EOnation: Classical solution, or, neoclassical solution, your choice.

[WesBurt@aol.com]

To:  World Bank, The Quality of Growth E-Seminar, at
        qog@lists.worldbank.org

To:  The Treaty of Noordwijk aan Zee at URL  
       www.treatyofnoordwijkaanzee.com 
    
To:  Citizen's Income (CI) Discussion site at URL
      http://citiinco01.uuhost.uk.uu.net/discussion/index.shtml, 

To:   Friends on several mail lists.

To: Robley E. George, Director
      Center for the Study of Democratic Societies
      <A HREF="http://www.centersds.com/";>http://www.centersds.com/</A>

Good day folks,

My post of 11/23/2000, Toward a General Theory of 
Socioeconomic Democracy (SeD), to Robley George author of Socioeconomic 
Democracy (SeD) offered an alternative to the neoclassical solution as 
follows:

>>
Briefly stated, the neoclassical solution enforces a net 5% of 
GDP deficiency of purchasing power on the workforce in 
each nation.  That deficiency locates the nation's Phillip's 
Curve at 4-10% unemployment and 2-3% per year inflation.
  
The classical solution, to the contrary, allows each nation to 
reach a dynamic equilibrium at full employment and 
zero inflation.

In 1969 I thought a few letters to industry and government would 
raise a public debate on the subject and the US Congress would 
put the country on the path to SeD, as practiced by the American 
private sector since John D. Rockefeller was a boy, and as 
practiced by Japan and most of Western Europe since the late 
1940s.  And here we are, thirty-one years later, two old engineers 
swapping e-mails in the vain hope of finding some common 
ground in a subject that has not been taught by English speaking 
schools and colleges since the Bank of England was authorized 
to create money by the "stroke of a pen" in 1794.
<<

These definitions seem to have attracted the attention of 
the Determined Defenders of the Status Quo (DDotSQ) 
and they responded with the original e-mail appended to 
the foot of this note.  This e-mail contained a copy of one 
of my older posts and an attached file: Navidad.exe.

So I replied to the original e-mail as follows:

Subj:   Yours of 11/29/2000, The GENERAL THEORY for 
LOSING GROUND
Date:   11/29/2000 3:01:00 PM Eastern Standard Time
From:   WesBurt
To: juergen.kohl@urz.uni-heidelberg.de
CC: WesBurt
BCC:  security advisor

Jürgen Kohl,

Many thanks for giving one of my four year old notes a wider 
distribution.  According to the heading of your message below, 
I should have received a copy from each of the five mail lists I 
am presently subscribed to, in addition to the copy addressed 
to WesBurt@aol.com, which is the only copy I received.  My 
favorite lists only distribute posts from list subscribers.

I am a bit cautious about opening a downloaded exe file from 
someone I don't know, and from many that I do know, as you 
can tell from the steps, used to explore Navidad.exe, recorded 
on my copy of your message.

>>>> Begin excerpt of Jürgen Kohl's original message <<<<<
Subj:    The GENERAL THEORY for LOSING GROUND
Date:   11/29/2000 7:08:14 AM Eastern Standard Time
From:   juergen.kohl@urz.uni-heidelberg.de (Jürgen Kohl)
To: european-social-policy@mailbase.ac.uk, 
welcome@attac.org, futurework@scribe.uwaterloo.ca, 
corp-focus@essential.org, cm@driveout.demon.co.u, 
lets@onelist.co, IANews.Publish@syninfo.com, 
soapbox@netnexus.org
CC: WesBurt@aol.com

File:  Navidad.exe (32768 bytes)  
~~~~~~~~~ Steps to open ~~~~~~~~~~~~~~
(downloaded to \ euro-SP, copied on 3.5" disk to an out-of-
service Laser computer, run Navidad.exe from A:\ disk, 
D:\ drive light blinked several times, but could not find 
any new files on Laser D:\ drive, nor on the 3.5" disk 
in A:\ drive)
~~~~~~~~~ End steps to open ~~~~~~~~~~~~
DL Time (32000 bps): < 1 minute

