Economics

 

As described in the physics section, the failure of physics has resulted in some level of failure in all the tethered sciences. But the social science of economics is being singled out in this section because economists have the highest level of failure within a field that has the highest level of global impact. Consequently, if the capability of economists were measured as the space between their level of failure and their level of impact they would be, as a professional group, considered completely incompetent. In turn, the incompetence of economists has allowed the financial ecosystem to become toxic and be the main enabler of global turmoil. To understand this result, economics will be explained below through a new paradigm.

Innovation, commerce and government are the three divisions of a civilized framework. A financial system is the grid that inter-connects the civilized framework and money is the energy powering it. The civilized framework, the financial system and money comprise what will be defined henceforth as the ‘economic structure’. In turn, an economic structure makes it possible for humans to work together as a society and significantly increase productivity. Without an economic structure, a low productivity tribe would be the largest potential group size humans could work together as. Human activity within the economic structure can be defined as such; the ‘working class’ endeavor within innovation and commerce, the ‘government class’ endeavor within government and the ‘speculation class’ endeavor within the financial system. Humans interchange between each class type fluidly, with all aspects of the economic structure self-organizing continuously, just like the self-organization found in atomic and cosmological structures.

The economic structure along with it class types evolved throughout societal history mainly through a Creative process. This process of steady societal evolution with mainly Creative economic structures was changed in 1971 when the U.S. went of the gold standard. From that year onward paper money began to be printed at will and backed by nothing. As the rest of the world followed the U.S. lead, money started slowly altering the entire global financial system and then shifted the global Creative economic structure into becoming Reactive. The following documentation will explain what a Reactive economic structure is along with the unfolding global toxic effects from this yet unrecognized shift.

 

While the functions and terms for economic structures have continually changed, the core outcomes have showed consistent patterns throughout the evolution of society. The patterns that would be recognize as positive outcomes would be easy to label as Creative. But all the negative outcomes in a society are part of a Creative economic structure as well. This is because positive outcomes can only exist if its relative opposite of negative outcomes exists as well. So within societal evolution, positive and negative outcomes are both part of a Creative economic structure. Consequently, the negative outcomes play the role of imparting on society powerful lessons of what not to do. These negative outcomes end up being just as strong an evolutionary tool to ultimately strengthen economic structures and society as positive outcomes are. That is why all the negative outcomes from; empires, tyrants, revolutions, armed conflict, subjugation, occupation, wealth concentration, depression, recession, bankruptcy, exploitation, default, corruption, speculation, fraud, sabotage, debt, austerity, crime syndicates, bribery, schemes, collusion, conspiracies, hidden assets, exorbitant taxation, regulations, unemployment, poverty and mismanagement are all allocated under the umbrella of a Creative economic structure. So that begs the question:  If negative outcomes don’t define a Reactive economic structure then what does?

To start answering that question, a relevant explanation of monetary function is needed. ‘Money’ is simply any means for exchanging goods and services. Therefore, everything from barter to precious metals to paper and digital currency is considered money. Barter and precious metals worked in economic structures for many millennia. This type of money is stable because it is a tangible asset, in limited supply and has a recognized inherent usable value in-of-itself. Nevertheless, there have been many cities, nations and empires that have sporadically experimented with printing paper currency that was backed by nothing. This type of paper currency, called fiat money, has been tried and has failed over 600 times throughout history. The median time for the circulation of these currencies had been less than 20 years before the fiat money collapsed or was replaced. Voltaire clearly gave the reason for their failure: “Paper money eventually returns to its intrinsic value – zero”. But presently, fiat money in the U.S. has been in circulation for over twice as long as the previous median time. This unique result is due to the historically high level of U.S. innovation and productivity of the working class that gives fiat money its sustained level of value. This high level of innovation and productivity is what has extended the usability of U.S. fiat money. Additionally, since many industrial nations around the world have economically followed the U.S. example, they also extended the usability of their fiat money. Other nations that could not achieve that high level of innovation and productivity already had their fiat money fail.

There is small percentage of competent economists who have studied the use of fiat money. They have concluded that the ‘internal reason’ government continually tries to implement fiat money is because it offered a man-made-apparatus for a government to attain an end-result of attaining more power and asserting more control over the people it governs. That is a valid conclusion with a lot of documentation to support it. But it is only partially correct. The inherent nature and self-interest tendency of every government, in every economic structure, is to work toward attaining the end-result of more power and control. Fiat money just accelerates and intensifies the attempt to achieve that end-result. While the tangible asset money slows and weakens the attempt to achieve that end-result.

The reason fiat money has such an effect is because government can use it to fund itself and the rest of the economic structure, without having to use actual tangible assets. The ‘external reason’ offered by government for this action is that it empowers the financial system with a virtually unlimited money supply while allowing the tangible assets to be used by the working class within innovation and commerce to increase productivity. This reason is actually theoretically correct. But the inherent nature of government culture, along with its authority to create and enforce laws, causes another outcome. Government purposefully sets up mechanisms to transfer most of those tangible assets to itself and adjacent agencies/organizations. This transfer then grows the Government under a variety of pretenses of strengthening the city, state, nation, or empire.

