Monday Message Board

Back again with another Monday Message Board.

Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please. If you would like to receive my (hopefully) regular email news, please sign up using the following link You can also follow me on Twitter @JohnQuiggin, at my Facebook public page   and at my Economics in Two Lessons page

25 thoughts on “Monday Message Board

  1. A new paradigm shift?
    The one we need to replace is the current worldwide neoliberal /market forces/economic model that has been operating for 4 decades across the developed world, It is based on assumptions that people are all Homo Economicus, self-interested ‘rational’ individuals, not social connected or responsible for others. Starting with UK PM Thatcher, who declared ‘there is no such thing as society!’, it spread internationally, driven by big corporations, who wanted free markets to increase profits. They undermined the power of nation states to reduce taxation and public services. It’s messing up many overseas countries as well as Australia. We have become cross customers instead of citizens with rights and obligations because policies are based on the idea that we live in an economy not a society.
    I am old and therefore have seen the changes. I remember what we had before, earlier paradigm shift post World War 2, when the democracies that won decided that avoiding another war needed policy making to include substantial welfare and social spending. These shifts would reduce the risk that discontented voters, eg the poor, would no longer create populist movements that supported the dictatorships that had created the war.
    Till the 1980s we had the growth of welfare states that funded benefits, community services, education and health care on a universal basis, not just ability to pay. However, discontented rich and big businesses objected to controls and higher taxes, so worked on an alternative set of beliefs. Soon they took over in the UK and USA and it spread. They claimed if democracies accepted that market forces and big business could run the nation state and privatise most public and other community services, so they’d make us all rich!!
    However, imposing the business individualised competition failed by 2008, as greed led to problems, not wealth. Austerity was imposed to allow governments to pay company debt, so the poor became poorer and the levels of trust in democracy diminished…………..
    Over a decade later, those in power are still stuck with their dysfunctional beliefs, and economies are not growing. It’s a mess so it’s time to find another set of beliefs, an alternate paradigm that restores the focus on the social needs that underpin societies and have been grossly ignores and damaged.
    It shows in the failing levels of trust people have in our current power holders. A survey the Australian election study (AES) just released, a regular post-election survey which showed trust in government, which in 1969 was 51%, is now 25% and those believing govt looks after itself first, has risen from 49% to 75% now. This distrust is a serious threat to social cohesion and stable government.
    So, what can we do to create the necessary changes to restore trust, the social capital we need to live well with others, including strangers? There are lots of demonstrators and protestors, but there are far too few offering the big new ideas we need to create the necessary optimism and enthusiasm. The solutions must unite the protestors and advocates in a serious campaign to replace the bad neoliberal paradigm with a socially based fairness version.
    What if we offer viable alternatives?
    Australia has a long history of being a social innovator. We were and early introducer of more universal franchise, as men got the vote in the mid C19th and women early in the C20th. Only the 2nd in the world, (even if this disenfranchised Aborigines!). Other examples include the Basic wage in 1908, the age pension around the same time, Child Endowment in the 1940s and later unemployment benefits. Women gained Equal Pay for the same work in the 70’s and freedom from discrimination shortly after. Medicare in 80s….and expanded funding for children’s services and Tertiary studies…
    We started fixing the first Nation inequities in the sixties with voting restored and a referendum on including them in Census, and some Land rights shortly after. There is much more to do but there are moves to recognising the value of access to the wisdom of the oldest continuous set of nations in the world.
    And financially we are one of the wealthiest nations, so even if the inequities are problematic, we can afford to fairly redistribute adequate resources for all……
    Some options
    For instance, how about reviving and updating the social contract? We are a country that has always expected government to be part of our service provisions, as unlike the USA, we were set up as a colony by government, not distrustful Puritans, and unlike the UK, had no upper class to provide for our capital needs. So we need to see public provisions and support for community services, as we build the democratic processes and trust of those in power. Let’s start with restoring our status as citizens, not customers, by undoing the privatising of community services out, or at least restrict their profit motives so users of aged and children’s care can have their needs met, not shareholders.
    There is also a need to fix our increasingly conditional unfair welfare system, maybe by a Universal Social Dividend payment for unpaid contributions of care and creativity that we share and enjoy. It would cover the contribution of firies and all their support helpers who contribute unpaid times, as well as fix the gender income gaps!
    These income support changes could also assist in the changes we need to start making to reduce the dependency on growth of GDP that damages the environment. More commitment of sharing, caring and repairing as well as care of country could reduce the damage of over-use of resources and overdevelopment.
    We need to restore the roles of post school education, both tertiary and further/technical, so these also meet community and national needs, not just part of employment preparation. These are part of social fabric, not just sources of profit and growth.

