Comer
Review Original Text Book
Review
by
William Krehm
“The Politics of
Money — Towards Sustainability and Economic Democracy”
By Frances Hutchinson,
Mary Mellow and Wendy Olsen,
Pluto Press, London &
Sterling, Virginia, 2002.
COMer Vol 16, No8, 2004
Time there was when
Social Credit spoke its own arcane language not easy for outsiders to
understand. That is no longer so. Anybody seriously concerned with
money sooner or later must come to terms with Major Douglas; and in
that respect the Social Crediters are meeting the rest of us more
than half way. This is the second excellent book co-authored by Ms.
Hutchinson that not only unrolls Major Douglas’s ideas, but
presents him in the context of other great thinkers such as Karl Marx
and Thorstein Veblen. That is an immense help, since, like Marx,
Douglas has not been happy in some of his followers. Particularly was
that the case in Canada.
Douglas devised his
idiosyncratic tools because he felt he needed them to pursue some
penetrating observations of his own. Money and its creation he
identified as the root of much of society’s troubles – much as
Freud did sex. While many orthodox economists dismiss money as
“neutral” and attribute importance only to the “real” factors
of production, they in fact call to mind the attitude of Victorians
towards mating. Though supposedly practiced only in holy marriage and
there only for procreation, from Gladstone to Oscar Wilde, sex played
an obsessive part in their lives.
So, too, with the
“neutrality of money.” “Of the total international transactions
of a trillion or so dollars each day, 95% are purely financial.
Globalization is not about trade; it is about money. Global trade as
a percentage of national output is very little different to what it
was at the end of the nineteenth century – around 40% (1999).
Investors no longer put their money into factories or merchant ships
but, instead, into a plethora of overlapping ‘financial products’
such as futures, derivatives, hedge funds or currency speculation.”
And corresponding to
the institution of marriage, “there is also a theoretical
assumption that economic activity is organized within an orderly
circular flow. People sell their resources (labour, land, capital) so
that tangible goods and services can be produced. In exchange they
receive money. That money they take to the market place and buy the
goods and services they require. This completes the circle. The
assumption is that, left to itself, the circle will meet all economic
needs. No one will produce more than can be sold, no one will be left
without. If everything is not in order, the money and interest rates
may need to be adjusted so that the quantity of money does not exceed
the quantity of goods available for exchange. Next, economists
distinguish between wants backed by money (effective demand) and
needs that may exist but do not register as economic ‘facts.’
Economists also tend to assume that money prices have a natural
equilibrium, e.g., an equilibrium exchange rate, as does the interest
rate.
“Academic economists
are judged by their publications in a ‘Diamond list’ seen as
representing the best international journals constructed by Peter
Diamond, an orthodox economist. The Diamond list concentrated on
journals which espoused orthodoxy, such as the Economic Journal and
omitted several important heterodox journals, such as the Cambridge
Journal of Economics. In the US there is evidence of a purge during
the 1990s of non-neo-classical and non-mathematically oriented
economists from university faculties. This has been described as a
‘stalinization’ of the profession with history of economic
thought particularly targeted.”
The Ultimate Pollution
of Nature — Proclaiming Capitalism a “Natural” System
“Central to the
definition of orthodox economics as a science is the assumption
[that] capitalism is the natural system. Its essence is the
money/market system. There is no alternative, because the ‘free’
market is the only route to political freedom.
“Within the classical
theory which underpins conservative macro-analysis of the
self-sustaining economy, money is purely a measuring device having no
influence on economic outcomes. Commodities exchange for commodities,
while money merely facilitates the exchange. There are two key ideas
within this view: first that money is neutral and without history –
it simply exists as a technical resource; secondly, a circular model
of the economy.”
“People are seen as
utility-maximizers in all aspects of their life. Politics is taken
out and replaced by economics. The irony is that economics itself is
what Hazel Henderson has aptly termed ‘politics in disguise.’
“The non-existence of
time is directly related to the non-existence of capital within the
circular flow model. The study of economics postulates three physical
factors of production: land, labour and capital. The owners of each
factor receive a money reward (rent, wages or interest) for the
‘disutility’ of allowing the factor to be consumed in the
production process. Abstinence, the failure to consume, normally
considered the source of physical capital is a logical impossibility.
