Economics: The Dismal Science

Having been acquainted with the subject of Economics since I first studied it while in school in the late 1970s, from Micro to Macro Economics, from Adam Smith to Karl Marx and John Maynard Keynes, from Laissez Faire to Communism, from the collapse of the Communist Utopia in the 1990s and the recurring booms and busts of Capitalist Economics: it has dawned upon me and many others I believe that in our common pursuit of the illusive goal of human material happiness, we have all been duped.

Duped by none others than ourselves.

It has been said that what differentiates humans from other living things on Planet Earth is: Financial Worries.

It is not that non humans do not have physical needs like food and shelter, but that while humans have so called "progressed" from mere hunters and gatherers like animals to farming and industrialization, the agricultural, industrial and information technology revolution has brought us, ironically closer to Doomsday.

As we build, we destroy and as we in concert seek economic growth, we stimulate the economy by stroking the flames of consumption and production that exceeds the natural constraint of natural sustainable replenishment cycles.

In our misguided passion for economic growth, we will spare no effort in coming up with various devices to balloon up the figures.

The dismal consequence is at the end of the day, we are straddled with a ballooned economy awaiting explosion that will implode upon us.

When Lord Keynes first creatively devised the idea of inflating a sluggish economy out of recession by way of government spending, it was largely and initially rejected by Laissez Faire Economy Purists as interventionist against the spirit and letter of Capitalism.

When Keynesian Economics seem to do the trick in smoothing out the kinks in Capitalism; Reformed Capitalism with an element of selective government intervention and regulation has become the global economic religion.

Along the way, came economists of the caliber of Lord Keynes and singing from the same hymn sheet albeit cloaked in different attire like Milton Friedman and Paul Samuelson opposing one another, seemingly on opposing poles but with the common thread of government involvement and regulation.

The persistent suppression of a low interest rate economy to stimulate consumption and investment during the long tenure of Alan Greenspan (American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006) is one classic anathema to Laissez Faire Economics Doctrine where the Adam Smithsonian's Market Invisible Hands are the only hands that should self regulate and sustain the long term harmony of the Free and Fair Market.

Over the past 200 years or so of New World history, the USA has unravelled to us how ugly the laws of the unregulated jungle of Capitalism can be. From anti-trust legislation to prevent price fixing and monopoly to the ban on short selling and other stock market manipulations through insider trading, we are now faced with the hitherto unregulated financial market instruments like 'derivatives".

While it had been the sole exclusive right of the government as the printer of all her currency notes and banks, the creators of credit within the statutory deposit regulatory mechanisms set by the government regulatory bodies, the new financial device of "derivatives" seemed to have escaped the radar of the financial regulators that had almost caused the total collapse of the global financial and banking system in October, 2008.

The bail out by the US Government on selected financial and banking institutions, deem too big to fail may have saved the Capitalist World from a catastrophic collapse, albeit for the moment, major systemic and structural weaknesses have yet been materially addressed.

The current (2010) national financial challenges faced by the PIGS (Portugal, Ireland, Greece & Spain) are just the precursor of things to come as more countries with similar structural problem of persistent chronic fiscal deficits faced difficulties in rolling over their debts due to humongous accumulated budget overruns, inadequate revenue collection and weak political willpower.

The prognosis is dismal.

It will look like a total collapse of the global financial system is inevitable so as to usher in a New World Order.

It looks like Frederich Hegel's Thesis of "Thesis, Anti-Thesis, Synthesis" will reign true and supreme, once again, this time over Adam Smith and Karl Marx.

But all is not lost, yet.

In a post Synthesized New Global Economic Order, I envisaged for those who choose to be outside the system will return to basics: "hunting and gathering", albeit in substance rather than just mere form.

If we have yet learned the very basic survival skills of finding and making your own water, food, fuel, shelter, clothing and medicine, now is the time, even today is the right time to commence.


In Scouting, the motto is: "Be Prepared"; in Royal Rangers: "Be Ready".


Either way, if you are neither prepared nor ready, you are doomed in defaulted failure.