Association For Heterodox Economics 17th Annual Conference 2-4 of July,2015 Presentation by Joshua Konov

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State and Private Debt of Market Economics

In recent economics debt is in the foundations of business and equity – state debt limits governments’ expenses, social, educational, infrastructure, policies and international relations – private debt limits individuals’ expenditures, abilities to access better education, housing, and etc; however, ‘credit’ that could fall into ‘debt’ is a main market tool giving governments and individuals the abilities to expand infrastructure, business, equity, and etc using capital, which could not be approachable but by through crediting. The difference between ‘credit’ and ‘debt’ is in the momentum – whereas ‘credit’ is targeted investment considered in motion, a ‘debt’ is negative after deficiency market imbalance. The distinction between working ‘credit’ and accumulating ‘debt’ is a thin line that could be crossed by global recessions, works of nature, or political turbulence. Between ‘credit’ and ‘debit’ comes public financing – in case the ‘risk’ is taken in parts by the investors thus limiting the issuers (could be governments or corporations) liability; however, in cases like “Bondholders against Argentina”,

CAMBRIDGE – Argentina and its bankers have been barred from making payments to fulfill debt-restructuring agreements reached with the country’s creditors, unless the 7% of creditors who rejected the agreements are paid in full – a judgment that is likely to stick, now that the US Supreme Court has upheld it. Read more at http://www.project-syndicate.org/commentary/jeffrey-frankel-explains-why-a-recent-us-supreme-court-ruling-leaves-creditors-and-debtors-worse-off#LEKoUJp5KSDDLW2A.99

or “IMF, ECB, Germany and other lenders against Greece” bonds are capitalized into loans and the governments of Argentina and Greece are required to pay these in full.

There are many historical occasions when ‘debt’ on countries level was forgiven or let it die in time:

The revolutionary war set up the United States’ new monetary system – all partially causal to the austerity measures and trade restrictions on the Colonies implemented by the Minister George Grenville – by year 1763 Britain’s national debt had risen to £122 million, or over 150 percent of the Gross Domestic Product that prompted strict austerity and trade-restrictive policies:

“Grenville passed the Currency Act of 1764, which forbade the colonies to emit any new currency. Finally, in 1765, Grenville ushered the American Stamp Act through the House of Commons, a measure that was designed in part to restrict the colonial land market.” se “1776: The Revolt Against Austerity”

Germany after the Second World War and Poland after the fall of Communism are the best example of such …

Yet debt forgiveness has an established historical precedent in Europe. Poland, for example, had accrued external debts of about 57% of GDP by the time the Communist system had collapsed, with the majority of that debt (around $33 billion) being owed to Western governments. Poland’s largest creditor at the time was Germany, which reluctantly agreed in 1991 (under pressure from the United States) to go along with the “Paris Club” of creditor nations and forgive half of Poland’s debt to the West (though this was less than the 80% write-off Poland had originally been seeking). An even more dramatic example is provided by Germany itself. Historically, Germany has been described as the biggest “debt transgressor” of the 20th Century, with restructurings in 1924, 1929, 1932 and 1953. Total debt forgiveness for Germany between 1947 and 1953 amounted to somewhere in the region of 280% of GDP, according to economic historian Albrecht Ritschl of the London School of Economics. Today, Greece has an external debt-to-GDP ratio of roughly 175% (by comparison, Germany’s external debts currently stand at about 145% of GDP).

On individuals or corporate level ‘debt’ has been washed out by bankruptcy procedures – in the US bankruptcy courts are much speedier and overall easier than these in the EU, that some economists consider the main reason for the better way US economy has performed in post-2007-9 Recession times. By giving debtors a second chance bankruptcy courts play some fundamental role in taking individuals and businesses out of the big hole of debt into the market opportunities, thus boosting business and consumption.

The most unorthodox economic approaches to flood capital into underperforming markets is the used by the US, UK, Japan and now EU central banks so-called ‘quantitative easing’, while instead of borrowing publicly or privately capital to revive their economies these central banks ‘produced’ such capital from ‘thin air’ into the system. The ‘status quo’ economics predicts that additional capital – such not a product of an economy market activities (debit/credit) – would prompt inflation; however, no inflations but deflations have occurred in the post-recession times? Neither, the huge debt accumulations by Japan, the US, many EU countries, and others have prompted inflations either! Thus, neither the quantitative easing nor the huge debt has yet created sweeping inflationary forces. In context with the ‘status quo’ economics are the ways government accounting is done by not properly deducting QE from the overall debt even so the capital infusion by QE writes off debt by acquiring issued bonds? In referring to inflationary forces or the lock of it for the last 20 plus years the ongoing Globalization, rising Productivity, China’s Industrialization, and the Internet could be considered causing the increasing exogenous economic pressures over national economies indicated in by their deficit adding to their debt.

