YS: We should explain why and how human economy could have developed from a primitive gathering and hunting economy to the present complex economy.
Me: I completely agree that we need a new theory….that is truly a RADICAL paradigm shift, and by that I mean bringing fundamental assumptions into question like:
General equilibrium from a cost accounting and calculus perspective that will show that modern technologically advanced economies are inherently cost inflationary and thus impel continuous borrowing as a means to avoid recession or worse, and yet, because the current enforced paradigm of Debt Only is a continuous flow of costs…is doomed to failure without a new monetary paradigm.
The economic/productive legitimacy of the private for profit business model of finance-money creation from the fact that so much of the benefits of our modern productive system is unavailable to us except as additional costs post retail sale which is where production becomes consumption and hence is the only actual and legitimate end of the entire economic/productive process. (Note: This is not the crank assumption that interest is the be all and end all of the problem of finance-money creation as additional costs can accrue within the paradigm of Debt Only even if all such indebtedness is at 0% interest.)
YS: Craig, thank you for agreeing with the necessity of a completely new theory. Surely it requires a radical paradigm shift. But, I cannot understand what you have written at the second and third paragraphs. I understand that you have one or two problems that you want to approach but your descriptions are so abrupt and I can get no ideas on what you are thinking.
Me: Yes, thank you as well for your reply. My new theory I would call Wisdomics-Gracenomics which denotes that what economics needs is an integration of the truths and only the truths in opposing perspectives (which is the very process of wisdom itself) and those truths and relevant economic policies need to be aligned with the equally economically relevant aspects of the highest concept of wisdom as expressed in the world’s major wisdom traditions, namely grace as in: (monetary) gifting, (monetary) abundance, (monetary) directness and immediacy/nowness of monetary policy effect, thirdness greater oneness/newness which is the result of thorough and continuing integration, inversion of problematic dualities/realities, i.e. from systemic economic scarcity to abundance and from balkiness or stopped to free flowingness and lastly dynamic interactive integrative disequilibrium as opposed to static general equilibrium.
Grace is a traditionally religious/spiritual concept but I am not in any way claiming any traditionally religious/spiritual significance for it in such theory. Rather I claim that grace and its various aspects are actually the generally unperceived NATURAL/PHYSICAL/TEMPORAL reality and hence are highly relevant to human life and systems which are thoroughly embedded in the universe we all inhabit.
I claim that macro-economics suffers from excessive abstraction and a failure to look at the the digital nature and relevant economic significances to be found in double entry bookkeeping and various datums to be found in its subset cost accounting. I also claim that when those cost accounting datums are gathered and calculus applied to them it will reveal that modern economies are inherently cost inflationary because they continually produce a ratio and flow of more costs and so prices than they simultaneously produce a flow of individual incomes with which to liquidate those costs/prices, and hence the only way to resolve this most basic economic instability is to implement policies that are costless to both enterprise and the individual. Hence a new paradigm of direct and reciprocal monetary gifting policies of such amount and magnitude that they will also accomplish the effects that result and reflect the aspects of grace known as abundance, inversion of problematic dualities, dynamic interactive integrative disequilibrium and free flowingness.
Steve Keen has essentially re-discovered this monetary reality in his recognition that the moment the rate of credit increase drops the economy will enter recession, but not having a thorough understanding of accounting (a critique he himself has leveled at economists) and its digital nature in combination with recognition of the significances and policy capabilities at the ending point of the entire economic/productive process (retail sale) has also failed to craft the policies (a universal dividend combined with a discount/rebate at the point of retail sale) that will accomplish all of the signatures of a paradigm change as I have enumerated them many times here.
Also, as double entry bookkeeping is the utterly basic, integrative infrastructure upon and within which the entirety of the micro-economy operates it is exactly the tool macro-economists must re-discover and mine significances from if there is ever to be an honest and thorough understanding of its micro-foundations which as I understand it is one area you are interested in and investigating.
I’ve come to believe that the private financial/banking power of money creation is not a legitimate business model because it imposes costs post retail sale which (retail sale) is the end of the economic/truly productive process. It is also ethically problematic being the very power of business and individual survival in a monetary economy which is the economy’s actual reality and not “a veil over barter” as neo-liberal macro currently espouses. Lastly it is simply Occam’s Razor that a publicly administered banking/money creating power is simpler and more functionally possible and workable than the many private money creating entities we currently have and finally, the probably inevitable corruptibility of even a publicly administered absolute economic power like money creation would be best insured against by a concept/paradigm of grace as in benevolence.
YS: Thank you, Craig, for the explanation. It seems you are more interested in a normative reconstruction of economics. I am much more oriented toward positive theory, i.e. on how the actual economy is working.
At any rate, paradigm change requires various attempts. The later person can judge which was the good one and which was the bad one. For the moment, it is important that we all try to present what we think necessary.
Me: Yes, I’m saying double entry bookkeeping/accounting IS, most essentially, how the economy works and that due to the increased time, complexity and additional costs of modern technologically advanced production wed to the (correct) cost accounting convention that all costs must go into price….a costless means/set of monetary policies is the only thorough way to remedy the problem.
Further, an ABUNDANTLY costless means that inverts and transforms the present macro-economic scarcity ratio of free and available total individual incomes to total costs/prices will elevate those policies to the level of paradigm change. This is based on a study of the signatures of all historical paradigm changes and reveals that the policies I’ve posted here many times in fact DO fulfill every one of the signatures of same.