a brief history of economics’s crises of philosophy
DESCRIPTION
Paddington, NSW. 5/2/2013. A philosophical reflection over the history of developing economic theories & models as responses to the times & a critique of their basic & many times flawed assumptions that tend to support vested interests versus realities & truths.TRANSCRIPT
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A Brief History of Economics’s Crisis of Philosophy
Philosophers’ Corner 2013
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cybe
r
The branch of knowledge that records and analyzes past events
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Crisis Danger Risk Opportunity Crucial Point
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Philosophy Study of the general
& fundamental Returning to
universal principles
The phenomenon of economics
Parable: The Explorer & His Map
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Back to Basics: How To Get What You Need Produce It; DIY Trade/Buy Borrow Beg Steal
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Philosophical History
Religion Philosop
hy
Government
Political Economy/Economics
Equality in Citizenry
Equal Rights
Joint Rights
Resource & Property Conflict:
Individual, Group & Society
Natural Resources
Human
Effort
Commodities & Knowledge
Freedoms Limit States
State Limits Freedoms
Survival
Innovation & Technology
Cooperation & Organization
Society/ Civilization
Sciences & Math
Inequality in Nature
War Trade
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Henry Georg
e
Henry Owen
Friedrich Raifeisse
n
COOPERATIVE
Sun Yat Sen
Mao Ze
Dong
V. I. Lenin
ASIAN DRAGONS
Deng Xiaopin
gCOOPERATIVE MOVEMENTS
Revisiting the
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Factors of Production Capital: resources
not consumes & used for further production combined with labour
Labour: the potential exertion of human work
Land: all natural space & resources produced by nature & free of human intervention
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What Is Due ...
Capital: Produce of One’s Labour
Labour: Produce of One’s Energy/Enterprise
Land: Produce of Nature Over Time
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The Fruits
Yield of Capital: Interest/Returns
Yield of Labour: Salaries/Wages
Yield of Land: Appreciation/Site Rent
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Labour & Land
If property were nothing more than a bundle of rights, then no property means no rights & more property means more rights.
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Labour & Capital
If working is dependent on someone hiring you if you don’t have the capital, is there such a thing as the “right to work”?
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Land, Labour & Capital to Money
Who owns money? Who manages it?
For whose purpose & end?
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Back to Basics• Capital is Owned By
Capitalists, produced by the exertion of Labour
• Labour is Owned By Labourers by Virtue of their Freedom
• Land is owned by Landlords ... On what basis?
• Can natural resources be owned the same way?
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What are the chokepoints of the flow?• Resources– Land– Labour– Capital
• Factor Payments– Rent/Appreciation– Wages– Interest
• Produce should be– Community– Services– Goods
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The First Crucial Point Production Factors
Are Reduced to Two: Capital & Labour
Land Is Considered Capital, Despite Not Having Been
Produced By Labour Yielding Site Rent as
Manifested by terms like “Appreciation” & “Capital Gains”
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The Second Crucial Point Businesses Produce,
Households Consume Workers Become Factor
Inputs & Wages Are “Claims on Capital”
Profits from Business & Site Appreciation Are Success Factors Valued Homogenously
Unemployment Is Surplus Labour Supply viz. Capital & Desirable
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The Third Crucial Point Government is Taking
Its “Fair Share” of Incomes & Transactions
Taxation doesn’t comply with its own principles, makes too many exceptions & encourages avoidance
Taxation erodes its very own base, discouraging economic activity
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The Fourth Crucial Point The Economic Rent of
the Land Is Private Property of the Landowner
Land Value Appreciates Due to Social Activity/
Community Cooperation To Scarcity from
Speculation Subject to Speculative
Attacks Impulse buying & selling
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The Fifth Crucial Point Despite the Nature of
Currency as a Public Good, It is Entrusted in the Hands of Independent Experts
There is No Political Independence when Financial Institutions recommend experts for political selection
Conflict of Interest Between Business & Public Interests
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The Sixth Crucial Point The Rich Are
Responsible for the Economic Upswings Because They Contribute More Than the Rest of Society
Lopsided tax incentives
Laws & regulations are relaxed to the point of imprudence & crisis
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The Seventh Crucial Point Economic Downswings
Are the Fault of Poor/ Households for Not Contributing Enough to the Economy, If At All
If true, then the economy should have always been in crisis
The fact that they can be victims is diminished
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A Wrong Map Gets Us Lost• Households =
Consumers– Provide Labour, Live on
Land & Receive Wages• Businesses =
Producers– Provide Capital & Land
& Receive Interest & Profits
• Governments– Provide Public Works &
Charge Taxes Financial System
Provide currency & regulation
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Who Holds the Map Controls the People
• Households– Media, education &
credit• Businesses– Regulation & financial
markets• Governments– Campaign, lobbying &
fiscal management Currency System– Specialized expertise
& monetary control
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Accepting Such a Paradigm ...
Those who work labour & own their own homes are “middle class”
Those who provide capital & own more land than they can use are “upper class”
Those with no work & no homes are “lower class”
Government serves to preserve this status quo
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More Problems with the Model
Un-hired, Volunteer Labour is UNPAID & UNVALUED Natural Resources, once part of land that is owned
exclusively, becomes EVERYONE’S responsibility Benefits of site rent are privatized but the costs of land
degradation are DEMOCRATIZED
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This Is What the Current Model Delivers
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Is THIS How the Market Should Work?
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Justice: Achieving Balance Individual vs. Society Rights vs. Duties Equity vs. Efficiency
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Applied Georgism: Paradigm Shift
Right Wing
Left Wing
Centrist Georgist
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A New Circular Economy
Land
Labour
Capital
Site Rent
Public Works
Services
Goods
Appreciates
Just Wages
Pride of Workmanship
Market Interest
Real Savings
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End of Oppressive Taxation
Land
Labour
Capital
Public Works
Services
Goods
Appreciates
Just Wages
Pride of Workmanship
Market Interest
Real Savings
Site Rent
Occupies
Common Goods
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Democratized Money
Land
Labour
Capital
Money &
Treasury
Services
Goods
Appreciates
Work Choices
Human Dignity
Market Guarantee
Sustainability
Site Rent
Occupies
Common Wealth
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Trade System: Free Because It is Fair
Land
Labour
Capital
Money &
Treasury
Services
Goods
Appreciates
Monetized Site Rent
Pays Site Rent
Other Countries
Trade: if it’s
cheaper to buy/
exchange than
to make our own
Monetized
Common Wealth
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Money Returned to People’s Hands Monetary economy is
the fourth branch of government
A citizen’s dividend that responds to the basic human needs in society are prioritized
Citizens are free from poverty & to work voluntarily or for wages
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What About the Environment?
Environment Site Rent
Damages
Restorative Justice Pollution/Damages
Global Commons
Site Rent Common Funds
Recognition & Sustainability
Environmental Preserves
Currency Exchanges
Tobin Tax
Global Common Wealth Monetized Global Rents
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Simple Rules The Scout Rule:
Leave a place better than you left it looking like you were never there.
Pay as You Go Clean As You Go If You Break It, Pay
for It Or Don’t Do It
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Conclusion: Please Know the Difference Be An Explorer &
Draw Your Own Map Not an Expert of
Someone Else’s Map