I don’t really have a problem with pension plan bankruptcy, but it seems to me that if you’d take the advice of your friend Steve Keen and advocate “a modern debt jubilee” the system could be reset,  prices could fall and then to keep us all from stumbling back into the same debt problems ten years down the road (or more likely 5 as AI is going to continue to erode aggregate demand)  implement a universal dividend and a retail discount that is rebated back to merchants and we’ll have a stable virtual equilibrium.  I’m sorry Mish, even though your investment advice in view of the current system’s flaws is excellent you’d do well to accept Keen’s expose of general equilibrium theory and disequilibrium insight and move on. Then as AI continues toward an economic singularity a universal dividend of $900/mo. with a debt jubilee and the end of welfare, unemployment insurance and even social security taxes would be approximately the same purchasing power  as $1500-2000/mo without such.

Reply to Billy Bonobo who correctly says were all pretending:

Precisely.  Pretend that the economy would be in a state of general equilibrium if simply left to its normal operation, pretend that most value is created by humans instead of technology, pretend that any system dominated by a monopolistic idea like Debt will ever be anything but a top down domination and manipulation by a wealthy and powerful elite…and denial that the only way to truly change that situation is to empower and set the individual economically free by balancing the paradigm of Debt with the equally powerful idea of direct individual monetary Gifting to the extent that they have a satisfactorily middle class lifestyle whether they work or not and if they have a job they have an even more abundant lifestyle.

All of that fits seamlessly within profit making systems, frees up more purchasing power from the elimination of then redundant taxation and enables the elimination of more government bureaucracy than any conservative/libertarian pundit ever realistically dreamed of doing, produces more economic democracy than any socialist pundit ever dreamed of accomplishing, enables more decentralization of the economy and the entire society than any min-archist ever realistically dreamed of accomplishing. It’s so Galtish it would blow the mind of any Randroid/Objectivist….if they would only open their mind to its actually new idea/paradigm of Gifting.

You’re all nascent Social Crediters. 🙂

Posted in response to a blog post about Euro-sceptic political victory in Denmark:

The EU Financial monopoly is dead! Long live a Direct Distributist monetary integration and evolution of profit making systems!

Joe Allen:  ?????????
Is that English as a 2nd language … ?

Me:  Just re-read it a few times, maybe even contemplate it. It’s deadly to orthodox economic thinking, but enlightening to the mind of those afflicted with homo economicus.

Joe Allen: It’s NOT Keynesian and it’s NOT Austrian, but what is it … ???

Me:  It’s the integration of a new monetary paradigm in consumer finance which enables the possibility of an economic equilibrium, balances the monopoly paradigm of Debt currently enjoyed by the business model of Finance and empowers and sets the individual economically free with a supplementary income for their entire adult life in addition to anything they may earn via work for pay. It’s a new evolutionary idea, monetary Gifting, integrated into profit making systems.

Poster: Me thinks your report that “The EU Financial monopoly is dead!” is greatly exaggerated.

Me:   Oh it’s dead alright. Dead because the general equilibrium economic theory it’s based on is false, and dead because there is no way the world economic system is not going to collapse without “a modern debt jubilee”. And then it’s also dead because with AI advancing at the pace it is there is no way there’s ever going to a period of economic stability without a universal dividend and a retail discount.

In response to a post about the idiocy and enslavement of enforced conscription:

Me:  I completely agree with your post and sentiments. But enslavement can be very subtle too. For instance, what if the the economy is unstable because a necessary aspect of how one keeps track of profitability or loss (cost accounting) has a flaw in its conventions (which is that all costs must go into price) which enforces that instability because in the normal flow of the unimpeded economic process every enterprise has and produces more total costs than labor costs/individual incomes…with which to liquidate total costs…and the only way that the system allows for more money to be created is the current endogenous process enjoyed by the business model of Finance known as Debt…which of course adds a cost to both the system and the individual? Would that system be enslaving to businesses other than Finance and to the individuals living in that system?

