An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Friday, June 15, 2018
Editorial — The Guardian view on the NHS cash boost: pay for it with deficit spending
Being risk-free, the debt of a monetary sovereign should yield AT MOST 0% minus overhead costs to avoid welfare proportional to account balance. And that's for the longest maturity wait debt; shorter maturity wait debt should cost even more with demand account balances at the Central Bank (zero maturity wait) costing the most, i.e. most negative interest.
Thus by eliminating welfare proportional to account balance, i.e. welfare for the rich, deficits by the monetary sovereign become revenue PRODUCERS for the monetary sovereign and thus far less subject to criticism.
Minds are changing, policies are being discussed. All very hopeful. Labour and Democrats in the US have a real chance to turn around their fortunes using the MMT framing
Adding that since citizens have an inherent right to use their Nation's fiat, they should have individual debit/checking accounts at the Central Bank that are free of charge up to reasonable limits on balance size and transactions per month.
Note that negative interest/yields on the rich but none on the non-rich would tend to cause a flow of fiat from those who have more than enough to those who have less than enough.
The UK government is following the neoliberal playbook.
[1] Pretend that money is physical and limited (even though the government can create infinite money out of thin air)
[2] Select the public assets and services that would be most lucrative if privatized, and starve them of funding. Falsely claim that they are “unsustainable.”
[3] Continue to starve the public service until its operation becomes so poor that the peasants scream for any kind of relief, even if it means privatization. Claim that this is what always happens with “socialized medicine,” when in reality the cause of the breakdown is your starving the service of funds. Also, continually promote militant feminism, militant “trans rights” lunacy, and so on, in order to keep the peasants attacking each other.
[4] Give the public service to one of your cronies, thereby granting him a for-profit monopoly. From now on, anyone who cannot pay is doomed to die in the gutter.
This works because the masses choose to believe the lies.
I'm not an economist, but I was thinking about MMT and government created money. Now imagine s small country and it decides to provide a public health service, so it builds a hospital and spends a million a week on wages. But nothing is free, so how does society pay for the hospital? One way could be when the hospital staff spend their wages people supply goods and services they have worked hard at. These business people will buy stuff from other businesses and so on, and so in this way society pays for the hospital.
But society could pay another way. Say the government spends a million a week on the hospital and this money filters out into society, but eventually society gets flooded with money and inflation sets in, so the government introduces a tax to take the excess money out. But how much does it need to tax by, well, enough to remove what it put in paying for the hospital. So, could Egmont be right, it doesn't matter if you tax at the beginning to supply services, or the end? But there's more. Could Egmont be wrong? The government put the money in it created itself, and by taxing it is just taking the excess out again. The population got that extra money not because they earned it, but due to the government money making process. I tell right wingers that tax protects the value of the money in their pocket and the value of their savings.
Yeah. The problem is environmental conservatism infected leftist results in a political philosophy of scarcity and deprivation. Clean water act pragmatism is gone in favor of deprivation. It leads to poor labor markets and austerities. Muh global climate change needs to be viewed as an engineering problem rather than a Paris conference problem. Rather than subsidizing sports cars and solar panels while tripling energy costs on the poor, just solve the technical problem. The overarching idea that we can't pursue everything from health care to housing is rooted in the idea that we must reduce our footprint. Conservatism is the override rather than pragmatism, rather than mitigation. Stephanie can't even talk about MMT without invoking her conservation approach. Scarcity inevitably leads to worries about immigration. How humans work. So instead of promoting Housing, Trade, Health, Education, we pretend simple engineering problems required Democrats to impose austerity. Left goes down.
They are not pretending , they do not have adequate skills in abstraction due to a lack of rigorous training in a discipline that subjects the student to years of exercises that develop necessary abstraction skills...
Ryan here is Tom (PhD Philosophy ie qualified) from the other thread:
“Think of categorical thinking as analytic thinking and dialectical thinking as synthetic thinking. Analysis takes apart and synthesis unites into a whole. Both are required for holistic thinking.
This is owing to the limitation of descriptive language, which is based on model construction and no model is capable of capturing the whole in all possible detail. So different models are needed to complement each other, each with its own scope and scale.
Non-descriptive "language" is richer than descriptive language but fuzzier. Ordinary language is looser than technical language, the humanities looser than science, and the arts are the loosest of all. The arts can capture much more of the whole but not completely.”
The left is dominated by dialectical thinking they get thru Art Degree programs...
So shouldn’t be surprised to see SK talking about expansive policy and conservation policy at the same time...
“So instead of promoting Housing, Trade, Health, Education, we pretend simple engineering problems required Democrats to impose austerity.”
I don’t think you’re reading this right here.... they do BOTH... at the same time... it’s dialectical thinking on their part... classic Art Degree training...
“Global climate change needs to be viewed as an engineering problem rather than a Paris conference problem.” ~ Ryan Harris
All social problems, whether climate change or whatever, are created by our individual and collective fears, beliefs, and narratives. We live in a consensus reality, which we choose to believe is the only possible reality. Our fears, beliefs, and narratives determine what is “impossible” for us, on both an individual and collective level.
In our personal lives and in our collective social lives, we choose to create a mental box, which we choose to imprison ourselves inside of. It is not possible for us to escape our box as long as we tell ourselves that we are not in a box.
We are our jailers.
I myself cannot change other people’s boxes, which are created by people’s fears, beliefs, and narratives. I can only change my own box.
If what I say sounds silly, that’s okay. The seeds of truth are always “silly” until they sprout.
When Egmont writes economics, he makes some interesting points. The math appears to be correct. The questions are over the assumptions of the model, whether the terms are defined operationally in a way that allows for measurement, and what the model entails so that it can be tested against data, if data are available.
I would like to seem some economists take what he says seriously and debate it.
I just think his strategy for presenting it isn't likely to result in that.
But he is coming from the position that MMT economists have also been in for decades — being largely ignored. After a while you start getting pissed off. But if you vent, it further marginalizes you. And some have complained abut them being too prickly.
The MMT economists would still be in Siberia if Bernie hadn't blest Stephanie by appointing her as an advisor. And the only reason that any one listens to Warren is because he made a lot of money. But who has followed his advice?
The good news is that MMT is finally seeping into the media, probably as a result of exposure first on blogs and now on social media like Twitter and Facebook.
Globalwarmingclimatechangeclimate is not a social problem it’s a technical problem..
Technical problems can become social problems, sometime very quickly as when the levees were breached in New Orleans. There were designed for Class 3 storms not a Class 5 one. And that is just one example of many.
Design solutions are based on analysis and tradeoffs. There tradeoff for the Corps of Engineers was cost vs probable threat. The engineering was fine for the tolerances. The assumptions were wrong, and the margin of safety reduced "to save money." Another instance of "no one could have foreseen it coming."
Now we are likely seeing this unfolding on a grand scale with climate change.
Non-sequitur, Matt. No one listens to rants other than those that are already in agreement. Venting is seldom an appropratie strategy for advancing objectives, and when it is used in has to be used very selectively. Overuse dulls the axe.
“When Egmont writes economics, he makes some interesting points.”
Please. If a person cannot write clearly, such that one idea follows from the previous idea while leading to the next idea, then that’s person’s discourse is monkey chatter. His nonsense becomes even sillier when he adds meaningless garbage such as (i) (X−M)+(G−T)+(I−S)=0 or (ii) (X−M)+(G−T)+(I−S)−(Q−Yd)=0 in a futile attempt to show that he is a genius, and everyone around him is a moron.
I do not support or attack such idiocy. I ignore it, just as I ignore Natt Phranko’s idiocy.
Kaivey: I don't see any difference between your first way and the another way.
The population got that extra money not because they earned it, but due to the government money making process.
No, they got the money because they earned it in your examples. As I understand the meaning here, taxing "before" would require superhuman omniscience. The usual way is to limit spending so that inflation does not occur. This will leave say 5% of people unemployed. The neoliberal way is to say - not my problem, these are bad people or not people or they don't exist or whatever.
The MMT way is to just give people a job guarantee. That this is inflationary is preposterous. In fact it is preposterous that it is not a better inflation barrier than unemployment, so that a JG pool needs to be only 4% say to fight inflation as well as 5% unemployment. So you get the extra non-JG spending and output for free, as well as the JG output. The non-omniscient way is to set up a good tax system and have a decent JG. The tax amount, the deficit, whatever is what it is, and is of negligible importance. Much better results than economics that pretends that anybody is omniscient, the planners or the people, than "tax first".
