Page 9 - A Social Dividend: An Income Guaranteed to Each Citizen

The Chronic Shortage of Purchasing Power

25. Why do you say we are “missing purchasing Capital expenditure costs can be written off
power”? over several years or even decades while prices
One must not search long to find individuals are affixed to products as they are offered for sale.
who complain about a lack of purchasing power; (Ed. Note: A new factory is mortgaged just as
of not being able to pay for what they and their is a house. The mortgage will be paid over several
families need even when goods are plentiful. years or decades by making monthly payments.
As products that people want are not sold we Each payment will be factored into the prices of
must conclude that there is a deficient amount of the goods that are offered for sale that month.)
total purchasing power. Would an engineer measure a stream’s power
In the end, it is only by indebting those who by only considering the amount of water it carries
make purchases that goods are finally sold. Public without also calculating the time the water takes
institutions also borrow and accumulate debt to to flow from point A to point B? Engineer, Clifford
SPECIAL
EDITION
finance public works. All of this proves that pur- Hugh Douglas, brought this omission to the atten-
chasing power is collectively insufficient. tion of economists. He taught economists that
26. Do you have more examples that prove the water flowing downstream will not activate a tur-
For the Triumph of the Immaculate
bine situated upstream.
shortage of purchasing power?
62nd Year. No. 399 March/April 2018 4 years: $20.00
Money that was distributed in past production
Everyday, the media addresses the problems cannot be used to pay for both past production
of the unemployed. There are crucial public pro- and to finance production in the making. It can
An Efficient Financial System
jects that should be undertaken but are not. Un-
only be used to liquidate one of the two.
employment persists or becomes worse. At the Service
The answer to unemployment is for products 28. With such limits in purchasing power how do
Of Producers and Consumers
products manage to ever be sold?
to be sold. Goods al-
ready on store shelves Labour unions
must be sold in order and other interest
for there to be a de- groups lobby for the
mand for more. This I.M.F. construction of pub-
in turn stimulates lic projects, weapons
employment as more manufacturing and
products are manufac- other strategies that
tured. Even a school will not add consum-
child knows how PRODUCTIVE POWER er goods to the mar-
products can be sold: ket but will provide
“There must be more purchasing power to
purchasing power!” workers.
27. Are there not 29. Would asking for
economists who wage increases be
say that produc- a good way to
tion finances con- increase purchas-
sumption? And they still hesitate to change the wheel! ing power?
There are econo- Any increase in
mists who maintain that production automatically wages will be re-
finances consumption. Prices, they say, include flected in an increase in prices. The temporary
money that was spent and money that was spent benefits gained by raising salaries is short-lived.
will eventually reach the consumers’ hands. This As long as wages alone make up purchasing
“eventually” does not seem to worry them, even power, it will be impossible to correct the price-
though money might have been distributed 10 income gap.
years ago to build a factory while the construction 30. What if owners reduced their profits?
costs are included in the prices of today’s prod- It is customary for workers to keep an eye on
ucts and could be part of the price structure of owners’ profits. Consider that even if there was no
products for 15 or 20 years to come. profit margin total purchasing power would still u

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