Friday, 31 August 2012

Social Credit and the New Home Economics Part II

Practical proposals, such as a National Dividend based upon a Just Price system, have been put forward by ‘social crediters’, and can be justified once the relationship between the real and the financial economies is fully understood. Such proposals have their strengths and their weaknesses. The main strength is that they accord with no political faction, whether of the left or of the right, where party leaders can be subjected to external pressures. For example, a National Dividend paid as a right to all citizens could be a means to strengthen civil liberties, the theory being that an independent income would offer the individual the right to refuse to be exploited at work. (Yes, it is true that, in theory at least, there are laws about minimum wages and conditions of employment. In practice, however, in the UK as I write, workers in care homes are being hired for, say, 15 hours per week, but expected to work any number of extra hours unpaid if asked to do so, under threat of losing the job.) The main weakness is that, as things stand, the administering body offering the National Dividend could be centrally controlled, hence would itself potentially threaten civil liberties.

In a sane and sensible world, it would be possible to face the fact that, throughout the twentieth century, ‘the economy’ has veered from crisis to crisis, with bouts of war, and bouts of depression alternating seemingly beyond rhyme or reason. ‘It’, i.e., mainstream economic thinking, plainly is not working. Or, to put it another way, it is serving to produce increasing uncertainty. As finance grinds from crisis to crisis, it leads to military conflicts, environmental degradation and poverty on hitherto unprecedented scales. Yet ‘it’ – mainstream theory – is the only show in town. Whenever alternatives are raised - merely for the sake of discussion, as a way to think laterally - they have been silenced by being labelled ‘heretical’. Most notably, all discussion of Social Credit theory, of the history of this massive popular movement, and of its success as a democratic political alternative to the corruptible party system, all discussion has been banned in the academy. A tenured economist at a university cannot even raise the subject for free and open discussion and retain any chance of security of tenure, let alone promotion (See my Understanding the Financial System for details.) As a result of the stultifying of debate, economist jokes abound:

Q: How many economists does it take to change a light bulb?
A: None. They all assume it doesn’t need changing.
Economist jokes are humorous because, like all forms of jest, they contain a crucial element of truth. And the truth of the matter is that mainstream economic theory is not designed to relate to economic practice. In economic theory there are invisible hands, divisions of labour and a quest for general equilibrium. In economic practice there is a banking system based upon debt, taxation and employment laws passed by governments and backed by the full forces of law and order.

Economist jokes abound wherever economists congregate, because, deep down, economists know that they are employed to create plausible illusions about how the financial economy works. Like Christopher Columbus, they need lucrative government grants to ply their trade.

The New Home Economics distinguishes between the facts of the real economy and the fictions of the financial economy. All that glitters is not gold. See the New Home Economics Study Guide in the current issue of The Social Crediter, available on .

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