A new Paradigm for a new Monetary System [1]

Equity, Fairness and Worth

We, or our governments, spend time talking of economics and money, and even more esoteric things like fiscal policies, and when some idea is proposed, there is an instant antoinettequery about “resources” which usually means, “Where is the MONEY?” Our societies and their institutions are made up of people, made by people, they may seem fixed, but are, like our minds, more plastic than we may wish to acknowledge. The word “money” is also not concrete, not fixed, it is in fact an idea rather than a thing, and throughout history has had many forms. However, when the talk is of values, what is valued, it is the future that is envisaged in many different ways, with all its uncertainties, and over and over again, the wishes, for something fair, and something worthwhile, something equitable. “Be the change you want to be” is now a mantra, a useful one. What it may mean is that things will be different, will become different, when we are different in both thought and action, when our minds have changed along with our behaviours. We do now know that body, mind and action are not separable, but interlinked.

Thinking, the process or the way people think, has many forms, patterns if you like. It often seems natural, indeed often is instinctive, to start with parts, and build towards a whole, understanding the organism by seeing what each bit does, and then trying to find relationships. This is classificatory, cognitive, rational, and has often been mistaken for the “scientific process”[i]. However, this is only one aspect of scientific thinking, indeed only a part of any kind of thinking or thoughtfulness. There is another equally important, probably more important aspect to thought. This more inclusive, but more uncertain, way of thinking starts with the “whole”, allowing perception, feeling, intuition, experiment, and allows the parts themselves to show their enfolding into each other, so that understanding follows the actuality of their relationships. A better idea of whole emerges into the thinking mind.[ii] This is creative thought, reflexive, situated in the reality of observation, aware of bias in the self. Reflexive thinking moves mindfully between subjectivity, feeling experience, and logical connections, towards a stronger more enduring objectivity. This fluid thought process properly acknowledges that understanding is a matter of direction and probability, never complete, but what it grasps, is real. The parts, and logical patterns previously observed will fit in somewhere if the idea, so far, so good, matches reality. If parts don’t fit, if the process becomes mired in confusion, complication, anomaly, contradiction, then it does not matter how rational the theory sounds, it is a mess, not fit for purpose. The history of science, and politics and human endeavour is full of paradigm shifts, as theories were seen to fail, rather than succeed. In science, think Copernicus, Galileo, the wave theory of light, and in human interactions, remember the Berlin Wall, the Industrial Revolution, the outlawing of slavery, all the way back to the iron age replacing the stone age. Thought shifts towards the future, based in reality, when something whole is grasped, even if at first it is not at all understood.

Anyone attempting to follow modern 21st century economics theory, economics policies, government fiscal and monetary understanding, boom and bust, austerity, debt bonds, scarcity and wealth, the deficit, the borrowing, etc.etc. can see that economic theory, in particular neo-liberal economic theory, is not fit for purpose.

Economics is a study of a very important aspect of life, how people interact to produce the goods they and others need or want, how governments enact policy in particular ways to enable people to interact within markets to get what they want or accomplish certain goals. Or not, sometimes. It purports to study the production and consumption of goods and the transfer of wealth to produce and obtain those goods. Within the theories there will be parts that are in tune with real lives, as they are lived, and parts that are plain wrong. Without a new frame we cannot at the moment tell which is which.

Economics requires a rethink, a different paradigm, emerging from the sense of life. We may seek equity fairness and worth, but they can be put aside, temporarily, while life is observed as it is lived by all, not just some, not just in general, but by particular people each of whom lives their own story, connected to the stories from others. Life is a gift. We forget. How can we remember?

The next posts will look for the forward aspect of economics, that would happily not require too many major shifts in many of the ways we use money and production, as those parts of thinking and practice that do work well, will find a better home, and those that do not become redundant. Much of the detail and analysis, especially the details of economics and its history, owes a lot to Positive Money, to Ivo Mosley and to all those people who by active enabling listening and thoughtfulness have helped me to think. Positive Money ask that anyone who comes to see this need for a new way forward in economics, sign petitions here, asking that quantitative easing be directed towards the productive economy, and here, asking for a money commission.

Read part 2, then parts 3 and 4

[i] This is actually only the justificatory aspect of science, the checking out if the theory works, to see what evidence supports it, see by reasoning and logic if the theory stands up in practice. To create a theory, explore uncertainty, scientists also use a heuristic process, and this is more often than not an emotional and instinctive, highly subjective way of engaging with the world being explored.

[ii] Charles Darwin’s wife reported in the appendix to his autobiography that he had stated “it is fatal to reason whilst observing, though so necessary beforehand and so useful afterwards” Collins Edition, 1958. p.159. To work holistically from the real world of observation and experiment, not being afraid to see contradiction and anomaly, is how real understanding of anything has proceeded – and there is no “total” real understanding, no “certainty” just perspectives from which one can go outside of one’s mind and thought into the world, and find a fit with what is there. [Psychological references from Wilfred Bion, Learning from Experience, Daniel Seigal, Mindfulness, and Bessell van der Kolk, The Body Keeps the Score, and many others.]

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