RL: All this garbage about market capitalism has nothing to do with wars in Europe. It is a British story, which, because of the American victory in WWII has permitted that story to dominate the narrative.
KZ: I’ll go with Robert. European history isn’t my area of study, but it is Robert’s. While all that Asad describes of Europe was happening, the US was going through several revolutions. A political one that turned to war about the future of slavery in America. A move from a mostly rural population to one living in cities. From pre-industrial to industrial in manufacturing. A reduction in illiteracy, From a protectionist economy and trade to a free-trade economy. Not all history is about economics. In fact, when looked at a whole, very little history is about economics.
Me: “Not all history is about economics. In fact, when looked at a whole, very little history is about economics.”
Correct. History has always been driven most basically by an austere, ungracious and economically illegitimate public or private control of the paradigm of money and finance.
The paradigm of Debt Only has always been elementally de-stabilizing. Monetary Gifting, intelligently implemented, is its mega paradigm changing resolution.
We haven’t come to be dominated by Finance Capitalism without reason.
RL: Sartre said writtten history has a sense of inevitability, lived history does not. People in the first world war accepted that to die for ones country was expected, and they did so without great complaint. The leaders who took people to that war expected totally different outcomes than the ones they got — their own destruction with the fall of their regimes. When one lives history he/she lives the unexpected, your inventing history Craig.
Me: No I’m not. In the first place I’m NOT saying de-stabilization of economies, nations and civilizations by the paradigm of debt Only is inevitable….because there IS an alternative, a more conscious, more insightful alternative, and that is a pattern change in finance and the money system. Paradigm changes are permanently progressive cognitions regarding ENTIRE pattern changes, not fishbowl “paradigms” like business management which are only compartmentalized aspects in areas of human endeavor that additionally miss the mark of the area (money and finance) that actually needs analysis.
Has anyone here ever entertained the idea that private for profit money creation ONLY in the form of debt is a glaringly dominant monopoly paradigm and additionally NOT a legitimate business model at all? It’s not even a legitimate public utility…unless it’s firmly aligned with and guided by the new concept namely grace as in gifting. Wake up.
Sartre was referring to the fact about history that I have posted here before. That is, that it is mostly a record of humanity’s unconscious actions…unless we take Santayana’s perspective. Read Hudson’s recent research about debt for instance. And then apply the human psychological insights and consciousness raising techniques of the world’s major wisdom traditions…and you’ll have a truly conscious understanding of history’s potentials.
RL: When one lives in the United States he/she understands Greta Garbo’s remark about: “When I return to America, for 14 days, I feel like I’m throwing my life away.” She meant the continued obsession of Americans with money is throwing your life away. What you are calling the hall mark of civilization, is just an American peculiarity. I live in Europe surrounded by the achievements of urban civilization, and rural loveliness, with populations that work hard at retaining them. When I walk across the street and look up at the art nouveau buildings, I rejoice that people in this city do not tear them down to build a Trump Hotel and parking lot. It would not cross the mind of these Germans to do so. Don’t make Anglo-American values universal in history.
Me: Who ever said anything about the wonderfullnes of America’s obsession with money? That’s just another deflection from what I was actually posting about. Money is a wonderful tool…so wake up about the best way to use it to make everyone and every competitive enterprise secure and the system free flowing….so we can all contemplate the Good and build a culture of wisdom…like Europe has continually tried and failed to do….because they and everyone else is so friggin’ habitually chitter chatter and figure, figure, figure erudite that they can’t think paradigmatically…..even when the personal, mathematical and temporal policy effects of doing so are spectacularly of such greater positive effect than any other suggested policies so seldom posted here can offer up. It’s tiresome.
I keep trying to get everyone here to show me wiser philosophy and better policies to help us monetarily, financially and hence economically. All I get is crickets and (inaccurate) critiques. You guys should be bandwagoning with me here. C’mon.
KZ: Craig, I see I need to be more direct with you. People invent ways to mark-up and use money depending on what they believe is important. Not what you or any other outside adviser determines is important or meaningful for them. No one, including you should ever assume to take that right from people. They will not react politely. America is an example of people, now very angry after having that right taken away, by neoliberal politicians and economists. And their anger is growing. If you believe in the scheme you’ve proposed, believe it will make economic arrangements fairer and maybe even help solve some of the big problems we face, like climate change, I suggest you begin to make that case directly to people. Historically, academics do a poor job of such work. Lecturing instead of conversing, leading rather waiting to be led, and always giving directions. I suggest you stop focusing on academics and begin focusing on the peoples whose lives your plan will disrupt. But don’t expect them to accept what you say at face value. And don’t expect them to like you. They’ve been fooled by others before.
