The Waves of 2011
by John Browne
One of the founding myths of the modern global financial system was that governments, especially of the developed democracies, could borrow endlessly without consequence. But, with sovereign debt crises erupting across the globe, it appears the umbrella of perceived safety has gotten smaller, exposing some benighted countries, like Greece and Ireland, to severely rough weather.
As a key condition for financial rescues of these ailing sovereigns, the International Monetary Fund (IMF) and the European Central Bank (ECB) both demanded severe cuts in government spending. Faced with a bondholder revolt that sent yields upward, both acquiesced and have embarked on austerity campaigns to repair their financial positions.
The big question is: has the umbrella stopped shrinking, or will other countries soon face similar decisions?
For now, major governments such as the United States and European Union have been able to continue to borrow and spend licentiously to fend off the threat of deflation and keep their economies stimulated (the U.S. is by far the greater offender). But three surprising and powerful changes threaten the viability of a long-promised "exit strategy."
First, international investors are beginning to become net sellers of sovereign debt. Even the mighty United States is finding that, despite the Fed's rounds of massive quantitative easing, in which the Fed has bought outright hundreds of billions of dollars of U.S. Treasuries, yields are still rising. In other words, the private and foreign selling pressure is stronger than the Fed's buying pressure.
Second, the credit agencies, stung by their failure to warn investors about the banking crisis, are now emboldened enough to threaten the triple-A ratings of member states within the EU, and even of the United States itself--now the largest debtor in the world. Although it remains to be seen how great an impact the rating agencies will have on the debt markets, the fact that such moves are being contemplated at least drives the debate in an unprecedented direction.
Third, there is considerable and growing political pressure on governments to cut spending. There is a growing awareness among Western voters that government largesse can't be maintained forever, and that it will likely cost the next generation if not the present. Many pet spending programs, including defense, healthcare, welfare and even public pensions, are getting ready for haircuts - if not scalpings. Massive government spending cuts, possibly accompanied by tax increases, will be sure to take a huge bite out of near-term GDP growth, and will perhaps put the world back into the second act of a recession. This will lead us to the next great crossroads in the global financial crisis. Put simply, will the governments of Europe and America allow a natural contraction?
If the central banks of the EU and the U.S. choose to unleash even more massive reflationary programs, then a period of crippling inflation could be the outcome. This will form the basis of monetary chaos and prolonged economic stagnation, the most damaging of all economic conditions. In these circumstances, the prices of needed raw materials and commodities, including precious metals and energy, would explode in dollar terms.
Meanwhile, Chinese inflation is beginning to drive the international agenda. In order to keep a lid on this growing problem, China will soon have no choice but to revalue its currency, the yuan, higher. This will curb inflation and make most commodities cheaper in domestic terms. It will also satisfy the increasingly angry political calls of other nations for China to revalue.
A yuan revaluation requires a devaluation of other key currencies, most dramatically the U.S. dollar, but also the pound sterling and euro. This will raise prices for food, energy, and other necessities even in the absence of action by our central banks. Such an outcome will place further economic pressures on the developed West.
In conclusion, 2011 likely will open with a deepening recession, increasing austerity, and falling asset prices. If this is met by a new round of inflation creation and yuan revaluation, then investors should weigh whether to redeploy assets in anticipation of potential rising commodity prices. I expect these developments not to happen gradually, but to come in great waves. Smart investors will tie their fate to an investment vessel with a solid hull, because in these seas, even a hint of rot could tear a ship asunder.
John Browne is an investment advisor, financial commentator and a former member of Britain’s Parliament who served on the Treasury Select Committee and as a close associate of then-Prime Minister Margaret Thatcher.
--------------------------------------------------------------------------------
Friday, December 31, 2010
Saturday, November 27, 2010
Renaissance of the Gold Standard?
by Martin Hutchinson... LINK...
Global opposition to Fed Chairman Ben Bernanke's policy, World Bank President Robert Zoellick's "trial balloon" and statements by some of the new Republican Congressional caucus have caused a modest revival in consideration of the Gold Standard. In my view, the chances of its revival by official means in the next 10 years remain infinitesimal, but there is an increasing probability of private sector activity in that direction. Not only politically, the bombed-out Gold Standard stock may have reached bottom and be beginning a modest revival.
The Gold Standard did not disappear because it caused the Great Depression (it had only modest fingerprints on that disaster) nor because Maynard Keynes called gold a "barbarous relic." In reality, its demise had a much simpler cause: the rising rate of global population growth, which caused it to become damagingly deflationary.
The gold supply is limited. At the end of 2009, the total of all the gold ever mined was about 165,000 tons, worth $7 trillion at today's prices. Most of that total is still in existence, gold being essentially indestructible. However, new mine production in 2008 and 2009—both years enjoying near-record gold prices—was only around 2,500 tons, according to the World Gold Council. Thus even at the peak of the market, gold production is only 1.5% of existing supply. This hard limit on the world's gold supply exerts a considerable monetary effect on a Gold Standard world, limiting its money supply. Without an increase in monetary velocity, the world's gold supply can accommodate global growth of only about 1.5% per annum while maintaining prices constant. If global GDP growth is higher than that, the Gold Standard will be deflationary—prices will decline. If global growth is less than 1.5% per annum, prices may increase somewhat.
During the 18th century, for example, global population rose by 0.4% per annum, from 640 million in 1700 to 980 million in 1800, according to United Nations estimates. Accordingly, if world gold supplies had increased by 1.5% per annum during that century and monetary velocity had remained constant, a global Gold Standard would have accommodated about 1.1% per annum per capita economic growth. In practice global growth during that century averaged 0.56% per annum or 0.15% per capita, so gold supplies were ample to support it, even if mining was less active and successful than in some other periods. Indeed, in actuality the century saw mild inflation in Gold Standard countries.
During the 19th century, global economic growth accelerated, to 1.85% per annum, being 1.34% growth per capita (the result of the Industrial Revolution) and 0.51% per annum population growth. Thus the gold supply became much tighter, particularly towards the end of the century as economic and population growth accelerated. There was a shortage of specie and deflation during the "Hungry Forties" before the Californian gold discoveries of 1849 and another more prolonged period of deflation in 1873-96, before the discovery of new gold deposits in South Africa and the Yukon. During those years, the gold supply was increasing at a rate below its long-term average of 1%-1.5%, so global growth above that level caused the money supply to decline in terms of Gross World Product, and deflation to occur. By the early 1890s, there were multiple calls to abandon the Gold Standard, with proposals for bimetallism and William Jennings Bryan's "Cross of Gold" presidential campaign of 1896.
In practice, mild deflation is not a major economic problem, contrary to Ben Bernanke's theories. With an interest rate close to zero, even prolonged deflation of up to about 1% annually can be tolerated, as real interest rates remain containable. The 1880s, however, showed this to be close to the maximum tolerable level—U.S. prices declined by 22% from 1880 to 1896, an annual 1.5% deflation, and the strains showed.
In 1900-25, with world population growth of about 0.8% per annum, economic growth averaged 2.6% per annum, in spite of the depredations of World War I. Not surprisingly, the Gold Standard came under huge strain. Thus the failure of the 1925-31 British return to the Gold Standard was probably inevitable; by that time, global population and economic growth had reached a level at which the Gold Standard's deflationary effect had become intolerable.
For the quarter-century 1925-50, Keynes was right; with global population growth above 1%, even World War II could not hold economic growth below 2.7%. For the next 20 years, the heyday of the Bretton Woods Agreement monetary system, the equation was even worse. Population growth averaged 1.9%, while economic growth, recovering after World War II, averaged a startling 5.6% annually, with per capita economic growth of 3.7% annually. Even if the Bretton Woods system had been designed as a true Gold Standard, with private gold holding and trading permitted, it would never have stood a chance. In practice, since politically motivated governments controlled the Bretton Woods system, the breakdown came in the form of an explosion in the gold price rather than a tight deflation squeeze.
The good news for gold bugs is that the rate of global population increase peaked in 1963 and has now declined to about 1.1% annually. Judging by 1900-25's experience, that is still too high for a Gold Standard to be comfortable. However, the rate of population increase is continuing to decline; on current UN projections, it will by 2045 have fallen below 0.5% annually. At that level, as the 19th century showed, a Gold Standard is perfectly feasible and not excessively deflationary. Hence the young of today can perhaps hope to lead the world back to a Gold Standard in their later years.
The Gold Standard, however, remains anathema to the political class. This not surprising; as the U.S. is currently showing with its repeated bouts of quantitative easing, the seigniorage of money creation is highly profitable to governments strapped for cash owing to unaffordable social welfare programs. Even by 2045, absent a major economic crisis, it is unlikely that elite political opinion will have moved sufficiently to make Gold Standard re-introduction at an official level anything but a long and bitter struggle.
One advantage of commodity-based money over fiat currency, however, is that it does not require official sanction to come into existence. Whereas paper money requires a central bank and a national credit rating behind it to attain credibility (and even with this sometimes fails to do so, as in Zimbabwe, Weimar Germany or Latin America for much of the 20th century), gold-based money can come into existence through private activity.
There is some evidence that this is happening. Austria's Raiffesen Zentralbank now offers its clients gold-based accounts, and other banks are likely to follow. The SWIFT international payments system now allows payment in gold, an essential element in a currency's infrastructure in today's markets. Governments worldwide are competing to depreciate their currencies (or, like the hapless EU, watching their currencies come under fire as the weaker members of their union get into difficulties). At some point, a major exporter with a good competitive position—if you asked me to guess, from China or Germany—could start invoicing its customers in gold.
When that happens, a very important barrier will have been crossed. Once gold-denominated trade paper comes into existence, it will form the nucleus of a short-term money market, in the same way as the eurodollar market for assets and liabilities outside the United States arose in Europe after 1957 or so. Within a few years, gold bonds will be issued—once a company has gold-denominated receivables, it will have a natural hedge for such financing, which will remain cheap in interest terms even after conventional currency interest rates rise. It has happened before, in the formation of the eurodollar and eurobond markets in 1957-65. This time, once gold invoicing happens, the gold money and bond markets are likely to spring up quite quickly.
Banks, even outside Austria and Switzerland, will quickly get up the curve of offering gold-denominated accounts once their corporate customers demand them. They will find that a substantial demand exists at the retail level also. Here, modern technology will be very helpful. An ordinary citizen will be able to use a gold-denominated account for day-to-day transactions by means of a debit card, without the need to carry round expensive sovereigns or double eagles. A payment of $9.50 for a sandwich will be satisfied by the debit card, which will pay dollars (say) to the sandwich bar while debiting the account about 0.007 ounces of gold, using that day's gold price.
The card holder will pay perhaps 1% extra for everything, to cover the cost of the gold/dollar exchange transactions; but on the other hand, since his cash holdings are in gold, he will very likely gain much more than that percentage in dollar terms each month. His wealth will be expressed as so many ounces of gold (or kilos, if he is European), but he will never need to hold physical gold at all—or any other currency, though probably he will get a few dollars from the bank's cash machine each month for expenditures for which his debit card is not accepted.
In this way, both corporate and individual users will be able to move their transactions and holdings to gold, with the banks adapting to meet their needs. The banks will remain regulated by national authorities, and will have to manage their gold assets, liabilities and capital in such a way as to avoid breaching the authorities' leverage ratios, based on the gold price at the end of each reporting period.
If the world's monetary authorities come to their senses quickly enough, adopting Volckerite/Bundesbank monetary policies to restore confidence in their currencies, this private Gold Standard will remain a minor addition to the global financial landscape, perhaps dying away after a few years. If the authorities attempt to suppress the market, it will move underground or offshore, like the eurobond market in its early years—and their suppression attempts will in most countries be rebuked by an angry electorate. If they continue with sloppy monetary policies, then since the gold price will continue rising against all other currencies, gold will come to be seen as the most reliable available store of value and a perfectly acceptable unit of account.
At that point, the private gold standard could come to replace national currencies for most transactions. Governments will attempt to enforce usage of their currencies for tax payments, etc., but they will find themselves at a considerable disadvantage through doing so. They will also lose the vast majority of the seigniorage profit they have enjoyed since paper currencies became universal after World War II. Needless to say, this will cause a financial crisis, and a loss of confidence in the governments' own bonds. Their only remedy at that stage will be to move to gold themselves, cementing the dominance of a global monetary system entirely outside the control of governments and monetary authorities.
Central banks will find themselves unable to meddle with the new monetary system, since they do not control it—only the residual paper currencies will be subject to central bank monetary policy. A true Gold Standard on the basis of free banking will have been created more or less by accident. Banks will find that Basel III leverage requirements are much too generous in a Gold Standard system, so will have to deleverage themselves or face a liquidity crisis and apply for a bailout. Doubtless governments forced to bail out banks would insist that they reorient their business towards the shrinking economic area in which paper money is used—in which case such banks would quickly find themselves irrelevant to the new economic order. Their competitors, seeing the disastrous business- and bonus-destroying results of bailouts, would deleverage to a safe level.
For the world's governments, this would be a disaster. For everyone else, it would be a huge liberation. That is reason enough to encourage the beginnings of the private sector Gold Standard development now, rather than waiting until 2045 in the hope that governments will then establish an official Gold Standard.
As for deflation, don't worry too much about it. The day-to-day debit card-based Gold Standard will initially use very little metallic gold, so will not be particularly deflationary. The money supply will be established by trial and error, as banks that over-leverage and keep inadequate gold reserves discover the perils of fiat money banking without fiat money. In equilibrium, the money supply will be constrained by the physical gold supply, but by that time, we may be approaching 2045.
Global opposition to Fed Chairman Ben Bernanke's policy, World Bank President Robert Zoellick's "trial balloon" and statements by some of the new Republican Congressional caucus have caused a modest revival in consideration of the Gold Standard. In my view, the chances of its revival by official means in the next 10 years remain infinitesimal, but there is an increasing probability of private sector activity in that direction. Not only politically, the bombed-out Gold Standard stock may have reached bottom and be beginning a modest revival.
The Gold Standard did not disappear because it caused the Great Depression (it had only modest fingerprints on that disaster) nor because Maynard Keynes called gold a "barbarous relic." In reality, its demise had a much simpler cause: the rising rate of global population growth, which caused it to become damagingly deflationary.
The gold supply is limited. At the end of 2009, the total of all the gold ever mined was about 165,000 tons, worth $7 trillion at today's prices. Most of that total is still in existence, gold being essentially indestructible. However, new mine production in 2008 and 2009—both years enjoying near-record gold prices—was only around 2,500 tons, according to the World Gold Council. Thus even at the peak of the market, gold production is only 1.5% of existing supply. This hard limit on the world's gold supply exerts a considerable monetary effect on a Gold Standard world, limiting its money supply. Without an increase in monetary velocity, the world's gold supply can accommodate global growth of only about 1.5% per annum while maintaining prices constant. If global GDP growth is higher than that, the Gold Standard will be deflationary—prices will decline. If global growth is less than 1.5% per annum, prices may increase somewhat.
During the 18th century, for example, global population rose by 0.4% per annum, from 640 million in 1700 to 980 million in 1800, according to United Nations estimates. Accordingly, if world gold supplies had increased by 1.5% per annum during that century and monetary velocity had remained constant, a global Gold Standard would have accommodated about 1.1% per annum per capita economic growth. In practice global growth during that century averaged 0.56% per annum or 0.15% per capita, so gold supplies were ample to support it, even if mining was less active and successful than in some other periods. Indeed, in actuality the century saw mild inflation in Gold Standard countries.
During the 19th century, global economic growth accelerated, to 1.85% per annum, being 1.34% growth per capita (the result of the Industrial Revolution) and 0.51% per annum population growth. Thus the gold supply became much tighter, particularly towards the end of the century as economic and population growth accelerated. There was a shortage of specie and deflation during the "Hungry Forties" before the Californian gold discoveries of 1849 and another more prolonged period of deflation in 1873-96, before the discovery of new gold deposits in South Africa and the Yukon. During those years, the gold supply was increasing at a rate below its long-term average of 1%-1.5%, so global growth above that level caused the money supply to decline in terms of Gross World Product, and deflation to occur. By the early 1890s, there were multiple calls to abandon the Gold Standard, with proposals for bimetallism and William Jennings Bryan's "Cross of Gold" presidential campaign of 1896.
In practice, mild deflation is not a major economic problem, contrary to Ben Bernanke's theories. With an interest rate close to zero, even prolonged deflation of up to about 1% annually can be tolerated, as real interest rates remain containable. The 1880s, however, showed this to be close to the maximum tolerable level—U.S. prices declined by 22% from 1880 to 1896, an annual 1.5% deflation, and the strains showed.
In 1900-25, with world population growth of about 0.8% per annum, economic growth averaged 2.6% per annum, in spite of the depredations of World War I. Not surprisingly, the Gold Standard came under huge strain. Thus the failure of the 1925-31 British return to the Gold Standard was probably inevitable; by that time, global population and economic growth had reached a level at which the Gold Standard's deflationary effect had become intolerable.
For the quarter-century 1925-50, Keynes was right; with global population growth above 1%, even World War II could not hold economic growth below 2.7%. For the next 20 years, the heyday of the Bretton Woods Agreement monetary system, the equation was even worse. Population growth averaged 1.9%, while economic growth, recovering after World War II, averaged a startling 5.6% annually, with per capita economic growth of 3.7% annually. Even if the Bretton Woods system had been designed as a true Gold Standard, with private gold holding and trading permitted, it would never have stood a chance. In practice, since politically motivated governments controlled the Bretton Woods system, the breakdown came in the form of an explosion in the gold price rather than a tight deflation squeeze.
