Monetary Gifting is the new economic paradigm that needs to be integrated into the present paradigm of Debt. All of the leading reform movements and cutting edge theories have as their basic program a form of Gifting and the natural philosophical concept underlying Gifting which is the concept of Grace-Consciousness.
For instance Disequilibrium Theory is based on the concept of dynamic and continuous cycles/cycling as in process as opposed to stasis-equilibrium and is reflective of the continuous flow of consciousness. A call for “a modern debt jubilee” is giving/free Gifting/cancellation of debt.
Public Banking advocates a continual structural presence of Banking operating in the public’s/individual’s/commercial entity’s interests which is reflective of continual mindfulness-presence of Grace-Consciousness and also the necessity of an ethical component to the money/financial system.
Sovereign Money/MMT advocates national governmental control as in benevolent, unbiased and ethically just and balanced control and is reflective of a government controlled by “a/your sovereign Grace”. The Basic Income Guarantee (BIG) is reflective of addition, abundance,
and security as in confidence, hope and full consideration of the individual all of which are aspects of Grace-Consciousness.
Integrating Debt with monetary Gifting directly to the individual and reciprocally via price by businesses to consumers and then back to businesses is reflective of the continuous and dynamic eddy, flow and free flowingness of a river/economy and is also reflective of Grace as in balance and flow.
The various reform movements and cutting edge theories need to integrate their efforts and thinking around these observations and philosophy.
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Nothing at all wrong with stock/flow consistency, but what all economic theorists miss is the inherent cost inflationary nature of the economy. Keynes missed it. All DSGE theorists of course miss it by virtue of their stubborn adherence to general equilibrium.
As the economy has become more and more technologically advanced and capital intensive the depreciation costs of replacing all of the means of production dynamically and increasingly de-stabilize the economy.
As all costs must go into price by cost accounting convention and depreciation allowances for businesses are only a stay of execution of costs not a forgiveness or elimination of them the rate of flow of total costs in such an economy will always tend to exceed the rate of flow of total individual incomes simultaneously distributed by businesses.
The actual problem in economic theory is the failure to account dynamic costs honestly and accurately and deciphering the macro-economic effects of same. As Dr. Keen has said an economist can get his degree in economics without having taken even an elementary course in accounting. Few businessmen have much knowledge or probably concern with the minutinae of accounting and few accountants are trained economists and so able to think about the economic consequences of the data they work with everyday. Finally, probably few economists are “hands on” enough businessmen to be aware of the necessary, ever present and so dynamic nature of the costing/pricing system as it relates to the lower bound of prices.
If the lower bound of cost and so price is inflationary then no matter how much one tinkers, tweaks and economizes on the upper bound of same….the system will never be stable.
Don’t get me wrong, I’m not for austerity to “solve” the problem. That is simply orthodox and mistaken DSGE. But systemic cost inflation will erode both profits and individual purchasing power, and merely pumping more money at additional cost into such an already inherently inflationary system cannot solve the actual and (so far) undetected problem.
In fact the only valid economic way to resolve such a systemic problem is to gift the individual with income/purchasing power and businesses with revenue that they priorly gift to the consumer because to inject money into the system first, merely to have it generate less individual income than costs, only re-initiates the inherent systemic cost inflation.
TW: Finance is not a factor of production. Fictional problems are political.
Me: Depreciation is an empirical flow of costs and a systemic factor of production, especially in high tech capital intensive economies, and even if there were no additional costs associated with finance whatsoever would destabilize the economy.
Double entry bookkeeping is one of the greatest empirical inventions of the last 500 years and a wonderful tool, but it was conceived before high technology capital intensive economies were a reality. Thus its subtle and so missed cost accounting convention that “all costs must go into price” has become an anachronism that increasingly destabilizes modern economies. That is an empirical and dynamic reality not a political fiction, and will require those who understand dynamics and the digital nature of the money system to join forces to fight the current financial and political powers with an
idea even more powerful than Debt, namely monetary grace as in gifting.
