More of Science people arguing with Art people:
I'd encourage people to read this whole thread, and click on several of the links, and then ask yourself what it says that these are the most compelling defenses of the conventional view of budget deficits. https://t.co/Cf8Q20hcJw
— Joe Weisenthal (@TheStalwart) August 2, 2018
Art people are not qualified and shouldn't be allowed to get involved in these material matters... they should just stick with the Art...
Trump named his book "The Art of the Deal"
ReplyDeleteGuess he's an aspiring artist
He comes up a little short as a scientist for sure... probably lacked max rigor in his science training..
ReplyDeleteIt's no surprise that an unjust money system is confusing and unnecessarily complicated too.
ReplyDelete#PublicDeficitIsPrivateProfit
ReplyDeleteThe Magic Money Tree is real ― too bad that the magic is fraud
https://axecorg.blogspot.com/2018/07/the-magic-money-tree-is-real-too-bad.html
For the full-spectrum refutation of MMT see cross-references MMT
http://axecorg.blogspot.com/2017/07/mmt-cross-references.html
#MMT #FailedScience #FakeScience #ScientificIncompetence #ProfitTheory #SectoralBalances #Money #DeficitSpending #Debt #PoliticalEconomics #MagicMoneyTree #JunkEconomics #MMT2018 #JustAnotherFraud
We need more art in the world but artists don't want to do art. They want to do economics!
ReplyDeleteWell you wouldn’t want me to try to do Art that is for sure...
ReplyDeleteRyan here’s a comment over there:
ReplyDelete“Empirical/historical data demonstrates that future generations do not suffer higher taxes in order to pay back past deficits. Plus, the treasury securities held by public represent an asset for the private holder in the form of interest paid. Old strawmen die hard“
Guaranteed this guy is Science method trained...
The Illini Dean is BA from U of Miami... I checked his CV... ie trained to defend a Theory at all costs even if Science methodology shows it to be inaccurate/false...
ReplyDeleteUh, Matt, I'm pretty sure a true science person would be trying to falsify their own hypothesis. I don't see you doing that here. What you are practicing is by posting stuff like this is confirmation bias.
ReplyDeleteMatt Franko
ReplyDelete“Empirical/historical data demonstrates that future generations do not suffer higher taxes in order to pay back past deficits.”
A scientist realizes immediately that this statement is self-contradictory. There is no historical data for the future. It holds Public Debt = Deferred Taxes.
The relation between economics and science is roughly the same as between a pit latrine and a cathedral. This holds, of course, for MMT in general and you personally.#1
Egmont Kakarot-Handtke
#1 For the full-spectrum refutation of MMT see cross-references MMT
http://axecorg.blogspot.com/2017/07/mmt-cross-references.html
Egmont I have a BS Degree you have never said what your degree program was so until you provide your bona fides you have no qualifications to opine about anything science imo...
ReplyDeleteDo you have a BA or a BS?
You could easily just be advocating for a competing theory within the Liberal Arts methodology in your work and not using a scientific methodology...
Jeff there are TWO issues here.... there is the material economy which should be approached scientifically by science trained people only imo... and then there is the issue of the academe which is training the people who are being put into positions of authority wrt economic policy...
ReplyDeleteJeff, Im using a problem solving approach which is the scientific methodology 101... it’s how I’ve been trained to function...
ReplyDeleteYou guys are not trying to problem solve you have already established your theory of “neo liberal conspiracy!” first Where you guys think these people are competent and are looking for application of your theory...
We have a major problem with cognition when everyone is going all around saying “we’re out of money!”
To fix this you first have to fix the cognitive development process...
I have NO theory..... maybe I’ll have a theory in some years ahead once my investigation proceeds...
“A scientist realizes immediately that this statement is self-contradictory”
ReplyDeleteNo it might be a philosopher... not a scientist....
“TEACHING & LEARNING METHODS
ReplyDeleteBS:
Wharton classes focus on hands-on problem solving, using teaching methods such as case studies, negotiations, group work, and simulations in addition to traditional lectures. Students learn by starting with a problem or concrete example. After fully understanding the problem, they look for solutions and then begin to examine theories to see how they might apply.
BA:
In a liberal arts setting, students often learn by starting with a theory or abstract idea. After fully understanding the theory, they then look for problems to understand how the theory applies.”
Don’t confuse advocating for a competitive theory with doing Science methodology...
Matt, you do have a theory - arts trained people are incompetent. A scientific approach would try to falsify that hypothesis, which you are not doing.
ReplyDeleteThat’s not a Theory... ask Tom what it is ...
ReplyDeleteMight be a hypothesis or something which precedes a theory...
In any case my goal is to understand the problems here first.. eventually make policy recommendations...
ReplyDeleteNot to come up with “neoliberal conspiracy!” theories...
Here is Bill from the other day:
ReplyDelete“The government is not a household is a core Modern Monetary Theory (MMT) proposition”
It’s all about the THEORY....
I don’t have a theory ... where have I ever published a Theory?
In a science methodology the Theory if it ever comes is like the last thing anybody should be thinking about... investigation/exploration comes first...
That’s not a Theory... ask Tom what it is ...
ReplyDeleteIt's a personal opinion based on a particular worldview. Criteria are defined by worldview and serve to substantiate the world view in the minds that hold it.
If one accepts the framing of a world view, tenth debate takes place in terms of it and if one's own views are not congruent with that view, then one is either in a loaded game or refuses to play it.
Actually, this is being demonstrated in US politics right now, where the different cohorts are living in different worlds constructed by their respective world views, and the foundations of these world views are incompatible.
In a science methodology the Theory if it ever comes is like the last thing anybody should be thinking about... investigation/exploration comes first...
ReplyDeleteTell that to the theoretical scientists, AKA pure scientists vs applied scientists like engineers, physicians, etc.
Where do the equations that applied scientists use come from? Theory.
Where does does the math come from? Mathematicians.
And math is completely formal, it is not a science at all. Applied math is but not pure math, which is about notations and proofs.
Pure science, that is, theory, is also completely formal. Experimental scientists use the theory to generate hypotheses as theorems of that theory derived from the axioms. They then test the theory by designing experimental protocols and barring out experiments that are repeatable.
This is science, strictly speaking.
In the looser sense, "scientific" means that to which scientific method is applicable.
Some argue that this always requires formalization, quantification and precise measurement, even if it is not based on what is generally considered a scientific theory — e.g., certain approaches to psych that involved stochastic studies that can be replicated.
Others would allow for a looser approach to be included in the broad set, "science," as distinguished from speculation, as most philosophy is assumed to be.
What about “Laws” ? I think we use “Laws”... which that word is consonant with a didactic/authoritative methodology..
ReplyDeleteWhat about “Laws”
ReplyDeleteScientific "laws" are discovered theoretically and are only recognized as "laws" when the theory is well-confirmed.
Scientific "laws" are general propositions and as such are tentative on future discovery.
Their necessity is formal, that logical and mathematic necessity of deductive reasoning that lies at the basis of theory construction.
As scientific claims, they are contingent empirically, like the rest of science.
Applied scientists learn the laws by rote without necessarily understanding the theory. They don't need to, since correct application of the laws works even if the one applying these laws doesn't understand the theory in which they are embedded deductively.
Ok so you’re saying Newton never measured the time it took for different things to fall from the same height off the ground?
ReplyDeleteYeah sure.....
Matt Franko, Tom Hickey
ReplyDeleteFrom Adam Smith/Karl Marx onward, economics claims to be not only science but sciences: “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
How many sciences is economics? Zero! Economics is what Feynman called a cargo cult science.
Science is knowledge about how the universe or some greater or smaller part of it works. Scientific knowledge takes the form of a consistent theory: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant) A theory is the best mental representation of reality that is humanly possible. The rest of human communication is opinion, gossip, propaganda, piffle and cannot be taken seriously.
A theory is NOT about singular historical events but about invariances that apply always and everywhere. Example: The First Defenestration of Prague involved the killing of seven members of the city council by throwing them out of the window on 30 July 1419. The Law of Falling Bodies says d=1/2gt^2 and it applies to the members of the city council of Prague and to the moon and to the cannon balls that Galileo threw off the Leaning Tower of Pisa and to the falling feather in a vacuum and to the apple that hit Newton’s head. Scientists abstract from all historical and practical details which are so dear to the commonsenser.
