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Central banks also bought bonds from private institutions, with the aim of increasing the supply of money and reducing market — or so-called long-term — interest rates. His works advised the use of aggressive monetary policy because lower interest rates should help to stimulate higher private sector investment, because in most cases this is what lifts economies out of recession. But, he adds, if this was a really serious slump then monetary policy might not have been enough on its own.

People hoard cash rather than spend it. Keynes is told that ever bigger doses of monetary soma have been necessary to keep the global economy ticking over, with weak investment leading to poor productivity and growth rates well below those seen in the years leading up to the crisis. He asks the obvious question — if monetary policy has ceased to be effective, what have governments been doing to help? It is an obvious point to raise. When animal spirits are low, governments should step in with public investment.

They should do this even at the cost of a higher budget deficit, because the higher growth that will result will mean the investment more than pays for itself. He is aghast to hear that apart from during a brief period of collective stimulus in , this approach has not been followed. Governments quickly grew concerned about the size of their budget deficits and cut public investment. But weak growth meant deficit reduction took longer than expected. Ultra-low interest rates for the best part of a decade have led to asset-price bubbles. Measures of private indebtedness are rising again.

All depressingly predictable, Keynes says. Time to return to Before you go, he is asked, what advice do you have for policymakers in Keynes outlines three alternatives to the status quo. The tax-cutting and infrastructure spending plan proposed by Trump will lead to stronger growth in the short term, but Keynes says he is not especially impressed.

He fears that there will be little extra investment in the public infrastructure that the US actually needs and that the stimulus will be poorly focused. The second option would be to exploit exceptionally low interest rates by borrowing for long-term investment projects.

Governments could do this without alarming the markets, Keynes says, if they followed his teachings and borrowed solely to invest. But weak growth meant deficit reduction took longer than expected. Ultra-low interest rates for the best part of a decade have led to asset-price bubbles. Measures of private indebtedness are rising again. All depressingly predictable, Keynes says. Time to return to Before you go, he is asked, what advice do you have for policymakers in Keynes outlines three alternatives to the status quo.

The tax-cutting and infrastructure spending plan proposed by Trump will lead to stronger growth in the short term, but Keynes says he is not especially impressed. He fears that there will be little extra investment in the public infrastructure that the US actually needs and that the stimulus will be poorly focused.

The second option would be to exploit exceptionally low interest rates by borrowing for long-term investment projects. Governments could do this without alarming the markets, Keynes says, if they followed his teachings and borrowed solely to invest. Option number three would involve being more creative with quantitative easing, Keynes says. Building homes with QE makes sense; inflating house prices with QE does not. There is, he adds, another escape route. We were building up to it in and it arrived three years later. Hitler remilitarised the Rhineland in , not the Sudetenland as a previous version said.

Order by newest oldest recommendations. Show 25 25 50 All. Threads collapsed expanded unthreaded. Loading comments… Trouble loading? Are we heading for another developing world debt crisis? Western bank loans for projects in Africa were to be paid off via rising commodity prices. John, My own view is that, whatever we are born with, by the age of about 3 our habits, intuitions and logics have all co-developed, and continue to do so until by middle-age at least the have often congealed. To me logic is one of the tools we can use to help us move on.

But it needs to be an adequate and appropriate logic. I think that evolutionary psychology provides some useful insights, but — at least in the west — we seem to have evolved into putting too much weight on the opinions of others rather than thinking for ourselves. Historically, this has led to cultural silos which the Internet may help resolve. As long as we continue to debate nicely. Certainly, the main alternatives seem a part of our problems. And so a rectifiability of accounts, thus in a dynamic equilibrium over time but in a state of disequilibrium and even indeterminacy in time, is the reality of what we should be concerned with here.

Established psychological traits, habits, feelings, and intuitions of its agents are besides the point or at best secondary; and, in any case, their effects are easily counterbalanced by governmental fiscal measures. Now it may very well be that this depiction of a dynamic economic reality of accounts is missing something essential. Indeed my experience has been that heterodox economists are just as loath to give up their invested-in intellectual capital as orthodox ones. You are correct, both in the fact that the economy begins and expands and contracts based on legal obligations we are always in a state of feudalism and that no one wants to discuss this aspect because it reveals too much truth.

