Introducing Transition Economics

The Science

Transition Economics is a non-theory-based science that explains a strategic Right Plan of policy and programs proven to build good lives and prosperous economies

Economics is not a science today. If it was a science, could we all live the American Dream sustainably without social problems and wars? Yes – actually. If Americans lived the “Dream” in the 1960s – and Norway, Ireland and the Netherlands have it today, clearly a solution exists for every era

Contemporary Economics teaches theory in how economies might work, instead of teaching how they do work. Unlike micro and macro-economics, Transition Economics (TE) is not theory-based; it’s scientific approach teaches how economies actually do work – using new terms and proofs that can ensure strong economies in any phase of a monetary system’s life-cycle

Making Economics a science is as important as realizing that most countries share an economics problem today. Conservative and Liberal is irrelevant; is it sustainable – is the important question? Yes? No? Prove it. If No – Fix It. Next problem…

The first step in solving any problem is realizing you have a problem

When we don’t know what to stand for, we can fall for anything…

Social Contract Product Report

Give any population $1 million each and sixty-years later you will have gross inequity. This is how productive monetary systems are designed to work. Freedom – in a monetary system, is Salary minus Cost of Living (CoL); when Salaries fall to CoL, Freedom is lost. When Salary falls below CoL, Social Contract is lost and economies stall. When government policies permit monetary systems to collapse from this imbalance, countries descend into populism and create a powder-keg that any spark can then turn into world wars. There are more conflicts in this decade (2010-2020) than in any other decade in history – due to the hardships and lost freedoms created by wealth and income inequity, starvation wages, and high cost of living internationally.

Transition Economic’s scientific Proofs and Social Contract Product (SCP) Report show clearly that strong social contracts build strong economies. Where GDP Reports hide this problem and allow Social Contracts and productivity to atrophy, SCP Reports cast into sharp relief the high cost of unproductive populations. SCP recognizes that there is “a problem” so that a solution can be designed. “End of War” is the 500-page thesis that describes the project needed to correct maturing monetary systems in every country.

Capitalisms create strong Social Contracts better than state-owned production early-on in a monetary system’s lifecycle (from 1950 to 1990). But neither of these ownership-models support strong Social Contracts as a monetary system matures into imbalance near the end of a cycle. At this point active corrections are needed to correct balance in an economy and to reset it with the opportunity needed to allow it to mature through a new cycle again.

Read about the Social Contract Product Report in End of War – Managing Mature Capitalisms and click here to see the SCP Report for 2019 

Transition Economics manages Monetary System Cycles

Monetary system cycles begin balanced – and then they imbalance over time. Can an economy be managed to prevent imbalance? Yes; this is Transition Economic’s primary focus. Monetary system cycles – are manageable in two ways:

a) Governments can actively ensure that the ratio (balance) between reliable salaries and cost-of-living, stays in-balance annually. This is similar to CPI (Consumer Price Index) corrections but more sweeping to include all costs (housing , etc.) and salary levels.

b) Governments can simply allow open markets to unbalance themselves – and then, when social hardships become too great, the government of the day can reset the monetary system cycle to a new balance and a new cycle again.

The Code of Hammurabi and the Bible/Torah (Leviticus 25-26) suggested this second option in an era when monarchs had the authority to make sweeping economic resets easily. A fiftieth-year Jubilee Year was suggested to pre-empt the hardships of a mature monetary system’s 60-year cycle. “Reset” policies included: Universal Debt forgiveness, wealth redistributions, and a concerted effort to reset the balanced “American Dream” conditions that we should see at the beginning of any new cycle.

“25:10 Consecrate the fiftieth Jubilee Year and proclaim liberty throughout the land… 35. If any of your fellows become poor and are unable to support themselves among you, help them as you would a foreigner and stranger, so they can continue to live among you. 36 Do not take interest or any profit from them … so that they may continue to live among you. 37 You must not lend them money at interest or sell them food at a profit.”

Leviticus 25-26

FDR built the American Dream and greatest economy of all time, with policies of high wealth and income distribution (92% income and 80% estate taxes – for 20-years), nationalism, full-employment, an empathetic Second Bill of Rights and America’s mature and affordable home ownership system (a strong Social Contract). Eleanor Roosevelt carried these policies on to become the U.N’s Universal Declaration of Human Rights in 1948. Truman’s New Deals and Marshall Plan rolled this text into the constitutions of Japan, Italy, and Germany – which are the only three G7s with advancing economies today.

