And now for something . . .completely different . . . So, I just finished reading Robert A. Heinlien's first (and last) novel For Us the Living, and found it,essentially, his version of the Utopian books that H.G. Wells and others had written. Which is to say, mostly Socratic exposition with virtually no real plot to speak of. However, I was somewhat intruiged by the description of the economy in the near-perfect future, and I learned in the afterwards that it is closely based on a therom called "Social Credit" that a Scottish engineer named C.H. Douglas proposed back in the 1920's. I will admit frankly that I am a Jethro-level thinker when it comes to the higher intricacies of economics so I do not bring this up to say "Let's do it!!" but rather just to let some of the sharper economic minds here chew it over and, presumably, poke holes in it. I do know that I have always been taught to believe that "fiat money" was by it's very nature a bad idea....but that's tempered by the realization that fiat money is exactly what we have, and by the argument herein that now we have a system where banks create money from an inkwell (or a computer program) so shifting that power exclusively to the government is a wash. anyway, rather than trying to explain anything in a way that makes sense, I quote Wiki on it. I look forward to the analysis of my fellow Forgers: http://en.wikipedia.org/wiki/Social_credit Discuss!
Since the 1920s (everywhere except the Soviet Union, China, a few African republics, and among Ivy League professors), centrally planning any aspect of the economy has gone out of vogue because of its lackluster performance compared to market allocation. Fails to address supply and demand pressures and thus is less likely to result in total consumption of all produced goods. Also fails to communicate--via price mechanism--increased or decreased market demand for a product, thus making capital allocation less efficicent. Hugely destructive of society. Encourages dependence and discourages self-reliance. Makes joblessness palatable. Seems pretty socialistic; it would therefore have many of the same fundamental flaws as do more conventional forms of socialism.
I suspected this might come up. As RAH's characters were discussing it the "professor" kept coming back around to the ideal that there would always be a one-to-one ratio of production and consumption but there was no discussion of price point. I'm not sure if it was considered an irrelevancy or if it was an oversight. That was my first instinct as well. And the objection raised (in a modified form) by the protagonist. The reply was, in essence, that as long as giving a "heritage" to the ner-do-well did not upset the economy, it did not matter because he was a consumer to the extent he had income. the argument was that giving him a "salary for nothing" was less costly than the alternative social relief that would in any case be extended to the lazy and indignant, was fairer because it went to everyone and not just to the lazy or unable, and that it "cured" unemployment since those who worked would be those who truely wanted to, and those people could afford to pursue a profession that they found rewarding and fulfilling rather than take a job solely to "put food on the table" My reaction was that, firstly, it probably was too idealistic in terms of how many people would work if they didn't have to, and secondly, that - while the book presumes a highly automated society, for any past or current implementation, one has to face the reality that virtually no one will find picking up the garbage or working at the waste treatment plant or whatever to be a desirable and fulfilling career. So how does one get these things done? On the one hand, I am impressed with the calculation - any calculation - that finances the government without direct taxation, but I - like you - have not been able to reconcile the plan with what I believe to be the reality of human nature. Still, I look forward to a lot more commentary.
