Home > Uncategorized > Branko Milanovic and the hypocrites of the World Economic Forum

Branko Milanovic and the hypocrites of the World Economic Forum

from Lars Syll

Thousands of people will gather next week in Davos. Their combined wealth will reach several hundred billion dollars, perhaps even close to a trillion. Never in world history will be the amount of wealth per square foot so high. And this year, for the sixth or seventh consecutive time, what would be one of the principal topics addressed by these captains of industry, billionaires, employers of thousands of people across the four corners of the globe: inequality…

quote-the-only-vice-that-cannot-be-forgiven-is-hypocrisy-the-repentance-of-a-hypocrite-is-itself-william-hazlitt-81795Only in passing, and probably on the margins of the official program, will they get into the tremendous monopoly and monopsony power of their companies, ability to play one jurisdiction against another in order to avoid taxes, how to ban organized labor in their companies, how to use government ambulance services to carry workers who have fainted from extra heat (to save expense of air conditioning), how to make their workforce complement its wage through private charity donations, or perhaps how to pay the average tax rate between 0 and 12% …  

Still poverty and inequality which are, as we know, the defining issues of our time will be permanently on their minds.

It is just that somehow they never succeeded to find enough money, or time, or perhaps willing lobbyists to help with the policies they will all agree, during the official sessions, should be done: to increase taxes on the top 1% and on large inheritances, to provide decent wages or not to impound salaries, to reduce gaps between CEO and average pay, to spend more money on public education …

They are loath to pay a living wage, but they will fund a philharmonic orchestra. They will ban unions, but they will organize a workshop on transparency in government.

So in a year, they will be back in Davos and perhaps a new record in dollar wealth per square foot will be achieved, but the topics, in the conference halls and on the margins, will be again the same. And it will go on like this … until it does not.

Branko Milanovic

  1. January 26, 2018 at 12:56 am

    Thank you for this.

    They are very cultured in some ways the Davos people; in others, the structure of the workplace and who has “standing” there and in civil society, who gets listened too, they have some of the barbarisms of the worst of the 19th century. Discrete barbarisms, with psychological slashings more than blows over the head. Those the poor deliver upon themselves.

    I’ve been moved by the closing sentence of Richard Sennett’s 1998 book “The Corrosion of Character: The Personal Consequences of Work in the New Capitalism.” It comes just after he’s had an epiphany – in Davos: “But I do know a regime which provides human beings no deep reasons to care about one another cannot long preserve its legitimacy.”

    I’m afraid though, twenty years later, that we have been carried into Wolgang Streeck’s territory: “How will Capitalism End? Essays on a Failing System – which has no clear replacement. Yet.

  2. January 26, 2018 at 1:25 am

    Capitalism will end in fascism and global destruction.

  3. January 26, 2018 at 2:54 am

    It appears the purpose of the Davos conferences is to provide the participants with an opportunity to publicly advance their pious claim that they are paying attention to the needs of the world outside of themselves and are making good faith efforts to “give help where it is needed.”

    The results of these gatherings have always been disappointing, primarily because economists have failed to explain to them why it is true that submitting to steeply progressive marginal income tax rates would 1) give them the much better world they say they want, in a way that would 2) not impose any real, material sacrifice on any of them.

    What the Davos participants need to be reminded of, by economists, is what happened to America’s wealthiest citizens the last time Congress decided to dramatically increase the top marginal rates that people like them were required to pay on their incomes…

    The year was 1932, in the depths of the Great Depression. At that time Congress increased the Income Tax’s top marginal rate from 25% to 63%. Fours years later, it was raised again to 79%.

    Just how bad did it get for the country’s millionaires, once the government started to take huge amounts of money away from them? Answer: they got along just fine.

    When we look at what actually happened to rich people at the time, it becomes clear that dramatically increasing the tax obligations of these people did not actually inflict any kind of real suffering on them at all.

    In the years that followed the 1932 tax hike, none of the mansions, or the yachts, or the beachfront property disappeared. Throughout the Great Depression, rich people still owned all of the economy’s luxuries and they continued to enjoy them fully.

    They may have had fewer disposable dollars to throw around than they used to, but that just meant that they were able to get all the luxuries that the economy produced at lower prices.

    You see, in spite of the much larger tax bills they were paying, rich people still had the highest disposable incomes in the land, and in a market economy, that’s all the money you need to claim the scarcest luxury goods & services that the economy brings to market.

    The problem has always been the failure of economists to explain to rich people why 1) the real economy is the only economy that should ever matter to them, and why 2) the collective efforts they’ve made to protect their (perceived) interests as a class have only ended up hurting them, instead.

    • Robert Locke
      January 26, 2018 at 7:45 am

      The issue is not explaining, we all understand who is getting screwed. The issue is changing the structures through which power is expressed, it is politics but not as usual.

      • January 26, 2018 at 8:39 am

        Ahh…but my point is not that economists should point out who is getting screwed, but rather that they should point out who is NOT getting screwed (rich people) when they are required to pay income taxes at much higher marginal rates.

        That is a revelation which takes more than a couple of moments to explain, but is ultimately well worth the time needed to absorb it…

      • robert locke
        January 26, 2018 at 4:16 pm

        But my point is what are you going to do about it.

      • Rob Reno
        January 26, 2018 at 6:54 pm

        I really don’t think smart billionaires and the super rich don’t already know that if the marginal tax rate on their wealth were to increase that this would “not actually inflict any kind of real suffering on them at all.” They know that full well already; but it doesn’t serve their real underlying motives to acknowledge this publically when it is their belief (libertarian ideology?) they are somehow rightfully empowered to do with such massive wealth as they please, and will use any pseudo argument they can for public consumption (e.g., mainstream economics) to maintain such power over the structures though which they maintain such power to control over those institutions through which they extract such massive wealth at the expense of everyone else. I find it hard to believe this is really a _revelation_ to the super rich.

      • January 26, 2018 at 9:01 pm

        Hmm…

        I really don’t think smart billionaires and the super rich don’t already know that if the marginal tax rate on their wealth were to increase that this would “not actually inflict any kind of real suffering on them at all.”

        I’m just as cynical as the next man when it comes the motives/thinking of rich people, but I can’t say I share your skepticism here, Rob.

        In the Tax Fairness essay I quoted above, I cited a Gallup poll in which 60% of Americans surveyed earning over $75,000 per year believed that they were being taxed unfairly at rates that are too high.

        I can’t think of a good reason why rich people would think they are being unfairly taxed if they really knew and understood that a lower tax rate would not really benefit them in any material way.

        What is being discussed here, Rob, is one of the most important logical fallacies that intellectuals are prone to, including most economists: the fallacy of composition.

        As individuals, we understandably expect that if we personally were to receive a big gift of money from the government, we would experience a big boost in our purchasing power. (And yes, in one particular set of circumstances, that is precisely what would happen.)

        What most people do not realize is that if everyone was given the same gift, then none of them would actually experience an improvement in their purchasing power.

        To fully appreciate this point, one really does need to have an understanding of how purchasing power is determined in market economies (explained in the essay).

        Ultimately, markets are auctions. Because they are, the scarcest goods/services are auctioned off to the highest bidders. For this reason, it is your ranking within the hierarchy of all accumulations of disposable money wealth which determines how much purchasing power you have in the marketplace.

        It’s not how much money you have that determines your purchasing power; it’s how much money you have compared to everyone else.

        From the essay:

        One principle stands out above all others: whenever a household experiences an increase its disposable income, its purchasing power will either increase, decrease, or not change at all depending on what has happened to the disposable incomes of all other households.

        a) Your household income may increase next year, but that seemingly happy development would only provide your household with an increase in purchasing power if your gain in $$ earnings is exceptional (e.g., you win the lottery, or land a much better paying job).

        b) If the only reason your disposable income increases next year is because you and everyone else got a nice tax cut, then none of you is going to experience an improvement in your ranking within the hierarchy, and that means none of you will see an improvement in your purchasing power, all else equal.

        c) A third possibility: your household income increases next year at a time when everyone else’s is going up more. In this case, your household’s purchasing power would actually decline, even though your nominal income had increased, because your ranking within the hierarchy would decline relative to everyone else.

        d) Yet another possibility: your household’s disposable income declines next year, but because everyone else’s disposable income declines even more you actually end up experiencing an improvement in your purchasing power.

        Perhaps there are a few smart rich people out there, and maybe even a few economists, who are aware of these subtle truths re: purchasing power in market economies. Even more may be generally aware that they would not actually “suffer too much” if the government were to increase their taxes.

        But I find it extremely dubious that any substantial numbers of those connected with our culture’s Leadership Class understand the utter futility of “collectivist schemes” which seek to provide “everyone” with the same benefit from a money gift that a sole individual would experience if he alone were to receive the same gift.

        Markets ensure that this is an impossibility.

        In a much more advanced civilization, I would expect all would-be economists, policy makers, politicians would be taught to recognize the ultimate foolishness of all such simplistic attempts to make everybody better off with large-scale distributions of “money.”

      • Rob Reno
        January 27, 2018 at 7:28 pm

        “The issue is changing the structures through which power is expressed, it is politics but not as usual.” ~ Robert Locke

        In mainstream economics the models are devoid of politics and the many levels of

        uncertainty, conflict of interests and the systematic intervention of a great variety of lobbyists (Marques 2016, 9).

        Essentially, both Lars and Marques are pointing out that the social context cannot be ignored and reduced toy models, that as Locke points out, there is a distinction between the

        sciences of the spirit (Geisteswissenschaften) and sciences of nature (Naturwissenschaften). (Locke p. 2)

        Politics and power matter far more than mainstream economic theory, for we are not, individually or socially, anything like a nomological machines (Maques 2016, 106).

    • Stefanos
      January 26, 2018 at 4:43 pm

      James, I read your blog on this argument and the following question came up:

      Your argument says that if you tax more the rich then the structure of the economy will still remain the same (same goods produced for the rest of us — call them “necessity” goods — and same luxury goods produced for the rich) and the only thing that will change is that the luxury goods will be sold at a lower price.
      You then conclude that the Gov can tax the rich and use this money to buy “necessity” goods for the rest of us.

      However, if this is true, ie, if the structure of the economy does not change after the tax increase for the rich, then the only effect that this will have is to increase prices for the “necessity” goods, since more money will go after the same amount of necessity goods produced.

      So the issue is that in order for the rest of us to see a benefit, the structure of the economy has to change in some way that LESS yachts and MORE schools are produced.
      For this to happen, the purchasing power of the rich has to DECREASE significantly (contrary to your assertion) so they cannot afford the luxury goods.
      What will be the effect of that? initially, as more taxes are imposed on the rich, the prices will go down (as you say). At some point, the producers of luxury goods will not reduce further their prices or they will switch to a different business because this is no longer profitable.
      It is EXACTLY this event that we want to happen so that the economy re-orients itself in the production of more necessity goods.

      • January 26, 2018 at 7:11 pm

        For this to happen, the purchasing power of the rich has to DECREASE significantly (contrary to your assertion) so they cannot afford the luxury goods.

        That is not something that would ever happen in a market economy. No matter how heavily you tax rich people, so long as their rankings within the hierarchy of all disposable incomes are maintained, they will continue to have the highest disposable incomes in the land (which is ensured by the use of marginal income tax brackets).

        The sellers of whatever is brought to market are always going to charge the highest price the market will bear and rich people would still be able to outbid all others for the scarcest luxuries.

        If a steeply progressive income tax was phased in over a period of time, it would set off a continuous period of deflation within the markets which serve the rich, which means prices would drop in the assets markets, the art and real estate markets, the real estate market, etc.

        This deflation would work its way through the supply chain as retailers of luxuries would no longer be able to afford the wholesale prices they used to pay, so that would force down the prices that the wholesalers have to pay, and then with manufacturers, and miners, etc.

        (It would be the mirror opposite of the continuing inflation event we’ve seen within the luxury market supply chain over the past few decades)

        All the players in the supply chain would be upset about the way they’d be forced to constantly cut costs, but they would continue to bring the same stuff to market and sell it to the same people, only at a lower price.

        It would still be the only game in town for them, they’d still be making money/profits, just not like the way they used to. There would be a shakeout; those luxury suppliers that are most successful at lowering their costs will end up with most of the market share.

        So the issue is that in order for the rest of us to see a benefit, the structure of the economy has to change in some way that LESS yachts and MORE schools are produced.

        I cover this in the latter part of that rather lengthy essay when I explain how resource re-allocation would occur in market economies that have decided to tax the hell out of rich people.

        When a government spends the money it got from rich people, on schools, environmental cleanup, enhanced health care, state-of-the-art infrastructure, etc., it will directly improve the standard of living of the middle- and lower-classes, creating good paying jobs.

        I can’t foresee a sustained reduction in the number of yachts, etc. occurring without a government edict and I’m not convinced it should be all that necessary.

        If I could get everything else—zero unemployment, constant upward pressure on the wages of the poor via market pressures, improved standard of living and economic security—I could certainly live with rich people continuing to own as many yachts as the sellers of luxuries would bring to market.

        Understand that even if full-employment has already been achieved in the economy, the government can still force a re-allocation of resources in favor of the non-rich by throwing enough money at the infrastructure and education and health care industries and at environment initiatives that the builders/service providers receiving the government contracts would have high enough profits that they will be able to outbid all other competitors within the resource markets for the resources needed.

        Ultimately, this re-allocation process would force out of business some firms that produce ‘stuff’ that society’s money spenders just don’t care about (as much as they do other things). But it’s a scenario we aren’t going to have to worry about any time soon…

    • Rob Reno
      January 27, 2018 at 12:10 am

      So a 75,000 middle income was is comparable to billionaires now? Something seems rather askew. I don’t buy the auction argument as such only holds under very restricted conditions and the analogy completely ignores the real reality of how markets are rigged via power (e.g., Weils the Fissured Workplace and Akerlof et. al., Phishing for Phools, etc.). The arguments just aren’t carrying the water for me.

      • January 27, 2018 at 10:18 am

        I don’t buy the auction argument as such only holds under very restricted conditions and the analogy completely ignores the real reality of how markets are rigged via power.

        I can certainly understand your concern that acknowledging the “auction” role that markets play might in some way de-emphasize the significance of the market manipulations that clever deceivers are able to pull off, but I must point out that the “dissonance” you suspect might necessarily exist between the two perspectives is not really there.

        A clever deceiver seller in some market may be able to exploit imperfect information and less-than-perfect competition to generate excessive rents for himself, but whenever firms exploit unfair advantages like this, it does not change the underlying facts re: purchasing power in markets.

        Even after all the manipulations of “bad actor” firms in various markets (which give them an unfair competitive advantage over their market rivals), in the end you still have a price at which the total amount of product brought to market gets sold.

        Prices in particular markets may be higher than they should be (i.e., would be if perf info/comp reigned) but even without the “restricted conditions” you refer to, those prices will only hold if a sufficient number of buyers have enough disposable income to cover the offer (auction) price.

        None of the imperfections we rightfully identify in particular markets can override the central fact that an economic participant’s ability to participate in particular market (hiser purchasing power) is dependent upon how much disposable income shehe has compared to everyone else.

        If something costs more than you can afford, it’s because there are a sufficient number of people around who have more disposable dollars/pounds/euros/yen than you and who, for this basic reason, are willing to pay the higher price asked for the limited amount that is available.

        That is an auction, Rob, any way you look at it.

        What I am describing may not be a paradigm you’re familiar/comfortable with, but it is nigh impossible to dispute its validity when one takes the time to carefully examine the particulars being discussed with an open mind.

  4. Benjamin Morgentau
    January 26, 2018 at 8:53 am

    Some numbers from a few years back which i recall are the amounts of tax free inheritance changing the rightfull owners in Switzerland and Germany every year

    For the first it is more than 70 Mrd. and for the later it is more than 230 Mrd. changing hands every year free of any social or other responsibilities.

    This could be art, licenses, patents, land, buildings, housing… well protected wealth far above any democratic rights of the majorities for example.

  5. January 27, 2018 at 9:44 am

    This discussion is in my view pointless. It’s unlikely to change anything. And it misses what I believe is the central question. Does human society need the rich? Surveying human evolutionary and cultural history indicates the answer is NO! There is nothing in human evolution that supports a division between rich and non-rich humans as an evolutionary imperative. The opposite is the case. In terms of biological evolution humans are genetically designed to live as economic equals. Cultural history also provides no support for the contention that a division of rich and non-rich humans provides cultural advantages for humans in terms of survival or happiness. Again, the opposite is the case. Rich humans can thus then only be branded as an aberration in human evolution and culture. We need to rid ourselves of this aberration. It is producing too much harm to human society to do otherwise. This will be difficult for two reasons. First, we’ve allowed the rich to influence culture to such an extent they’ve convinced societies they are a normal and expected part of human culture and evolution. Second, the rich have used the very aberration of their excess wealth to “purchase” political and military power to retain their position in society. But if we don’t make this correction soon it will too late. Human societies will create culture ever more at odds with evolution, and force cultural adaptation into one blind alley after another. Until eventually human efforts to survive will fail. And another species will replace Sapiens as the “cultural” animal. In the larger scheme this is not so bad. Millions of species have gone extinct in the earth’s history. Many in these in the six mass extinction events. The sixth of these began about 500 years ago and is accelerating quickly. In this event Sapiens will be just one of hundreds of thousands of species that fail to survive. Nothing special.

