Me: So what does everyone think is/might be the new paradigm in economics? I’ve gone on record as Monetary Gifting being my assertion. C’mon give it a try, take a chance.
And by the way IMO fully recognizing the significance of retail sale as the point to implement monetary policy in the new economic paradigm is the telescope, the ellipse and cultivation of the ground type discovery that always attends, enlightens and confirms a genuine paradigm change.
RR: Thanks, but we will have to agree to disagree. You seem to be stuck on the Kuhn paradigm and not realize that the field of the history of science continues to grow. New theories are displaced in more than one way, depending on many factors, rather than following some archetypal mold. Alfred Wegener had a perfectly good theory while the old one was failing an multiple points. Nevertheless it was flatly rejected by American scientists not because Wegener’s “theory” was wrong (they never gave it an honest hearing in America from the start, except for a few) but rather because of methodological and cultural reasons. It doesn’t take a theory to beat a theory, for theories can fail miserably before a new theory emerges, and even if one is present it can be rejected because scientists are not automatons, but human beings, and science doesn’t take place in vacuum but in specific social context.
One thing that greatly clarifies even paradigms is considering the ascending scale of mental activity/epistemological awareness. We are not only approaching the necessity of a new economic and monetary paradigm, but a new zeitgeist as well. Here is that scale and the corresponding mental activity from top to bottom:
zeitgeist/ethic – self actualized knowingness
paradigm – looking in order to know while integrating both holistic and reductionistic mental modes of thought
philosophy – combining and aligning ideas
theory – combining and aligning data and factors
data – a kind of figure, figure on separate facts
This scale can also be looked at as concentric circles of mindsets with data the first such circle.
DT: Isn’t this what Steve Keen is doing at a more technical level with his ‘Minsky’ simulations?
KZ: DT, a proviso I suggest be added to your description is that scenario alternatives to Minsky need to be considered in the planning.
Me: Steve Keen is my choice of probably the best economist on the planet. Maybe co-equal with Michael Hudson. However, his Minsky software is basically “epicycle” research because it resides virtually entirely within the current paradigm of Debt Only. Yes, DSGE/Neo-classical Economics ignore/deny money, banks and debt…but factoring them correctly into theory…isn’t sufficient, and neither is one-off actions like “a modern debt jubilee”. It’s reform, it’s palliation of the actual problem, it is still hypnotization by the current paradigm. Minsky was right that modern economies are financially unstable. So how do we actually stabilize it?
Keen correctly states that whenever the rate of credit creation dips the economy will quite soon go into recession….unless (he thinks) the government injects more money and/or credit into the economy. This is basically new Keynesianism, MMT, his modern debt jubilee one-off and maybe a little QE for the People thrown in. That’s good. It’s better than the present enforced austerity and it looks some of the policies of the new paradigm straight in the face…..but it still doesn’t actually recognize the new paradigm, how it can be implemented so as to saturate the economy as the current paradigm of Debt Only has done and so replace its primacy and dominance. And because it’s only a reform instead of the paradigm change that has been needed for the last 150-200 years if not the last 5000….it will inevitably get morphed back into a tweaked DSGE/Neo-classical economics or worse just like what happened to the reform of Keynesianism….as Keen and every other heterodox economist is happy to point out.
Find the new paradigm and boldly go with it. Don’t Escape From Freedom. (Erich Fromm) Expand your mind, re-integrate your life….and enjoy!