Is tying direct and reciprocal monetary gifting policies to the point of sale throughout the entirety of the economic/productive process and also at its terminal ending point at retail sale.

That’s it. When you see the effects of the dividend and discount/rebate policies costlessly raising aggregate individual income and simultaneously lowering prices….the scales fall from your eyes.

*********************************

Posted To RWRE Blog 06/21/2018 regarding microfoundations in economic theory:

Look at the micro-foundational tool of double entry bookkeeping, decipher the digital and economic significances to be found within it and within the pricing and money systems and then play out the temporal universe effects of the policies I’ve posted about here….and voila!

which Douglas discovered via the opposite direction via the study of the data of double entry bookkeeping, applying calculus to that data and then crafting policies based on the digital realities of the pricing, money and accounting systems….that would have stabilized modern economies much more effectively and thoroughly than Keynesianism did.

The one thing Douglas and Social Crediters (and even heterodox economists today) did not see was that instead of only filling “the gap” it was necessary to over flow it via a high percentage compensated retail price policy….what I refer to as the discount/rebate policy….and that this would raise a merely superior economic theory to the level of paradigm change.  And any other lesser monetary or indirect policies are merely old paradigm “epicycle perturbations of the orbit of Mars.”

And my book Wisdomics/Gracenomics: The New Monetary and Economic Paradigm outlines the implementation of that new paradigm.

******************************

CB:  Craig: “And probably the biggest/most telling signature of a paradigm change is elegance, simplicity, effectiveness and the mirthful reaction to recognition of the new paradigm of: “Why didn’t I see this before, and why did it take 10 or 5000 years to see it.”
ONE BOOK -ONE AUTHOR ***What irony…IT’S Free Download***
“There never was an idea stated

that woke men out of their stupid indifference

but its originator was spoken of as a crank.”

— Oliver Wendell Holmes, Sr.

(1809-1894) American Poet

“In four books written from 1921 to 1934, Soddy carried on a “quixotic campaign for a radical restructuring of global monetary relationships”[this quote needs a citation], offering a perspective on economics rooted in physics—the laws of thermodynamics, in particular—and was “roundly dismissed as a crank”

Me:  Yes Soddy was so labeled by the “authorities”. And some of his ideas were closer to the truth than neo-liberalism’s stupidity of money being “a veil over barter”. (However, fractional reserve banking is fallacious as well.)

C. H. Douglas had the problematic ratio of moment to moment macro costs/prices as a flow, being greater than the simultaneous flow of available individual incomes way back in 1928 and so way before Minsky-Keen who have re-discovered Douglas’s A + B theorem. Same thing goes for UBI which has become popular lately. Nobody has any idea of the compensated retail price idea and policy that Douglas being a very astute observer and thinker derived from double entry bookkeeping….and which I have extended and innovated to raise it to paradigm changing effect.

Economic systems are chaotic because they lack a lower bound on costs and an upper bound of price. Thus rational, ethical and stabilizing control via regulation is necessary.

I hasten to add that this paradigm hypnotized organized complexity is also a mental-theoretical barrier to recognizing that the entire concept of “free” markets is fallacious. Markets are not just unstable….they are chaotic, that is they in fact are not bounded at all on the lower end by cost nor the upper end by price. In the temporal universe there is no such thing as total freedom….only freedom amongst known, rational and ethical barriers.

Thus the dominatingly smothered economy by Private Finance’s monopolistic paradigm of Debt Only is the parasitical present “answer”…..and the incisive, proactive and tremendously beneficial policies of the new paradigm are the wise actual answer.

YS:  It is necessary to remember Warren Weaver’s three classes of problems which were exposed in his seminal Science and Complexity paper (1948)

Weaver was in information theory an eminent researcher who has a co-authored book with Claude Shannon. Excepting problems of simplicity, which were targets of modern physics until the 19th century, Weaver distinguished problems of disorganized complexity and organized complexity. Probability theory is extremely useful for problems of disorganized complexity. It was successfully applied to statistical mechanics and then quantum statistical mechanics. However, Weaver knew well that there are many fields which cannot be treated as disorganized complexity (or simplicity). At the occasion he retires from the Science and Medicine Division of Rockefeller Foundation, he expressed his view on which direction the sciences should be developed in the next half century. This was a bit too premature prediction, because real science of complexity barely starts in 1970’s.

