Philosophy of the Economy Part One



1. Introduction.
2. History of development
3. Levels of Development: distinctive points, changes and reason for changes
4. Philosophy of Development
5. Psychology of Development
6. Social changes and consequences of Development
7. Nationalism, Ideologies and Political Systems enforcing them.
8. Economy and Market Forces: Historical Development
9. Globalization and consequences
10. Most Developed Countries different approaches in the modern world
11. From struggle to survive among individuals, societies, countries, blocks of a pro Supply Economy to a Regulated pro balance between Supply and Demand Economy
12. Life in Modern Developed Countries
13. Social tools of acceleration and deceleration.

Chapter I – Introduction

The Globalization has become an irreversible historical process constantly expanding and evolving at the same time the social and economic conditions in the most developed nations have succeeded raising productivity and concentration of capital. The old tools of Economics cannot anymore accommodate these new developments and are not able to establish most favored conditions for such an important to the World and for any individual countries new development to evolve smoothly by avoiding major economical crises and without destroying the environment. Having inadequate Economical Tools creates volatile market conditions which work in conflict with current possibilities of market expansion: this research is to proof the change from a Scarce Economics based on volatile interest rates fluctuations and deregulated speculations into a Market Economics based on market stability, regulated economics and Global Expansion of even small to medium size businesses and investors.

With the current system of Economics even the very resilient US economy will not be able to sustain the ravaging forces of shrinking profit margins and market crashes. It has become obvious for a company to maintain its profitability it must go Global /also National for US and EU/: but the Medium to Small companies and Investors are hardly capable going global in a highly deregulated markets and exchanges.

There are great possibilities in a Global scale for establishing a heavy regulated but at the same time free market place where more individuals from elsewhere will be able to compete in very increasing intellectual competition; this process could be accelerated by increasing the security of doing business and investing capital which will increase the LTV and MTV of the assets and even further to enhance some currently considered liabilities or with very limited LTV and MTV. When doing that the Monetary policies will change because of this extra security so more money will be able to circulate without provoking inflation; then more business and investment will follow and gradually these rules and regulations will envelope more markets around the Globe to establish a Global Market Place for even Medium to Small Business and Investors having such Global access.

This is the end of the shady Trickle Down Economics or the bureaucratized Socialized Economics and the beginning of a real Market Economics /called by me a Market Stability Economics/ because it relies on the Market Competition and on Regulated Business Practices and Direct and Indirect Investment under clearly stated laws and regulations implemented by the Governments but controlled by the Courts.

All these is becoming possible only in the very recent times by the incredible developments of the Internet, related technologies and communications; the fall of the Eastern Communist Block, the expansion of the European Union, the entering of WTO by China and by the expending freedom of business all over the Globe which as a consequence increased Global Productivity, Access to the Market Place, quick jump from Ideas to Realization, opening the Global Employment Market, allowing expanding Global Direct Investment, allowing Internet Education and Self Education. The World has changed forever.

The following is a Philosophical Conception attempting to substantiate the new changes through Historical sequence of developments and conclusions.

Economy is one of the reasons setting our life in motion and moderating our personal desires and behavior with compliance with the social rules of organization to accomplish highly sophisticated structures of societies and countries and lately economic blocks.

Many historical occurrences could be explained by the Economics and the ways individuals and societies are affected by it. The competition among individuals for economical and political advance in any society which competition has grown into Global has always been the way bringing innovations, improvements and progress but in the same time bringing corruption, injustice and the following revolutions and terrorism.

The Individual Desire for Success and the following competition among individuals is in the beginning of relations between individuals and societies as a general driving force which organized societies into countries, empires and economic blocks. A constant struggle between the interests of the society and individual interests is regulated by cultural and religious rules and common laws which moderate and leverage this relationship so the societies could function.

Historically the competition for success has moved from more primitive and physical one using more physical tools and methods for success to more intellectual and abstract one using more intellectual methods for success. So consequently of such changing priorities the social rules of behavior have changed accenting on these constantly evolving values.

Economy is a main field for individuals’ competition and also a general tool for comparison among societies; it has been evolving and changing with the new values invoked by the the general intellectualisation. Relativity of a society or group of societies to adjust their values through rules and common laws to fit a Current International Level of Development-CILOD is called Country’s /for this society/ Current Level of Development- CCLOD. This philosophical law of Social Relativity SR is to be established based on historical statistics and method of comparisons. Every single moment in history has its CILOD and every society has its CCLOD at any time of its existence.

