So the movie currently on the playbill outside the Circus Maximus inside which we are made to fight against one another is called “economics”? Good, let’s have a look.
The current “Word” that “wants it” is the “Market”, hence the “technical Word” of the moment is an “economic Word”. It has been aptly labelled “Pensée Unique in Economics”. It is “Unique” because it has achieved an enviable position. It is so enviable that the fact that it has achieved it, and that therefore it previously did not enjoy that position, has slipped out of our awareness. It is so much enviable that to put it in the right perspective I must begin its explaination from reality itself.

It has been said that reality is a synonym of agreement, and that things are real for the sole reason that we agree they are. But it is important to note that agreement has two levels. When we start to look at reality from the viewpoint that it consists of agreement, at first we run into the first level of agreement: liking. At this first level, we agree with things to the degree we like them: we like what we hear, we agree with it; we don’t like what we hear, we disagree with it. And maybe generally we agree or disagree accordingly with everything that has to do with it, too. But there is a second level of agreement beyond liking, underneath it; and if we continue to look at reality from the viewpoint of agreement we will run into that, too. At this second level, we agree with things whether we like them or not: we agree with the fact they do exist regardless of our liking them. We don’t like what we hear? We may disagree with it, but we nonetheless agree it has been said and we heard it. We dropped our ice cream? We’re certainly not happy about it but, though reluctantly, we agree it’s now there on the floor. And that’s also because should we dare to refuse to agree with that ice cream there on the floor we would find ourselves wearing a straitjacket shortly after, that such is the nature of the group agreement: something quite inclined to become a double−edged weapon, as we’re going to see.

And it has been said as well that, in paraphrased terms, the only thing that can trap one is one’s agreement on reality. Whether this is true or not is not that important; what counts is its usefulness, and that is better seen through its contrary: one is not going to tackle something unless one deems it possible and, even more so, one is not going to challenge the reality of something if one takes that reality for granted. Taking something for granted puts it out of one’s visual range, and we know this front is under permanent attack.

And that is exactly the enviable position acquired by the “Pensée Unique in Economics”: everybody agrees it does exist; everybody agrees it is true; everybody agrees that’s just the way it is; whether they like it or not. So much they agree it is real that they even forgot that what they so unanimously take for granted now was not always this way.

By the way, who’s “everybody”? Are the High Priests of the “economic Word” the only shepherd wolves taking care of the flock of sheep? Time to remind what was Wil Coyote studying so intently, when we disturbed him before to discuss what I called the mission of betrayal. What are the opinion leaders of the flock? Our modern (and one−way, from them to us) village square and window on the world are the media, and these are stuffed with, well, you name it; the categories are wasted: economists, academics and all sorts of “…ologists”, politicians, union leaders and all sorts of activists, intellectuals, specialists and all sorts of leaders, artists, showbiz people and all sorts of etc., etc.

The list is almost infinite, their ideological, political, economic natures and positions are rather varied and often conflicting, and this draws our attention on the fact that they have only two things in common: media visibility and that agreement on the “Pensée Unique in Economics”. Which in turn brings us back to the aforementioned second level of agreement: regardless of how conflicting in other issues, and regardless as well of whether they are plain dumb or playing dumb, there is, however, something basic they all agreed upon, and that is the “Pensée Unique in Economics”. An agreement which obviously includes turning an ironbound blind eye to all the facets of moneypulation we are now aware of.

At the risk of sounding pleonastic, the Pensée Unique in Economics is a case in point of the unsuspected depth of the second level of the agreement, that on what is real. Provided they’re in good faith, all the aforementioned opinion leaders have their wings unknowingly clipped by it; if on the contrary they’re in bad faith, then they have a field−day in having our own knowingly clipped by it. In both cases, they do influence our lives; and ourselves.
So, are we really sure that King Pensée Unique has any clothes at all? Let’s open the bonnet and inspect.

A good workshop manual mapping what is what under that bonnet is New Paradigm in Economics by Richard A. Werner; the attention dedicated to following the wires is more than rewarded by the understanding of what’s going on, what parts are doing what in that previously inextricable jumble. Seek and ye shall find. And on the contrary missing out on it leaves one at the mercy of an oppression that gets more and more powerful and misterious as its undiscovered twistedness is permitted to operate undisturbed.

Speaking of what I called rule over the environment, I mentioned how King Pensée Unique did not always enjoy its enviable position, and Werner tells us how in about twenty years it went from a minority position to the mainstream one: “this approach had succeeded in dominating its discipline at all leading universities in the world. Academics that did not adhere to it found it hard to make a career: obtaining jobs or moving up the ladder depended on publications in leading journals – which had been usurped by this particular school of thought. … A large number of prominent national and international bureaucrats, journalists, politicians and other ‘opinion−makers’ had either been trained in the discipline or had otherwise become its followers. As a result, the views proposed by it came to dominate public policy debate by the mid−1980s, permeating the discussion of issues affecting individuals, communities, companies, the nation and the international community. Proponents are often no longer aware that there could be alternative schools of thought. To them, neoclassical economics is synonymous with modern economics per se. Most economics programmes at universities consist entirely of neoclassical economics, and students can spend years studying for their degrees without becoming aware that they may have been studying just one particular branch, one of many schools of thought in the discipline of economics. The financial press cites neoclassical ideas on a daily basis and its followers have entered highest public office. Central bankers are among the first profession to have been closely associated with neoclassical economics. This was followed by financial journalists and civil servants. As a result, the tune of deregulation, liberalisation and privatisation is being played daily and offered almost as the panacea to many of the world’s ills. … Neoclassical economics turns out to be the one school of thought within the discipline of economics, indeed one of the very few intellectual disciplines in general, that rejects the inductive approach favoured by scientists, and prefers deductivism. It must be considered a unique phenomenon in the history of thought that the originally marginal and eccentric deductive approach to economics has today become the mainstream school of thought.”
Leaving aside inductivism and deductivism as labels I’ll explain shortly, indeed academic institutions and publications, media and publishing groups, political groups and social organisations in general do have operating costs; and as I said, if anyone has a price, now someone has the money…

Pensée Unique in Economics is actually an adjective, a surname, a statement of fact; at the civil registry, it is ‘neoclassical economics’. Furthermore, Werner informs us about its other labels being ‘neoclassical doctrine’, ‘neoliberalism’, ‘market fundamentalism’, ‘market extremism’, or even ‘religion’.

Back to his workshop manual, I can’t obviously quote it here in full; what I can do is discuss some main elements and refer you to it for a precious and thorough discussion.

Proceeding logically through the jumble under the bonnet, the first issue is the neoclassical approach to it, and Werner tells us how here we have the unique phenomenon of the only school of thought in economics rejecting the inductive approach to favour the deductive one. Wires, hoses, belts, spark plugs, … inductivism and deductivism? Werner tells us that…
“the neoclassical school of thought is based on the deductive approach. This methodology argues that knowledge is brought about by starting with axioms that are not derived from empirical evidence, to which theoretical assumptions are added (again not empirically backed), and on the basis of which tools of logic (mathematics) are utilized to prove theoretical results.
There is an alternative approach. This approach examines reality, identifies important facts and patterns, and then attempts to explain them, using logic, in the form of theories. These theories are then tested and modified as needed, in order to be most consistent with the facts of reality. This methodology is called inductivism. All the natural sciences and most scientific disciplines use this approach. Inductivism is not only dominant in science, it also describes how we learned as infants about this world. When we touched the hot stove in the kitchen and burnt our fingers we learned inductively that doing so again would also hurt again. Inductivism is not only scientific, it is also common sense. This is why before the arrival of neoclassical economics the majority of economists quite naturally followed the inductive approach.”

Well, in this world we deal in facts; the research for the why of facts has the purpose of being cause over them, which includes predicting them; predicting them is intrinsically a quest for the common elements that connect facts, and theories are hypoteses about such common elements; theories are perfectible, subject to trial and error, approximation, and also to being overturned, binned and redone from scratch in light of further facts.
Or at least they should. Unless a greater interest has a script to stage. Again, if any puppet theater has a price, now some puppeteer has the money…
Joseph Stiglitz, in his Nobel Price lecture, said, “One might ask, how can we explain the persistence of the paradigm for so long? Partly, it must be because, in spite of its deficiencies, it did provide insights into many economic phenomena. … But one cannot ignore the possibility that the survival of the paradigm was partly because the belief in that paradigm, and the policy prescriptions, has served certain interests.”

In fact, proof of this is how deeply the deductive approach – and its clever use, too – are instrumental in bringing forward those script and interest, as Werner points out: “It can be seen that the deductive methodology is the fundamental reason why economics could end up so far removed from reality. If a gap between reality and theory is pointed out (by some pesky inductivist), deductivism does not require neoclassical economists to change their theory. Instead, deductivists are entitled to demand that reality be changed to suit their theory (which is correct by axiom). If the long list of assumptions required for neoclassical models to work does not seem to reflect reality, it is logically consistent for deductivists to suggest that structural changes be implemented so that reality moves closer in line with their models. The deductive approach also explains why the increasing dominance of the neoclassical approach resulted in a relegation to secondary status of those branches of economics that do look at reality, such as applied economics, economic history, political economy and regional economic studies. They dealt with uncomfortable facts and thus their influence had to be reduced so as not to threaten the deductive mainstream.”

The outcome of this operation is that of a successful strategy of conquest of territories and minds. Werner again: “Neoclassical economists have moved beyond being appointed central bank governors, ministers of the economy or treasury secretaries. They have even become prime ministers or Presidents. In these positions of influence they have done much to advance the policy programme of the neoclassical school of thought. Neoclassical economics has dominated the decisions of the large international organizations that deal with economic policy. Among them, regional development banks, the International Monetary Fund, the World Bank, the Bank if International Settlements, the World Trade Organization, as well as the Organization for Economic Cooperation and Development stand out. Early on, these institutions had focused on hiring and advancing the careers of adherents of the neoclassical school of thought. Thanks to the legal, financial and political muscle of these institutions, especially the IMF and the World Bank, the neoclassical free market economics was projected beyond the limitations of a small number of industrialized countries where it had been developed and made its mark on the world by affecting the lives of millions of people in the most far−flung corners of the earth. In over 100 countries, central bank policies, IMF−led structural adjustment programmes and development bank−led reform packages drastically changed fiscal policy, monetary policy, regulatory policy and many aspects of how societies are organized, each time along the neoclassical lines. This could take the form of cutting food subsidies for the financially weak or privatizing the supply of drinking water, thus often pricing the poor out of their water supply.”

It has been said that the application of a technique is an art. And that no servomechanism will ever do, only you and I rolling up our sleeves. One of the reasons is that there is a gap between abstract concepts and real contingent circumstances, and we are called to the art of bridging it every single time. Every day we live that day as itself, not as a copy of the others.
Hence, when we apply a policy to a country, deductive as it may be, if we’re sensible and honest, we ought to monitor the feedback in order to adjust its application to the contingent circumstances. But Werner tells us, “Wherever the World Bank and the IMF became active – most of the developing world – they soon seemed to know the true problems of each country. Little local research was necessary to reach their conclusions. Switching the country name from an earlier study seemed to do much of the job, since the policy advice is highly predictable and appears to apply to all countries: structural reform to implement liberalisation, deregulation and privatisation, we are told, is the only path to prosperity.”
When a deductive policy is imposed not even just regadless of facts, of circumstances, but quite despite them, things obviously do not compute, and it becomes obvious that the real agenda is somewhat more in the province of betrayal than in that of help.

So much for the neoclassical approach. And it is quite meaningful to observe how its detachment from reality goes hand in hand with the virulence of its command.

Continuing to proceed through the jumble, the next issue under the neoclassical bonnet are its tenets.
One of the most typical dividing lines between a deductive, abstract, theoretical approach and an inductive, practical, empirical one corresponds to a difference found between the universe of ideas and the physical universe: absolutes. It has been observed how there exist no absolutes in the physical universe, and on the other hand it can be observed how absolutes, as abstract concepts, are a useful tool, but just as any tool they are intrinsically approximate, and then to be always used with a grain of salt.
Meaningfully, in light of this, the neoclassical tenets are founded on absolutes, absolutes with a definitely very scarce grain of salt.

The first assumption is that of the “invisible hand”: by that term they mean that individuals are motivated by self−interest and that, if allowed to operate freely, in pursuit of their individual self−interest they would spontaneously reach, as if led by an “invisible hand”, an equilibrium producing the best possible outcome for all. Sounds good when said like that. Now, let’s put it on the workbench and take it apart.

“Individuals are motivated by self−interest.” And also, “Individuals are motivated by accumulation of material wealth alone.” In other words, “me, me, me, mine, mine, mine, grab stuff, clench stuff, lug stuff around, and to hell with anyone and anything else!” They call it, “the theory of consumer”.
Independently of the other neoclassical tenets, this assumption is relevant in itself; moreover, it is so also because incentive structures are developed and used on the basis of an assumption: to persuade people to buy this and do that they use incentives and methods based on the motivation assumed.
You have learned about ethics as the greatest good for all: survival as the result of a group effort in producing and exchanging endless survival factors and forms of mutual help, in which no one survives alone and basically there is only one good and it is the good for all, no one and nothing left out. And there are both material and non−material survival factors produced and exchanged: there is bread, and there is love. Now, you can go and inspect for yourself whether it is true or not: whether individuals, communities and life thrive or wither according to whether individuals act selfishly and materialistically or cooperatively and all round. And in doing so you may find people in various conditions, more or less good or bad, acting on motivations corresponding to their conditions: the better one’s condition, the more one’s motivation is ethics; the worse one’s condition, the more one’s motivation is self−interest, if one is motivated at all.

It’s not merely that incentives based on wrong motivations may not work, worse than that. It has been said that you reap what you sow: what you reward you tend to get, what you penalise you tend not to get, and paying attention to something or ignoring it is a form of rewarding or penalising it. Therefore using incentive structures based on the lowest motivation people can be reduced to exerts a constant, widespread concealed degrading pressure on them. A suppressive pressure. It has been said that the criminal sees others in his or her own image, and indeed the influence of a criminal on his or her environment is still degrading and suppressive, whether he or she is carrying forward a deliberate plan to this end or not.
That such a manipulated exploitation of motivations is suppressive can be easily seen in how self interest in the strict sense of neoclassical economics alone degenerates into suicidal parasitism. I’ll discuss that in detail later on, suffice here to say that if such self interest is the one and only goal, then sooner or later one switches from exchange to robbery, from economy to finance, and one kicks off the spiral of speculation which is intrinsically destructive and lethal because, being essentially a pyramid scheme, it would require to endlessly expand esponentially, whereas there are no infinite resources in the world. And also because, while on its way to the final destruction, it gets a head start on it by leaving behind a widespread trail of destruction, now.
In fact, Werner tells us that while it has been demonstrated time and again by scientific studies that it is not such a materialistic self interest that motivates people, this trail of suppressive destruction based on this assumption takes the form of forcing the world in the very opposite, and wrong, direction: the hamster wheel. If one is motivated by self interested, one has to earn in order to have; incentive structures based on this assumption force people towards self interest as the imposed only motivation, and when it becomes the only motivation that allows one to survive, then people must either steal or work themselves to death to beat each other out. Thus reducing to the hamster wheel people who would aspire to a full life in communion with one another is most definitely suppressive.

