The Ego-Driven Interventionists Are the Cause of Disease.

When the interventionists have the license to meddle in the economy they demonstrate their ignorance and their intentions. Their lack of understanding of savings is a perfect example.

However, savings is not difficult to understand. It is the choice to consume later. So there is a very small difference between consumption and savings. It is simply the time frame that is the difference.

Saving is a personal choice made by each person, assuming that we have the freedom to make our own choices. While our savings fulfills the desire we have to consume later it also can earn a return, so it most often becomes capital.

Why are the interventionists opposed to savings? It is because they have allied themselves with political expediency. As the long term vision inherent in a monarchy was replaced with short term democratic cycles it became expedient for politicians to intervene to discourage savings. They may not be still be around in the long run so they want to make a splash now to satisfy their egos. They want consumption to happen now.

Consider the consequences of an artificially low interest rate set by an act of intervention. Savers feel discouraged. The incentive is to spend more now than they would have if they knew the real interest rate. This shorting of savings represents a consumption of capital!

The Divine Economy Model © makes it clear that the capital structure that is built upon savings is the cause of transformation. That is how vital savings is. That is why intervention is so destructive.

The current political systems and structure feed on interventionism and are parasitic to the economy. Eventually the people of the world will see the ego-driven interventionists as the cause of disease. At that point the healing will begin and the divine economy will enable everyone to reap the benefits of prosperity.

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The Divine Economy Will Eventually Purge Itself From Interventionism.

Since the divine economy is a system of justice there is no room for cheating in the divine economy. Bypassing the real mechanism of the economy with artificial data is a type of deception and it is cheating.

The real mechanism of the economy is the market process. It is real because it is the expression of people: what they want, where and how much. The market process is this exchange, it is this communication. If all of this information that is communicated leads to an outcome that is deemed incorrect by someone (in their normative assessment) then the interventionists 'rear their head' to modify the market outcome.

On the surface it sounds 'reasonable' to modify the outcome but let's look a little deeper. Who is this 'all-knowing' person or entity that knows more than the collective wishes expressed in the market process? Consider this: the choices made by market participants takes into account their personal history and assets. Their choices may convey information about their savings which then passes along information about their ability to buy and their desire for goods in the future. If someone arbitrarily alters the market outcome but does not know the reasons why the market process went that direction, then they are disregarding information that the market participants consider important.

No one is saying the market process is perfect, in fact it is always in disequilibrium, but it cannot be improved on by ego-driven interventionists who think that they know more than the dynamic expression yielded through the market process. Think of the market process as a means of communication. Prices represent the words in the market process language. Economic calculation is the meaning of the words. Knowing the meaning of what is being communicated is interfered with if words (prices) are rendered meaningless, as would be the case if someone outside the conversation changes their meaning.

Intervention disregards and distorts prices. It parasitically uses the prices generated by the market process, but if carried to its ultimate end there will be no real prices and the economy will cease functioning.

Why do we tolerate the ego-driven interventionists? They do not understand how economic calculation works, and yet they arbitrarily claim that they know what, where and how much for you and me and for everyone else on the planet! Rest assured the divine economy will eventually purge them from the system, which is nothing but justice. Knowledge about the Divine Economy Model © will be a part of this healing process.

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The Divine Economy is a System of Justice!

The basis of civilization is the contract. I am not talking about signing on the line necessarily. I am talking about the implied contracts that are a part of all human cooperation. The contract represents a trust, a trust that all parties are trustworthy. Those who are trustworthy will prosper and they will contribute to the advancement of civilization. Those who are not trustworthy will quickly be outcasts and will need to either change or become depraved.

As you can see the divine economy is a system of justice. The divine economy is a contractual society. It functions in a way that encourages trustworthiness.

It is the contract that becomes a defining entity for the betterment and advancement of human civilization. It is binding and has the capacity to be defined and refined with exacting precision. The degree of precision necessary all depends on the requirements of the situation.

Every arrangement made has this contractual nature. I can promise my friend that I will come and give him a hand moving some furniture. I can borrow money with the promise to pay it back. I can expect that employers pay employees and that the employees show up and do their job.

It is this contractual society that can be refined and which will bring about justice.

There is one standard, not one for people and a different one for government. This duplicity is where our present-day civilization falters. Combine such duplicity with the government as the holder of the reins of the justice system and it becomes clear how perversely favored government becomes. This is an injustice.

