The recession we had to have.
Paul Keating, Australian Treasurer, 1990
I was under twelve when I heard this statement, and my parents were struggling with extremely high mortgage rates over 17%, and unemployment neared 11%. Yet, these things all seem so natural, don't they? We expect that economies are going to crash from time to time, because we buy into the idea of economic cycles of peaks and troughs, ups and downs. At least for most of us, this is a given that doesn't need to be questioned.
An economy never crashes.
It really can't. Because the economy always scales, as all it is, is a tracking system of trade. It doesn't matter what is traded, nor what the value is, the "economy" is our way of visualizing what is going on. But, the numbers it provides are much more figment of imagination, because they aren't actually tied to the true trade of goods and services, but the derivatives of them - made up representations that calculate over and over in different ways, counting one aspect of the economy many times. When the markets crash, it isn't because the traded goods and services have changed that much, but that whatever change there might be, or sentiment around that change might be, gets amplified across all the false markers giving it a value.
None of it is real.
There is an economy that does work perfectly though, never crashes and never even has a hiccup in the system. It has literally never had a single problem since it started, because it has no falseness, no imagination, nothing other than truth. And of course what I am speaking about is nature, where no matter how much it has changed over the billions of years, it has consistently maintained the one rule that always keeps it in sync - energy cannot be created or destroyed, but its state can change.
Isn't it funny that we talk about the financial economy with terms like "natural cycle" when in actual fact, it is completely engineered. It crashes because our ability to engineer an economy is filtered through our preferences, favoring one of another, this over that, which ultimately leads to imbalance in the system. Of course, nno matter what we do we are inside the perfect economy of nature, but that is little comfort in the experience of our lives in this engineered environment.
The closest we get to "not caring" like nature, is in a distributed economy, with a high amount of participation. The more centralized the decision making becomes however, the more volatile the economy will get, as rules are made by preference to favor one aspect over another, one group of another. This also determines what gets supported in the economy, so even if something like the financial system or government are failing, they aren't allowed to die. The "natural" order is disrupted, it gets out of sync.
There are boom and bust cycles.
For anyone who thinks that the economic system is something to protect, consider that at the moment because of an election in one country, there are market swings based on which one of two people are going to get elected into a job where they actually can't do that much by themselves. Two people out of over 8 billion, and trillions are shifted on the markets. And this happens over and over and over, affecting all of those representations of trade, even if what is represented doesn't change. Take a step back from the economy a bit, and recognize at just how ridiculous and fragile it is, because humans don't have the disinterest of nature to create systems.
Nature doesn't create, it reacts.
What I mean by this is that there is no plan going forward, but once it all got set into motion at the beginning of movement, it is just a chain of reactions, one after another. And this will happen until the very last reaction. Yet, no matter what happened in the middle, the energy that was there at the start, will be there at the end.
Trillions of years. Zero inflation.
We can't achieve that kind of efficiency as a piece within the system, because even if we were able to right now, outside forces from other pieces would make the solution increasingly obsolete anyway. What we can do however, is build a system that is able to flex and scale with the changing influences and preferences as best we can, but that can't happen from a centralized position.
The masses will work it out one day.
Probably, too late.
Taraz
[ Gen1: Hive ]