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.

Me:  Dave,

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.

There is a third thing necessary to resolve the monetary and economic problem and that is to ask ourselves if the current monetary, financial and thus economic paradigm of Debt Only needs to be changed to Abundantly Direct and Reciprocal Monetary Gifting at the point of retail sale with a monetary policy of a 50% discount to consumers that is reciprocally rebated back to enterprise gifting it to the consumer.

MMT and all of the other leading edge heterodox reforms surround and analyze the current monetary paradigm, but lacking the new but centuries long hiding in plain sight insight of the significance and power of such a monetary policy at retail sale/the terminal ending point of the entire economic/productive process….fail to comprehend the above paradigm changing policy and the singular concept that characterizes any and every new paradigm. Strategically integrate sufficient direct and reciprocal monetary gifting into the economy at its terminal ending, summing and factor expressing point and you solve the economy’s deepest and most long standing problems of 1) individual income and systemic monetary austerity and 2) chronic price and asset inflation….and you resolve it for all economic agents individual and commercial.

A paradigm is a SINGLE concept that transforms and creates an entirely new PATTERN. Thus it, itself, is the phenomenon of the integration of the opposites of singular and plaural, part and whole. Think integratively/paradigmatically and study the signatures of all historical paradigm changes.

Yes, scientists (hopefully) change ientsie-tientsie data points or try to make partial theoretical conclusions. Paradigm perceivers take the truths, the most relevant datums, the most applicable aspects and the highest ethical considerations of scientists, and finding the integrative essence of that agglomeration discern the new paradigm concept in that body of knowledge/area of human endeavor that will transform and create an entire new pattern.

The difference between science and paradigm perception-wisdom is the difference between small and big, partial and full, depth and surface level, reform and permanent
progression.

The whole middle east thing is another problem/distraction to obsess over while finance consolidates the integration of its monopolistic paradigm internationally. In view of that I would prefer the relative stand off alliances recently accomplished in Syria. Trump being a merchant of chaos of “The Fourth Turning” variety believes otherwise.

Capitalism is not the correct target. Not because it doesn’t have multiple stupidities and ethical shortcomings, it does, but because it is used by finance to invoke the false dualism of capitalism vs socialism and so endlessly distract everyone from the REAL problem, namely finance’s monopolistic paradigm of Debt Only as the sole form and vehicle for the distribution of credit and/or money.

We need to focus on the real, the deepest, the broadest problem….the monetary and financial paradigm which will transform the economy by resolving the long standing problems of monetary scarcity and chronic price and asset inflation, increase our survivability by immediately enabling us to begin a bottom up consumer move toward ecological sanity and equally enable the fiscal projects necessary for our ecological survival.

Me:  MMT is an excellent reform that aligns with but does not rise to the level of paradigmatic thinking about money and finance….the same as several other reforms surrounding money and finance.

JD:  Craig. MMT IS the paradigm change we need. It’s the only complete description of the construction of an economy totally based on fact. It doesn’t mean it will solve every issue because we as humans will always be seeking leverage somewhere. But if we see it become dominant it will revitalise economies everywhere. Killing off the false lament that the government cannot afford spending on things they use as excuses for poverty and inequality, which today are blamed on the poor for being poor etc. will be refused acceptance. Even if we are heading to hell in a hand basket, at least let’s sort out the mess beforehand.

Me:  I’m sorry, it is good and accurate research on the money mechanics of the current paradigm and a very good attempt at reform.

Paradigms are the essence concepts of patterns and a new paradigm is a new concept whose essence, enlightened by a new insight and/or tool, resolves the major long term problems of an old/current pattern and expresses and creates the new one.

S:  Yes that’s why it creates a consistent, coherent post-keynesian logic throughout. It moves away from taxpayer dollars to the public purse. If that’s not a paradigm shift, I don’t know what is.

