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Saturday, May 28, 2011

"The Free Economic System"

Existentialist Economics – First Financial Insights Inc.



 The Free Economic System

 Navigating Open and Closed Systems

Before jumping into my snake oil sales pitch..."Read this and it will change your life...Forever" I will briefly cover some of the underlying concepts and history of "Existentialist Economics" The following words are the academic side of the sales pitch.

First, the root word is exist. In addition, like most words (nouns in particular), there is the dictionary entry, and then there are the thousands of books written sorting out its a more comprehensive meaning. Because time does not permit such a venture, I propose a short working definition of exist, or better yet existence. 


Clinically, the study of existence is concerned about defining actual working relationships amoung concrete and abstract objects to the extent that they can be determined by the primary senses and cognition. It fosters recognition of the processes affecting both cognitive and intellectual awareness in an effort to filter out intuitive or preconditioned bias with the purpose of setting out the most plausible assertion of reality. Once the key object relationships are determined, your ability to manage outcomes is greatly enhanced. This hypothesis touches nearly all the vast areas or fields of human concern.



Academic roots and traces of this field of study (existence) may be found historically in the schools of Greek Rhetoric, Austrian Economics and, of course European Existentialism. One may argue this concern drives the development of the sciences and the other"ologies". However, the latter social sciences do not lend themselves as well to a clinical or object methodology as their metrics and axioms are clouded by human interpretations. High forms of bias. Economics is no stranger to this limitation…


An existentialist is thus concerned with the relationships amoung object abstract and concrete constructs. Outside of this, the matter is superfluous or worse fabrication. It is not relevant in anyway to the course or purposes of existence. Many variations of this theme reflect the flavours of their authors. Ironically, existentialism itself wrestles with its own self-identity.


In my view, the central discourse of Economic Theory (and many others too) splits into the two distinct camps...  Free or Regulated Markets. Putting the infinite interpretations of adjectives aside for a moment, what are the real constructs being contrasted. Well, it is about systems. What system works best? Centralized or decentralized system? Or clinically an open or closed system? By examining the issue in this light, we can strip away the emotional, political, cultural and other biases and deal with just the raw elements. Analytically this briefly takes you past the concepts of freedom and regulation to higher forms of discourse and cognitive awareness.



Historically we know both forms of organization -systems- have strengths and weaknesses. There are thousands of examples in societies, theologies, and other forms of organization. Most recently we have experienced and been affected by the utter ruthless deeds of god-inspired fanatics. I propose that is not theology that is at fault. No the raw blame rests squarely with the flaw of a closed system that these people were citizens (sic) of. 

This is the great danger inherent in a closed system, of any sort. It causes a form of "group insanity" that disconnects them totally from all that is real. They are proverbial lemmings. Very dangerous...

On the brief other hand, open systems are inherently flawed. Against the tests of common sense, we cannot have social systems whereby all the entities involved can do whatever the heck they want. Complete anarchy and disorder will result in absolute social entropy. Chaos rules. Very Dangerous.


Where does a sound working solution exist? The answer lies sensibly somewhere is the middle. It is not in the use of the terms free or regulated markets. These are mere rallying icons for political and emotional beliefs to wave flags around.  The existential model instead encourages the operative term "Free Economic System". It is a model that works to navigate the advantages and disadvantages of both the open and closed system constructs. It is not perfect for many reasons, but it is the most practical and sensible. The governing devices and hallmarks of the system are open discourse, transparency and unfettered execution. Otherwise, known as Freedom.


America today already uses a form of this model. Though it is not generally accepted as the vernacular. Yet the very implementation of an income tax code that also uses devices of influence to allocate the scarce resources of a nation is one of a hundred examples of the use of this model. Others include roads, military, education etc Citizens would lividly assemble with pitchforks should any of these sacred offspring of the closed system be retracted..


So what then is the underlying issue? There is a contributing mix of factors that contribute to the confusion between a perceived reality and the actual model employed by a nation. Starting first with education, then followed by the semantics relating to the use of the terms. This is further exacerbated by a lack of general awareness of cognitive process and the limitations of abstract and concrete constructs. Is this a secret? The media and leading pundits also throw more fuel on the fires of misconception. By adding to this confusion they appear to serve some ungodly self-interest. Say it ain't so Joe! 


Like is or not. Believe it or not. America already applies a form of Existential Economics’ "Free Economic System” as is evidenced by its social institutions and methods of wealth redistribution. The debate should therefore shift away from the meaning of words, to a more mature clinical discourse on how to apply the tools of both open and closed systems in the best way. Add the goal of also allocating a nation’s resources sensibly, so as to sustain its society for as long a period as possible. Easy words. Monumental Undertakings.

Oh well, that’s enough snake oil for one day….   .


T A McNeil
First Financial Insights Inc.
Toronto, ON


@FirstFinInsight







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