Speaking of absolutes, if there’s an absolute here, and if there’s a basic subject for this ‘Overall Picture’, it is that of how crucial is the relationship between those tiny assumptions buried in hiding places so remote and unknown to most of us like economic theories or conceptions of humanity, and their immense destructive fallout, branched out in almost infinite forms, which usually put us against each other, in the real world of the flesh and lives of us all. And of how crucial as well are the intention behind them covered in the ‘Core’, and the force behind them covered in the ‘Philosopher’s Stone’, without which none of this would exist in the first place. Just as an example here, aimed at stimulating us to detect such ramifications of fallouts, that first assumption of neoclassical economics alone can turn people against one another on these two independent false suppressive pretexts at the very least: “economic need”, and “education”.

Back to the “invisible hand” now, I call your attention to the key crucial point in that first basic assumption: the word “if”. That first tenet contains a condition, a requisite: it states that it will be all right for all… if, provided that, on the condition that. If, provided that, on the condition that the “invisible hand”, that neoclassical individual materialistic self interest we’ve just reviewed, can operate freely. Freely…
What do they mean by “freely”? They mean the rest of the neoclassical tenets. And here the deductive, abstract, theoretical approach of neoclassical economy comes into play, to perform its function at the service of greater interests.
In fact, we reviewed the basic neoclassical tenet and we found it false, in that it presents the worst particular case as though it is universal. We’re going to review the ancillary neoclassical tenets and it will be even worse. Because the way the deductive approach serves greater interests is by staging something that does not even exist at all, thus providing the false conditions upon which to proceed as if the false theory was true and real.
In other words, and in practice, the neoclassical dogma is: all is needed to meet the condition it contains is freeing the “hidden hand”, the “structural reforms recommended to deregulate, liberalise, privatise and open up as many industries and aspects of the economy as possible”, and it will be all right for all, for the very good reason that all the remaining conditions described in these ancillary neoclassical tenets are automatically, intrinsically met, in place, real. A bit like telling to the trapeze artist, “You don’t have to check the net is there before you blindfold yourself and jump: it’s there by my definition; it’s there because I say so.” Sounds familiar? It starts with obeisance to “authority” and it ends up with the little dust cloud of Wil Coyote on the canyon floor. Boom.

When Wil Coyote barely gets back up, next to him in the dust he notices the ancillary neoclassical tenets: “perfect information”, “perfect competition”, “maximum capacity utilisation”, “constant or diminishing returns to scale”.
Knowing that the most important thing in learning is detecting and defining the unknown or misunderstood terms, and doing it right away because everything from an unknown or misunderstood term onward is a ruinous but unnoticed messy vacuum, he decides to hurry back to the big books in his lair to review these tenets, and to do so starting from the most incomprehensible.

What are constant or diminishing returns to scale?
Wil Coyote clarifies what he reads by drawing it. He draws a rectangle: this is a production entity, something that produces something. Then he draws a few arrows pointing to the rectangle and labels them “input”: these are the factors of production entering the entity. Then he draws an arrow pointing from the entity outwards and labels it “output”: this is its production getting out of it. If you measure the amounts of input and output, you have their scale. If you compare them with one another, you have their ratio. Then he takes another sheet, repeats the same drawing, but this time much bigger, and mutters to himself:
“These two entities are of the same type with the same type of input and output, and their only difference is the scale: one is smaller and the other is bigger; let’s say the size of the rectangle, of the input and of the output of the second is ten times that of the first. This is their difference in terms of scale; the question is, is there a difference between them in terms of input−output ratio?
Suppose that the input and output of the smaller one are both 10; its output−to−input ratio is 10 divided by 10: 1. Then suppose that the input and output of the bigger one are both 100; its output−to−input ratio is 100 divided by 100: here too, 1. In this case, increasing the scale, the ratio remains the same; this is called: constant returns to scale.
Then suppose that the input of the bigger one remains 100 but its output is 50; its output−to−input ratio is 50 divided by 100: 0.5. In this case, increasing the scale, the ratio lowers; this is called: diminishing returns to scale.
Finally suppose that the input of the bigger one remains 100 but its output is 200; its output−to−input ratio is 200 divided by 100: 2. In this case, increasing the scale, the ratio rises; this is called: increasing returns to scale.

In short: the return to scale is the return on increasing in scale, that is, in size, and answers the question, Is it worth getting bigger? The more it is increasing the more the answer is ‘yes’, the more it is decreasing the more the answer is ‘no’, and if it is constant the answer is ‘doesn’t make any difference’.
Returns to scale are close relatives to economies of scale, and the economy of scale is the decrease of the production cost per unit of product one has by increasing in scale, in size, and therefore increasing the number of units produced. Both show the effects of an increase of scale; economy of scale shows the effect on cost of production per unit of product, return to scale that on the ratio between input and output quantities.
It has been said that constant returns to scale implies that all producers (whatever their scale of production) can produce goods at the same unit costs: and this makes self−production a feasible alternative to market production. And therefore that if labour is the only factor of production, self−production becomes the only option: and the market economy ceases to exist.
Once again Wil Coyote closes the book, and a thought balloon appears above his head: “Hmm… let’s see: suppose there are two people, A and B, each of them produces two different products, X and Y, and each of them produces one unit of X and one unit of Y a day, for a total of two X and two Y a day. Now suppose they apply division of labour, and A specialises in producing only X, and B specialises in producing only Y. Then suppose that after a while A produces two units of X a day and B produces two units of Y a day, for still the same total as above of two X and two Y a day. Shortly after both A and B would reverse division of labour and return to produce both products autonomously, if only for sparing the repetitiveness, the burden of the exchange and for the principle of risk−sharing, just in case one of them would ever get sick. That is, if there were no increasing returns to scale and scale economy, there would be no reason for division of labour, specialisation and exchange. Therefore, the fact that division of labour, specialisation and exchange do exist in turn demonstrates that their very reason exists, too: increasing returns to scale. Besides, it has been pointed out how in the case of a building, for instance, while its surface, and its related costs as factors of production, increase by the square, its volume, and its related production potential, increase by the cube… at the very least, if you compare a one−storied building to a skyscraper! And, still on the subject, learning, education, training are quite another such case: the more you invest in them, the more production simply booms!”

Adam Smith is the first cornerstone of neoclassical economics, and he contradicts himself. On the one hand, he celebrates the division of labour and its relationship with exchange in a virtuous circle of growth, “The division of labor, however, so far as it can be introduced, occasions, in every art, a proportionate increase in the productive powers of labour.” “As it is the power of exchanging that gives occasion to the division of labor, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market.” On the other hand, his intention was to discredit the dirigiste policies of the mercantilist and make the case for ‘laissez faire’ (another label for neoclassical economics), and the benefits of division of labour and exchange were among the foundations of the mercantilists.
Hence he set them aside where he went on with his logical sequence in which the "invisible hand" of the self interest of buyers and sellers eventually determines a "central" or "natural" price on the "free" market, and he rooted the concept of such "central", "natural" price in constant returns to scale.
Constant returns to scale is a static lie: it is not only a falsehood; it is static, too. When you tackle a confusion, you begin to sort it out by taking something in it as a reference point. From the viewpoint of a reseacher, a confusion is a number of variables, and in order to know what each of them does, the researcher manages to hold the other variables firm. But he does so with each of them, and once he knows what each variable does, he reports it. And in doing so the researcher admits these are variables, not static elements.
Constant returns to scale is not an isolated case; assuming variables as static elements and then never restoring them to their true nature is a standard practice in neoclassic economics. And the deductive approach lends quite a helping hand in justifying not measuring onself against contrasting facts.
It has been said that the classical economists’ shift towards static analysis was an ideological necessity. That their tenets are deductive, static, and detached from reality can be freely investigated and we are reviewing the fundamental ones here; the point is, why? What is the motive of such tenets?

Deductive approach, static analysis, variables permanently assumed as static elements, they all add up to the staging of a fiction passed off as reality.
Increasing returns to scale means an obvious fact: a bigger organisation is more competitive than a smaller one; in other words, the stronger is stronger than the weaker. What’s the point in attempting to conceal that?
Fooling the weaker into believing there are no stronger and weaker, and by doing this preventing the latter from taking action to protect itself from the stronger. How?
The truth of increasing returns to scale is a dynamic factor, a variable that shows that bigger businesses not only do influence prices, start on their route towards oligopoly and monopoly, and outdo smaller ones, but that they do so across national borders as their competitive advantage expands across the markets. It shows that rich countries outdo the poor ones across open borders; it shows what protectionism protects poor countries from with closed borders. Conversely, the neoclassical static lie of constant returns to scale serves the interests of the oligo−monopolies and of the rich countries by concealing the truth: no increasing return to scale, no oligo−monopolies nor rich countries outdoing poor ones. At least not in the holy scriptures of mainstream economics.
When the stronger organisation attacks the weaker, the stronger wants free reign to unleash its strength against the weaker, while the weaker seeks help from third parties to defend and protect itself. Hence the stronger organisation wants “free trade” and governments out of its way, particularly the weaker ones, while the weaker one wants its government to intervene with protectionist measures. Unless its government has been fooled into believing there are no stronger and weaker, there is no attack, and everything that is going on is perfectly justified, natural, and all well and good.

There were, and there are, rich countries and poor countries, and there are now large−scale multinational corporations bigger than governments, and “free trade” favours the rich and the big at the expense of the poor, while protectionism protects the poor. “Dirigiste” mercantilism and mercantilists were protectionists, classical and neoclassical economics and economists were, and are, instrumental to justify that “free trade” which in the parlance of the various times went by the names of ‘colonialism’, ‘neocolonialism’, and ‘globalisation’. Adam Smith and the other classical economists first; and later on the neoclassical economists, worked for stronger economies such as Britain, and among the classical economists it has been said that “Josiah Tucker had the candor to concede that what was good policy for Britain was not good for poor countries. It would be judicious for them to take protectionist measures to raise productivity in their manufacturing activities.”
It is not to be believed that a successful attack is harmless to the victim, and an economic attack is hardly different from whatever form of attack; as they say, the winner takes it all, and it is all taken away from the victim: the victim gets bought up, all its resources, a term to meditate upon, suffocated or usurpated, and its people become the property of the attacker and at its mercy.

What is maximum capacity utilisation?
It is the assumption that all available resources are always fully employed. Well, just go and observe for yourself. Actually, it may be a bit difficult out there to isolate what a resource is, and even more so to determine what is its available amount and how much of it is being utilised. In the case of land, for instance, one has to consider the needs of flora and fauna, of oxygenation, of flood areas, mountains, and built−up areas to assess how much arable land is needed and not utilised.
However, such problems are outscored by something that underlines them; the core here is the most fundamental resource: people and their willingness. And indeed you can go and observe for yourself that, too, not to mention that on this core of the subject you probably have your own personal experiences.

Maximum capacity utilisation in terms of human factor translates into individuals using 100 percent of their abilities and willingness to the 100 percent of their energy for 100 percent of their time. Well, even those committed to subjugate Man are considerably busy researching the right buttons to push to tame him and crank him up, which means that his willingness is not so immediately available. Human beings have to be motivated, and we have seen how the suppressive assumption of materialistic self interest influences both the quantity and the quality of human commitment. Incentive structures are the bridge between human nature and resource utilisation, and if they are based on a degraded false assumption not only they are degrading as described above, but quite in addition they prevent the full utilisation of resources. And since people and their willingness are the most fundamental resource because withouth them no other resource is utilised, you can easily see how far from maximum global capacity utilisation we are.
So, what may this false assumption conceal? The fundamental resource are people and their willingness, and they have to be motivated, so what may be the point in concealing that?
One possibility is protecting the suppressive manipulation of people. First, the assumption of materialistic self interest produces degrading incentive structures in society, and the resulting degradation of people is not confined to hampering their motivation, but corrodes them across the board. Second, many powerful interests are engaged in manipulation of people. Assuming human beings do not need motivation contributes to detract attention from the subject and thus to let such activities proceed unhindered and undisturbed.
Another possibility is contributing to clear the way for the powerful interests behind the neoclassical economics by destroying the natural obstacles to their power: the individual, the community, the society, the identity, the citizenship, the culture, the institutions, and the social structure and ethics. If people need motivation, then people produce motivation; the whole human structure, from the individual and his or her sense of identity and ethics and citizenship and culture, to the whole social structure as the compound of all the individual contributions, is the resulting huge woven incentive structure. As such, it is the natural obstacle to both the criminals who want to exploit people and the suppressives who want to eliminate them. Assuming human beings do not need motivation contributes to make the whole social structure appear less important, something the suppressives and criminals can more easily persuade people to dispose of absent−mindedly, and, being less important, to make people less inclined to question the incentive structures woven into the social structure, thus making them more easily manipulable.

What is perfect competition?
When you research the subject, you end up with the adjective ‘perfect’ being synonymous of ‘fair’. Fair competition and fair market meaning no one throws one’s weight around, we see how this is an ideal condition having quite a number of, alas, quite idealistic requisites. Wikipedia currently lists thirteen of them, specifying that the actual requisites merely include those listed, and pointing out that those listed are but those currently prevailing in the discussion on the subject. It is nonetheless interesting to summarise them here to give you an idea:
Enough buyers−comsumers and sellers−producers willing and able to purchase and supply the products at a price to their liking.
All buyers−comsumers and sellers−producers know everything there is to know about all products, including their prices and their benefits.
The competing products of competing sellers−producers are perfectly interchangeable with one another.
The property rights regulating what, and what rights to it, are owned and can thus be traded are well defined and established.
There are no barriers to transfers of products in the area.
All participants are price takers, and no one has such market power to set prices.
The are no barriers, at least in the long run, to the perfect mobility of any factors of production to adjust to the changes in market conditions.
All sellers−producers are free to adjust, and do adjust, to the price, input and output levels that lead to their highest profit.
All buyers−comsumers are free to make, and do make, all trades that give them the maximum economic utility, as well as free to not do vice versa, too.
Costs or benefits of any activity do not affect third parties, including no externalities on anyone from government intervention.
The cost of any transaction in itself is zero, and therefore does not add any additional cost to it.
Regulation authorities provide fair and effective regulations and protections eliminating any anti−competitive practices.

No factors are present jeopardising the presence on the market of enough sellers−producers to ensure perfect competition. These are all the factors which make organisations the more competitive the bigger they are or they get, and a less euphemistical way to define this condition is that the market is oligo−monopoly−proof. Such factors include the economies of scale and the increasing returns to scale we’ve seen before, hence why neoclassical economics is based on the assumption of non−increasing returns to scale: increasing returns to scale destroy their fiction called perfect competition.
I mean, once again you can dedicate yourself for a little while to see for yourself whether these conditions do occur in the real world to a full extent. Even though some may not be so self−explanatory and observable, so much that we’re going to review next one of them in particular indeed, I guess you can get the idea. Hence, what’s the point in assuming perfect competition?
I started by saying that a perfect competition is a fair one where no one throws one’s weight around, and indeed by its definitions it is one where no one has the power to set the price. It is also true that such definitions are themselves influenced by neoclassical economics, in that they are focused on price alone, and it has been observed how in this regard neoclassical economics fails to consider all the other facets of market competition, such as competition on quality through better products, competition on quantity through greater choice and availability such as with large−scale retail, competition on service through better assistance, logistics and speed, competition on information through advertising and control of media, competition on support through the control of finance, legislation and “public opinion”, and indeed this vast incompleteness adds to the gap between neoclassical economics and reality.
However, these definitions of perfect competition nonetheless go to the heart of the matter: there is but one cause behind all the various factors making the competition imperfect, and that is the intention of some economic players to defraud others with a rigged deck of imperfect competition. As usual, the purpose of staging a lie is concealing the truth, and those who profit from that.

