A + B and Debt Deflation/The Systemic Necessity To Continually Borrow: The Same Insight Derived From The Microeconomic and Macroeconomic Perspectives

C. H. Douglas’ A + B Theorem (A as a flow will not pay for A + B as flows) derived from his empirical cost accounting studies of commercial agents was stated as “The rate of flow of total costs/prices exceeds the rate of flow of total individual incomes. This made him the first disequilibrium theorist.

Steve Keen’s macro-economic insight that continual private borrowing even at 0% interest eventually overwhelms the ability to service such debt build up, and that when the rate of debt creation turns downward a recession is the inevitable result ….unless of course one just keeps on borrowing….until an event like the GFC in 2008 occurs. In other words the system is unstably in a continual state of financial disequilibrium palliated for a season until it collapses into recession or depression.

And both of them consequently recommended policies to deal with the continual debt build up. Keen by his own admission (and recognizing the same of economists in general) not being educated about double entry bookkeeping, in less specific and effective policies than Douglas who was very well grounded in the discipline and so suggested an ongoing dividend and a discount/rebate policy at retail sale that would be recorded and paid back within that digital/debit/credit format.

Douglas perhaps did not have quite as clear of an understanding of quantum physics and the laws of thermo-dynamics as Keen, as they were only recently discovered, hence he tended toward equilibrium in his policies somewhat more than he should have. Keen despite being aware of these has not recognized the necessity that policies reflect the very disequilibrium he espouses as economic and financial reality.

I have recognized such policy necessity and so I advocate the inversion of Douglas’ monetary scarcity ratio above (inversion being one of the signatures of paradigm change) i.e. the rate of flow of total individual income must exceed the rate of flow of total costs/prices which I refer to as “the higher disequilibrium”.

Douglas was aware of the concept of trinity and how it was reflected throughout government, society and religion. Keen recognizes the same concept in the Hegelian dialectic. Neither was/is aware of the extended and deepened concept of Trinity-Unity-Oneness-Wholeness-Consciousness-Process which I have recognized and done an exegesis of, as well as recognized that this concept/experience pointed at by all of the world’s major wisdom traditions and variously called satori-kensho, samadhi, atonement or Grace….is the concept behind the new monetary and economic paradigm, i.e. Grace as in Monetary Gifting. Furthermore I have recognized that the Trinity-Process concept characterizes both the scientific method and the mental discipline known as Wisdom and formulated them thusly:

Scientific Method  [ Hypothesis  <–>  (true x false)  ]

Wisdom          [ (perspective truth x opposing perspective truth)  <–>  Greater truth ]

Science is a trinity-fragmenting-temporal-physical data truth discerning-process.

Wisdom is  the exact trinity-unity-oneness-wholeness-consciousness-process.

They are complementary and yet hierarchical as science and the scientific method reside entirely within the discipline of Wisdom by virtue of its nature and description.




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