The mathematization of economics since WW II has made mainstream — neoclassical — economists more or less obsessed with formal, deductive-axiomatic models. Confronted with the critique that they do not solve real problems, they  often react as Saint-Exupéry‘s Great Geographer, who, in response to the questions posed by The Little Prince, says that he is too occupied with his scientific work to be be able to say anything about reality. Confronting economic theory’s lack of relevance and ability to tackle real probems, one retreats into the wonderful world of economic models. One goes into the “shack of tools” — as my old mentor Erik Dahmén used to say — and stays there. While the economic problems in the world around us steadily increase, one is rather happily playing along with the latest toys in the mathematical toolbox.

Modern mainstream economics is sure very rigorous — but if it’s rigorously wrong, who cares?

Instead of making formal logical argumentation based on deductive-axiomatic models the message, I think we are better served by economists who more  than anything else try to contribute to solving real problems. And then the motto of John Maynard Keynes is more valid than ever:

It is better to be vaguely right than precisely wrong.

Me:  Yes, and this is why my model of Wisdom as an Integrated Trinity-Unity including and encompassing an integrated Duality expressed thusly:

[ 1 X ( 1 X 1) ] where X = integration, 1 is a reality, (1 X 1) is an integrated Duality and
[ 1 X ( 1 X 1) ] is an integrated Trinity-Unity including and encompassing and integrated Duality….and is actually both a paraphrased re-statement of Keynes’ motto….and the means of also becoming less vaguely right and actually more and more comprehensively right.

Me:  Again you show your lack of knowledge and understanding of Social Credit theory. The entire problem with commercial/private banking ….is that it IS endogenous and consequently in control of the economy. THAT’S WHY A TRULY EXOGENOUS SOURCE OF CREDIT PRECISELY LIKE THE SOCIAL CREDIT NATIONAL CREDIT OFFICE/TRUE PUBLIC CENTRAL BANK IS SO ABSOLUTELY NECESSARY! Would you please get that right in your mind…so that you don’t confuse people here with YOUR misconceptions and apparent unwillingness/inability to understand.

Me:  I’m trying to get people to recognize that the integrative mindset is necessary if one is to have a complete and clear understanding of any subject whether it is one’s self or a body of knowledge like economics and finance. Apparently you think that structural and intellectual compartmentalization and fragmentation are higher values than Wisdom which is the integrative process itself. Again, this would be YOUR apparent misconception and unwillingness/inability to understand.

Me:  Well then come here to learn…not to attempt (and fail) to de-bunk Social Credit theory with your own misunderstandings and/or my attempts here to forge an alliance via continually stressing the importance of taking the knowledge here and showing how the concept of Public Banking aligns seamlessly with the central banking concept envisioned by Social Credit…and then integrating those insights. Much of Ellen’s writing before she took up public banking was integrative/holistic in nature. She was on the right track then, and I think she can also see the Wisdom of such thinking regarding economic and monetary theories.

JR: Endo- ( from within ) -genous (generated or initiated in the case of banking.)

Douglas was adamant that this right should not be taken away from the banks, just that they should lose their monopoly of the process.
This group proposes no change in that regard, simply to use the power of States (which have no central banks) to reform the system.
John Herman, of ERA, believes the banking system should remain endogenous, i.e. they should have the right to initiate loans even if they have to draw equivalent reserves immediately upon doing so.

You are perfectly right in stating that full reform needs the use of a public body such as a central bank or a credit authority (I believe both).  But that is not part of the mandate of this group.

Me:  “Douglas was adamant that this right should not be taken away from the banks, just that they should lose their monopoly of the process.

You know, I don’t give a damn what Douglas, John Herman or anyone else said/says or didn’t say. Douglas did suggest a National Credit office as the sole lender/distributor of credit guided by the philosophy and aligned policies of Social Credit. That he did not insist upon and put a trinitarian template on Finance may have been a flawed inconsistency with his otherwise trinitarian thinking. I’m strongly suggesting a trinitarian model is necessary because history, the basically good but flawed and corruptible nature of Man and the template of my own Trinity including and encompassing Duality formula is a valid and general signature of completeness, wholeness and ethical ascension….and also suggests it (trinitarianism) is both the superior ethical and pragmatic one.

“But that is not part of the mandate of this group.”

Indeed. And I would suggest they consider it. Integration of truth(s), workabilities, applicabilities and the highest ethical considerations is both the process and the garnering of Wisdom. And Wisdom is equally as applicable externally/temporally as it is internally….otherwise it wouldn’t be Wisdom.

