Am I incorrect to say that regardless of any exchange value arbitrarily placed on a currency by the present international financial regime and their monetary paradigm of Debt Only, that if one could somehow reduce prices via digital policies and so simultaneously increase individual purchasing power….that their valuation “system” would effectively be transcended?

…any movement to resolve the problematic nature of finance’s dominating and monopolistic paradigm needs to loudly shout and make known to everyone at its inception is that finance and its attending allies will have no hesitation to foment and false flag us into war in order to attempt to avoid the end of their dominance. Using war is both an obvious strategy of dominators and has many historical examples. Finance makes tremendous profits with its monopoly paradigm in peace time….and even more profit during war. The populace must be made aware of these facts and decide to never allow such to happen.

…by not looking directly at the moment to moment operations of the economy and so not recognizing certain cost, price, monetary, double entry bookkeeping and hence economic realities.

First they are missing the fact that double entry bookkeeping, which is one of the top three human inventions of all time by the way, is the underlying infrastructure and vector-path mechanism of the entire legitimate economic/productive process. In other words every legitimate transaction is recorded within it, and even illegitimate transactions are decipherable with good forensic accounting.

Secondly, they are missing the significances regarding the point of retail sale, namely that it is the momentary and/or terminal stopping and summing point for all costs and so all prices for every item or service throughout the entire economic/productive process.

Thirdly, they are missing the fact that retail sale is also the terminal expression point for any and all consumer price inflation.

Fourthly, they are missing the fact that the costing, pricing, debt based monetary and double entry bookkeeping system are all digital in their most basic nature. In other words equal amounts of costs, prices, money and debits and credits will sum to zero.

And finally,  combining double entry bookkeeping’s absolute basic infrastructure and vector/path mechanism they fail to see how the policies of a 20% business model retail sale and a 50% discount/rebate at the point of final retail sale could linear-ize all of the cost savings and painless and beneficial  deflationary price effects mentioned above and also immediately resolve all of the thorniest and most chronic problems of modern economies. And furthermore, in conjunction with a universal dividend policy could immediately more than double every individual’s potential purchasing power, eliminate and/or significantly reduce the need for re-distributive taxation, painlessly and beneficially integrate price deflation into profit making systems and re-energize and rejuvenate them. Furthermore,  this paradigm change would have “knock on” integrative and beneficial effects in politics and other areas of our lives including uplifting social, psychological and ecological effects.

KZ:  The main reason Sapiens invented agriculture, government, and economics about 7-10 thousand years-ago was to provide security to otherwise comfortable Sapiens foragers. Most of what enters the thinking of economists, including Greenspan was therefore invented to protect and defend humans from precisely the types of “risks” Greenspan claims are not a proper use of resources. Including famines, plagues, homelessness, threating everyday conditions. In the stream of human collective life such occurrences are rare. But rare is not a fixed cultural invention. Famines may happen only once in a lifetime, while threatening weather events may occur several times per decade. Plagues may occur only once per century, but changes in demographics may occur as frequently as every decade. As Sapiens societies grew in complexity, so did the number and severity of risks for those societies. Today no society can prosper or even survive for long without electricity. Loss of electricity through weather, equipment breakdown, or sabotage is intolerable. Society guards against such losses in many ways. For example, stand-by generation plants are constructed that may only operate 10-12 days per year. Similarly, plagues are much less tolerated today than at prior points in Sapiens history. Which leads to the construction of specialized laboratories, creation of stockpiles of vaccines, regular monitoring and testing protocols, and training of thousands of doctors. Modern economics and economists be damned. They have perverted each of the inventions Sapiens intended to keep their species safe and secure. They have turned them all into statistical equations and betting stops on a roulette wheel. Into investment “opportunities” for smart and uncaring business persons. Bad species survival strategy.

Me:  Quite. And that is precisely why we need a paradigm change which will bring good, rational and ethical order to a system of dominatingly smothered financial chaos.

KZ:  Craig, but what are the origins of any rationality and ethics? The community. The community might be only a family, but the goal is to construct as large communities as possible; eventually a world-wide community. The community is a history of interactions, of accommodations, and mutual understandings and duties. Communities are constructed over time in an identifiable location or locations. Members of the community share a common history and identity, from which each member develops individuation. Communities solve problems first because it’s necessary for the communities’ survival and second because it’s tradition to do so. This view is “conservative” in the long historical sense of conservative. It creates both stability and creative individualism that only exists within the community. This view is also consistent with Sapiens evolution.