The subject matter of economics is the monetary economy but economists have to this day not figured out how the price- and profit-mechanism works and whether the system is inherently stable/unstable. This holds for Walrasianism, Keynesianism, Marxianism, Austrianism and also for MMT. All these approaches are materially and formally inconsistent.
Inconsistency has been proven for the MMT balances equation.#1 And this proof is sufficient to refute MMT as a whole. MMTers, of course, do not understand/accept this. To ignore refutation and to simply continue talking BS is standard operation procedure in economics. Because of this, it is NOT impolite but a statement of fact to summarize that MMTers in general and Matt Franko/Tom Hickey, in particular, are stupid or corrupt or both. That both have a university degree cast a negative light on their respective universities.#2, #3
Egmont Kakarot-Handtke
#1 For the full-spectrum refutation of MMT see cross-references MMT
http://axecorg.blogspot.com/2017/07/mmt-cross-references.html
#2 Cryptoeconomics ― the best of Bill Mitchell’s spam folder
https://axecorg.blogspot.com/2018/01/cryptoeconomics-best-of-bill-mitchells.html
#3 The Kelton-Fraud
https://axecorg.blogspot.com/2018/07/the-kelton-fraud.html
Ok so you’re saying Newton never measured the time it took for different things to fall from the same height off the ground?
ReplyDeleteYou think he arrived at his laws by measuring?
Take planetary motion.
Copernicus is credited with the heliocentric theory, but there were such theories much more ancient than his and many measurements had been made also that Copernicus built on.
The Ptolemaic geocentric system was in used in Europe at the time of Copernicus and Copernicus used those measurements to construct a heliocentric theory based on the math available at the time.
Later Tycho Brahe made much more precise measurements than had been available.
Brahe's assistant Johannes Kepler was not satisfied with Brahe's account, which was Ptolemaic, however.
Kepler was convinced that being is intelligible in principle, so the intelligibility of nature should be expressible mathematically. He developed his laws of planetary motion that greatly simplified the explanation of planetary motion using fewer equations and without the need for ad hoc adjustments to arrive at precise results that were predictable, hence, testable.
Building on Kepler's theory, Newton developed a mathematical model for gravitation that filled in understanding of the force involved that accounted for elliptical motion.
Of course measurement was necessary to get the process rolling and to check it, but these discoveries were at the level of theory and involved creating mathematical models to fit the data.
So the process is observation (data collection) > theory (causal explanation in terms of functions) > observation (hypothesis testing).
Correct and the Liberal Arts methodology is to SKIP step #1.... go right to Theory... then argue it out (this is what MMT people have been doing) .... maybe reach a dialectic synthesis of the two conpeteing theses as best case (see deficit doves)... but such a synthesis will contain elements of the false thesis as a result... not ideal or even close...
ReplyDeleteTom look at upthread for evidence of this tendency in the Art people here you have Jeff trying to break my balls saying I have a theory .... when I have no theory... I’m still in step 1... he doesn’t even see step 1 been trained to skip right over it ....
ReplyDeleteSays right here:
ReplyDelete“In a liberal arts setting, students often learn by starting with a theory”
I’m not making any of his up ... why would I make it up?
MMT starts with operational analysis not theory. The theory dis developed from the operational analysis and the policy formulation follows from the theory based on prioritizing values, like employment over inflation instead of inflation over employment.
ReplyDeleteThis is opposite to conventional economics which starts with assuming a causal relationship between saving > investment based on S = I, loanable funds, the Phillips curve and natural rates of inflation and employment (NAIRU).
The conventional view is wrong on account of presuming that operations are different from what they actually are.
Matt, I believe you have stated that your degree, raining and expertise is in engineering. This involves applying equations derived from theory, along with math, to solve practical problems. Other people came up with the math and the theory that produced the equations that you apply by rote learning plus understanding of local conditions in your field to produce design solutions.
ReplyDeleteTheoretical science precedes applied science.
There are three branches of science — theoretical science, experimental science, and applied science. The later two are based on the first in so far as experimental science is about empirical testing, although experimental science precedes theory wrt providing the data that calls for explanation.
“In a liberal arts setting, students often learn by starting with a theory” The introductory courses I took in math and science — physics, chemistry, and biology — all started with theory. Otherwise, how would one know how to solve specific problems. The teachers don't say, look this is theory. You just learn the definitions, scales, equations and are you go you also apply them to word problems. You can't solve the word problems without that prior knowledge and you develop skill by applying the knowledge you learn as you learn it.
ReplyDeleteWe come into this world and are conditioned by the world. We are told what everything is, how it is, what to do, what is expected of us – the quantum physicists believe everything is, as it is explained to them when they first hear about it in the universities. Just about everything we learn in this world is via rote. We are conditioned so much by this world, we have no idea how much. What if the Ageless Wisdom is correct and everything is Being? Then all of those quantum particles and force particles, their underlying fields, vacuum energy – all belong to Being, Consciousness, Life. Force is life force in some form or another. Which experiment are they going to run in the LHC to prove or disprove that?
ReplyDeleteBut we learn by rote how the world is ...... accepting everything; the cranium is opened up and it is all poured in. Then we argue about it.
'The only way you can learn anything, is by experience' .... was it Einstein said that?
“The only way you can learn anything, is by experience”
ReplyDeleteThat sounds probably right JR but remember not all of us have positive experiences... lots of people are abused, etc... PTSD from the people exposed to warfare is pretty well established they are forever changed.... it doesn’t work like Nancy Reagan’s “just say no”... we don’t have freewill in this regard at least... if not at all...
Again I th8nk you and Tom and a few others here are examples of some sort of future form of consciousness.... but outliers during these times...your experience is to go thru this moron fest with your specific form of experience just like everyone else...
Iow You guys are biased towards the good... not everyone is...
ReplyDeleteBut Tom the problems presented are not “what does force equal?” (F=ma)
ReplyDeleteThey are real/practical problems...
Thanks for the good wishes Matt .... I'm a student of experience too.
ReplyDeleteIronically, what jrbarch and I are talking about is the oldest knowledge, found in the earliest literature that survives, e.g., the Rig Veda.
ReplyDeleteIt's not even necessarily couched in religious terms. Buddha prescinded from God-talk, for instance.
The essence of Buddha's teaching, given over 2500 year ago, is to realize that all the products of mind — knowledge, experience, memory, imagination, sensibilty, motivation, volition, affect, etc., — are conditioned, hence behavior also. Find the unconditioned and you will be free.
One branch of the path lies through wisdom (prajna), which is gained though stillness or peace.
The other branch lies though unconditional universal love (metta).
They are complementary rather than mutually exclusive and they converge toward one another.
This is also the teaching of Krishna 5000 years ago. e/g. in the Bhagavad Gita, II, 45: "Be beyond the three qualities [that constitute change].
This is also the teaching of Jesus in John 8:31: “If you continue in my word, you are truly my disciples; and you will know the truth, and the truth will make you free.” Jesus taught also the way of universal unconditional love. See, for example, Matthew 5 (NRSV):
43 “You have heard that it was said, ‘You shall love your neighbor and hate your enemy.’ 44 But I say to you, Love your enemies and pray for those who persecute you, 45 so that you may be children of your Father in heaven; for he makes his sun rise on the evil and on the good, and sends rain on the righteous and on the unrighteous. 46 For if you love those who love you, what reward do you have? Do not even the tax collectors do the same? 47 And if you greet only your brothers and sisters, what more are you doing than others? Do not even the Gentiles do the same? 48 Be perfect, therefore, as your heavenly Father is perfect.
That liberalism has lost these sentiments and even devalued them. chasing instead to worship material things and the money that buys them while pursuing fame, fortune, and pleasure is one of the reasons that traditionalists are anti-liberal. For this is to confuse the trivial with the important. One will never find abiding happiness in those pursuits, since the source of that is within one's own heart ‚ not the physical organ but the heart center.
This teaching has been verified in experience over the ages without geographical restriction. That's why it is called traditional.
There is no inherent disconnect between liberalism and traditionalism. It simply needs a more developed understanding and appreciation of freedom. From from constraint and freedom to choose are for something more than pursuing material self-interest. There is also freedom for, and this is freedom for actualizing oneself as one deems best.
