Earn A Masters Degree In Divine Economy Theory!

How does this new endeavor - offering a Masters Degree program - feel for me?

It feels like a quantum leap; it feels like I am going from words to deeds; it feels like I am finally actively involved in re-educating people around the world (which is what is needed).

As the saying goes 'A picture is worth a thousand words.' Well, I have over 150 diagrams developed so far in pursuit of understanding the divine economy theory. Each of these diagrams constitutes a lesson.

Practically, what this means is that after studying and comprehending these lessons you will be a Master of the Divine Economy Theory!

Begin by contacting me at divineeconomyconsulting@gmail.com and expressing your interest.

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Empirical Economics Is Locked Into ‘Selfishness.’

As the saying goes: You reap what you sow.

Empirical economics has tried to be ‘scientific’ by removing all non-predictable elements. This is perfectly valid for the natural sciences but it is an illusion and an unfortunate sign of a lack of intelligent perception. There is nothing scientific about removing humans from the human sciences!

To stay true to this erroneous methodology (erroneous for the human sciences but not for the natural sciences) the empiricists collect data and then interpret their data. As part of their explanation of the trends they conclude that humans act selfishly. Humans choose what they perceive to be in their best interests.

Selfishness is one way of describing such a pattern but so is subjectivity. The empirical economists cannot acknowledge subjectivism because that undermines their empiricism. They are entrenched, locked into selfishness.

As a result they pin the label ‘selfishness’ on humans and this leads to all kinds of perverse outcomes. For instance, how can anyone imagine that laissez-faire can be good if, when left alone, people will act selfishly. Empiricists come to the conclusion that the government is necessary to keep people from acting in such a degraded state of mind - selfishness!

These perversities that result from empiricism would simply not exist if the proper methodology was used for economics. It is a human science, a social science, and the appropriate methodology is subjectivism. People make choices subjectively. Everyone does it. A person can only make decisions based on knowledge of one’s own self. How could it be otherwise?

Under subjectivism laissez-faire is obviously an expression of freedom - which is conducive to prosperity. This is the economic methodology that treats humans as humans and acknowledges natural law by recognizing that humans are subjective beings.

Economic empiricists sow seeds of false pretenses and reap economies that are rigid and easily subject to corruption. Ironically those who are the source of the corruption are the ego-driven interventionists who are indeed ‘selfish!!!!!’

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Foreword to "MORE THAN LAISSEZ-FAIRE"

by Bettina Bien Greaves

Most high school and college textbooks describe the nation’s economy as a huge agglomeration of goods and services, vast piles of food, clothing, coal mines, factories, computers, agricultural products, kitchen appliances, TVs, automobiles, computers, planes, and so on ad infinitum. But these physical things are not the market economy as such. They are what people produce while working and trading on the market economy.

Bruce Koerber explains that the market economy is not a physical thing; rather it is a process, a human institution. It is at the same time the consequence of human actions and a shaper of human actors, transforming them into cooperative social human beings. The economy is the outgrowth of the purposive actions and choices of men. As such, it is manmade, but it is not purposively planned. As men meet, cooperate and have dealings with one another, markets evolve, as do societies and civilizations.

Koerber shows how the market economy develops. It is a dynamic process. Market participants are ego-driven; they act on the basis of their subjective values. Their subjective values are expressed in prices. Prices furnish knowledge about the wants and needs of other market participants. As traders turned from barter to using a medium of exchange, money, trading became easier. Moreover, money prices furnish market participants with information, knowledge, and the tools for calculation. Thus the market disseminates and coordinates the activities of market participants.

As Koerber explains, all men are driven by the human spirit to try to improve their situation. Individuals can best improve their respective situations when they are free to act. Therefore, the human spirit should be free. The right of individuals to private property must be protected so that individuals will save, accumulate capital and invest. If entrepreneurs are free to look for and to discover opportunities they tend to improve economic productivity. In the process, the free market economy develops economic principles and fosters law, order, justice and harmonious relations among all participants. Thus, the path to economic progress, peace, prosperity and a more advanced civilization is through the free market economy. On the other hand, when outside interventions interfere with the voluntary activities of individuals in the market economy, especially by wars and inflation, they violate property rights, disrupt the market’s harmonious operations, distort prices and production, cause the boom/bust business cycles, and hamper economic progress.

For those who appreciate visual presentations of economic relationships, Koerber’s book is sprinkled throughout with diagrams illustrating the influence on economic production of property rights, capital structure, prices, entrepreneurship, competition, profit and loss, etc.

