It would easily enable government financing of new technologies for environmental cleansing and also the kind of resource efficiency and yet increased productivity that would countenance increased throughput yet ecological sustainability. Finally, it would also enable either/both carbon sequestration and/or off planeting of heat and energy.
Donald Trump’s disintegrative naivety is of course stupid enough to be very concerned about, but all of his dithering idiocies may actually be a conscious or unconscious smoke screen for obscuring and never getting to the real power behind nations, their foreign policies and what is actually wrong with modern economies; and that is finance’s monopolistic paradigm of Debt/Burden/Cost Post Retail Sale Only.
Until we see this and come to grips with it by recognizing and implementing the new paradigm of Direct and Reciprocal Monetary Grace As In Gifting and its policies, we will stumble from one real or manufactured crisis to another and never progress systemically let alone culturally and as a species.
The new concept behind modern economic systems needs to change from austere general equilibrium to grace as in the higher disequilibrium of stable, relatively abundant monetary gifting. The temporal universe being in an intensely integrated yet slightly disequilibrated state of continual dynamic, interactive grace as in process and flow, the economy would best capture nature by resonating closely with that reality.
The present economy and business cycle follows the same curve of a failed satellite orbital insertion. The direct distribution of money to the individual via a universal dividend and a high percentage discount and the discount’s reciprocal rebated gifting back to enterprise will enable the economy to achieve orbital free flow/free fall from so called Keynesian wage rigidities that will be much more stable exactly like a satellite’s successful orbit is, that is perturbed only slightly by atmospheric expansion.
This is not DSGE tweaking via the indirect, blunt and unworkable tool of interest rate changes, it is the deep, permanent, direct and transformational breakthrough known as a paradigm change.
DB: However, we should not go back to a trade policy that was based on lies. We need a trade policy that is about raising the living standards of working people in the United States and the developing world, not just giving all the money to the rich.
Me: Precisely. And Globalization has always been the profit making wet dream of finance, and also the way for it to accomplish the final coalescence of its monopolisitic paradigm of Debt/Burden/Additional Cost post retail sale Only. And a paradigm being an utterly integrated reality means it is an inherent one, so the only way to actually and effectively change that reality is to integrate a new primary paradigm into the system(s) laboring with the old and problematic one.
You say: “Macro-economics will never solve the problems it has correctly identified because they aren’t looking in the right places to solve them …”
There is no point any longer in bashing or reinterpreting macro or micro.#1, #2 Orthodoxy, Heterodoxy, and Pluralism are provably false. More specifically, they are axiomatically false, that is, beyond repair.
In this situation, the representative economist has only this options left (i) to work on the paradigm shift or (ii) to throw himself under the bus.
Science is binary true/false with NOTHING in-between.
Me: I completely agree that orthodoxy, heterodoxy and pluralism are all provably false…because they all still reside within the old monetary paradigm of scarcity/austerity….and ITS incompleteness, blindness…and in fact its non alignment with cutting edge science which tells us that the entire cosmos is in an utterly integrated,integrative and abundant (being cosmic how could it be anything but abundant) flux/process/flow…which are all aspects of the natural philosophical concept of grace.
Science, good science and scientific breakthroughs not only do not conflict with grace….they affirm it.
EKH: You violate the first rule of science: Do NOT apply religious/spiritual concepts in an economic argument.#1
Scientific truth is well-defined by material/formal consistency. The rest of human communication is just brain-dead blather.
Sorry, you violate the first rule of GOOD NON-orthodox science: Keep your mind open to all existent (no matter who it is attributed to) data and philosophy.
