Economics and Change

I hear a lot of stuff from this group that is very, very positive. The focus on transparency, populism, giving the little guy a voice... hedging against corruption... all great.

But I don't like to hear "the market" blasted in imprecise terms, because history is full of destructive revolutions who succumbed to this dogma. When you misunderstand the market, and you craft laws, you destroy the market... and it WILL be rebuilt by those who understand it better. Unfortunately, that is always the group who had control of it before.

If you destroy something that is a naturally evolving consequence of our free action, it will return. If you embrace and understand those... only then can you repair them, and wisely regulate them, if necessary.

There are three schools of economic thought that are taught today. First, there are the Keynesians. Like all of the "government must help" schools out there, they fling monkey poo at the free market. They say...

Second are the monetarists. The Keynesians turned two hundred years of economic research on its head in the 1920's. They took the research of Adam Smith and made it friendly to currency manipulators. The Monetarists appeared and tried to fix how central banking worked, because it was obviously broken (The great depression having just ended). Milton Friedman did a lot of great Micro research, and his "Monetary History" is a very valuable tome to read... but the Monetarists started at the wrong place. They say,

But Milton takes central banking as an unavoidable axiom, and tries to fix it. The fixes don't work. It is too broken.

And then there are the Neo-Classicals, who agree with Friedman more on micro stuff (unemployment effects, tariff effects, etc), but they are ambiguously between the Monetarists and Keynesians on issues of printing new money, fractional reserve lending, etc.

For 28 years, these are the only schools of economics that I had even heard of. I have a curious mind, and I have been programming computers that whole time. I know from countless hours of programming that there is a "CLICK" that happens when you finally get something... I mean, REALLY get it. It's not like the Micro-Clicks that keep happening when your arrogance tells you... "Okay... you understand that well enough... you can say you've mastered it."

You think, "I could answer questions about that in an interview and appear confident. I could probably even convince the other person I had some level of mastery in that topic"

But then, each of us has something we have mastered, or several things. Each of us have something where we put in the necessary thousand or ten thousand hours to really reach an extraordinary level. We know what the "Real Click" feels like, but we whore ourselves out mentally when we are faced with a subject that we want to understand, but do not.

If you were presented with the above theories of economics, and that was all you were given, you probably "clicked" on one of them. All three, Keynesian, Monetarist, and Neo-Classical are mash-up, bastard theories which do NOT produce predictions that match what happens in the real world. They predict incorrectly. For a theory, that is a nail in the coffin.

There are many nails in the coffin of each theory. Questions that cannot be answered. Arguments full of holes, and above all, a consistent steam of inaccurate predictions from each.

You cannot "Click" on a theory that is wrong. You "thud" over and over and then you give up... and you pretend that the last thud was a "Click"

Socrates, Martin Luther King, John Stuart Mill and even a carpenter from Nazareth wrote and spoke extensively about the value of humility, and its crucial role in understanding. We don't like to admit we are wrong or that we do not fully understand... but there is something huge at stake here...

The fourth theory is the Austrian theory of the business cycle. It is unmentioned in grade school, and even most colleges. It is the only that has consistently had accurate predictions... for over a hundred years. They predicted the great depression, stagflation in the 1970's, the interest rate rollercoaster of the 1980's, the stagnation of the Japanese economy in the late 80's, the collapse of communism, the 90's tech bubble, the 2000's real estate bubble.

In 1776, economics was called the "Philosophy of Political Economics". Adam Smith, the guy who wrote wealth of nations was a professor of moral philosophy. The reason is that the prosperity of man, the governance of a state, and the happiness of individuals are interconnected. From Aristotle to De Toqueville, philosophers were the advisers to kings and statesman. Philosophy and economy are the same thing. Economy is not about math, it is about "Human Action", which is the title of the book by Ludwig Von Mises that closes the holes in classical economics.

If you do not, then your revolution will end with the route to the next already paved. Knowledge is power, and ignorance will always give others power over you. If we do not construct a system that obeys economic law, we are not constructing a system for human beings... we are constructing a system for our egos.

So many revolutions have handed the reigns back to those who corrupt. It is not enough to fix voting, if you allow monetary abuse to continue.

Beware of those such as Amschel Rothschild, who said, "Give me control of a nations money, and I care not who crafts her laws".

Make no mistake... when you say things like, "private property is bad", you are succumbing to a lie that will leave you in the palm of the 'elites'. If you do not understand economics, you are just a cog in the machine that always hands us back to the same power brokers... in arrogant ignorance of our own self destruction.

If you have an idea about how goods should be exchanged, and how the structure of production should be aligned... it has probably been tried. Get rid of money? Get rid of property? Been tried. History is full of lessons that must be learned.

Tens of millions of people are learning about Business Cycle Theory right now. It is a hidden gem, and it is crucial to the movement. I'll quit beating this dead horse now.

From:	Joseph Hammer <parrhesiajoe(at)gmail.com>
Date:	Sun, 16 Jan 2011 15:23:59 -0800
Subject:	Economics and Change

02750: Economics and Change