Koerber’s book explains that the free market economy is guided by voluntary actions. It is “in accord with the will of God.” It leads to greater social cooperation, peace, increased prosperity and a more advanced civilization. It awakens the human spirit to its full potentiality. Koerber calls it the “divine economy.”

Bettina Bien Greaves *
Hickory, North Carolina
February 2008

* Formerly with the Foundation for Economic Education, Irvington-on-Hudson, NY; attended Ludwig von Mises’ NYU graduate seminar in economic theory (1951-1969); compiled a 2-volume annotated bibliography of Mises’ works, published by FEE in 1993 and 1995; and now editing the new editions of Mises’ several works being published by Liberty Fund, Indianapolis, IN. The latest volume in their series is Human Action (2007).

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Food Scarcity or Food Shortage?

Knowing the difference helps us to know what can be done to solve this problem. Everyone who is concerned about what is going on around the world recognizes that there is a problem. Although these two words appear to be synonyms they are not. Economic insight into the difference between these two is very valuable.

Scarcity is the unavoidable condition in this world. We can never have all of our needs and wants satisfied. At the same time it is possible to address scarcity by directing means of production towards satisfying our highest needs and wants. Scarcity is alleviated by production.

A shortage has a different origin. A shortage is the outcome of intervention in the market. Somewhere prices in the market are being interfered with (manipulated). It is the signal that we call prices that is like words in a language. The words are necessary for communication. Without market prices the signals are muddled and the consequence is either a shortage or a surplus.

In a centrally-planned economy the prices are arbitrary and ‘controlled’ rather than market prices. As a result you have a complete breakdown of the economy like what happened in the Soviet Union where there may have been a national toothbrush shortage yet there was a handle surplus in Minsk and a bristle surplus in Pinsk with no means of coordinating. Intervention, price manipulation, is like speaking Russian to someone who understands only Spanish. In the vast complexity of the economy such miscommunication leads to tremendous errors. Everyone suffers when the market economy is rendered ineffective by intervention.

Now we can get to the crisis at hand. The economies around the world are functionally ‘controlled’ economies and so we have a mess on our hands.

The food shortage is caused by interventionism. When prices are set by the central planners and are set below what the market price would be there is less production. Also at that ‘below market price’ the demand for the commodity is greater. Excessive demand combined with constrained production leads to a shortage. The cause is clearly interventionism. The solution is not to then to heed the call for increased control by the central planners! The solution is to recognize that the interventionists are the problem in the first place.

The immediate solution is to stop all intervention in the market so that the language of the market can re-establish communication and coordination.

If there is truly scarcity then production will be channeled towards that end. Indirectly there may exist the appearance of scarcity of foodstuffs since grain supplies are being depleted to produce biofuels. This is not scarcity but a part of the shortage caused by intervention into the market economy by short-sighted and ignorant politicians and those whose privilege they seek. Their intervention, subsidizing ethanol production as an example, is obviously interfering with market prices.

As soon as this intervention stops the resources in the free market will quickly flow towards production to alleviate scarcity. And market prices will assure that there are no shortages or surpluses.

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Divine Economy Theory - The Power of Deduction.

Empirical economists are blinded by and bogged down in minutiae. They are in a state of powerlessness whether they know it or not.

A holistic approach is absolutely necessary since humans all belong to the same species and there are natural laws that describe what they do. They behave subjectively within the spectrum of possibilities, constrained by the natural laws of the human operating system.

A holistic approach cannot start at the physical level nor can it choose the human intellect as its ultimate starting point. Holistically the human being is also a spiritual being. This means that the spiritual reality plus the intellect plus the physical qualities define the human being.

Deduction from only the physical nature of humans yields a different outcome than if one that starts more broadly from the intellect. Likewise, deduction from the higher level of perception, the spiritual, leads to a different discovery.

Backing up to the farthest point known takes us to the source of our creation - our Creator. We cannot go beyond that. Deduction proceeding from that point leads us to certain discoveries but there are no more stones to uncover that make it possible for us to broaden our point of origin.

What is extremely exciting about this origin of deduction for the human sciences is that it becomes fixed like a 'standard.’ Henceforth, the way one proceeds with deduction may vary but the ultimate starting point, the standard, is always the same.

This is why it is a truism to say that science and religion are in harmony.

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A Quote About Divine Economy Theory - Free Will.

“Only the subjective methodology can accommodate free will. Free will is another foundational piece of the divine economy since all of the actors in the economy have free will. Free will is also a foundation of the creation of humankind; it is part of human nature. It manifests itself in the independence of each decision made within the mind of each person — which is subjective valuation. Each decision is unique to the circumstances deemed important by each individual, who are themselves unique and therefore subjective.”

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A Quote About Divine Economy Theory - Capital Consumption.