#1 The supreme beingness being the cosmos and you being apart thereof….the associative principle applies
EKH: Show first your economic axioms or get out of the discussion
Me: axiom #1: The entire cosmos exists within a continually dynamic, interactive, integrative and yet somewhat disequilibrated/randomized state of gracefulness as in process and flow.
axiom #2: The economy being embedded within the cosmos will reflect this natural and temporal reality.
axiom #3: Economic policies that effect a greater alignment with and duplication of the cosmological-ly defined graceful reality will be more logical and scientifically accurate.
axiom #4: A full exegesis of the aspects of the natural philosophical concept of grace is the scientific route to crafting policies that will align with, duplicate and effect the cosmic reality in economics and in any other human system.
DM: Craig at 9:02 offers an ‘axiomatization’. What do you think of it?
It reminds me of a lot of psycho-babble that I find superficially unattractive, but which I have given some attention to. It may be an honest attempt to put the ideas of Whitehead into ‘accessible’ language. I certainly read Keynes’ Treatise and his GTE in the light of such ideas, without which underpinning they would seem vague or dangerous – or both.
I am tempted to add an axiom #5, that whatever we think grace is, it is not something that we can safely leave to others. Personally, I think that scientists who lack some kind of grace might reasonably called ‘pseudo-scientist’ (after Keynes) and – if too influential – can ’cause’ or exacerbate some of the problems that some ‘softer’ people complain of. But in practice it seems to be enough to follow Whitehead et al and point out the logical flaws in the (application of) the ‘science’, and avoid the wishy-washy stuff.
Me: Simply expunge any bias you might have for or against religion/spirituality and its traditional nomenclature and address the most cutting edge scientific description of the cosmos, the various non-religious definitions of the philosophical concept of grace and how economics being embedded within that cosmos would resonate, align with and be a good and accurate way to model same.
There is at least as much orthodox science floating around in people’s minds as there is religious orthodoxy, and way too much of both.
Un-examined/unperceived costs and time and their effects are what afflict macro-economics. As I have said here many times economists ARE NOT LOOKING AT double entry bookkeeping and so are missing extremely relevant economic insights to be derived from doing so. You can’t get any more empirical and grounded in the temporal universe than accounting, and it’s not just “bean counting”. And yet I’m the one that most here probably think is “new age” etc. No! I’m for BOTH enlightened philosophy AND scientifically aligned policy. Integration. Integrating. Looking…everywhere without bias. That’s good open minded science.
Macro-economics’ problem is it does not adequately consider the additional costs of depreciation/the second law of thermo-dynamics and its effects on price considering the cost accounting convention that ALL costs must go into price. It also does not distinguish between total money/credit in the system and total individual incomes the latter of which in ratio to total costs is a scarcity ratio.
DM: Craig, Are there any sources for “non-religious definitions of the philosophical concept of grace ” and their links to your axiom 1 that a mathematician who thinks he has some understanding of Whitehead, Keynes and Russell might find insightful?
Me: Dave, There’s lots of references in books on mindfulness/consciousness. As I said above one needs to look at the traditional definitions, de-super nature/de-attribute them and then compare those definitions/aspects to cutting edge quantum physics, human psychology, economics and money systems, whatever body of knowledge/human observation one wants to look at/investigate….and see how they jive. For instance dancing and gymnastics. A dancer or gymnast bodily moves across the mat or dance floor in a dynamic, interactive, and unitary balance, equilibrium process and flow that is described as graceful. It’s what is observed and described. It is simply what IS. And if wisdom is the process of personal integration then integrate what you see with the fact that you as a conscious being….are actually there observing it….and you might have a startling experience. As the zen saying goes, “Wherever you go, there YOU are.
Actually, each of the world’s major wisdom traditions is chock full of such proverbs, insights, and definitions of consciousness -grace.
Personally I couldn’t care less about whether someone wants to attribute everything to god or to science-nature. I’d simply encourage them to be graciously benevolent and open minded about it. That way it reinforces the positive experience and avoids orthodoxy and dogmatism.
JV: All economists, as far as I know, assume that the present is complete and we live within our economy. Hence, they come up with assumed points of departure like the accounting identity: Y = C + I, blissfully unaware that accounting itself is based on unprovable assumptions.
