Dear NASA!

Dear NASA, add emulsion!
Something is not right
with the image of gravity.
So,
Put a one-kilogram mass

On a weighing scale
On Mars and on the moon
and derive gravity:

For pure science
hinges on sincere experiments
not conjuctural derivations.

There will be discrepancies,
There will be differences
The image of Gravity

will glow forever!

A Manifesto for Scientific Poetics

Voltage, V; Current, I; Resistor, R; and Ohm’s Law.
Less known to our forefathers: Electric Charge is the property of subatomic particles.
Thales was the one who aimed at it first; then there was Pliny the Elder.
Why go so far and yonder when we have our man Franklin
And his fortunate-fated experiment?
Ampère, Faraday, or, say, J.C. Maxwell—
who added a few bricks to the shifting paradigm.
Now Microwave, elusive to all light spectrums, is in our kitchen.
cooking meals for us!

But to see even American poetry too dogged, too distant,
so deprived of these reaches of Time—
My heart burns in its innermost hexagon.
When will our creative posterity, whom we are so eager
to pass over this department-trove, perceive
that expansive horizon
where Wordsworth's emotion escapes attention,
And Time and its coeval Space be put at the center?

My heart clamors: TODAY IS THE DAY!

Cybernetic Capitalism in the AI and Blockchain Era

The world is entering a new economic age — one shaped not by paper money or manual decision-making, but by algorithms, data, and digital intelligence. Artificial Intelligence (AI) and blockchain technology are transforming how we trade, invest, and measure value. In this new reality, traditional economic models — designed for industrial or early information societies — are no longer enough. A new system is needed: one that thinks, adapts, and regulates itself. This is where Paudelian Economics, or Cybernetic Capitalism, becomes essential. It provides a mathematical and moral framework for how capitalism can survive — and even thrive — in the age of automation and decentralization.

1. The Shift Toward Intelligent Capitalism

AI has changed how decisions are made. Markets now move faster than human reaction time. Trading, credit analysis, and even monetary policy are increasingly algorithmic. Yet, traditional economics still relies on human judgment — central banks debating interest rates, governments guessing about inflation. These manual methods cause delays and overreactions.

Cybernetic Capitalism replaces guesswork with algorithmic equilibrium. It uses three interconnected principles — the Economy’s Pulse Ratio (EPR), the Paudelian Anchor Index (PAI), and the Spontaneous Interest Rate (SIR) — to keep the economy balanced automatically.

EPR = \frac{x}{x_0}, \quad PAI = k \log\left(\frac{x}{x_0}\right), \quad R = r + k \log\left(\frac{x}{x_0}\right)

These formulas act like sensors, interpreters, and regulators of the economic system. Together, they form a cybernetic feedback loop — just as AI systems learn and adjust through feedback, the economy can now self-regulate through continuous data.

2. Blockchain: The Perfect Partner

If AI gives the economy intelligence, blockchain gives it memory and trust. Blockchain technology decentralizes data, making transactions transparent and tamper-proof. But what has been missing until now is a mathematical logic that connects blockchain’s stability to economic behavior.

This is where Cybernetic Capitalism completes the picture. The formulas of EPR, PAI, and SIR can be coded directly into smart contracts, allowing interest rates, credit conditions, or even taxes to adjust automatically based on real-time economic activity.

For example:
• If spending and liquidity rise too quickly (EPR > 1), smart contracts can increase interest rates slightly to prevent inflation.
• If the economy slows (EPR < 1), rates automatically decrease, encouraging investment and spending.

No politics. No delays. No human bias.
This is self-governing capitalism — capitalism that corrects itself through code.

3. Solving Old Problems with New Logic

Traditional capitalism struggles with cycles of boom and bust. Keynes tried to fix it through government spending; Friedman through monetary control; but both required external intervention.

Cybernetic Capitalism builds intervention into the system itself. The economy becomes autonomous — sensing imbalance (EPR), anchoring stability (PAI), and restoring equilibrium (SIR). This removes the two biggest flaws of modern economics:
1. Human error and delay, and
2. Moral hazard, where bad decisions are rescued by external bailouts.

Instead, Cybernetic Capitalism creates a moral algorithm — one that rewards balance and punishes excess automatically. It aligns perfectly with the blockchain principle: code is law.

4. A New Role for Central Banks and AI Systems

In the AI era, central banks will no longer need to adjust rates manually. Instead, they will oversee algorithmic monetary systems built on Paudelian logic. The role of economists will evolve from controlling to calibrating — setting parameters (r and k) while letting data drive real-time regulation.

