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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  • Steve Hum­mel

    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 ACCOUNTINGFURTHER 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.

  • Bhaskara II

    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


    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.


    Here is a guide to much of the but­tons:

  • Bhaskara II

    I only meant to rec­om­mend the graph­ing tool at the fol­low­ing address:

    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.

  • Steve Hum­mel

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


    …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.

  • Steve Hum­mel

    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.