THE FREE MARKET SYSTEM AS AN ECONOMIC BIOFEEDBACK MECHANISM

THE FREE MARKET SYSTEM AS AN ECONOMIC BIOFEEDBACK MECHANISM

A Holistic Approach to Economics

Linda G. Davis

July 2, 1982

Los Angeles, California

Biofeedback is a process whereby Cause and Effect (information) is made visible to an observer by means of certain monitoring devices. It therefore becomes possible to alter the cause (i.e. the specific thoughts of the individual) in order to change the effect (i.e. the biological feedback—such as an illness—reproduced in the monitoring device). With practice, this process can become as smooth and sophisticated as our modern radar guidance systems. (Suggestion:  It is the measure of the mercy of our Creator that we’ve been allowed this distance between cause and effect—i.e. Time—and that this distance is decreasing at a pace that will allow us to re-enter Simultaneous Information Exchange*--S.I.E.—as smoothly as possible).

Since all products and services are, originally, the result of a single thought in a single human mind (collaborations always follow this), the Free Market System functions as a biofeedback mechanism. Intervention in this system will spoil the integrity of the information, and, since the quality of the information is directly related to its growth, affects the well-being of the individual. Many people die trying to preserve or to achieve this economic life-support system.

If this system is allowed to function naturally, it becomes a constant source of quality information—food for growth—because survival within this system demands (1) a constant search for better ideas (e.g. products and services) for (2) the lowest possible cost (i.e. the highest efficiency). A Natural Monopoly may occur, but only as long as (1) and (2) are serving the needs of the people. A Coercive Monopoly can exist as long as there is intervention (which we have) in the natural free market system.

The government of any group of people who enjoy and employ this system should function as a good gardener who, watchful and attendant, pulls the weeds of corruption and deception so that the people may eat and enjoy the fruits of the garden.

*Eternity:  Love looking in a mirror.

(C.S. Lewis, who held the Chair of Medieval and Renaissance English Literature at Cambridge University until shortly before his death in 1963, discussed the phenomenon of Simultaneous Cause and Effect in the chapter entitled “Good infection” from his book, “Beyond Personality: The Christian Idea of God.”)

Why the Pilgrims Abandoned Common Ownership for Private Property

The first few years of Plymouth colony were fraught with hardship and hunger. Economics had a lot to do with it:

https://fee.org/articles/why-the-pilgrims-abandoned-common-ownership-for-private-property/

Walter Williams: "The true measure of government's impact on our lives is government spending, not government taxing."

Let's Limit Spending

Walter E. Williams

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Posted: Feb 07, 2018 12:01 AM

Some people have called for a balanced budget amendment to our Constitution as a means of reining in a big-spending Congress. That's a misguided vision, for the simple reason that in any real economic sense, as opposed to an accounting sense, the federal budget is always balanced. . .

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Is Capitalism Moral?

African-American economist Walter Williams - simple and brilliant:

The hidden history of the minimum wage in America

Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan's Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

Don [George Mason University economics professor Don Boudreaux] has emphasized a very important, but usually overlooked or neglected reason that some empirical studies fail to find negative employment effects following increases in the minimum wage government-mandated wage floor that guarantees reduced employment opportunities for America’s teenagers and low-skilled workers (especially minorities). That reason has to do with the fact that the minimum wage has been in effect for almost 80 years since the Fair Unfair to Unskilled Labor Standards Act was passed in 1938, and it’s been increased 27 times since then. Therefore, the government’s mandated market-suppressing, artificial wage for low- and un-skilled workers has been around for such a long time, and it’s been raised so many times, that the distortionary effects of the minimum wage have long ago been “internalized” by employers who hire unskilled workers.

