Your scheme is for a redistribution of income, achieved through manipulation of the monetary system.
There are two evident difficulties. The scheme depends on a central authority that hands out money to everyone and subsidises producers. The first difficulty is that the central authority will probably lack the information needed to do this accurately enough to keep the stock of money and the productive potential of the economy in balance. The consequence would be periodic crises, no less than at present. A great deal of bureaucracy would certainly be involved and the political pressures for excess money issuance would be formidable. The second difficulty is that the scheme is utopian in that there are no political formations or powerful interest groups that are going to promote it.
Income distribution in society is not simply a product of the monetary system but of a complex of social forces. There is a lot to be said for a basic income system, whereby all citizens get an unconditional payment, a share of society’s surplus. It is better to consider how that might work in practice and to argue for it as a matter of principle rather than try and achieve it through manipulating the monetary system. It is an easier notion for most people to grasp than monetary reform. The monetary system is imperfect but reforming it to keep money and potential output of real goods and services in better harmony is difficult enough without confusing the that issue with income distribution and trying to solve all problems with one all-purpose device.
You appear to favour “monetary gifting” because you conflate the monetary system and the exercise of hierarchical power. It is true that most human societies in history have been hierarchical and undemocratic and most, other than hunter-gatherers, had some form of money. The monetary and social systems will of course be compatible in some sense but it does not follow that by altering one system you necessarily solve the principal problems of the other. The belief that you can do so follows, I suspect, from an over-simplified view of matters. For example, your statement that the monetary system has not changed in several thousand years is self-evidently untrue. It has changed enormously in many respects. Neither Nebuchadnezzar nor William the Conqueror used fractional reserve banking, never mind credit default swaps.
Whether I am right or wrong about this, you would be showing consideration for your fellow commentators if you did not use almost every other topic as an opportunity to restate the same conviction. Everyone now knows that you hold it.
Me: “The first difficulty is that the central authority will probably lack the information needed to do this accurately enough to keep the stock of money and the productive potential of the economy in balance.”
Who says you have to keep the stock of money and the productive potential in balance? Only those whose minds are stuck in the classical/neo-classical concept of equilibrium, that’s who. When you resolve the fearfully “unresolvable problems of unemployment and inflation with the two primary policies of a universal dividend and a 50% discount/rebate at retail sale then everyone can save and macro-economically it won’t matter what the stock of money is. It won’t be the state that withers away, but rather the necessity for finance. That is if we can walk and chew gum at the same time so far as sociological, psychological, anthropological and ecological regulations are concerned.
“The consequence would be periodic crises, no less than at present.”
Nope. Especially if you end the idiotic private monopolistic charter to create our money by private for profit banks, and instead create a national non-profit banking, financial and monetary system guided firmly and logically by the concept behind the new monetary paradigm. No more greedy destabilizing derivative financial products in fact very little financial speculation at all except perhaps with priorly created money and profits intermediated by the only truly valid financial business model, that is private investment for fees entities. That way they cannot become “too big to fail” and the habitual gamblers and narco-trafficers can get their fixes without systemic harm. The Great Depression and the GFC were both accompanied by prior speculative excess.
“The second difficulty is that the scheme is utopian in that there are no political formations or powerful interest groups that are going to promote it.”
I’ve addressed the inverted thinking regarding utopianism in a prior post. Monetary Gifting will FINALLY enable true decentralized communitarianism that lets every individual create THEIR OWN ideal scene/utopia.
You don’t think integrating the traditionally opposed political constituencies of labor and management who mutually benefit from abundant individual income/business revenue might be a powerful political interest group?
“The monetary and social systems will of course be compatible in some sense but it does not follow that by altering one system you necessarily solve the principal problems of the other.”
The privately controlled monetary system is an almost triumphantly integrated mortal parasite on the economy. One has to confront that fact honestly before the solution of the new paradigm can be clearly perceived. The two primary policies I advocate here will immediately, empirically and mathematically eliminate individual monetary scarcity, systemic austerity and chronic price and asset inflation which are the primary problems identified by the heterodox. It’s just that the heterodox did not/still don’t recognize the point in the productive process where their implementation will affect the paradigm change.
“The belief that you can do so follows, I suspect, from an over-simplified view of matters. For example, your statement that the monetary system has not changed in several thousand years is self-evidently untrue.”