The world is crippled by too much debt. The borrowings of global households, governments, companies and financial firms have risen from 246% of GDP in 2000 to 286% today. Since the financial crisis began in 2007, debt-to-GDP has risen in 41 of 47 big economies. For every extra dollar of output, the world cranks out more than a dollar of debt. The Economist explains why the world is addicted to debt http://econ.st/1eaQEgc

As simple as things may look like the results of this system of economics not being able to accommodate these exogenous forces cause fundamental global market imbalances – unemployment, declining middle class, small business and investment, and accumulation of high national debt.[1]

Market Economics employs exogenous market forces and thus capitalize on the 21st Century irreversible developments by not only enhancing the international accounting but further by employing the immense powers these exogenous forces posses to boosting national and global Market Development through alleviation of poverty and environmental Earth protection.

The countries debts are considered by Market Economics as the present corporate and individual debts involving bankruptcy, mitigations, negotiations, and etc; whereas investors take their reward and risk; however, Foreign Direct Investment and Productivity are not considered primary force for global development but supplementary such, because the more important consideration such as Earth protection requires poverty alleviation by not prompting mass industrialization.

Capitalism uses foreign direct investment by transnational corporations to raise productivity and bring a return on this investment that could be only achieved through industrialization, and the global accounting system is set up on these principles;

The Marketism uses subsidies, low-interest financing, and etc along with foreign direct investment to prompt environmentally friendly Market Development that will alleviate global poverty and thus save Earth from destruction using market principles and saving individual freedoms.   Joshua Konov 2015 [1] http://www.economist.com/blogs/graphicdetail/2015/05/daily-chart-4?fsrc=scn/fb/wl/dc/st/thetracksofarrears

Parameters – Market Agents and Tools – of Market Economics

Market Economics uses environmentally friendly approaches to steer business and employment of a democratic society that consequences into poverty alleviation and middle-class growth on a global scale. It is founded of the existing principles of the Capitalism, however, it changes the shady ‘easy’ business into strict law of business to deleverage the inequality of market competition to raise ‘market security’ and the small businesses and investors lend-ability that differs from the current economics.

If Market Economics accepts ‘uncertainty’ as an ongoing and growing market (economic) development – product of the ongoing exogenous for individual markets (economies) forces coming from the ongoing Globalization, rising Productivity, Chinese Industrialization, and the Internet – to manage such ‘uncertainty’ an ‘as it comes; as it goes’ approach is needed that could be only achieved if market (economic) tools are used as ‘parameters’ to prevent the global marketplace from exasperations that could bring upheaval.

The ‘market agents’ are status quo necessities required for raising the ‘market security’ by marginalizing the existing inequality in current market competition – how ‘small and medium businesses and investors’ are affected by the business laws and conditions in comparison to the ‘large businesses and investors’. For the ‘market economics’ to enhance ‘capital transmission-ability’ and thus boost business activities – employment and fiscal abilities – the acceptance of more fair ‘market agents’ is paramount: enhanced business, liability, contract, environmental, consumer protection, bankruptcy, insurance, bonding, and labor laws will raise ‘market security’ allowing lower rates of lending.

However, the ‘market tools’ are used as ‘parameters’ to balance market equilibriums in synchrony with the ongoing deflation/inflation forces in the real economy – flexible capital infusion through FDI but also through Subsidies, Low-Interest Lending using ‘market leaps’ mostly by developing alternative: energies, tourism, and farming should go global. Social, educational, research and development, and infrastructural expenses, prevailing wages, and etc are also such ‘market tools’,

To save Earth the alleviation of poverty is necessary; however, achieving it not through the industrialization of the present Capitalism but through targeted ‘leaps’ of diverse environmentally friendly businesses of the Marketism (Market Economics).

The Marketism will work under high ‘market security’ with enhanced ‘market agents’ whereas the ‘market tools’ are used indiscriminately in comparison to the ideological approaches or current budgetary economics – the debt issues will resemble the individuals/businesses system of lender/debtor approach in which governments and countries will have less intrusion in economics being more on the controlling side than on the capital transmission such – Commercial Banks and International Financial Institutions will approach directly markets thus reducing corruption and politically motivated investment of the Presence.

