In Response To A Post Entitled MMT = Keynes on RWER Blog

MMT = Keynes IS Keynes in that it’s a mere reform. Why? Because it does not comprehend private for profit finance (PPF) as a monopolistic, parasitic and hence illegitimate business model because it adds costs POST retail sale. Retail sale is the terminal ending point of economics. Hence PPF is non/anti-economic. (Spare me the mathematical justifications.) Furthermore it neither recognizes nor analyzes on the level of the paradigm/pattern thus rendering it inevitably reductionistic, palliative and non-resolving of the real problem which IS the current monetary paradigm of Debt Only.

The one thing MMT has going for it is that it philosophically aligns with the new monetary paradigm one of whose aspects is abundance.

Posted In Frustration on RWER Blog 07/24/2020

We can fret over ontologies, maths that are easily thwarted/supplanted by power and continue to ignore the looming deadline for species and ecological disaster, or we can recognize that the real and deepest problem isn’t economics or money itself AT ALL, but rather the MONETARY PARADIGM.

Then we can recognize that every historical paradigm change was accompanied by a new tool and/or insight and that the tipping/pivotal point of retail sale is just such an insight because it is a particularly powerful point to implement a price and monetary policy that with a few additional policies and regulations will enable us to resolve all of the above problems….instead of “straining at a gnat while swallowing a camel” for another 5000 years…..or at least another 50 until the resource wars and social chaos brought on by climate change puts most of us out of our misery.

The New Paradigm of Monetary Gifting Resolves Our Current Economic Problems and Completes The Thinking of Present Major Reforms

GH:  The bit missing from the discussion on MMT is that no-one is obliged to take anyone else’s money. Money is a claim on resources but it is not a legal claim on anyone in particular. That means its utility depends entirely on a general confidence that other people will accept it in return for the things I want to buy. Inflation is no more than an erosion of that confidence so that money exchanges on worse and worse terms. In a Zimbabwe style hyperinflation the confidence fails completely and money becomes worthless. Governments can issue as much money as they like but if the amount of money they issue far exceeds the value of the goods and services it can buy, confidence begins to erode. That might sound theoretical but it acts as a limit on the issuance that governments can make.
The practical difficulty is that governments do not know how much money is too much. They have only a vague idea of the supply potential of the economy at any time and an even vaguer notion of whether private people and companies will want to spend stocks of money they may be holding. Moreover while they control their own direct issuance via expenditure they have only weak control of secondary money creation by commercial banks.
MMT is not wrong but it doesn’t get us much further because it does not address the practical difficulties. Note that monetary gifting is subject to similar uncertainties; the central authority would always be unsure how much it could safely gift.

Me:  “Moreover while they control their own direct issuance via expenditure they have only weak control of secondary money creation by commercial banks.”

Not if we create a truly national non-profit banking, financial and monetary system based on and fully aligned with Monetary Gifting which private banking cannot compete against seeings how they require profit, interest and clients willing to pay far more than what they would need to pay from the new national system.

“Note that monetary gifting is subject to similar uncertainties; the central authority would always be unsure how much it could safely gift.”

In the consumer economy it would be 50% of whatever was purchased by the consumer. That’s a nice empirical figure. Fiscally, if it ought to be whatever makes the economy more internally integrated, self sufficient and thus robust and independent from any coercion from import platforms like China. In the mean time I doubt China would refuse our currency as it is still the largest consumer economy on the planet and thus their major importer, and if they try anti-social inflation of their prices you just slap a 100% tariff on the increase. Meanwhile, as the cost decreasing effect of Monetary Gifting’s policies are implemented we become competitive with them. And as we wouldn’t have to worry about unemployment, individual monetary scarcity or inflation, re-industrializing in the most efficient and ecologically sane way possible would be the obvious thing to do…no matter whether China or anyone else liked it or not.

MMT, Keen’s Minsky Financial Instability Hypothesis and Hudson’s Financial Parasitism are all good research. They just need the policies of Monetary Gifting to complete the paradigm change.

Reply To a Post on RWER Blog Regarding Money

Me:  A very good post. And you’re right that money is about power and control. Power and control are the zeitgeist/ethics of the present age.

The problem with money is its present paradigm, that is Debt Only. There isn’t anything inherently wrong with the idea or the nature of debt, but the monopolistic pattern of Debt Only keeps all of the economic problems heterodox economists want to change, in suspension. Integrate a new monetary and financial paradigm of Gifting into the economy and all manner of beneficial resolutions to those problems present themselves.

