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29th January, 2024, Have just posted link to the latest version of our macroeconomic poposition for Britain's economic recovery.
29th January, 2024, Have just posted the Development Intelligence take on the impact of RIO-Real Income Objective on the theory of money.
1st October, 2022, The OBR and the mini budget - a note This article calls attention to the lack of useful detail in the mini-budget and the sweeping declarations concerning a list of supply side initiatves to spur growth. What I have seen of OBR work they do not apply a detailed enough reference base to tease out which supply side initiatives will have any impact. There is clearly a need for a higher standard of transparency and quatitiave analysis in Treasury analysis and publications since it should not be the role of the OBR to work with deficient preparations and documentation.
10th September, 2022, The monetary pool, velocity of circulation and income - a note The Boolean Library has issued two sets of information on the RMT. One is a slide sequence and the other an article explaining the Real Incomes Approach to Economics. I was asked to review these before they were posted. The way the turns of phrase were cast caused me to realise three important facets which I have not emphasized. So this note reviews these.

The amount of subsequent constructive thought arising from the modest versions of RMT produced in 2020 and published by the Development Intelligence Organization has resulted in a request for me to produce an updated version. I welcome this since it gives me the opportunity to tie up a considerable number of loose ends.

I hope to submit my dratfs for this update in the coming days.
4th September, 2022, Real Money Theory revisited. Although the RMT is a baseline and fairly crude representation of monetary relationships in the economy it is has a lot more utility than the Quantity Theory of Money (QTM). The QTM has served to mystify and confuse many economists and politicians for more than a century with disastrous policy outcomes.

This article explores some of the applications of the RMT by explaining, in this case, three monetarist fallacies. Currently this analysis is somewhat crude because the more detailed RMT reference models are quite complex. However, fortunately they do remain very transparent. They therefore require a well prepared covering narrative. At the appropriate times, more advanced RMT extensions will be posted once lower level (simpler components) mechanisms have been identified and deemed to be correct.

The development of the baseline RMT is sufficiently correct to present this to students studying economics. For this reason I am producing a slide sequence of this article and preparing lecture notes for lecturers and teaching staff who wish to introduce this topic into their economic sequences.
20th August, 2022, The Cost of Living Crisis (COLIC) - Lessons from the past as the foundation for the present - Part 2 At the moment the government and candidates for premiership are not coming up with any effective means to tackle the impending stagflation.This is a repeat of 1975. In 1975 we switched to monetarism which, as is the case now, only compounds the typicl monetary debt-taxation trap. Governemnt actions generate more debt, this has no impact on productivity or real wages and so government revenue-seeking through taxation runs on a diminishing base leading to an increasing debt-taxation trap, a fatal embrace, generated by inappropriate policy. Monetary policy cannot solve this issue nor can the current forms of fiscal policy. Lessons have not been learned.

No one comes up with any solutions but Real Incomes Policy offers an option.
16th August, 2022, The Cost of Living Crisis (COLIC) - Lessons from the past as the foundation for the present - Part 1 The continuing "debates" over the current COLIC go nowhere and this is lamentable. The current situation is one of no policy management and control which threatens to further prejudice the state of the economy and the wellbeing of the people of this country. This new series attempts to spell out why most conventional economic theory is of no use in designing effective counter-inflationary solutions because lessons from the past ave not been learned and therefore economic theory remains untested, weak and generally non-existent; the mechanisms for change are not defined.
16th August, 2022, The Cost of Living Crisis (COLIC) - Sector policies and representation - notes Theprovide some observations on the issue of representation and sector policies. The issue of the obligation of governments to avoid inflicting prejudice on constituents is raised and it is pointed out that escaping from paying compensation for economic projudice from bad economic policies continues under the guise of considering being voted out of office is a sufficient condition to allow politicians to escape from their obligations. The question arises as to how the Bank of England's prejudicial QE policies have remained, so far, free from any forms of class action for compensation.
16th August, 2022, The Cost of Living Crisis (COLIC) - Lessons from the past as the foundation for the present - Part 1 The continuing "debates" over the current COLIC go nowhere and this is lamentable. The current situation is one of no policy management and control which threatens to further prejudice the state of the economy and the wellbeing of the people of this country. This new series attempts to spell out why most conventional economic theory is of no use in designing effective counter-inflationary solutions because lessons from the past ave not been learned and therefore economic theory remains untested, weak and generally non-existent; the mechanisms for change are not defined.
21st July,2022, The Beneficial Economics Review 2021-2022 Benecon.uk has posted their annual Review and this identified the Real Incomes Approach and RIP to be the main development in economic theory and policy to emerge in the last year. This of course ignores the fact that much of this approach was first defined in 1976!! However, much of the consolidation of the different strands of this policy did take place in the last couple of years.

Whoever wrote their Review did a good job on describing Nichloas Kaldor's criticism of Milton Friedman's position concerning a confusion of cause and effect with respect to money volumes, "demand" and inflation. Of course this was further dissected by the development of the Real Money Theory which we completed in 2020, and have extended since as a final disproof of the efficacy of the Qunatity Theory of Money (QTM), the crude guide book for declarations of the purpose and impact of policy decisions used by monetarists. Just as a reminder, the QTM is missing some 9 variables representing 7 types of asset markets, savings and offshore investment which absorbed the bulk of QE funds, draining the access to funds from the supply side production of goods and services sectors. As a result the QTM had no means what-so-ever to predict anything that took place under QE. A pretty shaky basis for policy decision-making by the Bank of England, who, admitted at the recent Lords Economic Committee evidence sessions, that after 12 years of ravaging the economy, that they, "..are still learning about the effects of quantiative easing!"

The Benecon Review also picked up on the current elaboration of the monetary aspects of RIP which is being prepared as a paper to be posted by Cambridge-Economics Network, next month.
18th July, 2022, A Special Edition of British Strategic Review - Monetarism & The Cost of Living. This publication has now been released by the BSR. In completing this document, that contains a considerable amount of previously unpublished content, some important realizations arose.

All of the fuss surrounding demand and the aggregate demand model (ADM) one sees the issuance of money through various forms as the main means of control of "demand". So we currently have governments dabbling in monetarism, Keynesianism, supply side economics and some experimentation with modern monetary theory. The instruments of base interest rates, money injection through debt, taxation, government lending and expenditure all focus on the "control" of demand in the form of disposable incomes. Growth is invariably associated with the need for finance and usually in the form of loans. Quantitative easing has done an effective job in destroying savings for fixed incomes and did an effective job in generating evidence to show that the QTM is flawed and that, on this basis, demonstrate that the whole edifice of monetarism linking average goods and service prices to money volumes is completely discredited because the QTM does not contain some 9 critical variables that represent various types of assets, overseas investment and savings where most QE funds ended up.

Something that had occurred to me many years ago, but it somehow drifted away from the list of priorities for investigation, was the thought that there is no need for so much money in order to secure real economic growth. I know that this sound like heresy for most but this is a quite rational supposition. In the very early 1970s Nicholas Kaldor made the comment that most business investment, about 90% at that time, came from savings and reinvestment of own equity. I don't recall Kaldor expanding on this or linking this to his work on the role of technology in macroeconomic models but there is connection which is quite important. It is important for several reasons. One is that RIP can help reduce significantly the need for loans and at the same time can greatly assist in the process of:
  • enhancing natural system carrying capacities, conserving natural capital and supporting climate action
  • tackling the cost of living crisis by reducing prices in the short term
  • tackling stagflation
  • reduction of income disparity
  • levelling up
This "magic" is a natural consequence of the RIP policy target being real incomes based on positive systemic consistency of impacts across companies, shareholders, workforce and consumers.

All of this, I need to re-emphasize can be achieved while significantly reducing the need for loans. Rather than work money as the governor of the economy, the Production, Accessibility and Consumption model works productive work as the governor of the economy with productivity changes creating economies in terms of marginal savings and falling unit costs on a continuing basis so that the accumulation of capital is not in banks but rather within enterprises and, under RIP, within the workforce.

This whole concept is maturing at speed and I will post an article or two on this in the coming days.

A paper will also be published via Cambridge Economics Network to explain that perhaps the expansion of the Cambridge version of the QTM I produced in 2021, into a Real Money Theory, should be the starting point from which to explain how a Real Money Theory oriented towards the policy objective of real incomes can provide a more effective growth model than monetarism, Keynesianism, supply side economics and modern monetary theory. Since these paradigm as all aggregate demand models which contain no components linked to learning, innovation and productivity, the foundation of RIP, there are no mechanisms for gaining real growth or more from less, only an expansion of nominal money volumes. The underlying monetary dimension is that under RIP a sufficient growth in productivity has implications for monetary growth which can be significantly reduced and with this the fundamental source of inflation removed.
20th June, 2022, A special Edition of British Strategic Review . Because of the failure of aggregate demand model theory and policy to handle stagflation and as a result our deepening cost of living crisis will find no effective solutions in the short run, a special edition of the British Strategic Review will address this issue.

This will explain why conventional theory and policies are flawed and in fact prejudicial to the people of this country.

Real Incomes Policy (RIP) represents a credible workable solution and it is disappointing that it has not been given more publicity to enable a broader analysis and appreciation of its potential.

The original RIP paradigm was revealed in 1976 as a more policy-oriented approach based on the Jean-Baptiste Say model of the economy and providing more arguments in support of Nicholas Kaldor's arguments against monetarism. Kaldor predicted in 1966 through the mid 1980s where the UK economy would end up and he was proven right. RIP provides a practical means to extricate the country from a crisis largely self-imposed by inadequate economic theory and policies.

4th June, 2022, Towards a mutual strategic economic security framework . This title is that of a paper in preparation.

It is designed to show the serious mistakes government has made in confusing military questions with strategic security at the expense of economic security. The military and, it would seem, government see military security as a primary bulwark to defend the economy and wellbeing of the country. However, the outcome of the recent events in Ukraine demonstrate that there is a significant gap in the understanding of the relationship between foreign policy and the economic wellbeing of the nation. The over-emphasis on a "defensive alliance" and serious underestimation of the economic impacts of a belligerent attitude prior to this Ukrainian conflict, resulted in an exacerbation of an already evolving cost of living crisis. This is an example of just how far strategic analysis in this country has failed to balance military and economic questions as a result of arbitrary and dangerous decisions being acted out in the foreign policy domain. There is an urgent need for a mutual strategic economic security framework which integrates all considerations so as to promote conflict avoidance. In this way it is possible to avoid so much wasteful and immoral death and destruction and being forced to attempt to address conflict resolution as the economy enters increasingly precious territory as a result of the conflict.