Why are we attempting to figure out the relativity of historical economic and social development?

The up to now marginal understanding of the processes of human development by the Philosophy over all has being limiting the abilities of different societies to find for themselves best ways for development: thus ideologies such as pro Capitalistic or pro Socialistic, or pro religious Fundamentalistic have been playing role in preventing philosophy to clear the values and reasons for socio-economic progress and development. The disconnection between Philosophy and Economics for some time has fragmented general abilities for comprehending a conclusive system of evaluation and consequential objectivism. Economics has drifted away from philosophical thought to a practical science of statistics and ideological self-adjustments. The desire of practical clearance of ideas has taken over philosophical reevaluations of sometimes subjective values. In context of such ideological more like status quo science of Modern Economics real historical possibilities have been sidelined and obscured as not complying with the “political correctness” and its accents. The same approach certainly applies to the ways different tools of Economics have been evaluated and used however under economic and social pressures Economics has been evolving an examples is the change form the Gold reserve backed currencies in the past to the more abstract current system.

The evaluation of the basic inflationary processes, the most recent effect of high tech developments, Internet and Worldwide Political liberalization causing fast Globalization; even the past changes from Farming driven Economics to Manufacturing Economics and now to Services and Investment Economics have been poorly evaluated not followed into conclusions and consequent resolutions which is to bring a coherent philosophical systems to describe these changes and provide guidelines to the Future; the understanding of Economic and Social tools historically has been very fragmented over the board.

The consequence of such insufficient approaches toward Economics have been many wars, revolutions, totalitarian dictatorships,depressions and most recently the rise of religious fundamentalism and terrorism. One will say that I am going too far in giving the Economics such powers: he or she could be right there are political situation driven by social forces not relating economy on their surface but beyond any socio ideological motion stay pressures of social expectation of certain values and motivations and such pressure is still a product of individuals’ desire for competition which was steered to ideological values because of lock of economic competition for majority of individuals to participate, and because governments’ role have always been to defend the status quot of socials structures the energies which could be used for such economic competition have been flown into nationalism, racism, chauvinism and the general ideologies as well

If in prospective we evaluate the economic and social reasons for the Second World War as an example when the conception of imperialism at the time by Hitler and by any world powers that appropriating foreign resources and occupying others’ assets was considered equitable when if a detail evaluation is done these neighboring countries could have been much more beneficial as trading partners which you can see in the new developments in Europe; Such an example of conceptual misunderstanding of economic and social tools by all of the great powers and Nazi Germany was a result of this mindless war which did not do any good to anyone but after the devastation it made clear that unleashing the dark powers of individuals’ powers instead of using their creativity is worthless. In the new world of rising terrorism such misunderstanding of reality by the Most Developed Countries’ Governments could have fatal consequences for any country or even for the World. To try to suppress millions of people living in poverty and religious fanaticism is not a feasible way to go forward into a new world when the possibilities of the Current International Level of Development to engage Worldwide individuals into a productive competition are real; denials of opening these opportunities by the Most Developed Countries based on ideologies such as status quo US capitalism or in case Chinese socialism, or European social bureaucratism, or nationalism, or whatever prejudice will only bring tensions, insecurity and environmental disasters..

One will say if there are too many economic and social factors to be put together in a way which can provide comprehensive evaluation, is it correct?

Yes if the information is accumulated with no strict guidelines. In case the principles of this conception is simplicity: not ignoring any major factors for socio-economic development but concentrating on the guiding ones that have the most effect on the projected development.

How competition could be considered main engine of individual and social relations and development?