The good news for gold bugs is that the rate of global population increase peaked in 1963 and has now declined to about 1.1% annually. Judging by 1900-25's experience, that is still too high for a Gold Standard to be comfortable. However, the rate of population increase is continuing to decline; on current UN projections, it will by 2045 have fallen below 0.5% annually. At that level, as the 19th century showed, a Gold Standard is perfectly feasible and not excessively deflationary. Hence the young of today can perhaps hope to lead the world back to a Gold Standard in their later years.
The Gold Standard, however, remains anathema to the political class. This not surprising; as the U.S. is currently showing with its repeated bouts of quantitative easing, the seigniorage of money creation is highly profitable to governments strapped for cash owing to unaffordable social welfare programs. Even by 2045, absent a major economic crisis, it is unlikely that elite political opinion will have moved sufficiently to make Gold Standard re-introduction at an official level anything but a long and bitter struggle.
One advantage of commodity-based money over fiat currency, however, is that it does not require official sanction to come into existence. Whereas paper money requires a central bank and a national credit rating behind it to attain credibility (and even with this sometimes fails to do so, as in Zimbabwe, Weimar Germany or Latin America for much of the 20th century), gold-based money can come into existence through private activity.
There is some evidence that this is happening. Austria's Raiffesen Zentralbank now offers its clients gold-based accounts, and other banks are likely to follow. The SWIFT international payments system now allows payment in gold, an essential element in a currency's infrastructure in today's markets. Governments worldwide are competing to depreciate their currencies (or, like the hapless EU, watching their currencies come under fire as the weaker members of their union get into difficulties). At some point, a major exporter with a good competitive position—if you asked me to guess, from China or Germany—could start invoicing its customers in gold.
When that happens, a very important barrier will have been crossed. Once gold-denominated trade paper comes into existence, it will form the nucleus of a short-term money market, in the same way as the eurodollar market for assets and liabilities outside the United States arose in Europe after 1957 or so. Within a few years, gold bonds will be issued—once a company has gold-denominated receivables, it will have a natural hedge for such financing, which will remain cheap in interest terms even after conventional currency interest rates rise. It has happened before, in the formation of the eurodollar and eurobond markets in 1957-65. This time, once gold invoicing happens, the gold money and bond markets are likely to spring up quite quickly.
Banks, even outside Austria and Switzerland, will quickly get up the curve of offering gold-denominated accounts once their corporate customers demand them. They will find that a substantial demand exists at the retail level also. Here, modern technology will be very helpful. An ordinary citizen will be able to use a gold-denominated account for day-to-day transactions by means of a debit card, without the need to carry round expensive sovereigns or double eagles. A payment of $9.50 for a sandwich will be satisfied by the debit card, which will pay dollars (say) to the sandwich bar while debiting the account about 0.007 ounces of gold, using that day's gold price.
The card holder will pay perhaps 1% extra for everything, to cover the cost of the gold/dollar exchange transactions; but on the other hand, since his cash holdings are in gold, he will very likely gain much more than that percentage in dollar terms each month. His wealth will be expressed as so many ounces of gold (or kilos, if he is European), but he will never need to hold physical gold at all—or any other currency, though probably he will get a few dollars from the bank's cash machine each month for expenditures for which his debit card is not accepted.
In this way, both corporate and individual users will be able to move their transactions and holdings to gold, with the banks adapting to meet their needs. The banks will remain regulated by national authorities, and will have to manage their gold assets, liabilities and capital in such a way as to avoid breaching the authorities' leverage ratios, based on the gold price at the end of each reporting period.
If the world's monetary authorities come to their senses quickly enough, adopting Volckerite/Bundesbank monetary policies to restore confidence in their currencies, this private Gold Standard will remain a minor addition to the global financial landscape, perhaps dying away after a few years. If the authorities attempt to suppress the market, it will move underground or offshore, like the eurobond market in its early years—and their suppression attempts will in most countries be rebuked by an angry electorate. If they continue with sloppy monetary policies, then since the gold price will continue rising against all other currencies, gold will come to be seen as the most reliable available store of value and a perfectly acceptable unit of account.
At that point, the private gold standard could come to replace national currencies for most transactions. Governments will attempt to enforce usage of their currencies for tax payments, etc., but they will find themselves at a considerable disadvantage through doing so. They will also lose the vast majority of the seigniorage profit they have enjoyed since paper currencies became universal after World War II. Needless to say, this will cause a financial crisis, and a loss of confidence in the governments' own bonds. Their only remedy at that stage will be to move to gold themselves, cementing the dominance of a global monetary system entirely outside the control of governments and monetary authorities.
Central banks will find themselves unable to meddle with the new monetary system, since they do not control it—only the residual paper currencies will be subject to central bank monetary policy. A true Gold Standard on the basis of free banking will have been created more or less by accident. Banks will find that Basel III leverage requirements are much too generous in a Gold Standard system, so will have to deleverage themselves or face a liquidity crisis and apply for a bailout. Doubtless governments forced to bail out banks would insist that they reorient their business towards the shrinking economic area in which paper money is used—in which case such banks would quickly find themselves irrelevant to the new economic order. Their competitors, seeing the disastrous business- and bonus-destroying results of bailouts, would deleverage to a safe level.
For the world's governments, this would be a disaster. For everyone else, it would be a huge liberation. That is reason enough to encourage the beginnings of the private sector Gold Standard development now, rather than waiting until 2045 in the hope that governments will then establish an official Gold Standard.
As for deflation, don't worry too much about it. The day-to-day debit card-based Gold Standard will initially use very little metallic gold, so will not be particularly deflationary. The money supply will be established by trial and error, as banks that over-leverage and keep inadequate gold reserves discover the perils of fiat money banking without fiat money. In equilibrium, the money supply will be constrained by the physical gold supply, but by that time, we may be approaching 2045.
Sunday, November 7, 2010
What Can Be Done...
By Paul Davidson:
After the shellacking the Democrats and Obama took in this November election, it is clear that the old time religion of classical economics will be coming back into fashion. The result is likely to be further economic disaster.
I am not surprised by the failure of the Obama Administration to win over the American people to a progressive economic program. On pages 13 to 18 of my book THE KEYNES SOLUTION: THE PATH TO GLOBAL ECONOMIC PROSPERITY – ( written in January 2009) -- I compared what I expected of Obama vis-à-vis what Roosevelt did in the first few years of his administration.
I cited a letter written by Keynes and published in December 1933 in the New York Times where Keynes warned the president that there were two goals -- Recovery and overdue social Reforms. But Keynes warned if one goes for the social reforms before full economic recovery (full employment) was achieved, then any reforms "will upset the confidence of business... And it will confuse thought ". Instead Keynes recommended just concentrate on recovery. Once the president succeeds at achieving that goal, then reforms will come much more easily!
I suggested that if Obama followed the “jump start” advice of his economic advisors for a small “stimulus” program just to get the private economy turned around , then the nation would not get the full recovery we needed and all reform as well as full recovery will be jeopardized.
Given the politics of austerity, we face maybe a decade of economic disaster. Progressive heterodox economists must get out in front with a Keynes-style of economic thinking – for Keynes’s analytical framework is the only complete available one that is not just a variant of classical theory. Keynes theory of liquidity can deal with full employment recovery, international trade imbalances, policies to prevent inflation and deflation, and an understanding of the role of financial markets in a money using entrepreneurial economy. – what Soros calls a reflexivity economy.
It is necessary to immediately put forth a consistent plan for not only the domestic economy but also for the international payments system to end the huge trade imbalances that have occurred --Mr. Geithner's call for devaluing the dollar relative to the Chinese yuan will not do it.
Nor will relying on some Old or New Keynesian variants of classical economics such as Stiglitz's assymetric information or some other MIT or Harvard New Keynesianism --since all these models assume that the economic system is a classical system except for some ad hoc restraint on the flexiblity of prices or constraint on obtaining complete information about a future predetermined by today's market fundamental. In the long run all these mainstream "Keynesian" models will provide a full employment solution when fixities are removed and full information preceived. It is only these ad hoc constraints that prevent short run optimal results -- theerfore the implication of these mainstream models is get government out of the way and the market, in the long run, will prove to be optimal!
My book THE KEYNES SOLUTION provides a complete alternative program to the various classical models that is going to dominate Washington in the next few years – as Obama tries to compromise with the conservatives such as Paul Ryan and Tea Party people like Rand Paul.
The American people are being interpreted as saying no more deficits—but what they really want back is prosperity and jobs for all who are willing to work. And if we can show them why these goals require governemnt deficits to get to prosperity , they will accept that. We have to get into the public forum the kind of progressive program that is in the Roosevelt tradition and currently can be an economic foundation to provide a good economic future for years to come.
Until we can provide a single consistent program for economic prosperity, all the other goals of progressive thinkers will remain in the dustbin!! The conservatives and their classical theory will dominate, even though they are wrong – because, as they say in politics, “You can not beat Somebody with Nobody”.
The only body of economic thinking available to take on, and beat, classical thinking, is Keynes’s original analytical foundation – and not the Keynesianism of Samuelson, or the New Keynesianism of Stiglitz and other MIT and Harvard graduates.
And remember that the original Keynes analysis implied a nonergodic stochastic process (Keynes called “uncertainty”) is fully compatible with the reflexivity analysis put forth by George Soros. It is when people fear uncertainty that they demand liquidity rather than goods and services. And given all the cash bankers and businesses are sitting on, can anyone doubt the problem is one of too much uncertainty and private demands for liquidity -with the resulting lack of aggregate demand for goods and services?
Paul
Paul Davidson
Editor, Journal of Post Keynesian Economics
author: THE KEYNES SOLUTION: THE PATH TO GLOBAL ECONOMIC PROSPERITY
Bernard Schwartz Center for Economic Policy Analysis
21 Stratford Drive E. Unit D
Boynton Beach, Florida 33436
phone and fax number: (561)369-1951
email: pdavidson@utk.edu
http://econ.bus.utk.edu/davidson.html
Manuscripts for Journal of Post Keynesian Economics can be submitted electronically
to pdavidson@mesharpe.com
After the shellacking the Democrats and Obama took in this November election, it is clear that the old time religion of classical economics will be coming back into fashion. The result is likely to be further economic disaster.
I am not surprised by the failure of the Obama Administration to win over the American people to a progressive economic program. On pages 13 to 18 of my book THE KEYNES SOLUTION: THE PATH TO GLOBAL ECONOMIC PROSPERITY – ( written in January 2009) -- I compared what I expected of Obama vis-à-vis what Roosevelt did in the first few years of his administration.
I cited a letter written by Keynes and published in December 1933 in the New York Times where Keynes warned the president that there were two goals -- Recovery and overdue social Reforms. But Keynes warned if one goes for the social reforms before full economic recovery (full employment) was achieved, then any reforms "will upset the confidence of business... And it will confuse thought ". Instead Keynes recommended just concentrate on recovery. Once the president succeeds at achieving that goal, then reforms will come much more easily!
I suggested that if Obama followed the “jump start” advice of his economic advisors for a small “stimulus” program just to get the private economy turned around , then the nation would not get the full recovery we needed and all reform as well as full recovery will be jeopardized.
Given the politics of austerity, we face maybe a decade of economic disaster. Progressive heterodox economists must get out in front with a Keynes-style of economic thinking – for Keynes’s analytical framework is the only complete available one that is not just a variant of classical theory. Keynes theory of liquidity can deal with full employment recovery, international trade imbalances, policies to prevent inflation and deflation, and an understanding of the role of financial markets in a money using entrepreneurial economy. – what Soros calls a reflexivity economy.
It is necessary to immediately put forth a consistent plan for not only the domestic economy but also for the international payments system to end the huge trade imbalances that have occurred --Mr. Geithner's call for devaluing the dollar relative to the Chinese yuan will not do it.
Nor will relying on some Old or New Keynesian variants of classical economics such as Stiglitz's assymetric information or some other MIT or Harvard New Keynesianism --since all these models assume that the economic system is a classical system except for some ad hoc restraint on the flexiblity of prices or constraint on obtaining complete information about a future predetermined by today's market fundamental. In the long run all these mainstream "Keynesian" models will provide a full employment solution when fixities are removed and full information preceived. It is only these ad hoc constraints that prevent short run optimal results -- theerfore the implication of these mainstream models is get government out of the way and the market, in the long run, will prove to be optimal!
My book THE KEYNES SOLUTION provides a complete alternative program to the various classical models that is going to dominate Washington in the next few years – as Obama tries to compromise with the conservatives such as Paul Ryan and Tea Party people like Rand Paul.
The American people are being interpreted as saying no more deficits—but what they really want back is prosperity and jobs for all who are willing to work. And if we can show them why these goals require governemnt deficits to get to prosperity , they will accept that. We have to get into the public forum the kind of progressive program that is in the Roosevelt tradition and currently can be an economic foundation to provide a good economic future for years to come.
Until we can provide a single consistent program for economic prosperity, all the other goals of progressive thinkers will remain in the dustbin!! The conservatives and their classical theory will dominate, even though they are wrong – because, as they say in politics, “You can not beat Somebody with Nobody”.
The only body of economic thinking available to take on, and beat, classical thinking, is Keynes’s original analytical foundation – and not the Keynesianism of Samuelson, or the New Keynesianism of Stiglitz and other MIT and Harvard graduates.
And remember that the original Keynes analysis implied a nonergodic stochastic process (Keynes called “uncertainty”) is fully compatible with the reflexivity analysis put forth by George Soros. It is when people fear uncertainty that they demand liquidity rather than goods and services. And given all the cash bankers and businesses are sitting on, can anyone doubt the problem is one of too much uncertainty and private demands for liquidity -with the resulting lack of aggregate demand for goods and services?
Paul
Paul Davidson
Editor, Journal of Post Keynesian Economics
author: THE KEYNES SOLUTION: THE PATH TO GLOBAL ECONOMIC PROSPERITY
Bernard Schwartz Center for Economic Policy Analysis
21 Stratford Drive E. Unit D
Boynton Beach, Florida 33436
phone and fax number: (561)369-1951
email: pdavidson@utk.edu
http://econ.bus.utk.edu/davidson.html
Manuscripts for Journal of Post Keynesian Economics can be submitted electronically
to pdavidson@mesharpe.com
Monday, September 13, 2010
The Tri-Polar Intelligence of Pure Thought…
"Wisdom is an ocean of visions, poured into a dewdrop, of a single ultimate vision...."
Ever look deep into the pure mind__I mean really deep, to where you can answer the questions about how thought thinks about pure thought…? Follow me to a zone you may never have been before__it won’t hurt, but it may surprise. Most think they know their own minds quite well, but do they really?__I think you’ll see for yourself, there’s much more to pure thought than you’ve so far realized…
Simply take the word intelligence, and ask yourself, ‘What is the intelligence of intelligence…?’ This is that ancient question Socrates first posed millennia ago, with a bit of a twist, as he asked, ‘What is the wisdom of wisdom?’ and ‘What is the science of science?’__but, these same thought-word relations lead us to the same destination. It’s also been asked by others as, ‘What’s the cognition of the cognition?’ and ‘What’s the concept of the concept?’ and ‘What’s the context of the context?’ and you could also ask; ‘What’s the feeling of the feeling…?’ These questions may seem strange to you at first, but when it’s explained__you’ll easily see the importance of such deep investigations of the mind’s purest deep states of thinking. Most likely, you all do think like this now__it’s just you’ve never given it the detail of contemplation to realize it…
Think about it__when one asks themselves’ any one of these single entity questions, one’s thoughts are centered strictly on the thought of thinking about thought itself. This is the mode of modal thought, modal logic, modal intelligence or modal wisdom, per se__and no different than thinking about the moods of the mind’s thinking about pure thinking… It’s really the easiest idea in the world to accomplish, it’s just most never think about the mood of their being, upon how such controls their thoughts and actions__but, the realization can be the most profound change in a person’s contemplations about themselves, the world and their actions toward self, others and the world…
If one starts out thinking in the mood of self-referential thinking, or experiential intelligence__one’s mood or modal thought is more childhood-soul to super-consciousness feelings' based__a most personal thought stance… If one starts out thinking in the mood of non-self-referential thinking, or operational intelligence of others’ and the world’s ideas__one’s mood or modal thought is more of the intellect to the entire systems’ architectures of all the world’s many systems__a most non-personal stance, yet closely related to the over-soul of global sight… There’s still one more mood or modal thought to contemplate__and that’s one’s modal actionable intelligence, or one’s will to act upon one’s experiential wisdom state, in an attempt to move pieces of such wisdom to one’s operational knowledge state__as it’s really how we all do achieve our best moments in life, that truly satisfy us… For when we accomplish, through our self-knowing actionable intelligence of personal will, to discover totally new ideas and links from our experiential intelligence, to our operational knowledge and action states of mind__we feel we can really set the world afire…
So, next time you’re thinking about thinking about something__first check the mood of the state of mind, you are truly thinking from__and I promise you, that by knowing the mood of your thinking state, is by far the most important progress one can ever accomplish in the evolution of the mind states advancement… It will also give you the chance to really coordinate any presentation state you may choose, from your most personal feelings, thoughts and actions, to the most complex of intellectual contemplations and actions. Along the way of thinking about thinking, you may realize how much the world has lost this art of pure contemplative thought__and how much we all really need to re-instate it__to communicate effectively__as it relaxes the mind more than anything else, to know one has the ability to choose the mood of the conversations and actions one is involved in__purely at the will of knowing one can…
All it requires is to state to another the mode of the thought talked about, whether experiential intelligence, operational intelligence or actionable intelligence__This can also be phrased as experiential wisdom, operational knowledge and knowing intelligent actions__and just simply notify another of the mood change… Many do this without knowing they do it, but to be able to do it knowingly is of great comfort to one’s being, and self-satisfaction…
Therefore; ‘Wisdom is the actionable intelligence capacity, to knowingly move percepts and concepts of experiential wisdom, into the greater world of operational knowledge__to help improve the function and form of our world at large…’
Btw, when anyone actually does see wisdom, even small pieces of it, it’s the most humbling experience in the world, as it’s so huge compared to any one of us__it’s truly overwhelming…
Tuesday, August 24, 2010
Paul Davidson Joined the Advisory Board of the Institute for New Economic Thinking...
