How Economic Changes can boost US Economy and save Free Entrepreneurship

How Economic Changes can boost US Economy and save Free Entrepreneurship

Under the brand new global market conditions

  • of rapid market (i.e. of economy, economies) globalization and rising productivity;
  • of China’s industrial growth;
  • of improving technologies in manufacturing and the Internet;
  • of colossal size transnational corporations;
  • of Vietnam, India, Brazil, and e.g.;

the theory of Market Equilibrium, Philips Curve, Productivity Effect^, Starving the Beast, Frontier Economics^^ the Frontier Thesis^^^ and many other theories of economics, sociology or politics do not  explain comprehensively the needed changes that could prompt under these new conditions the US economy into longer term market development (i.e. economic growth). The 2007-9 Recession with its deep global equity reduction effect and the post recession sluggish rebound is a good example for how dysfunctional modern day economics is where it comes to predicting and countering the effect such upheaval had on the US and many other economies. The WTO, WB and IMF and the entire international financial system, which was suppose to prevent the spreading of economic decline in production and capital failed to do it.

The monetary, stimulus packages, quantitative easing, and e.g. measures taken and being in process by the US, Japan, and China were counter-cyclical by nature far beyond Keynesian theories or even farther the rigid Austrian Economics so much practiced. Moreover, these have been acts of desperation pressured by the real market forces, however the governments helped save the global market from total collapse, whereas the ideological in its nature science of economics has been predicting inflation and doomed dollar that never materialized. Only the European Union continued following the ideological postulates, and the results has been catastrophic, indeed. Throughout this time, the US, Japanese and Chinese governments have been taking over business functions by physically buying share of companies, by giving easy money to different sections of the markets, and by interfering with the market balance (i.e. equilibrium). Many forms of wealth distribution have been implemented too. It has become obvious for the governments to save the market is necessary to raise demand and to help large financial institutions get rid of their evaporated equity, thus lending could be ignited, so the government acted for which high appreciation to President Obama and his decisive approaches.

However, what the US and other governments have been doing by direct market interference should be supplemented and extended into long-term economic program to boost the market share of Small & Medium Size Businesses and Investors (SME&I) bringing them to the front-line as market agents.

The market transmission-ability, whereas large sums of liquidity have been injected into the market through QE and other ways, is a paramount issue needing immediate solution; the options are two either the government takes bigger role in the overall business activities, or the SME&I are given such, thus the choice is between the inept governmental market interference or the market forces and competition to prompt a long-term market development. It is clear who should be doing it: the SME&I, but for them to do it the overall Market Security should be enhanced to raise SME&I’ lower-rate borrow-ability; through changes and enhancements of the intellectual property protection, the contract laws, the insurance and bonding provisions, of the corporate governing bodies personal liability laws, e.g. (

^Australian Economic Papers, Vol. 48, Issue 2, pp. 105-123, June 2009
^^^by historian Frederick Jackson Turner in 1893

that will raise the Market Security and bring the related relative Market Competition Equilibrium in favor of SME&I.

The overall globalization and rising productivity that brought deindustrialization of many developed markets followed by high unemployment and declining middle class and fiscal reserves could be positive to these markets if diverse business activities expands; the Productivity approach (only) cannot keep up with these new global market developments, therefore more diversified business environment is needed to boost employment, whereas the Inflation/Deflation are the main indicators for Market Balance (Equilibrium).

The R&D and Better Education are equally important, however, diverse market activities will expand overall capital and bring more opportunities for connecting R&D and Education to the real markets.

The Social and Infrastructural Expanses under these new conditions will become more equitable thus equally been used for Market Balance, however their Market Share should be limited to additives whereas the free Market Completion should be considered for primary market agent.

To comprehend the market possibilities such approach a detail and comprehensive research ( of should be taken in consideration.

On the question, can the US economy succeed and maintain long-term Market Development under these new global market conditions? The answer is definitely yes, because in the equity based new arriving global economics the well developed and with high equity flexible US market/economy could be a leader; however, the revolution of prioritizing SME&I role should be implemented.


