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