RL: When I was a young history professor my mentor told me, “stop reading, do some out of the window research,” meaning sit in your chair gazing out the window and think about the meaning of what you have read.
Me: Excellent suggestion! What we need is leisure which is self determined attentive activity…NOT idleness, sloth etc.
Leisure collectively would get us a lot more things like art, innovation, in all likelihood scientific breakthrough, with a modicum of enablement and encouragement a chance at developing a culture of contemplation and a load of other positive human fruits that might help us express our actual species designation of homo sapiens, i.e. wise and discerning man…instead of the failed and enforced experiment of homo economicus.
And a paradigm change in the economic and monetary system could make leisure and its fruits a virtual fait accompli.
I1: As a long-time business manager and consultant for architectural and engineering firms, one of my commissions had been to design a cost accounting and project budgeting system for A&Es. I had sat in one client’s main drafting room, gazing out the window and daydreaming about various approaches, all day long, day after day. Hadn’t yet written down a thing. Part of the daydreaming even involved reflecting on one of George Lucas’s movies, which gave me an idea about devising a system of predictive project budgeting that helped control costs and raise returns, and that is still in use.
Me: Yes, or as Whitman wrote: “I loaf and invite my soul.”
S7: A curious thing. The stories we tell about ‘loafing and souling’ are remarkably un-compelling to others. The essence is the experience. Which reminds me of John Keats’s ‘negative capability’ – what he surmised was the essence of the poet’s task, to enter into/absorb others’ experiences and open them up to others.
Me: Yes, the internal conscious experience of fully comprehending a new paradigm as the new single concept that entirely fits within and yet transcends the current old paradigm’s primacy….is an “Ah ha!” cognitive experience, not just a data point, theory or even philosophy all of which are merely intellectual modes and methods that can leave one staring right at the new paradigm…but not fully comprehending its significance.
And not seeing that…is also a major reason why the various heterodox researchers do not seem to be able/willing to unite even with themselves…let alone unite under a genuine new paradigm…which again, is a tremendously clarifying, unitary and focusing “thing”.
I1: Insights come from everywhere, huh!
Me: Relatively small, fragmentary and incremental insights come from evidence and logic and science. Huge insights and progress come from new paradigm perception and then aligning policy with it. And historically that perception involves using integrative mental disciplines other than mere science and other reductionist methods. Why fight rapid progress or refuse to utilize history and those other methods?
MM: I believe in the necessity and dignity of work, so long as it gets a minimum wage (the miniumum required to keep you alive based on notion of universal human rights. Everyone has a right to a living or minimum wage–enough so you can make to to work again tomorrow. All HuMans are equal but some are more equal than others—so some people get more than the minimum—they get the maximum, or the 1% percentile. . )
This debate occurs between advocates of a UBI and MMT people who want ‘a universal job guarantee’ . MMT people feel strongly about poverty, but dont believe people should just get free stuff–you should work like MMT people do –eg give a speech at a conference. Few people are competent to do that, so instead the guaranteed jobs might instead be working on the plantations owned by MMT’ers. They’ll prasie you too–benevolant masters.
Me: Constructive purpose is the human necessity. Work for pay AKA employment is a very small subset of possible such purposes. MMT has the mechanics of money creation correct, but its stance on employment still resides largely within the current paradigm of Debt Only. This is evidenced by some of its advocates’ disparaging of a UBI/universal dividend. Of course their advocacy of a job guarantee could easily fit within the new paradigm of Monetary Gifting, but rejection of the direct gift of UBI/UD betrays that they haven’t fully crossed over into visualizing the new paradigm.
Me: Fully consciously conceiving and perceiving the wholeness, significance and comprehensiveness of the pattern that is a paradigm requires a mental discipline inclusive of, but epistemologically larger than science. The reason for this? A paradigm is a new conscious realization within oneself. It’s not just a different idea alone, (novelty) a new slant on old ideas/the old paradigm (reform) a new organization of factors (theory) or even a new organization of ideas (philosophy). It is not just science applied, which routinely has become a mental discipline that not only does not include consciousness….but rejects it.
Thus it has become a stumbling block, not the otherwise useful tool that has enabled a great deal of temporal, but now only temporal progress….especially when in the present case in economics and money systems, a new paradigm….the essential component of which is a new conscious personal realization….has become necessary.