Me: Responding to Liamalone:

Liam,

Yes, from a strictly functional finance perspective the extraction of such huge profits from the flow of the economy, even disregarding the other contributing factors to “the Gap”, is becoming more and more obvious.

John’s viewpoint is actually tainted by lingering neo-liberal DSGE (Dynamic Stochastic General Equilibrium) and Keynesian orthodoxies which mistakenly think that all monies are able to nearly pay for all consumer prices and just need a slight tweaking. If this were the case national economies and the world economy would have been stable rather than having to continually deal with “the Asian flu” “the Southern hemisphere bankruptcies” etc. etc. Such theories actually served only to palliate and obscure the underlying validity of the Social Credit insight. And beyond that as I have come to understand the incredible power of the digital nature of both the money system and the Discount mechanism….it really doesn’t matter if the moment to moment gap is relatively small or huge and beyond 99.9% of those still adhering to the orthodoxy of equilibrium…because you could discount retail prices 40-50%, do absolutely no harm because the discount only occurs with actual sales and at the absolute end of the productive cycle of any enterprise’s retail product. Thus it could be used, along with the Dividend, to significantly increase the individual’s purchasing power via price deflation. That it would also consequently significantly reduce the private Banks’ consumer market is almost an after thought. Retail sale to an individual terminatedly ends a product or service’s costs so if the discount occurs at that point…and is fully rebated back to the participating merchants….no muss, no harm.

Me Responding to JR:  “As Douglas explained,  fresh money must come into circulation,  either as government deficit expenditure or as business expands,  both of which must be financed by fresh debt.”

Another example of misunderstanding Douglas and Social Credit and also having the taint of Neo-liberal and/or Keynesian orthodoxies. Why? BECAUSE NEITHER THE DIVIDEND NOR THE DISCOUNT ARE DEBT….THEY ARE GIFTS/GIFTING.

Me:   What the “pragmatists”, “realists” and cynics forget is that Social Credit was a world wide movement before WWII and also that the only way Social Credit ever was actually able to win politically was to include a heaping dose of religiosity/spirituality. But the above still insist that they will reach Valhalla via politics and reform.

Meanwhile the most important ingredient is awareness of the resolving power of consciousness and the integration of all of the lesser realities of Duality.

Me:  Excellent logical take down Liam. The truth, by his own admission, is that John was so startled, angered, overwhelmed, negatively effected (take your pick(s) by the Banking lobby’s deceitfulness in New Zealand that he has overreacted to it by counseling everyone not to be too enthusiastically hopeful when hope, as I pointed out in my previous post is the most important part of forming and maintaining a mass movement. He also accuses Social Crediters of orthodoxy when he is not even aware of his own mixing of recently invalidated theories with Social Credit. Furthermore, as Liam has pointed out he also fails in logic and also has no faith that others can understand it or use it to comprehend Social Credit and its A + B theorem. Calculus has been around for over 400 years. The problem is more that economists miss and/or refuse to look at and include in their calculitic models the cost inflationary nature of commerce itself….than that others can’t understand it (calculus and its insights). So John doesn’t believe in enthusiasm and hope, nor does he think people are smart enough to use or comprehend logic and calculus in order to understand A + B. So he is exposed as someone without any real faith in anything or anyone….and yet he lectures Social Crediters on failing to help others to understand..when as I pointed out integrating both hope and logic are the things that have awakened individuals enough to join a movement and elect a social credit government. His is a curious combination of cynicism and projection.

JR:   Steve, that is totally incorrect.  In Alberta, success was achieved by having access to a powerful medium of the time, radio.  Plus almost certainly hard work by Party members among people devastated by the Depression.  The Party there was later corrupted into  a mainly religious movement. This, not sitting on one’s backside writing irresponsible vagaries, is the path to progress.

Me:  Well of course a mass movement takes individuals to make it work. You act as if I didn’t know that. Your problem is you scotch the most important component for a successful one right from the start. Please do not lecture me on “work” while forgetting the value of its mental component, or on pragmatism…especially when all I’ve ever done is advocate THE INTEGRATION OF BOTH…AND ALL YOU’VE EVER DONE HERE IS CRITICIZE ME FOR IT AND SUGGESTED WE COULD GET FROM A TO B BETTER BY MEANS OF NON-INTEGRATIVE AND EMOTIONALLY SUPPRESSIVE MEANS.

The Social Credit mechanism of the compensated retail discount is the true QE for the individual. It is a swap of communal assets for a discount to retail prices after the terminal sum of costs of any item/service, and at the terminal ending of the productive process, that is retail sale to the individual. Every business has a retail product.