There are countless numbers of traditional and circumstantial factors in an individual life which play roles in characterizing this individual and his/her correlations and social interactions. The economic factors are limited but very important part of this process. The conditions in which an individual grows up, the stability of day to day life, the possibilities in front of him/her, the positive and negative pressures on him/her by the society; obviously negative economic pressure could have very depressing and mind altering effect on ones character; the lock of opportunities could contribute to ones instability and perplexities. Historically ideologies, religions, nationalism and general culture have helped offset the instability the lock of socio-economic opportunities to the majority. The social structures have established an array of tools to suppress individual Desire for Competition which suppression `historically has been antagonistic based on classes’, nationality and other belongings to limit majority of individuals from competing for socio-economic advance. But in a world of low productivity and political chaos such limits of competition ware actually positive for the stability and the survival of these societies

The main competition for individual success has changed not only from physical to intellectual but also from very limited opportunities for particular classes to more general and accessible; this process of opening of socio-economic competition to higher percentage of the population is at its best in the Most Developed Countries which historically have always been the most advance socio-economically thus at any PCLOD the CCLOD of the MDC is basically a result the best adaptability of this country or block at the historical moment to use in a better way Current Possibilities’ potentials of their citizens in the most productive at this moment ways. Because in different historical moments different socio-economic structures were working best, examples: the Roman Empire’s strong militaristic approach supported by political power needed militaristic organization and social philosophy to dominate the current World thus Roman structures were best reflecting the PCLOD and therefore Rome dominated the known world she was the best adapted under the circumstances. Other examples are ancient Persia, China, and Aztecs in the Americas.

Obviously to base this philosophical conclusion on the approach of evaluating these historical changes the continuity and relativity of these changes have to establish: and it may be best presented as a change of socio-economic philosophy and psychology from pro physical pro manual one reflecting at the time manual labor economic approach as dominating to a pro intellectual one apprehended by the developing high technologies and economic globalization one when intellectual economic approach is dominating. This socio-economic evolution is reflected into historical changes; here it needs to be mentioned that they were periods in the World history when these processes of intellectualization were severely interrupted and even reversed an example are the Dark Ages in Europe, or the Mao’s governing of China the changes are not necessary a flowing continuation but more like a spiral like continuation.

Someone will say that this philosophy replicate Marxism for these people my answer is that Marxism was based on development based on struggle between the having and having not classes when this Philosophy of the Economy is based on the historical continues change of historical priorities from physical to intellectual. Which I believe has given the opportunity of the human civilization to advance. So as an example when technologies and socio-economic structures were underdeveloped appropriating foreign resources was the only way was a country to advance into interstates competition therefore the best organized countries were establishing their empires by concurring others and imperialistic foreign policies were supporting them: in such socio-economic environment individuals’ competition was redirected into militaristic by nationalism and ideologies Individual Desire for Advance was obviously related to individual advance by militaristic ways. The same principle of timely important values applies to pre historic times when instead the organization militaristic skills of the time of the empires, personal physical personal strength had been much more valuable therefore the “heroes” from the Ancient Greek mythology were compared and related to the gods. When Great Empires before the Great Wars of the 20th Century were occupying the known World the mentality of conquest and spread of civilization was reflected in the literature, economics and science of that time to justify their policies fierce nationalism and chauvinism were promoted by the Governments and other institutions: “the philosophy of being better meant being militarily stronger, and even on a common level that a man is not one unless going through the army” prepared individuals for the armies and multiple devastating wars. Now days such “philosophy” sounds almost comical; people have understood the consequences of wars and they are used only under extreme circumstances.

Throughout history continues accumulated information was needed for successful competition which is another factor for coming to a new Current International Level of Development. Such higher ground can be reached only by expanding and enhancing current possibilities which always are a result of improving economies and political structures. On the ground base improving technologies, trade relations and business environment in any time of history had prompted a new CILOD.

When productivity was low classes based on individuals’ background and individuals’ access to resources and position in the society have been playing dominant role in societies around the world. Because of the low productivity to maintain “normal” level in the society multiple servants and feudal taxes were needed. Thus the theory of scarce resources was born. To suppress individuals for demanding more participation in economic competition a philosophy of servitude and tyranny of oppression was established: all over the world.

The negative socio-economic pressures on individuals accumulated in such conditions usually brought rebellions and revolutions therefore societies needed release valves: the nationalism, chauvinism, xenophobia, religious hatred have naturally been parts of such social negative built up releasing system which was promoted by government and negative social pressures were channeled into regional wars and constant insecurity.

The next and higher step in this social prevention system were the ideologies which were higher more sophisticated level of prejudice: in both systems of negative pressure releases any individuals not complying with the “acclaimed” ideas were persecuted and considered asocial and sometimes even enemy of the states: ideas for righteousness fitting some current criteria have been used and continued to being used for the same purposes even to promote belonging to causes and principles to suppress individual desire for success.

