The Remedy

E:  I agree with much here and in the full article., particularly this from the latter:
“The attraction of the language of modern micro to our business and investment class is consequently its ideologically convenient cover for wealth accumulation and protection rather than for its explanatory power. Real business, especially the corporation, represents an impossible challenge to economic theory.”

I would add that perhaps this is understated: “Economics cannot theorize correctly about the firm until it absorbs the reality of the corporate form that dominates business.” It seems to me that now the corporation is the dominant institution in all sectors, including governance. In my view economics orthodoxy is the emperor’s clothes, the “ideologically convenient cover” for the power of capital that is presently expressed in the global corporation.

I see these as issues that command further research if economics is to be taken seriously, all characteristics of the power of corporate capital, which I call the “elephant in the room” in discussions of diverse subjects in current affairs: the corporation is the dominant institution of our time, is inherently irresponsible, is inherently unstable, is dominated by short-term vision, fosters income and wealth inequality, seeks to turn everything into commodities in service to profit, and is undemocratic.

And about “shareholder primacy”, an ideology addressed and criticized in the article, Milton Friedman’s (and others’) advocacy of this ideology completely disregards the long history of the corporation as a government-chartered institution — a creature of the state — which charters often explicitly stated the public responsibilities that went with the charter. As the author discusses:

“[The corporation] is unowned. In this sense it is akin to a nation state, the church, most universities, and, at least here in the US, most towns. It would be odd to describe any of those bodies as being owned by the people who animate them. Yet we routinely talk of firms being owned by stockholders. It is this misattribution of ownership that leads most economists astray in their theorizing.”

Agreed and worth repeating again and again until we can construct a new orthodoxy in the field of economics. Radford’s is an informative article that I recommend to all.

Me:   “[The corporation] is unowned. In this sense it is akin to a nation state, the church, most universities, and, at least here in the US, most towns. It would be odd to describe any of those bodies as being owned by the people who animate them. Yet we routinely talk of firms being owned by stockholders. It is this misattribution of ownership that leads most economists astray in their theorizing.”

Indeed. And the best way to remedy this mis-attribution is to vouchsafe and directly GIVE/GIFT the most potent factor in a monetary economy, i.e. money, “into the many hands of the individual” ….at a point in time in the economic/productive process (retail sale) where it will have maximum problem resolving and beneficial effect.

 

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Exchange Regarding History, Science, Consciousness and Unconsciousness and Paradigm Change

Me:  Yes, ideas and the experiences behind them are what guide humanity. That is why paradigms are so powerful, why it is so important to be aware of current paradigms and the signatures of new ones. Considering that the current paradigm of finance, that is, Debt/Burden/Additional Cost Only has held humanity down for the entire history of human civilization it’s way over due for a change. And if the concept behind that new paradigm is the concept behind every historical paradigm change…how powerful could that idea be?

RL:  No serious student of history would subscribe to such a view, which is one reason I learn so little in this blog. History is not the study of ideas that guide humanity but of the unexpected and irrationality of historical outcomes that surprise the hell out of people. Nobody entering WWI expected the outcome would destroy Western civilization, except a lucky guesser. We all read them after the events not before. Napoleon said that between a battle gained and a battle lost, there are empires. Winning and losing a battle can be a close run thing, like the battle of the Marne in 1914. If the Germans had won, no fascism, no Hitler, no WWII. No new paradigm.

Me:  With all due respect history while valuable from a rear view mirror perspective is really the study of human UN-consciousness. Wisdom/paradigm perception is the integration of history and full consciousness. It may not be perfect, what human discipline is, but it’s a damned site better than the enforced un-knowingness/unconsciousness of the paradigm of Science ONLY. The proverb applies: The wise man sees trouble and hides himself, the fool goes on and suffers for it.

RL:  Craig, I don’t thing you know anything about how historians prepare to exercise their profession. We spend a great time as history majors and PhD students examining historiography which is all about human consciousness. Guess what, we read Hegel, too, and don’t just accept his dialectic as you seem to do. Get the sort of critical perspective in historiography that historians have.

