then finance that imposes additional costs post retail sale….cannot be a legitimate private business model.  That doesn’t mean loans are illegitimate or that profit is economically wrong or illegitimate, but it does mean that loans at interest, that is, additional cost post retail sale, are illegitimate.

In other words private for profit finance is not a legitimate economic/actually productive business model.

C. H. Douglas’ A + B theorem missed this distinction and Steve Keen’s recent recognition that when the rate of change in debt decreases the economy will enter recession unless it continues to go back up is a nascent recognition of the illegitimacy of for profit finance.

This doesn’t mean that the economy can’t continue to “tread water” and avoid recession by increasing the rate of flow of debt, it can, but such “dynamic imbalance” even with 0% interest is inevitably and ultimately unsustainable.

So why countenance this destabilizing and illegitimate business model? Why palliate the problem? Why not make finance a sovereign government function that indeed serves both a profit making economy of direct distributism and mankind by decreasing individual’s and commercial entity’s costs….instead?????????? That would be neither capitalism nor socialism….nor communism, but the profit making system of Graciously Direct Monetary Distributism.

Monetary grace as in gifting is not only the new paradigm of economics and finance….grace as in serving rather than manipulating mankind with finance is the new economic, monetary and financial ethic/zeitgeist.

Me:  Most if not all of the concerns expressed here recently can be eliminated by Douglas’ advocacy of integral accounting (and insisting that it be guided by the various applicable aspects of the natural philosophical concept of grace which I am emphasizing) ….and then using sin taxation on economic vices and tax incentives to encourage economic virtues.

JS:  Hi Steve, I just wanted to add some comments in bold. 

I’m not sure what you mean by “economic virtues” so you’ll have to elaborate.  A “sin tax” tends to mean something in economics that I’m sure Douglas, nor most of his supporters, would support.  However, you tend to use terms in your own way, so I might be mistaken as to the meaning of this term.

By economic virtues I mean things like thrift, competition and good will.  I’m quite sure that Douglas would probably be okay with taxing economic sins like greed as in non-cost caused price inflation, commercial domination and dishonest accounting.

There is nothing so boring as static dualisms fighting it out to the death forever…when a thirdness greater oneness is available after either a moment of near death or the courage to embrace an illogic as a way to exit the mindset of an old paradigm.

Steve Hummel 02/18/2019

KZ:  Sickening or not, observations show that as inequality increases, commitment to and trust in one another that make society possible decreases. The possibility of society declines until society either becomes impossible to sustain or the societies created are so dysfunctional that only societal members with private armies and fortresses can survive. I know most of the film makers like John Carpenter and George Romero whose films revolve around the end of human society probably did not consider themselves prophets. But their films may be closer to coming events than many of us want to consider.

Me:  Those are correct observations. The question we all need to ask ourselves is whether we want to wait and try to correct the situation as it descends into further confusion and chaos or take action together now. None of the complexities of any situation or any body of knowledge will matter in the former, and finding the core and ope-rant solution (the wisdom of a new monetary and economic paradigm of grace as in the astuteness of gifting and love in action) while brushing past most of the complexities in the meantime is the correct way to proceed in the latter.

We need to keep focused on three things:

1) taking control of money creation on the national level (Public Banking on the city and state level is fine and can run concurrently with the broader effort)

2) in order to accomplish that doing a hard sell of the incredibly beneficial results of having a public system with policies like a universal dividend for everyone at age 18, a 50% discount/rebate policy at retail sale that doubles everyone’s potential purchasing power and not only terminally ends any possibility of inflation but integrates price deflation into profit making economic systems and finally extending the 50% discount/rebate policy to a new ending point for the entire economic process at the point of note creation. That would make a $300k house be reduced at retail sale to $150k and to $75K at creation of the 0% note.

3) making damned good and sure that the new national publicly administered banking and financial system are aligned with and firmly guided by the new paradigm and unimpeachable ethic of grace as in love in individual action/systemic policy.

The world is a corrupted place and as this thread demonstrates it is often difficult to discern truth from deception, but the best way to proceed is always to attempt to legally grasp control of the situation and integrate the power of soverignty with the moral and ethical power of grace.

EB:  My feeling is that we’ll probably have to wait for the next collapse. Then everyone will be so fed up, they’ll be ready to change the money system. For now, I’m just trying to get ideas out there so they’ll be on the table when the crisis hits.

Me:  That’s an understandable stance, but over 10 years out from the GFC strategies like being an export platform or doing indirect QE forever so that the economy can take on the appearance of recovery, etc., etc. can obscure the underlying problem of an inherent scarcity of actually available individual incomes/business revenue….for a very long time.

