Rob is both right and wrong. Economists generally don’t give moral and ethical considerations their due. That’s because they get stuck at the theoretical level of thought and don’t get to the philosophical level where ideas themselves and ethics are an integral part of its mindset.

He’s wrong in thinking that MMT would necessarily run up debt any more than neo-classical economics. It would probably make it a little less likely and the effects of the build up would probably be less harsh then now.

MMT’s problems are that it focuses too much on governmental debt when private debt is the larger problem. It also believes that it could control inflation which is flimsy at best because the operant cause of “monetary” inflation….isn’t money at all, but rather not having/creating a better alternative to our monetarily austere situation where when commercial agents perceive more money coming into the system they raise their prices in the hopes of garnering more business revenue/available individual income. And that (the better, more beneficial alternative for all agents) is what my Wisdomics-Gracenomics does in spades. Wisdomics-Gracenomics also incorporates a job guarantee into the policy framework as an assist to anyone having problems finding purpose without necessarily putting in their time on a job. Thus it is more an adjunct to the primary and paradigm changing policies of a universal dividend and discount/rebate policies at the point of retail sale. There will be much more employment with a Wisdomics-Gracenomics than any other theory because the investment climate will be so good and stable, but it also enables us to see clearly that employment is only a subset of all positive and constructive human purposes.

Some MMTers who “knock” a universal dividend betray the fact that their theory is largely stuck in the old paradigm of Debt Only for the sole form and vehicle for the distribution of credit/
money.

The bane of human consciousness is duality wed to egotism. Its resolution is the thirdness greater oneness of wisdom and its pinnacle unitary natural philosophical concept of grace. True wisdom includes, encompasses and integrates science.

MMT and the rest of heterodox economic thought are pointed in the right direction. Now what they need to do is commence a study of the signatures of accomplished historical paradigm changes and a thorough exegesis of the natural philosophical concept of grace and see how the operations that define and determine every paradigm change have also been aspects of that concept.

It’s not that difficult a study, and its conclusions thoroughgoingly applied in policy clarifies the path forward for economics.

The truth is, except to confirm that private for profit banking and finance is an illegitimate and de-stabilizing factor in economics (Keen’s and Hudson’s conclusions ….whether or not they fully understand them themselves), macro-economics is largely an unfruitful distraction from much more important insights to be deciphered in micro-economics and the actually productive process, especially at the point of retail sale where a simple algebraic price and monetary policy can be implemented with paradigm changing consequences.

The master-economist must possess a rare combination of gifts …​ He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular, in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must be entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood, as aloof and incorruptible as an artist, yet sometimes as near to earth as a politician.

John Maynard Keynes

What a wonderfully correct quote of Keynes. It is correct in every word and is demonstrative of the nature of wisdom as in the integration of the truths in opposites. Of course when you’re one of the originators of a new discipline like macro-economics you inherit a lot of cultural bias and the blinding effects of the current long term paradigm as well. Keynes work was the monetarily indirect fall back position of finance which after the great depression and C. H. Douglas’ Social Credit which with its universal dividend and compensated retail discount was indeed monetarily direct and so a threat to their paradigm of Debt Only. It was also way ahead of its time as heterodox economists have come back to it with QE for the people, UBI and debt jubilees.

Your observation that economists don’t have a good sense of history is also accurate. Several years ago when I mentioned to Steve Keen that Douglas was the first disequilibrium theory he appeared to have no idea who Douglas was despite it being a world wide movement between the world wars, Douglas being a citizen of the British empire and Australia being a part of same and a place where Social Credit took root, albeit a rather religio-fied version of it.

Unfortunately Douglas had a little too much of the tory in him and never really looked at private finance with a totally objective eye, but who else even now has the guts and paradigm perception to call private finance not an actually legitimate economic/productive business model….and not for the reasons it’s normally criticized for? That plus Douglas and his followers since never really recognized the paradigm changing potential of their policies. Well, Kuhn had not written his seminal book yet, so like with so many other things it’s an awareness problem that prevents full vision.

It is virtual certainty that pre-scientific parochial religions are not literally true. It is also evident to any genuine philosopher and person interested in self awareness/consciousness itself that science has become a religion with many if not most who claim the title of scientists. This is partly a cultural problem and probably partly a personal one as the mindset of science tends to habituate mental fragmentation while wisdom/consciousness raising is a holistic process, and it is difficult to deal with one’s cultural roots.

The fact is that wisdom/consciousness raising at its best is an integratively dual process utilizing both the scientific and wisdom perspectives. In fact this integrative nature of both the wisdom process and paradigm perception are exactly the same process. The one personal and general, the other temporal and specific.

Science and religion will conflict or fail to be thoroughly integrated. There is no necessary conflict between science and spirituality.

Historically, populism has usually been a set of demagogued issues or non-issues by a politically ambitious leader with a third rate intellect who often lacks a refined sense of ethics. That describes Trump “to a T”. There are exceptions where the issues have at least some value and the leaders are less dangerously demagogic, however the true test of any political, social or economic movement is whether its leaders and followers have personal reality on the experience of grace as in love in action instead of only faith in the abstractions that build up around it. Hence populism like nearly every other political and economic movement of whatever name have always tended to fall into obsessive contentiousness and reactionary half truthfulness. The two most sucessful social and political movements of modern history were Ghandi’s satyagraha and MLK’s non-violent civil rights who admired Ghandi. SAtyagraha or “holding onto truth with non-violence” is an expression of grace as in love in action.

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.