Austrian economics whose orthodoxy, not unlike neo-classical economics’ orthodoxy, would unintentionally make the world safe for international banking…nonetheless does have truth in it which if integrated with the particles of truth in neo-classicalism (and the deletion of their separate untruths) is the basis of a potential thirdness and greater oneness of theory. Of course on a hierarchy of mental integration/understanding a theory is below both a philosophy and the perception of paradigms both current and new.
Austrian obsession with deflation as an economic virtue is flawed considering that the continual build up of public and private debt service, even if at 0%, will eventually outstrip the ability to repay it, and Neo-classical delusion that money and debt are just “a veil over barter” is equally flawed. Why? Because A as total financial outlay will not pay for A + B as in total financial outlay + the additional costs of the continual build up of debt….which with the currently enforced monopolistic paradigm of Debt Only is the only option to try (and yet still fail) to keep the system stable. The A + B theorem of C. H. Douglas was the empirical cost accounting flip side to the Debt Deflation macro perspective which Dr. Keen has brilliantly re-discovered. Both Keen and Douglas (posthumously) are deserving of Noble prizes.
Douglas in fact was more perceptive of the problem and how to solve it with policy than was Keynes because Douglas’ policies would have broken up Finance’s monopolistic paradigm of Debt Only. Hence Keynesianism became the fall back position of Finance…and we see what happened to Keynesianism…all because the deeper paradigm changing path was not chosen.
So what is the solution? It’s a new monetary paradigm of Direct and Reciprocal Monetary Gifting and a new economic paradigm of Traditionally Productive Integral Economic Inclusion Within Retail Sale, and that means the business model of Finance must become a retail business model entirely within the traditional economic process that ends at retail sale instead of the post retail sale, parasitical, utterly self serving and dominating thing it has become. That means private banks’ endogenous money creation must end and our fiat money system must have the FED/National Credit Office be the ACTUAL originator and distributor of new credit, and this credit creation must have specifically mandated policies aligned with the new paradigm of Gifting above like a rebated discount at the point of retail sale and a universal dividend. Other economic policies and regulations of finance and its enabling of many speculative idiocies are also necessary, and I have been compiling these and updating Douglas’ policies which although very insightful still had the stench of general equilibrium theory and austerity adhering to them.
Finally, as a paradigm is a much more mentally ingrained mostly unconsciously accepted pattern, much more so than just a theory, it is much more difficult to perceive. Likewise, it is always a higher integration of opposites which makes it appear illogical and absurd to most…right up until it’s recognized as the next greater truth. Further, because part and parcel of a paradigm is a new cognition (conscious recognition of a new truth for the very first time) theorists on both sides of the fracas within the old paradigm can be looking at it and even recommending policies that align with it but not seeing it in its entirety. So paradigms are interesting but tricky things.