Tag Archives: inflation

The Future is (Still) Ours

Jim Dempsey added this inspired and thoughtful comment which I felt should be foregrounded here in the archives.

After reading this post I decided to purchase the book The Future is Ours.

It was extremely interesting and covered the banking system, money, inflation, deflation and basic stabilizing the economy but with a focus on allowing all citizens to have enough money/buying power as they needed to get by. This current economic crisis that began in 2008 is very relevant to the discussion in the book. It is clear that some of the solutions in the book are based on economic theories and are used to varying extent in our current economy. Likewise infrastructure spending is recommended as a mechanism to increase the money supply when excess capacity exists, but no money in the system to access this capacity. It is quite interesting because economics is about human energy or ability and the interaction between humans in the utilization of their energy or goods/services is the essense of economics.

In the quotes and theories section of the book Shamcher has questions and then answers them. One is: “How do most of us want it to be?” The answer is “Prosperous, adventurous, unrestricted, secure. We want opportunities for realizing our abilities and resources. We want free choice in every walk of life, no shortages in our stream of supplies, good and happy neighbors”

Economics is about people not money. Economic instability creates imbalance and can cause problems for all society. We need to work towards economic balance for all this will allow our minds to be free to explore more important areas of human existance.

The chapter quoted in this blog on clearing centres was of extreme interest to me. While Shamcher discusses inflation, deflation, deficits, surpluses, money supply, etc. and the associated solutions to a balanced system. The clearing system discussed above was interwoven into the discussion and its benefit of minimum inflationary impact on the money system was very interesting.

But more interesting was the idea of a mechanism for people/businesses to get credit for goods/services and use these to access others goods/services through a clearing system. I recognized this as a way to generate an economy and not being dependent on the money supply. How many communities are money poor but human energy rich and if these energies could be tapped through a clearing system described in this posting we could allow people/businesses to access the goods/services they require in exchange for their goods/services therebye rejuvenating the community and its economy.

Another quick thought is look at developing countries and specifically places like Afganistan or Iraq or any other country in distress. Many of the problems stem from lack of jobs which creates money to purchase the goods/services needed to survive. A bank where people could deposit goods/service credits and exchange with others for their requirements would create an economy from the human energy in these places. Likewise it would strengthen the community as they would be creating most of their needs internally.

Another interesting quote from Shamcher in the book is: “The scientific method can be used to explore the the atom, but let it be applied to human affairs and at once the pressure of …. party loyalty, of nationalism, or merely of established customs prevent the acceptance of valid conclusions. It is the full revelation of the spirit of science, and the fact that it envisages all of civilization and not merely useful gadgets that will bring us to the age of science. To call on present science for help is futile. To call on politicians, lawyers, clergymen, economists, is equally futile until they have learned, from science perhaps, the spirit and method of research.”

The interesting thing about this quote for me is that it suggests that we have to understand research the concept of critical thinking and looking at the facts and coming to a conclusion that makes sense.

The “Future is Ours” discusses the facts and issues trying to create understanding. There is so much that needs to happen in the world and the process of faciliating this is through researching and understanding topics and coming to balanced approachs that can be tested and adjusted helping stablize humanity.

Within the context of the above context I am currently interested in two areas of research and development:

1. The clearing bank model: I am interested in more information on this topic with the goal of fully understanding the various models available. I then plan to develop a framework for these type of bank(s) that could be used to start actual banks. I then hope to start a bank of this type and work with others to do the same. If anyone has further information on these types of banks from the past or current models please let me know.

2. The second area is the topic of research and development or the scientific model. More specifically this is an area I have been interested in a while in conjunction with some reading I have been doing of Harold Innis works on communication and media as well as some thoughts regarding frameworks for creating venues for dialogue on topics for those interested in researching and developing thoughts and projects in specific areas of human/planetary/universal interest.

Again I have a similiar idea of development of a framework for dialogue on topics through multiple medias that could help progress thought and development patterns influencing social/human development. The “spirit and method of research” Shamcher quotes aligned with the ideas regarding dialogue and information that have been percolating in my mind lately.

If anyone has any interest in either of these areas or ideas please feel free to contact me for further discussion. I have started writing on # 2 and plan on working on #1 in the near future, further information will be available somewhere on the internet as they progress. I can be reached at jim.dempsey@shaw.ca.

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Filed under Economics, Energy, OTEC, Shamcher

Full Employment and Inflation

From the Appendix to Every Willing Hand, Shamcher’s book advocating full employment for all which is particularly relevant today.

A concluding word about inflation. If full employment were, as so often alleged, bound to generate inflation, amending the Employment Act to give it real teeth might have little point. But two recent developments have brought that gloomy thesis into the most serious question — first, the ample demonstration that inflation now tends to occur even without full employment, and second, the not unrelated shift of informed public opinion into favoring an incomes policy of some kind to help maintain price stability. Thus full employment need no longer carry such burdens as do not, properly speaking, belong to it.

More than that, however, it is here submitted that a program of guaranteed full employment along the lines suggested would not only not feed inflation but actually be the best cure for inflation. This is asserted for two reasons in combination. First, the ceilings on employment and on consumer spending that would be imposed under this approach would choke off upward demand spirals almost entirely. That is the built-in “mechanical” aspect. It would limit “demand pull” directly, as already emphasized, and indirectly it would also moderate the wage-demand side of the “cost push” by holding down the prices that make up the worker’s cost of living. Second, there is the psychological point that cannot be proved but that should appeal to common sense-a point that would arise from the very fact of the government’s readiness to commit itself in this unprecedented way. An agreement on the part of the government to assure a total market adequate for business prosperity, and to assure continuous full employment for labor, should be enough to persuade business and labor leaders to agree to abide by some reasonable set of price and wage guidelines.

Those who blame inflation on the incurable wickedness of Big Business or Big Labor or both often seem unaware of how far the behavior of both has been caused by the malfunctioning of our economy — its cyclical instability combined with secular weakness — the inevitability of which is precisely what needs to be denied. Once the government stood ready to assure continuously adequate total demand for products and for workers, (1) all businesses would have more chance to spread their overhead costs and hold prices down; (2) management in areas of administered pricing could logically give up planning for extra profits in boom times to cushion losses in future slumps; and (3) union leaders would feel less pressure to demand extreme hourly wage rates on the one hand, or annual pay guarantees on the other, to fortify their members against the return of unemployment.

To put this in context — as these words are being written, the country is deep in President Nixon’s economic Phase II. Whether this experiment with a Wage Board and a Price Commission will, be followed soon by selective permanent legal controls or by some other incomes policy is impossible to say. But what the government commitments proposed in this article would in any case contribute, when it comes to resolving the ultimate hard-core part of the “cost push” phenomenon, is to open the door as wide as possible to achieving essential results by voluntary cooperation.

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Filed under Economics, Shamcher