Me: I’m in agreement with the policy thrust of every heterodox economic theorist from Keen, to Hudson to MMT etc. about there being a need to inject more money into the economy. I’ve been on here for several years advocating a 50% discount at retail sale which is entirely rebated back to the retailer by the monetary authority. What I want to know is who here sees the paradigm changing effect of this single policy? Anyone want to critique it, let me hear from you, but you have to consider a couple of things. #1 retail sale is the terminal ending point for every consumer item or service thus #2 it is also by definition of #1 the terminal summing and expression point for all forms of inflation #3 Lets assume you have 3% garden variety inflation, so if you tacked that on and made the discount 53% it would automatically make everyone’s purchasing power double and not only completely eliminate any inflation, but would integrate price deflation painlessly and beneficially into profit making systems. #4 It simultaneously doubles the actually available business revenue in the economy which is a tremendous incentive for the business community to stand up and salute such a policy. #5 There are many other benefits that would consequently be possible and also further regulations and requirements, none of which would be onerous, to keep normal inflation before retail sale from increasing.
So who sees it? Yes the economic system is complex, but the actual operations and concepts behind all historical paradigm changes are always simple, elegant and powerful. Critique away…..
G: Great everyone. But we must find ways to get the debates into public forums. In considerable ways, the fate of a Green New Deal depends upon our ability to persuade enough of the public that the programs can be paid for or not without catastrophic consequences – and that many of the Neoliberal assumptions being dissected here no longer hold…but there is a huge gap between the ideas in this exchange and the “kitchen table family budget model” in most citizens’ heads. FDR himself never quite escaped the gravitational field of balanced budget traditions, despite ditching the gold standard from the late 19th century.
Me: Yes, that’s necessary, but iconoclasm and debate will only get you so far. You have to 1) incorporate philosophy/wisdom into the debate so that 2) the single concept that illustrates, defines and resolves the problems of economics becomes clear. Then you have to 3) discover the best way to integrate that concept into the economy in the form of policy.
1) wisdom is the integrative process itself and the natural philosophical concept of grace is its pinnacle concept
2) Monetary grace as in gifting is the applicable concept that strategically and insightfully resolves continual debt build up and price and asset inflation via
3) a 50% discount/rebate policy at the terminal ending point for all consumer items and services at the point of final retail sale.
Just look at it. Keep looking at it until you see the applicability of the idea, its workability and the problem resolving effects of the policy.
KZ: All the politicians, particularly the Republican ones contend that banks know what is best for us. And banks are certain they know what is best for us. Just saying, banks rule the world. The new progressives just elected to Congress will over the next year attempt to change this. How far will the banks go to keep control? More bribery, more threats, death squads, or just shutting down the America economy till everyone agrees to play by their rules? For more than 100 years American banks have rigged the game to favor themselves. And for 50 of those 100 years American banks set the standard for all banks in the world. Now we face a dangerous and uncertain decision. How do we take back that control? For over 5,000 years one and only one entity created and controlled money, governments. Most of these were monarchies and other forms of autocratic government. That makes control of money by democratic governments more important today than ever in human history. The prospects of subjecting banks to democratic control seems unlikely today, and more unlikely the longer the current situation continues.
Me: Ken, You’re right the banks do “own the joint”. However, government control of the money creation process (which I also advocate) is just as problematic as private control. Was the paradigm of Debt Only changed by governmental control? Of course not. The only way to insure ethical government control of the money creation process is to firmly guide its policies with the natural philosophical concept of grace as in BENEVOLENT and UNIVERSALLY beneficial SOVEREIGN intent and then have a policy like a 50% discount/rebate at the point of retail sale that tremendously benefits all economic agents individual and commercial and also resolves the two major problems of modern economies, namely scarcity of individual incomes/business revenue and inflation….in a single policy.
I’m calling you and others out here. Why keep splashing around on the surface of the economic and monetary problems with half measures and incomplete theorizing. Visualize the new paradigm and its paradigm changing policies and philosophy…and lets get on with its acculturation.