24th April, 2022, Notes on Monetarism & The Real Economy. I have corrected identity errors in the Notes entitled, "Why the Bank of England cannot solve the cost of living crisis". Identities (ii), (iii) and (iv) were missing an outer bracket (paretheses) on the left hand side, so as to create an M value net of asset value rises, before multiplying by V (velocity).
18th April, 2022, Notes on Monetarism & The Real Economy. I have posted some of the Notes on Monetarism & the Real Economy which provide extended discussions of some aspects of the British Stratetic Review.
11th February, 2022, Monetarism & The Real Economy. The review copies of this publication have stimulated sufficient interest to result in the linkage of some of the content related to Robin Matthews who was a member of Clare College Cambridge, to Nicholas Kaldor, who after a productive period at the LSE became a member of King's College Cambridge and my own work as a past member of Clare College Cambridge, to the organization of the Cambridge Economics Network (CEN). This is to put down a marker that more than just Keynesianism has emanated from economists with past links to Cambridge.

Both Robin Matthews and Nicholas Kaldor were professors of Economics at Cambridge and Robin Matthews was also the Master of Clare College.

To clarify, the foundation of RIP can be related to Kaldorian economics which opened up important vistas within the Keynesian context by admitting a constant state of disequilibrium in the economy and in the role of industry and manufacturing in maintaining national economic growth and international competivity. Robin Matthews' work revealed that the economy did well when Keynesianism and monetarism took a back seat. Robin Matthews also helped me point RIP in the right direction from being a condition-specific policy to a general theory and policy.

Venturing further back in history Jean-Baptiste Say's enthusiastic interpretation of Adam Smith's work shaped a transparent model where economic growth and real incomes were shaped by the work of entrepreneurs making increasingly efficient use of resources through innovation. It is notable just how little credit is gven to Say by contemporary economists and policy makers. Maybe a "not invented here issue..." but hopefully CEN can help set this record straight.

I'm not sure that CEN will fly. It is important to prevent this output becoming misinterpreted as being current output from the Faculty of Economics at the University. However, students and practitioners worldwide are welcome to contribute to this effort hopefully in the sense of raising critical comments either related to theory or the feasibility of policy propositions. CEN will also have the role of disseminating RIP on a wider basis. The network will be initiated next week based on an email list as opposed a "social media" approach".

When I have the details i.e. website and email list coordinates, I will post them here.

4th February, 2022, Monetarism & The Real Economy this comprehensive update document has been released. The full document release is held up because we are resolving an issue with the card payment system. However free executive summaries are availble for download in epub and pdf formats. The epub is a zipped file to protect it because some browsers do not handle the epub files correctly whereas all browsers know how to handle zips.

I have received various queries concerning the "policy solutions" which are to be found in the full review. However, I will be posting some additional "notes" to clarify some issues to improve the communication aspects which, after 50 years of monetarism, are counter-intuitive for many.

10th December, 2021, Witteveen's folly - Part 2 besides exacerbating the British economy's ability to recover its balance of payments problem in 1976, by insisting on harsh International Monetary Fund (IMF) loan conditions, albiet enthusiastically applied by Denis Healey, Johannes Witteveen, the Managing Director of the IMF also set in train the growing influence of Middle Eastern petroleum exporters over importing countries. His actions permitted petroleum exports to maintain high prices by offering IMF finance to importers and as a result discouraged the initiation of the required technological transitions towards petroleum substitution.

An intersting fact that might explain Witteveen's motivation was that he was a member of the Molsem Sufi sect. As a result of his influence and decisions, addiction to petroleum and its derivative increased during the period 1975 to 2021, with serious consequences for the environment and climate change. As a result of this misguided IMF and private bank support the UK remains more dependent on petroleum and its derivatives than it would have been if a Real Incomes Policy had been introduced when it first emerged as an alternative in 1976.

06th December, 2021, "The Real Incomes Policy - RIP series" provides a sequence of thematic windows into the different aspects of Real Incomes Policy and some readers have commented that this helps focus of the specific benefits of RIP across a wide range of economic activities and needed policy objectives including inflation control, reduction in income disparity, raising of real incomes and reducing the balance of payments deficit. Because it is fundamentally based on more-for-less productivity transitions, RIP is supportive of the necessary changes in support of reducing the consumption of natural resources and mitigating climate change and creating a sustainable foundation for advancing a recovery of manufacturing capabilities, levelling-up and, for want of a better term, "building back better."

The impact of RIP is pervasive and has the specific benefit of being completely participatory with policy impact decisions being taken by companies and work forces centred around growth in real incomes as a result of productivity. No other macroeconomic policy, including Keynesianism and monetarism even attempt to achieve this central and important purpose of creating a permanent incentive for increasing efficiency and real incomes, as opposed to nominal growth.

Because of its role in enhancing the real incomes status of the majority without prejudicing the asset-rich minority, RIP is a contribution to the broadening constitutional economics in both theoretical and derived policy terms where public choice comes into its own through the decision analysis and actions of corporate management and labour forces. Besides this humanizing and democratizing impact by responding to needs, RIP has important contributions to make in settling many aspects of the quest for alternatives to existing economic policies which still cling to vain ideological Kamikaze beliefs that there is no alternative.

25th November, 2021, "RIP and labour representation" is a stepping stone to specifying an industrial policy which needs to include, as its foundation, a Real Incomes Policy. Terms such as "building back better" and others will have no meaning as long as the government sustains monetarism as its principal macroeconomic paradigm with an increasingly unaccountable Bank of England's policies suffocating industrial renewal. Unions tend to ignore the majority of the workforce who are to be found in SMEs and much manufacturing ended up offshore doing nothing for UK real economic growth and wages. Falling unemployment figures mask a major decline in real wages as a result QE-induced cost-push inflation.

This question of labour representation will be a constant theme because it is complex. This complexity arises from institutional habits and contentious mindsets on the side of business and unions where a rational stepwise approach is required to clarify how their diametrically opposed interests can be met to create a competitive and productive economy. RIP has a contribution to make to this necessary transition.

25th November, 2021, In reviewing the adjusted graphs (see previous note) it is evident that this sort of analysis helps explain a series of anomolies in economic theory that are not commonly appreciated. A separate monograph will be published to summarise the main points and posted on this site as a contribution to the series on the real incomes approach, "Charter House Essays in Political Economy".
24th November, 2021, In conversations and exchanges referring to the RIP note "Real wages" the original comparative graphs, which illustrate the diametrically opposed interests of asset holders and wage-earners, made use of unit price axes that progressed in opposite directions. This created some confusion for readers who were presented with these graphs for the first time. Therefore, these graphs have been altered to make the contrast in interests more obvious by having the unit price axes price ranges move in the same direction. Apologies for this confusion but internally we have worked with these graphs over several years without confusion but it is evident that this presentation created interpretation and therefore communications problems for others.
20th November, 2021, From PPP-Price Performance Policy to RIP-Real Incomes Policy - although the first publication on the real incomes approach in 1976 referred to a real incomes policy, later it was imagined by calling it price performance policy would be more explicit in terms of how it works. However during the early 1990s the UK government introduced the Private Finance Initiative (PFI) to be applied to Public-Private Partnerships (PPP) in a effort to make national accounts look better by placing such operations off budget. This combo was intensified by the Labour governments under Blair and Brown and the acronym PPP became well known and this has given rise to confusion with respect to the PPP referring to Price Performance Policy.

In the 2000s we realized it was necessary to emphasize the objective of Real Incomes Policy as RIO-Real Incomes Objective but the Price Performance Policy PPP remained. However, the PPP acronym is still confused with public-private partnerships.

Therefore, this month, it was decided to switch back to the former, "Real Incomes Policy" or RIP which has a Real Incomes Objective" or RIO.

We will be updating all articles that refer to our old version PPP.

12th November, 2021, From nominal growth to stable real incomes

Getting to more for less and changing behaviour is the only way to save the planet.

This requires a practical basis for economic policies to provide incentives for millions of economic entities to move in the desired direction by recognizing that there is a major calculation and knowledge problem undermining centralized governance. This includes above all central banks. There is no need for yet further massive fiat money "handouts" and spiralling debt, but rather a change in the macroeconomic policy paradigm to a real incomes approach based on price performance policy. This provides direct incentives to all economic entities to orientate investment to higher productivity and moderated prices. The added dimension is that this is a basis for initiating the long process of achieving more for less resource consumption as a result of a learning process and changes in consumer behaviour.

There are of course some details which I will spell out in a series of posts in note form following this article.

This is to avoid a repeat of my experience in 1981 when I presented this approach to all main political parties in the UK. Their response tended to be to latch on those aspects that supported their established ideological positions while abandoning the rest. Some admitted that they wished to use some of the "phrases" because they sounded good for election time banter. However, this resulted in a failure to follow the logic and take aways to be incoherent and of no practical use. The political party "filter" is a major impediment to progress on the policy front.

6th October, 2021, Witteveen's folly - Part 1

The success of the granting of a loan to the UK in 1976 by the IMF under terms which made the balance of payments a policy target encouraged the IMF to drag up a range of internal research papers, produced by staff at the IMF, that had not seen the light of day, to produce a book "The Monetary Approach to the Balance of Payments", in 1977.

Considering the balance of payments to be a purely monetary phenomenon means the papers are very removed from the realities of supply side production in an economy and where one performance indicator is the balance of payments.

The book has an interesting Introductory Survey which I will review since it describes the state of understanding at that time. This might give further clues as to why this collection of papers are so useless as a guide to effective macroeconomic policy.

6th October, 2021, Asset entropy

Asset entropy is simply an addition to the lexicon of economics to name the current state of affairs where the flow of money into non-productive physical and financial assets reflects a decline in productivity in the supply side production sectors and a decline in ability to sustain real incomes of wage earners.

This, by the way, is linked to the state of the balance of payments referred to in the following article, see above.

27th September, 2021, Politics without parties

The two party system has failed to provide convincing economic policy alternatives to avoid the policy-induced prejudice facing the majority. This is a result of their "solution" having been a continued implementation of monetarism. Both Labour and Conservative parties have collaborated in their support of this flawed scheme since 1975. This is why neither party, for over 45 years, has been capable of implementing better options on the economic front.

"Politics without parties" appears to be the way out. This is not some new-fangled idea of some extreme faction. The very first, and best, constitutional documents penned in the 17th Century sought specifically to prevent the formation of political parties. This was because those constitutionalists understood human nature and foresaw the dangers for the majority in such groupings causing a decadence and self-serving corruption and the type of impasse we now face.

