The Four Pillars of Future
Progress—Part IV: The Neutral Economy
By Tim Krenz
October 4, 2020
For Hometown Gazette
Copyright ©
2020 CEPIA Club LLC
In
this fourth part of the series, “The Four Pillars of Future
Progress,” we examine the idea of a neutral economy, and how a new
thinking of economies, and the dismantling of some of the
established doctrines, might such a thing useful and better for the
world. Going forward to the future, with a goal of sustained goods
and services, how humanity designs, manages, uses, and benefits from
the neutral economy will to a large degree determine the type of
cultures we will have on earth someday. The world faces a clear and
trending choice now between cultures of either slavery or freedom.
After an end state analysis of future progress, when faced with this
choice, most people, one may believe, would rather have freedom, so
people must start now to ensure it. Understanding the concept of a
neutral economy only begins the process of undermining the forces
that would seek to make the many only slaves to the few. New thinking
hopefully will give motivation to readers to take some action on
their own.
Economies
make up the complex system of market trades between actors to procure
or acquire goods and services needed and wanted by both producers and
consumers. Humanity naturally developed economies to satisfy two
things, and two things only: things, or needs, for survival; and
things, or wants, for comfort. And the more complex these trades
become, the more levels of depth get added in goods and services.
People have needs at all times, and had them throughout history.
People also want more comfort, a sign of civilization's prosperity.
Economies exist everywhere in the world, and have existed at all
times in human interactions. Economies need at least two actors in a
transaction of trade. Add more actors, then add more layers of
complexity.
To
distinguish “economics” from “economies,” economics as social
science simply studies, too often wrongly or inadequately, how
economies and actors act and react to one another. It tries to create
predictive or explanatory frameworks for understanding or managing an
economy of diffuse markets. Most of the theories, but not all, and
not at all the very strict laws of economics (like the “law of
supply and demand,” for instance), can sometimes cause detrimental
effects to actors in a market of trades as a matter of economic
policy. In the area of policy, we find the institution of “political
economy,” a descriptive term for the system of the overall social
management of cost inputs and benefit outputs in an economy. And, in
a rather malicious way, the acts and actors of political-economics
determine most often in a biased and manipulative way the questions
of “who gets what, when, why, where and how?”
Discounting
other theories, models, and the history of partisan political biases
and manipulation of economics for the moment, we can briefly survey
some objective, more pure features of an economy, or what we can term
as “the neutral economy.” Before doing so, to answer a begging
question: Yes, an economy has some very neutral and natural forms and
characteristics. By doing this survey, we should arrive at how a
neutral economy can create a system of markets of trades that
preserves and increases human freedom for the most people possible.
An
economy has many characteristics of the physical sciences, if readers
can accept the meaning and illustrations. It resembles many
principles of physics, and even thermodynamics and fluid dynamics, in
some aspects. Most professional economists will despise such
analogies. One wonders why, if not for the very simplicity of
understanding it gives, it also makes mockeries of most of their
models and predictive theories.
As
in physics, an economy in neutral form works in the same fashions of
gravity, inflation, diffusion, orbits, equilibrium, and attraction.
But to illustrate only a select few, supply follows demand for an
economic product, from providers who have it to consumers who need or
want it, with the same irresistible gravity that make things fall to
the earth. The first primus
law of economy, that of supply and demand, all things remaining equal
and neutral, works for food, clothing, shelter, and energy, as well
as for transportation, or any product, legal or contraband. If the
body of consumers desire it, then providers will offer it. The larger
the group of consumers, the more superior gravity, the more it draws
it, from inferior bodies. Market mechanisms in trades (sort of like
attraction in physics) will match demand with supply. Another,
similar, physical example comes from the means of trade, the
instruments of the transaction. Money, or capital, or labor, or
indeed any rents on the supply side, or from the demand side in terms
of any investment and savings, will find the paths of least
resistance, and consequently the highest returns, and settle into
their orbits. Capital goes where it needs to go, in short.
Economics
also works in efficient modes, when neutral, like the theory of
energy (see; Pillars, # 3, “On Energy”). The transactions in
neutral form must equal, in inputs and outputs, for the transaction
to balance and have the same equity between supply and demand for the
actors. Otherwise, if not, one side of the equation suffers depletion
of the resources available. For the fairness of the transaction in
material/physical terms, the result of a “deal” must balance.
Just like energy in the universe, which few people ever seem to
admit, we only have a finite amount of resources on the earth, and
even the opportunity costs to exploit them (investment) depletes
another resource somewhere else. With this in mind, and also like
energy, true wealth on earth comes from the earth and that wealth can
never truly get created or destroyed, in resource terms. The resource
wealth can only change form or change hands in the process. “Earth
to earth, ashes to ashes, dust to dust” (from The
Book of Common Prayer).
Again, this takes place in the purer form of economy, one neutral and
natural, and without the dogma and religion of money to distort
it—but money, either as a true currency or fiat currency, has its
own story elsewhere.
When
he wrote his magisterial study on economics in the 18th
Century, An
Inquiry into the Nature and Causes of the Wealth of Nations
(1776), Adam Smith discussed how an economy works, if freely allowed
to trade in markets, and did not so much endorse a bias for a system
of capitalism as we know it today. Only one particular type of
economy, capitalism has its own peculiar spots on its leopard skin,
one of immense bias and manipulation. Actually a professor in
Scotland who lectured on “natural philosophy,” (an ancien
regime
name for physics, etc.), Adam Smith described and contrasted market
ideas as they then existed and how they could work more efficiently.
