The Market Equilibrium Trend changes from Supply-to-Demand to Demand-to-Supply Ascendancy


In number of articles, I presented the theory of Market Economics as based on the conception of the tipped-off, from a Supply to a Demand driven Global Market Trend to a Demand-to-Supply Trend that was prompted by the ongoing Globalization and rising Productivity, which new Trend is consequential to the improving Technologies, the China’s Industrialization, the Outsourcing and Moving of Manufacturing, the Internet and etc developments that have accelerated these processes for the last 20-25 years. This article uses available data and respectful papers to prove the validity of such conception. And, brings upfront the necessity of comprehensive assessments and the needed changes of Economics to meet these new challenges.

The beginning of the 21st Century showed the tremendous effect, technologies and globalization, has on the concentration of industrial production into a few players globally. The transnational corporation along with the Chinese state enterprises have succeeded in achieving immense capacities and potentials for swift expansion by using a large pool of international capital, improving technologies, better controlled management, and by outsourcing and moving of production (for transnational corporations mostly). Consulting companies, e.g. BCG, Ernst & Young, Deloitte Consulting, contributed globally to share competitive practices, compare managerial and technological approaches that boosted competition and productivity. The diversion between the large transnational corporation and Chinese state owned companies from one side and the small and medium companies and most developing economies from another has grown larger than ever, living the last in competitive disadvantage and thus prompting inequality not just between rich and poor in the most developed economies, but also between developed economies (including China) and the most developing ones. Even further, the success of their improvements has reduced the employment elsewhere, ironically “supported” by a shrinking and inadequate global demand, more like a “Catch 22’s perpetuum mobile”.

It has been argued that the “bottom billion may be trapped in poverty” (Collier 2007). The undeveloped markets i.d. economies along with the deteriorating such as Detroit will have to wait for their turn, until the giant industrial economies like China become rich and uncompetitive in manufacturing. When the technological changes have made manufacturing more capital and skill intensive. So, it is creating fewer jobs. Some form of pre-mature deindustrialization seems to have set in (Rodrik, 2013, Subramanian 2014). This might be because consumers and households in developed countries now spend a lot less on manufactured goods than they do on services. This can put a limit to how fast the latecomers to development can grow through industrialization. While jobs in the industrial sector are shrinking globally. In the past, technological and structural underdevelopment consisted of shortages that provoked inflations; however, in the presence, excessive manufacturing capacity and rising productivity brings high unemployment and prompts deflations. Large retailers have penetrated markets and Internet sales have brought international goods to most markets, aiding the high manufacturing capacity. The market equilibrium on a macro economic level has become less perceptive to Supply than to Demand factor.[1] (see Drawing 1)

Large Transnational Corporations employ about 0.82% of the global workforce taking more than a quarter of the global wealth adding to the widespread poverty[2], deteriorating middle class, rising inequality, and the Earth pollution, whereas poverty brings primitive fossil fuels heating, woods cutting, old car usage[3], and etc[4].; and, deteriorating middle class adds to the poor; what about excessive inequality? – It just accelerates the whole process, but most important it prompts the overall economic stagnation: market disequilibrium caused by inadequate demand. Most of the Emerging Markets are hit by the same problems as the poor in the Developed Markets are, whereas the results are all the same no difference between Detroit and many Undeveloped or Emerging Markets: factors affecting the market equilibrium from the demand side, expanding Earth pollution, rising Discrimination and Radicalization caused by the economic upheaval of the 2007-9 recession and sluggish recovery. While the existing middle class has shrunk the poor was not given opportunities of rising to a middle class. Shrinking fiscal reserves and trickle-down ideologies have imposed austerity policies to infrastructures, social and educational expenses, thus holding high unemployment from Spain, Portugal, and Italy to Greece, the living standards are free falling, or Bulgaria, and Romania in the European Union, where slow business activities and lack of vivid improvement prevails. However, from Guyana, Peru, and Ecuador to Bolivia, Paraguay and Colombia in South America, from Guinea-Bissau, and São Tomé and Príncipe to Republic of the Congo, Chad, and Zimbabwe in Africa, from Afghanistan, Tajikistan, and Yemen to Pakistan, Uzbekistan, and Iraq in the Middle East, etc. markets are underdeveloped, infrastructure is either undeveloped or deteriorating, corruption is roaring along with poverty and disarray! The world was never better, but it had never possessed the technologies nor the organization to be any better, but for the last few decades. In the past, the weak technologies and markets were a natural promoters of underdevelopment, poverty and the related discrimination and nationalism, but with the great technological inventions and improvements, the Internet and WIFI, the open globalized marketplace, and etc to have such roaring poverty and underdevelopment is inexcusable, thus I consider that if these if properly used these new developments would make the world advancing into a new era of prosperity; however, only a new system of economics that apprehends these new developments and abstract itself from the trickle-down philosophy would succeed in such improvement.

Joshua Konov, 2014

[1] [PDF] Global steel 2014 – Ernst & Young Excess capacity is the biggest threat to the sector While there are signs that the outlook for demand is slowly improving, excess capacity remains the biggest threat to the steel sector. The sector is straining under the relentless pressure caused by years of excess steelmaking capacity and low margins. While some capacity is expected to be removed over the next decade, the announced addition of capacity by steelmakers out to 2020 shows that investment is still alive and well. To counteract the investment in new steelmaking capacity, we estimate that about 300 million tonnes of steelmaking capacity needs to be closed for the industry’s profit margin to reach unsustainable level, and raise the capacity utilization rate for the sector globally, from below 80% to more than 85%. Permanent shutdown of capacity is the only real solution to bring balance to the market but in the short term it is difficult to see this happening given state participation in many countries and additional political incentive to retain employment, regardless of profitability. The overall net effect, however, has been an increase in steel making capacity despite the Chinese Government mandating 80 million tonnes of capacity to be removed restructuring and consolidation in the Chinese market, a handful of large Chinese steel players will emerge, leading to global competition intensifying. “Steel producers should test the vulnerability of their business models and the resilience of their strategies to ensure sustainable growth.“ Anjani Agrawal

[2] “It has been argued for more than 200 years that economic growth is associated with the manufacturing sector (Baumol 1967, Dercon 2014, Gelb 2014, Kaldor 1966, Rodrik and McMillan 2011, De Vries et al 2013, Winters 2010, UNIDO 2009). Services have been considered non-tradable, menial, low productivity, and low-innovation (McCredie and Bubner 2010). The East Asian Tigers are the classic success stories about how the conventional path to growth goes through industrialization. However, this conventional path to development seems to have hit a roadblock in other regions, especially low-income countries in Africa and South Asia. Indeed, several high level reports on Africa—the 2014 African Transformation Report, the African Union’s Agenda 2063, the African Development Bank’s long-term strategy, the UN Economic Commission for Africa’s 2013 report, and UNCTAD’s 2012 report—have all raised concern about limited industrialization and technological progress. Indeed, in many African economies, manufacturing—the sector that led rapid development in East Asia—is declining as a share of GDP. The worry is that without a major transformation, Africa’s recent growth spurt may soon run out of steam.”