Wisdom and its tools is the necessary mental discipline to remedy science’s shortcomings all the while including science’s tools as well. The insights of the world’s major wisdom traditions and their disciplines/techniques were the science and scientists of their day. An excellent example of this is the zen Buddhist tool of giving the new/overly glib novitiate a koan which is a question that the rational mind cannot resolve…..and yet intensively meditated upon often results in a new insight of wholeness, oneness/significance and comprehensiveness…in other words the definition and all of the essential component parts of a paradigm…including personal consciousness.
Science since approximately the 14th century has increasingly dominated consciousness and set before us great productivity and insight into the physical universe only…..or so orthodox science assumes.
Science can once again become Wisdom and instead of being a stumbling block to it, enable paradigm perception at a time when it is absolutely necessary….for further progress.
JK: One of the things I think you’re missing, Craig, is the fact that a household’s purchasing power is not automatically increased if/when it acquires a certain quantity of money.
It may, but it may not. It depends on if the increase in possessed money ends up improving that household’s ranking within the hierarchy of all household’s disposable dollars/pounds/euros.
This is because purchasing power in market economies is not determined by how much money you have; it is determined by how much money you have compared to everyone else.
See my comment above which begins, “Hmm…” for an elaboration of this very important point.
Me: Purchasing power is actually determined at the point of retail sale….for everyone. Why? Because that is where all costs and so prices are terminally summed (except perhaps in a few basically non-relevant and/or easily remediable instances). This is the single stable datum of the micro-economy and if the monetary policy of a 50% discount/rebate were implemented at that point…everyone’s purchasing power would be doubled….it’s that simple and elegant….like all paradigm changes and their very expression are. Paradigms are the singular stable datums within the flux of complexity.
JK: Au contraire…
If, for example, a country’s monetary policy was to simply “print up” and distribute a doubling of every income earner’s gross salary, do you believe that such an initiative would double every earner’s purchasing power?
In an economy that is already experiencing full-employment, such an initiative would not increase anyone’spurchasing power. This, because there would be no increase in the actual goods and services that people would be able to buy.
Not being able to buy any more real stuff (because the economy is already producing as much as it can) means no improvement in actual purchasing power is possible, no matter how many dollars/pounds/euros you throw at them.
Now if a single individual were to see her disposable income doubled by a gift from the government, then yes, her actual purchasing power would increase dramatically because her ranking within the hierarchy of all disposable incomes would have increased dramatically.
She would then be able to outbid the many who did not get the same income boost that she got, for some of the luxury items she wants to buy, but could not afford previously.
But if everyone gets the same gift, then none of them is going to see an improvement in their purchasing power relative to each other. It’s really a very important, albeit subtle, point that you appear not to be fully aware of.
I haven’t read all of your arguments, but I get the impression that you have mostly “explained away” the very real phenomenon of inflation, and do not acknowledge the very real effects it has on actual purchasing power in economies that use fiat money.
Something to think about…
Me: The policy I described is not a doubling of individual income/money but rather, due to it being a discount of 50% at retail sale which again is the terminal summing of costs/prices as well as the terminal end of the economic process where production becomes consumption it would automatically double every consumer’s purchasing power….not their nominal amount of money. You are missing the significance of the reciprocality of the discount/rebate as well as the place and time of the policy’s implementation. The above policy would do what most consider impossible, that is integrating price deflation painlessly and beneficially into profit making economic systems. It is actually an integration of Keynesian and Austrian economic intentions. Curiously I’ve presented this policy and that fact many times to both Keynesians and Austrians and virtually none of them seems to get it. They miss/refuse to look at the where and why of the policy’s implementation. That’s the power of orthodoxy to blind and to prevent one from even looking.
Paradigms are incredibly powerful, but there is still no end to history or to the other intentionedness/anti-social intentions of some so a new paradigm still requires real time regulation as well, but once people begin to see the obvious benefits of the new paradigm there’s no going back to the old. That has always been the case historically with new paradigms.
Sorry, I don’t actually see any significance in “purchasing power relative to each other” except perhaps in the case of the distribution of an equal universal dividend to everyone 18 years of age and older which is another policy that aligns with the new paradigm of monetary gifting. In that case a very wealthy individual’s purchasing power would not be increased nearly as much as a middle class individual’s income. But I don’t consider that significant either. It’s like the line from Max Ehrmann’s Desiderata: “Do not compare yourself to others you may become vain or bitter.”
JK: I’m trying to understand the flow of money under your plan, Craig.