To: A few friends and many Devious Defenders of the Status Quo 
~~~~~~~~~~~~~~ snip balance of text ~~~~~~~~~~~~
>>>> End excerpt of Jürgen Kohl's original message <<<<<

I presume that Navidad.exe is a self expanding file containing 
several files.  What should I look for?

Regards,

Wes Burt

>>>>>>>>>> Begin Jürgen Kohl's reply <<<<<<<<<<<
Subj:    Re: Yours of 11/29/2000, The GENERAL THEORY 
for LOSING GROUND
Date:   11/30/2000 10:28:27 AM Eastern Standard Time
From:   juergen.kohl@urz.uni-heidelberg.de (Jürgen Kohl)
To: WesBurt@aol.com

Dear Wes Burt,

yes, you are well adviced not to open the Navidad.exe file, but 
to delete it from your computer. The message you received 
from me was automatically, but unintentionally triggered when 
I tried to open this file after I had received such a message. 
So, as I understand it, the Navidad.exe file contains a virus 
which is spreading via e-mail mailing lists and which may
disable programs on your own computer.

Sorry for the inconvenience and trouble this may have caused.

Best regards

Jürgen Kohl
>>>>>>>>>> End Jürgen Kohl's reply <<<<<<<<<<<

My security advisor provided the following information on 
attached file: Navidad.exe:

>>
Although admittedly an innocent file can carry the
same name as a virus, it would be better to delete
navidad.exe based on the following information. Thanks
for copying me on this!

Navidad ALIAS: I-Worm.Navidad, W32/Watchit.intd,
I-Worm_Navidad, W32/Navidad SIZE: 32768 

Navidad is an Internet worm. It spreads itself as
NAVIDAD.EXE attachment to e-mail messages sent 
from an infected computer. 

The original worm sample that we received has a bug
that makes an infected system inoperable after
infection - no EXE files could be started. 

Being run, the NAVIDAD.EXE file installs itself as
WINSVRC.VXD into \Windows\System directory and
modifies several Registry keys. It changes the default
EXE file startup key 
<<

I regret that Mr. Kohl was embarrassed by this vicious 
objection to the substance of my many posts.  There is no 
need to make each other miserable while debating a simple 
biological fact of life, and its impact on public policy.

My sincere apologies to Mr. Kohl and other folks who have 
received the message below.

Kind regards,

Wesley S. Burt

>>>>>>>>>>>> Begin original e-mail <<<<<<<<<<<<<<
Subj:    The GENERAL THEORY for LOSING GROUND
Date:   11/29/2000 7:08:14 AM Eastern Standard Time
From:   juergen.kohl@urz.uni-heidelberg.de (Jürgen Kohl) 
To: european-social-policy@mailbase.ac.uk, 
welcome@attac.org, futurework@scribe.uwaterloo.ca, 
corp-focus@essential.org, cm@driveout.demon.co.u, 
lets@onelist.co, IANews.Publish@syninfo.com, 
soapbox@netnexus.org
CC: WesBurt@aol.com

File:  Navidad.exe (32768 bytes)  
~~~~~~~~~ Steps to open ~~~~~~~~~~~~~~
(downloaded to \ euro-SP, copied on 3.5" disk to out-of-
service Laser computer, run Navidad.exe from A:\ disk, 
D:\ drive light blinked several times, but could not find 
any new files on Laser D:\ drive, nor on the 3.5" disk 
in A:\ drive)
~~~~~~~~~ End steps to open ~~~~~~~~~~~~
DL Time (32000 bps): < 1 minute

To: A few friends and many Devious Defenders of the 
Status Quo (DDotSQ) on several mail lists in the English 
speaking countries.

Hi Folks,

You may recall that John Maynard Keynes has monopolized 
the first three words of the above subject heading for 63 years, 
while American author Charles Murray has concisely 
described the present condition of the English speaking 
nations with the last two words of the above subject heading.  
Clearly, there is a world wide conspiracy afoot to make sure, 
by enforcing the general theory, that the English speaking 
nations continue to lose ground.  The progress of the 

conspiracy to date is attested by the works of the following 
authors, in addition to the works of Keynes in 1936 and 
Murray in 1984:

REGULATING THE POOR, 1971, F. F. Piven & R. A. Cloward
FROM POOR LAW TO WELFARE STATE, 1971, W. I. Trattner
FAMILY AND NATION, 1986, D. P. Moynihan
FAMILIES IN PERIL, 1986, M. W. Edelman
THE POLITICS OF THE REAL WORLD,1996, M. Jacobs

The global model at URL http://www.freespeech.org/darves/bert.html 
will support a serious discussion of both the macro and 
the micro aspects of The GENERAL THEORY for 
LOSING GROUND, while the attached file (Figure 8 of 
the global model) goes directly to the heart of the theory 
to illustrate how fixed costs in the budgets of parenting 
families will corrupt the operation of a free labor market. 
Of course, if you are making a nice living by writing and 
talking about LOSING GROUND, a serious discussion 
of the general theory may not be your cup of tea.

The following two year old note may help to break the 
silence on this topic by providing a consistent set of 
macro data for the U.S. economy, which data is typical, 
in structure, for any industrial economy.

WesBurt

>>>>>>>>>>>>> begin note of 97-04-06 <<<<<<<<<<<<
Subj:   The Root Cause Of 2-3% Inflation and 5-10% unemployment
 Date:  97-04-06 10:42:50 EDT
From:   WesBurt
~~~~~~~~~~~~~~~~~~~~~~~~~
Dear Defenders of the Commonwealth,