    (More examples wanted?).
    These are just a few illustrations of policies that would restore trust of governments by higher visibility and legitimacy. So, we need people to join the paradigm resetting network and work on solutions, resolutions evolution or revolution?
    Re-creation of social values next year!!

    Eva Cox plus 29.12.19

  2. I think getting more explicit about the indirect benefits from good governance would help; the notion that less governance gets better outcomes needs to be challenged. Same with the self defeating notions that governance cannot be improved, services it provides cannot ever be efficient, that the absence of such services doesn’t accrue costs and inconvenience, only benefits from reduced taxation.

    Are there economists putting values and numbers to the indirect ways that commerce and industry – even aside from other interests – benefit from good governance that includes regulation, labour rights and the rule of law? Or putting estimates to the costs to the middle class and to small business owners of having an underclass that is perpetually hungry, desperate, resentful – which is what encouraging the middle class to be resentful enough of welfare to end welfare can bring.

    Can we have ubiquitous law enforcement that CAN contain and control and enforce poverty sufficiently that businesses can take advantage low to near zero wages but revolutionary fervor cannot arise? Where does the economic demand come from when wages are low and organised labour is suppressed? I remain doubtful the small government, low tax, minimal welfare society would (after the unmentionable costs flow through) be a prosperous one let alone humane but the enforcement tools that can make it stable – like identity recognition and tracking and data mining – are well along in development.

    I am inclined politically and practically towards strengthening the societal institutions we have rather than tearing them down; democracy that is more democratic, courts and legal redress more widely accessible and less exclusive. But I am not sure how that can be achieved with Big Media as it currently operates. Wasn’t there someone who predicted Newspaper companies would become the political parties of the future? “Soft” corruption that allows regulatory capture may ultimately be more insidious than the Baksheesh variety – and Big Media is not an objective observer and informer, it is a self interested player.

  3. Should this link have been placed in to the comments on Virtue Signaling. I doubt that is really makes any difference. The article emphaisis humanity’s delusional nature. Anyone who argues that humanity can transition from our fossil fuel driven industrial society to a carbon free industrial society with out taking a detour in to a much lower level of resource consumption (a much lower standard of living, a much lower quality of life) is flat out delusional and was not helpful in actually solving the problem.

    Think about this. Peope in Cuba have had a much lower standard of living than the rest of us. But they have not only survived they have acheived some level of happiness.
    Had a transitional process against global warming begun in 1980 or maybe 1990 it might have been possible. I had previously stated that we in first world countries can not expect the rest of the world to give up on achieving what we have unless we give it all up. But what I did not say is that if we give it all up those in second and third world countries may say, “so what, you lived in qomparitive luxury for decades and now you are going to give it up as your end in a bargin in which we are to give something up that we never had in the first place. That is not a very good deal for us.”

    The thing is many of those in second and third world countries are going to lose no matter what, The biosphere is going to collapse long before many of them get to enjoy the good life of airline travel, carnival cruises, and 140 km per hour travel across smooth roads in safe cars.

    The bill for our collective stupidity is in the mail. The amount of the bill is 8 or 9 bilion human lives.
    Will we chose to live until the collection day by denying that we have done anything wrong? Will we grasp at trying to stay afloat by pushing other peoples heads under the water beneath us? Will we simply let ourselves slid in to the abyss? Or will we seek to transform our lives by giving comfort to those who were not psycologically prepared for the end of our story?

    In the mean time, until that biosphere collapse occurs, we can still seek to sacrifce those that fought to build weapon systems for the wrong kind of war at the wrong time in hystory.

