04 November 2012

Day 130: Market or Government Failure? No - Human Failure

One of the most prominent discussions in Economics and Politics is about who does better: the Free Market or the Government?

The neo-classical economic textbooks will say that the free market is generally the most efficient in allocating resources - but that there are instances where the market fails (See 'Day 81: The Role of Government in the Economy'), and then the government has to step in to correct these mistakes.

Public Choice Theory argues that it is incorrect to just assume that because the market fails to be effective under certain conditions, that the government will therefore, automatically be able to correct the imperfections of the market. The objection relates specifically to the assumption that in the market, everyone acts according to their own self-interest and that public officials, on the other hand, take everyone's interests into account.

To them that is a big inconsistency - because you cannot argue that human beings always act in self-interest, yet, on the other hand say that public officials always act in the interest of the whole. According to public choice theory, politicians and bureaucrats as much as any participant in the free market always acts in their own self-interest (See 'Day 82: Government Failure').

So - the whole discussion on who fails the most: The Government or the Market - is really mis-directed. The simplicity of the situation is that: It's not the market or the government that fails - it's the human.

When considering economic problems, we cannot simply distance ourselves from the simple truth that all economic interactions - whether instigated from within the market or from government - is always determined by human beings. And human beings are seriously flawed beings in that they believe that they MUST be self-interested and that this is the only rational way to exist and behave.

If we ever hope to get some real solutions in terms of an an economic system that always provides the best results - we cannot ignore 'The Human Factor' - as this is the starting point that will determine the outcome the economic system will bring about.

So - the question is not: How does the balance/emphasis need to change between the Market and the Government's role - the question is: How does the human have to change?

This is a question that in the current economic and political discours is conveniently ignored. It is simply accepted and assumed that the human is a fucked up creature and we just 'have to find ways to control the thing' so that its behaviour and actions don't cause 'too much' damage.

If we really care about 'market imperfections' and 'government failures' - we won't just sit around talking about what's the least of two evils. Instead - we'll make a commitment to redesign ourselves as human beings so that we can look at the economic system with fresh eyes and not create an economic system that merely re-inforces unwanted selfish and spiteful behaviour - but instead encourages support and cooperation within the understanding of what we are responsible for as this world and our reality.

This is the primary focus of Desteni - and all who claim to want to create a better world or claim to be committed towards solving the economic and political conundrum should sign up for the free DIP Lite course to take the first steps at finding out the possibilities we have as a species of re-inventing ourselves into an optimum version and a manifestation of Life instead of Evil. See - EVIL is simply the word LIVE spelled backwards - that should tell us something... We've never lived as a species, we've merely tried to outlive and outsmart others in evil ways - which is really not what life is about, come on.

And economists and political scientists have competent enough brains to see that this problem is not going to be solved unless we address the problem of human failure. You simply have no excuse to not want to take responsibility - you have the skills and the ability to be an example in this world - and so you have a responsibility to. Swallow your academic pride and start over - start where you haven't been before - start with yourself. 

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