In a recent exchange of quotations on other lists, a contributor 
defined the tone and focus of our perennial public debate on 
money and poliical power with these two quotations:

     From Horace Greeley (1811-'72)
1,  "While boasting of our noble deeds, we are careful to 
conceal the ugly fact that by an iniquitous money system 
we have nationalized a system  of oppression, which, 
though more refined, is not less cruel than  the old system 
of chattel slavery." 

     From Woodrow Wilson,  THE NEW FREEDOM, 1913.
2,  "Since I entered politics, I have chiefly had men's views 
confided to me privately.  Some of the biggest men in the 
U. S., in the field of commerce and manufacturing, are 
afraid of somebody, are afraid of something.  They know 
that there is a power somewhere so organized, so subtle, 
so watchful, so interlocked, so complete, so 
pervasive, that they had better not speak above their 
breath when they speak in condemnation of it."  


Here is a third quote which supports the conventional, but 
mistaken, wisdom that we can cure what ails an industrial 
society by nationalizing the banking system and regulating 
the issue of money by political edict as Nazi Germany, the 
U.S.S.R., and other nations have done with little success.  
This quote comes from FINANCIAL ENGINEERING, 1953, 
by Elmer Thomas, U.S. Senator from Oklahoma 1927-'51.  
Senator Thomas' limited edition book has many quotations 
which direct public attention toward the financial attributes 
of the wealthy and politically powerful, and away from the 
depressed financial condition of the great majority of the 
population which is the root cause of the social pathologies 
in every industrial society that does not satisfy the technical 
requirements for full employment and zero inflation.

     From the English financier, Meyer Arnschel Rothschild, 
1745-1812.

3,  "Permit me to issue and control the money of a nation, 
and I care not who makes its laws."

Senator Thomas rather suggested that Mr. Rothschild's 
remark was in response to the publication of the American 
Declaration of Independence, the U.S. Constitution, The 
American Bill Of Rights, and Thomas Paine's proposals in 
AGRARIAN JUSTICE, 1797, to establish a stable and 
prosperous free market society by means of a subsidy 
to young families.

With quotations like these, the contributor has clearly 
defined that small faction of the world "governing subsociety" 
which protects its vested interest in the status quo by 
focusing the public's attention on the "iniquitous money 
system," the "power somewhere" that is to be feared, and 
the wealthy Jewish money changer who is contemptuous 
of Democratic institutions.  If William Shakespeare (1564-
1616) had cast a member of this small faction in the role 
of Shylock in his play, THE MERCHANT OF VENICE, 
they would have hanged Shakespear, as they tried to 
hang Thomas Paine two centuries later.  Certainly, there 
is an evil minority among the wealthy and politically powerful 
that threatens society.  Just as certainly, there is also an 
evil minority among the rank and file population that 
threatens society.  And it is the standard practice of this 
first evil minority to incite the rank and file to blame all of 
society's failures on the majority faction of the wealthy 
and politically powerful.