Me:  Ken, the origins of rationality and ethics is awareness…of one’s own awareness itself. If one has a firm reality on their own conscious existence then they must come to the conclusion of the reality….that everyone else is a consciously sensitive individual as well.

As I’ve said here before I don’t necessarily dispute the validity of sociological, anthropological, political or the input of any other body of knowledge, in fact I affirm them, it’s just that the topic is economics and in my mind the current and new monetary and economic paradigms. Deciphering the new one and getting it implemented will by definition be a dramatically beneficial event and realization for the individual, every economic agent and the system itself which is a community of entities, and integrating the best aspects of personal character and intellect while deleting/letting go of any non-survival traits is the real “job” of every individual, and makes the individual him/herself a community as well.

KZ:  Craig, one cannot reflect on one’s self until one is a self. And that only happens in communities. Defining selfhood is one of the basic struggles, reenacted repeatedly through the history of human communities. You’re correct that each person is a community. Anthropologists call all communities actor-networks. Which includes each of us. And communities are how Sapiens evolution occurs. Via multi-level group selection. Sometimes the movies and many capitalists (quoting Herbert Spencer) focus on selection of the fitness individual, this does not fit with the evidence about Sapiens evolution. Sapiens survive or perish through groups, not individual members of groups. There is nothing special about economic actions. They are created the same as other actions and can be studied just as any other aspect of the social world. Before there were specialized sciences there was only moral and natural philosophy. Economics falls into moral philosophy, along with law, war, crime, politics, etc. Economists are not special.

Me:  So we’re in agreement that integrative thinking and integrative agreement between groups of individuals is the path of greater wisdom and survivability for humans.

KZ:  Craig, no, that’s not it. In the words of Bruno Latour, “The world is not a solid continent of facts sprinkled by a few lakes of uncertainties, but a vast ocean of uncertainties speckled by a few islands of calibrated and stabilized forms.” Nothing permanently defeats these uncertainties. Evolution and cultural adaptation provide groups of Sapiens the opportunities to survive. Wisdom (whatever you take that to be) may be or may not be part of the mix. In any event, it’s defined after evolution, by the results of evolution. Not prior to evolution.

Me:  Who said wisdom was prior to evolution? The world’s major wisdom traditions, if understood properly, that is as the purest, highest and most evolved form of human psychology/conscious insight as opposed to a latching onto their various dogmas which are merely guide posts, but not the experience of consciousness itself,…….came about as the result of humans evolving self awareness.

I don’t get your disagreement with what I am saying here. Wisdom is an integration of psychology and sociology….and many more disciplines. It’s a superior and more inclusive mental discipline than science alone which is a rational yet fragmenting mental process and unfortunately has taken a trend toward the very religious orthodoxy it reacted against 500 years ago. That’s all I’m saying, and of course that we should apply the insights about the temporal universe that can be gleaned from such a study of Wisdom…and apply those insights to economics.

KZ:  Craig, we believe Sapiens brain structure and chemistry have not changed in about 70,000 years. Those changes about 70,000 years ago are the factors that favored Sapiens over other human species in terms of survival. Often described with the words intelligence, thought, or wisdom, I prefer another word to describe these changes, imagination. Imagination allowed Sapiens to create not only agriculture, government, money, etc. but also consciousness, personality, and a variety of forms of knowledge (e.g., religion, science, perception) and hierarchical arrangements for the life of Sapiens (e.g., animal life, cosmology, deities). Wisdom’s in there with all the others. Its story is important, but no more important than the others. Which of these cultural inventions has the greatest benefit for Sapiens in terms of survival is a pragmatic question. It’s answerable only in its effects. In the words of Charles Sander Peirce, “Consider what effects that might conceivably have practical bearings you conceive the objects of your conception to have. Then, your conception of those effects is the whole of your conception of the object.” This is how Sapiens knows and use wisdom.