    • Rob Reno
      January 28, 2018 at 11:29 pm

      Does human society need the rich?

      Assuming we have defined what we mean by “rich” I think it is a question being asked by many today. Andrew Sayer in Why We Can’t Afford the Rich defines the rich in this way,

      First, whom do I mean by ‘the rich’? How rich is rich? Is it an absolute number? £100,000+ per year [$141,339], £1 million+ per year [$1,413,391]? Or a percentage: the top 1% or 0.1%?

      Both absolute terms, like ‘millionaire’, and relative ones, like the 1%, are useful. And we should distinguish income … from wealth. The distribution of wealth is far more inequal than the distribution of income.

      So where do I draw the line between the rich and the rest? For much of this book I’ll be talking mainly about the top 1% in terms of share of national income and fractions within that.

      (….) But the problem of the rich isn’t just a matter of quantity of income or wealth, but one of where the money they get comes from. I’ll be arguing that the richer people are, the higher the proportion of their income is likely to be unearned, through being based on power rather than some kind of contribution. (Sayer 2015, 9-10)

      That definition works well for me. So, for example, where would that put a family wage earner earning between $75,000 and $150,000? Rich? Not rich? And so on.

      I certainly agree that society can decide on how wealth is distributed, and that extreme wealth inequality is not a necessity but rather a socially constructed outcome which different social groups have handled differently at different times. We don’t have to tolerate it if the majority of society decide it is not appropriate.

      There is nothing in human evolution that supports a division between rich and non-rich humans as an evolutionary imperative. The opposite is the case. In terms of biological evolution humans are genetically designed to live as economic equals. Cultural history also provides no support for the contention that a division of rich and non-rich humans provides cultural advantages for humans in terms of survival or happiness…. Rich humans can thus then only be branded as an aberration in human evolution and culture. (Ken Zimmerman)

      I think there is much in this statement that is simply not true. There is no genetic basis to whether we decide socially to live as economic equals or not. As human societies and culture evolved both biology and culture shaped economic outcomes. There existed division of labor even among hunters and gatherers. The more complex culture became the less economic equality was determined by biology (child bearing and gathering vs. hunting, for example) and the more it was determined by culture. But primitive man was not living in some “golden age” of economic equality.

      The divisions of labor may have at first been determined by nature, but soon human imagination (fear, superstition, war) and culture and determined economic and social circumstances. There was specialization due to sex (woman’s work was derived from the selective presence of the child; woman became the routine worker, while man became the hunter and fighter, engaging in accentuated periods of work and rest.)

      All down through the ages the taboos have operated to keep woman strictly in her own field. Man has most selfishly chosen the more agreeable work, leaving the routine drudgery to woman. Man has always been ashamed to do woman’s work, but woman has never shown any reluctance to doing man’s work.

      Old age and disease determined division of labor too. With the rise of shamans and medicine men there was a differentiation based on religion (superstition). And lest we forget, the master and slave relationship goes far back into the dawn of civilization. These relations between the conqueror to the conquered meant the beginning of human slavery.

      If slavery isn’t an example of ‘haves’ and ‘haves not’ then as Lars so eloquently says, I’ll be dipped!

      The best-selling text in the second half of the nineteenth century was Arthur Latham Perry’s The Elements of Political Economy, which taught students that providential design explained the remarkable capacity of free markets to promote the good of all. (Leanard 2016, 12)

      The myth of some primitive golden age when there were no rich hording wealth is no different than the myth that capitalism’s so-called ‘free market’ is designed by providence to promote the good all. Wealth accumulation, just like war, has been with humans practically since the beginning of complex social organization above the most rudimentary level.

  6. January 27, 2018 at 10:43 am

    Does human society need the rich? Surveying human evolutionary and cultural history indicates the answer is NO!

    Need to offer a rejoinder here, Ken. If you eliminate money from the equation, it becomes apparent that “The Rich will be with you always.”

    The reason for this is scarcity. There is only so much beachfront property, so many views from the top of a hill of the valley below, only so much mahogany that can be harvested, only so many Best Restaurants and Best Entertainers around for people to experience.

    Disposable incomes can be equalized, theoretically, but scarcity cannot be legislated out of existence. This is something that the Bolsheviks discovered rather early on when they realized that there just isn’t enough of all the “most desirable” experiences around for everyone to enjoy them.

    Because there is scarcity, The Rich will be with us always. Not so The Poor. It is possible to eliminate poverty, but not scarcity.

    Things can be done to improve the distribution of scarce desirables (instead of one gazillionaire owning all of most precious works of art, they could be spread out among more of the not-quite-as-rich) but while that is a concern that should matter to those in the Upper Class, its not really something that would ever affect the vast majority of the citizenry, who really need to experience major improvements in their economic security.

    The problem is not that there are rich people in the world; the problem is that A) not all rich people are deserving of their status as rich people, and B) not all rich people use the power they possess to further the betterment of ALL members of the tribe, which is something we have every right to insist that they do…or else.

    • January 28, 2018 at 6:53 am

      James, the rich will be a part of society only so long as the non-rich members of society allow it. You are correct that scarcity has always played a role in human evolution and culture. But scarcity in no way prevents removal of the rich from society. All the so called scarce things you mention – beachfronts, Mahoney, top notch restaurants can be shared among humans. This is how human groups functioned for over 98% (1.9 million years) of Sapiens time on earth. The error you make is assuming scarcity must be handled through market allocation. Markets as economic devices are new in human history. Less than 5,000 years. I’ll not pretend that changing human culture to end the era of markets will be easy. But from the long perspective of human evolution and cultural history eliminating markets is correct. As I’ve already said, doing otherwise is likely the death of our species. And you are also correct in identifying improvement in the “general” economic security of humans as an essential concern. As it has been for that same 1.9 million years. But markets are unnecessary for this goal. So, again I say now’s a great time to rid ourselves of both the rich and markets.

      I agree and disagree with your final paragraph. First, no rich person/family deserves their riches. Nearly 2 million years of Sapiens history proves that. Second, in line with the beliefs of the USA’s founders, the rich (if allowed) as a faction in a democracy must be controlled both by everyday and formal government oversight and regulation. This includes your “or else.” Unfortunately, oversight and regulation have largely ceased. Even language reprimanding the rich is today immediately rejected by not just the rich but their minions in the media, churches, and government.

      • January 28, 2018 at 8:01 pm

        The error you make is assuming scarcity must be handled through market allocation.

        Actually, I quite agree that it is not necessary to ration scarce desirables according to price, but other approaches that have been attempted in the past were generally abandoned for a variety of reasons.

        The Bolsheviks made an earnest attempt to ration scarce desirables via other means, basically by mandating that prices be kept low enough for “everybody” to buy them.

        What this meant in some instances was long lines for those scarce desirables, or in other instances mandated restrictions on their sale: i.e., made available to only those who were considered worthy (athletes, scientists) in some way to have access to certain privileged experiences, like caviar. IMO, not necessarily a bad approach. (In our society, any criminal, cheater, etc., can enjoy those consumption privileges, simply because they have more disposable money available, through ill-gotten means.)

        (There was a time in America when news shows would highlight the long lines in Moscow for The Best foodstuffs when they showed up in a shop, claiming that this demonstrated the superiority of The West’s economic philosophy. I would point out then that those long lines in Moscow could be eliminated overnight and be made to appear in American stores the next morning by doing one very simple thing. All one needed to do was increase the Moscow prices so high that people could not afford to stand in a queue, and then lower prices in American stores so low (for lobster, e.g.) that everyone could afford it and then the lines would appear automatically. My point: evidence of long lines proved nothing re: how well an economy was functioning for its people.)

        Rationing according to price—ultimately, according to one’s disposable money wealth—is not necessarily the best option in any and all circumstances. If a “supply shock” occurs (e.g., war, or natural disasters) making supplies of some key consumable thing quite scarce, it would probably be preferable (for political reasons or due to strong public feelings re: fairness) to ration “according to need” as best as a civic authority can, treating all citizens of equal need equally.

        But as a standard alternative to market-determined prices that are relatively stable over time, I think it would probably cause more problems than it would solve, perhaps even becoming quite unpopular across the general public.

      • January 29, 2018 at 5:12 am

        Rob and James,

        Like most who view the problems of economic inequality (rich and not rich) you begin with the economics. This is not correct. The correct place to begin is the entire culture(s) within which the economies exist. Human cultures have been pro-social for 2 million years. A couple of economists clearly captured the basics of what evolutionary biologists and cultural anthropologists have said for nearly 50 years. Suggest you review “A Cooperative Species: Human Reciprocity and Its Evolution,” by Samuel Bowles and Herbert Gintis. Opening paragraphs from the book.

        “In the pages that follow we advance two propositions. First, people cooperate not only for self-interested reasons but also because they are genuinely concerned about the well-being of others, try to uphold social norms, and value behaving ethically for its own sake. People punish those who exploit the cooperative behavior of others for the same reasons. Contributing to the success of a joint project for the benefit of one’s group, even at a personal cost, evokes feelings of satisfaction, pride, even elation. Failing to do so is often a source of shame or guilt. Second, we came to have these ‘moral sentiments’ because our ancestors lived in environments, both natural and socially constructed, in which groups of individuals who were predisposed to cooperate and uphold ethical norms tended to survive and expand relative to other groups, thereby allowing these prosocial motivations to proliferate. The first proposition concerns proximate motivations for prosocial behavior, the second addresses the distant evolutionary origins and ongoing perpetuation of these cooperative dispositions.”

        John Smith’s “The Theory of Moral Sentiments” clearly accepts both premises. So why do economists who claim to venerate Smith reject both? Could it have something to do with “pay offs?”

        Here are few suggestions for the how of getting back to the pro-social life that is correct for humans from both evolutionary and cultural perspectives. By correct I refer to survival. The species’ chances for continued survival improve with pro-social ways of life. Which means the next generation tends to be prosocial. But since evolution and cultural adaptation are both average results processes, there are always aberrations to deal with.

        There are nation-wide examples that move us back to pro-social ways of life. Consider the Scandinavian nations. Among the most economically equal in the world. If you’re looking for larger industrialized nation models, consider Canada and Germany. Citizens of these nations have both more equal wealth and all the services and resources needed for healthy and happy lives.

        And there a great many smaller examples within the US. There are more than 48,000 co-ops operating in the United States—and that 120 million Americans are co-op members. Roughly 10,000 credit unions (with total assets of over 600 billion) supply financial services to 83 million members; 36 million Americans purchase their electricity from rural electric cooperatives; more than a thousand mutual insurance companies (with more than 80 billion in assets) are owned by their policyholders; and approximately 30 percent of farm products are marketed through cooperatives. Add to this employee-owned companies located across the US. Further, there are cooperative land and home building groups in all parts of the US. There are many more examples.

        Contrary to statements here, the main road block in returning to human pro-social ways of life is indeed the rich. For two reasons. First, and of lesser import, the rich protect their place in society. Second, the rich want more than equality. They want dominance and reverence.

    • Rob Reno
      January 28, 2018 at 10:11 pm

      Don’t we need to define what we mean by “rich” before we can understand how the term is being used? I frankly, don’ t know how this term is being used by James (or anyone else) at this point.

    • Rob Reno
      January 29, 2018 at 12:04 am

      The problem is not that there are rich people in the world; the problem is that A) not all rich people are deserving of their status as rich people, and B) not all rich people use the power they possess to further the betterment of ALL members of the tribe, which is something we have every right to insist that they do…or else.

      I wholeheartedly agree. This is, it seems, the struggle of our times. What we need is to foster a new form of social disgust—disgust for both idleness and unearned wealth. Instead, the US has gone in the other direction to the extreme worshiping unearned wealth and fostering a reality-tv culture that aspires to be like Donald Trump. We are in a culture war for the heart and soul of this nation and capitalism is bigger threat to democracy than imagined bogyman of socialism or communism I think.

      But as a standard alternative to market-determined prices that are relatively stable over time, I think it would probably cause more problems than it would solve, perhaps even becoming quite unpopular across the general public.

      Much wisdom herein, I think. I’m going to lay my cards on the table here. I think what modern culture is starkly facing in these times of Piketty levels of inequality is a crisis of motive. What will be the motive for economic striving? Will it remain totally selfish, as mainstream economics has hawked as the lowest common denominator, or can we as a culture and civilization vision and higher and more inclusive motive that can augment and transform the purely selfish one?

      But to suddenly outlaw or take away the profited motivated economics we see today would leave many otherwise lazy people without work ;-) I am already seeing the budding vision of a newer social energy arouser that is reaching beyond mere selfish objectives. We don’t have to accept the profit motive as the sole motivation for economic striving; we don’t have to forever remain motivated by base and wholly unworthy selfish motives like Trump and ilk like him. Profit motivation must not be taken away until society has created a superior type of nonprofit motives for economic striving and social serving.

      This is what I mean by evolving new business models that meet real world problems.

      • Rob Reno
        January 29, 2018 at 12:06 am

        Not that I’m arguing for socialism or communism, just that these are used as bogymen to scare unthinking souls from looking at alternatives, such as democratic socialism. The sad truth is that many Americans are so poorly educated they cannot tell the difference between democratic socialism, socialism, communism, and rheumatism.

      • Rob Reno
        January 29, 2018 at 12:06 am

        Oh, dip me twice. “I’m _not_ arguing for socialism or communism …”

  7. Rob Reno
    January 27, 2018 at 5:22 pm

    James, how are you getting the site to format your quotes so nicely? Are you just putting the HTML code in and the site handles them correctly, like,

    Test text

    And so on ..

    • January 28, 2018 at 3:06 pm

      James, how are you getting the site to format your quotes so nicely? Are you just putting the HTML code in and the site handles them correctly…

      I see you answered your own question, Rob. ;) I was even able to put an image—a chart—in one of my comments once, but the second time I tried it, the comment never appeared at all. I assumed it was place in a queue for approval or maybe I didn’t use the same HTML tags as the first time. I’ll try it again sometime.

  8. Rob Reno
    January 27, 2018 at 6:59 pm

    Birks (2015), Lars (2016), and Marques (2016) all address the use of the auction heuristic in economic theory. What James argument ignores is that his assumptions do not hold in the real world except in very restricted cases, and it is even questionable if they even hold in those cases. It seems we have here a case of economic theorizing divorced from real world economics as it impacts the lives of most family wage earners struggling to get by in a world largely consisting of large corporations that are able to manipulate the market. James seems to minimize this reality, which is far more prevalent than he seems to acknowledge. Even within contexts that seem most likely to fit the auction heuristic, such as supermarkets, the model doesn’t hold:

    Auctions, including online auctions, further complicate matters. Even with outlets such as supermarkets which sell at a set price, prices may vary by the day or week and they may differ over stores or chains at any one time. It is hard to see how this fits a static representation of a market. Similar reasoning applies in other situations where static analysis is commonly applied. We live in a dynamic, ever changing environment. The focus in this section has been on supply and demand, but equivalent considerations would apply elsewhere, including production decisions by a firm or macroeconomic analysis of, for example, fiscal or monetary policy. [See also No.4] (Stuart Birks. 40 critical pointers for students of economics (Kindle Locations 196-202). WEA. Kindle Edition.)

    The claims made using the auction model assume, incorrectly, that economic causes act in socio-economic vacuum (Lars 2016, 6), but,

    Unfortunately, this is not so. The reason for this is that economic causes never act in a socio-economic vacuum. Causes have to be set in a contextual structure to be able to operate. This structure has to take some form or other, but instead of incorporating structures that are true to the target system, the settings made in economic models are rather based on formalistic mathematical tractability. In the models they appear as unrealistic assumptions, usually playing a decisive role in getting the deductive machinery deliver “precise” and “rigorous” results. As noted by Frank Hahn [1994:246] – one of the icons of neoclassical mathematical economics – “the assumptions are there to enable certain results to emerge and not because they are to be taken descriptively.” This, of course, makes exporting to real world target systems problematic, since these models – as part of a deductivist covering-law tradition in economics – are thought to deliver general and far-reaching conclusions that are externally valid. But how can we be sure the lessons learned in these theories and models have external validity, when based on highly specific unrealistic assumptions?

