Biological Economics
Finally an Economic Theory that Works!
by
Frank W. Andres
Copyright ©Frank W. Andres, 2023. All Rights Reserved.
Fire Mountain Publishing
4075 Vineyard Ave. Pleasanton, CA 94566
Introduction
We were reading a book: Debunking Economics – the Naked Emperor Dethroned? by Steve Keen. We were hoping to take this book with its detailed discussion of what is wrong with the discipline of Economics at the present time – and see if we could spread Light upon things – by bringing in ideas from our studies of Biology. After reading 60 pages of this incredible book – we realized that we had already experimented with models of Biological Eeconomic Theory – with great success when Mr. Andres was an Economist with the U.S. Army Corps of Engineers – and subsequent experiences as a consultant working with the Corps. We can just simply relay our experiences and this may help lead to an amelioration of a discipline that has always been deeply in trouble.
Well, Mr. Andres took his first Economics class in his sophomore year at U.C. Davis in 1962. He received an F on his first midterm. He had been on the Dean’s list the previous year. Troubled he bought a book on Economics that was featured in the University book store – The Worldly Philosophers by Richard Heilbroner. Well, Mr. Andres had studied hard for that first midterm – but he remembers having severe misgivings – just before he took the test: ‘I am just a kid. How am I – supposed to know what makes a great Economy work?’
Well, to make a short story shorter: Heilbroner simply said in so many words: ‘Economics is a game that people play. This book presents the ideas of six men who created this game. Just read this book – the game is a synthesis. It is a model. You just memorize the model. If the price of corn goes up in the countryside – the wages of steel workers go up also. With fifty steps in between. Nevermind thinking. Just play – the game.’
Mr. Andres received an A on the final for that first course and a B+ in the class. He would receive B’s from then on in a discipline that he would major in and graduate with. He also had a second major: Economic History – in the History department. In that discipline he was known for receiving A’s with four pluses on almost every paper he ever wrote. One major was a game. The other was: Simply Reality. It was Life itself.
Well, there was the Great Recession of 2008-9 – which we may still be in: Using our constructs of thought – we thought we knew the real reasons for the ’Recession’ and what should be done – and were amazed to find that the correct remedies were being applied during the first 30 days of the Obama administration.
Without further adieu: Let us lay out our new General Economic Theory – derived from an empirical study of Biological behavior.
What Happened!
The Great Recession of 2008-9: Well, Hillary Clinton had her own mysteries to confront in her autobiography – concerning her loss to Donald Trump. For most Americans – especially Economists – The GR of 2008-9 seemed to come out of nowhere. We knew better. The history of the U.S. is a history of Cotton – then Wheat. And finally of: Oil. The 20th Century was so much about us. About the U.S.! the U.S. has had successes but now suddenly – so much seemed to be going – wrong. No cigar! What happened?
Kyle Williams – in his book, Taming the Octopus – speaks of Corporations as being a species of Octopus. Well, Sinclair Lewis of course was the first to draw such an analogy. Before we confront the accuracy of such a depiction – let us start from scratch. ‘Octopus’: One is obviously talking about ‘Monopoly,’ but let us go back to Adam Smith; Speaking Biologically – how exactly would one speak Biologically about Classical Economics?
Well, first: Consider these things. The Great Recession of 2008-9 seems to have given the first signs that things are Greatly wrong with the existing Economic Theory. Neo-Classical Economic theory is of course fundamentally unsound. The U.S. is not a nation of small independent autonomous shopkeepers who are influenced only by price – prices of labor, land, capital, and products. No: Instead – F = ma, Newton, thermodynamics, boilers, steam engines well, these items and significant personages were the principle drivers to a new world which would soon become full of those inequities of a Moden Age: Monopolies. These monstrosities were part of a strange new sort of interaction among humans. In the Neo-Classical Theory – they were simply impossible.
