chdwr

I learned something here. The Austrians actually aren’t believers in DSGE, but they are still market worshipers, and the extreme Austrians I have known are like the Randrhoids who neglect ethics almost entirely when you continue to confront them with any of the innate insensitivities that are a part of capitalism. Let me ask you this. What if a modern debt jubilee takes place and yet we don’t implement any policy along with it to combat the “naturally upward tendency of capitalism”? Wouldn’t that be an incomplete regimen that would simply re-initiate the apparent tendency toward equilibrium, but which because of the natural upward tendency of prices in a profit making system and also the increasing erosion of aggregate individual incomes by innovation and AI….also repeat the reversal you accurately describe in your videos? And if we implemented a variable but continuing monthly universal dividend and a general discount to prices at the very end of the economic/productive process, especially if these created what I refer to as “the higher disequilibrium” of more total individual incomes than total prices for a given period of time , i.e abundant incomes and yet continuing price deflation….would that not be a positive integration of Austrian intentions and disequilibrium theory? By the way, I’m not just some doctrinaire Social Crediter. I can see that they still tend to embrace a statistical equilibrium in computing their dividend and discount policies as well. That’s why I call my Social Credit aligned but transcending theory Wisdomics/Gracenomics. It fully embraces disequilibrium as in continuous process and rejects austerity in favor of the deeper philosophical concept of Grace as in disequilibrative abundance. What harm could price deflation wed to increased income and savings have? (Remember a monetary authority would reimburse merchants all of the gifted discounts they gave to the consumer and people have self determined control over their savings, not so with debt.)

Innovation obviously plays a role in the evolution of economics, but the innovation of monetary grace as in abundant costlessness/gifting is so deep a philosophical and policy change in economic theory that it is able to integrate and resolve the paradigms of scarcity and austerity.

JS: I think the failure of modern economics is that its philosophy is rooted in materialism. I came across the following quote from Douglas in his book, “Whose Service is Perfect Freedom”:

“Both Nazism and Communism look at life from a purely materialistic basis. Human beings are mere pawns in the economic game. Life is a matter of mechanics and a perfect society is a perfect machine, designed and made by a little coterie of supermen who call themselves the State. Individuals are mere cogs in that machine. If individuals or groups of individuals do not fit into the society devised, then the State must step in and, with the impersonality of a surgeon wielding his knife, excise them from the body politic. They call it “liquidating” or “purging”. But it has not been done with the cold impersonality of a surgeon. It has been done rather with the deliberate cruelty of a gangster exercising his sadistic power and impulse. It is doubtful if any blacker pages of history have been written than those of the last few years which have seen the doctrines of materialism taking the shape of totalitarian States with their claim to absolute control over the entire life of the individual. Any system which begins successfully to use man as a means rather than as an end becomes a Juggernaut crushing out of life all human freedom and value. “The fundamental error of these systems is their denial of the truth that, ‘man does not live by bread alone’. His origin is more than biological and his needs are more than material. “

Me: Yes, great quote from Douglas.

[ (Faith/Confidence x Hope) –> Love ] = Grace

The technocrats at the very least neglect/drop out Love, at worst invalidate the entire formula/process in favor of power-knowledge.

WW: I think you’re right Steve that there needs to be a slackening of the tension as a matter of urgency and large scale forgiveness of debt would achieve that. It would be particularly effective as it would put people in a more secure relationship with their land.

Me: Thanks Will. Yes a Trinity-Unity [ (Dividend x Discount) –> Debt Jubilee-Grace ] is always the more complete solution. And in this case an aspect of Grace is actually present in each part of the Trinity. Trinity-Unity, when it includes love, is the very expression of Grace. It has its incomplete counterfeit that encourages obsessive contention and so only Duality, namely Dialectical materialism, but again, if we are looking for actual, complete and loving-caring solutions, Trinity-Unity is the ethic we need to encourage.

WK: Agreed, John.

They can hardly do anything else but fail on their own terms because their perceptions are fixated in the age of scarcity, they have no conception of “natural” cost”, they have demonstrated little understanding of the implications of modernizing technology (although the reality of automated process is beginning recently more to impress), they do not recognize the Cultural Heritage as a factor of production nor as a basis of general Inheritance, they appear locked in an inexplicably absurd belief that the real purchasing-power of money can be increased by boosting its “velocity of circulation”, they imagine that the economic salvation of a nation depends on its ability to export more real wealth than it imports, they regard money as something apparently of substance as a commodity to be traded when, in fact, realistically perceived, it is simply accountancy of costs and cancellation thereof. They seem oblivious to the interaction of the credit system with cost accountancy. They fabricate in their over-activated imaginations such rarified and fatuous terms as the “natural rate of employment” but provide no realistic counterpart such as the “natural rate of leisure”.