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Misesian Economics and the Bible

One of the several magnificent intellectual achievements of the Austrian economist Ludwig von Mises (1881—1973) was his development of a comprehensive science of human action, called “praxeology.” One of the main conclusions drawn from praxeology is that free markets will result in more prosperity than government-directed economic activity–a position that naturally makes Misesian economics popular with conservatives. At the same time, one aspect of praxeology often poses a gigantic stumbling block to conservatives of deep religious convictions. They have been perplexed and put off by Mises’ insistence that, in praxeology, he had developed a Wertfrei (value-free) science of economics.

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A Biblical View of Economics

In reality, the Bible speaks to economic issues more than any other issue. Whole sections of the book of Proverbs and many of the parables of Jesus deal with economic matters. They tell us what our attitude should be toward wealth and how a Christian should handle his or her finances. The Bible also provides a description of human nature, which helps us evaluate the possible success of an economic system in society.

The Bible teaches that there are two aspects to human nature. First, we are created in the image of God and thus able to control the economic system. But second, human beings are sinful and thus tend towards greed and exploitation. This points to the need to protect individuals from human sinfulness in the economic system. So Christians have a much more balanced view of economics and can therefore construct economic theories and analyze existing economic systems.

Christians should see the fallacy of such utopian economic theories because they fail to take seriously human sinfulness. Instead of changing people from the inside out as the gospel does, Marxists believe that people will be changed from the outside in. Change the economic base, they say, and you will change human beings. This is one of the reasons that Marxism was doomed to failure, because it did not take into account human sinfulness and our need for spiritual redemption.

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The ACA’s overall impact on employment, however, will arguably be larger than that of any single piece of legislation since World War II.

Much of the ACA’s tax effect resembles unemployment insurance: both encourage layoffs and discourage people from returning to work.

Starting this year, the United States’ working population will face three major employment disincentives resulting from the very benefits the Affordable Care Act (ACA) provides: (1) an explicit tax on full-time work, (2) an implicit tax on full-time work for those who are ineligible for the ACA’s health insurance subsidies, and (3) an implicit tax that links the amount of available subsidies to workers’ incomes.

A new study published by the Mercatus Center at George Mason University advances the understanding of how much these ACA taxes will reduce overall employment, and why. It concludes that the reduction will be nearly double that projected by previous analyses. Labor markets ultimately will reduce weekly employment per person by about 3 percent—translating to roughly 4 million fewer full-time-equivalent workers.

Below is a brief summary of this important update. Please see “The Affordable Care Act and the New Economics of Part-Time Work” to read the entire study and to learn more about author Casey B. Mulligan, a professor of economics at the University of Chicago.

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Re: Capitalism Institute

Just added Capitalism Institute under category "Economics" (scroll way down, right panel)

Capitalism Institute was founded in 2011 by Shaun Connell. Our mission is to provide a simple, comprehensive resource for individuals who are trying to learn more about natural law, Austrian economics, and current events. We strongly believe in free markets, property rights, contract enforcement, currency competition, low taxation, and peace.

Economics Is Easy, And Can Be Learned In 5 Minutes

The science of economics has been made out to be impossible to understand much less articulate. If you have five minutes, it's time to learn economics and blow the roof off the "dismal science."

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SOWELL ROCKS!!

(...and he's HOT, too!)

Some people like fake intellectuals such as Obama...I'll take the real thing, anytime:

Thomas Sowell

The Ethnic Flaw 1984 1/2 http://youtu.be/IxH1pCZi4jw

The Ethnic Flaw 1984 2/2 http://youtu.be/nzdJa8NZZ74

Who said this?

"Evil is powerless if the good are unafraid"

"The most dangerous myth is the demagoguery that business can be made to pay a larger share, thus relieving the individual. Politicians preaching this are either deliberately dishonest, or economically illiterate, and either one should scare us...
Only people pay taxes, and people pay as consumers every tax that is assessed against a business."

"We cannot play innocents abroad in a world that is not innocent"

"Peace is not the absense of conflict; it is the ability to manage conflict by peaceful means"

"Of the four wars of my lifetime, none came about because the U.S. was too strong"

"If the Soviet Union ever let another political party come into existence, they would still be a one-party state... 
because everbody would join the other party"

"How do you tell a communist? He reads Lenin and Marx. And how do you tell an anti-communist? 
Someone who understands Lenin and Marx."

