The Economic Point of Reason

The economy has always been in play, but not always operated in the way it is now. When we break it down, in essence, everything we do is an economic action of some sort, as it is all about value transfer, whether that value be comprised of money, goods, services, energy or social capital. It is about transfer of resources from one point to another for a trade of one thing for another.

What is the point of the monetary economy?

This is an obvious question with an obvious answer, as "money" in what ever form it comes is just a tokenized value, which allows us to more easily price goods of different types to enable the trade. Two swords for one shield, ten loaves of bread for fifty apples. Setting the price in "money" makes this process far simpler and can more accurately represent the actual value of goods and services by factoring in all of the supply chain costs too, like labor costs.

Originally in tribal groups, this was relatively easy to do, because it was contained largely within a group of people with a common goal - survival. This meant that trade value didn't have to be nearly as precise, because it was all covered by "for the greater good" of the tribe. This means that even if one action or good was more valuable than another, as long as everyone was pulling their weight for social protection and improvement, all activity was valuable to the tribe.

However, the more distributed we became as we began to expand past the borders of the tribe, the more disconnected we also became from each other, where "our protection and betterment" was more valuable than that of anyone else, so the relevance of the tribe decreased to where we are today, largely self-serving, without the need to serve others. But, this raises an interesting question in terms of the current monetary economy, because we all act on incentives.

Money is power.

Many might say that "Money is not be everything", but I could argue that because it is a tool that has purchasing power of pretty much everything that is important to us, it is "approaching everything", because it gives us the trade ability we have always needed, the protection and betterment, in the same way tribes needed it.

But, there is also a large disconnect from the tribe, because while we want the same things the tribe stood for, the incentive is to collect the tools of trade, even if it doesn't satisfy the same ends. So, we are encouraged to collect more money, even if it doesn't lead to greater security or opportunity for us, or anyone.

For example, I was talking with a client yesterday (which inspired this post) about health and how we know what we need to do to eat healthy, yet we struggle to do so, with the obesity epidemic worsening globally. This conversation started from the comment that "good food is expensive" - However, if you look at the facts of the matter, it is not really that way at all - it is just that for most of us, bad food is convenient. It also has sugars and other ingredients that we are naturally inclined to crave.

Think about the economy of it.

Someone who eats a lot of junk food spends more on all facets of the supply chain, where there is a full industry of mining, chemistry, packaging, advertising, etc that goes into the process and therefore, the price.

When was the last time you turned on the TV and saw an advert for pumpkin? Carrots, zucchini, broccoli? I don't mean mixed into something, I mean just the raw product. Never?

But, continuing with the obesity epidemic as the analogy, that consumption leads onto other supply chain values, where for instance, consumer spending is higher, illnesses like diabetes and cancers are increasing, health care and insurances are increasing and the entire supply chain of the pharmaceutical industry generates more value - taxable value. Unhealthy people generate more supply chain value than healthy people in this regard, in the same way that violence increases the supply chain value of weapons, and social disconnection increases the supply chain value of goods and services that cater to the lonely.

If you look at the "health of economy" though, it is all about consumer spending, where the value of the economy is whittled down to the monetary value of the tool, not where and how that tool is being applied. If you think about this in terms of the tribe, it is like saying that a sword is worth two shields and are more important, so everyone in the tribe will make swords and no shields. Or make bread, but grow no apples. The tribe would suffer because of this, which would mean that the "economy" of the tribe is failing, no matter how valuable those swords are as individual pieces.

With the incentive on generating the tool without the cross-refence of improving the people, there are a lot of issues that arise and questions, where for instance, what is the role of a government? Putting them in the position of "tribal elder" from the past, they should be geared towards improving the conditions of the tribe. Yet, if their focus and evaluations are all on the monetary state of affairs, they are evaluating their success on the state of the economy and value, so even if society is failing, their indicators will see it as a healthy economy - A success.