Heterodoxy, as is, requires a shake up that goes beyond following its heroes… Assumptions are required that we are creators of the economic system we make our living in; which purposeful final output we enjoy outside in the real world wherein we live, as added to an exogenous environment of non-economic utilities and pleasures. And that the economic process of our accomplishments is incomplete at any point in time, with non-linear determinants to follow, so that it’s not depictable endogenously in math equations.
Me: Macro-economic accounting identities are false/hopelessly inadequate because they do not distinguish between total money and total free and available INDIVIDUAL income, or at the very least economists themselves do not perceive the relevant differences between the two and how to effectively remedy the problems the scarcity of the latter causes.
Double entry bookkeeping itself is probably one of the most empirically scientific disciplines that man has ever developed, but it takes economic examination and evaluation of its data along with calculus and the significances of its (and any other system’s) temporal universe process of start, change and stop to fully understand it and how to therefore craft policies that will resolve modern economic problems.
Beyond these essentials, as we’re almost entirely in agreement that a new paradigm is required, one needs to do an historical study of paradigm changes and so decipher their signatures, inevitable structural and overall effects. For instance the ruling paradigm, its most powerful temporal/structural entity and its effects will always replaced and transformed.
Thus the ruling monetary and economic paradigm of Debt/Burden/Cost Only must be replaced in primacy by Direct and Reciprocal Monetary Gifting, the structural entity of Private Finance/Banking and its money creating powers must give way to a public entity that intelligently, insightfully and ethically is mandated to end the individual monetary scarcity the paradigm enforces and transform it into NOT an equilibrium with total costs/prices, but an abundance ratio of individual incomes to costs/prices. In other words the higher disequilibrium instead of the static, unnatural and un-maintainable stasis which the temporal universe abhors and will not countenance.
PB: We physicists are way up this learning curve of detecting signals in noise. Signal averaging is the first go to method but signal to noise improves as the square root of sample size. If this isn’t working early on it’s only going to get worse path forward. The only thing that works first time every time is to identify a robust signal variable that jumps off the page. For example Steve Keen keeps pointing out that the correlation over the trailing three decades between the slope of private debt (aka credit) and unemployment is -.93. This is not noisy signal buried in noise. When you find a true controlling variable you don’t need lots of ANOVA and signal averaging. The data grabs one by both ears and screams: Hey. Look here!
Me: Precisely. And if debt build up is continual and austerity is not the macro answer…how can anything other than a new paradigm of COSTLESS monetary gifting be the answer. Keen and other heterodox economists even acknowledge and advocate monetary gifting as a policy, it’s just that
1) they don’t know how to implement it without causing inflation, although they mouth the flimsy liberal orthodoxy that limited gifting with a UBI would not create inflation. Money of course is NOT the primary and operant factor in “monetary” inflation…it’s the complete freedom that business decision makers have to raise their prices because who or what is going to stop them from doing so???? especially in a macro-economically monetarily austere system when they perceive more money than normal is forthcoming????
2) they haven’t looked at and thought economically about where the terminal expression point for any and all price inflation is (retail sale)
3) they don’t have the knowledge of the digital nature of the accounting and pricing systems and so they miss how a high percentage discount/rebate monetary gifting policy at retail sale could be utilized to break up the idiotic and contradictory monopoly paradigm of Finance, implement the new paradigm of Direct and Reciprocal Monetary Gifting and put monetary and purchasing power scarcity forever in the dust bin of history.
Ah, not looking everywhere for answers (being orthodox) and not modeling temporal realities in their theories and potential policies….just what everyone here is lamenting. It’s way past time that heterodox economists stopped being extremely erudite policy and paradigm dunces.
JJ: It is scary to think that economists think they can solve problems with models based on individual experiences that are then introduced into large populations. I think that economists are using numbers and models in place of an empathic understanding that using people in experiments can mean real harm for the people, (for example, introducing austerity after banks commit fraud and then are bailed out while those defrauded are foreclosed upon). If economists would think about how people benefit, or not, from policies or actions, then the policies would make sense. Experimentation for the sake of experimentation is a fool’s errand.
