Introducing Transition Economics
Transition Economics explains the importance of creating strategic Right Plans to improve self-sufficiency and export diversity in every country
Economics is not a science today. If it was to become a science, could we all live the American Dream sustainably without social problems and wars? Yes – actually.
If the Americans had it in the 1960s – and Norway, Ireland and the Netherlands have it today, clearly a solution exists for every era
Transition Economics suggests a scientific approach to identifying the government policies which ensure strong Social Contracts sustainably in any Capitalism – mature or new.
Despite our investment in universities and the teaching of business and economics for almost three thousand years, 72% of 220 countries globally find large percentages of their population are made unproductive by a shortfall of opportunity. Recurring social collapses created by mature capitalisms have been 60-year events for thousands of years now; recorded since the time of Hammurabi’s 50-year debt-forgiveness Jubilee resets in 1763 BCE (see Leviticus 25-26 for these discussions).
Capitalism is important. A successful capitalism monetizes a nation’s opportunity and this is the important role of business in any society.
The important role of government is to balance the unsustainable processes of business to ensure strong social contracts. Why? Because as “winners” emerge in capitalisms over decades, economic growth slows because more and more citizens are “just surviving” without the freedom and opportunity to contribute.
When unsustainable business and special interest policies detriment everyone, business are impacted too. GDP reports hide these losses and accounting isn’t able to attract their either, so trillions of dollars are lost annually to economies.
Fruitless currency wars try to bolster growth, trade wars follow, and then real wars – or real opportunity – are required to reset the economy so that it can start the cycle again.
Transition Economics suggests a pragmatic and scientific approach to managing these cycles.
The Science of Transition Economics (TE) explains that Right Plans build and maintain sustainable economies. Aristotle’s Right Plans have two parts: the first is worthwhile projects #WPProjects and Worthwhile Ventures. The second part ensures that only proven-sustainable Government Policy and is permitted at ballot boxes – especially in large democracies (small democracies can more readily recognize and vote for sustainable policies by themselves).
By ensuring strong strategic planning, education, and communications, any impact caused by policy transitions are minimized – both in private lives and in business too. Unlike today’s interest-rate change announcements, Transition Economics changes ensure economic sustainability reliably.
1835’s Great Depression was ended by a small-population U.S. citizenry of 12-million, who re-invested its ten-fold increased Gold Reserves from the California Gold Rush. Opportunity alone reset the U.S. economy from a Great Depression deeper than 1930’s. This created the Industrial Revolution of the 1850s. So – is offshore banking of corporate profit a sustainable policy?
This leads us to conclude that war was then, and is today, completely avoidable and even “immature” – in Transition Economics’ Maturity Modeling vernacular.
Read about the ACT Party to understand how to quickly implement Transition Economics Resets in any nation. Reserve your copy of the upcoming Reform of War – The Democratic Reform ACT book, for a fuller, cited explanation of how we can, and should, be reforming our systems of democracy within large democracies.
Larger civilizations should make life easier for everyone – in theory, but the reality is that our systems of democracy were designed when we were small-population nations. These systems were not designed to prevent oligarchies and therefore, to preempt the support of unsustainable policies that profited few and reliably led our economies to the same austerity and starvation wages that created World Wars I and II – again and again.
No Economic Policy is uncorrectable – in Housing, Unemployment, Welfare, Taxation, Commerce, etc. and Transition Economics explains the research and methods to make changes responsibly.
Fully 72% of global economies are in a Collapse trending today. Transition Economics (TE) offers an important teaching and learning framework that explains scientifically, statistically, that this is perfectly normal and correctable.
Inequity stalls Growth and builds Debt
Transition Economics is critical today because our economies have run their normal course and are no-longer sustainable by the status-quo policies that worked so well at the start of a new “boom” economic cycle in the 1950s.
Government did not have to protect Social Contracts as individuals had sufficient opportunity to do this for themselves.
Per the normal cyclic behaviour of 60-year repeating capitalist economies, our economy will collapse until we realize that we must change our Conservative Right Policy to permit a responsible economic reset to take place. To order the book Transition Economics, click here.
We see the same phenomenon in any Monopoly Game. Strategies that worked well at the start of a game, do not work at all near the end of the game. But if we change the rules, so that the victor returns a significant percentage of assets to the players of the game so that all can be productive and enjoy the game, this game can continue sustainably for an indefinite period of time.