"If consumer credit is extended in the market artificially - which means that it is unmatched by existing savings - capital is consumed. What is happening is that consumption is in excess of the productive capacity. Productive capacity in the economy is supported by the level of savings and the subsequent capital. The only way to now consume more is to use current savings, which was to serve as the loanable funds for ‘new’ capital and economic growth. This is the equivalent of consuming capital which consequently will cause the economy to regress, the typical consequence of intervention."

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A Quote About Divine Economy Theory - Poles of Unity and Justice in the Model.

"Similarly the divine economy can be more fully understood when the model includes the poles of unity and justice. It is around these two poles that the divine economy revolves. The axis of these poles represents the ‘nature and role of knowledge.’ The implication here — with this axis being centrally located within the model — is that knowledge flows throughout and that it is this free-flowing knowledge that best serves all of the divine economy processes.

This is a key concept in the divine economy theory. It is the nature and role of knowledge that enables the equilibrium forces to maintain balance and harmony. Intervention by those with finite human understanding strikes at the ‘nature and role of knowledge’ axis — with the consequences being a condition of imbalance and disharmony and a corruption of the divine economy."

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A Quote About Divine Economy Theory - Capital is the Most Limiting Factor.

"Most significantly, of all factors in the economy capital is the most limiting. See if you understand why. Ponder: in the here and now — in the present — we cannot live in the future! That is our limitation. The reason capital is the most limiting is because it is what connects the present and the future in the economy within our limitation. It is constrained by uncertainty yet its variation or structure determines the transformation that takes place in the economy.

Since capital is the most limiting factor, the movement or advancement of civilization depends heavily upon the structure of capital. This necessitates, optimally, that the capital structure needs to be a harmonious expression of the market so that it truthfully reflects the will of the people. In the divine economy fully vested human beings find and share knowledge in the market. Part of that knowledge reflects the importance of time which becomes manifest in capital and its relevant structure."

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A Quote About Divine Economy Theory - Order Emerges From Market.

"The market is where individual human action undergoes reconfiguration into a more social entity. This is part of the dynamics between the ‘act’ and the ‘transformation.’ The market is where knowledge flows to and from in a civilization. And it is from this proverbial fountain of knowledge that order emerges."

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A Quote About Divine Economy Theory - The Property Rights Interface.

"Property rights interface closely with human action, the market and the capital structure. Property rights are truly foundational and have a strong connection to law in the divine economy since they anchor the economy to the human being.

In its most basic and primary expression, property rights are human rights. The existence of a human being grants dominion, and its peaceful expansion toward food, clothing and higher attainments all fall within the domain of property rights."

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A Quote About Divine Economy Theory - Overcoming Inefficiencies.

"If the market is in an inefficient condition the solution is to educate people about entrepreneurship not to corrupt the divine economy by imposing arbitrary restrictions through intervention."

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A Quote About Divine Economy Theory - Consumer Sovereignty.

"In a sense all forces are mobilized to answer the command of the king — the consumer. The entrepreneur, by nature, is alert to these opportunities and perceives the signals sent in the market. The motion set in order by the entrepreneur moves resources towards whatever means are needed to satisfy the consumer — the king.

Production of goods and services to satisfy the king — the consumer — necessitates that the producers hire labor and other resources. In that way all of the ‘subjects’ benefit from their service to the ‘king.’

Wherever in the economy the consumers spend more the profits rise and this stimulates economic competition; followed by investment and production. In other words, the pattern of investment and production follows the consumer spending pattern, in obedience to the ‘king.’"

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A Quote - Market Is Not A Product of Human Design.

"Granting that the economy is divine implies the following: that the actors are seen as expressive agents of the will of mankind, that there is no omniscience within the realm of human policy-making that can even minutely compare to the divine expression inherent in the market, and that the market is not a product of human design.

The market is a divine institution that emerges spontaneously from human action. It is a social institution that forms for the sake of production. The market is the time and place where the convergence of all of this useful information transpires and where it is discovered."

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A Quote About Divine Economy Theory - The Highest Potential.

"A moment of reflection is now needed for us to be able to discern what is real and foundational.

As I just mentioned, the economy is a uniquely human institution. Since the human being can dwell in the world of relative perfection or imperfection the potential then exists for the economy to be in one of two states. If the higher nature of humanity is realized then the institution (the economy) that is a tool for the expression of human action will itself be elevated and celestial.

Frankly, it is the divine nature of the human being which is his true reality and therefore it can be deduced that the highest potential of the institution of the economy is divine."

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Divine Economy Theory And Worldwide Prosperity!

