THE PROBLEMS OF ECONOMICS…
(have always been a matter of balancing the dynamics of its elements with its fundamentals)

Economics is often referred to as that “dismal science”, mainly because it is indeed subject to dismal and useless arguments about how to best manipulate economic factors, and a science only because a lot of esoteric mathematical calculations are applied to justify such arguments.

Economists will vehemently object to such a perspective about their profession, which is understandable since it is their…rice bowl. Nevertheless we tend to agree with such a description of it because the less than glowing record of results that dismal science has produced for us supports such a viewpoint.

The problems of Economics have always been a matter of balancing the dynamics of its elements with its fundamentals. Our old Economics professor at Georgetown University (who was somewhat of a maverick thinker about the subject) tried to explain it to our bunch of mush-brained students at the time in the following way:

• Unlike water, capital/money, always flows uphill…to the highest rate of return.
• Whenever government’s tax fingers become too sticky they disrupt that uphill flow.
• When that disruption is compounded by over-regulation that uphill flow can, and generally does, slow to a trickle, or come to a grinding halt.
• When that happens, then the economic machinery’s output (GDP) becomes so anemic it is barely able to sustain itself.
• The end result from that condition is then either total –implosion- or extreme –explosion- in an attempt to seek a cure-all for it.
• Unfortunately such cure-all attempts almost always end up being worse than the original problems. So everything goes back to square one, and the same old cycle starts all over again…to the next implosion…or the next explosion…ad infinitum.

That’s why we have such “dismal” perspectives about it since nothing ever done seems to make it change out of that cycle. And the only reason we continue to call it “science” is perhaps because we now have computer technologies to help us create ever more marvelous illusory projection models for it…even though these still produce the same old results.

If we ever hope to somehow change out of that cycle, one of the things we need to clearly understand is that national economies are not static but dynamic organic mechanisms, and that no two of them are ever in perfect synch with each other. Each operates with its own economic “bio-rhythm”. Thus, while most have the same common elements involved, we can never apply a one-size-fits-all formula to manage any of them. Each has its own particular combination of these. Some work better than others, that is, they are more productive in the way they serve their national interest than others…so they prosper…while others don’t.

With the advent of –globalization- however this has introduced a new element to the mix which does not work very well with such a matrix of non-synchronized economies. Worse yet, there are only a couple of ways to help offset that problem, and one of the key means to accomplish that, to provide a more equitable, practical, and stable “fuel”…to run all that diversity of economies…is to have a better and more rational means of exchange between them. So rather than structuring that exchange by comparing currencies against each other, we might instead consider establishing a standardized global yard stick against which all economies are measured, much like the DJI or other indices are used to gage the relative “value” of a given stock or commodity. We could call it an “International Monetary Unit”, or IMU, for short, as the common unit of exchange for global trade.

Since today’s technologies allow for real-time mathematical calculations, any given economy’s IMU value at any given time could easily be determined, allowing desired transactions to be made accordingly. Stronger more productive economies would need fewer units of their own currency for an IMU. Others, with less productive ones, would need more of their currency units to get the same number of IMU’s. Central banks would thus become brokerage/clearing houses for such exchanges, converting national currencies into IMU’s, and IMU’s into national currencies. However, since everyone’s currency would be measured against a common standard, manipulations of national currency values would largely be eliminated, and the relative disparity between the world’s economies would thus be minimized.

For those who might object to such a system our only riposte to such objection is…would it be any more “dismal” and less “scientific” than what we have now?

CENTURION