Me:  @Senexx

It’s a very good reform that is aligned with the concept of the new paradigm. The problem is not just government or private money creation. That is indeed a part of the problem. It is about the nature of money distributed. Presently it is in the form of Debt Only. Even money created and distributed by governments are Debt Only. Money in the form of Gifts, completely free of any need to repay it is the new paradigm. That fulfills one of the essential signatures of a new paradigm/paradigm change and that is conceptual and temporal opposition to the old/current paradigm. In Hunting & Gathering it was nomadic relative austere survival to much more abundant agriculture, homesteading and urbanization.

I’m not saying all money should be in the form of Gifts. Loans will still be issued, but true paradigms/paradigm changes are new ESSENTIAL concepts that create new TEMPORAL patterns. MMT is about who creates and distributes money…which is a temporal PART of the new paradigm. Abundantly Direct and Reciprocal Monetary Gifting….by a sovereign monetary authority is the FULL paradigm qualifying concept AND temporal universe pattern change.

R:  Food for thought from a personal conversation with a friend who is a retired professor of philosophy form Kent State University. The discussion was about science, methodology, and the limits of reductionism:
.

Reductionism has three types; the first two are philosophic, and the third is a common scientific strategy. Ontological reductionism denies the being of higher levels of reality: “So-called spiritual reality is nothing but a psychological experience; psychological experience is nothing but a biological process; and a biological process is nothing but a set of biochemical events.” Epistemological reductionism claims to explain a higher-level science wholly in terms of a lower-level science, for example, “Scientific theories using psychological terms can, in principle, be reduced to scientific theories using only biological terms; in the future scientists will be able to explain biological terms solely in terms of chemistry and physics.” So-called “non-reductive materialism” accepts ontological reductionism but rejects epistemological reductionism. Methodological reductionism says, “In order to have a coherent and rigorous science, we exclude any hypotheses about spirit. For the purposes of this research program, we restrict our conclusions about spiritual experience to the language of neuroscience.” Note that religionists and atheists can in good faith co-author reports of methodologically restricted research. Nevertheless, methodological reductionism may be problematic, too, because it raises a crucial question in the philosophy of science. Science, Scientia in Latin, means knowledge, which implies knowledge of the region of reality that it addresses. It would be absurd to claim to plumb the meaning of human action by the methods of chemistry. Should not the method appropriate to a given region of reality be attuned to that region itself? This observation does not imply that chemistry says nothing important about action, but it does imply that the meaningfulness of what chemistry tells us depends on a prior understanding of action itself. Making a commitment to a scientific method on account of its quantitative precision or other epistemological advantages can hobble access to the region to be known. (Jeff Wattles, personal communication, 2/14/2013, emphasis added.)

.
While not desiring to get into a debate about the rather narrow definition of science given in this post/article, I note it is a fact that this is one among many definitions give by scientists themselves and is not universal and itself has a historical context. Indeed, history is messy and simple right answers are not always so simple and easy.

Me:  Correct. Reductionistic “science” needs to be transcended and that can be done without resorting to religious dogma. Self awareness EXISTS no matter to what one attributes it or does not attribute it to.

Current economics doesn’t consider philosophy except to consciously or unconsciously affirm the current paradigm so it is stuck in either compartmentalized social or hard sciences which tribally resist integration of their particles of truth. As I have said here many times Wisdom is the integration of the truths etc. in opposing and/or compartmentalized perspectives, and paradigms are quintessential integrative concepts because they are a SINGLE MENTAL concept that transforms and creates an entirely new PLURALISM/TEMPORAL UNIVERSE PATTERN. Hence Wisdom/integrative thinking TO THE LEVEL OF paradigmatic perception must be the goal in economics.

Sometimes it takes a “road to Damascus” type cognition on the reality of the existence of self awareness to snap people out of their habitual pre-occupations with abstractionism.

Either that, or having someone utterly violate them physically or emotionally to make them aware of the fact that, in the human world, morals and even ethics (the rational consideration of morals) EXISTS!

And, without it becoming an obsession of course, underlies and under cuts every other consideration…in every area of life and living.