This will sound pretty intuitive and even obvious to most of us I think. The question for democratic law-makers and academics becomes, can the voices of special interests continue to successfully drive political messaging that misrepresents and even vilifies proven solutions? Invariably, it is the poor and the economy that suffers because Oligarchs are not personally impacted by their poor decision-making. For this reason, conflict of interests should be announced, individuals with personal interests should disclose and exclude themselves from votes, or express their views as self-promoting Advertising or Opinion transparently.

FDR’s Proven Success

FDR created the American Dream and greatest economy of all time – in a mature monetary system cycle very like today. Franklin Delano Roosevelt was President of the United States from 1933 until his death in 1945.

Advancing vs Collapse-Trending

“Advancing” economies can be confirmed using any two proven measures of an advancing economy. The term “Proven”, means that the measuring parameter can be confirmed transparently, in TE Proofs (TEPs and cited multi-national surveys), to indicate a causal influence of economic success. Measures will grow with continued research, but today’s frequently-used measures include :

Trade Surplus
(indicated as “Advancing” in TEP legends)

SCP over 5.5 (sometimes 5.8 – or similar)

Export per Capita over $8000

Probationary Measures:

These measures cannot be used individually as yet – because internal measures of economy are subject to many influences. Housing Bubbles (Usury), Salary to Cost-of-Living Imbalance (Low Social Contract), and other unsustainable policies that create dystopic conditions and stall economies, also report positively in a GDP report. We see this in the “GDP – 2008 to Today” TEP Chart

GDP-PPP per Capita – Top 30 Nations
($38k in 2017, $40k in 2018)
GDP-PPP per Capita

GDP – 2008 to Today

GDP-PPP per Capita appears Causal but GDP can overlook dystopic conditions. Suggest using this measure only in combination with a high Top-30 Social Contract score

Find a library of TE Proofs at the World at our Hands Report page

Adoption

What barriers can there be to adopting an understandable, transparent, scientific approach that builds economies reliably?

It took Einstein’s 1905 Theory of Relativity 20-years to be accepted in the west; professors preferred status-quo explanations of Ether at the time. This will slow TE’s adoption similarly.

Human nature explains this really; our professors, experts, and schools have written books, authored articles, lectured, peer-reviewed one-another – based on proven-failed theory. They have been assigned positions in high posts and asked to lead prodigious programs, based on their mastery of fiction. A credible new science can suggest that their credibility and advice has been questionable, bruising egos and besmirching reputations. In hyper-competitive mature capitalisms, there are compelling personal and professional reasons for established experts to want to discount and adopt-indirectly their own tellings of a new scientific approach. Given time, they can update their researches as they learn and assimilate the new material.

Once this transition period passes, beneficial new approaches can be adopted

Conservative/Liberal Policy in Late Capitalism

In Late Capitalisms, the following policies reset economies very successfully: Nationalism/Culture (Conservative), Full-employment (Conservative), Social Contract (Liberal), Empathy (Liberal), wealth and income distributions (Liberal), debt forgiveness (Liberal), low cost of living (Conservative), Single Income Families (Conservative) and accessible home ownership with a titling system that made “capital” available to everyone (Liberal).

FDR’s Second Bill of Rights explained this successful strategy and the countries that follow these rules still, live the American Dream and have the best economies per-capita in the world today too.

Social Contract is not Socialism (see a disambiguation here), and there can nothing unpatriotic nor irresponsible when it comes to running policies proven to work well in mature monetary systems past and present. See a list of top Social Contract countries among the Top-20 on The SCP Report here.

Great philosophers and authors like Lord Byron, Tolstoy, Dickens, Rousseau, Hobbes, Orwell, Hugo, and many others, have described the dystopic conditions created in mature, unbalanced monetary systems – when policies like low-tax, small government, open markets, immigration, middle-income, laissez-faire, and death-tax – created harsh living conditions and stalled economies.

Climate and the Environment

Transition Economics was developed by an engineer who realized that climate problems are solved through both projects and in operations too. An ounce of prevention is worth a pound of cure, so the design of operations – in mining, forestry, manufacturing, and every other industry, must always consider Climate and Environment as fundamentally important. Heat can be beamed into space, air can be scrubbed, ozone can be produced, plastics can be cleaned from our oceans and beaches, and so on.

This being said, Climate is addressable AND it never created a world war before. Social Contract, alternatively, creates a powder-keg that has sparked to ignite a World War reliably – many times in history. By the timings of World Wars I & II, World War III (an extinction-level event) could commence between 2018 and 2028 – if Social Contracts are not rebalanced and tensions to not reduced peacefully.