Me:  Yeah, we do disagree. Consciousness/self awareness is more basic than any separate -ology. Every body of knowledge is a perfectly valid study, but merely a derivative (including the phenomenon of mind as in abstraction) of the fact that we as homo sapiens sapiens are potentially capable of being more self aware than any other species on the planet. Consciousness is essence, wisdom is as much of the integration of mind as one is currently capable of understanding AND the essence of self awareness/consciousness itself. It’s the ultimate integration of the two and yet the key to experiencing self awareness is emptying one’s mind OF abstraction. It’s the meaning behind the verse, ““Truly I tell you, unless you change and become like little children, you will never enter the kingdom of heaven.”

KZ:  Craig, humans have no essence. This is the “uniqueness” of humans. Humans create the soul, consciousness, technology, science, etc. from the performances arising out of interactions with humans and nonhumans. Humans are made by themselves and the world. If this is what you mean by self-aware, then yes humans are self-aware. Evolution seems to indicate that humans did not originate as self-aware, however. But rather developed self-awareness via their history of interactions. I see no evidence of a spiritual factor in any of this. Except, of course the spirits humans create. Human communities are the setting for all of this. Here’s where all the work is done.

Me:  Yes, that’s the orthodox scientistic and sociologically fragmented viewpoint. The fully integrated natural and truly scientific look at it is that the thrust toward consciousness is an integral part of the cosmos itself.

KZ:  Craig, if we follow the universe, as best we’re able, I believe Fritjof Capra captures the path to insight. “Quantum theory thus reveals a basic oneness of the universe. It shows that we cannot decompose the world into independently existing smallest units. As we penetrate matter, nature does not show us any isolated “building blocks,” but rather appears as a complicated web of relations between the various parts of the whole. These relations always include the observer in an essential way. The human observer constitutes the final link in the chain of observational processes, and the properties of any atomic object can be understood only in terms of the object’s interaction with the observer.” Humans are, of course entangled in the universe, as is the universe in humans. Of course, humans ponder these entanglements. We call this pondering science. Others call it religion. Still others philosophy. So long as we never expect certainty in any of these, we are following the universe. Many humans do seek and hold on to what they claim is certain, in science, religion, and philosophy. In so doing, humans betray any access to insight. It’s difficult sometimes for humans to accept uncertainty. It’s a lesson each human needs to continue to learn.

Me:  All things are in process. I couldn’t have said it better. There is one proviso however, and that is has one had the fully conscious experience of the present moment, the present moment, the present moment…… or do they only “know” this as a data point or as a belief in religious….or scientific dogma? Every one of the world’s major wisdom traditions tells us that, the vast majority of us either haven’t had such an experience or do not know how to fit it into their normal walking around state of consciousness and so either invalidate it or latch onto the dogmas within which they were brought up…and so lose the experience itself.

So how is this relevant to economics? Such an experience is regularly referred to as being in a state of grace or “the flow state” which of course is conceptually reflected in the goals of classical economics’ for balance, equilibrium and flow for the economy. And when you do a definitional/philosophical exegesis of the word grace among its many, many other aspects, most of which are also directly relevant to economic theory….you find grace as in the gift, i.e. monetary gifting. Then if you know the signatures of all paradigm changes you realize that conceptual opposition to the current paradigm is one of them, and so the current paradigm of Debt/BURDEN Only is conceptually opposed by the new paradigm of monetary FREE gifting.

Perception of a new paradigm is a new conscious and enlightening experience. It’s the “ah ha” or “oh yeah, why didn’t I see that before especially because I’ve been looking at it for 30 years and didn’t see the connection?” kind of experience.

KZ:  Craig, you make the error I just described. You search for certainty. Consciousness is one of the many ways of life humans invent via interactions. Just one among many. It is no more certain or imposing than any of the others. Sorry, no “a ha’s.” Just, “might be,” “maybe.”

Me:  So there is no such thing as knowing-ness (not to be confused with self knowledge as in identity), or levels thereof?

And it appears you’ve found certainty yourself. Now all you have to do is mentally balance the opposites of certainty and uncertainty in an integrative and dynamic fashion…and you’ll have the natural experience of the flow state of grace.

KZ:  Craig, one of the performances that arise from interaction is explaining or giving meaning to the interactions. Often spoken of as knowledge or knowing. Humans make it up as they go, holding onto what seems useful. Knowledge is conditional on its demonstrated usefulness. Which people must continually reassess.

I’ll not oppose any efforts on your part to achieve this result. I prefer not to undertake the effort, however.