Thus, "politics without parties" was the essential foundation of the development of the original English constitutional thought and propositions. However, the promise of parties offering factions the ability to control governance resulted in parties being organized as a device to gain factional power through proxy while promoting political parties as the stalwarts of majority rule.

Although a vitally important topic involving electoral reform and a review of economic theory and practice, the two main political parties will never initiate this conversation. They are more likely to dimiss or ridicule "politics without parties" because of their survival depends upon their serving the interests of their factional benefactors. But, in the interests of the economic and social wellbeing of the majority, this conversation needs to start.

Much has been written on this topic and it is not idle theory. A document will be issued soon concerning the practical options and benefits for the majority of "politics without parties".

Part and parcel of this discussion is, of course, how "politics without parties" would handle macroeconomic policy

24th September, 2021, Changing our constitution to establish public choice - Part 2

The easy capture of our tiny political parties by benefactors who provide funding means the interests of the majority of the population who are wage-earners, are placed into a second priority behind the interests of physical and financial assets holders. Political parties will not change this reality.

There is a growing concern that mass participation will reduce the influence of political parties whose economic policiy failure have given rise to extreme right and left movements. However mass movements are not the answer whereas mass participation in public choice is.

In considering economic policy, the negative impact of political parties is often ignored. A review of options without political parties can open up vistas towards a more equitable democracy leading to a more productive constitutional economics.

This is a big topic whose time has come. So, I will post soon some documents on the requirements by proviving a proposal on how such a system could operate. It really is not that bad. Far from the party pananoia of hoards manning pitchforks and guillotine final solutions, the proposed solution promotes a rational peaceful collaboration and co-existence; certainly a better option to improve upon the dismal party system economic policy outcome track record.

13th September, 2021, Changing our constitution to establish public choice - Part 1

The easy capture of our tiny political parties by benefactors who provide funding means the interests of the majority of the population who are wage-earners are placed into a second priority behind the interests of physical and financial assets holders. Political parties will not change this reality.

A more representative constitutional economy that changes policies to prioritise the interests of the majority through participatory public choice, requires a mass involvement in politics. Political parties confuse mass involvement with mass movements, which they rightly fear could be existential threats to their survival. This is why the government has recently introduced legislation to counter their growth to the detriment of participatory public choice, the performance of the economy and therefore the wellbeing of the majority in this country.

On review I realised I need to tie up some threads starting in this article so this is part 1 of a 2 part article.

13th September, 2021, How to make care, and much else, affordable

As is normal practice the government is applying a static balance sheet approach to a changing circumstance in the form of the natural growth in the needs of the National Health Service and Care provisions. To pay for a provision characterized by its dynamic growth it is necessary to make use of organic growth achieved by applying the appropriate incentives for companies to accelerate technological innovation and advances in technique to generate the funds required, rather than resorting to the static device of taxation which will further impoverish the country.

The current policy instruments in the policy tool box will not suffice; there is a need to change policy targets to the RIO-Real Income Objective and make use of real incomes approach policy instruments.

28th August, 2021, The consequences of monetary econometrics based on incomplete datasets

Governments and central banks do not have access to the requisite data to trace the impacts of monetary and, indeed, fiscal policy on the growth in real incomes. This is because thie data is not collected in the form required.

Because of the nature of the time-base and the geographic reach of the diffusion of innovation it is generally not possible to assign inflation control or economic growth data to the actions of specific administrations because electoral cycles are too short for this to be possible. Even if the data was available, for the same reason, there would be no clear correlation between policy instruments and declared policy targets. The much-vaunted cause and effect relationship is not there; it does not exist.

The emphasis on policies that aim to maintain or increase asset values, undermines the accessibility of the supply side productive economy to finance on acceptable terms, making a nonsense of the concept of "trickle-down economics".

26th August, 2021, The plight of the majority in a loaded-dice policy environment

The persistent drive of income disparity and declining real incomes is less to do with the free market as opposed to the intent of policy makers to value assets over real incomes of wage-earners.

26th August, 2021, Ludwig von Mises' calculation and knowledge problem revisited

Ludwig von Mises, "Economic Calculation in the Socialist Commonwealth" was an interesting essay. In it he explains why "socialism" will fail.

He also warns of the dangers of a "socialist" centralised banking system but in explaining what this consists of and the dangers, he describes the banking system we now have. Mises' arguments against socialist banks apply equally to our current monetary policy framework.

25th August, 2021, The social and economic impact of what we know

von Mises, Hayek and Coase called atention to the "knowledge problem" facing centrally managed policies; this all makes sense. However this depends upon the type of knowledge and policy target.

Being related to knowledge, this clearly has implications for our education system which, so far, the United Kingdom has not handled well. Politicians and policy makers underestimate the impact of imparting the wrong types of knowledge through an educational systemt that is not fit for purpose in a modern economy.

13th August, 2021, Its mechanisms stupid!

The ability explain the mechanisms of transfer of economic forces, in terms of quantities and prices of anything, is the only basis upon which to understand how the economy works and the impacts on social and economic constituents.

Mechanisms matter and are central to both the understanding of and the justifiction for specific policy actions linked to specific policy instruments (determinants) and the objectives (policy targets).

13th August, 2021, Is there really no alternative to perversity?

According to Albert Hirschman the Perversity Thesis is a common retort used by "reactionaries" or "conservatives" to counter proposals by "progressives". One version of this is the retort, "What you are proposing will have the opposite effect to what you are stating!"

Well, in the case of the current government policies there is no need to make a proposition to receive such a response because quantitative easing is having the opposite effect to what they are stating!

There is also the Futility Thesis, which is a little more involved, and in the case of monetarists it would be along the lines of ... "attempting to ignore established relationships associated with the role of technological change in controlling inflation which is bound to fail; it is futile.". However, this one really has far reaching implications which are, once noted, self-evident. This is an interesting and important issue which I will address in another article.

12th August, 2021, QTI -The Quantity Theory of Inflation

This is just a restatement of why the current form of monetarism is a dangerous approach to the lives of constituents and in particular those who live off wages as opposed to asset transactions. The logic should alert people to the importance of the real incomes approach and the role of technology in society. Policies should be stimulating the maximization of PRACTICAL short to medium term innovation so as to drive real incomes growth. This has become more essential in the face of accelerating climate change. For the reasons explained in the article, the TINA solution of throwing money at climate change, based on debt, will only make mitigation and effective solutions more difficult to achieve.

7th August, 2021, Hayek, totally misunderstood?

I recently read Albert Hirschman's book "The Rhetoric of Reaction" (1991) which provides a historic account of the typical arguments of politicians and others against "progressive agendas". He sets these out under three types or theses as: perversity, futility and jeopardy. It is interesting to note that since the French revolution those wishing to resist economic and social change have made use of exactly the same arguments.

Today, these same arguments, or rather assertions, continue to be made.

Hirschman concentrates on the rhetoric of "conservatives" but at the end of the book turns his attention to "progressives" who turn out to be as assertive, which Hirschman admits is somewhat disconcerting. Right at the end of the book he ventures into "How not to argue in a democracy" where as man with his experience, I am sure he could have added much more of interest. However, as he states, this was not the objective of this interesting book.

In the chapter on, "The jeopardy thesis" he cites sections from Hayek's "Road to Serfdom" which, now 77 years after its publication, provides the opportunity for us to assess to what extent the Conservative governments, made up of some politicians who often refer to his work to justify the "logic" of their policies since the early 1980s to the present day, imagine that they have applied policies in line with his expressed points of view.

It is more than apparent that they have not done this at all but, in fact, they appear to have done, and continue to do, the exact reverse, in an ideological pursuit.
Note: there is a peculiar omission from Hayek's list of welfare provisions. Did anyone notice that? ;-)

11th June, 2021, A snippet of Kaldorian logic for building back better - A note  Nicholas Kaldor made a fundamentally valid cricticism of the connection between money volumes and inflation. Kaldor explained that money growth grew to support loans desired by borrowers. In business, loans go to, usually, more productive investments which counter inflation and such funds are endogenous to the economy.

Our own work confirms this logic. However, monetarism has since morphed into a financial blizzard augmenting endogenous money with injections of exogenous funds that flow into assets and non-productive activities prejudicing the working population.

Keynesian policies now being proposed for infrastructure, building back better and various new deals need to apply due diligence investment appraisal on direct benefits to the constituency in order for any of this to pay off and to avoid sinking the economy into a bigger mess than it is already.

11th June, 2021, Reflections on Kaldorian economics  Nicholas Kaldor was an unusual Keynesian in that he worked closely with Keynes but had a far more practical awareness of he role of technology and innovation in economic growth. What is paradoxical is that the Keynesians did not embrace his work more to fold it into a coherent theory and therefore policy.

RIO-Real Income Objective attempts to do this.

Kaldor was, I think, dealing with a more realistic and applied end of the spectrum which made it difficult to integrate this into Keynesianism at that time. My limited experience as a post-graduate at Cambridge was that Keynesianism had taken over the macoeconomic teaching agenda and was also far too theoretical to be of much practical use. Attempts to make it more applied would have dismounted much of the theory and put out of joint a lot of Keynesian noses.

Kaldor also had had convincing views on why money volumes don't cause inflation which RIO reconfirmed in 1976. We have also explained why the Quantity Theory of Money (QTM) is completely flawed. But policy makers plough on in a monetarist fiasco prejudicing the future prospects of the United Kingdom.

7th June, 2021, The impact of hegenomic stages on known universes - a locational-state perspective  One of the notable aspects of hegenomic cycles (see previous entry below) is their multi-generational character. One way to trace the impacts of this on human capabilities is what is referred to as "known universes" an aspect of Locational-State Theory, the development of which I have been involved in since 1985. Because many proposals on how we can build back better are oblivious of the skill-set and mind-set needed to achieve this to compete on the world stage, I have picked up three recent booklets and books addressing UK issues by British Members of Parliament, to place them in this perspective. None appears to get to grips with the locational-state aspects of the existing constraints and necessary actions to escape the current predicament of the UK economy and human wellbeing.

7th June, 2021, Hegemonic cycles: a few weeks ago I watched a programme "Worlds apart" anchored by Oksana Boyko who interviewed Georgi Derluguian a sociologist very much involved in the World Systems approach. During this programme the subject of "hegemonic cycles" came up and a specfic comment by Derluguian caught my attention. This was that the ends of hegemonic cycles always involved financial speculation. I became quite curious. I emailed Derluguian to seek clarification on this point. He kindly replied by return providing me with several references on the main works and he attached a reprint of an article by himself from the "Blackwell Encyclopedia of Sociology (2020)", entitled, "Braudel, Fernand (1902-1985)". This article explains the immense contribution of Braudel in establishing the foundations of the World Systems approach.

