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A Sad Statistic for the Traders Crucible

May 19, 2011

I was looking through the statistics today on the Traders Crucible back end.  The wordpress backend is great – it shows what search terms people use to get to the blog.  As soon as you check the visitors to the blog, the search terms show up right below – so its nearly impossible to avoid looking at them.

This is wrong

This afternoon, I noticed something about the search terms, and felt a bit sad.  Somebody found the Traders Crucible looking for the terms “Wynne Godley accounting identity“.   Wha??!  But it is true.  I did a search for “Wynne Godley accounting identity”, and The Traders Crucible is the first result.

If you are not familiar with Mr. Godley, he is the giant of looking at the world of money through the proper lens of balance sheet accounting.  He created a matrix of accounts that balance – must balance  – and revolutionized the way to look at modern economies that issue fiat currencies.

His matrix of accounts allows anyone to look at what is happening in an economy and see both the flows (what is going where)  and the stocks (how much of anything) in the economy.  I consider this matrix to be the basic data of economics – equivalent to realizing or wondering if light has a speed, so then you must devise a test to measure that speed.

The thing about his work is that even if his structure of accounts is wrong, or you disagree with his choices, the basic framework must be correct!  It’s a balance sheet approach that balances across multiple, coherent, and complete national accounts.  It’s like arguing with the sun, or the ocean.  You can argue, but the ocean is still there.

It’s hard to discover the emergent rules of human economic behavior until you have some really basic data.  We can make up cool stories and investigate how those stories work like we do in most economics, or we can collect some data first and try to make up stories that fits the data.  Mr. Godley’s work allows us to collect that data properly, so we can make up useful stories that help humans be proactive in the world.

The Traders Crucible came up ahead of Mr. Godley’s own papers and presentations. I’ve been blogging for about 6 months. I am a piker compared to Mr. Godley – a man who devoted his productive work life to developing something very, very useful.

I’ve mentioned Wynne a handful of times.  And let’s face it –  I’ve written a handful of semi-popular posts that appeal to a dedicated but still small audience, but this isn’t The Big Picture or Naked Capitalism.  I hope that in some other world of the multi-verse, the Traders Crucible never has to exist, and Mr. Godley has his proper place in the world of economics.

And maybe, in this world, I can help his work be noticed.

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  1. Detroit Dan
    May 19, 2011 at 9:46 pm

    Well said. But on the other hand, the Trader’s Crucible is performing a valuable service in keeping Mr Godley’s works and ideas alive…

  2. Clonal Antibody
    May 20, 2011 at 12:26 am

    You can set up a page with easy links to Godley’s work that you are familiar with — it will help others find it more easily

  3. beowulf
    May 20, 2011 at 12:56 am

    “If you are not familiar with Mr. Godley…”
    There’s always the jump in the deep end of the pool approach :o)

    The Wynne Godley Memorial Conference: Contributions in Stock-flow Modeling
    Levy Economics Institute of Bard College
    Annandale-on-Hudson, NY
    May 25–26, 2011


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