In the pure, natural forms of economy, Smith's philosophy reads more
for a strict neutrality between production and consumption, than for
the type of rigid controls the political-economic classes have
exerted on the functions of economies since his book appeared.
Wrongly known as the father of capitalism, Adam Smith should have
more renown as the founder of a neutralist economic philosophy.
Now
to contrast a neutral economy with one of bias and manipulations, we
need to keep in mind the physical-material analogies of science.
Like water flowing downhill, or like any physical principle that
sciences can understand and divert or change, political-economic
engineers can manipulate the flow of resources, inputs, outputs, and
destinations—similar to dams, canals, breaks, reservoirs,
aqueducts, etc. The union of political and business classes have
always and probably always will try to create distortions in the
economic terrain to divert or differ the outcome of any economy.
Doing so, they create the unnatural and “un-neutral” economy that
decides and determines the questions: who gets what, when, why, where
and how? In other words, engineering the physical principles of
economy create results different from the neutral and natural flow.
Whether
in the state-capitalist system of the modern world which actually
amounts to welfare for the rich by a statutory-endorsed fraud of a
trust, or the communist system of a dictatorship of the proletariat,
with the Nomenklatura
elite as top beneficiaries (another welfare for the rich scheme), and
every system in between them, government and business collusion in
economic engineering directs resources to wherever the
political-economic class wants them to go. Only a neutral economy, in
a system free of political-economic bias, as in the natural universe
of physics, prevents this corrupt fraud against natural law and for
nature's god when men and women can eat a plentiful bread of their
labors. Without a neutral economy, one where the physical principles
of nature move freely, the needs and wants of people will always
suffer to the corruption of power and those who unjustly use it to
benefit themselves.
While
an economy has multiple groups in common interests, control of an
economy by one vested interest ultimately affects, negatively, all
other interested actors. And when political-economic rulers run an
economy with bias, it puts all at the prey of corruption. In the end,
it all amounts to some type of open or closed bonded servitude of one
group to another, usually majority interests segments to a minority
interest sect. When and if times of scarcity or crisis happen, as
they have repeatedly happened in history, the few in control of an
economy get first choice. They eat better, in short. With those tools
and ways of engineering an economy by design, the powerful remain in
control. This would happen not as an absolute certainty, but as a
normal and repeated temptation of power. And the temptations of power
keep the few fed and free and the multitude starving and in an
unnatural and, in reality, in an even unwitting slavery.
Economics
distribute the needs and wants of a society, but markets of different
kinds form them, with the parts creating the sum of the whole.
Markets, by demonstration in the same history, do an efficient job of
matching buyers with sellers, and balancing risks and investments,
for the distribution of goods and services. And, as stated, every
market has its own vested interests and its own dominant actors. How
does this reconcile a biased economy, a need for a neutral economy,
with the want of a culture of freedom? In a more abstract theory, the
more markets that exist, and the more diversification of buyers and
sellers and risks and investments, the freer the needs and wants of
actors become matters of choice and consent.
In
physical principles, we can take the laws of thermodynamics, the
second law of which recognizes the eventual equilibrium of two
separate systems when allowed to interact. To explain further, when
the economy of the supply and demand system and the investment and
risk system interact, as a matter of individual actors given fuller
freedom to choose and consent—with a free, neutral system serving
as a catalyst—the equilibrium in the market will remain efficient
and free. The sums or resources should remain naturally equal between
inputs and outputs as a result. What about the alternative with the
biased outcome system as a catalyst? The equilibrium (still there,
after all) would remain the same corrupt and fraudulent economic
systems as now exist all over the world.
To
progress into the future, we face a multi-faceted dilemma. Some
resources for basic survival may, and some already do, get scarcer.
Some, however, become and will become more usable and plentiful, once
processes of research, investment, production and purchase take
place. To achieve progress, in a false sense, as a way of upholding a
further civilization of humanity on earth, a closed economy under the
biases and manipulations of the few would only bring an ever-more
oppressive, restrictive, and impoverished world for all but those few
who rule the systems. That world would not have choice or consent as
a positive system of equilibrium between needs and wants and
investment and risk, but only a negative fate of systems of more
violence and destruction in the competition for dwindling resources
and returns. This negative result would occur both between present
nation-states and within the current constructs of national borders,
if any such things as nation-states and borders even persist.
Creating,
and simply letting a neutral, natural economy between people operate,
but one with some safeguards for vulnerable groups and individuals in
dangerous areas of policy, might solve more problems than they pose.
Free systems inside the economies in history have never really
existed before, but the natural philosophy, the so-called physical
principles, do work in nature, and they very well could work in
man-made systems of trade and exchange for needs and wants. If at
all costs, the mechanism of demand and supply—the demand for
freedom and the supply of resources—can rectify the age old problem
of humanity. That problem needing resolution: whether “priests and
princes” will control resources and the fate of humanity, or
whether people themselves and physical nature should determine their
own destiny. That eternal struggle for power can only end in one of
two ways: either people find true freedom from the fears of need and
want or whether a political-economic class of the few force those
very same people into the base fears of no freedoms for speech or
conscience, i.e. the freedom for choice and consent.
A
neutral economy can save the future. It must form one of the pillars
of future progress. It can prevent wars and genocide, which powerful
people in a corrupt system have always brought upon the world. The
neutral economy at least leaves everyone free to pursue needs and
wants, in peace, and in terms of resources, in a pattern that brings
positive equilibrium. Otherwise, only the few will live through the
struggle to survive their own miscarriages of justice and corruption.
How do we create a neutral economy? In the end, we only have to
choose it, consent to it, practice it, and live it in the future. The
struggle of humankind now continues.