Posted in response to a blog entry mentioning the elimination of jobs by AI:

Yes, except we are also definitely going to need the second mechanism of Social Credit along with a BIG (basic income guarantee). That mechanism is the compensated retail discount and its purpose is the mathematically equate prices and actually available incomes to liquidate them. Why is this necessary? Because if you don’t have it many businesses will just raise their prices and inflation will continue. With the compensated retail discount participating merchants will decide their competitive price and then apply the discount which is based on the total cost of what was purchased for say the last two weeks and the total costs of producing what was actually produced for the same period of time. This eliminates the possibility of inflation and actually opens the door to faster and greater price reduction as innovation and AI continue their effects on productivity and aggregate demand. The entirety of the merchant’s discounts to consumers are rebated back to them which increases their profit margin without having to access nearly as much normal additional finance. As priorly stated it is applied only after the merchant has discovered their best price so it is not in any way manipulative or intrusive on that process. It’s a completely pro-active win-win policy for businesses and consumers….and equilibrates a system which inherently creates less individual incomes than total costs and prices and so accomplishes the “holy grail” of economic theory and policies….a stable equilibrium. As stated many times on here it also accomplishes more governmental and bureaucratic dismantlement, more economic democracy, more tax cuts and more individual economic freedom than any pundit or theorist on the left or right has ever imagined or dreamed of. Think a new thought. It’s way overdue on both the left and right.

Another post to Mish Shedlock’s blog regarding the economic effects of robotics and AI: The logics of both profit making systems and innovation, particularly AI, are efficiency. Robotics is going to happen and it will become more and more economically disruptive. Capitalism which is more about power and control than even profit will have to evolve and become Distributism which is a much more integrated, humane and workable profit making system.  All of the theorists on both the left and right will just have learn to think a new thought and accept that. The future belongs to the open minded, more intellectually and philosophically nimble and more ethical. The orthodox, rigid and irrationally obstructive will just have to eat some humble pie when those changes become apparent to everyone including even themselves.

Posted in response to a poster saying “all costs are labor costs”:

berserkerscientist: All costs are labour costs. People aren’t burning money, so eventually, the cost of something goes into someone’s hands.

Me: You are obviously not a cost accountant who accounts for capital equipment and any of the other costs of a business including the replacement of said capital equipment. Moment to moment and hence dynamically the rate of flow of total costs exceeds the rate of flow of total individual incomes, i.e. labor costs.  And “eventually” never actually occurs when each moment has this scarcity ratio between costs and individual incomes. What does occur, seeings how our money is endogenously created by the Banks, is continuous borrowing which gives the illusion that the system is stable and tends toward an equilibrium…when it is actually continuously in a state of cost and income disequilibrium and borrowing of course incurs an additional cost to either the business or the individual and hence the entire system that must be passed on to the consumer…who already has a scarcity of income with which to liquidate all costs/prices. So there you have it, the social credit insight that every general equilibrium theorist misses and even disequilibrium theorists like Steve Keen are groping for as the underlying cause of our economic instability.

berserkerscientist:  berserkerscientist: Name one product or service that isn’t the result of labour. If the timing belt breaks on your car, you need to buy a belt and have someone install it. Someone made the belt. Someone made the plastic in the belt. Someone pumped and refined the oil in that made the plastic. And so on. Labour is the only cost there is.

Me:  Orthodoxy, mistaken orthodoxy. Businesses must replace capital equipment…that has already been paid for in its initial financial outlay…and yet there is no additional income created with which to liquidate those replacement costs and all other costs that the business must recoup. Hence these additional costs pass over into future productive and financial cycles building up until they destabilize the system. Continuous borrowing and/or (inadequate) Keynesian stimulus, which is necessary to keep the system from rapidly falling into a deflationary spiral, merely obscures and palliates the problem. To actually solve it moment to moment a direct supplementary income and a discount to retail prices is necessary.

berserkerscientist:  Actually, it is the total opposite of what you think. The B costs are actually paid before the A costs. Think about it. If you have a lawn mowing business, do you open and then buy the lawn mowers? Of course not. So the B costs are already in the system. In fact, your first customer might be the guy who sold you the lawn mower.

Me:  When a cost is incurred does not matter in the circular flow of the economy….only that costs build up and become “unrepayable”….which as pointed out by me above….does occur.

Me:  Excellent video. Every economic theorist and every economic pundit is a nascent social crediter. Oh, and by the way I think that understanding how technology is created and works is essential to the future because what if a disaster of some sort destroys technology or its energy source. Also, I believe that maintaining the culture of employment and even hand made manufacturing is important simply as a grounding mechanism for humanity….it’s just that its economic impact will be nil. Humanity has a bright future if it thinks through its current hypnotization by Finance and the ideology of homo economicus, after all:

“Systems were made for men, and not men for systems, and the interest of man which is self-development, is above all systems, whether theological, political or economic.”  C. H. Douglas