The new economics - Post 6

We should take what we have learned from Capitalism, Communism, and Socialism and move on to a new economics system based on a rational market.

What do I mean by a "rational" market? A rational understanding of the world typically means that we understand the cause and effect relationship of events. If the temperature of water drops below 0 degrees Centigrade/ 32 degrees Fahrenheit then the water freezes.

In a market in order to produce goods or services to sell or exchange, the producer/seller has to use a given set of resources and thereby incurs what should be the costs of bringing the goods and services to market. These "costs" are the "cause" of the "effect" of having goods or services to sell or exchange in a market. A market is rational to the extent that the costs (cause) are paid for out of the selling price (effect) of the market, as one factor.

We know from experience that the traditional market is not efficient in matching all costs incurred in producing given goods and services to the selling prices of those goods and services; and therefore some costs are left out of the current market price system (euphemistically called the free market or free price system). These costs not included are called "externalities". Examples of externalities are the cancer caused by second-hand cigarette smoke, the excavating and dumping of mountaintops into valleys and streams to get at coal seams in the mountains, and the dumping of dioxin in the Delaware and Hudson Rivers--to name but three.

It really doesn't take a rocket scientist of an economist to figure this stuff out, yet we have had these brilliant idiots foisting the benefits of free market globalization off on us unsuspecting laypersons at least since Eisenhower became president.

It doesn't take a higher level equation to prove the free market economists wrong, simple common sense will do. The key thread to pull on to unravel their gossamer theory is the concept of "The Invisible Hand". Anyone who abandons rational skepticism for some god-like mechanism has already identified themselves as a flim-flam faker in the post-enlightenment world. (Yes, I understand that's a little hard to swallow for some folks.)

Do we still believe that whirlpools or tornadoes are the work of an angry God? Do we believe that pouring sand through a funnel and having it fall into a cone shaped mound is the work of an Invisible Hand?

What is more, is the whirlpool the ocean? Is the tornado the sky?