RL: The story goes that when a Brit discovers great poverty some place, he/she says, “how sad,’ but when an American sees this poverty he/she says “what can we do about it.” Craig, in you zest to do somethiing about the world, don’t destroy the artifacts of a civilizatization that gives substance to our daily meaning.
Me: “Craig, in you zest to do somethiing about the world, don’t destroy the artifacts of a civilizatization that gives substance to our daily meaning.”
Robert, I’m not doing that in any way in anything I’ve ever posted here. In fact, as I made clear in my last post I’m attempting to maintain, enable and create the artifacts of civilization “so we can all contemplate the Good and build a culture of wisdom.”
Ken, “People invent ways to mark-up and use money depending on what they believe is important. Not what you or any other outside adviser determines is important or meaningful for them.”
That is undoubtedly true, and they’ll be free to do so after the program I’m advising is implemented….and as a sovereign the government will be free to tax the hell out of and otherwise regulate any price rises that are merely arbitrary attempts to game the new (universally cost saving and monetarily beneficial) program and end the obvious benefits of that program if they persist in such greedy and anti-social actions.
Such direct and immediate benefits that I’m advocating will be obvious enough to the individual and quite quickly to commercial agents, even if they aren’t apparent to economists, pundits and chatterers here. Social Security has resisted regressive attempts to get rid of it for 90 years, and has become “the third rail of politics” despite the fact that it was a mere reform. A paradigm change will make anyone who opposed it look like all the Ptolemaic cosmologists and nomadic witch doctors and tribal chiefs looked when those paradigm changes took root.
So I’m not stopping anyone from committing economic suicide via consumer contempt but neither would I just sit idle-ly by while those with twisted or non-existent ethics tried to destroy a gracious system. Shame on me.
And please do not lecture me about cultures as I’m already in full agreement with the legitimate insights to be found in anthropological research. Why don’t you focus more on the pattern/culture of the money system and its civilizationally long monopoly paradigm? It might be enlightening.
KZ: Craig, whether your proposals are enlightening to me is irrelevant. You propose to change peoples’ lives greatly, without asking their permission to do so. I suggest you negotiate with the millions whose lives will be changed, you say for the better. But I don’t think they’ll take your word for it.
Me: Incorrect. I’m proposing/asking them to consider they be able to purchase a $200k house for $50k with a loan at 0% interest, a $50k electric car for $12.5k, $40k solar panels for $10k, double their earned income ability to purchase whatever, give them a secured $24k worth of additional purchasing power every year for their entire adult life and finally think about contemplating the various aspects of the natural philosophical concept of grace as in love in action in every other part of their lives.
And after perhaps a few moments of incredulity, a couple months of dividend payments and the ability to purchase everything with a 50% discount even the most conservative, libertarian or “know nothing” erudite liberal will go for it because in the words of one of my favorite childhood cartoon characters “they might be dumb, but they ain’t stooopid!”
It’s cynicism that is irrelevant, not the new paradigm concept of monetary grace as in Gifting.
KZ: Craig, none of this is your choice to make. It is the choice of those “little” people with whom you need to negotiate. I frankly don’t know how they will react. But it will likely not be as you expect.
Me: Yes, well thanks for enlightening me in that regard. You might do a quick little study of the signatures of imminent and accomplished paradigm changes and, why, once they are comprehended/personally experienced, they become the new primary and dominant idea.
KZ: Present your proposals to some “applied” economic planning meetings. See if you get any nibbles to explain it more fully in local meetings, with detail about how these local planners can use them. That’s one way to start the changes you want to happen. Email us the results.
Me: That is exactly what I shouldn’t do because it would be doing exactly what I’ve been doing here for several years, that is going no where, because it will run smack dab into either their conservative or liberal orthodoxies and mind filters or be an opportunity for them to figure, figure, figure on what I said instead of simply looking at the immediate effects of the policies I’m recommending.
No, I’m going directly to the individual who even though they may have either biases and/or lack of knowledge about how economic theories are formulated….can see the obvious benefits of a simple operation at retail sale makes his income go twice as far as it did yesterday with my 50% discount/rebate policy.
