Day 186: The Invisible Hand is Invisible because it Doesn't Exist - Equal Money Capitalism and Providing Results that are Best for All

Another fascinating point that is backwards in our Capitalistic System today is the philosophy that if each one acts in a way to satisfy their own self-interest, these self-interest acts will kind of balance each other out in a way that generates results that our beneficial to society as a whole. This is what economists refer to as 'the Invisible Hand'.

When then confronted with the obvious failures of the current economic system, where so many are living below the poverty line (which by the way doesn't mean that only those people are poor), where crime runs rampant, where half the population can't even read or write - if we point those things out to economists, they'll point fingers at the government - saying - well, yes - that's because the market isn't allowed to freely operate. You have the government officials who fuck things up.

So - what's the deal with the government? Where the economic principles impulse individuals to act in their own self-interest, government officials are supposed to act in a way that is best for society as a whole. What needs to be understood, though - is that politicians form part of the very same economic system - they don't stand 'outside' of it - and so, they as well are being impulsed to act in their own self-interest - in fact, they are following the rules of the game of capitalism as it currently exists - the rules that free market economists like to defend so much. So - how can you point fingers at the government for not doing their job effectively, when they are actually doing exactly what you ask of them.

What free market economists will argue is that the free market must be allowed to just reign freely - and that the government really has no business interfering. But, I mean - isn't the very purpose of the government to correct market failures? There really is no other function for government - AT ALL. The origin of government is the realization that there's people who suffer if the market has free reign.

So - the entire philosophy - which is really just a belief - is completely debunked by practical reality. You can't argue your way out of this. So - having tried the idea that if you act in your own self-interest, you manifest a world that's best for all and seeing how it just doesn't work - the common sensical thing to do is to stop an economic system that is build on this philosophy - and to, instead, develop an economy that is based on the principle of: If you act in a way that is best for all, you automatically manifest the best solution for yourself as well. Considering that the world is a closed system and that we are not separate from the environment we live in - it makes sense to support the system as a whole in the most effective way - as this will ensure that we live in the healthiest and most supportive environment on an individual level. It is the most simplest common sensical  truth that if you lift up society as a whole - you lift up each one that is part of society as well.

Equal Money Capitalism is the proposed economic system that is built upon and aligned with the principle of doing what's best for all, from which flows what is best for each one individually. To read more about this economic system, consult the blog-posts on the Equal Money Capitalism page of this blog: http://economistjourneytolife.blogspot.com/p/emc.html#.URKuI_JBnTo.

Related articles

• Day 183: The Myth of No Alternative and Equal Money Capitalism
• Day 162: EQUAL MONEY CAPITALISM - The Way Forward
• Day 180: The Word 'Capitalism' in 'Equal Money Capitalism'
• Day 181: Applied Equality in Equal Money Capitalism
• Day 171: Life-Force and Expression in Equal Money Capitalism
• Day 163: Equal Money Capitalism - Redefining Profit
• Day 169: Equal Living within Equal Money Capitalism
• Day 259: Give Happiness, Get Happiness
• Day 175: The Economic Problem and Equal Money Capitalism
• Day 167: Harmony and Equilibrium within Equal Money Capitalism

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Day 130: Market or Government Failure? No - Human Failure

One of the most prominent discussions in Economics and Politics is about who does better: the Free Market or the Government?

The neo-classical economic textbooks will say that the free market is generally the most efficient in allocating resources - but that there are instances where the market fails (See 'Day 81: The Role of Government in the Economy'), and then the government has to step in to correct these mistakes.

Public Choice Theory argues that it is incorrect to just assume that because the market fails to be effective under certain conditions, that the government will therefore, automatically be able to correct the imperfections of the market. The objection relates specifically to the assumption that in the market, everyone acts according to their own self-interest and that public officials, on the other hand, take everyone's interests into account.

To them that is a big inconsistency - because you cannot argue that human beings always act in self-interest, yet, on the other hand say that public officials always act in the interest of the whole. According to public choice theory, politicians and bureaucrats as much as any participant in the free market always acts in their own self-interest (See 'Day 82: Government Failure').

So - the whole discussion on who fails the most: The Government or the Market - is really mis-directed. The simplicity of the situation is that: It's not the market or the government that fails - it's the human.

When considering economic problems, we cannot simply distance ourselves from the simple truth that all economic interactions - whether instigated from within the market or from government - is always determined by human beings. And human beings are seriously flawed beings in that they believe that they MUST be self-interested and that this is the only rational way to exist and behave.

If we ever hope to get some real solutions in terms of an an economic system that always provides the best results - we cannot ignore 'The Human Factor' - as this is the starting point that will determine the outcome the economic system will bring about.

So - the question is not: How does the balance/emphasis need to change between the Market and the Government's role - the question is: How does the human have to change?

This is a question that in the current economic and political discours is conveniently ignored. It is simply accepted and assumed that the human is a fucked up creature and we just 'have to find ways to control the thing' so that its behaviour and actions don't cause 'too much' damage.

If we really care about 'market imperfections' and 'government failures' - we won't just sit around talking about what's the least of two evils. Instead - we'll make a commitment to redesign ourselves as human beings so that we can look at the economic system with fresh eyes and not create an economic system that merely re-inforces unwanted selfish and spiteful behaviour - but instead encourages support and cooperation within the understanding of what we are responsible for as this world and our reality.

This is the primary focus of Desteni - and all who claim to want to create a better world or claim to be committed towards solving the economic and political conundrum should sign up for the free DIP Lite course to take the first steps at finding out the possibilities we have as a species of re-inventing ourselves into an optimum version and a manifestation of Life instead of Evil. See - EVIL is simply the word LIVE spelled backwards - that should tell us something... We've never lived as a species, we've merely tried to outlive and outsmart others in evil ways - which is really not what life is about, come on.

