Statement of Policy
ICE - Institute for Creditary Economics
Any policy is totally dependent on "circumstances",
and policy suggestions cannot be regarded as "one" size fits all.
Neither will all individuals agree on all points,
even in a small institution like the ICE.
Nevertheless, it may be of interest to the public
to get some idea of which general direction the individuals of ICE
would like to see policies take.
The following list may therefore be regarded as a collection of suggestions,
a smorgasbord of possible polices, and will be further streamlined.
The following list is our outline for general policies:
(author: James Cumes)
(1) The Institute for Creditary Economics is concerned to promote high and stable real investment, rising productivity of labour and capital, and growth of production for the benefit of all.
(2) Central to the objectives of ICE is the achievement of high and stable rates of employment and the realisation of full employment to the full extent possible in a free-enterprise/mixed/ market economy.
(3) In the pursuit of high rates of real investment, ICE will promote low and stable rates of interest for real investment. Central banks should determine their policies so as to keep rates low and real investment at the highest possible levels consistent with the objective of achieving high rates of economic growth and full employment.
(4) The problem of inflation should be met by adopting policies which achieve harmony between aggregate supply and demand at the upper level of the two aggregates and not by restricting economic growth to achieve balance at the level of the lower of the two aggregates.
(5) Taxation should be directed to encouraging real investment, rising productivity and high and rising production. Taxation systems should be equitable for all social sectors. This will be most readily achieved by systems directed towards stable economic growth and full employment.
(6) Spiking of real-estate or other kinds of investment should be managed through a range of measures which will reinforce interest-rate policy while maintaining high levels of growth and employment in other sectors.
(7) Policies promoting investment, productivity and production should be directed towards creating and maintaining growth in a diversified economy in primary, secondary and tertiary industry and not to creating undue dependence on one area of production or on exports rather than a mixed and dynamic domestic and international market.
(8) Trade policies should be formulated and implemented so as to offer reasonable protection for the creation and maintenance of a diversified economy, while seeking to avoid such restrictions on external trade as would prevent the evolution of an open and just globalised trading system.
(9) Exchange rates should be set at rates which fairly reflect the competitive trading situation but allowance should be made for the need to adjust rates to allow for diversification of the economy if those rates are otherwise too high because of special dependence on natural resources or on one economic sector such as agriculture.
(10) Currencies should be freely convertible and no restrictions should be placed on payments for current-account transactions. Transactions on capital account should also be as free as the need for stability in international financial arrangements allows. However, management of capital flows especially when they are short term, should be allowed and in some instances required, in accordance with rules established by the international financial institutions described below.
(11) The maintenance of high and stable levels of domestic investment, productivity and production, with full employment, will substantially ensure a high degree of stability in international financial arrangements. This will be so for both the highly developed economies and those at the beginning of the development process. However, international financial institutions will be needed to draft and administer financial rules for the
stability, growth and equal treatment for all members of the world economy.
(12) The international financial institutions may be based on the present International Monetary Fund and the International Bank for Reconstruction and Development but must be fundamentally reformed so as promote high and stable growth for all members of the world economy. Management of the international financial institutions should acknowledge differences in size and significance of certain large economies but should balance the tendency for domination by large financial entities with the need to give equitable treatment to smaller financial entities, including developing and least developed economies.
E-mail: post ( @ ) credec.org