Home > Uncategorized > Nine years with euro crisis – time to think anew

Nine years with euro crisis – time to think anew

from Trond AndresenSteve Keen and Marco Cattaneo

A new means of payment can be part of the solution for the eurozone’s unemployed.

We have now seen nine years of social crisis and huge unemployment in many euro countries. An entire youth generation has barely experienced anything but being out of work. Still no solution has been found or implemented. The time is overdue to think outside the box.

We propose a solution that has circulated internationally for several years: some of us have argued for this since 2011.

Both households and businesses should be provided with an additional national means of payment, “Electronic Parallel Money” (“EPM”).

Our proposal works like this: EPM transactions take place via mobile phone, PC and card. The transactions are logged on a server in the country’s central bank. There are no EPM coins and notes in circulation. The government (and local authorities) have EPM accounts in the central bank. These are debited when the public pays wages and pensions, or purchases goods and services. All citizens and enterprises also receive a user account there.

EPM will greatly reduce unemployment and enable people and businesses to exchange goods and services. It will alleviate the social crisis and reduce pessimism in economics and society. Such a solution is now being discussed in Italy, triggered by the acute budgetary conflict with the EU. 

New EPM is created as needed in the central bank. The public sector pays both in EPM and Euro. The ratio can be adjusted based on how the economy develops. Taxes are collected in a corresponding mix of the two currencies. The EPM will have value since it can be used to pay taxes. While government and other public sectors pay expenses and collect taxes in the same and fixed ratios, the euro/EPM mix used in private sector transactions can be freely chosen by the parties involved, and will thus vary.

We are very aware that an EPM proposal will be met with opposition from the EU’s elites, and many columnists in the financial press. However, the scheme will not be illegal according to EU monetary policy: the EPMs are legally government bonds that are extinguished when holders use them to meet tax claims. In addition, they do not exist physically – there are no EPM banknotes or coins, thus avoiding conflict with the euro’s money monopoly.

One can expect that the public’s initial confidence in the EPM will be very low, not the least because of widespread skepticism with national authorities who have not managed to counteract the crisis for nine years. For the analysis, it may be useful to define two terms, “trust” and “need”. Although trust is very low from the beginning, the need is very high: one should expect some initial use of the EPM because the options ‘no sale’ or ‘no job’ are worse. Over time, other actors will observe that transactions with the EPM are taking place, which will increase trust – which leads to more acceptance of a certain percentage of EPM in payments.

Eventually this will also include wages. When firms receive a share of EPMs in payment, they will ask their employees to accept a share of EPMs in wages. And employees will then often have the choice of accepting this or unemployment. This again causes businesses to become more willing to accept EPM in payments. We get a positive spiral.

After an initial period of political turbulence and low confidence, the EPM will approach a value not so far below the euro, because one EPM counts as one euro in the payment of tax. And as long as the economy is far away from full employment and the business sector has significant spare capacity, the inflationary impact of more money due to the circulation of EPM will be minimal.

A parallel electronic national currency will – with immediate effects – improve the situation for most residents of euro-crisis countries. It will also give the countries a much stronger position to negotiate euro debt forgiveness or easing the debt service burden.

Our proposal allows for a gradual and controlled movement towards a national currency, if desired (and yes, we are aware that this will be met with resistance from the EU system). Or for that case, the opposite: to later turn 100 percent back to euro if that option is considered better. It gives the National Assembly in a crisis country time to consider and make decisions in both directions, based on experience with the EPM.

Sadly, our observation over many years is that it is almost impossible to get public and academic conversation about alternative solutions that can make a big difference. This text is thus an exception. The authors are an engineer and two economists respectively. We wish to emphasize a point (provocative for some colleagues) about the difference between the social sciences’ and engineering culture, and which can explain to some extent why it is so difficult to implement even obvious solutions: social scientists and economists are – in contrast to the engineers – mostly concerned with describing the state of things, not finding solutions. Engineers look for solutions.

An economist who was very aware of this shortcoming was John Maynard Keynes. He expressed it somewhat sarcastically:

“Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”

Our EPM proposal ignores “reputation”, and proposes a means to succeed unconventionally when all conventional methods have failed.

Trond Andresen, associate professor, Department of engineering Cybernetics, NTNU
Steve Keen, professor of Economics, Kingston University, London
Marco Cattaneo, founding member “Fiscal Money Group”, chairman CPI Private Equity, Milan

  1. antireifier
    November 20, 2018 at 6:35 pm

    It is not clear to me how this will alleviate unemployment. How would an unemployed youth get access to EPM?

  2. Trond Andresen
    November 20, 2018 at 6:55 pm

    Immediate relief via more govt social support to the unemployed. Additional relief by govt job guarantee program. Plus more regular jobs after a while due to demand increase via circulating EPM.

    All govt payments in the same mix of € and EPM. Payments in the private sector both for goods & services and for wages, will be in some mix.

    After a a while a larger average share of EPM in the private sector, even if such shares will vary in specific transactions.

  3. November 20, 2018 at 7:56 pm

    You can make an honest and secure living in engineering being a chronic naysayer too. No one gets fired for saying, “It’ll never work.”, even if it does work. The real question is why anyone ever says,”Let’s try it and see if it works.”. Honestly, I believe people in large institutions never do. Only entrepreneurs as individuals on their own or in small organizations they lead actually take chances. If events shatter an institution leading to reconstruction maybe then. Think Lincoln issuing greenbacks. And then there’s Germany after Weimar. If only they could have tried a little bit of Nazism and seen how that went.

  4. Craig
    November 20, 2018 at 10:52 pm

    While I applaud the determination to finally actually try to implement monetary reforms why utilize a new or alternate payment system that doesn’t actually deal with the monopolistic paradigm of finance for the creation, form and vehicle of monetary distribution?

    This effort still needs to be further simplified, more integrally implemented and enabled to have immediate beneficial effects for both individual and commercial agents.

    All of this could be accomplished by recognizing the triple power point of retail sale and the fact that the pricing, money and accounting systems all utilize the same equal amounts of debits and credits summing to zero. It is:

    1) the terminal economic ending point for every consumer item or service including homes/mortgages and other “big ticket items” and so

    2) it is the terminal summing point for all costs (including profits and capital and depreciation costs) and so all prices for every item or service

    3) it is also the terminal expression point for all forms of inflation for these same items

    Hence a 50% discount policy for every item or service at retail sale that was rebated back to the enterprise giving the discount by a monetary authority specifically mandated to do just that would immediately double everyone’s potential purchasing power, double the business revenue available for any enterprise participating in the policy and its rules…and so slay the deepest and most chronic problems of modern economies, namely systemic austerity, individual income scarcity and price/asset inflation.

    Money, debt and banks’ monopolistic paradigm of Debt-Burden Only are the problem and Monetary Gifting is the solution.

    Simple, elegant and effective….just like every other paradigm change has been.

    • Craig
      November 21, 2018 at 1:40 am

      Particularly when you recognize the single concept defining that new paradigm.

  5. Helen Sakho
    November 21, 2018 at 3:14 am

    Yes, poor Economists are facing progressively mortal problems! They may well be in danger of facing unknown phenomena. At least, that will give the rest of colleauges some brain power challenges.

  6. James Beckman
    November 21, 2018 at 12:42 pm

    I though democracies wanted to educate/train their youth for better lives. What nations, aside from some in Asia (So Korea, Japan, China) are really doing such either on the private business or public side?

  7. rotzeichen
    November 21, 2018 at 8:51 pm

    It would appear to me that the only way individuals would use use this money would be in the form of a credit card, using a special bank card from one particular bank. Any user of this currency would need to trade in it the same way as if it were a Euro, meaning it would not be interchangeable with Euros but a separate dual currency.

  8. Trond Andresen
    November 22, 2018 at 8:39 am

    The obvious instrument for transactions will be the mobile phone. There are technologies out there that works even on cheap non-smart-phones, already implemented in several poor countries with an excellent track record. Italy or Greece could buy and implement such a system off-the-shelf. But of course a debit card should also be available. And most shops have card readers.