The ‘parameters’ are flexible in nature: some on the supply side such as targeted subsidies and low-interest business financing another on the demand side such as social, infrastructural, educational, prevailing wages, and etc expenses. Balancing ‘market equilibrium’ because of increasingly relevant exogenous market forces will be targeted through market sectors ‘parts equilibrium’ than the currently used ‘general market equilibrium’ – thus monetary policies will not work by varying discount interest rates of the Central Banks but by expanding or reducing individual market sectors lending rates and/or fiscal initiatives. If markets are taken as ‘demand to supply’ (not to be mistaken with ‘supply to demand’) places for business competition the long-term ‘market development’ depends on the relative ‘stable’ market environment that is only possible by mitigating the excessive market/economic fluctuations through using the ‘parameters’ to prevent ‘big waves’ of excessiveness – the market forces on sectored/partial level – natural to the market competition are the best ways for keeping ‘marketing equilibrium’; however, the fierce variations experienced in the last 2007-9 Recession lesson goes to active usage of these ‘parameters’ to prevent such harmful consequences of a ‘as it comes; as it goes’ economics.

Joshua Konov 2015

Bankruptcy in Market Economics

There are well-substantiated suggestions that the difference in the bankruptcy procedures between the US and the EU has given the US an upper hand while dealing with the 2007-9 Great Recession and the Post-Recession tremendous economic issues. By giving individuals and businesses a second chance in relatively short procedures the US Bankruptcy Courts have helped jump starting the economy, whereas their EU counterparts followed much lengthier and complacent largely ineffective practices – the divisions among countries and even regions in the EU, in their economic achievements and jurisprudence apprehension have taken an additional toll to prolonging bankruptcy procedures; however, the difference in the way bankruptcy has been processed in the US and in the EU is just one of the issues that have brought to substantial divergence in economic growth between the two – the insistence by the EU on the trickle-down economics of austerity, the redistribution of wealth from the have and to the have not: through VAT, monetary and fiscal means, subsidies and programs targeting mostly large businesses, the overall reliance on the large corporations and investors – the so called FDI – to boost productivity and growth, the growing nationalism, xenophobia, and the pressure on the national governments to comply through pay backs boosting corruption are just some of it. However, this article will concentrate on the ‘bankruptcy’ and how it is considered by the Market Economics as a ‘tool’ of economics.

Just for reminding – the Market Economics is an ‘as it comes; as it goes’ approach in economics that uses market ‘tools’ as parameter to steer up or slow down market forces under the circumstances– it is not so much a ‘budgetary’ economics as it is ‘inflationary/deflationary’ adjusted to system. What brought Market Economics as possibility was the tipped off over all industrial capability by the ongoing Globalization and rising Productivity, the Chinas Industrialization and the Internet; the Market Economics is necessary to deal with the needed Environmental Protection and related Poverty Alleviation not relying on an industrialization of the Capitalism, and therefore not relying on the Large Transnational Corporation and Investors or the so called FDI to boost productivity and economic growth. The deleveraging of market structures to marginalize current economy’s market advances to the large corporations and investors is a postulate to raise the market security – and thus the Small Businesses and Investors lend-ability. Fundamental, for this approach, is the exogenous economic forces consequential to the ongoing Globalization and rising Productivity.

Market ‘agents’ and ‘tools’ to succeed market security vary from the enhanced business, insurance, environmental, consumer protection laws to the prevailing wages, labor laws, to market ‘quantum’ leaps through investment, subsidies, and low interest rate – all pinned to inflation/deflation.

The idea is by enhancing market security the global economy would allow small businesses and investors through natural to the markets means.

Market Economics changes the ideas about what a global marketplace should look like – whereas Environmental Protection Laws are paramount – but such to be succeeded in a world, deepening in poverty, an alleviation of such poverty on a global scale must be accomplished!

A ‘bankruptcy’ is a ‘tool’ of economics such as ‘infrastructure’ and ‘social expenses’ are – just a balance market tool on the demand side of the occasion, and therefore, the laws of market economics and the possible balances between the demand and the supply sides apply to the quantities of bankruptcies’ market tool used without provoking inflation/deflation that can hurt an economy – it is all about market equilibrium that could be achieved by using FDI or/and targeted subsidies, low interest rate lending, etc through gradual and/or market leaps approaches. Alike ‘social and infrastructural expenses’ that could be expanded to a point when these start hurting the market economy by prompting excessive inflation/deflation ‘bankruptcies’ even needed to keep market equilibrium may easy rise up into excessiveness – that must be sustained accordingly!