    Lars specifically addresses the market model heuristic, noting that real-world economics turns out to be more complex and such simplistic assumptions don’t turn out to be very relevant in the real world:

    One would of course think it most likely that parallelism would hold for e. g. auctions, where we have a naturally demi-closed system in relative isolation and with a transparent and simple internal logic. As Alexandrova [2008:401] however shows, economic theory is unable to account even for this case, which the economists themselves consider to be a paradigm example of model application, the main reason being that “many more factors turned out to be relevant than was thought at first.” (Lars 2016, 10-11)

    Marques addresses the same case, noting:

    Recently, Ana Alexandrova has defended a new vision about the role that economic models play in the implementation of economic policies. She limits her analysis to one particular model, the auction model, which is praised as a paradigmatic case of successful application in the design of institutions (Alexandrova, 2008; Alexandrova and Northcott, 2008). (Marques 2016, 34)

    They do not deny the tractability assumptions, but claim the way to bridge such “idealizations” or models-to-reality is by a process of,

    De-idealization allows models to be applicable and to acquire empirical content. (Marques 2016, 34)

    Yet, even Alexandrova (2006, 183) admits it is not always possible to de-idealize the tractability assumptions incorporated into a model-auction-toy-world:

    In what sense is it more realistic for agents to have discretely as opposed to continuously distributed valuations? It is controversial enough to say that people form their beliefs about the value of the painting or the profit potential of an oil well by drawing a variable from a probability distribution. So the further question about whether this distribution is continuous or not is not a question that seems to make sense when asked about human bidders and their beliefs. (Marques 2016, 35)

    So, once again, we are left with an auction model that begs the question of how workable is this heuristic really when it comes to the real world? The outcome is predicated on arbitrary assumptions that are purported to describe a situation that is absent in the real economic environment (Marques 2016, 36). A perfect example of how such heuristic frameworks are unrelated to how the real world of “wages” and “price” work nothing like an auction model is cogently described in David Weil’s (2014) The Fissured Workplace, which shows conclusively that when it comes to major corporations and how they manipulate the market, “price” is just another attribute to be manipulated by rigging the supply chain to drive down what was once “wages” in a race-to-the-bottom competition between predatory middle-tier staffing companies supplying the “contingent” workforce at the lowest possible “price”:

    [T]he jobs shifted away to be done by separate employers pay low wages; provide limited or often no health care, pension, or other benefits; and offer tenuous job security. Moreover, workers in each case received pay or faced workplace conditions that violated one or more workplace laws…. In the late 1980s and early 1990s, many companies, facing increasingly restive capital markets, shed activities deemed peripheral to their core business models: out went janitors, security guards, payroll administrators, and information technology specialists…. Even lawyers who handle our business transactions and consultants who work for well-known accounting companies may now have an arm’s-length relationship with those whom we think they are employed. By shedding direct employment, lead business enterprises select from among multiple providers [i.e., ‘preferred vendors’ as MSFT calls them] of those activities and services formally done inside the organization, thereby substantially reducing costs [they play vendors off of one another based on cost and create what is, know in the recruiting/staffing industry ‘the death of the middle man’ race to the bottom] and dispatching the many responsibilities connected to being the employer of record [sometimes saving as much as ~30% in employee benefits no longer paid]. Information and communication technologies have enabled this hidden transformation of work…. By shedding employment to other parties, lead companies change a wage-setting problem into a contracting [and price] decision. The result is stagnation of real wages [and loss of employee benefits] for many of the jobs formerly done inside. (Weil 2014, 3-4)

    From janitors to security guards, payroll administrators to information technology specialists and software engineers, from electrical and aerospace engineers to even lawyers and accountants, from nurses to doctors, the “shedding employees” model is becoming, as one “preferred vendor” for Microsoft put it, a “standard industry model.” The middle-tier vendors, which are effectively a small number and are able to act like a monopsony, set the price for jobs, not some toy auction model.

    By shedding employees and only rehiring them (frequently to do the same job) through a small authorized group of “preferred vendors” the lead company can force third party vendors to compete against one another on “price” rather than facing a question of wages & benefits if they were employees. Larger lead companies may have vendor standards and theoretically require their preferred vendors to provide employee benefits, which are in some cases negotiated into the direct bill rate (or card rate), but in most cases there exists no effective monitoring mechanism to assure that such an overhead (typically ~30%) is passed through the “contingent” worker. The ~30% or more becomes extracted profits for the CEOs and directors of the “staffing” company acting as a third party vendor.
    Within the industry of third party vendors, as one told me, this creates a situation they call the-death-of-the-middle-man as they compete with each other to get lucrative contracts with the lead company. (See Weil 2014, 88) If you are the middle-man and furiously competing on the basis of price and have no room to cut costs as your only real cost are the wages and benefits of the W-2 employee shed by the lead company, the only way to boost profits is to extract the employee benefits and to cut wages (typically by 50% or more than when the workers was an employee of the lead firm) even further, hence the race-to-the-bottom. At no point does the employee turned into contingent work have the power to bid on the job; they are at the complete mercy of the supply chain setup (rigged) by the lead companies and their army of third party vendors supplying the “flexible” (hire easy and fire easy) workforce of “contingent” workers. As Weil notes,

    The upshot is that price is largely determined by powerful buyers (Weil 2014, 260).

    If you can call that an auction than I can only defer to H.L. Mencken’s quip,

    [T]here is always an easy solution to every human problem – neat, plausible and wrong…. And as someone has so wisely remarked, murder is unfortunately the only way to reduce biology to chemistry – reducing macroeconomics to Walrasian general equilibrium microeconomics basically means committing the same crime (Lars 2016, 56).

    Lastly, the idea that such manipulative and deceptive practices are the exception rather than the norm within the “free market” is a myth that serves makers and hawkers of toy model scenarios based upon mainstream/neoclassical economics (See Netflix, Dirty Money, https://www.netflix.com/title/80118100). Akerlof & Shiller in their Phishing for Phools have already shown that market manipulation and deception are far more prevalent than mainstream economists admit (fraud, manipulation, etc. are not even possible in their toy models).

    • Rob Reno
      January 27, 2018 at 7:07 pm

      Sorry, should be:

      ‘[T]here is always an easy solution to every human problem – neat, plausible and wrong.’ (…) And as someone has so wisely remarked, murder is unfortunately the only way to reduce biology to chemistry – reducing macroeconomics to Walrasian general equilibrium microeconomics basically means committing the same crime (Lars 2016, 56, quoting Mencken).

    • January 28, 2018 at 7:01 pm

      I must say, Rob, that I like how you have approached this topic.

      I think it’s important that I explain why I say that the overall marketplace functions as an auction of a sort. From my article:

      The auction process we see in most markets is different from the one we observe at Sotheby’s, but the results are the same.

      The essential element driving the process is the freedom sellers have to charge the highest price for their products that they think the market will bear. With extraordinarily few exceptions, this is precisely what sellers in competitive markets always do.

      If sellers become aware that—for whatever reason—supplies of the product they sell will soon be in short supply relative to demand, they will immediately raise their prices. They understand that, given the anticipated shortage, many people will be willing to pay a higher price for the product rather than do without.

      How high will the price ultimately go? That is what the auctioning process ultimately determines.

      A seller starts off by trying to guess the highest price she can charge while still being able to sell all of her products. If her guess is too high, product will remain on the shelf unpurchased.

      But if instead she finds her products are ‘flying off the shelf’ at the original price she set, she will increase her prices further to see what happens. If they are still flying off the shelf, she will proceed to raise them again.

      The price she charges will continue to go up until sales slow to a trickle and product remains on her shelves unpurchased. When this happens, she will then lower her price just enough to move the product off the shelf, but no lower. Equilibrium—for the moment—is achieved.

      In this Markets’ Method of auction, sellers try to guess the winning high bid in advance, ask for it up front, and then allow potential buyers some time to respond. Potential buyers only participate in the auction if they believe they can afford the winning high bid that the seller/auctioneer has set.

      In a free-market economy, prices are always going to go as high as they can possibly go, limited only by the quantity of $$ that potential buyers have available to them. That is why the scarcest luxuries always end up in the hands of those who possess the most disposable dollars because sellers are always going to do their best to price everyone else out of the market.

      It is a process that is every bit as effective as a Sotheby’s auction at delivering the scarcest goods & services generated by the economy to the highest bidders.

      I found it quite amusing, actually, to see my analysis described as a departure from reality, since my central argument emphasizes the importance of the REAL Economy above all other considerations.

      If we completely eliminate any thought of money for a moment and focus only on the physical economic behavior of human beings, we notice that there are substantial numbers of individuals and firms who have decided to produce something that they can “bring to market” that they are willing to trade for other things of value that others have brought to market.

      One feature of this trading behavior of humans which stands out is the fact that there are often more interested buyers/traders around than there are things to buy/trade for. Not enough for everyone.

      If a seller decides he will try to get the best price he can for what he has to offer—which is common—then he might decide to sell it at a particular time to the highest bidder of those who are aware of the sale (a Sotheby’s auction) or—if he knows he is going to bring more of these things to market quite regularly in the future—he might well decide to just set a price that he thinks will move his fluctuating inventory over the coming days/weeks/etc.

      Whichever method he chooses, over time he will be selling his limited supplies of product for he highest “price” he can get, which is the same result we would expect to see from a Sotheby’s auction.

      Considered from a global perspective, what happens in the real economy on a daily basis is that a “totality of product” is brought to market. Of this total product, we see varying grades of quality in varying quantities, all of which is auctioned to the highest bidders.

      Because my focus is on The REAL Economy, I can see that living standards have improved for people on the lower half of the economic ladder over the past couple of centuries, not because they have more dollars/pounds/euros to spend, but because increasing quantities of real stuff is being brought to market that average folks find useful/desirable.

      I understand that the only way to really improve the welfare of the bottom half of the economic ladder is by A) reducing the scarcity they face with respect to things that are currently too expensive for them, and B) significantly improving their economic security, which is a topic I expound on at the end of my rather lengthy essay on the topic.

      The fact that prices vary in supermarkets from day to day, hour to hour, does not invalidate the “auction” conceptualization, but is actually a testament to it. The variance of prices over time IS the auction process (Market’s Method) taking place, achieving the same end over time that all auctions generate by design.

      Market manipulations by clever deceivers are a very real problem that I say should be dealt with harshly, in the interest of fairness and economic justice. But in no way do these “market failures” invalidate the plainly observable fact that the total product that is brought to market is auctioned off to the highest bidders.

      It seems we have here a case of economic theorizing divorced from real world economics as it impacts the lives of most family wage earners struggling to get by in a world largely consisting of large corporations that are able to manipulate the market.

      That would be a misinterpretation of what my analysis ultimately proposes, Rob. Don’t make the mistake of assuming that because I underscore the fact that markets auction scarce desirables to the highest bidders, I must therefore be saying, “…so don’t do anything because markets are behaving just as the should…”. Quite the contrary…

      My proposal is that an enlightened government could use this fundamental truth re: markets to provide those on the bottom half of the economic ladder with the ideal economy they could ever hope for. I’m talking about a true optimization of their welfare, their purchasing power, their material well-being, and topped off by real economic security.

      An actual Utopian Ideal, but far more realistically envisioned than previous attempts, I would argue.

      I think you would have to agree that if my proposals were implemented and they actually achieved the ambitious goals I’ve stated, they would in fact take away the power that corporations have had to manipulate their markets at the expense of their employees, which you have rightfully indicted.

      • Rob Reno
        January 28, 2018 at 9:30 pm

        I think one of the problems I’m having with the use of mainstream economic language is it frequently starts from general theory and moves to purportedly describing reality, whereas my journey into economics was first from a pragmatic business and entrepreneurial perspective which then evolved into an almost investigative journalist endeavor only afterward studying economics to see how the theory either dealt with or ignored what was found through such research.

        At the time I had not begun reading in economics; but I had encountered experientially the Fissured Workplace Weil describes and the dual economy as described by Peter Temin (http://a.co/1Dsdsl6) through our (my spouse and I) observations internally at a large technology company. This entire adventure in disentangling a global supply chain really began when some call center jockey in India working for a “recruiting process outsourcing” (RPO) company, which is really nothing but an outbound call center branded as a “talent sourcer” called me up (he was one of thousands cold calling and spamming my inbox) and proceeded to abuse my professional references and quote ridiculously low-ball rates for what was clearly very senior roles and skills.

        As it turned out this fellow was hired by a “third party vendor” staffing company hired by the technology company my spouse worked for and she was managing this vendor, which gave us a very unique vantage point from which to view the landscape. She was unaware of much of the supply chain that I was using technology – digital forensics, reverse deception, honey pots, big data, Azure SaaS platform, machine learning, etc. – to disarticulate from the source (aka lead company) all the way back to the call center jockey running the same script a hundred other RPOs with thousands of other young men and women in India trained to call up highly educated and highly skilled workers around the world and lie to them all in an effort to feed them into a transnational network of high-tech body-shops fulfilling the needs of lead companies taking on the model of “shedding” employees so they could focus on their core competency.

        Mind you I knew nothing of such terminology or economic jargon at the time. I was just pissed off and wanted to get to the bottom of what I knew was somehow a scam. I didn’t even know how big or widespread it was at first. I didn’t learn that until I read Weil’s work, and then it all began to make sense. This entire global supply chain – actually a global valueless chain – was designed, despite the economic theoretical justifications, for one purpose: to increase profits and decrease costs by shedding employees into a managed vendor “market” created by the large and powerful technology companies in which they would compete for providing a flexible contingent workforce based upon “price.” The third party vendors are competing based on lowest cost (price) and the powerful lead technology company is deciding who the winners are and who the losers are and the actual family wage earner is simply a pawn in this manipulative and deceptive (and largely hidden) supply chain. I find it very difficult to model this situation as an auction the way you describe the “auction market.”

        They used technological smoke screens to hide this global valueless chain, hence I needed to use technology to reverse engineer and disarticulate the supply chain to make visible what was hidden – massive manipulation and deception targeting high technology workers, and now, after reading Weil, all levels of workers, whether blue-collar or white-collar, whether highly educated or not. The deeper I went the wider the net spread; from lead companies to middle-tier-vendors to RPOs, from hugely profitable “staffing” companies with names like HCL , Infosys, Tata, Wipro, and hundreds of other fly-by-night shell companies operating in the US. My research led to a history of lobbyists for these firms trying to influence politicians who tried to introduce legislation that would bring some transparency to this cloaked supply chain (aka CAN-SPAM) or reign in the more egregious abuses of the H-1B visa system.

        Quite literally, the real economy is what you have left when you think of the entire economic universe and then completely remove money from the picture. The REAL Economy is the productive behavior of people; it is the actual goods and services that people produce and trade and consume on a daily basis. (James Kroeger blog)

        This makes a lot of sense to me. So does your idea that bad actors should be subject to government intervention, which in a perfect world would happen. But I see no possibility of that happening in the current US political context; rather I see it only getting worse. You may call that pessimism, but I believe it is critical realism grounded in sound problem solving.

        My one and only reason for studying economics is to separate the wheat from the chaff and find what within economic theory is useful for creating innovated business models that address real world problems for working class families. I no longer believe we can afford to wait for either economists or government (or both in collusion) to fix the problem.

        In my experience the art of problem solving requires the mastery of dependable techniques for solving common problems. Step one is to locate the difficulty, to isolate the problem, and frankly to recognize its nature and gravity.

        The are many things that get in the way of solving life’s problems. Our fears can blind so we refuse to recognize the core of the problem. Or facing the problem entails giving up long-cherished and deep-seated prejudices and mental frameworks we have become accustomed to. We all at one time or another prefer to cling to the old illusions of safety and to the long-cherished false feelings of security.

        In the end, only a brave person is willing honestly to admit, and fearlessly to face, what a sincere and logical mind discovers. While there is no such thing as a bias free mind, we can at least try to prevent our prejudices from interfering and maintain some degree of disinterested survey of the actual factors that go to make up the problem presenting itself for solution.

        Speaking for myself, at times trying to understand pragmatically real world economic practice and then relate them to economic theory reveals a perplexing and confusing maze of living on the ground practice and a plethora of theoretical models. They are at times, it seems, completely divorced and unconnected.

        I think when models, including the auction model, which is a framework or a heuristic for formulating hypotheses are generalized uncritically or to generally — reified into totalizing conceptual frameworks ignoring local context and specific markets — they lose their connection with larger reality. I think the reification of models like this lead economists to lose sight into the real behaviors of various actors and the real structures of power-politics and manipulation and deception influencing (distorting?) a given specific market, which are always local and contextual, and involve real human beings in relation to both corporate and government actors.

        That is the only point I meant to make about missing reality, for on many of your points I think we agree completely. But try as I might I am just not able to sincerely see how the auction model holds generally across all domains.

        We both agree that bad actors require government interaction. I just don’t see that as a near-term pragmatic solution here in the US given the current political turmoil. I do recognize it is needed though and don’t dismiss that given a healthy body politic this would be generally recognized. But these are not normal times ;-)

        A while back over beers I found myself discussing AI with some bright aspiring graduate students discussing whether it will take over the world and destroy humanity or lead to the next technological revolution and lead to another level of productivity and growth. Mind you, none of them had actually worked in the industry so much of the conversation was academic in nature, although they might take offense at such a characterization. They seemed to be settling into two camps; the techno-optimists and the techno-pessimists.

        After having used technology to disarticulate a rather, in my view, ugly supply chain that used technology in what I felt was a malicious way, I found myself concluding that the better approach was to be a techno-realist: i.e., a critical realist.