Konrad: John R. Commons made that comparison, that societies, economies, their institutions are like prisons where we are both inmates and jailers. Geoffrey Harcourt, Hodgson (?) or some other Geoffrey has a paper about Commons' comparison somewhere.
The population got that extra money not because they earned it, but due to the government money making process.
'No, they got the money because they earned it in your examples.'
You're right, Calgacus, I figured it out afterwards. You can't get something for nothing, not even the government. The general public do real work when they supply the hospital staff with goods and services.
I've written to Micheal Hudson about it. But it might take him too long to give me an answer as he's busy so I'm only half expecting an answer. If I'm not lucky I will try Bill Mitchell or Steve Keen.
Konrad youre not qualified or competent to really weigh in here we have been into these issues for over 10 years now...
Sometimes when you are new to something its better to read into it for a while then weigh in later once youve come up to speed...
those variables Egmont uses are right out of the system on national accounts he is just modifying them a bit to get more detail related to profit which is what he is interested in analyzing...
Stanko, I never read your comments or blog posts, but this one time I was skimming, and I saw my name mentioned. Then I saw that the village idiot was squawking.
As a special favor to you, this one time I shall respond to your stupidity.
I am not new to economics. I was qualified in this field before you were even born. I have been a banker, and I was a professor of Economics at UC Berkeley. You have no idea who you are trying to insult.
You may respond as you like. I will not read it, since I always skip over whatever you write, except for this one time, which was most unusual.
Konrad: John R. Commons made that comparison, that societies, economies, their institutions are like prisons where we are both inmates and jailers. Geoffrey Harcourt, Hodgson (?) or some other Geoffrey has a paper about Commons' comparison somewhere.
Perennial wisdom teaches that we are prisoners of our own minds. Freedom is found by transcending the mind to discover what we really are — pure consciousness, the attributes of which are being, knowledge and bliss. The path of development involves progressively realizing this.
One of the steps is realizing that we are prisoners of our own stories and that these stories are not only individual but also socially embedded and socially constructed.
The study of philosophy, psychology, sociology, anthropology and history can assist us in this intellectually.
But realizing pure consciousness requires transcending mind entirely. The knowledge is the triad of being, knowledge and bliss is not intellectual knowledge but self-knowingness, being is that which underlies form and change, and bliss is categorically different from ordinary meanings of "happiness."
Pure consciousness is the "ground state."
While transcendental, pure consciousness is naturalistic in that many report realizing it at least temporarily, and cognitive scientists are now correlating physical conditions with reports of it.
Most people experience three levels with which they identify themselves — body, mind, and personal ego apprehended in terms of personality. Realization of pure consciousness transcends all three.
The current economic framework is based on methodological individualism as an assumptions that often based on ontological individualism as a presumption or hidden assumption.
The problem is that this may be a useful assumption in some cases and the ontological presumption is realistic to the degree that individuals expertise free choice as agents.
But this is not the whole story.
Humans are social and individuals are socially embedded. The social unit is not the individual but the family, which economists acknowledge as "households."
Society is a social system in which the elements are individual agents existing at the micro level while the society as a system exists at the marco level. The various affiliations and groupings of individuals in the society are subsystems that constitute the meso level. These levels interact and influence each other.
Methodological individualism has been interpreted as implying "microfoundations" in the sense that the element of the system generate the rest of the system, hence, everything can ultimately be accounted for by the micro level. This has led to the assumption that microeconomics scaled up generates macroeconomics. Keynes criticized this assumption as falling victim to the fallacy of composition.
In the terms of system theory, microfoundations ignores synergy, that is, the whole is greater than the sum of its parts (owing to network relationships). As a systems science, economics is synergetic because societies are complex adaptive systems that exhibit adaptive behavior on account of reflexivity and therefore are subject to emergence.
“Perennial wisdom teaches that we are prisoners of our own minds. Freedom is found by transcending the mind to discover what we really are — pure consciousness, the attributes of which are being, knowledge and bliss. The path of development involves progressively realizing this.”
Yes. We are not male, female, black, white, German, American, or even humans. We are pure consciousness, beyond all forms and all thought. This is our essence. This is what we really are. For our pleasure, we evolve by experiencing reality through the limitations of various forms. Book learning can only take us so far. Spiritual learning is permanent, and it is based on direct personal experience. If I take the form of a man, then I cannot really know what it’s like to be a woman until I experience the world as a woman. I must assume the female form.
We exist in all dimensions at once, although our awareness is temporarily focused on the physical dimension, which is an infinitesimally small part of overall reality. The entire physical universe is like an ultra-thin skin on an infinitely large planet. It is a speck of foam on an sea of consciousness.
One of the steps is realizing that we are prisoners of our own stories, and that these stories are not only individual but also socially embedded and socially constructed.
Exactly. We are programmed from birth with fear-based belief systems that cripple us. We voluntarily take on these crippling beliefs in order to continue our evolution, though we may not consciously be aware of doing so. Beyond the physical there is no war, death, or disease. Hence courage and self-sacrifice have little meaning. We take human form in order to understand and appreciate courage and self-sacrifice.
This is our choice. We are in control, though we may not realize it. We are the deciders. Our higher selves are in charge. Our task is to become aware of what we already know.
The study of philosophy, psychology, sociology, anthropology and history can assist us in this intellectually. But realizing pure consciousness requires transcending mind entirely.
Correct. Transcending mind, emotion, and form.
“The knowledge is the triad of being, knowledge and bliss is not intellectual knowledge but self-knowingness, being is that which underlies form and change, and bliss is categorically different from ordinary meanings of ‘happiness’.”
Yes. It cannot be named or described in any earthly language, nor depicted in any form. And yet it exists in all forms. It is all forms.
“Pure consciousness is the ‘ground state’.”
Yes. It is the source of all that was, all that is, and all that will ever be. We have a million names for it. Consciousness. God. Soul. Higher Self. Whatever. All are correct, and yet all are flawed.
“While transcendental, pure consciousness is naturalistic in that many report realizing it at least temporarily, and cognitive scientists are now correlating physical conditions with reports of it.”
Most of us have glimpses of it in our lives. Our mission is to have more than glimpses. There are many techniques for this, such as meditation and controlled out-of-body experiences.
“Most people experience three levels with which they identify themselves — body, mind, and personal ego apprehended in terms of personality. Realization of pure consciousness transcends all three.”
Yes. In my reader comments I often talk about how people seal themselves in little boxes, which they imagine to the Ultimate Truth. One box is the illusion that body, mind, and personal ego are what we are. This is the first major box that we must get outside of.
people seal themselves in little boxes, which they imagine to the Ultimate Truth. One box is the illusion that body, mind, and personal ego are what we are. This is the first major box that we must get outside of.
Exactly.
One of the first things that has to go is the mistaken notion that the entire ocean is in one's little bucket, or even that it could be with further understanding. This is a fundamental mistake of scientism.
One could say that the level of one's consciousness corresponds to the level of one's apprehension or at least appreciation of universality. The level of collective consciousness of a society is exhibited socially through culture and reflected in the society's institutional arrangements, again with respect to universality.
While appreciation and apprehension evolves even in sub-human forms and manifests as reason in humans intellectually, the non-rational component, e.g., love, is more significant. But even this is seen to develop in sub-human species, e.g., through reciprocity.
But humans are capable of much more. Self knowledge is the great purifier, hence, the dictum of the Delphic oracle, "Know thyself," and love is the great unifier, exemplified in the West as "God is love, and those who abide in love abide in God, and God abides in them." 1 Jn 4:17 (NRSV).
In Sanskrit the term for self is atma and the term for God is paramatma, meaning supreme or highest self. The teaching of perennial wisdom is that all atmas are in paramatma; all atmas are one in paramatma, and all atmas are paramatma.
This contradicts the stories based on naive realism, epistemological dualism and "commonsense," and naturalism other than as methodological assumption, not to mention materialism as an ontological assumption.
The stories that provide the framework for economics as it is practiced, being embedded in methodological individualism, especially when it presumes ontological individualism, are based on self-interest as the driver. Studies have suggested that after taking even a single course in economics students tend to become more self-centered based on the assumption that socio-economic optimization results naturally and spontaneously by independent and autonomous "rational" agents pursuing "utility" maximization.
From the POV of perennial wisdom, this is the height of folly and is sure to result in personal unfulfillment and social dysfunction in that it goes against the purpose of life, which is progressive self-discovery and self-actualization, and ultimately self-realization. This egocentric behavior is the result of an evolutionary trait that is useful to point but which must be surpassed in order to become truly human in the sense of having unfolded one's full potential.