  4. I almost don’t want to post this image. Sort of fire porn, but Id challenge anyone to find an image showing extent geographically of the fires around Sydney. They are just about to block me from driving east.

  5. The penny seems to have dropped for some religious types;

    The fires are indeed a “judgement,” not in the sense of God pouring out indiscriminate punishment, but rather in the sense of us all being brought to a crisis point, resulting from our ecological sins, in which we face a decision to continue in darkness, or to repent and be reconciled to God, one another, and God’s creation.

    I realise that climate change is a divisive topic among Eternity readers. However, we are literally dealing with the consensus of experts at this point, namely climate scientists and fire chiefs. Indeed, just this week, former fire and emergency chiefs from all states and territories held a joint press conference to call for urgent action on the escalating climate threat. Unless we think these figures represent some cashed-up, clandestine firefighting cabal, we’d best take heed.

    Any opposition to this aforementioned consensus bears the overwhelming burden of proof, and mere cherry-picking of data is, at this stage, endangering human life by contributing to the delay of meaningful climate action.

  6. Eva refers to the need for a new paradigm shift. This is correct. A shift in people’s beliefs and understandings about money and its relation to physical and social reality is required. The problem now is that people believe in money and markets as actuating forces just as they once believed in gods, demons and spirits as actuating forces. If a belief about causation is incorrect then we cannot obtain the desired results. As the philosopher Francis Bacon wrote: “Where the cause is not known the effect cannot be produced.”

    Let me illustrate. When the mechanisms of physical disease were not understood (theories before empirical scientific theories of disease) desired effects (cures) could not be produced except occasionally by pure fortuitous accident. For example, blood-letting would actually have worked for persons with haemochromatosis (colloquially iron overload).

    People who believe that money and markets are the way to manage environments and societies continue to adhere to a pre-scientific ontology or a pseudo-scientific ontology at best. Money does not and cannot measure anything objective. It cannot even measure value. Rather, it is a social instantiation of power. Money is the power to do something under our current rule system. For analyses of these issues see Capital as Power (CasP) theory. In particular read;

    “Capital as Power” – Shimshon Bichler and Jonathan Nitzan.
    And two very accessible articles:
    “The Aggregation Problem” – Blair Fix
    “The Autocatalytic Sprawl of Pseudorational Mastery – Ulf Martin

    From my point of view, a new ontology is of prime importance for renovating economics philosophically and empirically. The solution lies in a monistic conception of existents and processes. I will commence with definitions necessary to the discussion.


    Model: A simplified representation of a more complex original.

    Monism: Attribution of oneness or singleness to a concept or system, e.g. to the cosmos.

    Ontology: The study of existence, emergence and evolution, in terms of categories and relations
    Process: A transformation over a period of time.

    System: A regularly interacting or interdependent group of items forming an integrated whole. Every system is delineated by its spatial and temporal boundaries, surrounded and influenced by its environment, described by its structure and purpose and expressed in its functioning.

    Real System: Any system which obeys the discovered Laws of hard science.

    Formal System: Any system of signs based on or forming a language, including mathematics.


    All-existence (the cosmos) may be posited as a single complex system (an a priori justification in philosophical terms) and thus the “concrete whole” in the priority monism sense. Parts of the cosmos are sub-systems, sub-systems of sub-systems and so on. The cosmos is a real system. All sub-systems of the cosmos are real systems.


    The entirety of human perception and understanding is achieved by modelling. Brain-internal coalesced perception, as perceived perception, is a virtual model of perceived external reality. Higher level ideations, concepts and explicit models themselves are also all models. Human understanding (and misunderstanding) is comprised of models and nothing but models.


    Truth correspondence exists (if it exists at all) as a connection of valid congruences or homomorphisms between our brain’s models (both internal modeled perceptions and understandings and explicit exteriorized statements and models) and all reality external to the brain or mind.


    Formal Systems are a sub-set of real systems, paradoxical as this statement might first seem. They are a special subset of real systems where information as patterns is encoded, transmitted, received and interpreted in and via real system media comprised of matter and energy. The formal system is instantiated in real system media.


