Re: Surplus Wealth; Geopoltical Expansion; the New Frontier

[TPMacD@xxxxxxx by emout01.mail.aol.com (8.7.6/8.7.3/AOL-2.0.0) Mon, 6 Oct 1997 09:43:35 -0400 (EDT)]

Capital is formed when individuals within an economic system find themselves
in possession of purchasing power in excess of what they require to satisfy
their own, personal wants and desires.

Purchasing power can be "excess" only if our wants and desires are limited.

Therefor, the existence of capital proves that our wants and desires are
limited.

If our wants and desires are limited, then by observing them in the limit, we
should be able to classify and catalogue them according to their respective
limiting principles.

Once classified, our wants and desires can be measured, and Demand can be
calculated.

Once Demand has been calculated, we can then engineer our investments,  so
that we always produce enough, but never too much.

By producing enough, but not too much, we can eliminate the booms and busts
that have plagued the Euro-American economic system throughout it's history.
 But once we eliminate booms and busts, we have to devise a new methodology
for managing our surplus wealth.

Keynes saw the problem of managing surpluses as principally one of the
distribution of purchasing power.  He faulted the price system for creating
disproportionate aggregations of wealth that left a significant percentage of
aggregate demand unfunded, a problem he diagnosed as being caused by less
than full employment.  The unemployed being without the means of paying the
price, they could not buy what they otherwise would demand.  Demand from the
unemployed being unfunded, it was, as far as the pricing system was
concerned, non-existent.  The result? Artificial surpluses, and unnecessary
losses.

His solution: a non-price-sensitive (i.e. governmental) stimulus to drive
investment toward full employment, thereby empowering effective demand,
eliminating artificial surpluses, and restoring systemic equilibrium.

Keynes erred, however, in conceiving of the economy as a closed system,
wherein 100% employment would absorb 100% of effective demand which would
absorb 100% of production, thereby supporting 100% employment, and so on, ad
infinitum.

His analysis overlooks the fact that technology always produces results in
volume, such that 100% employment produces not 100% of effective demand, but
n times 100%, i.e., a surplus.

It is surplus, not scarcity, that is the principle obstacle to sustained
prosperity in a technology-driven economy.

Historically, surpluses have been managed by the Euro-American economic
system through geopolitical expansion along the Western Frontier: the surplus
population migrated West, possessing new lands and creating new markets to
absorb the growth in production back home.

But now, the Western Frontier is closed.  It has been for over 100 years.

So, how are we going to expand?  Where will our people go?  What will become
our New Frontier?

Tim MacDonald