#161. A welcome initiative

This Varafoukis Lecture on The Nature of Money was brought to mind today after watching a more recent interview he gave to a French interview channel in February 2019, recommended to me by a French friend today.

In the second one He is asked to explain the Exponential Function. @ 24.08 income was around 55 trillion just say
25:51
55 there are too many zeros to worry
25:52
about 55 the total size of financial
25:57
derivatives was 70 okay so total income
26:02
another world 55
26:05
total derivatives 70 2007 exponential
26:12
growth okay this is this global income
26:17
had risen because of globalization from
26:19
55 to 70 from in six years as a lot from
26:23
55 to 70 growth in the size magnitude
26:28
volume of the river
26:30
others from 70 to 780 sooo nice so to
26:38
put it bluntly planet Earth was not big
26:40
enough for this bubble say burst in 2008

Steve Keen A good friend of Varafoukis has published and been linked to here on the Physiocrats and the Energy aspects of the Economic System.
The point is though that it’s not only about Energy qua energy.
Which brings me to Dominic Cummings?
I actually read all of the linked-to papers and blogs,

After the whole exercise I have more doubts about Dominic Cummings before I started, The Un-necessary, “I will bin you”, machismo is rather off-putting.

This Talk on the Edge web site is very good, Cummings would do well to watch it and internalise the ideas.

https://www.edge.org/conversation/lee_smolin-the-causal-theory-of-views

This is a very good video on Di-Electric Magnetism, now this guy is a proper misfit. What’s more, he is I think very close to scientific truth as we would get to, absent vested interests.

Smolin really is onto something as is this man.

https://www.edge.org/conversation/stephen_wolfram-mining-the-computational-universe

  1. IRAN – a SEEDS take on the economy

    Re. assessing the tensions between Iran and the US/West, here are some findings on the economy of the Islamic Republic, drawn from SEEDS.

    I should caveat that available data for Iran is not wholly satisfactory, particularly over debt numbers. IMF data is useful, the BIS doesn’t list Iran in its credit data, and official Iranian stats are hard to navigate. Other sources are patchy on Iran.

    Starting with estimated GDP for 2019, the local number translates to $450bn based on market F/X rates, but the PPP equivalent (about $1,450bn) is probably much more reliable. C-GDP is probably very similar, in that there seems, unsurprisingly, to have been little or no ‘debt-bingeing’ “credit effect” behind Iranian GDP.

    ECoE, put by SEEDS at 7.0% (2019), is surprisingly high for a significant energy-exporting country. In USD PPP, prosperity per person is estimated at $16,300 (though only $5,080 in market dollars).

    Importantly, prosperity per capita is falling quite rapidly. SEEDS data shows it down by 16%, both local and USD PPP, since the recent peak in 2011. (It has dropped even further in market dollars, but what markets think about the Iranian currency isn’t ‘fact’). Prosperity in constant Rial is falling by between 3% and 4% annually, according to SEEDS.

    I’m posting this comment because realistic and useful economic info on Iran seems thin on the ground. Data converted into USD at market rates is virtually meaningless.

    Objectively, Iran has a problem in that prosperity per person is falling rapidly – but it hasn’t ‘collapsed’, as some might think or assume.

    • Iran is an Islamic state, as such, it does not have the Deadweight of usury around its neck, merely of US sanctions. The Usury point is not to be trifled with although remains one of the great enduring taboos of Finacialised Capitalism and the Dismal Science.
      Prof. Helmuth Kreutz’s The Money Syndrome or Gringons Money Lent Twice to see how Usury is the problem and driver of a Growth imperative and all the absurd wastes and inefficiencies baked into the Cake to privilege the Financial parasite class.

    • The Islamic ban on usury is also in the Bible, and was enforced in Christian Europe until the sixteenth century. Opposition to usury seems a wise principle.

      This needn’t mean that all debt is necessarily bad (mortgages have helped many). But opposition to usury means, to me, that exploitation of others is always bad, and few instruments offer as much scope for exploitation as debt.