Joshua Konov 2015

The EU Mixing True and Fiction in Dealing With Greece

The European Union authorities and the media are constantly talking about reduction of Greece’s debt whereas it is about the turnaround of the Germany’s insisted austerity policies that have wracked the EU ever since the 2007-9 Recession. An approach of ‘bagger your neighbor’ by keep cutting social services, education, medical, and any governmental expenses – the theory goes: ‘when a market gets indebted by cutting expenses and regulations such market becomes attractive to foreign direct investment with its low salaries, desperate work force under high unemployment, low social expenses, cheep prices privatized assets, etc idyllic conditions for the large investors and transnational corporations to move in raise productivity and get such market becoming competitive and sound’; however, that was suppose to happen, instead – the unemployment reached heights unknown, the consumption plummeted without attracting major investment or rising productivity – in reality, the whole theory that is founded by neo-liberalism collapsed prolonging slow if no growth in-and-out of recession business environment followed by rising National Dept as a percentage of an ever declining GDP – it has become a ‘catch 22’.

The Brussels bureaucrats and the Berlin masters instead of sitting down in comprehensive evaluation of these realities has continued to call their mantras until Greece elected a totally different and not controlled by them government who called for change.

Seemingly, the Greece’s insufficiencies in administration and business environment did – in the past – cause substantial debt, the EU actions targeted reducing the existing administration and improving business to overcome these insufficiencies; in practice, nothing good came out of the austerity measures but misery, unemployment, lack of development, so obviously the reasons for these insufficiencies were not the one evaluated by the ideologically inclined Brussels and Berlin, or at least the actions requested were not the right one to change the existing pattern, you should recognize them by the results: higher unemployment, increasing Debt to GDP ratio, and total economic collapse of the Greek market equilibrium and development.

What went wrong and why the liberalism did not perform? One sentence: – the exogenous pressure were not accounted for and taken in consideration – the Globalization and rising Productivity have brought pressures in manufacturing, employment, technologies changing the pro-supply market growth of the Capitalism that could have been positively affected by the Austerity into a pro-demand (pro-market equilibrium) market development of the 21^st Century in which inflationary forces change with deflationary, exogenous factors take larger percentage from economies/markets, and the Economics must change to accommodate these changes in order to perform, the Liberalism has not done it and therefore the results are negative. Greece is a best example of these new developments: the high debt and unemployment, and lack of growth will persist unless new approaches are used to take the Greek as well entire EU. Joshua Konov, 2015

Market Leap of ‘As It Comes; As It Goes’ Market Economics

Market leaps are necessary to achieve Market Development on a Globalized Marketplace.

The difference between the passive currently used Economics and the proactive Market Economics is in the approach to prompt Market Development id Economic Growth; whereas, the formal one uses Investment (mostly private) and Productivity preferably under shady business practices and lower taxation to prompt Economic Growth; the Market Economics uses targeted financing through investment, subsidies, low interest lending, and other market tools for a pre-programmed approach (Market Leap) to prompt Market Development.

The ‘J Factor’ indicates the level of sufficiency of the market transmission-ability of Capital. It varies in conjunction with the functionality of an economy/market. The Rule of Law in Business, the Infrastructure, the Social Structure are the objectives for the ‘J Factor’; however, the ongoing Globalization and rising Productivity provide higher flexibility to have economies/markets enhance their ‘J Factor’ by the implementation of the following Market Agents:

• Consumer Protection Laws
• Environmental Protection Laws
• Insurance Laws
• Bonding Laws
• Unlimited Liability Corporate Laws
• Firm Business Contracting Laws
• Intellectual Property Laws
• By-Sectors Monetary Policies on Lending

The inadequate infrastructure and social structures play important role to higher ‘J Factor’; however, the implementation of the appointed ‘Agents’ gives over ‘0’ – ‘J Factor’. Artificial Market Tools as Subsidies and Low Lending boost such undeveloped markets through targeted investment. Through a ‘Market Leap’ using Quantum Probabilities Theory to project and limit inflation/deflation effect a Market Development is achieved; however, with the improvement of the Infrastructure and social structures in a longer-term development the ‘J Factor’ comes substantially higher. Undeveloped markets with corruption, weak banking, and lack of infrastructure and social structures are considered impossible for exogenous interference; however, the globalization allowed large retailers, manufacturers, and banks to open outlets almost elsewhere – with the few exceptions of North Korea, Cuba, and the war zones. The exogenous Market Leap can be financed and controlled through the commercial banks; the government should be required to implement the Market Agents.

The Projects of Alternative Energies, Tourism, Farming, and Technologies should be the motors for Market Development; so, Market Leaps should be the Market Tool for succeeding it. The world cannot afford any more deforestation, exploitation of old cars, and fossil fuels heating resulted of the poverty driven markets/economies.