Thanks for the consensus, dingo.

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Rereading your previous post indicates a micro-approach contract connection between individuals like you and the government, while I reject all micro as a valid methodology to clarify and solve economic problems. The main reason, as part of micro-value indeterminacy as outlined earlier, is the fact that our economy to an overwhelming extent is vertically integrated; with embedded costs, profits, and taxes passed on to -, and assumed by retailers for an economy-deep resolution and a consequently realized unencumbered reproduction process through the sale of final output, to cost, profit, and transfer income receivers.

Additionally there are back-feed loops of output to higher economic levels, like machinery to the resource level; all in all making the economic structure far too complex for your approach to have any chance of success. Apart from an economy as a set of accounts being inherently a fair and non-ideological reality, comprehensive theories of money, capital, profit, inflation, etc. For instance investments, rather that generally understood to be unmitigated blessings to an economy, can now be seen for what they are in this alternative reality: And furthermore, that the disbursed income associated with additional capital goods production in short order will appear on the retail level, chasing a quantity of final output to which it has no embedded existing claim.

As recently posted to another group, my radical paradigm shift encompasses the following: Create an irrefutable set of first principles from which it follows that any economic structure is inherently social. Convince the electorate of the latter. Conserve the structure that capitalism built; less by far the greatest part of the FIRE sector.

What was the Stockholm School? The two main figures were Bertil Ohlin and Gunnar Myrdal. I am only really familiar with the work of the latter — and even then, only in a highly abridged edition entitled The Essential Gunnar Myrdal from which I derive all the quotes in the following post. It seems to me that the purely economic work of Myrdal and Ohlin is very hard to come by in English. In what follows we will focus on what Myrdal considered to be his main contribution to Keynesian theory; that is, the distinction between ex post and ex ante in the analysis of savings and investment.

This distinction, which came from a book called Monetary Equilibrium which the Post-Keynesian economist G. Many Post-Keynesians would later come to realise this. A criticism of Keynes and Hayek would have to begin by pointing out the fact that in their theoretical systems there is no place for the uncertainty factor and anticipations. This may strike Post-Keynesians as being a rather unusual statement. Yes, it does but what Myrdal is complaining about is that the actual theoretical framework of the General Theory, which is static, cannot really accommodate these observations.

Myrdal goes on to say that if we introduce the distinction between ex post and ex ante we can avoid much theoretical confusion. Before we turn to this statement let us allow Myrdal to define what he means by these terms:. Quantities defined in terms of measurements made at the end of the period in question are referred to as ex post; quantities defined in terms of action planned at the beginning of the period in question are referred to as ex ante. He then goes on to make the salient point that it is only by keeping this in mind that the Keynesian framework can fruitfully be applied to the analysis of savings and investment in real historical time:.

Looking backward on a period which is finished, we are looking at actually realized returns, costs, etc. In such an ex post calculation there is, as we will show later, an exact balance between the invested waiting and the value of gross investment [Phil: Looking forward there is no such balance except under certain conditions which remain to be ascertained. In the ex ante calculus it is a question not of realized results but of anticipations, calculations, and plans driving the dynamic process forward. There is in fact no contradiction at all between the statement of an exact bookkeeping balance ex post and the obvious inference that in a situation in which saving is increasing without a corresponding increase in investment, or perhaps with an adverse movement in investment, there must be a tendency ex ante to disparity.

Let us not doubt the importance of this distinction. Myrdal is perfectly correct that it is not to be found properly articulated in the General Theory which was indeed embedded in a static framework rather than one suited to the analysis of economic processes embedded in actual historical time.

Indeed, it was the role of uncertainty and expectations that Keynes had to stress in the follow-up article to the book that attempted to clarify the central argument, The General Theory of Employment. But, since net investment and net saving are accounting identities, this was not a legitimate argument; it allowed hostile critics to create confusion.

An ex-post accounting identity, which records what happened over, say, the past year, cannot explain causality; rather, it shows what has to be explained. Alas, however, it was too late. Such classroom texts soon fell out of print and into oblivion and the ISLM came to reign supreme.