  1. 2001 & 2007 Recessions prompted remaking of the international organizations
    MPRA Paper, University Library of Munich, Germany View citations (1)
  2. Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, etc)
    MPRA Paper, University Library of Munich, Germany

Joshua Ioji Konov, 2012





Philosophy of a Governing Economy

THURSDAY, MAY 27, 2010

Philosophy of a Governing Economy

In contrast to the US economic policies, China uses much more decisively economic tools when a situation arises. In many cases when either Global economic crises were on its ways as it happens in 2008-2009 or now when the Chinese economy shows overheating the Chinese government does not hesitate to act and to act promptly and decisively. When Real Estate bust in the US provoked rambling effect over the entire Global Marketplace in China a curbing on speculation and targeted low housing prevented similarly to what happened to US and EU effect in there.

When in 2009 stimulus packages were needed to add monetary supplies and keep the economy from falling as a result of decreasing export elsewhere and particularly in the US as a main trade Chinese partner, a “flexible” usage of raising Chinese internal demand and expanding trade relations elsewhere and particularly with South Asian markets kept Chinese economy in relatively strong growth of over 9%. In First Quarter China the world’s fastest-growing major economy expanded 11.9 percent in comparison to the last year and now Chinese government takes prompt action again:

China’s Rules to Curb Property ‘Madness’ Will Take Effect Now

“The market is having its “last madness” and speculation may dissipate in a year or 18 months on extra action by local authorities and an increased supply of low-price, so-called policy homes, Li said.

Cheung Kong (Holdings) Ltd., the Hong Kong developer controlled by billionaire Li Ka-shing, said yesterday that efforts to cool the Chinese property market are “timely.”

“You want to take action before the market gets too hot,” Justin Chiu, executive director of Cheung Kong, said in a Bloomberg Television interview. “Prices have gone up really quite a lot; people buying for their own use should do it within their means. If they invest, they need to be cautious about interest rates.”

The Chinese government is not persuaded by lobbyists of falling stocks prices “The Shanghai Composite Index fell 1.1 percent yesterday” to moderate or change their policies, they are acting indiscriminately using the available “tools” of economics for prevention or stimulus when needed.

In comparison to China, here in the US a partially pro political and ideologically motivated system of the ways of economics is used by the government for prevention of economic crisis or stimulating the economy when needed.

President Obama spent years to promote the Health Reform in a fierce fight over details sometimes quite irrelevant when the Health Reform is a purely economic “tool” for expanding economic activities and overall for so much needed wealth distribution and redistribution in the US. This constant talk of US deficit and constantly rising National Debt also handicaps the Government to take decisive prompt action when a situation arises.

The economic “tools” are more considered ideological prerogatives for political gains andEconomics is more considered as a belief in something could be the Right “trickle-down” Capitalism could be the Left more business involved Government, when economics is a Science by which any “tools” of economics should be used indiscriminately under different arousing economic conditions, any economic tool should be on the table: curbing speculations, financial regulation, enhancing personal liability of risk management of corporate structures, social policies, infrastructural expenses, healthcare expenses, SME tax breaks and low interest financing, subsidies and etc.

In a time in the ever-globalizing marketplace and rising productivity, industrial production of the production based economics is not going to maintain conditions for many countries all over the world to keep up with their Fiscal expanses. When countries like China are building industrial production to new heights in combination with Japan, Germany, and the US, these may well build capacities filling the Global supply for such industrial production. Here in context the exhausting Earth resources, the Global pollution, and deteriorating Environment should be taken in account, too: showing limitations to a constant Global Industrial Growth for all countries so these countries could keep their Fiscal expenses under control.

Industrial production adds the most to any country’s GDP at the moment, therefore under the current production based economics for a country to not be industrialized means either this country is very much underdeveloped like Bulgaria or it runs high deficit like Greece and Portugal. For the US the effect of decreasing industrial production has a very similar effect to the Bulgaria and Greece: when in some areas like Detroit poverty roars just like it does in Bulgaria in some other areas like Chicago high deficit is becoming imminent. Thus the policies President Obama is implementing of “artificially” boosting Healthcare, SME and tax breaks to the low income are the only economic policies possible under the circumstances, though there should be some better ways for sustained economic growth in which private entrepreneurship is not curbed and freedom of business is not overtaken by governments, because what all learn from the last Great Recession was that Governments could take over businesses, financial institution in a very quick, and as a conclusion when future recessions hit Governments will go even farther.

China’s handling of the last Recession is a good example of how such crisis should be handled but when well-balanced economics is combined with personal freedom of the US the results could be much higher, but to preserve this freedom we should adjust currently used economics to the arousing developments of the New Century.

©Joshua Konov, 2010