The justice system needs to be made independent of government and it needs to hold all parties accountable to the contracts. If areas of agreement are murky then the contracts need to be defined with precision.

The most powerful starting point for the renovation of justice is to define property rights as human rights and to continually refine the property right contracts.

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Capital Structure Extends as Far as Transformation Allows.

Consider the time structure of an organism like a tree. It starts as a seed. It becomes a seedling and then a sapling and then it begins to take on its structural identity. It continues to mature and it yields fruit.

Now consider capital and its structure. It starts as savings. It becomes investment and then it enters the production process which gives it a structural identity. Part of this identity is the time frame of the specific production process. Does it yield products immediately or does it yield products in a roundabout manner? Regardless, capital is an essential part of structural maturation.

In the divine economy model the capital structure extends from the womb of the market process, where it is acted upon by the exercise of entrepreneurial alertness, all the way to the outer reaches of production and as far as tranformation allows.

The capital structure of the economy is like the plant ecology of a forest. There are many different types of plants of great variety in size, shape, rigidity, function and longevity. All play an important role and all operate according to the principles of symmetry and reciprocity. Similarly, capital is heterogeneous and it, too, is an intricate latticework.

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What is the Pure Rate of Interest?

The ideal is purity. Is it attainable? Is it understood?

To answer these two questions as it pertains to the pure interest rate the answers are: "Not really" and "Hardly," respectively!

The pure interest rate underlies the market interest rate. The market interest rate includes risk, intervention effects, and the impact of these on the cultural time preference. Eliminating intervention and its impact on risk and its impact on the cultural time preference leads to a fairly close approach to the pure interest rate.

Most people see a number that represents the interest rate, and that is all they care about. It is unfortunate but true that there are two layers that have to be removed before most people can see beyond the numbers. First, the interest rate is a price and it serves as a means of communicating about the availability of savings. Monetary intervention is like lying since it communicates the wrong information.

Second, the interest rate is a vital link between the present and the future and so it greatly ameliorates the inherent uncertainty. Without this link functioning well, uncertainty increases. Intervention expands and intensifies uncertainty.

What the pure interest rate represents is an ideal that clearly shows the extremely harmful effects of intervention. In contrast to interventionism the pure interest rate conveys trustworthiness and advances the economy in accordance with peoples' time preference.

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Athletes, Explorers and Profit Seekers are Noble!

What is the difference between profit and loss? The difference is the correct decision made about a future event! Because of uncertainty there is always risk involved in decisions.

What are some analogies to profit and loss? If I am an athlete I choose a difficult and often grueling lifesyle to master enough skill to be the best. What if I lose the competition?

If I am an explorer I am trying to find the object of my quest? Not every explorer succeeds.

But if I am the best athlete and I win the medal or if I am the explorer and I make the discovery, am I scorned as evil and labeled with unpure motives? No! The same human quality is being exercised by all of these noble individuals. The profit seeker is aspiring in a field of endeavor just like the athlete or the explorer.

To scorn profit seeking degrades our human reality just like scorning an explorer would degrade our human reality. If an explorer uses methods considered uncivilized (for example, the early American explorers used native people to facilitate their explorations) the 'institution' of human exploration is not denigrated. The ignorance of the explorer is recognized as the historical condition and is seen as a weakness, but the idea of exploration as a noble deed is always held up.

To be just the same 'rule' needs to be applied to profit seeking. The profit seeker can always be refined and made more perfect but the idea of 'exploration' for profit opportunities needs to be justly seen as a noble and exalted deed.

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The Purchasing Power of Money is an Indicator of Economic Disease.

Power is at your fingertips! That is the reason for having a medium of exchange. It is by the means of a medium of exchange that the barriers that exist in barter disappear.

With this powerful tool - money - the market process accelerates and all types of exchanges flourish. The language of the market then functions at a high level leading to much coordination and cooperation. Money has purchasing power!

This is the condition of the economy when it is 'healthy.' This is the way the divine economy works.

But then we have entry into the system by ego-driven interventionists who have as their objective to 'correct' the economy in their favor. One of the symptoms of this disease - interventionism - is the loss of purchasing power. Its ramifications are greater than just a decrease in purchasing power since it also causes discoordination, and it causes partisan bickering rather than cooperation.

Therefore the purchasing power of money is an indicator of economic disease or of economic health. In an economy free from intervention the purchasing power of money is always increasing, as depicted in the Divine Economy Model ©.

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