    Imagine a payment scenario under this regime: A shop offers an item for 20 €, or 15 € plus 8 EPM. The customer chooses the second option, pays 15 € and uses his mobile phone to top up with 8 EPM. A bit more cumbersome – yes – but a small annoyance compared to the economy remaining in today’s depressed and hopeless state. And after a while such payments will be executed fast and routinely.

    • Craig
      November 22, 2018 at 8:13 pm

      You’re adding to price at retail sale and not dealing with the actual cause of inflation which is not having a more beneficial alternative to raising prices in a monetarily austere system. I’m sorry, the idea that inflation will not occur if there is significant under capacity is as flimsy and errant a liberal orthodoxy as austerity is a conservative one. Money does not magically cause inflation, decisions by commercial agents in an austere system do. Inflation is actually built into your system.Hence inflation will continue and, pushed by regressive forces, will undoubtedly get even worse and then they’ll be able to say for the millionth time to the un-astute, “See, we told you the liberals didn’t know what they were talking about.”

      If you implemented a 50% discount/rebate policy at retail sale instead the consumer gets $100 worth of groceries for $50 effectively doubling his purchasing power, the enterprise giving the discount gets his $50 discount rebated back by the monetary authority making him whole on his overheads and margins of profit while doubling the potential business revenue available to him.

      You have to reduce price at retail sale sufficiently to significantly increase both individual purchasing power and business revenue AND make opting out of the policy economic suicide because what business can do so when their competition only needs to charge 50% of their best price and still gets 100%? Any garden variety inflation will be a smallish percentage so as to not lose market share and is dwarfed by the relatively high discount percentage effectively integrating price deflation painlessly and beneficially into profit making systems.

      Add a 1000 dollar or euro/mo universal dividend and you can eliminate all transfer taxes for unemployment insurance etc. and you’ve got a system that the large constituencies of the small to medium sized business community and EVERYONE 18 and older can enthusiastically buy into.

      Once you take intelligent, beneficial and effective control of the point of retail sale with a price deflationary policy….within reason….it doesn’t matter how much money you inject into the system.

      Of course the human race not being entirely rational and ethical you’ll need some additional regulation and taxation rewards and punishments, but what else is new?

  9. November 22, 2018 at 10:19 pm

    No argument from me that the economy could do so much better. But is a band-aid solution with possibly unintended consequences really the answer? I’m getting the impression that money in the EPM sense is a positively valued and unencumbered means of payment, operating side-by-side with money-as-debt in the normal state of affairs. No? Maybe it’ll work in an economy wherein every activity is accounted for, i.e. kept track of until the account resolves itself on the retail level in the abstract, but can it be ascertained as such beforehand?

    And why resorting to something so cumbersome? It’s no secret why the economy of ours is underperforming. All disbursed cost and obtained profit incomes, including those in banking, become passed on and embedded in final output, and the lack of direct spending of those incomes makes the economy underperform. Isn’t progressive taxation at a rate that will sufficiently counter the siphoning off of income into the financial-asset market a cure, rather than at best just being a treatment of symptoms as EPM would have it? Cryptocurrencies with blockchain technology ought to make the hiding of all income, and not just EPM income, a thing of the past.

    The elites will be screwed more effectively and the 99% will finally get what’s due to them. Comments?

    • December 2, 2018 at 6:48 am

      John, I agree with your conclusions. I can see and understand the EPM as a technical solution for what is fundamentally a non-technical problem. The EPM is a cultural creation intended to circumvent the results of a cultural artifact, while not replacing that artifact. Obviously, a preferred approach is to replace the artifact. John suggests adding more progressive taxes to redistribute a greater share of wealth and income. The result might be more equality in wealth and income, which might in turn translate to more political equality. I prefer a more direct approach. For example, by law require that bosses (owners, shareholders, etc.) and workers receive precisely the same compensation from any private economic enterprise. Any differences in compensation would rest solely on the type of work performed and the skill with which that work is performed. This not only provides ample income for all but assures that money differences do not translate into different starting points in terms of political and economic negotiations. It also assures that government policy and elections are not purchased. “Deep” pockets are done away with.

      • December 2, 2018 at 7:26 pm


        While I agree with and applaud your conclusion that “deep pockets” will be done away with, I believe your more direct approach (less the in-congruent shareholder part) has been kind of tried in the “great experiment” of the 20th century and found sorely wanting. My approach is direct enough and it will leave the free-enterprise system as such intact. This has the to my mind great advantage of leaving the blue-collar jobs of those employed in the luxury-goods industry basically unaffected. Unless there is a real shortage of natural resources, including energy, supplying that sector, I don’t think that the demand for such output has any cause to be tampered with; either as a result of your suggestion, or through say a specific taxation on luxury items.

        Instead, after progressive taxation has been more or less effective, I would ameliorate your drastic approach along the lines of those suggested by (e.g.) E.F. Schumacher, who I believe proposed a maximum 4-5 times spread between the highest and lowest paid employees of any firm; and would let cooperative decision making replace the corporate boards that are doing so now. This spread in proposed compensation would also roughly be corresponding to the price difference of luxury items, as compared to the more basic ones affordable by those just starting out in their productive careers. A possible ongoing betterment throughout ones productive life would generally be conducive to keep a desired motivation in tact as well. Such approach has no use at all for shareholders other than intra-firm; who’d be reaping any resulting profits due to skill, aptitude, and efficiency. In the real world the “saving” for one’s retirement is an illusion anyway, since the necessary support is inevitably being supplied and shared by those productive at that time and not from any accumulated “funds”. Pay-as-you-go is the underlying operating factor, regardless as to how it’s accounted for.

        And finally, though somewhat outside the particular spin you’re giving it, it should become general knowledge that those “deep pockets” are being filled at present with “stuff” that, if necessary for growth reasons, is freely creatable out of thin air; thus in no way being the indispensable scarce resource it’s held to be.

      • December 3, 2018 at 5:35 am

        John, my work the last 25 years has been “controlling shareholders.” Particularly their “take home pay,” so to speak. They’re tenacious adversaries. John, I’ve little interest in maintaining the “free enterprise” system. Hasn’t helped me or the country very much. You disagree? What do you include in “luxury goods?” Once I have that answer I can respond to this part of your proposals. The suggestions you make based on E.F. Schumacher’s ideas are in my view reasonable. I worry they are too complex to work, however. That’s why I suggest just a few changes in law to limit corporate profits and shareholder earnings. I believe this would have the same impact as the proposals you make but would be easier to implement and draw less push back.

        On your final points I’ll just say a couple of things. First, it’s seems ridiculous to me to base any economy on unending growth or scarcity. I recognize these are important for many economists. Infinite growth on a finite planet is simply impossible. Holding on to such a scheme is foolish and dangerous. Some scarcities can be genuine. Such as food, building materials, and other natural resources. Others are merely created by corporations to increase profits. Neither problem is settled best by capitalism, or unregulated “free enterprise.” Both respond better to an economy based on democratic socialism.

      • December 4, 2018 at 4:37 pm

        Ken: capitalism, regulated or not, isn’t synonymous with free enterprise. My anti-capitalist model shows that entrepreneurs are either forced to play with a stacked deck, or don’t play at all; so that’s all but being free. Second, sustainability of resources is paramount, so that limits a growth in inputs. But since learning-by-doing causes outputs in general to rise for any given unit of input, a growth in output will need to limit the amount of embedded working hours dedicated to being economically active. Hence the yet sustained betterment in living (standard) for at least some time to come. This is easily substantiated in my model, but perhaps not as easily in yours as leisure activities there don’t escape being economic.

        I would define a luxury good as any good that goes beyond fulfilling the basic purpose of a given product. The retail market is full of examples in price and quality differentiation. Now you may well be of the opinion that much of the enormous variety in final output is superfluous and I may even agree. But where and how are you going to draw the line between the drab of a centrally planned economy, with its by enlarge equality in purchasing power over available retail output, and what we have at present?