[3] Mongolia is the world’s most polluted country and also home to one of the world’s most polluted cities — Ulaanbaatar. The country’s main sources of pollution are its traditional coal-fueled stoves and boilers used for heating and cooking, as well as congested traffic and old cars. Heating is essential for the survival of its people for about eight months of year. The country uses everything from coal, wood to refuse, such as black tar-dipped bricks and old car tires to fuel stoves and boilers World’s Most Polluted Countries

[4] Neither of the top 10 polluted sites are in the U.S., Japan or western Europe. However, a lot of the pollution in poorer countries has to do with the lifestyles of richer ones, noted Stephan Robinson of Green Cross Switzerland—for example, a tannery in Bangladesh that provides leather for shoes made in Italy that are sold in New York City or Zurich. “The pollution we see is not coming from the major global industrial companies, it’s all from small mom-and-pop shops, which prepare the raw materials that we then later use,” Robinson said. Or, in the case of Agbogbloshie, Ghanaians are polluted by the electronic devices Westerners have already used. Local people in such areas, Robinson added, “are very often polluting their environment not because they think it is fun but because it is a question of survival.”

Drawing 1

With the raised demand (from D1 to D2) the high Elasticity of the supply that has come with the ongoing Globalization and rising Productivity matches the demand by expanding (from S1 to S2) and thus living the same market equilibrium price (P1&P2). Such Supply Elasticity is probable to a certain turning point which approximate quantities are estimated (see next paper on “Probability Factors of Quantities Proximity”)

DtoS

The Global Economy prompts Radicalization


THE GLOBAL OVERVIEWWealth_map_3071886c

The technological advance in all spheres and the Internet keeps people around the globe informed, while the economy underperforms in most global markets. The ideology of the trickle-down Capitalism could not prevent or shorten the 2007-9 recession, neither it can boost the anemic post-recession recovery in the European Union, the Middle East, Africa or South America, (if realistically, a recession with limited less than 1% growth constantly sinking under water markets could be considered over). Simultaneously, the growing inequality concentrates highest percentage wealth into smaller number of ultra-rich ravaging the middle-class, wherever it is succeeded, or not providing condition for establishing one.

Global-Economy-SharesWhat the researchers find is that global wealth has increased every year since 2008, and that personal wealth seems to be rising at the fastest rate ever recorded, much of it driven by strong equity markets. But the benefits of this growth have largely been channeled to those who are already affluent. While the restaurant workers in America struggled to achieve wages of $10 an hour for their labor, those invested in equities saw their wealth soar without lifting a finger. So it goes around the world.

The bottom half of the world’s people now own less than 1 percent of total wealth, and they’re struggling to hold onto even that minuscule portion. On the other hand, the wealthiest 10 percent have accumulated a staggering 87 percent of global assets. The top percentile has 48.2 percent of the world wealth.

Under such conditions, it becomes natural for the dark human forces that prompt discrimination, nationalism, and narcissism to bloom. There is a plenty of economic data to support appointed statements; however, the effect of these developments on the rising radicalization is not researched to its full extend. The world media tends to politicize global instabilities: the Arabian Spring, the ISIL, the Crimea’s take over, e.g. are either associated with harsh regimes such as the Mubarak’s in Egypt, Khadafy’s in Libya, or the US war on terror in Iraq and Afghanistan, or the religious fanaticism such as ISIL and Al-Qaida, or the Mr. Putin policies in Russia. However, very few journalists or economists attempt looking beyond the obvious into the fundamental reasons for such profound radicalization of religious, nationalistic, and other ideas that remand such disharmony instead of the prevailing ideas that the world is a better place, where generally, genocide, cruelty, aggression are attitudes of the past of a matured humanity.

Even when US led Coalition waged war on Saddam Hussein in Iraq, or on Al-Qaida in Afghanistan, the idea was to instigate “good” over “evil”, democracy over dictatorship. Certainly, the ideas of liberties, human rights, and righteousness were the Coalition’s standing-points in decision-making: from the political to down on the field strategic ones. Humanitarian approach, even in time of war was considered paramount.

The cruelty with which ISIL treats their enemies, chopping heads and raping girls even when many well educated and “civilized” ISIL participants came from all over the developed world, or the self-centered Russian aggression by occupying Crimea and by provoking unrest and mingling with their neighbor Ukraine’s territorial integrity that already cost thousand of killed are considered uncivilized and unthinkable; The widely accepted noble ideas: obviously, are not the status-quo,

Historically viewed: the a Half-Century bettered economically world created for themselves an illusion of invisibility, but when the global economies slammed causal the last 2007-9 Recession and the following slow recovery (if such could be called recovery) by bringing insecurity and poverty to many, the world remands aggression and radicalism to hound our sense of justice.

The recession slam was instigated by the:

1) Imbalance in real estate overcapitalized prices;

2) Slow down in industrial production and related industries causal of the ongoing globalization and rising productivity;

3) China’s super-industrialization and the outsourcing and moving of industrial production from the developed economies to elsewhere;

4) Internet and the Twitter, Facebook, and etc networks;

5) Earth pollution that affected weather-prompting extremities.

The developed economies from UK and US to China and Japan dealt through unorthodox economic policies of quantitative easing, subsidies, fiscal stimulus, targeted investment packages into infrastructure and business development to boost their growth, and with idea that their success will improve the global economy. Many of Emerging Markets (China not included) were constrained from pursuing counter-cyclical measures by the WB and IMF, or by the European Union in case of their members and associate members. EU, under Germany, followed and continues the trickle-down budgetary economics of austerity measures (pro-cyclical by nature) resulting in prolonged in-and-out recession and a very limited “recovery” (as the data shows).

shrader_fig2Domestic US timeline The domestic US timeline begins in June 2007 and shows the lead-up to and development of the crisis, as well as subsequent US government responses. The timeline is divided into three sections: Federal Reserve policy actions, other policy actions, and market events, toenable users to view Federal Reserve and other policy actions in the context of major market events.

shrader_fig1International timeline

The international timeline provides a thematic and chronological ordering of the many programmes announced by G7 countries since the intensification of the global financial crisis in the fall of 2008. It organises announcements into four general categories: bank liability guarantees, liquidity and rescue interventions, unconventional monetary policy, and other market interventions. The entries are colour-coded to allow users to follow the developments of each country individually.

