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Gravitational Economics

(Note: I do not posess a formal education, please refrain from pedagogical attacks as I am "unarmed.") It begins with a friend in college 20 years ago, he speculated on the idea of the "Black Hole Theory" of money. Simply put it deals with entrenched capital or "Mattress Money" and its effect on the economy. The reference was to the black hole that money seems to fall into in society when, for example, individuals with capital hoard it and prevent its circulation, hence "Mattress Money." His general idea was that an individual with hoarded money still effects the flow of capital around them. Money must flow in order to have value. My thought turned to physics. Black holes affect space around them but are invisable. Gravity makes this possible.
"The wealthy get wealthier, the poor get poorer" This expresses the general view of the flow of capital. I believe that some of the equations found in the field of physics could be adapted to analyze this and understand the dynamics. Money is governed by the principle of gravity. This is not just capital gains, investment or interest or any other mechanism for static capital growth. This would be an analysis of the movement of money through society and its effect. For example: the wealthy are constantly being courted. This may involve gifts or significant discounts (or free) products and services. This would constitute the "pull" of capital gravity on people, activities and money. This could be viewed as an extension of the "Canadian Disease" (an economic term). While I understand it, I have not the skills to realize it.

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  • Jul 6 2012: I am trying to avoid introducing into the discussion anything that verges on the ideological or the political. But in order to clarify my thinking I should respond to the issues raised.

    P.T. Barnum said "There's a sucker born every minute, and one to take him." On Wall Street the saying is "....eat what you kill." In the end there are two kinds of people, slaves and slavers, predator and prey. This is the essence of social Darwinism expressed in its naked glory. We live in a top down, command world. The few rule the many and thus it shall ever be. The brilliant mathematician John Nash in his pursuit of game theory in society created a game called "F__k You, Buddy" (my deepest apologies...) this is clearly a statement. I recognize the predatory, top down nature of our socioeconomic system. I am a realist and have, in the distant past, had some experience in international business on a small scale. I recognize the fundamental basis of the view point.

    I differ with it. This emerges not from some moral or ethical motivation. I do feel those things as well. The simple fact is (IMHO) that this system is not sustainable. Sustainability is not a matter of solar panels and recycling, its an issue of the very structure of our society itself. Foreign exchange is going to be difficult when there is no “Foreign” anymore. Globalization is not a conspiracy it's an organic reality. Our population is growing and will continue. Perhaps future social forces or other developments will have the effect of controlling that but none the less, we will increase. Growth is the very nature of an economic system. Malthusianism is outdated. The world's food production (2005) of fruits, vegetables and grains was 3600 calories per person per day. The global production of energy (2010) was 38 Kwh per person, per hour. Certainly there is enough there for all to enjoy a decent standard of living. (con't in next post)
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      Jul 6 2012: The best way to predict the future is by looking at the past. I don't see the dire circumstances that you describe. Once again please review this video:

      http://www.ted.com/talks/peter_diamandis_abundance_is_our_future.html

      Didn't you say that you depend on public support? doesn't that speak against the predator mentality?

      I do agree with your sentiments regarding Keynes.
      • Jul 6 2012: Thank you! I had intended to review that talk. And you are right it does, most of my life has been inextricably entwined with the social welfare state, which I abandoned for a time. This is precisely what I am referring to. The predator-prey relationship, while a prevalent paradigm, is not the only model. As far as dire circumstances go a very long time ago I realized the potential for the future. Resources will be infinite and with a population of 10 billion we would be well provided by society. It is our present circumstances that are "dire," if I may quote you. My thrust is toward a new view of the economic system as a means to that end, for all the human race.
        As the numbers show, we are already generating raw production sufficient to sustain the world with a reasonable standard of living, yet over 10 % of the world is suffering starvation, a number that has exploded while global production skyrocketed. We just need to organize things better and suffering could end in my lifetime. (Knock Wood) Besides, imagine the wealth that would be possible with a sustainable global model and a bottom up wealth generation dynamic with "singularity-class" technology to boot! Just from the title I see that Mr. Diamandis's presentation will be very enjoyable!
      • Jul 7 2012: I disagree with you, pat gilbert. Those who study history seem to repeat the mistakes of history. Only the names of the "enemies" keep changing. We do need a new economics. Perhaps money income should not be linked to work.
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          Jul 7 2012: Disagreement duly noted Rhona Pavis.
        • Jul 7 2012: The connection between money, income and work is the very thing that needs to return. For those in the U.S.; does anybody remember union benefits, good paying jobs with retirement and such? We are less competitive now than then and our standard of living has faded. What I think is needed is the establishment of a direct connection in the form of a time-based currency. In other words; the standard of currency value is the labor rate (NOT income) of human effort. Just as carbon credits become currency the basis of currency can be anything or nothing. Thank you Rhona!

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