What is perfect information?
His big books told Wil Coyote to save this tenet for last; dulcis in fundo, they read. He’s still wondering why.
For a number of reasons, Wil. For one thing, of all the props of the neoclassical stage, this is the most central one. For another thing, being a central assumption of the mainstream school of thought, it is a textbook case of an “everybody knows that” everybody takes for granted without even thinking about it, and which anyone caring about his position would hardly dare to question. For another thing more, while it is passed off as an innocuous assumption, quite to the contrary it is an enormity; as Werner puts it, “To assume perfect information is a monstrous distortion of reality. It creates a fictional world that is not just a little different from reality, but one that is diametrically opposed to what constitutes the very essence of the world we live in. All economic activity is based on the very fact that information is not perfectly and equally distributed.” And for another thing more, Werner still, “Since the fiction of ‘perfect information’ is a standard assumption, most economists have become thoroughly hardened to its enormity.”
So vast is this enormity that I’ll confine our review to a brief overflight of the regions of this terra almost incognita that Werner has mapped for us, sharing his introductory comment: here’s a glimpse at how a parallel neoclassical universe of perfect information would look like, if it ever did exist at all.
Before we fly through the looking glass and this terra almost incognita materialises on the horizon, Wil Coyote suggests that I clarify the basic terms which are apparently obvious: ‘perfect information’. Good point, Wil.
I call it ‘the logistics of data and information’. It has been said that the definition of datum is ‘anything that can be known’, and it could be said that the definition of information is ‘valuable datum’, which implies that it has been received, confronted and evaluated. I’d say that a suitable definition of logistics is ‘anything needed, anywhere needed, anytime needed’. That said, I would define what I call the logistics of data and information as ‘any data and information needed, anywhere needed, anytime needed’. I guess that could be a good definition of ‘perfect information’. Wil Coyote nods in agreement: now we can fly through the looking glass and overfly the parallel neoclassical universe where everyone knows everything already and therefore…

There would be no meetings. Whereas, in the universe we came from, our organisations invest much in meetings where information is shared and produces understanding and coordination.
There would be no events. Whereas we invest much in events where information is exchanged and produces innovation and development.
There would be no media. Whereas we invest much in means to store, communicate and consume information and culture, thus feeding whole business sectors.
There would be no audits. Whereas we invest much in training and hiring analysts to unravel the misteries of corporate records.
There would be no corporate accounting scandals. Whereas we are regularly stabbed in the back by fraudulent bankruptcies.
There would be no obscenely paid top management scandals. Whereas every now and then we are outraged to find out.
There would be no secret services. Whereas much of our taxes is invested to discover political, military, commercial secrets, and to plot against us and our civil and innermost liberties.
There would not be politicians coming from the showbiz. Whereas with us stardom is often sufficient to be elected to the highest public office.
Any product would be perfectly known and available to anyone. Wherease with us the biggest bottleneck for the producers is reaching the potential buyers through the jungles of distribution channels and information channels, where competitors vie for intrinsically limited resources such as shelf space, advertising space, and mind space.
There would be no education, study, learning, training. Whereas with us no one is “born learned” and so we have parents and families, teachers and schools, professors and universities, librarians and libraries, instructors, veteran colleagues and businesses, etc. passing down our knowledge, standards of living, culture and civilisation, and their preservation depend on them.
There would be no qualifications required nor headhunting. Whereas with us, to make our organisations function, our employers look for, favour and reward them; and so much important and needed qualifications are that they feed the headhunting sector.

There would be no brand reputation activities. Whereas with us the producers and their organisations invest much in building their reputation among the customers as a precondition for that of their products.
There would be no improvements and growth. Whereas we make discoveries and share them, which is new information, and by using it we produce improvements and growth.
There would be no issues related to information property. Whereas we do have many of them, such as laws on intellectual property and its regulation, protection, violation and licensing, in fields as diverse as plagiary in art, industrial espionage, technology aid programmes for developing countries.
There would be no import−export industry. Whereas with us the knowledge of languages, customs, laws, taxes and customs codes and duties of other countries is a valuable commodity.
There would be no salespersons, sales representatives, agents and intermediaries. Whereas with us the infomation gap between supply and demand is so vast, and bridging it so much important, that a significant percentage of us and of our resources is devoted to finding, developing, matching and assisting supply and demand in every field and any sector.
There would be no consulting industry. Whereas with us all types of specific expertise, commercial, technical and administrative, are a much valued commodity in every field and sector.
There would be no investment advisers. Whereas we do rely very much on these to know where to invest our savings.
There would be no telecommunication industry. Whereas we do rely on it to communicate, that is, to send information.
There would be no science and scientists, research and researchers. Whereas we do rely on them for the research and discovery of information on the still unknown.
There would be no lawyers and tax advisers. Whereas we tend to be forced to rely on them by more or less suppressive laws.
There would be no doctors and no professional certifications in general. Whereas we rely on doctors to take care of our health, and on professional certifications in general to ensure we are properly taken care of in many complex, specialised but crucial fields.

There would be no investigating police officers. Since there would be nothing to find out, and everyone knew everything, that would for sure shift the British Bulldogs game to another plane…
Probably, there wouldn’t even be telepathy: we already knew everything.
By the way, there would be no economists, either.

Dulcis in fundo, there would be no money. Yep: no quids. Why? Money is the solution to the problem of barter by splitting it and separating and disengaging from one another the two flows of the exchange. The problem of barter is that we don’t find someone who wants to have what we want to give and wants to give what we want to have; but in the parallel neoclassical universe of ‘perfect information’ there is no such a problem; isn’t it? Hence, no reason to invent money as a means of exchange in the first place.

Ironically then, if this tenet of ‘perfect information’ serving the greater interests of moneypulators and their partners in crime were true, the very raw material for them to erect their philosopher’s stone upon, with which to perpetrate the greatest swindle and the greatest crime against humanity in human history would not exist in the first place.

Well, so much for the “perfect information”. Werner observes, “It is no exaggeration to say that each one of us spends most of our time gathering, analysing, disseminating information and communicating with others. It is the very essence of our activities. It is the essence of commercial activity and hence of what happens in an economy. To assume perfect information is to assume that none of this happens.” My two cents, if we knew everything there is to know already, we would have little point in communicating. And it has been said that one is as alive as one can and does communicate.

Now, if all that were still not enough, it so happens that a large chunk of uncomfortable real world went to the trouble of refuting – or, rather, belying – the neoclassical economic theory as well: the Japanese “anomaly”.

Despite the fact that Japan outperformed Europe and North−America for 45 years, from World War II until the 1990’s recession, supporters of the neoclassical doctrine argued that their system was an obstacle to their prosperity, and obviously enough such doctrine did not win much support in Japan. Then recession came and with it more receptiveness, and the same doctrine that could not replicate Japan’s past success could not end its present recession, either, even though its adherents managed to turn that recession into an evidence in favour of their models and their receipts of “structural reforms”; namely, “deregulation, liberalisation and privatisation”.

Let’s get a bit technical about a first group of neoclassical theoretical foundations, on which a first group of neoclassical recepits are based. These receipts relate to public spending and interest rates. Werner informs us about these foundations.
The first one is not specific to neoclassical theory, and it is that actual output is the result of resources and of their productivity. Just to be clear, how much potatoes depends on how much farmers and land, and on how deft the farmers and how fertile the land.
The second one, on the contrary, is peculiar to the neoclassical theory, it is arbitrarily assumed as true just as the other neoclassical tenets discussed above, and it holds that the actual output equals the potential output. Just to be clear, all potatoes than those farmers and land can grow will be grown, always and however.
The third one derives from the combination of the first two, and it is that, for the neoclassical theory to explain reality and thus hold true, for any change in output there must be corresponding changes in – and only in – resources and/or in their productivity.
Well, Werner’s findings about the Japanese case are that all of them are false: first, there were no changes in resources and productivity such as to account for recession; second, the actual output during recession did not equal potential output; and thus third, the neoclassical theory failed to explain reality.
So much for the neoclassical foundations of the public spending and interest rates receipts. They had to be rooted in a different province than truth, evidently, because the receipts derived from them made their way into the corridors of power in spite of truth. In fact…

The government applied the neoclassical doctrine and tried to stimulate the economy through increased public spending. To get the needed money, devoid of the carefully concealed basic of monetary sovereignty, and while the weaker economy further reduced tax revenues, the government couldn’t help sinking the State into increasingly greater debt. And it did not work. Record−sized public spending failed to lift Japan’s economy out of recession. It even seemed to have a negative impact on private demand.

The central bank applied the neoclassical doctrine and tried to stimulate the economy through interest rate reductions. To the usurpers of monetary sovereignty any interest on what they create out of nothing in their own pockets, be it positive, zero, or negative too, is immaterial, and indeed they reduced interest rates down to zero. And it did not work. That too failed to trigger a significant economic recovery.
Interestingly enough, Werner’s data show us how the cause−effect relationship between interest rates and growth in the real world, if ever there is one, is the exact opposite of neoclassical claims: neoclassical economists say that interest rates are cause and growth is effect, and therefore use interest rates to stimulate economy; real world data document how growth is cause and interest rates are, if ever, effect, and therefore how it cannot be at the same time the other way around, too.

To these failures the countermoves of the supporters of neoclassical mainstream were two, typical and fraudulent: “claiming not enough”, and “lowering the bar”.
As to “claiming not enough”, the swindle consists of claiming that the cure is not working because its amount is insufficient, and thus advocating that the “cure” is even increased. The neoclassical cure for Japan was so “insufficient” that the unprecedented “stimulation” doubled−to−tripled the outstanding public debt over Gross Domestic Product on the one hand, and on the other hand it reduced the interest rates down to zero. The typical fraudulent mechanism here is passing off the cause of the disease as its cure: as long as the victim can be made to buy it, the suppressive criminal can say that the cure is not working because its amount is still insufficient and has to be increased, thus increasing the suppression, and the whole point is: what will the victim do first, wake up or die?

As to “lowering the bar”, here the swindle is that if the mountain won’t come to the theory, then the theory goes to the mountain. The mainstream economists turned the tables and “adjusted” the very definition of effectiveness their theories had to be judged by: from the definition they labelled “mutatis mutandis”, creating significant positive growth, to that they labelled “ceteris paribus”, preventing a contraction that would “undoubtedly” occur in absence thereof. As to the typical fraudulent mechanism, here, it has been said that when one can’t solve something, the only way to maintain an authoritative position on the subject is saying it can’t be solved. And, I would add, sweeping those who can, and those who say the king has no clothes, under the rug.

But the best was yet to come.
The ineffectiveness of both the public spending and interest rate reduction recepits was in turn exploited as evidence that the answer was another neoclassical dogma, a major one: “structural reforms”. “Deregulation, liberalisation, privatisation…” we know the chorus and, what do you know, the choir singing it swelled its ranks and sung it loud enough in the helpful sounding board of media to hide the lack of empirical evidence. Or, rather, the contrary evidence.

Let’s now get a bit technical about a second group of neoclassical theoretical foundations, on which a second group of neoclassical recepits are based. These receipits relate to the chorus: “structural reforms”. Werner informs us about these foundations, too.
The first one is that, after deficit public spending regardless was pushed as a receipt for recession, now the ensuing debt problem suddenly was the cause or that recession.
The second one is the first group of foundations previously covered – and refuted –: they now come back into play, put in place by force, to become the foundation for a second group of receipts.
Well, these are nothing less than the full package of the very neoclassical assumptions which, after his previous thorough inspection, Wil Coyote concluded they do describe the world of cartoons, not that of the economy: “Perfect information, perfect competition, maximum this, constant or diminishing that… it’d be nice if the laws of cartoons applied to the material world, too, isn’t it? People in the real world wouldn’t get seriously hurt when they fell to the canyon floor… just like me!”

So let’s now study Werner’s findings as to how much Japan resembles cartoons. Our conclusions about which province these foundations have to be rooted in for the ensuing receipts to make their way into the corridors of power, will come as a consequence.

Werner compares hard data about United Kingdom and United States on the one hand, and Japan, Korea and Germany on the other; in the postwar era the first have had their economies shaped according to the neoclassical principles and the axiomatic and deductivist approach, while the second have had theirs shaped at odds with those principles, on the basis of an inductivist and empirical approach. The meaningfulness of this comparison is that, as testbeds too narrow may be unbalanced by contingent factors, here the structural reforms demanded for Japan had a testbed many contries wide and half a century long to prove themselves; hence the evidence in their favour should be both undeniable and abundant. Let’s see…

Time period: from 1950 to 2000.
Average real Gross Domestic Product growth percentage rate:
United States: 3.2
United Kingdom: 2.4
Germany: 4.0
Japan: 6.3
Korea: 7.6
Gini coefficient (explained below):
United States: 40.8
United Kingdom: 36.1
Germany: 30.0
Japan: 24.9
Korea: 31.6

You know how it goes with averages: they said that behind the figure of half a chicken per capita there could be half a chicken for you and half a chicken for me, but there could be a whole chicken for you and an empty plate for me as well. And here’s where the Gini coefficient above comes into play: given that whole chicken, it measures the fairness of its portions. Here it is expressed on a scale where 100 means the whole chicken in one plate and no chicken in the other, and 0 means half a chicken in both plates: the higher the number, the less fair the portions.

So we have a two−stage yardstick here:
First, we can observe how reality belied neoclassical economics and its supporters in terms of the overall result: contrary to their claims, countries abiding by what they demand did not better than those that do not; on the contrary, they did quite worse. And to this it must be added that for one fifth of that time period Japan underwent a severe recession. Does the fog begin to lift?
Second, we can observe as well how reality nailed neoclassical economics and its supporters as to inequality, too: in addition to delivering less instead of the more claimed, that less is also more unequally shared. And to this is must be added the fallout on people’s lives of this less, amplified by this greater inequality, in terms not measured by the above figures but which still do constitute the quality of life, such as unemployment rate, injury rate, crime rate, suicide rate, etc. Does the fog continue to lift?

But then Werner moves on from static to dynamic: the above outlines the outcome during that time period as an overall static picture, so now let’s put it in motion to observe more closely the relationship between a change in the degree of neoclassical “cure” and a change in the Japan’s health.
This dynamic testbed as well is half a century long because Japan underwent a constant neoclassical pressure since the 1960s and started to change significantly from the 1970s onwards, resulting in a progressive but radical shift in that direction, which makes an ideal testbed for neoclassical structural reforms to prove themselves.

To gauge the increasing degree of neoclassical reshaping of Japanese economy Werner mentions various dials: the increase of imported manufactured goods (a sign of deregulation, liberalisation, etc. and the subsequent globalisation), the decline of corporate financing via bank loans (a sign of financing via shareholders and of the subsequent “shareholder capitalism”), the increase of previously government−owned companies privatised, the decrease of government regulations, the increase in job mobility, and, particularly, the decline in the number of explicit, official cartels. Werner reports they are defined as official exeptions from the Anti−Monopoly Law granted by the Fair Trade Commission, and then compares their number with the nominal Gross Domestic Product growth rate expressed in percentage on a year−by−year basis. Let’s see…

Time period: from 1958 to 1998.
Phase one: the 1950s. Both increase sharply: cartels increase from about 400 to nearly 1000, Gross Domestic Product growth rate increases from about 6 percent to about 15 percent.
Phase two: the 1960s. Both maintain a steady trend: cartels average about nearly 1000, Gross Domestic Product growth rate averages about 15 percent.
Phase three: 1970s to 1990s. Both maintain a constant declining trend: cartels decline to nearly 0, Gross Domestic Product growth rate declines to less than 0.