The alternative medium CybaCity.com asked me to write some articles on this topic which I did and I have now placed these articles here for the readership of this website. I hasten to add that my specific interpretations of the hegemonic cycles are my own and no doubt those more deeply involved in this fascinating field of study might have reservations on what I have stated in these articles. If they had time to read them, and they have any reservations, they are welcome to contact me with feedback and corrections where necessary. I will post any substantive or important feedback received.

7th June, 2021, 3o to 1.5o: I changed the number of degrees in the article entitled, "Why 3o is too much for some" because the article describes why, already, the impact has been substantial and the target of a maximum of 1.5o is already too high.

3rd March, 2021, 4 Charter House Essays"

I have posted four papers published by HPC in their Charter House Essays in Political Economy. These were prepared at the request of APEurope Pool of correspeondents for dissemination to support discussions on new macroeconomic policies under a series entitled, Economics Briefs.

The group is sequential in character and perhaps the most important are "Technology, technique and real incomes" and "Inconsistencies in macroeconomic theory and derived practice" where I believe the content conveys key facts which I have not observed anywhere else and which are important. The last one explains why no political party can apply monetary theory in the "interests of the country" because of the degrees of prejudice it imposes on a sizeable proportion of voters.

There will be several more papers in this series.

23nd February, 2021, "Why 3oC is far too much for some"

This article uses a lot of info from a more detailed article posted on Agricultural Innovation on farm typologies, but I thought several aspects are relevant to economists and anyone interested in project appraisal and design, given that currently something like 35% of agricultural projects fail.

In basic terms, climatic projections based on average temperature projections do not capture the degrees of potential detsruction that, in fact, have already begun as a result of meteorological variance in conditions.

22nd February, 2021, "Terminating the assault on humanity"

Much has been accomplished in improving the ways to establish investments and projects that can reduce the rates of climate change but they are not yet applied. Generic policies to this end must be supported by due diligence procedures that are applied to every investment both in terms of optimized design and implementation management. Evaluation needs to be real time and an integral part of implementation management. The current basis for evaluation looks for lessons learned after everything has gone wrong. This is no longer acceptable when we already know that the current system supports at least a 35% investment project failure rate.

I will return to this topic soon to point out some fundamental errors in economic modeling on climate change with respect to potential near term impacts.

9th February, 2021, "Real Exchange - A practical proposition for investment for a better distribution of real economic growth - Part 1."

This is very late coming out - apologies. It is the folllow up of the previous article, "A constitutional economic policy - Part 7, Designing a sustainable future - Step 1", posted on 28th September, 2021!!!

This provides a very general overview to introduce a digital currency called REX standing for Real Exchange. This is used to provide real time oversight and management orientation of policies designed to improve investment and real incomes while controlling the excesses in asset markets.

Most of the current talk is about Central Bank Digital Currencies (CBDC) but central banks are wreaking so much havoc with excessive monetary injections, and they remain committed to this "policy", that it makes a lot more sense to introduce a digital system that helps mitigate the impact of central bank policies. REX provides a handle on the orientatiom of investment to where it is needed and to provide guidance on what is high return low risk investment. It therefore enables counries to fine tune their policy to their specific circumstances.

The details on investment quality is to be found in the previous article,"A constitutional economic policy - Part 7, Designing a sustainable future - Step 1".

This general overview is Part 1 of a two part article and Part 2 covers the macroeconomic policy framework and business rules to make all of this work.

7th February, 2021, "The UK's policy-induced pauperism - a note"

This simply reports on the fact that one dreadful results of quantiative easing and central bank excesses is increased pauperism in the UK i.e. people who can only survive with help from the state or voluntary efforts (food banks) even although they are in work.

31st January, 2021, "Jung and the inflationary Jungle"

The extraordinary failure of the economic world to propose practical solutions to the economic decline caused by monetarism and quantitative easing, and in particular, and the brave talk of post-Covid-19 building back better referring to infrastructural initiatives remain talk. These conversations appear to be in a frozen time warp or stasis, treading water and repeating the TINA mantra and hoping something in the theory will spark some new ideas. It is self-evident that the theories held on to are useless in practice as a means of improving the lot of the majority.

The situation is very similar to the state of mind described by Jung as inflation. More specifically the states of being,

"...hypnotized by itself and therefore cannot be argued with."

is a perfect description of the state of affairs and the financial fiascoes of 1929, 2007 and now, are perfect examples of the parallel state of being,

" .. incapable of learning from the past, incapable of understanding contemporary events, and incapable of drawing right conclusions about the future."

seems to be even more apposite.

It is evident that there is a need to re-examine economic theory in order to detect where it is wrong because the evidence that this is the case is overwhelming. Monetarism is patently not a basis for policy making for any government wishing to improve the wellbeing of the majority as 50 years of financialization and 12 of QE have demonstrated. The fact is that the people of the country are not sitting at the policy table and parliament has no influence over monetary policy. This is set by the Bank of England. This only deepens the inability to find solutions. The country is in denial over the fact that we therefore face a serious constitutional crisis as a result of a failure to live in a participatory democracy.

29th January, 2021, "Bretton Woods in retrospect"

The so-called Bretton Woods moment calls attention to the fact the global economy is in a mess. Indirectly, this is an admission that prevailing national and international economic policies have gained traction but this has exacerbated several negative trends including rising income disparity and poverty, declining production and consumption pattern sustainability and rising temperatures as a result of failures to introduce effective climate action.

In reality significant failures have been apparent since 1971 and with the rise of fiat currencies global development and central bank policies have contributed to a form of international economic development characterised by extreme inefficiency and the rises in speculative encapsulated markets which do not circulate funds back into the real economy. The 2019 Sustainable Development Report pointed out the negative correlation between "economic development" and critical Sustainable Development Goals including income disparity, sustainability and climate action.

The paradox is that the very institutions that have reported on these issues are remnants of the former Bretton Woods structure but they have not acted to remedy this state of affairs.

The specific benefits that the USA obtained from the dollar being the international reserve currency are now well known.

As a result, there is a serious lack of confidence in the institutions concerned and in their ability to make proposals for a new equivalent to Bretton Woods which will not favour the USA or shore up their own survival. It is unlikely that the rest of the international community will accept such propositions.

In this article I point to some controversal allegations concerning what the British were doing under the Imperial Preference scheme and the notion that the USA wished to emulate what they imagined the British were up to, to gain national advantage through Bretton Woods. I don't know to what extent these particular allegations are correct but the evidence of the evolution of the international economy since Bretton Woods failure in 1971 seems to support these views. There is a lot more digging and explaining to be done to clarify these questions.

In concluding the article, I state that any realistic future "negotiations" require changes in both economic theory and practice. Some economists do not believe that economic theory can be changed but only policy instruments. The next article will explain why this belief is mistaken.

19th January, 2021, "On life, loves, sense and economists"

I have always considered the notion that markets are territories within which individuals, companies and countries confront each other on the basis of a misinterpretation of Darwinian survival and of what Adam Smith referred to as self-interest, as an absurdity. Unfortunately, most economists adhere to this erroneous interpretation and even promote it as a basis for economic strategies helping intensify an acceleration in the disintegration of the economy.

A more collaborative approach valuing the impact of an adaptive evolution in productivity can alleviate much of the existing disparities in society.

Work completed as far back as the 18th Century explained why increasing monetarization of the economy was likely to increase income disparity and eventual poverty as a result of differentials in the degree to which different citizens benefit from the process of money injection into the economy.

The outcome has been a state of extreme isolation of factional interests some with political power and a majority without political power, leading to a destabilizing social and economci state of affairs in this country.

17th January, 2021, "The critical issue of absorptive capacity"

Absorptive capacity is an very important topic in terms of the question of resources allocation it basically determines the performance of economic processes in terms of society, technology, economics, finance, relevance, impact, coherence, resilience and sustainability.

This short article outlines its relevance but I will return to this topic because QE and Covid-19 have presented many examples of its significance.

17th January, 2021, "The Mais Lecture 2021 - delivered by Annaliese Dodds"

Annaliese Dodds delivered an interesting lecture correctly pointing out all of the ills of economic policies by concentrating, largely, on the last 12 years. However this is just a recent intensification of a trend that has built up since the mid-1970s. The policy track record has been abysmal for the majority.

As a result of debates between Keynesians and monetarists in the 1970s all based on assertion and no clear solutions to slumpflation, the work on real incomes was initiated. It soon became evident that much macroeconomic theory was not a sound basis upon which to establish macroeconomic policies. The assumptions in the intellectual baggage of monetarists and Keynesians involve ideas and concepts that lend themselves to an apparently sophisticated articulation of economics but which have failed to deliver, in practice, effective results. Dodds even referred to this failing as being the position of the NAO chairman; he is right.

As Dodds observed, we have declining investment and productivity and rising income disparity. But these are the crowing glory of a "solution" devised in 2008 to an already out of control monetary framework. She overdoes the current flavour of the month at the banker's club in emphasizing the importance of the independence of the Bank of England which, of course, places its policies beyond the arena of public choice. Dodds is concerned about the low wages of the majority so considering constitutional economics and public choice cannot be ignored.

It would do her and her team no harm to look at RIO-Real income objective for some possible options.

16th January, 2021, "Economics, the dilemma of conscience"

After some 50 years working in development economics for the leading international development agencies, it becomes very apparent that it has much to offer to the solutions to the current predicament of the United Kingdom. The UK economy is in a state of policy-induced decadence and underdevelopment as measured by the unacceptable income levels, disparity and rising poverty.

Being concerned with poverty, many economists, no doubt, think development economics is for the birds. Their version of being "realistic" is that the issue of income distribution is a phase and that the solution is to promote "demand" by injecting yet more money into an economy that cannot absorb it. The fact that, after 12 years of effort, this has been amply demonstrated to be ineffective has yet to occur to them.

On the other hand, development economics suffers from similar defects of differences between theory and application, resulting in project failures. So, I will explain in subsequent articles where, based on first hand project experience, some of these defects lie. On this basis I will identify where I think there is a feasible axis upon which this can be applied to the specific conditions facing United Kingdom in a successful manner.

6th January, 2021, "Economics is physics"

The statement by Mark Carney and confirmation by Lord O'Neill that economics is not physics is an extraordinary admission of a peculiar perspective on economics. I suppose this point of view depends on one's training and life experience dealing with the economy at ground level or from some distant disconnected extremely high ivory tower.

In short, as long as the monetarists and central banks rely on the QTM as their font of wisdom on the contribution of monetarism to the production and wage earning side of the economy this massive disconnect between policy and real economy will continue.