    • Collapse of the credit system has likely the best chance of decreasing what you call usury. Until then, interest rates matching inflation should not be termed usurious, as retirees and those saving for it merely break even over time if rates of interest match inflation. If zero interest, they are pauperized over time.

    • Tim we agree on that, manipulated behaviour is not the same as determined behaviour it is a flaw at the centre of atomist logic. Graeber is very good on Debt Jubilees they were the ancients solution to the “Problem of Usury”. It’s a huge subject area I actually blame Jeremy Benthams In defence of Usury for the fall of sensible political defence against Usury. Bentham wrote that in an attempt to get Adam Smith to recant from his views against Usury. It’s a delicious Irony of all the Adam Smith fan boys who have not taken the Trouble to read Wealth of Nations let alone Smiths substantial Body of other work. Darwin is in many respects as dumbed down and bumper stickered as is Malthus.

    • Its a tautology, Chicken and egg.

      The Solution is to create bonds bearing equity returns on real investment, not Casino Captial Debt perpetuating the Hubris of the Financial Oligarchical class and its cronies sand henchmen.
      Taleb calls it asymmetric Risk and its a Skin in the game problem, too many dilettantes and not enough stakeholders. Moral Hazard no longer exists in the current bankrupt Model, there are people who are to Blame for this Steven, we all must acknowledge our own part in the idiotic artifice, some are more guilty than others, we all know which side we stand on when we clean our teeth or shave whilst looking in the mirror.

    • http://userpage.fu-berlin.de/~roehrigw/kennedy/english/
      Margrit Kennedy: Interest and Inflation Free Money
      (Published by Seva International; ISBN 0-9643025-0-0;
      1. Four Basic Misconceptions About Money 15
      …First Misconception: There Is Only One Type of Growth 18
      …Second Misconception: We Pay Interest Only If We Borrow Money 24
      …Third Misconception: In the Present Monetary System
      We Are All Equally Affected by Interest 25
      …Fourth Misconception: Inflation Is an Integral Part of Free Market Economies 29
      Interest on money drives need for expansion.
      Reliance on one currency ( the dollar is a defacto gold standard.with no monetisation of an analogue for silver to provide circulation and a multiplier due to velocity.
      ”Patriarchal Value Coherence
      All patriarchal societies in history have had the tendency to impose
      a monopoly of a single currency, hierarchically issued, naturally scarce or artificially kept scarce, and with positive interest rates. This was, for instance, the case in Sumer and Babylon, in Greece and Rome, and from the Renaissance onwards in Western societies all the way to today. The form of these currencies has varied widely, ranging from standardized commodities, precious metals, paper or electronic bits. But what they all have in
      common is that governments accepted only that specific currency for payment of taxes, that this currency could be stored and accumulated, and that borrowing such currencies implied payment of interest. They all have in common Yang characteristics as illustrated in Figure 1.”
      https://www.scribd.com/doc/34659324/The-Monetary-Blind-Spot-by-Bernard-Lietaer

      The Monetary Blind Spot by … by tesasilvestre on Scribd

      123

      An Integral View on Money a… by tesasilvestre on Scribd

    • “Academic Taboo
      Challenging a paradigm in any field is always a risky business. In particular, challenging
      the monetary paradigm can be interpreted as violating an academic taboo. It somehow
      gets in the way in being invited to the top conferences or getting published in the most

      prestigious “peer-reviewed” journals. Let us take as example the most prestigious award
      of all, the “Nobel Prize in Economics”. Many people ignore that there is a significant
      difference between that economics prize and the other five established in 1901; the ones
      in physics, chemistry, medicine, literature and peace. The Economics prize is the only
      one that wasn’t created by the will of Alfred Nobel, nor is it funded by the Nobel
      Foundation. Its technical name is the “Sveriges Riksbank Prize in Economic Sciences in
      Memory of Alfred Nobel”, and it was first awarded in 1969. Its laureates are selected
      exclusively by the Board of the Swedish central bank, and its funding is coming from the
      central bank. Is it surprising that none of the 64 Nobel Laureates in economics so far have
      made the mistake of challenging the monetary paradigm?