        I don’t see you’re presenting a coherent alternative, Ken; the more so since you seem to have changed your position considerably from your previous post. There you advocated a by law control of equal compensation for all at the outset, amended by special skill sets. And here you’re suggesting just a few [minor?] changes in law, limiting corporate profits and shareholder earnings. In neither case do I detect any particular ease of implementation nor less push-back than what a steeper progressiveness in taxation rates is likely to bring about. To the contrary, I’d think the opposite is more probable.

      • December 5, 2018 at 8:00 am

        John, I’m on board with you except for the following. First, entrepreneurs are necessary for any society. But not as the term has been used by libertarians. Entrepreneur derives from the old French word entreprendre meaning to undertake. An entrepreneur is one who takes up a challenge, a leader in the community whose focus is helping the community. As it evolved on the libertarian side, entrepreneur today is just one step (and sometimes not even that) below an autocrat focused on profit for private companies, even if the community suffers as a result. I’ll stick with the original meaning. Second, I know all the stories about how capitalism improved standards of living. That’s historically accurate. But democratic socialism improved living standards more; in some instances, much more. The most successful nations today in the combination of high living standards, feelings of well-being, and ample leisure time are all democratic socialist. They’re also the most democratic as measured by voting numbers, public participation in government, and efforts to hold public officials and private businesses accountable. And there is no “drab” in these planning (but not centrally) economies. They are not as glitzy as the USA but they are exciting and interesting places to live. I make regular trips to Norway, Iceland, and the Netherlands to visit relatives. The only difference from the USA that takes me some time to adjust to is the recycling and conservation of resources. By comparison the USA is a glutton. The line between the cultures of Norway, etc. and the USA is easy to see. Norway, etc. create societies and economies to serve all their people, sometimes lowering productivity to do so, but never so much as to deny anyone what’s needed for a good life – from health care, to income, to good housing, to transportation. I do find most offices in Norway sort of creepy, however. No walls.

        As to changing my position, I’ve changed nothing. The way I get to equal compensation is taking from those who get too much while adding to the pay of those who get too little. I would leave it there. But USA culture places emphasis on pay based on merit. I incorporate this cultural tendency by increasing pay for the more skilled and those with crucial skills. Americans have been socialized into meritocracy too long to do otherwise. I agree with increasing the progressiveness of USA taxes. Taxes are not popular in the USA. We’ve just gone through a tax change in which Republicans in Congress insisted those changes added progressivity to taxes. Did they? In other words, taxes are confusing. From my side, I suggest we add 25 lines to existing law and completely change the distribution of money in the USA. Easier to explain and quicker to take effect. Senator Warren’s Accountable Capitalism Act is much broader but only adds about 75 lines to existing law. In laws a few changes can make a big difference.

      • December 6, 2018 at 4:03 pm

        Ken, you should know by now that libertarianism (neoliberalism) is just about the antithesis of what my model represents. And I too make it a habit to stick with the original meaning of the word, so welcome aboard. Sorry for the still depressed state of its surroundings, but at least the only direction to go from here is upwards.

        I’m under the impression that Americans in general are brainwashed into thinking that the aptitude to play the game within a capitalist structure well, has got to be meritorious. I’d say your above description of an entrepreneur is a perfect example of true meritoriousness. If only compensation would be based on such merit, as well as employee’s skill and dedication, the world would be a far better place. Truth is, the overwhelming majority of them go broke within the first two years of operation; with the financial predators sucking up the spoils.

        Tried to find some info on Warren’s proposed ACA and its 75 line addition to law, only to discover the WSJ pay-wall restriction. And reviews of it by others didn’t add much to the proposals I’ve been making here lately. Would you like to elaborate on the 25 line addition to law of your own?

      • December 7, 2018 at 6:45 am

        John, I’ll accept your interpretation that your approach is not libertarian. But it’s my view it is so. Thanks, I’ll stick with the old French. Although it’s an interesting study to examine how liberal philosophers and people of business made the changes.

        Socialization is not brainwashing. It’s how humans are brought into a culture. It’s how humans become human. They’re certainly not born as such. The real tragedy of socialization into meritocracy and the life of private business is it sacrifices many humans so that a few can succeed, and an even smaller number become powerfully wealthy. Those who showed themselves gifted at financial transactions added an even more denigrating twist to this way of life by forcing those occupied with non-financial business to depend fully for their existence on financial transactions.

        On the 25 lines, I’m speaking of new lines added to existing law. Not counting definitions and all transition phrases. This I estimate would be about 25 lines changing the chartering requirements for corporations and moving all chartering out of state and into federal control. There are examples of the requirements I propose to add in early American corporate charters. I have a copy of Senator Warren’s Accountable Capitalism Act. Happy to email to you. Just need the address.

      • December 8, 2018 at 4:48 pm

        I wonder what it is in my anti-capitalist approach, holding the economy to be an inherently social structure, that strikes you as libertarian, Ken. I’m interested in your view. I could understand it if perhaps you don’t believe in the valid undertaking of any kind of private business ventures. But that would belie your effort to change the chartering requirements for corporations. So I still don’t see how my (and say Schumacher’s) interpretation of an entrepreneur differs from yours.

        I would think that, within the kind of society that Schumacher visualized and I concur with, merit takes on an entirely different meaning than the one you, with good reason, despise. The latter meaning isn’t an outflow of the natural condition of the human spirit, born with the innate drive to be useful to one’s kin and community, but as benefitting a concealed kleptocracy that gains “wealth” at the expense of the majority, a corruption of society that in the main still undiagnosed as such isn’t sourced in but only facilitated by law.

        So if you’re equating your particular efforts to add to existing law with my proposal of a much more steeply progressive taxation rate that would be cutting away the very means to corrupt at its source; I cannot help but think, without at this stage having more details, that you’re overestimating any effects as to its potential to alter society.

        And just briefly, I don’t think that the worshipping of kleptocratic behaviour, as is the sad state of USA’s affairs right now, could have happened without a kind of brainwashing. For that I hold its MSM responsible for uncritically accepting whatever it’s spoonfed by the “powers” that be. So I’ve got to disagree with you on that point as well.

        I much appreciate your offer to email to me Sen. Warren’s proposed ACA. My address is: vertegaa@vcn.bc.ca

      • December 9, 2018 at 6:36 am

        John, all I can say is it is one of those chicken and egg things. I’m an historian and anthropologist. Belief is split among historians but among anthropologists 99% accept that community came first (families, groups, corporations, societies, etc.) and humans only exist as humans within one or more of these communities. Even the individualist philosopher or economist is only such due to socialization into a community that makes individualism something factual. In simple terms humans can only and do only exist in communities. When asked about the human brain, which the questioner took for granted would seal the case for individual humans preceding community, anthropologists replied – the human brain only works with other human brains. The human brain is a community brain. Libertarians are such because they are part of a libertarian community. They are fooled by liberalism into the opposite conclusion.

        Schumacher’s ideas and writings originate as you suggest in a spiritual and intellectual community. To understand Schumacher study this community and his history within it.

        You call existing American society a kleptocracy. Another community to consider. And you condemn it. When I said humans are human only within a community, I never claimed each such community was useful and benevolent. The Russian Mafia is often neither of these, but it is a community, nonetheless.

        I prefer the option of changing corporate chartering and related laws because it has a firm basis in American law and lay history. Americans have used this option before. Plus, I believe my option controls corporations more tightly and across all areas of corporate life, rather than focusing just on taxes.

        Emailed you the text of Warren’s Accountable Capitalism Act.

      • December 10, 2018 at 3:13 pm

        Ken, I have no problem with accepting the thrust of your post, which I interpret as an argument to establish the necessary conditions for self-perpetuation; as nothing can _be_, from the family unit on upwards, without there having been a cause to continue or prevail in the past, to get us to any present perception of reality. So, while perhaps putting a somewhat different slant on your point of departure, in that very real sense individuals do come second. And that’s exactly the reason why I’m not a libertarian, because it’s the same argument I make with respect to an economy being a social structure, and not as the sum total of individual motives being the cause of its existence.

