Working Paper No. 529: Banks are not intermediaries of loanable funds – and why this matters
I thought Beardsley Ruml exploded that myth back in 1946, & that it was obvious even before John Law back in ~1715. It's been officially obvious in the USA since 1933, & since the invention of fiat currency (350 BC?). WHY it's ignored is a far more interesting question, involving the myth of elites being necessary intermediaries of scarce, loanable intelligence.
Tall Paul's Association says that part of the blame is fragmented policies, a balkanized regulatory system and barriers between bureaucratic silos. That's more like it, but both these articles (by BoE & Tall Paul) still consist of pointing out the obvious, year after austere year.
Hello! Anyone home? All those zealots occupying Wall Street but not the space between their ears may want to take notice here. Let's cut to the chase, and project patterns further than the ends of our noses.
WHY are our electorates taking 80+ years to recognize the obvious, EVEN after they boxed themselves into tripping over it, yet again? It was obvious to Greek city-states 2300 years ago, so what's wrong with our culture? What part of the Classics aren't studied? The parts that matter the most?
And why is THAT a perennial truth, pray tell?
Military veterans say that every army in the world is inept at the start of a war, highly organized by the end, and once again inept by the start of the next war.
Military veterans say that every army in the world is inept at the start of a war, highly organized by the end, and once again inept by the start of the next war.
Ergo, short of maintaining practice tilting at various windmills, we can't stay good at dressing ourselves. In short, only scalable practice makes scalable perfect (... perfect pursuit that is, of an infinite future).
For a growing aggregate, only aggressive exploration of our emerging options (a bias to exploration) lines up enough windmills worth tilting at. It's up to us to keep up enough practice to be fairly good at SELECTING which challenges are worthy of our growing cultural skills.
No aggregate practice (full & challenging employment) ..... no aggregate gain. No matter how many equations too few people write (and still don't practice).
Finally getting everyone to admit what some have always known is a necessary but not sufficient step. No amount of financial theorizing will by itself be adequate, only full & challenging citizen employment. The evolving moment of group-intelligence in any network or human culture is held in its emerging body of discourse, NOT in its components, its individuals, in silos of copyrighted information OR in the theories that sum our past knowledge. By definition, no theory predicts novel findings. No theory has been final and enduring, only practice has been. Call it evolution if you like, but it's still practice.
Can we move on from the myth of Loanable Intelligence, and instead start generating far more of it, de novo, by aggregate fiat? :)
That'll happen only when citizens glorify General "Next!" more than Captain Obvious.
For a growing aggregate, only aggressive exploration of our emerging options (a bias to exploration) lines up enough windmills worth tilting at. It's up to us to keep up enough practice to be fairly good at SELECTING which challenges are worthy of our growing cultural skills.
No aggregate practice (full & challenging employment) ..... no aggregate gain. No matter how many equations too few people write (and still don't practice).
Finally getting everyone to admit what some have always known is a necessary but not sufficient step. No amount of financial theorizing will by itself be adequate, only full & challenging citizen employment. The evolving moment of group-intelligence in any network or human culture is held in its emerging body of discourse, NOT in its components, its individuals, in silos of copyrighted information OR in the theories that sum our past knowledge. By definition, no theory predicts novel findings. No theory has been final and enduring, only practice has been. Call it evolution if you like, but it's still practice.
Can we move on from the myth of Loanable Intelligence, and instead start generating far more of it, de novo, by aggregate fiat? :)
That'll happen only when citizens glorify General "Next!" more than Captain Obvious.
Fiat Group Intelligence is real, and a product of persistent aggregate practice.