      Paul Krugman told the author personally in 2002 in Seoul, Korea, that he has always
      followed one piece of advice that his MIT professors had given him: “never touch the
      money system”. He did get the Nobel in 2008.

      Conclusions
      The four layers that generate the blind spot in the monetary paradigm reinforce each other
      to the point of locking us into a pretty tight straightjacket around what is perceived as
      “normal” or “acceptable” in the monetary domain.”
      Bernard Lietaer. The Monetary Blind Spot by Bernard Lietaer

      Bernards Integral Theory of Money is also very good.
      https://www.scribd.com/document/31690240/An-Integral-View-on-Money-and-Financial-Crashes

  2. Regarding Mis Pricing and misallocation of resources under advanced Financialised Capitalism this paper from 2010 by Saskia Sassen
    http://www.columbia.edu/~sjs2/PDFs/savage.pdf
    is very good regarding Debt as an instrument of Primitive accumulation, or Coercive Aggregation. These trends are Capital / Political and Ideological in nature and not I would argue driven by Energy imperatives but a necessity for keeping the medium of Exchange scarce so as to privilege one ingroup of Finacial Capitalists, the Roving Cavaliers of Credit as Marx called them. as such SEEDS is forecasting a problem which will arrive but could be postponed a little longer by Changing the Management.

2 thoughts on “#161. A welcome initiative

  1. Steven B Kurtz on January 6, 2020 at 3:24 pm said:
    Talk about “appeal to authority” 😉

    My name is mentioned once in your 1000 word diatribe. I’m familiar with M. Kennedy’s work, and much else that you paste here.

    Questions:

    How does it change (from human intentionality and action) *sooner* than system crash or multiple decades long natural evolution? Do you propose pitchforks at a time when drones can control mobs? Why direct your energy at esoteric utopian theories?

    I hate fiat/credit based money too. But as our host says, this is what we’re stuck with now. You like to curse at the powerful and call them names. I choose instead to deal with probabilities going forward that will affect my son and grandsons, and small responses I can take in educating them with old skills as well as insights into system fragility/brittleness.

    Reply ↓

    rogerglewis
    on January 6, 2020 at 3:41 pm said:
    Your comment is awaiting moderation.
    Steven,
    The sort of Name dropping you indulge your self in is an appeal to authority, Citing Sources with their own reasoning is not appealing to Authority it is the presentation of Argument and data as evidence.
    I know you are upset that you think I have not shown your wished-for level of deference to your “Systems Paper on Over-Population”, It is outdated and also superficial on its treatment of the subject. I spent a good deal of time structuring a reasoned argument in response, again citing evidence and data which is checkable, and challengeable and you responded with abusive emails and continued sour grapes on this site.

    What I have presented here in this discussion thread is all publicly available for review and readers here and elsewhere can make up their own minds. Your own feelings on the matter are of no interest to me Steven.
    Enjoy the rest of your day. I am getting ready for a business trip to London, maybe even to meet with Dominic Cummings for an interview. I’ll let you all know how I get on.
    With Best wishes and no Animus,
    Roger

  2. rogerglewis
    on January 6, 2020 at 4:30 pm said:
    Your comment is awaiting moderation.
    I have responded here but the comment has not been published. It is copy and pasted onto my own blog.
    Regarding the charge of Diatribe and Esoteric utopian theories, I have not made any such arguments or any appeals to Authority. No, I do not propose pitchforks I subscribe to Erica Chernowerths research that non-violent civil resistance is what works and is the only plausible action in a State apparatus where the monopoly on violence and as you say access to instruments of surveillance capitalism are at the disposal of the current corrupted establishment leadership and being used with increasing frequency in France and the United States as well as in the so-called failed rogue states.
    Regarding your religious atheism Steven, your own zealotry does not convert into better arguments for the case you continually fail to make.
    Regarding the philosophy of mind and atomistic reductionist world view to which you claim no alternative Electro Magnetism is non-pyhsical, no one knows many of the answers that you claim to be settled, they simply are not.

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