Me: I got banned here after repeatedly complimenting Dr. Keen and agreeing with everything he had re-discovered about the disequilibrated state of modern economies. Re-check the threads and it will confirm that this is true. If I mentioned that there were flows of empirical data and their economic significance he was still not considering, others were annoyed about that and complained and Dr. Keen in his haste (I understand he’s a busy person) failed to read and consider all of this then it’s actually just a misunderstanding. I think facts, intellectual curiosity and discourse should trump human emotional reaction as I’m sure Dr Keen does. So perhaps each of us should avoid invective and accusation. After all if there is one thing less accurate than neo-liberal economic theory it is long distance internet psycho-analysis.
TW: I agree with Bhaskara. Haven’t heard anyone agreeing with the self styled Copernicus.
Me: Okay. Do you agree that “a modern debt jubilee” and QE directly to the individual are policies that reflect monetary grace as in gifting?
TW: Propaganda. Bringing debt and the ability to pay in line isn’t gifts.
Me: Of course it’s not propaganda. If the economic system itself is inherently cost inflationary by the correct and universally applied cost accounting convention that all costs must go into price, that is the FLOW of total individual incomes (total monetary financing) is exceeded by the FLOW of total costs including the ADDITIONAL costs of waste, obsolescence and depreciation plus the ever increasing growth of tangible capital….then the only and best ways to stabilize such a system is to COSTLESSLY increase individual incomes with a direct gift of income and COSTLESSLY reduce prices where no economic agent is penalized, namely the point of retail sale which is where every item’s total costs are terminally summed and ended, and production…..has become consumption.
These direct policies by the way correct the glaringly contradictory and unethically dominating virtual monopoly on credit creation that the business model of Finance enjoys (like 97+% of it) that governmental stimulus, which is not direct, and hence only palliates and leaves unresolved both the systemic problem and the unethical financial dominance.
Note: This does not mean I’m for the non-integrative idiocy of austerity. I’m all for intelligent governmental spending, but lets also solve the actual and deepest, currently largely unperceived, problem.
Finally, a debt jubilee IS a gift as is QE directly to the individual. Hence they are correct, if fragmented and incomplete policy. If one doesn’t see that….I’m sorry, they’re just not looking at it. And if I’m banned for speaking that truth….so be it.
TW: When debt is written down in corporate bankruptcy proceedings no one ever calls it gifts. Bringing debt in line with ability to pay is not gifts. The agents getting debt write downs still have to pay. It isn’t getting out of paying, it’s getting the debts in line with ability to pay. They are not receiving something for nothing, it’s not gifts. Calling it gifts is propaganda, it’s a misrepresentation.
“the correct and universally applied cost accounting convention that all costs must go into price, ”
Producers that do not control the price of produced commodities cannot guarantee that they will be able to recover their costs. Commodity markets show this. It is in the interest of producers that they recover their costs, but they cannot guarantee it. And so there is no such convention. Businesses go belly up, if they can’t cover their costs, but they cannot guarantee they will be able to cover them.
Me: Both of your examples are anecdotal/micro-economic observations. I’m talking about macro-economic realities and basic accounting rules/conventions. No one is talking about guaranteeing a business be able to cover its costs. I am talking about making commercial survival somewhat less difficult and onerous….especially for new business start ups, and why not? Enforced austerity is irrationally authoritarian and punitive, and only benefits Finance who inherits assets, and encourages corporate giantism and oligarchy.
I also never said the bankruptcy process was gifting. A debt jubilee where individuals are GIVEN money, even with the proviso that they pay down debt with it…is monetary grace as in Gifting. A fully fleshed out philosophical and linguistic concept of grace would be a consciousness raising experience for everyone, especially economists, and it IS the basic concept upon which a new and modern economic philosophy needs to be built which Dr. Keen himself has called for.
TW: “Buy now and receive absolutely free, your free gift!” Children know better. If you have to pay, it’s not a gift.