New York, NY, August 24, 2010 – The Institute for New Economic Thinking (INET) has appointed Paul Davidson, Editor of the Journal of Post Keynesian Economics and Holly Chair of Excellence Professor Emeritus, University of Tennessee, to its advisory board. Paul Davidson, is the 31st distinguished individual to join INET’s Advisory Board, including five Nobel Prize winners.
Professor Paul Davidson is currently a Senior Fellow at the Schwartz Center for Economic Policy Analysis, The New School. He has taught at number of prestigious institutions including: University of Pennsylvania, Rutgers University, and Bristol University (UK). Davidson served as the Assistant Director of the Economic Division of the Continental Oil Company and has testified before 20 congressional committees over the years on various economic questions. He has authored co-authored or edited 22 books, including: The Keynes Solution: The Path to Global Economic Prosperity, Economics For A Civilized Society (co-author), Financial Markets, Money and the Real World, and Post Keynesian /macroeconomic Theory: A Foundation For Successful Economic Policies For the Twenty-first Century.
“I share the Institute’s commitment to education, open dialogue, and the support of the next generation in effecting change,” commented Paul Davidson. “I am dedicated to advancing the Institute’s vital initiatives and honored to join its distinguished Advisory Board.”
“As a distinguished educator and champion of Keynesian Economics, Paul Davidson is a invaluable addition to the INET community that held its inaugural conference at King’s College, University Cambridge, where Keynes himself debated economic theory and instigated reform,” commented Dr. Robert Johnson, Executive Director of INET. “His presence and counsel will undoubtedly have an important impact on the Institute and its work.”
About the Institute for New Economic Thinking:
Launched in October 2009 with a $50 million pledge from George Soros, the Institute for New Economic Thinking promotes changes in economic theory and practice through conferences, grants and education initiatives. The Institute embraces the professional responsibility to think beyond the inadequate methods and models of the world’s financial infrastructures and will support the creation of new paradigms in the understanding of economic processes. For more information please visit http://www.ineteconomics.org/
----# # #--------------------------------------------------------------------------
Paul Davidson
Editor, Journal of Post Keynesian Economics
author: THE KEYNES SOLUTION: THE PATH TO GLOBAL ECONOMIC PROSPERITY
Bernard Schwartz Center for Economic Policy Analysis
66 Country Club Drive
Monroe Township, New Jersey 08831
email: pdavidson@utk.edu
Paul Davidson
Professor Paul Davidson is currently a Senior Fellow at the Schwartz Center for Economic Policy Analysis, The New School. He has taught at number of prestigious institutions including: University of Pennsylvania, Rutgers University, and Bristol University (UK). Davidson served as the Assistant Director of the Economic Division of the Continental Oil Company and has testified before 20 congressional committees over the years on various economic questions. He has authored co-authored or edited 22 books, including: The Keynes Solution: The Path to Global Economic Prosperity, Economics For A Civilized Society (co-author), Financial Markets, Money and the Real World, and Post Keynesian /macroeconomic Theory: A Foundation For Successful Economic Policies For the Twenty-first Century.
“I share the Institute’s commitment to education, open dialogue, and the support of the next generation in effecting change,” commented Paul Davidson. “I am dedicated to advancing the Institute’s vital initiatives and honored to join its distinguished Advisory Board.”
“As a distinguished educator and champion of Keynesian Economics, Paul Davidson is a invaluable addition to the INET community that held its inaugural conference at King’s College, University Cambridge, where Keynes himself debated economic theory and instigated reform,” commented Dr. Robert Johnson, Executive Director of INET. “His presence and counsel will undoubtedly have an important impact on the Institute and its work.”
About the Institute for New Economic Thinking:
Launched in October 2009 with a $50 million pledge from George Soros, the Institute for New Economic Thinking promotes changes in economic theory and practice through conferences, grants and education initiatives. The Institute embraces the professional responsibility to think beyond the inadequate methods and models of the world’s financial infrastructures and will support the creation of new paradigms in the understanding of economic processes. For more information please visit http://www.ineteconomics.org/
----# # #--------------------------------------------------------------------------
Paul Davidson
Editor, Journal of Post Keynesian Economics
author: THE KEYNES SOLUTION: THE PATH TO GLOBAL ECONOMIC PROSPERITY
Bernard Schwartz Center for Economic Policy Analysis
66 Country Club Drive
Monroe Township, New Jersey 08831
email: pdavidson@utk.edu
Paul Davidson
The Triadic Analytic Esthetic Geometry of Our Universal Emotions of Genericity's Simplicity__Dimensionality and Proportionality__From the Gentile, to
(Someone elsewhere on the web mentioned this post, so I'm re-posting...)
"The world is divided into men who have wit and no religion and men who have religion and no wit. " Avicenna
"As to the mental essence, we find it in infants devoid of every mental form." Avicenna
"At night I would return home, set out a lamp before me, and devote myself to reading and writing. Whenever sleep overcame me or I became conscious of weakening, I would turn aside to drink a cup of wine, so that my strength would return to me. Then I would return to reading. And whenever sleep seized me I would see those very problems in my dream; and many questions became clear to me in my sleep. I continued in this until all of the sciences were deeply rooted within me and I understood them as is humanly possible. Everything which I knew at the time is just as I know it now; I have not added anything to it to this day. Thus I mastered the logical, natural, and mathematical sciences, and I had now reached the science." Avicenna
"The knowledge of anything, since all things have causes, is not acquired or complete unless it is known by its causes." Avicenna
The Triadic Analytic Esthetic Geometry of Our Universal Emotions of Genericity's Simplicity__Dimensionality and Proportionality__From the Gentile, to the Projective, to the Factual...
Avicenna made it part way there... Kant made it a bit further... Peirce made it the furthest... We must finish the journey of the triadic whole__subjective/objective/ajective, or the, monojective/bijective/trijective minds' final journey...
Emotions, our most important essence, are much simpler than most have thought them to be__iff looked at, thoroughly, from and with the esthetic, analytic-synthetic a priori__The true triadic self...
Emotions are the primary source of all the energies of our complete mind’s functioning, whether our animal fight or flight instincts, our most aesthetic emotions of compassion and empathy, or our higher emotional foundations under our intellectual and logical states of mind. We’re talking about our primary energy states in all these categories of choices of personalities, attitudes or medium to higher states of mind potentialities. Many have stated for centuries that this metaphysical state of primary energies could not be analyzed__But I see this, so far non-conceptual state of mind, as being analyzable iff we simply see its primary brain state function, before we apply content to it, as being fully possible of analyzability.
When the primary brain state is looked at, which would be our perceptions’ essence agents’ tools, whether passion, pain, reason, compassion, empathy, love, judgment or whatever other state may be involved, at the time of our action’s choices__is subject to nothing more than the use of the powers of this very primary energy. And when we are talking about any human energy source, we are simply talking about its capacity for good or bad, happiness or sadness, helping or hurting, loving or hating, on and on, yet it has and implies parameters of these mentioned choices and actions__which would be the proportionalities of energies applied to the many different situations we encounter. Just as a simple example; We may use our gentlest of emotional states of love toward another, with the least proportion of energy applied to the person our love is projected toward, even though this may take a tremendous amount of energy to control our will’s involuntary action, at the time__while at other times this state of low intensity energy may be a naturally flowing symmetry, often granted by what's outside our personal control of energy flows__The purely natural metaphysical flows. It’s still understandable as a low proportionality of energy applied.
On the other hand, we may want to excite another couple to a certain action for the day’s activities, and we’d apply a large proportion of energy, with our personality and attitude, to entice that particular couple to be enthused to bid our wishes, as we may have planned a very exciting outing, for everyone to enjoy, as I’ve often done, when bored of the atmosphere of the local area I may have been in. All I’m showing is the simple proportional emotional energy use we may have all applied at differing times in our lives. This would mean our basic epistemic agents of perception, as I see all essence agents, as being housed in perception, are actually acting through a geometric process of distributing energy to our willed actions proportionately differing at differing times and circumstances. Of course, this is just a simple explanation, but many are un-aware of the basic mechanics of pure emotional energy, and I think it’s very important to see all the varied dimensions of actions the emotional mind is actually capable of.
When one realizes it's simple energy choices, of actions’ choices, to control our emotions, we need never be trapped in our boredoms, excess desires or greed, because the free-knowledge-choices of actions is much more fun, than all the fulfillments of possessions could ever accomplish. A pure freedom of our mind’s actions’ choices, knowingly, is the most fulfilling of the spirit's possibilities__and is available to anyone who is shown this simple path__”Put the body in action/motion and the mind will follow.” It is no more complex than this simple statement. There’s no amount of possessions or money in the world, that can surpass the mind’s knowledge of its own freedom’s possibilities of free-will actions’ Possibilia. I’ve seen so many relationships go sour for the simple reason of not realizing the power of empowering the body’s actions, to have the minds follow, it's almost uncountable__and for no other reason than not knowing__The body controls the mind’s states of happiness__Do something__Anything__You’ll like it...
I’ve only offered a simple mind map of happiness’s possible actions, but imo, this is the fundamental state of The Triadic Analytic Esthetic Geometry of Our Universal Emotions of Genericity's Simplicity__Dimensionality and Proportionality__From the Gentile, to the Projective, to the Factual...
"The world is divided into men who have wit and no religion and men who have religion and no wit. " Avicenna
"As to the mental essence, we find it in infants devoid of every mental form." Avicenna
"At night I would return home, set out a lamp before me, and devote myself to reading and writing. Whenever sleep overcame me or I became conscious of weakening, I would turn aside to drink a cup of wine, so that my strength would return to me. Then I would return to reading. And whenever sleep seized me I would see those very problems in my dream; and many questions became clear to me in my sleep. I continued in this until all of the sciences were deeply rooted within me and I understood them as is humanly possible. Everything which I knew at the time is just as I know it now; I have not added anything to it to this day. Thus I mastered the logical, natural, and mathematical sciences, and I had now reached the science." Avicenna
"The knowledge of anything, since all things have causes, is not acquired or complete unless it is known by its causes." Avicenna
The Triadic Analytic Esthetic Geometry of Our Universal Emotions of Genericity's Simplicity__Dimensionality and Proportionality__From the Gentile, to the Projective, to the Factual...
Avicenna made it part way there... Kant made it a bit further... Peirce made it the furthest... We must finish the journey of the triadic whole__subjective/objective/ajective, or the, monojective/bijective/trijective minds' final journey...
Emotions, our most important essence, are much simpler than most have thought them to be__iff looked at, thoroughly, from and with the esthetic, analytic-synthetic a priori__The true triadic self...
Emotions are the primary source of all the energies of our complete mind’s functioning, whether our animal fight or flight instincts, our most aesthetic emotions of compassion and empathy, or our higher emotional foundations under our intellectual and logical states of mind. We’re talking about our primary energy states in all these categories of choices of personalities, attitudes or medium to higher states of mind potentialities. Many have stated for centuries that this metaphysical state of primary energies could not be analyzed__But I see this, so far non-conceptual state of mind, as being analyzable iff we simply see its primary brain state function, before we apply content to it, as being fully possible of analyzability.
When the primary brain state is looked at, which would be our perceptions’ essence agents’ tools, whether passion, pain, reason, compassion, empathy, love, judgment or whatever other state may be involved, at the time of our action’s choices__is subject to nothing more than the use of the powers of this very primary energy. And when we are talking about any human energy source, we are simply talking about its capacity for good or bad, happiness or sadness, helping or hurting, loving or hating, on and on, yet it has and implies parameters of these mentioned choices and actions__which would be the proportionalities of energies applied to the many different situations we encounter. Just as a simple example; We may use our gentlest of emotional states of love toward another, with the least proportion of energy applied to the person our love is projected toward, even though this may take a tremendous amount of energy to control our will’s involuntary action, at the time__while at other times this state of low intensity energy may be a naturally flowing symmetry, often granted by what's outside our personal control of energy flows__The purely natural metaphysical flows. It’s still understandable as a low proportionality of energy applied.
On the other hand, we may want to excite another couple to a certain action for the day’s activities, and we’d apply a large proportion of energy, with our personality and attitude, to entice that particular couple to be enthused to bid our wishes, as we may have planned a very exciting outing, for everyone to enjoy, as I’ve often done, when bored of the atmosphere of the local area I may have been in. All I’m showing is the simple proportional emotional energy use we may have all applied at differing times in our lives. This would mean our basic epistemic agents of perception, as I see all essence agents, as being housed in perception, are actually acting through a geometric process of distributing energy to our willed actions proportionately differing at differing times and circumstances. Of course, this is just a simple explanation, but many are un-aware of the basic mechanics of pure emotional energy, and I think it’s very important to see all the varied dimensions of actions the emotional mind is actually capable of.
When one realizes it's simple energy choices, of actions’ choices, to control our emotions, we need never be trapped in our boredoms, excess desires or greed, because the free-knowledge-choices of actions is much more fun, than all the fulfillments of possessions could ever accomplish. A pure freedom of our mind’s actions’ choices, knowingly, is the most fulfilling of the spirit's possibilities__and is available to anyone who is shown this simple path__”Put the body in action/motion and the mind will follow.” It is no more complex than this simple statement. There’s no amount of possessions or money in the world, that can surpass the mind’s knowledge of its own freedom’s possibilities of free-will actions’ Possibilia. I’ve seen so many relationships go sour for the simple reason of not realizing the power of empowering the body’s actions, to have the minds follow, it's almost uncountable__and for no other reason than not knowing__The body controls the mind’s states of happiness__Do something__Anything__You’ll like it...
I’ve only offered a simple mind map of happiness’s possible actions, but imo, this is the fundamental state of The Triadic Analytic Esthetic Geometry of Our Universal Emotions of Genericity's Simplicity__Dimensionality and Proportionality__From the Gentile, to the Projective, to the Factual...
Monday, August 2, 2010
Making Dollars and Sense of the U.S Government Debt...
Paul Davidson
Abstract: This paper explains why, given Keynes’s General Theory, worries over the size of the government’s national debt per se is foolish. It is more important to educate politicians and the public that government fiscal policy should be designed to make sure that aggregate market demand will produce sufficient profits so that entrepreneurs will hire all domestic workers willing and able to work. Empirical evidence is provided to demonstrate the correctness of this concept of fiscal policy of the balancing wheel for full employment effective demand. Key words: deficits, national debt.
No economic topic encourages more political demagoguery than the
“unsustainable” national deficits that face the Obama administration as
it tries to extricate the economy from this Great Recession that began
in 2007. Even President Obama has appointed a commission to develop
a plan to assure a reduction in future deficits by lowering government
expenditures or raising taxes.
A sage once said, “Those who cannot remember the past are condemned
to repeat its errors.” So let us review the past history of the national debt
to make sure we avoid its errors and repeat its successes.
Is the national debt too large? In 1790, the newly founded U.S. government
assumed the debts that had been incurred during the Revolutionary
War. Thus, from the very beginning, the U.S. national debt was
approximately $75 million. In 1835, President Jackson reduced the debt
to close to a zero balance. By 1837, however, the economy went into a
steep recession that lasted approximately six years and the national debt
increased dramatically. Since then, the U.S. government has always had
a significant outstanding debt.
During World War I, the national debt increased substantially from approximately
$6 billion in 1916 to over $27 billion in 1919. The prosperous
decade of the “roaring twenties” saw a decline in the national debt
as tax receipts exceeded government spending. By 1929, the total debt
had been reduced to $16.9 billion. This 1920s experience indicates that
when the private sector is spending sufficiently to buy all the products
that industry can produce in a fully employed economy, then there is no
need for the government to deficit spend merely to maintain a prosperous
economy. The 1920s prosperity, however, was partly the result of
significant bubbles in the stock market and in real estate. (Shades of the
dot.com bubble of the 1990s and the housing bubble of early 2000s.)
In 1929, private spending suddenly slowed causing a devastating drop
in business profits. Unemployment rose rapidly as the United States
entered the Great Depression. Tax revenues fell from $4 billion in 1930
to less than $2 billion in 1932. When Roosevelt took office in 1933, the
national debt was almost $20 billion; a sum equal to 20 percent of the
U.S. gross domestic product (GDP).
During its first term, the Roosevelt administration ran large annual
deficits between 2 and 5 percent of GDP. By 1936, the national debt had
increased to $33.7 billion or approximately 40 percent of GDP. Many
“experts” of that era said disaster awaited the nation if the government
continued to deficit spend and thereby burden future generations with this
huge debt. Accordingly, as a part of his reelection campaign, Roosevelt’s
fiscal year 1937 budget submitted to Congress in 1936 cut government
spending dramatically. As a result, in 1937, the economy fell into a steep
recession. Tax revenues declined and the national debt increased to $37
billion. The government resumed significant deficit spending in 1938
and the economy quickly recovered. By 1940, the economy had grown
substantially while the national debt rose to $43 billion.