"Freedom is never more than one generation away from extinction; it's not something we pass along in our bloodstream.
It must be fought-for, protected, and passed-along for them to do the same"

"Entrepeneurs and small businesses are responsible for almost all the economic growth in the United States"

"If you can't make them see the light, let them feel the heat"

"They say the world has become too complex for simple answers... they are wrong"

"The most terrifying words in the English language are: I'm from the government, and I'm here to help"

"Recession is when your neighbor loses his job; a depression is when you lose yours"

"Before I refuse to take your questions, I have an opening statement..."

RONALD REAGAN

SOUND MONEY

IBD just recommended this on Facebook:

"This is worth looking at - at some point the public is going to Have Enough of inflation, a little discussed topic that shouldn't be"

so I just added it under the category "Economics" (right panel).

Shale shafts 'Vlad the Impaler': If the price of oil drops, Russia is wiped out

Sweet...oh, SO SWEET!!

Thanks to Daniel Greenfield over at Sultan Knish:

...if conservatives win in America and elsewhere, domestic drilling will go into high gear and the price of oil will drop. If the price of oil drops, Russia is wiped out.

Why Putin Cannot Afford an Obama Defeat.

And, if you're really into energy 'inside baseball' (as many fancy themselves to be):

...if anything, highlights the gas giant’s core problem: Gazprom has gone beyond the point of any commercial return to play the role that Russia wants, due to shale developments elsewhere [Emphasis mine.]. Unless Putin backs up his words with credible actions, not just fobbing off the EU, but putting more ‘state’ and cash back into Gazprom to progress its global ambitions, it’s going to suffer a slow and painful market death. That’s not exactly good news for Mr. Putin either. Back to Soviet economics 101.

Do any of you realize how f*cking amazing life is that this ex-KGB self-worshipping tough guy Vladimir Putin's entire f*cking future rests with our real-life version of Maxwell Smart's re-election? (Forget Chauncey Gardiner!)

ROFL.

‘Top-Down’ vs. ‘Bottom-Up’

Which path to job creation and prosperity do we prefer: A continued emphasis on trusting government with top-down economics, or greater emphasis on trusting consumers and entrepreneurs with trial-and-error bottom-up economics?

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When the French were actually smart

Frédéric Bastiat:

Claude Frédéric Bastiat (30 June 1801 – 24 December 1850) was a French classical liberal theorist, political economist, and member of the French assembly.

Thanks to Kurt Vangsness for the following two links:

THE LAW

WHAT IS SEEN AND WHAT IS NOT SEEN
This essay published in 1848 explains why Keynesian stimulus does not work."

This explains man's necessarily painful evolution. Ignorance surrounds him at his cradle; therefore, he regulates his acts according to their first consequences, the only ones that, in his infancy, he can see. It is only after a long time that he learns to take account of the others.**2 Two very different masters teach him this lesson: experience and foresight. Experience teaches efficaciously but brutally. It instructs us in all the effects of an act by making us feel them, and we cannot fail to learn eventually, from having been burned ourselves, that fire burns. I should prefer, in so far as possible, to replace this rude teacher with one more gentle: foresight. For that reason I shall investigate the consequences of several economic phenomena, contrasting those that are seen with those that are not seen.

The one book that would transform the United States of America

A couple of years ago, I was driving and listening to one of the founders of Real Clear Politics being interviewed on talk radio.