The Great Recession of 2008-9 was forecast by Professor Williams just by looking at one thing: The exponential Growth in the debt-to-GDP ratios for Australia and the USA by itself was sufficient warning to any proficient economist at the time that a truly huge crisis was imminent. The Economic crisis began with a vengeance in September 2007. Unemployment in the USA doubled in the next year, while a 5 percent rate of inflation rapidly gave way to a 2 percent deflation.
We remember reading the New York Times in January of 2008. President Berack Obama had taken office and in his first month of office he seemed to be taking an important action every day of the month for thirty days. That was the month in which the government bought General Motors – among other things. Obama of course had little knowledge of Economics of his own – his experience before being President had been mainly the editor of a Law journal. Obviously some people had a plan and it was executed perfectly. And one had the feeling that if Hillary Clinton had won instead – she somehow would have been instructed to take exactly the same precise actions during those crucial thirty days. This book, Debunking Economics, promised at the onset to provide a brief and accessible look at an alternative, realistic model of the economy – which it never seemed to provide. In the Preface to this book’s second edition – the book foretold that this period will one day be renamed the ‘Second Great Depression – by future historians. This of course has not happened. Those thirty actions that President Obama took during that first month in office – seems to have done the trick. Of course, it now is also obviously True that he had had some help. We mean of course: This time Banks did not fail. Well, first of all of course: The Great Recession was caused by an increase in Oil prices. During the 1950s and 1960s – gasoline prices were around 25 cents a gallon. Then in 1973 there was the Oil Embargo when Iran threw off the leadership of Saudi Arabia and simply started charging much more for oil. The price of Oil jumped for Europeans at that time – to the range that exists today: In the range of 4-5 dollars a gallon for gasoline – well, in California. The U.S. was still protected by cheaper Oil from Saudi Arabia which kept gasoline prices in the neighborhood of one dollar a gallon. Still the jump in gasoline prices in 1973 was sufficient to have a profound impact on the U.S. Economy – although the impact did not occur until around 14 years later. When the impact finally occurred it was expressed mostly by a failure of Banks. Well, an increase in gasoline prices increased the costs of transportation to and towards the Core of the metropolitan areas in the U.S. This caused the value of suburb properties to fall and the price of land in the core areas to jump some four times. It took fourteen years for these transportation cost pressures to be expressed in new skyscrapers in metropolitan area core areas – increasing the number of commercial and residential properties. This increase in Core properties in value and space ultimately caused suburban prices to plunge causing Savings and Loans to fail in vast numbers during the 1990s.
In 2008-9: Things seemed to be even more serious this time. In the past: Well, Oil prices would go up – gasoline of course would follow up also – the demand for land properties closer to the center of the metropolitan area would increase by approximately the same ratio. And properties in the suburbs would fall in value because of the long distances of expensive travel now required daily to work to or towards the center of the metropolitan area. The values of suburban property would fall and banks with those mortgages were instantly in trouble. As we say: During the 1990s the impact of the 1973 oil embargo was finally felt – when one third of the banks in the U.S. – mostly the ‘Savings and Loans’ – as they were called – which carried the mortgages of suburban properites – failed. This time in 2008-9 – development of new and larger properties in downtown San Francisco and Oakland, for example, were delayed indefinitely to mitigate anticipated impacts of the increase in the price of Oil. This time the impacts on banks was also mitigated by the use of what became to be termed: ‘Derivatives’ – that is, the bundling into stock piles – of toxic mortgages – which were sold as premium grade non-risk securities to large financial institutions. This time: These large financial groups absorbed the Pressures of high-priced Oil – instead of banks.
When the Great Recession struck: Economic theory was the last thing on any person’s mind. The Charman of the Federal Reserve, Ben Bernanke said at the time that this financial crisis had been ‘more a failure of economic engineering and economic management than that of what I have called economic science.’ This would imply that someone has ideas of how things actually work but at that point measures were more part of a total Practice – a part of what was a kind of an Art – than a Science.
