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Date: 2024-05-18 Page is: DBtxt003.php txt00003947

Economic Dynamics
Productivity

There have been huge improvements in economic productivity over the past three centuries.

Burgess COMMENTARY

Peter Burgess

The modern money profit capitalist market economy is driven by the optimization of the simple formula:

Revenue minus Costs equals Profit
This is a formula that has driven economics since the beginning in time, and was articulated rather powerfully by Adam Smith in the 18th century. Adam Smith was born in 17XX and published 'The Wealth of Nations' in 1776.

My impression is that modern economists have not noticed some of the rather important changes in the world economy since the time of Adam Smith. I would argue that what worked in the 18th century will not work optimally in the 21st century.

All of this can be summarized into one rather simple economic idea. The world has moved from a state where the economic system could not support the population because of endemic shortage to one where the economic system functions to generate chronic surplus.

A money profit capitalist market economy that works well in a global shortage economy does not work so well in a world of chronic surplus.

What is it that does not work? The answer is 'Almost Everything'.

In a complex system where almost everything does not work, the data needed to make thoughtful national good decisions are voluminous. REWORK

In a large very complex system, it is difficult to know where to start. For the last fifty years the 'experts' have become more and more expert in their own field of expertise ... they have all been subject to a money profit measuring system that has been equating money profit with good performance.

This is wrong and makes no sense.

To their credit, there are a good number of thoughtful people who have recognised this problem and have been writing about it for two or three decades. This is good, but the sad reality that the world's money capital markets are not taking any notice, and the media does little or nothing to change anything.

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