At the basis of all this is an anachronistic lack of faith and misperception of abundance as scarcity, consequent to an erroneous assumption that money correctly reflects real wealth–and they construct their whole twisted edifice upon such chaotic beliefs. In a futile effort to prove their point they tax the consumer to pay producers not to produce and destroy surpluses while people languish in hunger and poverty and they ensure maximum waste by pursuing endless wars of annihilation. Astride the entire structure is the over-bearing tyranny of a Puritanical Will-to-Power which asserts imperiously, arrogantly and judgementally that it is dangerous for people to be independently prosperous and would bring out the worst possible (assumed) characteristics of human nature. A system of meager rewards and vicious penalties is imposed to ensure that all “except the morally superior few” adhere to a rigid regimen of toil, whether in “coal mines” or air-conditioned “boxes”, which they extoll as the (sometimes “Christian”) “Work Ethic”–as the pinnacle of human moral development—even if this involves the destruction of nations. (into which abyss the current U.S. Administration seems determined to cast us by its relentless aggressions in the Middle East and more recent insane provocation and escalation of tensions with Russia) Eric Butler, who spearheaded the Social Credit movement in Australia for many decades, in his numerous domestic and international lectures, branded these people alternately as “Madmen” and “Economic Witch Doctors”. They are both because they administer evil and destructive policies while maintaining general compliance by means of perverse psychological conditioning and manipulation.

Maintenance of a base minimum of “unemployment” (as you say, “un-empayment” in Social Credit terms) serves to moderate demands of labour for higher wages and reduce the price of their only “commodity” by creating a desperate competition for survival in order to avoid being cast off into a state of “unemployment” and penury. Labour has had seemingly little or no understanding that their commodity is a cost that emerges in future prices and is taken back from them in consumer prices. (“We will give the workers wages of which they have never dreamed but take it all away in rising prices.”) We attempt to suppress social unrest by re-distributing already grossly and progressively insufficient aggregate incomes. Meanwhile all sectors of society and all nations are set in potential and actual enmity one with the other as they compete for an ephemeral prosperity which recedes evermore out of grasp into a distant future.

JH: Yes, I agree with this critique Wally. However the reality is that the concept of cultural heritage (which should underpin all of these considerations) is not understood by the orthodoxy, by the media, or by the average person in the street, and its practical implications would be generally regarded by all three of them as a utopian dream. In order to deal with this misunderstanding and lack of insight, it seems to me that it would be a mistake to form a political movement advocating the sudden imposition of universal payment mechanisms along SC lines (i.e. “cold turkey”). The resistance to this would be immense. As an interim measure, and in order to allay any alarm, I would suggest advocating some combination of (a) shorter human working hours per day – commensurate with the tasks being performed by robots and computers, (b) redefining remunerated “work” to include all of those currently unpaid activities which contribute to our society’s well-being, advancement and enlightenment – in either the short or longer term (including all tertiary and further education, currently unpaid or underpaid research projects, artistically creative activities, not-for-profit community activities, individuals and groups working for environmental conservation, charitable activities, etc etc). These would be a step in the right direction, and much better than nothing. Most importantly, it would demonstrate – to all the doubting Thomases – that the injection into the economy of newly created state fiat money – free from any borrowing, taxing or other liabilities – would not necessarily lead us all down the path of runaway inflation, which is the perrenial and misguided criticism of neoclassical economists to all such proposals.

Me: Yes, I think those are all good ideas to advocate, and also instead of a political movement the idea of an Operation Monetary Wisdom and Grace aimed at the small to medium sized businessman and various constituencies like students, the dwindling middle class etc. It’s consciousness raising for Social Credit.

WW: Douglas wrote:

Inflation is not an increase in purchasing power, it is an increase in the number or amount of money tokens, whether paper or otherwise, accompanied by an increase in price, so that both the money-to-spend side is, in figures, raised and the price side is also, in figures, raised.’

and…

Now a rise in purchasing power accompanied by a fall in prices is not inflation – it is an increased purchasing power, which is quite a different thing, and if you do apply credit as we call it – the source from which purchasing power is drawn – to a reduction of prices you cannot produce inflation.

The following is an excerpt from a brochure entitled Consumer Price Discounts. It details the history of the mechanism in Australia including its success during the war in preventing inflation and reducing prices.