Economy belongs to the problems of organized complexity. Probability and statistics have only limited applicability. Complex systems of the second category (i.e. disorganized complexity) should develop new methods and tools of analysis. Mainstream economists did not proceeded in this direction and was satisfied with what they can do with probability and statistics. They are attacking problems of organized complexity with the means and tools which were successful for problems of disorganized complexity.

P.S. Ordinary differential equations (whether they are linear or non-linear) are essentially tools for problems of simplicity. Mathematics has not yet developed suitable tools to attack problems of organized complexity. This is one of reasons that we should expect much in agent-based simulation. In short, theory and mathematics are the first mode of scientific method, experimentation the second mode. We need the third mode of scientific research method. See my paper:

A Guided Tour of the Backside of Agent-Based Simulation.

Me:  That is a very good post and set of observations. However, economic theory is actually paradigm hypnotized organized complexity.

YS:  Craig
Thank you for your kind comment. Would you like to explain more concretely what you mean by “paradigm hypnotized organized complexity”? We may deepen our argument by chance.

Me:  Being hypnotized is an unconscious state. Current paradigms are largely unconsiously accepted norms. Thus old/current paradigms generally lack full examination, and new ones are generally either rejected as illogical or not reacted to at all because the individual has no frame of reference regarding it.

The current virtually monopolistic monetary paradigm for the vehicle and distribution of credit/money described as Privately Created Debt ONLY is a form of hypnotization that has become the unconsciously accepted norm, and its organized complexity and enforced lack of directness to the individual is coalescing as we sit debating instead of organizing.

The only reason why the new paradigm of Direct and Reciprocal Monetary Gifting is not accepted and applauded is because:

1) economists are not looking at the integratively micro-foundational character of double entry bookkeeping,

2) its digital character (equal amounts of debits and credits equal to zero) is not being recognized

3) the point of sale throughout the entirety of the economic/productive process is a temporary summing and ending point for all costs and prices for any item or service and the point of retail sale is the TERMINAL summing and
ending point for same….and the terminal EXPRESSION POINT for any and all types of inflation as well.

Thus, along with a universal dividend, a digital policy at these points of sale of equal discounts to the consumer and rebates back to merchants giving the discount would enable us to vastly increase individual purchasing power which would equally benefit both the individual and enterprise….and again, as retail sale is the terminal expression point for all inflation, not only eliminate inflation…but painlessly and beneficially integrate price deflation into profit making systems.

I hasten to add that this paradigm hypnotized organized complexity is also a mental-theoretical barrier to recognizing that the entire concept of “free” markets is fallacious. Markets are not just unstable….they are chaotic, that is they in fact are not bounded at all on the lower end by cost nor the upper end by price. In the temporal universe there is no such thing as total freedom….only freedom amongst known, rational and ethical barriers.

Thus the dominatingly smothered economy by Private Finance’s monopolistic paradigm of Debt Only is the parasitical present “answer”…..and the incisive, proactive and tremendously beneficial policies of the new paradigm are the wise actual answer.

YS:  Dear Craig,
I understand how economics is hypnotized paradigm. I agree with you. Those who believe in neoclassical theory are hypnotized.

The question we must ask is how to dehypnotize those (perhaps including us). It must need a new paradigm.

Me:  We de-hypnotize ourselves and others by looking at and playing out the double entry bookkeeping/micro-foundational policy effects I outlined….and then integrating the very correct macro-economic critiques of neo-liberalism with those micro policies. And then begin organizing a movement to communicate the benefits of those policies to the small to medium sized business community and every individual who has the common sense to accept gifts of income and price reduction.

In other words the integration of heterodox macro critique and the policies I outline IMPLEMENT the new paradigm….so lets take that ball and score six or seven social and political touchdowns with it.

A paradigm is also very much like a hologram where the same information is in every data point and the whole…at the same time. It’s the epitome of the integration of opposites which is a seeming illogic. That and habit are the primary reasons it is difficult for people to perceive.

