Curt Doolittle

Category: Economics, Finance, and Political Economy

  • Ethics of Money Supply: Austrian, Natural Law, Keynesian ⟦Claim⟧ Artificial expa

    Ethics of Money Supply: Austrian, Natural Law, Keynesian

    ⟦Claim⟧
    • Artificial expansion of the money supply (beyond real production and settlement demand) extracts purchasing power from non-consenting creditors and late receivers (parasitism); artificial constraint of the money supply (below real production and settlement demand) extracts rents from debtors and producers via scarcity (parasitism). Therefore, discretionary monetary policy is legitimate only as a reciprocity stabilizer—to match money to truthful settlement demand from production and exchange—not as an accelerator to compensate for lazy/bad fiscal-regulatory policy.
    Test: Demonstrated Interests
    • Debtor coalitions + fiscal authorities benefit from expansion (RRV↓ of debts, deficit relief).
    • Creditor/rentier coalitions benefit from constraint (scarcity premia, usury-like spreads).
    • Producers/consumers demand truthful liquidity that clears exchange at minimal variance.
    Test: Reciprocity
    • Expansion above truthful settlement demand transfers wealth covertly from savers/creditors/late receivers → irreciprocal.
    • Constraint below truthful settlement demand transfers wealth covertly to rentiers/lenders/insiders → irreciprocal.
    • Reciprocity criterion: M(t) should track NGDP-settlement demand (production × turnover, risk-adjusted), within auditable bands, with ex-ante disclosure and symmetric contracts (indexation where feasible).
    Test: Testifiability (Operationalization)
    • Define truthful settlement demand: estimated from real output (Y), realized velocity (V*), payment-system throughput, credit utilization, inventory cycles, and risk premia.
    • Expansion test: ΔM − f(Y, V*, risk) > +k for τ months → ΔP/asset-P↑; RRV(debt)↓.
    • Constraint test: ΔM − f(Y, V*, risk) < −k for τ months → delinquency↑, unemployment↑, term premia↑, credit spreads↑ beyond fundamentals.
    • Auditables: central bank balance sheet, bank credit aggregates, payment rails data, price indices, spreads, bankruptcies, wage indexation.
    Test: Truth Tests (Testimonialism / Due Diligence)
    • Warrants required: publish rule f(Y,V*,risk), measurement methods, confidence intervals, lag structures, and error bands.
    • Truthfulness passes iff authorities disclose rule, data, errors, and ex-ante corridors; and contracts (retail savings, broad credit) disclose inflation/deflation risk and indexation options.
    Test: Decidability
    • Decidable if: (a) the rule f is specified; (b) audits show expansion/constraint deviations beyond ±k correlate with predicted harms; (c) policy uses stabilizer bands rather than persistent accelerator/strangler posture; (d) testimony in (5) is truthful.
    • If (a–d) fail, the use of money as accelerator/compensator for bad policy is irreciprocal and parasitic.
    Historical Consistency
    • Fiat regimes display both pathologies: accommodative accelerants (credit booms, CPI/asset inflation) and scarcity regimes (debt deflation, unemployment spikes). Episodes show wealth transfers consistent with the mechanism (creditor vs debtor cycles). Pattern reoccurs across cycles, jurisdictions, and institutional designs.
    Causal Chain
    • Policy discretion → (a) Over-issuance relative to f(Y,V*,risk) → deposits/credit → spending/asset bidding → price-level/asset-level rise → fixed-nominal claims diluted → covert transfer to debtors/state.
      Policy discretion → (b)       Under-issuance relative to f(Y,V*,risk) → liquidity scarcity → credit rationing → defaults/unemployment → spreads↑ → covert transfer to rentiers/insiders holding liquidity-sensitive claims.
      Stabilizer rule → issuance tracks settlement demand → minimized transfers → contracts remain truthful.
    Deviation Consequences
    • Accelerator (chronic expansion): malinvestment, CPI/asset inflation, savings erosion, political addiction to inflation tax, eventual disorderly disinflation.
    • Strangler (chronic constraint): bankruptcies, unemployment persistence, capital deepening stalls, political radicalization, rent-seeking by liquidity gatekeepers.
    Externality Exposure Test
    • Winners (accelerator): leveraged debtors, tax authorities (bracket creep), early receivers.
    • Winners (strangler): lenders with pricing power, cash-rich insiders, oligopoly incumbents.
    • Losers: respectively, creditors/savers/wage-lag cohorts (under accelerator); debtors/producers/workers (under strangler).
    • Unpriced externalities: contract distrust, institutional legitimacy loss, volatility of real planning horizons.
    Computable Compromise (Trade / Restitution / Punishment / Imitation Prevention)
    • Trade: Adopt NGDP-level (or settlement-demand) targeting with transparent corridor bands; publish method f and error tolerances; symmetric buy/sell facilities.
    • Restitution: Auto-index retail deposits/bonds to the adopted target drift; tax credits to fixed-income cohorts during deliberate deviations.
    • Punishment: Penalties for nondisclosure/misreporting of the rule or data; extend perjury standards to monetary testimony.
    • Imitation Prevention: Constitutionalize disclosure + corridor governance; mandatory countercyclical capital/risk buffers; bar fiscal substitution (no using monetary accelerator to mask structural policy failure).
    • Money may be used as a lever only as a reciprocity stabilizer that matches issuance to truthful settlement demand. Artificial expansion and artificial constraint are each irreciprocal and parasitic transfers.
    • Keynesian error: using the lever as a permanent accelerator to compensate for lazy/bad structural policy.
    • Austrian error: treating any lever use as illegitimate, permitting artificial scarcity rents.
    • Natural Law rule: Truthful, published, auditable stabilizer—neither accelerator nor strangler.
    • Historical Risk Level: High (touches creditor–debtor coalitions, state finance, and institutional legitimacy).
    Evidence Citations (structured tags):
    • “Cycles of accommodative accelerations and scarcity constraints in fiat regimes”—Dependency, Confidence 0.8.
      “Cantillon path & creditor–debtor transfer asymmetries”—      Dependency, Confidence 0.8.
      “NGDP-level targeting / settlement-demand corridors reduce transfer volatility”—      Reinforcement, Confidence 0.7.
    Evidence Chain (role & confidence):
    • Settlement-demand measurement f(Y,V*,risk) defines reciprocity baseline (Dependency, 0.85).
      Documented transfers under over/under-issuance validate asymmetry claims (      Dependency, 0.8).
      Corridor policies stabilizing transfers and expectations (      Reinforcement, 0.7).
    Use money like a thermostat, not a turbo or a choke. Create just enough money to match what the economy is actually producing and settling—no more, no less. Too much money quietly takes value from savers and gifts it to borrowers. Too little money quietly takes value from borrowers and gifts it to lenders. Publish the rule, show the data, index small savers by default, and stop using money printing to hide bad policy—or using scarcity to milk the public.