This unfoldment is a gradual process. Perennial wisdom lays out various means, different means fitting different conditions.
On the social level, the purpose of culture is to culture, that is, to refine. Refinement means purifying away adulterations. To realize pure consciousness nothing need be added, only the dross removed. Cultures that increase the dross in individuals are working at cross-purposes and they can never successful in the broadest sense of incubating the unfolding of full human potential.
Thus the importance of a good society. It is very difficult to be a good person in a bad society. Unfolding full human potential individually and socially would lead to living a good life as an individual in a good society, that is, an enlightened populace and ideal society.
The existing cultural paradigm is taking us in the wrong direction because freedom is viewed as freedom from coercion and freedom to chose but not freedom for self-actualization and self-realization. This is what traditionalism can teach liberalism. But most traditionalism have lost sight of the perennial wisdom lying at the core, and instead the tradition itself gets worshipped.
Thus the need for a spiritual awakening to right the ship.
“The existing cultural paradigm is taking us in the wrong direction because freedom is viewed as freedom from coercion and freedom to chose but not freedom for self-actualization and self-realization. This is what traditionalism can teach liberalism. But most traditionalism have lost sight of the perennial wisdom lying at the core, and instead the tradition itself gets worshipped.
I say that freedom is a product of realizing that we are always in control. Even when our minds are enslaved, we are in control, for we choose to be enslaved. We can choose to not be mentally enslaved if we wish.
People refuse to take responsibility for their own thoughts. People refuse to take ownership of their creative power. People refuse to change, or let go. They are miserable in their box, yet they refuse to leave it.
That’s okay. It's normal. It’s part of their evolution. Their condition is only temporary. Our time in the physical world is only temporary. Natt Phranko’s time in his shriveled little cocoon of madness is only temporary.
Countless things happen in our subconscious mind (i.e. our inner self) that we are not consciously aware of. However with time and practice we can become aware of them if we choose.
Self-empowerment begins with the realization that we create our reality, and that nothing external manipulates us, unless we choose to be manipulated. We decide what to believe. We decide what holds us back. If we choose to believe that our physical body is all we are, then for us it is “true.” If we choose to believe that MMT is false, then for us it is “false,” and we have the math to “prove” it. We have meaningless little symbols and weird sentence fragments to “prove” that our feeble little dream world is “absolute incontrovertible reality.”
Each of us has been there. Each us consists of a concentric series of cocoons within cocoons. We must steadily peel away the layers of our mental onion to revel the Truth beyond.
Until we choose to step outside our self-created box, the walls of our box are utterly impenetrable.
Not everyone in society needs to understand or question systems. People should be able to trust a group of peer observations as substitutes for their own, judgments as reasonable, and assumptions as representative without doubting motives or biased ideology. Dialing down into the dialectics of systems and philosophies, for example, shouldn't be necessary for most social and physical systems on a daily basis. Economists just need to do their damn jobs and design systems that work. And when things break, fix them. It's not that complicated.
The idea that an artist or whatever must know and be aware of how the NHS is funded is beyond my comprehension. Dolly Parton is perfection because she knows music, history and folk culture and doesn't give a toss about MMT. Economists parading around as if it the fault of ordinary man not being "aware" or "conscious" or enlightened enough elitist trash. People are just fine, economists are not doing their damn jobs. The rent is too damn high.
Libertarians say I'm not free. But I never have had to look at boring paperwork for health insurance. Experts, many of them PhDs, went through all the fine detail and got the best deal for me. It's bullet proof, and if I run out of money I'm still covered. What a deal? That means I have far more freedom to do other things, like playing piano. The NHS frees me of the burden of worrying about health care. I love it. I just wish the government supplied top rate pensions too.
Max Hastings, once editor of the Times, says he was ripped off by pension companies. He said he would have made more money keeping it under the mattress. When he realised he had been ripped off he changed pension companies and they sympathised with him but they went and ripped him off too. So really, we're better off getting the governments financial experts to go through the paperwork and ensure there are no hidden charges and get the best deal for us. You can always get a private pension on top. I had a company pension, but even there the pension company was said to be taken too much money out.
It is in an individual's power and it is an individual responsibility — that few seem to be willing to act on.
But there may very well be more that would appear.
The elite have a strong interest in keeping the masses in the dark by controlling the media, and they also have had the means to do so.
Until the Internet came along, and blogging with comments, and then social media like Twitter and Facebook.
Now people are beginning to discover that they were not abnormal as they may have thought previously because it was difficult to impossible to communicate outside one's limited network.
The anti-war activists and countercultural revolutionaries discovered this during the days of national protest, when the media did not report on what was happening other than superficially and the only means that the alternative community had to communicate was the independent "free press" that functioned like samizdat in the USSR under totalitarian communism.
That is over now with the Internet and social media. People are also discovering this in many other ways, such as beliefs and behavior that are taboo in the overarching cultural narrative and the major sub-narratives. For example, mysticism is more or less excluded from most prevailing narratives, religious or scientific. But a lot of people are finding that they are not alone in having such experiences and holding counter-narratives related to them. A lot of this may be loosey-goosey, but a significant portion is not. Some of this has gone mainstream, like meditation, which is no longer exclusively or even chiefly spiritual, but rather as a management tool and healthcare modality.
If meditation can become accepted as a management tool and health care modality, it should also be possible to shift the focus of economics toward living a good life as an individual in a good society. Indeed, no less a name that John Kenneth Galbraith wrote a book, The Good Society: A Humane Agenda, about fashioning economic policy based on this concept. The idea runs through Western intellectual history. The conventional story is based on Jeremy Bentham, not the brightest bulb in the Western intellectual tradition. We are better than that.
As a person that has lived though many stages of this development, growing up in the forties and fifties, participating in the anti-war movement and countercultural revolution after leaving the military, and watching the dawn of the digital age, it appears to me that things are improving vastly and the speed is picking up. People coming along today have a lot more freedom to explore, resources available to do so, and opportunities to affiliate with like minds and to share and compare.
I recall being fascinated by the "Lost Generation" of authors and artists after WWI and the Beats in the Fifties, but feeling quite alone and isolated as the only kid on the block into that sort of thing, until the social activism of the Sixties broke out and the countercultural revolution was in full swing when I was in grad school. Now alternatives abound. However, it is also concerting that many are not taking advantage of them, wandering around looking at their devices.
But overall it is encouraging that opportunities are increasing to break out of the cage of one's own making.
Michael Hudson said that way back, maybe in the 50's and 60's, people thought the leisure society was coming. Tomorrow's World, a very popular BBC programme which looked into future new technology, would often run episodes about how we would live our lives in the future, where they said there would be a lot more social work, taken care of older people, and the unfortunate. I felt so optimistic.
Everyone knew the folly of the two world wars, and it seemed mankind had moved on. I was a big fan of Star Trek, where the crew was multicultural, and they were gentle and thoughtful. When they encountered what maybe danger they put their phasors on stun so not to harm anything. I thought mankind was moving towards this enlightened future. Then Thatcher got in and turned everything up-side-down and then the working class Tories came out of the woodwork being mean and vulgar, glorifying supreme selfishness, Ayn Rand style, even though no one had ever heard of her back then. Things have gone slowly downhill since then with all my dreams shattered one after another.
How long will it be before people realise it doesn't have to be like this? Where the technology produces stuff so cheaply now we can pay ourselves more and have more leisure time without it driving inflation.
Again, it comes back to morons or complicit, or some of both.
I wonder if economists understand the engineering enough to do the job.
Some people do, and Neil Wilson is a good example of a non-economists that understand how the system works since he builds systems. EEs understand how circuits work in terms of energy flows.
Economists don't seem to have that kind of training regarding either goods flows or money flows. It's all based on how they think economics systems work. When they have to work directly with a large system, e.g., in government, they fail. Actually, fail up.
“Not everyone in society needs to understand or question systems.”
I was referring to belief systems. I ask people to examine their own beliefs, assumptions, and thought habits. What do they believe, and why do they believe it? Could they be mistaken? Would they believe the same thing if they had been born in Africa or Borneo?
People should be able to trust a group of peer observations as substitutes for their own judgments as reasonable, and assumptions as representative without doubting motives or biased ideology.
People should be able to live without being murdered too, but murder happens. This world is full of people who would deceive you for their own gain. To reduce our gullibility, we must assess what we believe, and why we believe it.
Dialing down into the dialectics of systems and philosophies, for example, shouldn't be necessary for most social and physical systems on a daily basis. Economists just need to do their damn jobs and design systems that work. And when things break, fix them. It's not that complicated.