What the global market experiences, because of these pro-cyclical policies, is extreme stagnation, lack of growth, high unemployment, and solid retraction from the humanitarian values that had been built for a Half of Century, up to the beginning of this one. The discriminatory immigration policies loomed in the US, France, UK, e.g. steering nationalism,“Racism and xenophobia, intolerance and Islamophobia are on the rise,” warns José Manuel Barroso, President of the European Commission. “They foster division and create suspicion and hatred between communities. In recent years, we have even seen a mounting wave of harassment and violence targeting asylum seekers, immigrants, ethnic minorities and sexual minorities in many European countries.”One need not look far to see that President Barroso has a point. In February 2014, the Swiss population voted – albeit by a tiny majority – to reintroduce stringent quotas on immigration from EU countries. A few months later, in May 2014, anti-immigrant parties made significant gains in the European elections. In July, pro- and anti-immigration demonstrators clashed in Murrieta, a town in southern California, over the arrival of illegal immigrants – mainly children – at a border control station.

However, the most economically affected areas of the Middle East, Africa, and Eastern Europe, e.g. exploded out. When the two Charts/World Maps: the first indicates “People Displaces by Conflict and Violence 2014″ and the second indicates “World Wealth Levels 2014″ seemingly the data matches indiscriminately. There is a straightforward interrelation between the economic upheavals ravaging most markets around the globe and the forces invoking the dark human sides and the emerging conflicts. Targeted economic actions are required to prevent their expansion, indeed. To continue business as usual seems very dangerous for the entire Hamanity!

It is of high importance for the most developed economies and China, WB and IMF to start acting responsibly in promoting global economic development, also environmentally friendly one, but not rely on the “old” system of the so called orthodox economics.

Joshua Konov 2014

Capital – Investment, Debt, Employment to Market Equilibrium before and in the 21st Century


market* - equals – economic, economy, macroeconomic marketplace

demand^ – equals – income, macroeconomic demand

market development** – equals – economic growth

In the currently used Economics, the employment is still considered as a market consequence to a natural investment of capital with rising productivity, whereas tight monetary supply keeps a “hungry” pool of unemployed making them under pressure to comply with the market* driven supply-to-demand labor and otherwise market*, therefore, a full employment was considered as counter-productive for the market* growth to be maintained, moreover, the inflationary forces of an over-demand would be sustained. The Economics of Scarce Resources of anytime before the 21st Century with relatively less developed technologies, limited globalization, political divisions, etc (the rest of the points will be given in later) had worked in proper for such successful Capitalism by the markets* of US, some EU countries, UK, and Japan.

Then the most developed markets* had used their mostly manufacturing capabilities empowered by the best at its time technologies and well developed labor market to dominate on a less developed, struggling to improve global market*.

However, the 21st Century has brought a few market developments that are new by nature to affect the real economy: developing and undeveloped markets* by tipping off the supply-to-demand market pressure into a demand-to-supply such.

 

  • Ongoing Globalization – sharply expanded by the end of the cold war.
  • Rising Productivity: accelerated by the Internet.
  • China’s Industrialization and WTO membership.
  • Transnational Corporations’ Moving and Outsourcing of Industrial Production from the Developed Countries.
  • Capital FDI mostly through the Transnational Corporations.

 

The 21st Century came with very high productivity and large pool of capital to a globalized market* taken literally by the Transnationals for a ride; with the exception of China, which well run market* policies boosted its internal market demand^ to properly capitalize on its long-run trade surplus: Stimulus packages into Infrastructure and targeted less-developed (internal) markets*, Fiscal breaks to targeted market* sectors and less developed areas, to SME (Small and Medium Enterprises), the usage of State-owned Enterprises to lower unemployment and raise salaries; or of Germany, which highly-competitive export oriented manufacturing kept it afloat in times of the 2007+ Recession and Post-Recession times to not accumulate excessive National Debt; or of a few markets* such as some of the OPEC countries and Norway e.g. The rest of the world has gone through the deepest 2007+ Recession followed by slow Post-recovery, increasing inequality and national debt, declining middle class, high unemployment, and most important: the over all lack of vivid market development** that could be improving the global market in environmentally friendly ways to provide to the majority a sustained probable access to employment and the related goods and services. The austerity measure that followed the ongoing theory in economics are pro-cyclical by nature, the trickle-down philosophy of lower taxation, the subsidies particularly in the EU: all prompted inequality lowered the market demand and established conditions of market imbalance that policies resulted in their worst in the most of the EU markets* slum, indeed. Casual of high unemployment, deficit, longer-term recession. What the US, UK and Japan did through Quantitative Easing, Stimulus Packages, Fiscal measures generally counter-cyclical measures have been avoided by the EU, and therefore, it could be said with certainty that these market* policies have helped these markets* to keep however sluggish market development** following the 2007-9 Recessions (the 2009 is added to these markets* performance while the EU is not included). With certainty the more active policies with a consistent long term the better performance e.g. China tops them all with very proactive and consistent market policies, Japan follows with the Abenomocs in action whereas the PM Abe holds firm powers, the US and UK follow less successful casual of using unorthodox methods more-like preventive as post-recession ones, than proactive “as it come; as it goes” market* policies, then finally it comes the EU with the most rigid orthodox market* policies based on deficit reduction and austerity measures that resulted in prolonged recession up to the end of 2013, high unemployment and slow recovery. Most of this information is supported by reliable data sources by “The (not so) Unconventional Monetary Policy of the European Central Bank since 2008″ | Read more at Bruegel http://www.bruegel.org/publications/publication-detail/publication/837-the-not-so-unconventional-monetary-policy-of-the-european-central-bank-since-2008/.

The utilization on the conclusions made by the previous section of this article clearly shows that pro-active market* policies by a government or governments brings better results to more consistent Market Development, whereas inactive policies, or ones based on the orthodox economics prolongs recessions and slow recoveries. However, contrary to this conclusion: in different levels all governments lack business sense and flexibility to manage economics, whereas populism and ideological polarization, mostly in the plural democracies, add substantially to the governments’ inconsistency in their market* policies, and it could be stated with surety that governments could be blamed for their offhand deregulation policies particularly in the financial sector that prompted the 2007 Recession; therefore, to rely just on the governmental market* intervention will be incoherent.

Second, the governments are not proficient enough to maintain adequate market* activities with low unemployment and underemployment, thus bringing fiscal shortages and rising social expenses and inequality.

The success of the most developed markets with the exception of EU to wrestle the 2007-9 Recession is real, but it was necessary because the system of economics well supported by the governments themselves was not proficient enough to do not allow it happening in the first place? The possible prevention was not activated whereas the needed reforms were not implemented on time.

The expectations of a shorter and milder market correction managed by the self-adjusting cyclical powers of the Capitalism did not work it out?