      • Rob Reno
        January 29, 2018 at 1:29 am

        Rob. Don’t make the mistake of assuming that because I underscore the fact that markets auction scarce desirables to the highest bidders, I must therefore be saying, “…so don’t do anything because markets are behaving just as the should…”. Quite the contrary…

        Most certainly, I hear you. The question then becomes if not government (now, not later in theoretical time), than who? I believe social benefit and for-profit+social benefit, co-op (shared capitalism, see Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options (National Bureau of Economic Research Conference Report) by Douglas L. Kruse et al. (here)

        Foster a culture of good actors acting locally.

      • January 29, 2018 at 7:46 pm

        …to increase profits and decrease costs by shedding employees into a managed vendor “market” created by the large and powerful technology companies in which they would compete for providing a flexible contingent workforce based upon “price.”

        And:

        …discussing AI …whether it will take over the world and destroy humanity or lead to the next technological revolution and lead to another level of productivity and growth.

        As I’m sure you are aware, these topics are related in that they both worry about the consequences of actions taken by major market players to reduce their costs (by finding someone, or a machine, that will perform the same tasks at a reduced cost).

        It is not uncommon for people to blame “the marketplace” for these negative developments because it seems as though the marketplace necessarily allows them to occur as a result of market players following their instinctive motivations.

        But I am here to tell you that—with a deliberate intervention from government—a marketplace in which firms are fully exploiting “comparative advantage” opportunities to lower their costs can be “rigged” by government in a way that will ensure that only good consequences—for the working class—will prevail.

        You see, the classical economists were correct when they insisted that improvements in productive efficiency—which have historically eliminated jobs—are necessary if we want to continually improve living standards for those who work for a living.

        People who were no longer needed on the farm to bring in a harvest became available to build cars and planes and communications networks.

        But the method that Raw Capitalism prefers—simply releasing un-needed employees to an unknown fate in the economic wilderness—is unacceptable…and unnecessary.

        No one would be complaining about outsourcing and immigration and job-killing technology advancement IF national governments would constantly increase their spending on real economic investments (infrastructure, human capital) up to the point when the government’s demand for labour has (either directly or indirectly) created a sustained Labour Shortage, where significantly more jobs are available than there are people to fill them.

        In such an environment, natural “market forces” would put constant upward pressure on the wages that firms must pay, obviating the need for minimum wage laws and other types of compensatory legislation.

        In such a Labour Market, good-paying jobs would continue to be eliminated by advances in technology, etc. but it wouldn’t matter because other jobs would be available, offered by a variety of employers who are all promising attractive compensation packages as they try to steal needed employees from other firms.

        This is why, from my POV, there is nothing wrong with the labour market that a substantial increase in demand can’t fix.

        So my point here, ultimately, is that we do not have to choose between Free Trade and Fairness to Workers; we can have both.

      • Rob Reno
        February 15, 2018 at 10:29 pm

        But I am here to tell you that—with a deliberate intervention from government—a marketplace in which firms are fully exploiting “comparative advantage” opportunities to lower their costs can be “rigged” by government in a way that will ensure that only good consequences—for the working class—will prevail.

        That is, I believe James, what they call a mixed economy. I don’t see that happening anytime soon under right-wing populism led by Trumpism, do you?

      • February 16, 2018 at 2:46 am

        But I am here to tell you that—with a deliberate intervention from government—a marketplace in which firms are fully exploiting “comparative advantage” opportunities to lower their costs can be “rigged” by government in a way that will ensure that only good consequences—for the working class—will prevail.

        That is, I believe James, what they call a mixed economy. I don’t see that happening anytime soon under right-wing populism led by Trumpism, do you?

        Under right-wing populism, Rob? That is a really interesting context I have never considered before.

        I suppose it is at least theoretically possible that a right-wing populist could end up enacting the kind of major increase in government spending that would end up creating a labor shortage that would benefit workers.

        We may all be witnesses to precisely that kind of experiment over the next couple of years, given the big boost in government spending the Republican Congress is passing at a time when unemployment levels are already at cyclical lows.

        It is extremely doubtful, however, that the FIRE sector of the economy, including the FED, would the labor shortage to be sustained indefinitely, once the [desirable] evidence of inflation in wages begins to show up in the statistics.

        The next 2-3 years should be very interesting, indeed…

      • Rob Reno
        February 16, 2018 at 3:10 am

        But I am here to tell you that—with a deliberate intervention from government—a marketplace in which firms are fully exploiting “comparative advantage” opportunities to lower their costs can be “rigged” by government in a way that will ensure that only good consequences—for the working class—will prevail. ~ James Kroeger

        If you see Trumpism doing this then I don’t know what you are seeing or how to interpret what you are saying. Unemployment measures do not in my view say anything about the quality of the jobs. College graduates in STEM forced to work as baristas is not my definition of a healthy economy. Privatizing infrastructure is a sham. Time will tell.

      • February 17, 2018 at 12:32 am

        If you see Trumpism doing this then I don’t know what you are seeing or how to interpret what you are saying. Unemployment measures do not in my view say anything about the quality of the jobs. College graduates in STEM forced to work as baristas is not my definition of a healthy economy. Privatizing infrastructure is a sham.

        We are not in disagreement. Part of the ‘rigging’ of the economy by government (that is necessary to produce an economy that will ensure only good consequences for workers) would include a monetary policy that would indefinitely maintain the labor shortage. That is not something that is going to happen under Trumpism. The FED will throw the economy into a recession as they are determined to keep the inflation that affects the working class at very low levels while allowing the inflation that affects the very wealthy to occur at very high levels.

        If this is a given—and I think it unquestionably is the intention of the major players—than the ‘ideal solution’ I am proposing will never become a reality under a right-wing populist regime.

        To be able to see what I am talking about when I say those who work for a living will be better off if firm managers continue to lower their labor costs in a maintained full-employment economy, you need to focus on what is happening in the REAL Economy when these costs are lowered.

        If we still needed 95% of our population employed on farms to produce the food we need, we would not have enough labor available to produce the many other things we now consume that are part of our modern standard of living: transportation and other infrastructure advancements, the Internet, etc., etc.

        That is the basic benefit generated by labor-saving technological advances: time, to produce other things of value. And then, ultimately, a growing amount of leisure time will be afforded to the ‘average’ worker, as well.

        The problem has always been how to get to there from here without putting the entire sacrifice that may be required on the working class, alone. My point, if unemployment—or rather anything other than a chronic labor shortage—can be avoided while this is going on, then the trauma of losing your good-paying job will be minimized.

        Your labor will still be valued by potential employers who will be more than happy to offer you a ‘living wage’ and you will still have an opportunity to re-qualify yourself for other positions that happen be be in particularly strong demand.

        If you simply look at what is happening in the real economy over time, more and more actual real ‘stuff’ is being produced (e.g. smart phones) that is improving the lifestyles of the working class, none of which would have been produced if the labor required to produce them had not been ‘freed up’ by labor-saving advances in previous years/decades.

        If we can succeed in optimizing the amount of desirable stuff that the economy is capable of producing (including a clean environment), then it is not possible for us to do any better.

        Now, I am not a big cheerleader for technological advances because that is one variable that is not being neglected at all by our soul-less execrable capitalist system. Insufficient investment in tech advances is not The Problem.

        The Problem is how to optimize the welfare of the working class while these technological advances are being exploited…

  9. Craig
    January 27, 2018 at 11:45 pm

    Everyone here is assuming any increase in purchasing power MUST come from employment which would result in a consequent increase in costs and so prices by enterprise. However, if it came from a monetary authority other than Private banks, was a gift and that gifting was peculiarly and strategically implemented at the terminal summation of all costs and so total prices in the economy…..hmmmm, paradigm change and its numerous “knock on” benefits for virtually all agents.

    • January 28, 2018 at 7:29 pm

      One of the things I think you’re missing, Craig, is the fact that a household’s purchasing power is not automatically increased if/when it acquires a certain quantity of money.

      It may, but it may not. It depends on if the increase in possessed money ends up improving that household’s ranking within the hierarchy of all household’s disposable dollars/pounds/euros.

      This is because purchasing power in market economies is not determined by how much money you have; it is determined by how much money you have compared to everyone else.

      See my comment above which begins, “Hmm…” for an elaboration of this very important point.

      • Craig
        January 28, 2018 at 9:24 pm

        Purchasing power is actually determined at the point of retail sale….for everyone. Why? Because that is where all costs and so prices are terminally summed (except perhaps in a few basically non-relevant instances). This is the single stable datum of the micro-economy and if the monetary policy of a 50% discount/rebate were implemented at that point…everyone’s purchasing power would be doubled….it’s that simple and elegant….like all paradigm changes and their very expression are. Paradigms are the singular stable datums within the flux of complexity.

      • January 28, 2018 at 10:18 pm

        This is the single stable datum of the micro-economy and if the monetary policy of a 50% discount/rebate were implemented at that point…everyone’s purchasing power would be doubled….it’s that simple and elegant…

        Au contraire…

        If, for example, a country’s monetary policy was to simply “print up” and distribute a doubling of every income earner’s gross salary, do you believe that such an initiative would double every earner’s purchasing power?

        In an economy that is already experiencing full-employment, such an initiative would not increase anyone’s purchasing power. This, because there would be no increase in the actual goods and services that people would be able to buy.

        Not being able to buy any more real stuff (because the economy is already producing as much as it can) means no improvement in actual purchasing power is possible, no matter how many dollars/pounds/euros you throw at them.

        Now if a single individual were to see her disposable income doubled by a gift from the government, then yes, her actual purchasing power would increase dramatically because her ranking within the hierarchy of all disposable incomes would have increased dramatically.

        She would then be able to outbid the many who did not get the same income boost that she got, for some of the luxury items she wants to buy, but could not afford previously.

        But if everyone gets the same gift, then none of them is going to see an improvement in their purchasing power relative to each other. It’s really a very important, albeit subtle, point that you appear not to be fully aware of.

        I haven’t read all of your arguments, but I get the impression that you have mostly “explained away” the very real phenomenon of inflation, and do not acknowledge the very real effects it has on actual purchasing power in economies that use fiat money.

        Something to think about…

      • Craig
        January 29, 2018 at 1:43 am

        The policy I described is not a doubling of individual income/money but rather, due to it being a discount of 50% at retail sale which again is the terminal summing of costs/prices as well as the terminal end of the economic process where production becomes consumption it would automatically double every consumer’s purchasing power….not their nominal amount of money. You are missing the significance of the reciprocality of the discount/rebate as well as the place and time of the policy’s implementation. The above policy would do what most consider impossible, that is integrating price deflation painlessly and beneficially into profit making economic systems. It is actually an integration of Keynesian and Austrian economic intentions. Curiously I’ve presented this policy and that fact many times to both Keynesians and Austrians and virtually none of them seems to get it. They miss/refuse to look at the where and why of the policy’s implementation. That’s the power of orthodoxy to blind and to prevent one from even looking.

        Paradigms are incredibly powerful, but there is still no end to history or to the other intentionedness/anti-social intentions of some so a new paradigm still requires real time regulation as well, but once people begin to see the obvious benefits of the new paradigm there’s no going back to the old. That has always been the case historically with new paradigms.

        Sorry, I don’t actually see any significance in “purchasing power relative to each other” except perhaps in the case of the distribution of an equal universal dividend to everyone 18 years of age and older which is another policy that aligns with the new paradigm of monetary gifting. In that case a very wealthy individual’s purchasing power would not be increased nearly as much as a middle class individual’s income. But I don’t consider that significant either. It’s like the line from Max Ehrmann’s Desiderata: “Do not compare yourself to others you may become vain or bitter.”

      • Rob Reno
        January 29, 2018 at 3:10 am

        James I think you would really enjoy this book. Science and the Economic Crisis: Impact on Science, Lessons from Science by Francesco Sylos Labini (link). I’d sure like to know what you think about it.

  10. January 28, 2018 at 9:10 pm

    Rob’s quotes from Weil put the problem of the slave supermarket starkly, albeit not emphasising enought the dishonesty which cannot exist if one accepts Ken’s argument (repeated ad nauseam), that truth does not exist because reality just amounts to different minds making up different fictitious stories. He says “This discussion is in my view pointless”; but his isn’t? As Hazlitt says above, “The only vice that cannot be forgiven is hypocrisy”. Stop this, Ken. You’ve let Humes’s metaphysical garbage in, and for all you eloquence this is garbage coming out.

    The idle and thoughtless rich are so obvious and untouchable as they jet around the world that the point of sharing our feelings about them is more of a bonding exercise for us, like mourners at the passing of the Keynesian golden age. As I see it, nothing is likely to change unless we can give them something better to think about than their businesses and partying. For want of a better quote here I’m reading into this from Rob a human-scale perspective on what economic theorising is all about:

    “It seems we have here a case of economic theorizing divorced from real world economics as it impacts the lives of most family wage earners struggling to get by in a world largely consisting of large corporations that are able to manipulate the market.”

    In my formative years, I was introduced to economics by my bike being stolen so I had to acquire another by doing a paper-round for a pittance (morning, evening and Sunday mornings). Drawn by the lure of the sea and the challenges of getting up the hills I could see in the distance, I became a long-distance cyclist and spent long hours with nothing to occupy my mind except reflect on the world I saw about me. And girls, of course: Chesterton captured my mood in a lovely line: “Ladies like landscapes, very fair and far”. When I got to the hills, of course, the perspective had changed; but if I was not cycling through village streets I might be cycling up valleys in which water was flowing down.

    Still an explorer in my fifties, my wife and I went to an Australian church in which they were saying prayers and and having a collection for farmers who hadn’t had rain for seven years. I was very moved just now by a Edward Ross telling a similar story (ironically on Utopia), with the outcome being banks foreclosing on assets only the wealthy could afford to invest in. When such farms were set up, rivers ran inland down the hills and economists advised their use for irrigation; but the rivers dried up. What sort of model should they be thinking about now? Kenneth Boulding used a global model of Spaceship Earth to emphasise that our living on it uses resources which need to be replaced. With that perspective family wage-earners can’t be seen, but that doesn’t mean replanting trees etc is irrelevant. My model is relevant to the understanding God, but here it applies to the water not running down the river any more.
    Water has three forms: ice, liquid and vapour. For the water to run down thie river the sun has to energise a large enough area of sea for the water to form clouds of vapour, which have to rise so high that they turn into ice which, falling on the hills, runs back down the river to the sea, or falling as water on trees, is cooked by shade and the energy absorbtion of photosynthesis.

    Economists need to accept that the hydrological cycle is not just a story in Ken’s or my mind, but physical conditions creating difficulties for flat lands with no trees. To become and remain habitable the requisite conditions will have to be created artificiallywhere they don’t exist. As for how to finance this, Craig is saying more or less the same as me, but there is no point in financing it if we don’t do it.

    • Rob Reno
      January 29, 2018 at 12:43 am

      The idle and thoughtless rich are so obvious and untouchable as they jet around the world that the point of sharing our feelings about them is more of a bonding exercise for us … In my formative years, I was introduced to economics by my bike being stolen so I had to acquire another by doing a paper-round for a pittance (morning, evening and Sunday mornings). Drawn by the lure of the sea and the challenges of getting up the hills I could see in the distance, I became a long-distance cyclist and spent long hours with nothing to occupy my mind except reflect on the world I saw about me. And girls, of course: Chesterton captured my mood in a lovely line: “Ladies like landscapes, very fair and far”

      Dave, you’re a poet! You brought laughter and a smile to my heart ;-)

      Still an explorer in my fifties, my wife and I went to an Australian church in which they were saying prayers and and having a collection for farmers who hadn’t had rain for seven years. I was very moved just now by a Edward Ross telling a similar story (ironically on Utopia), with the outcome being banks foreclosing on assets only the wealthy could afford to invest in.

      Just like they should have made the creditors take a bath rather than economically destroying the family wage earning class repeated ad nauseam. I have a number of business case studies of small and larger firms that put human values, frequently rooted in religious beliefs but expressed as social service, putting people before profits. I love the Spaceship Earth analogy (not sure what to call it) that “emphasis that our living on it uses resources which need to be replaced.” I think we need to reinvent capitalism that is not based on infinite “growthism,” if that is even a word ;-) Heck, family wage earners are riding on that Spaceship Earth, so since they are along for the ride I bet many will be into keeping their spaceship clean and sustainably running!

      My model is relevant to the understanding God, but here it applies to the water not running down the river any more. Water has three forms: ice, liquid and vapor. For the water to run down the river the sun has to energize a large enough area of sea for the water to form clouds of vapor, which have to rise so high that they turn into ice which, falling on the hills, runs back down the river to the sea, or falling as water on trees, is cooked by shade and the energy absorption of photosynthesis.

      Tell me more, including the “understanding God” part. In my own philosophy of living I view philosophy (the love of wisdom) to be the mediator between religion and science. I have hesitated to share my religious beliefs herein as I thought they might take us to far afield of the topic, but I am coming to the belief that we cannot ignore them either.