If we have learned anything from Trump it is that the big lie works…especially with a populace that is already sick and tired of being sick and tired. And what we should learn from that is that providing an abundantly attractive, self interested and TRUTHFUL vision as a more workable and beneficial alternative….WILL WORK…and has the further advantage of being a much more ethical alternative to the dark side nonsense of Trumpism etc.

The last three general elections have all been about change. That’s not going to change until an actually better alternative AND VISION OF IT…is provided.

So let’s get on with it.

MMT has money mechanics correct, and like every other heterodox theory recognizes that the system is monetarily austere. Unfortunately like every heterodox theory to one degree or another they are still hypnotized by the quantity theory of money and the velocity of its circulation. Monetary inflation occurs, but money is not its primary cause which makes it a misnomer. It actually occurs because of monetary scarcity….and there not being a better, more rational and more beneficial alternative for commercial agents existing in an austere system with a chronic and general scarcity of actually available individual income/business revenue. Thus when such agents perceive more money coming into the system they raise their prices in the hopes of garnering more revenue. The assertion that inflation will not occur if we only toss a little more money into the economy is a flimsy orthodoxy.

You have to provide the better, concrete and temporal universe alternative by looking directly at the day to day operations of the economy…not just relate to it via abstractions and near misses.

It’s good that you’re citing Steve Keen he’s the best and most insightful macro-economist on the planet. All he needs to do now is awaken to the single paradigm changing concept of Abundantly Direct and Reciprocal Monetary Gifting and also discover the exact point in the economic process to implement a monetary and pricing policy that exactly reflects that concept and by its actions will effect the new paradigm.

Directness of monetary gifting to the individual is one of the aspects the monetary system has always lacked, and a policy of reciprocal monetary gifting at a significant point in the economy is what will synergize the effects of the two policies. Then add abundance and many more of the supposedly necessary inflation fighting mechanisms will become redundant and governmental funding via taxation will be able to be vastly reduced. Paradigms are earth shaking and orthodoxy destroying events. Let us proceed with the one in economic theory, finance and the money system.

What if today’s current paradigm for inquiry is Science Only and the new paradigm is wisdom as in the inclusive integration of only the truths in opposing perspectives including the scientific method? And what if the philosophical concept of grace as in the dynamic, interactive, integrative and unitary free flow of everything is actually the best and most accurate scientific description of the physical/temporal universe which we and the entirety of the legitimate economic process is embedded in and must adhere to…if it indeed also wants to be gracefully, abundantly and stably free flowing?

Economics doesn’t need endless iconoclastic critique or equally endless theoretical tweaking, it needs philosophical search and exegesis for the concept that has been behind every historical paradigm change and that in fact is reflective of the concept behind every one of the cutting edge policy suggestions espoused by each of the cutting edge heterodox economists like UBI, government deficit spending and debt jubilees.

Once Galileo saw the moons of Jupiter he knew helio-centrism was almost certainly the defining single concept of the new cosmological paradigm and it was simply a straight forward rational if precarious process for him and a few others to affirm it in the minds of others. When economists focus in microscopically and analyze the summing, ending and terminal expression point significances of the point of retail sale and craft a reality inverting direct and reciprocal monetary and pricing policy there…they can all become Galileo’s.

and that is contemplate the many and various aspects of the pinnacle wisdom and natural philosophical concept of grace….until they’ve self actualized them.

Then they’d have enough of the integratively wise mindset to drop any obsessive and arrogant allegiances they might have to theories with only particles of truth and that might be based on any lesser concept than that pinnacle one….and we could all graciously/joyfully proceed toward humanity’s adulthood instead of lingering in an enforced adolescence in the failed experiment of homo economicus also enforced by the more than 5000 year old paradigm of Debt Only.

Profit making systems are inherently innovative and competitive and that won’t change with Wisdomics-Gracenomics despite it having a publicly administered directly distributive financial system because it would still remain a profit making economic system.

As the natural philosophical concept of grace is an inherently wise as in integrative of opposites type one, regulatory encouragements and sanctions would naturally follow on from it, and any unbalanced fall away from such could be met with appropriately gracious as in benevolent and yet sovereignly powerful means of enforcement.

Sin taxation and profitable virtue encouraging incentives in whatever area any such imbalance in the economy occurs would be a rather straight forward rational and ethical process….so long as it abided by any other relevant aspects of the concept of grace as well.