As fiat money goes into circulation it is also transferred to new and bigger financial institutions. As a result, the speculation of financial institutions that fiat money spawns becomes so aggressively leveraged and ingrained in the economic structure that their culture actually starts corrupting the working class. At the start of this process the working class sees benefits from the new fiat money. The fiat money plays the role of synthetic energy to the economic structure, while freeing up some tangible assets to be used within the innovation and commerce divisions. This causes a temporary increase in productivity and a temporary improvement in society as a whole. The government uses this time frame to additionally transfer more wealth created from the increased productivity.

Consequently, the majority of tangible assets and money ends up in the control of the minority within the government and speculation class. This entire wealth transfer process is in essence, one of the most deceptive and destructive forms of taxation without representation that victimizes the working class. This process may sound just like another negative outcome within a Creative economic structure. But it is not. It is entirely a Reactive process that shifts the economic structure to becoming Reactive. All outcomes, positive and negative, from this Reactive process end up only damaging productivity, economic structures and society.

The reason all outcomes are damaging in this Reactive process is because humans eventually lose trust in the money itself, not just each other. This is a critical point because in a Creative process mistrust between humans is not only accepted, but also expected. All negative outcomes due to damaging human interaction in a Creative process are eventually settled in a way that further evolves society. But break the trust in money and society shifts to a Reactive process. Society starts tearing apart and devolving back into tribe structures. So it is not the ‘tangible asset’ aspect that humans value in money. It is the ‘tangible trust’ aspect humans value in money. Consequently, it does not matter what monetary form is used within a Creative economic structure as long as tangible trust is the fundamental core. Not understanding this absolutely critical element of money is at the heart of economists incompetence.

The dichotomy is that once it is understood that tangible trust is the critical element then using tangible assets, as money, in a modern economic structure becomes an outdated and primitive concept. So for society to take the next evolutionary step and develop successful money, innovators need to clearly comprehend the inherent nature of all aspects of an economic structure. Then a breakthrough innovation is needed to develop a new form of global digital money to power a global financial system within a global economic structure. Yes, this concept is a huge evolutionary cultural change. To achieve this breakthrough innovation now would require strong leadership in many arenas and would be one of the greatest proactive evolutionary actions in history. Without such a proactive action the current financial system will eventually collapse. Such collapses happened sporadically over 600 times through history and our current financial system will not escape that outcome.

The main difference with the coming collapse this time is that all national economic structures are all globally interconnected with their dependence on fiat money, which includes massive credit and debt. Therefore the domino effect of the collapse will touch every part of the world leading to tremendous suffering. Fiat monetary wealth will evaporate and society will start disintegrating. At that point, the economic and societal breakdown will push the entire world to teeter on the edge of chaos.

This is the outcome of the advancing toxic ecosystem and global turmoil that was mentioned in the very first paragraph. Unfortunately, society almost never takes a proactive evolutionary action, usually waiting until drastic outcomes unfold that forces society to take action. So the hereto-described outcomes are what will finally force society to take action. At that point of societal breakdown humans will understand the correlation between the world turmoil and the money being used within the financial systems. Governments around the world will be forced to take an evolutionary action where they will in-their-own self-interest choose to create a global digital money based on tangible trust.

Tangible trust will require three constructs:

1.      Complete transparency at the macro level.

2.      Complete anonymity at the micro level.

3.      Complete security at the macro and micro level.

 

·         Complete transparency means that the total amount of monetary digits that are earned and spent by each government, and the global monetary system as a whole, is openly accounted for. This includes transparency on all new monetary digits added to the global monetary system in economic response to growing populations and increased productivity.

 

·         Complete anonymity means that all individuals and businesses have encrypted anonymity. Only monetary digit exchanges are kept track of. So no matter what is being purchased/sold; be it cocaine, condoms or cauliflower, the specifics of that transaction and participants involved always remain anonymous. Without that guarantee, humans will not trust the system and always seek to undermine it by using an alternative form of money that gives anonymity.  

 

·         Complete security means that all monetary accounts, from personal to government accounts, have the highest priority of protection against hacking. Humans will always try to cheat or abuse the system. So when a problem is discovered then there is an established effective process of guaranteed redress and recovery of monetary digits.

 

This new global financial system is not just imagination. The conceptually information on it actually exists right now. Potential breakthrough innovators can source that information. But it requires those potential breakthrough innovators to think different. In order for that to happen they must act different first. This starts with implementing LED accelerator to develop breakthrough innovators today. Consequently, LED accelerator is not just another education program. LED accelerator is the only proactive solution to avoid the advancing toxic ecosystems.

Discovering breakthrough innovation is a process. Therefore developing breakthrough innovation is a process.