Granted, people should do the right thing. It's not that complicated. And your point would be…?
The idea that an artist or whatever must know and be aware of how the NHS is funded is beyond my comprehension.
I see. So when the U.K. government falsely claims that there is “no money” for the NIH, the idea that people should know why this is a lie is beyond your comprehension.
With all due respect, your attitude is beyond my comprehension.
“Dolly Parton is perfection because she knows music, history and folk culture and doesn't give a toss about MMT. Economists parading around as if it the fault of ordinary man not being "aware" or "conscious" or enlightened enough elitist trash. People are just fine, economists are not doing their damn jobs. The rent is too damn high.”
So it’s all the fault of economists “not doing their damn jobs”? Wow.
Most economists are paid to lie (just like politicians) and they do their jobs very well.
All of us use money in modern society. If you would avoid being robbed, scammed, and defrauded, then it’s up to YOU to learn how the money game works. Learn to know when pundits, professors, and politicians are lying.
If the economy is not working, economists who are appointed to monitor, design and control the economy should be held responsible. "Not working" means when it doesn't meet growth, inflation, employment targets.
Economists are not paid to lie, at the BoE, Fed, CBO, etc. Voters should be able to trust them, admittedly, they can't. Conversely, Economists should trust voters when they say the rent is too damn high and not dismiss it.
Politicians like laywers don't need to be factually correct, they need to make their best case to voters.
I believe that we make our own reality. I believe that economist lie. I believe that religion is at the heart of the problem with this world. Until we change to a true religion that explains that we make our own reality and mature through many lifetimes then we will fight and kill ourselves. I suspect that the Jewish god, worshipped by Jews, Christians and Muslims, is the biggest problem in the world today and until people understand that there will trouble in the world.
The people that own and design the machines do it to make money, lots of money. Try taking the Too-Damn-High-Rent from their cold dead hands... just try it. That is when the bombs start dropping and the guns start shooting and the boys start marching.
The people that own and design the machines do it to make money, lots of money. Ryan Harris
The problem is not automation but that what is essentially* the public's credit but for private gain has been used to finance it. Thus the ownership of the machines is unjustly distributed.
Try taking the Too-Damn-High-Rent from their cold dead hands... just try it. Ryan Harris
If people have played by the rules, it's no wonder if they think they are deserving of the results.
*Due to government privileges for private credit creation such as the government-provided insurance of private liabilities.
Also, I would define "rent" as something derived from unjust ownership - no matter how justly that ownership might have been acquired (cf. Leviticus 25).
The people that own and design the machines do it to make money, lots of money. Try taking the Too-Damn-High-Rent from their cold dead hands... just try it. That is when the bombs start dropping and the guns start shooting and the boys start marching.
Just like Marx said: If you want a different system with different distribution, you will have to join with others of like mind and take it. "They" aren't going to just hand it to you.
Or, as Marx also said, otherwise you can just wait until the mode of production evolves "in the long run" through the operation of the historical dialectic. But as Keynes pointed out, in the long run we are all dead.
Just like Marx said: If you want a different system with different distribution, you will have to join with others of like mind and take it. Tom Hickey [bold added]
Interestingly, I read this just yesterday:
My son, fear the Lord and the king; Do not associate with those who are given to change, For their calamity will rise suddenly, And who knows the ruin that comes from both of them? Proverbs 24:21-23 New American Standard Bible (NASB) [bold added]
“ I was a professor of Economics at UC Berkeley. ”
As I said you are not qualified to be here then... you never were educated/trained correctly and rigorously enough by being in that discipline and are part of the cohort that is creating all the problems...
Well just the other day you were saying Treasury uses TTL accounts and as far as I can tell they stopped using them 10 years ago AND it matters to the regulatory reporting of the depositories...
Sooooo... instead of learning something from my comment Mr Econ Professor you ignore it and make yourself stupid and at least 10 years out of the loop...
I agree with Andrew Anderson's claim (1st comment above) that interest on government debt should be zero. Milton Friedman, Warren Mosler and Bill Mitchell have advocated that. And most important of all, Ralph Musgrave advocates it....:-)
See my recent work on that topic:
https://mpra.ub.uni-muenchen.de/87111/
That version of my work is a bit messy. I'll do a second edition in a few weeks time.
I agree with Andrew Anderson's claim (1st comment above) that interest on government debt should be zero. Ralph Musgrave
Actually less than zero (i.e. NEGATIVE) when administrative costs are taken into account. And that's for the longest maturity debt of a monetary sovereign, e.g. 30 US Treasury Bonds; shorter maturity debt would cost more (MORE NEGATIVE YIELD) with demand account balances at the Central Bank (zero maturity weight) costing the most (MOST NEGATIVE INTEREST).
I doubt those other guys would levy negative interest on bank reserves even though they are inherently risk-free too.
That said, Romans 13:8 would seem to preclude, along with other passages from the Bible, ANY support by Christians for government-privileges for private credit creation since those enable the driving of our neighbors into debt among other evils.
Andrew, If there is no return on the liabilities of government and central bank, then there wouldn't be any 30 year bonds, or even one year bonds: there's no point in locking up your money for years if there is no reward for doing so. In short, the only govt / CB liability (if you can call it a liability) would be base money. And that's the scenario advocated by Milton Friedman and Warren Mosler.
there's no point in locking up your money for years if there is no reward for doing so. Ralph Musgrave
1) It isn't your money; it's the monetary sovereign's fiat and you may be charged to use it accordingly.
2) Where else can you put "your money" assuming physical fiat, aka "cash", can no longer be used to escape negative interest?
3) In recent history, we have seen even the debt of non-monetary sovereigns sell for negative yields - something you claim would never happen but did anyway.
In short, the only govt / CB liability (if you can call it a liability) would be base money. Ralph Musgrave
No, since account balances at the CB have ZERO maturity, they would be charged the HIGHEST* NEGATIVE INTEREST. Thus, assuming once again that physical fiat, aka "cash", can no longer be used to escape negative interest, "investors" would buy the debt of the monetary sovereign with the longest maturity wait they could tolerate in order to minimize interest charges.
*Except for individual citizen accounts at the CB which would be free of charge up to reasonable limits on account size and number of transactions per month.
Andrew, Yes, I agree it is fair enough for the central bank to charge for administration costs. Plus where a sizeable sum is locked away for a significant period, that presumably cuts the CB's admin costs, so there is, as you say, an incentive to lock away money which the owner does not intend using for a year or two.
What I've said flows from two simple principles: 1) Non-negative yields/interest on the inherently risk-free debt of a monetary sovereign constitute welfare proportional to account balance and should be avoided as welfare for the rich. 2) Shorter maturity wait debt of a monetary sovereign should cost more (more negative yield/interest) than longer maturity wait debt.
3) However, individual citizen checking/debit accounts at the CB should be free of charge up to reasonable limits on account size and number of transactions per month.
Being risk-free, the debt of a monetary sovereign should yield AT MOST 0% minus overhead costs to avoid welfare proportional to account balance. And that's for the longest maturity wait debt; shorter maturity wait debt should cost even more with demand account balances at the Central Bank (zero maturity wait) costing the most, i.e. most negative interest.
ReplyDeleteThus by eliminating welfare proportional to account balance, i.e. welfare for the rich, deficits by the monetary sovereign become revenue PRODUCERS for the monetary sovereign and thus far less subject to criticism.
Minds are changing, policies are being discussed. All very hopeful. Labour and Democrats in the US have a real chance to turn around their fortunes using the MMT framing
ReplyDeleteAdding that since citizens have an inherent right to use their Nation's fiat, they should have individual debit/checking accounts at the Central Bank that are free of charge up to reasonable limits on balance size and transactions per month.
ReplyDeleteNote that negative interest/yields on the rich but none on the non-rich would tend to cause a flow of fiat from those who have more than enough to those who have less than enough.
The UK government is following the neoliberal playbook.
ReplyDelete[1] Pretend that money is physical and limited (even though the government can create infinite money out of thin air)
[2] Select the public assets and services that would be most lucrative if privatized, and starve them of funding. Falsely claim that they are “unsustainable.”
[3] Continue to starve the public service until its operation becomes so poor that the peasants scream for any kind of relief, even if it means privatization. Claim that this is what always happens with “socialized medicine,” when in reality the cause of the breakdown is your starving the service of funds. Also, continually promote militant feminism, militant “trans rights” lunacy, and so on, in order to keep the peasants attacking each other.
[4] Give the public service to one of your cronies, thereby granting him a for-profit monopoly. From now on, anyone who cannot pay is doomed to die in the gutter.