You suspect wrong. It comes from a study of historical paradigm changes and their imminent and accomplished signatures, every one of which the new paradigm of Direct and Reciprocal Monetary fulfills.
I’ve never said the monetary system has never changed. I said its paradigm of Debt Only as the sole form and vehicle for the distribution of credit/money has never changed for that period. And I’m correct in that observation.
“Whether I am right or wrong about this, you would be showing consideration for your fellow commentators if you did not use almost every other topic as an opportunity to restate the same conviction. Everyone now knows that you hold it.”
Screw consideration when converging crises are looming and the new paradigm I’m advocating prima facie resolves all of the major problems everyone here says need to be resolved. We’re all big boys and girls here. If I can stand their invalidation and stubborn refusal to look, they can handle me repeating empirical mathematical truth. That, and old and new paradigms are self actualized by the same old dictum that “number of times over the lesson translates to better understanding.”
gholthamm: A huge problem is the complete subjection of the US political system to the power of money, aided by a reactionary Supreme Court. Democracy has become plutocracy. Alongside that is a complete breakdown in the belief that the state can solve problems. When FDR proposed the New Deal and LBJ the Great Society voters thought that politics could help. Starting with Reagan’s crack “the most frightening words you will hear: I’m from the government and I’m here to help”, there has been a loss of faith in politics and a loss of self confidence on the part of politicians in the power to change things. Electoral law needs to change to confine the ower of money. How that happens I don’t know.
Me: Precisely. However, the conservative/libertarian irrational generalization that government is always problematic and tyrannical would immediately become an obvious falsehood to everyone if the monetary and financial paradigm of Direct and Reciprocal grace as in Monetary Gifting were implemented by a universal dividend and a 50% discount/rebate price and monetary policy at the point of retail sale.
Solve the real and deepest problem and you’ll have a paradigm change. Plant the seed of the universal solvent of graciousness in the money system and acculturate that same natural concept intelligently and in a few generations you might even begin the process of changing the present zeitgeist from Power to Grace as in sovereign and benevolent power.
gholtham: Perhaps I should have said the power of wealth, rather than the power of money. it is command over resources that is the key, in whatever form the assets are held. Political power should be equally distributed in a democracy and that provides a countervailing balance to economic power, which under a capitalist system – and most preceding systems – is unequally distributed. If economic power is able to buy the political system then the countervailing balance is lost and society operates exclusively in the interests of the rich. That seems to have happened in the United States. I daresay direct and reciprocal grace would solve the problem but that is not a political programme. How do we soften men’s hearts? It seems more to the point to help the voters see that a reform of the political system to limit paid advertising and the need for campaign “donations” is required if they are to assert their interests.
Me: “I daresay direct and reciprocal grace would solve the problem but that is not a political programme.”
If it were implemented into the economy in the policies I suggest it would be incredibly politically powerful. Social Security which is an old paradigm reform was a powerful enough political policy that it resisted regressive attempts to destroy it for over 90 years. If you give everyone a more than 100% raise in their purchasing power and simultaneously more than double the business revenue for every enterprise’s products and services that not only integrates the normally opposed political constituencies of labor and management it integrates their self interests. Such is the unitary power of the natural philosophical concept of grace.
“How do we soften men’s hearts? ”
By contemplating the aspects of grace until one self actualizes them. And if the economic system which vitally impacts everyone numerous times each day were a continual reminder of its power and benevolence…..?
All we really need is a mass movement to get the political apparatus herded toward the wisdom, sanity and power of the concept and its economic policies.
gohlthamm: If you give everyone a more than 100 per cent rise in their purchasing power and double business revenue you are requiring the economy to more than double output in short order. Good luck with that. A real output increase of 100 per cent normally takes about 20 years in a modern economy. I gather you don’t believe there is any need to balance supply and demand so as well as contemplating aspects of grace you might contemplate the history of the Weimar Republic.1922-23 or Venezuela since 2015.
Me: “If you give everyone a more than 100 per cent rise in their purchasing power and double business revenue you are requiring the economy to more than double output in short order.”
It doesn’t REQUIRE anything of the sort. It WILL enable people to quite quickly pay off large amounts of their debt and/or save a very good percentage of their income while maintaining or even improving their lifestyle. As I’ve pointed out here numerous times before the 50% discount/rebate policy resolves the paradox of thrift.
