Monday, January 30, 2006

Transformation is a dynamic process!

It is not realistic to view the economy in a static state or in a state of equilibrium. Equilibrium is an ever-present tendency that is never attained, and the element of time is absolutely and relatively critical when looking at the dynamic, real world economy.

Once we go beyond the present we enter into the world of uncertainty. Empirical economists try to eliminate uncertainty by designing static models. This is a duplication of the same error made when the subjective nature of human beings is removed "for the sake of science." Neither are scientifically appropriate or necessary since the subjectivist methodology incorporates both time and its uncertainty, and human action and its subjective nature.

It is no wonder that the empirical economists ultimately recommend measures that are interventionist and lead towards socialism. Without allowing time and its uncertainty into their models they neuter capital. Consider how serious is such a flaw! As shown in the divine economy model, 'capital and its structure' is the fundamental element that leads to transformation. And since transformation is a dynamic process, static model methodology again cannot contain it.

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