He was asked to pick just one book that would revolutionize the understanding of economics in this country (in other words, turn the tide completely away from the standard, government-issued Marxist crap taught in schools these days) and here it is:

The Foundation for Economic Education presents:

Henry Hazlitt's 1946 ECONOMICS IN ONE LESSION

PREFACE: This book is an analysis of economic fallacies that are at last so prevalent that they have almost become a new orthodoxy. The one thing that has prevented this has been their own self-contradictions, which have scattered those who accept the same premises into a hundred different “schools,” for the simple reason that it is impossible in matters touching practical life to be consistently wrong. But the difference between one new school and another is merely that one group wakes up earlier than another to the absurdities to which its false premises are driving it, and becomes at that moment inconsistent by either unwittingly abandoning its false premises or accepting conclusions from them less disturbing or fantastic than those that logic would demand.

There is not a major government in the world at this moment, however, whose economic policies are not influenced if they are not almost wholly determined by acceptance of some of these fallacies. Perhaps the shortest and surest way to an understanding of economics is through a dissection of such errors, and particularly of the central error from which they stem. That is the assumption of this volume and of its somewhat ambitious and belligerent title. . .

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Economics 101: Keynesian Economics Is Wrong

STATISM

Professor Mike Rappaport is a Professor of Law at the University of San Diego, where he also serves as the Director of the Center for the Study of Constitutional Originalism.

Feb 6, 2012

In my first post on Statism, I define the concept as an excessive and harmful embrace of the power of the state.

Statism I
Conservatism, Libertarianism, Statism

Feb 9, 2012

In my second post, I attempt to show Statism functions as a bias in economics – the most market oriented of academic disciplines.

Statism II
Bias, economics, government failure, market failure, Statism

Feb 19, 2012

In this third and final post, I attempt to discuss briefly how one might apply the newest insight into human behavior – cognitive biases – to government action by administrative agencies to show how their actions might turn out to be harmful. One could then balance its effect on government and on the market to determine which was greater.

Statism III
Cognitive Biases, Statism

Jesus rejects ZIRP (it's in the Bible)

Jesus Rejects ZIRP. It's In The Bible. (Part 1)
Posted by Ann Barnhardt - February 14, AD 2012 9:02 PM MST
ZIRP stands for "Zero Interest Rate Policy."

There is a lot of misunderstanding out in the world about the charging of interest. The nutball anti-Semites would have you believe that ALL banking and finance is an immoral activity and construct of the JOOOOOOZ. Those people are also stupid, and many of them are genuinely psychiatrically ill. Have I ever mentioned how much insanity and evil lands in my email box? Yeah. Quite a bit. Thanks be to God that He made me the steely, obdurate battle-ax that I am, so that I can laugh at that garbage rather than get all squishy and sensitive about it.

Super-fun rockband church is too busy drooling on its shirt and watching the flashing lights to even consider such non-canine-level concepts.

The distinction that needs to be made here is between interest and usury. Usury, in the modern sense of the word, is the charging of obscenely high interest rates, and is often directed at those who are desperate - so not only is usury screwing people, it is screwing people who are, for whatever reason, exceptionally vulnerable. Yeah. That's evil. However, in the ancient origins of the word, “usury” referred to any interest, even fair interest rates. Keep that in mind for later.

The charging of interest is NOT evil or sinful. In fact, interest is utterly essential to a healthy, moral economy. Here's the deal. Money is the device that men use to give value to their capacity to produce - whether that production be the production of a clean toilet in a Burger King by getting down on one's knees and scrubbing the thing with a brush, or the production of a new life-saving drug or revolutionary device. From toilet scrubbing to cars or laptops, it is all production of a good, borne from human drive, energy, action and reason. Further, money is an inherently hopeful and socially unitive thing. Money requires that men trust in each other, and hope in each other's goodness and honesty not just in the present, but also into the future.

Why do you think the evil satanic Marxists who have now taken over this country are doing everything they can to debase and destroy the currency? Because they want to utterly destroy social cohesion. They want to literally break our spirits. They want to break us of any independent drive to action or productivity. They want to sap us of all of our creative energy. They want us to stop trusting in each other. Why? So that THEY will be the only thing anyone can turn to. THEY want to be the SOURCE of production, and thus THEY will be in control of all wages, earnings and, ultimately, all wealth. They want all creative energy to serve one end: THEM and THEIR PERSONAL WEALTH. They want everyone sniping and mistrustful of everyone else so that while we are busy fighting with each other we won't notice that THEY are raping us mercilessly and unceasingly. They want us to stop hoping and just give up.