As defined by Keynes, it must hold at all times — ex ante, instantaneously and ex post. The same about causality — all savings is caused by investment. The following quote from p. Of course it depends on how you define things. In the previous chapter, saving and investment have been so defined that they are necessarily equal in amount, being, for the community as a whole, merely different aspects of the same thing. Following Keynes, the Fosters note how many — probably most economists — continued to make complete hash out of things by using different definitions — and never bothering to actually make the definitions!!

Or use them consistently- how could they?! Robertson does NOT do these ridiculous things. He said so in so many words quoted by Gnos. And Keynes was right to reject that and discard what he wrote about it. Peter Dorman has a relevant paper on this. Are you aware that accountancy, being a deductive discipline, is based on its own set of assumptions? Consumption, or better said: Your pointing out that the source of saving can only be a previously made investment, is wholly irrelevant to what I would hold to be the crux of the matter; i.

Are crucialities in the eye of the beholder? There is no difficulty in understanding or dispute about what Keynes meant here. The difficulty is in understanding what those who purvey improvements or disagree or criticize are saying, if they actually are saying anything rather than producing word salad, because they often never make the necessary definitions.

So understanding them can be like trying to solve a crossword puzzle, figuring out how they must be defining things to arrive at different equations. Because in the real business world expenditures as a rule precede returns from coming in, the economy is in a net deficit disequilibrium position at all times. We are speaking about the whole economy, while the above seems to be concerned with a single firm that might spend before it gets a return. But somebody else is getting their spending, exactly when they spend!

Keynesian economics: is it time for the theory to rise from the dead?

If I have a dollar and you have none and I give you the dollar, then you get the dollar at the instant I give it to you. My expenditure or investment here is 0, then 1 and so is your income or saving, because my giving and your getting are two ways of saying the same thing. There is always just that one dollar, no matter whose pocket it is in. Can we perhaps agree on that? For an accounting identity to be true, the accounted-for system both in a micro and macro sense needs to be coherent… agreed? Accounting ledgers form two columns, debits and credits i. Do we furthermore agree that a general coherency, i.

The rest of your paragraph is irrelevant piffle…. But what exactly is that dollar? This compels continual borrowing until the debt service is impossible to pay….. Also, macro-economics does not distinguish between total money and total free and available to spend unencumbered by present or future debt….. Can we agree that sometimes a salad is just a salad? Umm, no to all. If there are ambiguities, just put them in with opposite signs on the ledgers of a creditor and debtor.

Then they cancel out, and do not affect the accounting identity conclusion. That definitional ambiguity, that Keynes shows how to deal with, dwarfs any real world ambiguity, which is dealt with the same way. Those Foster papers, probably as well as Keynes somewhere, note how just what is consumption is subject to definition. There is just what Keynes says, which is quite clear and made even clearer by the citations above, enough to get through my poor head even.

Unfortunately many followers and critics are NOT clear — a point of Keynes et al is that the difficulty in understanding them is because again, they are being ridiculously sloppy at best, and at worst, sometimes an apparent word salad is a word salad. The fact that when somebody spends, somebody else receives income at that instant, and the same for incurring and releasing debts, refutes this, at least according to any chain of reasoning involving any coherent accounting rules that I or anybody else afaik has understood.

There is a comprehensive theory of what money is. The first person to basically get everything right to a T, with no garbage added, and explain it with crystal clarity was Alfred Mitchell-Innes. Keynes reviewed Mitchell-Innes papers. While Keynes made some obscure, even nonsensical comments there, he basically got what he was trying to do right in the General Theory, clearly using the MMT theory at the back of his mind.

What is a dollar?: A dollar is a monetary unit of account, often represented by dollar bills or accounting entries on paper or electronically — which are money things. The dollar, the money itself, is a immaterial, negotiable or transferrable relation between two economic agents. From the above definition, a dollar is and always was both a negative to the debtor and a positive to the creditor at the same time. The original and instantaneous and universal accounting identity.