In order to exercise freedom for intelligently, a deeper concept of human nature and human potential is required than gross materialism provides. This is also needed to properly approach the fundamental question in every society in every age — what does it mean to live a good life in a good society. While there will be common principles, the design solution in every age must be adapted to the conditions that prevail.
Instead, what we have is consumerism and we in the West are trying to foist that on the rest of the world "in their best interests."
But Tom the problems presented are not “what does force equal?” (F=ma)
ReplyDeleteThey are real/practical problems..
Right. This means that the theory has to be transformed into technical knowledge and skill. That's what engineering does for physics, and medicine for chemistry and biology, for example.
There is a big different between undergrad education in chemistry, chemical engineering and medicine, although they all depend on the theory.
IN addition, undergrad education in science and technology is mostly rote. In grad school one has to deal with the professional literature in preparation for researching and writing a dissertation, as well as teaching the subject at both the undergrad and graduate levels.
Undergrads that don't go on to grad school get their technical training on the job.
Probably the longest and most intense is medical training, which is four years of med school on top of four years of premed undergrad and then a year of internship and two years residency. No wonder many doctors think they are gods (or so some nurses tell me).
Tom Hickey, jrbarch, Matt Franko
ReplyDeleteStop blathering about scientific methodology in general and answer one simple/real/practical/concrete/relevant economic question.
This is the sectoral balances equation the MMT salesforce presents on any occasion (i) (X−M)+(G−T)+(I−S)=0.
This is the axiomatically correct balances equation (ii) (X−M)+(G−T)+(I−S)−(Q−Yd)=0.
Both equations consist of variables that are measurable with the accuracy of two decimal places.
Question: Which of the two macroeconomic equations is correct? Just answer with (i) or (ii).
Egmont Kakarot-Handtke
For me E.K-H, I’m sorry, but it’s not a multiple choice question; or constrained to either-or.
ReplyDeleteWhichever one you choose to be true, is true for you. Other people may choose differently, or something else entirely, because that is what they accept. That’s mind for you. People learn by rote and you have just taken that and modified it a bit. Then you call it science?
Why is 1 one? Why is 2 two? Because people learn it by rote. Why is the Queen of England a Queen (?) – because people learn it by rote and accept it. Otherwise she would just have to be herself – a human being, making her way from birth to death like everyone else – wondering who she really is? Why do you exist?
In quantum field theory (QFT), as you probably know, particles are field quanta (discrete bundles or excited states) of their underlying fields. Any field devoid of particles is considered to be a vacuum (of matter and force); fields ripple and sway in quantum vacuum fluctuations (QVF) – responding to temporary changes in background dynamic energy levels (labelled vacuum energy) at some seemingly random, or perhaps pre-determined (who can tell) point in (infinite ?) space. Today, physicists explain the cosmological constant as the vacuum energy of space. This energy is thought to be pushing outward on spacetime itself, causing the universe to accelerate its expansion, stretching spacetime, perhaps even to the point of rupture.
Generally speaking then, space and time are the foundation of all theories. Yet we never see spacetime directly. We infer its existence from our everyday experience and always assume change is due to some mechanism that operates within it. However quantum gravity reveals not all phenomena neatly fit within spacetime. Nor is time necessarily an attribute of space (I agree and think it’s an attribute of consciousness). Physicists must find some new foundational structure, and when they do (if they do), they will have turned the key on the material veil at least, and perhaps learnt something of the true nature of ‘vacuum energy’.
The observation I draw from the above, is that physics has so many competing theories about matter and time, that the theories of the Ageless Wisdom and the Himalayan School are just as worthy. All the laws of nature disappear over a vacuum energy horizon taking all scientific thought with it – on the street we level this and say ‘they haven’t got a clue’.
When little kids play games they just make up the rules as they go along. I don’t see anything different happens with politics, religion, economics – except the guns are real: so I can’t honestly answer your question. To me it doesn’t matter. Rewrite the game and re-program the players.
Just be kind to one another; that would be a start. If there is a purpose to life it is to enjoy being alive and discover the self. If human beings allowed the heart to rule in their existence, all of the problems we create for ourselves would mostly vapourise!
So, (i) or (ii) – they both look the same to me .... [!end blather]
I make no secret that the Bible is my source of inspiration wrt economics. No doubt some scoff at that idea but it has led me to something I think is revolutionary wrt reversing wealth inequity yet which no one can oppose on ethical grounds and which is very simple in concept.
ReplyDeleteHere it is:
1) Allow all citizens to have checking/debit accounts at the Central Bank itself alongside those of the banks and other depository institutions.
2) Impose negative interest on all accounts except those of the momentary sovereign and except individual citizen accounts up to say $250,000.
3) The negative interest collected minus the Central Bank's operating costs shall be distributed equally into all individual citizen accounts as a Citizen's Dividend on a weekly or perhaps daily schedule.
4) The monetary sovereign shall issue no more debt other than its fiat and shall normally run deficits to counter fiat leakages into savings. Existing debt will be paid off as it comes due with new fiat that will itself, of course, be subjected to negative interest unless it resides in an individual citizen account with a balance not greater than $250,00.
The banks will, of course, hate to pay for what they've been using for free or even worse being paid interest (IOR) to use but:
1) Fiat is the property of monetary sovereign or more specifically the property of its Central Bank.
2) Only individual citizens have an inherent right to use their Nation's fiat without charge up to reasonable limits on account size and number of transactions, not the banks, foreigners or other large users of fiat.
How much would the Citizen's Dividend be? Using the US as an example, and assuming $2 trillion in reserves and an APR of 36.5%* gives $730 billion per year to be divided equally among 245 million adult US citizens which equals $2,979 per citizen per year.
Not only that but once the entire US National Debt is converted to account balances at the Central Bank, the Citizen's Dividend would be roughly 10 TIMES $2,979 per year or roughly $30,000 per citizen per year.
Of course, the banks and the rich would then flee the US dollar as much as they could so there would have to be strict limits on how much land, for example, an individual or corporation might buy. This part I haven't thought through.
Thoughts anyone?
*That's how much the Alabama Southern Baptists think the poor may be charged so why not the banks and the rich too?
All this discussion because of Matt Franko taking the piss.
ReplyDeleteAndrew Anderson
ReplyDeleteThe bible says: “But let your ‘Yes’ be ‘Yes,’ and your ‘No,’ ‘No.’ For whatever is more than these is from the evil one.”
So, stop blathering and answer with (i) or (ii) lest the evil one will get you as he has already gotten the blatherers Tom Hickey, jrbarch, and Matt Franko.
Egmont Kakarot-Handtke
“Stop blathering about scientific methodology in general”
ReplyDeleteMethodology imo (and from experience) is the most important aspect of education/training.... if you don’t get the methodology correct your student isn’t going to learn very much if anything at all...
MMT is manifestly failing... why? What is the cause of this failure? Could something be done differently to improve outcomes? What methodology are they using?
The process of science in a nutshell:
ReplyDeleteCannot be tested > Can be tested > Results of testing
Conjecture > Hypothesis > Theory
AXEC, I choose (ii), the extended equation.
ReplyDeleteMMT is manifestly failing... why? What is the cause of this failure? Could something be done differently to improve outcomes? What methodology are they using?
ReplyDeleteMMT is not failing in popularity. It has become better known in a period of time than I expected it to be.
The teaching of MMT is encountering resistance in several ways. This could be a flaw in the teaching method. But when people refuse to do their homework, or experience cognitive dissonance, this indicates that psychological factors are at play.
Disabusing people of what "they know for sure but just ain't so" is always a challenge.
Egmont Accounting can be done numerous ways depending on what financial aspect you are trying to isolate ....it’s expost ..
ReplyDeleteSo the way you do it is probably correct for what you are trying to examine... profit? or whatever...
Doesn’t have anything to do with this current problem we have where 99.9999% of people are going all around saying “we’re out of money!!!!” which is resulting in major material systems underperformance...
“The process of science in a nutshell:
ReplyDeleteCannot be tested > Can be tested > Results of testing
Conjecture > Hypothesis > Theory”
Well that is NOT how 99.999 % of Economists are being educated... most Econ is under BA Degree programs...
And things are all F-ed up so correlation or causation?
They are using the wrong methodology imo... It’s manifestly ineffective...
BA Degree programs that have real-world application versus BADs that are restricted to academia. Economics is wedded to academia as religion is to a place of worship.