One of the things historians do is checked out how well people in the past have predicted the future. I did this in the 1980s with a set of predictions about what the world would look like after 25 years (made in 1960) by a group of distinguished men. Result nobody got it right, not even the digital revolution, most of them predicted the triumph of atomic energy. I doubt if we come back and check out your predictions, you’ll do much better. I won’t be here, but some other historian will check you out, unless in your smugness you decide to get rid of historians because of their Unconsciousness.

Me: Robert,

My point is this: Is humanity largely conscious….or unconscious? By conscious I mean self aware, not what is their IQ or how scholarly they are or any other metric except aware that they ARE aware. By that measure the obvious answer is they are almost entirely UNconscious and hence history is largely the study of man’s unconsciousness, or to put it a little more euphemistically the study of his struggles and generally his failures to become fully conscious….due largely to his lack of knowledge and application of the superior (and scientifically inclusive) human mental discipline AKA wisdom. Man is very smart so far as data and logic are concerned and at best an adolescent so far as wisdom/self awareness is concerned.

This has nothing whatsoever to do with religion and everything to do with the depth and quality of our experience and our greater ability to discern truths of all kinds and act with greater rationality.

Given that naturalistic description of wisdom, Is there any reason why the scientific method and wisdom cannot operate concurrently? Of course not, especially as I have posited that wisdom is inclusive of science, and have pointed out that historically the signature of good non-orthodox and inclusive science and of scientific breakthrough has generally been as a result of the integration of the scientific method and an aspect or aspects of consciousness like imagination, creativity, comfortability with ambiguity and strategic illogic in order to exit the mental hypnosis and suffocation of old/current paradigms.

RL:  (In response to a poster who stated that quantity calculus was the only legitimate way of science)

Mike Rother in Toyota Kata notes that “Toyota’s shop floors are not connected to the IT system. Managerial accounting control systems can exacerbate the negative effects of managing from a distance via metrics, since reported data arrives late and leaders interact even less with the reality of the situation. This is why accounting control systems have little or no place on factory floors at Toyota. Factory leaders at Toyota do not refer to accounting report to get an understanding of a situation. p. 167. H. Thomas Johnson, who wrote, with Kaplan, the prize-winner book, Relevance Lost (1987) says the same thing after study Toyota’s Georgetown operations for years. So what is all this number racket versus human behavior.

Me:  Yes, and the wisdom of integrating both calculus and direct present time observation would undoubtedly lead us to a deeper understanding.

RL:  But Rother and Johnson and a host of others say they don’t integrate, point final.

Me:  So attempts to integrate observations and truths in different bodies of knowledge is impossible. Nice fragmentary, departmentalizing and ossifying “scientific” point of view that is.

MM:  Wow! This may be the richest RWER thread yet. Very encouraging yet, unless I’m mistaken, there was no valid definition of value. Effective analysis & dialog require accepting the semi-transcendant, often arbitrary but always qualitative nature of the principle of “value” and all the associated causes and effects in our personal & communal realities. There will never be an understanding of any cultural “economy” without recognizing and understanding the actual qualitative issues and causal factors influencing and motivating personal decisions that determine the nature and outcomes of communal activities. Naturally, a science of cultural economies requires consideration of ethics, cultural specifics, characteristic psychosocial dymaics and, for scientifically artistic (effective) results, useful ethical ecometrics. As I’ve claimed in other comments, valid theory and successful practice also require a singular, viable foundation of meta-theory, a logically consistent meta-economics. If I am wrong about any of this, please correct me, convincingly, in sufficient detail. Thanks, sincerely.

Me:  You’re quite right, but you being a relatively new poster here you missed my defining value which is the superior and scientifically inclusive human mental discipline of wisdom and its pinnacle natural philosophical concept of grace whose relevant aspect of Gifting is not only the new monetary, economic and financial paradigm, but the concept behind every human paradigm change.

MM:  Craig > Bravo! Tho not a new commentator on RWER’s blogsite, I was new to this potent thread. So, I’m inexpressively grateful to find your approach, which is definitely axiological. However, I think that we should discuss the issues and details in personal dialog. Ok? I think that we will very soon reach a very productive, co-creative rappore, re: a practical alternative to global misrule by kleptocracy by default. Otherwise, we may as well join the Barnumite Banksters, whose motto is obviously “never give a sucker an even break.” Rite [sic]?