Well Keynes may have been confused about his paradox-laden theory, but at least you seem to be consistent in your ignorance of valid theories requiring assumptions. So by all means, hang on to it; and also the notion that accounting identities are true in the absolute, without requiring anything as mundane as a set of underlying assumptions; and, lets not forget, that MMT constitutes a comprehensive theory of money. Good luck with that consistency of disseminated wisdom in attracting a fan base…. One of the most difficult aspects of this activity and hence why schools exist as a means to develop the skill , is because the human being does not like being observed.

The more one tries to observe oneself, the more the emotional aspect of the human tries to trip up the observing side, mostly, by encouraging one to see what they see from an emotional aspect. To illustrate, as I began to seriously observe my many emotional responses to people and circumstances around me, it became apparent to me that vanity was at the core, i. The first, is a personal reason. It is by the long and hard work of observing myself in many situations over quite some time that I was able to see that I am not a homoeconomicus, that I am not an economic agent at heart, and that there is nothing resembling an economic activity which appeals to me.

All that I am good at, and am most skilled at I am unable to do for money or under any legal contract without it becoming an emotional prison. Trusts which operate under different arrangements, such as the time-honoured profit share arrangement, as opposed to the pre-determined profit rate contractual agreements.

John Maynard Keynes

What I ultimately crave is the trust that if my crop fails using an example , the guy next door, or around the corner, whose crop succeeds, will help me out, and vice versa. The second, which is more for the purpose of this blog, is that when one is able to observe themselves long enough they start to realize and they must reach this point if they are to be able to observe objectively that there is nothing they can do on their own to change what is an inherent feature of the human machine, i.

Economics, particularly political economics, is the field which overlooks all the contracting people, which is basically most of us today as the west increases the size of its footprint. In other words, it sees us as children needing rules and guidance as we spend most of our lives competing against one another. Now, and here is the most important part. Many economists and I confess, I am finding it difficult to openly admit this are not deliberately making a mess of economics; the mess is coming from an inability to objectively see what are the true causes of why we must engage in economic activities under contractual laws to begin with.

Further, even if many were to be able to see it, there is no way it could be changed on a grand scale because everyone must advance to a higher level of operation on their own accord. No one can teach trust, trust must be earned, but it is easy to teach contract and it is easy to operate under contracts, especially when all the rules have been laid out already for us.

However, by the same token, trust cannot be taught unless one is also practicing it, and for these purposes, I mean, to operate under trust outside of the monetary economy. Some of us need to get together and develop these types of models in order to operate under them and then we can begin the task of organically teaching it to others. This we can do without any political economists in the world even knowing we are doing it until it becomes too late for them to do anything to stop us.

It means that change wont come from the top, it must come from the bottom However to add a pessimistic note, we need to build communities and re-create social training within families the famous family values were to teach cooperation, to observe, critique, and correct behavior of children acting in anti-social ways. With the breakdown of family structure in the West, it would be difficult to carry out this program.

In the East, the spread of the internet has led to the spread of the powerful and attractive message of hedonism and individualism, which prohibit development of community, and make individual growth and spiritual progress impossible. There are many other elements of modernity which are spreading rapidly and which are extremely disruptive and inhibit building of community and long term social relations. There are several groups big and small making efforts along the lines you mention with varying degrees of success.

The hope for mankind rests on their shoulders, but the light seems very dim. BTW where did you get training in self-observation? I thought this was practiced mainly by Buddhists and Hindus, and such schools do not exist in the West, and are very difficult to find in the East? I started out studying the Fourth Way Gurdjieff , but as time has gone on the schools have lost a lot of connect to the original teachings.

Working directly with people has become almost impossible, which only leaves the internet, but this has serious limitations. I have reached a point where I can go no further in this aspect, but I have supplemented my studies and work by studying other subjects such as religion, philosophy, etc, which enabled me to see that the Fourth Way is not original but a modern day re-explanation of the wheel.