      Economists need to accept that the hydrological cycle is not just a story in Ken’s or my mind, but physical conditions creating difficulties for flat lands with no trees. To become and remain habitable the requisite conditions will have to be created artificially where they don’t exist. As for how to finance this, Craig is saying more or less the same as me, but there is no point in financing it if we don’t do it.

      You comments makes me think of some things I read in the WEA book Trumponomics:

      Naomi Oreskes and Erik M. Conway, in their 2010 book, Merchants of Doubt, do an excellent job of describing how the public was given a false picture of science, especially that of climate change. The petrochemical industry has used bad science and clever marketing to cast doubt on the need for urgent action against climate change. Many of these writers and spokespeople were ready and willing to fight for the market, against government, because they felt they were upholding capitalism in the Cold War. Industry continues to benefit from an anti-science, anti-government atmosphere fanning hatred of all regulations – even those intended to protect the environment and provide safety nets for people who are suffering in a rapidly changing economy…. Humanity’s enemies today are the giant corporations that profit in the short term from business as usual while diverting attention from the huge difficulties that face the world – most of all, climate change, inequality, discrimination, and corruption of democracy.
      (PDF version, p.435-436)

      • January 29, 2018 at 12:56 pm

        Rob, my ‘God’ reference was of course to the Christian doctrines of the Trinity and Transubstantiation, which the transformations in the water cycle show are not conceptual nonsense. Bhaskar’s ‘Critical Realist’ philosophy of science likewise has three levels. Philosophy for me is about seeing, evaluating and being willing to act on possibilities, observation revealing that happiness is found not by pursuing it but by learning to be grateful even for small mercies. Decoding the latin word ‘Religion’. it amounts to commitment to God by way of thankgiving for his dying that we might live. Defending pluralism in science, critical realist Tony Lawson [in ‘Economics and Reality’ and ‘Reorienting Economics’] says that if the only tool you have is a hammer, every problem looks like a nail. Did you have the wisdom to take time to watch the long youtube I recommended recently? See

      • January 29, 2018 at 12:58 pm

        Wonderful! But I’ve no idea how the picture got in!

      • January 29, 2018 at 4:51 pm

        When it comes to religion, I have more questions than I have answers, but I have arrived at a few of those, as well.

        …the Christian doctrines of the Trinity and Transubstantiation, which the transformations in the water cycle show are not conceptual nonsense.

        Metaphorically conceivable, yes…but…

        The concept/doctrine of a Trinitarian God has always been a difficult one for me, mostly because I cannot reconcile it with the fact that Jesus in the NT repeatedly refers to his Father as someone separate from himself.

        Why would he refer to his other form as an entity distinct from himself—as if they were separate beings—if it is not actually true? To intentionally confuse the listener?

        And here’s the other part of the problem:

        From our perspective two thousand years later, it is now quite obvious that the authors of the New Testament accounts were wrong about something they believed Jesus was telling them.

        From Matthew 24: “Truly I tell you, this generation will not pass away until all these things have taken place.” (The end of the world and his return.)

        It is not just this statement but all of the rest of the New Testament accounts taken together which tell us that Jesus’ first hand witnesses to his spoken words were mistaken in what they thought he was telling them about the near future.

        Specifically, they literally believed that the end of the world was coming in their lifetimes, in their generation, which is why they wrote those words down.

        Now we can say that Jesus—as God—intentionally chose words that would be misinterpreted by his disciples, since it proved to be a major catalyst to the growth of Christianity over the next thousand years, the belief that the was soon coming to an end, and I’m okay with that.

        But we are still confronted with the fact that they were wrong about something they believed Jesus was telling them, and it’s not a conclusion that anyone can rationally dispute.

        So here’s the thing: If they were wrong about that, then perhaps the early Church fathers who created and advanced the Trinity doctrine were also wrong in their interpretations of Jesus’ words as quoted in the gospels with respect to his ontological constitution.

        What makes this a more compelling possibility is realizing that it actually makes more sense to believe that Jesus was a divine creation of God, an immortal being quite separate from himself, whom he favored as a “son” because this creation was given special transcendental wisdom (of God) and powers that normal humans do not have.

        Such a conceptualization of Jesus would eliminate the problem of Jesus in the Bible referring to God as someone separate from himself, and would make the entire account more plausible to those who are in a habit of entertaining their doubts.

        But wouldn’t such an alternative conceptualization of Jesus’ ontology ultimately threaten the perceived legitimacy of the Christian Church?

        Well, I suppose one could argue if the modern Church were to admit that its founding fathers had made a mistake about something as important as Jesus’ ontology, it could put their entire account of things in doubt.

        The way around this, of course, is to argue that yes, the early Church fathers made a mistake about an important matter of faith, but they were in fact divinely inspired to make such a mistake because it served God’s greater purposes.

        Significantly, that happens to be the only way the modern Church can explain the mistake—evident in the scriptures—that Matthew, Mark, Luke, and John made regarding the time when the world would come to an end.

        That is, that they were divinely inspired to tell everyone that the end was coming soon because it generated a sense of urgency among the earliest “believers” and that was key to the rapid spread of the new religion.

        I could go on, of course, but I’ll stop here…

      • January 29, 2018 at 5:35 pm

        James, you really do go on, but perhaps I’m remembering telling someone else about how the substance of a word is its meaning and the same meaning can be expressed in different languages. For quickness I’ll quote from what I wrote then:

        “… As suggested above, ‘transubstantiation’ amounts to using another language when the ‘substance’ is words. Familiar theology struggles to articulate that in the case of the Trinity and the Eucharist, and schools no longer teach the old linguistic Trivium of Grammar, Dialectic and Rhetoric which was the prerequisite for understanding a Quadrivium of subjects. … The history of this new ‘theorem’ , which is not about but applies to the Eucharist as Word, is a sort of ‘proof of its proof’, in the sense of giving it some credibility. It arose directly out of my work with the revolutionary computer language Algol68, which married the functional logic of Frege to the address-functional logic of computers to the grammar which Chomsky found explained how not yet ‘programmed’ children could learn any language, turning “computing” with Shannon’s Boolean circuit logic into general purpose data processing. Behind Frege’s logic was the family tree logic of Aristotle, the algebraic logic of Boole (as realised in C E Shannon’s electric circuit logic) and the numerical mechanical computer of Babbage. What was new in Frege’s “sense and reference” logic was that his ‘sense’ of types of thing distinguished things from references to them (e.g. names and addresses), including references to references to functions (i.e. what they do). What was found experimentally is captured in an Algol68 User’s Guide (effectively the third edition): “A whole class of applications exploits triple references, but quadruple references never seem to be required in practice”. Actually this follows logically: the type of object which is an address of the address of an address is still the address of an address: if a1 <- a2 <- a3 then a3 points to a1".

      • Rob Reno
        January 29, 2018 at 7:02 pm

        Dave, I have watched that lecture/seminar at length, several times, and love it. It is very informative. Although I do confess, there are times I simply cannot keep up with the vast resources shared herein.

      • Rob Reno
        January 29, 2018 at 8:22 pm

        Thanks Dave and James. Appreciate your sharing.

        When it comes to religion, I have more questions than I have answers, but I have arrived at a few of those, as well. Metaphorically conceivable, yes…but… The concept/doctrine of a Trinitarian God has always been a difficult one for me, mostly because I cannot reconcile it with the fact that Jesus in the NT repeatedly refers to his Father as someone separate from himself.

        Don’t we all ;-)

        I asked the same questions, and prior to the discovery of an obscure text and a personal experience, I asked the exact same questions James and also did not receive satisfactory answers.

        I am not a Christian. But I did experientially encounter the Light of Life, or as the Quran so beautifully describes it,

        Allah is the Light
        Of the heavens and the earth.
        The parable of His Light
        Is as if there were a Niche
        And within it a Lamp:
        The Lamp enclosed in Glass;
        The glass as it were
        A brilliant star:
        Lit from a blessed Tree,
        An Olive, neither of the East
        Nor of the West,
        Whose Oil is well-nigh
        Luminous,
        Though fire scare touched it:
        Light upon Light!

        (Surah 24:35)

        This experience came during meditation upon the teachings of Jesus I discovered in an obscure religious text called The Urantia Book. It was this text that launched me into a life-long passion and thirst for knowledge in the study of the history and philosophy of religion and the history and philosophy of science, etc. Its essential theme is that there is a difference between the teachings about Jesus and the teachings of Jesus.

        Over decades of study within the field of religion I have seen this theme reflected in other scholars, where the discern a difference between the gospel of Jesus exemplified in the earliest records of his life and teachings, opposed to the gospel about Jesus that grew up around his life and teachings as the early followers emerged from their beginnings as Jewish cult with the larger framework of ancient Christian church institutions.

        The rash title of this book, The Gospel of Jesus, does not have in view the gospel about Jesus that Paul preached, which, following him, the Christian church down through the ages has believed as the one and only gospel. Rather, the title refers to the gospel that was Jesus’ own message in Galilee during a very brief period, probably no more than a year, before his crucifixion. These two gospels are not the same, and, what is even worse, Jesus’ own gospel has been lost from sight, hidden behind the gospel truth.

        [The goal is to find] “… the core, what Jesus considered his own gospel.” (Robinson 2005: 1)

        (….) Our real problem with Jesus is not the vast amount of detail we will never know, for most of that we do not need to know. The problem is that we have ascribed to him a different gospel from what he himself envisaged! We have put him on a pedestal and worshiped him, rather than walking in his footsteps. Put somewhat differently: we must work our way back through the church’s own familiar gospel and its domestication of the gospel of Jesus. Only then do we strike upon what he really had to say, which was a brittle, upsetting, comforting, challenging gospel — one the present book seeks to lay bare. (Robinson 2005: 2)

        (….) THE APOSTLES’ CREED

        The Apostles’ Creed, shared among almost all branches of Christianity, poses the problem clearly, if unintentionally. It presents Jesus as the central figure in the Trinity in heaven, rather than as the individual he was in Galilee. Listen Closely to the way the creed presents him. Before reporting that Jesus went to heaven, the creed only tells what was done for him:

        conceived by the Holy Ghost, born of the Virgin Mary

        and then what was done against him:

        suffered under Pontius Pilate, was crucified, dead, and buried

        But on his life between birth and death, Bethlehem and Golgotha, the creed is completely silent! Missing is what was said and done by Jesus, what Jesus himself actually had to say by way of gospel. (Robinson 2005: 2-3)

        I call this the Jesusonian way, or I am a follower of Jesus’ teachings – a disciple of the Jesusonian gospel. In this regard I’m less concerned about Christian theology (which I know well) than I am about the pragmatics of living a life of loving service to one’s fellows, of all religious and non-religious persuasions. I am not even concerned with convincing others to believe what I believe about Jesus. I believe that both Muslims and Christians, Jews and Buddhists, and even non-religious secularists who hold a high ethical and moral philosophy can unite on a vision of loving service to one another in making those social and political transformations that will be required to keep ourselves from trashing our planet or descending into another senseless world war.

      • Rob Reno
        January 29, 2018 at 8:36 pm

        What makes this a more compelling possibility is realizing that it actually makes more sense to believe that Jesus was a divine creation of God, an immortal being quite separate from himself, whom he favored as a “son” because this creation was given special transcendental wisdom (of God) and powers that normal humans do not have.

        But wouldn’t such an alternative conceptualization of Jesus’ ontology ultimately threaten the perceived legitimacy of the Christian Church?

        Not some; for this line of reasoning you are taking has existed within the Christian tradition itself. Your line of reasoning is exactly what The Urantia Book says about Jesus.

        You might really enjoy Robinson James:

        It may well seem to you that the gospel of Jesus did not include all that is high and holy in the Christian gospel as we know it. All those magnificent, transcendent, Christian beliefs seem absent from the original gospel of Jesus — his “gospel” may seem minimal by comparison with the gospel! Missing from his gospel are not only where he came from (“conceived by the Holy Spirit, born of the Virgin Mary”), but also what he came to do. Where, after all, is “the saving work of Christ”: dying for out sins, rising on the third day, appearing to the apostles resurrected from the dead? These are, after all, the gospel about Jesus, which you, understandably enough, believe and cherish. But if you really are committed to Jesus, then you should be committed to the gospel of Jesus, which is what I have written this book to try to help you see and understand: the “good news” Jesus offered people during his public ministry. (Robinson 2005: 225)

      • January 30, 2018 at 8:11 am

        And I was saying James was “going on”? Rob, in answer to Robinson James, “Actions speak louder than words”. And in answer to you, my understanding came from the beginning of St John’s Gospel, which the church has left as “a mystery” but I find makes perfect sense when one gets away from the physical understanding of “substance” to the Aristotelian one of meaning – as in “the substance of a message” – which shows up in Shannon’s work emerging as one decodes a message. To get away from our normal understanding of ‘words’ as mere sounds or symbols, imagine that Christ is acting in a stage play re-enacting the life of Christ. Okay, the person acting out the story is a human, but the life being re-enacted is the Divine one and the moral of the story is that Christ being human, it is possible for us to act out the same story in our own lives, i.e. feed the hungry and heal the sick and offer hope when we come across despair. The commitment, though, is not to Jesus as man but to the God he is the living Word of.

  11. Rob Reno
    January 29, 2018 at 5:19 am

    I have always liked what Robert Reich had to say (see Neflix’s Saving Capitalism).

    • January 29, 2018 at 5:38 am

      I like Reich. I used to work for him. So, I know he’s sincere in what he believes and says. But even Robert doesn’t have the courage to ask the fundamental question — why would any sane person want to save capitalism? It’s a disaster now and for most of its history. It has been successful only when tightly controlled by government regulation and taxes. Take those away, it quickly destroys both itself and the societies who allow it to operate unchecked. When I worked for Reich I was a socialist. I still believe democratic socialism is superior to capitalism in every area. But the “s” word has had more propaganda aimed at demonizing and killing it than the USSR and the USA aimed at one another during the Cold War.

      • Rob Reno
        January 29, 2018 at 7:03 am

        Funny, you don’t reason like him ;-) And of course you know better than him. Consummately full of yourself aren’t you Ken?

      • January 29, 2018 at 7:15 am

        Proud to say I do not “reason” like Robert. He and I disagree about many things. Including his support for Clinton in the 2016 election. But at times our goals are consistent. Right now, I’m working with some Bernie Sanders supporters rounding up money and planning for mid-terms. I remain a socialist. Robert continues to contend that capitalism should be saved. Keynes was wrong on this. So is Robert.

      • January 29, 2018 at 11:15 am

        Ken, I have to agree with you that Keynes was wrong on saving capitalism. Compromise is understandable, but it leaves the back door open for trouble to sneak in again.

        I’m glad I made Rob laugh! What made me laugh is a typo I just discovered. Probably not the spell checker but ‘k’ being next to ‘l’ on the QWERTY keyboard. Rain not cooled by shade but cooked?

      • January 29, 2018 at 11:39 am

        Dave, I’m amazed by the great emphasis of economists since the middle of the 19th century on money and its life among humans. Rather than what I believe is a proper focus for economists – investigating and making practical recommendations on how humans live a satisfying, useful, and socially beneficial life. One focused on cooperation and mutual benefit. Economists have done a wonderful job of leading the great portion of humanity down the wrong path. That includes Keynes, unfortunately. I wonder how he made such an error?

      • Craig
        January 29, 2018 at 4:36 pm

        Ken, Dave
        You’re quiet correct that capitalism is not the answer, but of course neither is socialism. Why not integrate the two to the point where they become Profit Making Direct Distributism? Thirdness has always been the signature of Wisdom and Oneness the signature of Grace. In fact I’m working on a book I’m going to call The Cosmic Code that posits that ultimate reality is contained in the following formula:

        [ (A x Z) G/C ] read thusly:

        a fully integrated duality within an integrative trinity-unity-conscious oneness where A is a temporal reality, Z is its actual or potential opposite reality, x is the sign for a thorough integration and G/C is the integrative state of Grace Consciousness or substitute G Grace for K kensho/satori, O atonement/Oneness or S samadhi

        An integrated duality within an integrative Trinity of course is mirrored all over nature, mathematics, psychology, spirituality and logic when one is attentive to it. For instance:

        [ ( 3 + 5) = 8 ] Fibonacci sequence

        [ (Thesis x Antithesis) Synthesis ] Hegelian Dialectic

        [ (Trunk x Branches) Roots ] Tree

        [ (Land x Sea) Sky ]

        [ (Body x Mind) Consciousness ]

        [ (Profit x Sharing) Monetary Gifting ]

        [ (Capitalism x Socialism) Profit Making Direct Distributism ]

        [ Hypothesis (Dualistic process of comparison of datums) ] Scientific Method

        [ (Reality x Opposite or Different Reality) Greater Reality ] The process of Wisdom

      • Rob Reno
        January 29, 2018 at 7:14 pm

        I find it funny that you accuse Robert Reich of not being “pro social” or not starting from that position, whatever that means. In my view his actions speak much louder than your rhetoric. He is action is not only pro-social but he is modeling it in his arguments in that he is teaching the truth that the economic system is socially rigged, and that the people who are being harmed don’t have to accept it the way it is if they simple step out of the cave of misinformation spread by narrow minded mainstream economists that reduces all human interaction to homo economicus. They are attempting, mistakenly, to model their field after mechanistic physics (which is overturned and outdated) or a dogmatic ultra-Darwinian scientism which is simply wrong about selection and competition being the only forces in evolution that bring about creative change. It may come as news flash to you Ken, but within the field of biology there is a vast and growing literature that cooperation and altruism and pro-social behaviors are as much a part of evolution as competition. That mainstream economists may be stuck in their outdated models doesn’t say anything about the underlying fields that have and are continuing to make progress in understanding the that evolutionary theory need not be so one-dimensional, to wit, Evolution in Four Dimensions: Genetic, Epigenetic, Behavioral, and Symbolic Variation in the History of Life (Life & Mind: Philosophical Issues in Biology & Psychology) by Eva Jablonka (http://a.co/1439h1y).