Once the circular flow is established, the productive forces of land
and labour sell in exchange for consumption goods. Whether the goods
produced are ‘producers’ goods’ or ‘consumers goods’ is
immaterial. In each period the real services of labour and land are
exchanged for consumption goods produced in the previous period. Each
good sees two periods, the one in which it is produced, and the one
in which it is consumed. ‘Capital’ cannot be stored up because
there are no gaps in the continuity between the process of production
and the process of consumption. Counting abstinence as a legitimate
cost would involve counting the same item twice (Schumpeter).”
Shockingly, the
neo-classical circular model holds even many of the great rebels in
thrall. Keynes’s final rebuttal of the self-balancing model [at
least in public] still adhered to its basic paradigm. Despite Karl
Marx’s astounding anticipation of the most involved curves that the
contemporary financial sector can pitch, “many 20th century
Marxists have followed the orthodox path of erasing finance from the
study of economics (Alan Freeman). For Freeman, capitalist power
stems from the financially based institutional constructs of legally
enforced contract and sale. Unfortunately, Marx’s labour theory of
value has been interpreted from the neo-classical simultaneous
methodological standpoint, in which the profit rate is everywhere
actually equal, technology does not change, and the market always
clears during each act of circulation, and money is a pure numéraire.
In this analysis money and time do not exist.
“The model of
orthodox economics fuses and confuses wealth production with money
making. Within a capitalist economy production would not occur
if there was not a product. The starting point for establishing an
alternative framework must be to question the construction.
Separating production from wealth creation follows an old tradition
that can be traced back to Aristotle. Daly and Cobb define
chrematistics as the branch of political economy relating to the
manipulation of property and wealth to maximize the short-term
monetary exchange value to the owner. By contrast oikonomia is ‘the
management of the household to increase its use to its members over
the long run.’ Mainstream neo-classical economics has not only
fused chrematistics and oikonomia, it has concentrated on the former
to the exclusion of the latter.
“The fossilization of
economic thought renders economists increasingly incapable of
offering coherent explanations of economic phenomena. It would appear
that the aim of neo-liberal economic theory is to dominate all other
theories, just as the aim of market capitalism has been to eclipse
all value systems beyond those of the money economy.”
Why the Spartans
Outlawed Money
“Evidence of the use
of money dates back to 3000 BC, and the earliest writings were
statements of accounts. There is evidence that communal grain stores
were used as a banking resource in ancient Egypt with what were
effectively cheques exchanged between depositors. However, until
modern times the use of money to settle everyday social obligations
was virtually unknown. Money was used in exceptional circumstances,
in times of famine, hard times generally, for travel and warfare.
What is new is a society driven by money, banking and credit. With
Marx we agree that the role of money in acquiring the means of
sustenance is the critical feature of modernity. Concern about usury
in the Old Testament also shows that the idea of lending money for
interest is very old and religious laws against that were carried
into both Christianity and Islam. Usury is still against Islamic
law.”
Indeed, it is the very
taking of interest [“riba”] rather than just “usury” that is
proscribed in the Koran. Profit from risk-taking was on the other
hand allowed. Venice, whose trade was to a large extent with Islamic
lands, devised risk partnerships between traders who accompanied
their goods and the financiers who stayed behind that were acceptable
to the Muslims Venice dealt with.
“The Lydians of Greek
Asia Minor are credited with the invention of money as coin. In the
seventh century BC they were striking coins from electrum, a
gold-silver alloy occurring naturally near their capital Sardis.
Their King Croesus became a symbol of the accumulation of riches. The
distrust of money led to its being outlawed in Sparta. Aristotle
records the marginal status of bankers in Athens.
“For James Buchan
‘since money is a purely social construct it is of concern that
trust in money displaces other values like a cuckoo in the nest.’
This is the victory of money that Margaret Thatcher infamously
celebrated when she said there was no such thing as society, only
individuals and their families.
“What money does is
enable things to happen. Money is not a neutral instrument within
trade. It creates the very potential of trade. Control of, or access
to the creation of money is vital to social and political power.
Evidence for this exists in the ‘John Law’ phenomenon, an aspect
of economic history which James Buchan argues has been largely hidden
from mainstream economics.
“Law was the son of a
goldsmith/banker from Edinburgh born in 1671. After a rakish youth
(including killing someone in a duel) he tried in 1705 to get
Scotland to issue paper money to get out of an economic crisis. Law
argued that what was needed was ‘stimulatory paper currency.’ He
based the issue of paper money on the future productivity of land and
rejected more traditional options such as exchange controls, coining
plate, ‘raising the Money’ (devaluation), or a sovereign loan
(viz. Bank of England).
