Me:  John and Ken,

This is a macro-economic blog. Why don’t we discuss the the macro-economic insights to be garnered from double entry bookkeeping regarding the scarcity ratio between total available to spend individual incomes and total systemic costs and hence prices? Also, the macro-economic and policy significances to be gathered from the fact that the money, pricing and accounting systems are all digital in nature, that is, equal amounts of debits and credits, prices and money and money and debt sum to zero?

John, you are apparently a cost accountant. Are you aware of the cost accounting convention that all costs must go into price?

KZ: Craig, macroeconomics is something a group or groups of people invent. Follow the inventions. Craig, “all costs my go to price.” Is that average price, marginal price, or transitive price. Got to pick one. And then you’ll have to defend your choice.

Me: Ken, The answer is final retail price because that is the terminal end of ALL costs, of the entire legitimate economic process and hence the terminal expression point for all forms of inflation. The ending point for any process is also an ultimately powerful point for policy expression and effect, and that is when and where the paradigm changing policy of the discount/rebate is implemented. Whatever occurs before it is largely irrelevant so far as policy effect is concerned.

It is of course also true that accounting is complex and can be gamed…..that’s why the new growth area in the new paradigm will be forensic accounting in order to ferret it out and hence increasingly stabilize the incredibly stabilized system wrought by the philosophy and policies of Wisdomics-Gracenomics.

Thank god, you’ll pardon the expression, for guys like you and Bill Black.

KZ:  Craig, an old saying amongst haberdashers, “never pay retail.” Aside from the dealing in prices that goes on constantly, making retail price a fluid value, often political or social position can change the price one pays for any commodity. Pricing, and all the process of buying and selling, are pragmatic, rather than paradigmatic. Usually the result of cultural rules of thumb and prejudices more than any “rational” computation. Accounting is complex, but that’s not why it can be “gamed.” It can be gamed and is gamed because it is a human creation, full of inconsistencies and uncertainties. Like all other aspects of culture, buying and selling is made stable “after the fact.” Human buy/sell based on shortcuts and estimates and then give the process policy and paradigmatic stability after the deal is closed. Look at all the big mergers over the last five years to see this process in action. You might call the rough-cut rules and guesses used by humans in buying and selling wisdom. But I would not.

Me:  The economic system ending point of retail sale and the abundantly high percentage of the discount/rebate policy render all that you have said in your last post….irrelevant. Why? Because no enterprise can withstand opting out of the policy because to do so is to commit economic suicide due to the fact that net profit margins are almost exclusively of single digit size. Put that together with the fact that doubling everyone’s earned income means doubling every enterprise’s potential sales and you’ve got not only “an offer/policy that no one can rationally refuse”, but also the better and problem resolving alternative to raising prices in a monetarily austere system.

Oh, yeah, yeah you’ll need to craft rules and regulations to accompany the dividend and discount/rebate policies just like every other system that has ever been put together because not everyone is rational and ethical, but if they align with the concept behind the new paradigm the result will be mutually beneficial and more ethically effective than the present system that is based on the tawdry ethics of power, profit and domination.

Philosophy and direct observation are lacking in economics. It’s time they were applied.

FS: The whole of this blog can be abstracted into its describing the failure of economists to understand the difference between concrete and abstract relationships.

Econometrics only produces and only ever will produce concrete relationships.

Abstract relationships are derivable from first principles analysis. These are the only possible examples of valid theoretical understanding. I fail to understand why this appears never to be recognised by economists. Possibly it is the wish to conflate decision making which is not necessarily predictable with the predictable results in the physical world of decisions implemented.

Me: Frank,  I perceive that you think I’m a crackpot, but we are very close in actual fact. Economists are like Marley’s ghost they are “forced” to be loaded down by the chains of their own thinking and and they are condemned to remain so by their inability to identify the concept of the new paradigm and the concept behind even it.

So far as first principles are concerned, if the scientific, quantum mechanical and electro-magnetic reality of the cosmos is most accurately and honestly described as a dynamic, interactive and graceful flow then why are we not aligning economic theory and policy with that best analysis? If the adding of space and time enable a certain randomness to this ultimate reality should we just ignore the more basic reality, or align policy and regulation with it so that their effects approximate it instead?

