Intended and Unanticipated Consequences

Chris Dillow gives Us a good Post on acceptable equality, but cannot see a right level to the Gini Coefficient. I personally dislike using the Gini, finding more information in the old-fashioned Point spread. The Gini coefficient hides the Pirates’ Treasure–who is putting a Lock on necessary Goods and Services. Big Pharmaceutical companies certainly have a Lock on the dispersal of Drugs; promoting Patented Drugs, and even going so far as to cut Production of unPatented Drugs. Computer Hardware locks in the Mechanics, and Software has to be tuned to the basic DOS systems, or it will find no Market. Car companies lock the Consumers into Maintenance programs to meet their Warranty fulfillment. The Gini Coefficient never tells exactly Who is raiding the Cookie Jar.

Maybe some Readers will not understand why this article makes me growl, as it is the basic attitude of most of the Economic profession. This Call for high-end Production with wide-open Markets simply writes off 80% of the domestic population of Europe, who cannot hope to match the Skill levels necessary to succeed in the high-end Production labor pool. It also discounts older Production facilities and Investment Capital. The labor being dismissed from the Production cycle are also the First to face accelerating Import Costs, while older Technologies cannot find the Operating Capital to supply abandoned Consumers with Product. I am glad that I will probably not be around to witness the long-term impact of Free Trader policy.

Ned Phelps may finally be earning his Honors, with his focus upon ‘unanticipated consequences’. Younger Economists take their Training too seriously, while older Economists realize that all Economic models are Best Guess at most. Several years ago, I advanced a theory that the relative size of the Economy (based upon the Production levels of Product) set the Rules of Economics. Older economic theories lost relevance simply because they were defined in and for smaller economies. Some Economic forces gained Power, and some Economic forces lost Power, in an expanding Economy. The interactive structure of the Economies, therefore, altered their basic nature, and those ‘unanticipated consequences’ become a natural consequence. lgl