“Still with an
English warrant on his head, Law had to leave Scotland after the Act
of Union in 1707 and continued promoting a ‘bank of issue’ in
Paris. He was expelled from the city. Law’s last chance came to put
his ideas into practice in Regency France, bankrupt after years of
war and court extravagance. In 1715 Law opened a private bank which
operated with only one-sixteenth of its equity in coin. The bank’s
paper became highly valued and by 1717 was used to pay taxes. By 1718
the bank was effectively nationalized and used to capitalize the
state of Louisiana. John Law became effectively Prime Minister and
all national debt and credit was taken on by him. He converted rentes
and billets into a national commercial venture and the entire liquid
capital flowed into the company. The word ‘millionaire’ was
coined for him as he owned a lot of France and half the present US.
As Buchan points out, effectively the entire nation became a nation
of traders.
“In many ways Law’s
speculative ventures would have been at home today. He tried to buy
into the English Indies market by selling short, but the market
carried on rising and he ended up paying £372,000 for stocks
contracted at £180,000. To maintain liquidity he increased money
supply; this led to inflation. By 1720 it was all over and, in final
irony, London and Amsterdam crashed not long afterward with their own
bubbles.
“Schumpeter argued
that the 17th century ‘cowboy’ experimenter in banking Law fully
realized the business potentialities of the discovery that money –
and hence that capital in the monetary sense – can be created.’
James Buchan agrees with Marx that he was a mixture of swindler and
prophet.
“For Schumpeter when
money has no intrinsic value it is possible to manage the quantity of
money, paving the way for ‘management of currency and credit as a
means of managing the economic process.’ Recognition of this
destroys the concept of the equilibrating circular flow. Law observed
that once a commodity like silver and gold is used as money in
coinage, its value changes. And once such a commodity like silver is
used almost exclusively as money, it can easily be replaced by one
that has no commodity value at all like paper. Law saw money as ‘pure
function’ and attacked the bullionists like John Locke who argued
for a gold standard. Buchan goes on: ‘Law believed money was a
distillation of human relations and might be turned to create a
prosperous and just society and he damned near pulled it off.’
“Thereby lies an
irony. While, as we have argued, money values are social, or at least
relative rather than natural, the presumed ‘naturalness’ of the
economy justifies extreme inequality even to the present day. It is
taken for granted that there is no economic basis to question what
‘the economy’ is doing, whether making weapons, trafficking in
women, enslaving children, using environmentally destructive
productive methods, or trading in drugs. The will of the people can
only be expressed through the cash register.
“Before Adam Smith it
was assumed that bankers were intermediary lenders of other peoples’
money. However, economic outcomes are affected when such sums are
lent out again and again ‘before the first borrower has been
repaid.’ It would be logically possible for a cloakroom attendant
at a restaurant to hire out the coats of diners while they were
eating. But it would be impossible for two people – the owner and
the hirer – to wear the same coat at the same time. However, that
is exactly what happens when a banker makes a new loan. It changes
the quantity of money in existence. ‘While I cannot ride a claim to
a horse, I can, under certain conditions, do exactly the same with
claims to money as with money itself. In short, the institutions of
banking and finance create the money supply through a range of
mechanisms ultimately endorsed by statutory authority.
“Real goods and
services are created by labour’s use of the natural resources of
the planet. Money, the defining element within the formal
economy, is created by financial institutions. [However], banks and
financial institutions need to stay in business and the statutory
framework is constantly adapted to take account of changing practice.
With the development of off-shore financial havens (not tax havens),
the legal loopholes are increasingly difficult to police, while
international finance has become a law unto itself.
“When a bank issues a
loan, it needs reserves of some kind to guard against the whole value
of its outstanding commitments being presented at the same time.
These fractional reserves may take the form of cash and coins held by
the commercial bank, together with the bank’s deposits with the
central bank. In theory the government/statutory authority, through
the central bank, can regulate the money supply by manipulating
reserves and reserve requirements. [Such] evolving financial practice
is progressively endorsed by the statutory authority.