I'm just paraphrasing Francisco d'Anconia's speech on money from "Atlas Shrugged." Here is a link to the excerpt. READ IT. And spare me the emails claiming that to quote Rand is to deny Christ. Yes, she was an atheist, but don’t you think that God is powerful enough to reveal Himself through atheists, too? If you don’t believe that is possible, then you need to give up pretty much everything in your life that has any origin in any mathematics or physics discoveries of the last 100+ years. Including all medical imaging and computers. To start. Don’t be obtuse.

Now back to interest rates. Now that we know what money actually is, namely an exchangeable, fungible representation of man's capacity to create and produce, we can easily understand what the TIME VALUE OF MONEY is.

If you are going to let someone else use your money for a period of time, you will, by definition, NOT get to use that money yourself. Thus, you are giving up something very real in loaning your money out, and you need to be reasonably compensated for what you are giving up. This is the TIME VALUE OF MONEY, or "interest".

Let's take some of my cattlemen clients. They know how to generate a consistent return on their money by trading cattle. For the sake of simplicity, let's call that rate of return 10% per year (my yound Jedi Padawan in Nebraska who has seen a triple-digit return over the last year is laughing his Jedi keister off right now). If they would loan their money to a bank in the form of a certificate of deposit, they would be losing a fortune. Why? Because the bank would only pay 1% on a one-year CD, and my guys could make 10%. They would be squandering the TIME VALUE of their money.

So, what ZIRP, or zero interest rate policy, which is what the evil Federal Reserve has done since 2008, is to effectively declare that our money is worthless – completely independent of the whole gold standard/fiat currency argument. That isn’t even what we’re talking about here. Money has no time value. Think about that. Your human capacity to produce has no time value. Loan someone all of the money that you earned working for the last year. Let them use that money for a year. When it is time to pay it back, you will get exactly what you started with back, MINUS ONE YEAR OF YOUR LIFE and all of the productivity and innovation that could have happened in that year. This is intentional. The objective of ZIRP is NOT to stimulate the economy. The objective of ZIRP is to grind the economy to a halt so that there is no private investment or entrepreneurship - only fascistic government raping of the public coffers and exponentially increasing public dependence on the government. Hello? What do you think all of this solar panel bee-ess is about? Do you think that has ANYTHING to do with energy production or "global warming?" Give me a break. It is looting – pure, unadulterated LOOTING.

Jesus Rejects ZIRP. It's In The Bible. (Part 2)
Posted by Ann Barnhardt - February 14, AD 2012 9:01 PM MST

What has been the byproduct of ZIRP coupled with the intense debasement of the currency itself via quantitative easing? INFLATING commodity prices with simultaneously DEFLATING wages. It’s a perfect storm – exactly what they want. News broke this week that gasoline, and really ALL energy consumption is tanking. We are using far less gas than we were four years ago, and yet prices are climbing. Why? Because we have given up. The time value of our money is zero according to the government, will stay at zero for years to come according to the government, and thus people have just . . . stopped. Why do anything now if what I do isn’t really worth anything? Why strive to produce when I know that the fruits of my production will generate no significant return if invested? In fact, why do anything if the only thing I can be sure of is that if I have any degree of success with my investments, I will be taxed and regulated back into breaking even at best and failing at worst? ZIRP essentially says: IT’S NOT WORTH IT. JUST SIT ON THE COUCH. IT'S THE SAME DIFFERENCE IN THE END.

