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    1000 Castaways: Fundamentals of Economics
    1000 Castaways: Fundamentals of Economics
    1000 Castaways: Fundamentals of Economics
    Ebook112 pages1 hour

    1000 Castaways: Fundamentals of Economics

    By Clint Ballinger

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    About this ebook

    A renegade band of Modern Monetary Theorists has overturned mainstream economics in part by emphasizing that there is not one, but two systems of modern money, the "vertical" and the "horizontal." They demonstrate conclusively how unifying our understanding of these is crucial for grasping modern economies.

    "the key to understanding Modern Monetary Theory is this vertical-horizontal relationship"   Warren Mosler

    1000 Castaways develops Mosler's statement into a concise book-length treatment that is accessible to all readers, starting from first principles and, step-by-step, leading the reader up to the complexities of the real world. 

    Our one thousand castaways develop, before our eyes, a "perfect" economy, and demonstrate how the horizontal and vertical systems of money naturally emerge from still more profound inherent organizational needs of a large society. 

    1000 Castaways then contrasts the Island's "economics" with real-world economics, illustrating the last few steps in our economic understanding we must take in order to run our modern economies in a way that maximizes wellbeing.

    LanguageEnglish
    PublisherAetiology Press
    Release dateJun 26, 2019
    ISBN9780648390602
    1000 Castaways: Fundamentals of Economics

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      Book preview

      1000 Castaways - Clint Ballinger

      Clint Ballinger began his interest in economic development in the very long run while at The University of Texas at Austin. While there he worked with the World's oldest accounting tokens (Mesopotamian, 8000-3500 BC) under Denise Schmandt-Besserat and researched the development of both State and credit-money with a special interest in the debt-deflation work of Irving Fisher. For his M.A. in Political Science at The University of North Carolina at Chapel Hill he focused on modern uneven economic development, and went on to specialize in the interpretation of global econometric data for his PhD in Geography at Cambridge University.

      How Your Professor Should Have Explained

      The Principles of Macroeconomics

      But Didn't

      It took over 9,000 years from the earliest human settlements to the dawning of modern states and modern banking systems circa 1500 AD.

      It took several more centuries for the gradual appearance of reasonably accurate albeit sporadic descriptions of the role of states and banks in the creation of currencies and their profound roles of capital development and social coordination in both the public and private spheres.

      This progress was briefly interrupted by an intellectual decline of Economics into a period of real-world irrelevance (~1950~2008). However, led by a handful of pioneering economists, and not yet in classrooms or textbooks, earlier partial theories of the two coordinating systems of the macroeconomy were revived in the 1990s and then, more crucially, consolidated into a unified understanding of how real-world economies actually function. Economic understanding emerged into a Golden Age of which the present generation is in the exciting midst of.

      1000 Castaways compresses this 10,000 years of economic development into several years and a society small enough to allow an illuminating overview, yet large enough to feature the institutions essential to modern economies. Centuries of economic thought are distilled for the reader to the essence of how the macroeconomy functions (and malfunctions).

      Arenegade band of Modern Monetary Theorists has overturned mainstream economics in part by emphasizing that there is not one, but two systems of modern money, the vertical and the horizontal. They conclusively demonstrate how unifying our understanding of these is crucial for grasping modern economics. 

      the key to understanding Modern Monetary Theory is this vertical-horizontal relationship (Warren Mosler)

      1000 Castaways develops Mosler's statement into a concise, book-length treatment that is accessible to all readers, starting from first principles and, step-by-step, leading the reader up to the complexities of the real world.

      Our one thousand castaways develop, before our eyes, a perfect economy, and demonstrate how the horizontal and vertical systems of money naturally emerge from even more fundamental organizational needs of a large society.

      1000 Castaways then contrasts the Island's economics with real-world economics, in an enlightening illustration of the last few steps in our common economic understanding that we must take in order to run our modern economies in a way that maximizes wellbeing.

      Copyright © 2019 by Clint Ballinger

      All rights reserved. 

      This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in a book review.

      cjballinger@gmail.com

      eBook ISBN 978-0-6483906-0-2

      Paperback ISBN 978-0-6483906-1-9

      Hardcover ISBN 978-0-6483906-2-6

      IMAGES  COVER: DREAMSTIME.com.  Introduction: Compass, public domain. Ch 1: Shutterstock.com. Ch 2: Shutterstock.com. Ch 3: Knots, public domain. Ch 4: Puck Magazine 1889, Joseph Keppler, public domain. Ch 5: Theatrum Orbis Terrarum by Abraham Ortelius, 1517, public domain;  German Accounting Ledger, public domain; Dutch East India Company - Vereenigde Oost-Indische Companie VOC logo, public domain. Additional Material: Battle of Waterloo 1815 by William Sadler, public domain; European Tribes 300 BC, creative commons license by Wikimedia user m654z; Europe 1092 AD, creative commons; Europe 1648 AD, creative commons. All other images: public domain.

      aetiology /ˌiːtɪˈɒlədʒi/, noun, (Oxford English Dictionary, def. 2): the investigation or attribution of the cause or reason for something, often expressed in terms of historical or mythical explanation.

      Ætiology

      1000 CASTAWAYS

      Fundamentals

      of

      Economics

      Clint Ballinger

      Ætiology

      Contents

      INTRODUCTION.............................................................13

      PART I: THE ISLAND

      Chapter One

      System One (Horizontal).........................................19

      A Monumental Step: Transferability ..................24

      Important Points to remember for future chapters:..............27

      Loanable funds............................................27

      Money creation and inflation ..................28

      Balance Sheet Expansion ...........................29

      Other systems of finance besides System One ..............30

      System one creates what is known as horizontal or inside money..............31

      Interest ......................................................32

      Chapter Two

      System Two (Vertical).............................................33

      The Final Step: Unifying the Two Systems.........38

      A few things to remember before moving on... 41

      Electronic money/accounting entries ........41

      Access to System Two Money (tax-credits)  ..............41

      Direct spending of tax-credits (crusoes) into the economy ..............42

      Chapter Three

      Balancing the Two Systems.....................................43

      Unemployment and Spinning Cord.....................46

      Some General Principles ....................................48

      PART II: THE REAL WORLD

      Chapter Four

      SYSTEM ONE (HORIZONTAL).........................................61

      System One ........................................................62

      Chapter Five

      System Two (Vertical).............................................68

      Addendum: The Emerged Economy ...................75

      Emergence .........................................................77

      The slings and arrows of outrageous fortune

      (Additional material, chapter five).........................82

      Works Cited  ..........................................................89

      A Few Points on Quantitative Easing, MMT, Trade Policy, & Economic Geography..............93

      Quantitative Easing  ....................................93

      A note on MMT and international trade.........94

      Economic Geography  ....................................96

      Further reading ......................................................98

      Trade/Economic Geography............................99

      Additional notes, print edition ..........................103

      Monopoly on dollars..................................103

      97 percent of money is bank credit money 104

      Natural division into two systems. ...............105

      Introduction

      Over the broad sweep of history economic well-being has primarily increased because of advances in technology and human organization. Understanding the latter is the key to understanding the macroeconomy and is the topic of this book.

      Before imagining our group of a thousand castaways, imagine an island of just ten people. You are on a sailboat, along with nine others, that crashes onto a small deserted island. You have a pretty good idea you won't be discovered for a very long time, months or perhaps years. So you go about first trying to survive, and then trying to thrive: to improve your long-term material well-being as much as possible.

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