DT:  So I agree basically with Craig too, though I find his language as confusing as his money. Didn’t he say before that the ‘gifting’ had to be mutual? On a one-one or one-many basis?

Me:  Dave,

What is confusing about crediting a 50% discount to the consumer at the points of retail sale and at note signing, and the monetary authority debiting every cent of that retail discount back to the enterprise giving it to the individual? And the true national bank simply reducing the already 50% reduced note by another 50% at note signing, which because it is not a profit making concern and the credit is created ex nihilo like all fiat money is, can simply apply the debit credit convention at that point as well?)

That way commerce is facilitated not inhibited by austerity/individual monetary scarcity, both the individual and commercial agents benefit and the natural philosophical concept of grace as in Gifting is self actualized in the economy and in the minds of everyone participating…continuously?

It’s just double entry bookkeeping and wisdom applied to the economy and the money system.

NR:  Really ‘Craig’ ? You & your old time ‘funny-money’ chevaliers, still embody the ancient , wisdom of the great Japanese {Zen Buddhist ?} haiku: “When the glaciers melt & recede, old weeds bloom afresh”. But ! ‘FISCALLY confront climate change’ ? Egad ! Is that ‘rigged’ too ? i.e. By whom ? heh’ heh’ heh’ . As if we can’t guess. But CAN THEY actually ‘rig’ the climate? If they’re that omnipotent, wouldn’t it be ‘Pareto-opitimal’ to join THEM, rather than always be pointing fingers at ’em ? But, Take comfort from your righteous agony, Craig old sport. Because Major Douglas, Anton Drexler, Dietrich Eckhart, Nesta Webster et al, are still pining away for you ‘in the place where they are at, where it’s always double drill and no canteen’ to paraphrase Kipling.

Me:  Sorry to offend so badly Norman. It’s just that such policies seamlessly implemented into the current system are too simple for the intellectual vanities of the erudite and too generally temporal reality altering not to be a paradigm change.

IK:   What is “Gifting” in your theory? You need to define it and explain it. As it is your “Gifting” is just a black box term to me. I have no idea what is in the black box nor how it connects and interacts with anything else.

Me:  Monetary Gifting in a monetary economy (it IS a monetary economy not a “veil over barter” as neo-liberal economists have re-defined and obfuscated it) is simply the strategic giving of additional purchasing power/money in the form of a universal dividend of say $1000 monthly, and via the twin policies of a 50% discount to the consumer at retail for virtually every consumer item and also at the point of note signing for big ticket items. The latter two policies work exquisitely because they are summing, ending and terminal factor expression points in the economic process and hence legitimate potential turning points. They are also universally beneficial. So much so that every retail enterprise would need to opt into them or rapidly go out of business because if you didn’t opt in they would have to get 100% of their price from the consumer while their competitors would only need to get 50% of same.

These three basic policies (there ARE more policies, regulations and systemic changes) are a gigantic assist to all economic agents and resolve what heterodox economists say are the major problems with the present system, namely systemic monetary austerity, systemic financial instability and manipulation of the system by the dominant business model of Banking and Finance whose exclusionary and monopolistic paradigm of Debt Only as the sole form and vehicle for the creation and distribution of credit/money is the root cause that keeps all of these systemic problems in suspension.

Do I say there will not be any borrowing? No. Do I say that resolving the major cause (the present monopolistic paradigm) of the current system will have major stabilizing and beneficial effects? Absolutely yes. Paradigm changes are always permanent beneficial and progressive phenomena, and mega paradigm changes imminently and continuously effect everyone and are trans-systemic and trans-body of knowledge beneficial and progressive. Do I say there will not be other
problems? No. Systems, Life and the cosmos are emergent processes that will always evoke change and present problems, but again, historically, paradigm changes are permanently progressive.

Be happy to address any other questions.

Reply To Yoshi On RWER Blog

Yoshi:  Craig, I know that Keynes said that economists should be like dentists who relieve the pain of patients. If an economic policy is right one, we can boast we are dentists of national or regional economy. But, it is possible that a policy is wrong or misplaced. Then, we suffer side-effects. Economic policies should be tested by (1) experiences (consequently by history and evidence) and (2) theory (deeper understanding of the mechanism). I am afraid so many people like to talk about policies and contend that they are right to claim it, but history tells they were often wrong.

