KZ:  Related to but slightly different from the above, I also want to point out that debates among economists about what money is or is not, and how it “ought to be used” are largely unheard and irrelevant to most of the people who use money every day. Bankers listen to economists with one ear, some businesses with half an ear, and the ordinary citizen with no ears. Governments listen to economists when they should definitely not.

Me:  “Related to but slightly different from the above, I also want to point out that debates among economists about what money is or is not, and how it “ought to be used” are largely unheard and irrelevant to most of the people who use money every day. Bankers listen to economists with one ear, some businesses with half an ear, and the ordinary citizen with no ears. Governments listen to economists when they should definitely not.”

Defining money is fine. Better is to recognize it as an effective and essential tool, the economy as monetary in nature and to look for ways that it can be utilized to resolve income, revenue and systemic problems.

Again to paraphrase: “It’s the monetary paradigm, stupid.”

KZ:  Craig, you are correct that money is just another cultural tool to use in figuring out how to live our lives. So, let’s figure out how to best use it.

Me:  Thanks Ken. Correct, and actually my statement that “to look for ways that it can be utilized to resolve income, revenue and systemic problems” was slightly off my real point which is that more of us need to discover the simple and yet economic paradigm changing effects of an accounting and algebraic operation of equal numerical amounts credited to consumers and debited back to enterprise….of a 50% Discount/Rebate monetary policy at the point of retail sale.

That single policy has so much problem resolving effect, so much integrative economic benefits to both individuals and commercial agents and potential personal, social and systemic psychological up-lift-ness that I am continually amazed that you guys don’t get on the bandwagon with me on it.

This thread affirms what I have been trying to break through the sound barrier with other posters here. The Interdisciplinary-integrative approach is always wisdom. It is in fact the very process of wisdom itself. The world’s major wisdom traditions, despite most of their adherents, have given us the contemplative, ab-reactive and consciousness raising techniques to self actualize the higher concepts necessary to qualify for what defines the word wisdom. Wisdom in its highest form is not religion, but rather deeper insight and the development of the integrative mindset.

Economics has been analyzed and critiqued fifteen ways from the middle and most of us here agree with the various heterodox perspectives that have resulted from that work. What remains to be done is to analyze the most important and influential aspect of the economy on the integrative level of the paradigm, namely the money system, whose paradigm has not changed for the entire course of human history.

Two of the techniques used by various wisdom traditions is to repetitively ask the novitiate to contemplate an absurdity until they have a deep cognition about a problem or their own moment to moment consciousness, or to ask them to look at their immediate environment until they discover that they have not actually looked DIRECTLY at things there since early childhood but rather relate to it via an abstraction instead.

Repetition is not always appreciated, but it is a very workable technique.

JD:  I would like to ask a very sincere question, if you don’t mind. I am not a professional economist, so I really don’t know the answer. Why don’t economists start by saying what the purpose of an economy (or “the economy”) is and then analyze what is happening in relation to that?

Me:  I’ll answer that in the most basic and potentially insightful way, as basics/elementals are always insightful.

The purpose of economic production is consumption.

And a 50% Discount/Rebate monetary policy at the point of retail sale facilitates a free flowing economy by doubling everyone’s earned income purchasing power, doubling the actually available individual income/business revenue for any and all enterprises and just as a kicker not only completely eliminates any possibility of price and asset inflation, but by so integratively inverting the reality of chronic inflation to beneficial price deflation…fulfills one (and all) of the historically verifiable signatures of paradigm changes.

Look at that. Don’t just gloss over it. Its effects are mathematical, empirical, temporal and almost un-gameable (and virtually so with philosophically aligned tax and economic regulations). And when everyone (immediately) realizes how nice it is that their income/revenue is mathematically doubled and economic stability is bulwarked, another of the signatures of paradigm changes will take effect. That is, everything adapts and moves on to the new paradigm….not the other way around….because its so obviously beneficial to every economic agent and to the system.

The operations of paradigm changes are always basically simple and yet always transformational to the pattern it relates to.

We should be focusing on the new paradigm, its problem resolving aspects and building a mass movement to herd the political apparatus toward its implementation, not endlessly affirming already agreed upon theories and policy parts of the paradigm change.

