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Pentecost - 12 Apr 2017 17:23:44 (#1 of 22)

An interesting read, thanks.

thisonehasalittlehat - 12 Apr 2017 18:49:20 (#2 of 22)

Follow the laws of nature not the laws of physics?

Um....

breakfast - 12 Apr 2017 18:50:02 (#3 of 22)

Picky.

Pentecost - 12 Apr 2017 21:18:59 (#4 of 22)

Well, the laws of nature was a bit crap, and the idea that a model in mathematical or scientific sense is interchangeable with a model in the normative sense. And a few other things, but an interesting read for me all the same.

tasselhoff - 12 Apr 2017 22:29:28 (#5 of 22)

It doesn't address debt-based broad money which is the prime driver for the need for growth. Maybe the book does.

Intowntonight - 12 Apr 2017 22:31:35 (#6 of 22)

Does it address technical innovation which , along with the global economy has been the biggest driver of growth.

tasselhoff - 12 Apr 2017 22:39:52 (#7 of 22)

I'm talking about the intrinsic nature of debt-based money creation whereby all broad money is created as credit. When it gets paid off the money disappears leaving the interest debt that needs to be paid off with yet more debt-based money.

It's the reason we need growth just to have a functioning economy (not a driver of growth, which by definition is only available when the banks lend more as a precondition to us having more money for whatever stuff we want to buy). And without addressing it, the model's just a pretty design.

Anchorman - 12 Apr 2017 23:16:16 (#8 of 22)

I'm talking about the intrinsic nature of debt-based money creation whereby all broad money is created as credit. When it gets paid off the money disappears leaving the interest debt that needs to be paid off with yet more debt-based money.



Not that you've ever mentioned that before!

tasselhoff - 13 Apr 2017 06:53:45 (#9 of 22)

Well it is relevant to the thread.

Anchorman - 13 Apr 2017 10:34:52 (#10 of 22)

Fairynuff!

Arjuna - 13 Apr 2017 10:41:55 (#11 of 22)

Hasn't this criticism been around at least since Carlyle dubbed economics as the dismal science?

thisonehasalittlehat - 13 Apr 2017 11:17:15 (#12 of 22)

Indeed nobody had done classical economics since the ark.

Pentecost - 13 Apr 2017 16:29:20 (#13 of 22)

I'm talking about the intrinsic nature of debt-based money creation whereby all broad money is created as credit. When it gets paid off the money disappears leaving the interest debt that needs to be paid off with yet more debt-based money.

If you can spare the time, tass, I get the first bit but I'm not sure I see why the interest necessarily has to be paid with more borrowing - why not just with value-add from work? This value add does not need to add to money supply: it could be manifest as notional asset value increase. The interest paid to the lender does not disappear, it has only been transferred to the lender and then gets re-circulated via dividends and spending etc.

MaybeLeon - 13 Apr 2017 17:02:55 (#14 of 22)

Well, this looks as if it might get infinitely more interesting than pedantic talk about laws of nature and laws of physics.

tasselhoff - 13 Apr 2017 18:20:31 (#15 of 22)

I'm not sure I see why the interest necessarily has to be paid with more borrowing - why not just with value-add from work?

Because the interest has to be paid with broad money. And that is only created in a normal modern economy by creating more debt.

You can try adding as much value as you like but if the banks crank down lending there just isn't enough money about so order books get thinner.

Pentecost - 13 Apr 2017 23:08:52 (#16 of 22)

Yes but it's not new broad money that necessarily pays interest, it's just broad money already in circulation that is transferred from one holder to another. It doesn't have to decrease or increase the money supply.

Someone could take on debt to pay it, or they could add value to someone else who would pay it as a fee. I don't see that it's necessarily to come only from more debt.

