The work here is a view of economic thinking not to decry established theory but to look at traditionally important factors in a different light.
Politicians look to "market forces" to effect economic activity and subsequent economic success or failure. This is on the notional grounds that supply and demand are major influential elements in contract and price is the factor that generates contract.
Already in this work I have queried price insofar as in many cases it should be substituted by "capacity to buy", the ability to meet the price. Without it there is no contract.
Further, if free water overnight attracted price, the matter of price as a consideration would be overtaken by the need to take a quantity of water to survive, consequently a price on water would not lead necessarily to an effect on water consumption but other non-related things as necessarily juggled within budget to meet this new cost imposed upon selection.
The other factors about prices will be dealt with later. Supply and demand are notionally energetic functions that in contractual terms meet at price. The historic view is that throughout economic activity, without exception the important factor is market force comprised of supply, demand and price, i.e. supply and demand are fuel, price is the point of ignition; when they all meet there is combustion which effects motion in the form of distribution of goods and wealth. Economy is functional rather than power.
However, I am now going to ask you to forget supply, demand and price and treat market activity purely as a physical process and for supply, demand and price substitute existence, force, momentum and price. Firstly by way of demonstration of the points, I am going to ask you to consider dominoes, the game of dominoes where you line them up, knock one and they automatically carry on knocking each other over - chain reaction.
What we have in this example is existence in the form of dominoes; to the first domino we apply force, to subsequent dominoes force is applied; as a consequence of applying force to the first domino there is in fact the physical set-up of unavoidable momentum whereby the force is unavoidably transferred, and in this situation existence loses its value as existence and becomes merely a "patsy"- only existing to effect motion.
What we have is a situation where reality and existence as an importance in their own right become the subject of force to where motion is the value and existence exists in order to effect motion, i.e. from start to finish there is very quickly a shift in relationships.
Furthermore, as motion can be virtually predetermined it is possible to set up thousands of dominoes and the effect will be the same; the only way to affect matters is to alter the domino pattern; e.g., if I lay 100 dominoes I expect domino 95 to fall; however if I remove domino 72 or divert the pattern, domino 95 will not fall, i.e. it is real activity affecting realities that causes change rather than necessarily price modifications. Using this example it becomes easy to see why economies fall into recession. it is the domino effect. There is a momentum towards reduction as sell/buy loses momentum. When we apply the momentum theory to economics we can say that goods/elements of services form the existence or domino; they are subject to an injection of cash and/or effort which acts as creator or force; they are pushed into the market; they become accepted/not accepted, that acceptance or non-acceptance affects the domino syndrome, whereby the momentum created by trade, sets up profit, tax and reinvestment thereby creating a chain whereby the goods and services only exist to be the "domino". It is the scale of momentum that affects the value and justification of goods/service elements.
What there is in effect is a cash building exercise with reality "used" in a recurring process whereby reality loses its value as a reality and becomes a pawn in a combined momentum-sustaining, wealth-building phenomenon.
The real problem with the above analysis of activity is quite simply, despite preparations, the economic activity is out of control and simply dependent upon the same or similar events continuing to happen. In other words economics are at the mercy of maintained momentum; consequently what we can say overall is that market force originated business when existence, supply, demand and price fuse (i.e. equivalent to pushing the first domino). Thereafter it is market momentum that is the key to success when the relationship between reality and motion. changes and reality in pure economic terms is unimportant.
What we can say is that the factors of physical effort in a rolling economy change from static notion. As a consequence all those examples in economic textbooks that "suspend time" and show a static notion of goods at a price, quantity for supply, quantity in demand, price, suggests the impact of supply and demand on the market, by the very 1 fact that they are static, detracts from the important criterion that the economy exists to move, i.e. there is a great necessity to move.
So far I have not reviewed price and its role; of course price is all-important in maintaining momentum; consequently it has to affect demand in such a way that it will continue to affect demand and the capacity to supply.
But historically, "pricing" has been subjective rather than objective. As a nation, i.e. businesses are often self-contained about prices and further the public at large don't generally understand price and the role and effect it has on everyone's life.
Which brings me back to altering the domino to affect the role of domino 95, i.e. it was physical change that altered momentum - altering the potential of momentum.
This leads me to suggest that things like the invention of the mechanical combustion engine changed the economy, its new existence created a situation whereby the whole ball game of economic life was changed; what happened was that the motorcar was given existence, backed with cash and effort to give it the push into the market place; thereafter it created its own demand orientated momentum, this overall affecting the economy, i.e. there was a change forced by invention, momentum by demand, price aimed at making manufacturers viable. Today we have a situation where the motorcar, highly competitively, maintains market momentum not only because people want cars but because of the level of investment in capital and human terms; plus because of competition, manufacturers will have tendency to be subjective about prices.
