The moral solution to amoral

[twc]

The moral solution to amoral capitalism…Keen, lost deep inside his Minskian models of the capitalist economy — in abstraction from the amoral world of practical capitalist profiteering — demands that the banks make his models, which reveal the amorality, work morally in the interest of capitalism.He tells the banks to kickstart capitalism by gifting everyone money to pay off “debt” — the essential capitalist necessity — or suffer the stigma of “profligacy” — the essential capitalist virtue.Here we can view the folly of pursuing a purely phenomenological modelling of the capitalist economy, and passionately believing in the rules that make the model work in abstraction from the human necessity of reproducing society under capitalist social relations of ownership and control of society’s productive forces.And then, emerging from his phenomenological model into the world beyond it, and pontificating on human conditions such as the “morality” of debt repayment, and not its essential necessity for capitalism and his model of it.Keen forgets that it is precisely the amoral capitalist class that demands its debts be settled — under compulsion of capital to actuate itself — in order that the capitalist may remain the personification of his vital bloodsteam: capital.God, and the aggrieved investor, bless moral Keen…

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As a transition from todays debt stagnation, Keen suggests that the central banks create a lump sum to put into everyone’s account. Debtors would be required to use their gift to pay down the debt. Non-debtors would keep the transfer payment – so as not to let demagogic political opponents accuse this plan of rewarding the profligate.If this solution is not taken, debtors will continue to lumber on under debt and tax conditions where only about a third of their nominal wages are available to spend on the goods and services that labor produces. The circular flow between producers and consumers will shrink – being siphoned off by debt service and government taxes to bail out bankers instead of their victims.This should be what today’s politics is all about. It should be the politics of the future. But that requires an Economics of the Future – that is, Reality Economics.