6th January, 2021, "Not all assets are assets"

Quantitative easing's pumping up of the speculative value of assets has disconnected the essential relationship identified by Schumpeter where profit is the guarantee of the sustainability of production and of employment and that the maintenance of profit depends on investment in innovation. The Keynesian and monetarist's poor appreciation of such basic facts has led to a disintegration of the economy into various asset markets and shattered the basis for sustainability of the economy, production and wellbeing of wage earners.

30th December, "The Reith Lectures 2020 - delivered by Mark Carney"

This is a late review of Mark Carney's Reith Lecture series. The distance between monetary policy coordinated through the Bank of England and the needs of supply side production and service sectors is very evident in these lectures where Carney devoted much time to ephemeral issues such as markets taking over values and the misbehaviour of financial services. It is financialization and weak financial regulations that have smothered the economy with a proactive valuation of financialization and "financial engineering", much of it fraudulent, that have undermined social values.

On the question of better pay for front line workers the discussions were embarassingly academic and avoided addressing this issue in a serious manner.

The reality of the result of QE in increasing income disparity, declining investment and the real value of wages, declining consumption - for Mark Carney that is "demand" - and a totally depressed economy, long before Covid-19 came along, was side stepped in a lecture on Covid-19.

The QE-induced asset value inflation and speculation a la 1929 was not addressed. No mention was made of the fact that the Quantity Theory of Money, the mainstay prop of monetary decision logic, is useless because it does not address assets, savings and offshore investment so QE did not achieve its aims resulting in the supply side, wages and an economy in a dire state.

The solution, it would seem, is a "re-set" and a redirection of financialization towards activities in a New Deal on climate. For this to succeed there needs to be a supply side production sector and a workforce with decent wages to circulate their disposable incomes back into the supply side through consumption so it can grow and innovate. The track record of policy on such a requirement provides no confidence that this will happen as quickly and as cost-effectively as is required.

29th December, "A century of encapsulation & economic disintegration Part 2 - 1920-2020"

The leakage from the cash flow of the supply side and ability to pay decent real wages is not only a result of leakage of exogenous finance into assets it has also been the result of a considerable amount of this money supply leaking into offshore investment.

29th December, 2020 - "A Real Money Theory II"

The Real Money Theory, the substitute for the Quantity Theory of Money has been updated to include monetary leakage into offshore investment.

24th December, 2020 - "More to Say - Part 1"

Say's equating of consumption to disposable incomes is so basic it is amazing that contemporary economists see wages as something that "supply and demand" can resolve.

The resolution of the rising income disparity in the United Kingdom has to be resolved within the supply production domain through policy incentives that encourage more competitive activities that can trade-off wages, margins and unit prices in a optimised fashion so as to raise real economic growth and incomes for all.

Monetarists and Keynesians foolishly smothered the Say model in bluster post-1929 as if the irresponsible rampant speculation that sunk the world economy into a depression had anything to do with Say. However, we can see there is more to Say than was realized. Lessons have not been learned.

This article is in 2 parts. The next one will seek to remind us to examine the simple Say model to guide current day policy solutions. With QE demonstrating that the QTM is nonsense, monetarists are bereft of policy guidance beyond bluff. Better diagnostics and practical orientation are essential.

23rd December, 2020 - "Leading issues in development economics"

This short article is a recognition of the fact that the constitutional dualism generated by 50 years of financialization has divided the nation along a boundary separating asset holders and wage earners. This is a throw back to pre-democratic period in history, precipitating an increasing dependency of a growing population segment that is unable to afford to pay for essential needs; many having to revert to foodbanks.

This is a failure in macroeconomic policy in not achieving a sustainable traction through incentives for investment in higher productivity processes that maintain wages at levels that provide adequate consumption levels for national production. This particular aspect, the wage/production nexus, will be covered in following articles.

22nd October, 2020 - "Why the International Monetary Fund is in a hurry to become the International Digital Monetary Fund"

The IMF and World Bank are being "encouraged" to change in an effort to shore up US control over international monetary affairs.

Covid-19 has been selected as the watershed moment to justify this change.

This is needed but the IMF theatrics are not convincing.

22nd October, 2020 - "Alleviating the Covid-19 economic hardships through DxCs"

This article covers the issue of how to boost a depressed a depressed economy and enable all to purchase theior needs under Covid-19 without debt.

DxCs are Digital exchange currencies or essentially digital vouchers. The paper versions of vouchers have been used to boost economies in the past.

I will follow this up with a more detailed analysis on how this can work in the UK and how to avoid abuse of the system. Unfortunately this is an issue with any initiative involving means of payment.

28th September, 2020 - "A constitutional economic policy - Part 7; Designing a sustainable future - Step 1 "

This article covers the issue of investment quality especially in relation to the current need for a rapid and sustained economic recovery.

The following articles cover the "next steps" on the policy incentives to encourage this investment and also the business rules to be applied to maximise corporate and economic growth.

28th September, 2020 - "Monetary policy: The journey to there and back - a note "

This note sums up the challenge facing governments and central banks.

This has been the consistent position of the real incomes approach, established as a logical alternative theory and practice some 44 years ago in 1976.

It is disappointing that monetary policy decision makers think they know better by investing in the flawed logic of the Quantity Theory of Money; their actions are destroying the economy.

27th September, 2020 - "The real incomes and investment trap"

Have just posted this note. The PE ratios (price earnings ratios) are, for many companies, beyond logic. Although the asset holders remain satified with Bank of England's QE, this will push the economy into a structural currency devaluation which is a form of a silent collapse of the economy.

I have included an index projection of this process covering 2010-2024. The assumptions are optimistic but it is obvious, from the table, that the likely result is dire.

The unacceptable levels of increasing real incomes disparity can only be reversed with good quality real investment under a RIO-Real Income Objective policy.

The next article will review what is meant by high quality investment and the subsequent article will outline a practical policy option.

22nd September, 2020 - "The imposed internalization of monetarism's destructive externalities"

Have just posted this note. The externalities of monetarism, and QE in particular, are selectively prejudicial to those who do not benefit directly from policy such as a minority of constituents who hold assets. There is an abuse of property rights in that money holders or savers, face a overt monetary policy that depreciates funds at 18% each decade by targeting 2% inflation and QE that drives down savings returns and has sequestered the incomes of many retirees. This bias in policy is so stark that serious considerations needs to be given to compensation for such externalities.

16th September, 2020 - "The British Strategic Review (BSR)"

The BSR is coming together quite well and it moves beyond Anthony Sampson's excellent series "An Anatomy of Britain" that was published between 1962 and 2004. Unfortunately Anthony Sampson died in 2004.

In basic terms the difference is that the BSR contains more functional analysis of theories of constitution and economics, compares the theory with actual practice and identifies gaps in delivery from the standpoint of a constituency in a so-called democracy. The BSR is essentially a, "Physiology of Britain". It identified functional gaps which have appeared as a result of the motivations of those in power and how they have shaped constitution and economic policies largely in their own and their benefactor's' interests. The BSR goes beyond this and contains propositions for better constitutional settlements and macroeconomic policies that respond better to constituent needs.

It is of interest to note that Sir Paul Judge, the businessman who attempted to launch a new wave of "politics without parties" in the UK, was an admirer of Anthony Sampson's analysis in exposing myths. One such myth is the belief that political parties represent the interests of constituents.

The sections on the BSR recounting the negative impacts of political parties on the British constitution and the individual freedoms of constituents, draw on fully updated sections of the publication "The Briton's Quest for Freedom - Our unfinished journey ..." which I completed in 2007.

29th August, 2020 - "A constitutional economic policy - Part 3"

I have just posted this article which adds explains why conventional policies fail and how Covid-19 pay outs cannot be treated in the same way as quantitative easing.

I explain how RIO can help governments sort out their post-Covid-19 balance sheets and how to introduce RIO policies in the UK.

28th August, 2020 - "A constitutional economic policy - Part 2"

I have just posted this article which adds considerations of freedom and opportunities. It explains why the current basis for policy decisions is a classic case of what is referred to as constitutional anarchy in the field of constitutional economics. This is because the decision-making processes involved are commandeered by a small group of people who seem to have unlimited power over the people in this country and use it unfairly; this is the definition of tyranny.

28th August, 2020 - "A constitutional economic policy - Part 1"

I have just posted this article which has three parts. The first sets out the basis of the constitutional dimension of constitutional economics of which RIO is a branch. The folowing parts will spell out the specific policy in more detail.

26th August, 2020 - "Is this RIO business socialism or capitalism?"

I have just posted this article which has been a long time coming because this is a question I receive regularly because people like to place economic policies on a spectrum on that left-right axis.

I use the examples of Labour and Conservative governments over the last 75 years to explain why the UK versions of socialism and capitalism do not have a good track record because they both apply the same school of flawed economic logic.

RIO shares nothing with these failed systems but is a new policy front within the perspective of constitutional economics.

28th August, 2020 - "A constitutional economic policy - Part 1"

I have just posted this article which has three parts. The first sets out the basis of the constitutional dimension of constitutional economics of which RIO is a branch. The folowing parts will spell out the specific policy in more detail.

26th August, 2020 - "Is this RIO business socialism or capitalism?"

I have just posted this article which has been a long time coming because this is a question I receive regularly because people like to place economic policies on a spectrum on that left-right axis.

I use the examples of Labour and Conservative governments over the last 75 years to explain why the UK versions of socialism and capitalism do not have a good track record because they both apply the same school of flawed economic logic.

RIO shares nothing with these failed systems but is a new policy front within the perspective of constitutional economics.

13th August, 2020 - "DIO publication"

The DIO-Development Intelligence Organization has published the article "A Real Money Theory" as a stand alone document. This explains why the old standard, Quantity Theory of Money (QTM), the mainstay logic of monetarists and central banks, is flawed and pretty useless. The DIO consider the content to be of importance in understanding the failure of QE and something that should be widely circulated for use by students and study groups. Click here to access the DIO document

I would like to add that if any groups do have any feedback on this document I would be glad to receive and respond to this.

6th August, 2020 - "Why the partying has to stop"

I have just posted a note entitled, "RIO and Locational State Theory - The evolving dualistic disequilibrium". I am extending the exploration on the impact of Locational State Theory (LST) coordinates on economics. The fact that LST adds the time dimension we find that people's freedom is more intimately bound up with free as well as transacted goods and services with equates this with real incomes. This mmakes apparent more clearly, the current economic policies not only reduce the purchasing power of the majority, but they also reduce our freedom. Our political economy should not be doing this. Political parties need to stop acting as proxies for their benefactors. As a citizens of a democracy, our wellbeing is better defended by the free expression of the population gaining access to a parliament which does not include political parties.