And economists and political scientists have competent enough brains to see that this problem is not going to be solved unless we address the problem of human failure. You simply have no excuse to not want to take responsibility - you have the skills and the ability to be an example in this world - and so you have a responsibility to. Swallow your academic pride and start over - start where you haven't been before - start with yourself. 

http://lite.desteniiprocess.com

Related articles

• Dag 126: Turning a Blind Eye to Corruption
• Day 89: There ain't no Such thing as a Free Lunch
• Day 101: True Care Knows no Compromise
• Day 88: Capitalism vs Socialism?
• Day 97: An Economic Life Support System

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Day 88: Capitalism vs Socialism?

This blog-post is a continuation to: Day 82: Government Failure, Day 83: Nationalisation and Privatisation and Day 86: Who Really Pays the Taxes?

I forgive myself for accepting and allowing myself to believe that politicians actually represent the population that elected them, without considering that the population only has a say when they cast their votes, and afterwards don't require - and thus, don't - consult with the population on matters of public policy - and thus, any representative democracy is really a fraud as voting is just done to make people feel like they are part of the decision-making - when, in the end, it is those with power and money who get to decide.

I forgive myself for not accepting and allowing myself to realise that bureaucrats are in quite powerful positions, able to influence the situation to suit their own needs, while they are not held accountable to/by the population in any way whatsoever.

I forgive myself for not accepting and allowing myself to realise that in a country/society where some have more money than others, it will always be those with the most money who actually run the country, despite elections, executive governments, parliaments and judiciary systems - because each official in government can be seduced and influenced by greed and thus, act in a way that benefits the few in spite of the many.

I forgive myself for not accepting and allowing myself to realise that, unless our monetary system is based within and operates according to the principle of equality, the public nor the private sector is suited to distribute goods and services - because, in the end, the distribution of resources is handled by individuals, who due to inequality, feel they have the right to abuse their position to distribute resoruces in a way that suits their personal desires.

I forgive myself for not accepting and allowing myself to realise that a monetary system of inequality and competition is directly responsible for the creation of crime - as all crime is an act of inequality, which is justified in the mind of the criminal by the acceptance and allowance of inequality by society as a whole.

I forgive myself for not accepting and allowing myself to realise that, unless all individuals are taken care of with the resources required to live a life of excellence in an equal way - no one can be trusted with the task of distributing resources - neither the government, nor private companies - because within inquality, the human is corrupted and acts accordingly in corrupt ways - therefore, only an equal money system can ensure efficient and equitable distribution of resources.

I forgive myself for not accepting and allowing myself to realise that taxes are not an effective way to redistribute resources among the population - by 'taking from the rich' and 'giving to the poor' - because the government is only able to specify who hands over the tax, but does not specify where it gets the money to be able to pay the tax - and thus, it is often customers who bear the real tax burden and not the owners or shareholders of the company, as companies, faced with having to pay higher taxes, simply raise their prices and, thus collect the money to pay their taxes from the customers who still require/want the goods or services they provide.

I forgive myself for not accepting and allowing myself to realise that any attempt to 'correct' market failure in terms of unequal distribution of resources will be negated by the market itself, as the whole economic system moves according to the principal of inequality, and thus ways will always be found to manifest unequal results that benefit some at the expense of others.

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Day 82: Government Failure

Previous blog-posts would have made it clear by now that the market is not perfect and never will be - and this is something many economists are willing to admit. However, they believe that governments are able to 'adjust' the market when necessary through acts of intervention. Within this blog-post we're having a look at the problems related to government intervention, or otherwise: 'government failure'.

In terms of government failure, let's discuss three major weaknesses of governments and how they attempt to manipulate the economy, namely:
- Politicians
- Bureaucrats
- Rent-seeking by interest groups

Politicians

Politicians are those who are elected by a population to represent their interests in government. However, in most democracies, people only get to voice what they want politicians to do on their behalf at the moment of election. After that, politicians can pretend to represent the people, but they can pretty much make decisions that suit their personal interests. Due to the desire for power and wealth, they wish to remain in their current position or progress their careers for more influential positions and do this, they need people/more people to vote for them. Therefore, politicians will have a tendency to take the limited time they are elected for to satisfy their voters in the short-term in order to 'prove' that they are the right choice - without considering long-term consequences. They'll implement programs and organise interventions that have clear benefits to particular people, of which the costs and disadvantages are vague or ignored. Another tendency is to make decisions that will give a small group a whole lot of benefit, while a large amount of people accrue relatively small costs.

Bureaucrats

Bureaucrats are not even elected by the population. They are 'civil servants' and are responsible for the supply of goods and services by the government. They, thus, have quite a lot of power and, just like politicians, often use this power to pursue personal gain. They'll attempt to maximise their salaries, power or prestige. For instance, the defense  establishment often exaggerates the military threat so that a lot of money is allocated to this department and this, obviously, allows them to increase their salaries.

It is claimed that bureaucracies are often inefficient because there is no competition to keep each other in check. In terms of simply overseeing the efficiency of bureaucrats, it is claimed that this is mostly impossible and for some reason it is very difficult to fire inefficient bureaucrats.

Rent-seeking by interest groups

Due to politicians' sensitivity towards buying votes, they are easily manipulated. Interest groups will attempt to pressure/persuade/seduce governments to use their ability to intervene in economics in a way that benefits them - and these attempts are often successful.

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