A ‘J Factor’ could vary from ‘-2 to 0 to +2’. Such J Factor is a multiplier to the invested capital; whereas, a market performs causal to its pre and projected level of development could bring straight return on the invested capital, along with some ‘Equity” built up of a long-term Market Development. Thus seasoned ‘Equity’ is to improve these markets’ standard of living, prompt environmentally friendly development, and eradicate poverty. The Market Economics uses Quantum Factors to provide “J Factors’ for different markets: first, to show their transmission-ability and return on invested capital along with added market ‘Equity’, and, second, to prevent from harmful inflation/deflation sparks.

The J Factor performs in its best while a market runs from 2% Deflation to 2% Inflation; however, such precondition is optional and is mostly advancing to a straight return on investment, and not that much to a long-term Market Development, which would advance independently as long the pointed Market Agents are implemented in a market/economy (such independent – not connected to the Inflation/Deflation Market Development depend from the size of such market/economy as well of the size of the targeted Market Leap. In such a case, the expectations would be for more volatile return rising with the increasing Inflation/Deflation market environment.

In relation to the ‘J Factor’ a market/economy could need pro-demand market (when the globalization is well presented), a combination of pro demand and supply, or a pro-supply leaps; therefore, the planning of a market leap is specific for individual markets.

Pro demand Market Tools:

• Fiscal Expenses
• Investment
• Low Interest Lending
• Monetary Subsidies
• Insurance Expenses
• Social Expenses
• Infrastructural Expenses
• Educational Expenses

Pro supply Market Tools:

• Fiscal Breaks
• Investment
• Subsidies
• Sectional Inflation/Deflation Interest Rates
•      Lending Rates
• Borrowing Rates
•      Prevailing Wages
•      Bonding on Market Prices
•     Access to Public Financing

A Market Leap is the approach to boost business activities through subsidizing, low interest lending, or investing will differ because of the ‘J Factors” levels for individual markets. The industrialization belonging to the supply side of individual markets is not considered possible Market Leaps, because as stated in many places of this research, the global industrial production capability has tipped-off as a result of already succeeded by the Transnational Corporations and China capacities, which will benefit substantially from other markets increase of demand.

Example 1 for a Demand based Market Leap:

Undeveloped Market A (could be a country or underdeveloped markets ex. Detroit) in which 60% of the heaters are on fossil fuels, 80% private and commercial residences not-insulated (walls, windows, doors, etc.) resulted in very high pollution.

Low-income results to low consumption:

GPI 5,000 USD per person

GDP 10,000 USD

Residential Occupied Properties: $3 Million

Commercial: $1.5 Million

High energy consumption and on fossil fuels 2,000,000 Residential 1,000,000 Commercial

Inflation 1%

Required by the Environmental Protection Laws improving to standard properties.

To Improve Properties to low energy consumption with non-fossil heating per Item $20,000 US total $60 billion US:

1. Market Agents implemented.
2. Market Tools used:

• Fiscal Expenses – 0 Taxes on Non-commercial Houses for 5 Year
• Investment – 20% (Commercial properties related) – $12b US
• Low (1-2%) Interest Lending – 40% – $24b US
• Monetary Subsidies – $24b US – IMF
• Insurance Expenses – $2b US – Gov
• Apprenticeships – $1b US – Gov
• Prevailing Wages plus Materials 95% from Total or $6b US
• Local Employment Preferential and Market Related
• Financing and Financial Control: Lending and Subsidies thru Commercial Banks
• Social Expenses– N/A
• Infrastructural Expenses – N/A
• Educational Expenses – N/A

‘Equity” (on paper) built non-seasoned $50b US, seasoned equals Total (minus 20% on Loans) plus ‘J Factor” – example 0.50% – $25b US ($18b US Commercial with ROI $6b US in ‘Equity’). Overall seasoned ‘Equity’ gained by the market – $75b US.

Paid for Construction Employment – about $27.5b US or $9,500 US per Unit.

Paid for Equipment and Materials – about $27.5b US or $9,500 US per Unit

Pollution from heating and waist of energy after Market Leap NONE.