When the United States entered the war in 1941, the fear of deficits and
the size of the national debt were forgotten. The important thing was to
defeat the enemy. In the war years from 1941 to 1945, the GDP doubled
while the national debt increased by more than 500 percent as Roosevelt
financed much of the war expenditures by government borrowing. By the
end of the war in 1945, the national debt had increased to $258 billion
and was equal to approximately 120 percent of GDP.
Rather than bankrupting the nation, this large growth in the national
debt promoted a prosperous economy. By 1946, the average American
household was living much better economically than in the prewar
days. Moreover, the children of that Depression–World War II generation
were not burdened by having to pay off what then was considered
a huge national debt. Instead, for the next quarter century, the economy
continued on a path of unprecedented economic growth and prosperity
with the Eisenhower administration launching the biggest public works
project—the interstate highway system—and the Kennedy–Johnson
administration spending large sums on sending a man to the moon and
the escalating Vietnam War. At the same time, the inequality in the distribution
of income was significantly narrowed. It was the golden age
of economic development for the United States as the rich grew richer
while the poor gained even more in a rapidly rising level of income that
created a large American middle class.
As a child of the Depression and a young teenager during the World
War II, I have never felt burdened by the huge government deficits that
accrued due to government spending during the Great Depression and
the war that followed. The legacy that the Great Generation who were
adults during the depression and the war left to their children was an
economy of abundance and prosperity. I inherited an economy that made
finding a good job easy for me and all of my cohorts and provided excellent
opportunities to improve our living standards. If this is burdening
children and grandchildren, I hope the current generation can create such
a “burden” for their progeny.
The moral of this history of the national debt and the economy during
the Great Depression and World War II is that we have nothing to fear
about running big government deficits when, during a recession with
significant unemployment, the federal government is the only spender
that can take the responsibility to sufficiently increase the market demand
for the products of our industries and thereby maintain a profitable entrepreneurial
system. For government to spend less in the hopes of keeping
down the size of the national debt will cause market demand to remain
slack, thereby impoverishing both our business firms and our workers.
The idea that capitalism works best when spenders cause healthy growth
in market demands and thereby generate profits and jobs for the community
was the basic message of Keynes theory.
This was clearly demonstrated when government spending increased
during the years 1933–36 and 1938–45. When Roosevelt cut spending
in 1937, the sharp recession showed that at that stage of recovery, no
other spenders were willing or able to take over from government the
role of generator of market demand and profits for American businesses.
Had Roosevelt, in 1938, continued on the path of keeping government
spending in check in order not to increase the total national debt, the
result would have been to propagate the poorly performing economy
of 1937. When the war broke out and no further thought was given to
the size of the national debt, government spending quickly pushed the
economy to a profitable full employment status. Keynes’s ideas that the
role of government fiscal policy was to make sure that the total demand
for goods and services provided profit opportunities to encourage business
firms to hire all workers who wanted a job was validated by this
historical record.
Business firms will hire more workers only when they expect the market
demand for their products is increasing. Today, who are these buyers who
will be willing to buy significantly more products from factories located
in the United States in order to end this Great Recession? Clearly households
suffering from high unemployment, decreasing market values for
their homes, large credit card debt, and shrinking pension funds are not
likely to rush to buy significant more goods and services. Entrepreneurs
with existing excess facilities and facing declining or at most not rapidly
rising market demands are unlikely to invest significantly in new plant and
equipment. Moreover, foreigners such as China with its large savings of
U.S. dollar earnings appears unlikely to spend more dollars to buy more
U.S.‑produced goods. With falling property and sales tax revenues, local
and state governments such as California are cutting spending on public
services and reducing purchases from domestically located firms. Only
the Federal government can afford to buy significant additional products
to stimulate market demand for American products.
Just as we expect the Federal government to spend whatever is necessary
to protect us from foreign enemies during a war, we should also
expect the government to spend whatever is necessary to protect us
from the economic terrorism of a great recession. The public must be
educated to understand that a civilized society is one that assures both
domestic workers and enterprises prosper and that the intelligent use of
government fiscal policy can assure that total market demand is always
sufficient to generate domestic profits large enough to create a fully
employed economy.
Some argue that tax revenues must finance all government spending
so that the federal budget is always balanced without deficits, or at least
annual deficits do not increase the debt-to-GDP ratio. As history shows,
however, even during World War II when America was attacked by foreign
nations (remember Pearl Harbor?) the U.S. government did not finance
the entire defense of this nation by raising taxes. Instead, during the war
years, deficits expanded dramatically while no one worried (correctly)
about burdening future generations with debt.
If wars are not sufficient (or necessary) reasons to raise taxes or cut
government spending sufficiently to balance the budget while protecting
the nation, then why should defending the nation against serious economic
threats require a balanced budget or a lower deficit? Our politicians and
the public must be educated to understand that when total demand for
domestically produced goods is low so that recession and depression
threaten, then government must deficit spend as much as necessary to
encourage domestic entrepreneurs to hire all American workers who
are willing and able to work. If, on the other hand, market demand for
domestically produced goods and services exceed America’s full employment
productive capacity, then government must increase taxes and
reduce spending in order to reduce aggregate demand to a level that can
be met by a fully employed labor force.
When the public and politicians recognize that a primary function of
government fiscal policy is to act as a balancing wheel for aggregate
demand to be sufficient to encourage America’s entrepreneurs to create
jobs for all our workers, we will have developed the political will to
develop a perpetual prosperous American civilized society.
At that point of time, our next task will be to develop an international
financial and payments system that will provide for global full employment
and prosperity.
Abstract: This paper explains why, given Keynes’s General Theory, worries over the size of the government’s national debt per se is foolish. It is more important to educate politicians and the public that government fiscal policy should be designed to make sure that aggregate market demand will produce sufficient profits so that entrepreneurs will hire all domestic workers willing and able to work. Empirical evidence is provided to demonstrate the correctness of this concept of fiscal policy of the balancing wheel for full employment effective demand. Key words: deficits, national debt.
No economic topic encourages more political demagoguery than the
“unsustainable” national deficits that face the Obama administration as
it tries to extricate the economy from this Great Recession that began
in 2007. Even President Obama has appointed a commission to develop
a plan to assure a reduction in future deficits by lowering government
expenditures or raising taxes.
A sage once said, “Those who cannot remember the past are condemned
to repeat its errors.” So let us review the past history of the national debt
to make sure we avoid its errors and repeat its successes.
Is the national debt too large? In 1790, the newly founded U.S. government
assumed the debts that had been incurred during the Revolutionary
War. Thus, from the very beginning, the U.S. national debt was
approximately $75 million. In 1835, President Jackson reduced the debt
to close to a zero balance. By 1837, however, the economy went into a
steep recession that lasted approximately six years and the national debt
increased dramatically. Since then, the U.S. government has always had
a significant outstanding debt.
During World War I, the national debt increased substantially from approximately
$6 billion in 1916 to over $27 billion in 1919. The prosperous
decade of the “roaring twenties” saw a decline in the national debt
as tax receipts exceeded government spending. By 1929, the total debt
had been reduced to $16.9 billion. This 1920s experience indicates that
when the private sector is spending sufficiently to buy all the products
that industry can produce in a fully employed economy, then there is no
need for the government to deficit spend merely to maintain a prosperous
economy. The 1920s prosperity, however, was partly the result of
significant bubbles in the stock market and in real estate. (Shades of the
dot.com bubble of the 1990s and the housing bubble of early 2000s.)
In 1929, private spending suddenly slowed causing a devastating drop
in business profits. Unemployment rose rapidly as the United States
entered the Great Depression. Tax revenues fell from $4 billion in 1930
to less than $2 billion in 1932. When Roosevelt took office in 1933, the
national debt was almost $20 billion; a sum equal to 20 percent of the
U.S. gross domestic product (GDP).
During its first term, the Roosevelt administration ran large annual
deficits between 2 and 5 percent of GDP. By 1936, the national debt had
increased to $33.7 billion or approximately 40 percent of GDP. Many
“experts” of that era said disaster awaited the nation if the government
continued to deficit spend and thereby burden future generations with this
huge debt. Accordingly, as a part of his reelection campaign, Roosevelt’s
fiscal year 1937 budget submitted to Congress in 1936 cut government
spending dramatically. As a result, in 1937, the economy fell into a steep
recession. Tax revenues declined and the national debt increased to $37
billion. The government resumed significant deficit spending in 1938
and the economy quickly recovered. By 1940, the economy had grown
substantially while the national debt rose to $43 billion.
When the United States entered the war in 1941, the fear of deficits and
the size of the national debt were forgotten. The important thing was to
defeat the enemy. In the war years from 1941 to 1945, the GDP doubled
while the national debt increased by more than 500 percent as Roosevelt
financed much of the war expenditures by government borrowing. By the
end of the war in 1945, the national debt had increased to $258 billion
and was equal to approximately 120 percent of GDP.
Rather than bankrupting the nation, this large growth in the national
debt promoted a prosperous economy. By 1946, the average American
household was living much better economically than in the prewar
days. Moreover, the children of that Depression–World War II generation
were not burdened by having to pay off what then was considered
a huge national debt. Instead, for the next quarter century, the economy
continued on a path of unprecedented economic growth and prosperity
with the Eisenhower administration launching the biggest public works
project—the interstate highway system—and the Kennedy–Johnson
administration spending large sums on sending a man to the moon and
the escalating Vietnam War. At the same time, the inequality in the distribution
of income was significantly narrowed. It was the golden age
of economic development for the United States as the rich grew richer
while the poor gained even more in a rapidly rising level of income that
created a large American middle class.
As a child of the Depression and a young teenager during the World
War II, I have never felt burdened by the huge government deficits that
accrued due to government spending during the Great Depression and
the war that followed. The legacy that the Great Generation who were
adults during the depression and the war left to their children was an
economy of abundance and prosperity. I inherited an economy that made
finding a good job easy for me and all of my cohorts and provided excellent
opportunities to improve our living standards. If this is burdening
children and grandchildren, I hope the current generation can create such
a “burden” for their progeny.
The moral of this history of the national debt and the economy during
the Great Depression and World War II is that we have nothing to fear
about running big government deficits when, during a recession with
significant unemployment, the federal government is the only spender
that can take the responsibility to sufficiently increase the market demand
for the products of our industries and thereby maintain a profitable entrepreneurial
system. For government to spend less in the hopes of keeping
down the size of the national debt will cause market demand to remain
slack, thereby impoverishing both our business firms and our workers.
The idea that capitalism works best when spenders cause healthy growth
in market demands and thereby generate profits and jobs for the community
was the basic message of Keynes theory.
This was clearly demonstrated when government spending increased
during the years 1933–36 and 1938–45. When Roosevelt cut spending
in 1937, the sharp recession showed that at that stage of recovery, no
other spenders were willing or able to take over from government the
role of generator of market demand and profits for American businesses.
Had Roosevelt, in 1938, continued on the path of keeping government
spending in check in order not to increase the total national debt, the
result would have been to propagate the poorly performing economy
of 1937. When the war broke out and no further thought was given to
the size of the national debt, government spending quickly pushed the
economy to a profitable full employment status. Keynes’s ideas that the
role of government fiscal policy was to make sure that the total demand
for goods and services provided profit opportunities to encourage business
firms to hire all workers who wanted a job was validated by this
historical record.
Business firms will hire more workers only when they expect the market
demand for their products is increasing. Today, who are these buyers who
will be willing to buy significantly more products from factories located
in the United States in order to end this Great Recession? Clearly households
suffering from high unemployment, decreasing market values for
their homes, large credit card debt, and shrinking pension funds are not
likely to rush to buy significant more goods and services. Entrepreneurs
with existing excess facilities and facing declining or at most not rapidly
rising market demands are unlikely to invest significantly in new plant and
equipment. Moreover, foreigners such as China with its large savings of
U.S. dollar earnings appears unlikely to spend more dollars to buy more
U.S.‑produced goods. With falling property and sales tax revenues, local
and state governments such as California are cutting spending on public
services and reducing purchases from domestically located firms. Only
the Federal government can afford to buy significant additional products
to stimulate market demand for American products.
Just as we expect the Federal government to spend whatever is necessary
to protect us from foreign enemies during a war, we should also
expect the government to spend whatever is necessary to protect us
from the economic terrorism of a great recession. The public must be
educated to understand that a civilized society is one that assures both
domestic workers and enterprises prosper and that the intelligent use of
government fiscal policy can assure that total market demand is always
sufficient to generate domestic profits large enough to create a fully
employed economy.
Some argue that tax revenues must finance all government spending
so that the federal budget is always balanced without deficits, or at least
annual deficits do not increase the debt-to-GDP ratio. As history shows,
however, even during World War II when America was attacked by foreign
nations (remember Pearl Harbor?) the U.S. government did not finance
the entire defense of this nation by raising taxes. Instead, during the war
years, deficits expanded dramatically while no one worried (correctly)
about burdening future generations with debt.
If wars are not sufficient (or necessary) reasons to raise taxes or cut
government spending sufficiently to balance the budget while protecting
the nation, then why should defending the nation against serious economic
threats require a balanced budget or a lower deficit? Our politicians and
the public must be educated to understand that when total demand for
domestically produced goods is low so that recession and depression
threaten, then government must deficit spend as much as necessary to
encourage domestic entrepreneurs to hire all American workers who
are willing and able to work. If, on the other hand, market demand for
domestically produced goods and services exceed America’s full employment
productive capacity, then government must increase taxes and
reduce spending in order to reduce aggregate demand to a level that can
be met by a fully employed labor force.
When the public and politicians recognize that a primary function of
government fiscal policy is to act as a balancing wheel for aggregate
demand to be sufficient to encourage America’s entrepreneurs to create
jobs for all our workers, we will have developed the political will to
develop a perpetual prosperous American civilized society.
At that point of time, our next task will be to develop an international
financial and payments system that will provide for global full employment
and prosperity.
Thursday, July 15, 2010
State-owned enterprises in China: How big are they...?
by Gao Xu...
In China's industrial sector, the shrinking share of state-owned enterprises (SOEs) is evident. This is due in part to the stronger growth of non-government-owned enterprises.
When communicating with my friends outside China, their misconception of Chinese State-Owned Enterprises (SOE) always surprises me. It seems that although Chinese SOEs play a major role in the Chinese economy, they continue to remain mysterious to most outsiders. For some people – even some long-time observers of China – Chinese SOEs are best described as dying dinosaurs that continuously absorb resources from the economy but produce little economic value. However, this impression is far from the case in nowadays.
That’s why I feel obliged to write something about the reality of this myth. In this blog post and the following ones, I’ll try to profile Chinese SOEs with data mainly from industrial sector, addressing questions regarding their size, profitability, leverage, and so on, hopefully presenting a clear picture to readers.
Today, I will tackle the question of how big are Chinese SOEs. This question can be rephrased in two different ways. First, how big are Chinese SOEs as a whole in the Chinese economy? Second, how big are individual SOEs compared with non-SOEs? Starting with the former question:
What is the share of SOEs as a whole in the Chinese economy? It depends on the criteria one chooses. This share is really negligible in terms of the enterprise number, but quite substantial in terms of assets.
The Second National Economic Census conducted in 2008 reveals that of all the 208 trillion RMB total assets of the secondary and tertiary sectors (industrial and service sectors), 63 trillion – or 30 percent of total – was held by SOEs. (SOEs here correspond to state sole funded corporations and enterprises with the state as the biggest share holder.) Meanwhile, in terms of enterprise number, there were 154,000 SOEs at the end of 2008, only accounting for 3.1 percent of the total enterprise number. Hence, the big picture is clear: SOEs control a substantial part of total enterprise assets in China despite the fact that their total number is marginal. As a corollary of this observation it follows that the average size of SOEs is much bigger than that of non-SOEs. This is indeed the case. In terms of average assets, SOEs are equal to 13.4 times of non-SOEs.
To analyze the developments, we now turn to the industrial enterprise survey dataset. As the National Economic Census is conducted once in 5 years, it is hard to study the dynamics with only the census data. Fortunately, there is another dataset that continuously dates back to 1999 readily available to us – the industrial enterprise survey data. This dataset is constructed and released by China’s National Statistical Bureau, covering all SOEs and other enterprises with annual sales larger than 5 million RMB in the industrial sectors. (Note: under the current foreign exchange rate, US$1 equals 6.8 RMB.) As non-state-owned small industrial firms (annual sales smaller than 5 million RMB) are excluded from the survey, this is a biased sample. However, enterprises covered by the survey in total account for almost 90 percent of total industrial value-added, suggesting this dataset is good enough to give a big picture of the overall developments.
The industrial survey data corroborates the Economic Census. In Figure 1, the dark blue line shows the share of SOEs number in total surveyed industrial enterprises, juxtaposed with the asset share shown by light blue line. At the end of 2008, SOEs only accounted for 4.8 percent of total enterprise numbers but controlled 43.8 percent of total assets owned by surveyed firms. Again, the data suggests that the average size of SOEs was much bigger than that of non-SOEs (15.5 times to be specific).
The shrinking share of SOEs in the industrial sector is evident in figure 1. This is on one hand due to the stronger growth of non-SOEs, and on the other hand, with less quantitative significance, reflects the fact that more non-SOEs that used to be excluded from the survey have crossed the 5 million RMB sales threshold and thereby entered into the sample. Once one takes into account the fact that the sample covers 90 percent of the industrial sector, or 39 percent of the national economy, the diminishing SOE share in the sample clearly points to a bigger role played by the non-SOEs in the Chinese economy.