Me:  Do yourself a favor and keep your mind open to the idea that modern scientific orthodoxy does not have it “all together” so far as awareness of being aware is concerned. I appreciate the back and forth with an obviously erudite individual.

Everything in the way of policies I have suggested accomplishes precisely what heterodox and leading edge critics of current economics and economic theory….say they’d like to see, that is if one actually looks at what those policies do instead of immediately internally invalidating them due to orthodox blinkers or not actually looking at them and their effects at all. The only difference between they and I is I have perceived the single concept that will enable a new pattern known as a paradigm change and placed them within the framework of the moment to moment operations of commerce so as to thoroughly integrate them into the system.

As for analogies the body IS an excellent one for what every economist tries to accomplish with their thinking, that is create a complex and dynamic system that remains stable, robust and healthy despite the inevitable internal and external changes that must take place in the temporal universe so your skepticism regarding using it does not hold.

The real difference between the leading heterodox economists and myself is what I said above, and that I’ve recognized the historical signatures of paradigm changes and shown that the policies I recommend fit virtually all of them. If anyone cares to have a discussion here regarding those signatures I’d be happy to elaborate on them with them. Paradigm changes and perceiving them after all are so staggeringly positive and progressive that one would think they should be the focus here.

I have absolutely no problems with economists utilizing differential equations to describe certain aspects of the economy or even the entire economy…as it presently is. What I am saying however, is that if one takes certain utterly basic aspects of not only the economy, but of the temporal universe itself and then craft policies that take advantage of their mutual realities….that you can penetrate/see through all of the chaos/complexity in the economy, resolve its otherwise currently thought unresolvable problems and virtually linearize its flow, its realities and direct the effects of the system.

The perfect analogy to this is the body which is an incredibly complex mechanism that when healthy flows within a dynamic state of homeostasis.

All heterodox economists I’m aware of are very erudite about economics and highly intelligent generally. However, when it comes to identifying a new monetary and economic paradigm virtually all of them are reduced to dunces. This is mostly because they only utilize science to examine economics instead of using both science and the supreme mental discipline of the human species, namely wisdom, which includes and integrates science into its perspective. Wisdom is simultaneously reductive and holistic thinking and direct looking at the area of human existence/body of knowledge supposedly being examined. But that’s the point, science too often only abstracts while neglecting direct observation and so misses much. Looking and then integratively deciphering the various significances looked at is the very means of paradigm perception, and deserves to be called Wisdomics.

Modern economies do not tend toward general equilibrium, and they aren’t remediable by tweaking the current monetary and economic paradigm. The most accurate characterization of modern economies is:

Dominatingly Smothered Financial Chaos

Dominatingly smothered financial chaos, with an attending power and profit obsessed corporate elite that is largely independent from finance’s paradigm of Debt Only and so in many ways safe from and yet complicit in their domination. The new paradigm will end finance’s dominance and the corporate elites will need to embrace the new paradigm and its ethic of monetary grace as in gifting or eventually, and hopefully quickly, they will also take their place in the dust bin of history the same as private finance. But finance needs be the key factor, the real target and the unrelenting focus, not of mere reform, but of utter structural and paradigmatic change.

The arc of the moral universe is long, but it bends toward justice. To whomever you attribute that quote it remains true, and when a paradigm change effecting so many aspects of human life and that has plagued human civilization for its entire history and consequently is utterly overdue….the necessity and rate of change of that arc is tremendously increased.

When in doubt….integrate the truths in apparently opposing perspectives while simultaneously deleting their separate untruths, unworkabilities, inapplicabilities and lesser ethical considerations. Why? Because that is the very process of wisdom itself. It’s also the fulfillment of the Hegelian Dialectic

[ (Thesis x Antithesis) <–> Synthesis ]

and (should be) the focus in progressing any system or body of knowledge.

For instance:

[ (Capitalism x Socialism) <–> A profit making system of Direct and Reciprocally Distributed Monetary Gifting ]

Theorizing and critiquing is all well and good, but Wisdom and its policy application is what we need in economics….and every area of life.

PB:  All true but it’s slightly more complicated. There are actually two sources of new money in a credit economy. For sure, one is government deficit spending, but another is private bank lending to private borrowers. When banks lend they create an asset called a signed note which they post to their balance sheet. They then create new credit money by funding said loan (a liability of the bank) by crediting the borrowers demand account at the bank. This second source of newly created money can and often does dwarf the money creation by government. This bank credit can lead to instability when bank lending turns down as money supply growth stalls. When this happens government must step in by running deficits to hold the money supply constant. Steve Keen is doing great work in this area.