Joshua Ioji Konov, 2014

Quantum Economics – Philosophy of the Economy

 

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The philosophical comparison of social developments: such as economy to the particle related quantum mechanics may look incidental or incoherent, but conceptionally said the human perception has changed from certainty and simplicity to uncertainty and complexity, too. Therefore, the perception of principle understanding processes in economy, philosophically, must change, too; the way it has changed in Physics and Mathematics , because the “uncertainty” of the information for particles in their “position” and “momentum” goes much farther in social sciences where the “uncertainty” of the social-economic developments and processes as reported by Governments or private groups are even more unclear and subjective. The similarity of the old “certain” and “simplified” approaches in Physics where particles were taken as measurable and static was well used in Philosophy and Economics where the processes were simplified and taken as measurable or at least easily put in systems of evaluation; thus there is not difference between the approaches in Physics and Economics in terms of thought and conventionalizing of simplifying processes and what in science seems irreversible is the constant conventionalizing complex reality. More “uncertainty” must go in the same way and apply to Philosophy and Economics as well.

The similarities between science in Physics and Economics goes even beyond the evolving perception from simplicity to complexity into the reality of realization of “unpredictability” and “uncertainty” when the same way when in Physics was realized that a “particle” is in constant change that there isn’t way it could be measured without error. It isn’t just because of the insufficiency of the human technology but because of multiple and mutually changing realities and even farther because the reality is extremely unpredictable and unknown. The same way in Philosophy and Economics could be easily realized that social economic processes are not static but “unpredictability” and “uncertainty” of ever changing social economic realities are not measurable by any means therefore to think that by using a few statistical measurements might give us a realistic picture of the economic situations is unrealistic and uncertain but even beyond the processes in social and economic structures are so diverse and changing that they are more like the particles in quantum mechanics then to any theoretical explanations of the statistic economics or principle of evaluations of Philosophical conceptions such as Marx’s or John Lodge’s or whoever’s. The ever changing reality and the uncertainty coming out of it may only be theoretically explained by some theories and philosophical conceptions but these could not provide an adequate picture of the ever changing and uncertain social-economic reality in which especially economic processes are at the most unpredictable and uncertain. The ideologies of some economic structures such as Communism or Capitalism, or Socialism which are conventionalized based on philosophical conceptions are far away from explaining the social-economic processes but more likely they are providing some “security” in a very diverse and insecure realities; these ideologies did work somehow in a political world of cold wars and ideological confrontations when one was better then the others, but do not work in an open free world where these philosophical conceptions do not find any applications or support.

To measure statistically or anyhow a realistic picture of the social-economic processes is uncertain the developed tools and indicators for such measuring are inadequate and limited but even they were developed to perfection they still would not be able to measure these processes because the processes by themselves are uncertain and could not be measured.

The processes in social-economics could be only given “parameters of expansion or contraction” so they can develop in “certain areas” to “certain extend” and then changed or adjusted, it may be done in a way to disperse accumulating energy so instead of big wave: the ways energies are accumulated and create big waves is the example of Real Estate market appreciation: which is positive for the economy to the extend of providing additional capital and equity thus expanding individual capitalization and investing but as we saw in the current crisis when this process of appreciation expanded over its positive for the economy effect such over appreciation had devastating consequences to literally crashing the existed economic structures; the negative accumulation of energies because of the over appreciation wasn’t dispersed to the rest of the economy so the ripple effect was unavoidable; in case a possible way to minimize such over-appreciation is not by not allowing or even limiting appreciation as all but by establishing “parameters” which will ring the bell for over-appreciations or even better they will automatically trigger “prevention valves” to limit the over-appreciation or under-appreciation as well.

The differences between the self-adjusting so called capitalism or socialism economics where governments use very political tools to adjust these fluctuations; as well Fiscal and Monetary policies and talk about distribution and redistribution of wealth or limiting or expanding business activities may not necessary be the right economic tools to set the needed “parameters” so “over expansion” or “under expansion” do not occur.

The “Iquanta” is a quanta but is not anymore a part of a particle or an energy, or any thing in physical aspect but a philosophical measured quantity of “energy” or just a “word” which could be considered as an abstraction or an “imaginary particle” as well, it will depend from the point of view: when some could believe that social-economic processes have their own energies or some not; for me such believes do not have any meaning because the most important thing is going to be to establish the parameters of it; The same principles would apply to “Iglued plasma” and some others terminology taken from the Quantum Mechanics which will be used in this research.

This research is attempting to challenge the status quo of the ideologically motivated Philosophy and Economics with the principle of uncertainty of the processes of economic development; to show the similarities existing between the Quantum Mechanics of Physics and the Iquantum Economics of Social-Economics Philosophy; to set some “parameters” of social-economic processes which eventually could be used in practical Economics to limit “big waves” of economic recessions or at least explain these “parameters.”

To show that even unpredictable by nature and impossible to be put into one philosophical structure which could explain all of these social-economic processes, though there are still some parameters which could limit the occurrence of big wave and not the least to show that economic downturns and recessions even uncontrollable are not a part or a tool of somehow “free market development”, but the violent adjustments are a result of occasional build up of energies to a big wave and in the same time some of these energies could be put in parameters /diversified thus it may prevent these big waves from being so frequent or so violent.