25th July, 2020 - "Welfare & constitutionalism"

I have just posted a note entitled, "RIO and Locational State Theory - Changing perceptions on welfare and constitution". I am extending the exploration on the impact of Locational State Theory coordinates on economics. In this article I show that LST expands the legitimate scope of the considerations of significance to people in the exercise of freedom within the confines of their real income. This justifies a more proactive concern of individuals with a wider range of externalities, including the negative impacts of policy on the earning capacity of the majority. The solution requires positive incentives such as those proposed under RIO-Real Incomes Objective policies. It also requires that "representatives" in government take into account the needs of the majority. Political parties are unable to achieve this. There are solutions which will be explored in subsequent articles.

23rd July, 2020 - "Individual freedom"

I have just posted a note entitled, "RIO and Locational State Theory - Adding individual freedom to policy objectives". I am beginning to explore the impact of Locational State Theory coordinates on economics. This is an initial exploration of this topic. In this short exploration I explain how Locational State Theory expands the boundaries of real incomes to become the domain within which individuals are free to pursue their objectives. However, conventional macroeconomic policies severely constrain these freedoms as a result of the declining real incomes of the majority. I think this is a significant exploration and I am sure it will be revisited and expanded upon in the coming period.

20th July, 2020 - "Rolling short termism"

I have just posted a note entitled, "Evolutionary economics - a note" to set out some points on the necessary foundation of policies designed to avoid our current chaotic and erratic scurrying towards a state of affairs that represents an existential threat to the human populaton. Needless to say I am preparing the ground to explain the role of RIO-Real Incomes Objective policies as a possible solution to this unacceptable void in rational policies ;-)

18th July, 2020 - "Yes, Bitcoin has been around since 2009"

Just to clarify, the SEEL document referred to in the article comparing RIO and Bitcoin as "36th Annual Review of Global State-of-the-Art Network Technologies", as the last title of an internal series. SEEL was established to track the State of global network technologies in 1983. Bitcoin progress is covered in the last seven editions.

16th July, 2020 - "Supporting Bitcoin"

I have just posted a short article entitled, "RIO and Bitcoin" to explain their complementary nature, because their common objective of preventing currency debasement. They can work together or separately to good effect.

16th July, 2020 - "The Bitcoin standard"

Saifedean Ammous's book "The Bitcoin Standard" has an excellent historic review of the impact of raising volumes of exogenous money a la monetary policy on the debasement of the currency, social instability, revolutions and wars. The rest of his book deals with the benefits of Bitcoin.

There is something there which did not occur to me the first time I read these sections but Ammous does state the issue in his sub-title of his book, "The decentralization alternative to central banking". RIO-Real Incomes Objective policies are exactly run on the same basis i.e. total decentralization of policy instruments but without looking at opperational alternatives for the currency itself. This is, I feel, a significant realization since the "logic" behind Bitcoin is the same as RIO. However, in both cases, these approaches are a significant challenge to conventional thinking on monetarism which, as we all know, is archaic and somewhat out of date when it comes to securing sustainable and real economic growth.

14th July, 2020 - "MMT"

It is notable that Modern Monetary Theory "solutions" are popping up in interviews related to many different topics including how to get out of the Covid-19 related depression. I have just posted an article "The emerging status of Modern Monetary Theory" on what I have concluded so far on MMT since reviewing it since April 2020.

Articulations on MMT are so "easy to understand" as to be simplistic. As a result it is seductive and for some, convincing. However, this simplicity relates to a failure to face up to a range of constraints within our political economy which relate to who really controls and benefits from monetary policy. The track record of monetary policy to date is not in any way encouraging and MMT doesn't present any significant logic or evidence to separate it from this evolving disaster.

14th July, 2020 - "article classification"

This site has around 110 articles posted as a selection from the RIO-Real Incomes Objective development work since 1975. RIO relates to all issues in economics across the micro-macro spectrum and this is not immediately apparent from the titles. I will therefore classify the articles by topic. I am working on this and hopefully within the next few weeks I can post a new home page with indexed articles by topic to help readers access those articles of interest to them.

8th July, 2020 - "constitueny oversight over unethical financial decisions"

I just posted an article entitled, "Function assignment options - Part 4 - Imprudence under prudential financial regulations".

The objective is to call attention to the fact that monetary policy is "ring-fenced" not against budgetary limitations but rather against the constituents gaining any oversight or any participatory contribution to decions on matters which, to date, have created prejudice for the majority.

6th July, 2020 - "archaic elusiveness of macroeconomic management endangers us all"

I just posted an article entitled, "Function assignment options - Part 3, Artificial intelligence and economic practice".

The objective is to demonstrate that not only is monetary theory and policy archaic and a bad fit for a modern democractic society, the slow application of appropriate means of analyzing and managing financial markets by governments, through state-of-the-art technologies, only contributes to the chaos and prejudice caused by financial markets.

4th July, 2020 - "financialization"

I have updated the article on the growth of financialization to extend coverage to 2020.

The point to note is that the solution to the excesses of financialization witnessed in 2008 has been more financialization! So the prejudice continues.

4th July, 2020 - "liberty?"

I have posted a note, "The opportunity cost of our democratic deficit" co-incidentally on the day of indendence of the USA.

In this context, it is paradoxical that worldwide the monetary policy model, exogenous money and taxation applied by colonial overlords was the motivation for revolutions, and yet, having rejected this system as unjust, the "liberated and now democractic" societies, free from their colonial oppressors, installed the very same archaic undemocratic system of exogenous money and taxation.

As in the past, a very small faction controls government decision making on monetary policy, to their benefit. As in the past, the rest of the constituency faces the consequences of these policy decisions with no say in the matter; the opportunity cost of this persistence systemic democractic deficit. It is unlikely, if given the choice, this is what the constituency would vote for.

The deciding factor is whether or not such a small faction can avoid arbitrary decisons with respect to the interests of the majority; the track record shows that they have not achieved this, at least during the last century. Tyranny is defined as: "government by a ruler or small group of people who have unlimited power over the people in their country or state and use it unfairly".

3rd July, 2020 - "the impact of information technology on economics"

I have posted a note, "Function assignment options - Part 2 - The implications of location state theory on economics " in which I review explain in a little more detail how information technology and telecommunications is demanding that we re-evaluate many past economic theories declared to be defunct, when this is no longer the case. We need to exercise an enormous precaution over the excessive confidence in our conventional economic theories and practice which were essentially conceived at least a century ago when information and knowledge management were in their infancy.

2nd July, 2020 - "Pigou's welfare economics and his tax"

I have posted a note, "Is RIO policy Pigovian Welfare Economics?" in which I review Pigou's tax proposals, made in 1920 which are applied today, one century later, in carbon trading and plastic bag charges. Well done Pigou!

RIO Real Income Objective policies in fact apply a positive Pigovian tax (I only realised this last week). However, in reviewing this area and analysing criticisms of Pigou's proposals, I was interested to note that the criticisms made by, for example, Ronald Coase and Ludvig von Mises, are no longer valid. This is because their criticisms related to the then state of communications and information processing state-of-the-art. The global W3 and associated digital capabilitie have invalidated their criticisms.

These are good examples of Alfred Korzybki's concept of time-binding, a part of this General Semantics approach. The validity of statements is time-bound to when they were made.

30th June, 2020 - "Function assignment options"

I have posted a note, "Function Assignment Options - Part 1" in response to some criticisms leveled at Say's Law. It is interesting to observe how the attacks on Say's Law become more strident and irrational as we transition towards policies that favour exogenous money (debt). This has been associated with a widening array of function assignment options resulting in a loss of control over transactional monetary instruments. This caused the 1929 Crash and Great Depression, the 2008 crisis and the current quantitative easing fiasco. It isn't too late to move back to policies that reinstate endogenous money policies, including savings, so that we can get back to Say's principles and an strengthened supply side and contented constituency.

30th June, 2020 - "useless CPIs"

I have posted a note, "Useless Consumer Price Indices" because as our eonomy declines in real terms the CPI has become wholly arbitrary and an anathema to consumer interests. The CPI provides no indications on the drastic decline in purchasing power because it only records transactions. It is not taking into account failures to purchase and heavy product substitution based on price by a struggling population. In fact this consumer behaviour is reflecte in the CPI as a component reflecting declining inflation and therefore reflecting "policy success in containing inflation".

30th June, 2020 - "money volumes and inflation"

I have posted a note, "Keynes' position on Money and Inflation" because his position on this is virtually identical to that of RIO analysis. However, on the side of the Quantity Theory of Money, he and other Cambridge colleagues, only went a partial step towards a full explanation of money volume impacts, by adding savings as non-circulating funds, in their Cambridge Equation. RIO added assets to create the Real Money Theory. This provides a more realistic explanation of how low interest funds drive a massive inflation in asset markets and a serious inflationary leakage into goods and service consumption markets. The case study for this has been a decade of quantitative easing.

30th June, 2020 - "supply and demand"

I have posted an article, "Supply and Demand, Revisited" because it is the misrepresentation of supply and demand that creates some confusion in explaining the real incomes approach. The application of the conventional supply and demand diagram to an economy is unrealistic because, in reality, market positions are largely indeterminate because of the variation in performance of producers in any sector, consumer income levels and purchasing power. The best we can do is define a transactional envelope within which transactions can occur with benefits to both producers and consumers.

24th June, 2020 - "managing recovery"

At the moment I am editing the first edition of the British Strategic Review (BSR) (publishers HPC). This contains a considerable amount on proposals for economic recovery. I have just posted the article "Heading for recovery" which provides an overview of some aspects of this report.

I have tried to make this "understandable" but in reality moving forward will be complicated because of the embedded lobbies who are articulate and fund-rich and who have been close to key politicians and parties for a long time. There is a need to spell out how things can improve for all. This is why the details will be set out in the BSR

23rd June, 2020 - "inertia of interests"

I have just posted an article entitled: "Constitutional inconsistencies" which explores why the design and outcome of monetary policy is biased towards the financial interests of a tiny group of constituents.

This is a systemic problem cause by the structures of government revenue-seeking (taxation), the accountancy legal and regulatory treatment of profits and monetary policy. This structure is levered by the Bank of England and the Treasury with a coordinated objective.

Constituents have no representation or means to influence these policies.