Therefore, when leveraging the positive to the negative effect of the governmental involvement: it appears the governments’ intervention was necessary, and when for the future: if the system of economics does not succeed to prompt enough business activities the governments will be the only saviors by using total market interventions?

What the Capitalism misses under the ongoing globalization and rising productivity to manage market equilibrium is the ability to properly use market tools to steer enough business activity matching the needed demand; unless in long human history, when the supply was the ruling market element alone with always boiling inflation; however, under the new conditions, the demand alone with ever pushing deflation is that issue. Therefore, deficit and national debt alone with inequality are on a rise, the globalization has had allowed large transnational corporation to access inexpensive labor-pool, low taxation, lack of consumer and environmental protection…. for the few large transnational corporations and large investors under such conditions the system has performed well, but for the many it has not had at all: declining middle class, high personal debt, unemployment and underemployment….., expanding governmental market intervention to prevent from total collapse in the recession time, and in attempts to boost growth in post recession time.

What distinguished China as the best performing market of the all developed ones has been the combination of social distribution well inherited in Socialists’ ideologies, combined with active market policies, however, even the Chinese policies and performance has been and still are the best, under the conditions of the very developed US, UK, EU and Japan on a global scale if their system of economics is enhanced by using more proficiently the variable market tools the results could be very advancing, indeed. What China has been and now Japan are following an “as it comes; as it goes” flexible economic policies adapting the ongoing and upcoming market* realities; policies that have been highly recommended by all my articles.

However, even recommending the governmental involvement as an “invisible hand” to boost and maintain market development** particularly into environmentally friendly energies and industries, for such policies’ longer term market equilibrium some definite changes and enchantments are necessary: thus whereas the current Capitalism relies on the large transnational corporations to “export” development under the conditions of shady business; lower taxation, environmental and consumer protections, the so called Market Economics relies on Small and Medium Enterprises to steer business activities, and thus prompt employment and Fiscal stability whereas a strict rule of law in business; enhanced environmental and consumer protection laws are considered as preconditions for marginalizing the unfair market* competition and thus raising their market* security and lend-ability. The pro-active and counter-cyclical governmental “invisible hand” is considered necessary to keep deleveraging wealth inequality through social redistribution; however, the usage of the market forces for maintaining market equilibrium is paramount thus imbalances are prevented. Moreover, a system of probability in economics when economic tools are used as parameters is also necessary for succeeding such relative market equilibrium, because the mathematical principles would not work in such a complex market* environment. In my works the so-called Quantum Economics i.e. Market Economics is a foundation for making possible the rest of the market* approaches be implemented without causing major market* upheavals. The “as it comes; as it goes”’ economics could only logically work if Quantum Factors are used to leverage or deleverage markets*’ buildups when the needs arises, and my works uses such approaches to setup a market* system of economics called Market Economics. System that peaches for full employment boosted by market* noise of a relatively fair market competition supported by targeted investment national and global into environmentally friendly industries and products, and carried on mostly by small and medium enterprises and investors, whereas the large businesses and investors are not discounted in anyway: in the opposite their role is substantial. Social and infrastructural expanses are not considered just expenses anymore, but partial equities used to leverage the market variances: as market* tools, indeed.

The Market Economics comprehends ongoing globalization and rising productivity as main motors for market development by environmentally friendly approaches on a global scale in an interdependent and interconnected world. It is not a Budgetary and Scares Recourses Economics, even so market competition on micro and macro economic levels well complies with such economic principle, however, on a larger scale neither budgetary nor scarce recourses as economic principles are considered bounding. Capital and Debt are considered secondary to Environmental Protection and Market Development whose are attached to the Inflation/Deflation instead. Market* tools are used as parameters to maintain full or close to employment when protecting the Earth environment, Globally.

Joshua Ioji Konov, 2014

Globalization and Consumer Protection


In the system of trickle-down capitalism the consumer protection is counterproductive: along with the business taxation, the strict business laws and environmental protection laws. To succeed quick economic growth a market should lower weight on businesses and investors. The most developed economies under the pressure of democratically elected officials and the public opinion have developed stricter than the developing and undeveloped economies consumer protection laws: entailed by constant struggle between lobbyists and public pressure. In some developing economies the consumer protection is consciously avoided whereas in undeveloped such it is ignored all together to attract foreign investors and large transnational corporations.

For years the developed economies and their Central Banks, and the international financial institutions such as WTO and IMF, ignored the subject of promoting strict consumer protection laws to the rest of the world with the very simple idea to let the transnational corporation roar free that finally should have prompted global economic growth. However, the ongoing Globalization and rising Productivity, the Transnationals the Chinese Industrialization, the Internet, and the outsourcing and moving of Industrial Production have brought a new global market of close economic intercorrelation, and of a tipping off point of global industrial overproduction limiting the ability of many developed and developing countries to manage the necessarily for their fiscal stability economic growth, thus the global economy has come from a pro-supply factor to rule economics to a pro-equilibrium on the demand side factor. The weak consumer protection laws was an market i.e. economic agent that could prompt fast economic growth, which market agent is becoming counterproductive under these new global market conditions, whereas in the opposite an enhanced strict consumer protection laws’ market agent would bring more employment to a market i.e. economy and globally so. This change of values was proved by the widespread indebtedness of many developed, developing and undeveloped economies, which are straggling to keep their rising social and infrastructural expenses with their under-performing economic structures: the inequality, the deteriorating middle class, the increasing environmental pollution particularly by the undeveloped and some developing markets where the use of fossil fuels and old cars is substantial. The weak consumer protection laws are supply related while the new problems are lack of demand related, whereas the struggling to keep adequate employment markets is a pro-supply economics.

The consumer protection laws are demand related that will improve the quality of goods and services, cutting on officials and corporate managements’ corruption and fraud by giving to the consumers rights and voice. It will press businesses to carry out more responsible products and services development and promotion. It will boost the goods and services quality that will require more R&D and therefore more educated employment. On a global scale it will cut down on white collar crime: human rights violations. It finally will bring economic growth based on natural market forces. The quantitative supply economics of limited-mostly-national marketplaces and lower productivity of still undeveloped technologies evolved into a quality demand economics of globalized marketplace and rising productivity of high technologies, therefor, the pro growth system boosted by lack of consumer protection laws must change to a pro market development one boosted by an enhanced consumer protection laws that will unify the globalized marketplace under similar rules for business, quality and the rule of law; the highly sophisticated and succeeded by the most-developed economies achievements will apply to the rest of the world in their best bringing business and social improvement.