“A real output increase of 100 per cent normally takes about 20 years in a modern economy. I gather you don’t believe there is any need to balance supply and demand so as well as contemplating aspects of grace you might contemplate the history of the Weimar Republic.1922-23 or Venezuela since 2015.”
Number one most producers don’t operate at 100% capacity. Number two that’s an irrelevant criticism anyway because supply and demand is a hoax and the 50% discount/rebate mathematically resolves inflation…because it handles the OPERANT causes of inflation, namely an austere system, a (smallish) cost inflationary system and because given the above two facts it appears to be the best option for business decision makers to increase their prices, so its a self reinforcing problem….unless of course you make the system monetarily abundant for all agents and resolve inflation at the same time.
Last, hyperinflations never occur before several disastrous circumstances take place first, none of which are remotely liable to happen to us. If you’d like to educate yourself on the Weimar Republic hyperinflation read Stephen Zarlenga’s excellent history of it on pages 579-588 of his book The Lost Science of Money.
Venezuela isn’t a true hyperinflation and is a combination of domestic political stupidity and US financial domination. C’mon, you know this…or should.
Contemplate grace ghholtham, you’ll be better off personally and with a little logic you’ll see the concept’s efficacy for the economic system as well.
gholthamm: “Supply and demand is a hoax…”.
You seem to be saying there are no supply constraints at all. So why stop at giving people a 100 per cent rise in their purchasing power? What’s wrong with 500 per cent or 1000 per cent? Why be mean? Where’s the limit?
Y: Craig may have hear say that “supply and demand is a hoax.” He may not have thought what it means.
If “supply and demand” means “law of supply and demand” and this law means the price mechanism of the market that prices are determined at the crossing point of demand and supply curves, it is really a hoax. It exists in the theoretical core of the neoclassical economics, that almost all people here deny. However, this only stands that there is no valid logic that attests the existence of demand and supply curves. To derive the existence of supply curve, the standard theory had to assume decreasing returns to scale, which is ridiculously contradictory to the reality. Almost all industrial firms are operating at the constant returns or increasing returns conditions.
Money is an important entity in market economy, but money alone does not explain all market phenomena.
Me: “Money is an important entity in market economy, but money alone does not explain all market phenomena.”
As I already posted the new paradigm won’t solve or explain ALL market phenomena…only the the deepest and seemingly unresolvable ones. That fact makes it a paradigm change. Should we ignore that and go back to puzzling over those problems as if the new paradigm policies do not resolve them????
Me: “So why stop at giving people a 100 per cent rise in their purchasing power? What’s wrong with 500 per cent or 1000 per cent? Why be mean? Where’s the limit?”
The limit is understanding the integrative of opposites nature of grace as in both abundance and prudence. Now go back and contemplate grace some more until you see that.
Me: Why should we allow the business model of private banking to have not only a monopoly on credit creation, but also a monopoly on the form and vehicle for the distribution of money, i.e. DEBT ONLY? It’s TOTALLY FRIGGIN’ STUPID….especially when one considers the problem solving proclivities of monetary gifting both directly to the individual and directly and reciprocally at the point of retail sale.
Me: Dave, Thanks for the acknowledgement. However you miss the potential for wisdom in a system economically and culturally based on grace as in the thorough integration of the truths in opposites. Thus you make economic policy on the integration of greater abundance of potential consumption and/or saving so as to reduce the tendency/compulsion to only borrow …and the wisdom of ecologically sane macro-policies. Like for instance my SECOND 50% discount/rebate policy at the point of note signing for all big ticket and green items like electric autos, solar and battery powered housing products etc. A Wisdomics-Gracenomics is the integrative alignment of the ultimate integrative and ethical concept of grace AND its policy ACTIONS. In other words Wisdom is its own PID system.
gholthamm: The fact that Craig cannot say why 100 per cent is ok but 1000 per cent might not be shows his proposition is vacuous. He is wasting everyone’s time.
Me: Wisdom as an answer has always been a waste of time for those who apparently do not know it.
gholthamm: So in your wisdom, why not answer the question? Why is 100 correct, rather than 87 or 129 or any other number? What is the basis of your quantification?
Me: The idea of a 50% discount/rebate policy at retail sale is to make up for the last 50+ years of income stagnation and to establish abundance WITHOUT tempting profligacy. We’re talking about ECO-nomy after all. And by the way you couldn’t have more than a 100% discount or everything would be free and you would indeed have excesses of all kinds. Proof positive that you haven’t really looked at the policy or visualized its effects.