Ricardian Analysis, Macro Economic Theory, and Biology
When Mr. Andres was an Economist with the U.S. Army Corps of Engineers, he worked on many flood control projects in the Los Angeles and Phoenix areas. At one point, he was working on one project located in Ventura County, along Sespe Creek, which was a tributary to the Pajaro River in the vicinity of Fillmore, California. A project along the Creek would allow urban development to expand from the City of Fillmore into the flood plain which would result in benefits from land enhancement. Mr. Andres was working on some twenty projects in the Los Angeles and Phoenix areas at the time – and it was apparent that there needed to be some way to make calculations as to when vacant land in the vicinity of various urban centers might be needed for development in the future. Mr. Andres developed a Ricardian spatial model for projecting urban expansion in the Los Angeles Area. Such a ‘Macro’ type of model was deemed impossible at the time. Macro Economics was seen as a mere aggregation of the decisions of individual firms. How could there be an Economics at a higher level? Well, there had been Keynesian Economic Theory – but we shall return to that.
` The general model that Mr Andres came up with – was based on the fact that an urban area with a central core area is like a valley with a river flowing through it. If one is raising corn, then productivity of land decreases as one progresses up the slopes of adjoining hills away from the fertile lands next to the river. In an urban area land becomes similarly less valuable as one moves away from the urban core due to increasing costs of transportation from outlying areas to or towards the center of the metropolitan area. At any moment in time the extent of the urban area is related to the amount of population that is in the area as it is spread outwardly contiguously from the core according to lines of increasing cost. Thus: Essential to his model was the delineation of an isochronic map laying out sequential lines of increasing costs related to distances from the urban core. Using such a map with isochronic lines, Mr. Andres took the extent of urbanization that existed in the Los Angeles metropolitan area in 1900 and established ratios between extent covered by urbanization and the amount of population that existed at a particular time. With such ratios, Mr. Andres took the extent of area covered by urbanization in the area in 1900 and added the population that actually occurred for every ten year period between 1900 and 1960. He then made a projection from the extent covered in 1900 for the year 1960 and the difference between his projection and what actually had occurred – was less than 5 percent! The model had experienced: A Proof of Product! Mr. Andres had just proved that a MacroEconomic theory is possible for entities larger than the individual firm.
However, he was able to prove more: Looking at the resultant projections – it soon was apparent that the growth of urban areas is very similar to the growth that occurs with molds – as increases in population is absorbed by outward contiguous expansion of the organism. Thus in this way: Mr. Andres had proved two things – that MicroEconomics can be expanded beyond the firm into MacroEconomics studies. The resultant model was more than a mere aggregation of the activity of individual entities. Principles of Ricardian analysis must be extended conceptually step by step to the Macro level.
Second: As we say – it became apparent that Ricardian analysis at the macro level had a counterpart in normal biological behavior. Thus instantly it was seen: One might be able to substitute the study of the mathematical graphs and dubious mathematical relationships – by lessons learned – from the examination of actual Biological behavior.
Keynesian Economic Theory
During the 1960s when Mr. Andres was at the University – there was an attempt to devise a ‘Macro’ approach – supplemental to the ‘Micro’ Neo-Classical approach. The former of course was the famous Keynesian Economics. This approach we have shown in a previous minibook – was derived from latter portions of Marx’s Das Kapitol – which had been translated from the German to English by one person and then simply appropriated by John Maynard Keynes. The main contribution of these portions of Marx’s work was a vision of an Economy as a Whole. In Marx’s vision – an Economy became a sort of living breathing organism that generated products but also Savings, that is, Profits – which then were available to be plowed back into the Economy – to be invested in the New. It was a vision of what one might interpret to be: A Healthy Biological Functioning organism. Human beings were sort of a parasite that lived within this organism – whose Fate as far – as Marx and Engels were concerned – the organism seemed to be largely indifferent towards. Nevertheless – the Marx-Engels perspective was hugely different from the NeoClassical approach which preceded it. Perhaps this new Macro model could be adjusted such that the prospects for human beings caught in the Capitalistic Web might be better off.