The theory of Scarce Resources has being based on a pro supply economics and competition it reflects the allowed by this conception limited percent of individuals access to fair competition which is accessible mostly for the upper classes who control big business and investment in now days. The Scarce Resources Economics including access to good education, to borrowing Capital, to market exchanges investing is pro Supply and the supply has been controlled by the big business and large investment groups and their strong lobbyists; the Governments have been part of this system by promoting their interests.

US is a perfect example how this conception works where good schools are quite expensive and the theory of income based education is dominant: which theory was probably good for a steady developing US economy and not so good for the rapidly developing global market which promotes different kind of competition by globalizing the labor market so the large corporation are looking elsewhere for qualified scientists and technicians, following on such demand large US Universities responded by creating graduate programs in science where high % PHD graduates are of foreign origin. Same conception prompted number of software specialists and medical doctors to come from India and elsewhere to fill the existing demand in US. So far Business Graduate Schools even opening some competition are lingering behind relying on the more conservative and seemingly less demanding business competition as still a steady place for the upper classes kids to be promoted but with the Europeans and Chinese’s high accessibility for commoners to all strong undergraduate educational programs and the becoming extremely sophisticated Global business a demand for highly intellectual business managers will drive Business Schools toward similar to the science faculties global approaches of admittance and scholarships.

The philosophy of Scarce Resources doesn’t reflect the demand for allowing more access to competition in order a society to keep up with the global development. Obviously US economy is based on Supply and Demand adjustments therefore finally the most advance individuals are to succeed but when the educational system limits lower classes from stimulating education the potentials of many capable individuals have not being enhanced properly will bring disadvantage to US economy as a whole. The theory of Capitalism is based on ideology not on reality and therefore it is bound to change or US will lose its Most Developed Country’s superiority.

The ideological status quo for government to protect and promote big business and large investment by closing eyes of shady business and investment practices generally lower the security of the assets in US which hits on the diminishing value of the dollar and the gradual changing investment to more stable foreign markets of Europe and China where pro social distribution of wealth creates “stable” demand. Which systems by the way are not sufficient and flexible at all but on the principle of “the least evil” work better. Here it must be made clear that Philosophy of the Economy’s Market Stability Economics is not based of socialization of Economics and Governmental redistribution of wealth but it is based on a heavily regulated business and investment structures and increase the equity of US infrastructures and social expenditures such as Medicare and Social Security which security will increase the value of the US economy overall and retain its status as a Most Developed Economy and Market.

Historically, the upper classes protection was normal because in a system of Scarce Resources the statuesque has had progressive effect on the economy by creating relative market stability. The problem with this system as with all systems of selective access to competition is the ongoing globalization where US market could not be considered anymore above others and untouchable. EU, India and China are entering this competition which used to be regional for US market making it a global competition. Big business and investors are moving their operations elsewhere and the process will accelerate.

To not loose competitiveness US economy must adapt under these new developments and capitalize of and promote the advances in communications and other spheres of technologies, of the US infrastructure, social services and Medicare, educational system in particular highly developed graduate schools and promote their expansion, the globalization of the very flexible US business and promote access to global markets for medium to small companies and investors; which actions will establish a more open competition for more individuals to participate and the strengths of the US free market competition will expand and be empowered.

The US educational system is one example of based on ideology system, but the US graduate studies universities are adapting into these new global competition and finally the flexibilities of the US interest driven education will prevail to maintain its high status by accepting more foreign students. The looser will finally be the lower and middle class Americans being isolated from the global competition.

What is really changing historically and could it be considered a new development?

Very simple:

1. the pro supply trickle down or socialistic economics are changing in a pro market stability economics 2. the improving high technologies, the globally expanding business freedom, the access of capital medium to small businesses and investors will make business not anymore limited to a few conglomerates on the Global Marketplace: the medium to small companies because of the new technologies will be able to provide adequate products and services globally. 3. Manufacturing is no more driving force of the economy: Global Investing and Intellectual properties are becoming the driven forces;

Life as we know it is changing and the change will accelerate.

The most advance countries in this environment will be the one having the best developed system to establish the best conditions for these new developments to flourish.

EU has very well regulated economics but the nationalism, chauvinism and overextended governmental control over the business are stoppers existing from a previous CILOD and do not allow the flexibilities needed for Possible Development for this new CILOD. Still EU has better then the US regulated economics which reflects the devaluation of the US dollar to the euro.