        Now you may well have decided that the socialization of culture produces certain things and conditions on a single level. But ultimately that’s a structure of beliefs, and there neither is way to prove any of it nor convince a non-believer. The tack I’ve chosen to take is different, in that by considering different levels it is able to get to the bottom of phenomena and explain the why and how of their occurrence.

        Your economy is one of things and conditions, mine is one of accounts. Human intellect decided a long time ago that accounts are indispensable to keep track of output whose consumption occurs at a different time and place than its production. So right away there are two different levels involved. One being the level that is occupied by the human species whose purpose is beyond our cognition or unfathomable, earlier without having the benefit of accounts, and next the level where the economy as a system of accounts for a purpose occurs; i.e., after accounts were introduced the latter being the subset to the set.

        By this way of looking at the world one is able to conclude for instance, why it is senseless to seek a theory of money, the holy grail of economics, within the single level of one’s conceptional view of totality; and this btw. goes for conventional economics as well. The invention of money had to take place on the (higher) level that humans occupy, where, as a notional unit of account, it fundamentally is a “no-thing” while depicting the workings of an economy in its terms. Transpose this to the generally held to be single level of the economy, where money is “obviously” a thing, and a conflicting interpretation becomes inevitable. As nothing can both be a thing and its opposite a no-thing, the philosophy of a _needing to reproduce itself_ single-level economy has to come to a stop.

        Haven’t had time yet to study the ACA, but many thanks for sending it.

      • December 11, 2018 at 10:29 am

        John, historians and anthropologists don’t deal in causes. They deal in relationships that involve other relationships, etc. over time. Anthropologists call these ethnography. I prefer the term used by historians, stories. As we continue to examine living and non-living relationships, we find that as far back as we search all things, living and non-living exist in relationships, back to the first cells, geologies, etc. In simple terms things exist in pairs, and only in pairs. You can read the biological and physics work on this. Warning: it’s complex. Sapiens is a distinct change in these relationships. Sapiens is the only creature we know of that can create and recreate itself and the things around it. This is the “social” in action. Though the term came long after the actions. For Sapiens economy is social, not as a choice but as the only way our species functions.

        My long-time friend Andrew Pickering (sociologist and physicist) points out that beliefs (judgments) are the basis of human cultures, including scientific culture. I’m not certain I understand fully the “accounts” you prefer over “things and conditions.” But all are a creation of human cultures, which develop in human groups. In Pickering’s terms, they’re human judgments, formed via these cultures. So what scientists (social and physical) study is judgments, and the scientists create judgments about these judgments. Judgments that Sapiens has a purpose are not uncommon in this work. Also, not uncommon are hierarchies. Sapiens creates rank and non-rank orders to explain itself and the parts of the world that are not it. Economies and all their tools, ways of life, science, etc. are judged into existence by Sapiens, and then this work is studied, explaining the explanations by social scientists, whose work is in turn studied by philosophers, etc., etc. It’s not senseless to look for and find literally dozens of theories covering economic ways of life, from the firm, to money, to markets, etc. It would be surprising only if we found no such theories. Money is not obviously anything till it is made something by our species. And that something can exist and operate in a literally endless variety of ways. This is the work some members of Sapiens enjoy studying, wanting to “reveal” how its all done. The wizard behind the curtain, you might say. But as in the story the wizard is always just Sapiens.

      • December 12, 2018 at 4:36 pm

        In economics, when returns don’t cover expenditures one goes broke, Ken. There is a direct causation, in terms of accounts, operating here. If the frame of reference of both anthropology and history doesn’t deal with causation then perhaps those disciplines aren’t suited to obtain the sought answers. Your “stories” about relationships may well work for you, but it’s too wishy-washy for me. Let’s agree to disagree.

      • December 13, 2018 at 7:25 am

        John, causation is a belief that events occur in predictable ways and that one event leads to another. Yet, our understanding of non-linear dynamics (e.g., Chaos) shows us this cannot be the case as it is currently stated in western science. Complex or dynamic relationships are predictable but only in part and within situational limits. Most every physical relationship is complex and a great many social ones as well. But we shall agree to disagree. All the best.

      • Craig
        December 2, 2018 at 8:09 pm

        It’s all old paradigm thinking and tweaking. A new paradigm is a radical, powerful, elegant and yet simple change. The paradigm of Debt Only has ruled for over 5000 years. The world changes. Forget the tweaking….solve the problem…so that everyone benefits and finance is possible for the innovative and sane ecological changes we need.

  10. Trond Andresen
    December 3, 2018 at 9:17 am

    To some of the objections(?) above against our proposal: The electronic (= digital) parallel currency proposal is aimed at solving pressing social problems in eurocrisis countries HERE AND NOW. For me some of the theoretical issues and positions introduced above is not relevant for the problem we try to find a solution to.

    • December 3, 2018 at 11:28 am

      Trond, your own focus on “solving pressing social problems in eurocrisis countries HERE AND NOW” is absolutely fine, and contra Craig, parallel currencies are not mere “tweaking”, for his “problem” is central banks creating money as debt and being in a position to goverrn governments. On that one can quote Josiah Stamp as well as explore it in depth via the documentary films like “The Money Makers” and “The Inside Story”. The Fed and Bank of England are as much a cause of uneven development in the US and Britain as the ECB is in the EU, so the long-term solution has to include not only the giving of credit instead of selling it as debt, but also an inalienably constitutionalised return to localised banking, to which more centralised banks and governments merely have oversight as advisors on work needs and coordination (for simply replacing debt money by gifted credit won’t get the real work done).

      An article in the latest issue of Economic Thoughts reveals what Walras actually said c.1898 about General Equilibrium and cooperation: asking in effect for what I’ve been saying and building on since first reading Keynes in 1969: the cybernetics of 1948 in its modern form of an information-based PID servo rather than a homeostatic mechnism. See Section 3 in http://www.worldeconomicsassociation.org/files/journals/economicthought/WEA-ET-7-2-Holland-Black.pdf.

      Craig might like to have a think about annex A.1. The Hilbert Space and Quantum Cognition
      in the same issue of ET (pp.73-4). Apparently simple ideas can be complex.

      • Craig
        December 4, 2018 at 1:23 am

        “Craig, parallel currencies are not mere “tweaking””

        Everything below paradigm change is tweaking. Consult history for that fact. Historically, everything adapts to a new paradigm….NOT the other way around.

        “Apparently simple ideas can be complex.”

        Simple ideas/concepts, of which every new paradigm is an example, (nomadism to homesteading, hunting and gathering to agriculture, terra-centrism to helio-centrism, Debt Only to Direct and Reciprocal Monetary Gifting) fit within, transform and bring clarity to complex systems.

    • December 3, 2018 at 12:16 pm

      O how what looks so elegant when you type it gets chewed up by the time WordPress has processed it! I’ve come back anyway because Ken Zimmerman, reflecting on the need to understand money, has come up with a couple of more American versions of Stamp:

      ‘By controlling our nation’s money supply – up and down, “The fluctuations of our circulating medium have committed greater depredations upon the property of honest men than all the French piracies.” – President John Adams, 1799. And, more famously: “If the American people ever allow private banks to control the issue of their currency first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered.” – Thomas Jefferson’.

      Thank you, Ken. The significance of the Jefferson quote may be understood by comparing it with ac electric current, which transmits power whichever direction the current is flowing.

    • December 3, 2018 at 12:46 pm

      Trond, I think I understand what you’re attempting to accomplish with EPM. You write, “Both households and businesses should be provided with an additional national means of
      payment, “Electronic Parallel Money” (“EPM”). … EPM will greatly reduce unemployment and enable people and businesses to exchange goods and services.” There’s not been a lot of research on alternative currencies. So, the empirical basis for questions is narrow. But two question occur to me outside of what I’ve said already. First, how is sabotage of EPM by bankers overcome? Second, how to stop those same bankers and financial speculators from turning EPM into just another financial commodity to be churned up and down, and on which bets can be placed? Both have happened to Bitcoin and other alternative currencies.