      • Rob Reno
        January 29, 2018 at 7:27 pm

        “[W]hy would any sane person want to save capitalism?” I think this question begs another question, Is there only one form of capitalism? I think not. Just as Robert Reich points out, in a well functioning democratic society the people can decide what form capitalism takes. Asad Zaman is correct in noting that historically economics came with an equally important moral philosophy (e.g., Adam Smith’s ignored but more important work). Even Honest Abe was a co-op dude.

      • Rob Reno
        January 29, 2018 at 7:39 pm

        Capitalism,

        has been successful only when tightly controlled by government regulation and taxes. Take those away, it quickly destroys both itself and the societies who allow it to operate unchecked.

        And the US has vacillated from one extreme to the other, while more enlightened developed countries in Europe have adopted forms of democratic socialism and at times weathered the predatory capitalist storms with varying degrees of stability. Indeed the vitriol and propaganda in the US aimed at democratic socialism has been spread with the zealotry of the fundamentalist. But it is beginning to fail as on both the left and right predatory corporatism is becoming a common theme.

        I find a receptive ear among my blue-collar working neighbors when I share with them that Shared Capitalism goes back to Adam Smith and that Honest Abe was a co-op dude. They are more open and receptive than the armchair critics given them credit for, which is why Robert Reich’s efforts are so important.

      • Rob Reno
        January 30, 2018 at 12:32 am

        I remain a socialist. Robert continues to contend that capitalism should be saved.

        Which are you Ken? Socialist or democratic socialist? Each deals with capitalism in its own way. Personally I don’t believe capitalism can survive without moving towards enlightened democratic socialism. That is what I understand Bernie to be arguing for and that is why I was one of his delegates.

      • Rob Reno
        January 30, 2018 at 12:33 am

        I remain a socialist. Robert continues to contend that capitalism should be saved.

        Which are you Ken? Socialist or democratic socialist? Each deals with capitalism in its own way. Personally I don’t believe capitalism can survive without moving towards enlightened democratic socialism. That is what I understand Bernie to be arguing for and that is why I was one of his delegates.

    • January 30, 2018 at 4:45 am

      Rob, let me try to address all your comments. First, apology for using jargon. Pro-social is term used by some evolutionary biologists and anthropologists. One of my PhDs is in anthropology. The other in history. Home Sapiens is unusual among species in evolving pro-socially (through altruism) rather than through individuals. Human is between groups, rather than within groups. In simple terms homo Sapiens have cohesive and caring groups which favor their survival, rather than competition within groups. One of the problems with current economic theory is its emphasis on within group competition contradicts 2 million years of Sapiens genetic evolution. This threatens Sapiens survival. One of the many reasons I oppose capitalism. This makes human culture maladaptive. Since genetic changes, particularly complex ones require hundreds if not thousands of years. Culture may put up new paths in 1-3 generation. Genetics and culture out-of-sync create big survival problems for humans. This is compounded when field experiments show humans tend to behave pro-socially in situations in which culture says they should be anti-social (competitive). You are correct that both evolution and cultural adaptation involve both cooperation and competition. Kropotkin made this case in a clear way in his book, “Mutual Aid: a factor in evolution.” But how these two mix matters. Sapiens cooperate within groups, but compete, even war between groups. All this is covered in basic anthropology and biology courses. Which apparently economists have not completed.

      Your question about forms of capitalism is a good one. In his new book, “The Common Good,” Robert Reich provides a great description of capitalism. Or, rather he quotes it from a well know capitalist. Reich tells the story of Martin Shkreli, the son of Albania immigrants who was good with numbers and morally unopposed of taking short-cuts to acquire money. He was able to amass enough money to purchase for $55 million the US rights to sell Daraprim, a drug on WHO’s list of essential medications. Shortly after Shkreli increased the drug’s price by 5,000%. From $13.50 to $5,000 per pill. Shkreli’s response to the negative outcry was as follows, “No one wants to say it, no one’s proud of it, but this is a capitalist society, a capitalist system and capitalist rules. And my investors expect me to maximize profits, not to minimize them or go half or go 70 percent but to go to 100 percent of the profit curve.” Only Congressional intervention stopped his price increase. Without a strong moral order controlling it or government regulation capitalism has the tendency always to destroy both itself and the societies that permit it. Voila, why capitalism is a dead end, literally. Smith assumed the moral order. Otherwise, capitalism was not in his view workable. Do we have such an order now in the US? I think not. So, we need government oversight. Which everyday Sapiens outliers work hard to destroy. I’m convinced the best to achieve this oversight in through direct citizen involvement through cooperatives and other citizen groups. One thing Robert and I agree on 100% is the need to revive civic education and involvement. Socialism tends to devolve into dictatorship by demagogues (e.g., Huey Long, Hugo Chavez) when citizens become uninvolved. In talks I give often on cooperativism in the US, I point out that cooperativism is all-American. Growing up in 1950’s Texas I saw electric, water, farm, and labor cooperatives, along with credit unions and employee-owned businesses. That’s all-American.

      Right now, the most successful economies and societies in the world are democratic socialist (Denmark, Sweden, Holland, Germany, etc.) cooperatives. It’s time the US returned to these roots.

      • Rob Reno
        January 30, 2018 at 6:19 am

        Right now, the most successful economies and societies in the world are democratic socialist (Denmark, Sweden, Holland, Germany, etc.) cooperatives. It’s time the US returned to these roots.

        I wish, I hope, I pray, and prepare for the worst here in the USA, but plan for possible strategic response from a new business model perspective. I don’t know what is going to happen in the US anymore. If we can’t educated plumber Joe and we continue this descent into mindless demagoguery and right-wing populism democracy could decay into autocracy wedded to raw predatory crony capitalism.

        A Kulturkamp may well take place in which rival totalitarianisms clash, violently perhaps, to mobilize consent and enforce political order.[77] Under less dire circumstances, after all, as it was predicted a decade ago, “Christian doctrine, made an adjunct to right-wing and capitalist policies, could provide the necessary self-imposed order that a fascist movement in America would require to maintain control over the country.” And more recently, “a state religion, compulsory in character, authoritarian in tone, ‘traditional’ in outlook,” has been seriously foreseen. “America would be ‘socialized’ not in the name of Marx but of Jesus, not in the name of communism but of Christian republicanism.”[78]

        None of these possibilities is inevitable, of course, or even likely. But one thing at any rate seems certain. Whatever shape the creationist cosmos may take at the hands of Protestant fundamentalists, it will break free from its flourishing subculture and hold sway over people and nations only when it is commended in its integrity: not as a mere science among sciences, but as the one religious answer, among uniquely religious answers, to the unfathomable mystery of existence.

        (Marty, Martin E. and Appleby R. Scott. et. al. Fundamentalisms and Society: Reclaiming the Sciences, the Family, and Education. Chicago: University of Chicago Press; 1993; 2 pp. 62-64. (The Fundamentalism Project.))

        Democracy is fragile; and we — the general US voting populace — are really screwing with it. I’m doing my best to advise my two daughters to emigrate now in preparation for the worst case scenario. This is real culture war. Right now it’s political & cultural. What happens if it ends up on the wrong side of the Enlightenment and instead ends up in the Dark Ages 2.0?

        Your comment is much appreciated. I’ll reflect slowly and respond here: motanomics.com

      • Craig
        January 30, 2018 at 3:20 pm

        Ken,

        The reason we don’t consciously comprehend paradigms whether old or new has more to do with the fact that we tend to love problems much more than solutions. This is born mostly out of the mostly unconscious fear that if we solve problems then we’ll lose much of the purpose/purposes that prevent us from being terminally bored. Of course there are a zillion worthwhile purposes available to us as well as the wonder and mind blowing conscious experience of a guzillion things in our immediate environment, things one has looked at and immediately abstracted for the last 30-40 years instead of actually directly perceiving it, so there is actually no dearth of purposes or conscious experiences at all.

        This is not to belittle philosophy, theorizing, abstraction etc. just the realization that they are undoubtedly the thing that most inhibits us from consciously experiencing things as well as the meanings and purposes behind words. Integrating abstraction and direct conscious looking/experience is in fact the route to paradigm perception because paradigm perception is the process of finding the single philosophical concept that re-defines/re-creates an entire new pattern. In other words its simultaneously a reductionist and wholistic mental process the latter of which is sharpened and honed by dropping the obsessive inner chatter of the former.

      • January 31, 2018 at 6:06 am

        Craig,
        It’s correct that humans do not have the immediate life/death problems today as when they lived as foragers 20,000 years ago. But today humans have more life/death decisions to make. The human brain evolved to solve group problems of survival. Humans have as one anthropologists calls it, a “group brain.” Our brain only works in coordination with other humans. That coordination is more fragmented today than ever in human history. In addition, most human knowledge is not held in the conscious brain. But rather as tacit (routinized) knowledge for action which is seldom fully viewed as humans live each day. Much knowledge is also held as bodily knowledge in which the brain plays little part. The one important form of knowledge/action that depends greatly on the brain is imagination. Many anthropologists believe imagination is what favored Homo Sapiens for survival when the other human species died off. But imagination is even more task/need oriented than either the explicit or tacit knowledge of the species. Imagination creates hundreds of scenarios often in just minutes. I’m convinced that humans called genius are those who create the most scenarios in the shortest period. On the other side, humans who create the fewest scenarios and take the longest time to do it become philosophers.

  12. January 29, 2018 at 4:37 pm

    Re James Kroeger at January 26, 2018 at 9:01 pm on making everyone rich (anyone here familiar with W S Gilbert’s “King Goodheart”?) and Ken still not being grateful for Keynes (who made things better for a time, even if they didn’t stay that way so we could all be rich in the real terms he wanted):

    The point is that we are adopting the wrong point of view about what money is (as the academics put it, its ontology). I see it as a fluid like water or electricity: comprising uncountable numbers of H2O molecules or electrons but flowing at a measurable rate round a network of channels like water round a central heating system or hydrological cycle. One cannot have a budget of a number of electrons but a given rate of flow through a radiator will heat up the adjacent area, or a tap will allow us to get a cup of water whenever we need it, rationed only if water is running short. (So we only need to ration and measure it when there IS a risk of it running short). As James says, from the overall point of view, what does it matter if a few rich or drunken layabouts are thirstier than others, provided enough of us are able to enjoy keeping our spaceship shipshape?

    • Rob Reno
      January 29, 2018 at 7:46 pm

      I confess my ignorance fellows! Whenever the conversation turns to money my eyes glaze over ;-) As far as I can tell in my ignorant pedestrian understanding money just serves to facilitate exchange (or show off wealth!) and has performed different roles at different times in evolutionary history, but when it comes to modern capitalism and predatory finance it has become a weapon of mass manipulation with banks creating it out of thin air with no actual social benefit or underlying productivity-benefit for society as a whole. But that is only a muddled opinion so I’m not sticking to it ;-)

    • January 30, 2018 at 10:41 am

      Dave, I really don’t like the term ontology. In my view it’s just a philosopher’s device to hide things from we ordinary people. But if you like, we’ll begin with ontology. Human ontology consists of two elements – relationships and performances. Humans for with relationships with other humans and nonhumans as well. They are required to perform – to do something – in these relationships. Combined with human imagination, these are the sources of everything – societies, cultures, religions, and of course money. Money is then best described as a performance. And performances always do something. That something is the result of the relationships in which the performances are made. Most of the relationships in which money was part of the performances relate to trading and valuing, according to the history we know. Money is thus always set up in terms of what humans want, what humans need, and what humans can do. Money is useful humans. Otherwise, they would never have invented it. And there many types of money. Depending on the needs of the situations and the humans involved. There you have it. And no “big” words from philosophers needed.

  13. January 29, 2018 at 5:08 pm

    Come on, guys! Have you not yet clicked the arrow on my picture to enjoy its live debate?

    Craig, reading your formulae as functional notation in computer language [so x is a procedure with two variables (a,b) delivering result c], what types of object are your variables and are the results obtainable with known procedures?

    I thought the problem was that Capitalism and Socialism are the same type, so that at either extreme (as Belloc already saw in 1911) government by large and therefore ill-informed corporations is (in the critical respect of not looking at the facts on the ground) no different from centralised state government. Distributism was about doing your own thing as far as possible so you can see and learn from what you are doing, not who gets the money.

    • Craig
      January 29, 2018 at 6:41 pm

      Capitalism and Socialism ARE alike in that they are ultimately tyrannous…unless you integrate their separate truths while simultaneously deleting their separate or mutual untruths under a greater zeitgeist/ethic than mere power or profit, i.e. the natural philosophical concept of grace/graciousness. Re economics and money systems….that’s why the new paradigm is Monetary Gifting…because Gifts/Gifting is an aspect of grace and the integrative combination of only the truths, workabilities, applicabilities and highest ethical considerations within Capitalism and Socialism. And that fits into The Cosmic Code which is a TOE.

      • Rob Reno
        January 30, 2018 at 7:58 pm

        Personally, I think it is time for a vision of a

        greater zeitgeist/ethic than mere power or profit, i.e. the natural philosophical concept of grace/graciousness.

        And where philosophy reaches the limits of reason and logic, living spiritual experience in and with divine love and wisdom (experiential truth, beauty, and goodness) admonishes us to place greater importance upon the service motive (i.e., Golden Rule) than the profit motive which must be restrained.

      • January 31, 2018 at 6:23 am

        Rob, First, reason (whatever that is) and logic (whatever that is) help little in understanding humans. But you’re point about the “Golden Rule” is a good one. That rule, the rule of reciprocity or fair treatment dates to the beginning of human culture (13,000 BCE).

      • Craig
        January 31, 2018 at 12:29 am

        Precisely, and reflectively as it applies to theory and policy in economics and the money system….Monetary Gifting.

        It’s even reflected in every past and current leading edge reform. For instance

        Every Past Civilization That Didn’t Crumble When It Had A Debt Crisis: Utilized a debt jubilee, i.e. a gift of money in order to momentarily avoid collapse

        Keen: “a modern debt jubilee”, a one off policy of Monetary Gifting

        MMT: Sovereign governments can create money, not debt, and distribute/gift it into the economy.

        UBI: A gift of money albeit generally via re-distributive taxation which makes it something other than an actual gift.

        Social Crediters: They’ve held forth for Monetary Gifting for almost 100 years, but never advocated policy that would fully express and guarantee its implementation, mostly because they were hampered by the orthodoxy of DSGE. In fact they never made the paradigmatic connection which is proof that you can look at the truth and still never fully comprehend its power because you don’t keep integrating its aspects until you fully comprehend the concept behind even the paradigm…which is the natural philosophical concept of grace.

        Me: I did the thinking, integrating and contemplating of as many of the aspects of grace as I needed until I recognized its complete philosophically aligned relevance as the single utterly applicable economic concept behind Monetary Gifting and so the new paradigm. And then I innovated the Social Credit policies so that they became the very expression of that paradigm in a way that Social Crediters never did. I Innovated them in a way that would make it virtually impossible for enterprise to reject or game such policies, where every agent benefited, the system attained true free flowingness, the best aspects of the agendas of both American Major political parties were accomplished and there were many more additional “knock on” socio-economic, political and psychological problems resolved as well.

        Sorry cutting edge reformers but those are the facts.

        wisdomicsblog.com

      • January 31, 2018 at 6:52 am

        Craig, you recognize, of course that debt is a distinction made up by humans. It’s first incarnation came from Hammurabi’s code. Human evolution provides no biological instincts necessary to create and sustain mass-cooperation networks (e.g., tribes, villages, societies). So, how do humans do it? Humans create imagined guidelines and devise scripts to carry out the guidelines. These two inventions took the place of what biology failed to provide humans. These inventions and the networks they led to are both a blessing and a curse, however. The imagined guidelines sustaining these networks are neither neutral nor fair. They divide people into make-believe groups, arranged in a hierarchy. The upper levels enjoy privileges and power, while the lower ones suffer discrimination and oppression. Often to the point of death for the lowest rung. Hammurabi’s Code, for example, establishes a pecking order of superiors, commoners, and slaves. Superiors get ALL the good things in life. Commoners get what is left. Slaves get a thrashing if they complain. Slavery, persecution, and class murder originated with Hammurabi’s code, as did debt. Rather than look for ways to moderate the impacts of slavery, persecution, class murder, and debt, my preference is to abolish them all. They have no place in democratic societies.

