Hi All,

 

  Thanks, Jason, for starting this discussion. I look forward to next Monday’s presentation. Economics and finance are things that, unfortunately, I am woefully ignorant about. I will say that, from a UTOK perspective, I see money as a symbol of potential energy. Moreover, there is, or should be, a very clear line between micro-economics and BIT. See, for example, here. Macro-economic forces need to be thought of in societal terms of social influence forces, practices, justification systems, resource ecology, technology production lines, capital labor relations, and the like. I found this podcast on the physics of money worthwhile. I also found this lecture on economics theory valuable, which I think rightfully argued that we need to point our economic systems that the right kind of problems to develop the right kind of market forces to leverage the right kind of change. Most significantly, I think we need to move from a materialistic labor-capital production-consumer model to one that is more of a “social capital” system that produces the conditions that foster mutual relational value, as mapped by the Influence Matrix.

 

  I like MMT because it does challenge some old orthodoxies and opens up new ways to think about finance, economics, government in the like that could give rise to powerful new policies. That said, I think we should all be aware that the digital landscape is changing ALL our institutions, and I don’t think anyone really understands the finance-economic system these days. Just like no one really understands where media is or is going or education. All of the old systems are in flux and god only knows where they will land.

 

Good to see some stimulating exchanges on the topic.


Best,
Gregg  

 

From: tree of knowledge system discussion <[log in to unmask]> On Behalf Of Deepak Loomba
Sent: Saturday, September 12, 2020 5:39 AM
To: [log in to unmask]
Subject: Re: picture bio desc

 

Jason,

https://arxiv.org/pdf/0905.1518.pdf

is an interesting paper. Have read it some years ago.

Economists are always had a premium on their job because they were believed to be doing something that everyone wanted but no one could - predict future in complexity. Economic-foretellers are only slightly better than palmists and astrologers. Because fewer ordinary people understand them than astrologers as they use Maths and the Govt. employs them to prove they are in control of the future.

Their job is in trouble. With technology like blockchain, it is possible to do completely traceable money. Indeed, one of my companies is working on a special token (http://www.indycia.com) which can provide live information of where how much money is residing and moving. Which means practically zero-slack economy. Theoretically, we might need less of economists and more of philosophers. Because the challenge in future will be why to distribute wealth in a specific fashion, rather than how is wealth distributed, because distribution, location & dynamics of wealth will no more need serious looking economists.

 

Truly yours
Deepak Loomba

 

 

 

While researching dark matter, I unexpectedly came across this study you may find interesting. If the conclusions of Professors V. Yakovenko (Maryland) and J.B. Rosser Jr. (James Madison) are correct, then money is simply a quantized form of energy.

 

By treating money as a conserved quantity, they modeled the economy as a closed energy system using a standard Boltzmann-Gibbs distribution and found it matched the U.S. Census Bureau data for the given year. A study out of Duke by Professor A. Bejan linking GDP to energy consumption points in the same direction (https://www.eurekalert.org/pub_releases/2020-03/du-tpt032420.php).

 

If money can be modeled as a form of energy, then they’re effectively same thing. This has ramifications for our interpretation of economic data and proposed solutions to inequality. It also provides a reasonable explanation why it’s comparatively difficult to profit from sustainable energy than fossil fuel (https://www.greentechmedia.com/articles/read/wind-and-solar-profits-the-battle).

 

If we can create a sustainable energy economy, it would apparently lessen the disparities. Makes sense considering the primary driver of supply & demand is scarcity. Anyways, hope you find the data useful. If you’re curious about the initial source, the presentation’s called “Dark Matter is Not Enough” on YouTube, 45 min.

 

Sincerely,

Eric S.

 


On Friday, September 11, 2020, Alex Goodall <[log in to unmask]> wrote:

Just found this in relation to MMT and PM:

 

 

One take-away is that PM want to take reform 'further' than MMT - FWIW

 

Alex

 

Hi Jason,

 

This all sounds very fascinating and I'm looking forward to your presentation! I am wondering what your familiarity with and opinion of cryptocurrency is, and how you think it might solve or fail to solve some of the issues that you've presented here? You don't have to answer now, as I realize that is a whole separate area of discussion. I am curious, though, as I currently manage an online community for Stake Pool Operators (creators and contributors of/to the transactional accounting ecosystem) for the Cardano cryptocurrency protocol. I've been impressed with the proposed solutions of the platform to large-scale economic issues, but I lack a traditional (or even modern) understanding of economics to be able to evaluate this from a perspective outside of a crypto-positive angle. May ping you for discussion on this if time allows :)

 

 

Hi Alex,

I think Seven Deadly Innocent Frauds of Economic Policy by Warren Mosler (particularly Part 1, pp. 13-68) is a terrific intro to MMT. Mosler is a a very clear and articulate writer.