What is an iquanta? – it is not a part of any particle it might be part of energies or part of conceptional particles for explaining certain philosophical conceptions which particles move, contract and expand in limited predictability. It is influenced by social-economic processes and developments. It accumulates energies mostly based on social-economic occurrences and fluctuations.

What is igloued plasma?- the powers which connect the iquantas and other parts of a constantly changing and moving occurrences and processes in social-economic processes; we can imagine these terminology as a mirror of these social-economic processes so thus they could be located in their changes and explained in their changes, vibrations, accumulation of energies and creating violent social-economic adjustments. The physical quantities are built up by iquantas and other parts rapidly changing and moving, where the igloued plasma connects these parts and gives them the meaning of occurrence; the “energies” build up by the acceleration of the iquantas and other parts and the fluent economic developments become violent big waves: similar to the monster waves in the ocean. Well, common qualities of such build up is concentration of energies between the neighboring waves but this observation is not a principle. In real development of the economies some factors have positive effect over expansion and progress in certain time and the same factors might have negative effect in different time or mostly when passing the level of a positive build up: (for example the real estate appreciation has a positive effect on the economic development to the extent when the market prices are not supported by income to expanse ratios, or until the withdrawn and reinvested capital do not bring the supporting profit flow; or until becomes exuberant compared to the other business activities or if etc.), many variety of conditions hence if particular waves in the physical quantities relate the real estate built energies which might push up the big wave and this wave might well shake a lot of other sections of the real economy.

So comes the difference between quantum mechanics and iquantum economics: the uncertainty of observation of the iphysical quantities do not relate only ever changing realities but also the ways of observations when in the quantum mechanics the main issue is measuring and observing in the iquantum economics is putting parameters after analyzing of the information when the difference between iphysical quantities and final observations are even greater hence the vectors may start from the same or even totally opposite points so the relevance between and among these vectors is based on their directions, length and the angles of their projections.

The founding formula in explaining the existed uncertainties in the social economic development and processes is

A³Ai

(/Ai/ at one possible statistical or anyhow observation of current social-economic developments and processes) 
A is the imaginable real “iphysical quantities” which has its /X,P/ ( /X/ Momentum and /P/ Position) so

X,P ³Ai

X,P»A³Ai

Mathematically: 
|A/

Joshua Konov, 2010

 

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, to some degree applies to Economics bringing the Principles of Probabilities to manage the complexity and the uncertainty of these new developments. However, unlike in Quantum 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 artificially 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 susceptible. 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 set up into equal access to financing. There are two possibilities 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 lock of Rule of Laws’ Business Environment, therefore, any capital injections under such condition could not boost Market Development, these may stir temporally business activities bit cannot succeed seasoned Market Development (example of 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 marginalizing the inequality in the market competition.

The J Constant will go above (0) and therefore 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 perspective 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.22DefinitionsProbability 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

Md = Market Development

LIR = Lending Interest Rate

En = Market Entropy

Eq = Market Equity

E = Market Equilibrium

EE1= Market Leap

Dynamic Macroeconomics of the Marketism

Dynamic Macroeconomics of the Marketism

Abstract

Market leaps prompt market development shifting the entropy that changes the market  value of the equity fluctuations (i.e. market value verses market lending interest rate ratios) still in to the right thus building up market value, whereas the equity of the entropy mostly balancing in the opposite direction of it. Therefore, these two market (i.e. economic) variances in theory should balance each other, whereas the lending interest rates and fiscal initiatives to different market sectors these targeted market sectors through deleveraging the equity by raising the lending rates and fiscal methods or leveraging by injecting liquidity through low rates lending, subsidies and fiscal stimulus, whereas the capital should be generated by quantitative easing for highly indebted developed markets (.i.e. economies). Conditional for properly functioning of such scheme is fluent market transmissionability of high market security.

Introduction

The principles of quantum factor apprehends the uncertainty of observation “Random variables, stochastic processes, and events: mathematical abstractions of nondeterministic events or measured quantities that may either be single occurrences or evolve over time in an apparently random fashion” economies) these processes are adjustable by using market (i.e. economic) tools more like parameters for either dispersing energy buildups or shifting these energies in different parametrical market (i.e. economic) sections; the “grey” grid/equity is already settled equity with higher percentage equitable power. Competition is the recommended market agent for market development (i.e. economic growth). This economic system accepts open marketplace demand and supply (instea of supply and demand) with externalities from the open global marketplace, which has its substantial effect mostly on the supply side. All the determents of this economic system is to be considered determined only in principle, whereas the market (i.e.economy) is considered in motion and change “panta rei”.in non linear (i.e. quantum) grid.

