Me:  The paradigm of the economy and the money system hasn’t changed for the entire length of human civilization. Economic specialists are not idiots because they don’t believe me, they’re idiots because, curiously from a scientific standpoint, they don’t and/or refuse to analyze from the paradigmatic level.

DT:  But Craig, economics is still in the pre-scientific class because it is using the WRONG paradigm: not of economics but of scientific method. It is disagreeing about paradigms and what they are because empiricists try to theorise events rather than what is channelling and ordering them: trying to bring order out of chaos before it knows how to by mimicking the ‘force’ rather than the ‘communication of information’ paradigm.

Me:  Dave, yes economics is held back by the fact that the monetary paradigm has never changed for the last 5000 years as David Graeber has written about. It has ALWAYS been Debt Only. That is both its conceptual essence and temporal fact….which should satisfy scientists, but mostly doesn’t because the present paradigm for inquiry is Empirical Science Only and hence strongly tends to invalidate and exclude philosophy and integrative phenomena like paradigm changes.

Simply base the 50% discount on after tax price and the monetary authority thus pays for half of the state’s funding needs.

This discussion dramatizes what is wrong with economic theorizing, namely dualistic, obsessive, non-resolving contentiousness.

What is required is integrating BOTH anthropological AND empirical evidences and then considering and finding a single concept that fits seamlessly within and enables a thirdness greater oneness of such evidences namely a pattern/paradigm change. As I have pointed out here many times before two of the major signatures of a paradigm change are the discovery of a new insight and/or tool and conceptual opposition to the current/old paradigm.

So the discovery of the power of a monetary policy at the single aggregative ending point for all consumer goods and services, hence the terminal expression point for all economic factors including inflation and purchasing power and finally that fits seamlessly within the very woof and warp of exchange, i.e. economics/the productive process itself…seems to fit such insight.

And a 50% discount/rebate monetary policy at that point (retail sale) would result in empirically inverting the present realities of individual income scarcity and systemic business revenue austerity into abundance of same thus fulfilling the conceptual opposition signature (and integratively the temporal reality one as well) of genuine paradigm change.

1) Macro-economically the rate of change in credit must always go up or you go into recession according to Steve Keen, yet as that means debt service consequently continuously rises you’re stuck between a rock and a hard place in a rigged cost inflationary monetary system.

2) This is the exact same calculus that C. H. Douglas correctly came to from his cost accounting micro-economic perspective characterized by his statement that “the rate of flow of total costs exceeds the rate of flow of total individual incomes simultaneously created to liquidate them.”

3) Economists have iconoclastically analyzed and de-bunked macro-economics 15 trillion times from the middle….and almost totally neglected and/or totally missed that the real problem is the monopolistic monetary and financial paradigm of Debt Only, that’s ONLY AS DEBT…WHICH ALWAYS MUST GO UP….WHICH WHEN ALL FACTORS ARE CONSIDERED ALWAYS INCREASES COSTS….WHICH MEANS THE SYSTEM IS COST INFLATIONARY…WHICH MEANS A MEANS (READ MONETARY AND FINANCIAL PARADIGM CHANGE) MUST BE FOUND TO COUNTER THE PRESENT PARADIGM…NOT JUST TO CREATE AN EQUILIBRIUM WHICH IS PALLIATIVE, STATIC AND LAGGING, BUT TO CREATE “THE HIGHER FREEING, INTERACTIVE, DYNAMIC, FREE FLOWING AND ETHICAL MONETARY DISEQUILIBRIUM, AND BENEFICIAL PRICE AND ASSET DEFLATION WITH A HIGH PERCENTAGE DISCOUNT/REBATE MONETARY POLICY AT BOTH THE POINT OF RETAIL SALE AND NOTE SIGNING….WHICH IS THE VERY EXPRESSION OF THE NEW PARADIGM OF DIRECT AND RECIPROCAL MONETARY AND FINANCIAL GIFTING.