The digital money system is actually completely analogous to the top two states of direct and immediate beingness that conscious human beings are capable of, namely Know and Not Know/Unknow. Thus it (the money system) can be used to costlessly add effects or costlessly subtract them, create effects and uncreate them.

Ib Jorgensen:  Says Jean-Pierre Dupuy in “Economy and the Future – A Crisis of Faith” 2014:

“Little by little, Economy emancipated itself from the shackles of the sacred. Once held in check by religion, and then by politics, it has today become both our religion and our politics. No longer subject to any higher authority, it cannot decide our future, or make us a world in which to live: it has become our future and our world. Advanced postindustrial societies have been well and truly mystified, in the original sense of that word, and their politicians hoodwinked. The result is paralysis. …. If civilization can yet be saved from extinction, the change in attitude this requires of us must be, first and foremost, metaphysical in nature.”

Me:  Amen to that Ib. And that could be either/and/or supernatural or natural metaphysics.

Ib:  Thanks – my hunch is that natural metaphysics will serve us the best – we have to nurture our capacity for self-transcendence in order for us to understand and relate to our global predicament.

Me:  I agree. Current supernaturalism has almost as much baggage as….economics :)) , but at least they do have a mental openness to grace as in the free gift that might make a number of them decent allies in the temporal fight to unseat the paradigms of Debt and Loan ONLY.

Infrastructure spending? Fine, the toilets are backing up nationally and bridges are an accident waiting to happen.

Increased free gifts of demand for businesses forced into an inherently austere cost inflationary economy because of the scarcity of individual incomes to liquidate total costs/prices brought on by the additional costs of depreciation, interest and taxes? Excellent idea, every progressive loves to hate business, but they have to operate within an onerous system the same as individuals do.

Doing a true QE for the people swap of communal assets from an America Inc. account to rebate retailers for their discounts to consumers? Enlightened policy that will free both the individual and businesses so that we can all rapidly progress toward a prosperous and leisurely future without having to be continually economically stymied by the effects of robotics and AI.

Integrate MMT, Public Banking and Social Credit/Wisdomics and toss in my trinitarian model for Banking. That alliance could be taken to both the public at large and to the small to medium sized business community…and it would resonate enough with hope and self interest to be able to herd the entirety of the political apparatus toward freedom and actual prosperity for all. Why bother with trying to enlighten the vast majority of economists, Bankers and Pols none of which have the imagination or the inclination to listen or hear? “Hit the streets” with the above integrative approach, awaken and empower the natural alliance of businesses and consumers and strike fear in the powers that be.

The point is twofold. #1 Our money system truly is a social contract, i.e. a social credit system that we can decide to put either to our service or foolisly chose to serve. #2 it is digital, that is it can be added to and/or subtracted from…by whatever point of equilibrium WE CHOSE TO CREATE.That it has to be a strict balancing of books/budgets at an arbitrary (and scarce individual income level) is actually nothing but an unnecessary adherence to orthodoxy. The point again is we can chose whatever level of abundant equilibrium we so choose. As the dividend and discount mechanisms are actually the anatomy and component parts OF A MONETARY AND ACCOUNTING EQUILIBRIUM…THEY CAN BE SET AT WHATEVER LEVEL OUR PRODUCTIVE SYSTEM…IS CAPABLE OF MATCHING. It also enables the present level to be distributed AT A PRICE LEVEL FAR BELOW COST! The Distributive-Digital paradigm is therefore capable of being a universal economic and monetary solvent.

Tim:   Hi: thanks! But what I am trying to get at is that the government can easily function on credit obtained directly from tax-creditors instead of pledging the same capacity as security to private banks to supply the same credit at interest.

Equity dictates that government may exercise no more power than is required and the robbery-based business model is not necessary. I am ready, willing and able to advance credit or even loan money directly to government at zero interest and non-callable in exchange for the government’s bare acknowledgement that I am the creditor and not an inferior legal entity/debtor by virtue of my having produced something of value.

(Also, sorry for the delay and odd hours but I am in South Africa with a 9-hour time difference from my home on Vancouver Island).

Me:  Tim,

Precisely. The problem is neither the government nor our “friends” the Banks are willing to meet you half way in that regard…because it may require them to surrender power or control. Wealth is actually probably even a secondary consideration to them…which only goes to show how given over to (or hypnotized by) these corruptible considerations they actually are. And of course the solution to the entire situation is monetary grace/graciousness distributed sufficiently to provide everyone with a secure economic life, is additional enough to make the economy actually functional….and still fits seamlessly within a profit making system.