TW: If production is less than the physical depreciation of productive tangible capital, then the tangible capital is not replaced. By fiction was meant legal fiction, finance, accounting, money, financial instruments are all legal fictions. Financial capital is fictitious. Financial instruments are routinely voided in courts, eg on bankruptcy. Account books can be voided by law. Real factors of production can not be voided in courts, like the laws of thermodynamics can not be voided in courts. Political solutions are also brought to bear on fictional problems. The real terms costs of tangible capital, commodity inputs, labour, public infrastructure, can not ever exceed the output, else production ceases. This operates on low cost energy. When energy runs out, or gets expensive, that’s the end. Those real terms costs include the physical depreciation. And of course there are real costs of pollution, environmental degradation, resource depletion, and such, that are real terms issues, that are not currently adequately accounted for. Those are not anachronisms. But you have not stated any of those things, you have left it as unidentified flow of costs, and unidentified bookkeeping depreciation. Identify, specify those cost flows, otherwise no one will listen. You will not “gift” your way out of entropy, resource depletion, or environmental degradation by nuclear pollution, and some other such problems. “Gifting” of legal fictions is neither necessary, nor sufficient to solve real terms problems.
And Debt, also is a legal fiction. It is never the real terms problem. It’s a political problem. That which can be created with the stroke of a pen may be voided with the stroke of a pen.
Me: “Real terms costs” is an orthodoxy the same as general equilibrium is, and the economy will be forever and increasingly halting if we adhere to it because depreciation of capital is factored into the costs of consumer prices moment to moment. The classical and correct goal of economic systems is flow/free flowingness no matter that the economy is in an inherent state of disequilibrium due to the rate of flow of total costs exceeding the rate of flow of total individual incomes with which to liquidate them. Policy must address that reality with that classical goal in mind.
The costs of pollution, environmental degradation and resource depletion are certainly real, but do you think these would be more likely rationally dealt with if we didn’t have financial dominance, economic stagnation (at best) and the individual pinned to a frustrating and exhausting austerity?
Integrating monetary gifting into the debt based system would enable an integration of leftist Keynesian and rightist Austrian economics and accomplish more of their separate agendas than they have accomplished railing at each other for a hundred years. You could actually have what I refer to as “the higher disequilibrium” where of the rate of flow of total individual incomes exceeds the rate of flow of total costs and we had proactive price deflation and yet such policies still fit seamlessly within profit making systems.
TW: And now two questions: 1) What is money? 2) What is the central purpose of classical value theory?
Me: Money is a lot of different things to different people, but presently it is an abstract agreement based on trust. The money system is digital, that is it is capable of creation and destruction of money and prices, and that is why monetary grace as in monetary gifting will work.
Right off the top of my head I don’t know what the central purpose of classical value theory is. I’m more concerned that both theory and policy be aligned with freedom so as to effect immanent economic freedom for the individual and free flowingness for the system. Debt which is cost and burden can be balanced by monetary gifting which is costless and free. The integration of Debt and Gifting will result in a third unified economic paradigm. Paradigms are always absurd until they are universal truth, and new ones are generally an integration that simply reverses or inverts the power and hypnotic perceptions of the present paradigm. So it was with Copernicus and Ptolemy, so it will be with Marx and Smith, Keynes and Von Mises.
Me: Again, the fact is that every one of the leading reform movements and cutting edge theories has one or more of the aspects of the philosophical concept/personal experience/psychological flow state known as Grace, which is synonymous with consciousness itself, as the basis for its policies .