One enigma remained though: So there were Micro visions of the firm – and now Macro visions of the Whole Economy – but where do things like monopolies, unions and even government itself – fit into some sort of comprehensive theory? There were people like W.W. Rostow who envisioned how government could have in fact possess a role in helping undeveloped countries rise to become more developed. This was a dynamic vision in which government might play a very important part. Rostow developed an Economic Theory that included things – that operated like Stages – like pragmatic schemes for how certain part of the economy might take leading roles working with government – and help propel a backwards country – forward. This was a very optimistic time!
Biology and the Development of Economic Theory
Metropolitan areas are like molds and we have explained them using Ricardian Economic theory. So: MicroEconomic theory seems to be a mathematical way of looking at biology in general. A Neo-Classical world of multitudinous tiny individual firms is like bacteria or molds which have many individuals seemingly working in accordance with their own self interest – and yet is it not also obvious they have certain patterns that emerge at a higher – a Macro level – patterns that are assumed by the organism as a Whole? Plants have no one thing in charge – yet individual cells seem to be communicating with each other. A cluster of plant cells can move limbs to be more into the sunshine. A corporation – a monopoly – is more like an animal than a plant: It has one thing in charge. An Octopus has one ‘I’ in charge yet each limb has one also.
So there are instances in Biology – where Individual cells give up autonomy such that one ‘I’ can assume command and either by chemical or neural activity command large numbers of cells – to work in concert – move where there is more food – more safety – more women (Yes!), Some things are merely a change in time frame: Debt is merely postponing the culmination of transactions. So: There are similarities between human activity and animals.
But animals have instinct: Which is like MicroEconomics in slow motion. Animals make adjustments over long periods of time – here we are talking about evolution. People with brains can make mistakes instantly. At the Micro level: We just let people do what they want. Macro: Well – looking at the organism as a whole – there are times to grow the Pie – there are times to eat the Pie. These are the traditional positions of: Republican – Democrat. As we say: There are Arts and Crafts which have evolved to meet the needs of certain challenging moments in the Economy – like: Put money into the Economy to prevent a recession – raise interest rates to prevent inflation when we finally have a boom. Right now in the year 2024: We have bust and boom at the same time!
One of the things we did not know. The U.S. government forced ATT which invented the transistor to share its knowledge with competing firms – including Microsoft. See: We got rid of the bad influences of Monopoly – right there. Obviously Microsoft with Bill Gates and Apple with Steve Jobs were able to do more than ATT could/would have done by itself.
Monopolistic Competition
The book – Debunking Economics – has an interesting idea: Well, small firms are supposed to be equal. Their differences are Zero. Well, we have calculus involved here and as we know from that mathematics: A limit is zero – but there is a long distance between here where we might be presently located – and zero. The book keeps pointing out that the Earth is curved – but at any point where one might be standing: Things appear – to Be – Flat! So: How far is the deviation between the generalization that the world is flat – and reality?: Well, the Earth in reality is – A Globe!!!! Big difference! What this means is that a firm in actuality is not really equal to all the others. It really has its own little market – as Virginia Wolfe said: A Room of its own. Each firm possesses its own little monopoly: Just from the nature of Geographical Space. Q.E.D. There exists Monopolistic Competition! You live here – on/at a certain location on a map: There are only seven firms that sell glass within ten miles – if you need to replace a broken window you start with the firms closest and work outward – 99.9 percent of firms in the State you will never even think about let alone visit! And of course very quickly comes to one’s mind is the fact that most animals possess their own territory. They have ways to make it, defend it, utilize it. This Truth is probably True all the way down to bacteria. So when we think about MicroEconomics we can think of molds and how they cluster and grow like metropolises but we also must consider that each bacteria probably has its own territory that it stakes out at a microscopic level. So let us think how this breakthrough might lead to a new Biological Economics.