      Dave, think of money, any money as a tool. Any tool can be used to create and repair, or to tear down and abuse. I see no reason alternative currencies won’t be used for both, as are standard currencies today.

      • Trond Andresen
        December 3, 2018 at 1:21 pm

        Bankers cannot stop it when it has been implemented, but they will of course use their considerable power to derail it before that.

        Concerning speculation, since the currency is purely digital and resides only in some center under the treasury, one may have software running 24/7 to detect speculative attempts, alerting human controllers when such transaction patterns are detected.

        A digital national centralised currency is the first type of money where it is technically feasible to detect and quash speculative activity, according to laws on may have against this. This a positive side effect of an EPM. Another positive side effect is that criminal activity, capital flight and tax cheating is very difficult to get away with in such a system.

        All this is discussed in chapter 7 of my recent phd, see https://www.dropbox.com/s/6xobwa1b1ybtsjz/andresen-phd-finished.pdf

      • December 3, 2018 at 6:51 pm


        The way I see it is that you’re introducing a “money”, without having a coherent theory of what money “is”. The latter requires a set of assumptions and then let the meaning of money roll out in terms of those assumptions. Lacking an underlying theory the operation becomes pure speculative. It may work or may not. The odds may well be in your favour, but you cannot tell its result for sure either way.

        In my model, coherent until shown different, money is solely a unit of accounting for claims to output; and thus, unlike the Keynesian view, has no other attributes. It’s a disbursed non-physical negative from the perspective of producing output anew. EPM, as I understand it, is a form of (also non-physical) positive money. Will it introduce conflicts, aside from being confusing and cumbersome? I don’t know but would think it’s imperative to find out beforehand.

        Progressive taxation is also possible in the here and now. It additionally has already been tried before with the apparent success of the post-war “golden age”. It’s understandably out of favour with the proverbial 1%. But that ought not to be a hindrance for the rest of us. Once the model has been clarified, democratic decisions will rule regardless of “power”.

      • December 4, 2018 at 4:49 am

        Trond, you may be correct. But here are some items you should investigate, I think. First, the legality of virtual or digital currencies is generally settled in terms of buying, selling, and owning them. These are not illegal. However, the US Federal government has not yet passed laws to this effect. According to the IRS, cryptocurrencies such as Bitcoin will be treated as property. Some wanted Bitcoin futures to be traded on the stock market, but the Securities Exchange Commission and the Commodities Futures Trading Commission do not appear to share the excitement. They have put out a joint statement demanding answers before they allow cryptocurrencies to move onto the market. For most parts of the USA digital currencies are considered a “monetary instrument,” like travelers’ checks or money orders. These laws also state that virtual currencies cannot be used to commit money laundering or other white-collar crimes. Both are major concerns of law enforcement agencies. The Financial Crimes Enforcement Network (FinCEN), issued several warnings about virtual money, and how it can be used for money laundering and financing terrorism. One of the biggest reasons that many forms of virtual currency have become popular is that it is incredibly hard to trace. That makes it appealing to criminals. Bitcoin has been used by drug dealers, and money launderers. Recently, a currency exchange was fined $110 Million for facilitating ransomware and dark net drug sales. What it is illegal to do with Dollars or Euros, it is also illegal to do with virtual currencies. Under current law, companies and businesses are not required to accept virtual currency of any sort for payment.

      • December 3, 2018 at 10:49 pm

        Ken, “time to think anew”.

        MONEY sure is a slippery concept, and I’ve dithered over it being of negative value or a mere symbol of no real value. It is however not a physical but a linguistic tool: the equivalent of a mathematical variable which can have different [implied] values at different times. The tokens of it [see definition of ‘token’ in linguistics] which form a currency do not all have to be spent, so they represent a CREDIT LIMIT rather than a credit. If you have credit in your account or a pile of money of different denominations, one’s credit limit is the arithmetical sum of one’s credits less what has already been spent. On this basis a debit does not denote a debt but the the extent to which one has one: for which one should be grateful and willing to earn CREDIT WORTHINESS [conveniently symbolised but not earned by ‘wages’] by giving in return what others need of us.

        We all start life as children, of course, and have to be weaned off the understanding of money as a ‘thing’. Until we have been, cheats and liars will always be able to undermine and abuse our ignorance and innocence. That is one of the main reasons – the epidemial one – for localising economies as far as possible: so that the damage done by “rotten apples” does not spread. The other is to value the apples on one’s own tree, not daft politicians drunk on mass-produced monetary “cider”.

      • December 4, 2018 at 6:40 am

        Dave, not as slippery as it first may appear. Money is not a commodity or even a physical object (although money may use physical objects). Money is a cultural process (institution) created to credit and clear, satisfy and impose obligations, duties, and responsibilities. Historians often misunderstand money because they focused too much on what it leaves behind, coins, contracts, pay and tax records, etc., rather than the networks created via money and their working out over time. They along with economists and social scientists fail to analyze money because they are the fish of the Chinese proverb, “The fish is the last to know water.” Humans are the last to know money. The closer an institution is to the center of our daily lives, the trickier it is to step outside of it in order to analyze it—and the more controversial will be attempts to do so.

      • December 4, 2018 at 10:18 am

        Ken, sounds like “more slippery”! I did think of money as an institution, but thought the mathematical variable approach more unambiguously instructive. My problem with your cultural process is precisely that it does not do the work necessary to satisfy real as against legal obligations, i.e. to help regenerate what society’s crediting us has enabled us to consume. Think of the case when money used for repayment has been stolen.
        Were the “fish in water” to listen to those amphibious fish that have learned how to survive droughts, perhaps they might see the relevance of this to the post-euro crisis of global warming.

        Trond, I again accept that your localising while staying within the ‘money has positive value’ paradigm may in the be the best we can do in the short term. Academics, however, are fish out of water and have little justification for not “thinking anew”.

      • December 4, 2018 at 2:16 pm

        Dave, like most social scientists, anthropologists often disagree about the precise definition of culture. However, fundamentally culture can be defined as sets of human ways of life (institutions) that are passed down from one generation to the next. This includes social structure, language, law, politics, religion, magic, art, and technology, and many institutions that don’t fit neatly into any of these categories, or cross from one part of life to another and sometimes back again. The important point is that culture is to humans like water is to the fish. It is everything humans take for granted, seldom examine, and use in every part of human existence. Mostly culture is purposeful. Intended to serve certain needs. Money is one such institution. Your last point is well taken. Often humans become aware of culture when it fails, as when the fish’s water drys up. Then humans must adapt by changing their culture.

    • Craig
      December 4, 2018 at 1:07 am


      Implementing EPM requires just as much political effort as Monetary Gifting…and by far lacks the level of attractive individual and commercial benefit as the latter, hence its not nearly as likely to suceed politically. It also does not resolve the real cause of “monetary” inflation, hence such will continue, and financial and corporate forces will undoubtedly try to increase it so that they can claim that progressives “don’t know what they are talking about” and muddy the waters for another hundred years or so.

  11. Trond Andresen
    December 3, 2018 at 6:57 pm

    The digital EPM vil have value and be accepted in transactions since it may be used to pay taxes — one EPM counting as one euro.

    • Craig
      December 4, 2018 at 5:19 pm


      A nation’s present currency pays for taxes. Why create an additional one when, with the strategic implementation of the policies of the new paradigm of Monetary Gifting, you can resolve the deepest and most chronic problems of modern economies.

      We see the beginnings of part of the awakening to the new paradigm in ideas such as “a modern debt jubilee”, 5 Star’s dividend, QE for the People, MMT’s assertion that direct funding by government is the actual reality in fiat money systems and that money is essentially accounting. Now all economists need to do in order to integrate all of these insights is look directly at the operations of commerce and cognite on the incredible mathematical significance and paradigm changing effects of a discount/rebate monetary policy at the point of retail sale. The abundant relatively high percentage discount/rebate at retail sale is the invention of the telescope and discovery of the ellipse of economic theory.