      • Craig
        January 31, 2018 at 8:25 am

        “Craig, you recognize, of course that debt is a distinction made up by humans.”

        Debt is an idea, a concept, a paradigm. These are all things that human beings create…..and make real. Debt ONLY is the current monetary and economic paradigm. Economics and money systems, society, mankind…requires a new paradigm and as new paradigms are always oppositional in some respects to the old paradigm as well as an inversion of the greatest problem of the old paradigm, Relatively Abundant Monetary Gifting is the new paradigm. Debt is burden, relatively abundant money and purchasing power is its opposite. The rate of flow of total costs and so prices in technologically advanced economies always exceeds the rate of flow of total individual incomes simultaneously produced. It’s the most basic disequilibrating reality. That scarcity ratio must be inverted. And that’s what the policies and others that I have suggested here create.

        Beyond those things my point is simply that a paradigm, an actual and new paradigm, is a change of concept that applies in all respects to the body of knowledge it is applied to. Once you’ve cognited on that vision, and that’s what really seeing a paradigm is, a vision, a validly applicable vision….then it’s just a straightforward rational process of policy alignment and all of the leading reforms/reformers can then unite and work together to get the paradigm implemented But you have to see it….before it makes sense to you. It’s very difficult to scientifically, reductionistically and/or iconoclastically realize a new paradigm. You realize it much more swiftly if you utilize vision and the other tools of Wisdom.

      • January 31, 2018 at 1:06 pm

        Craig, before we can begin to examine debt today, we need to understand money. Once we get rid of the mistaken notion that money developed from barter trade, it’s clear that money has never been a thing or object. Money is a process defined by cultures for comparing things mathematically, e.g. one of X is equivalent to six of Y. This process can take just about any physical form. One of the consequences of the process is debt, e.g., I agree to pay seller 8 of X next year for 6 of Y right now. Today trade and thus debt is described in terms of what neoclassical critics call fiat money (money unrelated to any “precious” metal). Whatever its earliest forms or history, for the last four thousand years money has been effectively a creature of the state (government). Persons, companies, etc. make agreements with one another. Set up debts they promise to pay. First, the government enforces payment of debts and in the proper forms and amounts. At the same time the government claims and enforces the right to determine and declare what thing corresponds to the name and vary its declaration from time to time. In this way government allows persons, companies, nations, banks, etc. to create money. Money is thus credit, with the government determining who and how it can be created but not limiting the amount and types of money that can be created. Thus, if our objective is to change or scrap money and debt, the beginning point must be government, not markets. Government precedes markets and is largely responsible for markets. Now, the question is, do we want to change or eliminate money and debt?

      • Rob Reno
        February 15, 2018 at 9:55 pm

        Rob, First, reason (whatever that is) and logic (whatever that is) help little in understanding humans. But you’re point about the “Golden Rule” is a good one. That rule, the rule of reciprocity or fair treatment dates to the beginning of human culture (13,000 BCE).
        ~ Ken Zimmerman

        I say this with love in my heart Ken ;-) I find true irony that an evolutionary human animal (we all are, are we not?) endowed with a mind capable engaging in such critical thinking (http://a.co/gvGzQ7T) as you frequently engage herein — at times with eloquent reason and cogent logic — feign ignorance of both ;-)

        Perhaps it’s cynicism or secular materialism, or something else, I cannot say, but your own well reasoned and (sometimes) consistently logical arguments (in the best sense of the meaning of the term) serve as counterfactual enough for me.

      • February 16, 2018 at 8:35 am

        Rob, love back at you. I am often cynical about such terms as reason, critical thinking, and logic. They can be and have been used to do great harm. On top of that they are place holders for ways of life, historical processes, and expectations with which we need to be in touch. But I also consider one more factor. I add a step. Logic and reason are human creations, social constructs. Evolution shows that generally humans only create social constructs they believe are useful. So, I use them.

    • Rob Reno
      January 29, 2018 at 7:19 pm

      I clicked it and liked it ;-)

    • Craig
      January 31, 2018 at 5:12 pm

      Of course we don’t want to eliminate money and debt, and we don’t have to other than the way it’s currently eliminated via the digital pricing and debt based money systems. We just want that process to be free flowing…and more prosperous for everyone…than it is now.

      I don’t dispute some of the things you say in your last post, but understanding the new paradigm and how it could resolve the present paradigm’s deepest and most chronic problems can be explained by my post to Billy Mitchell’s blog just now where I counter some misconceptions:

      Mr S:

      “MMT’s actual greatest insight is that governments don’t need taxation because they can create money”

      That’s not what MMT says at all; to disseminate that inaccurate interpretation of MMT is irresponsible, and gives ready ammunition to its mocking critics.

      MMT absolutely recognises that governments need taxation. In fact, it’s essential to destroy previously created money, as well as to ensure acceptance of a fiat currency.

      Govt doesn’t need the revenue from taxation as funding before it can spend, but that’s a different point entirely.

      Craig:

      “That’s not what MMT says at all; to disseminate that inaccurate interpretation of MMT is irresponsible, and gives ready ammunition to its mocking critics.”

      Yes, well that’s always the cry of those who are not fully conscious of a new paradigm…right up until they see that it’s the next new truth. I’m sure there were many tribal chiefs of hunters and gatherers who laughingly mocked the first farmers saying, “Everyone knows you have to move around to gather fruit and hunt game. If you stay in one place…you’re gonna die dummy.”

      “In fact, it’s essential to destroy previously created money, as well as to ensure acceptance of a fiat currency.”

      To prevent what? Inflation? If you had a 50% discount at retail sale which is the TERMINALLY expressed place and time of consumer price inflation…how are you going to have inflation? As for the fear of hyperinflation that’s just another irrational fear because hyperinflations never occur unless there are catastrophic circumstances, priorly enforced indebtedness that a nation’s elite wants to end and the central bank is complicit with speculators who short the currency. And all you need to do to prevent the latter is a government to pass a law that any leveraged shorting of the currency by anyone will be considered “null and void”. And even if you allowed for a manageable 2-3% yearly inflation (which could probably be effectively prevented as well with rather simple and rational regulations) you’re still looking at an immediate increase in everyone’s purchasing power by 47-48%

      And if down the road when everyone is a millionaire maybe you could have International burn $10,000 day…or more intelligently Everybody contribute $10,000 to Burkina Faso day to help them ecologically industrialize and enjoy the wonderful heritage of productive potential that mankind has has achieved.

      All you really need to make such a system work is legal tender laws, an operational economy and a political elite with a couple of balls and more than three brain cells that cognites on the new paradigm and its aligned policies.

      New debt will probably be needed for a very long time, but proportionally less and less with the new paradigm of Monetary Gifting and that is why economies will become more and more stabilized the paradigm of Debt ONLY and the ideology of austerity being the current insanity. Marx almost got it right, but rather than the state it will be Finance that will “wither away.”

      • January 31, 2018 at 7:19 pm

        If you had a 50% discount at retail sale which is the TERMINALLY expressed place and time of consumer price inflation…how are you going to have inflation?

        I’m trying to understand the flow of money under your plan, Craig.

        Am I correct in assuming that it is the government which will be sending money gifts to corporations and other businesses, to allow them to cover their costs and intended profits, while at the same time reducing sale prices by 50%?

        If so, let’s consider some of the immediate effects.

        Are you able see that giving business owners money to reduce their prices by 50% generates the same money flow as simply giving consumers enough money to cover half of the cost of all of their purchases? Show me the receipt, I’ll send a check for half of what you spent.

        If a consumer normally spends all of his income, this gift from the government will cut the cost of all of his normal purchases in half. So if his income does not change, he will find himself in possession of an additional amount of money that is equal to half of his normal take home pay.

        He could spend this or save it, but the bottom line is that as a result of the government’s gifting program, all those who spend most of their paychecks from week to week will have gotten a big chunk of money from the government that is equivalent to a 50% increase in his disposable income.

        Normally, when businesses see that their buyers have all gotten huge chunks of money to spend, they will quite naturally raise their prices as high as they can, to absorb as much of those extra dollars out there as they can.

        Would your gifting program include a law which forbids businesses from raising their prices whenever they think they can get a higher price? The “purchasing power” is there. Why shouldn’t they raise their prices if consumers are willing to pay them (because they can afford to)?

        Whether you realize it or not, the end result is going to be a dramatic increase in inflation, unless you enact “price controls” which would be the government’s method of setting prices (if for no other reason than to limit the increasing amount of money that they’d have to shell out once prices started to go up.

        Simply lowering the initial price by 50% does not in any way eliminate the incentive that businesses have to thereafter raise prices as high as they can, to absorb all of the extra dollars that are out there, if people are willing to pay them (and they would, cuz they’ve got the money to do so)

        Hmm….

      • February 2, 2018 at 6:43 am

        Craig and James, let’s bring this to the level of the participants and users of economies. And get away from theories. Economies are supposed to function to provide the framework for everyone to obtain the resources and services needed for a good quality of life. Or, at least one that allows good chances for survival. Money and markets are devices that can be used to accomplish these goals. Money to establish mathematical relationships in obtaining resources/services. Markets as means to move resources and services form one location and/or seller to another location and/or buyer. These can be arranged as profit making or as gifting exchanges. The choice is cultural, not economic. It is correct that economists study the differences between profit making and gifting economies, which are variable from culture to culture. Inflation is not difficult to understand once one sees it for what it is – changes in the struggle involved to procure that “good life quality.” It can harm both providers of resources and users of resources (in most instances market participants are both). The Bible’s (and many other religion’s) warning that the “love” of money is the root of all evil is practical advice based on recognizing that accumulating money through love is the root of the growth of economic elites and these elites tend to harm or destroy the distribution of resources and services based on need, not wealth. Debt is one tool in this war between elites and equal distribution. The major problem faced by all economic arrangements throughout history is their construction and control by political and religious elites. This problem in America varies between no controls on elites to strong controls that are ineffectual to strong controls that work but are sabotaged regularly by elected officials. Curing this problem would not only go a long way in resolving the inequality issues in America but would open the way to creating more efficient economic arrangements, generally. The main political and economic issues facing Sapiens have not changed for 12,000 years. Since politics and economics was invented along with agriculture. The issues: how shall politics and economics be used, and their creations shared? Sapiens have invented hundreds of answers for these questions. But the problem of unequal sharing continues. Modern economists’ solutions have failed. Along with those of religion, social sciences, and political “professionals.” The consequences of not finding a solution will soon threaten Sapiens’ survival. Will that be enough incentive for modern humans to stop hedging their ideological bets and solve these ancient problems? The solutions offered here appear to provide no path forward.

        I don’t care whether economics or economists survive. They could perish tomorrow; I wouldn’t miss them. All the social sciences and humanities have over time made efforts to resolve these problems. On that list economics ranks last. Until economists (like Piketty) demonstrate an interest in and understanding of these problems, and a firm desire to address them, they are, in my book “a waste of skin.”

      • Craig
        January 31, 2018 at 9:56 pm

        A monetary authority will reciprocate the gift the retailer gave to the consumer which means there’s actually no more money involved than if the consumer actually had that much money to spend. As Steve Keen says capitalist economies are demand constrained. So lets un-constrain them.

        You’re quite right that businesses before retail sale could raise their prices, but as I think I mentioned before they probably couldn’t raise them much more than a few percentage points. Purchasing agents aren’t stupid after all, competition still is in play in the micro-economy and collusion by multiple agents of course is in restraint of trade. Policies and regulations could also be applied that would re-inforce and are aligned with Gifting that would encourage the valid micro-economic virtue of competition and cost cutting like taxing any price increase that could not be rigorously justified as due to valid and honest cost increases by like 100-150%. You could also incentivize competition by corporations that kept their prices the same or even lowered them by Gifting them 1% of their net monthly profits. And if a business was recalcitrant despite all of the “knock-on” benefits to them from these policies (which will follow) then you could just not allow them to participate in the discount/rebate policy…and that would of course mean bye-bye business.

        Just hire someone like Bill Black Inc. to do forensic accounting on those enterprises who despite these policies that create a free flowing prosperous economy for all agents, due to an adequate universal dividend makes immediately redundant and eliminate-able any transfer taxes that both employers and employees pay. It could also probably quite quickly do the same for social security taxes which could be fazed out with a sufficient and continually rising universal dividend as innovation and AI erode aggregate demand. For that matter who needs much or any capital gains taxation (except for the recalcitrants and anti-social enterprises who aren’t satisfied with all of these benefits)? Re-distributive taxation is so old paradigm. But brutally effective sin taxation aligns not only with Gifting but also with the new zeitgeist/ethic of the natural philosophical concept of sovereignly powerful but benevolent grace/graciousness which in turn reflects the individual’s
        highest mental potentiality. Integrity matters. As above, so below, as with the person, so with the system. And when inevitably human frailty or flaw occurs…economic rationality and justice.

        If there’s one thing we’ve learned from the terminally economically orthodox and third rate populist intellect Trump, demagoging mere morality works. When everyone and all businesses obviously benefit from these new paradigm policies and integratively accomplish the best of the agendas of both the left and the right ….messing with them by the greedy and/or financially seditious would be fairly easy to identify and point the finger at, even if it takes a little initial thinking through. Helping the individual and participating enterprise is the key. Look at the partial reform of social security. 80 plus years of regressive railing hasn’t been able to repeal it. With the actual paradigm change policies of a universal dividend and a 50% retail discount/rebate….you’ll be able to quickly convert even the hardened conservative or libertarian theorist.

        There are also well thought through rebuttals to all of the “old saws” that everyone always brings up like “everyone will become lazy etc. etc. etc.

        A new paradigm transforms and broadens thinking.

      • Craig
        February 2, 2018 at 6:54 pm

        Ken, re: your jan. 2 6:43 post

        I’m the one here who has been posting about paradigms, philosophy AND specific policies all of which align with each other. My contention is that while research, theorizing and philosophizing is all well and good, the new monetary and economic paradigm which enables economists to clarify, focus and unite their various reforms….is right before their eyes and all they have to do in order to move forward….is cognite on that fact.

        I’ve shown that the insights and separate policy suggestions of all of the major heterodox theories align (albeit incompletely) with the new paradigm of Abundant Systemic Monetary Gifting and given insight about the significance of the point of retail sale and then suggested specific policies that would implement that paradigm throughout the entirety of the economy in a way that would benefit virtually all commercial agents, all individuals and the system as a whole.

        So what’s the next actual step? After LBJ defeated Goldwater in the ’64 election Lewis Powell wrote what has become known as The Powell Memo which began the process of conservative economic ideology being woven into the social and political systems. We need to begin “The Craig Paradigm Memo” with an integrative mass socio-economic and political movement targeted at large constituencies like students, the small to medium sized business community and for that matter every individual that shows them how the two main policies of a universal dividend and a 50% discount/rebate at the point of retail sale will benefit them and the entire system….like no other policies crafted by either party has every benefited them before. And how with relatively simple regulation will not only prevent inflation, but beneficially implement price deflation into profit making systems.

        Everything adapts to a new paradigm. The primacy of the old paradigm is dead! Long live the primacy of the new paradigm!

  14. Rob Reno
    January 30, 2018 at 7:30 pm

    Thanks for the tip to Reich’s new book. That’s a lot to think on Ken. It seems that biological evolution is increasingly coming under our own control as the Modern Prometheus is already out of the box. From here on out I fear/hope (there is grounds for both) it depends upon our brains and not our brawn if we are to avoid our own self-inflicted extinction event. War in the past may have fostered discipline and imposed organization and leadership and created empires and civilizations, but today there are no dividends, just collective civilizational suicide.

    The hopeful part is that you are correct I think; the pro social instinct is far more prevalent and deeper than past evolutionary theorists (i.e., Modern Synthesis) have admitted. From Horizontal Gene Transfer (HGT) to Symbiosis, from Cooperation to Altruism, we know better now, that when different human groups met they mated and traded more frequently than they fought.

    Today, it will require all our civilizational resources (scientific, philosophical, and religious) to tip the balance towards cooperation and away from tribalism & nationalism which inevitably leads to conflict. In the past capitalists argued that international trade organizations did more to foster peace than all the sentimental sophistry of visionary peace planning. Perhaps for a while they had an argument, but that old canard is wearing thin. Mating and trading certainly promotes cooperation over conflict, but we’re not shepherds and herdsman on the fertile plains of Sumer anymore, and the global elite capitalists aren’t anything like the butcher, baker, and candle stick maker frequently trotted out by pedestrian economists as though that settles the question.

    Economics needs to pull its head out the dark end of its mathematical arse and swallow a heavy dose of humility and learn anew from history of ideas/ideals, moral philosophy (ethics), religious & spiritual insight, and the more holistic and environmentally aware frameworks emerging from modern science’s cross-disciplinary understandings in fields as disparate as anthropology, systems biology, evo-devo to devo-evo, comparative genomics (a field unheard of only a few decades ago), epigenetics, etc.