By Joshua Ioji Konov 2014

         

Market Development Verses Economic Growth


Market Development Verses Economic Growth

 The global industrial overproduction capabilities have been gaining momentum accelerated by ongoing globalization, rising productivity, China’s industrialization, the Internet and mostly by the vastly improving high technologies in manufacturing, communications, and international trade. The Transnationals have been given great advantages to find new cheaper markets that they could relocate or outsource industrial production, whereas the huge Chinese marketplace has provided them the needed demand to expand and aggregate their capitalization and economic health even in the time of 2007-9 Recession and post recession time. Simultaneously to the rising profit of the transnationals and big investors, declining industrial employment, middle class, and fiscal reserves have been observed in the United States, many European countries, and Japan, the manufacturing jobs that used to replenish fiscal reserves and maintain large middle class have largely disappeared being moved and outsourced, moreover the industrial jobs still left in there have been highly robotized bringing down salaries and numbers of employed. The low paid jobs that have been gaining in post recession time could not compensate to the lost high paid industrial jobs from the past. In general, capitalism relied on industrial jobs and high interest lending rates to raise profits, boost economic growth and replenishes fiscal reserves; however, none of these three points is working under the conditions of most recent market developments, whereas aggregated super-production, moving, outsourcing, the long-term and deep 2007-9 recession and post recession time, and e.g., made these three points, which are founding for the capitalism, obscure and under-performing. Hence, the governments are keeping their discount tier one interest rates close to zero, but the poor transmissibility of the economies is establishing the condition for new market bubbles instead of boosting higher percentage economic growth with high employment and salaries in manufacturing. The idea that manufacturing will come back to the US, or most European countries to employ the high single and double digits unemployed is unrealistic in its nature. The austerity measures in UK and Europe, the quantitative easing and stimulus packages in the US, UK and Japan, and the stimulus programs in China are temporarily economics tools capable of reviving business activities of mostly lower paid jobs in service sector, however the majority highly paid industrial jobs are gone forever being undercut by high technologies, and moved or outsourced elsewhere, therefore the capitalism could not work out these economies to sustain adequate economic growth to balance rising fiscal social and infrastructural expenses.

 The main carriers of economic growth in the capitalism are big transnational corporations and big investors, which were suppose to stir economic growth by raising productivity supported by trickling down capital. Moving and outsourcing industrial production to wherever cheaper and qualified labor is found, these two economic agents are considered the noise in (1=f noise) formula for every country/market economic development that is suppose to close underdeveloped economies to the developed industrial ones. Hence, low taxes, low regulations, shady not particularly clear business laws, and corporate contracting are the keys to progress, industrial employment, and economic growth. However, for the last 20 years the system of capitalism greatly under-performed the 1=f noise formula has not worked, the middle class deteriorated, the manufacturing jobs are gone, and the business activities are shrinking lacking demand balanced marketplace.

 Moreover, the economic growth, which was suppose to keep at the least as high as to compensate for the natural energy related price rising could not keep up marginalizing into the very low, or like in EU into the recessionary minuses. The deflationary forces have been gaining strength, whereas Japan is the good example of it. Thus, the market forces pressure has degenerated economic growth into market development, however neither the overall financial system, business laws, lending approaches or market security have been adapted to the natural processes of this ongoing change, thus instead of a sustained market development be succeeded and maintained the economies continue accumulating fiscal debt, and under-performing with high unemployment and underemployment. The ideologies are ruling over the clear indicators of a system, which has exhausted its growth generating powers.

 Economic growth differentiates from market development by its fundamental change of priority from big business and investors as main economic agent for economic growth to small and medium businesses and investors as main market agent for market development. Hence, the economic tools such as high lending rates, shady business laws, deregulated financial system, tax breaks for the rich, limited liability corporate structures, cutting down on social and infrastructural expenses, e.g. that worked to boost economic growth are to change into more sophisticated deleveraging diverse business environment using market tools such as enhanced business laws, unlimited liability corporate structures (to the decision making corporate structures – not to the investors), higher market security allowing lower lending rates, using social and infrastructural expenses as an extra equity demand, e.g. that overall will provide better balance to demand-to-supply markets. Market development is an enhanced version of the trickle down capitalism that rely basically on market forces to balance markets demand-to-supply but uses indiscriminately market tools to keep this balance in marginal proximity.

Joshua Ioji Konov 2012

Poverty and Pollution How Inequality will destroy Earth!


Poverty and Pollution

How Inequality will destroy Earth!

The tight lenders leech on the poor undeveloped countries creates hazardous issues that harm the Earth environment and potentially will destroy it. The use of coal and wood for heating, the driving of old vehicles, the garbage disposal and water contamination, the relentless woods destruction relates a lock of market i.e.economic development;

Distribution of Wealth: Inequality in 21st Century
 The ability of Large Transnational Corporations and Investors to outsource and move industrial production, and invest globally has helped them gain profit in time of worst 2007-9 recession and post-recession accelerating and expending inequality;

“Many corporations have a greater turnover than the GDP of most countries. Of the 100 largest economies in the world, 52 are corporations and 48 are countries, and these corporations have sales figures between $51 billion and $247 billion.

Seventy percent of world trade is controlled by just 500 of the largest industrial corporations, and in 2002, the top 200 had combined sales equivalent to 28% of world GDP. However, these 200 corporations only employed 0.82% of the global work force.

In the US, ninety-eight percent of all companies account for only 25 percent of business activity; the remaining two percent account for nearly 75 percent of the remaining activity. The top 500 industrial corporations, which represent only one-tenth of one percent of all US companies, control over two-thirds of the business resources in the US and collect over 70 percent of all US profits.

According to the International Finance Corporation (IFC), inflows of foreign direct investment to the emerging markets have grown by an average of 23 percent per year between 1990 and 2000. The combined value of stock markets in emerging economies is set to exceed $5 trillion in 2006, and has more than doubled in the past decade.

In 2005 the number of millionaires globally swelled to 8.7 million, 5.7 million of whom are based in North America and Europe. Forbes reported a 15% rise in the number of billionaires since 2005, who now have a combined worth of $2.6 trillion.”[ Share the World Resources http://www.stwr.org/multinational-corporations/key-facts.html

While the middles class in developed countries has been deteriorating in numbers, and poverty has stricken many individuals and countries around the Globe.

In current research we therefore extend the work reported in “Leveraging Inequality” (F&D, December 2010), which dealt with only the United States, to include an open-economy dimension. We find (see Chart 1) that what unites the experiences of the main deficit countries is a steep increase in income inequality over recent decades, as measured by the share of income going to the richest 5 percent of the country’s income distribution.

This increase in inequality has contributed to a deterioration in the richest countries’ aggregate savings-investment balances, as the poor and middle class borrowed from the rich and from foreign lenders. This, along with the other factors mentioned above, can fuel current account deficits.

