Recently, economists have been slinging invective at each other from all sides it seems, and I can see why. Macro-economists have been operating on a load of false and/or impossibly unrealistic assumptions for the last 35 years. Even Steve Keen, probably the best and most iconoclastic economist on the planet and from whom I have learned a lot about theory over the last several years, still has a foggy and incomplete concept of the necessary new monetary and economic paradigm. He and virtually everyone else also have virtually no idea how to target ongoing policies that will enable the saturation of the economy with that new paradigm. Well, it’s my turn, so here are the policies, the new paradigm, why they will work and what will be their beneficial effects for everyone and for the system as a whole.
Macro-economists are always so far off in some abstract theoretical or mathematical fugue that they fail to comprehend certain vital economic significance’s that take place continually in day to day commerce. The first of these is the fact that when a sale of anything takes place total costs for that item or service are terminally summed. The second fact is that both the pricing system and the money system are digital. In other words $10 of income will reduce $10 in prices for any product or service, and $10 in income will also eliminate $10 in debt.
The most basic purpose of production is consumption, the point of sale IS the point of consumption, and after a sale occurs…no agent can be economically harmed that cannot be readily repaired by standard business practices or legal precedents. Thus it is the perfect place to implement one of the two policies that will usher in the new economic paradigm of Direct and Reciprocal Monetary Gifting. That first policy is a relatively large percentage discount to price (say 40% or higher) by any enterprise to its consumer and that is then rebated back to the enterprise by a monetary authority specifically mandated to do so…so they (the enterprise) can be whole on their margins and overheads.
Up until this specific and generalized policy was conceived by me, price deflation could not be implemented into profit making systems without extreme pain and bankruptcy for both individuals and enterprise. With old paradigms “Weeping may endure for a night, (or for millennia) but joy cometh in the morning” with the new.
The other necessary policy is a relatively abundant universal dividend in the neighborhood of $1500 per month directly distributed to everyone 18 years of age and older in order to resolve modern technologically advancing economies’ chronic and increasing problem of lack of demand.
There are numerous economic, political and psychological benefits that “fall on” with this new paradigm and these policies being implemented that I cannot elaborate upon in this op-ed format. If The Arizona Republic would care to interview me I would be happy to present these additional things.
All the best,
Yes, I realize it’s an incomplete analysis, but letters to the editor to The Republic are required to be less than 550 words so I had to cut it short. And actually, as John Rawson has noted here many times, trying to explain A + B and the Gap is more likely to confuse the layman and invite controversy with other intentioned economists. I’ve decided the best approach is to sell both the potential of a rejuvenated civilization and the obvious self interest of the policies to both the individual and small to medium sized business person. Hence the emphasis on numbers and direct and reciprocal benefits to those constituencies. I see that Steve Keen has come around to directing his efforts more directly to students and interested parties with his Patreon campaign. I’ve been pointing out to him for years that trying to convince ego involved other intentioned academics and economists was a dead end apathy inducing effort. Monetary reform/paradigm change needs to become a mass movement. That’s the lesson to be learned from Trump and Bannonism…sans the demagoguery, chaos merchantry, 3rd rate intellectualism and buffoonery of course.