Advancing Economics with the Fundamental Model

Have we reached a point in time when society needs better economic forecasting models? Free-markets around the world, from greece, to portugal, to italy, to france are facing tremendously difficult futures. There are regulation problems, debt problems, liquidity problems, and so forth. So it appears that the markets have many problems, but can they be boiled down to just one overall problem? I propose that society's quality of interaction across the fundamental model, reveals an 'economy', which in turn reflects the society's ratio of problems to solutions. I propose that economists should start considering the validity of more robust economic models that address problem solving: for example, instead of addressing an economic cash flow, let's address an economic mental flow.

What is the number one thing that we need to address in economics? Its growth. It turns out that growth is the number one thing that everyone engages in at all walks of life, because relationships crave growth. Relationships also crave change, and economics should also model change. Classical economic models of supply and demand are very much akin to models on growth and change. However, where are the growth and change specific economic models? Can growth and change models render supply and demand models obsolete? So what do growth and change imply?

When anyone builds around the Fundamental Model, they are implying a connection to the flow of energy between relationships. They will naturally describe the growth and change in the flow of energy. And by association to energy, the laws of thermodynamics are intrinsincly associated because they describe the laws of motion and equilibrium of energy through the exchange of heat.

Do businesses and other organizations produce heat? Do they produce friction with other organizations? How do the laws of thermodynamics equate with micro-economics? How does the conservation of energy fit into economics? What about Einstein's mass-energy equivalence principle? I believe that our laws of society should mimic the laws of nature; that's how we can build a balance that is sustainable. Do we really want and need to have an economic recession every tens years? Are recessions and depressions inevitable in our current economic models? If so, let's get rid of them, now.

Where are the models on complexity? Where are the models that address abstract time dilation? Where are the mind-over-matter models? Its not that supply and demand is wrong, its actually quite right, but I believe its incomplete, and its incompleteness causes confusion and contributes to economic problems of all types. For example, supply and demand only addresses two, out of the three laws of relationships - symmetry and attraction; supply and demand fails to translate itself into a thermo-economics model with friction, representing negation that is perhaps caused by government regulation. Simplistic supply and demand models are over 200 years old and they may be nearing their end. Today's free-market is a bit more complicated than a simple supply and demand graph.

I founded my particular economic model on the 'Lune of Hippocrates'. The lune of Hippocrates was formed to 'square the circle'. That means to find a square with the same area as that of a circle. I'll take it to mean 'to transmute energy from one form into another'. Hippocrates never succeeded to square the circle with his model, however it contains several peculiar symmetries. I will go over all the peculiarities of the lune of Hippocrates in a later post - its quite amazing. But the primary objective of my economic model using the lune of Hippocrates is to illustrate the fundamental rollercoaster-like transmutation of complex energy in today's complex societies. In my model, supply and demand aren't static, they evolve and change dynamically every instant. My model extends past consumer products, it applies to all relationship needs. My model goes beyond the supply and demand of matter, because it refers to the growth and change of thought.

People think, and then they buy something while in one of two states: working or playing.

Our minds exists between three states: work, play, and sleep. Every waking day is balanced between two categories of activities: work and play. Work feels like accumulating, while play feels like spending. And by the way, the lines between the two are very blurry. But here's something that I find incredibly fascinating about work: have you ever noticed that it is impossible to get worse at something if you practice it regularly? For example, if one practices the piano every day, after a few weeks, he cannot be worse then when he started; its impossible, it goes against nature. Growth, work and practice, always go up, while change and spending always go down. A person can only decrease their skill at the piano, if they change to another instrument or activity and neglect relationships.

Growth feeds relationships, and change adjusts the complexity of the relationships. In other words, supply feeds relationships, and demand changes the relationships. In turn, demand forces the re-growth of new supplies for the newly evolved relationships. If the growth of new or existing supplies fail, relationships die, and the economies of the related organizations appear to sputter and lose efficiency.

Now as I was saying, about all the problems we have with free-markets: the perceived problems are only reflections of dying organizations. The organizations are being killed off by an unbalance of economic interactions across relationships in MultiSpace.

The lines of economic supply can fail for exactly 2 reasons:

1) The demand is changing too fast
2) There is too little supply

Even economists should think that this sounds logical enough. However, I'm not specifically referencing free-market economics. My metaphor goes beyond corporations and consumers. I'm actually referencing their thoughts on growth vs. change directly. When too many people are thinking about change, while too few are thinking about growth, in all their forms, an unbalance is created in society and it is reflected as problems in the free-markets.

1) When too many people think about change - free-markets appear volatile + rising inflation.
2) When too many people think about growth - free-markets appear slow + rising interest rates.

I love the depth of the layers within in this model - it can unify a great deal of economic and philosophical perspectives. At the end of the day, the economy of our societies depends entirely on the economy of our minds as they transition between states of growth and change across the fundamental model.