Me: JJ, Exactly. Now if economists, politicians, the lords of finance and large political constituencies would cognite on the fact that, that empathic understanding was the natural personal experience of grace as in love in action/love in application….they’d also cognite on wisdom which is the best integration of the practical and the ideal. Wisdom isn’t wisdom unless it is imminently practical, and as I have shown the policies of economic and monetary grace are best accomplished within commerce’s infrastructure of double entry bookkeeping, using its digital nature and an understanding of where and when it could best be APPLIED in the economic process. Play the policies out with the above criteria in your mind or better yet on a clay table to make them more temporally real to yourself….and the elegant simplicity and yet thorough applicability of them will become apparent to you.
The mental and temporal reflectivities and alignments of logic and wisdom after all DO count.
Me: Too many misconceptions, orthodox blindness and wrong headedness for me to address all of them here. UBI must be paired with an additional policy of a high percentage discount/rebate policy strategically implemented at the point of sale throughout the entire economic process and also at final retail sale which just happens to also be the terminal expression point for any and all forms of inflation….thus eliminating any possibility of inflation and actually implementing what Austrians say they want to see, namely price deflation painlessly and beneficially integrated into profit making systems. Not looking at the temporal universe effects of this additional policy….doesn’t change the truth about it.
MS: Good Grief – Austrians do not seek price deflation. They seek a free market in currency without government interference. You propose intervention madness. By the way, inflation is not really about prices. So you are off the deep end in many ways.
Me: It doesn’t matter your opinion about inflation is….only that its terminal expression point is final retail sale. And you and Austrians are always barking about how deflation would be good because it would get rid of malinvestment. I’ve seen that expressed so many times here I can’t count them.
The answer to any and all inflation is the second policy of a 50% discount/rebate at the point of sale and final retail sale. The point of sale is the self determined totaling of all costs for any item or service plus profit margin. Hence if you implement the above policy at that point and require that the consuming business “pass on” that discount to their customer in order to receive their rebate of it back by the monetary authority…you’ve linearized a 50% discount to prices throughout the entire length of the economic/productive process and also doubled the $1000/mo UBI…as well as everyone’s purchasing power that they’ve earned from work for pay. When was the last time any economist or pol has doubled everyone’s income and consequently the total free and available demand for every business’s product and service??? If everyone 18 and older has $24k/yr and $64k if they have a part time job making $20k/yr…what is the reason to have transfer taxes paid by both businesses and individuals??? Or for social secuity for that matter after some form of phase out. As for all of the concern about everyone becoming lazy, if this were going to be true except perhaps for a smallish percentage, the wealthy would have killed themselves long ago. It’s just an unconscious fear that is irrelevant because the set of positive and constructive purposes is larger than the set of purpose through employment only, and if we grew two neurons and had a cooperative effort by the clergy, helping professions and the government to acculturate and guide the populace toward leisure, which is not idleness, but rather self chosen focused and attentive activities…we’d have a much happier, healthier and creative society than we have now…and much more prosperous too.
CO: Robbing Peter to pay Paul, no matter how it is framed, will not ever lead to a more prosperous society. The number of votes the scheme buys before all Peter’s in the world close shop is another matter.
Me: The policies I advocate are not socialist/re-distributive but rather directly distributive but implemented at the point of retail sale in a digital manner (equal amounts of debits and credits sum to zero thus a 50% discount followed by a 50% rebate back to the discounter enables the business to be whole on his overhead payments and profit margins and the consumer’s purchasing power is doubled. And taxes can actually be lowered instead of increased.