Meanwhile, capital is flowing into physical commodities in order to provide a hedge against the inflation that is the inevitable consequence of printing trillions and trillions of dollars AND as a speculative investment vehicle for those people who are looking for any sort of reasonable return on their money over time, which they CAN’T get in the conventional money market. Thus, we have the price of gas going up while demand is tanking. The same goes for my market: beef. Why do you think the price of beef is skyrocketing? Do you think it is because people are beating down the doors at Morton’s of Chicago and other steakhouses? Hardly. Food prices are inflating while wages tank for exactly the same reasons outlined above.

Eventually, the government and the financial system will collapse. When that happens and the Federal Reserve is no longer able to synthetically hold interest rates at zero and people look around and realize that our money is worthless smoke and mirrors, the rubber band will snap and we will see the dollar finally die via hyperinflation like that seen in Weimar Germany. I heard a story about Weimar Germany last week that I have to share. A man had a wheelbarrow filled with cash that he took to the market. He stepped into a storefront to purchase something and left the wheelbarrow filled with cash just outside the door because it wouldn’t fit inside. He wasn’t inside but for a few seconds. When he stepped back out, the money was all lying on the ground – but the wheelbarrow was gone. True story. Think about that.

Now to the Jesus bit, and you financial people don’t bug out, because this is really quite interesting. Go to Matthew 25:14-30 and read the Parable of the Talents. A “talent” is a currency unit, FYI. In a nutshell, Jesus tells of three servants who are entrusted by their master with a sum of money. The first goes out, invests his five talents, and is able to return the principle plus five more – a 100% return on investment. The second likewise generates a 100% ROI in the two talents he was given. The third merely buried the one talent he was given and returned the principle with zero interest. Now listen to the words of Christ speaking to the third servant. It’s amazing:

Wicked and slothful servant, thou knewest that I reap where I sow not, and gather where I have not strewed: Thou oughtest therefore to have committed my money to the bankers, and at my coming I should have received my own with usury. Take ye away therefore the talent from him, and give it to him that hath ten talents. For to every one that hath shall be given, and he shall abound: but from him that hath not, that also which he seemeth to have shall be taken away. And the unprofitable servant cast ye out into the exterior darkness. There shall be weeping and gnashing of teeth.

Dude. Now, what were you saying about the abolition of all interest? Here is where all of the idiot Marxist theologians will wail and moan and say that this passage is a metaphor for the spiritual gifts we have been given AND NOTHING MORE. Uh, wrong.

Of course it is a metaphor, that is the point of PARABLES, to convey deeper meaning using everyday examples. But here is the point that so many pridefully, and moronically, miss:

Our Lord would never, ever use an evil activity in order to illustrate a virtuous activity. He would never use a lie to illustrate TRUTH. If all usury (in the ancient sense of any charging and paying of interest) was truly evil, He would not, He COULD NOT use that evil activity as a metaphor for a virtue. Do you see this? Do you understand? If you’re fighting this obvious, glaring truth, then the reality is most likely that you are so completely consumed with anti-Semitism, and are so personally invested in Jew-hatred and blaming the Jews, via the banking industry, for EVERYTHING that you are literally mentally impaired by that hate, because this is stark black and white truth. Are there bad Jews? Of course. But there are bad Christians, too. Like . . . Jon Corzine, who is ethnically Christian. As is Hank Paulson. As is Timmy Geithner. As is Paul Volcker. Oh, we’re ALL responsible for this mess. Every one of us who have sat by and let it get this out of control. Every one of us who have gleefully leveraged ourselves into this debt, every one of us who have consumed the bread-and-circuses “entertainment”, every one of us who have sat passively while 56,000,000 children were slaughtered and said not a word, and obediently paid our taxes. Oh, yes, the guilt is most assuredly collective, so spare me your anti-Semitic filth.

Couple the glaring scriptural evidence with the Randian explanation of the essence of money, and how money is directly tied to the dignity of the individual human being, and finally cross-reference both of these points to the obvious damage that ZIRP is doing to the global economy, and there you have it. Jesus rejects ZIRP. It’s in the Bible.