Me:  All of that is correct, except running a fiscal deficit does next to nothing for the moment to moment and inherent scarcity of individual demand in ratio to total costs and so total prices that is the generally unperceived even by heterodox economists root cause of instability of modern technologically advanced profit making economies.

Dr. Keen has a brilliant and iconoclastic economic mind, but new paradigms, which he regularly gives lip service to, require more than iconoclasm for their perception.

And everything less than paradigm perception is a mere perturbative epicycle of the current one.

L:  “There are actually two sources of new money in a credit economy. For sure, one is government deficit spending, but another is private bank lending to private borrowers” Whoa, there. Bank-created money that is lent into the real economy is paid back with interest. The principal is extinguished, and the interest is the bank’s profit. This is a zero sum process except for (1) bad loans, the upaid principal of which is an unencumbered addition to the money supply, and (2) the paid interest, which is a drain on the real economy money supply, and is probably funneled into the Wall Street casino.
I am not sure what you are getting at with the remarks about Dr. Keen and new paradigms. Have you the same criticism about Stephanie Kelton?

Me:  L,

I’m certainly on board with your understanding that the rentier/purely financialized aspect of the economy is outrageously outsized. The derivative nonsense that preceded the “great financial crisis” resulted from from private banking’s fallacious belief that the economy tends toward general equilibrium…”so we can re-hypothecate the same collateral ad infinitum….right?” ….wrong!

I’m on board with what MMT says about the mechanics of money creation and virtually all of what Steve Keen says. What I’m pointing at is that the advocates of neither MMT nor Keen’s disequilibrium-Minsky’s instability theory are able to craft policies that would implement a new monetary and economic paradigm.

This is mostly because they are caught up in abstractions rather than taking a zen like focus on the moment to moment operations of commerce/the economy, recognizing the economic significance of the stopping-ending and summing point of retail sale throughout the entire legitimate economic process…and then putting all of that knowledge together and crafting policies that would usher in the above new paradigm.

PB:  More fundamentally the cognitive error is failing to distinguish endogenous shocks from exogenous shocks and their corresponding risks and instabilities. It’s as though ship designers only obsessed about capsize risk from tidal waves hitting the ship while utterly ignoring the possibility of hull breach due to corrosion from deferred maintenance or running aground due to poor sailing. This is not an exaggeration, and the stubborn failure by economics to consider any possible mechanism of internally derived systemic failure is breathtaking.

Me:  “It’s as though ship designers only obsessed about capsize risk from tidal waves hitting the ship while utterly ignoring the possibility of hull breach due to corrosion from deferred maintenance or running aground due to poor sailing. This is not an exaggeration, and the stubborn failure by economics to consider any possible mechanism of internally derived systemic failure is breathtaking.”

Precisely. And the best way to do that would be to find the precise points within and throughout the entire economy where one could undo the dominating and monopolistic monetary and financial paradigm of Debt Only and at the same time thoroughly integrate costless monetary policies at those same points that benefited all agents and resolved modern demand constrained economies….all in one fell swoop. Don’t ya think?

L:  Are you on board with the sectoral balances model described at https://en.wikipedia.org/wiki/Sectoral_balances ? Kelton and others have described what could be done by a benevolent sovereign by monitoring the sectoral changes and using public spending for infrastructure to affect the deficit of the private sector. This would also take a realistic view of public spending as a prerogative of the sovereign–i.e., realization that deficit spending by the government is necessary, and that the national debt is not a debt to be repaid. This means realization that the government has infinitely deep pockets and does not ever need to borrow to spend.

Me:  Yes, that’s valid, but monetarily and like the Catholic Church demanding that grace/salvation could only be received via the sacraments….it’s still indirect to the individual via employment.

The new monetary paradigm is DIRECT and Reciprocal Monetary Gifting….implemented by a universal dividend and with the discount/rebate policies at the point of retail sale. Paradigm changes have signatures that are reflective of each other, and directness of effect is one of them…..as is the natural philosophical concept of grace reflected in the Reformation and now in economics as grace as in gifting.