Indeed, we find that as income shares of the top 5 percent increased between the early 1980s and the end of the millennium, current account balances worsened. For example, in the United Kingdom, an 8.7 percentage point increase in the income share of the richest 5 percent was accompanied by a deterioration in the current account–to-GDP ratio of 2.7 percentage points.[ Unequal = Indebted

imbalancesFINANCE & DEVELOPMENT, September 2011, Vol. 48, No. 3

Michael Kumhof and Romain Rancière

Distribution of Wealth: Inequality in 21st Century

]The Earth environment has suffered farther deterioration by being polluted through burning coal and wood, by cutting woods and destroying rain forests, by driving old vehicle, by disposing of garbage and row sewer and etc.

Mongolia is the world’s most polluted country and also home to one of the world’s most polluted cities — Ulaanbaatar. The country’s main sources of pollution are its traditional coal-fuelled stoves and boilers used for heating and cooking, as well as congested traffic and old cars. Heating is essential for the survival of its people for about eight months of year. The country uses everything from coal, wood to refuse, such as black tar-dipped bricks and old car tires to fuel stoves and boilers.[ http://www.cnbc.com/id/44781282/page/11%5D]

Neither of the top 10 polluted sites are in the U.S., Japan or western Europe. However, a lot of the pollution in poorer countries has to do with the lifestyles of richer ones, noted Stephan Robinson of Green Cross Switzerland—for example, a tannery in Bangladesh that provides leather for shoes made in Italy that are sold in New York City or Zurich. “The pollution we see is not coming from the major global industrial companies, it’s all from small mom-and-pop shops, which prepare the raw materials that we then later use,” Robinson said. Or, in the case of Agbogbloshie, Ghanaians are polluted by the electronic devices Westerners have already used. Local people in such areas, Robinson added, “are very often polluting their environment not because they think it is fun but because it is a question of survival.[ http://esciencenews.com/sources/scientific.american/2013/11/05/the.worlds.10.most.polluted.places.slide.show%5D

 The most developed countries are taking prompt action to improve their environment through investing and tax initiatives to boost green energies and through enforcing strict environmental laws and regulations. However, it is not possible to take on some consistent environmental protection policies on just national level. To prevent from farther harmful environmental deterioration long-term Global policies should be implemented by the International Financial Institution of WTO, WB, and IMF widely supported and financed by the most developed economies of the US, EU, China, and Japan. But, most important, the ways the global marketplace “business as usual” should evolve into more engaging ways promotion of a Green Market Development for many if not all undeveloped markets i.e. economies. An end of the budgetary debt economics that relates economic growth to productivity and investment only, by keeping firm hand on borrowers: individuals or countries alike, is necessary. Even from purely historical stand point of view the system that had performed well in North America, Western Europe, and Japan until the beginning of the 21st Century has been tipping off: 

  •  the Globalization enveloped the entire globe with a very few exceptions,
  • the Internet and rising Productivity made outsourcing and moving of industrial production much easier,
  • and China has emerged as a great economic industrial power

 Developments that have distorted the market equilibrium in many developed and undeveloped markets alike (with the exception of China, Germany and Japan after the Abenomics) by bringing long-term high unemployment and underemployment, debt accumulation, falling standard of living, and rising inequality that were shaking the foundations of the Capitalism, which short term relatively high lending rates, low market security, weak business and intellectual property laws, weak consumer protection and environmental protection laws that were suppose to boost productivity, investment, and growth have established conditions for bubbles and recessions, instead: the 2001 $ 2007 Recessions followed by sluggish recoveries exemplify it.

The conception of using market i.e. economic agents and tools in an “as it comes; as it goes” attitude to prompt Market Development i.e. economic growth is called Market Economics. It has become possible for short-term in History: since the turn of the new century, which brought some new capability for industrial overproduction by the same development that distorted the existing Capitalism. Whereas the technologies that improve Productivity, the Globalization, and China that utilized at best these new opportunities could become the market i.e. economic agents to offset the possibilities for shortages and inflation to allow long-term market development.

 The Market Economics utilizes on such counterproductive for the Capitalism developments to prompt Market Development into targeted Environmentally friendly industries that could prevent from further pollution causal of an industrial production, productivity and investment approach, and in the same time create employment, replenish fiscal reserves, and allow a more balanced market approach in economics.

 The economic agents in Market Economics are flexible parameters that adjust most recent fluctuations on “as it comes; as it comes” probability principle. A high Market Security is paramount to improve the investment transmission-ability, whereas less developed and undeveloped markets, and small businesses and investors are given access to relatively fair market competition. Targeted into Environmentally friendly industries and technologies capital infusion should be adjusted to the Inflation (not to the budget). On local for the developed countries e.g. Detroit and international for the International Financial Institutions the “invisible hand” should prevent from pollution, wasting of resources, destruction of woods, wetlands, etc.