Ib Jorgensen:  Says Jean-Pierre Dupuy in “Economy and the Future – A Crisis of Faith” 2014:

“Little by little, Economy emancipated itself from the shackles of the sacred. Once held in check by religion, and then by politics, it has today become both our religion and our politics. No longer subject to any higher authority, it cannot decide our future, or make us a world in which to live: it has become our future and our world. Advanced postindustrial societies have been well and truly mystified, in the original sense of that word, and their politicians hoodwinked. The result is paralysis. …. If civilization can yet be saved from extinction, the change in attitude this requires of us must be, first and foremost, metaphysical in nature.”

Me: Amen to that Ib. And that could be either/and/or supernatural or natural metaphysics.

This is insightful thinking. In fact it is the beginning of economic Wisdom. If genuine Wisdom is the most relevant integration of truths, workabilities and applicbilities that also excels ethically for all parties and the system as well….how can it not be the framework and impetus for a new and alternative theory?

“Depending on retail subsidies and income transfers is another iteration of the regulatory state policies of the 20th Century. With many hands grasping the economic steering wheel such policies presume to tell us how often and to what degree the wheel may be turned.”

The retail discount mechanism and percentage I am envisioning is a macro-economically derived one that would apply generally and to every product and service based on the formula of total cost of individual consumption over total cost of overall production for a given time, say monthly (although with our current computing power that could be a shorter period of time). It is placed at retail sale to an individual for good reason. As I have said before retail sale to the individual is where the total costs for any item are terminally summed. Thus placing it there would be completely unobtrusive because every merchant including retailers will have been able to discover their best price BEFORE the discount was applied. Then, as the discounts given to the consumer by the retailers are completely rebated back to the participating merchants there is absolutely no harm done to any business entity…and of course the individual is graciously granted a price that actually ends up greatly increasing their individual purchasing power.

As for income transfers….there is no transfer. The universal dividend and retail discount policies are directly Distributive in nature, not RE-distributive. They simply use the digital plus and minus nature of the monetary system to “zero in on” the two most problematic and chronic problems of technologically advanced economies, scarcity of individual income and inflation, and solve them without incurring an additional cost to either the individual or the system.

Wisdom is the integrative process no matter whether it is applied personally or systemically. The above two mechanisms integrate seamlessly with profit making systems and the digital money system. They express the necessary new economic and monetary paradigm of direct monetary grace/monetary gifting that will enable us to embrace robotics and AI rather than fear/fight them. It will also enable us to finally, after 5000 years of instability and servitude, terminatedly handle and break up the monopolistic paradigm of Loan ONLY long standingly enforced and puzzlingly enjoyed by the business model of Finance. MMT is reflective of this paradigm. I’m just extending its systemic scope and its reach all the way to the individual. The more one “gets their head around” the direct distributive grace/gifting paradigm the more its universal solvent nature becomes apparent. Wisdom applied is not BS, but rather the higher relevance and pragmatism. New paradigms are always generally considered absurd…right up to the time the old paradigm is generally recognized as completely unworkable….and absurd itself, for instance the structural absurdity of austerity.

Me:

Kevin and Ben
“applying a discount cannot be an effective price anchor because it does not address inflationary effects that do not result from spending.”

Sure it and can and sure it does if it is administered at retail sale to an individual…because again, that is where ALL costs for any item are terminally summed….due to both production costs and any other costs whether they are circumstantial, due to asset inflation from bubble creation or even arbitrary decision by the enterprise.

“all income shifts are transfers”

Not if the income is a free and additional gift as the dividend actually is.

‘Still sounds like corruption. Selective handouts to the retail sector are as indefensible as handouts to debtors advocated by debt jubilee proponents’

They are not really handouts they are hand backs at and only for actual retail sales that are graciously given to the consumer….and then just as graciously given back to the retailers. As for their indefensibility, Steve Keen’s concept of a modern debt jubilee correctly would give those who did not have debt (actually a very small number of individuals nowadays) an equivalent cash payment so there is no moral hazard there, plus considering present world circumstances and the fact that long economic downturns very strongly rhyme with war….the obviously ethical thing to do is eliminate the debt overhang and go from DefCon 4 to DefCon1.

The policies I am referring to are aligned with and actually effect freedom for the individual and free flowingness to the system. Effecting freedom is effecting freedom. A = A. I’m sorry, but belief that centralized government and policy is necessarily tyrannical is too general to be completely rational.

Economic research is undeniably important and necessary to figure out the minutinae of regulation, however relying mostly/entirely on research when philosophy/Wisdom is also available to assist us and point at more complete and comprehensive solutions, especially when a lingering economic crisis is setting us all up for a rhyming war in an age of modern weaponry, is a perfect example of economic neurosis.