Uncategorized

Markets are derived from labor and natural resources, not the other way around

Economic stability and resilience are not possible with a large working poor segment of society, a large overpaid parasitic upper class, and a small or shrinking debt burdened middle class. This is pretty obvious. The cult of growth has convinced too many that economic growth is more important than economic stability and resilience. Growth is, in actuality, only important in keeping up with population growth, inflation, and the giving of raises and bonuses to already overpaid executives. If executive pay were capped and inflation and population growth controlled, economic growth would not only be unnecessary in several sectors of many economies, but in many sectors of several economies might actually be undesirable.

In a narrow microeconomic view economic activity “generates” wealth, but if one takes a broader view of how all economic systems actually function the view is quite different. We actually need to revert to some classical economics and dump a lot of the junk “economics” that has infected classrooms and boardrooms in recent decades. The the simplest and most accurate way to understand all economies, regardless of which economic system(s) are employed, is to understand that all economies are actually doing more redistributing of wealth than creation of wealth.

Natural resources and human effort are the two elements that all economic activities are derived from and are therefore the two most important building blocks of all economies. From those two elements we derive intellectual property, technology, and markets. Unfortunately many modern economic theories have it backwards, thinking that markets “create” natural resources and human labor, when the reality is that markets are created by humans harnessing natural resources to create products and technologies which allow “markets” to exist.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s