Joshua Ioji Konov 2014

Social and Infrastructural Expenses to Help Balancing Markets i.e. Economies


Social and Infrastructural Expenses to Help Balancing Markets i.e. Economies

 social expenses include social benefits, pensions, educational, unemployment expenses
market equals economy, economic
Market Economics is about Demand and Supply (it is not an error of the Supply and Demand of the past) of goods and services that have gone Global, which complicates the ways Economics explains these processes. Some market sectors have become less Nationally dependent than Globally such, therefore the inflationary forces could not be explained anymore in a closed marketplace as it was before. The ongoing Globalization, the rising Productivity, and the Chinese Industrialization have accelerated the up mentioned processes that have given the opportunity to many markets to develop into not industrial production related market sectors without prompting necessarily Inflations, whereas the Deflations instead have become bigger issue.
 The foundations of current Economics has been less or more a Socialized Capitalism, which lays on the Industrial production. The most developed markets are called Industrialized Economies. However, the most recently expanding Global capabilities of industrial overproduction has invoked the needs for reevaluating Economics and finding ways for Fiscal balance by not accenting on industrial production and industrialization: the most common method is by imposing high taxation. Social and Infrastructural Expenses have become a main tools for re-balancing market demand to supply: however, high National debt run by the most developed countries, but China, has undercut the abilities of governments to continue such policies; Neo Liberals, Big Business and Investors have put political pressure on these governments to reduce Social and Infrastructural expenses. The situation with less developed and undeveloped markets is even worst because of their dependence from their debt holders: the World Bank, European Union, IMF, WTO, which serve their lenders and apply constant pressure to prevent these countries from adding more debt to the already accumulated such.
The unorthodox approaches in Economics by China to use their public sector and stimulus packages for improving consumption have proved productive, as well the Abenomics and the US Quantitative Easing have had. The indifferent European Union orthodox approach has proved a disaster. All of these are good proofs for the changing Global markets’ realities and the need for action by the “Invisible Hand” to re-balance markets under these new arousing realities.
 However, the market interventions by governments or international financial institution may finally backfire and prompt new recessions if the ongoing processes are not properly apprehended and long term policies are not implemented. Policies that can boost market development i.e. Economic growth must prevent from bubbles and major market imbalances. Whereas the Social and Infrastructural are market tools to be used for maintaining markets’ balance they also could be used to prompt market development by targeted capital injecting into Market Leaps without prompting Inflation. If properly executed such Market Leaps could accelerate business and investment activities in these particular market sectors. What is necessary before using these market tools is a detailed evaluation of this market overall abilities to absorb such expansion of consumption and business. Market Economics is an “as it comes, as it goes”’ approach in Economics that tolerate the usage of all market tools to expand and manage market development, therefore, if Social and Infrastructural expansion could prompt employment, consumption and business activities without excessive Inflation, than such approach is considered appropriate. The Uncertainty Principle and the Probability Principle are used for simulations of Market Leaps and prevention of Bubbles. Market Tools are used as parameters for maintaining relative fluency. Parts Market Equilibria are used to maintain General Market Equilibrium. (SEE the related Papers and Articles).
 The Market Economics considers Social and Infrastructural Expenses to certain percentage as equity: such change is made possible by the Globalization and rising Productivity, which allow some extra consumption and business activities balanced by the globalized markets overproduction. Even partial equity such expenses are supplementary approach toward Market Development that that supports the main production and services based approach. Social and Infrastructural Expenses could have a good use for fighting deflation (example for such is Japan).
 The percentage of equity Social and Infrastructural Expenses reflects ta market’s success in adapting the principles of Market Economics, not that much the level of Market Development i.e. Economic Development. An open market with adapted Rule of Laws: Contract Laws, Consumer Protection Laws, Environmental Laws, Intellectual Property Laws, Insurance & Bonding Laws may well be suitable for using such expenses to start a Market Leap, even though this market i.e. economy is not developed in compare to the most developed markets.
 Joshua Ioji Konov 2014

Can the Global Investment and Productivity Steer Growth


Can the Global Investment and Productivity Steer Growth

In the ways the Global economy works, the expectations for the investment and productivity as fundamental economic agents for growth vary in different countries:

Whereas the European Union relies generally on such to prompt and maintain economic growth, in the United States the market interference was much bigger through Quantitative Easing and Stimulus Packages, it when farther in Japan, and even farther in China whereas the market interference is basically running the whole economy through targeted stimulus packages, establishing tax free regions, using the state owned businesses to raise salaries, income and internal consumption. Unless in the US whereas the politics interfere with the government policies: in Japan and China such policies are roaming free: the “as it comes: as it goes”’s Economics of 21st Century has arrived and whoever understood it right and start using it indiscriminately from political views and ideas will benefit. The winners clearly are these the last one. To rely mostly on the Investment and Productivity to steer and stir up the markets into growth and possible employment has become a dream for a few economists in the West that excuses them from the failure to oversee and overcome the 2007-9 Recession that almost crushed the Global economy.

According to the Organization for Economic Cooperation and Development (OECD), the United States had the fourth highest GDP per hour worked ($59.50 USD) in Oct. 2011, behind the Netherlands ($59.60), Norway ($75.40) and Luxembourg ($78.50). Research at the U.S. Bureau of Labor Statistics shows that between 2000 and 2010, real GDP per hour worked in the United States grew from $48.47 to $59.28, or 22.7%. Productivity was clearly on the rise, and at a fairly quick clip.

The OECD also indicates that between 2000 and 2010, average annual wages for full-time employment grew from $49,981 to $52,607, or 5%. They were basically stagnant, but how did this happen? (For a look at GDP and what investors look for, read Can Global Investors Profit From GDP Watching?)

What the Chinese took off on the Recession was the practical ideas that relying only on the National and International Investment and the rising Productivity, which relies on the simple ideas of lower taxation and weak regulations to prompt economic growth causa finita est, therefor, they started targeted market interference by watching the Inflation and possible Bubbles, so the system has worked much better than everywhere else. The Social and Infrastructural Policies have been positive economic tools, too. What the Chinese discovered, followed by Japan, was that by using the “invisible hand” was much more effective than waiting for some investors to decide to boost their economies.

What the EU and now the US are doing is digging themselves into a perpetual circle of unemployment and underemployment that consequently will push them to start using so called unorthodox economic agents and tools to prompt long term economic growth. The Investment and Productivity always follow the winners, and guess who will be the winners if a long term economic policies are not undertaken.

Joshua Ioji Konov 2014

Probabilities in Market Economics


Market* equals economy, economic, 

 

For the last 20-25 years. the accelerated Globalization, the rising Productivity, and the Chinese Industrialization have accelerated the moving and outsourcing of industrial production by the large transnational corporations from the Most Developed Markets have brought more complex Global economic situation of industrial overproduction capacity, higher unemployment, rising national debt, increasing income inequality, and etc negative developments that exceed the abilities of currently used economics to deal with it appropriately. The Uncertainty Principle, which changed Physics, in some degree applies to Economics bringing the Principles of Probabilities to manage the complexity and the uncertainty of these new developments. However, unlike in Q uantum Physics in the Quantum i.e. Market Economics the Plank Constant does not apply but a new J Constant should be applied, which vary between (-2…….0………+2) from the lowest to the highest possible Market Security: Market Development is a seasonal Entropy/Equity Market Place. Through a Market Leap prompted by targeted injection of capital into a particular market sector or Natural Market Investment an accelerated Entropy/Equity process could establish artificial accelerated market activities, however if the Market Security is higher than a (0) a Market Development higher than (0) is possible. The Globalization, which supports markets against Inflation in some market sectors, allows Market Leaps (accelerated market activities).

The general market equilibrium evolves into part’s market equilibrium a complicated structure of interdependence between market sectors in a Globalized marketplace in which some sectors are more globalized than others, and therefore market sectors vary in their inflationary susceptibly. The overall lock of inflation in the US Economy, for this period of time, presents a prove for the power of these new forces.