A Not So Dismal Science
So: Economics is not really the Dismal Science. Not when we think things through. In a small town most people have a 100 I.Q. How do they survive?! Well, there are things called: Practices and Crafts. Knowledge is passed from generation to generation. People are not geniuses but they have family they have Community. People have what we call: ‘Care’. This is related to Love. Economics thus is not a discipline that is focused only on Will and tearing the competition apart. A community works because people have been given skills from family and friends – and they have the patronage that often is related to friendships with other people in the Community. People take ‘Care’ of each other. They work together. Life is not a scary place – because of this ‘Care’. We have lost most of this – these past 60 years. This is part of what the Trump Crazies are yelling about. When we were young – we went to Church. Just as 80 percent of Americans did at that time. Now less than 30 percent do. Cell phones have encouraged this separation! Witness: Irony. Paradox. A cell phone is an invention that supposedly increases contact among people – but the fact is: The Opposite has happened! People are in silos listening only to what they want to hear – seldom relating to people in person. This new Distance among people – creates a New World. A Lonely World. People lose ‘Care’. People have lost intimate knowledge about other people and their families. People are actually alone now. The World now – is a frightening place. People are committing suicide.
A New Biological Economic theory
So: MacroEconomic theory has let us down. We are left with a MicroEconomic theory that is useless. But we have Practices and Crafts – such as the ones the Fed is now using during a challenging Economic time. But we don’t want to leave things the way they are. We desire to do more – than merely applaud problems. We desire a Theory that can move Worlds!
As we say: Right now Economists possess a mathematical theory that is the envy of all – yet in the end it is ignored by everyone. Right now the U.S. is in a period of inflation which fortunately has not plunged into a Recession – yet. But the fact is: Regardless of what the Arts or Crafts say: Everyone is unhappy. If we could just come up with the emergence of a new Theory that might not provide all the complete answers but would still provide a Beam of Bright optimistic Light and Hope – then our country might be saved four more years of a Terrible Trump presidency. We are faced with such a dismal prospect because a sizeable portion of our population is Angry and is willing to try anything even a potential dictator who might sweep aside all the wonderful aspects of a Democracy just because of a Napoleon who shouts and grabs unmentionable anatomy and claims he has all the answers. Such a prospect seems to be preferable to the present state of affairs that has no viable Economic Theory to help it. Right now the only hope to fight inflation is to keep raising Federal interest rates until the housing market collapses and inflation may be induced to fall towards the 2 percent range. Of course such action threatens the Nation with recession and unemployment. As we say: The U.S. has no real Economic Theory – just a NeoClassical approach which is full of mathematics and male dominance – so – we are left with only things that have sort of worked in the past – and not a real theory to guide government action.
The things is: We have forgotten Love in all of this. We have forgotten that the Economy is – an organism.
So: MicroEconomic theory is primarily an analytical exercise wherein the theorist merely looks at his or her Life and deduces from what is evident therein. The Macro approach as we have shown in a previous minibook comes from Marx – whose work carries a lot of ideological and political nonsense with it: Communism and all of that.
The fact is: Marx was looking at Hegel. He was looking for a Universal Economic theory. Hegel actually found such a theory for philosophy – but he neglected one step: Yes: There were people who could think inductively and some who could think analytically – but who was right? Well, Hegel came up with the right answer: You need both to find the Absolute – to find the Ultimate Synthesis. The Ultimate Truth. But to really understand what he had discovered – one must go one step further: One must relate the theory to Biology. Inductive – Analytical. Collection – Separation. History -Mathematics. Well, obviously what we are talking about here is: There are two sides of the Brain! We must look at physiology – we must look at Biology. In the end the Hegelian model collapses into a Biological one. Finally we have Power!
Fine: But what does this mean for Economics? Well, we need to step back and take a Universal view – a world view – move from the world of the individual firm and look at the totality of society – as a functioning organism! We ae talking about man and woman working together right and left sides of the brain to make the Economy work efficiently and smoothly.
