The Missing Kernel

["John Gelles" <johng@xxxxxxxxxx>]

                 THE  MISSING  KERNEL

        The PKT forum is primarily a place to challenge,
        as pseudo-science, mainstream orthodoxy of
        economists and politicians who embrace the
        American dollar as the foundation for global
        economic growth and stability.

        That orthodoxy largely follows the approach
        to economics recommended by MIT's 1971
        Nobel Prize winner Paul A. Samuelson.

        Samuelson wanted the economic literature he
        inherited to make the giant leap from literature
        to science.

        If Samuelson and those he influences were to
        be successful in making the leap, economic
        uncertainty and failure would be the exception
        among advanced industrial nations; they would
        reflect natural disasters not internal contradictions
        between (1) national goals and (2) decisions
        affecting domestic poverty, unemployment and
        disorder whose primary cause is economic
        deprivation.

        Samuelson was not correct. We are not ready
        for the giant leap. Political economy remains
        political. Economics remains a literature.

        And money regimes that must thread their way
        between excessive inflation and deflation cannot
        continue to ignore advances in information theory
        and technology that society has a right to see in
        use as replacement for Say's law.

        Say's law, that, "society can equate the power
        to buy with the capacity to produce, without
        deliberate political action," and, by implication
        that "this equation means national wealth and
        revenues will follow, (based on naked business
        and taxation practice -- largely free of active
        legislative pursuit of full employment and fair
        business practice), is false.

        Yet it is the hard implication of Samuelson's ideas
        PKT would labeled pseudo-science.

        If there is any defense to be made of Say and
        Samuelson it is that alternative ideas that might
        lead to steady improvement in economic
        outcomes (measured by minimum living standards
        and maximum human decency and freedom) are
        not simple, welcome in society, or popular in
        the world's free press.

        If there is a kernel of an idea on which to develop
        new economic systems to accomplish PKT's
        ultimate goal (that no nation be less well organized
        economically, than, say, Iceland), that kernel is yet
        to be written and promoted.

        Of course I have written a kernel. It is the Individual
        Estate Account (IEA). It replaces taxes with inflation
        protected savings accounts. Overdrafts in the IEA
        replace safety nets. Savings reduce private
        consumption and increase private economic security.
        Reduced private consumption allows government
        spending and lending to direct labor toward the
        provision of prioity needs. Fiat money, legislative
        priorities and prize juries replace "happenstance in
        consumer choices and habitual attachment to
        entrenched inefficiency", as primary drivers of the
        economy. It welcomes robots as replacement
        for all human drudgery without endangering any
        jobs. And it's green from top to bottom.

        Not that the IEA kernel is any good. Only that it
        is a Keynes-Lerner kernel. It rests on an economic
        bill of rights. And the rest of PKT offers virtually
        no supply side strategy.

        John Gelles
        www.1944.org