TRaney - 18 Sep 2018 10:27:17 (#17 of 22)

https://www.bloomberg.com/news/articles/2018-09-17/why-is-this-supersafe-bank-scaring-the-fed

Gotout - 18 Sep 2018 10:45:58 (#18 of 22)

Nothing will really change because those at the top like the Kuznets Curve. It allows them to hide behind a pseudo scientific justification for their greed methods whilst allowing those at the bottom to sit under the illusion of 'trickle down money'.

uranrising - 18 Sep 2018 12:11:10 (#19 of 22)

The EU needs a stability and wellbeing pact, not more growth

238 academics call on the European Union and its member states to plan for a post-growth future in which human and ecological wellbeing is prioritised over GDP

headline to https://www.theguardian.com/politics/2018/sep/16/t
he-eu-needs-a-stability-and-wellbeing-pact-not-more-growth


Sun 16 Sep 2018 16.26 BST Last modified on Sun 16 Sep 2018 16.41 BST This week, scientists, politicians, and policymakers are gathering in Brussels for a landmark conference. The aim of this event, organised by members of the European parliament from five different political groups, alongside trade unions and NGOs, is to explore possibilities for a “post-growth economy” in Europe.

For the past seven decades, GDP growth has stood as the primary economic objective of European nations. But as our economies have grown, so has our negative impact on the environment. We are now exceeding the safe operating space for humanity on this planet, and there is no sign that economic activity is being decoupled from resource use or pollution at anything like the scale required. Today, solving social problems within European nations does not require more growth. It requires a fairer distribution of the income and wealth that we already have.

Growth is also becoming harder to achieve due to declining productivity gains, market saturation, and ecological degradation. If current trends continue, there may be no growth at all in Europe within a decade. Right now the response is to try to fuel growth by issuing more debt, shredding environmental regulations, extending working hours, and cutting social protections. This aggressive pursuit of growth at all costs divides society, creates economic instability, and undermines democracy.



Those in power have not been willing to engage with these issues, at least not until now. The European commission’s Beyond GDP project became GDP and Beyond. The official mantra remains growth — redressed as “sustainable”, “green”, or “inclusive” – but first and foremost, growth. Even the new UN sustainable development goals include the pursuit of economic growth as a policy goal for all countries, despite the fundamental contradiction between growth and sustainability.

The good news is that within civil society and academia, a post-growth movement has been emerging. It goes by different names in different places: décroissance, Postwachstum, steady-state or doughnut economics, prosperity without growth, to name a few. Since 2008, regular degrowth conferences have gathered thousands of participants. A new global initiative, the Wellbeing Economies Alliance (or WE-All), is making connections between these movements, while a European research network has been developing new “ecological macroeconomic models”. Such work suggests that it’s possible to improve quality of life, restore the living world, reduce inequality, and provide meaningful jobs – all without the need for economic growth, provided we enact policies to overcome our current growth dependence...

... As a group of concerned social and natural scientists representing all Europe, we call on the European Union, its institutions, and member states to:

1. Constitute a special commission on post-growth futures in the EU parliament. This commission should actively debate the future of growth, devise policy alternatives for post-growth futures, and reconsider the pursuit of growth as an overarching policy goal.

2. Incorporate alternative indicators into the macroeconomic framework of the EU and its member states. Economic policies should be evaluated in terms of their impact on human wellbeing, resource use, inequality, and the provision of decent work. These indicators should be given higher priority than GDP in decision-making.

3. Turn the stability and growth pact (SGP) into a stability and wellbeing pact. The SGP is a set of rules aimed at limiting government deficits and national debt. It should be revised to ensure member states meet the basic needs of their citizens, while reducing resource use and waste emissions to a sustainable level.

4. Establish a ministry for economic transition in each member state. A new economy that focuses directly on human and ecological wellbeing could offer a much better future than one that is structurally dependent on economic growth.

tasselhoff - 18 Sep 2018 12:32:15 (#20 of 22)

Yes but it's not new broad money that necessarily pays interest, it's just broad money already in circulation that is transferred from one holder to another. It doesn't have to decrease or increase the money supply

That's untrue. An individual or company or government may make use of existing broad money, but given the money is created as debt, once the principal is paid that broad money disappears (leaving just the interest). So, overall, growth is needed to continue creating more broad money as credit in order to pay off the increasing debt (Why do you think growth is so important?).

See the BoE doc on how broad money is created and destroyed https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/money-creation-in-the-modern-economy

Just as taking out a new loan creates money, the repayment of bank loans destroys money.

The only general exception is quantitative easing, which only occurs when the economy is too fucked to grow (due to banks loosening credit then reining it back in, almost immediately decreasing available broad money).

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