In the Transition Economics chart above we see Opportunity is a waving black line; high in the beginning of a cycle and low in a mature capitalism. TE-Mature Policies vary – from capitalistic, monetizing policies early on in the cycle, back to sustainable, affordable policies as needed to reset Opportunity. These adjustments have resulted in a steady line of Opportunity in Norway, Ireland and most small-democracy and Monarchy-led nations today.
Credible Economists recognize Longwave cycles of economic boom and bust, as documented 40-times back to Ancient Babylon on the Code of Hammurabi (1763 BCE) and in Leviticus 25/26.
TE Maturity Models and TEP Charts discuss #TEMature policies that sustain Spring Economies and avoid Winters altogether, but if these steps are not taught to governments and not enacted, Winter Phase economies MUST switch to a number of key new policies in housing, in guaranteed reverse-tax incomes, and in automation engineering supports which can safely and responsibly restore incomes, spending power and restart a new and viable Economic Cycle once again – without war and revolution.
Failing this Transition, economies continue right along a collapse-trending – until either “new wealth” (as in the California Gold Rush example above, which ended the Great Depression of 1835), or responsible government policy intervenes. Without these resets, we have seen wars / revolutions / populism / dark ages and similar disastrous events reset the economic cycle by distributing wealth forcefully.
This is what John F. Kennedy explained in 1962 …
“Those who make peaceful revolution impossible will make violent revolution inevitable”
Mature capitalisms are normal; predictable; and correctable – and so are the wars and hardship they create.
Once we teach our high-school students (and future voters) the strategies that proactively prevent these collapses, we should be able to maintain a sustainable capitalism indefinitely.
The quicker and more thoroughly we reset to a new 60-year Financial Cycle, the quicker we will all realize a Good Life in a new boom economy.
When we don’t know what to stand for, we can fall for anything…
Strong Social Contracts build strong economies; GDP hides our problem economies and lets Social Contract wither. Social Contracts are there for citizens in immature new monetary system cycles but they require active management during mature capitalisms. Read about the Social Contract Product Report in End of War – Managing Mature Capitalisms and click here to see the SCP Report for 2018.
TE Mature Policy & Models
Give any population $1 million each and sixty years later you will have gross inequity. This is how successful capitalism is designed to work. When government policies permit these repeating cycles to collapse, our important social contracts fail and countries collapse into revolution under the weight of this inequity
Click here to view Transition Economics’s Maturity Models and TE-Mature Policy
When observation shows phenomena that are absent in, or inconsistent with, available theories, Economic Theorists look for new theories
Transition Economics falls into this category of “new theory” as no previous work has targeted strategic sustainable Social Contracts, Industry, and Democratic Reform to ensure sustainable societies worldwide.
Transition Economics is a Science, where other Economic Theories fail to prove in observation and Scientific Method. In other words, if current Economic Theory and Education worked, surely America we would be the strongest economy by a wide margin and we would not be seeing 72% Collapse Trendings in Economies worldwide today
Keynesian Economic Theory is an example of economic theory proven unsustainable by observation. Yet universities the world over spin-off deep-dives into these theories – in banking and monetary systems management – which are also proven unscientific.
The Science of Cycle Economics
Any Science must be validatable in observation. Where Keynesian Economic theories were proven unsustainable in the 1930s by Keynes and again by Greenspan in 2008, Transition Economics is based on Longwave Cycle Economics proved in the historical record for 4000 years.
Before today’s Great Recession, there was the 1930 Great Depression, the Long Depression and Panic of 1894, The Great Depression of 1835 and so on and so on.
There are more wars and conflicts ongoing in this decade than in any previous time in our history. We see similar U-shapes between Great Depressions in wars, inequity, debt, on and on.
The primary concern of Transition Economics is to deal with the necessary adjustments which must be made in Economic Controls and Government Policy which manage the four phases of a naturally recurring 60-year phenomenon in Capitalism called Cycle Economics, Kondratieff Waves or Longwave Economics. Well-documented in academic research, Cycle Economists notice that controls in housing, monetary systems, interest rates, and wealth distribution must change with the changing phases of each cycle. Kondraitiev called these phases of Expansion, Boom, Recession and Depression – Spring, Summer, Fall, and Winter.
The black line in the chart below notes Opportunity within an economy. Great Depressions have come every 60-years in Capitalist societies; shorter if inequity failed to reset properly – and the European Dark Ages (500 -1300 AD approximately) is an example of a global economy that never reset inequity until it remained in depression for hundreds of years. World War II was certainly created by inequity as was World War I and dozens of revolutions globally when governments failed to reset inequity after the Panic of 1893.