CO: I fail to see how the “monetary authority” injecting 50% new money into the economy with retailers on each transaction at the point of sale solves any problems. If anything, that sounds like a good way to make all prices double overnight, and then again the next night, and then again the next night after that…
Me: Simple, if you get a 50% discount from your vendors and do not pass it along…you don’t get any rebate….while just one of your competitors does pass it along….and your customers don’t buy from you anymore because they can get what they need from someone whose not an anti-social idiot like you. The rules for such a policy would have incentives to honestly participate….and punishments for stiffing your customers even though your vendors gave you a 50% discount on your costs from them. And even if there was 2-3% inflation because of cheating…you just tweak the discount percentage at retail to insure a 50% or more reduction in price and hence a doubling of every individual’s purchasing power.
DN: The industry rationalizing the last 100 years of monetary idiocy (where banks could create from thin air an “asset” on which they charged rent) can just as easily rationalize something as foolish as the UBI.
There’s a special place in Hades for those who claim that without such “credit-from-nowhere” schemes an economy would be starved for investment capital. Their view supports the idea that an economy should be governed by positive feedback loops. Engineers weep.
Me: Fiat is here to stay, gold bugs and libertarian fantasies of being able to cost cut our way to a free flowing economy to the contrary. The one thing no economic theorist on the left or right is willing to look at and see is that because of the ever increasing depreciation costs of fixed capital facilities there is no way to have a stable modern economy without monetary gifting being integrated into the debt based money system. Engineers….and everyone else must weep….until this reality is recognized and acted upon.
S60: Over 1.2 million people emigrated from Zimbabwe in 2010 alone, out of a population of 12.5 million. 9.9% of the population according to the World Bank. Desperate people will go looking for food regardless of pride.
Me: The reason Germans didn’t emigrate was because Hitler spent money into the economy and built infrastructure and a military and so made things good for Germans. If Hitler hadn’t been a homocidal maniac he probably would have been the greatest German leader of all time. Of course his reich wouldn’t have survived any longer than Keynesianism has because he didn’t know how to implement the new economic paradigm of Direct and Reciprocal Monetary Gifting at the point of retail sale.
SG: There was at least a 10-year gap between the Weimar hyperinflation of 1923 and the Nazi ascension to power in 1933, let alone any measurable economic effect of NSDAP policies.
Me: Yes, along with riots in the street and the formation of the Nazi party, however, Germany still retained its productive capabilities and the Weimar Republic DID inflate its way out of the onerousness of the Versaille treaty which was the point of the hyperinflation. The point of positive if temporary effects of government economic stimulus also remains the same.
MS: The “WindowCleaner” seems like a resurrection of “Mr. Give the people a dividend” What was the name? I forgot.
Me: Who I am is irrelevant to the truth that a 50% discount/rebate policy at the point of retail sale would double everyone’s purchasing power while also absolutely ending inflation and in fact miraculously integrating price deflation into profit making systems and just as a “kicker” implement the new monetary paradigm while ending the rule of the current one that has afflicted human civilization for like 5000 years. Look at the temporal universe effects of the policy Mish instead of not looking at it. Realize that the discount/rebate policy is in the intersts of both the individual (increased purchasing power) and enterprise (twice the demand for their product) and is an offer they cannot refuse….unless they want to make their customers pay the full price for their products and services while their competition will only be charging 50%. They can not participate….right up until they go out of business in like a couple of months.
SG: Riiiiiiggght …. but the lack of German emigration had absolutely zero to do with alleged Nazi economic success that occurred no earlier than 13 years after the hyperinflation, which was your original point. Glad we now agree on that salient fact.
Me: You’re correct, but it’s a minor point. What’s important is Mish asserts in his original post that Turkey will have a mass immigration which is not a fait accompli merely a possibility. And of course none of this invalidates anything regarding the dual policies I advocate to right ourselves from our inherent economic and monetary instability. You’re good at spotting inconsistencies. Are you just as good at looking at temporal universe policy effects?
MS: (In Venezuela) Gasoline is priced well under the cost of production. The black market siphoned off most of the supply which soon collapsed.