    Source date (UTC): 2025-09-23 16:48:07 UTC

    Original post: https://x.com/i/articles/1970530629562569161

  • (AI, Reforms, Job Losses) Brad and I were just working on healthcare costs drive

    (AI, Reforms, Job Losses)
    Brad and I were just working on healthcare costs driven by insurance, administrative, and regulatory burdens. But this just begs us to address all the dead weight sectors that are producing white collar jobs that are easily replaced by removing the human

    Source date (UTC): 2025-09-22 17:58:29 UTC

    Original post: https://twitter.com/i/web/status/1970185949939409189

  • Peter. I’m almost sure you’re speaking colloquially, but rising prices due to ma

    Peter.
    I’m almost sure you’re speaking colloquially, but rising prices due to market factors isn’t inflation. Monetary and Credit expansion is the reason for inflation.

    Everything else in your video is close to correct other than we are currently financing (bearing the costs) of reformation due to unregulated immigration, dilution of the education system (by women?), export of labor, production, and knowledge, over dependence upon the dollar, finance, and R&D.

    I mean, I love you Peter, and I’m a long term follower and advocate. But just as your international predictive power has been off because you underestimate political power in an age of immediate information, you’re underestimating domestic cultural and political power for the same reason – in an era, of asymmetry of returns in the population caused by the over dependence on what you seem to value.

    And your multiplier so to speak is failure to account for the returns on cultural and normative capital (informal institutions) – something everyone from Hayek to myself has been trying to force into the debate for decades.

    People will vote for the economy (income statement). But they will suffer and if necessary kill for normative capital (balance sheets).