I see the bulk of religious scriptures, philosophy, and esoteric teachings as being a guide to self-observation but is spoken in metaphors. As an aside, I had the idea for a while that by being able to implement the program I suggested, that this may also be a way to organically grow more schools again — but I have since found that it may not be my place to do this. Yes I agree as well. Trust can only be achieved within small groups. As a child, I learned through experiences at school, that one could expect to find one untrustworthy individual when group sizes of about thirty arise.

Everyone, I know, has experience of bosses who claim the credit for others ideas etc. I am sure that every one has had similar experiences. The list is endless. Small mutuals and cooperatives are less likely to suffer trust issues than large alternatives. Small privately owned businesses can be similarly successful. Small numbers allow personal observation, questions to be asked and answered. Integer problems may, however, make larger organisations necessary. I believe in free market economics.

Unfortunately, in reality, free markets do not exist. Most markets are corrupt. I believe in capitalism, when it means the use of appropriate tools. Capitalists are the corruption of capitalism. So we need to move to institutions, including governmental, which encourage the attitudes which benefit all and which move against the corruption which the untrustworthy will inevitably try to introduce.

My explanation of the trust was an observation of what I crave but not a full and exhaustive explanation of how I would operate one; any so called co-ops or other community based groups are far from the plan of what I have in mind at least initially. The trust I have in mind begins with government the government becomes my partner under a surplus share arrangement and I act as custodian over all resources necessary to meet my social obligations such as access to housing, clothing etc, and any tools I use to produce whatever it is I am good at..

My observations have shown me that each person is different and whilst some possess the inherent human capacities to operate within markets, there are many who do not.

Unfortunately, from a political perspective, what appears to be happening is that many who believe in free markets or capitalism belive everyone should have to operate within it, regarldess of whether it is for or against their will — likewise, those who believe in socialism or communism have the same type of politcial motive, that we all should operate this way.

Instead, I advocate multiple models which co-exist alongside one another and allow people to hold and treat resources and operate within the respective legal framework which best suits their personalities. This has been what I have been working on for the last 15 or so years of my life, and the more I have worked on it the more I am seeing that each model will benefit more by not trying to crowd everyone on the planet into it. Although there has been a huge diversity of comments, I believe that a common thread among many is the need to change human behavior — this is conflict with economic methodology which takes human behavior and desires as fixed and exogenous.

The idea that we are all selfish, and that this is best for us and for social welfare the invisible hand , is exactly what leads to the poisoning of the well from which we get our moral bearings. We need to hold up and pursue higher standards of human character and vision. The key to change is transformation of human beings, as discussed in my post below, about how Islamic Economics is about transforming humans.

A noble dream but hardly attainable in this wicked world. Better to seek a fairness in the distribution of wealth and the power relations in decision making by giving all interest a seat at the table, a voice, when the distribution of the rewards of work are managed.

In the current constitution of firms the rich and powerful monopolise decision making about who gets what, give the the heretofore economically weak a voice at the table and the possibility of a fairer distribution of the rewards of enterprises emerges. We ignore this subject on this blog when we ignore the governance of the firm, which we do constantly.

An economic science that exists within the framework of a power relations dominated by director primacy, will never face up to the question of fairer distribution. Get the power relations straight, then the economic science could be socially useful. Give the unheard voices of non management a voice at the table and the fruits of the ensuing sciences could be interesting. The point of any collective, surely, that it leads to greater efficiency and effectiveness so that everyone is better off.

Psychologically, what matters is a sense of fairness. This could be true: I also agree that it is no use relying on logic alone to get us out of this mess, and that we need to be looking far and wide at less messy approaches, such as you and Robert suggest. But having opened our eyes and hearts, how to narrow our options? Actually, what I get from Russell and co is that we shall probably need to co-evolve the rules along with the practice.

What I might accept is that to dwell on this aspect would be a distraction, but I am genuinely sceptical about the chance of success without at least some genuine logical input.

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Islam is not the only religion or ideology that promotes changing behavior and adopting the giolden rule. He is inferring by retroduction: Intuition, incidentally, is more like seeing possibly relevant patterns in a kaleidoscope than calculating probable outcomes. I entirely agree, but what is the answer most economists and politicians are not seeing? Figures 14 and Importantly, even infants differ. Most of us are young and therefore not yet significantly intuitive. Even allowing for less regimented America attracting intuitives from England, less than a quarter of their population is intuitive.