The Australian (June 8th 1974) quoted Mr Bjelke-Peterson as follows:

“The Queensland Premier, Mr Bjelke-Petersen, will present his own plan to beat inflation to the Premiers’ Conference today if the Federal Government’s proposals disappoint him. The plan – based on an expert Queensland Govts. study he commissioned for the conference – will call for a freeze on income tax and a reduction or elimination of sales tax… Mr. Bjelke-Petersen will also ask the Federal Government for money to be used to keep the price of basic food items down for the Consumer… “our study showed that each leap-frog movement forward of prices and wages is amplified by the tax factor”, Mr. Bjelke-Petersen said … “he would tell the conference the higher inflation goes the greater income tax and sales taxation”, he said “A more forceful step must surely be to reduce or eliminate sales tax. This would do more in one stroke to put value back into the dollar than any rash of tariff cuts, restrictive credit controls and so on. Mr. Bjelke-Petersen said many items on the Consumer Price Index were subject to sales tax – “not just sales tax, but ever-increasing sales tax…”

He would tell the conference if sales tax were eliminated the price of everything from lollies, cakes and refrigerators to cars would come down. “This would have a double-barrel effect because it would reduce Federal revenue and its spending, but at the same time give consumers television sets up to 27% cheaper and cars more than a quarter off. Mr Bjelke-Petersen said “Consumer support – which has now been called subsidies – of food would make potatoes, bread and butter etc cheaper. These moves would particularly help the low income earner. I don’t know how the man on the basic wage can survive now.”

The summary that immediately follows is also helpful. Here is the first paragraph…

“The expansion of all new credits through capital production and through wage increases merely increases costs which must be recovered through higher prices. Every time a wage increase is awarded by the Arbitration Court – generally because the value of previous awards has been eroded by price increases, industry must obtain from the banking system large sums of new credits, on loan, to finance the wages. New credit is created and reaches consumers in higher wages. But as they increase costs, and subsequently prices, their value is destroyed. It is elementary then, that there must be a Government policy which will ensure that new credits are of permanent value. This can be done by applying them to reducing prices, instead of inflating them. A reduced price level would mean a genuine and permanent increase in purchasing power. This policy would at one stroke completely destroy the power of subversives in the Trade Unions, to whom financial and economic dislocation are an essential ingredient of industrial friction and confrontation. Wage-earners would be receiving real benefits in increased purchasing power through lower prices.”

Me: Yes, if one actually simply looks at the immediate and continuing effects of both the dividend and the discount it becomes apparent that they are both valid within the system and resolving of the deepest problems of it. Economists, pundits and investigators need only be willing to look and see it. They will then be “released to reality” as Eric Butler so eloquently said.

GM: Imho, you and others in this group should define such terms as “orthodox”. Otherwise what you say about “orthodoxy” is nonsense. Is there a Pope or patriarch of economics who establishes what is “orthodox”? Money creation via credit is no stunning revelation. That banks create money by lending is part of Econ. 101 at any halfway decent school. That is why the central banks supuse such monetary transmission tools as interest rates to influence bank lending and thereby the money supply. Are Nobel economics laureates all “orthodox?”. They differ greatly in their views. Krugman is not Sharpe is not Stiglitz is not Myron Scholes. So what is the orthodoxy you disdain so? Do you just mean that anyone who may not see the world as Douglas did is “orthodox” or “puritan,” another favorite and much bandied pejorative term for this group?

OH: I believe that Manuel is using the term “orthodox” here to contrast the views of people like Krugman with those of people like Keen who are, by their own admission, highly critical of certain basic principles or assumptions of mainstream economics (hence Keen’s book,Debunking Economics). I see no indication that Manuel was using the term in a pejorative sense, but merely as a way of differentiating two very different groups of thinkers.

Me: Yes, economic theory is very much in flux. Neo-liberal economics also known as DSGE (Dynamic Stochastic General Equilibrium) is excellently de-bunked by Keen. I suggest reading both Douglas and Keen. It will become apparent that Keen, who has shown DSGE to be fatally flawed has

1) re-discovered Douglas’s prior observations about the economy not being in general equilibrium, (he hasn’t yet discovered the most basic reason why it is disequilibrated, i.e. the flow of excess total costs in ratio to total individual incomes, i.e. Douglas’s A + B theorem and

2) that money, debt and Banking are significant factors as Douglas declared and which neo-liberalism basically denies/ignores).

Keen’s call for “a modern debt jubilee” is actually a reflective and yet still not fully conscious or philosophically consistent call for the policies of monetary grace as in gifting.

Keen is a nascent Social Crediter.

Social Credit/Wisdomics/Gracenomics/ Gracientialism

Author: chdwr

Personal Quote Aspect(s) of Grace

Personal Quote

Personal Quote

Posted To a SteveKeen youtube Video 10/16/2016

Wisdom and Grace: Flow, Free Flowingness

Grace: The Unitary Experience of Trinity-Unity and The Wisdom of Integrating Dualities

Posted To Mish Shedlock In Response To His Advocating a Politician Whose Approach To Brexit Is Integrative And Hence a Call For Trinity-Unity

Personal Quote

Personal Quote

Posted To The Social Credit Group