Market Security is a fundamental Market Agent that could prompt Market Development[ See Table 1]. To succeed Market Security over (0) a fair Market Competition is required, whereas Market Agents such as Large Businesses and Investors, and Small Businesses and Investors should be setup into a equal access to financing. There are two possibility for such: either the Government interfere into Markets by providing additional security to the small business’ loans, which is not market related approach if under a lower Market Security, and in many cases are politically motivated reversible actions , or when targeted Market Sectoral investments are injected into a higher Market Security that would consequence into seasoned Market Development (market equilibrium when expanded business activities). Current market conditions are with very low Market Security: the large businesses and investors are given advantage in a a lock of Rule of Laws’ Business Environment, therefor, any capital injections under such condition could not boost Market Development, these may stir temporally business activities bit cannot succeed seasoned Market Development (example for this is the City of Detroit, where for years many capital injections could not succeed Market Development); currently used Economics tolerates low Market Security, because such is considered helpful to trickle-up capital into the very few, who were suppose to trickle-it-down into business activities and economic growth, however, the Globalization and rising Productivity have provided Global opportunities for such reinvestment, and the expanding wealth inequality results of these new developments: the large transnational corporations and the direct international investment are the economic agents for these global opportunities. Enhancing the Rule of Law in Business: Liability Laws, Contract Laws, Consumer Protection Laws, Environmental Laws, Insurance & Bonding Laws, Intellectual Property Laws will improve the Market Security by marginalize the inequality in the market competition.

The J Constant will go above (0) and therefor if capital injections are properly done Market Development could be succeeded.

The Probabilities’ Principle is to be used:

*to give the right levels for possible Capital Injections without prompting Inflation/Deflation.

*To show the amount of possible such Capital Injections.

*To oversee the possible results,

*and if some emergencies arouse the possible actions to be taken that would disperse the negative bubbles.

Simulations, historical and prospective by using Possibilities’ Principle are in a working process.

Joshua Ioji Konov 2014

1 For centuries, scientists have gotten used to the idea that something like strong objectivity is the foundation of knowledge. So much so that we have come to believe that it is an essential part of the scientific method and that without this most solid kind of objectivity science would be pointless and arbitrary. However, the Copenhagen interpretation of quantum physics (see below) denies that there is any such thing as a true and unambiguous reality at the bottom of everything. Reality is what you measure it to be, and no more. No matter how uncomfortable science is with this viewpoint, quantum physics is extremely accurate and is the foundation of modern physics (perhaps then an objective view of reality is not essential to the conduct of physics). And concepts, such as cause and effect, survive only as a consequence of the collective behavior of large quantum systems.2

2Definitions

Probability is a measure of how likely it is (or how probable it is) that a given event will occur. The more likely an event is, the higher its probability. The sample space is the set of possible outcomes within a given context. The sample space is equivalent to the universal set. An event is a subset of the sample space. The elements in the event are referred to as favorable outcomes. The word “favorable” is not used to mean “good” or “desirable” in the normal sense. A favorable outcome means only that the event has occurred. The probability of an event is the number of elements in the event divided by the number of elements in the sample space.

3 The Planck constant (denoted h, also called Planck’s constant) is a physical constant that is the quantum of action in quantum mechanics. The Planck constant was first described as the proportionality constant between the energy (E) of a charged atomic oscillator in the wall of a black body, and the frequency (ν) of its associated electromagnetic wave. This relation between the energy and frequency is called the Planck relation:

4 Table 1

Untitled

Md = Market Development

LIR = Lending Interest Rate

En = Market Entropy

Eq = Market Equity

E = Market Equilibrium

EE1= Market Leap

“As It Comes; As It Goes” Economics of the 21st Century; the End of the Budgetary Economics


“As It Comes; As It Goes” Economics of the 21st Century; the End of the Budgetary Economics

Joshua Ioji Konov, 2013

INTRODUCTION

The Globalization, the rising Productivity, the Internet and the Chinese Industrialization have established some very new conditions to a global marketplace of vest industrial capacity mobile and highly effective that changed Economics forever from a pre-supply Libertarian and Keynesian budgetary approaches into the unorthodox innovative Market related pro-equilibrium approach. The Quantitative Easing, the Abenomics, the Chinese targeting certain areas for economic empowerment, the Federal mortgage security targeting lower lending rates in the US, etc are the first steps to an Economics of “as it comes; as it goes approach” which does not count just on a market liberalization through deregulation, low business taxation, and rising productivity to prompt Economic growth, thus the “invisible hand” has become more active. However, the economists and the Economics still retain their highly ideological stand up by either not evaluating these new developments or coming back to the status quo by just ignoring these developments as never happened.

CHANGE (Market I.E Economic, Economy)

As the Physics has changed from its orthodox ‘assertive’ knowledge into the uncertainty of Quantum, whereas probability theory so the Economics should change its ‘assertive’ ideologically motivated approaches of trickle-down into a ‘as it comes; as it goes’ Market Economics, whereas market agents and tools are used adequately to maintain market equilibrium and market development.

In real Marketplace such approach means by using Monetary, Fiscal, and others the Central Banks and Governments to target particular market sectors and areas to boost their development, sectors such as Alternative Energies, Tourism, Farming, etc should be prioritized. The ‘invisible hand’ that boosts certain market activities could be only implemented if markets transmissionability is appropriate to absorb and transform the liquidity into market equity e.g. to establish market equilibrium by maintaining low inflation or deflation. High market transmissionability could be achieved by enhancing the ‘rule of law in business’ through changing the limited liability corporate laws into unlimited such, by enhancing business insurance and bonding, by enhancing contracting laws, by enhancing environmental and consumer protection laws, etc then the ‘invisible hand’ of targeted liquidity and fiscal stimulus would work its best through the marketplace to buildup market development.

Currently used by the Central Banks monetary policies through lowering or raising Primary Rates a general market equilibrium approach should change into using lending rates, fiscal policies and targeted investment parts market equilibriums approach e.g. is the China’s handling their Real Estate bubble.

The Uncertainty Principle applies to Economics whereas the Probability Theory shows the ways market agents and tools are used as parameters to adjust market fluctuations; however, in comparison to the Quantum Mechanics the Market Economics i.e. Quantum Economics’ equations, oscillators, theorems, and etc differ in principles and values.

GUIDING LINES

Market Economics does not put all markets i.e. economies under the same constant, whereas different markets posses specifics that should be taken in considerations in applying the best for these markets oscillators. Even when the free market entrepreneurship of the Small and Medium Enterprises is considered the best and most productive approach toward market development the ways some countries have their Markets/Economies entailed to specific social, medical and educational policies by more aggressive governmental involvement should be taken in considerations when simulations are put together.

MARKET COMPETITION   

However, for best performance, the principles of an open market competition whereas Small and Medium Enterprises and Investors are set on equal opportunity competition are paramount for a long term success. The marginalization of advantages Large Transnational Corporations & Investors is one of the principles for Markets to function properly, so to speak market transmissionability and overall market development could not be achieved if the market competition does not reach relative fairness.

GLOBALIZATION

THE Globalization of the Marketplace should be used to prompt business activities, build equity, and maintain market development, but for such to be fluent the principles of Market Economics must be implemented globally, which is highly achievable in the present day open politically and entailed economically world.

Joshua Ioji Konov, 2013

SEE Market Economy under Rapid Globalization and Rising Productivity http://ideas.repec.org/p/pra/mprapa/48750.html

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