“Although the banking
system as a whole creates 97% of new money as loans, it was, until
very recently, assumed that the money creation process was regulated
by a central banking authority through its ability to regulate the
issue of notes and coins. However, the money created by banks is not
the same as notes and coins, which have a tangible existence. We
could call the former ‘bookkeeping money’ and the latter ‘pocket
money.’ Pocket money, when used by ordinary people for their
everyday transactions is normally regarded as real, tangible money,
‘as good as gold.’ Bookkeeping money has no existence outside a
bank or financial institution. To use bookkeeping money one needs a
bank account. Bookkeeping money determines the quantity of cash in
the economy.”
The Credit Card Takes
Over
“Since the 1980s in
the US and the UK money has been increasingly issued into the economy
through credit card borrowing, giving rise to ‘credit card
capitalism.’ Credit cards were originally issued as a company
currency. The first Diner’s Club of 1949 was issued by oil
companies to create brand loyalty and a symbol of creditworthiness.
VISA issued by the Bank of America in 1958 is now a network of 20,000
banks, and the largest mutual company in the world of up to 600
million card-holders. The important change with the widespread use of
credit cards is that the responsibility for the issuing of debt money
into the economy and thereby ensuring its vitality now rests with
consumers.” A form of economic democracy? “That ignores the role
of advertising and the problems of those burdened with consumer
debts. Credit cards also make a mockery of the idea of a control of
money issue in an economy where nearly every store now has its own
credit card. The non-bank financial markets have their own deposit
banks, money-market funds, that can be lent repeatedly (multiplied)
without limit. Lending to the financial sector – up 40% since 1998
– is a turbo-charged credit machine into financial assets and
corporate balance sheets.”
William Krehm
The second instalment
of our review of this valuable book will be carried in our next
issue.
Book Review: part Two
“The Politics of
Money Towards Sustainability and Economic Democracy”
By Frances Hutchinson,
Mary Mellor and Wendy Olsen, Pluto Press, London and Sterling,
Virginia, 2002.
“The importance of
the enclosure of land as private property is that many of the
resources communities held would have been in the form of common
land. Common resources are those which have no deeds of ownership but
are regularly used for farming or harnessing subsistence. Under these
conditions most people would have gathered, hunted, gardened and
herded, growing and preparing their own food. The emergence of
capitalist market society together with industrial patterns of
resource use including agricultural production has broken down the
direct relationship between people and the source of their
subsistence for at least two-third of the world’s population.
Self-provisioning has been replaced by waged labour contractually
engaged ‘through a network of society-embracing markets.’ It was
this compulsion into waged labour, ironically described as ‘free,’
which Marx argued made capitalism a unique form of exploitation.
According to John Locke
(1632-1704), although God gave the land to be held in common, it was
the duty of individuals to improve [it] with their own labour. Where
the land is made more valuable and profitable, common possession must
give way to private property. According to this theory, land has
value in itself. Hence when an individual encloses waste or common
land, and labours to improve it, they add to, rather than take away
from communal welfare.
The Escalation of
Unsustainable Practices
“Such improvements
enabled the individual household or firm to produce commodities for
sale for money in distant markets. In the process it created the
illusion that unsustainable practices could be escalated
indefinitely.
“The process of
absorbing the commons into the market system continues apace today.
Forest people in particular are struggling for the retention of the
commons of tropical rain forests from Sarawak to the Amazon. Across
the globe indigenous peoples are launching anti-globalization
campaigns.
“Equally, the state
can guarantee the rights of the international, global capitalist
elite class to plunder the social and ecological commons, placing the
short-term profit of powerful individuals and corporations before the
common good. In the eyes of many people organizations like the World
Bank, IMF and WTO are just that, agents of property regimes that seek
to transfer all resources into capitalist corporate regimes.
“Capitalism is the
enclosure not only of land but also of tools and knowledge for the
purpose of private financial gain. As Veblen has argued, all
invention is based on the common cultural inheritance built up over
countless generations. Although the fencing of land is commonly
portrayed as a means of introducing more ‘efficient’ farming
methods, it entailed far more than mere fencing. Loss of subsistence
access through enclosure, exclusion or patenting leads to a loss of
social inheritance and knowledge.
“Intellectual
property has now become an important aspect of world trade. The
patenting of seed in particular is causing a loss of species as well
as denying poorer people access to their traditional plants. Often
this is because the seed has been hybridized and patented. What this
might mean in the longer run is that hardy species developed over
millennia to resist salination, drought or low temperatures, or
forage animals that can live in difficult terrain, will be lost
forever.”