The sensory types tend to see as fact only what they can see: Other labels for them are empiricist and positivist. Intuitive types tend to see how things relate: How they make decisions about what they can see depends on. The danger with label thinking is not checking out the conclusion. The advantage of jig-saw thinking is that one can remember the outcome, label it okay or not and thereafter think quickly about it — though sensory types may see this as jumping to conclusions.

The point, anyway, is that if sensory types are seeing only labels, the labels need to show diagrammatically what is going on inside. The objective form of thinking about people is this along the lines of understanding the information feedbacks involved in driving, navigation or guiding missiles.

I entirely agree with what Frank is saying about this being more likely to happen in small groups, but I am talking about how to teach kids to understand themselves and each other and the value of cooperating, while they are still impressionable and still in small groups. Teachers including economics professors who have been taught by rote need more than anyone else to be persuaded by her. I commend her style: However, insofar as we grow up with trustworthy parents, we learn that what we see initially as laws are more like parental advice, informing us of conventions and rules of thumb that we ignore at our peril.

These came up while I was busy. In the first pair of these Asad seems to be saying in his own way much the same as me here. In the third, he seems to have a conventional view of logic as following definite rules. Descartes — which I agree was pivotal in directing attention to inner experience. This ignores the role of the subjective — every empirical statement represents truth-to-me and if this can differ from truth-to-you than the role of logic becomes very limited. In fact as Zen emphasized and Islam also teaches, a lot of human reasoning and thinking is built around paradoxes — cases where sentence X and not X are both simultaneously true.

In modal logic, we different kinds of truth. There are logics with four truth values true, false, both true and false, and neither true nor false. What do we do with this? Can we get rid of this sentence. In fact the Godel theorems depend on using sentences like this and embedding them into mathematics. Attempting to universalize application of logic to ALL domains of human knowledge has been truly catastrophic, because it has led to intolerance — I know because I have the sole truth and anyone who disagrees must be an idiot.

How Muslims, Jews, and Christians Created a Culture of Tolerance in Medieval Spain — she mentions how the love of paradox was a crucial element in creating tolerance for other points of view. Apologies for stirring you up, for let us be clear: I am on your side, wanting to cooperate and pained by our being at cross-purposes. The problem is, where logic is concerned you like almost everybody else are seeing the old lady and I as an old-timer electronic computer man am seeing the young one.

The difference is about seeing logic as a dynamic process guided by physical programming, rather than as a static set of rules. See, perhaps, Passmore , As to whether the gestalt switch from the old to the young woman can be achieved by logic, clearly not by Aristotelean rules, but perhaps by learned powers of redirecting sensory attention to e. How does a camera zoom in to reframe an object? Back in the paradox-using G K Chesterton had already realised the two sides of the brain provided for both.

Shannon showed in that the rules of logic could be expressed in terms of the iconic language of electric switching circuits, which marked the flow of [in his work, telephone] information just as the flow of a river is marked by its banks. The banks provide objects about which one can reason, whereas the flow itself does not. Similarly, discussing political economic theorising, Chesterton had said: However, the personality differences mentioned above suggest most economics readers here will be looking for facts and confused by analogies.

Better then to end with a few references to facts of logic paradigm change worth looking for and reflecting on. Hence the paradigmatic transition in programming languages from Algol60 algorithmic computing to Algol68 general purpose data processing. Asad, looking at your July 20, at 1: I really appreciate the way you brought the discussion here to the problem of pride.

But surely that pointed to it NOT having come to a dead end? In fact, its difficulties have led to Lakotasian progression into multi-valued, typed, dynamic and error-correcting logics, logic languages and communications protocols. Similar appreciation along with a significant quibble occurred in your response to Edward Ross on July 20, at 1: But that means the logic has to do work, meaning there will also be entirely internal information about how far the work has progressed. Which takes us back to Descartes restarting from nothing.

Asad Zaman made a mistake to precede his arguments on logical positivism from Descartes to Empirical positivism before his main contention. It invited too many angels on the top of a needle. As a result, the most important part of his proposal was discussed in no replies. This is really unfortunate and disastrous.

