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People’s Economics – Dynamic Stability

A world which seems to move faster all the time usually doesn’t feel like it at all. Like a car on a highway, speed is never what people sense. Yet the faster the speed, the more likely it is that every bump in the road or sudden gust of wind can cause an accident.

A few decades ago, cars felt simply dangerous at high speeds. As technology advances they become more comfortable and much safer because they are more stable. It’s not a static balance that they achieve, but a dynamic reaction to every bump and every change, correcting it back to controllable and level.

The same sense of dynamic stability is essential to a faster moving economy as well.  This is why it is one of the Five Points of People’s Economics.

Despair takes planning and time to make it work to be overcome.

People who are poor, or simply in a bad time, need one thing more than anything else. A few months where nothing goes wrong and everything is predictable can make all the difference between being stuck forever and being able to execute a long-term plan to thrive. Stability is also essential to anyone trying to perfect a new invention, raise a family, or really do anything which improves happiness.

The world is chaotic, yes. But it is a bounded chaos, and those boundaries can be understood and possibly narrowed.

When looking at economics, the first problem is always that there are at least three main views of money. They depend heavily on how much of it you have and how long you have had it. Money can be:

  1. What you need to survive until tomorrow,
  2. A way of keeping score, or
  3. A resource to get things done.

When money is a way of keeping score, everyone loses.

A characteristic of developing or regressing economies is that the first two views dominate. When a large part of the population is barely getting by and the rest are simply keeping score, the result is a completely dysfunctional politics. All of the good things in life come when the great luxury of holding the third view of money is routine and obvious.

This means that it is possible to plan for the future and make solid investments, either with time or money and particularly in yourself. The world has to be dynamically stable for this to happen, meaning that every bump or gust of wind is not going to become a calamity.

Markets, as a concept, always work better in the long term. The ideal of a fully open market depends on everyone working in the longest term they possibly can.

In ancient times granaries were built to even out the harvest from one year to the next so that people did not starve. Cities eventually developed sanitary sewers and water systems so that clean water was plentiful. Food and water are the basics of life, but a modern economy needs similar systems that include energy and finance, among many other things.

Growth means replenishment.

If resources of any kind are being constantly depleted, this is not a dynamically stable system for the log haul. For that reason, sustainability is a critical component. This means not only that natural resources are not stripped, but also that financial resources are not applied without regard for their cost.

It is also critical to build resilience into any system so that small shocks are not devastating. Like the granaries of old, a little excess capacity can mean the difference between life and death for millions. Modern concepts of efficiency can be wonderful in areas where people’s very lives are not depending on a resource, but certain critical resources have to be resilient and dependable.

Finally, new solutions are always going to be necessary. Innovation is a double-edged sword in that it often causes disruptions more than it levels them out. But like the water and sewer infrastructure we all depend on for basic health, systems of our integrated life can become expensive. The overhead of a municipal government is never going down as demands public works constantly increases while essential systems age in place. New solutions are always necessary to improve existing overhead.

In all cases, however, the goal has to be a social and economic system which is stable at high speeds, actively responding to forces that could otherwise make the journey dangerous. This is a core value of People’s Economics. It requires sustainability, resilience, and innovation.  A dynamic stability is necessary for people to invest in themselves and innovate, planning for the long term. It is also essential for a happy life that is as predictable as is reasonable.

3 thoughts on “People’s Economics – Dynamic Stability

  1. Pingback: Why People’s Economics? | Barataria - The work of Erik Hare

  2. Pingback: A Model for Federal Equity, not Debt | Barataria - The work of Erik Hare

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