It is worthwhile to note that the decline in the share of SOEs is much bigger than that in the share of SOE assets. Since 1999, the share of SOEs has declined from 37 percent to less than 5 percent in terms of numbers, and from 68 percent to 44 percent in terms of assets. This is to a large extent a result of the SOE reform – specifically the “grasping the big, letting go of the small” strategy – carried out in the past decade. Since the reform started in late 1990s, most small SOEs have been privatized or filed bankruptcy to lessen the burden of the government, while larger ones have been subsidized (directly or implicitly) and/or merged to hopefully create stronger firms controlling the commanding high of the national economy. This reform strategy is a big success in terms of creating large SOEs. As what is shown in figure 2 by the dark blue line, the average asset size of industrial SOEs increased from 134 million RMB in 1999 to 923 million in 2008, expanding by 589 percent in 9 years. Meanwhile, the average assets of non-SOEs only moderately increased from 36 million to 60 million, up by a dwarfed 67 percent.
With all these evidences in hand, we can now answer the question raised before: How big are Chinese SOEs? Even though their share in the economy continued to decline in the past decade, SOEs still make up a substantial part of the national economy – roughly controlling 30 percent of the total secondary and tertiary assets, or over 50 percent of total industrial assets. The average size of SOEs is much bigger than their non-SOE peers, with average assets of the former equaling over 13 times of the latter.
Now we know that Chinese SOEs have a relatively bigger average asset size, while they continue to account for a substantial part of the national economy. Naturally, one would ask what performances of these big SOEs are. This will be the topic of my next blog post – Chinese SOEs: how profitable are they?
In China's industrial sector, the shrinking share of state-owned enterprises (SOEs) is evident. This is due in part to the stronger growth of non-government-owned enterprises.
When communicating with my friends outside China, their misconception of Chinese State-Owned Enterprises (SOE) always surprises me. It seems that although Chinese SOEs play a major role in the Chinese economy, they continue to remain mysterious to most outsiders. For some people – even some long-time observers of China – Chinese SOEs are best described as dying dinosaurs that continuously absorb resources from the economy but produce little economic value. However, this impression is far from the case in nowadays.
That’s why I feel obliged to write something about the reality of this myth. In this blog post and the following ones, I’ll try to profile Chinese SOEs with data mainly from industrial sector, addressing questions regarding their size, profitability, leverage, and so on, hopefully presenting a clear picture to readers.
Today, I will tackle the question of how big are Chinese SOEs. This question can be rephrased in two different ways. First, how big are Chinese SOEs as a whole in the Chinese economy? Second, how big are individual SOEs compared with non-SOEs? Starting with the former question:
What is the share of SOEs as a whole in the Chinese economy? It depends on the criteria one chooses. This share is really negligible in terms of the enterprise number, but quite substantial in terms of assets.
The Second National Economic Census conducted in 2008 reveals that of all the 208 trillion RMB total assets of the secondary and tertiary sectors (industrial and service sectors), 63 trillion – or 30 percent of total – was held by SOEs. (SOEs here correspond to state sole funded corporations and enterprises with the state as the biggest share holder.) Meanwhile, in terms of enterprise number, there were 154,000 SOEs at the end of 2008, only accounting for 3.1 percent of the total enterprise number. Hence, the big picture is clear: SOEs control a substantial part of total enterprise assets in China despite the fact that their total number is marginal. As a corollary of this observation it follows that the average size of SOEs is much bigger than that of non-SOEs. This is indeed the case. In terms of average assets, SOEs are equal to 13.4 times of non-SOEs.
To analyze the developments, we now turn to the industrial enterprise survey dataset. As the National Economic Census is conducted once in 5 years, it is hard to study the dynamics with only the census data. Fortunately, there is another dataset that continuously dates back to 1999 readily available to us – the industrial enterprise survey data. This dataset is constructed and released by China’s National Statistical Bureau, covering all SOEs and other enterprises with annual sales larger than 5 million RMB in the industrial sectors. (Note: under the current foreign exchange rate, US$1 equals 6.8 RMB.) As non-state-owned small industrial firms (annual sales smaller than 5 million RMB) are excluded from the survey, this is a biased sample. However, enterprises covered by the survey in total account for almost 90 percent of total industrial value-added, suggesting this dataset is good enough to give a big picture of the overall developments.
The industrial survey data corroborates the Economic Census. In Figure 1, the dark blue line shows the share of SOEs number in total surveyed industrial enterprises, juxtaposed with the asset share shown by light blue line. At the end of 2008, SOEs only accounted for 4.8 percent of total enterprise numbers but controlled 43.8 percent of total assets owned by surveyed firms. Again, the data suggests that the average size of SOEs was much bigger than that of non-SOEs (15.5 times to be specific).
The shrinking share of SOEs in the industrial sector is evident in figure 1. This is on one hand due to the stronger growth of non-SOEs, and on the other hand, with less quantitative significance, reflects the fact that more non-SOEs that used to be excluded from the survey have crossed the 5 million RMB sales threshold and thereby entered into the sample. Once one takes into account the fact that the sample covers 90 percent of the industrial sector, or 39 percent of the national economy, the diminishing SOE share in the sample clearly points to a bigger role played by the non-SOEs in the Chinese economy.
It is worthwhile to note that the decline in the share of SOEs is much bigger than that in the share of SOE assets. Since 1999, the share of SOEs has declined from 37 percent to less than 5 percent in terms of numbers, and from 68 percent to 44 percent in terms of assets. This is to a large extent a result of the SOE reform – specifically the “grasping the big, letting go of the small” strategy – carried out in the past decade. Since the reform started in late 1990s, most small SOEs have been privatized or filed bankruptcy to lessen the burden of the government, while larger ones have been subsidized (directly or implicitly) and/or merged to hopefully create stronger firms controlling the commanding high of the national economy. This reform strategy is a big success in terms of creating large SOEs. As what is shown in figure 2 by the dark blue line, the average asset size of industrial SOEs increased from 134 million RMB in 1999 to 923 million in 2008, expanding by 589 percent in 9 years. Meanwhile, the average assets of non-SOEs only moderately increased from 36 million to 60 million, up by a dwarfed 67 percent.
With all these evidences in hand, we can now answer the question raised before: How big are Chinese SOEs? Even though their share in the economy continued to decline in the past decade, SOEs still make up a substantial part of the national economy – roughly controlling 30 percent of the total secondary and tertiary assets, or over 50 percent of total industrial assets. The average size of SOEs is much bigger than their non-SOE peers, with average assets of the former equaling over 13 times of the latter.
Now we know that Chinese SOEs have a relatively bigger average asset size, while they continue to account for a substantial part of the national economy. Naturally, one would ask what performances of these big SOEs are. This will be the topic of my next blog post – Chinese SOEs: how profitable are they?
Monday, June 14, 2010
Explanation of The Triadic Shadow Logic, Used In The Graphic…
What I mean by 'fully considered limits', is to collect all the systems' data, and personal data, in the entire world, at a generally applicable enough logical level for mathematical soundness, not perfection, but at the fair enough probability level of general accuracy beyond doubt__then process the numbers representing this data into real 'Universal Knowledge' of our world, to chart a proper future course__toward our best ideals and orders of liberty for all...
Such data if collected, which has not been yet, can be computer processed into a sound 'Universal Knowledge' of human actions, even projected by sound modeling, out into the future, of course with less accuracy, the further projected into the future, and that's why I'd always suggested 'Sliding Time-Scaled Laws', that are dynamic and capable of changing as new numbers are crunched. Of course some would be repelled by math guiding their futures, but 'Mathematical Futures' are better than 'War Futures'__which we all know we are going to get, if we keep pursuing the non-past and non-future-knowledge route...
These solutions are possible with computers, responsibility and effort...
Here's the military model of processing such massive informations: The same can be used for peaceful purposes...
Explanation of The Triadic Shadow Logic, Used In Above Graphic…
Here’s a recent survey of my deepest thoughts about creative hypothesis logic, known as ‘Abduction’:
Most accept psychology as a valid study of humanity's conditions__I do not. To me psychology is a regress of scientific philosophical logic's long march to find the full scientific truth, of itself and the scientific psychology of the feelings. The trouble all through-out almost all the psychological literature is the simple word uses of; may, suppose, maybe, if and not iff, probably and not probability, possibly and not possibility, non-necessity and not necessity, etc., which forms most of psychology's and sociology's main linguistic texts__and involves far too much conjecture and hear-say. This is far too loose a language for any science to exist in, therefore, even though I also entertain this area of speech, when it's not too blatantly negative against science__I only accept a logic that does not accept psychology proper into its realm__except to talk about the science of psychology, as per my attempts to use Esthetics__The sceince of motives, aims and goals__long established since the Greeks. The reason everything may seem so confusing at times, is the fact, I often am more or less crossing my own borders of linguistic and system uses, to even begin to talk to those who are, imo, far too psychological__which causes problems because I'm always trying to bring those conversations, in the science threads or ideas, back to science's accepted logical norms. That's the war you may sometimes see... Until I can build better bridges between what I knowingly reject, and what I knowingly accept__psychology vs. logic__I am bound to be trapped in the in-betweens of bad communications at times, and there's nothing I can do about that, except self-evolve the bridges__Nature's got control of that__They don't fully exist yet__referred to as the Einstein-Gap, or the J. Herbrand-Gap__The very wise mathematician Gode'l followed__but he died mountain climbing, a year or so before Godel published his famous papers, mainly from Herbrand's papers and letters to Gode'l. Here was one of the real true geniuses of history, hardly anyone even knows existed...
As to my own ideas, just this morning I awoke to the deep pre-suppositional reasoning we all use, knowingly or unknowingly. It's the realization of how 'inductive logic' actually functions, deep in all our pre-thinking processes, we may or may not be fully aware of. That's why I've nick-named it 'Shadow Logic', which is really the triadic logic process C.S. Peirce tried to awake the world to, over 100 years ago. He named it 'Abduction’(published earlier at my thread, with the military uses shown by graph above), and the most famous living philosopher, mathematician, logician__a lifelong scholar of Peirce__J. Hintikka(professor at Boston U., from Finland)__stated; "The greatest goal the modern world has to achieve, is to fully understand abduction." This is the 'shadow logic' I speak of. Put simply__'Abductions are modal inductions, creating deductions, for models, hypotheses, and facts'. In a common language, this would be; 'The thinking taking place in the very backgrounds of all our brains(shadow logic_semi-conscious and non-conscious states, i.e., barely visible if we fully reflect) is a basic triadic+ thought process, of all the infinite constant inflow of information, from all external and internal memory, sensory, imagination, intuition and feelings sources, that is naturally being processed by the triadic modal processes of possibility, probability and necessity__from this infinite creative source, into its finite deductions, we all use in fully-conscious thoughts, ideas, aims and actions, to work up all our models of reality, hypotheses about reality, and all our final beliefs into facts, as knowledge and or even creative wisdom, which is the state of necessity, we all seek__knowingly or unknowingly...
Finally in summing this short piece__Imo, this is the difference between psychologists, sociologists and I, myself… They use a psychology and sociology I reject as far too inaccurate, and I use a logic I'm further trying to define, so it can do the science of both psychology and logic. That's a battleground, even within me__one which must be played out for discovery purposes__the public be damned, at times... Though, I am being able to see between the two opposed schools of thought better__they still are governed by opposite mental state laws, just as Freud, Jung and Husserl long ago stated__as did Peirce__One being too subjective to the other's objectivity of subjectivity...
This may not be too informative, but it's too new to me to be any better__yet...
Such data if collected, which has not been yet, can be computer processed into a sound 'Universal Knowledge' of human actions, even projected by sound modeling, out into the future, of course with less accuracy, the further projected into the future, and that's why I'd always suggested 'Sliding Time-Scaled Laws', that are dynamic and capable of changing as new numbers are crunched. Of course some would be repelled by math guiding their futures, but 'Mathematical Futures' are better than 'War Futures'__which we all know we are going to get, if we keep pursuing the non-past and non-future-knowledge route...
These solutions are possible with computers, responsibility and effort...
Here's the military model of processing such massive informations: The same can be used for peaceful purposes...
Explanation of The Triadic Shadow Logic, Used In Above Graphic…
Here’s a recent survey of my deepest thoughts about creative hypothesis logic, known as ‘Abduction’:
Most accept psychology as a valid study of humanity's conditions__I do not. To me psychology is a regress of scientific philosophical logic's long march to find the full scientific truth, of itself and the scientific psychology of the feelings. The trouble all through-out almost all the psychological literature is the simple word uses of; may, suppose, maybe, if and not iff, probably and not probability, possibly and not possibility, non-necessity and not necessity, etc., which forms most of psychology's and sociology's main linguistic texts__and involves far too much conjecture and hear-say. This is far too loose a language for any science to exist in, therefore, even though I also entertain this area of speech, when it's not too blatantly negative against science__I only accept a logic that does not accept psychology proper into its realm__except to talk about the science of psychology, as per my attempts to use Esthetics__The sceince of motives, aims and goals__long established since the Greeks. The reason everything may seem so confusing at times, is the fact, I often am more or less crossing my own borders of linguistic and system uses, to even begin to talk to those who are, imo, far too psychological__which causes problems because I'm always trying to bring those conversations, in the science threads or ideas, back to science's accepted logical norms. That's the war you may sometimes see... Until I can build better bridges between what I knowingly reject, and what I knowingly accept__psychology vs. logic__I am bound to be trapped in the in-betweens of bad communications at times, and there's nothing I can do about that, except self-evolve the bridges__Nature's got control of that__They don't fully exist yet__referred to as the Einstein-Gap, or the J. Herbrand-Gap__The very wise mathematician Gode'l followed__but he died mountain climbing, a year or so before Godel published his famous papers, mainly from Herbrand's papers and letters to Gode'l. Here was one of the real true geniuses of history, hardly anyone even knows existed...
As to my own ideas, just this morning I awoke to the deep pre-suppositional reasoning we all use, knowingly or unknowingly. It's the realization of how 'inductive logic' actually functions, deep in all our pre-thinking processes, we may or may not be fully aware of. That's why I've nick-named it 'Shadow Logic', which is really the triadic logic process C.S. Peirce tried to awake the world to, over 100 years ago. He named it 'Abduction’(published earlier at my thread, with the military uses shown by graph above), and the most famous living philosopher, mathematician, logician__a lifelong scholar of Peirce__J. Hintikka(professor at Boston U., from Finland)__stated; "The greatest goal the modern world has to achieve, is to fully understand abduction." This is the 'shadow logic' I speak of. Put simply__'Abductions are modal inductions, creating deductions, for models, hypotheses, and facts'. In a common language, this would be; 'The thinking taking place in the very backgrounds of all our brains(shadow logic_semi-conscious and non-conscious states, i.e., barely visible if we fully reflect) is a basic triadic+ thought process, of all the infinite constant inflow of information, from all external and internal memory, sensory, imagination, intuition and feelings sources, that is naturally being processed by the triadic modal processes of possibility, probability and necessity__from this infinite creative source, into its finite deductions, we all use in fully-conscious thoughts, ideas, aims and actions, to work up all our models of reality, hypotheses about reality, and all our final beliefs into facts, as knowledge and or even creative wisdom, which is the state of necessity, we all seek__knowingly or unknowingly...
Finally in summing this short piece__Imo, this is the difference between psychologists, sociologists and I, myself… They use a psychology and sociology I reject as far too inaccurate, and I use a logic I'm further trying to define, so it can do the science of both psychology and logic. That's a battleground, even within me__one which must be played out for discovery purposes__the public be damned, at times... Though, I am being able to see between the two opposed schools of thought better__they still are governed by opposite mental state laws, just as Freud, Jung and Husserl long ago stated__as did Peirce__One being too subjective to the other's objectivity of subjectivity...
This may not be too informative, but it's too new to me to be any better__yet...
Saturday, May 22, 2010
The Non-Existent Hand...
My letter on the Stiglitz review of Robert Skidelsky's "Keynes: The Return of The Master" is printed in the May 27, 2010 issue of the London Review of Books. Paul Davidson
It reads as follows:(Sent to me by Paul Davidson__The economist we need to solve the present world crisis...)
The Non-Existent Hand...
Joseph Stiglitz criticises Robert Skidelsky, Keynes’s biographer, for not understanding Keynes’s theory, but in doing so reveals his own imperfect understanding (LRB, 22 April). The basis of his complaint is Skidelsky’s distinction between risk and uncertainty. Risk, Skidelsky explains, exists when the future can be predicted on the basis of currently existing information (e.g. probability distributions calculated from existing market data); uncertainty exists when no reliable information exists today about the future outcomes of current decisions, because the economic future can be created by decisions taken today. According to Stiglitz, this is a distinction without a difference, and ‘little insight’ into the causes of the Great Recession is gained from Skidelsky’s emphasis on uncertainty as opposed to risk.
But this is not what Keynes believed. The classical economics of Keynes’s time presumed that today’s economic decision-makers have reliable information regarding all future outcomes. I have labelled this the ‘ergodic axiom’. By contrast, Keynes argued that ‘unfortunate collisions’ occurred because the economic future was very uncertain. ‘By very uncertain,’ he wrote, ‘I do not mean the same thing as “very improbable”.’ No reliable information existed today for providing a reliable forecast of future outcomes.
This is the very proposition that Stiglitz denies. All that is needed to provide better insight into the workings of the market, he thinks, is ‘small and obviously reasonable change in assumptions’; for example, that reliable information about the future does exist but that different individuals have access to different information. The only necessary policy is ‘transparency’: to make complete information about the future available to all. The classical ergodic axiom is correct, provided one accepts that not everyone has access to all the information that exists.
