Economics –  'Step out of the Dream'

Within the dream, you believe its true.  However crazy the dream may be, impossible physics, flying high above the ground, you don’t perceive the impossibilities.  When awoken, we wonder why the impossibilities were not obvious whilst in the dream. 

When we finally wake, we shall see current Economics for what it really is – impossibly clever nonsense, and of our own making.  In fact it is because we are very clever animals that we have created such unreal systems.  From the Nomads who had only what they carried, through agriculture and the inevitable money systems, initially base on underlying values and rare base metals we made them reflect our own human values with all our flaws and improbabilities.

In time, these money systems became completely divorced from practical values, with derivatives of money and commodities creating ever more complex systems.  Currently we have global currencies based on nothing more than a whim, being traded between themselves and many other traded derivatives. Thus we now have all human endeavour measured against unknowable quantities.  Throw in human nature (see The Human Contradiction) and we get an economic system that changes by the minute simply because of what we may think we think at some point in time.

These systems are driven by fads and fashion, leading to boom and bust - again and again. Our money systems and thus the economy as a whole are truly chaotic in a mathematical sense.  There is no chance whatsoever of controlling such profoundly wild and improbably complex systems.  This we must understand, we must come out of the dream state.

And when we do, we shall have a different perspective on many things.   Lets take for example the word ‘savings’  We know exactly what it means, don’t we?  We put money aside for a rainy day or for our future retirement.  Yes we do.  But awakened from the dream, we ask but what is it we are saving?  Money we now know represents little and maybe nothing in the future, say in fifty years hence when you need to use it.  So, should you save something else rather than money? But what can you save that is sure to maintain its value? 

Many commodities are transient or perishable, some may not be worth anything (wood, coal, oil, metals) as the world may have moved on technically and their value falls away. (Wood was very valuable 150 years ago).   Shares then? But which? So a basket of shares, lets say we place our savings based on the whole world economy - this is much more sensible as we are effectively investing in the world moving forward – but will it? 

Take the fact that currently a large part of our savings have been lent to Governments around the world – USA alone owes about $16 Trillion.  So, in effect, a lot of our savings has already gone, it is reflected by the debt within our societies – it does not have any future worth.  There maybe a small amount that has been used as investment within our societies that will provide future efficiencies, but these are few and far between (unfortunately).

We live for and in the present.  This is the human condition and this is the next thing we must understand. Very little is spent on long term investment.  Stock markets also insist on short term returns and thus short term investment policies.  So, we live in a short term merry-go-round.   Raising money to pay for today’s consumption and not investing in core programmes for the future.  This lack of longer term investment is becoming more important as technology projects become larger and more complex, (such as the building of safe nuclear power stations).

This is absolutely key.  Our politics/economics/money systems have hijacked our ability to think ahead. (see The Human Contradiction).  And to make matters worse much of the wealth in the worlds largest companies is currently ending up within the clutches of a few very rich people.  This hampers high quality, long term investment decisions for the society as a whole.

What else can we sensibly invest in?  Land and property.  This is going to  be controversial – but in future, having stepped out of the dream - this is the third thing we must understand. We shall see that we as individuals should never have expected to own land.  Or for that mater, water, air, the sea, or basic elements.  In the longer term future, the ownership of such will be thought just as ridiculous as we (now consider) slavery.  Slavery was the bedrock of many societies that endured for many hundreds or even thousands of years.  Suggest to a Roman plebiscite that slavery was immoral and would be eventually banned, they would not have been able to imagine such an outcome. To them it was just part of their economy, always had been and always would be.  

Why is this change so certain?  Imagine, in the not too distant future, (a mere hundred years?), a world where everyone on the planet has no need to work and there is enough food, water and many lifestyle choices.  The world’s resources will remain (more or less) finite.  The few who own the land especially in the most sought after areas in the world will be ‘disenfranchised’ by the rest whom will see it as morally wrong and unsustainable.  Everyone will want their fair share and nothing will prevent them from having it.

If you disagree with this outcome, consider how the human race moved from the initial alpha male controlled groups through the more egalitarian Nomadic stage, then through dictatorships and onto more democratic systems.  Why did these cultural changes occur? 

Technology was the key, initially the form of weapons.   These made it impossible for the alpha male to keep sway in his group, spears have been found dating back 400,000 years.  These would have made the lesser male an awkward challenge to the alpha male and he was replaced by a more egalitarian tribal system.  But the new technology of agriculture and money changed the emphasis again. Money created a means for 'the few' to use to rule all others. And they did so as tyrants for many thousands of years, subjugating others and creating armies of paid followers using the power derived from their purse strings. 

So why did society become more democratic?  Again it may have been due to technology in the form of guns that allowed the ordinary man to take revenge and put the lives of these ‘leaders’ at risk.  So, the easy path was to offer more egalitarianism in the way of votes and systems of fairer governance.  In this way societies have changed culturally and continue to do so.  Money still plays an important part in current power struggles and political systems. These are tempered to some extent by our use of legal and administrative systems.

Now, what is the power of the internet and of worldwide social networking?  We have seen already some changes (Egypt, et al) where this seems to have been instrumental in starting a movement for change.  The power of the masses, (as Marx perhaps first predicted), the genie can never be put back in the box.  The masses from now on will have their say and culture shall change again. (see World View & Capitalism vs Resourcism).

Inevitably change is on its way, maybe much closer than we wish to believe and this is the fourth thing we must understand. With China and India (between them) having 2.5 billion people ‘demanding’ a future for their people within finite world resources, it is difficult to imagine the current status-quo enduring ad-infinitum.  The western world must step out of the dream – not to do so may turn it into a nightmare.

Once we awake - perhaps we can start organising things a bit differently? World-wide systems of reform are required for banking, all derivatives of money and commodities. These should be traded only within closely monitored structures and by organisations, governments and other bodies who are part and parcel of the underlying commodity. The trading should reflect real-world uses and not allowed for 'betting'. Prices for key commodities should be fixed world-wide on a practical basis on the underlying physical resource.

It's difficult to see how we could move to a world currency in the shorter term. Meanwhile there should be international support for all currencies with the valuation of those currencies based on clear real world economics. This would be based on providing competitiveness and thus jobs and progress within each country. Technology allows a path for such a change. The difficulties of manual counting and rates of exchange within commerce or personal transactions are in the past. Rather than attempting to shore up or impose a currency upon a country or region, we may use modern worldwide digital money systems to provide for immediate, accurate and liquid global exchange rates and this is the best way to support a currency. Technology provides the answer again, as always.

To create such a process would mean massive cultural & political change across all societies. We would need to see the world as a whole - as the nature of resourcism becomes better understood - we may be able to understand that this is in our own interests wherever we reside.

This would also pave the way for higher quality, long term worldwide investment projects, (power production, education, infrastructure). Rather than see the use of another country for our own ends, resourcism means we can plan to improve the world as a whole and all benefit. This is the only way to truly 'save' or 'invest' for our children's future prosperity, happiness and sustainability.

Better this than the nightmare scenarios?

Your move.

Summary

Current economics is based on unknowable values. The words and ideas used within ecomic theory do not represent real world underlying issues.

Humans are impelled by our innate societal values. These drive our economic systems, and as such they are 'chaotic' in nature. The underlying real world values are discussed and these shed light on creating new ideas and momentum for change to allow us to move away from current unsustainable economic behaviour.