ReplyDelete“They are complementary rather than mutually exclusive and they converge toward one another.“
ReplyDeleteTom, just to point out that does not describe the dialectic though... iow ‘thesis” and “anti thesis” appear to me as opposites not complements... it’s some really bad shit...
@ AXEC / E.K-H
ReplyDeleteThe first is an accounting identify.
The second is an axiom.
There's a difference.
ReplyDeleteBlogger Matt Franko said...
“They are complementary rather than mutually exclusive and they converge toward one another.“
Tom, just to point out that does not describe the dialectic though... iow ‘thesis” and “anti thesis” appear to me as opposites not complements... it’s some really bad shit...
The because you have an idea of dialectic is that is only one of many ways to understand dialectic.
Those that are most noted for the use of dialectic method — Plato, Hegel, and Marx — did not use a method that can be adequately described as thesis-antithesis-synthesis.
The problem seems to be looking around for a simple idea that fits one's confirmation bias. This is comparable to mining scripture for quotes that "prove" one's position.
Part of this comes from the training in STEM that only allows for one definition of a key term.
Ordinary language, which is used in conceptual models that are not formalized and quantified work differently.
The same term has many uses and one has to determine the meaning from the use in a particular context.
For example, Marx both adopted and adapted Hegel's dialectical method. Thus, they are similar but different. Neither sticks to the thesis-anti>thesis>synthesis model and neither use these terms to describe what they are doing. They knew of these terms and this model and presumably would have mentioned it if that is what they thought they were doing. But they did not. Some scholars try to fit them in that box, others object that this is incorrect based on the actual methods they use in their work.
But even granting that thesis/antithesis/synthesis is a general description of dialectic, the way it works is that the thesis and anti-thesis converge in the synthesis since they are not mutually exclusive, as may appear, but can be seen to have complimentary aspects if one does nuance.
Nor is time necessarily an attribute of space (I agree and think it’s an attribute of consciousness). Physicists must find some new foundational structure, and when they do (if they do), they will have turned the key on the material veil at least, and perhaps learnt something of the true nature of ‘vacuum energy’.
ReplyDeleteThe observation I draw from the above, is that physics has so many competing theories about matter and time, that the theories of the Ageless Wisdom and the Himalayan School are just as worthy.
Physics (and science in general) is "just" a theory, meaning a mental construct that might be true or false depending on observation. But it is not possible to test a theory by observing it directly. Theories are subject to test by translating theorems into hypotheses and subjecting them to experimental testing or at least comparison with data. If the hypothesis is falsified, then this serves as evidence to disconfirm the theory. Theories are considered "well-confirmed" when the evidence from observation accords with their deductively derived hypotheses. But logically, no amount of evidence can confirm general statements that concern the future and are therefore contingent on further evidence.
In the other hand perennial wisdom is ground in the reported experience of the sages of different levels of reality — gross, subtle, causal/mental and transcendent, while science, being empirically based, is limited to the gross level.
Perennial wisdom does suggest solutions to scientific issues, as well as "the enduring questions" that reasoning and evidence from the gross are not able to handle decisively.
In addition to conceptual models of the whole in term of its aspects, perennial wisdom not only assert this is based on the experience of those qualified to gain it, but that this is the birthright of all human beings. The sages have set forth a map that leads to this experience in successive stages in terms of many ways. The sages have also set forth the various "vehicles" as means for traversing this path through "inner space" by the various ways.
Those familiar with both perennial wisdom and science have pointed out that the vacuum state of QFT is at least analogous to the "emptiness that is not empty" that perennial wisdom holds to be the ultimate source.
My friend, theoretical physicist John Hagelin (Harvard PhD, worked at CERN, pioneer of string theory), received the Ig Noble Prize in physics in 1994 for publishing in this field relating perennial wisdom to science, for example. Moreover, it was a report of an experiment rather than a purely theoretical paper, although he has written those, too.
I have reported previously that Hagelin ran for president as the candidate of the Natural Law Party, which he said gave him the opportunity to get in the door and explain to people how science had already come up with tested solutions for many of the most pressing problems facing the world today and addressing the most significant challenges. He reported that many if not most people to whom he talked agreed with him, but told him that it was not politically viable to take this stand publicly at this time. Too far from the dominant narrative and collective mindset in terms of which politics operates.
That's why I keep saying that humanity will remain in this box it has created for itself until level of collective consciousness rises enough to escape it.
Methodology imo (and from experience) is the most important aspect of education/training.... if you don’t get the methodology correct your student isn’t going to learn very much if anything at all...
ReplyDeleteRight. Methods are tools and there are many tools in the toolbox of knowledge and skill.
Students need to be trained in this way of thinking so that they don't glom onto one method as the be all and end all and treat all problems as hammer and nail when other more suitable tools are available if one know about them and how to use them.
@ Bob
ReplyDeleteData > Problem needing explanation > Conjecture (conceptual model)m> Theory (formalized and quantified model) > Theorems (deduced from theory) > Hypotheses (testable theorems) > Experiment (testing hypothesis against data).
Tom Hickey
ReplyDeleteYou say: “The first [equation] is an accounting identity. The second is an axiom. There’s a difference.”
Indeed, there is a huge difference. Unfortunately, you do not understand it. The often heard sentence ‘This is an accounting identity’ is one of the most idiotic assertions in economics. For the proof see the comment on the Wikipedia entry Accounting Identity:
Wikipedia and the promotion of economists’ idiotism
https://axecorg.blogspot.com/2018/07/wikipedia-and-promotion-of-economists.html
The most elementary accounting identity is Qm=−Sm and from this follows immediately that the MMT balances equation is false and from this follows immediately that the whole of MMT is false and from this follows immediately that all MMTers are either stupid or corrupt or both.
Egmont Kakarot-Handtke
My approach to teaching philosophy is methodologicalL
ReplyDelete1. Philosophy studies the whole. It is a license to explore. Philosophy excludes nothing — actually, it includes nothing, too, and nothing turns out to be very significant.
2. Exploration is through understanding informed by experience, and its goal lies through explanation — who, what, when, when, where, how, and why.
3. The purpose of philosophical explanation is to understand everything in terms of the whole. There are many wholes that make up the whole.
4. Wholes can be approached as systems.
5. Different types of system are approached in different ways, that is, using different methods.
6. There are different aspects and angles of approach — definitions of key terminology, assumptions and presumptions (unstated and possibly unknown assumptions), method, criteria, and conclusions — each having characteristics and requirements.
7. Critiquing creative thinking with critical thinking: Checking the reasoning (logic and math), assessing quality of evidence, questioning authority, and asking what could go wrong.
8. Undertaking exploration and investigation without appreciating these will likely lead to incomplete or biased results. Take care before going to conclusions and making claims.
9. Have fun exploring but don't fall into any holes.
a) Conjecture doesn't necessarily require data.
ReplyDeleteb) There isn't necessarily a way of moving from conjecture to hypothesis.
a) Even so, there are questions science will never ask.
b) Because so, there are questions science will never answer.
Conjecture doesn't necessarily require data.
ReplyDeleteIf it doesn't start with data, it is isn't science. It is speculation ("philosophy").
This is a a chief criticism that physicists make of economists' claiming that what they are doing is science after the model of natural science rather than social sciences, which may use some aspects of scientific method along with narrative and speculation, but aren't sciences in the same sense as are the natural sciences.
Tom Hickey, jrbarch, Matt Franko
ReplyDeleteDoesn't really matter what any of us or all of think about this since we are not economists and our view is immaterial in the field.
You need to convince economists on your position if you wish to get any traction.
Conjecture can be a part of science. It is the leap from conjecture to theory without supporting evidence that is unscientific. Where would cosmology and astronomy be if conjecture were ruled out?
ReplyDeleteAs it stands, most science is focused on existing lines of inquiry. That is a limitation.
Where have economists presented conjecture? The seem to have begun with a conclusion, and proceeded to fill in the blanks. Reverse engineering, yes. Scientific, no.
@Tom
ReplyDeleteYour first five teaching points appear to be compatible with science. The rest are where the scientific method may or may not be useful.
Your first five teaching points appear to be compatible with science. The rest are where the scientific method may or may not be useful.
ReplyDeleteRight.