Among the ‘numerous additional costs’ destabilizing the economy, you keep insisting must be in price, are monopoly charges, rent extraction, evaluation fraud, spurious fees, tolls, charges, penalties, that have no counterpart in the necessary costs of production, transport, distribution.. Cutting these down by jubilee or QE is not a gift. As if returning the proceeds of fraud back to the victims is a gift. Of course it’s propaganda to say that debt jubilee is a gift.
The monopoly fees, evaluation fraud, rent extraction, spurious fees tolls charges penalties, etc are why your macro thingy is full of holes. They aren’t necessary costs that have to be in price. Cutting these down is not a gift.
Me: I’m sorry, but you’re not following me here so far as the difference between micro-economic data (your examples) and macro-economic, i.e. systemic factors. And many of your examples are either irrelevant or actually make my point. For instance “monopoly fees, evaluation fraud, rent extraction, spurious fees tolls charges penalties, etc” are simply costs. They therefore are included as a subset of total costs. Total costs as a flow is a macro-economic factor. The individual costs you refer to are micro-economic factors because they are not continual or built into the system. Dr. Keen correctly states that interest (a single additional and continual cost factor) can be paid over time….except it requires continual borrowing and hence the build up of debt. But Interest is not the only additional flow of built in systemic costs. All of the other systemically built in flows of additional costs (waste, obsolescence, depreciation, the costs associated with re-investment of savings-profit) make the system cost inflationary and hence unstable….without monetary and/or price Gifting. Minsky and Dr. Keen are correct that the fundamental direction of capitalism is up, and the deepest reason for this is the cost inflationary NATURE of profit making systems. However, why should we be hung up on capitalism….when the profit making system of Monetary Distributism/Gracenomics/Wisdomics/Social Credit eliminates that tendency? And of course costless Gifting, Monetary Distributism/Gracenomics/Wisdomics/Social Credit makes the system actually work for the individual and for all business models…not just Finance. A nice “little” additional and ethical benefit.
TW: You don’t seem to realize the enormity of your task, you’re in an impossible position. You are trying to sell something, and I’m not. You’re failing to prove any of your points.
Me: “You are trying to sell something, and I’m not.”
Incorrect. You’re selling a current orthodoxy. I’m selling looking at an acknowledged accounting convention and an unstable economic history….because theorists have not recognized the flaw in it and corrected the instability it causes with valid and workable economic polices like a universal dividend and a rebated back to merchants discount to consumers at point of retail sale.
Isn’t calling someone a propagandist ad hominem? Especially someone who is espousing a mere economic orthodoxy of “only this for that” when Dr. Keen’s call for “a modern debt jubilee” seems to be more aligned with my perspective of a new philosophy and policies of monetary grace as in gifting.
Humanistic psychologists and sages down through history were correct when they recognized that it is hard to perceive and make fully real a new idea/paradigm unless and until one actually lets it into their mind where that process actually begins.
TW: twowithinthreethatisone does not have a “real a new idea/paradigm” because none of his assertions are true. They cannot be demonstrated to be true, no data is ever supplied. Every one of them falls apart on inspection. There are no references for them, no supporting data, and twowithinthreethatisone won’t provide any references.
Me: Actually I don’t need to reference any data, especially data that would probably only be endlessly and obsessively contended, because a convention….is a universally valid and applied rule.
So just to follow up. I don’t tilt at windmills like pointing at fraudulent or unnecessary costs that there is often no way one can prior-ly perceive or effectively police except to make modern markets, which are inherently cost inflationary actually work and so true costs become more apparent. Rather I advocate accepting everything that Dr. Keen has shown to be invalid about neo-liberal economic theory AND a new economic paradigm whose policies will enable the mere “this for that” current paradigm that apparently you and nearly everyone is still stuck in….to actually and stably work. That is innovative and integrative. Think a new thought. It’s healthy and stimulating, and as I’m sure Dr. Keen would agree is extremely hard for the orthodox to even countenance let alone actually do.