Nikolai Kondratieff first wrote about this phenomenon of Longwaves in 1925; Howard Schumpeter brought the study of Longwave Economics to Harvard in the 1940s, which he renamed Kondratieff Waves in tribute to its founder – or simply K-Waves. K-Waves in Capitalist societies have since been confirmed back to 930 AD China in numerous academic thesis, and Edward Tilley suggested in 2015 that these phenomena are confirmed again in records of the Economic Controls, the pre-emptive 50-year corrections made by “Jubilees” (Debt forgiveness & Wealth Redistribution), that are recorded on the 1760 BCE Code of Hammurabi and also Leviticus 25-26.
Click on charts to see Hi-Res image …
A Game of Monopoly permits us to view a 60-year Capitalist cycle in just 60 or 90 minutes of play. Notice that normal “status-quo” strategies from the beginning of the game, do not work near the end – in the hotel-round of the game – and also notice what happens at the end of the game; all property returns to the bank for redistribution so that the game can begin again. Debt-Forgiveness and Wealth Distribution – the return of Incomes and Spending-power to all – is needed to restart the game (the cycle) again at the end.
Making the Monopoly Game Sustainable
At the point where players begin to drop out of a Monopoly Game, based on normal capitalistic rules of play, Transition Economics introduces new rules, new policies, that reset the ability of all players to continue – and to be prosperous indefinitely.
The same changes that restart a game of Monopoly, restart a new cycle of Capitalism. If #TEMature Policy has not controlled inequity, there must be a safe, pragmatic and successful Reset 0f Incomes and of Spending-Powers.
- In Spring and Summer Phases of this 60-year K-Wave cycle, wealth is well distributed and society has opportunity. People can own homes, cottages, start families at age 20, easily – so Wealth Creation can go on under Capitalistic Policies that monetize the economy; everything works in a Boom Phase basically, so the Social Contract is protected by opportunity.
- In Autumn, wealth begins to accumulate in a few households, and now Socialistic policies are needed to sustain a Good Life and Social Contract for all. This is the reason that Norway and The Netherlands have a Good Life and strong economy still today – in our present mature capitalism. Strong Social Contract nations have strong economies – examples are Netherlands, Ireland, Norway, Denmark, UAE, China, and so on.
- In Winter – Yes of course we are in a Great Depression today. Socialistic Wealth Redistribution Policies are needed urgently in housing (Land-Grants instead of Mortgages), Interest Rate recovery protections, Usury Prevention Laws, Graduated Tax (92% for Rich), Offshoring & Foreign Ownership Protections, Income guarantees and working Safety-nets, Automation of Basics of Life – see #WPProjects.
The Good News? The deeper the Wealth Redistribution in a Winter Phase, the longer and more successful is the next 60-year Cycle.
Cause and Effect
Kondratieff noted these waves in time coincided with Technological Advances also. The Cause for this Effect, was high opportunity; take the Great Depression of 1835 for example – a Great Depression as bad as 1930s’ or worse. It was ended by the California Gold Rush which multiplied the Gold Reserves in the US ten-times. This great infusion of capital meant that banks could extend lending easily to engineering firm and industrialists as was needed to build the Industrial Revolution of the 1850s. Similarly, the high opportunity climate of the 1960s, inspired the Cold War-times great advances in technology. With no war to slow research and unlimited resources afforded to them, scientists created some of the greatest advances that mankind have ever known in the short span of just 25-years.
Economies – both good and bad, are caused by something so Transition Economics uses TE Proof Charts – TEPs for short, to understand how dramatically does a policy cause an advancing economy. It makes little sense to compare your country to a failing economy, so we compare every policy to understand is it causal, does it contribute, to an advancing society – or doesn’t it.
All policies are then ranked by causality on a TE “World in our Hands” Report as seen in End of War – Managing Mature Capitalisms.