Me:  Heh boy, I appreciate that and you do seem to have a philosophical bent and a lot of the problems correctly identified, but it’s probably just what I don’t need. I already spend too much time trying to elicit paradigm perception and illuminate paradigm change instead of dedicating-ly working on three books at the same time. For now lets see if we truly have an integrative mindset in common via this forum. Thanks again, and after the first 35 or so years of my young adulthood not being an ambitious careerist I might have had thoughts of chucking it all and getting into finance….but I might have gone nuts from not being able to sleep due to the ethical compromise. 🙂

RL:  Craig, I fear you don’t know a thing about the Kata con movement, and, therefore, do not understand attempts to base sustainable business on a scientific basis for the past 40 or so years. Don’t go outside business and industry to find a “science” that explains them, develop the science within their confines, so that the scientific methods and principles have practical application. I don’t know how old you are but I started studying sustainable management over 25 years ago, and wrote about it in my work. It’s shocking that such an important event has passed over you.

Me:  Well Robert I can only say that I’m simply taking the most basic and potent factor in a monetary economy, namely money and its current 5000 year old paradigm, and utilizing wisdom and wisdom’s process to try to decipher and apply the new one based on a study of the signatures of historical paradigm changes. I’m inclined to consider the new paradigm change a couple of mental integrations higher and of more importance than sustainable management of the the present one.

RL:  Craig, if you haven’t investigated any of this, how can you say that studying money is a couple of integrations higher than the study of the sustainability of firms, economic communities, and nations. Maybe sustainability is the new paradigm not the one you are hankering after. If you are not continually immersed in the work world you will not be able to follow sustainability as science. Knowing a scientific discipline is not a substitute for knowing work environments.

Me:  Because money is the supreme factor and deepest problem to solve in a MONETARY economy and we DO live in a monetary economy. Of course managerial problems are important and I’d be the last person to suggest we not integrate study of them into economics. As wisdom is the integrative process integration is “my thing”.

It is a much observed behavioral science and psycho-analytic phenomenon that when a neurotic confronts their most basic conflict virtually all of related and even peripheral neurotic tendencies either disappear or dissipate. As with human beings, so with human systems.

Sustainability is exquisitely important. And the only way that we are ever going to fund the research and implement the programs to accomplish it is to make sure we see past the current paradigm of private finance and its elites who tell us it is “too expensive”. As I am trying make the new paradigm of Monetary Gifting the new primary and reigning paradigm that makes it quintessentially important in that pursuit.

RL:  We do live in a monetary economy in anglo-saxonia. But if people want to sustain a manufacturing economy and the communities that accompanied them, they cannot use the tools and methods developed in a monetary economy to do so. Hegel’s dialectic in our context calls for the discontinuities inherent in finance capitalism to be the thesis, but the antithesis, sustainabilities cannot be sought in finance capitalism; they must be found somewhere else. You talk of Wisdom, which is far distant from the Shop Floor. I talk of a science rooted in the shop floor being the antithesis of finance capitalism and the way forward.

Me:  I’m the last person to affirm finance capitalism. The synthesis of finance capitalism and democratic socialism is neither of these, but the thirdness greater oneness of their truths, workabilities, applicabilities and highest ethical considerations AKA Direct Monetary Distributism. When in doubt integrate….and keep on integrating.

DT:  Craig and Robert, the management pioneer Mary Parker Follett’s collected works, “Dynamic Administration”, begin with an essay on “Constructive Conflict” which considers three ways of dealing with it: domination, compromise and integration. Her example of integration features two guys who apparently want different things but find a solution which unexpectly satisfies both of them. The starting point is facing up to there being a difference. Integration requires circular behaviour in which “Employees do not respond only to their employers but to the relationship between themselves and their employer”.

So what’s the connection between this and mathematical integration? The latter adds a dimension (a degree of freedom), but loses (abstracts) some of the original information. Likewise, stepping back from the concrete problem to see the positions of both parties at the same time creates the space necessary to see the solution.

Me:  That’s an excellent illustration of the process of wisdom. Now if we’d just do that on the grand theoretical and paradigmatic levels….we’d be getting somewhere instead of forever ruminating over the entrails of a goat which is the passion and obsession of the current paradigm of inquiry AKA Science ONLY.