As a priority, Climate and the Environment must take a distant second priority to Social Contract – especially in a mature capitalism like today. Fortunately, there is no reason why we can’t do two things at the same time. Anyone who tells you differently is no credible leader.

Large Democracies need FDR’s Social Contract in Constitution

One can observe that social contract problems are worse in large democracies (in populations greater than 18-million population) in post-enlightenment eras after active monarchies were disassembled. It’s certainly true to say that modern monarchies are running more effectively than are most large democracies in today’s mature capitalism.

Adding to voter confusion is the fact that many “Conservative” policies which worked well to monetize the enormous opportunity that was available early in a monetary system cycle, will reliably damage social contracts and economies late in the cycle. Today the U.S.’s policies cause it to lose $37 billion a day in exports, and there is nothing conservative nor pragmatic about failing to correct those losses and costs.

I mentioned above that before today’s “Great Recession”, there were more than thirty previous recorded mature capitalisms. The Bible and Code of Hammurabi both discuss strategies similar to FDR’s and yet none of us were trained in how to manage our democracies in school. Without Civics training, and with no understanding of how to build a sustainable society as explained in Bibles, this means we must now struggle to understand how to vote and how to sustain our good lives. This educational shortfall was irresponsible in any era – but in a mature nuclear age, it’s impermissible.

CSQ Research’s 16-week high-school Civics course, CSQ Common Sense 101 addresses this need and training curriculum.

When are new theories and sciences required?

“When observation shows phenomena that are absent in, or inconsistent with, available theories, Economic Theorists look for new theories.”

The American Economic Association website

Social Contract Proof TEP

Social Contract

Transition Economics falls into this category, and it is also new science too – as no previous work has previously targeted proven economic building blocks like Social Contract, and the democratic reforms needed to ensure economies remain in an optimal most-productive balance globally. Had current Economic Theories worked as theorized, surely America would be the strongest economy by a wide margin, and we would also not be seeing a 68% collapse-trending rate across 200+ economies worldwide. There must be a fundamental flaw in our current approaches to Economics.

Transition Economics is a Science – and not “theory”. Where Micro and Macroeconomic theories fail observably, Transition Economics can prove decisions defendably by Scientific Method – in both observations and in statistics.

A new language was needed. Terms like Supply and Demand can’t be proven to create a successful economy, but Social Contract can. Socialism, Conservative, Liberal – are deprecated terms, now replaced by proper disambiguations that can be proven or disproven.

Most “isms” are deprecated in TE due to this important missing requirement. Socialism – is not given eight meanings; now it means just the one thing – see a disambiguation of the term “Socialism” here. Meaningless “Conservative Policy” or “Liberal Policy” is redacted – and replaced with the terms “Sustainable” or “Unsustainable”. It’s not clear that Marxism, Liberalism, etc. are proven-failed fictions and so we don’t permit their misuse any longer.

G8 Social Contract Losses since 1960

Globally, the world stands at its highest debt levels ever; at its highest conflict-levels ever; populism, extremism, high suicide rates, homelessness, poverty, rent/mortgage/energy poverty rates, low productivity (in low social contract nations), crime, etc. 68% of nations maintain year-over-year negative trade balances and exports-per-capita shortfalls; $32 trillion sit in tax-havens as do many more trillions of dollars in negative interest-bearing bonds.

Current economic approaches, measures, and controls – therefore, require new theories. Economics is not a science presently – which makes it undefendable and requires new approaches that are scientific – as well.

Keynes’ explained that his brilliant economic theories were short-term, and today they stand as an example of theory proven to be unsustainable longterm by observation. Theory proven incorrect – is fiction – and yet universities the world over spin deep-dives into these micro and macroeconomics theories still. Worldwide banking and monetary system managers carry on with policies proven unsustainable and unscientific, recklessly and blindly reconstructing the dystopia and powder-keg that is an unbalanced global mature capitalism.

TE Mature Policy & Models

Transition Economics is a new science, there is much work, improvement, and learning ahead. Click here to view Transition Economics’s Maturity Models and TE-Mature Policy

Maturity Models and TE-Mature Policy

Context

Important to any presentation of statistical information – is Context. First, presentations must compare successful nations, they must use most recent data, and the must present only credible measures. An example of a credible measure is any measure that is proven highly causal to an advancing economy. Context in history is relevant too; Debt was forgiven for most european countries in the 1930s from 25% to 250% of their GDP

Is a 3% Salary increase good? No – its an embarassing stat. Since the 1980s, individual and household salaries haven’t budged. It would take a 100% increase just to come back to balance.