So: In the end the Macro model is correct. Say’s Law and microanalysis seem to be complete and satisfactory: Except for one aspect – Savings does not seem to automatically bring forth its own Demand. Demand does not automatically bring forth its own Supply. One of the problems is: Time frame. Money is fluid. People are paid now. But they do not consume every bit of their income. They Save some. If they are rich – they save a lot. They keep excess money in a bank. The bank’s main job is to invest this surplus cash: In the New. But such investment takes time It does not take place right now like consumption does – it occurs tomorrow or the next day. – far from the day in which the income was earned. So: Supply eventually rushes forth to meet an increase in demand – but there is a lag. And a lag is enough to foul things up. So: The obvious solution as John Maynard Keynes proposed is: The government must step in and add a bit of demand here and subtract a bit there. To sort of even things out.
The problem is: If this is not done minutely accurately: We end up with inflation. Or we have to buy General Motors like we did – to help investment change gears NOW and not tomorrow!
So: We thought we had an angle: Biology Economics. But it turns out that J.A. Schumpeter was talking about ‘swarms’ of business activity one hundred years ago. And there was a French man talking about the Nation’s Economic Organism. So: This tack is not a new one. We were thinking about comparing the Nation’s Economy to a beehive. Every so often either the population of a hive grows larger or the existing hive degenerates and the bees must ‘swarm’ and build a new nest somewhere else. There are a lot of similarities between this behavior and Economic activity in every Boom and Bust. There is a lot of violence implicit in a Boom. That is: Things don’t just get better – we are talking infrastructure here – Baby! Manufacturing Plants have to be built. Rows of Machinery must be hammered together – metal joined , welded together with Great Sparks! Millions of dollars must be expended in a short period of time. And these monumental steps must be taken at a time that the men with the surplus money start seeing dollar signs in their eyes. Investors must be induced by the certainty of Humungus profits to become Innovators! They must be induced to provide the millions of dollars required – to Move the BeeHive!
So – the first step is: We must somehow make analogies between our Nation’s Economy and bacteria, plant, insect, and animal behavior. We could write paragraphs about how parts of the economy are like molds, plants and animal tissues. For instance: Fat in a human is like a bank – it accumulates excess energy to be used subsequently when required. Suddenly there arises in our minds: A synthesis incorporating what we know about Music Theory, Economic Theory, and Creative Clusters begins to come together.
A Biological, Musical, Sociological Theory
So: We are agreed that existing theory is useless. We just must be in a situation – like music was for centuries – there simply was no theory – so we must just do what was done way back then – we simply must do the best we can – with gimmicks and rules. If there is unemployment: Increase Federal spending. If there is inflation: Raise the Federal discount rate. And Pray.
Let’s see if we can’t do better.
Frist – we have experience. We – the authors of this minibook – have developed a new Music theory. What have we learned from doing that? Is there anything from that experience that can be used in developing a new Economic Theory?
So Music Theory: Looking at history – all was trial and error before Joseph Haydn. He gave us the Circle of 5ths that is like our Neo-Classical economic theory. Little has been done since then. We have desired to do more. So: We went to Alchemy. We used a couple of ideas from a body of urScience – primitive science – which looked promising: We moved from Dark to Light. Haydn created a Circle of 5th. You take the 12 scales in music. You place them in a Circle. There is C with no sharps or flats at the top. You move one notch at a time to the left and add one flat as you add one scale at a time. Until you reach Gflat with six flats at the bottom. Then back to the top then move one notch at a time adding one sharp with each scale. Until you reach the bottom where you find F sharp which has six sharps. In a tempered scale Gflat and Fsharp are the same at the bottom.
As we move clockwise around the Circle of 5ths from the bottom to the top and then down the other side: The dark colored scales are on the left side – the brighter ones are on the right side. We move through a rainbow of colors as we move around – culminating with purple at the bottom. This is the Philosopher’s Stone.