    • December 4, 2018 at 5:24 pm

      Ah, the old MMT shibboleth that gives value to that part of the “money supply” that’s paid in taxes. What about the other half to two thirds? Why not simply hold that money is valuable because it allows one to legally appropriate the output of others in exchange for ones own? At least the position of taxes supporting military expenses won’t need to be defended as being valuable.

      • Craig
        December 4, 2018 at 6:04 pm

        It’s not a shibboleth that sovereignty/order/ethics is an essential aspect of human interaction. If the government isn’t sovereign….why would powerful corporations and individuals bother to pay their taxes?

        When you can integrate the apparently opposing aspects of the natural philosophical concept of grace like benevolence and sovereignty with the policies I advocate….you know you’re on to something truly profound….like a breakthrough discernment that brings resolving wisdom to economics and the money systems.

      • Calgacus
        December 5, 2018 at 6:43 pm

        Well, Trond Andresen is right. Because the “old MMT shibboleth” “taxes drive money” is right.

        Why not simply hold that money is valuable because it allows one to legally appropriate the output of others in exchange for ones own?

        By putting in both “the output of others” and “ones own” you are including multiple monetary transactions here – more properly this explains why a monetary system can work, can organize the division of labor, not the simpler question of why money is valuable.

        So in other, simpler, words, money is valuable because you can buy stuff with it. Right. But this means money in the modern world, for all practical purposes money everywhere and always is driven by taxes, by payments to the government, for buying from the government.

        Because there is a name for the biggest. meanest kid on the block, with the biggest gang – “Government”.
        The output of this government, what it sells, is extremely valuable – the right to “own” land – the right to one’s head – the right to income – the right to buy stuff. And governments only sell these rights for “money”. To the general public, all money, not 1/3? of money – that is BOTH directly government-issued money (bills, coins, bonds) and bank-money are acceptable forms of payment to the government. Governments make bank money valuable that way. For banks paying to the gov, only government money (cash, bonds, reserves) will do.

        I mean, for current, practical purposes, there isn’t much that is so slippery about money any more. The MMTers have dotted every i and crossed every t. And fjorded every stream, so they found their dream. What is more necessary is for people to actually read and rethink what they have written, not try to rebut a superficial glance with superficial argumentation. If one glances more, then one sees that there are ready answers to any real objection.

      • December 6, 2018 at 4:06 pm

        Nice opinion piece you came up with Galgacus. Problem is, you can’t prove any of it without a set of assumptions in which terms it is true. MMTers are well aware of the fact that all they can claim to have is an an inductively gleaned explanation of the economy’s operational monetary procedures. So it isn’t about a monetary theory where all the i’s are dotted and the t’s crossed, far from it. That dream you’re talking about is all yours, not theirs. Wray, though admittedly some time ago, confusedly waffled back and forth between money “thingies” and money not being a thing. Now don’t get me wrong. I like much of what they stand for. But their prescription in the main is mitigative rather than a cure.

        Also, I have no problem admitting that taxes drive the economy, at least in those countries where income taxes are levied. That in fact happens when you’re by far the biggest single player in the hood. But the assertion that all money _is_ fundamentally valuable because taxes can be paid with it is preposterous. For it is nixed by the dozen or so countries, mainly in the middle east, whose money is yet valuable without compelling its citizens to pay taxes. Reductio ad absurdum indirectly proves you wrong.

        In any case, while government confers a right of legal tender for any debt redemption on all its money, the value it bestows because taxes can be paid with it doesn’t exceed the amount of taxation it extracts; which in its totality is about 35-50% of GDP, depending on the country one lives in. Furthermore, the MMT notion that the process in question comes to a stop with the paying of taxes doesn’t make any sense either. The government’s books are part and parcel of the economy’s books in general. So what it takes in it spends into the economy again in income, and society’s “valuable” benefit is infrastructure and the military. The latter, in the USA since the war on terror started, projected over the next couple of decades or so, to be approximately equivalent to half a dozen Chinese BRI’s. Some value, isn’t it?

      • Calgacus
        December 10, 2018 at 8:47 pm

        If you seriously studied MMT, you would change your opinion. There really isn’t any big mystery about money any more, not like it is spoken of here. The MMT prescription is to actually understand what one is talking about, and we do. If one sees confusion or waffling coming from an MMT thinker on such points, it is invariably due to the listener not really paying attention, not the speaker.

        MMT, following Alfred Mitchell Innes is general enough to cover everything, and extremely simple. I said, “for practical purposes” taxes are what drive money everywhere. One needs to do a little more work, have a little more understanding to cover those Middle Eastern countries, that’s all.

        Also, I have no problem admitting that taxes drive the economy, at least in those countries where income taxes are levied.

        Displays lack of MMT knowledge and understanding. An MMT point that Wray make is that income taxes cannot (initially) drive money demand. They can only augment a pre-existing demand, driven by taxes.

        But the assertion that all money _is_ fundamentally valuable because taxes can be paid with it is preposterous.
        That isn’t precisely what I said, which was:
        “money is valuable because you can buy stuff with it. Right. But this means money in the modern world, for all practical purposes money everywhere and always is driven by taxes, by payments to the government, for buying from the government.”

        Not seeing this, which is in front of everyone’s eyes, which has been known for centuries, is what is preposterous. If the USA or the UK got rid of taxes and spent as they do, their money would quickly become worthless. Again, money is valuable because you can buy stuff from it. All the other non MMT explanations are ridiculous fairy tales that have been refuted in the real world whenever a country is foolish enough to believe them.

        The proportion of the tax take to the total of money or GDP is irrelevant to the causality. There may be a small drain in the bathtub, but that drain and gravity do drive the motion of the water down.

        That a process ends with tax payment is obvious. You have a dollar or a McDonald’s coupon. You pay taxes or you get your McChicken sandwich with it. The government takes it for taxes or McDonald’s accepts the coupon. End of this story. For a new story, the government or McDonald’s prints a dollar or coupon and asks the employee build an aircraft carrier or sweep the floors.

        Like I said, you have to want to have more than a superficial understanding if you want to come up with more than superficial, incoherent and empty objections.

      • December 12, 2018 at 4:39 pm

        I have no intention arguing with a true believer who just tells me to study the word, and everything will become obvious, Calgacus. Get back to me when you’ve figured out what set of basic assumptions underlie your assertions. Who are you anyway that makes you qualified to counter the acknowledgment of Stephanie Kelton that MMT is not a theory?

      • Calgacus
        December 12, 2018 at 6:16 pm

        I have no intention arguing with a true believer who just tells me to study the word, and everything will become obvious, Calgacus.

        Yes, well that is how people learn things. Want to learn calculus? Study the word of Newton & Leibniz as explained in your calculus textbook. Real criticism needs engagement with what is being criticized. A good test is – do the critics put words in others’ mouths? Can they understand the theory enough to repeat it in their own words, like a student would on an exam?

        Many people would be happy to explain things, but it is hard to convince people who are sure they are right already and the theory must be wrong for some mysterious reason.. If you think calculus is wrong, you won’t be able to learn it.

        You have said that Wray or Kelton said something that somehow supports what you are saying. What?
        Saying that there is something, left mysterious, that refutes an opponent is not a good sign.

        If the critics and refuters of a theory are making more assumptions than the theorists, that is a pretty good sign the theory is true. Basically, there is no there there with MMT. No assumptions to speak of, outside of ones everyone makes to live their daily lives. It is all about doing the accounting correctly, understanding how English or any other language speaks about debt and credit etc, and making economics consistent with that.

      • December 12, 2018 at 6:52 pm

        Happy to oblige posting a repeat of what I wrote in the course of the thread “Radical paradigm shifts” on 7/29/2018.

