Creditary Economics

["John Gelles" <johng@xxxxxxxxxx>]

        The last line in the message below, (on Alan Green-
        span's telling speech which may be viewed in color
        at  www.1944.org/greenspan28mar01.htm ) , reads
        as follows: [we, on Pkt forum, fight for] freedom from
        the rule of price, profit and debt (monetized or not),
        at strategic levels of decision where vision counts.
        (Implied is a claim Pkt has the vision that Alan lacks.)

        To be ruled by BOTH monetized debt and UN-
        monetized debt, (i.e., loans we have agreed to repay
        with interest), set me to thinking:  Is it significant to
        think of "money" as debt, (which it can be),when it
        is "money" we use to DISCHARGE  "debt" and be
        free of it?

        Just because money is a "debt" from government to
        all parties holding it -- a "debt" it does not usually
        pay with money -- but does try hard to protect
        from inflation (in its then present form as money),
        does that mean that money is "debt" more than it
        is "legal tender for the payment of debt"?

        We have seen in recent months comment on
        "creditary economics"-- always from the "gang of 8",
        although not in recent days -- (they may have gone
        to a distant place).

        The actual doctrine of said gang was very close to
        Keynesian thought and to post-autistic economics.
        But they also appeared to be in search for
        foundational axioms that might define what money is
        and afterward use the definition to support reform
        very similar to our list of reforms.

        If we could indeed break "free of rule by debt,
        monetized or not", we would, possibly, monetize
        some of it -- to pay the rest. We appear to entering
        a recursive maze by thinking this way:
                yet, in substance, reorganization of debt
                along traditional lines, (stretch it out, swap-
                ping for equity, writing of cents on the dollar),
                is similar to monetization.

        If a money-using entrepreneurial market is useful
        at this point in history, we may admit we cannot
        live without debt. Microsoft can. But a nation
        cannot. At the very least, the nation that prints the
        money must see its currency as reflecting collateral
        that includes every asset subject to trade. This
        connects money, theoretically, to price -- the
        mysterious thing we set out to do.

        Greenspan, too,brings up price-- the other side of
        the money coin. Of course debt is already on the
        otherside of the money coin. Our problem may be --
        we need a three sided coin!

        John Gelles

----- Referenced Message (posted on pkt site but,
         possibly not delivered to Henry and me) ---------

From: John Gelles <johng@xxxxxxxxxx>
To: Post Keynesian Thought <pkt@xxxxxxxxxxxxxxxx>
Cc: Henry Liu ...
Sent: Thursday, March 29, 2001 1:53 AM
Subject: Greenspan's cristal balls and data base,


    Chairman Greenspan's speech to the National Association
    for Business Economics, (copied to us by Stephen Dunn
    yesterday,) did reflect thinking by staff at the US central
    bank.

    It also revealed the Chairman's bias against reaching full
    employment:  he went so far as to say, "monetary policy
    could not permanently influence the level of the
    unemployment rate" -- with no added comment of what
    additional policy might be brought to bear to accomplish
    that goal, or something like it.

    The Chairman took his audience, (now including ourselves,)
    down history's path -- from the age of "steel, fabrics and
    grain" right up to our own "age of the microprocessor,
    fiber optics, and the laser". He took us in quest of price
    -- that most ambiguous measure to reveal or obscure
    what we do in quest of what we need.

    He was not happy with price as a measure of medical
    output or as a measure of output in the information
    industries -- so important to economic power in the
    world now under financial stress wherever we look.

    If price were a problem, the solution was more data.
    Not just price but data that might relate today to
    tomorrow -- in terms of the struggle for high tech
    prowess -- eventually as it may contribute to military
    and financial superpower status in coming decades.

    The Chairman opined, "If we had the appropriate
    database, of course, who knows?"   By which he
    meant it might make us rich and reliable as guardians
    of freedom on the planet -- or maybe not. Who
    knows?

    One of us who knows is Henry Liu. Henry knows
    the Chairman was offering "the application of motifs
    without content", not anything to do with Keynes --
    just Greenspan's post modern greenspanism.

    In my view, the Chairman took the measure and
    model of our profession (your profession, if you
    prefer,) and in spite of the fact that "the financial
    system appears to be capable of reaching myriad
    equilibria...[and] the fundamental forces that
    determine which of these equilibria will be selected
    may themselves be inherently unpredictable," he
    agreed to chair the US central bank in quest of
    praiseworthy results no matter the absence of
    cristal balls and meaningful prices, and a data base
    strong enough to make up for it.

    What else could he do? He's too young to retire.
    And the Challenge of Measuring and Modeling a
    Dynamic Economy to achieve a stated purpose
    is not being met by a competitor. So it is his,
    like it or not.

    It seems to me Joseph Stiglitz is more up to the
    challenge, but Susan George said Larry Summers
    did him in. He, the Chairman and Susan might all
    agree "greater payoffs will come from more data than
    from more technique", (which seems to echo our own
    Paul Davidson and the students behind post-autistic
    economics,) but Susan and Joseph would better
    define what is a "greater payoff" -- in terms of food for
    the hungry, and shelter, and freedom from the rule of
    price, profit and debt (monetized or not), at strategic
    levels of decision where vision counts.

        John Gelles