A New Year gift suggestion

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Blogging on economics and the ecology are not necessarily economic propositions, but many of those who do it commenced for philanthropic reasons, rather than financial. One of the pleasures of blogging for me has been meeting such people, and one of my favourites is Nicole Foss, who maintains the Automatic Earth site.


Nicole has just released a new 4 hour video presentation entitled Facing the Future, co-presented with Laurence Boomert and available from the Automatic Earth Store. If you’re looking for a thought provoking gift, or something to stimulate your own brain cells over the Festive Season, consider purchasing Nicole’s video and helping keep the Automatic Earth operating in 2014.

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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5 Responses to A New Year gift suggestion

  1. Steve Hummel says:

    Originally posted on Ellen Brown’s forum:

    Symmetry. BOTH its philosophical AND policy, power and importance…is the key to understanding and remedying our economic and monetary problems.

    Paul Grignon’s video really is an excellent tutorial on money, even though it omits the fact that Banks also re-circulate some of their income, a small percentage of which becomes individual incomes, and the true significance of the fact of money’s first and primary cycle of re-circulation is indeed to the Banks, which is that it removes a statistically gigantic percentage of the available money…THAT MIGHT OTHERWISE BECOME INDIVIDUAL INCOMES. Now the fact is that this occurs. The true significance of that fact is…..it results in a mathematically impossible and enforced SCARCITY OF INDIVIDUAL INCOMES IN RATIO TO PRICES. And there is your most basic economic and monetary asymmetry, that is, A SCARCITY OF INDIVIDUAL INCOMES AVAILABLE TO LIQUIDATE PRICES….not total money and its inflationary effect and not interest as a cost. These are indeed ADDITIONAL factors in the problem….just not the most basic and so most significant of the problems.

    Symmetry. BOTH its philosophical AND policy, power and importance…is the key to understanding and remedying our economic and monetary problems.

    I note in the video that Paul says that a citizen’s dividend is one of the things some have suggested as remedies for the problems of our money system. And as explained above it is indeed the most basic remedy of the actual most basic problem/reality. He apparently has abandoned/rejected this fact and decided that “a failure of velocity” is at the root of the problem, I suspect under the considerable intellectual influence of a person whose domineering obsession with interest as the basic problem eventually lead to his being banned from this forum.

    Ironically, as we see above “a failure of velocity” is indeed the EFFECT of the primary COST ACCOUNTING CYCLE that money goes through before and in addition to its general re-circulation back through the economy, significantly, ONLY VIA AN ENTERPRISE, WHICH OF COURSE DUE TO THE EVER PRESENT AND CURRENTLY ENFORCED RULES OF COST ACCOUNTING…FURTHER RESTRICTS/DIMINISHES….INDIVIDUAL INCOMES.

    “But”, say the economists and monetary reformers, “if individual incomes is the problem, how can adding even more money in the form of a citizen’s dividend, not contribute to monetary inflation and higher prices?”

    And the answer is BOTH because of the scarcity reality above AND ALSO…a general discount on prices by participating retail merchants done for a given period of time, which is imminently statistically gatherable and that mathematically balances total incomes and the cost of total prices, that is, the holy grail of macro-economics…equilibrium.

    The natural experience of Grace, which is itself the ultimate state of mental equilibrium has a perfect symmetry with an empirical policy of monetary Grace in the form of a citizen’s dividend.

    Symmetry. BOTH its philosophical AND policy, power and importance…is the key to understanding and remedying our economic and monetary problems.

    Have a Merry Christmas. And please consider the power and importance of BOTH the experience of Grace AND it’s policy symmetry in our economic and monetary systems.

  2. Bhaskara II says:

    Here is an interesting statistical graph site with data from multiple sources. I have played around with it. It does some cool stuff and quicker than manually putting it all together. When the data expands it should even get better

    http://www.gapminder.org

    I gotta laugh or cry at this graph. It appears to show a negative correlation of hourly wages and 8th grade math achievement. Ha. Ha. However it does not have many of the other countries.

    http://www.gapminder.org/world/#$majorMode=chart$is;shi=t;ly=2003;lb=f;il=t;fs=11;al=30;stl=t;st=t;nsl=t;se=t$wst;tts=C$ts;sp=5.20967741935484;ti=2006$zpv;v=1$inc_x;mmid=XCOORDS;iid=rEF20Sw6Sy7tn4DKsKSDDMQ;by=ind$inc_y;mmid=YCOORDS;iid=phAwcNAVuyj3fwfA8XA25Eg;by=ind$inc_s;uniValue=8.21;iid=phAwcNAVuyj0XOoBL_n5tAQ;by=ind$inc_c;uniValue=255;gid=CATID0;by=grp$map_x;scale=lin;dataMin=2.553;dataMax=42$map_y;scale=lin;dataMin=449;dataMax=609$map_s;sma=34;smi=8.2$cd;bd=0$inds=

