The Theory of Economy

supply-and-demand-01-resized-600This summer I had the mixed pleasure of reading a course in Microeconomics and International trade. In microeconomics the primary focus of the researchers is to establish ‘What is the market really doing and why?’ – and this is attempted to be done utilizing mathematical formulas; primarily utilizing the famous graph where two lines cross each-other, the one line sloping downwards (demand) and the other sloping upwards (supply) – and where they meet each other = that’s apparently the optimal price for the product and the optimal quantity of that product in that given market.

What first struck me as being fascinating about these theories was that they seldom predicted how the market would behave in reality, and neither could they be verified with empirical evidence – and most of the time the authors of the my books where busy trying to find reasons and various viewpoints as to why these theories wasn’t working “as they should” – and how they probably did work but it was just that the inventors missed to take into consideration some important factors and variables.

Though, what was the most fascinating about this entire area of research, was how there was this complete worship to the idea that lower prices = higher consumer satisfaction; and that apparently for a market to be functional, what is required is that we produce as many products as possible, to the lowest prices possible, because then the consumers are able to buy as much as possible, and then we’re apparently okay, happy, and have a fruitful existence here on earth.

Obviously, when I looked at these ideas, I silently chuckled – because the logical flaw of this assumption is glaringly simple = the producers are the consumers! YES – that’s the secret of economy and the reason why we’ve got so many unemployed in this day and age is because we’ve failed to understand that when a product is cheaper, someone at the other end gets less money, which in turns means that a (employee) consumer gets less money, which in turns means that the producer gets less customers = and it all ends up in such a way that most lose but a few that manage to reap the monopoly profits of those very low-priced products – because they’ve priced out everyone else.

It’s clear that we have to develop a new way of looking at economics, and that mathematics and statistics isn’t the way to go – no – we actually require to look at the actuality of what is going on. For example, poverty, what is the actuality of poverty? Why does poverty exist to begin with? It’s not a matter of mathematics, rather it’s a matter of seeing what is behind everything in this world – and that is MONEY – money that in itself is a completely innocent creation meant to be but a way of distributing goods and services to where they are required and wanted the most; but in our current system – money has become a point of control – where those that are already rich and on top of things with all possible means make sure the keep those stricken by poverty in place – else we wouldn’t anymore have a functional slave labor force that can produce all of our various gadgets and other mechanics of entertainment.

Thus, what we must ask ourselves, and economists more importantly, is why have we never used our knowledge to produce a sustainable system where all of us are able to create a life that is dignified, cool and enjoyable? What is required for us to do that? MONEY – and what do we need to bring through such money into this world? Resources – so what is then the solution – the real economic master plan as to how to create a world that would be sustainable and practical for all its inhabitants? To agree that we share the resources – at least the basic and most essential resources – those that we MUST HAVE in order to live.

Thus, I stand behind the Living Income Guaranteed – which is a functional, effective and sustainable way of creating a new world for all people where money will be shared – and for those economists that want to make a difference – I suggest that you investigate this concept and bring your knowledge to the table and help to create something from which we can all benefit!


Is Economics Too Complicated?

ComplicatedThere is a tendency within human beings when faced with economic considerations to immediately and without any reflection state “economics is simply too complicated for me!”

What is interesting though, is that economics isn’t really at all that complicated. Let’s look at what economics is, in it’s very essence – it’s the exchange of goods and services – it’s about that I want something that you have, and to get that thing I give you MONEY. That’s really the gist of economics – I GIVE you money and I accordingly RECEIVE what it is that I want.

Taking a look at the state of world from this very simple understanding of what economics is makes the picture of what is actually going on much more clear and specific. Because, what is happening in the world is that more and more people are thrown into poverty, more and more people are unable to afford to basics required to survive, which thus implies that they are not able to GIVE money and accordingly RECEIVE goods or services.

What happens when more and more people are unable to GIVE and consequently RECEIVE is that poverty widens, because what is easy to see, is that this GIVE and RECEIVE point is not isolated to individuals alone, it’s a circulation that takes place, which means that when one person GIVES money it empowers the RECEIVER to in turn GIVE and so forth. This is the basics of economics – a constant exchange of the things we need, want or desire – which fuels the system and makes more people able to participate in the GIVING and RECEIVING.

In our current economy, what has happened is that a lot of people have been excluded from this cycle, and they accordingly do not have the means anymore to GIVE and the outflow is that the economy shrinks and thus disables even more people from participating fully in the economy – shrinking the amount of money available as well as the amount of goods and services available.

This is what is happening in our world today and this is the reason as to why our economy is continuously becoming less and less effective. The basic problem is that people do not anymore have the means to give – they do not have the means to participate in the cycle of GIVING and RECEIVING.

The solution to this problem is very simple – it is to give to each individual in the economy the means (money) to participate which can be done through implementing a Living Income Guaranteed; this will allow for all to yet again become part of the cycle of GIVING and RECEIVING, creating more jobs, more opportunities, more money, more welfare – and overall – a less stressful environment for all.

A documentary that explains this relationship effectively is Inequality for all which I suggest that everyone watch.