to compare selling price and therefore mark-up percentage. The same goes for any service or financial industry where high prices are always rationalised by 'provision of improved service', whcih are unasked for but which the producer, wholesaler, and retailer pays meekly and recovers from the final consumer. Banks, IT Sevices, Insurance companies, Consultants, are major players in that field. If I was buying a chair completed at a mid-point of my wages cycle, the price may coincide with my pegged wage; otherwise it is either above or below my ability to buy it. Capital investment does play a part, but mainly at the beginning of an era such as when mass-produced tractors replace horses; or at a time of re-tooling after an earthquake or major fire; or at a time of rebuilding after a war or of intensifying production in preparation for war. At other times the process of capital-items replacement forms a fairly constant curve, not too different than other inflation factors. Increasing competition has a big responsibility for price increases, particularly in the service and financial sectors. As the market becomes more crowded there may be an initial tendency for prices to fall, but soon some sort of unconscious colusion sends them up again as the industry 'agrees' to recoup business lost (more, smaller, slices from the same cake) through higher charges. But there are also factors which tend to increase the buying power of my wages, all of which are devices to sell off over-production:- End of season sales; short-life perishables marked down to prevent excess waste; special offers -- "Buy two get one free"; "buy now, pay later interest free" (seen in the car industry recently). These do present the danger taht I might buy what I don't need because of the tempting price I could go on, but I think you will have got the gist, and I suppose the only difference it would make is that the Compensated Price could be changed from being a gift to the retailer to being a straight gift to the consumer who is unable to buy the necssities of life from his own wage packet. All others can take care of themsleves. Jessop. ------------------------------ On Thursday 06 March 2003 16:00, you wrote: > Dear Friends, > > Vince asks how the anomaly that social credit seeks to redress has come > about. I suspect he will get a range of answers even from social > crediters, and I invite him to choose the best one. Here is mine in two > paragraphs: > > 1. Production occurs in multiple stages (e.g., logs, boards, furniture). > The nature of technology, if it is not interfered with, is to spare labor > and pay out less money. This would lead to a perfectly natural price fall > in the ultimate product. But multiple-stage production means that less > money paid out at one state translates into a reduced consumer price only > at a subsequent stage when the product goes to market. In other words, if > technology is not interfered with, income will fall ahead of prices: > income will be chronically short of prices, and markets will not clear. > 2. This is a situation that the actual economy cannot tolerate, and it > reacts spasmodically in compulsive growth and waste (which can also be > analyzed as purposive on some level). Pay for something, the economy > says--anything--in order to keep income up with, or even a little ahead of, > prices. Thus, a huge potential energy of production is sabotaged--turned > to waste--in order to enable markets to clear. Social credit says that we > can take the money-and-price system in hand, make adjustments for income > falling ahead of price, and enjoy the natural price fall. > > Michael Lane > Triumph of the Past > ==^^=============================================================== This email was sent to: [EMAIL PROTECTED] EASY UNSUBSCRIBE click here: http://topica.com/u/?a84IaC.bcVIgP.YXJjaGl2 Or send an email to: [EMAIL PROTECTED] TOPICA - Start your own email discussion group. FREE! http://www.topica.com/partner/tag02/create/index2.html ==^^===============================================================
