rkm website: http://cyberjournal.org
The power of sovereign economics
Mark Keenan said:
sounds good- i just had time to read the first few paragraphs – i also recommend progressive economists like herman daly, richard douthwaite, manfred max neef – neo classical orthdox economics is completely flawed (ie 99 % of economists are operating in a flawed discipline)
I’m familiar with the various local-currency schemes, and have corresponded with Richard Douthwaite regarding currency issues, and regarding the local-currency system he was promoting, before his untimely death (RIP). I also implemented a web-based prototype system, where anyone could create a currency, and invite other people to subscribe. That was for Michael Linton
A lot of interesting and creative ideas have come out of those systems. Stuff that broadens your perspective regarding what economics and transactions are all about. Orthodox economics is not so much ‘flawed’; I’d say rather that it’s a ‘cover story’, just as ‘Free World’ was a cover story for postwar neo-imperialism.
It’s good to be familiar with the local-currency technology, but that is not the be-all and end-all of useful economics. If we ignore the orthodox-economics mythology, and look at the actual bankster perspective and bankster activity, we discover another equally useful technology: the power of central banks to enable and disable economies.
To exaggerate a point, trading haircuts for fresh-baked bread is quite a different thing from funding the construction of a rail network, or setting up a large-scale manufacturing facility for solar panels. The concept of investments in long-term ventures, is outside the realm of local currencies. According to Douthwaite, there should be a penalty for holding currency and not spending it. The actual record of local-currency performance, as regards ‘new economic activity generated’, is not particularly promising, from what I’ve seen.
Whenever people get disgusted with a system, there is always the tendency to throw the baby out with the bathwater. Like the way Communist states, in their rejection of capitalism, thought they should outlaw market activity altogether. Big mistake. We’re all disgusted with the way the financial / money system works now, and into the bathwater goes the baby – central-bank technology. As we know, it’s a powerful dragon. The technology is policy neutral; the dragon is the banksters who are at the controls.
Central banks are like Shiva – god of both creativity and destruction. When you can issue the official currency, which for obvious reasons everyone will accept and use, you already have a huge advantage, vis a vis voluntary local-currency schemes. When you understand how boom cycles are created, and when you can factor out the debt mechanism, then you can see how a whole nation could come alive economically almost overnight, simply by spreading massive credit around wisely, some grants to public agencies, and some distributed to local banks for sound business loans, interest free.
The public agencies put salaries into circulation, which creates demand for consumer products, and they become customers for construction projects for facilities, for various services and supplies, etc. The public-sector contribution to economic activity is very significant, particularly if you’re undertaking major infrastructure development. We’d basically be looking at a boom-time economy, when you’re having a hard time finding enough workers, like during the World-War-2 years in the USA.
During such a boom-time, with credit available and a strong public-sector-generated demand for products developing, the entrepreneurial opportunity and the business-expansion opportunity are open ended. Rather than this leading to the development of corporate cartels, as it has, we could instead guide economic development toward distributed small-scale operations, and in particular I strongly favor the highly-successful Mondragon model, based on worker-owned production-oriented co-ops.
The Mondragon story is a very interesting one, and over the years, through experience, they’ve evolved a successful model, with strong worker representation in policy, combined with competent management practices. They’ve learned that when the company size stays below a certain limit, around 200 if I recall, it can retain a cooperative, family-like spirit, a we’re all in this together enthusiasm. When it grows beyond that, they’ve found its best for it to spin off a new operation, possibly in the same business, or more likely pursuing newly-emerging opportunity.