So we have another yardstick here, and it speaks for itself.
Not only it is a testbed long enough to allow neoclassical structural reforms to prove themselves, but to further expand the sample it also happens to span across, and document, a complete set of trends: rising, steady, declining.
A conclusion? In Werner’s words, “The financial press and learned commentators assert almost on a daily basis that Japanese economic performance will improve if US−style capitalism is adopted. However, the truth is that there is no empirical foundation for such a claim. The structural reform argument must be considered an unfounded theory. If one did consult the empirical record, then one can only conclude that Japan’s structural reforms towards deregulation and liberalization have been accompanied by a steady reduction in economic growth, both in the short term and in the long run. Reforms may be ‘badly wanted’ by certain parts of society. However, it is far from clear that they are ‘badly needed’.
Especially in the 1990s the proponents of structural reform in Japan have dealt with this uncomfortable fact by simply moving the goalposts on the definition of structural reform. As the recession of the 1990s continued despite accelerating structural reform, it is simply claimed by the reformers that the continued weak economic performance is due to the insufficiency of reform: if even further−reaching reforms had been implemented, economic performance would surely improve. Obviously, this merely expands the range of unsubstantiated assertions, but does not constitute factual evidence.”

I often stress the importance of detecting the strategy I label “passing off the cause of the illness as its cure” at work. In confronting here the direct correlation between the neoclassical reshaping and the state of Japanese economy, it is apt to have an idea of the degree of neoclassical reshaping correlated with such results; the reason is comparing the claims of its insufficient application to the actual degree of its application. Werner informs us that “by the end of the 1990s the scale of structural reforms had reached such proportions that even structural reform proponents were in awe.” So, if such a degree of application is “insufficient”, where would a “sufficient” degree lead us?
And, finally, to all this it must again be added the meaning of these dry figures in the flesh of people’s lives: it is important that we pay due attention to it, because figures and graphs may tend to be overlooked as “cold and meaningless”, and we may fail to confront fully what does each slump in a graph mean in terms of real sufferings in real lives of real people like us. Furthermore, there are the further social costs – an euphemism for human sufferings –, in the undocumented terms of unemployment rate, injury rate, crime rate, suicide rate, etc., that usually escape the GDP and Gili index figures. Has the fog lifted completely?

If it hasn’t, and some fog bank still floats, let’s blow it away by touching upon the fact that many of the injuries caused to people by the advocates of the Pensée Unique are of a very precise type: divide et impera, divide and rule. How many wars among the poor are provoked? How many casualties are caused by every war among the poor? What is a war among the poor other than putting us all agaisnt each other, through hunger or some other pretext? And who is doing that and thus is responsible for all the casualties?

And now that the fog has lifted, there’s even something else that becomes visible behind that. Should you ever be puzzled by the strong position held by the Pensée Unique and its false dogmas in the fields of media, education, government, and not only in finance, as I previously said, if anyone has a price, now someone has the money; and these antisocial, suppressive assumptions are instrumental in paving the way: the more one can be conditioned to believe that self−interest and the accumulation of material wealth are the only motivating values of anyone, self included, the more one is liable to become willing to have a price.

So far, we may think that Pensée Unique and neoclassical economics are synonimous, but that is not the case: the strategy is more sophisticated. And Werner informs us of its key factors:
First, at the centre of the temple formed by the previously covered neoclassical assumptions there is a sancta sanctorum, and it contains the very few core ones.
Second, the neoclassical school of thought is not the only mainstream school of thought in economics; not only there are also the classical, neoclassical, new classical and real business cycle mainstream schools of thought, not too divergent, but there are even other schools of thought which are more divergent and nonetheless mainstream as well: the Keynesian, monetarist and fiscalist.
Third, regardless of how divergent, all the mainstream schools of thought in economics share that same sancta sanctorum.
Some may call it role playing; a bit like politicians playing right wing vs left wing to distract us from what’s really going on. Isn’t removing the truth from the stage and at the same time clogging that stage with red herrings the most obvious cover−up strategy?
On the other hand, if we find out what’s in the sancta sanctorum of the Pensée Unique in Economics, and shed light on it, that’s likely to get us somewhere.

In Werner’s words, “We can also identify several aspects that they have in common: firstly, they are all based on the deductive methodology, which starts by making assumptions about reality, and then proceeds to build models; secondly, they generally are based on the faith that most markets will be in equilibrium…” (a market is said to be in equilibrium if the economic entities in it, individuals, groups, companies, etc. can adjust their economic relationships freely, without constraints or interference, “where an equilibrium is determined through movements of prices to the level that equalises demand and supply”); “thirdly, they all agree about the link between money and the economy … which forms the fundamental pillar on which they are built; and fourthly, they all do not work – since they are unable to explain events in the ‘real world’, for instance the second largest economy. Since they have in common that they do not seem to work, it stands to reason that their other common features may be part of the problem. We can easily test this, and thereby simultaneously put all mainstream macroeconomic theories on trial, if we test their common foundation, namely their postulated link between money and the economy.”

And that postulated link is that the ratio of the economy to money is constant; they define it as the ratio of Gross Domestic Product to the money supply. In their formula the Gross Domestic Product is the amount of products multiplied by their prices, and they postulate that it equals the amount of money multiplied by the number of times it changes hands. They call “velocity” the number of times money changes hands, and then they say that velocity is constant.
Said like this, true or otherwise, it doesn’t look like much; but as usual devil is in the details.

Formulas need data, and the Gross Domestic Product data are not only easily available, but easily defined as well. Not so with money. What is money? An only apparently silly question.
The tale of the answer to this simple question begins with economists which, in accordance with their deductivist approach, simply postulate that both what money is and how much of it there is are established facts, and it ends with Werner quoting Alan Greenspan, Chairman of the Board of Governors of the Federal Reserve System, stating in front of the House Budget Committee in 2001, “We have had an extraordinary difficulty in trying to find the right proxy to measure money per se, and none of these various measures – M2, M3, … – as best we can judge, seems to have the characteristics necessary for moneyness…”

I previously mentioned what those various Ms are: M1, M2, M3, etc. are the labels invented by economists for the progressive degrees of dilution and blurring of the very concept of what money is. And we now know what’s going on underneath those labels: moneypulation through usurpation of monetary sovereignty.
This tale unfolds along the path of the Wizard of Oz, and many are its interesting points:

Werner informs us how “most leading university−level textbooks on monetary economics offer no proper answer”, for starters, and quotes some of them: “theoretical models of monetary economies often provide little guidance to how the quantity of money appearing in the theory should be related to empirical measures of the money supply”; “an empirical answer to the definition of the money stock is much more eclectic than its theoretical counterpart”; “money is difficult to define and measure” and “divergences in views about what constitutes money are likely to widen with time”.
The economists first tried the formula with the most deductivist, restricted – and unreal – among those various Ms, such as cash or the money issued by the formal rightful (let us use these adjectives, even though ridicolous here, for sake of clarity) holder of monetary sovereignty. But as these account for just the scraps of all transactions, that was an untenable position.
So they delved into the deep uncharted sea of those various Ms, and finally resurfaced from it with their solution: the “money multiplier”: they chiselled brave new formulas whose appeal lies in their increased complexity, but whose net result is, once again, postulating that the amount of all that uncharted sea of money is simply proportional to that of the money discernible on their deductivist seashore.
Indeed it has been said that all the answers are basically simple, and there’s nothing like its opposite to – hopefully – realise it. On the strategic usefulness of complexity, Werner again: “As the reader will readily discern, there are limitless ways in which this expression can be rendered more complex, without adding any information value, and this is what has actually been done. This rather convoluted way of looking at the ratio between a broader money supply measure … and a more narrow one … has also encouraged researchers to postulate (without empirical evidence) that broad measures of money are in some stable relationship to narrow ones,” – after which he gves us a clue – “and that bank deposits are merely an extension of narrow money measures. Consequently, for decades little need was felt to study the origin and role of deposits further, the actual functioning and economic role of banks or other institutional realities that could yield important insights into how the economy works. The deductivists could stay within their axiomatic models and did not have to venture into the vagaries of reality.”

Back to their purpose of demonstrating true the foundation of their mainstream schools of Pensée Unique in Economics, that the “velocity” with which money changes hands is constant, and that therefore the ratio of Gross Domestic Product to the money supply is also constant, the unresolved issue of what money is resulted in a license for economists to choose the definition of money supply that best suited such purpose of theirs: if choosing one definition did not produce a velocity constant enough, well, choose another. As they say, try again, you’ll be luckier next time…
“Textbooks and researchers have been unwilling to tie themselves down to any one measure of the money supply, partly because there is such a large variety to pick and choose from.” Points out Werner.

But Werner points out something else, too: “This in itself, however, should make us suspicious: how could confidence in economics and its link to reality be high, if what surely must be one of the most important variables in economics – the amount of money circulating in the economy – cannot be measured or defined accurately?”

The unmasking of the Pensée Unique in Economics begins by the demolition of its foundation: that the ratio of Gross Domestic Product to the money supply is constant. And it starts from there not by chance, and in the most overwhelming way.
Not by chance because, not surprisingly, the hidden real purpose of the Pensée Unique is directly connected to its foundation.
In the most overwhelming way because that foundation proves false with any definition of money supply.

Data in hand, Werner plots the graphs of the ratio of Gross Domestic Product to ALL the measures of money, and finds that “velocity” is higly variable over time. So inescapable is this fact that the aforementioned statement of the then Chairman of the Board of Governors of the Federal Reserve System in front of the House Budget Committee in 2001 is a grudging admission of it.

Then, another fact in those graphed data bridges from the false foundation of the Pensée Unique to its hidden real purpose: not only the ratio of Gross Domestic Product to the money supply is highly variable, but in addition it is so only in one way: downwards.
Werner’s data are for Japan, but he reports that Japan is no exception, and that many studies and economists documented how that ratio “appeared to hold until the early 1970s”, and then it “increasingly came apart at the seams during the course of the 1980s”, so… “A decline in the velocity meant that the money supply grew faster than nominal GDP. But where did the money go?”

As Werner’s graphs show the ratio for different measures of money, perhaps a further interesting clue may be found in comparing the graphs: if the more a money measure is detached from the root one – the money issued by the formal holder of monetary sovereignty – and the more the resulting ratio declines, this would mean that the more monetary sovereignty is usurped, the more moneypulation takes place.

Anyway, Werner asks the pivotal question, and Werner finds its answer: the money went to speculators. It could be said it never left the pockets of moneypulators.
This answer is obviously found by facing head−on exactly what the Pensée Unique conceals: the terms of the question are Gross Domestic Product and money? Let’s look at them more closely.

Not all transactions that take place are reflected in Gross Domestic Product. Financial, speculative ones do not. As the name implies, GDP is about production; finance is about speculation, not production. So let’s disaggregate both transactions and the money used for them in those that are part of the Gross Domestic Product and those that are not.

Negligible detail, looking more closely at money here means getting to the root of things, diametrically opposed to the blatant cover lie universally maintained by the mainstream economics establishment. To further clarify it, let’s merge the terms money and credit into a single basic one: purchasing power. Why? Because we do now know the first are swept by the waves of legal tricks, while the latter is the undisturbed undersea current of substance.
The cover lie is: banks are mere intermediaries of existing purchasing power. The truth is: banks – and only banks – do enjoy the “privilege” of creating purchasing power out of nothing. In their own pockets – just another negligible detail.

One of the difficulties in answering the question “what is money?” in relation to Gross Domestic Product is that in this context money is only that which changes hands, not that which remains idle in one’s pockets. And the negligible detail above clarifies that difficulty, too: almost all this money changing hands is purchasing power created out of nothing by banks.

Once disaggregated both transactions and money, Werner puts the neoclassical foundation back to the test, but this time separatedly: how is the ratio of transactions to money that are both part of the Gross Domestic Product? How is the ratio of those that are both not part of it? That is, how are the “velocities” in production and in speculation, respectively? Constant. Both of them.

Gross Domestic Product represents only production−related transactions, prior to this disaggregation it was compared to money used for both production−related and speculation−related transactions, and the resulting ratio was declining: there is surplus money and it is not production−related.
The ratio of production−related transactions to production−related money is constant: that money is used for production.
The ratio of speculation−related transactions to speculation−related money is constant: that other money is used for speculation.
That’s where the money goes.
And, by the way, comparing the sizes of the speculation−related and production−related sides in time tells us another interesting tale, too: the size and trend of the problem.

Then Werner “follows that money”: who controls it, and with what effects? This thread begins with the concept of market equilibrium and disequilibrium, and a market is said to be in equilibrium if the economic entities in it can adjust their economic relationships freely, that is, prices move freely to the level that equalises demand and supply without constraint or interference; a market in such a condition is said to “clear”.

The Pensée Unique postulates deductively that markets are in equilibrium on the basis of its fundamental assumptions, such as that of perfect information. We have already seen how such assumptions are blatantly false and how the deductivist approach is but a cover−up strategy. The reality is that market are in disequilibrium, that is, they are subject to constraint or interference, and in such a condition they do not “clear” at all.

Markets in disequilibrium are also called rationed markets, meaning that they are determined not by prices, but by quantities. In other words, a rationed market is one in which people cause the state of affairs not through prices, but through quantities. And the use of the verb “to ration” means that this is done through scarcity. Someone has the power of making either the demand or the supply of something scarce, and of exploiting this power to profit and control. Or, rather, to plunder and enslave.

And the rationed factor in the economy is none other than that very purchasing power that banks create out of nothing… (in their own pockets, incidentally.)
It is rationed supply side: demand side, unlike goods, its demand is unlimited; supply side, banks enjoy the monopoly of the privileged position of being totally free to decide both how much and to whom.
Think about it: virtually all the purchasing power circulating in the society as a means of exchange is credit created by banks, out of nothing and out of their monopolistic privilege; this means that they can do as they please with it – and with us – and when they do no other economic entity can ever step in because no other economic entity shares in both their monopolies, that of circulating purchasing power and that of the privilege of creating it out of nothing.

It could be said that our long investigation has eventually brought us back to what we knew all along: what makes that organism called society thrive or wither is none other than the lymph called purchasing power, transporting the nourishment to its cells, depending on whether its flow is boosted or hindered. And what is true for the whole is true for its parts as well.
In Werner’s words, “This means (a) that the market for credit is determined by the quantity of credit supplied by the creators of credit, and (b) those suppliers – mainly commercial banks – make allocative decisions about who will obtain loans and who will not. … credit supply determines the credit market and hence economic activity. The supply of credit constitutes a binding finance constraint on the macroeconomy… Credit rationing by the banking system in aggregate will also lead to rationing in other markets. … Since the credit market is supply−determined and the decision about whether and how much to lend and who to lend to is entirely made by the banks, a crucial public goods function that affects the entire economy is performed by them. They not only create most of the purchasing power in the economy, they also decide about who will use it for what purposes. A rationed market means that some loan applicants are accepted, while others are rejected. There is no guarantee that the choice made by individual banks is consistent with the allocation that would maximize social welfare. Given the pervasiveness of imperfect information, it would be a mere coincidence if the banks’ decisions were welfare optimal. Indeed, the incentive structure of loan officers may produce behaviour that is oriented towards other goals than what would be in the interest of the overall population (for instance, they may favour large−scale firms in established industries, as this may minimize risk to their own job security, or real estate speculators, expecting high profits).”