Economists are extremely intelligent and erudite, but when it comes to paradigm perception and solutions they tend to be “dipsticks”.

A very good article. Perhaps we can paraphrase G. K. Chesterton’s slogan “Three acres and a cow” to: Twenty acres and a solar/battery powered mini-tractor. An economics of grace would include an ultimate wise and respectful attitude toward the land and its cultivation, and the approach would best be integrative in every way.  Incentivizing economic virtues and discouraging economic vices via taxation with a mind toward ecological sanity is a part of the solution, yet costs are the ultimate factor in both economics and ecology. None of the ideas and projects mentioned in your article are ever likely to come to fruition until the money system is taken off our necks and utilized to assist rather than impede such sanity.

In other words you multiply savings’ purchasing power by 2. Then, if you buy a new electric powered auto or solar energy home you not only get a 75% reduction in its price with the double 50% discount, if you use savings to buy it you get an additional doubling of the purchasing power of your savings. Thus a $40k electric car  is purchasable for $10k with the double discount and if you use $5000 of your savings you’ve paid off the total cost of the car and the note goes poof. Normal savings’ purchasing power doubles with the 50% discount/rebate at retail sale for any product or service, and at note signing for “big ticket” and/or green products, but savings’ purchasing power is not doubled on the residual note….unless you do so with a 2x purchasing power of savings policy.

It incentivizes savings and to that degree also tends to reduce overall general and non-green consumption.

5will

So you’ve not only reduced

Me:  @JD

Excellent suggestion. KISS is always a good policy. How about:

1) Loans create deposits

2) Private banks create 97+% of loans, a virtual monopoly on credit creation

3) Even the money created by governments via the FED as deficit spending is created as debt.

4) Hence the monetary paradigm/pattern is Debt Only

5) A monopoly on both credit creation and also on the ENTIRE pattern of Debt Only, that is as the sole FORM and VEHICLE for the DISTRIBUTION of money/credit is probably

a) the stupidest,

b) most naive, (in view of the fact that money in a monetary economy is both the means of security, and the ability to deny it is the power to deny both individual survival and the continuation of commercial enterprise) and

c) blatantly contradictory fact in an alleged competitive free market economy.

6) Finding a way to place the power of money “into the many hands of the individual” in such secure abundance that there is no longer “the reserve army of the unemployed” that can be extorted and cowed, that also more abundantly benefits 99.9% of enterprise, that resolves the deepest problems of the current paradigm by literally inverting its realities of individual income scarcity, systemic austerity, balkiness and tendency toward recession or worse and finally of price and asset inflation….would seem to be the order of the day.

It immediately gives every individual a 100% raise in their purchasing power, potentially doubles the actually available business revenue for every enterprise’s goods and services. If the economy doesn’t flow freely with that reality being established I don’t know what would.

It also not only completely eliminates ant possibility of price and asset inflation, but actually accomplishes what has been considered impossible and that is it beneficially integrates price and asset deflation into profit making economic systems.

Such inversions and establishments of new realities only occur in what is called paradigm changes. In fact, to the degree of those new realities effecting virtually everyone, that is what I refer to as a mega civilizational paradigm change, the likes of which has not happened since the change from Nomadic Hunting & Gathering to Agriculture, Homesteading and Urbanization.

Mankind stands at the crossroads of its history where accumulated and generalized crises are increasingly afflicting  us. The importance of now and the pattern breakthrough nature of paradigm change are precisely what is required for our own and othewr species survival. Let us grasp onto it with post haste.

It is the single cost, price and profit summing, ending and aggregative point, and also the terminal ending and economic factor expression point in the micro-economy.

It is thus also a pivoting, inverting and potentially transforming point for monetary, financial and economic realities. In other words it is a paradigm changing power point for policy in all of those systems.

G:  And anyone who thinks the essential problem is “the monetary paradigm” should be careful throwing around the word stupid.