AI will serve as the system’s “neural network,” reading vast streams of economic data, predicting shocks, and continuously updating PAI and SIR values. Blockchain will record every adjustment, ensuring transparency, auditability, and trust.

This makes Cybernetic Capitalism the bridge between human intention and machine precision — between moral capitalism and mathematical capitalism.

5. Toward a Conscious Economy

The ultimate goal of Paudelian Economics is not just automation, but awareness. It imagines an economy that “knows” when it is unbalanced and “chooses” to restore harmony — a living, cybernetic organism guided by logic and fairness.

This vision also solves the ethical challenge of AI: how to make machines serve human values. By embedding equilibrium (EPR), stability (PAI), and self-regulation (SIR) into the economic algorithm, Paudelian Economics ensures that progress remains human-centered.

Conclusion

As AI and blockchain reshape global finance, Cybernetic Capitalism provides the blueprint for a new economic civilization — one that is not ruled by greed or guesswork, but by feedback, harmony, and intelligence.

It doesn’t reject capitalism; it perfects it.
It doesn’t replace humans; it frees them from error.
In this new era, markets, algorithms, and morality finally unite under one principle: the mathematics of balance.

Cybernetic Capitalism (Paudelian Economics) is not just a theory for the future — it is the economic operating system of the AI and blockchain age.

Feedback Cycle in Cybernetic Capitalism

The modern economy is like a living organism — it breathes, grows, and reacts to its environment. Sometimes it overheats, and sometimes it slows down. Traditional economics tries to fix this by using human decisions — governments increase spending or central banks change interest rates. But this process is slow, imperfect, and often driven by emotion or politics.

Cybernetic Capitalism, the central idea of Paudelian Economics, offers something completely new: an economy that can regulate itself through continuous feedback — just like the human body keeps its heartbeat or temperature stable without conscious control. This system depends on three core elements: EPR (Economy’s Pulse Ratio), PAI (Paudelian Anchor Index), and SIR (Spontaneous Interest Rate). Together, they form what is called the Feedback Cycle of Cybernetic Capitalism — a self-balancing loop that makes the economy adaptive, intelligent, and fair.

1. The Heartbeat: EPR (Economy’s Pulse Ratio)

Every living being has a pulse, and so does an economy. The Economy’s Pulse Ratio (EPR) measures the rhythm of economic activity. It is written as:

EPR = \frac{x}{x_0}

Here, x means the current level of economic activity — spending, investment, and production — and x₀ means the normal or balanced level.
• When EPR > 1, the economy is running fast — people are buying, investing, and borrowing more.
• When EPR < 1, the economy is slowing — demand and confidence are falling.
• When EPR = 1, the economy is healthy and stable.

EPR acts like a sensor, constantly measuring whether the economy’s “pulse” is too high, too low, or just right.

2. The Brain: PAI (Paudelian Anchor Index)

Once the pulse is measured, the economy needs to understand what that means. That’s where the Paudelian Anchor Index (PAI) comes in. Its formula is:

PAI = k \log\left(\frac{x}{x_0}\right)

Here, k is a constant that decides how strongly the system reacts to changes. The logarithmic part — log(x/x₀) — converts large swings into smaller, smoother responses.

Think of PAI as the brain of the system — it interprets signals from the pulse (EPR) and converts them into instructions for correction.
• If EPR shows the economy is overheating, PAI sends a signal to cool it down.
• If the economy is too cold, PAI signals the system to warm it up.

This prevents wild swings, turning chaos into controlled balance.

3. The Regulator: SIR (Spontaneous Interest Rate)

After the signal is processed, the system needs to act — to correct the imbalance. The Spontaneous Interest Rate (SIR) does this job automatically.

Its formula is:
R = r + PAI

Here, r is the base rate — a kind of “resting heart rate” for the economy — and PAI adds or subtracts from it depending on the situation.
• When the economy overheats (EPR > 1 → PAI positive), R increases, making loans costlier and slowing demand.
• When the economy cools down (EPR < 1 → PAI negative), R decreases, making credit cheaper and encouraging spending.

This is the feedback mechanism — the economy listens to itself, interprets what it hears, and responds instantly.

4. The Cycle in Action

The full cycle works like this:
1. Sensing: EPR detects the state of the economy.
2. Interpreting: PAI translates that data into a signal of imbalance.
3. Correcting: SIR adjusts the interest rate automatically.
4. Stabilizing: The change in interest rate affects borrowing, saving, and investment — which changes EPR again.
5. Repeating: The system keeps looping until EPR returns close to 1, the equilibrium point.

