I have a particularly technical and analytical mind. With this analytical and technical mid, I am drawn to the sciences, learning and questioning all that I find around me. I always enjoyed studying science and physics with the math behind the explanation of WHY things happen the way that they do.
I was reminded the other day of how in the study of physics, all the equations are based in a vacuum. Being in a vacuum means that there are no interfering 3rd parties or objects. This makes the equations simple and finding the solution straight forward. The force exerted on an object is equal to the result, since in physics, there is no friction between the ground and the object being pushed in any particular direction. The reality is not quite the same. We all know that pushing a stone up a hill gets only more difficult with time, since the slope or gradient of the hill is not constant, and due to our fatigue setting in more and more!
It got me thinking about the simplistic or idealistic view on the economy and economics. If we were to run the economy according to certain economical principles with a vacuum or bubble without any interference, surely the results would come out very favorable for the economic approach and theory. However economic theories are not proven merely on a piece of paper but in reality! This is where the rubber hits the road and it gets ugly, in the land of reality!
Economic principles and theories can not be evaluated in reality without the interference of 3rd parties that act as the friction between the ideas, hopes and intentions, and the challenges facing the human race. Many times the fatigue of overcoming all the obstacles and challenges causes those with the desires and intentions to make a positive difference in the various communities locally and globally buckle and get hit by the rolling stone on the way down, being run over by the stone that gathers no moss!
In a community with growing numbers, an economy has to grow, on paper it can make no sense why it would be contracting when there are more mouths to feed, bodies to clothe and people to house. With growing economies we should see growing wages due to increased profits, so why do we see this constant cyclical up and down in an economy?
In a one word answer, Humans!
I was reminded the other day of how in the study of physics, all the equations are based in a vacuum. Being in a vacuum means that there are no interfering 3rd parties or objects. This makes the equations simple and finding the solution straight forward. The force exerted on an object is equal to the result, since in physics, there is no friction between the ground and the object being pushed in any particular direction. The reality is not quite the same. We all know that pushing a stone up a hill gets only more difficult with time, since the slope or gradient of the hill is not constant, and due to our fatigue setting in more and more!
It got me thinking about the simplistic or idealistic view on the economy and economics. If we were to run the economy according to certain economical principles with a vacuum or bubble without any interference, surely the results would come out very favorable for the economic approach and theory. However economic theories are not proven merely on a piece of paper but in reality! This is where the rubber hits the road and it gets ugly, in the land of reality!
Economic principles and theories can not be evaluated in reality without the interference of 3rd parties that act as the friction between the ideas, hopes and intentions, and the challenges facing the human race. Many times the fatigue of overcoming all the obstacles and challenges causes those with the desires and intentions to make a positive difference in the various communities locally and globally buckle and get hit by the rolling stone on the way down, being run over by the stone that gathers no moss!
In a community with growing numbers, an economy has to grow, on paper it can make no sense why it would be contracting when there are more mouths to feed, bodies to clothe and people to house. With growing economies we should see growing wages due to increased profits, so why do we see this constant cyclical up and down in an economy?
In a one word answer, Humans!
No comments:
Post a Comment