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Monday, October 05, 2020

The Four Pillars of Future Progress—Part IV: The Neutral Economy


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.


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