Am I correct in assuming that it is the government which will be sending money gifts to corporations and other businesses, to allow them to cover their costs and intended profits, while at the same time reducing sale prices by 50%?
If so, let’s consider some of the immediate effects.
Are you able see that giving business owners money to reduce their prices by 50% generates the same money flow as simply giving consumers enough money to cover half of the cost of all of their purchases? Show me the receipt, I’ll send a check for half of what you spent.
If a consumer normally spends all of his income, this gift from the government will cut the cost of all of his normal purchases in half. So if his income does not change, he will find himself in possession of an additional amount of money that is equal to half of his normal take home pay.
He could spend this or save it, but the bottom line is that as a result of the government’s gifting program, all those who spend most of their paychecks from week to week will have gotten a big chunk of money from the government that is equivalent to a 50% increase in his disposable income.
Normally, when businesses see that their buyers have all gotten huge chunks of money to spend, they will quite naturally raise their prices as high as they can, to absorb as much of those extra dollars out there as they can.
Would your gifting program include a law which forbids businesses from raising their prices whenever they think they can get a higher price? The “purchasing power” is there. Why shouldn’t they raise their prices if consumers are willing to pay them (because they can afford to)?
Whether you realize it or not, the end result is going to be a dramatic increase in inflation, unless you enact “price controls” which would be the government’s method of setting prices (if for no other reason than to limit the increasing amount of money that they’d have to shell out once prices started to go up.
Simply lowering the initial price by 50% does not in any way eliminate the incentive that businesses have to thereafter raise prices as high as they can, to absorb all of the extra dollars that are out there, if people are willing to pay them (and they would, cuz they’ve got the money to do so)
Me: A monetary authority will reciprocate the gift the retailer gave to the consumer which means there’s actually no more money involved than if the consumer actually had that much money to spend. As Steve Keen says capitalist economies are demand constrained. So lets un-constrain them.
You’re quite right that businesses before retail sale could raise their prices, but as I think I mentioned before they probably couldn’t raise them much more than a few percentage points. Purchasing agents aren’t stupid after all, competition still is in play in the micro-economy and collusion by multiple agents of course is in restraint of trade. Policies and regulations could also be applied that would re-inforce and are aligned with Gifting that would encourage the valid micro-economic virtue of competition and cost cutting like taxing any price increase that could not be rigorously justified as due to valid and honest cost increases by like 100-150%. You could also incentivize competition by corporations that kept their prices the same or even lowered them by Gifting them 1% of their net monthly profits. And if a business was recalcitrant despite all of the “knock-on” benefits to them from these policies (which will follow) then you could just not allow them to participate in the discount/rebate policy…and that would of course mean bye-bye business.
Just hire someone like Bill Black Inc. to do forensic accounting on those enterprises who despite these policies that create a free flowing prosperous economy for all agents, due to an adequate universal dividend makes immediately redundant and eliminate-able any transfer taxes that both employers and employees pay. It could also probably quite quickly do the same for social security taxes which could be fazed out with a sufficient and continually rising universal dividend as innovation and AI erode aggregate demand. For that matter who needs much or any capital gains taxation (except for the recalcitrants and anti-social enterprises who aren’t satisfied with all of these benefits)? Re-distributive taxation is so old paradigm. But brutally effective sin taxation aligns not only with Gifting but also with the new zeitgeist/ethic of the natural philosophical concept of sovereignly powerful but benevolent grace/graciousness which in turn reflects the individual’s
highest mental potentiality. Integrity matters. As above, so below, as with the person, so with the system. And when inevitably human frailty or flaw occurs…economic rationality and justice.
If there’s one thing we’ve learned from the terminally economically orthodox and third rate populist intellect Trump, demagoging mere morality works. When everyone and all businesses obviously benefit from these new paradigm policies and integratively accomplish the best of the agendas of both the left and the right ….messing with them by the greedy and/or financially seditious would be fairly easy to identify and point the finger at, even if it takes a little initial thinking through. Helping the individual and participating enterprise is the key. Look at the partial reform of social security. 80 plus years of regressive railing hasn’t been able to repeal it. With the actual paradigm change policies of a universal dividend and a 50% retail discount/rebate….you’ll be able to quickly convert even the hardened conservative or libertarian theorist.
There are also well thought through rebuttals to all of the “old saws” that everyone always brings up like “everyone will become lazy etc. etc. etc.
A new paradigm transforms and broadens thinking.