A New Paradigm A New Paradigm for for

Robust Sustainable Progress Robust Sustainable Progress with with

Economic Feedback ControlEconomic Feedback Control

The Swedish Sustainable Economy FoundationThe Swedish Sustainable Economy Foundation

The EconomyThe Economyan an

Inherently Unstable SystemInherently Unstable System

The natural destabilizing forces in the economy are constantly The natural destabilizing forces in the economy are constantly forcing the system away from a stable equilibriumforcing the system away from a stable equilibrium

These destabilizing forces are the main underlying cause of These destabilizing forces are the main underlying cause of business cycles, housing bubbles, financial crises and many other business cycles, housing bubbles, financial crises and many other harmful instabilitiesharmful instabilities

The current economic paradigm is painfully impotent to fulfill its The current economic paradigm is painfully impotent to fulfill its important task to secure a stable and reliable economic and important task to secure a stable and reliable economic and financial systemfinancial system

As a result of the shortcomings of the current economic paradigm As a result of the shortcomings of the current economic paradigm millions of people suffer unjustly and bitter seeds are sown millions of people suffer unjustly and bitter seeds are sown −− potentially one day resulting in civil unrestpotentially one day resulting in civil unrest

22The Swedish Sustainable Economy FoundationThe Swedish Sustainable Economy Foundation

What are the basic requirements for a What are the basic requirements for a fundamentally stable and sustainable fundamentally stable and sustainable

economy?economy? An economic incentive structure harmonizing individual and private An economic incentive structure harmonizing individual and private

interest with common long-term interestinterest with common long-term interest

A basic income, sufficient for the fundamental needs of the individual A basic income, sufficient for the fundamental needs of the individual − − food, shelter, security, health care and educationfood, shelter, security, health care and education

An economic feedback control ensuring a sufficiently high, stable and An economic feedback control ensuring a sufficiently high, stable and sustainable demand in the economy sustainable demand in the economy − − rewarding investment, rewarding investment, employment and productionemployment and production

An economic feedback control stabilizing the value of real assets in the An economic feedback control stabilizing the value of real assets in the economy and securing the underlying securities in the financial systemeconomy and securing the underlying securities in the financial system

An economic feedback control discouraging the generation of external An economic feedback control discouraging the generation of external effects causing long-term damage and a net loss to societyeffects causing long-term damage and a net loss to society

33The Swedish Sustainable Economy FoundationThe Swedish Sustainable Economy Foundation

Necessary societal and economic componentsNecessary societal and economic components

A financial system fully secured by real assets in the economyA financial system fully secured by real assets in the economy

A feedback control to stabilize the value of the stock of real assets in A feedback control to stabilize the value of the stock of real assets in the economythe economy

A fair and balanced rate of interest reflecting the rate of growth of A fair and balanced rate of interest reflecting the rate of growth of the average labor productivity in the economythe average labor productivity in the economy

An average real wage reflecting the average labor productivity in the An average real wage reflecting the average labor productivity in the economyeconomy

A free floating currency fundamentally balanced by a continual A free floating currency fundamentally balanced by a continual clearing of the trade deficit clearing of the trade deficit − − secured through a continual acquisition secured through a continual acquisition of a ‘trade deficit currency reserve’of a ‘trade deficit currency reserve’

A feedback control system with sufficiently high fees on negative A feedback control system with sufficiently high fees on negative externalities externalities − − to economize the use of limited natural resources and to economize the use of limited natural resources and to reduce the emissions of pollutantsto reduce the emissions of pollutants

A fee reimbursement mechanism securing a regular repayment of an A fee reimbursement mechanism securing a regular repayment of an equal share of the income from these fees to every individualequal share of the income from these fees to every individual

44The Swedish Sustainable Economy FoundationThe Swedish Sustainable Economy Foundation

Some fruits of a sound economic paradigmSome fruits of a sound economic paradigm

A stable and secure financial systemA stable and secure financial system

A stable value of the stock of real assets and real estateA stable value of the stock of real assets and real estate

A stable, fair and balanced rate of interestA stable, fair and balanced rate of interest

A steady growth of the average real wageA steady growth of the average real wage

A steady reduction of emissions of pollutantsA steady reduction of emissions of pollutants

A steady and regular repayment of the income from control feesA steady and regular repayment of the income from control fees

A reliable currency with a unique trade balancing capabilityA reliable currency with a unique trade balancing capability

A robust high rate of employment without inflation problemsA robust high rate of employment without inflation problems

A robust, fair and efficient pension systemA robust, fair and efficient pension system

A robust, balanced budget with powerful resources for developmentA robust, balanced budget with powerful resources for development

55The Swedish Sustainable Economy FoundationThe Swedish Sustainable Economy Foundation