DT: Robert, while I agree with you France was different, wasn’t the French Revolution about accumulation of money leading to “Let them eat cake”? What I see different in France from Germany and Britain was that most of France only had agricultural resources, so its industrial development too was in the regions north and east of Paris where it had coal and iron. (With its size, though, it has long been a leader in development of railway transport).
I’m struggling to see why you are down-playing Polanyi, Robert. He was simply following the development of capitalism in the context in which it began, though it is good to be reminded that the politics played out differently in Central Europe.
RL: Dave, as a Catholic, I would think you would be more sympathetic to other views about capitalism. The Catholic entrepreneurs I studied did not look on society like the mill operators in Manchester or Oldham; ever hear of Frederic LePlay, of Lamenais, Benoist d’Azy and others who took a general interest in forms of capitalism of a socially responsible nature. Benoist d’Azy in the 1850s, worked out sickness and accident provision, old age retirement schemes for his workers and their families at the forges and foundry’s of Alais. I read all the correspondence between father and son that set them up.
Me: The obvious reason the French and any other revolution never ended tyranny is because it didn’t change the monetary paradigm which is the deepest and most insidious aspect of the problem we face. C’mon, you guys can see that, you’re not dumb. You’re all extremely smart, it’s just that your perspective is stuck in the weeds of details and in lower levels of mental integration that prevent you from seeing that the NECESSITY is a paradigm change. That’s the problem here. Nobody but me is addressing that necessity.
HS: We are fixated on particular explanations that are outdated and devoid of even acknowledging what is going on in ALL economies around the world, let alone capable of posing valid questions for deliberation. In Germany under Hitler, the price of a cup of coffee went up beyond the financial ability of the consumer to pay for it by the time the coffee was drunk. Right now, in Venezuela, a country rich in oil and Gas resources, a loaf of bread is costing so much because of hyperinflation that it has become unaffordable for the vast majority of people.
Economics really needs to repent! It does keep missing the main issues that one has repeatedly pleaded here need urgent attention: the arms race, climatic catastrophes, abject poverty, collapse of all systems of credible governance and associated outcomes.
Me: Correct Helen. Everyone touts their particular tweak of theory and policy, but none of them have any real idea how to create an entirely new pattern in economics….except me. Here’s a list of beneficial effects of my two primary policies a $1000/mo. universal dividend available to everyone 18 and older and a 50% discount/rebate policy at retail sale.
1) Immediately more than doubles everyone’s purchasing power. Does that sound like a policy most people could get behind even if they are die hard libertarians and conservatives?
2) Because individual income is basically the same as business revenue the potential business revenue is also more than doubled. Does that sound like a policy the business community could get behind?
3) With everyone getting $2000/mo. worth of purchasing power when they hit 18 students could pay for their tuition at a university that charged $10k/yr (reduced 50% by the discount/rebate policy to $5k/yr divided by 12 = $416.67/mo and still have $583.33/mo. which would purchase $1166.66/mo of goods and services….and never have to borrow a cent to get their degree
4) Few or no one gets $2000/mo worth of welfare and few people get $2000/mo of social security so the transfer taxes for welfare, unemployment insurance and social security that both individuals and businesses pay could be eliminated. Nice little addition to individual paychecks and business profit margins there, eh?
5) Retail sale being the terminal end of the entire economic/actually productive process it by definition is also then the terminal expression point for any and all forms of inflation. No one has ever gotten a call from the grocer they just bought $100 worth of groceries from where the grocer then demanded another $30-40…..because when you buy it its now consumption. If possession is 90% of the law possession as in consumption is 99.99% of economics. Hence a 50% discount/rebate policy at the point of retail sale amazingly and miraculously from an orthodox economic perspective…integrates price DEFLATION painlessly and beneficially into profit making systems.
