Money, Credit, Financing, but it's very simple
far I am very reluctant to rally behind the banner of Social Credit, for purely technical reasons - even though their arguments humanistic, sociological and economic I had always appeared the ring of common sense. The technical argument that I 'do not feel' was the famous discount.
I'm trying to understand it, nothing worked. I even wrote a post about this, telling me that if I tried to explain it to others, I would see more clear. Neither worked, for some reason I think right now is that this " compensated discount " has no place, it is quite unnecessary, and, moreover, difficult to establish , if indeed we want to apply, unlike the other two principles: currency-credit community service and a social dividend .
Before resuming the only question that matters, how to finance the tens of thousands, even millions, of production processes that characterize any modern economy, I would like to offer a methodological reflection that I sketched many years ago when I was working on problems of artificial intelligence and expert systems. I mean the question of passage from concrete to abstract , inductive analysis of the above synthesis deductive model before talking, let's look at the actual card before speaking include at least territory.
Among the many math teachers who tried to teach me some knowledge in this area, there are scarcely two that really marked me for one reason, before explaining or demonstrating theorem importantly, they tried to from a practical problem that led to this theorem .
Thus, the famous theorem of Thales, that we meet in third. This was my teacher terminal - a converted old X to education - which we had talked about a specific problem posed to Archimedes (regardless of whether it or not a legend), that of estimating the height of a pyramid: the question of similar triangles was there in germ.
It took me until a chance encounter with a teacher - when I was preparing aggregation math - so I can again speak with a teacher (not even aggregate) which addressed the problems and important theorems on the basis of experimental data. I was far from my college courses or 'Bourbakist' service was launched in topological definitions of a priori not even attempt to explain why their definitions. It's like if Riemann had forgotten the spherical spaces to justify his non-Cartesian geometry.
What relationship with the corporate finance and production processes would tell me you? I come here. In the various
discussions on the currency in which I participated, which have mostly turned to experts quibbling Byzantine scholars most of us have more or less managed to convey to lay the lifecycle of a ticket without always send others to do the same for the issuance of bank money - at least for central bank money.
This is obviously not their skills - undeniable - that must be challenged, but the total lack - at least that seems like now - to stand on concrete demand for money, at least demand 'economic' money, not the demand for liquidity needs or speculation.
Take an example to be as concrete as possible - for example raised by supporters of Social Credit but treated incorrectly, in my opinion at least.
us consider a company, among the hundreds of thousands possible, who wants to produce a certain commodity, a 'good'. Consider that there are four factors 'expenditure' possible, machine depreciation which will be called Amortization - the various 'consumers' and other intermediate products - Rated MAT - wages - and finally scored SAL profits and other financial charges - noted PROF. We could of course bring in a much finer breakdown, but the idea here is to show two things.
1) financing needs of this process (what we might call, somewhat unfairly, the demand for money) exists if it is not instantaneous (in which case costs and revenues would or could be, simultaneously: it is the major criticism that can be done simultaneously with the models showing the curves of supply and demand curves, claiming that the adjustment of production and demand reacts instantaneously to price information). This
(need) funding can take various forms, and has no reason in particular, to be identical for the four major 'drivers of expenditure, AMOR, MAT, SAL and PROF
2) the fact, indisputable that the sum + PROF SAL (and even more so for SAL alone) is less than the total financing requirement of production, namely PRODb = AMORb MATB + + + BAS PROFb.
Faced with this evidence as to offset the discount was introduced, incorrectly, by Proponents of Social Credit, which has been useless imprudence discredit theories, otherwise flawless, Major Douglas and his successors. We certainly can not fault the staff of Douglas did not use the input-output Leontief taking into account the exchange inter-company to explain the difference between national income - that is to say sum of all salaries and benefits distributed over the various processes - and sum of all sales (that is to say borrowing requirement) made, or expected, as a consequence of same process. But this theoretical weakness, however, is indisputable.
So our real problem, put as simply a problem of financing costs of four factors:
PRODb = AMORb MATB + + + BAS PROFb
To be as general as possible, we will imagine that each expense factor may have a 'source of funding' different, knowing that if the 'trust' reign, and reigned, they could settle for a mere accounting entries, such as:
The producer must PRODUCTEURb AMORb (at suppliers of machines) - it will list somewhere - and MATB (to suppliers of consumables and intermediate goods) - it will list somewhere - and BAS (for employees) - another entry - and finally PROFb (for its shareholders and its bankers last-entry accounting . When PRODUCTEURb has sold its production to expected prices, it will receive its buyers against the party (which might only be an accountant) of its original listings of 'factors of expenditure', various written and will be fully compensated.
It n 'there is no need for monetary circulation' real 'simple scripts (Accountants) have done the trick.
can obviously complicated, and that the production process was accompanied by a money issue, and that the sale is an equal dollar destruction, but it seems to me to bring anything new. However, I would return to this point about the concept of complementary currency, or local or regional, or private - whatever term.
Now for the real, concrete situation, the context in which 'trust,' credit 'does not just happen. Instead of a call only serious and honest accounting - there are certainly - we're going to use four different funding sources.
PRODUCTEURb will appeal to the mutual inter-enterprise credit to finance AMORb, why he may sign a trade deals for a period equivalent to the duration of its production process. Any interest, if any, will affect the cost factor PROFb
PRODUCTEURb can call his local bank to finance its MATB - what is sometimes called crop loans - again, interest, s' there will affect the position PROFb.
PRODUCTEURb may also apply to employees wait for the end of production (and sale of PRODb) to be paid. But he may also ask his bank for a cash advance to cover these salary expenditures: again, any costs will be able to augment PROFb.
PRODUCTEURb finally asked his bank for an advance pay both dividends to its shareholders, and to repay the interest owed by the mere fact of bank financing any of his other 'expenditure factors' - also known as production costs .
So instead PRODUCTEURb that is his own bank (this is also true for the state), lack of trust - or absolute power obtained today by the banking system (the banking and financial sphere has thus taken over, may finally be on the real economy, yet only produce real wealth), PRODUCTEURb must - at least in the contemporary context - request advances (on which it will pay financial expenses) to banks. These banks have as yet only merit, if one may say that the emergence of "trusted third party guaranteeing the value of both" AMOR "of" MAT "" profit "and" SAL3 while, of course, if the company is not "trust" all the money pledged to the true value of PRODb not worth much.
It is as if, to guarantee the value of a company - which produces goods or services 'real' - was preferred to rely on banks ensure that, in fact, that the 'wind' ( with the guarantee of the state, it is true, at least until the crisis occurs).
Now back to complementary currency, or local, or private. One objective of the preceding argument is to show that a company or a set of business or department, or a lander or a region can be sufficiently powerful (and 'trust') to issue its own currency, without necessarily creating music (and piles) of paper labeled 'bank notes' - it seems that is prohibited.
Mere bookkeeping may suffice, that those accounts are in books, computer databases or computer chips. Call
so good political will to : what is the mayor, the deputy, the president of council or regional dare leap? Or do we prefer to continue to suffer the dictates of the International Monetary Fund and World Bank, or its vassals of the European Commission and the ECB? The example of Ireland is not enough there to question the role of banks?
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