New Market Economics

While money is an undeniable and irreplaceable element of our day-to-day lives, it was originally an element created to improve the operation of the marketplace. New Market Economics recognizes this objective and seeks other ways to improve our marketplace or economy. That is the primary purpose of New Market Economics. It is not a primary objective of Government. Government wants to improve the lives of its citizenry, in the best case, and simply have power over others, in the worse case. The obsession with control that is the dominant characteristic of Government is at odds with the freedom to pursue business in Market Economics. Economic growth springs from choice and the entrepreneurial motive of fulfilling unmet needs.

Government enforces power over their citizenry through the legal system. The goal of the market system is to nurture the business sector and create wealth-making opportunities for all. 

New Market Economics is the wealth building and distributing system created to ensure maximum participation and productive outcomes through entrepreneurship. It is an apolitical concept that can be applied in a communist country or a western style democracy.

Every organization whether private or political works to reward and enhance their membership and the institutions that promote their organization. This tendency conflicts with the principle of diffused control that guides New Market Economics and must be resisted wherever it emerges in regard to the economic system. Asserting control over economic buds must be only done to nurture the growth of the segment, not for political gain.

(August 24, 2022)

Today it was reported Nobel Laureate economist Joseph Stiglitz stated, “that the Federal Reserve Bank of the USA was wrong to pursue a policy of interest rate increases during a downturn in the economy.” For the first time in his life, Rand agreed with Dr. Stiglitz. Fifty years ago, such a crude approach was tolerable, but today Rand says we need a more nuanced approach, and that such a crude technique is unnecessary.

Why did raising interest rates in the United States during the 1970s abate inflation? At this time,  the Democratic party in the United States took control of the federal government and went on an  relentless spending spree. The result was a massive debt increase. Raising interest rates worked as a brake on this debt building process, because the higher interest rates payments reduced the amount of “free-money” available for Congress to spend on their pet projects. In fact, the inflation increases of the 1970s stopped within a month of the election of a new Republican President. From a historical perspective, it looks like the way to fight inflation is to put the fiscally conservative party in power.

(March 3, 2023)

The desire to control economic markets is a government and political craving. Such a tendency should be banned from the economic world. Markets must be allowed to adjust naturally without interference. Controlling inflation and other such political desires must be resisted. Inflation is caused by political actions and is best solved by reversing or negating the political action that caused the financial anomaly. Attempts to mitigate inflation by taking economic action to disrupt market activity is unnecessarily harsh and financially painful.

When Rand was in China in the last century, the Chinese government struggled with the idea of an authority outside of government possessing skills they lacked. Kudos to the Chinese for recognizing their deficiency. The United States government lacks that capability. It is interesting that in the United States and China government power is vested in two political parties that strongly support centralized government.

In both countries members of the government bureaucracies are nearly all members of one political party. Rand was told only three times in the 3,000 year history of Chinese government did people revolt and overthrow the bureaucrats. It is a worry the Chinese take seriously.