Aristotle, Stanford Encyclopedia of Philosophy:
ReplyDeleteAristotle’s basic approach to philosophy is best grasped initially by way of contrast. Whereas Descartes seeks to place philosophy and science on firm foundations by subjecting all knowledge claims to a searing methodological doubt, Aristotle begins with the conviction that our perceptual and cognitive faculties are basically dependable, that they for the most part put us into direct contact with the features and divisions of our world, and that we need not dally with sceptical postures before engaging in substantive philosophy. Accordingly, he proceeds in all areas of inquiry in the manner of a modern-day natural scientist, who takes it for granted that progress follows the assiduous application of a well-trained mind and so, when presented with a problem, simply goes to work. When he goes to work, Aristotle begins by considering how the world appears, reflecting on the puzzles those appearances throw up, and reviewing what has been said about those puzzles to date. These methods comprise his twin appeals to phainomena and the endoxic method.
These two methods reflect in different ways Aristotle’s deepest motivations for doing philosophy in the first place. “Human beings began to do philosophy,” he says, “even as they do now, because of wonder, at first because they wondered about the strange things right in front of them, and then later, advancing little by little, because they came to find greater things puzzling” (Met. 982b12). Human beings philosophize, according to Aristotle, because they find aspects of their experience puzzling. The sorts of puzzles we encounter in thinking about the universe and our place within it—aporiai, in Aristotle’s terminology—tax our understanding and induce us to philosophize.
According to Aristotle, it behooves us to begin philosophizing by laying out the phainomena, the appearances, or, more fully, the things appearing to be the case, and then also collecting the endoxa, the credible opinions handed down regarding matters we find puzzling. As a typical example, in a passage of his Nicomachean Ethics, Aristotle confronts a puzzle of human conduct, the fact that we are apparently sometimes akratic or weak-willed. When introducing this puzzle, Aristotle pauses to reflect upon a precept governing his approach to philosophy:
"As in other cases, we must set out the appearances (phainomena) and run through all the puzzles regarding them. In this way we must prove the credible opinions (endoxa) about these sorts of experiences—ideally, all the credible opinions, but if not all, then most of them, those which are the most important. For if the objections are answered and the credible opinions remain, we shall have an adequate proof." (EN 1145b2–7)
forgot to include the link
ReplyDelete3. Phainomena and the Endoxic Method
Are endoxa different from just-so stories?
ReplyDeleteIn fields of science that explore prehistory, just-so stories are the best explanations we'll ever find.
In fields of science that explore prehistory, just-so stories are the best explanations we'll ever find
ReplyDeleteAnthropology and ancient history attempting to explain data from observation, like very early burial mounds. This is informed speculation but I would not call it science. Maybe proto-science. Maybe pseudo-science.
Same with Robinson Crusoe economics and Locke's just-so story about the origin of property rights.
Tom Hickey
ReplyDeleteThe methodologically relevant quote from Aristotle reads: “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.” (Wikipedia)
The certain, true, and primary economic premises are given with the set of macroeconomic axioms.#1
From these premises formally follows the testable conclusion (X−M)+(G−T)+(I−S)−(Q−Yd)=0.
From this, in turn, follows immediately that the MMT balances equation is false. And from this finally follows that the whole of MMT is scientifically unacceptable.
To copy/paste Aristotle from the Stanford Encyclopedia is neither philosophy nor science. The point is how to apply Aristotle’s methodology to economics. And here the wannabe philosopher Tom Hickey fails badly.
Egmont Kakarot-Handtke
#1 Wikimedia, New Foundations of Economics
https://commons.wikimedia.org/wiki/File:AXEC137.png
Energy follows thought. Energy shapes the atoms which shape the neurons and circuits in your brain. You have to be careful placing your thinking on a train track because it will have an effect.
ReplyDeleteThe thing that turned homo erectus into homo sapiens (wisdom) was imagination. But it has to be grounded in reality; expressive of reality. That is why there is not too much wisdom in the world. Why do we think everything human beings make up for themselves is reality?
Kabir thought about this and laughed: - ‘read all of the books in the world and still you will be in ignorance of the reality inside of you’. Which means you will not know who you are. And if you do not know who you are, how will you know what you should do? The heart knows exactly what to do – for mind it is a debate.
We make it up as we go along and in order to feel chuffed, call it science. Bigger than flat earth theory (it appeared to Kabir).
From these premises formally follows the testable conclusion (X−M)+(G−T)+(I−S)−(Q−Yd)=0.
ReplyDeleteHave you convinced even one other economist?
Anthropology is only science to the extent that it has evidence?
ReplyDeleteI disagree. Build a time machine and I'll reconsider.
Economic just-so stories take place within recorded history, in the here and now, and extend into the future. There's no excuse for not gathering evidence or falsifying previous claims.
So, let’s take one example of imagination. There is good imagination and there is bad imagination (just like good deficits and bad deficits).
ReplyDeleteUrch (a caveman) looks up at the stars wheeling overhead and feels an awe and wonder deep inside. Others feel it too. They talk about it. Then the imagination kicks in. Here we go ... Instead of investigating this feeling, following it back to its core, mind begins making up its stories. Before long, as the stories multiply and get revised (learnt by rote), the Creator of the wheeling stars is conveniently put in a box, as a very personal god, with very human propensities, acting out of revenge, anger, jealousy – just like us; ruling over us, and ready to toast us at the slightest indiscretion (just like we like to do). No privacy for the human being – all is recorded in a little book: - god checks your records. God also interferes, intervenes with the tribes, painting each with original sin; just like we would to put your neighbour over a barrel. So we invent the god, write the books, pray to our god like he is Aladdin’s lamp, and blame him for everything that happens to us, most righteous and truest of believers - rather than discovering what that universal energy actually is, that DID create the universe: - what it IS actually all about. That’s bad imagination. And different people invent a different god; then they fight over them? Different rules to the game. So, where is the sapiens in homo sapiens? Sleeping?
Now if we invent something as important as god, it makes you wonder what else have we invented: - imagine!
How about the whole society; the reason for existing? How about making up what a human being actually is? Painting on layers of societal bling, until you can barely recognise the being underneath it all. Or does that leave us too naked? All those political and social ideologies, bearing only on an assumed, cosmetic, reality? Just imagination; ego - mostly gone awry. Making it all up over the centuries and millennia; adding daily to the game. Elevating some to royalty, ditching others in the gutter. Anointing highly qualified and competent priests of the game of dice. When you arrive here on this earth the usb gets plugged in and the program is copied to you. If you dare to think differently you are considered an aberration in the program. All generated out of our base human nature, without actually understanding that nature – because – we do not understand the energy that created The Nature, of which we are just an atom. When the book of life closes, no matter what you have written, most people have no clue as to why they even came. They come in one door and exit another, and very little has changed. Would that be stretching it too far?
I am not saying scrap society. I am saying what is bad in society we could easily get rid of. But it involves uncovering the true nature of a human being.
After seventy years on this earth, seventy laps around the sun, I have never found one single reason why I should take modernity seriously .... it kind of looks very primitive to me, even though it’s dressed up in hi-tech clothes! The essence of human existence has not changed.
That’s why we have a sense of humour – the alternative is crying! (... monkeys sitting around with their opposing thumb on nuclear buttons – all the concepts, the rationales, dumb conditioning, learnt by rote too)! If we want to build something sensible in this world, that makes sense to the hu in a human being, then I believe absolutely, it has to come from the heart. The heart is wonderful at using the good imagination. The imagination this world uses at the moment is negative, fearful, spiralling in on itself instead of expanding, huddling in materialism to keep warm.
Hope Neil Wilson is OK too! He always had a human logic about him.
A good imagination would have looked at the Moon and the stars and surmised how large the world is. Celestial bodies that are far away, like distant mountains. Maybe they did, but the oral tradition was lost.
ReplyDeleteImagine god? As an all powerful being with anger management issues? That's conditioning. Your species has a pecking order, so must the universe. Gods must also be like us emotionally.
Now if you imagine a god or gods that are alien, that is better, but how do you relate to that object? What kinds of stories could you tell that are unlike your own experience as a human? Would those stories hold meaning for you?
For some purposes, what we invent must remain familiar. The really strange aspects of the universe can only be comprehended by scientists, or glimpsed by non-dilettantes.
Are we imagining that our way of life and our sheer numbers are destroying the ecosystems that support life on this planet? Nah, we prefer to imagine it will all work out. We prefer to not worry about it. The myth of progress is the greatest story ever told. It's right up there with Arnold J. Rimmer's My Incredible Career.