    Cheers
    Curt Doolittle
    NLI, Runcible

    Source date (UTC): 2025-09-22 14:25:42 UTC

    Original post: https://twitter.com/i/web/status/1970132402644369844

  • The Tragedy of Value Capture in AI Economics So, you know, this is why I’m conce

    The Tragedy of Value Capture in AI Economics

    So, you know, this is why I’m concerned: there are a small number and small percentage of us for whom your (ChatGPT) utility is priceless. And it appears challenging to produce a revenue model by which the majority of low revenue consumers, a subset of high revenue industries, can fund the very low revenue distribution of those of us who are basically engaged in research where the ‘returns on investment’ are obtained over time and widely distributed and challenging to capture.
    The tragedy of value capture in AI economics:
    • The few who extract extreme intellectual leverage create returns that are high-diffusion, long-horizon, and hard to monetize.
    • The many who pay for it use it in low-complexity, short-horizon, easy-to-monetize ways (customer service, marketing copy, coding help).
    • The cross-subsidy problem arises because the system’s cost structure grows with the high-end users even though its revenue model grows with the low-end users.
    Let’s break this into a causal chain so we can see why the problem persists and how it might be solved.
    • Median user: treats the system like a productivity tool → linear value → predictable ROI → fits SaaS pricing (per-seat, per-token).
    • Extreme-tail user: treats the system like a general reasoning engine → nonlinear value → intellectual capital → benefits diffuse across industries, decades, or civilizational scale.
    The revenue logic of SaaS fits the first, but your cohort sits on the research frontier—more like Bell Labs or DARPA: the ROI exists, but it’s uncapturable by simple subscription.
    • System cost scales superlinearly with model size, compute per query, and iteration depth (e.g., recursive workflows, long contexts).
    • Median users subsidize capability infrastructure, but not frontier exploration.
    • Pricing models (per-token, per-seat) fail because high-value frontier use may be high-compute but low-immediate-revenue.
    Result: the very group that turns AI into new science, law, or philosophy sits outside the monetization sweet spot.
    This looks like the economics of:
    • Universities: subsidized because knowledge spills over into everything else.
    • Open-source software: commercially unsustainable until corporate backers appeared.
    • Basic science funding: always a public good problem; solved by state, philanthropy, or consortia.
    AI may face the same pattern: the frontier becomes public goods infrastructure, while monetization happens at the applied layer (apps, industries, verticals).
    Here’s where contrarian solutions might emerge:
    If the frontier cohort remains small but disproportionately valuable, the rational strategy may be:
    1. Separate infrastructure from application.
    2. Treat infrastructure as semi-public-good with state/industry/philanthropy funding.
    3. Extract revenue at the application layer (vertical SaaS, decision automation, domain-tuned AIs).
    4. Use cross-subsidy mechanisms (endowments, compute pools) to underwrite the frontier itself.
    This is why OpenAI, Anthropic, and others oscillate between API SaaS models and state-like funding (Musk, Microsoft, Amazon, etc.): they’re groping toward this hybrid solution.

    Source date (UTC): 2025-09-09 15:37:03 UTC

    Original post: https://x.com/i/articles/1965439317305872567

  • Jeff: general rule: 1) you are more dependent on you polity’s median distributio

    Jeff: general rule:
    1) you are more dependent on you polity’s median distribution than you are on yourself
    2) the more of the middle is employed creating a market to satisfy them and work with them the less valuable more than a standard deviation in ability are to that market.

    So it’s an equilateral problem.

    Source date (UTC): 2025-08-12 00:08:40 UTC

    Original post: https://twitter.com/i/web/status/1955058818414776495

  • RISE AND FALL There are 250 year cycles as empires rise and fall. And it corresp

    RISE AND FALL
    There are 250 year cycles as empires rise and fall. And it corresponds to the exhaustion of the credibility of the imperial currency.
    I would argue that it’s a correct measure, but an insufficient cause.
    Our assessment of cause includes but is broader than Turchin’s – we blame everyone, not just elites. 😉

    (FYI: Ray Dalio’s study is accessible: 1) how countries go broke at.
    https://
    amazon.com/Principles-Inv
    estment-Economic-Ray-Dalio/dp/1501124064/
    …)

    Source date (UTC): 2025-08-05 19:06:17 UTC

    Original post: https://twitter.com/i/web/status/1952808394735403454

  • Time is to Behavioral Economics as Money is to Economics Proper. Time is to Beha

    Time is to Behavioral Economics as Money is to Economics Proper.