Enclosing Intellectual
Property
“To live people must
do paid work or find a source of money income. The entire edifice of
economic theorizing has been built upon the false premise that things
exchange for things and not for money. That was why Marx was so
outraged at the argument put forward by Jean Baptiste Say that in
every sale there is a purchase, and in every purchase a sale, exactly
as in barter. Marx is quite clear that money, not commodities, is the
focus of the market economy.
“Only if money is
eliminated is it possible to regard ‘capital’ as the commodities
or ‘things’ comprising a necessary element in the productive
process: hence the common misapprehension that ownership of the
physical rather than the financial means of production is the key
issue in the control and production of wealth. It is also possible to
be drawn into the debate on booms, slumps, inflation, stagflation,
unemployment and the general tendency for a falling rate of profit
without challenging the conceptualization of a formal economy which
is assumed to be providing for universal welfare through the
production of things. According to Freeman and his colleagues the
study of economics which ignores the central role of money in the
economy has also invaded Marxist economics. Economics must be
situated in real time and the real world.”
Striving Towards
Exponential Growth
That is far truer than
Alan Freeman seems to realize. Not only have money prices and money
profits replaced the prime role of commodities in the economy, but
the rate of growth of the profit already obtained by public
corporations in a single year, is by grace of an alleged knowledge
extrapolated into the remote future and then discounted for present
value and incorporated into present price. The knowledge of such
items is supposed available from equilibrium points located with
“derivatives.” The result: market prices of successfully promoted
stocks strive towards the exponential curve which is the mathematics
of the atom bomb.
Man shapes his theories
under the influence of his technology. Marx’s view of the society’s
future, was obviously inspired by the railway-building age in which
it was conceived: its course was plotted via foreseeable stations to
the socialist terminal. This is what Veblen identified as Marx’s
“teleological” aspect (Hutchinson et al., p.106). With our
contemporary economists, the major influence is the split atom. It is
the model not only for the stock market but for the entire economy.1
Veblen laid a finger on
the vulnerable “romantic” side of Marxism (“a sequence of
theory”). “Capitalism relies on two basic mechanisms of cultural
conditioning. First, the conditioning of ‘chronic dissatisfaction’
associated with emulative consumption (consumerism) – the
‘spiritual’ poverty of labouring for a money wage, going into
debt to acquire and consume more objects offering the illusion of
leisure and status. He enriched the language and sociology with the
term ‘conspicuous consumption’ that increasingly drives our
world. Second, patriotism and military discipline to maintain its
aggressive imperialist expansion.”
This might well have
been written not in 1899, but the day before yesterday.
“Veblen provides a
neat example of the ‘double-think’ of neo-classical economics
when the factors of production are described in purely material
terms. [He cites] John Bates Clark, an early American marginalist,
dismissing the notion of capital as financial (money) value. In his
view, it would be more accurate to regard capital as ‘a fund of
productive goods.’ However, Veblen refers to Clark’s own
contradictory example of the transfer of capital from a whaling ship
to a cotton mill. Plainly, ‘capital goods are not purchase and
sale.’ Finance capital intervenese to change the nature of
exchange’ (Hutchinson, p. 113). Capitalism upsets all concepts of
‘natural’ returns to the factors of production.”
Veblen emphasized the
rigidities into which the concept of “class” led Marxists. “The
complexities of class within capitalized money/market systems has
been somewhat obscured by Marxist thinking that narrows the emphasis
to capital-labour relations. This not only ignores the problems of
unpaid work but cannot make connection with the position of
debt-based, small-scale property ownership such as the peasant
landholder. Veblen questioned Marx’s prediction that agribusiness
would absorb the small proprietor, converting them to landless
labour. As early as 1906 Veblen suggested that socialists and small
peasant farmers should have common cause in resisting finance
capitalism. However, Veblen was a voice in the wilderness.
Henceforth, the small farmer, classed as ‘bourgeois’ by
‘socialists’ sought to oppose the hated financial capitalism by
adopting an ideology on the far right.”
Broadening the Marxian
Class Concept
More recently, under
the impact of other cultures, this has begun changing with leftist
politicians lending a sympathetic ear to land claims of indigenous
peoples. In India Marxists are recognizing the links between the
rural bourgeoisie with urban industrialists, that is influenced by
the caste system. The authors of the book under review bring to
centre-stage the exploitation that occurs within families where the
women’s unpaid labour is not recognized. “Social class is now
just part of the set of resource factors and interrelated
subjectivities such as gender and ethnicity that go into shaping
social relations.”