22nd June, 2020 - "reducing income disparity"

I have just posted an article entitled: "Addressing income disparity" which is changing focus to practical solutions to the issue of policy-induced income disparity. Attempting to introduce completely new "system" would have too many interested parties working against such a move. Accordingly I have identified solutions, in this case a major investment in mutuals, that operate within existing legal and regulatory frameworks. I will extend this analysis suggesting ways and means of mutuals to become major innovators and MuTecs for the future.

21st June, 2020 - "the deflationary policy bonus"

The last cluster of articles to be posted represent a new frontier in policy making because it is revealing new policy instrument options in support of RIO (real incomes objective) policies. The exciting aspect to this advance is that it does not represent a zero-sum game but rather a realization of the real incomes policy imperative of a "Positive systemic consistency" or the concept of all constituents benefiting.

This is of paramount importance because the original objective I set out to establish in 1975 was to identify policies which avoid the prejudice imposed on constituents by conventional policies. These continue to create winners, losers and those who appeal to remain in a neutral policy-impact state. Unfortunately the winners are always a select few and the losers many.

This policy frontier needs to review the role of central banks whose actual contribution appears to be increasingly marginal because one of the policy options is to initiate policies of fixed money volumes in order to reverse the centuries of decline in currency value. The notion of price stability being associated with a 2% inflation rate is defunct in the new scenario. Centralized fixing of interest rates would appear to have no beneficial function to generate fixed income from savings or to manage currency value and exchange rates. There appears to be a strong case for a transition to natural interest rates, see "Is there such a thing as a natural interest rate? - note". In the end all of this has to do with a form of pursuit of optimization based on microeconomic principles as set out by Adam Smith and the correct perception of the role of the supply side in establishing a more stable and manageable economy (see: "A clarification of the role and significance of supply side operations").

Lastly, as far as I can see this dispels the logic and the need for so called Modern Monetary Theory which follows the well-trodden path of the aggregate demand model (ADM) and by placing too much emphasis on financialization which by its very nature is controlled by those who manage finance; the track record on this count does not inspire any confidence in such an approach benefiting the constituency in an impartial manner.

RIO-Real income objective policies pass the baton to the supply side and the constituency who are almost bound to do a better job, if they are allowed to do so. This of course raises significant political questions which we can explore later.

21st June, 2020 - "tackling debt in a rational fashion"

I have just posted a short article, "Why we should not need banks " which clarifies the fact that deflation is equivalent to having a savings account that raises the value of money holdings. However, in the case of deflation the same number of currency units end up having more value as a result of increased purchasing power of goods, services and assets. Real incomes objective (RIO) policies can use this reality to extend the range of policy instruments to get governments and constituents off the debt addiction imposed by conventional macroeconomic policies, monetarism and misguided central banks.

20th June, 2020 - "observations on money volumes and inflation in market segments"

I have just posted a note entitled, "QTM Inflation analysis" which clarifies the fact that the QTM can only indicate inflation in asset markets but not in consumption item markets. Apologies for coming back to this dead topic but it clarifies why monetary policy is largely ineffective as a means of managing goods production and service activity price inflation. This further confirms the potential benefits of RIO-Real Incomes Objective policies.

22nd June, 2020 - "the importance of microeconomic foundations to macroeconomic policies"

I have just posted a follow up to "A Real Money Theory" pointing out why the QTM, The Cambridge Model and the RMT, in reality, cannot provide any useful basis for deciding on macroeconomic policies related to inflation. This is because inflation, or price levels, are wholly dependent of resources acquisition, allocation, production and unit output price setting by individual economic units. This is why the The Real Incomes Approach concentrates on the provision of incentives for economic unit productivity and price setting designed to augment real incomes.

Keynesianism, monetarism, so-called supply side economics and MMT do not have such microeconomic foundations and, as a result, frustrate the operation of the "invisible hand" by marginalizing the potency of decisions taken freely by the economic constituency.

19th May, 2020 - "cracks in monetary economics"

The Real Incomes Approach has essentially established that the Aggregate Demand Model which is the basic tenet of Keynesianism, montarism, supply side economics and, it would seem, Modern Monetary Theory, cannot endure as a logical determinant model of how the economy works. The following have been demonstrated:
  • inflation has no functional connection to demand
  • the quantity theory of money (QTM) is bogus
The last valiant policy instrument, struggling for a rational role in the monetary desert, is the centralized arbitrary interference by central banks in financial markets through the setting of base rates for interest. Although a long established monetary policy instrument, it does not appear to be of much benefit to the real economy. Analysis to date suggests that such interventions appear to be negatively correlated to productivity investment requirements. I am preparing some analyses on this topic.

19th May, 2020 - "Dodgy money theory"

I have just posted short note on a Real Money Theory (RMT) as a substitute for the hallowed Quantity Theory of Money (QTM) which turns out to be flawed since it does not contain key variables to explain the quantitative easing fiasco.

Although people focus on "austerity" as the "visible" part of government policy that has caused problems for this country, the real culprit is QE which has constituted austerity by stealth for most. Since this aspect of policy emanates from the "independent" Bank of England, its ongoing destruction, for some reason, escapes the necessary level of scrutiny while being a bonanza for those the Bank, and government favour, the financial fraternity. Clearly income and wealth disparity is of no concern to government policy makers.

13th May, 2020 - "Irrational debt"

I have just posted an initial attempt to explain what I have termed irrational debt. Although a mundane almost obvious concept, I delayed posting it because so many black holes appeared in the fundament of my understanding of economic theory related to the topic. However, in researching to find who might have covered these topics, I found myself wandering around a sort of Gobi Desert, not for 40 days however, but long enough to realise that, in general, these holes have not been detected or, if some lonesome economist detected them they are still working on the topic or died of confusion.

These relate mainly to what appears to be a fundamental error in how we see "money" as some neutral means of exchange.

In 1963, John Robinson, Dean of Clare College, published a book entitled, "Honest to God". It was covered at its launch with an article in The Observer headed "Our image of God must go". The notion was that to understand the purpose and value of religion, stop taking about God.

In an environment where increasing numbers of economists have joined the ranks of servile clerics and defenders of the faith in the monetarist idol, it is self-evident that to understand the purpose and value of our economy to the constituency, "money" should not feature in the discussion. This helps clarify many issues and then helps place the role of money in a productive perspective.

I am preparing some notes on this issue with a view to preparing and posting something on what appears to be an important topic; to me at least ;-)

8th May, 2020 - "Irrational debt"

In reviewing the impact of exogenous money, within which I would include the money generated under MMT, I have not been able to identify any benefits while there are quantifiable costs in terms of endogenous real growth. Part of this, in the domain of financial intermediation and banking, is related to what I have dubbed "irrational debt" on the part of individuals, economic units and governments; the concept is all-embracing. I will define what this in a note I will post on this issue soon.

Observing the political coverage of the government's grants and loans to companies and income support during this Covid-19 crisis there is a danger of this unique and necessary action being intentionally confused with quantiative easing (QE) to sugar coat the motivations behind QE and to detract from its disastrous outcomes. These payments have nothing to do with the QE policy. QE is, however, a case study in "irrational debt".

May 3rd, 2020 - QTM.

I have posted a replacement pdf for the previous one concerning missing savings and assets from the QTM which was entitled: "A Real Theory of Money (RTM).". This is because applying the RTM algorithm did not project expected results. On closer examination of the Cambridge equation, this also gave unnexpected results.

The replacement document, "A New Real Theory of Money (NRTM)" presents a new equation which generates expected results. However, this area requires a lot more work.

May 3rd, 2020 - Modern Monetary Theory (MMT) ...

I have posted an article concerning my doubts in relation to the national accounts approach used as a basis for KMS macroeconomic policy decision-making, "Production, innovation and national accounts" which, for the moment sets out some of the problems with this approach. The aspect related to there being no microeconomic foundations to KMS policies and, I suspect MMT, is subject to another article, in preparation.

May 1st, 2020 - Modern Monetary Theory (MMT) ...

I stated in my last comments that as far as I have been able to gather Modern Monetary Theory is the same as Keynesianism, monetarism and supply side economics in:
  • being a national accounting approach (NAA)
  • having no microeconomic foundations (NMF)
I stated that this has a major potential problem, if my understanding is correct, because of the implications on innovation and real incomes. At this stage I have posted an article explaining the realtionship between NAA, NMF and innovation.

May 1st, 2020 - Change of title

I have changed the title of the article "A clarification of supply side economics" to "A clarification of the role and significance of supply side operations" to avoid confusion with what is know as supply side economics which is a fiscal scheme with little connection to the economy of the supply side.

April 29th, 2020 - Modern Monetary Theory (MMT) ...

As promised, I am reviewing MMT and my preliminary take is as follows. In spite of all the media and economics exchanges and general "excitement" I have found it to be disappointing. It differs from other macroeconomic management paradigms in that it openly admits to be a financialization system but is, as far as I have been able to gather from very intense workshops, the same as Keynesianism, monetarism and supply side economics in:
  • being a national accounting approach
  • having no microeconomic foundations
These are a major potential problem, if my understanding is correct, because of the implications on innovation and real incomes. There are some, what appear to be, significant constitutional economic issues related to the enhanced role of government in having an even greater role in management of the economy under the guidance of financial intermediation and banking interest groups; so far this has been a mess. Given the way financial institutions work with political parties within the USA, for example, any idealism associated with this "new" approach would appear to be at risk of disappointment. The interesting and troubling point is that MMT has not liberated itself from the Aggregate Demand Model fixation that plagues all macroeconomic theories in practice.

The lack of explanation of what causes inflation only places the theory in the flawed QTM camp. The most troubling aspect is the tone of MMT in that it sees this top down system as a way to "run the economy" which studiously avoids the reality of the heterogeneity of the reality on the ground where one-size has never fitted all. I won't say any more at this stage, but I will prepare some articles in the coming days. I am double checking what I have said here, I hold no "partisan" position on this, only, I hope, logical doubts which I hope MMT can clarify.

April 28th, 2020 - exogenous money ...

I have posted an initial version of an article on exogenous finance, "Resources, economic capacity, endogenous & exogenous means of exchange" promised in the last post below. I will probably modify it because additional implications occured to me while completing it, it will do for now ;-)

April 27th, 2020 - money, money, money ...

