This is just a collection of musings based on my own observation and conclusions drawn from my “logic”. I do not pretend to be an expert on economics. I also realize that the references to history I constantly use are incomplete, biased, and out of context at best and possibly misremembered. Everything that is to follow would undoubtedly be picked apart and refuted beyond rebuttal by someone more learned on this topic. Even given this disclaimer, I still feel that the fundamental thesis of this work is a universal truth. (I also feel it necessary to point out that despite it being my native tongue, the English language is not my friend)
MACROECONOMIC SYSTEMS ARE A NATURALLY OCCURRING ENTITY, NOT A CREATION OF HUMANS. THE FAILURE OF HUMANS TO RECOGNIZE THIS IS THE FUNDAMENTAL CAUSE OF ALL ECONOMIC CRISES.
Prologue
For almost the last 300 years the principles of three major economic systems have dominated the way we trade with one another. Socialism, Capitalism, and Communism have all been practiced with varying degrees of success since the Age of Enlightenment. I believe that each of these systems is flawless in their design. Each has a different goal, and is adapted to its own type of environment.
While acknowledging that fact that currently none of these system exist in a vacuum today, I feel it is indisputable that at its base the economy of the globe is mostly capitalistic. This assertion is not intended to promote capitalism over one of the other two systems, simply using the reality of the current situation to find a starting point. The rest of what I have to say is reliant upon my assertion that capitalism’s guiding principles serve as the foundation for most of the economic dealings that create the global economy.
Would you trust the government to direct the earth’s gravity, weather, or rotation? So what makes the economy any different?
Economic systems are not a creation of humans. They are naturally occurring phenomena that are governed by a set of natural laws. Humans can not consistently manipulate these laws to affect a specific result anymore than the natural laws that govern science. Just like many scientific experiments conducted by humans, most human interference with the laws governing economics have resulted in unexpected consequences. Quite often these consequences far outweigh the benefit; assuming there is any type of benefit that results from the human economics experiment.
To some of you this thought might seem ridiculous or naïve, but take a moment to think about it. Were the laws of supply and demand there before we had a scholar define them for us? Of course they were. Supply and demand would still exist if humans became extinct. Two different packs of lions would certainly be forced to react to this law if faced with a depleted food source.
How would these two packs of lions respond to the undiscovered forces of this law? Competition of course. Just like many scientific laws, economic laws produce a predictable reaction by everything it governs.
There is one major reality that separates scientific experiments from the government’s experimentation with economic “tweaks”. If a scientist was erroneous in his hypothesis, very few are affected when his experiment goes awry. If the government’s experiment with the economy is ineffective, or, as in most cases, counter productive, millions or even billions are affected.
The acceleration of the evolution of a Global economy is only making this more complicated. Now billions of people might be affected by an economic experiment being conducted by a government thousands of miles away. Combine that with the reality that there are dozens of governments all conduction experiments that are in at least a small way (and sometimes major way) different from one another. So it becomes nearly impossible for the economic system’s natural self-correcting mechanisms to keep up with the constant interference from multiple sources.
This constant government intervention creates a “snowball” effect. One government decides to “help” their economic situation by introducing an unnatural stimulus into a perfectly balanced natural system, which causes others to respond either because their citizens demand it, or an irrational approach that assumes that a new direction (which direction is irrelevant, as long as it is different) will always be better than following a direction that seems to be leading down the wrong path. Once this snowball gets rolling downhill it just accelerates.
-next installment looks at the beginnings of this snowball
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