By Lambert Strether of Corrente.
Here’s more material from this iNet “Paradigm Lost” conference in Berlin (from which Yves has just returned). Hat tips to readers BT and JurisV for suggesting it.
Here’s the introduction:
The first thing we need to say to each other is what do we mean by socially useful… Now the first thing to notice about this is that conventional cutting-edge macro monetary theory here is of no help at all in determing what is a socially useful credit sector, and that’s for the simple reason that there is no credit sector in the cutting edge macro models today.
OK, this goes back a long way: Frank Hahn [sp?] in the 1960s wrote a paper on problems of proving the existence of money in the multi-market equilibrium economy, so money itself is not supposed to exist even. This has been laid out and explained in many publications since. And my point is not to bash macroeconomics as it is today, but my point is that we really need to look for other models and other ways of thinking if we want to get to an assessment of what is a socially useful credit system. Supporting these you might say science fiction models [ouch], financially speaking, because there is no finance in them, the models that central bankers use have no banks — just let that sink in — is fictional history….
The whole presentation is deadpan screamingly funny, besides providing some superb analytical and polemic tools. Don’t listen to NPR with your morning coffee; listen to this!
NOTE Readers, sorry I had to take this down for a bit; fifty lashes with a wet noodle for lambert, for overexcitedly pressing the Submit button too early.