Can we use this knowledge to help build a new Economic Theory? Well: Economics must have ideas related to Growth – like moving from Dark to Light. In an Economy such Changes must be intentional . Things simply do not happen automatically when it comes to Growth. A Government is essential – leading the way. Like developing an underdeveloped country – we must have a plan we need stages of growth. As we say: We must move from Darkness to Light. This is not an exercise in mathematics and logic. This is an exercise in ‘Care’. War must Stop. Stop killing people! People must start moving from Fucking Deserts!
Now – a second thing we learn from Alchemy: Opposites. When we use triads in ways that have never worked before: Magic occurs!!! Fsharp – F minor, Dflat minor – D, Aflat minor – A, Eflat minor – E, Bflat minor – B – suddenly the entire Circle of 5ths becomes Gold!!!!
How about Economics? Are there opposites? Yes: Supply and Demand. Male and Female. Right and Left sides of the Brain. There is a Rainbow of Truth as one moves through these opposites: Will. Love. Truth. Beauty. Justice. Which are Components of every electromagnetic wave.
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Economic Theory: So – moving from Music Theory to the development of a new Economic Theory. Well, the first thing is obviously: Boom and Bust. We must somehow make analogies between our Nation’s Economy and bacteria, plant, insect, and animal behaivor. We have already written paragraphs about how parts of the Economy are like molds, plants and animal tissues.
Suddenly there was in our minds: A synthesis incorporating what we know about music theory, economic theory, and Creative Clusters. The last is an Idea – from Sociology. Or is it Philosophy? Ideas go Boom!: The Economy goes from Dark to Bright and meets at the bottom when/where Boom transitions into Bust. This is the Crucial point in music theory: It is the crucial Moment in the Business Cycle too. We need to turn this moment into Gold – Economically!. How?
Well, We know already that money surpluses – extra savings have been accumulating during the Boom – when the Boom begins to fizzle out now somehow we just cure any inflation that may be present as the Economy is still trying to move at high speed but it is losing gas and only the price level is still moving at a fast gait. At this point we need inventions to stir investors to action to create the next Boom and not let the economy fall into a Recession – or even worse – a Depression. Inventions become Innovations when investors become excited and decide to plow those accumulations of savings into Action that might make them millions of dollars! To make those millions of dollars – millions of dollars of savings have to be taken and turned into manufacturing plants and machinery. There has to be an initial Bubble of Excitement. How?
Creative Clusters: it is time to take an idea from our book, Omicron Blue. Opposites: Left and Right sides of the Brain. Now we know where this idea can fit into a new MacroEconnomic theory! Franz Schubert – the composer – wrote a lot of little songs and instrumental works because he didn’t always have a symphony orchestra at hand. So: He and his friends had a sort of Creative Cluster of their own. They would meet in his parlor every month – each having worked feverishly on new stuff. Once a month – they would listen to and critique and work on all the new stuff together. We have a Creative Cluster in our household. Two of us are right hemispheric dominant in the Brain. This is ascertained from the only I.Q. test available for this side of the Brain: The Wechler-Bellevue Block Test. Two of us are left hemispheric dominant. All of the other I.Q. tests – measure this physiological fact. The four of us are churning our ideas out at a break neck pace. We can add people if and when it is a happy thing to do.
So here they are!: Ideas for as New Economic theory.
Invention Becomes Innovation
Well, our new music theory was not completed until we had a proof of product. Not that the theory will ever be completely finished – but hundreds of breakthroughs were proven to be Powerful and Working well – when we presented our musical production of ‘Faust 2024.’ Now we must do the same for our new Economic Theory. What we must do is: Simply show that our concept of Creative Clusters actually is able to produce new ideas that have economic value at a constant rate making inventions available to be inserted into an economy at the exact moment innovation is required – which is immediately before interest rates return to a low normal level. Even with the discount rate very high – aimed at reducing inflation – inventions should be attractive enough in their prospects for profit that innovators, investors will start working on the next boom even before the last one is over.