So if the result of the investigation is that, on the one hand, behind the lies of the Pensée Unique the truth is that what counts is how much and to whom, that is, enough purchasing power where it is productive for all and none where it is harmful, and if, on the other hand, this crucial factor for the common good is relinquished to the discretion of its monopolists, consequently Werner deduces that there is a case for intervention in the common interest, and wonders whether such interventions do take place at all – which would also constitute proof that those so intervening are aware of the truth, since they use it.
And the answer he finds is articulated, so to speak.

“The fact is that precisely such credit controls have been implemented by most central banks all over the world. Credit controls have at one stage been used by, among others, the Bank of England, the Bank of France, the Bank of Japan, the Bank of Korea, the Bank of Thailand, the US Federal Reserve, the German Reichsbank, the Austrian National Bank, the Reserve Bank of India, the central banks of Malaysia, Indonesia, Taiwan, China and several dozen central banks of developing countries. Finally, even the IMF (International Monetary Fund) has throughout its existence engaged in ‘direct guidance’ of bank credit to specific sectors of the economy. It turns out that most fast−growing economies have relied on fairly formalized procedures of credit control in order to enhance economic growth.
Polak (1997) describes a typical IMF exercise in ‘financial programming’ of the kind that the Fund has regularly implemented in numerous countries over the past decades. According to Polak, information about credit creation in a client country is disaggregated by IMF staff, and the specific allocation of credit creation to different parts of the economy is made subject to IMF conditionality. Credit creation for ‘non−productive expenditures’ receives the IMF’s ‘frowning’ and is dealt with through the enforcement of ‘financial restraint’, that is, credit rationing. Much more evidence can be gleaned from the (often confidential) structural adjustment programmes implemented by the IMF all over the world in over 100 instances over the past 50 years.”

So far, the evidence they do tell truth from their lies. But when it comes to what they use the power of truth for, the matter takes an even darker turn:

“If this is the case, why have central banks and the IMF not openly admitted their de facto belief in disequilibrium economics? Central banks and the IMF have spent considerable resources on supporting esoteric … equilibrium economics by hiring many expensive economists and funding their publications. Their revealed preference in terms of their actions (as opposed to their official publications in economics) does not conform with their proclaimed economic orthodoxy concerning the assumptions about market clearing (but it makes sense in the real world with disequilibrium economics). It would appear that the IMF uses such mainly neoclassical models as a political tool to justify, or cover up, what is de facto direct intervention by a bureaucracy. While this in itself is contradictory, it is likely that the IMF has refrained from admitting publicly its belief in more realistic, quantity−based and credit−focused models, as it may undermine its political agenda of enforcing predetermined, market−oriented structural adjustment programmes that tend to force open the markets of developing countries for the benefit of foreign investors. As a result, both the IMF and most central banks have played down the importance of credit controls in many official publications. Even when credit controls exist, their existence has frequently been denied.”

When it comes to confronting the fact that some self−crowned kings have no clothes, some more of Werner’s evidence and observations doesn’t hurt:

In the thirteenth century, Marco Polo made his famous journey to the Mongol Empire of Kublai Khan. He was a trained merchant, thus he reported two illuminating facts, cause and effect: a) Not only Kublai Khan held monetary sovereignty, but he also issued paper, legal tender and fiat money. b) The Great Khan had “more treasure than anyone else in the world”, and “all the world’s great potentates put together have not such riches as belong to the Great Khan alone”.

Exaggerated as it might seem to his comtemporaries, we now know this is but hard evidence that such is the power of money, of monetary sovereignty, and of moneypulation: Kublai Khan evidently understood that fiat money could turn sheer power in purchasing power fully. Regardless of his being the first usurper of monetary sovereignty from its legitimate owners, the producing citizens, and regardless of the division of its profits between him and the latter, that made the difference from the rest of world’s rulers who did not undersand it and so had monetary sovereignty restricted by the intrinsic value of their money.

Between the two World Wars the German Reichsbank, headed by Hjalmar Schacht, managed to bring Germany back from rubble to threats again, and what’s more, fast. And Werner reports two more illuminating, cause and effect, subsequent facts: a) “The German case may be an exception among industrialized countries, since the Reichsbank repeatedly and publicly attempted to explain its belief in the importance of ‘productive credit creation’.” b) Schacht “was a popular adviser with many developing countries in the postwar era. The German example had an especially profound impact on East Asian economies, including Japan, Korea and Taiwan. Thus it was not surprising that the IBRD’s (International Bank for Reconstruction and Development) 1993 study of the East Asian ‘Economic Miracle’ concluded that intervention in the direction of credit has played a substantial role in achieving superior economic performance.”

And when it comes to lies in terms of wrong solutions, of causes of the illness actively passed off as its cure, here too Werner points out two illuminating examples: borrowing foreign currency and inviting foreign investments, demonstrating how both are but betrayal masquerading as help.
Both are usually considered important for helping developing countries develop and grow, both collapse like a house of cards when the basic truth comes to light: purchasing power of fiat money is created out of nothing. And the reasons are so elemental and obvious that formulating them explicitly would be an insult to our intelligence, if it wasn’t for the fact that some pretend not to see or not to understand:

Borrowing foreign currency? “If funds are necessary to mobilize domestic resources, then these can be created ‘out of nothing’ through the costless process of credit creation. Why borrow from abroad and pay back interest and the principal in foreign currency, when one can create the money for free at home? After all, the foreign banks are also merely creating the money ‘out of nothing’ through the process of credit creation. Of course, certain foreign purchases may be necessary. But these can be kept to a minimum and in line with export earnings. … foreign debt, usually in foreign currency, needs to be serviced, and the principal ultimately paid back. This imposes additional costs and currency risk. With many development countries suffering from structural trade deficits (since they mainly export low value−added goods, whose long−term relative prices tend to fall, while importing high−value−added goods, whose relative prices tend to rise), their currencies tend to depreciate, thus raising their real debt. Together with the compound interest, an escalating debt trap quickly develops.”
Inviting foreign investments? “Apart from usually being unnecessary, foreign investment has a number of disadvantages: firstly, foreign investors are primarily oriented towards their own interests, and these are unlikely to coincide with the national interest of the developing country. Secondly, foreign ownership of real assets, such as land and factories, implies foreign control – including over the allocation and disposal of profits, as well as the decision when to close local factories and pull out. Thirdly, foreign investment may be encouraged by a developing country in order to enhance technology transfer and the level of know−how at home. However, few studies of technology transfer have shown that much technology is actually transferred to developing countries. In the real world of imperfect information, technology is protected know−how that firms are reluctant to share. Thus there may be cheaper and more efficient methods to transfer technology, not related to foreign investment.

A key example of wholly unnecessary foreign investment is Thailand or Korea in the mid to late 1990s. On pressure from the US Treasury, the IMF and their central banks, both countries liberalized their capital flows. The central banks then took policies to encourage borrowing from abroad, namely to reaffirm publicly their determination to maintain the dollar pegs, while raising domestic interest rates above US dollar rates. Companies in both countries reacted rationally by borrowing significant sums from foreign investors, despite the fact that both countries had substantial savings and functioning banking systems that could have created this money domestically. When the foreign investors decided to cancel their loans at short notice, large−scale bankruptcies were triggered and foreign investors could acquire assets and market shares that earlier they could only dream of.
Meanwhile an example of successful technology transfer is Japan, which achieved it by sending students and apprentices abroad, and by inviting foreign experts to Japan to transfer their knowledge. This method does not generate the type of kickbacks or windfall gains that foreign investment may generate in the short term for a small group of locals, and it may take a little while to reveal its fruits. But empirical evidence shows that this method has been successful in transferring only technology, without also inviting foreign control and draining domestic resources. With many developing countries the problems are, however, more basic, as they are not even mobilizing given domestic resources properly, and neither do they make sufficient use of the technology that is already available and which thus does not need to be paid for in foreign currency.”

Furthermore, with his breakthrough of separating productive and speculative sides of both economy and credit creation, Werner provides us with an interesting countercheck as well; interesting in itself, and interesting in its implications.
The subject is the rise and fall of speculative bubbles, and the ensuing banking crises dragging the rest of us down with them. The proving ground is the boom and bust of Japanese land prices and foreign investments during the 1980s and the early 1990s.
Once productive and speculative sides are separated, their respective inner workings, now visible, can both be studied; and the study of the speculative side brought to light that, just as what makes the organism thrive or wither is but one thing, what makes the parasite thrive or wither as well is but the same thing: the lymph called purchasing power.
For the title of real cause of speculative booms and busts Werner subjected many contenders to an objective inspection of their trends compared to that of the Japanese boom and bust cycle. The contenders were changes in: central bank money supply, domestic and foreign interest rates, exchange rates, bond holdings, fiscal stimulation and credit creation.
The empirical data of statistics showed correlation to the boom and bust, as well as direction of causation from it to the boom and bust, for only one contender, credit creation, and no correlation whatsoever for any other contender.

This is not only conclusive. This has a number of deep implications, too.

That only purchasing power makes the economy either thrive or wither implies that, lacking that, all other “tools” are ineffective, useless, if not harmful. So why do some insist on them?

For example, fiscal stimulation, that is, a fiscal policy of increased public spending (let alone its infinite debt trap−related side) is at best useless because, without increasing the purchasing power, any increased share of it which is managed by the state is pulled from the hands of the citizens through increased taxation, thus depressing the economy while it attempts at stimulating it.
For example, lowering interest rates without increasing the purchasing power as well proved useless, as (let alone once again the infinite debt trap−related side) lowering the rent for a purchasing power which is not available in the first place can hardly make any difference.
As another example of what results from insisting on wrong remedies instead of the correct one, “many of the policies, especially those adopted by the IMF in such post−crisis countries have focused on raising bank stability by tightening up loan procedures, bank supervision and capital adequacy. These policies had a significant negative impact on macroeconomic performance, which was not explained by standard theory.”

It could be said that this facet of Werner’s investigation too has eventually brought us back to what we at least suspected, if we did not knew it all along… provided we know what a pyramid scheme is. Because parasites have an inclination to pyramid schemes.
The usurpers of monetary sovereignty inflate the credit created for speculative purposes, and speculative investments boom, be them land prices, foreign investment or whatever. The usurpers of monetary sovereignty choke the credit created for speculative purposes, and speculative investments bust.
We call them parasites because we know survival is based on production and fair exchange of actual survival factors, and to the contrary speculation is based on cheating and stealing, not on production and its fair exchange. So where do the profits of speculation come from?
It could be said that, fundamentally, anything which is not honest production and exchange, if it is to last beyond a one−time rip−off, becomes a pyramid scheme. As such, it is intrinsically doomed. But as long as it lasts it yields profits to the speculators. And the speculators form a pyramid in which those at the top are perfectly aware that the pyramid is doomed, so when it crumbles they have long planned securing their loot, and letting their victims die under the rubble in return.

To put all this in perspective before returning to the subject of how mainstream economics deals with the occulted real cause, let’s consider how those responsible for such crises create them in the first place, and then react to them by dragging the rest of us down.
Banks create credit and use it for speculation, either directly or by lending it to other speculators. Speculation does not produce anything valuable, hence interests and profits can only derive from more speculators or victims feeding the pyramid scheme. For more speculators to get on board and feed the pyramid scheme, more credit must be created by banks for them in the first place. Speculators line their pockets. What is called “systemic risk” builds up. As it builds up, so does the inflating pressure of the specuilative bubble. The higher its inflating pressure, the little it takes to blow it up. It’s just a matter of time, and sooner or later the time comes. The higher the inflating pressure, the slighter the decline in feeding the scheme that is enough to reach the tipping point, and the more violent the chain reaction that sets off. Speculative values begin to fall. To the degree they are close to the bottom of the pyramid, speculators begin to become insolvent or bankrupt. Debts not serviced by speculators become bad debts for the banks. Speculative values were also used as loan collateral, thus banks’ assets, foreclosed or not, are scaled down. What is called banks’ “risk aversion” builds up. As it builds up, banks create and extend less and less credit and so the circulating purchasing power shrinks. Being circulating purchasing power the deciding factor of the economy, its shrinkage keeps on worsening it, regardless of whatever other ineffective tools are used. As banks’ risk aversion builds up, it extends to productive borrowers, thus further depressing the economy. The worse productive economy gets, the more speculation on falling values sets in, and the more banks’ risk aversion builds up, in a self−feeding dwindling spiral. The worse things get, the longer we’ll all have to pay a higher price in our flesh and lives, while the top speculators enjoy their loot.

In terms of cause and effect, if what makes an organism thrive or wither, be it a society or a parasite, is the lymph of purchasing power, of means of credit, payment and exchange, then the ultimate cause of the effects that we all do suffer in full, and that speculators themselves suffer according to their position in the pyramid scheme, are those who control that lymph: either the legitimate owners of monetary sovereignty – you and me – or its usurpers: the moneypulators.

In the face of all this, what is the position of the mainstream economics schools and literature?
Drawing again from that “Japanese anomaly” whose study inspired Werner his breakthrough of separating productive and speculative flows, and considering it for what it really is, an exposition of common denominators rather than contingent items, I will consider the comments related to it too as expression of the Pensée Unique in Economics as a whole:
“This is in contrast to the mainstream literature, which has not been able to find determinants of land price rises or has found, as in Hutchison (1994), that, using the traditional deposit−money based approach, there is ‘little evidence that monetary factors have played a significant systematic role in land price fluctuations in Japan’.”

Should that sound familiar to you, it may be because you either instinctively or explicitly know that “When one cannot solve a problem, the only way to maintain an authoritative position about it is saying it cannot be solved.”
Firstly, using their tools they couldn’t find the cause of facts; secondly, using their tools no relationship surfaced between the hypothesised cause and the facts; thirdly, consequently the conclusion is that the hypothesised cause is not the cause of facts and that’s that. Right?
We know how that stuff goes: I’m right, you’re wrong, anything outside my perimeter just does not exist, and then if it even threatens to undermine my position…

But it’s worse than that, actually. There’s method in the madness.
For a puppet, maintaining an authoritative position may be an end; for a puppeteer, that the puppet maintains it is a means to an end. And the puppeteer’s end is that the puppet continues to perform the function the puppeteer put him on stage to perform in the first place.

Apparently, Pensée Unique in Economics does not work: grouping under such label all the mainstream economic schools sharing its foundations despite their apparent divergences, their tools do not identify the real causes and so they do not improve things but either they are uninfluential or, usually, make things even worse.
Are we to dismiss it as a mere attempt not working that nonetheless survives in the absence of better tools? Let’s be serious. How come that the Pensée Unique in Economics is so powerful if it does not work? You mean every stone age is the result of our ignorance alone? Indeed our ignorance is an intensely pursued result, but there’s even more to it than just cultivated ignorance. Werner, for instance, points out, “There is no sound empirical evidence that greater central bank independence leads to lower inflation. Furthermore, there is no evidence that more central bank independence leads to better macroeconomic performance, in terms of higher growth and less unemployment.” Yet, “There are many economists who do claim that more central bank independence is desirable. However, empirical research, based on fieldwork and interviews with central bankers, has indicated that the relationship between the media and central bankers as well as between economists and central bankers may be more problematic than commonly assumed in the economics literature.” Elementary, my dear Watson, isn’t it?

