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Sunday, October 13, 2013



Economics Fails?

The question of why economics failed came up in a recent economic forum "Unlearning Economics" wherein the following response was provided. This is obviously a short version of a much more in depth complex answer but should serve to drive the fundamental point across "Economics ignores the macro-physical rules of reality at great peril" It is a peril, that in the end, exponentially advances the last chapters of the human condition. 

"Economics simply fails because it ignores the laws of physics, exponential mathematics and the concept of eternity. It falsely believes its abstractions and theories, which create a make-believe positive-sum-game world, will, by sheer hope and dreams, overcome and defeat the negative-sum game constraints that define existential reality. It AIN'T going to happen - Entropy and Eternity will win the day - being absolutes that you cannot convince, negotiate or legislate in any way.

When Einstein said he was not sure about eternity, but certain there was no end to human stupidity - there is little doubt he was thinking specifically about economics with its beliefs, gurus and sheep...

So the writing is on the wall, as economies all over the world are beginning to look more like Nauru or Easter Island with every passing day. From Cyprus and Iceland, to PIIGS, to Egypt and Syria and now to even Venezuela or possibly Japan - what is perfectly clear is that when you run out of inputs (i.e. resources) it is utterly impossible to produce outputs, such as food, regardless of how much Keynesian currency and debt you print and create, to feed your hungry civilians. "Again, it just AIN'T going to happen.”

Now you try explaining that to an Economist. Good Luck!"

T A McNeil
CEO and Founder
First Financial Insights Inc.
October 14, 2013

"We cannot solve our problems with the same thinking we used when we created them"