I’ve tried to contact Andrew Yang’s campaign to alert him to how the 50% discount/rebate policy would double the freedom dividend, everyone’s earned income, every business’s potential revenue etc. etc. They and every other campaign is interested in donations. A new idea is long down the list. That’s why MLK and Gandhi went mass movement. Politics is so full of craven political partisan power, ethical cowardice and mealy mouthed reform it can’t be trusted…until their political survival is an imminent reality.
JH: In my opinion Huber’s primary criticism of MMT is unjustified and the assertions and arguments he has given in this regard are flawed. To critique Huber’s paper in detail would require considerable effort, however I would like to draw attention here to one section where his assertions are incorrect and
misleading. Let me quote the section:
“ Don’t let yourself be fooled. The biggest part of government expenditure is funded by taxes. Tax revenues represent transfers of already existing money. The money that serves for paying taxes is neither extinguished upon paying taxes, nor is it created or re-created when government spends its tax revenues. In actual fact, this is all about simple circulation of existing money. “
Firstly, the matching of government spending to taxing plus borrowing is a convention which governments adopt in order to manage aggregate demand and inflation, leaving the tuning required for ensuring net growth in the money supply without undue inflation/deflation to the nation’s central bank (CB), which it accomplishes endogenously via open market operations. But this division of responsibility is only a convention; there is no necessity to do it this way.
Secondly, the MMT position is that the government injects new money into the real economy when it spends, and withdraws money from the real economy when it taxes, implying that Treasury’s account with the CB is not composed of money at all and is therefore merely an operating account. Moreover, federal deficit spending entails the creation of net financial assets for the non-government sectors, which they require in order to save, invest and spend, and for the economy as a whole to function healthily. Those net financial assets are a form of money (narrow and/or broad) and their aggregate over time equals the net money supply. Putting it a little differently, to destroy federal Treasury securities amounts to destroying the money supply. The good news is that it is not going to happen anytime soon.
In order to make sense of this, one should distinguish between narrow state fiat money (currency and reserves) and bank deposit money. At a technical level there can be no doubt that new bank deposit money is created in an account of the payee (the money supply temporarily expands) whenever a sovereign government spends, and that the money supply is temporarily reduced when a sovereign government taxes the non-bank sector.
The credits within Treasury’s CB account do not form part of the money supply or indeed any measure of money (this is something that Huber does not appreciate, along with many other economists who wrongly imagine that they understand the monetary aspects of macroeconomics). However the manner in which the central government’s various fiscal operations accommodate the flow of state fiat money is less transparent. Is there an argument for regarding the credits in Treasury’s CB account as a form of state fiat money?
In my view, one of the characteristics of an entity which is entitled to be called “money” is that it is used by a set of marketplace players (traders) and may be transferred and loaned between those players. For example, the credits that banks maintain within their CB accounts (reserves, or exchange settlement funds) can be regarded as a form of money because – apart from satisfying the usual criteria of medium of exchange, store of value, and unit of account – they may be freely loaned between those players and directly transferred between their CB accounts. These forms of money are also acceptable to the central government for the payment of government taxes.
However the credits held in Treasury’s CB account are not loaned to others. Treasury borrows from, but has no incentive to lend to, financial markets (i.e. it sells bonds but has no interest in buying bonds). And unlike commercial banks, Treasury offers no depository facilities. These features distinguish the operations of Treasury from those of banks, and is grounded in the fact that Treasury is not in competition with other institutions holding CB accounts. Its CB account is not associated with profit making activity, and serves a very different (public) purpose. There are other reasons for regarding Treasury’s CB account as an operating account but NOT a transaction account, which I will be happy to expound on if anyone is interested.
To summarise, when central government spends, deposit money is created by the payee’s bank and matching new reserves are created in that bank’s CB account. Banking reserves are not transferred, because the definition of reserves excludes Treasury deposits.
Me: As I said it’s all about the distribution of money. All MMT advocates need to do is cognite on how to best directly, reciprocally and ethically distribute money so as to resolve the economy’s problems of individual income scarcity, systemic austerity and creeping chronic inflation.
To wit a universal dividend for one’s entire adult life, the 50% discount/rebate policy at the point of retail sale, ending virtual monopoly private for profit creation of money/credit with a publicly administered non-profit national banking and financial system and then regulating the economy so as to guide and foster the systemic and personal effects of the concept of the new monetary paradigm of gifting, and the natural philosophical concept behind even the new monetary paradigm itself, the pinnacle concept of wisdom, namely grace.
It’s the monetary paradigm and wisdom as opposed to folly, stupid.