So, what is the purpose in pushing something that does not work? It’s quintessentially obvious: the professed purpose is not the real purpose; the real purpose is the end, professing a false purpose is a means to achieve it, the professed purpose is to be expected to be the opposite of the real one, and while behind the scenes the achievement of the real purpose works like a charm aod goes swimmingly, on stage it is the triumph of Orwellian doublespeak to implant that two plus two equals five, and that the continuing failure of the professed purpose is actually a triumph. Cherry on the cake, that freedom is slavery, that ignorance is force and, why not, that war is peace, can always follow in due time.

Proof of this is the previously seen behaviour of central banks, and first and foremost the IMF: they do not “practice what they preach”. Well, they would certainly not waste time “preaching what they do not practice” if the worship of the Pensée Unique did not serve other ends. And that they continue to do so since decades proves that this liturgy most definitely serves such other ends well.

Proof of this is the deductive method, too, due to the combination of its results and position. Werner points out, “It must be considered a unique phenomenon in the history of thought that the originally marginal and eccentric deductive approach to economics has today become the mainstream school of thought. … It is striking how seamlessly neoclassical economists have bridged the gap from their wholly fictional world of unrealistic models to recommendations of policies that actual politicians are supposed to implement in reality. … The predominance of this methodology is virtually unique among the academic disciplines. … if deductive mainstream economics had been empirically successful, one might have wished to tolerate its unusual methodology. However, the fact that major challenges exist to the fundamental tenets of macroeconomics means that the deductive approach cannot be sustained.” We are confronted by the unique case of a house of cards that wheaters the storms unscathed as if it was made of steel. This is no small thing. And it proves there must be props behind it, and they must be made of steel.

So, if the real purpose of the Pensée Unique is not to “work” – at least not in the sense economists in good faith mean: for the benefit of people – then what is the real purpose that it serves, exacty?

A first clue is that, once called its bluff, the Pensée Unique in Economics has demonstrated something, after all: it refutes itself.
We’re back to the key crucial point in that first basic assumption: the word “IF”. Did we notice that first tenet contains a condition, a requisite? It states that it will be all right for all… if, provided that, on the condition that. As those conditions will never occur in the real world, likewise it will never produce its stated results.
So one wonders, why go to the trouble of setting up a bluff doomed to break under its own weight? Just pour rire – just for the fun of it?
Werner again points out, “neoclassical models have demonstrated quite precisely that free markets and free trade would only then lead to optimum welfare, and government intervention would only then be an inefficient distortion of the economy, if and only if …, neoclassical economics found that liberalisation, deregulation and privatisation would only improve economies in situations where everyone had perfect information … and so on. It has demonstrated that demand will equal supply if and only if … The string of highly restrictive and unrealistic assumptions on which the neoclassical models are based are like the uncomfortable small print in a contract that gets easily overlooked. But they have far−reaching implications.”

Is the real purpose of the Pensée Unique in Economics perhaps to be a strategic invitation to apathy on the subject? Staging the fiction of the impossibility of getting to grips with the economy to plunge us all into an apathy as deep as possible on the subject, for the very good reason that the thicker is the curtain of our apathy about it, the more we leave the field open to moneypulators, and the more vastly and deeply they can tamper with the economy?
Yes indeed, but that’s just the beginning.

Is the Pensée Unique in Economics perhaps a mere instrument of social engineering and control? Indeed, as Werner points out, “If most outcomes are due to anonymous market forces, we may more readily accept them … If … one price applies to all, then this seems fair and transparent. But if reality is one of pervasive disequilibrium … then there may also be different effective prices for different people. Furthermore, some people will get the goods or the jobs, while equally qualified others won’t. This becomes especially obvious when considering the types of jobs that many of us would like to have, thus where labour supply is significantly outstripping labour demand: movie actors, TV announcers, TV anchorpeople, singers, models, even successful painters, artists in general, writers and journalists. The majority to whom such jobs are not available and who may have less rewarding jobs will find it easier to accept if such jobs are said to have been determined by market forces. The incumbents are simply the best, and thus the market has efficiently allocated the jobs to them. But the fact is that excess demand for such jobs means that the labour market in these industries does not clear. It is rationed, and rationed markets are determined by allocation. Somebody has the power to pick and choose who will be given a chance in the form of a contract with a music company or a book deal – and who will be promoted sufficiently to reach prominence in a world characterized by imperfect information and lack of knowledge about whose works are truly valuable. … Similarly, are the programmes offered on TV necessarily the best possible programmes that one could produce? Are all the important news items reported? Or are markets rationed, and a powerful executive has simply decided that certain types of programmes should be broadcast, while other information is withheld?
Thus it cannot be said that the market mechanism is unimportant. On the contrary, it appears to be playing an important role in our society – but that seems largely confined to the world of rhetoric and public relations: the rhetoric of the free market mechanism serves to hide the reality of pervasive rationing, untransparent allocation decisions and the power by the allocators to control resources. It therefore may serve to render reality more acceptable, without too much political resistance or demands for fairness, transparency and social justice. Ironically, the true role of the free market may be based on the reality of imperfect information and the consequent scope for manipulating information about reality.”
Most definitely. But, even though this is quite something indeed, are we to think it is all there is to it and thus stop here?

Is the real purpose of the Pensée Unique in Economics perhaps to repeat the success of its “direct forerunner … British classical economics of the nineteenth century”? As Werner tells us, “Classical economics appeared to serve a useful purpose for the empire: it recommended that other countries did not need to develop competing industries, or use government intervention, but instead should open their markets, without charging any tariffs, to British exports. Not surprisingly, classical economics was used to advance British power worldwide.” We’ve already covered the debt spiral a country is going to put itself into by exporting only low−value−added commodities whose prices decrease over time in exchange for importing high−value−added items whose prices increase over time; suffice here Werner reporting that “Studying the facts by meticulously researching the historical record of economic development of the major economic powers over the centuries, (Friedrich, development economist) List concluded that there was not one major economic power that owed its successful development to free trade and free market policies. … He found that although British leaders were loudest in propagating the free market paradigm, British economic development was due to trade restrictions, protectionism, government intervention, industrial policy and other ‘visible hands’.”
Of course economic imperialism is a prime motive, but when focusing on the fact that it intrinsically implies a victim and an attacker, let’s think bigger than sheer countries; let’s think global.

Is the real purpose of the Pensée Unique in Economics perhaps to allow moneypulators – global moneypulators – to “practice contrary to what they preach” undisturbed? So that those who control central banks, the IMF and all the rest of it can go on bleeding whole countries dry with impunity for ever, by disguising predation as heavy but unavoidable therapy and as their victims’ fault anyway?
Yes indeed, but these are mere tactical targets, not strategic ones.

The Pensée Unique in Economics is a strategical instrument of concealment and diversion put to work universally, not a tactical one uncommonly used. I trust that you find this obvious, and that therefore you can easily notice how its various facets are universally applicable – and universally applied.
Among its obvious key concealment and diversion functions there are: keeping us away from the truth of the matter and from inductivism which unveils it and exposes deductivist lies, making the plunderer right and the victim wrong, and fooling the victim into believing there is no attacker and no attack going on and thus into dropping any defence and rolling out the red carpet for the attacker.

As to keeping us away from the truth of the matter, deductivism is its very framework, and it conceals both the effects and their causes, both the facts and their perpetrators.
It conceals them thoroughly and systematically by deliberately omitting them from the outset, in all its deductivist axioms unsupported by facts, and then deliberately omitting them all along, in all its ensuing deductivist assumptions unsupported by facts either. And we know that the most difficult crookedness to detect is what ought to be there and it’s not.
In light of this it takes on a certain relevance how deductivism – or, rather, the driving force behind it – educates economists, and other professions and people too, to reject reality: individually and collectively, in any possible way, through any possible state of consciousness, from wilful to hypnotic, and we know how that goes, don’t we? With an inclination to certain events such as the “relegation to secondary status of those branches of economics that do look at reality”.
And to put in perspective both the concealment and diversion function of the Pensée Unique and its being based on deductivism, reviewing some of the instances previously seen might come in handy:

Postulating that markets are in equilibrium to occult both the fact that they are in disequilibrium, and its cause: markets are rationed by moneypulators.
Postulating that actual output equals potential output to occult both the effect, that actual output is less than the potential output, and its cause: credit rationing by moneypulators.
Postulating both Gross Domestic Product and money supply as blurred overall entities to occult the fact that production and finance are two distinct and separate flows, and thus occult the very existence of finance which, controlled by moneypulators, speculates and grows at the expense of production.
Even though these occulted factors are just the beginning, not yet the sancta sanctorum, there could be already enough to conclude that the deductivist method is intrinsically fraudulent: if your purpose is concealing something and diverting attention from it, then I guess that you may hardly concoct a method more aligned to such a purpose than deductivism.
Incidentally, it could be expected that deductivists, or rather their instigators, and inductivists are at war over historical memory and empirical data, for the obvious reason that these are the archives of past and present reality on the basis of which inductivists can belie deductivist frauds. And since we know there exists an overall suppressive pressure aimed at destroying individuals, and that destroying what one knows is part of destroying one, then we also know what any push in that direction on the part of deductivists essentially is.

As to making the plunderer right and the victim wrong, to this aim the Pensée Unique resorts to its roots: its vision of Man and the world, and hence of the economy.

As I said, anything powerful is targeted by suppressives and prior to economics philosophy and religion have been targeted too, and it could be said that under such influence the Protestant schism has been a jump out of the frying pan into the fire. If Catholicism, being infiltrated, exploited solidarity to blame and attack initiative, Protestantism, being infiltrated too, reacted by exploiting initiative to blame and attack solidarity. It has been said that Protestantism, in becoming economic liberalism, from Martin Luther to Adam Smith, utterly reversed Ethics from “it is what is right that suits me” to “it is what suits me that is right”. This reversal of Ethics was further strengthened when Darwinism were infiltrated and exploited beyond Darwin’s claims to prop up materialism and social Darwinism.
The first result is a deductivist vision of Man, life and the economy in which every individual is motivated by the goal of self−interest and material wealth alone, and by nothing else. In other words, to hell with his fellow men, all other life forms, the whole world and their future. Observing reality, people and life thriving to the degree they cooperate proves this is a first bunch of lies. But to the degree one can be made to buy them instead of reality one actively contributes to digging one’s own and everyone’s grave by pushing life in that very direction, variously labelled rat race, hamster wheel, frustration, unhappiness, alienation, strain, disenfranchisement, unsustainability, etc. After all, if what you actually need is A and you’re brainwashed into the pursuit of anything else, you’ll end up in a dwindling spiral of B, C, D… while your unappeased need increasingly gnaws at you.
The second result is passing off the “ethics” of the survival of the “fittest”: dog−eat−dog, homo homini lupus, mors tua vita mea are “natural”, just the way it is, and therefore they’re all well and good. The first implications are that attacking and being attacked, defeating and be defeated, defrauding and being defrauded are all well and good, too. The next implications are that the attacker is superior and the victim inferior, and thus that attacking and defeating is in itself being right and being attacked and defeated is in itself being wrong. The attacker deserves to win because he is an attacker, the victim deserves to lose because he’s a victim. That’s the whole rationale. And the whole point is, shifting the blame from the attacker to the attacked, from the oppressor to the victim, from the moneypulators to all of us. The more the victim blames a wrong why, self, the better for the real why, the attacker.

Not to mention the sheer divide et impera, divide and rule effect, of putting us all against each other. A facet whose immense fallout should prompt us to become experts in detecting it at work.
To those who know by observation how the true ethics of survival is just a tad different, this vision looks a bit weird. To those who also know how a suppressive sees others, it looks less weird. To a certain degree, we all may tend to see others as we ourselves are, and it has been said that the criminals do see others as they themselves are. It thus comes as no surprise that to a certain degree we all tend to act on that basis, and that criminals do so above the average – which is not without effect indeed. The very heart of Pensée Unique is suppressive, hence we should not be surprised by any suppressive outcome resulting from it at all.

As to fooling the victim into rolling out the red carpet for the attacker, indeed this is an even more radical solution: no need to make the attacker right and the victim wrong for the very good reason there is no attack going on in the first place, and thus there are no attacker and attacked, and nothing to defend oneself from. What about the casualties? Poor victims of “blunders” which would be avoided by just abiding by our dogmatic “miracle treatment” more.
And once again “dogmatic” is the key word here: the more the moneypulators are successful at hoisting their Pensée Unique’s basics on the pedestal of “everybody knows that”, the more the very idea of questioning them deserts the minds of their victims, and as a result the blame will be placed somewhere else on a wrong cause in any case, and the way is open for passing off the cause of the illness as its cure. Here’s a couple of dogmas in point in Werner’s words again:

According to the dogma of “comparative advantage”, to make things go well all countries must “focus on their comparative advantage”; translated for the poor and developing countries this becomes “no need to develop indigenous industries”, while “they had to continue to produce low value−added and low−priced commodities, whose relative prices are known to decline inexorably, while their consumers must buy finished goods at ever−rising relative prices from abroad – importing them from the largest IMF and World Bank shareholders. Since the well−known long−term trends of falling commodity and rising finished goods prices mean that developing countries will receive ever less for their exports, while having to pay ever more for their imports, they cannot help but become indebted to the rich countries. When debt becomes large, the IMF seems ready to take over the government and arrange for further ‘beneficial’ market−oriented reforms, such as cutting food subsidies and social welfare, while seizing key domestic assets as collateral for the foreign investors.”
According to the dogma of “free flow of capital”, to make things go well all countries must enact a “liberalization of international capital flows”; translated for the poor and developing countries this becomes they “have merely become more indebted, spending an increasing amount of their resources on interest and interest−on−interest payments. Often, the interest payments alone are larger than any initial loan received. Furthermore, the liberalization of international capital flows that was strongly urged on developing countries by the US Treasury, the IMF and the other neoliberal international organizations has often produced major economic disasters in the form of balance of payments crises and currency and financial market collapses, as happened during the Asian crisis or many times in Latin America.”
Let’s add to the dogma of “comparative advantage” the principle of risk spreading as opposed to that of economic dependency, let’s add to the dogma of “free flow of capital” what we now know about monetary sovereignty as opposed to what we now know about its usurpation, and then let’s ask ourselves what does it take to successfully cover all that up as “no attack going on here”.

And that against the Japan of the moment is not just mere retaliation; this tactic has a precise function in the strategy: shutting the black sheep in the enclosure has the obvious double aim of shearing it with the rest of the flock, and at the same time removing the living example of its health and freedom from the sight of the flock. Out of sight, out of mind… before someone notices the loophole in the system.

Speaking of the tactic against Japan, Werner observes, “The persistent balance of trade surpluses resulting from Japan’s economic success were of such proportion that they triggered serious and repeated government intervention by the US.” So far, it makes sense; but how about the rest? “This was reflected in a string of protracted trade negotiations, during which US trade representatives listed the ways in which Japan’s economy differed from the theoretical new classical models and demanded that it change.” Say, do we really think such demands could ever be aimed at helping Japan solve its supposed “defects”… and thus further increase its success and ensuing trade surpluses? Do we really think that any Japanese who haven’t got a screw loose would? Let’s be serious. If the besiegers made their way into the Japanese fortress, do we really think there could be any other reason than a fifth column unlocking the gates from the inside?