Creative Clusters using both sides of the brain must be shown to create new ideas continually which will supply a plentiful supply of ideas to be used when required.
Conclusion.
Degression here: As we say – the market gave us cell phones but did not protect us from dangers: Loss of ‘Care’. Loss of Community. People are unemployed or more accurately they are now earning less than they would like. So: They have cell phones with screens, games, sex, and friends to divert their attention – to help soothe their Anger. This is like drinking vinegar to assuage one’s thirst. People are now Alone and Angry. Is this any part of Economics? We maintain that it is. You can’t just invent something like a cell phone and not deal with all of its consequences. This is Tao Economics: Corporations simply must take in account all impacts of an action – these are called Externalities – like Global Warming.
So how about this?: Let us look at where the economy is obviously headed. We are talking about Automated Cities. If there are no human beings – what would robots do? Well, the secret here is: Humans are always involved. There is a hydrogen ion in each our brains that possesses Consciousness and Consciousness is always in Command. So even if a society is completely automated – it is still part of a Biological organism. So assume: Everyone is out of work. Machines now do everything. So obviously there must be a basic income that all receive which can be added to – if one is Creative and can come up with new ideas that lead to new production. See our book: Omicron Blue. It is finally time for us to move to the next step – not taken in that book.
Well, quickly we are diverted: We are worrying about some Unpleasantness in our Lives right now. But we need new sources of Energy and a cure for Cancer. Stop! We are dealing with our Economy right now. We are always headed off in some other direction! So: We have automated Cities. We have resources. There are people to feed. We have stopped population Growth. For God’s sake this must be done now! Our daily needs are being met. This means that we have somehow found a way to lift up two-thirds of the world that has nothing! Immigration is not bad. People must move from deserts where they have nothing to areas that have resources. Economic theory is becoming a sort of adjunct to Economic History.
Yes – things are very simple: Human society is – exactly like a bee hive, ant hill, tissues in the body are like a million tiny firms. We have two sides of the Brain. Not all societies are so lucky. We – simply – must led the Way! Now!
There is one final issue we must address: The Future of Oil! Simply Put: There is no such Future. We only have so many days of Oil left. It is the Elephant in the room. Two World Wars: The U.S. just simply went through three hundred years’ worth of Oil – in thirty years! Texas had as much Oil as Saudi Arabia. But the U.S.: Filled the Sky with Planes, the Sea with Ships, and the Ground with Tanks and other vehicles. Each of these pieces of equipment possessed a voracious appetite for Oil: Measured in Barrels per Hour! In 1937 the Rockefellers visited Saudi Arabia and arranged for the first time – for the importation of Oil into the U.S. – with the promise of cheap Oil for us until the end of the Twentieth Century. As we say: Iran sort of put a monkey wrench into this plan with the Oil Embargo. But the U.S. still had a good situation compared to the rest of the world: Until Now – when the Oil is almost completely gone.
So: Why haven’t urban cores gone on and built the skyscrapers filled with residential that property values now are screaming at the top of their lungs for right now. There was one prototype of such a residential complex built in Oakland, CA – it is seven blocks on a side – seven floors of residential above the ground three below with parking. The entire first floor is devoted to commercial and public properties – like museums and stuff. Exciting. But – what’s the point?
Are Americans really going to buy electric vehicles? Or will they finally just give in and just go with rapid transit all the way? Some cities have elephant trains and small buses that go anywhere – for free – right now! Big residential skyscrapers in the city cores will only suck even more people from the suburbs. At any moment gasoline will rise to $12 a gallon. And people just bought all of those Big Trucks!
Russia. Iran. Countries causing Big problems. But they are countries with only one Trick Pony: Their only export is Oil and Gas. The clock is ticking. The World is at a Crossroads. We are in need of a more Compassionate Society. We need more Women in Charge! There is a reason that every Hive and ant hill is run – by its – Queen!
Namaste!
THE END
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