Finally, iconoclasm is a great value, but good science is always open to new ideas and factors, and the signature of scientific breakthroughs has always been a valid integration of the scientific method and an aspect of consciousness like curiosity, the ability to visualize and/or the ethical impulse that actually arises from self awareness and hence the realization that others are essentially aware also and so worthy of every right and consideration as oneself. So let us visualize such a valid, workable and ethical economic philosophy and its reflective policies.
Me: As Minsky and Dr. Keen say: “The fundamental direction of capitalism is up.” What that means is businesses will try to price whatever the market will bear….and ALSO that the lower bound of cost, especially in an increasingly FIXED capital intensive modern economy, will dynamically be upward as well…because the cost accounting convention that all costs must go into price is economically valid and thus the lower bound of costs/prices will always be increasing as well.
TW: blah, blah, blah, you cite no references
Me: Actually a lot of heat but no light. The cost accounting convention I cite that all costs must go into price is an actual one. Go to any accountant and he will confirm it that it is indeed an accounting rule. Understanding its enforcing effect and the fact that in an economy with continually increasing fixed capital costs along with depreciation and waste, the rate of flow of total costs will exceed the rate of flow total individual incomes alone should bring insight.
As I have mentioned a couple of times I agree with most if not all of Dr. Keen’s research so far as the disequilibrated nature of modern economies as well as his de-bunking of neo-liberal economics. I agree with Michael Hudson’s critiques of finance. So I cite their researches…..which simply are re-discoveries of C. H. Douglas’s theory Social Credit. So there, if you require references and citations, I cite them to confirm most of what I say.
TW: Apologies to all. I apologize to you twowithinthreethatisone, for my multiple errors. I apologize to twowithinthreethatisone, to professor Keen, and all readers (who understandably avoid my posts now) for for my mistakes and the tremendous nuisance I’ve been.
I didn’t ask an accountant, nor consult a text. I realized I don’t know what cost and price are, they are not what I think.
And I don’t understand this quote from twowithinthreethatisone five posts above: “Rather I advocate everything that Dr. Keen has shown to be invalid about neo-liberal economic theory ” To me this means twowithinthreethatisone advocates policies shown to be invalid. Now I’m thinking nothing I read means what I think.
Me: Yes, that should have been re-worded as I advocate Dr. Keen’s de-bunking of neo-liberal economics. Having said the same thing several times here and a couple of times on this thread I would have thought it would have been properly understood anyway, but score one for sarcasm and irrelevant to the discussion grammatical critique.
Seriously though, you should ask an accountant whether all costs having to go into price is a convention or not. He may not understand the economic significance of that convention just as most macro-economic theorists who Dr. Keen himself has declared could get their degree without so much as taking an elementary course in accounting probably won’t either, especially an apparently “bean counting” one like cost accounting. But sometimes the little things are actually big and the abstract trip over them.
TW: There’s no mystery here. I learned twowithinthreethatisone‘s phrase ‘convention that all cost must go into price’ ages ago, worded completely differently. So differently that twowithinthreethatisone‘s phrase is an alien construct. It is obvious why 90% complain or disagree with twowithinthreethatisone‘s posts, think it’s propaganda or are bored with them. Far from accepting twowithinthreethatisone‘s economics, I fundamentally disagree with them, now that I really know what twowithinthreethatisone is writing about, and I’m neither an Austrian, nor neo-liberal, nor technocratic. So apologies for the confusion.
Me: Okay. How was it worded?
“It is obvious why 90% complain or disagree with twowithinthreethatisone‘s posts, think it’s propaganda or are bored with them. ”
Obvious? Did you take a poll to get that conclusion, or is it simply a smear tactic meant to ostracize and induce a reaction by an understandably busy Dr. Keen? Is this a discussion or an attempt at invalidation and long distance internet psycho-analysis…which is the only thing less accurate than neo-liberal economic theory?
Let us have a discussion. So do you agree with what Dr. Keen has said about DSGE? Then we agree on much. Do you agree that a debt jubilee is a gift and so is aligned with grace as in gifting which I assert is the concept upon which a new economic philosophy and aligned policies needs to be based?