Reciprocal System #572 "The Road to Permanent Prosperity" ch22-Dealing with Recessions A

Transcript

hello everyone and welcome to my channel this is an educational Channel and we look at Great theories of everything um in their entirety and uh try to you know figure out the best way to use these things in our own lives and maybe even how to put them together um to uh synthesize many different theories of everything so that we can uh maybe get some kind of overarching even Theory of Everything um we've looked at primarily two so far um this is the 572nd video that we've done on the reciprocal system of theory from dwey B Larson and we did many many videos before that on the ancient Egyptian Tree of Life um especially as interpreted by R Neer men in meduna and uh we're going to get into some other stuff here soon but uh we're sticking with uh Dewey larsson's reciprocal system for right now and uh Mr Larsson was an American engineer who lived in the 20th century he died back in 1990 Left Behind many books physics and chemistry and astronomy but also he has books on metaphysics a book on metaphysics which includes sections on um religion psychology philosophy biology even dream interpretation and he has two books on economics we're looking at one of those books today that is called the road to permanent Prosperity Mr Larson's uh theory of the reciprocal systems also known as the universe of motion Larson was one of the few uh cosmologists to propose a universe based on motion the universe is not made out of matter it's not made out of energy or force or anything like that the universe is made out of motion uh in fact Force matter energy and every other scientific quantity is a form of motion and they can all be expressed in terms exclusively made out of space and time motion larsson's first postulate states that the universe is composed entirely of one component motion existing in three dimensions in discrete units and with two reciprocal aspects space and time and so motion is a fraction with space or time as the numerator and time or space as the denominator you can think of that in terms of speed I was riding my bike at 20 M hour 20 M of space in 1 hour of time space over time is speed and uh if you you know double the speed you can either say I was going at 40 mph or you could would say equivalently I was going at 20 m per half hour can double the space or have the time and both would give you the same result that is a reciprocal relationship um but LaRon spreads that out to all forms of motion all of our scientific quantities matter energy force pressure electric charge they are all expressable in space-time terms um with the idea that space and time can have multiple Dimensions you can have uh acceleration space over time to the second power or Force time over space to the second power or matter time to the third power over space to the third power or uh pressure time over space to the fourth power and so on and so forth now when Larson uh applies this to economics um well first he you know contends that the economic system is a system in motion and that it relies on two reciprocal aspects production and consumption and uh also you have uh some basic economic laws um that uh we can't get around um Larson is uh quite opposed to the sociological School of Economics which is most of it um which is ideologically based politically based that uh you know people have certain political viewpoints and they try to uh you know propound those things through their um economic philosophy uh but Larson is really saying that you've got to set up set up your economic program uh in harmony with the physical laws uh he proposes what he calls scientific economics or what ronatz calls Econo physics and um that is the first principle you can deal with the other stuff the ideological stuff once you're sure that your economic system complies with the laws of physics um anyway uh I'm going to let Larson speak for himself but if you'd like to go to the beginning of this book go back about six seven weeks in the archives and start with chapter one um and uh also if you'd like to know more about the reciprocal system I did about 474 videos where I explain it in a little bit more detail so check out uh any or many of those because they're all different but um they all have uh kind of an ad hoc explanation in them now today we're going to check out chapter 22 or at least start chapter 22 of this book The Road to permanent prosperity and uh chapter 22 is called dealing with recessions so this is going to be you know Larson's approach to recessions he's got a specific approach to deal with the boom and bus cycles of the economic system which he says are you know basically unavoidable but they are kind of mitigable you can uh you can smooth out the uh amplitude or dampen the amp amplitude of the boom and bus Cycles so that you have your economic system humming and that uh you have basically permanent prosperity it's always um working pretty well and there's no periods of scarcity okay chapter 22 dealing with recession as pointed out in chapter 21 the principles and relations that were developed in the theoretical discussions in the early pages of this work specify distinctly and definitely just how stabilization of the economy can be accomplished and it would be possible to proceed immediately with the identification of suitable practical measures for achieving the desired results however most of the measures that will be recommended are not new they are included in one form or another among the multitude of proposals that have been offered in the past as solutions for the problem or as contributions toward such a solution it may not be a immediately apparent therefore just where the conclusions of this work differ from their predecessors or why the recommended measures can be expected to accomplish their purpose under the proposed new program when they have not done so in the past for this reason it seems advisable to discuss the various remedies for our economic ills that have previously been proposed and to examine them in the light of the economic principles that have been developed in the forgoing pages some of the proposals that will be included in this review of previous ideas are so far out of the mainstream of economic thought that they may seem out of place in a serious discussion but these proposals have been given serious consideration during past periods of economic stress and in view of the lack of any accepted Criterion of validity it is quite po quite probable that at least some of them will surface again when the economy once more runs into difficulties from the results of this analysis we will be able to appraise the merits of each proposal and we will then check this theoretical evaluation against the results that have been obtained in actual practice when we find as we will that the plans judged worthless on the basis of this appraisal have fizzled out have fizzled out without doing any appreciable good that the proposals which have some sound points according to our analysis have