Valuing Commerce (L1)

ClosedTHEE Note:

If you don't yet know what interacting-for-benefit is about, look at this, and then check out a summary.

Challenges for meta-economic management emerge in a hierarchy. This starts from a market-based foundation. The distinctive levels correspond to the order of approaches in interacting-for-benefit.

The hierarchy is made up of principles. i.e. the Levels focus on underlying widely accepted values in the approaches, rather than dealing with their core methods and activities. The limitations of principles at each Level, plus implications of their success, become the stimulus to move up to the next Level.

ClosedTOP Note:

No economic expertise is required for this Section.

To reiterate: The investigation here does not deal with economic concepts like capital accumulation, inflation, balance of payments, consumption levels, rates of return, &c.

These matters do need to be measured &/or addressed—but only within a wider framework relevant to the governance of society. It is this encompassing meta-economic framework that is examined and mapped here.

However, a common-sense understanding of money, wealth, prices and lending is useful and can be found here.

Commerce is Important: Market-centred

The situation is extremely simple:

► Prosperity depends on commerce, and

► Commerce depends on enterprise, and

► Enterprise depends on individuals who are market-centred.

ClosedEconomic activity and wealth-creation is amazing. ►

All the government can do is appreciate and respect personal enterprise and encourage self-reliance through work.

But this is not a trivial demand. ClosedMore ►

Many governments seem ambivalent or even unable to value commerce. As a result, too many people seek and get public sector jobs with employment safety, higher salaries and better guaranteed pensions. This means more power for government: as explained in the inquiry into politics. Governments do not produce wealth, they consume wealth, and the public sector overall weakens prosperity. One problem may be that rather few politicians or civil servants are themselves primarily market-centred. See choice of mentalities.

Government has a duty to unambiguously affirm the importance of commerce and of entrepreneurial endeavours.This includes affirming market-centred valuesClosedlike ►

Prosperity flows from willing producers, consumers, buyers and sellers, who freely interact and exchange goods and services for money via markets. These markets are a common good emerging spontaneously in any society.

Markets depend on individual self-interest via enterprise, employment and prudent management of resources and finances. These activities reveal inequality amongst people and generate more inequality in earnings and assets.

Factors affecting wealth creation and earning include: ●inborn talent, ●familial support, ●cultural attitudes, ●available opportunities, & ●what the society primarily values.

As this inherent inequality gets translated into material inequality, it becomes visible to all. Even if society as a whole becomes better off over time, growing blatant wealth differentials lead to counter reactions. Feelings of envy and entitlement breed discontent and weaken social bonds. Unless something is done, civil turmoil and even violence are distinct possibilities.

These social tensions at the foundation are handled by the next three Levels in the framework.

Bringing Social Tensions under Control

Because an economy depends on markets, property rights, the law of contracts and so on, governments have an unarguable duty to prevent fraud, distortion or unfair manipulation by powerful interests. This entails wielding social power, being coercive and actively enforcing society's laws and regulations.

This power-centred viewpoint is distinctive and sits at the next Level (L2) to prevent abuse of weaker individuals in society.

Brute legal force cannot deal with all social tensions, and needs to be complemented by inputs from yet higher Levels (L3 & L4). L2, L3 and L4 are progressively more effective ways to manage social tensions that can interfere with the economic activity of individuals.

Originally posted: Q3-2009