Me: Don’t get me wrong Steve Keen’s work is brilliant and inconoclastically insightful, but it’s all been a rediscovery of C. H. Douglas’s insights made before the second world war including his now also correct emphasis on an energy and technology theory of value which was summed up by Douglas’s Cultural Heritage theory of value of productive capabilities built up over the last couple of centuries. My soon to be published book Wisdomics-Giftonomics: The Integrative Theory of The New Monetary Paradigm, extends and expands upon Douglas’s theory of Social Credit and integrates all of the coalescing thinking and incomplete policy recommendations of Keen, Michael Hudson, Ellen Brown’s Public Banking and MMT.
CG: I think free income for no labour is a communist mistake, not justified by Keen’s energy argument, and it is like the social credit nonsense mentioned by Steve Hummel in another comment at Revengeance Economics (same video). Low interest rates rewarded financiers with banking fee strategies for no labour and socialist give aways are financed for no labour.
Me: I must have rebutted the confused idea that Social Credit was socialism a thousand times over the last several years on the internet. Social Crediters were in fact more opposed to socialism and socialist re-distributive taxation than traditional capitalists were back in its early days, and vice versa socialists were just as opposed to Social Credit. My book Wisdomics-Giftonomics is actually a further extension of Social Credit and an integration of traditional capitalist thinking and Austrian economic desire for price deflation. Considering the incredibly destructive history of the conflicts between capitalism, socialism and populist/fascist thinking over the last century, and as disintegrated as profit making systems and western civilization have become you’d think a genuine third and integrated alternative that would utterly rejuvenate profit making systems and double individual purchasing power via price deflation would be welcomed. Only the arrogance of orthodox thinking prevents such solutions from being recognized.
CG: Social Credit says freely given credits must be handed to consumers to counter a theoretical deficiency in demand in the economy. In that way it resembles communism and Steve Keen’s idea of free income also resembles communism. Social Credit is based on a fallacy about banking and money supply.
Me: And what might that banking and money supply fallacy be?
CG: The resemblance of Social Credit to communism and Steve Keen’s basic income to communism is justified. All three are income without market priced labour in exchange for that income.
Me: Theorists on the left and right can regurgitate orthodoxy for another zillion years or take an honest look at actual aggregate costs and the aggregative insights to be found in the day to day operations of commerce.
300-400 years ago when the costs of technology and a multifaceted productive process were largely absent the economy could be close to an equilibrium of costs and prices albeit at the “cost” of being incredibly less productive compared to today. Now all of those ADDITIONAL flow of costs must be factored into price by cost accounting convention. Depreciation allowances are correctly given to businesses otherwise no enterprise would be viable now. However, no additional individual income is provided to liquidate those costs and so the the system is hamstrung by the fact that the rate of flow of total costs/prices always tends to exceed the rate of flow of total individual incomes simultaneously produced. Keen has basically re-discovered this fact by macro-economically observing that whenever the rate of creation of new credit/debt slows marks the start of a recession.
And so you see that in fact the only truly ECONOMICALLY RATIONAL action to be taken is a continuing flow of ADDITIONAL income directly and/or reciprocally distributed to both the individual and enterprise…..so that systemic free flowingness may be attained/maintained.