Abundant Resources, Inadequate Effective Demand

["John Gelles" <indexed-savings@xxxxxxxxxxxxx>]

William Ryan today writes:

    "Resources become abundant (rather than scarce)
      through discovery, invention and innovation.

      They are continually assembled into their most
      efficient combination through 'entrepreneurship',
      in terms of the effective demand of consumers
      expressed through free markets -- that are enabled
      through mechanisms of credit broadly defined. "
-----------------------------------------------------------

OK, Bill.  I would add, however :

Credit, broadly defined may mean money.

But, money, broadly defined means money related
to credit, (deposits and loans), seen as countable
STOCK ,

                                        and

FLOWS  of money from spenders to depositors and
then spent again by depositors and going to others
who deposit and spend yet again, etc., etc., finally both
(a) determining the price in money of everything and
(b) affecting the creation, distribution and consump-
tion of real things on a reasonable basis.



Now the story does NOT end here. What is described
above is money as we know it -- not money as it ought
to be.

Money as we know it is not  ENOUGH  money.  If we
focus on price, (not countable deposits and loans, etc., )
we will see that money, as we know it, results in a short-
fall in purchasing power such that
    (a)  profit is not sustainable,
    (b)  unemployment is encouraged,
    (c)  higher outputs lead to commodity pricing
           with inadequate profits -- instead of stable
           prices and sustainable full employment, and
    (d)  finally, concentration and consolidation of
           producers to create oligopoly and cartel
           induced scarcity to sustain profit.

Therefore, some additional money, not based on credit,
but rather based on stable prices and fast rising output
(based on automation), etc., is required.

One source of such additional money might be government
spending (for national necessities) of money not raised by
taxes or bond sales -- money spent into circulation like
Stiglitz or Bernanke  "greenbacks"  would be spent.

If food and housing production is revolutionized by
biology and technology, and government intervenes to
get money into the hands of needy consumers (that is,
government spends such money into circulation without
taxing it away from working people or borrowing it at
interest, then a vast increase in food and housing will
not break a profitable pricing structure for these outputs.

If, through a related inflationary effect, other prices rise
that is OK.   A general rise in price is OK -- if the higher
prices are affordable to working people, and no one who
wants to work is unemployed.

I think Ryan agrees with these general ideas -- but may
want to recast them in other words.

But most on PKT appear to be content with "non-green-
back" money. They believe "credit" mechanisms along
with conventional taxes and gov't bond sales are
sufficient for us to make  what we need and buy what
we make.
        That is for Says law to work and for Says law
        to elevate consumer choice to an expert level
        that finds we need schools and clean water
        ahead of drugs and alcohol.

        Sounds crazy -- yes.  Consumer choice and Says Law
        are not going to produce what we really need.  So we
        must empower leadership (in congress or somewhere
        else) to spend into circulation some fraction of demand
        for total output that will buy education, homes, infra-
        structure, and the like, ahead of circuses.

O'Donnell, Ryan and I  keep saying something like all the
above.  Yet we cannot agree on how to say it.

Is it any wonder that Gunnar, Paul, Barkley, Warren, Bill,
UMKC, Levy's Bard, etc., etc., cannot accept our thoughts.
We cannot accept them either.  If O'Donnell or Ryan or I
can agree on any single sentence I'll eat my hat.

How can we expect PKT to explain to itself or to the voters
what the problems are or how to solve them?  They keep
looking for the power to predict the future with the help
of prices, algebra, calculus, and jargon no one agrees on.
Employed by banks, trading firms and government, they
have a vested interest in the ignorance of those who pay
them and themselves.

    John Gelles