Essense of Economics

So, why can't computers be precisely and unfailingly programmed for economic predictions? Here's my thoughts on that subject.

Just as the basic, fundamental unit of the computer you're using right now is a BIT, which is either zero or one, off or on; so is a PROMISE the basic, fundamental unit of economics. There is either a promise to be fulfilled, or there isn't one. And there lies the reason why ALL computerized economic models eventually fail!

How can you possibly program a computer to predict WHO will, and WHO will not, keep their promises? And the WHO we're discussing are global businesses and governments.

It makes me upset that something so simple, as this essence of economics, could not have been taught in grade school. Remember your mom saying, "Keep your promises!" and "Don't make promises you can't keep!" Bet you didn't know your mom was an economic expert. I sure didn't. But I suspect there is a sinister reason schools and universities avoid validating this concept.

Ever think about what paper money, notes, stocks, bonds, savings accounts and checking accounts, really are? They're just, fundamentally, promises! And what happens to you if the maker of those promises don't keep their word? More than likely, you won't be able to keep all your promises to others. And so goes the economy. As long as most folks keep their promises, things are good. When promises start being broken, the downward spiral begins. For simplicity, folks call them "boom" and "depression", "economic cycles", and so on.

And that's one of my reasons for publishing this book on the Internet. Your promises, and mine, are intertwined with millions of others; through businesses, through banks, and eventually through the State. Historically speaking, the average person keeps their promises over 99% of the time. And they're usually very careful not to make promises they knowingly can't keep.

Businesses must keep most of their promises, or they go out of business. Why do you think it's called "business failure?" They simply "failed" to keep their promises. Harry Scherman, back in 1938, published a book titled "The Promises Men Live By." This is an excellent book for understanding economics by understanding how our modern survival depends on promises being kept.

Banks are a business; they rent money, and thus fall into the above business category. But considering the volume of promises they enter into and complete every working day, they're almost as solid as individuals. But when more individuals start finding that they cannot keep their promises, the banks will certainly be immediately affected.

Governments are not businesses, due to the fact that when they make promises they can't keep and start to fail, they print more money. We know this as "inflation." They claim to keep their promises, but those who really understand, know they are only paying the "amount" of the promise, not the "buying power" at the time the promise was made. That's why so many people get hurt when governments get into trouble. Overall, historically speaking, governments do not have such a good record as individuals. This is unfortunate for all of us.

In spite of all this, I am NOT anti-government. I just don't want governments to be out of control. Perhaps we should think of governments to be like fire!

We all have fire in our homes. Under OUR control, it heats water, heats the house, and cooks our food. This makes us comfortable. But when fire gets out of control, it consumes the entire home, and everything is lost, sometimes our lives. Fire does NOT control itself.

So goes government. A reasonable amount of it makes everyone fairly comfortable. But it also does NOT control itself. And when it gets out of control, it will consume the nation. And we lose everything, including our lives.

So we've got to try keeping our governments under control.

I hope putting this book on the Internet helps to accomplish this by making it painfully aware to everyone how close the warnings, or prophesies of the Book of Revelations [I'm not a bible-thumper; just an example!] are to being fulfilled, should we NOT do anything about it.

God provides for the birds,
but He does not throw
the worms into the nest.

To those who say we have no control, "Just let God take care of it," is falling for for oldest trick in every government's book. Which says,

Give us all that we ask, and we'll take good care of you.
We promise!"

© 2006 by Edward Ulysses Cate
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