 

Market Equilibrium

The general market equilibrium is achievable by aggregating partial equilibriums-ceteris

paribus, of the market sectors (i.e. industries); monetary and fiscal policies should

target different sectors’ performance based on the sectors’ personal consumption

expenditures (PCE) inflation data using the Probability theory to either deleveraging

or leveraging these sectors to maximum efficiency, however market leaps should be

used to shift demand and supply to the right through targeted capital investment into

environmentally friendly efficient products and services, and related technologies. The

monetary and fiscal policies have been used to generally cool or boost markets (i.e.

economies) as a whole, however the powerful Discount Interest Rate hikes to cool

down the e.g. real estate overcapitalization that prompted the 2007-9 Recession would

not necessary be needed to e.g. manufacturing or communications which were not

overcapitalized at the time. The extreme lost of equity casual of the recession could

have been localized in the real estate overcapitalization and dealt through monetary and

fiscal means, moreover, not allowing the spill over that has materialized at the time.

Fluent transmissionability is necessary for a proper market functioning, whereas the

injected liquidity and fiscal stimulus effect would work into the markets to boost market

value. Such transmissionability is achievable by raising the market security under a

fair market competition. Monetary and fiscal stimulus should target fair equitability

benefiting small businesses and investors along with the large transnationals and

investors. (Konov 2013)

Exogenous Effect

The globalization, the rising productivity and technological advances in communications

and manufacturing, the China’s industrialization and intellectualization, etc have

established a global marketplace with excessive manufacturing capacity and well

developed means for distribution. Large transnational corporations have advanced

by utilizing on these new market conditions by moving and outsourcing through

having access to cheap public financing and injected by the central banks liquidity,

and marginalized labor market. Hence has aggregated exogenous macroeconomic

effect on developed and undeveloped markets (i.e. economies) alike, whereas the

beneficiaries are few markets and individuals: a widening gap between rich and

poor is in its progress, a market equilibrium imbalance, particularly on the demand

side, is becoming the most serious of issues. High unemployment, shrinking salaries,

underemployment, shrinking fiscal reserves, large national debt, diminishing middle

class, dysfunctional markets (i.e. economies), and etc are products of mostly exogenous

macroeconomic pressures coming out of these new global excessive overproduction

and the capacity for such. The system of trickle-down Capitalism with shady business

practices promotes monopolies and oligopolies on a global level; the low market (i.e.

economic) security prompts the wealth concentration and locks fair market competition

that becomes a liability to adequate market development (i.e. economic growth). To

absorb market shocks emulating from strong exogenous in a diminishing business

environment, employment, fiscal reserves, etc is achievable only by two approaches:

first, by more socialization and governmental involvement, or second, by marginalizing

all insufficiencies preventing a fair market competition and thus stirring more business

activities – entropy; in particular, empowering small and medium enterprises &

investors’ market participation.

General Equilibrium through Partial Equilibriums

The unevenness in developments of heterogeneous markets (i.e. economies):

a) National:

• e.g. more developed markets of New York and Chicago, or less developed

markets of Detroit and Cleveland,

• even further is divided into number of market areas leveraged by development

and profitability e.g. more developed Oakland County in Michigan and less

developed Wayne County;

• or market sectors e.g. more overcapitalized Real Estate (before 2007) and less

profitable small and medium size manufacturers.

b) Global: the developed markets (i.e. economies) and undeveloped such in an open

global marketplace.

Therefore, general equilibrium on a national level is greatly affected and related to

global equilibrium, whereas such general equilibrium could be only achieved by tracking

partial equilibriums of different market sections nationally and globally.

Leveraging or Deleveraging Markets’ (i.e. economies) Sectors

The unpredictable and fluctuating business entropy of individual market sectors could be

leveraged by monetary, fiscal stimulus approaches through market leaps or deleveraged

by rising lending interest rates and tightening fiscal policies.

Joshua Ioji Konov, 2013

Market (i.e. Economy’s) Equity of Market Economics (i.e. Marketism)

Market Equity[1] is the value built in assets[2] by the level of market development. Market Equity (i.e. Eq) decreases with rising Lending Interest Rate (i.e. LIR), whereas Market Entropy increases with rising Lending Interest Rate (i.e. LIR).

http://www.scribd.com/doc/131635795/Market-i-e-Economy%E2%80%99s-Equity-of-Market-Economics-i-e-Marketism