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Instead of a complete overhaul, we just need to patch-up the problem areas. In contrast to this reformation, I would like to argue for a revolution. Just like modern astronomy was created by rejecting the concept of the heavenly spheres on which the stars rotated around the earth, so creating a viable economics for the 21st century requires rejecting the entire edifice of modern economics. The process by which a paradigm shift can be created differs radically from normal science, which involves looking at problems within existing theory and patchwork modifications.

This is how Ptolemaic astronomy evolved. If the original spheres did not suffice, then new spheres were added, and if the second did not suffice to match observational evidence, a third sphere was added. Rethinking the whole framework from scratch cannot be done in a piecemeal way. Past arguments and discussions were simply forgotten. Let me put at first that I have aslo argued the similarity or parallelism between the Ptolemaic system and neoclassical economics:. Peter Radford Economics 10Whatever June 28, https: I have also argued a similar point in my paper: An Origin of the neoclassical revolution and its consequences.

However, the crucial point to argue is how to view or imagine the new economics which must come after Copernican revolution. Negatively we have a kind of consensus: Unfortunately, Zaman talks nothing on it. IMHO, the construction of the new economics requires a scientific spirit which comprises logical reasoning mathematics as well as other kinds of objectivism. This does not deny the active role of our will. The construction of a new economics is itself an act of our will and not an objective entity. Thanks for this comment Yoshniori Shiozawa — In the post, I write that: I am just going to talk about the difficulties involved in making people change their minds.

By itself, this would be sufficient to create a paradigm change. Once we take off positivist glasses, we realize that there are no universal truths out there.

Radical paradigm shifts

So instead of displaying the truth and asking others to just examine it — they will automatically see that it is true and convert to it — we have to think seriously about HOW we can create consensus on new ways of seeing reality. This is where the now forgotten and lost art of rhetoric is required. Also, one needs to be pragmatic — if the truth is so radical that people will not accept it, then the desired social consensus — which is what creates socially accepted truths — cannot be created.

This process is completely shunted aside by believers in objectivity of truth and binary logic, when it is CENTRAL to creating a paradigm shift. It is not sufficient for me to be the lone ranger, in solitary possession of the truth which no one else knows about.

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The process of conversion, by which I persuade others to use the frameworks which I find insightful is central. FOR this reason, my own efforts lie along the direction of Islamic Economics. Islam has a ready-made framework, widely known to a billion plus adherents, which is in radical conflict with central tenets of capitalism. Constructing an economics based on coooperation and generosity is very much in line with central principles of Islam.

The massive effort required in gaining adherents to a radical shift in perspective is bypassed, since every Muslim automatically subscribes to this framework. Can this strategy be generalized to include non-Muslims? I believe it is possible, because the central principles — cooperation and generosity — or in Mankwian terms, love and kindness instead of selfishness — would naturally appeal to human hearts. I have written a large number of articles on how to construct a new discipline of Islamic Economics based on foundations radically different from those used by neoclassical economics.

My study of Polanyi also led me to the conclusion that pre-market societies were much more strongly aligned with Islamic views of society, and creating the required consensus would have been much easier. However, living in market societies shapes minds in certain unpleasant ways, to see all human interactions in terms of the market, with a price attached. Incidentally, this is also a message of David Graeber in his book Debt: The first years. So in terms of creating consensus on a new paradigm, we have to find how to persuade minds shaped by market societies to accept non market transactions as being MORE important than market transactions.

That is, the most precious things in life are the ones which CANNOT be purchased and cannot be measured and quantified. This is a point that I have tried to make in my essay on Markets and Society. A Survey of the Literature: Anyway, the main takeaway here is that it is NOT ENOUGH to have a good idea for a new paradigm — one must have a clear idea about how we can go about creating social consensus for acceptance of this new paradigm — this is one thing that all of the many lone rangers pushing new paradigms which they have discovered all by themselves, and cannot get anyone to consider, seem to ignore completely.

This has some resemblance to the dilemma of whether there can be a language which has only one speaker.