been partially successful and that the measures which have which we have identified as theoretically correct have been effective for their particular purposes to the extent that they have been correctly employed this should put the findings of this work into the proper perspective what we have done is not to devise any new tool for stabilization purposes but to determine precisely what needs to be stabilized how this stabilization can be accomplished what contribution toward the defined objective each of the measures previously proposed can make if properly applied and how the condition of the economy from the stability standpoint can be measured for control purposes the essence of the new program is a clear recognition of just what should be controlled and the formulation of a procedure which will ensure that the control measures are applied in exactly the right direction at exactly the right time in the discussion of measures previously utilized or advocated for this purpose it will be brought out that some have failed or would fail if they were tried because they contribute nothing toward the particular kind of action that is necessary whereas other measures actually do have an effect on the business cycle and have failed wholly or partially in past applications only because they were applied without any clear understanding of what they were capable of doing and without any adequate Criterion by which to judge the magnitude of the action that should be taken it was pointed out in chapter 18 that the principal reason for studying the reaction of the world economies to wartime conditions is that operation under the stresses introduced by the divers of Civilian productive facilities to war production intensifies the problems of the normal economy and makes it easier to see their true nature the situation with respect to economic stability is somewhat similar we can see the reasons for instability and the effects of corrective measures most distinctly by viewing them under extreme conditions specifically in a major depression where all of the principal economic problems became serious enough to be clearly defined the discussion that follows will therefore be addressed to the issue as to how to deal with a severe recession or depression and will concentrate largely on experience during the Great Depression of the 19 1930s uh the section is called psychological measures usually one of the first expedients called upon in a time of difficulty is an attempt to change the psychological Outlook by reassuring words from Men in high places in the early stages of the depression of the 1930s a flood of optimistic statements emanated from administrative Administration spokesmen and prominent business figures but the decline continued on its way in cynical disregard of the Eminence of these modern King canoes um I do not know who King Cano is but uh that's interesting these reassurances are doomed to failure for two reasons first they fool no one those who suspect the worst are not going to change their opinions merely because some of those persons vitally interested in maintaining the status quo talk loudly about the fundamentally sound conditions an even more significant point is that the condition of the money and credit reservoirs at the top of the upswing is abnormal and cannot be maintained except under the influence of a rising trend of prices and general business activity much of the borrowing has been for the purpose of taking advantage of rising price levels speculators for instance have no incentive to continue using borrowed funds if the market remains stationary a change from a rising Trend to a level Trend therefore causes a substantial contraction in credit an input into the credit Reservoir as well as a rise in money storage toward more normal levels the diversions from the purchasing power stream to fill the reservoirs reduce the flow of purchasing power to the markets not only to the equivalent of production which would stabilize prices but to a still lower level this causes a drop in market prices and the whole system starts down there is no stationary condition in the absence of effective of an effective control program we jump directly from the upswing to the downswing unless the psychological campaign can convince the public that the rise is still going on an obviously hopeless assignment it does no good to convince them that there will be no decline for the realization that the rise is over is sufficient in itself to start the decline the decline must continue in an uncontrolled economy until the abnormal conditions in the reservoirs are corrected if the situation at the peak is not much overbuilt the drop is moderate and the repercussions are limited though not without importance if the Peak is capped by speculative excesses the fall is precipitous and by the time the abnormal Reservoir conditions are corrected a further crisis is created by the increase in unemployment we cannot talk ourselves out of this kind of a problem okay now this is called buy now campaigns closely related to the Proclaim optimism approach is the idea that the decline can be stopped by persuading the public to do more buing but it is unrealistic to expect any substantial increase in consumer buying during a period of falling prices and there is no incentive for an increase in business investment to the extent that these two propaganda programs are convincing they may have some effect in slowing the rate of decline but the value of this achievement is questionable to say the least if we must have a depression the sooner we get it over with the better uh this is called loans to Industries and homeowners in the 1930s depression the government embarked on a program of making loans to distressed Industries on a hitherto unprecedented scale similar help was extended to homeowners who were unable to meet their commitments these loans with relatively few exceptions were not new credit but merely devices to prevent the forced liquidation of existing credit all they accomplished from the standpoint of the system as a whole was to slow up the process of refilling the credit reservoirs and thereby the speed of deflation the loans were unquestionably helpful in minimizing in individual distress but they cannot be considered as as contributing toward the restoration of normal business conditions if we take a coldblooded factual view of the situation and ignore the inequality of personal hardships it is clear that as long as the means that are available for controlling money inflation remain unrecognized by the monetary authorities measures such as these loans actually stand in the way of the readjustments that are necessary before the trend of business can be reversed before a rise can begin as matters now stand liquidation of credit must proceed until the credit reservoirs are full enough to cause an outward pressure bankruptcies would hasten this process prep uh propping up tottering industry IES delays the Readjustment and prolongs the depression this does not mean that such a cold blooded policy ought