:|
Tom Hickey, Bob, jrbach
ReplyDeleteYour attempt to avoid the admission that the MMT balances equation has been conclusively proven to be materially/formally inconsistent is silly and futile.
Fact is that MMT is NOT a scientifically valid theory but academic snake oil.#1, #2, #3, #4
By consequence, the actual task is NOT to convince any MMTer of anything but to throw these fake scientists and their social media sales trolls without further ado out of science and the econoblogosphere.
Egmont Kakarot-Handtke
#1 MMT: academic snake oil for the people
https://axecorg.blogspot.com/2018/02/mmt-academic-snake-oil-for-people.html
#2 The Kelton-Fraud
https://axecorg.blogspot.com/2018/07/the-kelton-fraud.html
#3 Richard Murphy: the MMT fraudster dressed up as realist
https://axecorg.blogspot.com/2018/06/richard-murphy-mmt-fraudster-dressed-up.html
#4 MMT and grassroots movements
https://axecorg.blogspot.com/2018/01/mmt-and-grassroots-movements.html
I have to confess that I don't the chops in the field to come to an expert opinion on economics or finance, academic and professional fields in which there is wide disagreement.
ReplyDeleteLooking in from outside, it is very difficult to assess these disagreements since they seem to be theory-laden, ssumption-based, and ridden with ideology.
In addition, there are a lot of presumptions that act as hidden assumptions that are never questioned if they are even known.
Technical definition tends to be poor, along with mixing up ordinary language with combines connotation with denotation with technical language that is supposed to be exclusively about denotation for measurement.
I do my best to follow debates that are relevant to my interests and my field which is philosophy. Although not my specialty, I have been active in social and political philosophy, so I have a peripheral interest in this area.
So it makes zero difference what I think about economics from the professional standpoint and my opinion on political economy are just views of an interested party and citizen attempting to become informed about issues and candidates positions. But on my priority of issues influencing how I choose to vote, economics is way down the list, foreign/military policy and international relations being at the top of the list.
My (tentative) conclusion is that there is no good alternative to MMT in the field of political economy on the table, given the feasibility of bringing change under the current conditions. MMT is finally getting enough traction to make a difference.
Those who are economists or have expertise in the relevance fields such as finance are the people that should be working on this professionally if they are concerned with the state of the world and their respective countries. But we should all be aware that this will involve a heavy dose of persuasion along with the actual content of the field. Making an objective case that is highly nuanced is losing strategy in politics.
What I do here is to report on relevant matters that people will likely not find in the corporate media or discussed by establishment politicians that may be useful in coming to informed decisions in the voting booth and being active politically.
From a professional point of view with respect to my speciality in philosophy, comparative spirituality, I don' think that the most fundamental issues that individuals, groups, societies and the world face are economic (contra Marx). So they won't be solved by making political or economic changes, although more superficial problems may be improved until fresh challenges emerge. The can will just get kicked down the road.
The way I see things the next moment in the historical dialectic involves moving beyond the major oppositional positions, capitalism and socialism, and liberalism and traditionalism. While the forces involved through various interests are oriented toward replacing one with the other, this will only lead to kinetic conflict in the end and the next step will arise out of the ashes.
The intelligent and humane way to do this is by focusing on raising the level of collective consciousness, which may be the sine qua non of avoiding serious conflict. Almost no one is either aware of this or focusing on it, though, so it will have to a natural process, or a matter of grace.
AXEC,
ReplyDeleteI'm in favor of discussing economic issues. ANC Driver has asked you a question in this thread:
https://mikenormaneconomics.blogspot.com/2018/08/bill-mitchell-government-is-not.html
Sorry that I don't have the chops to discuss this with you.
As Tom has revealed, this isn't an economics blog in the literal sense. I myself am less interested in MMT than it's implications. Economic policies affect my life, hence I'm not studying this as a hobby.
@E.K-H.
ReplyDeleteI didn’t avoid the question. I pointed out (to me) the question is like asking ‘is the left tyre flat or the right tyre flat (?) when - take one look at the car - there is smoke pouring out of the engine, the windscreen is caked in thick mud, and the driver is hallucinating.
Now, to approach people watching this car wreck and start labelling them and screaming you want to throw them under a bus for not answering your question is a very ineffective way to engage your audience?
Is that want you really want? Even when some people are willingly to discuss the situation with you calmly.
If you do not shape your message to engage your audience, who are you talking to? People in your imagination? Every human being I have ever met is much deeper than any label assigned to them; or the events that happen to them in life. No one is our enemy and no one is our friend. Your mind is your own real estate and no one else responsible for it. What other people think is none of your (my) business. Just state your truth calmly and clearly. If others find it relevant they will soon strike up a conversation with you; change their own mind, voluntarily. Other than that you will get that most famous reply from everyone: - ‘uh huh’.
As Konrad mentioned once, there is a box around our head that we all live in. Yet our existence takes place outside of the box; it doesn’t even care about the box. It wants something deeper. I make an effort to connect, build a bridge, between this reality and the box. I have no idea how logical your work is in the field – there are people on this site much more qualified. For me, the heart says share – lift the whole. A joist system distributes the load and the bearers back them up; the columns support the whole. The three columns of a human being are Will, Love, Intelligence - all working together if you want the structure to stay up.
Tom Hickey, Bob, jrbach
ReplyDeleteThis thread is about the economic implications of public deficits and how the conventional and the MMT view about this important issue differ.
Now, re-read your posts. They are consistently off-topic and entirely vacuous.
The main and direct effect of public deficit spending is, according to the macroeconomic Profit Law, on the business sector’s profit. There can be secondary effects on employment or prices but the primary and absolutely certain effect is on distribution.
So, people who argue for deficit-spending/money-creation argue ― whether they are aware of it or not does not matter ― for the agenda of the one-percenters.
To be sure, this is legitimate in the political realm. Free speech means practically also free speech for imbeciles, crooks, madmen, liars, detractors, warmongers, etcetera with the vague hope that in the course of the discussion error and fraud will be successively eliminated and that eventually truth prevails. In the scientific realm, it is not sufficient to have an opinion, what is expected is a contribution to the growth of certain knowledge with certainty established by rigorous material and formal proof.
The observable unequal distribution of income and financial wealth is the empirical proof (i) of the Profit Law, and (ii), that the deficit-agenda-pushing from Keynes to Lerner to MMT to Trump has been successful beyond the wildest dreams.
What our discussion clearly shows is:
• your political/philosophical/religious blather does NOT contribute anything to the growth of scientific knowledge,
• MMT is refuted according to the criteria of material/formal consistency,
• the MMT sales crowd promotes a falsified theory in the social media and in the econoblogosphere,
• MMT academics do NOT promote science but provide a cover for the agenda of the one-percenters,
• MMT academics suppress free speech on their blogs,
• neither universities nor institutions like the American Economic Association enforce well-defined scientific standards among their members as they are supposed to do but uphold the claim that economics is a science which is provably false for 200+ years.
The good thing that can be said about the Mike Norman Economics blog is that it does not directly block/suppress the refutation of MMT but only tries to bury it under a massive heap of philosophical shit. Compared to the rest of the politically corrupted econoblogosphere, the Mike Norman Economics blog is a beacon of free speech.
Egmont Kakarot-Handtke
The main and direct effect of public deficit spending is, according to the macroeconomic Profit Law, on the business sector’s profit. There can be secondary effects on employment or prices but the primary and absolutely certain effect is on distribution.
ReplyDeleteOne argument in favor of welfare is that money given to individuals will end up as increased sales for businesses. Same would apply for a UBI or a JG that results in income for consumers who them distribute it to businesses. The purpose of these schemes is to help individuals; that it increases the business's sector profit is secondary.
The sum of spending on different programs for various purposes has precious little to do with economics, let alone science. Now if we were to apply your macroeconomic model as the correct one, what kinds of policies would be compatible with it? What would be the role of government?
Under capitalism, income spent flows to firms. Firms then use those funds to produce consumable, add to their capital stock, and provide a return on investment to owners. That is how the system works from the vantage of firms and workers.
ReplyDelete, which constitutes the bulk of the money stock in use by the domestic private sector.