Now go chastize yourself for your lack of looking…and wisdom.
MC: “Now go chastize yourself for your lack of looking…and wisdom.” ~ Craig’s Arrogance and Ignorance on Full Display.
Gerald is right. Craig cannot answer a simple question without displaying his presumptive arrogance proving his idealism is devoid of balance, grace, and wisdom. Craig rightly perceives that the ends of economics aught to serve human needs and not the other way around, he fails to distinguish the value of science (along with other disciplines) in addressing the means of accomplishing those goals and therefore, his idealism is divorced from reality and cannot answer a simple pragmatic question.
The acid test of any science, any philosophy, any religion (new age or traditional or humanist) is its ability to balance pragmatism with idealism and to distinguish between the realities of the material, moral, ethical, and spiritual ways of perceiving and contemplating the world and their unification in intellectual striving and in social serving. A sound philosophy does not confound material things of this world with the moral and ethical meanings embodied in our value-perceptions that are able to wisely distinguish between means and ends; to recognize that persons are ends in themselves and not means for one’s own self-gratification for pleasure and/or profit.
Nobel laureate Sir Peter Medawar said, “Catastrophe apart, I believe it to be science’s greatest glory that there is no limit upon the power of science to answer questions of the kind science can answer.” (P. B. Medawar, The Limits of Science, p. 87).
It is equally foolish to think that science can answer all questions including questions of human values (i.e., ends) or that there are no other means by which humans obtain knowledge and insight about their world of things, meanings, and values.
Me: You’re last statement is true. The rest of it, if you’ve actually read my posts, is either a re-statement of exactly what I advocate or completely false accusation. For instance your statement of:
“The acid test of any science, any philosophy, any religion (new age or traditional or humanist) is its ability to balance pragmatism with idealism and to distinguish between the realities of the material, moral, ethical, and spiritual ways of perceiving and contemplating the world and their unification in intellectual striving and in social serving.” …sums up precisely what I advocate and nicely defines the philosophical concept of grace.
“Craig rightly perceives that the ends of economics aught to serve human needs and not the other way around, he fails to distinguish the value of science (along with other disciplines) in addressing the means of accomplishing those goals and therefore, his idealism is divorced from reality and cannot answer a simple pragmatic question.”
For someone who advocates unifying the truths in opposites how could I ever not be four square for science. The only thing I have ever complained about science is its unconscious use by those who don’t realize that it’s current paradigm is Science ONLY.
MC: Your hubris exceeds your wisdom as it does for all zealots. You have a one-size-fits-all solution for a complex social problem that requires a pluralism of approaches is a form of idealism based upon if-pigs-could-fly assumptions every bit as much as the assumptions exposed by Lars and others regarding mainstream and even some so-called heterodox economists. You have isolated money and debt as being the root of all evil and proposed a one-size-fits all solution and are impervious to reasonable doubt. You are in my view one more example of the Terrible Simplifers syndrome.
Me: Not correct. My policies fit seamlessly within the complexities that everyone here obsessively posts about. Accounting conventions are accounting conventions and accounting is the infrastructure upon and within which the entirety of the economy exists. The accounting operations of debits and credits I suggest as policies effect the new paradigm mathematically and temporally. It’s apparently too simple for you to look at and comprehend. As I have posted here many times before the actual operations of historic paradigm changes have always been simple and yet strikingly deep in the changes they create. The Copernican Cosmological paradigm change was at base nothing more and certainly nothing less than the simple inversion of the positions of the earth and the sun.
I don’t and never have rejected complexity, I just happened to be lucky enough to have the right adult interests that enabled me to see how the new monetary paradigm could be transcended and how that would tremendously benefit the economy.
gholthamm: The 100 per cent Craig quoted was an increase in purchasing power not a discount. I’m sure he remembered what he wrote but misrepresented it to avoid exposing his intellectual nakedness. Clusters of abstract nouns and an inability to explain spurious quantification show we are deep in bullshit gulch here. But I give up – over and out.
Me: Again not correct. A 100% discount at retail sale would make every consumer item free. A 50% discount at that point indeed would double everyone’s purchasing power. Who’s the one
with the inability to comprehend quantification?