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Thursday, 31 December 2009

The Last Good Day of the Year

As the last (or as some claim, preliminary) day of this decade dawned, I thought about the irony and constant ‘conflicts’ that live and economic activity always presents us with.

The last 18 months in particular was evidenced by a constant attack on the ‘Western Capitalist’ model, due to the deep and prolonged recession, set off by the Credit Quake of 2008 – 2009.

As it is a ‘Quake’ and not a ‘Crunch’, we have and still are experiencing aftershocks of varying magnitudes.

However, the irony of economic activity is the dichotomy the theory and reality actually presents us with.

If we focus on just one of these little ironies, it is the story of scale.

Economic theory would have us believe that ‘Economies of Scale’ is desired as the Total Cost curve is lowered, thereby maximising profit at the point where the Total Revenue curve is at its apex and the Total Cost curve at its base, with the gap in between representing profit.

Yet, with banks being “too big to fail”, this flies bang in the face of the economies of scale theory.

Therefore, there is a delicate balancing act and a ‘Stakeholder’ management approach that we need to follow and implement in the years to come, in order to address one of the inherent weaknesses in the way in which we have managed and controlled the capitalist economic system.

Don’t get me wrong on this point though, I am still arguing for a Libertarian approach and philosophy. What I believe the problem is that the libertarian philosophy is watered down and contaminated; thereby diluting and distracting focus from its core principles, thus rendering it merely an aspiration rather than a true and meaningful alternative to a more politically controlled socialist approach to economic life.

One of the goals and aspirations I have with this blog is to inspire and educate, thereby encouraging a constant questioning of the status quo which will hopefully lead to a change in mindset and economic growth “so that we can encourage the growth and development of sustainable human endeavours ...”, as the concluding sentence in the header to this blog page testifies.

To this end, I wish everyone a very prosperous and happy start to 2010, whether it be the end of the first decade of the 21st Century or the beginning of the second decade...

Let 2010 be the year in which we encourage more equal and equitable access to markets for all willing and able participants in the capitalist market mechanism. However, let us all have tolerance and respect for the points of view and practices which do not encourage a truly libertarian philosophy and approach too. It is only in sharing and respecting that we will all get along and make progress somehow.

theMarketSoul © 2009

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