Friday, December 14, 2012

Randy Wray — Alternative Framing of Money: Coda

Randy concluded his series on reframing "money" yesterday, but has added another post in response to comments and also a post by George Lakoff yesterday, which was linked to here at MNE.

New Economic Perspectives

Alternative Framing of Money: Coda
L. Randall Wray | Professor of Economics, UMKC

Randy called attention to these comments today:
Schofield | December 14, 2012 at 8:26 am

To paraphrase David Sloan Wilson in his article “The New Fable of the Bees” conservatives “demonically strive to widen their slice of the pie while remaining oblivious to the size of the pie.” Wilson calls this the fundamental problem of social life. The principal motive for MMT’s development is the recognition it can make the pie bigger and, therefore, how a society can best make the pie bigger should be a goal of “framing” arguments.
The New Fable Of The Bees: Multilevel Selection, Adaptive Societies, And The Concept Of Self Interest
Schofield | December 14, 2012 at 9:07 am

If David Sloan Wilson is implying that conservatives are not open to new ideas about increasing the size of the pie because they are obsessive about increasing their slice of the pie then it follows that they are unlikely to be open to expanding their understanding of a fundamental aspect of money’s nature. They will struggle to understand that money like our DNA coding mechanism is a “conceptual communication system,” that it allows labor to be instructed to use resources to produce goods and services including the social exchange of goods already produced or indeed benefit from the social effects of services already funded (e.g. improved policing). This failure leads to not seeing that a healthy economy requires an optimal of money of money for both active spending and prudent saving. Accordingly the lack of conservatives “openness” has to be framed by progressives as detrimental to advancing an economy just as obsessiveness with part of the pie rather than the whole pie is too.

LRWray | December 14, 2012 at 9:23 am
Schofield: I like the wilson point on the pie–it has always been the conservative approach to “distribution”: a fixed pie so if I get more, you get less. I also like your analogy to DNA–could be something important there for developing the alternative framing.

Schofield | December 14, 2012 at 9:47 am
The phrase “conceptual communication system” for one aspect of money’s utility is a straight lift from the following article:- seemed to fit since I was interested in exploring what we know about any rational argument concerning the origin of cooperation at the molecular and cell level of life. Precious little it would appear. But since money is a social technology that helps us to cooperate with each other to meet our needs then so is DNA coding to help cells survive and meet their objectives. 
Schofield | December 14, 2012 at 10:27 am 
To paraphrase Trevors and Abel in their article referenced about the property of “value” in money relates to the operation of a “linear digital algorithmic program.” So a simply coded program would incorporate the understanding that if too much money is injected into an economy relative to resources availability “value” will tend to fall and vice-versa. Additional coding, for example, could support Steve Keen’s observation about economic performance being related to income and the quantity of increase or decrease in private debt but it obviously also impinges on money’s “value.” A good algorithmic program would obviously help determine the parameters affecting “value” and clearly this relates to Wynne Godley’s life-time’s work on Sectoral Accounting Balances. So money is like DNA it’s subject to algorithmic programming.

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