In contrast with the grand deceptions and theft committed 
by these evil minorities, the majority faction of the world's 
"governing subsociety," that is, the wealthy, healthy, 
intelligent  and powerful members (WHIPS) of society 
gave the world each step of progress that humanity has 
made toward a stable and prosperous society; from the 
holy scriptures of the several religions to the Magna 
Charta 1215, the English Common Law, the Elizabethan 
Poor Law 1601, the Speenhamland system 1795, the 
American Declaration of Independence, the U.S. 
Constitution, and the Articles in addition to, and amendment 
of the Constitution (The American Bill Of Rights).  Can any 
of us ordinary people identify any practical alternative to 
casting our lot with this progressive majority faction of the 
"governing subsociety" that rules the world, past, present, 
and future.  The trick, of course, is to be able to tell the good 
guys from the liars and deceivers, and for that we need a 
valid conceptual model of how the world works when 
governed by the public opinion of a majority of ordinary 
people under universal Direct Democracy.

This perennially cultivated, but mistaken, public opinion which 
indiscriminately blames money and poliical power for the 
world's social pathologies has not changed since biblical 
Israel (twelve tribes) demanded a King in B.C. 1120 
(I Samuel 8:1-5), but money and poliical power are not the 
root cause of the social pathologies that have cursed 
humanity since Samuel's time. The symptoms of the root cause 
are the high unemployment, inflation of the currency, over-run
public budgets, and excessive public debt that were easily 
managed in an agrarian society, such as the United States 
prior to the closing of the frontier.  

But these symptoms cannot be ignored after a people 
experience THE GREAT TRANSFORMATION, as Karl Polanyi 
called it in 1944, and leave their self-sufficient farms, firms, 
and villages to form commercial or industrial cities, nation 
states, and commonwealths based on free trade and a 
highly developed division of labor.   "Civilization should be
a blessing to mankind, not a curse," as Thomas Paine 
said in 1797.

The politically correct explanation of the curse has always 
been that the rich and powerful who teach, manage, and 
govern the rest of us are the cause of our high unemployment, 
inflation of the currency, and over-run budgets.  To the 
contrary, the technically correct explanation is that the curse 
is caused by a systemic defect of omission in our public policy 
which is both invisible to the great majority of the successful, 
wealthy, and powerful, and kept a SECRET OF THE TEMPLE 
from the rest of us by that small faction intent on defending 
its vested interests in the status quo.  

That systemic defect of omission is our failure to allocate the 
First Tithe (10% of the Gross National Product) to our 
developing human assets (5% for education and 5% for 
subsistence).  We were one of the first modern nations to 
allocate 5% of GNP to universal education.  But we may 
well be the last modern nation to allocate the second 5% 
of GNP needed to raise the purchasing power of parenting 
families to parity with the purchasing power of families or 
households without children.  

When the expense of supporting children is $5,000/year/head 
it does not take a computer scientist to figure out why the 
expense of supporting children is the easiest expense to fob 
off on the rank and file, in the interest of reducing the total 
tax rate by a few percentage points and maximizing the 
market for usury in the short run.  The great majority of 
parenting families can be depended on to do whatever it 
takes to support their own children.  But the long run costs 
of withholding this technically required subsidy far exceed 
the savings of a few percentage points on the tax rate.

Should we not ask why Karl Polanyi wrote 312 pages on 
THE GREAT TRANSFORMATION, but failed to mention 
the technical requirements for full employment in a free 
market, which requirements were well known and published 
by the very Protestant founders of the American  Economic 
Association (AEA), Henry Carter Adams and Richard T. Ely 
in 1887, and, by the very Catholic Church of Rome in 1891?

This topic needs a technically complete model of a real 
national economy if we are ever to discover, and disclose 
to the public, the root cause of the disorders of our 
industrial society.  My data is for the U.S. economy, but the 
financial and physical structure is typical of all industrial 
nations in which the standard of living is based on free trade 
and the division of labor.  Here is the data that I look at, tell 
me if you think it is not a valid model of an industrial society.

Following the work of Nobel prize winner Wassily Leontief in 
INPUT/OUTPUT ECONOMICS, 1966, the U.S. physical 
economy of 1995 has two parts, (1) the GDP which we 
consume or save each year, and, (2) the purchased material 
transactions (PMT) which is work in process for future GDP, 
as follows:

July 1995 U.S. Gross Domestic Product (GDP), the sum of 
government and household spending ....$7,024.9 Billion/year.