China’s economics is a mixture of free market and socialism, and is well based on the hard working population which had been isolated from the rest of the world for hundreds of years the Chinese have cultural differences from the rest which well work well in their current organization. The huge size of the population and the market attracts foreign investment and foreign corporation which allows the Chinese government to regulate the economics. Communists and socialists’ economics are pro supply economics but the distribution of wealth is regulated by the governments which gives them a pro demand market abilities. Their problem was and always will be the limited flexibilities to act properly to adapt to the rapidly changing realities: when ideology plays regulative role and ideologies as usual are not market driven; also because they limit personal freedoms it affects the horizons of business expansion.

What is the Current International Level of Development and how the most feasible Economics could be determined?

This is a Million dollars question and the whole study of “Philosophy of the Economy” is to attempt answering it. One thing for sure in order this to be done an evaluation of historical processes of development shall be done which must justify and trace historical changes and their relativity if any.

Chapter II History of Development

When Karl Marx proclaimed the struggle between of the having and having not as a main force for development he was wrong it is a struggle but it is between the Individual Desire for Competition and Social Tools of Suppression and Limiting of Individuals’ Access to such competition considered socially unacceptable at certain historical point. When John Lock proclaimed the market competition of a Supply to Demand based on a Scarce Resources Supply driven Philosophy he was wrong because even at the time his philosophy was adequately reflecting the driving free market economics he could not oversee the coming of a pro Market driven Demand to Supply balanced Economics. The scares resources is a historical justification of suppression of Individuals Desire to Compete: putting this statement from Social Relativity prospective such suppression had positive competitive effect for maintaining Social Stability at any historical moment until most recent global situation. So the Marx’s upper Classes in historical prospective had positive effect on development by establishing needed for maintaining such development Social Stability. At the same time the market competition of John Lock was a revolution by itself coming from a feudalistic structured Europe into a pro market driven world where the market adjustments were based on economics not on Kings orders. Things were changing a new Current International Level of Development was arriving.

What is a Current International Level of Development CILOD and how it changes?

A probable historical period when under the circumstances particular individual skills were considered productive for a society or country thus the society or country’s tolerated and promoted such individual competition to maintain internal stability and advance in the regional or international competition.

Usually changing CILOD are painful processes of changing classes’ structure and redistribution of wealth thus wars, revolutions and social unrest have been a good indicator for changing CILOD. The approaching new CILOD is prompted by the new valued individual skills and knowledge needed under the new developments for a society or country to maintain internal stability and advance internationally;

Two things are of high importance at this time of change from one CILOD to another the Real Possibilities which reflect the socio-economic developments of a CILOD and also the Individuals Expectations which at time of change are getting higher: there is a relation between these two Relativities thus they usually closely follow one another: the expending Real Possibilities unlashes the constant Individual Desires for greater freedom of competition: the general direction of such competition is directed by the Real Possibilities and the current at the time possible spheres of competition: thus if we go back in history at feudal times the Individual Desires were much different from these in the 18 Century Empires of Europe and these from 20 Century Japan and even further different from the Post Wars Most Developed Countries;

The Philosophy of the Economy distinguishes and summarize these differences to show a very particular patterns in the world history which until now have been seen from other angles; by showing such changes it capitalizes of the constantly expanding role of the Individual Intellectual Abilities and the new historical role they are to play in the constantly changing new world.

From another side, if societies/countries do not adapt to the emerging new socio-economic accents they may loose competitiveness and even further disintegrate and become unstable.

Philosophy of the Economy is a philosophical conception of locating the historical CILOD and the related Individual /for individual countries/ Current Levels of Development and thus showing a different way of such evaluations from the used socio-economic philosophical conceptions up to date. This new way is progressively distinguishing itself from socio-economic ideologies, nationalism, racism or any products of the Scarce Resources Economics philosophies; it is founded on the most recent socio-economic changes in the Worlds Markets and establishes a new conception for sustained market development for the Most Developed Countries and Blocks and for any other countries and even individuals into the new Globalizing Market and World.

The history of the world is a history of changing priorities of the role of individuals in societies: the Individual Desire to Compete for socio economic success as a natural human reaction in life and Societies’ from other side have established cultural and regulatory systems to keep this competition under acceptable limits.

Follow up: Part Two


About Joshua Ioji Konov
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