Are stock market ups and downs meaningful? No. GDP lifts – No.

See Credible Measures explained in the Proofs of the World at our Hands Report

Important Roles

The important role of Academia is to prepare our adults and children to understand and maintain a Sustainable Society. Despite our investment in universities and in the teachings of business and economics faculties for 2500-years, 72% of 220 countries globally find that large percentages of their population are unproductive and collapse-trending today. See TASK (The Academic Sustainable Societies Challenge)

Capitalism is important; a successful capitalism monetizes a nation’s opportunity.

The important role of businesses in any monetary-system-based society – is to monetize economic opportunity.

The important role of government is to balance the unsustainable processes of business to ensure social contracts remain strong as monetary cycles see inflations compound annually. As monies channel to a smaller number of households over decades, economic growth slows because citizens are “just surviving” and no longer have the freedom nor capital to contribute.

When unsustainable policies detriment the population, business are impacted too. GDP reports hide these losses and so do accounting best-practices, so trillions of dollars are lost annually to economies suffering weak social contracts.

Fruitless currency wars try to bolster growth, populism and trade wars follow, and then real wars – or real opportunity – Reset the economy so that it can balance incomes to cost of living and start a new monetary system cycle once again.

Transition Economics suggests a pragmatic and scientific approach to managing normal 60-year cycles of exponential inflation and imbalance in global monetary systems

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)

End of War

The social impacts of transitioning to sustainable policy are minimized by ensuring strong strategic planning, education, project management (change) process, and reporting.

1837’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 terminology.

It only takes your vote. 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.

Maturity Models & TE-Mature Policy BookTransition Economics Collapse-trending Statistics among surveyed countries

Click here to read about TE Maturity Modeling and TE-Mature Policy

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

3d-te-8x5Transition 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 1837), 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.

Transparency

Policy statistics in TE are available online so as to be able to confirm there are no misrepresentations, and that the data is properly cited and summarised credibly

TE’s transparency policies are founded on Edgar Alan Poe’s famous truism:

Believe nothing you hear, half of what you read, and everything you see

 


Transition Economics - Rate of Automation

Transition Economics – An Example

Any Science must be defendable in observation. Where Keynesian Economic theories were proven unsustainable in the 1930s (Keynes acknowledged as much himself) and again in 2008 under Greenspan’s monitoring in the U.S., Transition Economics is based on Monetary System Cycles proven to exist observably in our historical records for 4,000 years.

 

A new Science needn’t seem intimidating either. In the words of Isaac Newton, the founder of two sciences in physics and in mathematics …

Truth is ever to be found in simplicity, and not in the multiplicity and confusion of things

 

An example of this can be seen in the Transition Economics Proof for Social Contract. Social Contracts are the basics we need – food, shelter, reliable incomes, security, healthcare, education, etc.

Do strong Social Contracts build advancing economies consistently? To answer this question, we use transparent Transition Economics (TE) Proofs (TEP Charts) see the thesis End of War:

TEP Charts are frequency distributions; these specific TEPs survey 158-countries to confirm that high social contract nations have advancing economies – both reliably and progressively – up to 100% of the time.

These TEP Charts show something else too. Not only do strong social contracts increase the probability of an advancing economy (see the right upper orange line), but weak social contracts increase the probability of a collapse-trending stalling economy too (seen on the left side of the orange curve). In a TE Proof Chart, every plot is a survey of the number of countries indicated on the blue line here.

The Social Contract measures the most economically beneficial social measures of an economy:


Social Contract

=


Education

+


Income Inequity

Longevity

Suicide

Poverty

The SCP Report (Social Contract Product), adds the most beneficial financial measures to Social Contract:


The SCP Report

=


Export per Capita

Trade Balance

Debt

+


Social Contract

Are these truly the best measures of successful economies? For 2019 we didn’t have the World at our Hands Report – which is a ranked library of all available TEP Chart Surveys, where now we do.  In 2020, we’ll know a little more and we will revise the SCP and Social Contract to include the best social and financial measures possible. As it is, 100% of The SCP’s top-20 countries have advancing economies. That’s a much better indicator of economic success than the GDP Report can offer.

The World at our Hands Report

A complete library of TEP Surveys resides in the World at our Hands Report. Researchers are invited to contribute to the library and CSQ Research publishes updates on a regular basis.

Cause and Effect

World at our Hands Report - Transition EconomicsRussian Economist Nikolai Kondratieff noticed that monetary system cycle Longwaves also coincided with technological advances. Economic opportunity, capital, and strong social contracts became the cause for the effect of a boom in technological innovation.