This works because the masses choose to believe the lies.
Question. Thought experiment.
DeleteI'm not an economist, but I was thinking about MMT and government created money. Now imagine s small country and it decides to provide a public health service, so it builds a hospital and spends a million a week on wages. But nothing is free, so how does society pay for the hospital? One way could be when the hospital staff spend their wages people supply goods and services they have worked hard at. These business people will buy stuff from other businesses and so on, and so in this way society pays for the hospital.
But society could pay another way. Say the government spends a million a week on the hospital and this money filters out into society, but eventually society gets flooded with money and inflation sets in, so the government introduces a tax to take the excess money out. But how much does it need to tax by, well, enough to remove what it put in paying for the hospital. So, could Egmont be right, it doesn't matter if you tax at the beginning to supply services, or the end? But there's more. Could Egmont be wrong? The government put the money in it created itself, and by taxing it is just taking the excess out again. The population got that extra money not because they earned it, but due to the government money making process. I tell right wingers that tax protects the value of the money in their pocket and the value of their savings.
"Labor and Democrats"
ReplyDeleteLabor is dead, Democrats are Republicans.
Yeah. The problem is environmental conservatism infected leftist results in a political philosophy of scarcity and deprivation. Clean water act pragmatism is gone in favor of deprivation.
ReplyDeleteIt leads to poor labor markets and austerities. Muh global climate change needs to be viewed as an engineering problem rather than a Paris conference problem. Rather than subsidizing sports cars and solar panels while tripling energy costs on the poor, just solve the technical problem. The overarching idea that we can't pursue everything from health care to housing is rooted in the idea that we must reduce our footprint. Conservatism is the override rather than pragmatism, rather than mitigation. Stephanie can't even talk about MMT without invoking her conservation approach. Scarcity inevitably leads to worries about immigration. How humans work. So instead of promoting Housing, Trade, Health, Education, we pretend simple engineering problems required Democrats to impose austerity. Left goes down.
“ Pretend that money is physical and limited”
ReplyDeleteThey are not pretending , they do not have adequate skills in abstraction due to a lack of rigorous training in a discipline that subjects the student to years of exercises that develop necessary abstraction skills...
“Left goes down.”
ReplyDeleteThey are all Art Degree people Ryan they will never look at it as an engineering problem they are not trained that way...
Ryan here is Tom (PhD Philosophy ie qualified) from the other thread:
ReplyDelete“Think of categorical thinking as analytic thinking and dialectical thinking as synthetic thinking. Analysis takes apart and synthesis unites into a whole. Both are required for holistic thinking.
This is owing to the limitation of descriptive language, which is based on model construction and no model is capable of capturing the whole in all possible detail. So different models are needed to complement each other, each with its own scope and scale.
Non-descriptive "language" is richer than descriptive language but fuzzier. Ordinary language is looser than technical language, the humanities looser than science, and the arts are the loosest of all. The arts can capture much more of the whole but not completely.”
The left is dominated by dialectical thinking they get thru Art Degree programs...
So shouldn’t be surprised to see SK talking about expansive policy and conservation policy at the same time...
“So instead of promoting Housing, Trade, Health, Education, we pretend simple engineering problems required Democrats to impose austerity.”
ReplyDeleteI don’t think you’re reading this right here.... they do BOTH... at the same time... it’s dialectical thinking on their part... classic Art Degree training...
Doesn’t work that way in material systems...
@ Kaivey: “Could Egmont be wrong?”
ReplyDeleteMonkey chatter is neither right nor wrong.
It is just meaningless noises.
“Global climate change needs to be viewed as an engineering problem rather than a Paris conference problem.” ~ Ryan Harris
ReplyDeleteAll social problems, whether climate change or whatever, are created by our individual and collective fears, beliefs, and narratives. We live in a consensus reality, which we choose to believe is the only possible reality. Our fears, beliefs, and narratives determine what is “impossible” for us, on both an individual and collective level.
In our personal lives and in our collective social lives, we choose to create a mental box, which we choose to imprison ourselves inside of. It is not possible for us to escape our box as long as we tell ourselves that we are not in a box.
We are our jailers.
I myself cannot change other people’s boxes, which are created by people’s fears, beliefs, and narratives. I can only change my own box.
If what I say sounds silly, that’s okay. The seeds of truth are always “silly” until they sprout.
“All social problems, whether climate change or whatever,”
ReplyDeleteGlobalwarmingclimatechangeclimate is not a social problem it’s a technical problem...
Monkey chatter is neither right nor wrong.
ReplyDeleteIt is just meaningless noises.
I am not sure that is the case.
When Egmont writes economics, he makes some interesting points. The math appears to be correct. The questions are over the assumptions of the model, whether the terms are defined operationally in a way that allows for measurement, and what the model entails so that it can be tested against data, if data are available.
I would like to seem some economists take what he says seriously and debate it.
I just think his strategy for presenting it isn't likely to result in that.
But he is coming from the position that MMT economists have also been in for decades — being largely ignored. After a while you start getting pissed off. But if you vent, it further marginalizes you. And some have complained abut them being too prickly.
The MMT economists would still be in Siberia if Bernie hadn't blest Stephanie by appointing her as an advisor. And the only reason that any one listens to Warren is because he made a lot of money. But who has followed his advice?
The good news is that MMT is finally seeping into the media, probably as a result of exposure first on blogs and now on social media like Twitter and Facebook.
“Monkey chatter is neither right nor wrong.”
ReplyDeleteNice metaphor as a tip off that you don’t know what you are talking about...
Individual judgement is a normal part of the Accounting science:
https://www.sciencedirect.com/science/article/pii/S0890838914000699
“Individual differences in managerial accounting judgments and decision making”
It’s not a “right or wrong” issue it’s whether or not it leads to effective managerial decisions..
Egmont can create his own Accounting schema for his purposes...
Globalwarmingclimatechangeclimate is not a social problem it’s a technical problem..
ReplyDeleteTechnical problems can become social problems, sometime very quickly as when the levees were breached in New Orleans. There were designed for Class 3 storms not a Class 5 one. And that is just one example of many.
Design solutions are based on analysis and tradeoffs. There tradeoff for the Corps of Engineers was cost vs probable threat. The engineering was fine for the tolerances. The assumptions were wrong, and the margin of safety reduced "to save money." Another instance of "no one could have foreseen it coming."
Now we are likely seeing this unfolding on a grand scale with climate change.
“But if you vent, it further marginalizes you”
ReplyDeleteThis is your anti-war bias here Tom...
“But if you vent, it further marginalizes you”
ReplyDeleteThis is your anti-war bias here Tom...
Non-sequitur, Matt. No one listens to rants other than those that are already in agreement. Venting is seldom an appropratie strategy for advancing objectives, and when it is used in has to be used very selectively. Overuse dulls the axe.
I don't listen to Alex Jones.
DeleteImo you’re trying to maintain the dialectic... which is not working...
ReplyDeleteWe should rather divide ourselves and go to war with these morons and win...
But again I’m not biased anti-war... and I’m not dialectical....
“When Egmont writes economics, he makes some interesting points.”
ReplyDeletePlease. If a person cannot write clearly, such that one idea follows from the previous idea while leading to the next idea, then that’s person’s discourse is monkey chatter. His nonsense becomes even sillier when he adds meaningless garbage such as (i) (X−M)+(G−T)+(I−S)=0 or (ii) (X−M)+(G−T)+(I−S)−(Q−Yd)=0 in a futile attempt to show that he is a genius, and everyone around him is a moron.
I do not support or attack such idiocy. I ignore it, just as I ignore Natt Phranko’s idiocy.
The best response to trolls is to not feed them.
Kaivey: I don't see any difference between your first way and the another way.
ReplyDeleteThe population got that extra money not because they earned it, but due to the government money making process.
No, they got the money because they earned it in your examples. As I understand the meaning here, taxing "before" would require superhuman omniscience. The usual way is to limit spending so that inflation does not occur. This will leave say 5% of people unemployed. The neoliberal way is to say - not my problem, these are bad people or not people or they don't exist or whatever.
The MMT way is to just give people a job guarantee. That this is inflationary is preposterous. In fact it is preposterous that it is not a better inflation barrier than unemployment, so that a JG pool needs to be only 4% say to fight inflation as well as 5% unemployment. So you get the extra non-JG spending and output for free, as well as the JG output. The non-omniscient way is to set up a good tax system and have a decent JG. The tax amount, the deficit, whatever is what it is, and is of negligible importance. Much better results than economics that pretends that anybody is omniscient, the planners or the people, than "tax first".