Whenever something goes wrong in the field of economics, a frequent occurrence, various individuals appear selling miraculous solutions, as if any theory or construct will, of course, work in practice. From consideration of the discipline of decision analysis procedures to the fact that most policies fail to achieve their objectives, we all need to admit is that life is not that simple. Today, I received an email expounding the benefits of "Modern Monetary Theory & Practice" (MMTP). Based on the email content, my immediate reaction is one of caution, simply because whenever we have seen exogenous money applied to speed up growth or fix some issue, such as unemployment or inflation in the real economy, things go wrong. MMTP has quite a long history but has gathered momentum with economic circles more recently. Exogenous money issuance tends to go wrong quickly if it is:
  • used to support the aggregate demand model
  • based on national accounting principles
I will produce a note on exogenous and endogenous money. I was going to do this anyway as a critique of our current money issuance system, so my notes are more or less complete on this subject. I hope this will clarify why I am cautious from a real incomes position about exogenous money. Then, from that platform I will review MMYP ;-)

April 26th, 2020 - unjustified statements

Today I heard an economist refer to Say's law as nonsense and that economies are demand led. From what followed, the person concerned did not appear to understand, as I am afraid is the case with many economists, what Jean Baptiste had to say concerning production, distribution and consumption.

My latest article "A clarification of the role and significance of supply side operations" attempts to clarify this question. I will follow this up with a loose end I left in that article ;-)

April 4th, 2020 - Concerning the need to be able to distinguish between Gobbledy gook and Mumbo jumbo

In reviewing some of my older papers and communications it is very apparent that the use of common English words, by different economists to mean different things, is a significant problem. This is not only an issue in communication between economists but even more so between economists and the national constituency.

However, we were warned that this is the state of affairs. In the mid-1960s, Fritz Machlup published a book entitled "Essays in Economic Sematics", which provides countless examples of how "leading economists" were applying the same terminologies to mean, sometimes, completely different things. Merton Miller, in his preface to this book stated, "By forcing ambiguities, sloppy reasoning and implicit theorizing out into the open, Professor Machlup has alerted his own students and the profession at large to the tyanny of words."

As a student I found this to be quite frustrating. If our mentors could not agree on what they were talking about then we, as a future generation working in this field, were bound to face an unneccessary communications issue. Unfortunately this has turned out to be the case and it has resulted in what should be transparent evidence-based economic logic, often being no more than political assertions.

On this point, I have noticed that engineers and members of the public are adept at understanding the concepts behind the Real Incomes Approach. On the other hand trained economists are more resistant since the concepts jar with what they gleaned from their dog-eared lecture notes.... but then, Fritz did warn me.

April 3rd, 2020

Covid-19 has imposed an awareness that economic policies should be, first and foremost, about the wellbeing of individuals families and communities. This is difficult to honour with a political system that gives power to tiny factional political parties. There has been a transition from mixed economy planning based on the old tripartite system between business, unions and the government to one of applying a business school bottom line mentality, or financialization, to whole economies.

Harvard Business School's Jeremy Sachs advised Russian and Central European authorities, with the fall of the Berlin Wall, to introduce a " "short and sharp" transition from state-based operations to privatization. As a result millions lost their jobs with no social support and state enterprises were carved up. The most profitable segments were transferred at nominal prices to the so-called "young Communists" and much of the rest auctioned off to naive foreign "investors". The result was millions of suicides and the creation of the oligarchs who now influence or control the politics of their nations.

This is a case study of the damage economic policies, driven from an enterprise perspective, can do. It was my disagreement with the social damage wrought by conventional macroeconomic policies in 1975 that motivated me to look for alternatives. Improving the wellbeing of individuals, families and communities can be a central aim of economic theory while improving business productuivity and real incomes. There is no fundamental conflict between these two objectives. This is the foundation of a resilient economy that is also environmentally sustainable. We need to address the climate crisis and build a happy and free society with just settlements and without recriminations. It is certainly the time for the mantra, "There is no alternative", as the sustained cause of social prejudice and disruption, to be abandoned; Covid-19 appears to have sparked some thought in this direction.

March 31st, 2020

A lot of the articles are somewhat repetitive, largely to make specific points that could be overlooked. However, I also find this somewhat irritating because I do not always have time to dedicate to more leisurely and reflective writing. However, I will rewrite some of the more recent addtions in order to consolidate them into more concise focused pieces.

March 26th, 2020

Next steps....

Some may have noticed that I referred to a Real Incomes Policy administrative framework linked to business rules. I know that this is a crucial aspect of turning theory into fully fledged likely-to-be feasible policies. This is a weak point in most economics since the theory does not map over practice and less so over outcomes.

I know this is important because it was first drawn to my attention in 1981 when I had circulated a bare bones proposition to all UK political parties i.e. at the time Conservative, Liberal and Labour. Richard Wainright, the Liberal Party Economics Spokesman, was the one of the only people who demonstrated in his questions to have obviously read and understood the proposition and to have reflected on it in practical terms. He was reticent, he said, not because of the logic but more on the practical point of "If we propose this and win the election, we will then be faced with the problem of having to implement it!"

The main Conservative representative, now in the House of Lords, couldn't advance our exchange because he became fixated with the fact that one of my real income projections generate a growth of 2.75% each year under a specific scenario. This he considered to be impossible, based, of course on ADM experience, and he suggested 0.25% or maybe 0.5% would be more realistic; if he had read the paper I had circulated he might have understood or at least queried me on the model.

Labour asked me to speak to Len Murray, the General Secretary of the TUC but he would not entertain anything that differed from the existing "position of Congress".

However, a senior manager from KMPG, in a Conservative group, had to leave a group luncheon early, so he made the point of approaching me to say he found the proposition to be of interest but, in order to introduce it, thought need to be given to required administrative changes because, at that time, companies and/or authorities did not collect the type of data required to make use of the PPR (price performance ratio) and the PPL (price performance levy) as policy instruments. This message hit home immediately since I was aware I had not, at that time, advanced any details how this would be accomplished at the national administrative level. I had got as far as explaining the microeconomic operation or rudimentary business rules. Unfortunately in attempting to follow up with this individual, no one who had been present was able to identify who he was; bit of a mystery there.

However, on the political side, and based on feedback by two experienced individuals, it was evident that I needed to turn my attention to a specification of the Real Incomes Policy administrative framework linked to the business rules. There are several reasons why the current UK administrative framework needs to change and I have explored some aspects in very short articles on "paradoxes" (the profit paradox, the fiscal paradox and the montary paradox) of how current administrative frameworks currently constrain desired change and innovation.

Hovering in the background, given how we arrived at this location in space-time, and under what policy circumstances, there will be enoromous presssure to not disturb government revenue seeking, or what Gordon Brown frequently referred to as the fiscal neutrality rule. Having analysed this since 1981 I hope the articles that will appear on this topic will prove to be useful and of interest.

20th March, 2020

In the context of Sustainable Development Goals (SDGs) and climate action, most will be aware that the 2019 UN Sustanable Development Report identified that so far, after the launch of Agenda 2030 in 2015, there is a problem with three SDGs that "go backwards" when there is economic growth. These include:
  • SDG 10 - Reduced inequalities
  • SDG 12 - Responsible consumption and production
  • SDG 13 - Climate action
We all know that the failure to meet SDG 10 is the common feature of ADM policies. SDG 12 is essentially the whole economy which is, of course, all supply side. SDG 13 is our existential challenge that needs to be addressed. Well, what can we expect under ADM policies? The UN Sustainable Development Report did not labour these issues it being a typical product of an editing committee very much concerned with the image of their institutions and Agenda 2030. However, individual memmbers of their oversight expert committee have been more forthright.

It is worth noting at over 65% of the indicators for climate action and responsible consumption and production have not yet been specified. So this alone is a serious issue. It is also the case the 70% of the SDG 12 indicators have also not been specified.

The Real Incomes Approach has much to contribute to this predicament as it does to the analysis of poverty economics an important component of the proces of designing projects adapted to the conditions of low income countries and in particular the lowest 40th percentile, many of whom are at risk. I will be adding articles to explain the mechanisms of operationalizing the real income objective to not only promote economic development but also via means to sustain environemntal and ecosystem carrying capacity and thereby contributing to climate action.


In this section I provide some feedback to those who write in with questions....

This isn't a blog it is an informal communications platform where I can let people know what is being advanced and to provide some observations.....

The Real Incomes Approach the macroeconomic policy framework with the RIO-Real Incomes Objective has always been a fluid exercise advancing rapidly both in terms of theory and practical propositions. Some have asked me why this appears to be the case, I think the reason is that this has occurred because in 1976 this work was no longer guided by the pre-ordained constraints imposed by the Aggregate Demand Model Box. These limitations both in theory and practice are caused by conceptual and quantative model errors that have caused so many problems for Keynesianism, monetarism and so-called supply side economics.

The nature of the problem is that these policies all fail to gain traction and the policy targets keep changing as the failing policy sparks another issue. Invariably these erratic cycles generate winners, losers and those who somehow remain in a neutral policy impact state. The general outcomes, it would seem, for an increasing proportion of the constituency, is the lot of being expected to endure policy-imposed prejudice. It was this prejudice imposed on constituencies by clearly inappropriate policy instruments, that caused me to question conventional economic practice. This naturally led me back to the theory to find how it could be so oblivious of human needs after centuries of development. With time the reason has become obvious.

The visceral nature of confrontational politics deploys a cynical tactic of attracting contending groups, each with a convenient identity tag, used unashamedly by politicians in dog-whistle politics to accumulate enough "identities" to win an election. Today the dog-whistle is less connected to open declarations but the process is operated through web-based social media to route messages to their identity-tagged targets. Many of these messages are purposely misleading either in terms of their promise or characterization of political opponents. This is, in reality, a serious constitutional issue. However, interests, so far, have been effective in attenuating any substantive corrective action.

This undermines any coordinated objective analytical procedures by political parties because they are invariably controlled by considerably smaller but powerful factions, who select procedures that support their interests; to protect their survival in the job the other representatives and members of parliaments tend to go along with the "position" of the party. Somewhat like derivatives, these disjointed policies are "sold" to the electorate as coherent policies but which always result in specific segments of the constituency benefiting while others are prejudiced. Policy makers tend to express policies in broad sweeping declarations, but it is the details that are important and today. many of these details are hidden.

The Real Incomes Approach does not have a political colour or brand, it is neither left wing or right wing (whatever that means), it does not have a pre-ordained position on private enterprise or public services or some underlying desire to nationalize everything or privatise everything.

What the current mission consists of is to bring about a better alignment of the interests of the ciizens of the country in line with how they go about their activities and affairs through a process of constant learning, development and adaptation of technology and techniques, the acqusition of tacit and explicit knowledge leading to better decision analysis to identify and implement appropriate innovation, advancing the interests of all.

What appears on these pages is the result, I hope, of logical deductions from observations. I welcome any feedback pointing out flaws in logic on my part. I am not selling the Real Incomes Approach but I continue to develop it in the directions that analysis leads me and then I write out conclusions on the pages of this website.

There is a long way to go to make this a reality, why not join in?