Everything seems to be based on the expectation that the holidays will bring an enormous increase in consumer spending (debt funded?), and the speculators and gamblers on Wall Street will cause additional gains in the stock market. Of course, in light of Mr. Bernanke's announcement that the Great Recession is over, the stock market is up . . . at least as this is being written before noon. The day isn't over yet, and it's become fairly typical that whatever was happening an hour ago on Wall Street is countered by what happens an hour in the future.
So much for this week's Big News. Most of what has been going on this week within the Just Third Way is responding to inquiries from the public, which doesn't make for short bulleted points in a news brief posting. More and more, the essential question in the inquiries, whether or not explicitly stated, is how are people without savings or access to the savings of others supposed to acquire ownership of the means of production? Unfortunately, due in large measure to the failure of modern economics to take the actual operation of the science of finance into account, the main schools of economic thought cannot address this issue. Instead, they dismiss it as unimportant, or put the blame for the failure to gain ownership on some flaw in a person's nature.
A reading of Kelso and Adler's second book, The New Capitalists (1961), would show them where they went wrong, and what can be done about it, as is evident from the book's subtitle: "A Proposal to Free Economic Growth from the Slavery of Savings." If they want a proposal with specifics to get things back on track they might want to browse through Capital Homesteading for Every Citizen. Both books are free, so that should be no problem . . . unless they're afraid that getting something for free will not adequately stimulate the economy.
We therefore make this offer: Any economist or policymaker who reads the e-texts of The New Capitalists and Capital Homesteading for Every Citizen and who doesn't think that the proposals are sound can either tell us what is wrong with them and why they won't work, or send us a stimulus check with lots of zeros to the left of the decimal point to comfort us in the affliction of our political and economic blindness.
• Early this week we began turning what originated as a request to explain the definition and origin of "money" as we understand it into a major article. The focus of the article is how something called the "real bills doctrine," while it reflects the reality of the practice of accounting and the science of finance, is unaccountably rejected by the economic establishment and thus by policymakers.Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.
• The real bills doctrine, mentioned a number of times on this blog, is that money can be created without inflation or deflation (defining inflation as "demand-pull" inflation in which an increase in the money supply exceeds an increase in the supply of marketable goods and services) if — and only if — the increase or decrease in the money supply is matched by an increase or decrease in the supply of marketable goods and services. The real bills doctrine is an application of the logic behind Say's Law of Markets and the quantity theory of money, M x V = P x Q. Most modern schools of economic thought reject the real bills doctrine without explaining why in any substantive manner, and even erroneously credit Henry Thornton with repudiating or rejecting the real bills doctrine that he defended.
• Also this week we prepared a response to a friend of CESJ who sent an article that appeared to contain vague terminology with respect to capitalism. CESJ and most people and organizations in the Just Third Way reject the term "capitalism" as too vague in its modern spectrum of meanings, and too pejorative in its classic sense. As might be expected from the title of this blog, we prefer "the Just Third Way" to "capitalism" to describe a system based on a limited economic role for the State, free and open markets as the best means of determining just prices, just wages, and just profits, restoration of the rights of private property, and widespread ownership of the means of production.
• Work is proceeding on the editing of Dr. Alamgir's book, Notes from a Prison: Bangladesh. Some editing questions have arisen that will probably delay release until later this year or early next year.
• As of this morning, we have had visitors from 37 different countries and 41 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Brunei, Canada, and Venezuela (unless you count the Long Lost Land of Not Set). People in Aruba, the Netherlands, Indonesia, (Not Set), Venezuela, and Brazil spent the most average time on the blog. The most popular posting continues to be "What Caused the Economic Crisis," "Who is Responsible for Our Health Care?" followed by the Keynesian "paradox of thrift," what you can do to end the economic crisis, and the news items. With respect to the amount of time spent reading, the postings on Lincoln's Homestead Act has seen a sudden burst of popularity, followed by the "thoughts on money," usury, the paradox of thrift, the reign of the British Currency School, and William Cobbett.