The Great Depression of 1837 was a Great Depression as bad as 1930s’ and worse. It was ended by the California Gold Rush which multiplied the Gold Reserves in the U.S. 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 1860s.

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. Transition Economics’s approach is to use TE Proof Charts – TEPs for short, and similar infographic tools to understand how dramatically does any policy contribute to, or cause, an advancing economy.

As it makes little sense to compare your country to other’s with failing economies, we compare every policy to understand “is it a correlation with”, and “does it cause an advancing economy” as well.

A policy with a strongly causal relationship to advancing economies builds a steeply verticle TEP Chart, and less economically beneficial policies, build a flatter and more horizontal chart.

All policies are then ranked by causality (in building advancing economies) on a TE “World in our Hands” Report as seen in End of War – Managing Mature Capitalisms.

 

Policy

Credible Measure ?

Debt

Little credibility – per debt forgiveness and TEP

Immigration

No – so TE policy is to greatly reduce in mature capitalism

Export per Capita

Yes – Causal

DiversityNoSocially Irresponsible too; prefer Nationalism, Culture, Family Values, Respect, Full Employment
Education

Yes

A WallNo – Except in 10% of cases due to short-term security concern cases. The more important policy here is Empathy; well-supported neighbors don’t need to leave home to find a good life
Russian Collusion and assorted TV DramaNo – Vote for empathetic government officials and ACT-compliant proven policies

World War III by 2030?


Similar to the wars per decade in this chart, we see similar 60-year “U”-shapes in statistics for inequity, debt, savings, Bond Yield, PPI (U.S. Pricing) and also in social KPIs from longevity, unemployment rates, suicide rates, and similar. If the timing of starts for World Wars I & II were to repeat, a failure to correct Social Contracts by 2030 could very well result in World War III. Today’s is the first mature capitalism to take place in a mature nuclear era.

For anyone who isn’t very clear on this point, World War III could be an extinction-level event affecting 100% of the human population of this planet.

The primary concern of Transition Economics is to identify the necessary ongoing adjustments in Economic Controls and Government Policy which must be made in order to manage balance in a naturally recurring 60-year Monetary System Cycle.

Why 60-years? Simple Compound Inflation

Today’s World GDP is fifty-nine-times the GDP in 1960. A 1% inflation rate now, amounts to a 60-times increase in cost-of-living and spending by 1960’s measures.

Why has there been such a large increase – and why are these exponential increases a mathematical certainty?

Annual inflation is calculated from GDP values taken one year prior, which included all of the accumulated inflations of prior periods. Like interest rates, a 10% inflation last year plus a 10% inflation this year, does not amount to a 20% increase, it amounts to a two-year increase of 21%, a five-year increase of 61%, and so on.

Today, 1% to 14% annual inflation rates have compounded for 60-years from the start of our present monetary system cycle. If salary to cost-of-living ratios get out of balance (and they usually do), the gap – like the inflations, increase exponentially – and this guarantees that monetary systems are not sustainable without either on-going balancing or a “Reset”.

Controls in housing, monetary systems, interest rates, and wealth distribution, must change as the monetary system cycle matures. Kondratiev called these phases – 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; or shorter, if inequity failed to reset properly in the previous cycle. 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.

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 …

Longwave K-Wave Economics23510_a_large

In the right-most chart, note how some countries were able to keep inequity from forming a U-shape again as the monetary cycle matured, while other countries could not.

What about the leaders of Monetary System Cycles?

Making a Monopoly Game Sustainable

At the point where players begin to drop out of a Monopoly Game, Transition Economics introduces new rules and new policies, that reset the ability of all players to continue – and to be prosperous indefinitely. In the same way that policy changes restart or sustain a game of Monopoly, a new cycle of the monetary system must be initiated too.

FDR (Franklin Delanor Roosevelt) created the American Dream through Nationalism, Full-Employment, an empathetic strong social contract which included low costs-of-living which afforded titled property ownership, and wealth distribution (for 20-years America taxed the rich 92% income and 80% estate tax). This formula built the strongest economy of all time.

Adolf Hitler – turned Germany’s economy around even faster – through Nationalism, Full-Employment, Social Contract and wealth distribution, but forgot essential Empathy toward both neighbors and its own citizens. This failing undid any benefit.