For Keynes the inability of firms and households to ‘know’ the economic future is essential to understanding why financial crashes occur in an economy that uses money and money contracts to organise transactions. Firms and households use money contracts to gain some control over their cash inflows and outflows as they venture into the uncertain future. Liquidity in such an economy implies the ability to meet all money contractual obligations when they fall due. The role of financial markets is to assure holders of financial assets that are traded on orderly markets that they can readily convert these liquid assets into cash whenever additional funds are needed to meet a contractual cash outflow commitment. In Keynes’s analysis, the sudden drying up of liquidity in financial markets, occasioned by sudden drops of confidence, explains why ‘unfortunate collisions’ occur – and have occurred more than a hundred times in the last 30 years, according to Stiglitz.
By contrast, Stiglitz implicitly accepts the orthodox view that all contracts are made in real terms, as if the economy were a barter economy. Consequently people’s need for liquidity is irrelevant. Stiglitz indicates that he and Bruce Greenwald have explained that financial markets fail ‘because contracts are not appropriately indexed’, i.e., contracts in our economy are denominated in money terms rather than ‘real’ terms. He suggests that if only such contracts were made in real, rather than monetary, terms we would not suffer the ‘unfortunate collisions’ of economic crisis. If only we lived in a classical world, where contracts would be denominated in real terms! But in a money-using economy, this is impossible.
Paul Davidson
Journal of Post Keynesian Economics, New York
It reads as follows:(Sent to me by Paul Davidson__The economist we need to solve the present world crisis...)
The Non-Existent Hand...
Joseph Stiglitz criticises Robert Skidelsky, Keynes’s biographer, for not understanding Keynes’s theory, but in doing so reveals his own imperfect understanding (LRB, 22 April). The basis of his complaint is Skidelsky’s distinction between risk and uncertainty. Risk, Skidelsky explains, exists when the future can be predicted on the basis of currently existing information (e.g. probability distributions calculated from existing market data); uncertainty exists when no reliable information exists today about the future outcomes of current decisions, because the economic future can be created by decisions taken today. According to Stiglitz, this is a distinction without a difference, and ‘little insight’ into the causes of the Great Recession is gained from Skidelsky’s emphasis on uncertainty as opposed to risk.
But this is not what Keynes believed. The classical economics of Keynes’s time presumed that today’s economic decision-makers have reliable information regarding all future outcomes. I have labelled this the ‘ergodic axiom’. By contrast, Keynes argued that ‘unfortunate collisions’ occurred because the economic future was very uncertain. ‘By very uncertain,’ he wrote, ‘I do not mean the same thing as “very improbable”.’ No reliable information existed today for providing a reliable forecast of future outcomes.
This is the very proposition that Stiglitz denies. All that is needed to provide better insight into the workings of the market, he thinks, is ‘small and obviously reasonable change in assumptions’; for example, that reliable information about the future does exist but that different individuals have access to different information. The only necessary policy is ‘transparency’: to make complete information about the future available to all. The classical ergodic axiom is correct, provided one accepts that not everyone has access to all the information that exists.
For Keynes the inability of firms and households to ‘know’ the economic future is essential to understanding why financial crashes occur in an economy that uses money and money contracts to organise transactions. Firms and households use money contracts to gain some control over their cash inflows and outflows as they venture into the uncertain future. Liquidity in such an economy implies the ability to meet all money contractual obligations when they fall due. The role of financial markets is to assure holders of financial assets that are traded on orderly markets that they can readily convert these liquid assets into cash whenever additional funds are needed to meet a contractual cash outflow commitment. In Keynes’s analysis, the sudden drying up of liquidity in financial markets, occasioned by sudden drops of confidence, explains why ‘unfortunate collisions’ occur – and have occurred more than a hundred times in the last 30 years, according to Stiglitz.
By contrast, Stiglitz implicitly accepts the orthodox view that all contracts are made in real terms, as if the economy were a barter economy. Consequently people’s need for liquidity is irrelevant. Stiglitz indicates that he and Bruce Greenwald have explained that financial markets fail ‘because contracts are not appropriately indexed’, i.e., contracts in our economy are denominated in money terms rather than ‘real’ terms. He suggests that if only such contracts were made in real, rather than monetary, terms we would not suffer the ‘unfortunate collisions’ of economic crisis. If only we lived in a classical world, where contracts would be denominated in real terms! But in a money-using economy, this is impossible.
Paul Davidson
Journal of Post Keynesian Economics, New York
Sunday, May 9, 2010
The Higher Nation-State of Law…
This post is just going to be a jumble of ideas I’m throwing out, which all relate in my mind to evolving the world through a new systems’ logic, to a new universally law structured state. I’m always shooting for the same basic better ordered state of liberty, achieved by what I’ve elsewhere stated as a subtraction from the universals__I believe I published it elsewhere as Kant’s metaphysics of ethics, where he actually started with the universal continuum, associated it as the grand equilibrium, for this particular purpose, and subtracted the equal universal rights of individuals and nations, to achieve a proper state of liberty__governed by the laws of mathematical fairness… Kant’s ideas just happen to be very reasonable for any age, and that alone is why Kant is so important, in my mind__He, and he alone, seems to have related the laws of liberty so closely aligned with arithmetic… He also related the laws of thought closely aligned with arithmetic, and quantum mechanics, long before anyone even had any idea about the quantum continuum__with his continuum mind space, actually shaping our concepts, objects and ideas… Now, if that isn’t quantum state space acting on the photonic structure of concepts, I don’t know what is…
Where natural law verses the higher self of the state, which can only truly be realized by the realities of the Nuremberg Trials, as this is really the first time and place where nations realized their man-made law structures lacked the ability to judge states against states, that new universally applicable laws were first created… This required applying the intellect of mans law system, to draw upon the natural law system of nature, represented by the universality that only Kant had really written about. Of course secular society being so against theistic approaches of the past, to establish the higher ground of judgment required of a state to judge another, this left the field blank, until someone realized one could draw from the natural universality of reality, or the universal continuum, as Kant had named it, that new codes of ethics and laws for international war crimes trials could take shape, to evolve the world to the higher international standards required, by the times. So, some of these old philosophers really do have some use after all, when all is investigated and known__believe it or not…
My point here being that, the many seeming contradictory truths of man’s laws, and nature’s higher universal laws, are more than just the usual chimera many have so long thought… If we truly try to thoroughly understand this simple conceptual difference between the existing law systems, that so seem to be destroying the better order of the world today, and the much higher possibilities of nature’s universal law systems’ abilities, to greatly improve the global order of present conditions__we have much more to look forward to than many at present may realize… The re-arrangement of the planet’s necessary law changes is not so difficult to see, when one realizes it at such a simple conceptual level as introduced at the Nuremberg Trials, and simply being copied from a treatise on ‘The Metaphysics of Ethics’, some two hundred years before__and being based on such a simple arithmetic as subtracting equal universal rights for you and your state, and equal universal rights for me and my state__while keeping all satisfied with the results based on such a simple mathematical fairness__How could anyone complain…? These are also the simple arithmetic methods employed by many of America’s founding fathers__to achieve her initial fairness… Don’t you really think it’s about time we started re-copying some of these very wise men of history, instead of blindly following our present pin-headed leaders…???
Why are we on this foolish road of destruction anyway…? I can tell you simply, it’s none other than the dictatorship of relativism, that’s had its near 100 year run-up to ruling all our lives to ruin… This cultural relativism, creating cultural particularism and it’s cousin cultural pluralism__is no pretty kitty… Oh it’s true, everyone thinks it’s such a great world, that all truths, viewpoints, perspectives and perceptions are equally valid__Oh it’s such a wonderful world with these new equal universal rights__The trouble is, no-one’s ever pointed it out to you, that this is the very destruction vehicle of all societies in history… It’s nothing new__The Indians experienced it__the Chinese, the Egyptians, the Greeks, the Romans, the Spanish, etc., on and on… It’s always the same story__it feels good, but few realize such a state of relativism is granting the same universal rights to ignorance and stupidity, as to intelligence and wisdom__which in turn can only destroy intelligence and wisdom, since ignorance and stupidity are always any states’ over-whelming majority…
If more could just realize it’s a simpler process to understand than they presently think, we may be able to step into a new pair of shoes… If more could just see it’s more a triadic bio-cognitive perception agency world, than the simple dyadic oppositions far too many think it is__as is clearly witnessed in the opposing gridlocks of global governments everywhere… Believe it or not__there is a middle way in all this global madness, if anyone just takes the time to look, instead of falsely believing it this way or that, left or right, right or wrong, good or bad, etc., on and on__which are all false extremes, never looking at the central truths__that are clearly staring everyone straight in the face__if they’d but open their sleepy eyes, and look… All our minds contain a bio-neuro-mirror system of abstract perception and cognition, between all our natural memory and perception states__which can easily see these three present conditional differences existing__at all times…
You know, I lived all my life practicing an iff conditional induction logic, which my job required… I didn’t realize how important this was until recently, to the work I was trying to achieve with my writing, as I’d not really looked deeply enough at just what I’d done all my life__I took it for granted so much, I actually didn’t see it__But, I now see it’s extreme importance in possibly adding something simple to understand to this modern over-confused and over-conflated world. To make this short and sweet, iff conditional common sense necessitates truth, intelligence and wisdom… It does this so simply, just by always asking or stating the iff conditionals of any desired aim or goal, before actually attempting to achieve any such aims or goals. As an example; “If you want a better world, you gotta do the work required to achieve such aims and goals.” Nothing comes easy, and I found all through my professional career, that if I premised all my actions by iff conditionals, I always had a much easier time of it. Another simpler example still is; “If you want me to do that for you, will you do this for me…?” The iff conditional logic is just a trade-off action, that allows the other person we all have to deal with, to have some input in the action__and such shared actions, aims and goals automatically develop co-operation among all involved, as everyone sees their part in the enterprise. It makes everyone feel important to be involved, if you allow them to be involved__and the iff conditionals allow just this…
The iff conditional is also a very powerful logic, when used inductively, as models can be best averaged over all inductions__in other words, we can answer, in general, future conditions of otherwise unknown states of nature, science and reality__as economists have been doing this for years__even though present political pin-head reality makes it look like economics is a bust… It’s not, it’s just politically corrupted by the powers that be__but if more people realized how iff conditional model logic actually works, we could have an army of very intelligent and influencial political operatives__to pass the properly written universally ethical international laws… Such simple knowledge sytems can do tremendous benefit, if properly understood…
A final thought I’d like to express is the fact that psychology lacks the economy of identity that philosophy uses__with its far more clearly worked out concepts of philosophy, over the millennia__and are imo a far more sound system of organizing thought… It’s not that psychology can not cognitively organize thought just about as well, it’s the fact that most psychologists do not use a sound economy of research, when working up and presenting their ideas__thus they contain far too much confused and conflated presentations imo, although there are some fine cognitive psychologists__they are few and far between… Most psychologists do not have a proper understanding of the universals, and the continuum of connectives involved__thus create a cognitive apartheid, lacking the needed cultural universalism…
As I stated first off, these are a jumbled bunch of ideas, but I think worth putting forth, as it helps me organize my better thoughts, later__yet at the same time, may contain something of interest to some__At least, it gives you some idea of the direction I’m headed… Presently, I’m putting together some ideas of recent books and other materials I’ve read and talked to others about, as to best methods to present major law change ideas…
Where natural law verses the higher self of the state, which can only truly be realized by the realities of the Nuremberg Trials, as this is really the first time and place where nations realized their man-made law structures lacked the ability to judge states against states, that new universally applicable laws were first created… This required applying the intellect of mans law system, to draw upon the natural law system of nature, represented by the universality that only Kant had really written about. Of course secular society being so against theistic approaches of the past, to establish the higher ground of judgment required of a state to judge another, this left the field blank, until someone realized one could draw from the natural universality of reality, or the universal continuum, as Kant had named it, that new codes of ethics and laws for international war crimes trials could take shape, to evolve the world to the higher international standards required, by the times. So, some of these old philosophers really do have some use after all, when all is investigated and known__believe it or not…
My point here being that, the many seeming contradictory truths of man’s laws, and nature’s higher universal laws, are more than just the usual chimera many have so long thought… If we truly try to thoroughly understand this simple conceptual difference between the existing law systems, that so seem to be destroying the better order of the world today, and the much higher possibilities of nature’s universal law systems’ abilities, to greatly improve the global order of present conditions__we have much more to look forward to than many at present may realize… The re-arrangement of the planet’s necessary law changes is not so difficult to see, when one realizes it at such a simple conceptual level as introduced at the Nuremberg Trials, and simply being copied from a treatise on ‘The Metaphysics of Ethics’, some two hundred years before__and being based on such a simple arithmetic as subtracting equal universal rights for you and your state, and equal universal rights for me and my state__while keeping all satisfied with the results based on such a simple mathematical fairness__How could anyone complain…? These are also the simple arithmetic methods employed by many of America’s founding fathers__to achieve her initial fairness… Don’t you really think it’s about time we started re-copying some of these very wise men of history, instead of blindly following our present pin-headed leaders…???
Why are we on this foolish road of destruction anyway…? I can tell you simply, it’s none other than the dictatorship of relativism, that’s had its near 100 year run-up to ruling all our lives to ruin… This cultural relativism, creating cultural particularism and it’s cousin cultural pluralism__is no pretty kitty… Oh it’s true, everyone thinks it’s such a great world, that all truths, viewpoints, perspectives and perceptions are equally valid__Oh it’s such a wonderful world with these new equal universal rights__The trouble is, no-one’s ever pointed it out to you, that this is the very destruction vehicle of all societies in history… It’s nothing new__The Indians experienced it__the Chinese, the Egyptians, the Greeks, the Romans, the Spanish, etc., on and on… It’s always the same story__it feels good, but few realize such a state of relativism is granting the same universal rights to ignorance and stupidity, as to intelligence and wisdom__which in turn can only destroy intelligence and wisdom, since ignorance and stupidity are always any states’ over-whelming majority…
If more could just realize it’s a simpler process to understand than they presently think, we may be able to step into a new pair of shoes… If more could just see it’s more a triadic bio-cognitive perception agency world, than the simple dyadic oppositions far too many think it is__as is clearly witnessed in the opposing gridlocks of global governments everywhere… Believe it or not__there is a middle way in all this global madness, if anyone just takes the time to look, instead of falsely believing it this way or that, left or right, right or wrong, good or bad, etc., on and on__which are all false extremes, never looking at the central truths__that are clearly staring everyone straight in the face__if they’d but open their sleepy eyes, and look… All our minds contain a bio-neuro-mirror system of abstract perception and cognition, between all our natural memory and perception states__which can easily see these three present conditional differences existing__at all times…
You know, I lived all my life practicing an iff conditional induction logic, which my job required… I didn’t realize how important this was until recently, to the work I was trying to achieve with my writing, as I’d not really looked deeply enough at just what I’d done all my life__I took it for granted so much, I actually didn’t see it__But, I now see it’s extreme importance in possibly adding something simple to understand to this modern over-confused and over-conflated world. To make this short and sweet, iff conditional common sense necessitates truth, intelligence and wisdom… It does this so simply, just by always asking or stating the iff conditionals of any desired aim or goal, before actually attempting to achieve any such aims or goals. As an example; “If you want a better world, you gotta do the work required to achieve such aims and goals.” Nothing comes easy, and I found all through my professional career, that if I premised all my actions by iff conditionals, I always had a much easier time of it. Another simpler example still is; “If you want me to do that for you, will you do this for me…?” The iff conditional logic is just a trade-off action, that allows the other person we all have to deal with, to have some input in the action__and such shared actions, aims and goals automatically develop co-operation among all involved, as everyone sees their part in the enterprise. It makes everyone feel important to be involved, if you allow them to be involved__and the iff conditionals allow just this…
The iff conditional is also a very powerful logic, when used inductively, as models can be best averaged over all inductions__in other words, we can answer, in general, future conditions of otherwise unknown states of nature, science and reality__as economists have been doing this for years__even though present political pin-head reality makes it look like economics is a bust… It’s not, it’s just politically corrupted by the powers that be__but if more people realized how iff conditional model logic actually works, we could have an army of very intelligent and influencial political operatives__to pass the properly written universally ethical international laws… Such simple knowledge sytems can do tremendous benefit, if properly understood…
A final thought I’d like to express is the fact that psychology lacks the economy of identity that philosophy uses__with its far more clearly worked out concepts of philosophy, over the millennia__and are imo a far more sound system of organizing thought… It’s not that psychology can not cognitively organize thought just about as well, it’s the fact that most psychologists do not use a sound economy of research, when working up and presenting their ideas__thus they contain far too much confused and conflated presentations imo, although there are some fine cognitive psychologists__they are few and far between… Most psychologists do not have a proper understanding of the universals, and the continuum of connectives involved__thus create a cognitive apartheid, lacking the needed cultural universalism…
As I stated first off, these are a jumbled bunch of ideas, but I think worth putting forth, as it helps me organize my better thoughts, later__yet at the same time, may contain something of interest to some__At least, it gives you some idea of the direction I’m headed… Presently, I’m putting together some ideas of recent books and other materials I’ve read and talked to others about, as to best methods to present major law change ideas…
Wednesday, April 14, 2010
The Conceptual Scientific__Non-Conceptual Imagination, Distinctions...
