source: http://www.youtube.com/watch?v=bCQaNdbRMWw published on Sep 27, 2014.
This is a rough transcript of the above video that you should store on your offline-harddisk just in case youtube decides to delete it.
Universities and wast majority of the population and academics all have a blind spot – we have a blind spot on the domain of money.
this blind spots consists of 3 levels/layers:
- 1st Level/Layer) is very old 5000 years old: Distinction between value systems in a patriarchal and a Matrifocal society society.
- All patriarchal societies in history have always imposed a single currency with positives interest rates – top down – it is actually an extraction device and we still have that.
- All societies that honor feminine values (Matrifocal societies like Egypt – or central middle ages) use several currencies – an ecosystem of currencies – some of these currencies which are identical to the patriarchal one’s are used for long-distance-trade.
- more sophisticated: the have “demurage” – a negative interest rate – which is a penalty in keeping and storing money – so it becomes a pure medium of exchange – not at all a store of value – you would be crazy to store a value when there is a penalty in keeping.
- 2nd Level/Layer) about 100 years old:
- All fields of human sciences including economics but also sociology, anthropology have all completely polarized between capitalism and communism – as two poles of interpretation of how to organize a modern or industrial society.
- That polarization has created a tension on everything that is different between them – there are millions of books about what is different between capitalism and communism – there are zero books that study
- what they (capitalism and communism) have in common – blind spot – that is:
- the use of a singular currency, on the national level, created by bank-debt, with interest.
- i would add: they both failed on preventing corruption
- differences are:
- in communism / soviet system: the banks were owned by the government
- in capitalism – the governments only own the banks when the banks fall apart
- … the rest is the same.
- 3rd Level/Layer): The Academic BlindSpot
- try to publish an article in the quarterly Journal of American Economics on questioning the money-system – no way you get it published in this “prestigious” journal – it is locked.
- i have no problems with economics using mathematics – but what you have is the evidence and the proof – that the mathematics they use is wrong – the mathematical model is wrong since the 19th century – we haven’t gotten out of it – we are still talking about prices being formed by supply and demand and automatically getting to an equilibrium – in fact – the same product in the same city has very different prices depending on the supermarket and it should not be there – according to that model – so reality is proofing us – that this is a very abstract way of looking at reality that does not fit the way economics really is.
When you do an open system – then the model that we are proposing which is a complex flow network (like in any natural ecosystem) in which money circulates is the valid one – and we have the proof from thousands of examples of natural ecosystems that this is not stable – unless you put diversity and inter-connectivity within a particular range.
We need to rethink – which mathematics are used and which theoretical framework is being used – which just requires rethinking the entire economic field – which is of course very exciting – for those who want to create something.
There is a huge amount of work to be done – everything needs to be redone.
Economics has never incorporated entropy.
it has been attempted by Nicolas Georgescu-Roegen (Mathematician, Statistician and Economist) in the 1960s/1970s – but has never been integrated back into economics – has never been integrated into mainstream-economics.
Nicolas Georgescu-Roegen is the scholar of the scholars – and the economist of the economists – really hardcore – and no economist should be ignorant of the implications of entropy in the field – because it really questions everything.
Samuelson himself has never changed his book (to reflect that) – it ran through another 20 editions without changing it (in that direction in any way) – so there is an ideological blockage.
i see in the economic framework – besides the definition of an open system – as opposed to a closed system – which is the way it is usually taught – is what do we do what they call “extranalaties”.
In the economic field you have a theoretical framework that is perfectly rational and perfectly mathematical coherent – but it is not related to anything outside of it’s framework.
This is a structural problem – and if you deal with structural problems you need to have structural solutions – if you don’t you just gonna repeat the cycle.
What politicians, economists and (!) society (your father/mother) say:
“If you would work harder – we would not have economic problems” (governments would not be in debt and so on):
FALSE! if there are “STRUCTURAL PROBLEMS IN YOUR ECONOMIC MODEL.”
What i am proposing as a model is: You have the economy as a center – and you have around it the human-social system were economics is a subset of – there are lots of things we do that are not economic.
And the social-system itself is a subset of the biosphere – so the three fall into each other – and therefore there are no analogies in that approach – that is the model – which is called
i haven’t invented it – there is a full series of people that have been working with it.
What is taught is an abstract ideology that has nothing to do with reality.
Screenshot from the above Video: nice gesture Mr Lietaer 😀
Just for the Love of it: Who the F**** is “Courtney Love was invented?” ah never mind i just misheard something in the above video.