Donald Trump – Addressed: Nationalism, Full-Employment   Unaddressed:  Social Contract, Empathy, Cost-of-living, and housing ownership

Good Policy:  are the TE Mature Policies mentioned above – and those causal reports seen in the World at our Hands Report

Bad Policy – in Mature Capitalisms:   Low-Tax, Death-Tax, Small Government, Open Markets, Middle Class, Usury, High Cost of Living, Globalization, Immigration – read Dickens, Tolstoy, Byron and others to understand the dystopias these policies build during a mature capitalism.

Yes, of course we are in a Great Depression today – there is problem to solve. Wealth Redistribution Policies are needed urgently in housing (perhaps revisiting land-grants instead of Usury through unpayable 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 Redistributions in a Winter Phase and reset; the longer and more successful is the next new 60-year monetary system cycle – and American Dream.

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 makes the economic pie smaller and costs economies trillions of dollars annually

To understand the important role of supports for the Middle Class AND for “The 49%”, see this article.

poor_rich_middle_class-7

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.

Social innovation just takes good leadership, SEED Investment, and strong processes.

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 contracts, automation, exports, guaranteed incomes, government investment, and infrastructure spending. This has not been addressed by previous theory scientifically.

 Democracy and Change

actcdn-ban

Visit our ACT Party concept pages to view how Democratic Parties will select policy via Transition Economic’s TE-Mature approach in future.

The Code of Hammurabi Stone

When a trained Monarch governed the Economy in ancient Mesopotamia, King Hammurabi’s “Jubilees” corrected the problem easily. When untrained Democracies governed, and voters were not trained in how to implement these resets, tremendous human suffering followed. In approximately 50% of Great Depressions historically, War or Revolution was required to redistribute wealth and create opportunity. 1837 – the California Gold Rush reset opportunity for sixty years; 1893’s “Panic” was never properly reset and resulted in an unprecedented number of Revolutions (in Russia, Poland, Romania, Argentina, and Mexico) culminating in World War 1. 1930’s Great Depression was ended by World War II – largely due to Economist’s insistence that Keynes’ capitalistic policies were sustainable (Keynes himself noted “And then we’ll be dead”). Transition Economists should file this event away for what it is – a scientific fact validated in observation – that status quo Capitalistic Policy is inappropriate during Autumn and Winter Economic Cycle phases.

The more extensive the Wealth Distribution, the longer and richer is the next Economic Cycle. 1893’s Cycle lasted just 40 years as that “Panic” did not reset opportunity. This failing created the underpinnings of economic hardship needed to inspire World Wars I and then the 1930s’ Depression, slave wages, and Versaille Treaty austerities in Germany – created World War II.

Back to Monopoly

A Monopoly Game permits us to view a 60-year Capitalist cycle in about 60 or 90 minutes. Notice now how “status-quo” strategies from the beginning of the game, do not work reliably (or at all) near the end of the game – and also notice what is needed to restart and begin the game (the cycle) again; restarting requires wealth distribution and debt forgiveness.

Again, this Reset was an easy thing to accomplish when King Hammurabi was the supreme Monarch of all Mesopotamia in 1763 BC, but this change becomes a lot more difficult in democratic times where we do not teach our students about responsible proactive Economic Controls like “Jubilee”.

What do Economic Resets Look Like?

This second area of Transition Economics is designed to correct the numerous changes in capitalist societies caused by the cycle phase’s as they advance from Spring’s one-income-household and one-job-for-life model to Winter’s very interrupted income and social supports.

Example 1: Wealth Distribution Targets and Graduated Tax are important to maintain in any society. The Netherlands (#5 on The CMI and an RAI Maturity Level 3 Country) has universal healthcare, daycare, guaranteed incomes, retirements, housing and offshore hiring controls – and as a result, they also have one of the highest Per-capita GDP export (wealth creation) rates in the world.

Why is this true? Because all citizens can participate in commerce – and clearly citizens do just that when they are afforded the opportunity. In North America during the 1980s, we implemented Reagonomics (Trickle-down) and began lowering interest rates; by 2010’s U.S. Federal Reserve Report, neither policy had distributed wealth into the hands of lower-income citizens and so inequity and social problems climbed steadily for 25 years; the problem is so extreme that U.S. incarceration rates are 5-times that of the next G7 nation. Canada (#100) and United Kingdom (#29) citizens have one-third Holland’s export per capita; Australia (#106) creates 1/6th; Americans (#60) create 50% fewer exports than a Dutch Citizen.

What does this lost productivity cost each nation when they fail to permit socialistic or capitalistic policy changes as explained by Transition Economics? In America – as much as $8 trillion is lost in exports annually (based on 160 million people being unable to participate today) and in Canada, the United Kingdom, Australia – $600 billion are forfeited annually on average. This is a very high cost to pay in defense of inequity.