Konrad: John R. Commons made that comparison, that societies, economies, their institutions are like prisons where we are both inmates and jailers. Geoffrey Harcourt, Hodgson (?) or some other Geoffrey has a paper about Commons' comparison somewhere.
The population got that extra money not because they earned it, but due to the government money making process.
Delete'No, they got the money because they earned it in your examples.'
You're right, Calgacus, I figured it out afterwards. You can't get something for nothing, not even the government. The general public do real work when they supply the hospital staff with goods and services.
I've written to Micheal Hudson about it. But it might take him too long to give me an answer as he's busy so I'm only half expecting an answer. If I'm not lucky I will try Bill Mitchell or Steve Keen.
DeleteKonrad youre not qualified or competent to really weigh in here we have been into these issues for over 10 years now...
ReplyDeleteSometimes when you are new to something its better to read into it for a while then weigh in later once youve come up to speed...
those variables Egmont uses are right out of the system on national accounts he is just modifying them a bit to get more detail related to profit which is what he is interested in analyzing...
Stanko, I never read your comments or blog posts, but this one time I was skimming, and I saw my name mentioned. Then I saw that the village idiot was squawking.
ReplyDeleteAs a special favor to you, this one time I shall respond to your stupidity.
I am not new to economics. I was qualified in this field before you were even born. I have been a banker, and I was a professor of Economics at UC Berkeley. You have no idea who you are trying to insult.
You may respond as you like. I will not read it, since I always skip over whatever you write, except for this one time, which was most unusual.
There will not be a repeat.
Konrad: John R. Commons made that comparison, that societies, economies, their institutions are like prisons where we are both inmates and jailers. Geoffrey Harcourt, Hodgson (?) or some other Geoffrey has a paper about Commons' comparison somewhere.
ReplyDeletePerennial wisdom teaches that we are prisoners of our own minds. Freedom is found by transcending the mind to discover what we really are — pure consciousness, the attributes of which are being, knowledge and bliss. The path of development involves progressively realizing this.
One of the steps is realizing that we are prisoners of our own stories and that these stories are not only individual but also socially embedded and socially constructed.
The study of philosophy, psychology, sociology, anthropology and history can assist us in this intellectually.
But realizing pure consciousness requires transcending mind entirely. The knowledge is the triad of being, knowledge and bliss is not intellectual knowledge but self-knowingness, being is that which underlies form and change, and bliss is categorically different from ordinary meanings of "happiness."
Pure consciousness is the "ground state."
While transcendental, pure consciousness is naturalistic in that many report realizing it at least temporarily, and cognitive scientists are now correlating physical conditions with reports of it.
Most people experience three levels with which they identify themselves — body, mind, and personal ego apprehended in terms of personality. Realization of pure consciousness transcends all three.
The current economic framework is based on methodological individualism as an assumptions that often based on ontological individualism as a presumption or hidden assumption.
ReplyDeleteThe problem is that this may be a useful assumption in some cases and the ontological presumption is realistic to the degree that individuals expertise free choice as agents.
But this is not the whole story.
Humans are social and individuals are socially embedded. The social unit is not the individual but the family, which economists acknowledge as "households."
Society is a social system in which the elements are individual agents existing at the micro level while the society as a system exists at the marco level. The various affiliations and groupings of individuals in the society are subsystems that constitute the meso level. These levels interact and influence each other.
Methodological individualism has been interpreted as implying "microfoundations" in the sense that the element of the system generate the rest of the system, hence, everything can ultimately be accounted for by the micro level. This has led to the assumption that microeconomics scaled up generates macroeconomics. Keynes criticized this assumption as falling victim to the fallacy of composition.
In the terms of system theory, microfoundations ignores synergy, that is, the whole is greater than the sum of its parts (owing to network relationships). As a systems science, economics is synergetic because societies are complex adaptive systems that exhibit adaptive behavior on account of reflexivity and therefore are subject to emergence.
.
ReplyDelete@ Tom Hickey:
“Perennial wisdom teaches that we are prisoners of our own minds. Freedom is found by transcending the mind to discover what we really are — pure consciousness, the attributes of which are being, knowledge and bliss. The path of development involves progressively realizing this.”
Yes. We are not male, female, black, white, German, American, or even humans. We are pure consciousness, beyond all forms and all thought. This is our essence. This is what we really are. For our pleasure, we evolve by experiencing reality through the limitations of various forms. Book learning can only take us so far. Spiritual learning is permanent, and it is based on direct personal experience. If I take the form of a man, then I cannot really know what it’s like to be a woman until I experience the world as a woman. I must assume the female form.
We exist in all dimensions at once, although our awareness is temporarily focused on the physical dimension, which is an infinitesimally small part of overall reality. The entire physical universe is like an ultra-thin skin on an infinitely large planet. It is a speck of foam on an sea of consciousness.
One of the steps is realizing that we are prisoners of our own stories, and that these stories are not only individual but also socially embedded and socially constructed.
Exactly. We are programmed from birth with fear-based belief systems that cripple us. We voluntarily take on these crippling beliefs in order to continue our evolution, though we may not consciously be aware of doing so. Beyond the physical there is no war, death, or disease. Hence courage and self-sacrifice have little meaning. We take human form in order to understand and appreciate courage and self-sacrifice.
This is our choice. We are in control, though we may not realize it. We are the deciders. Our higher selves are in charge. Our task is to become aware of what we already know.
The study of philosophy, psychology, sociology, anthropology and history can assist us in this intellectually. But realizing pure consciousness requires transcending mind entirely.
Correct. Transcending mind, emotion, and form.
“The knowledge is the triad of being, knowledge and bliss is not intellectual knowledge but self-knowingness, being is that which underlies form and change, and bliss is categorically different from ordinary meanings of ‘happiness’.”
Yes. It cannot be named or described in any earthly language, nor depicted in any form. And yet it exists in all forms. It is all forms.
“Pure consciousness is the ‘ground state’.”
Yes. It is the source of all that was, all that is, and all that will ever be. We have a million names for it. Consciousness. God. Soul. Higher Self. Whatever. All are correct, and yet all are flawed.
“While transcendental, pure consciousness is naturalistic in that many report realizing it at least temporarily, and cognitive scientists are now correlating physical conditions with reports of it.”
Most of us have glimpses of it in our lives. Our mission is to have more than glimpses. There are many techniques for this, such as meditation and controlled out-of-body experiences.
“Most people experience three levels with which they identify themselves — body, mind, and personal ego apprehended in terms of personality. Realization of pure consciousness transcends all three.”
Yes. In my reader comments I often talk about how people seal themselves in little boxes, which they imagine to the Ultimate Truth. One box is the illusion that body, mind, and personal ego are what we are. This is the first major box that we must get outside of.
people seal themselves in little boxes, which they imagine to the Ultimate Truth. One box is the illusion that body, mind, and personal ego are what we are. This is the first major box that we must get outside of.
ReplyDeleteExactly.
One of the first things that has to go is the mistaken notion that the entire ocean is in one's little bucket, or even that it could be with further understanding. This is a fundamental mistake of scientism.
One could say that the level of one's consciousness corresponds to the level of one's apprehension or at least appreciation of universality. The level of collective consciousness of a society is exhibited socially through culture and reflected in the society's institutional arrangements, again with respect to universality.
While appreciation and apprehension evolves even in sub-human forms and manifests as reason in humans intellectually, the non-rational component, e.g., love, is more significant. But even this is seen to develop in sub-human species, e.g., through reciprocity.
But humans are capable of much more. Self knowledge is the great purifier, hence, the dictum of the Delphic oracle, "Know thyself," and love is the great unifier, exemplified in the West as "God is love, and those who abide in love abide in God, and God abides in them." 1 Jn 4:17 (NRSV).
In Sanskrit the term for self is atma and the term for God is paramatma, meaning supreme or highest self. The teaching of perennial wisdom is that all atmas are in paramatma; all atmas are one in paramatma, and all atmas are paramatma.
This contradicts the stories based on naive realism, epistemological dualism and "commonsense," and naturalism other than as methodological assumption, not to mention materialism as an ontological assumption.
The stories that provide the framework for economics as it is practiced, being embedded in methodological individualism, especially when it presumes ontological individualism, are based on self-interest as the driver. Studies have suggested that after taking even a single course in economics students tend to become more self-centered based on the assumption that socio-economic optimization results naturally and spontaneously by independent and autonomous "rational" agents pursuing "utility" maximization.