When government is added, government gains control over some of the flow, both financial flows by spending and taxation and flow of real goods for public use by purchasing goods, including labor, from the private sector.
The "money" that is created by commercial credit refluxes to loan repayment, which destroys it by removing it from the money stock that private sector uses.
The "money" that government creates as currency aka "state money" is used to move real goods to the public sector, provide support to the private sector by contributing to welfare, and the net financial assets add to the stock of private savings. State money refluxes to the state as the source, which destroys state money held by the private sector in that it is now longer in the money stock that the private sector draws on.
The basic idea of MMT is that left to itself, the desire to saving will result in private credit creation, as the source of the savings, that is, to say, the private savings will be equal to the private debt. Increase of private debt is limited to ability to pay, so the economy is constrained by financial limits. If these limits are exceeded through excessive credit creation, then a debt-fueled financial crisis will occur and there will be an economic contraction.
Government can obviate that by adding net financial assets in aggregate that offset saving desire, preventing the accumulation of excessive private credit that over time becomes unsustainable and result in crisis, economic contraction, contract in growth, increase in unemployment, and decline in welfare.
It is well-known that this supports profit and wealth accumulation. This is the way that capitalism works.
Those on the right hold that this is just fine and dandy, while those on the left hold that government should address this with fiscal policy, specifically progressive taxation, to correct for rent extraction that government policy facilitates.
Others hold that capitalism is a poorly designed system for this reason among others and needs a redesign along the lines of socialism in order to preempt rent extraction.
Yet other argue that genuine capitalism doesn't exist and the system needs to be overhauled to create it, for one thing, by greatly reducing or eliminating government economic influence.
Government can obviate that by adding net financial assets in aggregate that offset saving desire, ... Tom Hickey
ReplyDeleteRisk-free saving beyond legitimate needs constitutes hoarding and government should penalize the hoarding of its fiat (cf. "The Parable of the Talents", Matthew 25:14-30), not enable it. Thus, beyond legitimate needs for fiat, negative interest is a natural solution. Moreover, since other citizens have been deprived of THEIR legitimate needs for fiat by the hoarders, redistribution of the collected negative interest to all citizens equally (or perhaps only to those citizens who have not yet achieved legitimate fiat savings) is also justified.
Of course this solution is largely only theoretical since the citizens may not even USE fiat except for unsafe, unhygienic, inconvenient physical fiat, aka "cash", but instead must work through a government-privileged cartel of depository institutions, aka "the banks." It's true that citizens may SAVE in fiat (e.g. US Treasury Direct®) and, except perhaps for physical fiat, those risk-free savings could be penalized beyond legitimate needs but the current possibility of a large number of government-insured bank accounts per citizen (e.g. 1 per insured bank and ~8000? government-insured banks in the US) makes a mockery of the individual account limit (currently $250,000 in the US).
E.K-H,
ReplyDeleteFor me, understanding the nature of a human being is far more powerful, in terms of existence, than understanding the nature of a public deficit; and further - I am just putting forth an opinion here based on my experience – without the understanding of a human being, you will never understand the true contextual nature of a public deficit. The world is a mirror of what goes on inside of the box (mind) – the beauty of the planet and nature is more a mirror, a symbol, of our inner reality. Understanding one little piece in the jigsaw puzzle of the world, is impossible without seeing the entire picture and more importantly, what is behind the picture - the broader the outlook the better. Think of Russian dolls. Human beings come in layers. To understand what is happening in the outer layer you have to peel them away; causation always takes one step back after another. The deficit does not even belong to a layer – it is just a construct of modern (merely 6,000 year old man); we did without them for a long time and won’t need them forever.
Therefore both the wider and narrower discussion is relevant. But the universal always encompasses the particular.
I can agree that the $money humans create, ends up mostly with the greedy few, and other people and the planet and all of its creatures suffer because of it. I do not agree with labelling a human being that took billions of years to emerge in evolution, with a derogative, narrow, societal prejudice that has only been around for a few thousand years (along with the ‘scientific realm’). It is unnecessary to the discussion and detracts from any argument.
The MMT academics I have read are just as concerned about the welfare of humanity as E.K-H is, as are commenter’s on this blog – I don’t see any differences other than some minor variations in what goes on inside of the box.
Most of what goes on inside of the box is ‘noise’; most of that is emotional noise with accompanying thoughts driven by desire. A lot of what passes for pure mental abstraction is based on the imagination. Subtract the imagination from the noise and what is left is experience. That’s maths to me. Am thinking here of Stephen Wolfram, the creator of Mathematica What is Spacetime, Really who has spent thousands of hours working with an imagination (hypothesis) that spacetime may be composed of a network of nodes; and is wondering if he should double his efforts. Like the sands in an hourglass his life is running out: - what has he learnt through experience; and where has his imagination taken him?
I agree $money is meant to minister to humanity, not imprison them in just about every way imaginable.
Sapiens huh?
Bob, Tom Hickey, jrbach, Andrew Anderson
ReplyDeleteBob argues: “One argument in favor of welfare is that money given to individuals will end up as increased sales for businesses. Same would apply for a UBI or a JG that results in income for consumers who then distribute it to businesses. The purpose of these schemes is to help individuals; that it increases the business’s sector profit is secondary.”
You folks simply do not get it. Roughly speaking, if welfare is paid for by taxes, then, in the most elementary case, the spending of the taxed goes down and the spending of the welfare recipients goes up by the same amount. The effect of macroeconomic profit is ZERO.
If, on the other hand, the welfare is provided by deficit-spending/money-creation then macroeconomic profit goes UP by exactly the same amount. Because of this, MMT social programs are nothing but a cover for the self-alimentation of the oligarchy.
Bob argues: “The sum of spending on different programs for various purposes has precious little to do with economics, let alone science.”
Again false. There is a second way to increase welfare expenditures, that is, by changing the composition on the expenditure side and keeping the volume of the budget and taxes constant. It is well known that by reducing military spending one can finance any social programs for any number of years. Reducing military spending and increasing welfare spending by the same amount leaves macroeconomic profit unchanged.
So, as a matter of principle, social spending can be increased without increasing macroeconomic profit. But that is NOT MMT policy. MMT social policy, i.e. deficit-spending/money-creation is designed to increase macroeconomic profit. Clearly, MMT social policy is a fraud.
In fact, things are politically worse. The constant mockery of the simple-minded balanced-budget folks obscures the fact that the main argument against credit financed government spending came from the philosopher Kant. Kant realized that there is a rather obvious connection between deficit-spending/growth of government debt and war. Therefore, in his Essay Zum Ewigen Frieden. Ein philosophischer Entwurf = Perpetual Peace: A Philosophical Sketch under #4 Kant ruled out deficit-spending: “National debts shall not be contracted with a view to the external friction of states”.
Needless to emphasize that war/military spending has always been the main driver of public debt: “Adam Smith, when he wrote his Wealth of Nations, and Burke, when he produced his famous speech on economic reform, understood by ‘political economy’ a ‘branch of the science of the statesman or legislator’, a theory of practice, the science of the prudent management of the public finances. The growth of the huge debts which weighed on the great military nations would end in proving their ruin. This was especially true of England, which had become immensely in debt through the conquest of her colonial Empire.” (Halevy)
So, the classical balanced-budget hawks were NOT social sadists hell-bent on torturing the poor in the name of austerity. Kant’s prohibition of deficit-spending was clearly aimed a the war-mongers.
Whether you are aware of it or not does not matter: as promoters of MMT you are pushing the agenda of the oligarchy in general and of the war-mongers among them in particular. MMT is NOT a scientifically valid economy theory but a political bluff package. The philosopher Tom Hickey as MMT chief-ideologue is the living example of how degenerated and corrupt philosophy has become since Kant.
Egmont Kakarot-Handtke
Again false. There is a second way to increase welfare expenditures, that is, by changing the composition on the expenditure side and keeping the volume of the budget and taxes constant. It is well known that by reducing military spending one can finance any social programs for any number of years. Reducing military spending and increasing welfare spending by the same amount leaves macroeconomic profit unchanged.
ReplyDeleteThe US would be running the same deficits. The redirection of spending is a political decision for which MMT has nothing to add. If the redirect were to a job guarantee then MMT would come into play. MMT prescribes a JG program rather than welfare for the unemployed.
As for military spending, I'm one of those who use the term "Military Monetary Theory" because that is how those appropriations are made.