Transition Economists argue that tax-neutral and revenue-neutral changes that support basic services, avert a “Penny-wise and pound-foolish” decision to continue current status quo policies which prevent 100% of citizens from participating in commerce.

Example 2: Capitalistic Housing Policies must be reconsidered when a Winter Cycle is permitted by poor economic controls. Mortgages can often turn into Usury as interest rates fall over a long period until Bubblenomics takes control. In the GTA area in Canada, a 5% interest rate increase would turn 50% and more, of new homeowners homeless, and turn whole communities into ghost towns at the same time. Solving this problem is straight-forward, Socialistic Land Grant Housing Policies would not only give a second option to homeowners who cannot afford mortgages, but it would also permit young people to start a family at age 20 without the stress of waiting for University to finish, jobs to pay student loans, on-and-on. Could we switch back-and-forth from Land Grants to Home Ownership? Of course, yes.

Why must Transition Economics address Government Policy broadly in Finance, Technology, Social Supports and more? Because managing Reset requires this and it is important.

Take for an example, a situation where Science might solve a major issue in Emissions-related Global Warming. Science might create Thorium Reactors, Cold Fusion, Carbon-Polymer batteries, and zero-emission Fischer-Tropsch distilled (non-fossil) diesel fuels and diesel-hybrid cars, and this would quickly resolve the problem of Global Warming within five years.

Financial pragmatism, however, prevents these technologies from being developed and also adopted. How many governments could afford to lose up to 40% of their GDP Export revenues if Oil Production stopped trading tomorrow for example? How many legal contracts, companies, and employees would be uprooted? Politicians would be evicted; and politicians are people and organizations that generally prefer to take credit for their tremendous economic leadership – than to be removed and unemployed. So, Transition Economics must solve these finance problems as well.

Global Automation of our presently Manual Economies

The technical field of automation is advancing at a rapid rate and no economic theory is presented to manage it, Transition Economics is suggested to set guidelines on how to weather the storm of the next 20 to 30 years of consistent automation change within our societies. Transition Economics develops new skills in core transitioning algorithms and is also explains the application of these skills in specific real world examples and business cases.

A criticism of mine for Keynesian and other economic theorists is in their often exclusive use of mathematical proofs as evidence or measure of deductive reasoning. Any theory may be true in unrealistic isolation, similar to the 12th-century Fibonacci Sequence’s description of plant growth, but both in Science and in practical terms, 800 years later – Observation remains the only valid measure of a forest. The importance of the forest’s many thousands of other ecosystems cannot easily be modelled one on top of the other and many systems can be too easily forgotten as well. In Economics, mathematics works to model very specific and isolated systems like Supply and Demand, Interest Rate reactions, but it cannot as yet accurately predict the effect of hundreds and perhaps thousands of external economic influences that each relies upon probability and even luck (exceptions to highest-probability outcomes).

Science & Finance

Scientific Method insists on both Observation and Calculation; one must confirm the other to credibly call itself a Science and Observation is the more important of the two measures. Keynesian Economics delayed critical Wealth Distributions that resulted in a world war killing 40 million in the 1930s – failing its test of good science when its theories were observed to be unsustainable; these results were observed again in 2008 again as well. We would hardly want to revisit an unscientific and proven unsustainable course again in today’s mature Nuclear Era.

Longwave, or K-Wave Theory, is an excellent example of an economic science divined through observation of repeating patterns almost entirely; K-Waves are to economics what geysers are to geologists. K-Wave Cycles are far more useful in determining which economic controls are appropriate for our capitalism’s cyclic needs, than any other mathematically modelled economic theory system that we know of presently.

A Transition Economist would:

  • Counter 972 Job-losses (per million population per month) created by Automation with Guaranteed Incomes, Retraining and an Automation Engineering Fund. Why? Because observation in other countries proves that creating these supports, also creates a new economic injector at the same time that citizens are proven generate more wealth (higher export-per-capita) for their country by these policies.
  • Counter Interest Rate increases with Anti-Eviction and Land-Grant Policy alternatives. In the E.U., there are twice as many empty homes as their are homeless people; and there are 5.5 million homeless in Europe. Where has the adult sensibility in Financial Policy decision-making gone? Homeless people commit suicide 5% of the time and many are denied access to return to jobs and a viable life again.
  • The extent to which a Country’s Exports are impacted by resource-market swings, is dictated by its GDP Export diversity and quality, so a Transition Economist would seek to balance export and import quality carefully. Like any portfolio of assets, resource and food (Oil, Coal, Oranges, etc.) exports should represent a risk-managed percentage, alongside high-profit engineered products, packaged foods & goods, and other manufactured exports which can be automated and sold most profitably.
  • Renewable Automation – #WPProjects (http://csq1.org/world-peace-transition-projects-faq/) is a new global export marketplace that also builds sustainable Renewable Automation for all basic Production Economy goods and services, shelter, energy and so on. By participating in this plan, each country becomes a World-Leader in assigned Hi-tech Technologies at the same time that they create abundance.
  • Energy Poverty and Oil – Diesel-hybrid vehicles could be running 100-mpg with near-zero emissions on zero-carbon-footprint synthetic fuels within a year or two; Audi makes this fuel in Germany today. Fuel would not cost more at the pump – but in order to do this we would need to support jobs as they shift from companies pumping fossil fuels out of the ground. Workers would now be needed in local companies who are refining clean fuels where needed. Electricity Generation must change to full-time alternatives like Geothermal, cold-fusion and safe, inexpensive thorium nuclear reactors too. See Energy Policy here.

Transition Economics solutions are mandated to resolve Financial and Legal realities that encumber sustainable success as a community and nation. In keeping, Transition Economists recommend electing leadership who are builders, doers and engineers; individuals with solid track records in building by SUSTAIN Project Management Method process and problem-solving.

Problem Solving

SUSTAIN Project Management BookSUSTAIN Project Management Method is standardly called-up to run Transition Economics projects. Pre-order SUSTAIN Project Management here.

Considerable work was done in 1986 when the Soviet Union failed to monetize its economy as did its also-communist neighbour China, and the USSR changed their economic model to adhere with other G8 countries back in the 1980s.

The work to transition from Communistic to Capitalistic Policies was later called the “Transition Economy”: the one-way transition of a communistic policy system to a capitalistic policy system. “Transition Economics” studies the reverse change as well.

Transition Economics explains that a change in Government Policy is needed every 30 to 40 years – where Capitalistic Policies are best to use in high-opportunity Boom Economies, and then changing over to Socialistic Policies to ensure opportunity is not diminished by normal healthy capitalism. In this way, economies are reset and boom economies can restarted again and again sustainably.

Example TE-Throttle Calculations

  1. How to make automation charges simple, fair, and not labor-intensive for businesses.
  2. Should a surcharge or higher tax rate be requested from an employer when releasing a worker due to automation? Automated plants are more efficient and also use fewer working lights, security, worker amenities, and can run 7/24 in many cases. What is the socially-responsible thing for a company to do when enjoying a higher rate of productivity and profit? What should the rates for workers automated be – per industry?
  3. Workers wishing to transition to either maintenance technician or automation development & improvement roles should be permitted and paid a higher business salary or government income? Rules for offshoring restrictions should prefer local workers; should retrain and make all parties successful here at home wherever possible.
  4. If 20 men are rated as needed for road construction – which is now automated, should construction companies bid an equivalent cost per man and remit to government; or should the road owner pay a charge per kilometer of road installed – over and above the contractor’s bid?
  5. When bus, taxi and truck drivers are no longer required – and passengers or goods are picked up and dropped off automatically, how will displaced drivers be charged for?
  6.  Construction equipment replaces local jobs at a mine in Kenya. The Government of Kenya requests salaries equal to the crew required to build the road manually. Which algorithm to follow?
  7. Modelling turns what-ifs questions and KPIs (key performance indicators) into charts which permit smart optimization of automation decisions. Which models are important to each tier of the production economies? To mining, forestry, farming, fishing; to manufacturing, baking and food packaging; and to tertiary economy needs as well.

Important Data

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
  • GINI
  • HDI
  • Unemployment and Underemployment
  • Minimum Wage
  • Housing, Mortgage, and Usury Debt Limits
  • Military Spending
  • Underfunded Retirements
  • Debt
  • Real Estate & Housing
  • Social Problems – see Wealth Distribution is Good for Business

To name just a few measures…

Optimal Rate of Transition

Automations Target Top Export

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.

Transition Economics - Balancing_&_Safety-Nets

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.

Accelerating Trends in Industry Automation

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

Unemployment and Underemployment

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.

Underfunded Retirements

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.

Debt

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.

Real Estate

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.

Worldwide Markets

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

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 Book

——————————————

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 .

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World Peace is just a Project !

Let’s get building again !    Learn more at csq1.org/mag and Get the Book here, at Amazon, or at Apple!

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