But now let’s stop fiddling with specific cases and tactics and let’s go back to the point and to strategy. If a tabernacle is to be judged by the curtain woven to hide it, then what Holy Grail is hidden behind the Pensée Unique in Economics?

In a word, it is the philosopher’s stone itself.
That Holy Grail, obviously or surprisingly depending on whether one really knows the subject or not, is moneypulation and moneypulators; the usurpation of monetary sovereignty on the part of moneypulators, their ensuing power, and the fallout of its exercise on all of us.
In Crime Against Humanity: “National”, “Federal”, “Central” Banking above I promised you a “detailed report on the exploitation of the specific power to control money supply itself, through the control exerted on all the banks by the central bank”: here it is.

Translated into contemporary parlance by Werner:
“Strictly speaking, neoclassical economics has no role for money in its models. And those models that grudgingly introduce money make no room for the function of banks.”
Taken apart into its main components exposed by Werner:
how much money and for what is the decisive factor of economic health;
central banks and banks are not mere intermediaries of existing credit but they create credit;
their credit is not money but it is accepted as if it were;
they alone enjoy the privilege to create such credit “money”;
virtually all the existing money consists of their credit “money”;
central banks command to banks how much credit and to whom overall, and banks command it in detail;
therefore central banks ultimately control the economic health;
their power is totally unfettered and arbitrary: without any limitation whatsoever, legal, material, or of any other kind, and outside and above any jurisdiction, democratic accountability, scrutiny, control and the like from anyone;
to cover their power up, they may use the Pensée Unique in Economics to lie to their governments, pretending they only have ineffective tools such as interest rates, in order to fool and manipulate their governments and at the same time continuing to conceal and use the tool that truly works: credit creation.
Further taken apart into its additional main components:
their “privilege” of creating “money” includes creating it out of nothing in their own pockets;
such “privilege” is nothing other than the usurpation of monetary sovereignty;
and they reap the profits thereof in full: principal, interest, compound interest, and possible foreclosed collateral for, basically, lending nothing out of nothing;
they are the real and only cause of the economic health;
they have the power of life and death over their economies;
they do exercise it as they please, to exploit, expropriate, enslave and destroy their economies;
they do that not for mere personal ambition and interest alone, but at the orders and to the advantage of those who put them there, whom we can therefore quite rightly call their puppeteers.
And finally summed up in a single term:
premeditated crime against Humanity.

So shrewd, deep and dogmatic is the cover−up of moneypulation that “they are based on the traditional quantity equation linking money to the economy” which as we have seen removes it from the scene from the outset. So cast−iron, systematic and complete is the cover−up of moneypulators’ quite unique “privilege” that it comes as no surprise that, “put simply, economists cannot explain why banks exist or why only they apparently possess some special quality that gives them monopoly power over certain markets.”

To put this cover−up in perspective, Werner again, “We conclude that the feature of banks as creators of credit (what could equally be called their ability to ‘create money’) is what renders them special. This feature also explains why bankers quickly became powerful and influential, and could easily expand into various industries, quickly becoming the core of a network of affiliated companies that they either founded or bought up (life is much easier when one has a licence to print money).”
And to put this cover−up in perspective deeper still… “Mainstream economics and finance books give the impression that historically, early societies moved from barter to commodity money, and then to precious metals and coins. Banking and other financial institutions and financial instruments are often treated as a recent phenomenon. … many modern theories emphasize ‘cash’ and ‘narrow money’ indicators, even though cash transactions account for a small percentage of all transactions (usually less than 5%). It is with such analysis in mind that the ‘quantity equation’ was developed, linking such cash money to economic activity. Banks were thus of secondary – or no – interest to economists. … Today historians have demonstrated – though little−known to most economists – that banking came about much earlier, and credit transactions most likely preceded the development of money … In almost all cases, these banking systems led to the development of economies dominated by non−cash and non−money transactions. … Banking, we thus find, has been at the heart of human economic activity for thousands of years. It has also been an important aspect of the political economy, and via its link to warfare contributed to reshape world history. Given these facts, we should expect banking to either constitute the crucial link between the monetary/financial side and the ‘real economy’ or at least provide a major illumination of it. So why have banking activities been neglected for so long by economists?”

The Orwellian deletion of banking goes so far back in our history that it may well confirm the Biblical excerpts I mentioned before, whose main importance is their existence, regardless of who authored them, such as, “You may charge a foreigner interest, but you may not charge your brother interest, that the LORD your God may bless you in all that you undertake in the land that you are entering to take possession of it.” “For the LORD your God will bless you, as he promised you, and you shall lend to many nations, but you shall not borrow, and you shall rule over many nations, but they shall not rule over you.”
As well as the hypotesis that “when he took a whip and drove them out of the Temple … by performing this act of vengeance on the money−lenders Christ signed his own death warrant.”

These are not mere combination of random events that just happen, be it in the immediate or in the course of time. What’s staring straight at us is an operation.

Knowing our inclination to be “reasonable” when confronting evil, some more evidence from Werner that it is an operation won’t hurt. So, keeping an eye on dates:
“The link between credit and the macroeconomy has not been commented upon much in the twentieth century, although at its beginning this theory was widespread enough to warrant the following entry in the Encyclopaedia Britannica (1910–11 edition):
‘The immense growth of credit and its embodiment in instruments that can be used as substitutes for money has led to the promulgation of a view respecting the value of money which may be called the Credit Theory. According to the upholders of this doctrine, the actual amount of metallic money has but a trifling effect on the range of prices, and therefore on the value of money. What is really important is the volume of credit instruments in circulation. It is on their amount that price movements depend. Gold has become only the small change of the wholesale markets, and its quantity is comparatively unimportant as determinant of prices.’ …

But despite these early insights and occasional bursts of research focusing on credit, its role has remained too small in mainstream theories. According to Schumpeter (1954), ‘it proved extraordinarily difficult for economists to recognize that bank loans and bank investments do create deposits. In fact, throughout the period under survey they refused with practical unanimity to do so.’ …
Schumpeter notices the even greater curiosity that those economists that seemed to have recognized it at one stage, then completely abrogated the idea a few years later: Keynes recognized the function of banks as creators of credit in his 1930 Treatise, but the ‘deposit−creating bank loan and its role in the financing of investment without any previous saving up of the sums thus lent have practically disappeared in the analytic schema of the General Theory, where it is again the saving public that holds the scene. Orthodox Keynesianism has in fact reverted to the old view … Whether this spells progress or retrogression, every economist must decide for himself.’”

It is rather interesting to notice who the economist who turned the tables like this was: John Maynard Keynes, the founder of a mainstream economic school seemingly antithetical to neoclassical economics and nevertheless still acclaimed to this very day, on his way to becoming a leading figure in the economic, and political, events of that period. Considering on the one hand how both schools share the same blind eye turned to the falsity of the foundations that we have seen, and on the other hand how any economic school covering up the usurpation of monetary sovereignty plays in the hands of its usurpers regardless of whether they advocate balanced budget or deficit spending, there’s enough to look at Keynes, his turning the tables, his success, and their chronological relation with some suspicion.

And while we’re talking about the dimentions of this operation, we may consider the above as a sample of its depth; therefore as a sample of its width we may as well briefly indulge in the peculiar spreading among economic schools of thought of this strange disorder that leads them to stubborny refuse to see what’s in front of their nose and look the other way, when it comes to monetary sovereignty. What makes the spreading of this illness even more interesting is that it extends to economic schools that are rather antithetical, and even not quite mainstream.
In the synopsis I said: until we plug up the drain, fighting over the taps while the tub drains is not only a waste of resources, but red herring as well; politics is but a mass diversion weapon to divide us and distract us from solving economy: the smokescreen to keep us in the hamster wheel rat racing to death. Does the so−called “Right” say that to honour our debts we must restore our balance by tightening our belts? Does the so−called “Left” say that to honour our debts we must relaunch our balance by spending more? Both would be partly right, if it weren’t for the tiny, insignificant detail that that debt is intrinsically fraudulent and inextinguishable.
Now I add: I hope that tiny, insignificant detail now be even more clear, and that economists take an active part in this operation, too, be equally clear.
As the role of economists in this operation is akin to that of politicians, their script of seeming contrast is, too, and the same “Right” and “Left” labels can be applied without much need for adjstument.
So the dimention of this operation in terms of width may well be measured by how much apart these “Right” and “Left” of the Pensée Unique in Economics are.

As to the relevant examples, I have the honour to draw from the works of Daniele Pace: in his The Fruiterer Conspiracy, Pace exposes the Austrian School as an example of troops deployed to the “Right”, while in his article MMT: il banchiere che vorrebbe salvarci dalle banche? (MMT: the banker who would save us from banks?), he exposes Modern Money Theory as an example of troops deployed to the “Left”.

Among the neoclassical tenets that Wil Coyote concluded describe the world of cartoons, not that of the economy, the Austrian School has as its pet dogma that of maximum capacity utilisation; needless to say, this is fully backed by the concealment of the Holy Grail: the roles of money and banks with their usurpation of monetary sovereignty. The result of such carefully selected premises is that it was the government the one who creates the money, and therefore it would be automatically guilty of creating inflation for any expansionary policy. And we now know that the increase of the circulating money is the sole real cause of expansion, we know that expansionary policy is not inflationary because capacity utilisation is hardly maximum, and we also know that any expansionary policy on debt money sinks us all into an infinite debt trap to the moneypulators because it is on debt money, not because it is expansionary. The solution they propose to curb such inflationist original sin of the government is the return to the Gold Standard. And as there is too little gold to meet the monetary needs of the economy, we can deduce that such proposal aims at a Gold Standard cycle to the advantage of some moneypulators – just like the first time, when goldsmiths invented the fractional reserve fraud and became bankers. In a word, the purpose of the Austrian School is delegitimising the government as holder of monetary sovereignty, and it appears quite clear that the beneficiaries are those legitimised therefrom – ironically, but obviously, the real culprits of inflation: moneypulators.
As the title of the cited article points out, the originator of the self−styled Modern Money Theory is a banker who claims to protect us from the very source of his fortune, a quintessential conflict of interest which at the very least suggests particular attention. He claims that it is all very well to go on purchasing actual products with borrowed money ad infinitum because in so doing one acquires real products in exchange for nothing, and that’s a good thing. Looks just like a banker suggesting to operate as he does, getting something for nothing, in a way incidentally known as international seigniorage, or rather as imperialism, with only a small difference: doing so on his debt money. Setting aside how ethical it is to get something for nothing, that’d be a nice fairy tale, if it wasn’t for the negligible detail sometimes called “redde rationem”, or the day of reckoning. Because the conflict of interest of its originator is not the only key factor “accidentally” omitted; needless to say, here too there isn’t a trace of the Holy Grail of money and banks with their usurpation of monetary sovereignty. The solution they propose is a reform, and the article goes into detail to point out how all the facets of such “reform” are aimed solely at favouring the moneypulators; suffice here to summarise it all by saying that, given the now clear basic premises, we now know well what an infinite debt trap is.

In the memories of some of us the voices of the elderly resonate recommending us to study, when most of us were still far from witnessing firsthand they were right.
Because we now know any deception is based on Trojan horses, so anything requires thorough inspection firsthand, however palatable it appears, and whomever it comes from.
Also because the further down you are in the pyramid, the more challenging the quest for the key details of the way out.
And also because in economics much like in politics, as we run behind flags like dogs behind a stick, devil, as the saying goes, is in the details…

But now that we know them, let’s stop fiddling with his details and let’s track the devil down. Because once we have examined the mechanisms, the tactics and the strategy, the purposes and the goal, it’s time to remind ourselves that it is the hand that operates the hammer and it is the hand, not the hammer, which has goals and purposes. Every time we are appalled by a “what?”, our next step must be, “who?”

After all, central bankers made no secret of their point of view; thanks to Werner, as to this we learn that “the goal of monetary policy is to achieve ‘sustainable growth’” – which sounds good, plain and simple, doesn’t it? – so it is instructive to ascertain by their own words what they mean by ‘sustainable growth’.
To them, ‘sustainable growth’ “might require a short−term deterioration in the economy”, and “the prerequisite for sustainable economic growth is ‘structural reform’.” “Many people, Governor Hayami admits, feel that ‘bringing the economy back to the recovery phase of the business cycle is an important challenge’. But, like Mieno before him, he does not place priority on this goal: ‘Furthermore, it is more important that Japan goes beyond this by regaining economic dynamism by steadily pursuing structural reform’.”

Now, we know the concept of investment is “making a sacrifice today in exchange for something better tomorrow”, but we do know just as well the concept of swindle is “making a sacrifice today (to the advantage of the swindler) in exchange for something better tomorrow (a pie in the sky that will never come about)”. And thanks to Werner’s investigation and evidence we now know as well that these structural reforms are anything but a requisite for a “sustainable economic growth”. In a word, we know these are deliberate lies.
Moreover, I previously observed that hardly there could be another reason for the downfall of Japan under neoclassical siege than a fifth column unlocking its gates from the inside, and that therefore our next step is, “who?” Well, Werner informs us that “The Bank of Japan and its present or past staff have been the most consistent proponents of structural reform in Japan. The reports by commissions headed by former key Bank of Japan governors, namely the Sasaki Report of 1983 and the Maekawa Reports of 1986 and 1987, attracted much attention. In terms of their content they reiterated many of the views of US trade negotiators. Somewhat less known, though closely resembling their content, are the frequent statements made by past or present Bank of Japan staff during the 1990s. Their speeches and statements are remarkably consistent in arguing that the central bank had done all it could, and that instead it was up to the government to implement far−reaching structural reform. The Bank of Japan’s Okina (1999), for instance, warned: ‘What monetary policy alone can do is limited … the BoJ has taken the utmost efforts to promote monetary easing … But monetary policy alone cannot guarantee a return of the economy to a sustainable growth path. To this end, it is essential to solve structural problems.’” And thanks again to Werner’s investigation and evidence we now know these are more deliberate lies. And we can at this point get an idea of who the fifth column is.

To Werner, “monetary policy is the most powerful macroeconomic policy, since it not only affects economic growth, but can also reshape society. Given the power of monetary policy to control and allocate resources in the economy, it should be directly operated by an institution that is part of the democratic process, such as the ministry of finance or Treasury. Its operation should be transparent and accountable so that the overall goals of society can be reflected and deviations towards vested interest groups can be prevented or stopped early.”
My two cents, in view of the fact that the second usurpers of monetary sovereignty – banksters – can fool the first usurpers of it – rulers – as an alternative to buying them up as partners in crime, what appears as a fundamental truth is only reinforced: as expressed by Thomas Jefferson, not only “The issuing power should be taken from the banks and restored to the people, to whom it properly belongs”, but also “I know no safe depository of the ultimate powers of the society, but the people themselves”. And when Jefferson says ‘people’, to me he means ‘people’; not any of its “representatives”.