Instead of the free flow of information there is blockage. Instead of the grace of God reaching everyone on this planet there are many bottlenecks and there are many diversionary tactics that confiscate the wealth generated by the grace of God.

The blockage and the bottlenecks and the diversionary tactics are all man-made. They are all just the different variations of interventionism exercised by those humans who lust after power and who are ignorant of the sacredness of the economy.

The divine economy theory proves that there is no moral authority for interventionism and it proves that the grace of God will reach everyone quickly and effectively when the economy is unhampered by parasitic interventionists. The economy is a reflection of the human reality and it functions like a language, serving as the means of conveyance of all of the information necessary to satisfy the universal economic reality of ‘People desire things!’

Interference with the organic and automatic and divine nature of the economy, motivated by self-serving or ignorant interventionists, lessens the prosperity potential for everyone, that is, except the ego-driven interventionists. They are like embezzlers draining the wealth from the economic system to enrich themselves.

There are many ways to improve the economy, for example by strengthening private property rights, but the first and foremost step that needs to be taken is to expose the fraudulent practice of intervention and to stop the theft of the interventionists. The divine economy theory is very useful in this regard. It is stronger than the laissez-faire stance or the free market stance because it proves that the economy is a divine institution. Since the economy is a divine institution all human interference or intervention is a corruption. This is the economic truth, pure and simple!

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A Quote About Divine Economy Theory - Socialism Fails!

'The economy is dynamic and composed of trillions of needs and decisions that often change complexion. The basis of knowledge needed for economic calculation comes from the market in the form of relative prices. These prices are relative to all other prices at the current moment.

The freer the market is the quicker the information can flow and the greater the ability is for it to correct errors. Desires, needs, and resources converge in the market and find full expression in the form of relative prices. Economic calculation involves comparing and contrasting and speculating about the relative prices expressed through the market.

Any attempt to calculate economically using fictional non-market values — values arbitrarily assigned by someone removed from the market — ignores the dynamic nature of the knowledge within the market; which is tantamount to denying the human spirit. Use of non-market values is the reason why vertical production in an excessively large firm results in bureaucracy and calculation error.

This is also the reason why socialism fails, since it is an ‘error-based institution.’ What is meant by ‘error-based’ is the fact that the prices used for decision-making are arbitrary and imagined, not derived from the market process. These prices are erroneous and all decisions based on them are error-based.'

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A Quote About Divine Economy Theory - Decentralized!

'Human planners of the economy are hopeless failures and can be more aptly described as oppressors. In the real economy (the divine economy) there is a ‘central planner’ who is all-knowing and all-seeing and perfectly just. It is God.

God is the creator of the economy as a human institution and His design allows the fullest expression of human diversity. In the divine economy there is decentralized planning to the nth degree, where n represents each individual or business entity that is actively interacting within the market process. The economy changes as the human race changes and yields its promised fruits conditionally — depending upon whether the current state of affairs exists as either a hampered or an unhampered market.'

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A Quote About Divine Economy Theory - Willingness To Work.

"If we assume that there is no coercion then the first order of incentive for the human being is to meet one’s own needs. Since it is possible to meet one’s own needs by taking action, that is what is done. What we acquire from our labor we are able to keep, presumably. It can be deduced that this basic property right is necessary and sufficient to make a person willing to work.

A negative corollary is that without the right to receive the fruits of one’s labor there would be an unwillingness to work. Nothing destroys the willingness to work faster than removing the human right to ‘reap what you sow.’"

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A Quote About Divine Economy Theory - The Market.

"The market is a conveyor of information just as is language. The following analogy is useful.

Individually I speak to myself alone or I can more fully use language and speak with others. The full benefits of language as a human endowment come from its social nature. If I happen to speak vulgarly, language as a human institution should not be attacked as being harmful. In fact, the social nature of language empowers it to have a moderating and refining influence on individuals, thereby lessening the occurrence of vulgarity.

The market, likewise, releases the full benefits of the human spirit and all of the associated resources. If someone acts in a crude or frivolous manner it is not the fault of the market. In fact it is the social nature of the market that will tend to moderate and refine individuals, ultimately facilitating the advancement of civilization."

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The Essence of the Divine Economy Theory.

There is a dual reality in this world that exists because that dualism is an aspect of the human reality. God created and creates humans in a manner described as ‘in His Image.’ This is the human reality, either recognized and appreciated - or not. And at the same time humans are social beings. This is part of their reality, it is part of their journey, it is integral to the process of being human.

It turns out that the economy is the social expression of being created ‘in His Image.’ The economy is the process of cooperation in the quest for discovery of one’s reality. This is the essence of the divine economy theory.

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