The Fascinating Origins and Foundations of Economic Principles
When we think about the world of economics, we often focus on the big picture—products, services, markets, and systems. But there's a rich history and set of underlying principles that form the bedrock of economic theory. This article explores some of the most interesting and mind-blowing economic principles, from the fight to retain an oligarch financial system to the return to foundational economic processes. We'll also delve into the strategic thinking that underpins much of business practice, thanks to the influence of Michael Porter's microeconomic theories.
Retaining the Oligarch Financial System or Embracing American Hamiltonian Economics
As the world grapples with economic challenges, there are two distinct ideological camps: those who advocate for the retention of the collapsing oligarch financial system and those who propose a return to the principles of economics as laid out by Alexander Hamilton, the father of the U.S. financial system. Both viewpoints offer unique perspectives on how to move forward, but Hamilton's approach, which emphasizes the power of a growing populace and vibrant market, has reemerged as a key discussion point in today's economic discourse.
Capitalism vs. Socialism: Which Works Better?
The debate over which economic system is more effective has been raging for centuries. While many argue in favor of socialism, the reality is that capitalism, when implemented correctly, shows clear advantages. The key is to strike a balance and avoid the pitfalls that can arise from unregulated capitalism or from the rigid structures of socialism.
The Origins of Strategic Thinking in Business
One of the most fascinating aspects of economic theory is its application to business strategy. Michael Porter, often referred to as the father of modern strategic thinking, has had a profound impact on the way businesses operate. However, his training as an economist is often overlooked. Porter's strategic model is steeped in microeconomic theory, making it a powerful tool for businesses seeking to gain and maintain competitive advantage.
A Perfect Market vs. Monopoly
Students learning basic microeconomics are often introduced to the concept of perfect competition. In this scenario, if products or services are commodities, the equilibrium price will eventually settle at the production cost. But how do businesses make a profit when price and cost are equal? The answer lies in either becoming the cost leader or differentiating themselves to create a mini-monopoly.
The Role of Differentiation in Business
If you can't be the cost leader, differentiating your product or service is your second best bet. This could involve creating a unique brand identity, enhancing customer experience, or offering superior value. It's all about making your offering stand out from the competition. For example, while Libby's canned corn may be seen as just another commodity, the influence of advertising, logos, and jingles can make it seem distinct and more appealing to consumers.
The Dark Sides of Economic Practices
While economic theories and principles can be incredibly useful, it's important to also examine the darker sides of economic practices. Many economic systems have been riddled with corruption and hidden interests. For instance, the global economic meltdown in 2008 highlighted several instances of financial misconduct and lack of transparency.
Hidden Financial Manoeuvres and Milestones
One notable instance is the revelation that $21 trillion may have been "missing" from the U.S. government's books. This revelation was first brought to light by Professor Mark Skidmore and later elevated by Catherine Austin-Fitts. Additionally, documentaries like "Iraq for Sale" highlight the disproportionate number of contractors compared to military personnel, raising questions about corporate influence in military operations.
The Art of Economics
Perhaps one of the most powerful works in economic critique is Sidney Lumet's film "Network," directed by Paddy Chayefsky. The film's exploration of "the matrix" predates the more recent sci-fi film with the same name, offering a profound commentary on the control and manipulation of information in society. Other works, such as Robert Greenwald's "Iraq for Sale," further illustrate the power of media and financial interests in influencing public perception and policy.