DT: I entirely agree with what you say here about Steve Keen. The problem is to motivate those able to bring it about. Steve’s hopeful conclusion about the influence of central bankers at the end of the recent IIPP conference (https://www.youtube.com/watch?v=sUEWLqY9DEQ) seems to be close to my argument for converting the shepherds: the sheep will follow them.
Me: Keen has cognited on a systemic macro-economic truth, i.e. modern economies do not tend toward equilibrium, and has been trying to craft a theory regarding it. The problem is a theory is not up to resolving what is necessary. Keen talks about Copernican paradigm change, but he’s an iconoclast, a reductionistic mindset. You have to have the correct mindset skills to discover and fully perceive the effects of a new paradigm, i.e. an integrative mindset because a paradigm is a single concept…that fits into, saturates and effects every factor in the area in which it is applied. In other words It’s the definition of a paradox itself in that it is a single concept that describes, defines and effects an entire PATTERN, and of course a new paradigm is a new one of these. Its Agriculture. It’s Helio-Centrism. It’s Direct and Reciprocal Monetary Gifting. It’s Banking/Financial Inclusion Within the Economic Cycle That Terminally Ends at Retail Sale.
The advantage of being consciously aware of a paradigm is that policies aligned with it are incredibly powerful because they all work together within the new pattern, and if you have a policy that is actually the expression of the new paradigm itself it’s an utterly key and powerful one and contains within it a key new discovery that resolves one of the deep and major problems that the old paradigm couldn’t.
Keen often criticizes DSGE because their models do not include money, debt or banks, and he’s absolutely correct in doing so. However, not being aware of what the new monetary paradigm is and taking a macro perspective only because he has written off the micro-economy as a place for insight he misses the aggregative and integrative point in the micro economy that is the point of retail sale. Here is what I posted to him regarding this on his Patreon page:
“For instance, macro-economics is about aggregates. The point of retail sale is the terminal end of the entire micro-foundational economic process and also the aggregative total of all costs and prices for any item or service. Hence it’s an integrative point for both macro and micro economics, and for the pivotal monetary and economic policy of a 50% discount/rebate at the point of retail sale. Unfortunately none of neo-classical, Austrian or heterodox macro economists see this because the first two are deluded by DSGE and thus do not see that the economic system is demand constrained and the heterodox have written off microfoundations altogether as an area for insight. However, simply looking at the point and effect of such a policy enables one to see that a 50% discount/rebate doubles everyone’s purchasing power, completely eliminates any possibility of consumer price inflation and almost magically integrates the Austrian dream of price deflation painlessly and beneficially into profit making systems….and by the way breaks up Finance’s monopolistic paradigm of Debt Only as a kicker. This would stabilize the consumer economy like no other policy suggested by pols or econs on the left and right since forever, and if we made Banking/Finance a retail business model instead of the monstrously dominating money creating one it has been for the last 5000 years…humanity might get somewhere other than the muddle of the paradigm of Debt Only, and the failed and belittling experiment of homo economicus.”
You can read about the new paradigms and policies of same soon in my book Wisdomics-Giftonomics and see some of the thinking behind it on my blog wisdomicsblog.com
DT: Craig, just because Steve Keen has become justifiably famous for his “Debunking Economics” doesn’t mean he is a mere iconoclast. You have a point about his not having producted an alternative economics paradigm, but he has grasped the more fundamental and Copernican one of not mistaking appearances and lies for truth.
As I have repeatedly said Keen is brilliant, but you have to have, if even by the luck of the draw or some extraneous early life decision, the right mindset tools to ACTUALLY look at and BE WILLING to see a new paradigm…or even fully recognize the current/old one.
One needs a fundamental curiosity or intention, a willingness to (momentarily) suspend logic, to be comfortable with ambiguity/uncertainty, to prize integration over opinion…and solutions over problems, to build and visualize as opposed to merely pull apart, to recognize that real progress is both transcendence of and yet inclusion of the old, to see that obsessive duality is not ultimate reality, but rather completely integrated duality within an integrative trinity-unity-greater oneness.
And then be willing and able to consolidate all of that mental complexity and mental virtuousness by deciphering a key concept and/or concepts that apply to everything and resolve the old paradigm’s apparently unresolvable problem(s).
So it’s an elegant and yet simple concept/realization.
JK: “While I do not feel antipathy toward markets in the most general sense, I do feel antipathy toward certain markets in particular: the banking and finance industries, for example, stand out as morally bankrupt institutions that should be essentially legislated out of existence.
Yes, I hate the financial services sector of the economy (we only hate that which we fear) but I view financial markets as grotesque cancers which developed and thrived on top of our economy’s basic market structure and not as the defining essence of what the marketplace overall has to offer us.”
Me: I completely agree with you about banking and finance, and your moral compass in this area is spot on. Finance has been the problematic business model for the last 5000 years as David Graeber has shown us. The biggest reason for this is that for large assets like homes, autos and speculative leveraged stock purchases private Finance is parasitic, destabilizing, dominating and extremely expensive additional cost that is post retail sale which (retail sale) is the terminal end of the entire ACTUALLY productive/economic system.
We’re fooling ourselves if we do not see that the business model of Finance/Financial Services must therefore become merely another mark up retail type business model. And that is why the new economic paradigm is Integral Inclusion of All Business Models Within the Process That Ends At Retail Sale. Combine this with the new monetary paradigm of Direct and Reciprocal Monetary Gifting and it becomes apparent that Finance as it is now must surrender its money creating power to a national monetary authority with the sole ability to create all new credit and that also has the specific mandated policies that express the new paradigm of Gifting.