…is that yes, what you and/or businesses spend becomes some businesses’s income, but not directly or entirely some individual’s income. The standard illustration for the velocity of money shows businessmen spending money as if it were their individual income when in fact it is their business revenue which of course must be reduced by the expenses of the business, plus no matter how much an enterprise increases their revenue their labor costs/the individual income it produces and distributes stays essentially the same because the owners do not just pass along the entirety of increased revenue to their work force. 

Of course labor participation/employment rates have been going down for some time and with ever increasing innovation, capital technology costs themselves, capital depreciation costs for that technology and last but not least the disruptice effects of AI on aggregate demand has no where to go but down as well. The result is that the gap between total individual income and total costs/prices in technologically advanced capital intensive economies is ever widening.

A direct and costless means of increasing individual income (a universal dividend) is necessary, and a direct and reciprocal means of reducing commercial and consumer prices (a discount/rebate policy of relatively high percentage at the points of sale throughout the entirety of the economic process)  could double individual purchasing power and so is the key to stabilizing economies and will implement the new monetary and economic paradigm of Direct and Reciprocal Monetary Gifting.

A paradigm is simultaneously the decipherment of a single unifying concept that fits seamlessly within and creates an entirely qualitatively different system in which it applies to. Hence it is the epitome of contrast and integration. The mindset of Science is contrast, the mindset of wisdom is integration of contrast/opposites.

Economists here is your lesson/koan:

What is the peace of conflict?

Answer….after non-glib contemplation:

Integration of the truths in opposites-Wisdom….and ultimately the mental state of grace-graciousness via continual integrating.

What are considered free markets are actually simply chaotic markets in disguise because there is no effective way to prevent entreprenuers from simply arbitrarily increasing their prices when they perceive more money coming into the system. What the economy requires along with the universal dividend and discount/rebate policies is good, rational and ethical control over such arbitrary and vice ridden actions.

In the first place the universal dividend and 50% discount/rebate policies tremendously benefit both the individual and enterprise by raising the available amount the individual can purchase by a factor of 2-2.5 which of course benefits enterprise at the same time because now there is 2-2.5 times more money available for their products/services. It also would virtually eliminate the taxes both individuals and enterprise pay for welfare, unemployment insurance etc., and quite quickly even for social security. So the benefits and cost savings for everyone and every business are large and would make it hard to justify cost/price increases….except for purely greedy and anti-social reasons…and this despite being given a prosperous free flowing system and tremendously increasing the likelihood of their profitability. The healthy and correct response to being gifted is appreciation and honest participation. Hence greed and destabilizing actions will correctly be met with taxation and eventually, if not corrected, loss of the privileges of the discount/rebate policies.

Wisdom is common sense and its just and ethical application.

i.e. a continual mental flow through time of the integration of truths, workabilities, applicabilities and highest ethical considerations…which is simply the definition of the highest state of Wisdom.

P:  Michael Hudson points out that we’ve seen this movie before. Rome was destroyed apparently by a build up of too much private debt and an institutional failure to forgive same. In Rome before the fall, this debt was owed to creditors who were senators or other elites allied with them. This small cohort of creditors and their stubborn refusal to take a haircut is what doomed Rome. The moral decay, the military collapse, the institutional rot, and the ultimate fall and physical disintegration of Rome all are traceable to this core failure to forgive private debt.
And so here we go again?

Me:  Precisely…..unless we find a way to replace the current monetary paradigm of Debt ONLY with the new one of Direct and Reciprocal Monetary Gifting. A new paradigm that resolves austerity for enterprise, general scarcity of individual income, chronic inflation, lack of monetary sovereignty, the paradox of thrift, the “necessity” of re-distributive taxation and the endless economic theorizing/failure to begin organizing to politically significant constituencies…..because we fail to heed the two primary signatures of paradigm change, namely conceptual opposition to the old paradigm and inversion-transformation of it problematic dualities.

Examples: Nomadism to homesteading, terra to helio-centrism, Debt Only to Direct and reciprocal Monetary Gifting, the “necessity” of physical human input to human mental/artificial intelligence

And probably the biggest/most telling signature of a paradigm change is elegance, simplicity, effectiveness and the mirthful reaction to recognition of the new paradigm of: “Why didn’t I see this before, and why did it take 10 or 5000 years to see it.”