        “The ideas [of MMT] are not theoretical, and they aren’t particularly modern. What we’re doing is simply describing, operationally, the way government finance works. It’s not a theory; we do not make assumptions, although we are economists. What we’ve been describing to you today is not dependent upon any ceteris paribus condition or any set of assumptions about perfect competition or rational agents or anything else that you get exposed to when you study economics, but rather an attempt to simply describe the way in which the institutional arrangements are set up, and the accounting identities and what happens in a balance sheet framework; when one side of the equation moves, what happens on the other side of the equation? That’s really all we’re up to…”

        Stephanie Kelton, Session 2 — 1st Fiscal Sustainability Teach-In and Counter-Conference
        George Washington University, Washington DC, April 28, 2010

  12. Craig
    December 5, 2018 at 8:52 pm

    Question: Why does austerity appear to be so necessary to neo-liberal economists, and why despite their disdain for that austerity do leading edge heterodox economists still concern themselves about injecting too much money into the economy?

    Answer: Fear of inflation, and lack of insight about how to create a better alternative to commercial decision makers, trapped in a monetarily austere system, raising their prices when they perceive more money coming into the system.

    So if you can devise a policy that SIGNIFICANTLY reduces prices at retail sale which is both the end point of the entire economic process for every consumer item, the summing point for all costs and so prices for same and, as it is the ending point of the economic process where production becomes consumption must be the terminal expression point for any inflation as well….then you’ll have resolved the problem of inflation….and even made deflation beneficial in profit making systems. Of course you’ll need a set of taxations and regulations that encourage economic virtues and discourage economic vices throughout the entire economic process to keep the system stable, but what is theorizing for after all.

    Let us create not only a New Deal, but an Abundantly Freeing New Deal for both the individual and commercial agents. A New Deal that ends the “too expensive” nature of present finance and enables us to easily finance the necessary ecological research and innovation the planet requires. We’re way to close to a crisis at midnight not think and act boldly.

    • December 6, 2018 at 2:02 pm

      Craig, before we can create any deal that helps the country and all her people, we need to recognize that inflation and money are, for many morality concerns, in the everyday form of that term. Gerald Ford made the point well in his 1974 “WIN” speech (Whip Inflation Now!). “Our free enterprise system depends on orderly capital markets through which the savings of our people become productively used. Today our capital markets are in total disarray . . . Prudent monetary restraint is essential. You and the American people should know, however, that I have been personally assured by the chairman of the Federal Reserve that the supply of money and credit will expand sufficiently to meet the needs of our economy and that in no event will a credit crunch occur.” Ford masterfully blends the practical need for credit with an admonishment about our imprudence and lack of proper care. A strong but not too strong reprimand like a parent might give a small child. The call for austerity follows in my view more from the perceived imprudence of money users and money lenders than fear of inflation. Although it seems likely that contributing to a crisis of credit might also be looked on as an indecent offense against the community. This explains I think why austerity is adopted so quickly when there is a hint of inflation or recession. The austerity not only supposedly solves the technical problems of a failing economy, but also punishes those in our society who are reckless and use money imprudently. Mostly the poor and people of color. Almost never the rich or corporations.

      • Craig
        December 6, 2018 at 5:44 pm

        Ford’s statement was made entirely within the paradigm of Debt Only. That makes it not only delusional and ignorant, but irrelevant. As for the morality concerns regarding inflation those will always exist with or without inflation and are thus simply a false obstruction to the resolution of inflation and a much more prosperous economy for all. Of course we’ll have attempts by regressive forces to get us to return to austerity by broadcasting the inevitable examples of someone drinking themselves silly and falling down the stairs and breaking their neck etc…..as if extra money were the reason for such instead of human immaturity and stupidity which are simply the inevitable path toward eventual maturity. Tragic as it is…it’s still anecdotal. I have suggested here numerous times that if we are even a little smart we a cooperative effort by the clergy, helping professions and the government to guide and awaken people to the many positive and constructive purposes available to people now that they would have the time and monetary resources to enjoy and derive purpose from them. Why do you think I call it Wisdomics-Gracenomics?

      • December 7, 2018 at 7:27 am

        Craig, tough words for a President. It’s difficult for me to accept that his words are irrelevant or entirely wrong. You seem to be in the same boat as Peter Kropotkin. Kropotkin’s most famous book, Mutual Aid, maintains that cooperation within a species has been an historical factor in the development of social institutions, and in fact, that the avoidance of competition greatly increases the chances of survival and raises the quality of life. He contends that mutual aid is a factor that is both biological and voluntary in nature and is an enabler of progressive evolution. Without it, life as we know it could not exist. This is also seen in the animal kingdom.

        Kropotkin also believes that humans have a predisposition to help one another and do so without governmental coercion. A centralized government is not needed to set an example or to make people do the right thing. People did so before the rise of the State. In fact, Kropotkin maintains that often it is government that represses humans’ natural tendency for cooperation. He accuses historians of giving little attention to the lives of the masses and their inclination to help each other, offering up instead, a distorted view of civilization through a series of “epic poems, the inscriptions on monuments, the treaties of peace – nearly all historical documents bear the same character; they deal with breaches of peace, not with peace itself” (Kropotkin 1989, 117).

        Kropotkin strongly objects to the Hobbesian notion that defined humanity as no more than an indifferent alliance of individuals who prefer to battle with one another rather than make peace, only prevented from doing so by some outside authoritarian force. In his own words,
        The leaders of contemporary thought are still inclined to maintain that the masses had little concern in the evolution of the sociable institutions of man, and that all the progress made in this direction was due to the intellectual, political, and military leaders of the inert masses (Kropotkin 1989, preface).

        Kropotkin’s insights not withstanding, humans seem clearly still stuck in struggle and competition, not cooperation. The sociopaths are clearly winning today.

      • Craig
        December 9, 2018 at 9:47 am

        Kropotkin does a good job of elucidating the anarchist point of view, and Hobbes’ cold logic, if less enlightening, has historical validity. The answer to both of them is the integrative mindset of wisdom and its pinnacle concept and experience, grace/increased self awareness. All the more reason to implement the policies and regulations of monetary grace as in gifting, de-stimulate the chronic stress and anxiety of individual monetary scarcity and systemic austerity caused by the dominance of finance’s paradigm and do our best to acculturate the philosophy and ethic of same.

      • December 9, 2018 at 2:30 pm

        Craig, you miss the significance of Kropotkin. He challenges a large portion of the foundations of modern western philosophy, social science, and politics. All rest on the basic belief that human life is, and only is a competition for survival. This is a foundation of the Social Darwinism that is a foundation of modern versions of capitalism. In other words, capitalism is not just misinformed, but basically worthless in its present form. Wide ranging radical changes are called for.

      • Craig
        December 9, 2018 at 5:41 pm

        I don’t miss what Kropotkin says at all. I’m simply saying that if we intelligently integrate the two perspectives we can come up with a thirdness greater oneness of culture that isn’t a mere reaction against and if guided by the concept of grace/graciousness can evolve instead of devolve.

      • December 10, 2018 at 2:07 pm

        Craig, I assume you mean integration of competition/struggle and cooperation/accord? These have been integrated into a way of life in several cultures. Ancient Greek efforts perhaps are more interesting. With warrior and scholarly ways of life existing side-by-side. And in fact, many warrior-scholars. That’s uncommon today. Our culture generally discourages such combinations. I have no idea what you’re trying to say with “a thirdness greater oneness of culture…” And I’m still struggling with your notion of grace. I know it as a part of Christian cultures. It certainly did not exist in the ancient worlds, or in Oriental cultures. Help me out again.

      • Craig
        December 10, 2018 at 9:23 pm


        Yes, mental/systemic integration of apparent opposites is the process of wisdom/insight itself. Eastern and western monastic cultures are probably better models of what I’d like to see modern societies evolve toward. It would be a process of course, but I see no reason why such could not become reality. That doesn’t mean that we all will have to go live in a monastery and commit to vows of silence and such, but, guided by the natural philosophical concept of grace, we can obviously become a much more contemplative, less distracted from distraction by distraction and alienated society.

