Binary Economics - Overview

Overview

Binary economics rejects the claim that Neoclassical economics alone promotes a ‘free market’ which is free, fair and efficient. (e.g., as an interpretation of the classical First Fundamental Theorem of Welfare Economics). Binary economists believe freedom is only truly achieved if all individuals are able to acquire an independent economic base from capital holdings, and that the distribution of ownership rights can "deepen democracy".

Binary economics argues financial savings prior to investment are not required on the basis that the present money supply is mostly created credit anyway. They argue that newly-minted money invested on behalf of those without access to existing cash savings or collateral can be adequately repaid through the returns on those investments, which need not be inflationary if the economy is operating below capacity. The theory asserts that what matters is whether the newly-created money is interest-free, whether it can be repaid, whether there is effective collateral and whether it goes towards the development and spreading of various forms of productive (and the associated consuming) capacity.

Another contrast is that, in evidence-based economics, interest (as distinct from administration cost) is practically always necessary; in Binary Economics theory it isn't (certainly where the development and spreading of productive capacity is concerned). Conventional economics accounts for the observed time value of money, whereas binary economics does not.