R:  Craig, your own religion is preached dogmatically on this very forum, I do believe 😉

Me: @ Rob

What is your (and anyone else’s) best guess about what the new monetary and financial paradigm concept is? It’s never brought up here. Very unscientific.

MC:  Religion can be defined as that which one holds to be of supreme value. You are every bit as much devoted, dogmatically, to your religion Craig which you preach (post) on this forum incessantly. You merely dismiss any reasonable response like any other zealot who holds to their religious beliefs fundamentally. You fit the definition to a shoe.

Me:  “Religion can be defined as that which one holds to be of supreme value.”

That’s a fair if incomplete definition of religion. Can you come up with a better supreme value than grace as in love in action/policy?

I have nothing whatsoever for or against religion per se, only the obsessive contention and dis-integrativeness it too often degenerates into. I agree with the particles of truths many express here like MMT and financial instability. I only wish their advocates would step up mentally and integrate their own theories with the philosophical concept behind the new monetary paradigm…which concept they already, if unconsciously, are in agreement with.

MC:  Craig, your obsessive contention that your belief is the only integrative philosophy and everyone else, no matter how reasonable their questions or honest their critique are wrong, is itself the sign of a zealots religious zeal and fanatical insistence one is right and everyone else is fundamentally wrong. The endless cycle of lip-service then ignore honest criticism never modifying one’s worldview or learning something new; these are the signs of a dogmatically held belief. You are not being intellectually consistent and that too is a warning sign of fanaticism. When a so-called “scientist” refuses to honestly face the facts of reality and be self-correcting, preferring a bad (erroneous) theory to no theory, they are acting like a religious zealot; their science has become a religion–scientism. When a so-called “scientist” distorts history for polemical and rhetorical purposes, despite historical evidence to prove they are twisting truth and fact, their science is a religion–scientism– not true science. The strength of science is that in the long turn it does self-correct. Religion too self-corrects but over a much longer and slower period of time for it lacks the necessary institutions and cultural norms to impose such self-correction without creating sectarianism and schisms. Science has it schisms too but these schisms are more open to self-correction by the larger scientific community over time.

Me:  I’m unapologetically evangelical about the new paradigm and its aligned policies and regulations, but I’ve done none of what you accuse me of above.

“your obsessive contention that your belief is the only integrative philosophy and everyone else, no matter how reasonable their questions or honest their critique are wrong,..”

I agree with much of what people say here, and I don’t make people wrong unless they attack me with ad hominem or false critique first. I do assert that virtually no one here thinks on the integrative level of the paradigm and that is an observable fact.

“The endless cycle of lip-service then ignore honest criticism never modifying one’s worldview or learning something new; these are the signs of a dogmatically held belief.”

Some of the theory and policies of Keen, Hudson, Mosler, Brown, Douglas etc. are in my book. That is not lip service, it’s being integrative. Almost no one here actually engages me on policy or philosophy. That is largely because their own theories and reforms fit fully and seamlessly within my theory of the new paradigm. I’m the only one here suggesting that the particles of truth etc. in Keen’s Minsky financial instability hypothesis, Hudson’s financial parasitism, Brown’s Public Banking and MMT integrate with each other on the paradigmatic level. Tribalism is probably part of the reason for that.

I’ve altered my thinking many times in numerous and even fundamental ways. Synthesis/integration IS change…and that is what I advocate.

“The strength of science is that in the long turn it does self-correct.”

Correct. And when a new paradigm comes into the awareness of virtually everyone as a result of one of the signatures of all historical paradigm changes, namely a new tool or insight, such change can broaden vastly, especially in our interconnected high tech world.

How do you disagree with the policies and philosophy I advocate?

MC:  Do you every ask yourself why no one will engage you regarding policy and philosophy? You say you have altered your thinking, but one would never know given the overwhelming repititious nature of the content of your posts. It has become so reflexively stereotypical that one could quite literally automate your replies to virtually every topic posted on this blog (it would make a fun intro to programming assignment), but take some solice you are not alone, you do have Salter’s company to console you.