This continuous flow is what makes Cybernetic Capitalism “alive.” It is not ruled by emotion or policy meetings but by real-time data and mathematical logic.

5. Why Feedback Matters

In traditional economics, decisions come after problems appear — inflation is controlled after prices rise, and unemployment is fixed after people lose jobs. In Cybernetic Capitalism, decisions happen as problems begin.

This is what makes it cybernetic — it uses feedback to prevent crises before they occur. The result is an economy that can adapt automatically, recover quickly, and stay balanced without constant human control.

6. The Human Touch in the Machine Age

Even though Cybernetic Capitalism is built on algorithms, it is not cold or mechanical. Its purpose is deeply human: to build an economic system that is fair, stable, and intelligent. It reflects the values of discipline, balance, and feedback that exist in nature and human life.

AI and blockchain make this model even more powerful. AI can read massive amounts of data, while blockchain provides transparency and trust. Together, they allow the Paudelian Feedback Cycle to function globally — across currencies, nations, and markets — without corruption or delay.

Conclusion

The Feedback Cycle in Cybernetic Capitalism turns the economy into a living system — one that senses, thinks, and heals itself.
EPR provides the pulse, PAI provides the logic, and SIR provides the action.
They work together in a continuous loop, keeping demand and supply in balance, preventing shocks, and ensuring fairness.

In a world driven by AI and digital finance, this feedback cycle is not just an idea — it is the blueprint for the next generation of economic order, where mathematics and morality finally move together.

Cybernetic Capitalism is, in essence, the science of balance, and the feedback cycle is its beating heart.

An Idyllic Countryside

Morning:
The leaves of dubo-grass
dance across the terraces,
bejeweled
with the embroidery of dew.

Evening:
Over the Himalayan hills,
clouds bellow—
shaking their crimson humps,
frolicking
like heavenly heifers.

Night:
Carrying heaven’s light
in their tiny tails,
they drift across the valley—
the fireflies.

The Paudelian Feedback Framework (PuFF) in CBDC Simulations

Abstract

The Paudelian Feedback Framework (PuFF) introduces a novel adaptive control model for modern monetary systems, where liquidity and interest rates self-adjust through real-time feedback loops.

In the context of Central Bank Digital Currency (CBDC) environments, PuFF enables a form of Cybernetic Capitalism — an economy capable of sensing, interpreting, and correcting itself.

Unlike conventional fixed-rate or rule-based systems, PuFF integrates three interlinked dynamic ratios:

EPR = \frac{x}{x_0}, \quad PAI = k \cdot \log\left(\frac{x}{x_0}\right), \quad SIR = r + k \cdot \log\left(\frac{x}{x_0}\right)

These equations allow liquidity ($x$) and interest rate ($SIR$) to interact through a behavioral feedback coefficient ($k$), which reflects psychological, socio-economic, and temporal sensitivity.

Applied within CBDC systems, PuFF transforms monetary policy into a self-regulating algorithm — one that reduces lag, prevents human bias, and maintains ethical equilibrium between inflation, growth, and fairness.

Key Concepts

• EPR (Economic Pulse Ratio): measures real-time economic “heartbeat” (liquidity vs equilibrium).

• PAI (Paudelian Anchor Index): the moral and mathematical anchor of value.

• SIR (Spontaneous Interest Rate): the self-adjusting rate guided by feedback, not decree.

• k: a dynamic sensitivity coefficient, driven by behavioral and algorithmic intelligence (Socio-Psychological Factor; eg, pandemics, war, etc.). In fact, k is a simplified expression of f(x, y, z, …).

• r: the structural base factor (Keynesian core).

Applications

When integrated with digital currency ledgers, PuFF can autonomously calibrate monetary conditions:

• Adjust interest rates in real-time as liquidity flows.

• React to psychological and behavioral data (via AI-driven $k$).

• Provide ethical transparency and system stability in digital economies.

Implication for Central Banks

CBDC systems operating under PuFF gain the ability to:

• Detect instability before it spreads.

• Auto-balance liquidity with policy responsiveness.

• Implement AI-augmented monetary governance — where feedback replaces political intervention.

Citation

Paudel, R. (2025). The Paudelian Feedback Framework (PuFF) in CBDC Simulations. Paudelian Economics Institute.