From the POV of perennial wisdom, this is the height of folly and is sure to result in personal unfulfillment and social dysfunction in that it goes against the purpose of life, which is progressive self-discovery and self-actualization, and ultimately self-realization. This egocentric behavior is the result of an evolutionary trait that is useful to point but which must be surpassed in order to become truly human in the sense of having unfolded one's full potential.
This unfoldment is a gradual process. Perennial wisdom lays out various means, different means fitting different conditions.
On the social level, the purpose of culture is to culture, that is, to refine. Refinement means purifying away adulterations. To realize pure consciousness nothing need be added, only the dross removed. Cultures that increase the dross in individuals are working at cross-purposes and they can never successful in the broadest sense of incubating the unfolding of full human potential.
Thus the importance of a good society. It is very difficult to be a good person in a bad society. Unfolding full human potential individually and socially would lead to living a good life as an individual in a good society, that is, an enlightened populace and ideal society.
The existing cultural paradigm is taking us in the wrong direction because freedom is viewed as freedom from coercion and freedom to chose but not freedom for self-actualization and self-realization. This is what traditionalism can teach liberalism. But most traditionalism have lost sight of the perennial wisdom lying at the core, and instead the tradition itself gets worshipped.
Thus the need for a spiritual awakening to right the ship.
“The existing cultural paradigm is taking us in the wrong direction because freedom is viewed as freedom from coercion and freedom to chose but not freedom for self-actualization and self-realization. This is what traditionalism can teach liberalism. But most traditionalism have lost sight of the perennial wisdom lying at the core, and instead the tradition itself gets worshipped.
ReplyDeleteI say that freedom is a product of realizing that we are always in control. Even when our minds are enslaved, we are in control, for we choose to be enslaved. We can choose to not be mentally enslaved if we wish.
People refuse to take responsibility for their own thoughts. People refuse to take ownership of their creative power. People refuse to change, or let go. They are miserable in their box, yet they refuse to leave it.
That’s okay. It's normal. It’s part of their evolution. Their condition is only temporary. Our time in the physical world is only temporary. Natt Phranko’s time in his shriveled little cocoon of madness is only temporary.
Countless things happen in our subconscious mind (i.e. our inner self) that we are not consciously aware of. However with time and practice we can become aware of them if we choose.
Self-empowerment begins with the realization that we create our reality, and that nothing external manipulates us, unless we choose to be manipulated. We decide what to believe. We decide what holds us back. If we choose to believe that our physical body is all we are, then for us it is “true.” If we choose to believe that MMT is false, then for us it is “false,” and we have the math to “prove” it. We have meaningless little symbols and weird sentence fragments to “prove” that our feeble little dream world is “absolute incontrovertible reality.”
Each of us has been there. Each us consists of a concentric series of cocoons within cocoons. We must steadily peel away the layers of our mental onion to revel the Truth beyond.
Until we choose to step outside our self-created box, the walls of our box are utterly impenetrable.
Not everyone in society needs to understand or question systems. People should be able to trust a group of peer observations as substitutes for their own, judgments as reasonable, and assumptions as representative without doubting motives or biased ideology. Dialing down into the dialectics of systems and philosophies, for example, shouldn't be necessary for most social and physical systems on a daily basis. Economists just need to do their damn jobs and design systems that work. And when things break, fix them. It's not that complicated.
ReplyDeleteThe idea that an artist or whatever must know and be aware of how the NHS is funded is beyond my comprehension. Dolly Parton is perfection because she knows music, history and folk culture and doesn't give a toss about MMT. Economists parading around as if it the fault of ordinary man not being "aware" or "conscious" or enlightened enough elitist trash. People are just fine, economists are not doing their damn jobs. The rent is too damn high.
Libertarians say I'm not free. But I never have had to look at boring paperwork for health insurance. Experts, many of them PhDs, went through all the fine detail and got the best deal for me. It's bullet proof, and if I run out of money I'm still covered. What a deal? That means I have far more freedom to do other things, like playing piano. The NHS frees me of the burden of worrying about health care. I love it. I just wish the government supplied top rate pensions too.
DeleteMax Hastings, once editor of the Times, says he was ripped off by pension companies. He said he would have made more money keeping it under the mattress. When he realised he had been ripped off he changed pension companies and they sympathised with him but they went and ripped him off too. So really, we're better off getting the governments financial experts to go through the paperwork and ensure there are no hidden charges and get the best deal for us. You can always get a private pension on top. I had a company pension, but even there the pension company was said to be taken too much money out.
@ Konrad.
ReplyDeleteI agree completely.
It is in an individual's power and it is an individual responsibility — that few seem to be willing to act on.
But there may very well be more that would appear.
The elite have a strong interest in keeping the masses in the dark by controlling the media, and they also have had the means to do so.
Until the Internet came along, and blogging with comments, and then social media like Twitter and Facebook.
Now people are beginning to discover that they were not abnormal as they may have thought previously because it was difficult to impossible to communicate outside one's limited network.
The anti-war activists and countercultural revolutionaries discovered this during the days of national protest, when the media did not report on what was happening other than superficially and the only means that the alternative community had to communicate was the independent "free press" that functioned like samizdat in the USSR under totalitarian communism.
That is over now with the Internet and social media. People are also discovering this in many other ways, such as beliefs and behavior that are taboo in the overarching cultural narrative and the major sub-narratives. For example, mysticism is more or less excluded from most prevailing narratives, religious or scientific. But a lot of people are finding that they are not alone in having such experiences and holding counter-narratives related to them. A lot of this may be loosey-goosey, but a significant portion is not. Some of this has gone mainstream, like meditation, which is no longer exclusively or even chiefly spiritual, but rather as a management tool and healthcare modality.
If meditation can become accepted as a management tool and health care modality, it should also be possible to shift the focus of economics toward living a good life as an individual in a good society. Indeed, no less a name that John Kenneth Galbraith wrote a book, The Good Society: A Humane Agenda, about fashioning economic policy based on this concept. The idea runs through Western intellectual history. The conventional story is based on Jeremy Bentham, not the brightest bulb in the Western intellectual tradition. We are better than that.
As a person that has lived though many stages of this development, growing up in the forties and fifties, participating in the anti-war movement and countercultural revolution after leaving the military, and watching the dawn of the digital age, it appears to me that things are improving vastly and the speed is picking up. People coming along today have a lot more freedom to explore, resources available to do so, and opportunities to affiliate with like minds and to share and compare.
I recall being fascinated by the "Lost Generation" of authors and artists after WWI and the Beats in the Fifties, but feeling quite alone and isolated as the only kid on the block into that sort of thing, until the social activism of the Sixties broke out and the countercultural revolution was in full swing when I was in grad school. Now alternatives abound. However, it is also concerting that many are not taking advantage of them, wandering around looking at their devices.
But overall it is encouraging that opportunities are increasing to break out of the cage of one's own making.
Michael Hudson said that way back, maybe in the 50's and 60's, people thought the leisure society was coming. Tomorrow's World, a very popular BBC programme which looked into future new technology, would often run episodes about how we would live our lives in the future, where they said there would be a lot more social work, taken care of older people, and the unfortunate. I felt so optimistic.
DeleteEveryone knew the folly of the two world wars, and it seemed mankind had moved on. I was a big fan of Star Trek, where the crew was multicultural, and they were gentle and thoughtful. When they encountered what maybe danger they put their phasors on stun so not to harm anything. I thought mankind was moving towards this enlightened future. Then Thatcher got in and turned everything up-side-down and then the working class Tories came out of the woodwork being mean and vulgar, glorifying supreme selfishness, Ayn Rand style, even though no one had ever heard of her back then. Things have gone slowly downhill since then with all my dreams shattered one after another.
How long will it be before people realise it doesn't have to be like this? Where the technology produces stuff so cheaply now we can pay ourselves more and have more leisure time without it driving inflation.
@ Ryan
ReplyDeleteAgain, it comes back to morons or complicit, or some of both.
I wonder if economists understand the engineering enough to do the job.
Some people do, and Neil Wilson is a good example of a non-economists that understand how the system works since he builds systems. EEs understand how circuits work in terms of energy flows.
Economists don't seem to have that kind of training regarding either goods flows or money flows. It's all based on how they think economics systems work. When they have to work directly with a large system, e.g., in government, they fail. Actually, fail up.
@ RYAN HARRIS:
ReplyDelete“Not everyone in society needs to understand or question systems.”
I was referring to belief systems. I ask people to examine their own beliefs, assumptions, and thought habits. What do they believe, and why do they believe it? Could they be mistaken? Would they believe the same thing if they had been born in Africa or Borneo?
People should be able to trust a group of peer observations as substitutes for their own judgments as reasonable, and assumptions as representative without doubting motives or biased ideology.