6) It inverts present individual and systemic monetary realities and destroys orthodoxies on both the left and right. Those are classical, historical signatures of paradigm changes.
The benefits go on and on and on and not only in economics. My book Wisdomics-Gracenomics: The Theory of the New Monetary and Economic Paradigm will be on Amazon in about 2-3 days. Probably be a free kindle rental. That will give you the full program. No one here even comes close to offering a better and more inclusively heterodox theory and program.
RL: Craig, you obviously do not know much about the French revolution, which scared the hell out of the privileged for over a century. It did end tyranny. In the Declaration of the Rights of Man and Citizen, in creating a representative democracy. On every French public building one reads “Liberty, Equality, Fraternity.” France’s problem is that its revolution was not part of an industrial revolution that generated the wealth necessary for the political and social equality to exist. That dilemma exists now, in the yellow veste’s still fighting for equality, but in an economy that is not productive enough to support it, because the French Revolution was not an economic one. I can explain all this and have. The French Revolution did change the monetary paradigm, that was what it was all about, it ended the tax-exemption status of the privileged orders. We need a French revolution in America.
Me: I know plenty about the French Revolution, and much more importantly I also know that “Liberty, Equality, Fraternity” are all aspects of the natural philosophical concept of grace. As you yourself pointed out the “revolution was not part of an industrial revolution that generated the wealth necessary for the political and social equality to exist”. So it wasn’t actually a PATTERN/PARADIGM change.
“The French Revolution did change the monetary paradigm, that was what it was all about, it ended the tax-exemption status of the privileged orders.”
No it didn’t. It merely changed a structural component/abusive regulatory aspect of the economy. A paradigm change is an entire PATTERN change….like from individual income scarcity and systemic austerity to abundance of same….like Wisdomics-Gracenomics does.
DT: Let me skip over Craig’s interruption and go back to what Robert was saying to me on
March 4, 2019 at 10:12 pm.
“Dave, as I understand it, central to Polanyi is that factors of production, are sold on the market at market-determined prices instead of allocated according to tradition, redistribution, or reciprocity. This was the great transformation”.
Robert, what you are seeing is the outcome. What I see is Polanyi’s interest in the reasons for it, which I picked up as being the unexpectedly perverse outcomes of Speenhamland and the Malthusian interpretation of Townsend’s story of the Robinson Crusoe island.
In a curious way I found him like Keynes, telling his own story but then drawing attention to the more practical significance of people like Gesell and Douglas. Polanyi likewise ends with Notes on Sources, where in view of the present discussion numbers 10 and 11 are worthy of close scrutiny.
Me: You can skip over the necessity of the ultimate tipping point known as paradigm change, but you can never run away from it unless you’re unconscious of its necessity or do not heed its imminent signatures like intellectual rigidity and unwillingness to consider integrating the particles of truth in opposite perspectives. Another of its imminent signatures is social and political unrest and eventually chaos. The history of human civilization is replete with examples of economic reforms that momentarily palliated the necessity of monetary paradigm change…and failures to do so which resulted in the imminent signatures above. After 5000 years of failures and palliatives isn’t it time we focused on the actual solution?
The reason why Polanyi is interesting is because his is a philosophical view which is a mental integration above mere theoretics and/or looking at the problem from one or another of the compartmentalized and fragmented scientific viewpoints. Science like food is endlessly intellectually interesting, delicious, necessary, on an ascending scale is epistemologically below philosophy and resides entirely within the integrative digestive tract of wisdom.
And paradigms and paradigm perception are a mental integration above philosophy.
Virtually everyone is hung up on the classical idea of equilibrium…ironically even Keen and other disequilibrium theorists. That’s because they’re still in the mindset of the paradigm of Debt Only, and they don’t see the significance of the summing,ending and terminal expression point of retail sale or the efficacy of a large percentage discount/rebate policy at that point.
I’m sorry, they’re Ptolemaic tweakers and aren’t conscious of the concept behind the new paradigm….and every paradigm.