Swarm Behavior

Stormy at Angry Bear establishes a position simply extending the state of nature to the field of Economics. The Concept might seem hard to refute, except for the use of Innovation in altering the direction of the swarm. Only humanity seems capable of self-modification of swarm behavior. A major element of swarm direction in the last Century has been the development of ‘Pocket Plants’ instead of huge ‘Total Production’ Plants. Almost all industry today outsources Parts to subsidiary plants throughout the World; partly to cheapen the Production Costs, but also in efforts to environmentally remain sound in their locale (shared usage of Power requirements, shared use of Transportation facilities, shared cadres of Labor, etc.). Industry found that simple Dumping procedures to extrude Waste could not continue, then found some value in Recycling; the entire Process likely not to be completed, until such time that it is cheaper to do than simple Dumping. Animals are not terribly efficient, as all species must accept some degree of migration regularly in their habitat. Humanity, through Economics, Technology, and Science, has devised methods to survive in environments for thousand of years, even through vast climate changes. It is not exactly Swarm behavior.

Don Boudreaux also expresses his own fears of Swarm behavior, though he uses the conservative term of Collectivism. Conservatives and Free Market advocates possess inherent belief in bucking the Trend, thinking this methodology garners some real gain; though it does not advance actual (real) Profitability of ventures, and funding for any endeavor (other than Personal investment) requires a Consensus concerning the Profitability of proposed ventures. This means that an alteration of Swarm direction cannot be achieved without Communications skill, as well as Political or Business acumen. Collectivism, on the other hand, again destroys its own environment, due to the lack of adaptability through the suppression of Innovation. Neither the Swarm or the Individual could survive in isolation, but they will not admit to the fact.

Jonathon Chevreau files a good Piece in the National Post on how to balance Portfolios in order to weather possible double-digit Inflation. I do believe such an Inflation rate is possible, especially if the Fed again responds to Market leaders, who want cheaper funds no matter what the Cost to the Economy. The Problem resides in the fact I believe that Energy, Agricultural stocks, base metals, and Gold are already over-priced, and you will be following the Swarm to invest in these areas which have already enjoyed their Inflation. One must remember that it is always the Swarm who endures the double-digit inflation, else it would not be Inflation. It always occurs in pulling other Market Products into line with Price leaders. lgl