C’mon.

JD:  If we take your purpose statement as a starting point, and I think it’s a pretty good one, economic analysis probably should begin by looking at how well and how efficiently an existing system actually serves people’s material needs, right? Why, then, don’t economists do that?

Me:  That’s because they are largely off in some abstraction ONLY looking for the answer when they should be integrating both abstract and direct observation. And that’s the heterodox ones. The orthodox ones are simply way inured to their orthodoxy, concerned with career more than the search for truth, afraid to risk criticism and/or numerous other factors none of which is the wisdom of integrative thinking, and thinking on the paradigmatic level which is the quintessential integrative mental and temporal level of thought and observation as it is the integration of simple and complex, singular concept and pluralistic pattern effect.

It’s a very good book. (Doughnut Economics) But it still lacks the key policy insight we need.

What’s more re-orienting than

1) a monetary paradigm change from scarcity to abundance,

2) the baulkiness of systemic austerity to free flowingness via primary factor and tool,

3) near crazed over production due to fear of commercial ruin and/or an unbalanced ethic of greed and power to a re-juvenated profit making economics guided philosophically and policy-wise by the concept and ethic of grace and

4) international far flung energy intensive supply chains due to the warped dreams of financial monopolistic and paradigmatic dominance to local and national production and finally

5) what’s more re-orienting than a new insight about the power and significance of a direct and reciprocal monetary policy at the point of retail sale that would accomplish the above inversions of reality and primary signatures of every historical paradigm change? (inversion of temporal reality and new insight and/or tool)

If we guaranteed every adult 18 years of age and older $24k of purchasing power with a $1000/mo. universal dividend and a 50% discount/rebate monetary policy at the point of retail sale, and also implemented a job guarantee of 35/hrs/wk at $10/hr that would give them a total of $57.6k/yr worth of purchasing power per individual or $115.2k per 2 adult household. And if we had a national non-profit financial and monetary system that gave a second 50% discount/rebate policy at the point of 0% note signing for electric autos, solar panels, green homes and every other green technology….we could end individual monetary scarcity, systemic austerity, chronic price and asset inflation and actually rapidly do something about climate change….instead of forever chattering about all of the junk economics and seemingly unsolvable problems….enforced by ignoring the power and significance of a direct and reciprocal monetary policy at retail sale.

Velocity of money is really just an indicator of “good economic times” even though that state is ephemeral and such description exists only within the rigged nature of the current monetary and financial paradigm. Money does NOT sprout a mind and decide to make prices rise. The two primary reasons for the economic vice of price and asset inflation are

1) individual income scarcity and hence systemic business revenue scarcity that tempts commercial decision makers to raise prices in hopes of garnering more business revenue in that austere system and

2) confusing freedom with chaos (which every economic perspective from ultra libertarian to MMT is guilty of) and thus not searching and finding a better, more beneficial alternative for all agents individual and commercial…to that rigged, austere and chaotic system.

Hyperinflations do not occur without several disastrous prior circumstances have taken place and finally a compliant central bank simply prints and/or leverages up speculators who short the currency. Normal garden variety inflation has always been a smallish single digit percentage except during and after wars or cost inflation due to a major commodity’s price rise…which isn’t “monetary inflation” anyway.

Retail sale is the end of the legitimate economic/actually productive process where production becomes consumption. That by definition also makes it the ending and summing point for any and all economic factors including of course price and asset inflation. Thus a high percentage, say 50%, discount/rebate price and monetary policy at that point and time will not only eliminate inflation it will beneficially integrate price and asset deflation into profit making economic systems, and accomplishes everything the leading reforms say they want which is more money/purchasing power for everyone and a system which does not get de-stabilized by inflation.

Popping out of the abstract thrice removed fugue of economic theorizing and coming into present time to recognize the incredible significance and power of such a policy shatters the orthodoxies and confusions described above and enables us to cognite on the new paradigm we all are seeking. Discovering genuine ending, summing, factor expression and pivoting points is incredibly powerful both mentally and temporally.

So what is everyone’s conclusions from all of this likely disinformationally laced geo-political goggledegook?

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.