Me: The intention of this post is excellent and a correct mental strategy because memes are (hopefully) concise and conceptually pungent thoughts that taken together (hopefully) result in a new cognition…..like a new paradigm for instance. My paraphrased meme of “It’s the monetary paradigm, stupid” is a meme attempt to focus economists on the deepest and most potent problem of all economics, namely the money system and its monopolistic paradigm of Debt Only. Even the best economists have this integrative focus problem.
Shortly after Steve Keen successfully de-bunked DSGE and concluded that we live in a monetary economy not “a veil over barter” he stated in a video: “Neo-classical economists ignore money, debt and banks because if they didn’t they’d have to acknowledge that the money system de-stabilizes the economy.” That was a nascent recognition of the need for a new monetary, financial and thus economic paradigm and Keen and other economists even shortly there after attended an event where they all emphasized the need for a new paradigm in economics. Unfortunately, and in no small degree due to the fact that the present paradigm for inquiry is Science Only, he never followed through with a study of paradigm changes and their signatures.
Since then he’s taken up the very real and existential problem of trying to quantify energy and its effects on the economy and the ecology. No criticism of that particular line of research, but it perfectly dramatizes the intellectual sterility and lack of integrative pragmatism of the above monopolistic paradigm for inquiry of Science Only. Of course if he had consulted the signatures of all historical paradigm changes he may have cognited on the wisdom of the new monetary paradigm of direct and reciprocal monetary gifting, and the incredibly powerful point in the economic/productive process to implement a monetary policy that would immediately invert individual and systemic monetary realities…..and thus changed the entire pattern of economics.
Keen and everyone else here is actually wanting a new paradigm in economics. The problem is they don’t focus and think integratively enough on the paradigmatic level about the most potent and relevant factor in economics, namely the money system and its monopolistic paradigm of Debt Only. So here’s the meme for the day:
“Study the signatures of historical paradigm changes, stupid.”
MJ: Changing a paradigm is notoriously difficult. Keynes succeeded. The combination of Friedman, Lucas, Sargent and Prescott succeeded, even if only in theory and not regarding measurement. Keen however is changing the conversation.
Me: “Changing a paradigm is notoriously difficult.”
Correct. At least up until one finds the correct single concept that transforms the pattern. Then its a relatively easy and straightforwardly rational process of aligning policy with the new paradigm changing concept.
I’m sorry, while somewhat helpful, the changes you refer to are merely separate reforms within the paradigm/pattern of economics. Genuine paradigm changes are changes in the nature of the ENTIRE pattern.
JV: I think there is an important analytical distinction to be made what money is in the subjective eyes of its beholders, and what it objectively has to be for the system as a whole to function; so as _not be subject to_ systemic crashes. The fact that money is endogenous goes deeper than generally assumed in heterodox circles. Money is and remains the economy’s money and never becomes an unencumbered property of individuals to be withdrawn at will from the debt resolution process the economic system constitutes in its very being. The assumption that an economy exists, (statically) at any present, as accumulated and thus depletable positives that includes liquidity values, is incoherent in the face of every economic initiation being a booked debit entry to be dynamically resolved through credits and endogenously netting to zero, in order to fulfill the economy’s objective and thus exogenously located purpose. For a coherent analysis, any functional attribute of money therefore has to be in conformation with the latter.
Me: Not that monetary gifts won’t be accounted for, they will be, but the deep problem resolving nature of the paradigm changing 50% Discount/Rebate monetary policy at retail sale essentially takes the conventionally orthodox sting out of the necessity to “balance the accounts/books” which itself is a lingering mental attachment to now de-bunked general equilibrium theory. Just another transformational aspect of the new monetary paradigm.
DT: John, I’m with you on what you are trying to say in this, and it’s worth highlighting, but surely this is a subjective view of ‘money’? Love the “debt resolution” definition, though.
“Money is and remains the economy’s money and never becomes an unencumbered property of individuals to be withdrawn at will from the debt resolution process the economic system constitutes in its very being.”
Suppose the debt resolution to be resolved by transfers not of money but of credit, what, then, is to be the objective view of the money we physically see? If we restrict it to a withdrawal from our credit obtained from a cash machine, then the withdrawal will appear in our accounts but there can be no record of what we spend it on until we spend it. This can be automatically corrected however, when the vendor accepts it (as he would a discount voucher, Craig) in lieu of credit deductions for the items we indebted ourselves for when we bought them. No double accounting involved, just completion of a blank space in our own account.
Money, then, would be objectively an advance of credit, representing a credit limit. I can’t see a neat way of saying this, but if you are advanced a £10 note then that limits how much you can buy with it. I must insist, however, that the real economy is not just the money side of it.
As I said monetary gifts will be accounted for by enterprise as they are now without them…as sales….and after that is presented to the monetary authority they rebate the 50% discount amount back to the enterprise so they can be made whole on their overheads and profit margins. Simple, elegant and a benevolent and gigantic assist to both individual and commercial agents. The only difference perhaps will be that a new account will also be created to reflect the amounts rebated entitled….Rebates.
The beauty of the 50% Discount/Rebate policy IS its strategic implementation AT the terminal ending point of the entire economic/productive process for every consumer product from a package of chewing gum to autos, homes etc.
Monetary gifts still retain their debt nature as in legal tender making them perfectly accountable, but it enables twice as much money to enter the economy while simultaneously not only remedying inflation but implementing beneficial price and asset deflation. It’s a simple operation, a basic inversion the same as the inversion of the positions of the earth and the sun was the actual operation of the Copernican cosmological paradigm change, the inversion of nomadic wandering about the land to staying in one place and having a direct relationship with the land and one’s stock and having a direct relationship with god instead of being forced to participate in the church’s sacraments for absolution.
Signatures, signatures. Heed them.
G: The creation or generation of money as the medium that fulfils each of the three functions mentioned above is a process with real implications for resource allocation and income distribution. The “neutrality” of money a property of very simple economic models does not apply in reality. That means there are real issues to be addressed in the management of the monetary and credit system. I’m not sure that any of them are illuminated by agonising over the definition of money.
Me: That’s quite right. What we need to do is take the fact that money is a damned good tool, and then use it to resolve monetary problems that will bring abundance and monetary freedom to all….and as a not so insignificant side effect enable us to rapidly begin both a bottom up consumer green product resolution to climate change, but also to fund the massive projects also necessary.
Awaken to the new monetary paradigm of Gifting….and then get schooled in its possibilities.