    Matter, energy and information can be passed between real systems. For many open systems, the transfers of all three are important. In the case of human formal systems (instantiated in real systems of course including the brain), the transfer of information is usually the most important component. The transfers of matter and energy are often minimal and even deliberately minimized to achieve a high information transfer rate to energy use and/or matter “use”. These material and energy savings are one key reason that all models, both language and mathematical models and crafted scale models say, placed in a wind tunnel, are of pragmatic use as tools for investigating reality.


    Human Agency is the capacity of human actors to act in a given environment.
    The (or each) living human agent is the human connection between human formal systems and real systems.

    We can represent this process very simply as:
    Real Systems Human Agency Formal Systems

    What is represented by the arrows in the diagram? What is shown as passing from Real Systems, through Humans exercising agency, to Formal Systems and vice versa? The simplest physicalist answer is mass, energy and information. This is the correct and complete physicalist description according to modern physics and its relational system model of the cosmos.


    Matter, energy and information can pass through system boundaries depending on permeability or penetrability. A system boundary is a boundary that separates the internal components of a system from external systems. A system boundary can be an interface for the transfer of matter, energy and information. The process of empirical detection relies on matter, energy, information (in any combination) coming through a system boundary from the detected existent and passing in through the system boundary of the detecting system (a human or human instrument when taking an anthropocentric view). Thence, the “depths” or internals of any system can only be inferred or deduced (as the case may be) by system boundary phenomena or more correctly by system boundary transferred phenomena.


    The above ontology is more consistent with the discoveries of modern science. It removes the Cartesian assumption of dual substances (of matter and mind or matter and spirit). Hence it removes the “transmission problem”. In Cartesian dualism how does mind affect matter? How does “will” actuate body? How is impulse transferred? This ontology also helps to clear up the puzzle of formal systems and their relationship to real systems. This is of prime importance for economics. Formal systems are patterns of information instantiated in real system media; real media like human brains, books, diagrams, formulae and scale models to give some examples. Formal systems can be of a descriptive or prescriptive nature. Hard science uses formal system models to describe real systems. Politics, ideology, religion and moral philosophy use prescriptive models to prescribe how humans should behave (and what beliefs should actuate them). Prescriptive models can be viewed as programming and coordination routines designed to govern human behavior in society.

    If we follow on from this we note that money is not real (descriptive of reality) in any way. It does not even measure value although it pretends to do so within the mythology of marketism. It can never capture all values (for example environmental and non-human values) and it does not even capture all human values properly or comprehensively. Money is not denominated in a scientific unit of measurement: SI units or the International System of Units being the only accepted and acceptable measuring units in hard science).

    It follows from this that we can identify money (and its support structure of market components and the state as guarantor of fiat money, markets and contracts) as prescriptive systems, not descriptive systems. Money and money systems tell us what to do and how to behave individually and in society. They are prescriptive not descriptive. To reify (concretize) and fetishize money as a real, objective, albeit heuristic, measure (rather than as an invented fictive social agreement and “finite state machine” network in computing analogy terms) is to misunderstand the ontological category to which money belongs.

    If the “finite state machine” or “finite state model” of the money and market system does not model reality accurately or effectively in even some crucial circumstances (like the approach to thermodynamic and other limits to growth and approaching climate disaster) then it is the finite state machine model of capitalist money and finance which is wrong and which needs to be changed.

  7. 2019: A year that began with such promise. A year that ended with such disappointment.

  8. 2019 started with controlled fireworks and ended with uncontrolled firestorms.

    The somewhat dubious entertainment value of pyrotechnics has been overwhelmed by the grim reality of our fragile environment.

  9. Judith Lucy recorded a piece with Amanda McKenzie illustrating the lack of concern by the individual to the welfare of others.

  10. In Austria, the Greens have become one of the two parties forming the next government! – as the junior coalition partner with the far right populist, vehemently anti-immigrant People’s Party.

  11. Greens were quite anti the outta-control-sky-high-business-driven-environment-destroying-immigration-ponzi, but then they rolled Bob Brown who later apologised in his goodbye to senate speech for being rolled over on this and other basic long held Greens positions. Smith9, it aint gonna happen any time soon and before you get any other hopes up, give or take, elections shall be suspended for good from about 2033.