to be followed under such circumstances from a humanitarian standpoint we are no doubt justified in relieving individual distress at the expense of the interest of the community as a whole but we should adopt remedial measures with our eyes open and and not delude ourselves into thinking that they constitute uh that they contribute toward the restoration of prosperity The Dilemma that we Face here is one of the strong arguments in favor of setting up the kind of controls that will eliminate the cyclical swing okay this section is called work spreading work spreading measures reduced hours per week rotating Unemployment uh rotating employment Etc are somewhat similar in that their primary effect is to reduce individual hardship analysis shows however that they do not recovery in the same manner as the loan programs just discussed they simply do not affect the depressed business situation either one way or the other the acceptance of the relief or welfare principle in recent years means that the effect of work sharing under present conditions is merely to reduce the amount of welfare expenditure a result which has little bearing on the general economic situation the basic question here is whether the burden of supporting the unemployed should be met by the taxpayers in general through welfare payments or by the employed workers through sharing their employment and earnings in either case the action is one which takes from one group of individuals and gives to another group that is it is a transaction between individuals at the same economic location hence it has no significant bearing on the problem of economic stability nor does either alternative make any contribution toward recovery from a depression the effect of work spreading policies on overall employment and economic growth was discussed in the road to Full Employment which is uh larsson's other book on economics uh this section is called welfare payments the severity of the unemployment during the 1930s depression together with a developing sense of community responsibility for the economic status of individual citizens resulted in general acceptance for the first time of the principle that those those who are unable to find employment through no fault of their own are entitled to support by the community during their period of enforced idleness the obvious Equity of this policy will no doubt make it permanent until the need is eliminated by some such program as the one that will be developed in this work the welfare payments have no direct effect on the general operation of the economic mechanism although the method of obtaining the necessary funds to finance the payments may have an issue that will be discussed later they merely transfer purchasing power from one group of consumers the taxpayers to another the recipients a transaction between individuals at the same economic location consequ ly they have no value as a control measure or as an anti-depression measure such transfers make the Depression more endurable but they do not contribute toward recovery furthermore there are some indirect results that should be noted the alleviation of distress commendable as it may be from some standpoints does have the effect of removing much of the pressure for positive action toward remedying the basic trouble in short it acts as a sedative to keep the patient quiet but does nothing toward a cure the influence of huge welfare roles on the state of public confidence must also be given some serious consideration or some consideration in the previous discussion of business Cycles it was pointed out that recovery from a depression finally gets underway when the liquidation of debts and the accumulation of money Reserve proceeds far enough proceeds far enough that further inflow into the reservoirs encounters resistance at which point even a small degree of optimism as to Future prospects starts an outflow that reverses the cycle there is no question but that large welfare expenditures have a dampening effect on business confidence and hence tend to prolong depressions uh this section is called unemployment insurance from a purely economic standpoint unemployment insurance and welfare payments are equivalent the foregoing discussion of welfare payments therefore applies in general to unemployment insurance as well but the insurance programs are much more satisfactory to the workers because they eliminate for the term of the insurance coverage the uncertainties as to eligibility and as to the amount of payment the scope of the insurance coverage is therefore being gradually extended uh this section is called subsistence employment much of the same considerations apply to the various alternatives to welfare mainly schemes for taking care of the unemployed by assigning them to special types of work by means of which they could earn a bare subsistence back to the farm movements in the case of declining prices for farm products self-help programs and various more or less elaborate communal projects make up this class an example of the last mentioned variety is a plan proposed during the 1930s depression by Professor Frank Graham who would have who would have the government lease who would have the government lease idle factories and other properties and put the unemployed to work producing Goods that could be exchanged among themselves to take care of their essential needs as pointed out by wi King who was one of the supporters of Graham's plan these Enterprises would be very inefficient in comparison with ordinary producers and the workers would have to put in long hours to obtain even a fraction of the rewards of normal employment this fact was listed by King as one of the merits of the plan in as much as it would ensure continued efforts by the participants to secure normal employment but the general public attitude toward the victims of economic difficulty has undergone drastic changes since 1930 the same electorate which has finally arrived at the point of recognizing the community responsibility for Furnishing a living to those who have been deprived of the opportunity to earn it for themselves because of the defective operation of the economic system will certainly realize that it is no different except in degree to impose the penalty of long hours and meager Returns on those unfortunate victims of community incompetence the fundamental weakness of all of these subsistent schemes however is that they are merely a cheap form of welfare assistance they treat the symptoms of our economic illness after a fashion but they do not touch the purchasing power unbalance that must be corrected before the business cycle can be reversed okay this next section is called Script and um uh let's try to knock out this paragraph here the uh well no cuz it's uh getting into more script okay we're going to stop right there and we will get into um the script and any other proposals that Mr Larson um wants to go through here in this chapter uh tomorrow so uh thank you for tuning in today and hope to see you tomorrow back uh same place have a great day