Why? Well, just for one thing, drawing on the main components of the Holy Grail listed above, not only the agenda of these individuals’s puppeteers is selling the world their “miracle cure”, but it includes as well actively causing and maintaining the illness and the suffering to exploit them as an instrument of blackmail to force the unaware world to accept it – and thus sink further into illness and suffering.
Werner again, “Bank of Japan’s Shirakawa (2001) … explains … how can monetary policy be helpful? It can be helpful, by not being helpful. Former Governor Mieno said that thanks to the recession everyone was becoming ‘conscious of the need to implement such transformation’. … According to prominent media reporting, then−Governor Hayami is convinced that Japan needs to undergo radical corporate restructuring and banking reforms before it can recover – and that he has a duty to promote this … Mr Hayami’s passion for reform also has a flavour of austerity. On paper, most economists – and politicians – think it would be sensible to offset the pain of restructuring with ultra−loose monetary policy. But Mr Hayami fears that if he loosens policy too quickly, it would remove the pressure for reform. In his own words of May 2000: ‘When the economy recovers … it might well be the case that efforts for structural reform might be neglected due to a sense of security’. … Present Governor Toshihiko Fukui has on several occasions reiterated his conviction that the recession of the 1990s had to be prolonged, in order to pursue structural change.”

And in order to dissolve any possible last doubts about their intentions and motivations, here’s some Werner’s remarks:
“Firstly, the logic of the argument remains flawed: the Bank of Japan argues that stimulative monetary policies would be counterproductive to its long−term goal of structural change precisely because they would be effective in achieving their goal of creating a recovery. This recognizes that the economy would respond to cyclical policies, and hence admits that neoclassical … theories do not apply to Japan’s economic situation. If such theories do not apply, then the longterm goal of structural change cannot be logically justified. In other words, by admitting that a short−term downturn may be necessary to implement structural changes, proponents of structural reform deprive themselves of their main argument for just why structural reforms are necessary. Those who agreed with structural changes, because they felt that the old system does not work, have been misled. The Bank of Japan effectively agrees with many of its critics that the economy, in an unreformed state, could have produced higher growth than has been the case for much of the 1990s. If this is the case, then just why did the Bank of Japan want to change Japan’s economic structure at all? Higher growth cannot be the motivation.
Secondly, social welfare cost−benefit analysis is stacked against the Bank of Japan’s large−scale live experiment. Cyclical policies aim at economic growth, hence at boosting the size of the national income pie. Structural policies aim at efficiency. While structural reform may indeed succeed in marginally increasing the efficiency of the economy, as measured by certain indicators, it seems clear that the enormous economic and social costs of the ten−year recession have greatly outstripped the potential benefits. To prolong the recession for sake of implementing structural change is like shrinking a cake to tiny size, only to be able to cut it up more easily.
There is therefore no good economic rationale for pursuing the types of policies that the Bank of Japan has pursued over the past decade. This leaves us with the fact that the decision about structural reform is ultimately a political one. Irrespective of the ultimate goal, the question here is whether the implementation of a long−term structural change agenda that affects income and wealth distribution, social and economic institutions and society in general is really the task of unelected central bankers. Nothing in the Bank of Japan Law, old or new, has ever awarded the central bank such a mandate. In Posen’s … words: ‘no Japanese citizen elected the Bank of Japan to pursue this policy of promoting restructuring, and in fact no elected official delegated this task to the Bank of Japan or put the goal of "encouraging creative destruction" into its mandate’. To create the public consensus for the ‘need’ for structural reform by purposely creating a recession must constitute an abuse of power. Does the population really want to be manipulated in such a costly and dishonest manner?”

As to the scope of such fraudulent, covert, totalitarian abuse of power, Werner initially gives us an inkling of it with the “carrot and stick” strategy of the European Central Bank: when a European country lags behind on its structural reforms agenda, the “stick” is drastically dropping its credit creation in order to – as we now know – induce it to “speed up”; when a European country is advanced on it, the “carrot” is increasing its credit creation in order to – guess what – pretend its ensuing expansion is all thanks to the structural reforms. Witness: Germany for the stick, Ireland for the carrot, from 2001 onwards.
And then, after that first inkling, Werner observes: “A cursory review of statements by central bankers all over the world – including many developing countries and emerging markets – will quickly yield the finding that they have much in common, no matter where spoken. Monetary policy is not powerful, and the burden of policy action rests with other players, whose foremost task is, according to the central bank, to implement deep structural changes. Analysing the precise details of these recommended structural changes, irrespective of country or continent, they seem to consist of the same set of policies that have been dubbed the ‘Washington consensus’, as they have been advanced forcefully by the main Washington−based institutions, such as the Federal Reserve, the US Treasury, the IMF, the World Bank, the Inter−American Development Bank, and their various subsidiaries and satellites. As we saw in the previous chapter, international organizations such as the World Bank consider crises an ‘opportunity’ to implement ‘structural reform’ and ‘transfer ownership’.”

Werner adds that “Despite these devastating findings, none of the above facts are pointed out to students of economics, nor to journalists or the general public. Apparently oblivious to the facts of this world, central bankers and theoretical economists keep repeating the mantra of the importance of interest rates, derived from their theoretical models, like monks spinning a prayer mill. Those who do not have the time to check the facts are easily misled by the so−called experts who are supposed to know better.”
And that “Every bureaucracy, including central banks, constitutes an interest group, and if the overall incentive structure within which it operates is not designed well, a gap is likely to unfold and gradually widen between the overall interests of society, and the sectarian interests of the bureaucracy itself. Again, the wisdom to grant independence to central banks, without commensurate checks and balances on their activities, is called into question.”

My two cents, central bankers and their acolytes in the abovementioned supranational institutions aren’t puppeteeers, they are puppets. The “wisdom” of their “independence” lies in serving their puppeteers better, and their interests and incentive structure, rather than sectarian, are merely those of their puppeteers. Each crisis they create and perpetuate is a tool to suppress both directly and indirectly: they starve and disenfranchise people tactically, and in doing so they strategically create the ‘opportunity’ to implement ‘structural reform’ and ‘transfer ownership’, which in turn advance the reshaping of the pyramid towards an increasingly oligo−monopolistic profile whose outcome in turn is going to be an increasingly deeper hell for their own kind.

To realise that I’m not speaking figuratively at all, it is apt to understand and bear in mind how both the nature and the order of magnitude of the power we’re studying lay the foundation for dictatorship; Werner calls it “the power of allocators”. Being based on scarcity, it constitutes another reason why scarcity is suppressive and suppressives aim at scarcity in order to exploit it: “Every market that is rationed gives the short side of supply or demand a type of power that does not exist in market−clearing economics: the power to allocate; the power to pick and choose. Whenever a market is rationed, allocative power is exerted. The allocator can decide A or B or C, and the market has nothing to do with it.”
The dictatorial, arbitrary power of allocators is a universal plague; just as an example: “Public announcements of job vacancies or public competitions may only provide a cover of openness and fairness, while the insiders at the firm or institution have long chosen their preferred candidate.”
But such endless examples become even secondary in comparison to the fields in which this plague becomes mass manipulation: “Of the thousands of news items that newswires report on a daily basis, only a few hundred or even only a few dozen are reported the following day by the press and only a handful make it on TV. Somebody – usually a small number of senior editors – made a selection and allocation decision. As a result, many important news items never get reported, because the mainstream media have refused to cover them. Those who make these allocative decisions wield enormous power. They can say yes or no to a piece of news. Since we do not possess perfect information, but are dependent on the objectivity of the reporting services, our view of the world will be influenced, even manipulated, by the news reported in the media. This editorial power is not the power of the markets, but the power of a small number of individuals who select and allocate in rationed markets.”

Even worse is when this plague pervades the fields that are closer to the inner horizons of people, such as artistic expression: “When Peter Gabriel spoke to a group of young attendees of the World Economic Forum at Davos in 2004, his modesty was striking, especially when this talented artist declared: ‘Talent is vastly overrated.’ Perhaps this statement reflects his realization that although there are many talented artists, not all could make it into superstars, even though by talent many more may have been entitled to. Perhaps the allocators did not favour them…”
But in the final analysis no one is safe from this plague: “While the rhetoric is of a globalized world dominated by anonymous market forces which decide the flow of goods, services and capital across the globe, the reality is that the majority of trade flows are decided by planners – bureaucrats or bureaucrat−like managers at large−scale corporations – who make allocation decisions: large−scale corporations dominate international trade and much international trade takes place within these large global firms. This makes sense in a world of pervasive rationing, where practically all economic decisions are allocative decisions.”
At which point let’s consider the other side of the power of allocators: wherever there is one, there will be something in return. If one is discarded, the damage is clear and it is in terms of the denial of one’s contribution and talent to one and all. But… what if one is chosen? What will the allocator demand in exchange from one? What kind of pact will the Devil demand Faust’s signature on?
Once all this is both clear and in the right perspective, it is time to apply it to the Holy Grail. Let’s not forget that these are but examples, and then let’s consider them in terms of scope, order of magnitude, impact. Then let’s try to get an idea of the whole society subjected to this plague, in every nook and cranny, every single person. And once there, let’s trace the main switch, the main tap behind this whole maze: the Holy Grail, how much purchasing power or how little, for what and to whom.

Let Werner help us get the idea with what we may call but a little inspiration: “These findings remind us of just how powerful a central bank is. It can control the creation and allocation of claims on resources. It is thus in many ways more powerful than the government. Yet worldwide, central banks have become independent of and unaccountable to governments. Central bank independence has been one of the key demands made by the IMF in its dozens of adjustment policies all over the world. The US troops in Iraq quickly set up an ‘independent’ central bank as one of the policy priorities. What can be the meaning of democracy, if the most powerful function is not subject to any democratic checks and balances?”

It is more than obvious that their machinations with the Holy Grail be kept hidden in utmost secrecy – at least to the degree the people is well enough to stand up against them.
It’s therefore no surprise that Werner informs us that central bankers, the absolute lords of “how much money or how little, for what and to whom”, are reluctant to disclose credit data to the public: “While central banks have such information available internally on a real−time basis, it often still takes several months, sometimes more than a quarter, until figures are released to the public, and then often only aggregate data lacking in detail.”
I mean, not a difficult question, is it? Day by day, month by month, year by year, how much “money” is created and allocated to whom, how much and whose destroyed, and therefore how much in existence and to whom? However, if you do not happen to belong to the Central Bank Sancta Sanctorum club, could you tell me “how much and to whom”?

To further put this criminal omission in perspective, in addition to all that we now know, it has been said that the real why opens the door to a solution, and it could be added here that so decisive and unparalleled is the “how much money” factor that it does open many doors. Some of which Werner leads us through:

The first door reveals that its disclosure is just as important: “given the importance of credit variables, they also call for comprehensive disclosure by central banks of timely and detailed high−frequency credit data.”
The second door reveals that, contrary to the – however false – myth of the central bank “independence”, “for policy−makers … it is imperative to monitor the allocation of credit”; after all, the importance of this factor for the lives of people most definitely entitles them to have a say in the matter, at the very least indirectly through a hopefully representative democracy.
The third door reveals that booms and busts, inflation, speculations and their ensuing casualties, can be even prevented: “this can be done by using suitably designed direct intervention in the credit market in order to influence both quantity and allocation of credit and ensure that credit creation is mainly used productively. This ensures inflation−free, stable growth.”
The fourth door reveals that thriving free of suppression is possible, if anything because it has been done already: “By ensuring that credit creation is mainly used for productive purposes, high real growth rates without inflation can be generated. As Japan’s case of the 1960s demonstrated, even double−digit economic growth rates are possible. It is not a coincidence that Korea, Taiwan and, most recently, China, have been using credit controls and the selective allocation of credit as key policy tools. These produced high growth rates.”
The fifth door reveals that “with appropriate credit policies, the only limit to growth becomes the human creativity in inventing new ideas, new technologies and new recipes of organizing inputs. If there is much such creativity, very high growth is possible.” After all, as expressed in the modest parlance of economists, “among all inputs into the production function, human resources are by far the most important.” Which incidentally puts the human factor – otherwise known as “You” – back to where it belongs: at the core. And in doing so it exposes a suppressive facet of the neoclassical Pensée Unique: that which nullifies it.
The sixt door reveals how “given the importance in creativity to provide the ideas that allow productive investments, our framework also shows that know−how, education and information are crucial for successful economic development – areas that were neglected in traditional theories, where agents were simply assumed to already know everything.” Which puts the other vital factor, knowledge, back where it belongs, at che core, close to the human factor. And in doing so it exposes another suppressive facet of the neoclassical Pensée Unique: that which nullifies it too.

But now let’s get to the core, and once there let’s call things with their name.
Werner observes how “Neoclassical economics is built on the premise that individuals care most of all for themselves and act independently of each other. The state of happiness of one is assumed to have no impact on others. Social relationships and the desire of individuals to relate to others and receive respect within social groups are outside the neoclassical model. A growing group of economists, originating in France but quickly spreading across the world’s economics campuses, has thus argued that neoclassical economics is ‘autistic’ – as it has difficulties in recognizing that humans need to relate to others.”
As the hand operates the hammer, in observing the model we can see its originator reflected. So now let’s look directly up to the latter.
Autistic? A−social? Not quite. It’s far worse. It’s ANTI−social. As I previously said, to those who know how the true ethics of survival is just a tad different, this vision looks a bit weird, but to those who also know how a suppressive sees others, it looks less weird.
The same idea can be expressed in many ways; it is true that the expression reflects the understanding, but it is also true that then the expression influences the understanding. So I wish to contribute by calling things with their name so as to help lift the fog from them.
Here’s an example from Werner: “Instances of asset inflation are not welfare optimal. For one thing, it cannot be considered efficient nor equitable when new claims on finite resources are created by banks and then granted to a specific group of individuals who use them purely for speculative gain, without adding to productivity or output.”
Well, what about reformulating it like this? “It’s quite obviously no good for us all when suppressive criminals steal purchasing power from us by creating money out of nothing and then, moreover, using it to steal more purchasing power from us through pyramid schemes, without delivering anything good in exchange at all, and to the contrary suppressing production as well meanwhile. Let’s call this with its name: economic suppression.”

What we have reviewed here is not all that has been detailed for us by Werner, far from it. However, in my view, what we have reviewed here alone, plus our awareness of its fallout on all of us, are enough to reach a thoughtful and precise conclusion.
The Pensée Unique in Economics is an intrinsically fraudulent tool, based on deception and falsehood from its very inception. It is so by design, to deliberately serve suppressive purposes. The reason for its very existence in the first place is screwing people. It was born not to help, but to betray. Pretending to fight monopolies, it conceals and serves the mother of all monopolies, that of moneypulators over moneypulation.
Werner is after economists, economics schools and textbooks, bankers and politicians making “blunders”, and he’s after the starting point: finding the Holy Grail, and documenting and exposing it through hard facts and evidences. And then progressively looks up to the intention behind those “blunders”.
Here, we capitalise on his invaluable breakthroughs and evidences, we go down the road he maps and take the extra step: here, we are after suppressive or potential trouble source puppeteers and puppets perpetrating crimes against Humanity.

Errare humanum est, perseverare autem diabolicum, et tertia non datur. To err is human, yet to persist is diabolic, third options not given.
I suppose the name “devil” could very well be applied to those whose agenda is creating and perpetuating hell for their own kind at large. For the reason set out in The Core above, I call them suppressives.
These are not random events. The Pensée Unique in Economics is an operation. And it serves a global strategy. Fully cognisant, lucid, intentional, deliberate, premeditate and continuous.
And they got names for them – and charges against their puppeteers and puppets – where I come from:
Criminal conspiracy
High treason
Crime against Humanity
Economic suppression
And as Eustace Mullins wrote, “the enormous guilt of the bankers and the long record of suffering and misery for which they are responsible would suggest that no punishment might be too severe for their crimes against their fellowmen.”