As I began saying yesterday on the issue of taxation:

As a matter of logical ordering, the currency had to have been spent into existence first before that currency could be taken back in taxes. Thus, (and let's use the U.S. federal government as an example), federal taxation doesn't actually function to fund federal expenditures. 

The primary function of federal taxes is to create demand for the intrinsically worthless currency. You could think of U.S. dollars as federal tax credits.

The government issues the currency, then imposes taxes which can only be satisfied by that government's own currency. 

After that, taxes function to help regulate the economy... for example, to control inflation by draining excess currency from the economy. Taxes can also function to discourage certain behaviors deemed undesirable --- for example a high enough tax on pollution should discourage polluting behaviors. 

Together, spending and taxation are referred to as fiscal policy.

Now, the same can be said for "borrowing". The currency had to have been spent into existence first before that currency could be "borrowed". Thus the "borrowing" must serve some other function than funding the expenditures of a currency issuer, as well.

In short, "borrowing" is just the issuing of Treasury Securities, the function of which is to drain reserves out of the banking system, so that the central bank can hit its targeted interest rate. The less reserves, the higher the interest rate, and vice versa.

The targeting of interest rates is referred to as monetary policy. 

More later. 

 

 

 

 

 

Very helpful - thanks, Jason.

 

 

 

 

 

 

 

 

 

  1.  Currency issuers and
  2. Currency users

 

As the names suggest, currency issuers issue the currency, and currency users merely use the currency.

Examples of currency issuers would be the U.S. federal government, (the U.S. dollar), the Canadian national government (the Canadian dollar), the Mexican government (the peso), the U.K. government (the pound sterling), the Japanese government (the yen), etc.

That is, currency issuers have a monopoly on creating their own respective currencies.

Examples of currency users would be households, businesses, and U.S. state & local governments. That is, they do not create currency. They must acquire the currency first (e.g., through work, investments, taxes, etc.) before they can spend. The Eurozone would be another example of currency users since each of those countries gave up their power to issue their own respective currencies, and now are just users of the euro.

I'll end with this final thought for now...

Why would currency-issuing governments need to tax or "borrow"? Indeed, as a matter of logical ordering, they would need to spend their currency into existence first before there would be any of that currency to tax or borrow! Hence, taxes and borrowing must serve some other function(s) than funding the spending of such governments. If anything, it's just the opposite --- it's the spending that funds the taxpayers and the "lenders"!

I'll dig into that in my next post!

Have a good one,
Jason Bessey

 

 

 

 

Hi Jason

 

 

 

 

 

 

 

 

 

 

Virus-free. www.avast.com

 

 

 

 

Hello ToK Community,

My name is Jason Bessey, and I'm 49 years-old from Skowhegan, Maine.

I've long had an interest in psychology and the social sciences, in general. I first heard of the ToK back around 2004 when I was a psychology major at the University of Maine at Farmington via Steve Quackenbush, also a member of this community.

I was very interested in the theoretical unification of psychology, and I found Gregg's proposal quite intriguing. I very much appreciated someone attempting to address psychology's theoretical fragmentation.

I found other fields in the social sciences interesting, as well --- such as anthropology, sociology, and political science. Furthermore, I could grasp the concepts in those fields.

But economics was strangely a different story. I wanted to understand it...but couldn't make heads-or-tails of it! It just didn't seem to make a lot of sense. Or to be more specific, orthodox economics didn't make any sense to me. It just didn't seem ---- right...but I couldn't quite put my finger on it.

So I delved into more heterodox schools of economics. Around 2009, I discovered Georgism --- a school of thought based on the writings of late 19th century political economist, Henry George. For the first time, economics started to make sense to me. George was deeply concerned with the increase of poverty in the midst of progress in his time --- hence the name of his popular book, Progress & Poverty, in which he based his analysis on the classical three factors of production: land, labor, and capital. His conclusion was that there should be a single tax on land, and there was a significant international "single tax" movement that followed and continued decades after his death.

As much as I appreciated George's thought, though. I never thought he got the concept of money quite right. So I asked myself, "What is money?" And I found this question extremely difficult to answer.

So for the next two years, I grappled with this question. Around 2013, I saw this mention here and there on social media about something called Modern Monetary Theory (MMT). So I Googled it, read a brief blog post on it, and immediately knew I found the answer to my question.

MMT, in short, is (at its core) a description of how sovereign currencies actually function, and has been developed by many professional economists over the years. The interesting part is that that description is significantly different  than what's been described to us by mainstream economists.

Furthermore, I began to realize that, in modern political discourse, we're framing questions about fiscal and monetary policy all wrong...and that's standing in the way of us dealing properly with the pressing issues of our time --- a sort of progress-and-poverty problem in our day!

So I look forward to sharing with you what I've learned about MMT over the years, and I hope you'll find it of value, too.

Sincerely,
Jason Bessey

 

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