        As far as the word/philosophical concept of grace is concerned I use the western word but It’s actually meant as an eclectic referral to the experience pointed at by each of the world’s wisdom traditions. I could substitute it with samadhi, satori-kensho, atonement, the Sufi concept of The Friend etc. I’m not trying to enforce or invalidate religion by using it, simply pointing at these pinnacle wisdom tradition experiences themselves and encouraging people to become aware of them, contemplate/self actualize them and apply their various aspects in relevant ways to every area of life.

        “Thirdness greater oneness” is the result of wisdom’s integrative process, namely grace/graciousness/higher consciousness. It can also be called a trinity-unity-oneness-process an example of which is the Hegelian dialectic of thesis, antithesis, synthesis. The trinity-unity-process if looked for is replete throughout nature, mathematics, syntax and human experience. For instance, every experience by everyone is a trinity-unity-oneness process of one’s consciousness itself, the experience and reaction to it. I call it the Cosmic Code of Wisdom and Full Consciousness and express it formulaic-ly as:

        [ (A x Z) —> G/C ]

        and expressed in words as: an integrated duality (often conceptually and/or experientially oppositional) within an integrative trinity-unity-oneness-process.

        Mathematically it is characterized by the Fibonacci Sequence.

        [ (1 + 2) —> 3 ], [ (2 + 3) —> 5 ] ….etc.

        Syntax wise it’s [ (subject x predicate) —> period ]

        It is my contention that the modern world is caught in egoistic duality and requires not only an economic, financial and monetary paradigm change, but a new trinitarian mindset and integrative ethic based on the natural philosophical concept of grace. The perfect example of this economically is the habitual contention between thesis/capitalism and antithesis/socialism which needs to become the synthesis/profit making system of Direct and Reciprocal Monetary Gifting.

        (I hope the formulas come through as typed. Often they do not)

      • December 11, 2018 at 10:22 am

        Craig, thanks for this detailed overview. It helps a great deal. I still see what you propose as a long shot. I constantly see for example the two opposite faces of American exceptionalism. The one egalitarian but obsessively individualistic. Americans permit no interference in living their lives as each pleases. The second, unequal but lifted by the close relationships in the groups and the fulfillment one feels in meeting one duties and obligations as an American. In the second, what you propose might be welcomed, but not in the first.

      • Craig
        December 11, 2018 at 6:47 pm

        Thanks Ken.

  13. December 11, 2018 at 2:17 pm

    As a European rather than a North American I think it time to protest this discussion has got off course from discussion of the Euro crisis and [I agreed] the need for parallel currencies. Centralised banking and usury have remained hidden behind tax arguments and MMT, while Ken and Craig, since Craig’s question on Dec 5 at 8:52 pm, “Why does austerity appear to be so necessary to neo-liberal economists?”, though trying to get to the root of the problem, has ended merely in reiteration of old opinions. When we have already tried to think anew and ended up disagreeing, surely it is time to reflect on others’ critiques of our own arguments?

    Here I found Ken’s quotations of US president Ford and Russian philosopher Kropotkin vs Hobbes very thought-provoking. Ford on stability makes the practical case for limiting the proportion of positive D feedback in the PID interpretation of the economy. Kropotkin makes the case for anarchy in my sense: self-control rather than needing Hobbesian central control. So thanks, Ken. Where we still seem to differ is where you insist (against my interpretation of money on December 3, 2018 at 10:49 pm) that “Money is a cultural process”. Sure, but that is not something we can change, whereas seeing it as a credit limit (number) rather than a quantity of value or even as a rate of flow of value in either direction, is something we can choose to do, with consequences that can be worked out.

    Craig rightly wants to get below the particular, but continues to wallow in waters where (knowing them better) I caught a fish. He’s looking at numbers, I’m looking at numbers representing the degress of freedom (or inversely, control) in initially empty space, which include the possibility of evolving beyond it, like shifting from units to tens in decimals. Is that what he means by an “integrative trinity-unity-oneness-process”? Does he mean quaternary number representation? Clearly I disagree with his algebraic formulations, the operations in which he has not defined. His Fibonacci claim looks to me like bluster. I see the (1 + 2) fragment as (1) things, mapped or locatible as points in minimally 2-dimensional space, and (2) processes, representable graphically as points moving along lines.

    Meanwhile, events in Britain show how the problem has gone beyond economic ignorance to a clash between Hobbesian dictatorship (satisfying a childish desire for strong leadership when things are going wrong) and Humean ‘expert’ democracy (hoping strong solutions will emerge from shared knowledge). Britain now has a dictatorial leader and dictatorial party discipline suppressing not merely democratic consultation but even the entry of experts into parliament and change of leader, government and political direction. The childish majority of the Right seems to be going along with rubbishing democratic impulses on the Left without either side understanding enough about brain function to see these as manifestations of personality development and differences rather than culture. Sympathy, physical and linguistic skill won’t solve problems. They need the intellectual skills of those used to rehersing the democracy of a wide variety of personal experience in their own minds: as Craig would put it, a much wiser leader than the ones we have around now. Read the list in this reference of what will have to be dealt with if we continue along the road to Brexit.


    As my correspondent put it, “….when looking at this list, ask yourself if the MPs voting understand the complexities and interrelationships between these facts and options, and then ask yourselves whether Mr/Mrs J. Bloggs knew what he was getting into when he or she voted leave. NO WAY”

    • Craig
      December 11, 2018 at 6:43 pm

      My posts on this thread show a better and more thorough way to actually progress than the proposal originally posited, for the EU, the US and any other modern economy…..not a distraction from the issue.

      As difficult as it is for economic and monetary theorists to think beyond habitual dualisms and even consider third more integratively whole alternatives, it’s undoubtedly a mistake to try to also get them to integrate their thinking to a higher and broader level. My response to Ken was simply trying to address his questions to me.

      Despite this, I soldier on :) and will say that the lesson that the Fibonacci sequence teaches us is that its trinity-unity-oneness-process (everything within [….] ) is reflective of the infinitude of the cosmos (A X Z) and the possible phenomena that the existential reality of self awareness/consciousness ( G/C ) can integratively and unifyingly experience and understand.

  14. Craig
    December 12, 2018 at 7:35 pm

    The whole problem for the EU can be boiled down to the fact that you cannot have an international economic, financial and monetary confederation unless the separate nations involved can have stable separate economies. And that’s why the paradigm changing policies, regulations and structural changes of Wisdomics-Gracenomics are the answer not only for the EU, but every other modern economy as well.

    Wisdomics-Gracenomics is the synthesis of capitalism and socialism AKA the profit making system of Direct and Reciprocal Monetary Distributism. Synthesis/Integration of the truths in apparent opposites is wisdom, and the natural philosophical concept of grace which is characterized as a dynamic, interactive, integrative ongoing process is wisdom’s pinnacle application.

    • December 12, 2018 at 8:17 pm

      I agree with your first statement. The problem is, the financial powers that be don’t want confederation, they want global union, superficially divided up so they can rule it.

      • Craig
        December 12, 2018 at 9:25 pm

        Exactly. That’s why we must end their dominant and monopolistic paradigm of Debt Only by integrating the new one of Direct and Reciprocal Monetary Gifting into the economy and money system. That doesn’t mean there won’t be loans anymore, just that Gifting will become primary and resolving of the chronic problems that afflict the current system/paradigm.

  15. Craig
    December 12, 2018 at 9:29 pm

    The pot is beginning to boil over and the wheels are falling off in the EU, and it will only get worse unless we implement the policies of Wisdomics-Gracenomics which will IMMEDIATELY change individual income/business revenue scarcity and systemic austerity into abundance, check the frustrations that all agents have built up for almost forty years, expose the conspiracy theorists, zenophobes, white supremicists and fascist malcontents as the idiot extremists they are and enable us all to take the deep breath necessary to step back from a lemming like rush over the cliff to civilizational collapse and probable war.

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