Inequity is expensive
Who is paying the bills? In any discussion of Economy, it’s important to realize that WE ALL ARE paying the bills. Inequity costs $4 for every $1 spent to maintain it. We can have performance bonuses and rich people, but when a large percentage of citizens do not have the opportunity to produce export wealth for a country, it costs economies trillions of dollars annually
During this next turn of the cycle, we are also transitioning from our current Manual Economy to an Automated Economy. Our technology has advanced sufficiently to support this important event in our Human Evolution and this is a really exciting time because automation that gives us the basics of life – like food, energy, shelter, and transportation automatically – can be considered – Renewable. Once Renewable Automations are scaled to the entire planet, we might never have to transition out of another Capitalist Cycle again – not 60-years from now – nor forever. Our reliance on money diminishes with this automation until we can finally ween off of any counter-productive influences that debt and monetary policies have brought into our societies as well.
“Imagine how foolish will we all look once we have permitted special interests to safeguard inequity – even at the potential risk of obliterating all in a nuclear war – at the very same time that humanity could be deploying our renewable automations to make money as unnecessary as we might like?”
Transition Economics – Edward Tilley, 2016
Transition Economics guides you through the Scientific Method of aligning policies that work to accomplish both Automation and a renewed, sustainable Cyclic Prosperity easily.
Automation and Jobs
Strong Social Contracts build strong Economies, and they are inexpensive too once robots build life-cycle-managed housing automatically. No-one starves when food is delivered to every home without a human hand required too. Like Google’s Driverless Car from 2013, food and shelter are both examples of automation projects that can be built within just 2 to 5 years. There is also no “emerging” technology required here either; it only takes focus to build socially important assembly lines that also build a self-sustainable strong economy.
Automations are forecast to reduce the total number of jobs by up to 50% over the next 20 years; that’s approximately 970 jobs lost per month per million population, lost per month.
Jobs being lost to automation are not new, the automated weave, Bessemer Steel Process, the cotton gin, water pumps, electricity, farm tractors, and modern assembly lines have all reduced the need for repetitive labor jobs.
Thousands of lives were lost to riots and hardship in these transitions when Governments failed to ensure a strong social contract. “Government for the People” (Democracy) must ensure that it supports the transit of its citizens to other forms of income and retraining through these innovation-driven changes.
Transition Economics studies the relationships between social needs automation, exports, guaranteed incomes, government investment, and infrastructure spending. This is not been addressed by previous theory scientifically.
CSQ Research is presently seeking leading University support and sponsorship for more than a dozen PhD Thesis in support of International Transition Economics Planning and Development:
- GDP Exports
- GDP Imports
- Highest Value GDP Industries World Wide
- # of Workers per Industry
- Number of Production Economy Automations
- Rate of Automation per Industry
- Cost of New Safety Nets per Automation
- Unemployment and Underemployment
- Minimum Wage
- Housing, Mortgage, and Usury Debt Limits
- Military Spending
- Underfunded Retirements
- Real Estate & Housing
- Social Problems – see Wealth Distribution is Good for Business
To name just a few measures…
With a basic understanding of which industry exports benefit the country most, and return investment most quickly, engineers should be enlisted and WP automation projects started in earnest.
Guaranteed Incomes and Public Utility Safety Nets permit these changes easily and in our TED Talk slide presentation explains more in World Peace – The Transition.
The following suggests a number of charting tools for determining our current inventory and trends in each country economy. Edward introduces a number of these charts in the book and then works through specific case studies.
Automations have started already in many industries and some of the safety net costs may need to be offset by revenue generating initiatives quickly now – in order to avoid national debt problems from becoming unmanageable in just the next few years.
Other Cycle Economics considerations
Consumption is the biggest percentage component of the GDP and economy. Consumers consume when they’re working, growing income, and are confident about their short-term economic circumstances. Not only do we have chronically high unemployment, it’s not going down, and the number of workers defined as “long-term unemployed” is at record levels.
The next chart shows the change in unemployment in this recession versus the prior ten recessions. Note that seven years in, we show unemployment comparatively higher and more consistent than in any other recession since the last great depression, which this certainly is as well.
Corporate layoffs of twenty-year workers, unfortunate investment instability and choices, and inadequate saving habits are creating very real concern for long term. Our corporations are failing us and they have a lot to answer for now.
According to the Employee Benefit Research Institute, 47% of workers age fifty-six to sixty-two are probably going to come up short in meeting all the expenses that retirement will throw at them. That’s half of the working population!
According to Public Integrity, the number of pensions at risk inside failing companies more than tripled during the recession. But not to be outdone, the public sector has even bigger problems. Related to the Municipal Finance Crunch referenced above, and poor investment results since 2000 have put many public retirement plans in dire straits.
This is a chart showing the state-by-state comparison of retirement fund status. To these statistics we also need to add Social Assistance and Medicare/Universal Healthcare as well.