Iff more people make the higher conceptual choices, we will have more chance, in a chance and choice world, of achieving the higher conceptual goals..." me
Hi all friends and enemies alike, and I can certainly see why you’d/we’d all have trouble making heads or tails of the differences between reason and rationalism, as the established academic community has not fully separated out the conceptual differences, from the imaginal differences, yet. Even Peirce, who did the best job of these processes, did not fully accomplish the job, in any common language. He only accomplished it through his entire system of signs, symbols and icons, etc., but this is the rather complex depth of his semeioses. I’ll do my best to make these concepts, ideas and imagination differences clear to you, as I’ve also noticed Wiki, or no other sources, deal with this effectively, without creating further confusion and un-necessary conflations of the ideas involved, whether historically__as the meanings have changed over time, or presently, due to so many different opinions. I’ll use the simple mechanics differences between scientific objective conceptualism, and non-conceptual imagination’s direct perception__to deal as best as I can with it. That should make it the simplest…
I’ve already answered most everything below, within your text, but I think you should read this first…
It was just last night that I came across a new scientific method to make clear distinctions, between rational conceptual science, and irrational non-conceptual opinion/imagination/religion or meta-physics of any kind… Up to this point in time even the best science and scientists have had great difficulty, using words, where meaning has double meaning, or applying meaning to different subject area meanings, especially between rationalism and reason, conceptualism and non-conceptualism, reason and logic, physics and meta-physics, direct and indirect perception, etc., but, I last night realized it could all be made clearly distinct by just discussing conceptualism and imagination…
In science, philosophy, and scientific method, conceptualism is defined as objectivism. This is how we know what is objective from what is subjective, or non-conceptual feelings__though feelings be real, they also can be extremely exaggerated by imagination__The 'Boogie-Man' that doesn’t exist. And, at the same time, science can suffer from exaggerated imagination at the hypothesis and theory stages, as well as the exaggerated maths of theories, i.e., there’s no such real physical world, that we can conceptualize existing beyond these numbers h = 10-33cm and c = 186,000mps, and t = 10-43cm , which represents h Planck length, the smallest we can scientifically measure, and c being the speed of light, the fastest we can scientifically measure, and t, time being the shortest motion we can measure __This is the domain of science, and nothing outside it is anything but false imagination, as there’s no integral path to ground, or the physical scientific proofs of, and herein lies the great difference between objective conceptualism and imagination. Concepts must be measurable, and groundable in physical reality, with an actual path integral, to the provable facts…
Imagination or exaggerated ideas and theories, on the other hand, are not only non-conceptual in certain ideas, such as conceptualizing the feeling “Happy”, but even where these imaginations, ideas and theories can be conceptualized, they entirely lack the necessary integral path from themselves to the necessary provable ground, i.e., these numbers can be conceptualized, yet never path integral grounded, as they exist as mathematical abstracts, beyond all our knowable reality; d = 10-999cm, and c = 10∞, and t = 0. Where we are certain such distance, speed of light numbers, and zero time, to such infinitesimals of distance, infinities of velocity, and zero time, are impossible of real and sound scientific measure, therefore nothing but exaggerated imagination, and anyone just common sensibly knows time zero is foolishly impossible, as there’d be no universe at all. So, the fact exists, that all possible thought can be scientifically classified, and or, scientifically classified, as not classifiable__What-so-ever…! Or, just the plain ol’ 'Boogie-Man' of any and all minds who spout such non-sense__There exists no sense in the world, to path integral connect un-real imagination to any form of scientific ground__thus exposing the purely meta-physical exaggerations of imagination, to all parties interested_or un-interested…
Simply put, there’s no possible path from exaggerated imaginations of any kind__to any form of feasible ground…
I think this is how you can easily tell the differences between all real and imaginational statements__Just ask if the concept of what’s being discussed is scientifically/realistically groundable__That scientifically exposes the truths of all statements, because true concepts all have integral paths to reality, and all exaggerations do not__And I mean, real physical paths to ground…
Link
Hi all friends and enemies alike, and I can certainly see why you’d/we’d all have trouble making heads or tails of the differences between reason and rationalism, as the established academic community has not fully separated out the conceptual differences, from the imaginal differences, yet. Even Peirce, who did the best job of these processes, did not fully accomplish the job, in any common language. He only accomplished it through his entire system of signs, symbols and icons, etc., but this is the rather complex depth of his semeioses. I’ll do my best to make these concepts, ideas and imagination differences clear to you, as I’ve also noticed Wiki, or no other sources, deal with this effectively, without creating further confusion and un-necessary conflations of the ideas involved, whether historically__as the meanings have changed over time, or presently, due to so many different opinions. I’ll use the simple mechanics differences between scientific objective conceptualism, and non-conceptual imagination’s direct perception__to deal as best as I can with it. That should make it the simplest…
I’ve already answered most everything below, within your text, but I think you should read this first…
It was just last night that I came across a new scientific method to make clear distinctions, between rational conceptual science, and irrational non-conceptual opinion/imagination/religion or meta-physics of any kind… Up to this point in time even the best science and scientists have had great difficulty, using words, where meaning has double meaning, or applying meaning to different subject area meanings, especially between rationalism and reason, conceptualism and non-conceptualism, reason and logic, physics and meta-physics, direct and indirect perception, etc., but, I last night realized it could all be made clearly distinct by just discussing conceptualism and imagination…
In science, philosophy, and scientific method, conceptualism is defined as objectivism. This is how we know what is objective from what is subjective, or non-conceptual feelings__though feelings be real, they also can be extremely exaggerated by imagination__The 'Boogie-Man' that doesn’t exist. And, at the same time, science can suffer from exaggerated imagination at the hypothesis and theory stages, as well as the exaggerated maths of theories, i.e., there’s no such real physical world, that we can conceptualize existing beyond these numbers h = 10-33cm and c = 186,000mps, and t = 10-43cm , which represents h Planck length, the smallest we can scientifically measure, and c being the speed of light, the fastest we can scientifically measure, and t, time being the shortest motion we can measure __This is the domain of science, and nothing outside it is anything but false imagination, as there’s no integral path to ground, or the physical scientific proofs of, and herein lies the great difference between objective conceptualism and imagination. Concepts must be measurable, and groundable in physical reality, with an actual path integral, to the provable facts…
Imagination or exaggerated ideas and theories, on the other hand, are not only non-conceptual in certain ideas, such as conceptualizing the feeling “Happy”, but even where these imaginations, ideas and theories can be conceptualized, they entirely lack the necessary integral path from themselves to the necessary provable ground, i.e., these numbers can be conceptualized, yet never path integral grounded, as they exist as mathematical abstracts, beyond all our knowable reality; d = 10-999cm, and c = 10∞, and t = 0. Where we are certain such distance, speed of light numbers, and zero time, to such infinitesimals of distance, infinities of velocity, and zero time, are impossible of real and sound scientific measure, therefore nothing but exaggerated imagination, and anyone just common sensibly knows time zero is foolishly impossible, as there’d be no universe at all. So, the fact exists, that all possible thought can be scientifically classified, and or, scientifically classified, as not classifiable__What-so-ever…! Or, just the plain ol’ 'Boogie-Man' of any and all minds who spout such non-sense__There exists no sense in the world, to path integral connect un-real imagination to any form of scientific ground__thus exposing the purely meta-physical exaggerations of imagination, to all parties interested_or un-interested…
Simply put, there’s no possible path from exaggerated imaginations of any kind__to any form of feasible ground…
I think this is how you can easily tell the differences between all real and imaginational statements__Just ask if the concept of what’s being discussed is scientifically/realistically groundable__That scientifically exposes the truths of all statements, because true concepts all have integral paths to reality, and all exaggerations do not__And I mean, real physical paths to ground…
Link
The Logic Fallacy__Imagination --> Logic…
Since being taught “The Prisoner’s Dilemma” of the logic fallacy, by my grandfather, at age 4, I’ve always noticed almost all others’ logic fallacy crop up in their reasoning processes. This is the fundamental scientific method of all reasoning processes, which must be most thoroughly understood, before one can successfully do any science, logic, math or proper theorizing of these most fundamental thought processes. It’s the most easily conflated area of thoughts crossing up between our basic ego-thoughts, imagined thoughts, imagination thinking, theory and hypotheses thinking, and the logical imagination being fully background independent__by the necessity of theory’s ability to think fully openly__yet to convert the fully open infinite thought processes, to finite results…
The above constitutes the interpretation process of all minds’ ability to find sound scientific conclusions to all possible models, theories and imaginings. We all know there are many theories proposed by science and metaphysics, for the mechanics, beginnings or non-beginnings of our Universe__But, what constitutes the heart of the ‘Interpretation Dilemma…?’ Imo, it’s knowing the differences between the capacities of thought to ground itself in that which is dependent on the finite, or background dependence__and in that which is non-dependent on the finite, or background independence__also stated as that ‘Ol’ Demon of Infinity__The Ultimate Non-Definable__The Absolute Universal…’
The Infinite is non-definable due to the fact that no matter how it’s added to, subtracted from, multiplied by, divided by or into itself__It’s always defined as Infinity. We can’t even take ratios of infinity, and achieve any other meaning than Infinity__But, we can compare infinity and ratios of finiteness, to infinity__And, herein lies the trick in our converting imagination to scientific logics, which must be grounded in finiteness__not to create confusion and conflations of the fundamental facts. I think it’s just because most have never looked deep enough into the fundamental mechanics of imagination’s necessary infinite functions, and logic’s necessary finite functions, that the logic fallacy arises…
We all may know that imagination truly requires the background independence of infinite function__but, have you truly considered what this entails…? The background independence of infinite thinking/reasoning is never a process of infinite regress__It’s always an induction process of infinite progress, toward the ultimate un-definable__But, at the same time is that ultimate limit of thought’s ability to think reasonably at all__Yet, entails the only true singularity of its self-existence, as the only possible true oneness, in the entire Universe__As going the other direction into finiteness, explodes into the infinite regress, of infinitesimal finitenesses, approaching infinity again, in the opposite direction of moving toward infinity. So, in truth, either direction the mind of thought travels, it ends up at infinity__Or the absolutely un-definable oneness of that ‘Ol’ Demon Singularity of Infinity…’
The difference of the above being, that science can only be determined from traveling the direction toward the finite infinitesimals, even if they still happen to explode into an infinite number of infinitesimals__When we divide any fundamental finite object to its smallest possible parts, as per this formula__X/X=1+IEE(isomorphic extension and entanglement), we end at the infinite infinitesimals of all the inter-weaving wave fields. This formula is just an extension of Einstein’s E=MC^2, which fully interpreted of potential mass, and kinetic energy, to total kinetic energy, can really be expressed as E=EC^2__Where all the stored potential mass of any matter object considered is fully decayed, to it’s most fundamental field waves, at the speed of light, or final decay limit. In other words, a titanium sized baseball, theoretically sped to the speed of light, would radiate all it’s potential mass energy to pure decay dispersed kinetic energy, at the true c speed of light, as no more than near zero mass photons, due to the fact that the field energy could no longer travel fast enough in group velocities, to hold the titanium ball together, at true c(no possible way for c to maintain its group em forces at true c…)
So, what we end with is the fact that neither the infinite nor the finite, offers a true ultimate finite testable experimental ground__for science to stand on. What we are really left with is a Ratio-Logic between the infinite number of finite infinitesimals to the total number infinity is capable of existing as__and the possible mechanics of maintaining the symmetry of the known laws of physics, to allow a proper functioning Universe__Which we absolutely know exists, by the fact if:__Ya kick a big rock, barefoot, and you get a very sore ToE. So, do we truly have any scientific method possible, of grounding a scientific logic in the finite background dependence, or must it be grounded in the infinite background independence…?
And, when we look for these answers, we are back at the ultimate problem of deciding what is the line we may draw between imagination and logic__as this is really our only possible true ground of reality__Since both ends of the model reality spectrum, end up at the infinite un-definable un-decidability. This is where we must realize the difference between what science classifies as science, and what science classifies as metaphysics. All science must be factually measurable, thus is known to be limited to the purely finite world of h Planck points plus, and true c and group c__Scientific measurement has no such animals as –h and true +c. This is the only method science defines sound finiteness, against the metaphysical infinite and sub-infinitesimal non-sense. If these limits are not respected, we have no science__We have only non-sensible metaphysics. So science is really nothing but definition of measurement__Pure and simple__The Measurable…
It’s just that where the measurable is between the finite and the infinite, most have never considered the scientific possibilities of a sound Ratio-Logic existing, to define the differences between imagination, and its many models and theories, and the truest finite model possible__as relates to the ‘Finite Oneness of Infinity…” Since, it’s really impossible to establish ground for the finite at the infinitesimal infinities level of, due to combinatorial explosions of field waves, as we go toward the smaller, which be necessary of becoming infinite__Then, the only door open to absolute ground is “The Finite Oneness of Infinity…” Now, this may at first sound contradictory, but it’s certainly not__as when one realizes all finities explode to infinities, at infinitesimal limits__the only option left, to achieve true scientific ground is “The Absolute Oneness of Infinity…” But, this should never be confused or conflated with how we do finite science__It’s sole purpose is to give solid grounding to where infinite imagination splits from the true and sound finite Ratio-Logic…
The Finiteness of True and Sound Scientific Measure, Is and Must Always Be__Our Fundamental Scientific Ground, Even Though We Must Thoroughly Explore Theoretical Infinite Imagination to Arrive At The Ultimate Truth__Which Is The Scientific Method of Hypothesis, Theory or Abduction…
Though There Be Thousands of Theories and Models__There Be Only One Absolutely True One__The Absolutely Necessary FS of Infinity__Because All Finiteness Decays Into The Absolute Fundamental Infinity Cycles, of The Great Circles Of The Eternal Infinite Universe…
The above constitutes the interpretation process of all minds’ ability to find sound scientific conclusions to all possible models, theories and imaginings. We all know there are many theories proposed by science and metaphysics, for the mechanics, beginnings or non-beginnings of our Universe__But, what constitutes the heart of the ‘Interpretation Dilemma…?’ Imo, it’s knowing the differences between the capacities of thought to ground itself in that which is dependent on the finite, or background dependence__and in that which is non-dependent on the finite, or background independence__also stated as that ‘Ol’ Demon of Infinity__The Ultimate Non-Definable__The Absolute Universal…’
The Infinite is non-definable due to the fact that no matter how it’s added to, subtracted from, multiplied by, divided by or into itself__It’s always defined as Infinity. We can’t even take ratios of infinity, and achieve any other meaning than Infinity__But, we can compare infinity and ratios of finiteness, to infinity__And, herein lies the trick in our converting imagination to scientific logics, which must be grounded in finiteness__not to create confusion and conflations of the fundamental facts. I think it’s just because most have never looked deep enough into the fundamental mechanics of imagination’s necessary infinite functions, and logic’s necessary finite functions, that the logic fallacy arises…
We all may know that imagination truly requires the background independence of infinite function__but, have you truly considered what this entails…? The background independence of infinite thinking/reasoning is never a process of infinite regress__It’s always an induction process of infinite progress, toward the ultimate un-definable__But, at the same time is that ultimate limit of thought’s ability to think reasonably at all__Yet, entails the only true singularity of its self-existence, as the only possible true oneness, in the entire Universe__As going the other direction into finiteness, explodes into the infinite regress, of infinitesimal finitenesses, approaching infinity again, in the opposite direction of moving toward infinity. So, in truth, either direction the mind of thought travels, it ends up at infinity__Or the absolutely un-definable oneness of that ‘Ol’ Demon Singularity of Infinity…’
The difference of the above being, that science can only be determined from traveling the direction toward the finite infinitesimals, even if they still happen to explode into an infinite number of infinitesimals__When we divide any fundamental finite object to its smallest possible parts, as per this formula__X/X=1+IEE(isomorphic extension and entanglement), we end at the infinite infinitesimals of all the inter-weaving wave fields. This formula is just an extension of Einstein’s E=MC^2, which fully interpreted of potential mass, and kinetic energy, to total kinetic energy, can really be expressed as E=EC^2__Where all the stored potential mass of any matter object considered is fully decayed, to it’s most fundamental field waves, at the speed of light, or final decay limit. In other words, a titanium sized baseball, theoretically sped to the speed of light, would radiate all it’s potential mass energy to pure decay dispersed kinetic energy, at the true c speed of light, as no more than near zero mass photons, due to the fact that the field energy could no longer travel fast enough in group velocities, to hold the titanium ball together, at true c(no possible way for c to maintain its group em forces at true c…)
So, what we end with is the fact that neither the infinite nor the finite, offers a true ultimate finite testable experimental ground__for science to stand on. What we are really left with is a Ratio-Logic between the infinite number of finite infinitesimals to the total number infinity is capable of existing as__and the possible mechanics of maintaining the symmetry of the known laws of physics, to allow a proper functioning Universe__Which we absolutely know exists, by the fact if:__Ya kick a big rock, barefoot, and you get a very sore ToE. So, do we truly have any scientific method possible, of grounding a scientific logic in the finite background dependence, or must it be grounded in the infinite background independence…?