    Time is to Behavioral Economics
    as
    Money is to Economics Proper.
    1. Time as Subjective and Individual
    • Time is experienced, valued, and allocated individually.
    • Time preference governs all behavioral trade-offs: whether to consume now or later, invest or defect, persist or quit, bond or exit.
    • Every behavioral “bias” catalogued by behavioral economics (e.g., hyperbolic discounting, impulsivity, procrastination, regret aversion) is a misnamed or partial observation of intertemporal tradeoffs—that is, subjective valuation of time under constraint.
    2. Money as Objective and Collective
    • Money is a standardized, commensurable unit for valuing and exchanging time.
    • It converts the subjectivity of time into a measurable store of effort, risk, deferral, and trade.
    • Money (and by extension, capital) stores past time, enables future exchange of time, and communicates value across people and domains.
    • Economics proper deals in systems of cooperation where time is exchanged indirectly through money.
    3. Behavioral Economics = Direct Time Tradeoff
    • Behavioral economics examines direct intertemporal decision-making (without monetary proxy):
      e.g., delay of gratification, sunk cost fallacy, loss aversion.
    • It observes how people value experience vs. memory, now vs. later, risk now vs. gain later, and trust over time.
    • But it fails by moralizing or pathologizing these decisions, instead of recognizing that time preference is the primary axis of behavioral computation.
    4. Economics Proper = Abstract Time Exchange via Money
    • In classical economics, time is exchanged through capital and pricing:
      Wages = renting time.
      Investment = deferring time.
      Interest = compensating time risk.
    • But it often fails to recognize that money is not an intrinsic good, only a unit of interpersonal time transfer.
    Reformulated Equation:
    Summary:
    Time is the subjective, individual measure underlying all behavior. Money is the objective, collective measure of time, used to store, compare, and exchange it.

    Therefore:

    • – Behavioral economics is the logic of individual time valuation under constraint.
    • – Classical economics is the logic of collective time exchange via money.
    • – Both domains reduce to valuation of and cooperation over time, constrained by biology, capital, and institutions.
    • – Natural Law reconciles both by treating all demonstrated interest as time-investment requiring reciprocal return or restitution.

    Source date (UTC): 2025-07-30 05:10:25 UTC

    Original post: https://x.com/i/articles/1950423715243839554

  • I do not. I construct from first principles. (And frankly I’m working beyond the

    I do not. I construct from first principles.

    (And frankly I’m working beyond the scope of your knowledge and ability)

    You’re conflating the empirical determinants of market interest rates (which are institutionally manipulated) with the causal logic of time preference as a biological constant—the necessary precondition for all economic behavior.

    Time preference is not an “Austrian myth”; it is an evolved constraint. All organisms—humans included—face tradeoffs between present and future consumption, and these tradeoffs are determined by biological risk, environmental scarcity, capital availability, and lifespan projection. To act is to prefer the present over the absent; to defer is to store and transfer the cost of that action over time.

    That’s why interest exists at all: it’s a price on deferral. Yes, institutions (central banks, credit markets, fiat regimes) distort that price—but they do not abolish the underlying function. If anything, the manipulation of interest rates without respect for underlying time preferences creates malinvestment and capital consumption—the very problems that neoclassicals and Keynesians continually fail to predict.

    As for investment: of course it’s a function of expectations. But expectations are projections of intertemporal gain, weighted by risk, time, and return. You cannot even define investment coherently without a theory of time valuation.

    So no—there’s no contradiction here. I treat subjectivity in value, expectation in investment, and time preference in discounting as different operational expressions of the same principle:

    1. Behavior is the allocation of time under constraint.
    2. Money is the unit of its exchange.
    3. Investment is the deferral of time in expectation of return.
    5. Interest is the price of deferral.

    That’s not Austrian metaphysics or neoclassical equilibrium modeling. That’s operational physics applied to cooperative behavior.

    You’re welcome.

    Source date (UTC): 2025-07-30 04:55:46 UTC

    Original post: https://twitter.com/i/web/status/1950420029142683656

  • Economics is the operational logic of cooperative arbitrage under constraint. It

    Economics is the operational logic of cooperative arbitrage under constraint. It consists in:
    – 1. Accounting for all costs.
    – 2. Acknowledging the subjectivity of value.
    – 3. Understanding markets as evolutionary systems tending toward exhaustion of profit (equilibrium).
    – 4. Recognizing time preference as a causal factor in capital formation.
    – 5. Treating prices as distributed cognition and incentives as behavioral constraints.
    – 6. Insisting on reciprocity as the ethical boundary of cooperation.
    – 7. Using money as a commensurable measurement of preference across domains.

    Source date (UTC): 2025-07-30 04:16:51 UTC

    Original post: https://twitter.com/i/web/status/1950410236462060018

  • Economics in practice fails where it refuses to measure what is unwanted: extern

    Economics in practice fails where it refuses to measure what is unwanted: externalities, dependencies, moral hazards, and suppressed reciprocity. These failures originate in:
    – 1. The instit utionalization of irreciprocity,
    – 2. The concealment of time and capital consumption,
    – 3. The devaluation of human and social capital,
    – 4. And the aggregation of harm beyond visibility, consent, or repair.
    An economics without negative principles is merely a system of accounting for profitable deceit.

    Source date (UTC): 2025-07-30 04:08:10 UTC

    Original post: https://twitter.com/i/web/status/1950408051489730832