Me:  When all of the leading thinkers and reformers such as Modern MONETARY Theory, Keen’s showing that Minsky was right about FINANCIAL instability, Hudson’s observations of the parasitical nature of present FINANCE and the efficacy of the gifting of DEBT jubilee’s in history, Ellen Brown’s attempts at FINANCIAL structural reform with state/public BANKING and Graeber’s history of DEBT…all revolve around and point at the MONETARY and FINANCIAL paradigm of DEBT ONLY…then the Martians are probably laughing if not rolling on the floor when we intellectualize endlessly while missing the salient and most relevant point.

G:  Craig, you are lumping a large number of disparate things together. I knew Minsky was right before most people had heard of him. I had lunch with him once back in the early 90s – lot of fun.. It’s true that excess resources from a social point of view are used up in excessively large financial sectors. None of that establishes that the essential problem is that monetary creation is associated with credit creation…….

Me:  Where to begin?

“It’s true that excess resources from a social point of view are used up in excessively large financial sectors. None of that establishes that the essential problem is that monetary creation is associated with credit creation.”

Yes it does. Do you believe in competition? Then why are you not in favor of paradigmatic competition? Oh, you’re for regulatory and (perhaps) structural financial reform…apparently because you cannot or will not look at the much wider, deeper and transformationally beneficial effects of an entire pattern change.

“Moreover it is not so easy to construct and calibrate a state-driven alternative.”

Not really, so long as one is conscientious about doing thorough market analysis and consciously and ethically adhering to aspects of the concept behind the new paradigm, namely the natural philosophical concept of grace.

“If you subsidise producers of consumption goods on condition they lower or do not raise prices, you raise the real wage.”

I’m not doing that. I’m assisting retailers and consumers AT retail sale which would benefit EVERY business model, except private banking/finance of course.

“To do that successfully you need to know how much labour productivity will be rising and how much of the extra income wage-earners will save and how much spend.”

Most if not all of that is rendered irrelevant because of the fact that a directly distributive money system that has terminally dealt with the old paradigm problems of inflation, unemployment and wide spread individual monetary scarcity. You can still account all of that, but the new paradigm ENDS the paradox of thrift and greatly homogenizes the fallacy of composition.

“And are you going to abolish private banking?”

I’m going to abolish private money creation by private banks. As I’ve said before intermediation of priorly created and saved money and profits that have been priorly garnered from the actually productive process would be allowed as investment is a legitimate financial business model. However, the non-profit national bank will not loan funds to anyone or any enterprise that could or would be immediately aggregated and used for speculative purposes by private investment firms. Relatively smallish individual loans for speculative investment, depending upon its stated purpose may actually be funded, but not for any ethically rancid things like hardcore pornography or wildly de-stabilizing nonsense like derivatives or synthetic derivatives etc.

“A state monopoly bank that lent out workers’ deposits would still generate additional deposits as its loans were spent.

Would not be allowed as per above.

“Looks as if you would need exchange controls too.”

Why would a start up or even a failed business that can correct its business plan want to borrow at interest from abroad when it could do so at 0% here? And if a smallish amount percentage-wise were allowed it probably wouldn’t be a problem anyway. Dare say it would be severely scrutinized.

“But the absence of a cost of capital was one of the reasons for inefficiency and waste in the Soviet system.”

I don’t think that was the actual reason. It was mostly corruption, idiot ideology and lack of awareness of how to implement the better new paradigm.

“Investment has an opportunity cost in foregone consumption spending and that should carry a price. A state bank would not normally make interest free loans.”

Old paradigm thinking.

“The tendency to speculative excess.in capitalist finance can be counteracted by appropriate regulation as long as the state is not captured by financial interests. More of investment can be managed in the public sector, as Minsky argued. Distributional issues can be tackled in various ways including tax and transfer. In attempting to solve a range of problems with a single magical solution, ignoring all the practical difficulties, I don’t think you serve the cause of reform.”

Impermanent and generally shallow reformist ideology and old paradigm thinking that hasn’t yet cognited on the concept behind the new paradigm and the significance of a high percentage discount/rebate monetary policy at retail sale.