Me:  When you engage me about your disagreements with my policies and philosophy, and show that you can come up with better and more universally beneficial ones I will embrace them. Until that time your recent posts are nothing but ad hominem.

Finally, whether I’m a zealot or not is irrelevant if the paradigm defining benefits of the concept and its policies I advocate are real enough to resolve the deepest and most long standing problems of modern economic systems.

MC: Craig, I don’t want to curb your enthusiasm (evangelism), for the world needs idealists no doubt. You have already been asked by Ken provide concrete practical steps as to how you might achieve this reformation of capitalism that you envision. Unless I missed the only response he got was dismissive rhetoric. Why should I think I (or anyone else for that matter) would be treated any differently?

Your ideals are sufficiently high, but your ideas are so impractical that they render your idealism pragmatically speaking, useless if you have no chance of convincing your fellows to actually adopt in practice your ideas.

I highly doubt that outside a closed utopian community you have much of a chance of convincing anyone, let alone society, to drop the current economic structure and adopt wholesale your ideas.

In other words, there must be intermediate steps to be able to implement even a small part of your ideal structure for economic behavior that your idealism envisions.

How to get there is as import and knowing where you want to go, for we (as both individuals and society) are evolutionary mortals.

Me:  “You have already been asked by Ken (to) provide concrete practical steps as to how you might achieve this reformation of capitalism that you envision.”

Yes, and I told him we should directly address the individual and the small to medium sized business community in order to start a mass socio-economic movement that could herd the entirety of the political apparatus toward THE OBVIOUSLY SELF INTERESTED policies of the new paradigm. Everyone else here apparently thinks they’re going to change things by chattering endlessly with each other here and to ego-involved academics who do not have a concept of what a paradigm is current or new.

“Your ideals are sufficiently high, but your ideas are so impractical that they render your idealism pragmatically speaking, useless if you have no chance of convincing your fellows to actually adopt in practice your ideas. I highly doubt that outside a closed utopian community you have much of a chance of convincing anyone, let alone society, to drop the current economic structure and adopt wholesale your ideas. ”

My key policy, the 50% Discount/Rebate policy at retail sale immediately, empirically, mathematically and temporally doubles everyone’s earned income potential. It also immediately doubles the actually available business revenue for any enterprise. Oh, and it not only immediately, empirically, mathematically and temporally eliminates any possibility of price and asset inflation it accomplishes one of the major signatures of paradigm changes which is to completely invert the realities of the old/current paradigm. In this case from chronic price and asset inflation to beneficial price deflation.
You don’t think a 100% raise might be attractive to virtually everyone? A 100% raise in presently available business revenue to enterprise? A $1000/mo. universal dividend at age 18 that is doubled by the 50% Discount/Rebate policy at retail sale? The lifting of transfer taxation for then redundant welfare, unemployment insurance and social security paid by all employed persons and every enterprise?

“In other words, there must be intermediate steps to be able to implement even a small part of your ideal structure for economic behavior that your idealism envisions.”

That is the orthodox mindset of reformists. Viral communication in a high tech world, the hope evoking nature of new paradigm concepts and historical paradigm changes are the destroyers of orthodoxies.

Do you disagree with any of my policies?

MC:  You can have the last word.

Me:  Yes, I can…unless you can come up with a better paradigm and its effects.

Obsessive conservative’s and liberal’s minds have the materials of the moral arch of history solidified in their minds. Classical liberals are walking on that arch and classical conservatives are trying to grip it with their hands. The trick is to try one’s best to wisely move along it while remaining two inches off it and yet being ready to descend onto it and act with clarity.

Paranoid ideation is fundamentally mentally divisive and emotionally irrational.

Wisdom is the very process of the integration of only truths, highest workabilities, most relevant applicabilities and highest ethical considerations of opposing perspectives.

Paranoid ideation is disintegrative. Wisdom is integrative.