The USA has record debt at $18.1 trillion by today’s count, which is approximately a debt to equity ratio of 15%. At the current rate, we’ll hit a point where we’ll be issuing debt to pay the interest on our debt. Fortunately the world has not lost interest in buying US debt. As borrowing rates begin to climb, debt will accelerate and we have to manage currency debasing leading to inflation and hyperinflation.
This is a look at the trajectory in debt accumulation.
By many measures, real estate is in a bubble that has become completely separated from economic indicators altogether. All Federal attempts to turn real estate around failed in 2010 and we stand poised to repeat the Usury Mortgage practices that created the 2008 as those that lost their houses then are coming back after seven years of bankruptcy forgiveness. Here at least we’re seeing correction pressure.
This shows the real estate mortgage purchase application index. Note the decline since the end of 2005.
I discussed Bubblenomics in Chapter 13 – Land Ownership. We will expand on managing these KPIs throughout the Transition in the next book.
The Top 10 Markets in the world were “crashing” in response to China’s Black Monday meltdown in August 2015. The United States was down 2000 points from highs, with two consecutive daily drops of 500 points. Japan’s Nikkei is extremely volatile and down more than 3000 points as well.
China plummeted 40% from highs earlier this year. Germany has lost one-fourth of the value of all German stocks. The UK, down 16% and their economy is on shaky ground. France’s stock are down 18%. Brazil plunged 12,000 points and is officially in recession as is Canada. Italy is down 15% with shaky economy as well. India stocks dropped 4000 points and finally Russia, was doing better than others, but half of their exports are oil and will suffer as long as oil prices stay low as they are today.
Point is, Financial Markets are of little and often negative benefit to low-income and middle-income families during Winter Cycles.
Reward Systems in Capitalist societies can arguably, but also easily, be said to be upside-down from or opposite Social Benefit. I do not think anyone could credibly argue that a cancer care, burn unit nurse, or even elderly caregiver – does not deserve to come home to a well supported household with scenic vistas and a quiet backyard. At the other obvious end of the spectrum, financial-system leads produce little, evade tax professionally, off-shore engineering, and release long-time employees as high-pension-risk employees, while they themselves retire easily while drive fast cars to high-end homes, send their kids to private schools, and afford well-padded bonuses, parachutes and retirement packages.
High-Performance is ever important to incent in any society; reward systems should be based on meeting goals which include accountable Socially Responsible goals.
Transition Economy versus Transition Economics
Transition Economics is the two-way transitioning of the “Transition Economy”, which was a one-way shift only.
The USSR failed to monetize its 1960s & 70s economy until it decided to change its Socialist States into Republics during Perestroika in 1986. The systems put in place to transition communist states into capitalist republics were called the “Transition Economy“. The “Transition Economy” built a Capitalist Economy that went on to build housing bubbles and inequity in Russia – as it typically does in every Capitalist Economy society.
The Chinese did monetize their economy, but rather than abandon their Socialistic Policies – as did the USSR altogether, the Chinese adopted a Dual-Policy approach which permitted the benefits of both approaches. China monetized their economy and empowered their one-billion-strong population to create wealth.
“Transition Economics” study the need to transition between Socialistic and Capitalistic Policies in response to Capitalism’s normal and unproductive inequity levels. Opportunity is highest when inequity is lowest, so Transition Economics creates a sustainable economy in perpetuity by changing policy from capitalistic to socialistic, and back, as needed to maintain opportunity and prosperity through the normal course of historically proven 60-year boom and depression economic cycles.
A weak economy is most felt when citizens are denied access to incomes – whether from Employment, Business Ventures, or Guaranteed Income Programs. Governments have the most interesting work to do during the Winter Phase – but we have been through this many, many times before as well.
Order the Book today !!
Transition Economics was first introduced in World Peace – The Transition on Christmas Eve 2015. TED and Nobel Selection Committees review submissions for Transition Economics in 2016.
Aristotle called projects in pursuit of a sustainable Good Life and Society, a “Right Plan”. At CSQ Research we have built that Plan and work tirelessly to communicate and work with World Leaders to do their part in building World Peace in a rapidly scalable and sustainable way via #WPProjects.
See our forums at Twitter and Google+, read the book, and sample articles at WP Magazine at csq1.org/mag .
World Peace is just a Project !
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— Edward Tilley (@TilleyEdward) December 29, 2015