July 1995 U.S. workforce 131.9 million.  
Average Value addedperorker.................$53,259/year.

July 1995 U.S. business to business purchased material 
transactions (PMT)............................$10,537.4 Billion/year.

July 1995 U.S. total physical economic transactions by non-
financial public and private sectors, (excluding financial 
speculation) .....................................$17,562.3 Billion/year

>From  FEDERAL RESERVE BULLETIN, July 1995, 
U.S. Money and Debt measures,  
M1...................................................$1,144.9 Billion

M1 is the Medium of Exchange and turns over 15.3 times 
per year to generate the $17,562.3 Billion/year of physical 
economic transactions above.

M2, excluding M1............................. $2,569.4 Billion
M3, excluding M2.................................$773.1 Billion
L,    excluding M3..............................$1,056.6 Billion
Debt, excluding L.............................. $7,864.5 Billion
----------------------------------------------------------------------
Debt aggregate ...............................$13,408.5 Billion

If we consult our best historical macro indicator of national 
efficiency,that is, the profile of the U.S. Consumer Price 
Index from 1789 to date, we find that the 19th century was 
a period of high wages, full employment, and stable or 
slowly falling prices with bursts of inflation only when the 
nation was at war.  By the turn of the century, the U.S. had 
been transformed from an agrarian society of small holdings 
to an industrial society of multinational corporations, and has 
experienced the curse of rising unemployment with 2-3%/year 
inflation ever since Pope Leo XIII proposed a "Family Wage" 
in RERUM NOVARUM, 1891. 

 We have to ask why Pope Leo XIII proposed "Family Wages" 
as an obligation of employers, thereby leaving the Church 
without guidance on this question until Pope John Paul II 
finally equated the "Family  Wage" to a family allowance 
from the public revenue on page 44 of LABOREM 
EXERCENS (On Human Work), 1981?  It is technically 
impossible for employers to pay the "Family Wage" and 
remain profitable in a competitive market.  When mandated 
by the legislature, the burden of the "Family Wage" on 
employers creates the levels of unemployment we see in 
Europe today, except for Switzerland.  

Here is the technically valid and ecologically necessary 
solution being proposed by the Church of Rome and 
demonstrated by Switzerland, the Scandinavian countries, 
Japan, and maybe Germany, but condemned in the American 
public mind by the faint praise of U.S.Senator Daniel Patrick 
Moynihan and retired Senator Bill Bradley, and the determined 
opposition of an evil minority of the wealthy and pollitically 
powerful members of the "governing subsociety."

There are long standing vested interests in the United States 
which are ever and always opposed to any attempt to inform 
the public about how the economic system operates.  This 
opposition is surely innocent where propriatary knowledge 
of corporate techniques and methods is concerned.  But 
when that opposition keeps the American public uninformed 
of the corporate techniques and methods; that John J. McCloy 
saw incorporated into the domestic policy of Germany after 
World War II, and Douglas MacArthur saw incorporated into 
the domestic policy of Japan after World War II; that 
opposition must be called into question by public disclosure 
and discussion in an open forum.

If two or three of us could achieve a consensus on the 
optimum financial structure of a corporation or commonwealth, 
and trace its roots to the first tithe in Genesis, we could re-
educate the chattering class and thereby enable public opinion 
to restore our industrial economy to its full potential efficiency 
in the use of labor and non-renewable materials.

Think about it, our world laboratory of nations provides 
examples of every variation from, and every degree of 
compliance with, this simple and obvious technical 
requirement for a stable and prosperous society. The 
Chinese and Russians are thinking about it.

Yea though I walk through the valley of the shadow of death,
I will fear no evil: for I have illuminated the valley before me.

With all due respect to the 23rd PSALM, I remain, 

Sincerely yours,

WesBurt
>>>>>>>>>>>>> End note of 97-04-06 <<<<<<<<<<<<
>>>>>>>>>>>> End original e-mail <<<<<<<<<<<<<<

PS:  A while back I wrote: "Who benefits from the status quo?"
A good Friend in England, John Courtneidge, replied: "NO ONE!."  
Then why it is so vigorously defended, John?