    Martin Shkreli is the poster boy for predatory capitalism that is an exemplar of the new gilded age of oligarchs and robber barons. This is an age old theme that goes all the way back to the Hebrew prophets lamenting the poor being sold for the price of pair of shoes and the rich using debt-slavery to abscond with widows’ land and houses. The desiccated and historically impoverished fundamentalist view that the prophets were all about predicting the future while ignoring present injustice and its resulting inequality reminds me of economists prognosticating whether the current housing bubble is really going to burst while ignoring the weightier matters of growing injustice and impoverishing inequality. Market fundamentalism comes to mind.

    Without a strong moral order controlling it or government regulation capitalism has the tendency always to destroy both itself and the societies that permit it. Voila, why capitalism is a dead end, literally. Smith assumed the moral order. Otherwise, capitalism was not in his view workable. Do we have such an order now in the US? I think not. So, we need government oversight. Which everyday Sapiens outliers work hard to destroy. I’m convinced the best to achieve this oversight in through direct citizen involvement through cooperatives and other citizen groups. One thing Robert and I agree on 100% is the need to revive civic education and involvement. Socialism tends to devolve into dictatorship by demagogues (e.g., Huey Long, Hugo Chavez) when citizens become uninvolved. In talks I give often on cooperativism in the US, I point out that cooperativism is all-American. Growing up in 1950’s Texas I saw electric, water, farm, and labor cooperatives, along with credit unions and employee-owned businesses. That’s all-American.

    Indeed, co-ops (cooperativism) is as American as Apple Pie. So is Shared Capitalism (perhaps same thing?), and Moral Capital (social capital) may be poised to make a comeback. Direct citizen involvement in creating a New Economy based upon cooperativism embodied in locally sustainable co-operative eco-economies that foster civic education (one startup brain-fart I have is democracy cafes where civic education is nurtured) are the only way I know to save capitalism. Mind you, it isn’t so much capitalism I want to save, but rather my children’s and grandchildren’s future so they can decide for themselves if they want to keep capitalism or not and if so what form of capitalism they see fit should they decide it’s worth saving.

    Idealism must be tempered by pragmatism and visa versa. Like Socialism, ignorant uninformed populism (left or right) “tends to devolve into dictatorship by demagogues.” The Founders knew well that self-government depended upon an informed and educated citizenry — public civic education. They also knew that virtue and character mattered:

    The concept of virtue which was most influential in American thinking was not limited in reference to political or social life but also applied to private life and character. All of these thinkers considered virtue to be something objective, not merely subjective, although they offered varying definitions of it. Virtue was the study of moral philosophy, which included political philosophy (and indeed all the rest of what we would call social science) within its broad domain. This concept of virtue was not derived directly from classical or neoclassical sources but from Christianity and the Enlightenment, particularly from the Christian moral philosophers of the Scottish Enlightenment such as Francis Hutcheson and Thomas Reid. The good life consisted of the pursuit of virtue in both a public and a private sense. Virtue, as early Americans understood it, was compatible with both community spirit and defense of self-interest, and with both republicanism and liberal political principles. (Howe 2009, 12)

    I think we have a rich well of tradition to draw upon; we just need to mine it and be sure not to pour the water into old wineskins.

    • January 31, 2018 at 7:42 am

      Rob, genetic manipulation may someday be within human capability. But that’s still several hundred years in the future. Right now, the UN has prohibited most such experimentation, including cloning. That does not mean, of course that some will not violate these prohibitions.

      Even the contacts between Sapiens and the other humans around 20,000 years ago were mostly peaceful. Sapiens survived by performing, not murdering the other groups.

      You misunderstand tribalism. Tribes are the groups to which humans were loyal and defended. Tribes competed with and warred with one another. Our challenge today is to expand through culture the tribe in which humans claim membership. The ultimate would be one world-wide tribe.

      With you on the challenges facing economics. The question before humanity is how this is accomplished. My suggestion remains we simply eliminate economics as a profession and study. It is not necessary for human advancement. On the future and dangers of capitalism’s continuation see my reply to Craig’s comments. I appreciate your comments on shared capitalism and moral capital. But when the individual profit motivation is removed then whatever is left is not capitalism. It’s cooperativism or socialism. Both consistent with democracy, unlike capitalism.

      Character is one of those words some American conservatives like to toss around, with the intent of shutting down debate. People of good character will always in their view attempt to do the right thing. Problem, this is wrong. The founders of the US were per conservatives of good character. Yet they established a nation and its government that not only allowed but condoned slavery, denied all rights (except to live as their male relatives dictated) to women, and denied rights to native Americans. These were practical men, and highly prejudiced ones. As are we all. Is that good character? Today an entire political party praises and defends a confessed serial liar, narcissist, misogynistic, and racist. Is this good character? When I was a Marine in combat I didn’t trust other men because they had good character. I trusted them because of what I saw them do. Actions count. Character not so much.

  15. January 31, 2018 at 2:23 am

    I have offered quite a few words in this comment stream in defense of the very existence of markets. What I have not made very clear is that while I acknowledge the good that markets have been able to achieve for humanity, I also loudly condemn the “market behavior” of clever deceivers who feel no reluctance to regularly victimize others.

    Eradicate markets? No. Use the power of government to “fix them”, if they can be fixed? Yes. Eliminate and replace specific markets (banking, health care provision) where the profit-motive typically generates only undesirable consequences? Absolutely.

    But I have not addressed the topic of The Profit Motive directly even though I have quite a bit to say about it.

    As many have pointed out, the obsessive pursuit of “optimized profit” by most business entities creates a culture within those entities that is singularly lacking in ‘conscience’ for anything other than company profits and personal advancement.

    What kind of value(s) could ever supersede this obsession with profits within The Management Class? Well, when I was a young lad, we frequently heard a much touted ‘solution’ to the problem of greed, presented to us through various media channels: Love Is The Answer.

    You know…the kind of feelings that often inspire people to give of themselves and of their bounty?

    The only problem with this solution is that it ended up not “catching on” in a way that would alter people’s behavior, and so it ended up solving nothing.

    It’s not that people were not able to conceptualize the positive attributes of Love during their reflective moments; the problem was how to imbue all those people in positions of power with a belief that Love should always be put before all other issues between human beings.

    Thoughts of Love were quickly forgotten when people found themselves in emotional confrontations, or when its importance was not embraced or even acknowledged by those in positions of power.

    Nevertheless, Love is at least part of The Answer because it is a descriptor of the feeling people experience when they feel inspired to give to someone in need.

    I argue that a big part of the “how to” solution we’ve been looking for requires an ability to provide people, in their daily lives and interactions, with an understanding of what they are perceiving when they see other human beings as a threat.

    Ultimately, I argue, what is needed in order to actually turn human behavior to the good on the scale we desire is changing people’s perceptions of the individual who stands in front of them. Instead of seeing a threat, they must see vulnerability instead. Such a perception will make them feel “naturally motivated” to reassure strangers that they are just as vulnerable as the person they are talking to.

    That should give a little hint as to the import of the foundational thesis I am able to apply to a wide range of human behaviors: including psychological, sociological, and economic behaviors.

    If you happen to be a discerning soul who wants to get a better idea of what I only hint at here, I would recommend this as a good place to start…

    • January 31, 2018 at 9:36 am

      James, markets are centered around exchanges. To make exchange possible market “frame” out all that is not involved with buying/selling. This is of course difficult. Consequently, markets always fail. They’re destroyed by externalities, by the avarice of participant, by participants who won’t “play by the rules,” by failures to isolate “the” commodity, and for many other reasons. Therefore, their useful for meeting human resources needs is limited. Government rules and intervention can extend their life, if vigorously carried out. This makes market results only slightly better than direct distribution. Justifying the time and resources to create and operate markets is thus always difficult.

      Profit is a capitalist device. It too requires framing, which makes it even more difficult to create and sustain. And an even greater danger to peoples’ access to resources and services necessary for a reasonable quality of life.

      The humans in the earliest tribes and villages did sometimes have emotional attachments to one another. But even if these did not exist, these humans were still altruistic toward one another. The reason, survival was dependent on the groups being effective in coordinating actions necessary for survival. So aside from any emotional attachments, the groups were pragmatic arrangements focused on survival of all members. Each member of the group (till shown disloyal) was a compatriot in survival of all the members.

      • January 31, 2018 at 5:48 pm

        The humans in the earliest tribes and villages did sometimes have emotional attachments to one another. But even if these did not exist, these humans were still altruistic toward one another.

        Did it ever occur to you, Ken, or any of the anthropologists you’ve worked with, that even in “uncivilized” tribal societies, that every one of those tribal members was possessed of a fundamental and intrinsic need for each other’s approval?

        I suspect not, for I have been unable to find any discussions of this topic in any academic discipline which purports to study human behavior and human motivation.

        There is a reason for this: the possibility that every human is born with a very powerful emotional need for the approval of other human beings is the very last thing that behavioral scientists have ever wanted to discover about their own inner selves.

        They intuitively understand that if they do possess such a need, it means that they can be rather easily hurt by the expressed or even implied disapproval of others—i.e., that they are vulnerable, emotionally.

        This is indeed why individual humans (especially men) have tried throughout history to deny that any such need actually exists, and have implicitly claimed that they possess some kind of power to “control” this need, to deprive it of its ability to make them feel any pain.

        And that is why it never shows up in the writings of philosophers, or even religions, through the entire known history of human civilization. Men have been pretending that they are emotionally invulnerable since the earliest of times, maybe even since their pre-tribal years.

        Because of this tradition of culturally shared self- and other-deception, researchers have earnestly sought a deeper understanding of human behavior, but only allow themselves to follow paths that steer them around the touchy subject of their own deepest fears.

        Would you say that this speculation re: the “focus” of researchers is something you can verify, Ken, from your own experience? Or is there perhaps another story to tell?

      • February 4, 2018 at 10:05 am

        “Did it ever occur to you, Ken, or any of the anthropologists you’ve worked with, that even in ‘uncivilized’ tribal societies, that every one of those tribal members was possessed of a fundamental and intrinsic need for each other’s approval?”

        Yes, it has. Sapiens are emotional creatures. They need emotional attachments not only for survival but also for good mental health. But I don’t understand your concern. I noted this already by pointing out that humans in groups tend to be altruistic toward other group members. I’m in the wrong professions to speak to any supernatural (spiritual) attachments between humans or to romantic love. You certainly can discuss those, if you like. The world literature I read does not show humans denying their emotional vulnerability. From Omar Khayyam to the love poem recited by a bride of Sumerian King Shu-Sin (fourth ruler of the Third Dynasty of Ur, who reigned between 2037 and 2029 BCE) to sonnets of Shakespeare to the poems of Maya Angelou show just the opposite. And if that’s not enough read any great war novel, poem, etc.

  16. Rob Reno
    February 7, 2018 at 4:03 am

    It is not uncommon for people to blame “the marketplace” for these negative developments because it seems as though the marketplace necessarily allows them to occur as a result of market players following their instinctive motivations. (….)
    ~ James

    James, I owe you an apology. I wasn’t ignoring you, for I didn’t see your post for some reason. I always enjoy your posts. I learn something, and even if I cannot find my way to agreeing always, you make me think.

    I wonder, have you read Robert H. Nelson’s book Economics as Religion: from Samuelson to Chicago and Beyond.? I ask because I think you might find it interesting. Your post makes me thing of many passages in his book.

    Do me a favor. Point me to a more fleshed out definition of “the Market” so I can better understand how you use this term. I will spend some time reflecting on your post.

    • February 8, 2018 at 2:58 am

      “Point me to a more fleshed out definition of “the Market” so I can better understand how you use this term.”

      Let me just say that The Marketplace is not some kind of Universal Dispenser of Economic Justice, which is what many dissolute economists would have us believe.

      I believe that when people express scorn for markets or for the marketplace, what they are really expressing scorn for is the individuals/cabals who unfairly manipulate markets in a way that benefits them at the expense of all others (the entire financial services sector of the economy). It’s understandable.

      What I’ve been able to do is filter out the propaganda pumped out by market exploiters and look at the mechanism of the marketplace itself…which led me to notice one very important function the marketplace carries out in defiance of certain specific efforts to manipulate it, in economies that utilize a fiat currency.

      The type of manipulation I’ve focused on I often refer to as the “collectivist scheme.” By this I am referring to the efforts certain groups make to improve their purchasing power in the marketplace by arranging for all the members of the group to experience an increase in the number of disposable dollars/pounds/etc. that each will have at hiser disposable.

      Prime example: the machination we just saw a Republican Congress execute a short while ago when they legislated big tax cuts for rich people. Another example would be Craig’s gifting idea.

      These schemes are based on a misunderstanding of how money accumulations translate into purchasing power in the marketplace. The schemer notices that if he were to experience a big increase in disposable dollars, he would a big increase in his purchasing power within the marketplace.

      The error the schemer makes is not realizing that giving all members of the group the same boost in disposable dollars will end up not improving any member’s purchasing power in the marketplace.

      They do not know this is predictable because they do not understand how markets always respond to such attempts to give “everybody” an improved position withing the hierarchy of all disposable incomes.

      Because of the “auctioning process” that markets execute (which I have specified in a comment above and in my essay on the topic), all of those extra dollars will be “burned up” in yet another inflation event. No real gains in purchasing power will occur, all else equal.

      My ultimate advice to those who are infatuated by these “collectivist schemes”: give up the folly of this desire for “easy enrichment” and focus on the kinds of changes in the real economy that could be wrought which would absolutely improve the material well-being and security of those who are Not Rich.

      If you want to get a better sense of what I’m describing here, Rob, and have a bit of free time available, I would recommend a careful reading of my rather lengthy composition, Why Rich People Should Insist On A Full-Employment Economy. If you’ve already read through it once, I would suggest that a second reading is likely to provide a much more expansive understanding of what I’m pointing at. Sometime, a new concept requires that kind of re-visitation if it challenges common misperceptions (ever tried to work your way through Einstein’s seminal publication on relativity? :)

      • Rob Reno
        February 8, 2018 at 5:49 am

        Sometime, a new concept requires that kind of re-visitation if it challenges common misperceptions (ever tried to work your way through Einstein’s seminal publication on relativity? :)

        Oh, I always revisit ;-) That’s why I have a library … as new wine, so is a new friend; if it becomes old, you shall drink it with gladness.

      • Craig
        February 8, 2018 at 7:09 am

        Supply and Demand models are not valid or reliable ones. The mark up model is much more reliable and a ubiquitously applied discount/rebate policy of sufficient percentage (50% or higher) would make the mark up model reality. The new paradigm would make economic vices, vices instead of shaky macro-economic theory, and economic virtues, virtues instead of financialized legerdemain that makes the economy a process of drawn out drowning rather than a legitimate system of orbital free flow.

      • Craig
        February 8, 2018 at 7:18 am

        After all, systems were made for man, not man for systems. Wouldn’t you agree?

  17. Rob Reno
    February 8, 2018 at 5:45 am

    Thanks James, I need to take some time and digest, think, and respond. I read Why Rich People … but can read it again. I will eventually read your entire site, but being methodical I have the stack that needs tending ;-) Many sympathetic neurons firing reading your post above. More later, thanks again.

    • robert locke
      February 8, 2018 at 11:37 am

      While you are thinking, consider the limitations of social science, Rob. I do not think the society is capable of being studied nomothetically. If neoclassical economists ask that we replace a nomothetic theory in economics, with another nomothetic theory, it is not possible, if the study of society and the economy cannot be done nomothetically, i.e., if neoclassical economics fails because society cannot be studied nomothetically.
      Does that mean we have to give up on social science? Yes, unless we work out a sort of compromise. That compromise is to incorporate vested interests into social science investigations. For example, if a problem is being investigated make sure employee representatives are being included along with employers on the scientific investigative team, and that all team members are scientifically competent. Unfortunately Anglo America has ended in a cul-de-sac in this regard, because it does not give employees an automatic, independent representative voice in the running of firms. So, if managers call all the shots, a lot of very useful social science is suspect.

      l

      • February 9, 2018 at 9:12 am

        Bob, must disagree just a bit. I’m an anthropologist as well as an historian. Anthropologists study society with the intent of creating generalizations. Most of these are local and limited in time. The two broad generalizations I was taught in graduate are: 1) human culture is the result of human interactions with humans and nonhumans. 2) these interactions require humans to perform – no one gets out of taking part in in the construction of society. Within these generalizations there are lots of contingent, unique, and culturally specific actions and meanings that still need to be examined and described. My overall conclusion is that the study of human culture and collective life involves both, and of necessity must. This includes what you call “vested interests.” All study of human culture and society begins with “areas of concern.” Areas resulting from interests and prior history. Which, of course requires broad involvement of all humans in these areas, not just the “experts.”

      • robert locke
        February 9, 2018 at 3:36 pm

        We agree. I only meant in my example within the firm. For example, when Professor Wildemann’s team implemented new production processes at VW, he taught the new processes to the IG Metall affiliated shop stewards as well as the VW management side. And the transformation went well.

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