"When the Swedish Central Bank awarded its fake "Nobel" in Economics (Offer and Söderberg 2016) to Ben Bernanke, for a model of banking in which bank loans don't create money, the so-called "Scientific Background" paper for his Prize did not even cite the Bank of England's contrary declaration about bank lending (Committee for the Prize in Economic Sciences in Memory of Alfred Nobel 2022)."
"Figure 1 plots private debt from 1947 till 2023, and credit against the unemployment rate from 1981 to 2023, when the private debt level has exceeded 100% of GDP. The negative correlation between credit and unemployment is visually obvious, and in the period between 1990 and 2015—which covers the boom leading up to the 2007 "Global Financial Crisis" and its aftermath—the correlation exceeded -0.9: when credit rises, unemployment falls, and vice versa. "
"Far from having "no significant macroeconomic effects", credit is possibly the most significant of all of the determinants of macroeconomic performance."
"I detail these here to show that key ripostes that economists make to many criticisms—that they lack empirical verification, that they cannot be modelled, and that they cannot be proved—are false. One has to be deliberately blind to the data to not see the impact of credit on the economy, credit can be modelled, but not within the Neoclassical paradigm—one must renounce it instead—and the logical proof that credit matters is irrefutable. "
"Neoclassical economists argue that the rich are different, because they are more productive… Marxists, in contrast, argue that the rich are different, because they exploit workers… What makes the rich different, I propose, is… their greater control of subordinates—what I call 'hierarchical power'.
Societies' elite get caught in peer contests of opulence and glory.
Machiavelli made this observation in both Prince and Discourses.
"The conservative project of the past 40 years has been to reverse this: to return the great majority of us to the status of desperate, forelock-tugging plebs who know our places. Hence the return of child labor, the tradwife movement, and of course the attacks on labor unions and voting rights.."
Money is a stock which represents an imbalance in the velocity of the flow of real goods. If I sell you a hat and you give me money and I hold the money, I can do so for a while until later I finally demand a pair of shoes... The time that passes between those two events is the whole reason for money. "The world" owes me something about as valuable as a hat, until the world has paid that debt, the money is there to represent it.
Money matters precisely because of the passage of time. It's also dynamic. Money can be created in the mean time by the govt or banks, and devalue the money I'm holding so I can't get that "about the value of a hat" anymore (inflation). Money can also disappear (bankruptcies, taxation, or whatever) causing my little pile to become more valuable. Govts tend to hate that these days.
money also acts to allow me to be uncertain about what I want, to spend time to investigate what's available and to demand at a later time something I didn't know about when I sold you the hat. That's a really important aspect of money.
That Economists don't know this is like Physicists not knowing that light exists.
@GhostOnTheHalfShell
When you think about it the emphasis on equilibrium is probably part of the issue. Anyone who knows differential equations knows that equilibrium is what happens at time equals infinity. So for economists to understand the role of money they have to have a dynamic view.... Because money is about the passage of time... And for them time doesn't exist. @economics@a.gup.pe
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