RL: I can’t let you get away with such ignorance.

Mike Rother in Toyota Kata wrote, “The way of thinking and acting described here has a potential beyond the business world. It shows us a scientifically systematic and constructive way of dealing with problems, uncertainty, and change, in other words , how we can work together and achieve beyond what we can see” p. xx.

Sustainable management is not about staying ‘in the present one,’ because in the present one, sustainability is not possible. And you are staying in the present one with your assumptions and methods about how the world works, while Rother method’s are designed for us to achieve beyond what we can see–a new paradigm. Read the book damm it, only 292 pages long.

Me:  Robert,

I don’t have to even read it…because if it is truly integrative…I know I already agree with it. I’m NOT slamming integrative managerialism. How you innovate the productive process to make it more efficient and ecologically sane is extremely important. I would completely affirm that. But Research/Data Gathering STILL REMAINS a couple of MENTAL integrations below paradigm perception/paradigm change….which will synergize not only such innovation and management, but by definition every other aspect of economics/the productive process.

I’m on the same page with you, so “Saul, Saul, why do you kick against the sticks?”

Reply To A Social Crediter

Thanks for replying Andrew.  I can understand caution, but the fact remains social credit has gone absolutely no where since WW II started and distracted everyone, Keynes became the fall back position of finance to it and Douglas and social credit got virtually erased from history.

Social credit needs at least a shocking re-introduction and preferably a re-working from the best mere economic theory of the last 90 years into the paradighm change its basic policies could accomplish. I prefer the $1000/mo dividend and 50% discount/rebate policy for that reason alone, but again I’m not one to quibble over numbers. You could also have a $1600/mo. dividend a 25%  discount rebate at retail sale for most everyday consumer items and a 50% discount/rebate on big ticket items like houses and cars. The point is to vastly decrease personal/private indebtedness and completely eliminate price and asset inflation which breaks up finance’s paradigm of Debt Only for the sole form and vehicle for the creation and distribution of money/credit.
I know this will bring howls from orthodox social crediters, but IMO private banking will never ever be anything but an unethical and disruptive force and so must be replaced by a publicly administered national banking system and a central bank aligned with the philosophical concept of grace which social credit is based on. It’s simply applying Occam’s Razor to the financial system. Private and public finance are potentially corruptible, but one entity stripped of its profit motive and strictly regulated and aligned with grace as in monetary gifting would be a whole lot easier to handle than a bunch of rogue trillionaires. That and it could also really supercharge the effects of a monthly dividend and a retail discount/rebate policy. How? By extending the retail discount/rebate policy to the point of note signing. In other words a $300k house discounted 50% at point of retail sale by the monetary authority to $150k and then a $150k note at 0% is disbursed to the home building corporation to make them whole on their margins and overheads…and then the public national bank which does not need to make a profit discounts the note 50% to $75k. On a 10 year note thats a $625/mo. payment. 10 years and you’re an actual owner of your home instead of a renter of the Banks for 30 years. Just how attractive might that be to every voter except the CEO and Board menbers of the banks???

Personal Quote: Tweakers and Name Callers vs Paradigm Perceivers

The economic tweakers and non-paradigm perceivers can call me “crank” all they want , but it is no mere coincidence that the UBI-Universal Dividend is all the rage now when Douglas was the first theorist to invent it almost a hundred years ago, and the most intelligent cutting edge economists are realizing that continual personal debt build up and asset inflation are the two unsolved problems in their theories….and the 50% discount/rebate policy of Wisdomics-Gracenomics is the solution to both.

MMT vs Wisdomics-Gracenomics

The problem With MMT is it focuses way too much on government debt when personal and private corporate debt and asset inflation what and where of the problem.

Of course if you integrated price deflation painlessly and beneficially into profit making systems by tying a discount/rebate monetary and economic policy to the point of retail sale you slay both the austerity MMT correctly abhors, the build up of personal and private debt and all forms of inflation in one fell swoop.

It won’t be the “withering away” of the state as both Marxism and libertarianism advocate, but the illegitimate monopolistic monetary and financial paradigm of Debt/Burden/Additional Cost Only….that dominates the state, the individual and all of the other actually legitimate business models in the economy.