Suchergebnisse

The economic theory implied by the terms "New Economics," "Douglasism," and "Social Credit" rests on the plea that the present economic system is inherently defective; that capitalism has a "mechanical" flaw which assures in any given period a flow of purchasing power almost always less than the flow of prices. As a consequence there is a surplus of goods; a surplus, that is, only in relation to consumers' capacity to purchase and not in their capacity to consume. Major Douglas asserts that the deficiency of purchasing power is not periodic or accidental, but is chronic and ever present. He attributes the cause of the deficiency to the following factors: first, current banking practice which permits private banks to create and destroy credit at will; second, the process of saving and investment; and third, the difference of "circuit velocity between cost liquidation and price creation" which results in charges being carried over into prices from a previous cost-accountancy cycle. It has been pointed out repeatedly that each of these assumptions is of questionable validity.In logical sequence to the hypothesis that capitalism produces a surplus of goods which consumers cannot purchase, Social Credit proposals for reform are designed to inject purchasing power into the consumption stream: in a word, to make consumption equal production. This can be achieved, it is stated, by introducing a "just-price" mechanism and by augmenting personal incomes through the issuance of "national dividends." The "just" or "assisted price" is conceived as an arithmetic ratio (total national consumption over total national production) which is to be the means of deciding, from time to time, in what proportion the retail price level will be reduced.