This is obviously not the case though, as not only are there large disparities in the wealth within the "tribe", there are also very large differences in the outcomes and opportunities available. If this really was a tribe, it would be failing and unable to survive, as there would be far too many people who are not producing toward improving conditions, even if they are producing to "add value". So the question is,

Who is the consumer a government needs to satisfy?

And this is obviously a big problem, because obviously, it should be the people themselves, but the indicators used, equate money to health, without looking at the actual health of people, in whatever form that takes. More money doesn't mean healthier people, unless the purchasing power is used on health improvement activities. And, because the focus is on generating more wealth without this purpose, the activities for gaining wealth will tend to be to minimize the improvement of society, to maximize the gains of the economy and of course, globally, this leads to a lot of unhealthy competition that leads to increased disparity, hardship and war.

And perhaps, here is the kicker, because while the monetary economy sounds terrible due to the misuse and abuse of purchasing power, we have labelled it all unhealthy, as if money itself is bad. This is not the case at all, it is just a token. What is "bad" is the way we use it to trade, because we are "tricked" into spending it on economic supply chain activities that are not actually in our best interest as individuals or society, but do increase the wealth of the economy and some individuals within.

But, if we are looking at the health of society as the goal of the economy, wealth generation doesn't go away, but how that wealth is generated matters, because the supply chain activities that have value, will be the valuable activities that improve tribal health, even if the entire planet's population is a single tribe. However, unlike the government attempts in the past, this can't be centralized, because that leads to a very poor pricing model, because the central authority will do what it has always done, make economic decisions that favor wealth generation, not the health of society.

It doesn't matter what form of governance is taken, when centralized, it is ultimately going to fail. Which is why the decentralized financial blockchain economy is going to be so important, as while in its infancy, it is able to accurately price the entire supply chain and provide precision values on different activities, based on what the decentralized tribe demands. In time, this will adjust where resources are spent, as supply will follow demand and if we are continually working in our own best interests, alignment of economic activity will happen to increase value in what increases our "health" - which Should eventually hit some kind of equilibrium where there are narrower and higher outcomes of life, but still the variation that incentives adding value to the economy.

A healthy economy is about trade, not charity.

And a healthy economy produces a healthy society, so what happens in the economy has to support that end. This means that the financial incentive has to enable healthy outcomes, which is driven by healthy consumption. So, it is up to us, isn't it? No centralized authority will ever look after the tribe adequately, because they are incentivized to look after themselves and the indicators they value, not the people they govern.

And, no charity is going to adequately look after the tribe either, because the value the charity spends has to come from economic activity incentivized through wealth maximization, which will end up creating a supply chain feedback loop creating more of the people that the charity end is trying to help. It is a stop-gap measure and is unsustainable, because the incentives through the supply chain are misaligned.

A healthy society is made up of healthy members of society and at the global scale we have now, the processes of the tribe have to be applied to the global economic activities. This requires a change in understanding of what is "healthy economic production" and a change in our reliance on others to provide for us, instead having a situation where people's wellbeing is more closely tied to the wellbeing of others in their community, so that there is the incentive to produce, bread, apples and shields and swords as needed by the end goal of healthy society, not the end goal of financial maximization.

But, this is no easy task and is definitely not going to happen quickly, because we have been conditioned as monetary maximization consumers, not as healthy society producers.

Will we ever use the monetary economy in a healthy way?

In my opinion, we might not, but we are currently on the path to learning how and if it is possible, even though the centralized forces and conditioning are slowing us down and trying to stop us from being successful. If we fail though, regardless of how valuable the economy might be, the disparity will be so great that we have failed as a society, failed as a tribe, failed as the human race and, as it will likely destroy us all through environmental degradation, social dysfunction and violence - one way or another.

The odds are stacked against us, because the economy is incentivized to keep us sick, as it maximizes financial wealth over societal health.

Money is power and what we purchase with it, matters a great deal.

Taraz
[ Gen1: Hive ]