@ AXEC / E.K-H
ReplyDeleteI doubt anyone disagrees with this on the merits.
It's true that economies run on flows and if the flows are designed to be in balance, then the budget can be balanced all time. No problem. However, this also means that saving desire needs to be met and this requires the end of private finance leading the economy and the increase in publicly provided goods and services to obviate it. It also means ending "the consumer society" as we know that is devoted to triviality.
However, under the present configuration of capitalism and militarism and its trajectory, that is not to going to happen, and wishing for it or planning for it to happen because people are going to wake up to this when it is explained to them is utopian thinking. First, people are not smart enough in general to be so motivated to vote that way. Moreover, power and wealth are aligned against it. See the parable about belling the cat. And realize that a police state has been erected against this, and the coordinate reaction to Occupy revealed if anyone doubted it.
Also, Kant was indeed prescient in his work on peace in light of what happened subsequently in Europe and the world in the ensuing wars, and humanity is still walking that path led by psychopathic and sociopathic elites.
Both capitalism and militarism are here for the foreseeable future, and while I believe strongly that both should be opposed, I don't think the best strategy for achieving this is postponing improvement in social wellbeing in the meantime.
Of course, capital reaps the bulk of the reward and much this is off the backs of workers. Yes, the US is completely depending economically now on feeding the military complex. These are in fact two side of the same coin.
And I agree that so-called fait currency does make the policy space for this. But, it also makes the policy space to increase welfare at the same time, as MMT points out.
My own view is that it would be better to allow the system to function while moderating it with increased welfare policy while working to change the system, instead of 1) promoting utopian solutions that are highly unlikely to happen, or 2) promoting revolutions, since the outcomes of revolutions are always uncertain.
If the climate change people are correct in their analysis, humanity has a short window of opportunity to takes these steps before the wind closes. Climate change also increases exposure to epidemics.
Similarly, with the world situation developing, there is a relatively short window of opportunity to avoid the present conflict from going kinetic and involving WMD.
Again I point to Meher Baba's Discourse on The New Humanity.
According to perennial wisdom, the underlying problem is not about politics or economics, which are only symptoms. It is due causality to the level of consciousness and cycles of time. The cycles of time are what they are, but the level of consciousness can be addressed individually and collectively.
This is where the focus belongs to bring social change and meet the emergent challenges. This requires exploring inner space, according to the perennial teaching lying at the heart of all wisdom traditions.
If, on the other hand, the welfare is provided by deficit-spending/money-creation then macroeconomic profit goes UP by exactly the same amount. Because of this, MMT social programs are nothing but a cover for the self-alimentation of the oligarchy. Egmont Kakarot-Handtke
ReplyDeleteYet some fiat creation is needed to keep up with population growth since SOME risk-free savings are legitimate as needed liquidity and initial capital formation.
The question then is how fiat shall be created in way that does not deny citizens equal protection under the law - unlike the current system which certainly does.
Andrew Anderson
ReplyDeleteYou say: “Yet some fiat creation is needed to keep up with population growth since SOME risk-free savings are legitimate as needed liquidity and initial capital formation. The question then is how fiat shall be created in way that does not deny citizens equal protection under the law …”
Yes, indeed. The correct way for the central bank to inject fiat money into the economy is by financing a growing wage bill. The incorrect way is the counterfeit-money-printer’s way.#1, #2
Egmont Kakarot-Handtke
#1 The MMT-Yawner: Government is not a household
https://axecorg.blogspot.com/2018/08/the-mmt-yawner-government-is-not.html
#2 MMT is gangsta economics
https://axecorg.blogspot.com/2018/07/mmt-is-gangsta-economics.html
The correct way for the central bank to inject fiat money into the economy is by financing a growing wage bill. AXEC / E.K-H
ReplyDeleteLink?
From May 2018 but I just saw it today:
ReplyDeleteCentral banks should consider offering accounts to everyone
E.K-H.
ReplyDeleteI too agree with you in the human sense, albeit, my only area of experience – war and greed, oligarchic control, are not good for humanity. None of the commenters on this blog come across as dupes (to me) – I think your last paragraph, last comment, is based on misperception (clouded by a sense of righteous anger (?) – not a problem). But why misperception?
First of all, misperception is just misperception. It does not necessarily make anyone a worse or better human being. Actions do – sometimes tied to the perception and sometimes not. Basically, it all boils down to whether the mind drives you, or you drive the mind.
Most of us are very big fans of our perceptions. We are not such big fans of our reality; our existence – until maybe, when it is time to go. As you get older, it focuses the mind as that wall we depart through looms. But, we love our perceptions. There were so many problems in the world when we arrived, and there will be so many problems after we are gone – and we try to solve those problems, get obsessed with solving those problems, in accordance with our perceptions.
We carry little cards, pictures in our mind on how we think things should be and how we think things are. Then we compare everyone and everything to the pictures, and make our judgements. Now, my experience tells me, whether or not I think one picture is closer to the reality of what is going on in this world than another, to look beyond the pictures and see a human being. The pictures will change over time, but the human nature does not change – humans evolve; just as a tree evolves from a seed. The pieces on the chessboard are pretty simple really: - $money, oligarchs, war, politicians, priests, academics, middle classes, workers, indigenous – the usual suspects. The game has been going on for millennia and is pretty well understood. For me, what is not understood is the human being on that chess board; that is actually the most important piece, but has all but been forgotten.
And what is required, I sincerely believe, if we are to solve this problem of conflicting pictures and incredibly greedy people who do not even care what the pictures are – they just do their predatory thing anyway – is to focus on the human being. Occupy Wall St. was unnecessarily confrontational and misdirected – we should be occupying planet earth. Beyond the box. Beyond politics, religion and economics; races and cultures. Beyond the predators. Embracing human existence and our beautiful planetary home.
(cont).
ReplyDeleteThe world of pictures is the box. Mind will throw up pictures like a kaleidoscope, over and over again, generating more questions than answers; around and around and around it goes, ceaselessly. I am very sorry to say E.K-H. - even if you or anyone else is 100% correct, it will not make a difference. Mind’s job is to generate pictures, geometrically and exponentially, and they will always conflict. Mind will always fight with mind. ‘The worldly mind is born in darkness, lives in darkness, will die in darkness’ [Upanishads]. Mind is not the tool for the job. Very difficult for academics to accept I know, because it cuts across their payroll.
I say, and I am certainly not alone in this, we have to understand the heart. It is the human being on that chessboard that can make a difference. The human being evolved through collaboration. We understand the mind pretty well, but we have to understand the heart, just as well, and allow it to blossom. Allow it to condition and ‘enlighten’ the mind. Otherwise, mind will lead us out into the desert.
A teacher knows – the kids learn the teacher long before they learn the teaching. They want to know how to press the teacher’s buttons, so that they can control the teacher long before the teacher begins controlling them. So the teacher has to make it enjoyable and engage the kids - working with their current understanding.
So, universally, people need to understand and enjoy human solidarity - this age old business of sharing and working together, and get a clear idea of the true nature of things. Collaboration is our ancient strength. We make this earth a hell when we could make it a heaven. It is the human being doing this. When we were in small groups, twenty, thirty thousand, everyone knew each other and collaboration was the way. With war, everything went backwards. A few people ruined it for everyone else. That means a few people can also, make a difference.
Now, living in mega cities it is all me me me .... rather than US. Politics, religion, economics divide us – they do not unite us. Collaboration has gone out the window – now it is all about control. We humans have not evolved to live in cities; we evolved with collaboration in those smaller groups. We have to learn how to collaborate, to celebrate human existence, all over again, but globally this time. The sixties was just an experiment. People have to reach out to people and say what they do want – not what they don’t want. When people want to get back to nature, what they really mean is to get back to being human, and enjoy their own nature as well as everything else. We wandered out of the jungle, to become civilised, and got lost – now the civilisation is more dangerous than the jungle: - even the supermarkets are killing us.
Maybe the little picture cards I hold are completely wrong too. But one thing I do know is that we get lost on the chess board; and we have to rediscover a human being again. And for me that means let the heart be the judge - find the self; know clearly the difference between mind and the heart. It is the heart that makes us human. Let the heart educate the mind as to our true nature. ‘Know thy self’.
Mind, all of the picture cards, we can’t take with us through that wall – what is in the human heart, we can. That is our substance