Examples and their advocates:
A debt jubilee is equivalent to monetary grace. (Steve Keen)
The economy is a dynamic flow of factors that inevitably will have cycles and fluctuations and so is reflective of the flow state of Grace in that it is being and becoming at the same time and yet is a stable and more focused conscious state of awareness of and in the present moment of the myriad external perceptions and internal considerations possible. (Disequilibrium Theory)
A banking system that is temporally ever present, ethical in the sense that it is not dominating, manipulative, biased toward cronies etc. and has the individual and commercial entities that want to do productive things with money uppermost in mind as opposed to a craven desire to merely make money as the current one has become is reflective of Buddhist mindfulness, conscious awareness in the present moment and its ethic of fairness, doing no harm and the grounding recognition that even the enlightened and/or powerful still need to “chop wood and carry water”. (Public Banking)
A central monetary authority that actually controls and rules ethically and benevolently over its subjects. This includes the private banks in a banking system that operates in the actual interests of the individual and commercial entities and so is a partner in commerce instead of a dominant business model. (Positive and Sovereign Money)
Grace-Consciousness-the flow state is the thread that binds each and all of these and others together. We simply need to become more conscious of all of its aspects as they relate to economics and money systems, integrate them and make sure that policies are actually and fully aligned with that philosophy.
TW: In the US, real depreciation is not the same as book value depreciation. Book depreciation is accelerated, 27½ years for residences and 39 years for commercial non-residential properties. Book value depreciation is inflated, fictitious, and does not represent real costs, and so is not part of the factors of production. The answer for rent extraction is not “gifting”.
Public banking is a good idea, because it can partially solve rent extraction. Additional measures are required.
Me: Depreciation remains an additional cost no matter whether accelerated or not. And of course you also have the diminutions from the circular flow that Keynes etc. figured out. Finally, waste is another huge component that widens the scarcity ratio between the flow of total individual incomes and total costs/prices.
The answer for asset inflation and rent extraction is reciprocal gifting strategically placed at the terminal end of the productive process at retail sale. A business discovers its best price then it is discounted/gifted 30-40% to consumers. After the actual sale the business is rebated/re-gifted the discount amount back by the monetary authority. Voila! A roaringly profitable economy and both immediate and a vector toward price deflation to boot. If some sensible regulation is further required to limit/end rent extraction….so be it. I’ve always admired Henry George, but his insights were not as complete as subsequent theories.
Every business has a retail product from candy stores to lawyers to home builders. A universal dividend costlessly interpenetrates the economy with individual income and a retail discount’s gifting effect encompasses the entirety of the economic/productive process from beginning to end.
Interpenetration and encompassment are aspects of the concept and psychological experience of Grace by the way.
What we need is Consciousness Economics or as I call it Wisdomics/Gracenomics. Then we will awaken to the wisdom of prudence, which is just another word for balance, in both economics and personal development, and leave scarcity, the profligate nightmares of obsession with profit (while still utilizing a profit making system) and the half assed view of humanity as homo economicus that half assed theories and systems have foisted on us
all…..in the rear view mirror of human history.
TW: Within your contention concerning “… the scarcity ratio between the flow of total individual incomes and total costs/prices.” it is not adequately revealed the extent to which “total costs/prices” are falsified. The destabilization is not technologically determined costs.
Me: There are costs that are systemic and additional to the costs of finance and you’re labeling them fictitious is errant IMO because it means that they can be altered or (partially) eliminated by decree. They exist as a dynamic flow of costs and not every business goes bankrupt and not all of their ADDITIONAL nature is equated in some general equilibrium belief. I probably won’t convince you of that, so fine.
Perhaps as a prelude to crafting intelligent and ethical policies we should consider how innovation and AI, as disruptive economic forces that are not going to go away soon and are in fact only getting started, will reduce aggregate demand and create the same scarcity ratio and so the necessity of monetary gifting.
Me: https://mishtalk.com/2016/05/26/we-need-new-labels-i-propose-100-robot-made/#comment-23143
“Buy Human” by the way is the reactionary, Luddite and unconsciously socialist sentiment.
All economists are nascent adherents of Wisdomic/Gracenomics.
Social Credit/Wisdomics/Gracenomics/ Gracientialism 