Even though our temporal reality is not the ultimate one, If we want to be accurate, honest and knowledgeable about the exchanges that take place in the economy and be able to know where we can best align it with our intentions of profitability and general flow why do we not analyze it using one of mankind’s greatest inventions double entry bookkeeping?

Why don’t we follow its conventions like the cost accounting convention that “all costs must ultimately go into price”?

Why don’t we recognize that the ending, summing and ultimate expression point for significant economic factors like price, the entire economic process and inflation is retail sale and so recognize that a policy at that point and time might have significant effects?

And just to sure we’re being practical about our temporal reality why don’t we utilize the fact that the pricing, money and accounting systems are all digital in nature and so craft a digital monetary policy that will benefit all agents and enable it to approximate the graceful flow of ultimate reality?

First principles. They ARE important.

JV:  If reality is indeed a process, something we both agree on, then Y=C+I in time cannot be real. In other words, Keynesian economics is fiction. And Keynes’ famous dictum about Hayak and his ending up in bedlam, I’m afraid is no more than a case of the pot calling the kettle black. Instead, C=I with the intermediary of Y over time has at least the possibility of representing reality. Unfortunately this potential point of departure would require a rewrite of the entire economics oeuvre. That this is too monumental a task for a single person to undertake ought to be clear.

Me:  Remedy the problems surrounding Y = C + I, the presently obvious monopoly paradigm of Debt Only and the equally historically obvious scarcity of aggregate free and available individual income that has attended it….with a universal dividend and 50% discount/rebate policies I have suggested here implemented specifically at the point of retail sale….and every other economic factor can align with and adapt to the new paradigm….exactly as has happened with every other paradigm change.

The 50% discount/rebate policy is effective for every consumer product at final retail sale. A discount/rebate policy is also necessary at significant points like commodities markets, at the creation of mortgage notes,  to businesses for government contracts, for real estate fees, insurance premiums/drug prices and speculative activities (the national bank will be very strict and effectively regulatory regarding what is to be legitimate speculation as well as what it will allow leveraging for at all, for instance no domestic or foreign shorting of the currency will be allowed, and all attempts at it will be identified as illegitimate and “null and void”).

If an economic theory or political system wants to survive and thrive they must form a satisfactory contract that obviously benefits both sets of agents, namely the individual and commercial enterprise.

1) Insuring everyone’s economic security for life with a $1000/mo universal dividend,

2) that is doubled by a 50% discount/rebate policy at the point of retail sale and

3) the latter policy also doubles both everyone’s earned purchasing power and

4) the potential actually available business revenue of every enterprise….

would seem to fit that bill rather nicely. Of course the kickers are that

5) the 50% discount/rebate policy taking effect at the terminal summing point for all costs (including the costs of capital goods and profits) and so total price for every consumer item in the economy eliminates any possibility of inflation (garden variety inflation is restrained by competition and potential loss of market share and hyper-inflations require specific disastrous conditions to occur) …because the end of the entire economic process is consumption and that means you own it and no commercial agent can enforce additional costs upon the individual. You get to eat it, wear it, drive it around, etc. etc. etc. and

6) the new paradigm of Direct and Reciprocal Monetary Gifting effectively breaks up Finance’s monopoly paradigm of Debt and Loan Only…which is the deepest, most underlying and largely unperceived problem in economics.

So I’d suggest we start there and then, because the world is not an altogether rational place, come up with regulations and sanctions aligned with the concept behind even Gifting…just for the sake of logic, pragmatism and philosophical continuity.

“What is often needed is both a good attitude and good mathematics.”

This is most definitely true because it is the integrative perspective.

However, it’s always the intuitors and paradigm perceivers who are first to see the truth and the whole…and sometimes the scientists and mathematicians come to the integrative and basic truth later. This is also why heterodox economists can advocate one off and once removed palliative policies that reflect the new paradigm concept (Gifting) like debt jubilees, government deficits etc. and yet because they have no real consciousness of the even larger and powerful concept behind even the concept of the new paradigm (grace) they miss the integrative bigger picture.