However in economic terms we somehow have to become objective about price. We have to recognise that price is responsible not just in economic terms but in social terms
too. What we need to develop is an international pricing governor. We face problems in the world today both in environmental terms and social terms in respect of the Third World.
I earlier suggested that happenings whether they be new inventions or social problems, both affect our need for economic success. In fact, having industry and commerce so well developed in our society is nothing to do with price because price is only an aid-to momentum. What more affects economic success are changes in existences and social changes; these find their way into an effect (and price) upon wealth by gathering momentum or slowing it.
Where we have been lucky is in living at a time when man became science-conscious and the developments created momentum in the economy. Where we have come unstuck is with regards to price, i.e. we failed to be objective about taxation and the level of prices to cover responsibilities. In the last 150 years the scale of man's development is colossal; creating things has improved wealth but it is reality or social change offering momentum that has determined price; as a consequence price is arbitrary and its level a matter of good luck rather than judgement.
It can be seen as a consequence that the rolling economy consists of existence and momentum, both interdependent with price (or the capacity to buy) affecting momentum.
Economic momentum has never been controlled and it is very difficult to perceive how it can be, but if man is going to progress he must learn how to do it. The only thing that can be perceived is something called "pricing science" whereby one looks at relative prices of goods and services and accordingly suggests how to reach pricing levels by examining the constituents of price, namely profit to maintain trade, tax and the constituents of tax, replacement of goods at cost.
This all seems difficult and hypothetical but I believe we have no choice. I referred to the last 150 years and they have meant relative progress but there are things happening now and on the horizon which will look to check progress unless we plan for them.
Firstly as I have said before in the book, I think that progress in terms of new discoveries to exploit will in future be limited. Secondly the Third World and the cost to support it is a growing burden for the developed world who really need to create additional profit in order to be able to divert it to the Third World. Thirdly, there are the enviromnental responsibilities now surfacing that suggest man is putting too much pressure on his only home.
Points 2 and 3 above are the equivalent to adjusting the dominoes before they reach the end of their run, i.e. they are impositions, but these change factors have to be addressed and that is why we need to be more objective about pricing; we need to be capable of engineering prices to effectively combat what are and will be a strain-on our western world economies to manage with rising inflation on the one hand and recession on the other. I would like at this stage particularly to draw attention to social needs as they directly affect the economy as much as supply and demand. Social responsibility must be a priority for any government. As a consequence taxation, levels must be geared to cope with them, not leaving social responsibility to charity~ Charity is, in fact, an individualised indirect tax.
So to precis domino economics we can say that reality/services are formed to create force affecting reality. We can say that the role of reality becomes a resource to affect wealth and does so by becoming the pawn of a perpetual drive or momentum which succeeds in creating wealth to, an indeterminable degree, but the nature of the thrust for growth of wealth puts pressure on the relative values of reality and wealth. As I have said before in the work, the economic parameters unchanged for a century are likened to a car with no gearbox and we have to learn how to give the car a gearbox, become sophisticated in our understanding of relative values and make the thrust for reality. Protection and preservation issues allow man to effect changes in the considerations of establishing "price" so that wealth can be created at the same time as regulating and monitoring the use of the earth's realities, i.e. we have to consider long-term social consequences of manufacturing, at the same time the social welfare of mankind.
What becomes evident from looking at the economy in the domino context is that apparently separate issues like starvation in Africa, economic slumps, environmental pressures, pollution and waste, all boil down to one common issue, the domino effect of economic activity putting pressure upon realities to create the "energy and fuel" to maintain momentum and its perpetuality, wealth produced rather like smoke in a chimney, a by-product of perpetual pressure.
We can of course say that the earth is perpetual in motion and economics is driven to respond to this perpetuality and maintain momentum. But what is important is that our response to perpetuality is not to lose sight of reality values and priorities; therefore we must learn how to re-regulate pricing by being able to alter the emphasis upon the relative value of reality and the environment in such a way that the pressure is taken off the need for unit reality, and the energy taken to create unit reality, i.e. we have to lessen the emphasis upon mass with over-produced, over-reality and energy consumptive processes just to maintain the wealth momentum, We need to put more emphasis on the "use" of staples rather than luxuries to produce social wealth, i.e. wealth that is not valued in money terms but has a value to man.
The next chapter looks at relative values.