  12. Might also want to look closely at the saintly Jacinda Ardern and how far The Greens Aotearoa have been rolled by her and Winston First. There’s been a lot of empty headlines and some seriously questionable behaviour from the other coalition party (as you would expect from Winston).

    Coalitions work when all the members are taken seriously, and in that respect Australia has an enviable record. When National in NZ tried that they were a bit too transparent about gaming they system and it hasn’t worked out for them, and of course the minor parties they got involved with have been shattered. Somehow the populist Winston First lot hang on, but I think that’s more to do with Winston’s political skills than any generosity from his “partners”. Pauline Hanson could learn a lot (if she was into learning…)

  13. Per “The Economic Times”, India.
    Reuters|Updated: Jan 02, 2020, 03.32 PM IST

    India electricity supply down 1.1 per cent in Dec, declines for 5th straight month

    NEW DELHI: India’s electricity supply fell for the fifth straight month in December, but declined at a slower pace than in November, provisional government data showed.

    Power supply fell to 101.92 billion units in December, down 1.1% from 103.04 billion units last year, an analysis of daily load despatch data by state-run Power System Operation Corp Ltd showed.

    Lower electricity supply could mean a fifth straight fall in power demand – linked by economists to a broader economic slowdown – as electricity deficit in India is marginal.

  14. Cognitive bias cheat sheet
    Because thinking is hard.

    …”I started with the raw list of the 175 biases and added them all to a spreadsheet, then took another pass removing duplicates, and grouping similar biases (like bizarreness effect and humor effect) or complementary biases (like optimism bias and pessimism bias). The list came down to about 20 unique biased mental strategies that we use for very specific reasons.

    “I made several different attempts to try to group these 20 or so at a higher level, and eventually landed on grouping them by the general mental problem that they were attempting to address. Every cognitive bias is there for a reason — primarily to save our brains time or energy. If you look at them by the problem they’re trying to solve, it becomes a lot easier to understand why they exist, how they’re useful, and the trade-offs (and resulting mental errors) that they introduce.”

    View at

  15. The IMF showing how your ‘not long for this world’ cash is an “impediment” to going below zero for interest rates. Cash nominally can’t be subject to negative rates – I like that. Which makes me feel like I am going to pay for and prop up every rentier and tax avoider. Maybe my reaction is just a cognitive bias?!

    Any comment on this appreciated. Suggested reading?

    “Cashing In: How to Make Negative Interest Rates Work

    …”How low can you go?
    “In a cashless world, there would be no lower bound on interest rates. A central bank could reduce the policy rate from, say, 2 percent to minus 4 percent to counter a severe recession. The interest rate cut would transmit to bank deposits, loans, and bonds. Without cash, depositors would have to pay the negative interest rate to keep their money with the bank, making consumption and investment more attractive. This would jolt lending, boost demand, and stimulate the economy.

    “When cash is available, however, cutting rates significantly into negative territory becomes impossible. Cash has the same purchasing power as bank deposits, but at zero nominal interest. Moreover, it can be obtained in unlimited quantities in exchange for bank money. Therefore, instead of paying negative interest, one can simply hold cash at zero interest. Cash is a free option on zero interest, and acts as an interest rate floor.”…

    Top 10 [ IMF ] Blogs of 2019

  16. 2x above link appears then disappears??? 3rd time – with spaces…
    medium com /better-humans/cognitive-bias-cheat-sheet-55a472476b18

    Ikonoclast… I thought of you Ikon when I saw this, due to your recent reply to Eva Cox in up thread, promoting a systems paradigm.

    “Everyone else! The Winners of the 8th Way to Think Like a 21st Century Economist

    (See video in page for the winning entry. Steve Keen and other judges. Extension of Kate Raworth’s “Doughnut Economics”. ) 
    FIRST PLACE: ‘From Business Case to Systems Case: Make Better Decisions’ 

    by – Camila Pestana, Abha Lakhotia, Kate Watson, Ann Main, Johanna Hofmann, Marlies Wisse, Nicol Mayr, and Tom Rippin.

    About 2min mark…

    “The business case is no longer fit for purpose. Instead we need to make the systems case” to which I fully agree.

    I wonder if many in Smirko’s government has a systems bone in his body.

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