People should be able to live without being murdered too, but murder happens. This world is full of people who would deceive you for their own gain. To reduce our gullibility, we must assess what we believe, and why we believe it.
Dialing down into the dialectics of systems and philosophies, for example, shouldn't be necessary for most social and physical systems on a daily basis. Economists just need to do their damn jobs and design systems that work. And when things break, fix them. It's not that complicated.
Granted, people should do the right thing. It's not that complicated. And your point would be…?
The idea that an artist or whatever must know and be aware of how the NHS is funded is beyond my comprehension.
I see. So when the U.K. government falsely claims that there is “no money” for the NIH, the idea that people should know why this is a lie is beyond your comprehension.
With all due respect, your attitude is beyond my comprehension.
“Dolly Parton is perfection because she knows music, history and folk culture and doesn't give a toss about MMT. Economists parading around as if it the fault of ordinary man not being "aware" or "conscious" or enlightened enough elitist trash. People are just fine, economists are not doing their damn jobs. The rent is too damn high.”
So it’s all the fault of economists “not doing their damn jobs”? Wow.
Most economists are paid to lie (just like politicians) and they do their jobs very well.
All of us use money in modern society. If you would avoid being robbed, scammed, and defrauded, then it’s up to YOU to learn how the money game works. Learn to know when pundits, professors, and politicians are lying.
This is not “elitist trash,” as you call it.
It is common sense.
If the economy is not working, economists who are appointed to monitor, design and control the economy should be held responsible. "Not working" means when it doesn't meet growth, inflation, employment targets.
ReplyDeleteEconomists are not paid to lie, at the BoE, Fed, CBO, etc. Voters should be able to trust them, admittedly, they can't. Conversely, Economists should trust voters when they say the rent is too damn high and not dismiss it.
Politicians like laywers don't need to be factually correct, they need to make their best case to voters.
"Economists are not paid to lie..."
ReplyDeleteDenial. It's not just a river in Egypt.
When an economist falsely claims that Social Security, for example, is "unsustainable," I call it lying.
Maybe you have a different word for it.
"He's not lying; he's just being economical with the truth."
"Voters should be able to trust economists. Admittedly, they can't."
Because economists lie. They are paid to support neoliberalism, which is a nexus of lies.
Next you'll be claiming that politicians are not paid to lie.
I believe that we make our own reality.
ReplyDeleteI believe that economist lie.
I believe that religion is at the heart of the problem with this world.
Until we change to a true religion that explains that we make our own reality and mature through many lifetimes then we will fight and kill ourselves. I suspect that the Jewish god, worshipped by Jews, Christians and Muslims, is the biggest problem in the world today and until people understand that there will trouble in the world.
The people that own and design the machines do it to make money, lots of money. Try taking the Too-Damn-High-Rent from their cold dead hands... just try it. That is when the bombs start dropping and the guns start shooting and the boys start marching.
ReplyDeleteThe people that own and design the machines do it to make money, lots of money. Ryan Harris
ReplyDeleteThe problem is not automation but that what is essentially* the public's credit but for private gain has been used to finance it. Thus the ownership of the machines is unjustly distributed.
Try taking the Too-Damn-High-Rent from their cold dead hands... just try it. Ryan Harris
If people have played by the rules, it's no wonder if they think they are deserving of the results.
*Due to government privileges for private credit creation such as the government-provided insurance of private liabilities.
This comment has been removed by the author.
ReplyDeleteAlso, I would define "rent" as something derived from unjust ownership - no matter how justly that ownership might have been acquired (cf. Leviticus 25).
ReplyDeleteThe people that own and design the machines do it to make money, lots of money. Try taking the Too-Damn-High-Rent from their cold dead hands... just try it. That is when the bombs start dropping and the guns start shooting and the boys start marching.
ReplyDeleteJust like Marx said: If you want a different system with different distribution, you will have to join with others of like mind and take it. "They" aren't going to just hand it to you.
Or, as Marx also said, otherwise you can just wait until the mode of production evolves "in the long run" through the operation of the historical dialectic. But as Keynes pointed out, in the long run we are all dead.
Just like Marx said: If you want a different system with different distribution, you will have to join with others of like mind and take it. Tom Hickey [bold added]
ReplyDeleteInterestingly, I read this just yesterday:
My son, fear the Lord and the king;
Do not associate with those who are given to change,
For their calamity will rise suddenly,
And who knows the ruin that comes from both of them? Proverbs 24:21-23 New American Standard Bible (NASB) [bold added]
@ AA
ReplyDeleteDivine right of kings.
Those who make peaceful revolution impossible make violent revolution inevitable. -- JFK
ReplyDelete“ I was a professor of Economics at UC Berkeley. ”
ReplyDeleteAs I said you are not qualified to be here then... you never were educated/trained correctly and rigorously enough by being in that discipline and are part of the cohort that is creating all the problems...
You should just read here for a while ...
ReplyDelete“I have been a banker, ”
ReplyDeleteWell just the other day you were saying Treasury uses TTL accounts and as far as I can tell they stopped using them 10 years ago AND it matters to the regulatory reporting of the depositories...
Sooooo... instead of learning something from my comment Mr Econ Professor you ignore it and make yourself stupid and at least 10 years out of the loop...
You’re not qualified sorry...
You can take MY class... for free here...
ReplyDeleteI agree with Andrew Anderson's claim (1st comment above) that interest on government debt should be zero. Milton Friedman, Warren Mosler and Bill Mitchell have advocated that. And most important of all, Ralph Musgrave advocates it....:-)
ReplyDeleteSee my recent work on that topic:
https://mpra.ub.uni-muenchen.de/87111/
That version of my work is a bit messy. I'll do a second edition in a few weeks time.
I agree with Andrew Anderson's claim (1st comment above) that interest on government debt should be zero. Ralph Musgrave
ReplyDeleteActually less than zero (i.e. NEGATIVE) when administrative costs are taken into account. And that's for the longest maturity debt of a monetary sovereign, e.g. 30 US Treasury Bonds; shorter maturity debt would cost more (MORE NEGATIVE YIELD) with demand account balances at the Central Bank (zero maturity weight) costing the most (MOST NEGATIVE INTEREST).
I doubt those other guys would levy negative interest on bank reserves even though they are inherently risk-free too.
Divine right of kings. Tom Hickey
ReplyDeleteRomans 13:1-7
That said, Romans 13:8 would seem to preclude, along with other passages from the Bible, ANY support by Christians for government-privileges for private credit creation since those enable the driving of our neighbors into debt among other evils.
Andrew, If there is no return on the liabilities of government and central bank, then there wouldn't be any 30 year bonds, or even one year bonds: there's no point in locking up your money for years if there is no reward for doing so. In short, the only govt / CB liability (if you can call it a liability) would be base money. And that's the scenario advocated by Milton Friedman and Warren Mosler.
ReplyDeletethere's no point in locking up your money for years if there is no reward for doing so. Ralph Musgrave
ReplyDelete1) It isn't your money; it's the monetary sovereign's fiat and you may be charged to use it accordingly.
2) Where else can you put "your money" assuming physical fiat, aka "cash", can no longer be used to escape negative interest?
3) In recent history, we have seen even the debt of non-monetary sovereigns sell for negative yields - something you claim would never happen but did anyway.
In short, the only govt / CB liability (if you can call it a liability) would be base money. Ralph Musgrave
No, since account balances at the CB have ZERO maturity, they would be charged the HIGHEST* NEGATIVE INTEREST. Thus, assuming once again that physical fiat, aka "cash", can no longer be used to escape negative interest, "investors" would buy the debt of the monetary sovereign with the longest maturity wait they could tolerate in order to minimize interest charges.
*Except for individual citizen accounts at the CB which would be free of charge up to reasonable limits on account size and number of transactions per month.
Andrew, Yes, I agree it is fair enough for the central bank to charge for administration costs. Plus where a sizeable sum is locked away for a significant period, that presumably cuts the CB's admin costs, so there is, as you say, an incentive to lock away money which the owner does not intend using for a year or two.
ReplyDeleteWhat I've said flows from two simple principles:
ReplyDelete1) Non-negative yields/interest on the inherently risk-free debt of a monetary sovereign constitute welfare proportional to account balance and should be avoided as welfare for the rich.
2) Shorter maturity wait debt of a monetary sovereign should cost more (more negative yield/interest) than longer maturity wait debt.
3) However, individual citizen checking/debit accounts at the CB should be free of charge up to reasonable limits on account size and number of transactions per month.
ReplyDelete