What's So Wrong with Socialism?

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Re: What's So Wrong with Socialism?

Post by thrombomodulin » Mon Nov 30, 2015 8:27 pm

Paidion wrote: If that were only so, it would be great! And C.H. Douglas would have had no need to come up with his social credit economic theory. But it doesn't happen.
This is where we disagree. Why do you think it does not, or cannot, happen? We can observe that prices for individual goods are readily changing every day (e.g. consider gasoline, milk, beef, iphones, etc,.). Since there is no mechanism being imposed by the State, or anything else, to restrain prices to some average level, why should they be seen as incapable of adjusting to an expansion or contraction of the money supply?

In modern times all nations have adopted a fiat currency. A policy of monetary expansion is favorable to State and so examples on the expansionary side are quite abundant, while a diminishing money supply is rare. Do you have in mind certain examples of contractions where market prices remained high? Prices certainly rose in keeping with the two most well known monetary expansions - German's Wiemar republic and Zimbabwe. If prices can go up in such circumstances, why should one think that they cannot go down in the other?
Paidion wrote: The problem when there is insufficient money to buy the goods and services available is ...
As per above, I am challenging the idea that such a situation can be arrived at with free market prices.
Paidion wrote: By the way, I did find in Douglas's book "The Monopoly of Credit" a reference to machines replacing labor. But Douglas did not oppose that in itself. What he opposed is the way the then present money system operated in conjunction with machines replacing labor. If the result was manufacturers reducing their prices accordingly because they wouldn't have to pay so many workers, there would have been no problem. But instead, they kept the much greater profits for themselves. The net result of all this is that manufacturers got richer and manual workers got poorer, and in general the rich became richer, and the poor became poorer...
That is a popular interpretation of events, but I do not agree with it in a number of ways. For now, I will just describe one. Human beings have a seemingly insatiable and unending desires for goods, services - and leisure. But there is a finite amount of labor available, and innumerable things have to be carried out with less than the desired resources - or not at all. What happens when a machine replaces labor is that men are released from having to do the work to fulfill a more urgent need, and are freed to be able to fulfill less urgent needs that hitherto could not be satisfied. The overall level of wealth in society rises because the overall magnitude of production has increased now there is both the machines output and human labor taking place some new endeavor. The prospect of insufficient work or lack of Jobs to "go around" is not the problem humanity faces, rather, it is a lack of production. Those who are displaced find labor in other fields which were not formerly able to be realized due to the scarcity and finite nature of labor.

Best Regards,

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