    Here is a guide to much of the buttons:
    http://www.gapminder.org/GapminderMedia/wp-uploads/tutorial/Gapminder_World_Guide.pdf

  3. Bhaskara II says:

    I only meant to recommend the graphing tool at the following address:
    http://www.gapminder.org/world/

    I can not recommend the rest of the site because I have not looked at all of it. But the tool looks a lot better than the rest of the junk on the site.

  4. Steve Hummel says:

    In response to a Georgist poster on Real World Economic Review blog here:

    http://rwer.wordpress.com/2013/12/03/such-an-economy-kills/#comment-42896

    …and also posted to Ellen Brown’s forum.

    henry1941 said: “The “scarcity” you refer to is rent of land. Collect as public revenue instead of hitting people with taxes on labour, goods and services.”

    Me: Perhaps you missed this at the end of my post:

    “Also, I have said that rent is a contributing cost/effect in that reality…but it is not the most basic reality…which is the elemental and unchanging scarcity of INDIVIDUAL incomes in ratio to prices…simultaneously produced.”

    Me: Is it not important to consider ALL of the relevant data, (the empirical monetary data and economic realities found in the cost accounting figures of any business), as well as all of the relevant constituents of the discipline under inquiry (both the businesses AND the individuals comprising the actual economy)? I think it does, and unfortunately economics comes up short on both of those requirements.

    henry1941 said: “There is no need to fiddle about with the medium of exchange. To do so is to prevent money from being used for its proper purpose as a medium of exchange which can retain purchasing power in space and time.”

    Me: That is the opinion to be had from the DSGE claim that money “is just a veil over barter”. However, the reality is we have a monetary economy. We just have to consider all of the relevant monetary data and become aware of the economic effects of that data so we can come up with the correct metric in order to solve the problem…like the scarcity of INDIVIDUAL incomes in ratio to costs/prices simultaneously produced in the normal operation of the economy.

    Money matters. The too big to fail Banks did not occur because of the irrelevance of money. I’m sure that your statement above is music to their ears.

    It IS true that money needs to evolve toward its ultimate form which is a ticket for the distribution of production, but that will occur as we progress technologically and rid ourselves of the various forms of economic sabotage like rent seeking…but ignoring the most basic reality/actual cause of the problem….the disequilibrium of individual incomes in ratio to prices on the micro-economic level and then failing to deal with that fact on the macro-economic level with the policies of a universal dividend and general re-compensated discount….would be “snatching defeat from the jaws of victory.”

    Human systems like economics and money, not unlike the humans that are an integral part of same, REQUIRE transcendence….if they BOTH are to be truly and completely reflective of all of their parts. Let us have a transcendent change to monetary policy like MONETARY grace in the form of a dividend, and an economic policy like a general compensated discount to consumers…and we’ll progress much faster and much more equitably toward Humanity’s deepest and strongest intention….freedom.

  5. Steve Hummel says:

    Velocity theory, even if it operated as theorists claim, which it doesn’t, would still be inadequate to equate total individual purchasing power with total prices. Velocity theory has always been historically inadequate and the reason for this is it is theoretically fallacious. It does not add to actual individual income/purchasing power. It is fallacious because 1) it does not/cannot break the yoke of cost that every business is chained to, 2) because actual individual incomes/purchasing power is only created by enterprises in the economy and due to the wedding of profit making systems and technological innovation, the logic of which are both efficiency, individual incomes are a continually diminishing fraction of total money/costs/prices and 3) because even when money re-circulates and no matter how much actually does re-circulate to and through an enterprise, the enterprise still only translates the same percentage of that total amount of money into individual income. The enterprise doesn’t just all of a sudden decide to generally raise wages, and as many enterprises (if not more) lose money and go out of business as those who remain or become more profitable due to growth so the effect is probably less than a wash. Any remaining money is retained or re-invested where the same individual monetary scarcity reality is re-initiated. The requirement for growth to maintain the system and to vainly attempt to equate incomes and prices is both unsustainable on a finite planet and an indication of the reality of a scarcity of incomes.

    The result of all this is our history of almost continuous recessions at least somewhere which amazingly is touted as “the great moderation” instead.

    And the only way out of this vicious cycle is a direct monetary supplement to individuals and a discount to prices to maintain the equilibrium the supplement costlessly approximates.

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