Saturday, April 25, 2020

I isn't about price, it is about keeping the congestion minimal

Filling the Arrow Explanatory Gap

Price, really cost of delivery,  is determined after the fact.  There is and was a great misunderstanding, price is a ratio, really a flow rate. And the price is very uncertain if flow is not stabilized.  

We know the equilibrium conditions, they are predicted even before you select your field of study.  What fouls the path to equilibrium is N, the number of traders is always insufficient to equilibriate.
To check if the economy is equilibriated, look at recession cycles. These are loops in the flow system, a disequilibrium.  We have them, cycles.

The reason we perceive the need growth in population is entanglement, suppliers looking for new customers to get congestion stabilized. That was Marx's point, the capitalists will grow the number of customers until the optimum number is reached, and that cannot be done. Hence, we cycle.

Back to the fundamental theory of everything, nothing likes to wait in line.  Solution? Cycle slightly less today then we did yesterday, but you will not get their with flat earth Keynesianism. Flat eart Keynesians need to assume, as you pointed out, that N will scale automatically. That is why we call them flat earthers.


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