Obviously, the Social
Credit people, no less than other reformers, will have to invest
further effort in grasping how society is to move to the solution of
the seemingly impossible problems that beset the world today. In an
earlier issue of ER (May 2004) we paid tribute to an earlier volume
co-authored by Ms. Hutchinson in disclosing to us what had previously
eluded us – what Douglas was saying with his A and B theorem. It
was not capital budgeting, for capital budgeting which recognized the
capital investment in equipment, buildings and much else that would
come back to the producer only over a long period. During that time
capital debt would have to be financed. That was the entry through
which exploitative financial capital took over. It had therefore to
be bridged with a social dividend that could be justified by the
heritage of all in previous generations who contributed in various
ways to make possible the institutions, science, technology and
social cohesion that made production possible in our day – slaves,
martyrs, inventors, civic leaders, jurists. That social dividend
would help make it possible to carry on production without being at
the mercy of finance capital. Producers’ banks would make its
contribution to this end. That, however, does not mean that in
addition to Douglas’s A and B accountancy, we have no need of
standard accrual accountancy (i.e., capital budgeting) that would
keep us informed of when the total investment is to return and with
what profits.
These two distinct
gauges of the efficiency of a firm – or the economy as a whole –
correspond to twin complementary concepts. One is liquidity that the
Douglas A & B theorem addresses; and solvency which has to do
with the existence of enough assets, liquid or otherwise, to cover
the institution’s debt.
One of the goals of the
A & B Theorem is to avoid the need for external financing of the
productive process. To close this monetary gap while production is
being completed and the income from the sale has come in, Douglas
depended upon the Social Dividend. This would help the producers
organize their own financing.
Rethinking the
“Inflation” Concept
There is another
important detail that our Social Credit friends should look into. In
recent election campaigns on all continents we have witnessed a
fixation on balancing the national budget. That of course, conflicts
with what we learned in the 1930s at a shattering cost. But so long
as our central banks insist on identifying any rise of price indexes
with inflation, we risk repeating that experience. Since World War
II, the market economy has become a pluralistic one, in which more
and more human and physical infrastructures are needed to serve ever
more complicated technologies and intense urbanization. And these
only the state can provide. The resulting taxation, however,
inevitably becomes a deepening layer of price. Thirty-five years ago
I identified this as “the social lien.” This must be
distinguished from inflation that properly refers to price rise
resulting from an excess of demand over supply. Economic Historians
(notably the late Ferdinand Braudel) have grasped the point.
Economists have remained blind to it. Recognizing it would undermine
the vested interests served by the self-balancing market construct,
that dispatches all social and environmental concerns as
“externalities.” Economic policy has become increasingly
identified with balancing the national budget that is increasingly in
deficit because of governments’ insistence on treating public
investment as current spending.
Unless serious
accountancy is introduced into our price theory, there will be no
possibility of bringing in anything resembling the “social
dividend.”
William Krehm
William Krehm
(November 23, 1913 – April 19, 2019) was a Canadian author,
journalist, political activist and real estate developer. He was a
prominent Trotskyist activist in the 1930s and went to Spain where he
participated in the Spanish Civil War. In the 1980s he co-founded the
Committee on Monetary and Economic Reform (COMER) in the 1980s and
continued as the group's principal leader until his death. He died in
April 2019 at the age of 105. (Wikipedia 5 June 2022)
Footnotes:
1. The exponential
function will repay a little attention. It is constructed to the
specification that the rate of growth equals the value already
attained by the function itself. That implies, of course, that the
same is the case with the higher derivatives to infinity.
The formula is:
Differentiating the
function for the rate of growth: 1 being a constant doesn’t grow
and hence becomes zero and x grows as the variable itself becomes 1
to replace the vanished first term on the left. The denominator of
the next term is chosen so that its first derivative becomes x to
replace the previous second term, and so on to infinity. Being an
infinite series it doesn’t matter that the first term disappears
and the expression shifts to the right. There are an infinite number
of terms available on the right to absorb the losses on the left. As
they occur you pass on to the next higher derivative. In graph form
this is a curve that starts almost horizontal but in no time at all
stands vertical.
COMer Vol 16, No8, 2004