And, when we look for these answers, we are back at the ultimate problem of deciding what is the line we may draw between imagination and logic__as this is really our only possible true ground of reality__Since both ends of the model reality spectrum, end up at the infinite un-definable un-decidability. This is where we must realize the difference between what science classifies as science, and what science classifies as metaphysics. All science must be factually measurable, thus is known to be limited to the purely finite world of h Planck points plus, and true c and group c__Scientific measurement has no such animals as –h and true +c. This is the only method science defines sound finiteness, against the metaphysical infinite and sub-infinitesimal non-sense. If these limits are not respected, we have no science__We have only non-sensible metaphysics. So science is really nothing but definition of measurement__Pure and simple__The Measurable…
It’s just that where the measurable is between the finite and the infinite, most have never considered the scientific possibilities of a sound Ratio-Logic existing, to define the differences between imagination, and its many models and theories, and the truest finite model possible__as relates to the ‘Finite Oneness of Infinity…” Since, it’s really impossible to establish ground for the finite at the infinitesimal infinities level of, due to combinatorial explosions of field waves, as we go toward the smaller, which be necessary of becoming infinite__Then, the only door open to absolute ground is “The Finite Oneness of Infinity…” Now, this may at first sound contradictory, but it’s certainly not__as when one realizes all finities explode to infinities, at infinitesimal limits__the only option left, to achieve true scientific ground is “The Absolute Oneness of Infinity…” But, this should never be confused or conflated with how we do finite science__It’s sole purpose is to give solid grounding to where infinite imagination splits from the true and sound finite Ratio-Logic…
The Finiteness of True and Sound Scientific Measure, Is and Must Always Be__Our Fundamental Scientific Ground, Even Though We Must Thoroughly Explore Theoretical Infinite Imagination to Arrive At The Ultimate Truth__Which Is The Scientific Method of Hypothesis, Theory or Abduction…
Though There Be Thousands of Theories and Models__There Be Only One Absolutely True One__The Absolutely Necessary FS of Infinity__Because All Finiteness Decays Into The Absolute Fundamental Infinity Cycles, of The Great Circles Of The Eternal Infinite Universe…
The Universal Science of Physics and Cosmology, vs., The Metaphysical Fallacy of Inside à Out Thinking…
"In order to need logic, we need a problem. In order to have a problem, we need to have a goal. In order to have a goal… we must have a mind…" by hambydammit
The scientific reality of Outside à In logical thinking is being almost entirely overlooked on most of this entire forum. Most every post I read is being premised from the mind’s background dependent ego circuits à out, onto the world stage. This type of thinking is not science, due to being grounded in the metaphysical experience of pure ego, instead of a logical id. No matter how much thinking, contemplating, meditating, theorizing or whatever, the scientific facts can never be reached by the background dependent inside-out process of thinking__From spirit and ego-out. All science must be grounded in the outside-in thinking processes, due to science requiring actual measurable grounding__Which no internal process offers__Due to the infinite regress to un-decidability. Outside-in always determines the proper scientific method…
Just as mentioned in this article I published a few days ago, any true scientific intelligence requires its external of mind system of proof, to allow it to escape the many metaphysical fallacies, which pervade most of the posts on this forum…
If one is careful in reading the above, you will notice how the logic mentioned does not refer to the geo-sphere, but to the bio-sphere of humanity__Then not to the metaphysical, but to the rational physical aspects of calculation__logical calculations__Which are calculations which can either be done by real external world computers, or on real external world paper, blackboards, etc.,__This is what makes our thinking truly objective and real world provable__Not some inside-out metaphysical fallacy conjured up by the base ego, of dumb lil’ ol’ man. Why people can not understand, their logics must shed their egos’ background dependencies, for the true scientific background independencies of Universal Intelligence__over personal intelligence, is beyond me. It seems no matter how many times certain people are exposed to these facts, they just absolutely do not see or fathom the necessity of such scientific methods, to do real science__Science Is Never Science, Without the Outside à In Method__To back and prove its internal mechanics of using the innate logic tool…
How one detaches their logic from their background dependent ego is not important, as even extremely religious people can detach from their metaphysical egos, to do pure science, as many great physicists, scientists and philosophers have shown, all through the ages__It’s just the fact, it absolutely must be done to do any form of sound science. I detached years ago, when I realized I couldn’t explore the major fields of science and physics any further__by being far too attached to my ingrained beliefs, which were really no more than ideologies, fallacies of beliefs, and other such brain-washings of many of life’s ill advised experiences. It’s just that trying to see the world whole, from the inside-out is so limiting in scope, it forces anyone, including many of our best physicists, mathematicians and scientists into the ridiculous gauge theories, and metaphysically false oneness models, they’ll never be able to see the Universal background independent intelligences of true scientific and Universal grounds. The inside-out view of cosmic formation, or any type of Universal and biological evolution__Traps one’s mind in an impossibility of the real physical world, Universe and laws’ true and possible actions__Yet, the inside-outers can’t see it__And it’s mostly due to their old nemesis, the one-God non-sense. And, it’s not there’s anything wrong with believing in God, if that be your choice__But, where science is concerned__God absolutely must be abandoned__To do any real science__And that’s a fact…
Science is not God, not oneness, not inside-out metaphysical ego or spirit, and not any internal sense, that can not be absolutely measured and proved by external means__And, that’s the bottom line, of all or any scientific method, behind any and all possible science. To try and do science, while ignoring these fundamental requirements of logical reasoning__Will never achieve any form of science…
The scientific reality of Outside à In logical thinking is being almost entirely overlooked on most of this entire forum. Most every post I read is being premised from the mind’s background dependent ego circuits à out, onto the world stage. This type of thinking is not science, due to being grounded in the metaphysical experience of pure ego, instead of a logical id. No matter how much thinking, contemplating, meditating, theorizing or whatever, the scientific facts can never be reached by the background dependent inside-out process of thinking__From spirit and ego-out. All science must be grounded in the outside-in thinking processes, due to science requiring actual measurable grounding__Which no internal process offers__Due to the infinite regress to un-decidability. Outside-in always determines the proper scientific method…
Just as mentioned in this article I published a few days ago, any true scientific intelligence requires its external of mind system of proof, to allow it to escape the many metaphysical fallacies, which pervade most of the posts on this forum…
Universal Intelligence...
by hambydammit
"To begin, we must ask what intelligence is and what it does. It’s very difficult to speak of it without getting very complicated, for intelligence is not really a single quality. It is a related set of abilities displayed by living organisms, including the capacity for logic, foresight, abstract thought, communication, and problem solving. Each of these concepts in itself presents a big problem for universal intelligence, for each of them is intrinsically tied to organic life.
The capacity for logic is certainly not restricted to organic life. Computers are capable of using it, but we must not be fooled into thinking this to be extraordinarily important. Computers are tools made by humans to serve a purpose, and that fact is crucial to understanding why logic is such a big deal. In order to need logic, we need a problem. In order to have a problem, we need to have a goal. In order to have a goal… we must have a mind.
Similarly, foresight, abstract thought, and communication are all manifestations of purpose. A living being has a need or a want, and each of these abilities is an evolutionary adaptation which developed to facilitate the achievement of a goal. So intrinsically joined are these concepts with purpose that it becomes quite nonsensical to discuss a non-living thing having any of them."
If one is careful in reading the above, you will notice how the logic mentioned does not refer to the geo-sphere, but to the bio-sphere of humanity__Then not to the metaphysical, but to the rational physical aspects of calculation__logical calculations__Which are calculations which can either be done by real external world computers, or on real external world paper, blackboards, etc.,__This is what makes our thinking truly objective and real world provable__Not some inside-out metaphysical fallacy conjured up by the base ego, of dumb lil’ ol’ man. Why people can not understand, their logics must shed their egos’ background dependencies, for the true scientific background independencies of Universal Intelligence__over personal intelligence, is beyond me. It seems no matter how many times certain people are exposed to these facts, they just absolutely do not see or fathom the necessity of such scientific methods, to do real science__Science Is Never Science, Without the Outside à In Method__To back and prove its internal mechanics of using the innate logic tool…
How one detaches their logic from their background dependent ego is not important, as even extremely religious people can detach from their metaphysical egos, to do pure science, as many great physicists, scientists and philosophers have shown, all through the ages__It’s just the fact, it absolutely must be done to do any form of sound science. I detached years ago, when I realized I couldn’t explore the major fields of science and physics any further__by being far too attached to my ingrained beliefs, which were really no more than ideologies, fallacies of beliefs, and other such brain-washings of many of life’s ill advised experiences. It’s just that trying to see the world whole, from the inside-out is so limiting in scope, it forces anyone, including many of our best physicists, mathematicians and scientists into the ridiculous gauge theories, and metaphysically false oneness models, they’ll never be able to see the Universal background independent intelligences of true scientific and Universal grounds. The inside-out view of cosmic formation, or any type of Universal and biological evolution__Traps one’s mind in an impossibility of the real physical world, Universe and laws’ true and possible actions__Yet, the inside-outers can’t see it__And it’s mostly due to their old nemesis, the one-God non-sense. And, it’s not there’s anything wrong with believing in God, if that be your choice__But, where science is concerned__God absolutely must be abandoned__To do any real science__And that’s a fact…
Science is not God, not oneness, not inside-out metaphysical ego or spirit, and not any internal sense, that can not be absolutely measured and proved by external means__And, that’s the bottom line, of all or any scientific method, behind any and all possible science. To try and do science, while ignoring these fundamental requirements of logical reasoning__Will never achieve any form of science…
The Tri-Modal Mechanics of Minds…
"All actionable necessity, is decided by systems' mechanics..." me
"Systems' Control__What can't be done, is more than what can be done..." me
"The space-time metric, is just the measurement tool of space and time..." me
"Universal intelligence is seeing time__Time connects all concepts..." me
The Interesting Questions__What is intelligence…? Is there truly anything that is really classifiable as intelligence…? Our egos have taken these questions for granted so long, we think it ridiculous to even ask such questions__But, is it ridiculous, or possibly the most important series of questions we must ask and answer, to discover any true grounding for any and all of our scientific investigations…? I say it is certainly the most profound and important scientific area of investigation we must explore, to truly understand our selves, and the greater Universe around us…
If we just take all mentality's systems' control, and explore its limits, through its opposing ends of subjective complexity, and objective complexity, all the way to super-objective systems’ complexity, we may begin to see some of these avenues of new groundings, even if these new groundings be in a complete realization of background independencies, not yet realized, in all our information and knowledge systems. Take a look at Robert Plutchik’s emotion diagram:
and one can easily see why any forms of subjective emotional intelligence quickly becomes almost impossible of interpretation or conceptualization, due to the complex inter-connectednesses possible__thus preventing anything but a general reference related to motives of will, or goals. It isn’t that we can’t know all these individual aspects of emotions, it’s just we have no distinct method of separating these many energy sources, from the whole, to make any particular sense of the individual information systems. All we can at most achieve, is to make up just about any scenario we may please, or the origin of the personal private languages, long ago mentioned by Wittgenstein…
Now, let’s look at the objective conceptualizable intellect, and see if we fair any better. Take any object you may wish, internal instinctual systems, or external objects, objective systems, or anything at all that we may form intelligent analysis about, and simply ask; “Do we actually form a true and viable intelligence of these many thousands of information systems, or do we just assemble information scenarios, hypotheses, concepts and simple relationships of…?” Truly look into the depths of your personal and intellectual analysis/es of any and all of the ideas you’ve looked at, or do hold as truths in your mind right now, and see if you really observe intelligence of the objectives and objects represented, or you are really assessing your own personal ego__and how can you seriously tell the difference…?
Now, let me complicate the problem even more by adding in the super-objectivity of the total global systems’ mechanics involved in the entire question, of any scenario, hypothesis, theory or whatever you may set up or think about, and ask what’s the relationships of the subjective systems’ mechanics, with the objective systems’ mechanics, and finally with the super-objective systems’ mechanics. By the super-objective systems’ mechanics I’m talking about all the physical geological, biological, cosmic, chemical, electrical, techtonic, volcanic, earthquake, flood, tsunami, gamma ray blast, resources’ depletions, metals depletions, minerals depletions, economics and contract goals from outside systems, the sun and sun bursts, em field changes, galactic system changes, on and on or whatever… What are the total effects on any single system we may think about, in relation to the interactions of all three of these major systems’ mechanics…? Is it even possible to know any real truth about such complexity on this end of the spectrum either, any more than it is at the bottom end of the emotional and instinctual systems spectrums…? It’s not that we can’t do the conceptual analyses of the individual elements, it’s the fact it’s next to impossible to hold these high number of concept systems’ mechanics’ inter-actions, in perception long enough to gather the accurate information required, to achieve scientific truth. The higher the number of concepts involved, the lower the probabilities of possible successes. The best we achieve, as the numbers of systems increases, is a fuzzy logic, and more fuzzy the higher the elements involved__Yet we and our systems of academics do not seem to take these facts into consideration when designing the definitions of what intelligence may truly be… So, is it truly anything any more clear to defining what intelligence really is than Plutchik’s ideas and complexities of emotional intelligence…?
I think our big egos have a long ways, to climb down out of the sky, to reach any soundness of real ground… There isn’t even any mathematics possible of handling all the complexities I’ve mentioned above__No matter how many computers are tasked to the problem, of finding and defining true intelligence… Intelligence may equate to a ToE, but if we can’t even begin to define intelligence, how can we ever expect to define a ToE…?
The honesty and experience mix, must be looked at much deeper. Truly look at these scenarios, and let me know how you see science having any possibility of defining a truly grounded intelligence__as relates to any possible ToE... The closer to inclusion of everything, the closer to the complexity of everything. The closer to simplicity of everything, the closer to the complexity of everything… You lose, by losing in either direction…
Mentality's Systems' Control__Limits = Subjective Complexity <--> Objective Complexity
"Systems' Control__What can't be done, is more than what can be done..." me
"The space-time metric, is just the measurement tool of space and time..." me
"Universal intelligence is seeing time__Time connects all concepts..." me
The Interesting Questions__What is intelligence…? Is there truly anything that is really classifiable as intelligence…? Our egos have taken these questions for granted so long, we think it ridiculous to even ask such questions__But, is it ridiculous, or possibly the most important series of questions we must ask and answer, to discover any true grounding for any and all of our scientific investigations…? I say it is certainly the most profound and important scientific area of investigation we must explore, to truly understand our selves, and the greater Universe around us…
If we just take all mentality's systems' control, and explore its limits, through its opposing ends of subjective complexity, and objective complexity, all the way to super-objective systems’ complexity, we may begin to see some of these avenues of new groundings, even if these new groundings be in a complete realization of background independencies, not yet realized, in all our information and knowledge systems. Take a look at Robert Plutchik’s emotion diagram:
and one can easily see why any forms of subjective emotional intelligence quickly becomes almost impossible of interpretation or conceptualization, due to the complex inter-connectednesses possible__thus preventing anything but a general reference related to motives of will, or goals. It isn’t that we can’t know all these individual aspects of emotions, it’s just we have no distinct method of separating these many energy sources, from the whole, to make any particular sense of the individual information systems. All we can at most achieve, is to make up just about any scenario we may please, or the origin of the personal private languages, long ago mentioned by Wittgenstein…
Now, let’s look at the objective conceptualizable intellect, and see if we fair any better. Take any object you may wish, internal instinctual systems, or external objects, objective systems, or anything at all that we may form intelligent analysis about, and simply ask; “Do we actually form a true and viable intelligence of these many thousands of information systems, or do we just assemble information scenarios, hypotheses, concepts and simple relationships of…?” Truly look into the depths of your personal and intellectual analysis/es of any and all of the ideas you’ve looked at, or do hold as truths in your mind right now, and see if you really observe intelligence of the objectives and objects represented, or you are really assessing your own personal ego__and how can you seriously tell the difference…?
Now, let me complicate the problem even more by adding in the super-objectivity of the total global systems’ mechanics involved in the entire question, of any scenario, hypothesis, theory or whatever you may set up or think about, and ask what’s the relationships of the subjective systems’ mechanics, with the objective systems’ mechanics, and finally with the super-objective systems’ mechanics. By the super-objective systems’ mechanics I’m talking about all the physical geological, biological, cosmic, chemical, electrical, techtonic, volcanic, earthquake, flood, tsunami, gamma ray blast, resources’ depletions, metals depletions, minerals depletions, economics and contract goals from outside systems, the sun and sun bursts, em field changes, galactic system changes, on and on or whatever… What are the total effects on any single system we may think about, in relation to the interactions of all three of these major systems’ mechanics…? Is it even possible to know any real truth about such complexity on this end of the spectrum either, any more than it is at the bottom end of the emotional and instinctual systems spectrums…? It’s not that we can’t do the conceptual analyses of the individual elements, it’s the fact it’s next to impossible to hold these high number of concept systems’ mechanics’ inter-actions, in perception long enough to gather the accurate information required, to achieve scientific truth. The higher the number of concepts involved, the lower the probabilities of possible successes. The best we achieve, as the numbers of systems increases, is a fuzzy logic, and more fuzzy the higher the elements involved__Yet we and our systems of academics do not seem to take these facts into consideration when designing the definitions of what intelligence may truly be… So, is it truly anything any more clear to defining what intelligence really is than Plutchik’s ideas and complexities of emotional intelligence…?
I think our big egos have a long ways, to climb down out of the sky, to reach any soundness of real ground… There isn’t even any mathematics possible of handling all the complexities I’ve mentioned above__No matter how many computers are tasked to the problem, of finding and defining true intelligence… Intelligence may equate to a ToE, but if we can’t even begin to define intelligence, how can we ever expect to define a ToE…?
The honesty and experience mix, must be looked at much deeper. Truly look at these scenarios, and let me know how you see science having any possibility of defining a truly grounded intelligence__as relates to any possible ToE... The closer to inclusion of everything, the closer to the complexity of everything. The closer to simplicity of everything, the closer to the complexity of everything… You lose, by losing in either direction…
Mentality's Systems' Control__Limits = Subjective Complexity <--> Objective Complexity
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