One of recent history is the failure of “reflationists” who claimed reflation policy (claiming to bring up inflation rate to 2% per an by working on the expectation of the people). Seven years of Abenomics and quantitative easing of “another dimension” (Kuroda) proved that all expectations of reflationists had no basis.

I do not say that Craig claims reflationist policy. I guess you are against it. What I want to say is policy without theory has a high risk to embrace serious side-effects out of imagination. Resolving problems in economy is much difficult than curing some kind of diseases. Are you sure that you can be a good dentist?

Me:  Thanks for the reply Yoshinori. The policies I’ve advocated here for years will:

1) beneficially deflate prices and increase purchasing power for all economic agents,
2) end poverty,
3) enable the integration and accomplishment of the dearest aspects of traditionally opposed economic perspectives (left-economic democracy and right-greatly reduce the sting of high taxation and the theft that re-distributive taxation actually is) and
4) enable us to direct consumer, industrial and fiscal policy toward green ecologically sane goals and thus have a chance to survive the existential threat of climate change.

That’s the removal of four infected wisdom teeth and the fitting of two brand new full denture implants.

Posted To RWER Blog (and censored)

Theorizing can go on forever, even after conclusions that the economy is monetary in nature (Keen and Graeber), that money is most basically accounting (Keen belatedly) and that the economy is correctly and inevitably embedded within a cost accounting infrastructure (no one since C. H. Douglas) which will enable us to directly implement solutions to the rigged austerity everyone here agrees is part and parcel of the problem.

Policy, most importantly paradigm changing policy implemented at strategic points in the economic/productive process, is what is needed. Policy is the action of systems. I suggest we focus on policies that will benefit all economic agents individual and commercial as soon as possible and also enable us to individually and fiscally confront the existential threat of climate change.

Posted To Rodger Malcom Mithchell’s Blog

Thanks for another spot on post. The real problem lies in the banking, financial and monetary systems and their monopolistic paradigm of Debt Only. And the solution is in a new paradigm, namely direct and reciprocal monetary gifting with a 50% discount policy at both retail sale and at the point of note/loan signing. That single policy does more for every economic agent individual and commercial than 5000 years of the current paradigm. Add in a $1000/mo. universal dividend, a new non-profit truly national banking system and you can not only end both inflation and poverty forever but enable large tax decreases, end expensive and energy intensive international supply chains, promote green re-industrialization, direct consumers toward sane ecological purchases and enable fiscal spending to handle the mega ecological projects that have so long been thwarted by the idiotic idea that money created ex nihilo is somehow scarce and we can only create money as debt instead of as both/either debt and gifts.

Personal Quote

Politics is about power. It’s only the degree to which politicians on both side of the aisle are infected with it that distinguishes one from the other.

Steve Hummel 07/11/2020

All True Summing and/or Ending Points Are Also Potentially Pivotal Turning Points

This is why private for profit money creation and financing is not a valid economic business model. Retail sale is currently the only valid economic ending point. Why? Retail sale is where production becomes consumption. Possession is 90% of the law and 99.9% of economics. Additional costs post retail sale violates the definition of possession as in consumption. Hence, for profit finance must end.

A 50% discount/debt jubilee policy at the point of note signing can become the new terminal ending point of economics, and the policy dramatically proves the fact that true summing and ending points can be pivotal turning points and aligns with the fact that all historical paradigm changes have been just such turning points.

Post To RWER Blog Regarding Paradigm Changes and The Concept Behind Them

How ironic it is that the additional purchasing power enabled by the paradigm changing policies of a 50% discount/rebate at retail sale and also at the point of note/loan signing will actually enable us to eliminate inflation, direct industrial policy toward green products and make possible the mega fiscal projects needed to off planet the most carbon releasing industries. Irony/inversion of present problematic realities has always been one of the primary signatures of paradigm change. That irony is enlightening when one also realizes that:

1) one of the primary aspects of the natural philosophical concept of grace is the resolution of problematic dualisms/conflicts

2) grace is (a) flow and gestalt, (b) the essence of present time reality is the continuous swirl of electro-magnetic emanation that we humans, caught up in our abstract fugues, miss, and (c) every major wisdom tradition preaches either contemplation of one’s own consciousness which is a manifestation of the graceful flow of the physical universe or a direct integration of same with the present electro-magnetic moment

3) the primary consequential effects of every historical paradigm change have always been aspects of the concept of grace

Book suggestion: The Master Game by R. S. De Ropp.