[ (Science/Fragmentation x Wisdom/Integration/Wholeness) = The Pinnacle Reality of Grace ]

God/the cosmos is grace as in flow, and Money’s Power is godlike. Recession/depression is not inevitable. At least not in monetary economic systems. If there is intention, more individual income than costs, means of production, regulations and sanctions aligned with grace/the cosmos and awareness of the power of a digital monetary policy at the ending point of the economic/productive process other than some incidental disaster, enterprise will continue.

Hence philosophically and monetarily/economically speaking grace/money as in an abundance ratio of individual income to costs is analogous to God’s/the cosmos’ omnipotent grace as in a loving flow of action.

What I’m trying to do is make what every heterodox economist agrees upon…but don’t know how to attain. They are at best recognizing one or two aspects of the concept of the new paradigm, I’m thoroughgoingly implementing every relevant economic, monetary and financial aspect of that concept to the economy with aligned and logical policies. They can only conceive and perceive palliatives and fixes, I’m operating with full consciousness of the aspects of the philosophical concept of the new paradigm and consequently its broad, deep and transformative solutions.

As grace is the deeply observed description of the essentially stripped bare dynamic, interactive flowing process of the cosmos itself it is the independent variable in virtually every differential equation and in economics its numerous applicable aspects are the dependent variables.

Me:  Even though I’m in agreement with virtually all of the heterodox theoretics being presented on this blog I’m the only one here who is comfortably willing and able to talk about monetary and economic POLICY because no one else here is confident enough to do so, and the reason for that is they have not yet recognized the philosophical concept upon which the new economic philosophy and paradigm needs to be based.

When you do a thorough exegesis of that concept and see how it fits seamlessly within the legitimate operations of economics, resolves its deepest and most chronic problems, replaces the dominance and primacy of the current structurally dominant entity and its paradigm (private finance/Debt Only) and defines the new paradigm itself…you become the one eyed man in the country of the blind.

HS:  I know a little about the one eyed man in a village becoming the source of all wisdom, but I do truly admire the Ethiopian one-eyed, wounded, old but fierce female tigers who scare the hell out of their male counterparts to defend their loved ones working co-operatively and teaching their young ones to do the same in battle.
God knows when these Economists will be confident enough or wise enough to develop better philosophies to leave behind for anyone!

Me:  Helen,

Maybe they will become wise enough if they contemplate that debt jubilees are are monetary grace as in gifting, and that government deficits are grace as in monetary abundance instead of austerity. Also, if they contemplate that a universal dividend is monetary grace as in directness instead of via re-distributive taxation (directness versus via the church only was the major aspect of grace expressed in the Protestant Reformation).

Maybe they will become wise enough if they contemplate that the reciprocality of the discount/rebate policy is grace as in graciousness, benevolence, lack of bias and relationship as opposed to the dominance by uneconomic costs by finance that businesses must pass on in order to attempt to be profitable in a system of individual monetary scarcity and systemic austerity.

Maybe if they study the signatures of imminent and accomplished paradigm change it will help as well.

It’s not only important to take political control of the economic and financial systems, it’s  essential to awaken to their new paradigms. Why? Because political wins and reforms  fade or get reversed. However, a paradigm change will never go back to the old one….because it’s such a complete and obvious no brainer advance and historically .

The New Deal was a significant reform, but was not a paradigm change. Regressive forces have been trying to reverse them for over 80 years. Recognizing that a universal dividend of $1000/mo. directly distributed to everyone 18 and older and a 50% discount/rebate policy at retail sale will immediately end poverty and immediately double everyone’s purchasing power IS a paradigm change. Furthermore and along with these policies, the recognition that the primacy of direct distributive monetary policy enables us to do away with RE-distributive taxation and greatly reduce individual and business taxation.

If regressive forces have not been able to reverse social security and medicare, how are they ever going to be able to reverse these obvious, universal and bipartisan constituency paradigm changing policies???