Restructuring the Externalities

Capitalism actively operates to deliberately build-out an economy-of-scale efficiency. Capitalists call this “networking the externalities,” but when bad things derive from it, like deflation and unemployment, they claim limited liability. They argue the law of large numbers is to blame, operating in the aggregate dimension of “the invisible hand.”

The Fed’s new chair of the board of governors, Mr. Powell, said before the Senate Finance Committee today that wage inflation is not a likely risk. Modest increases are expected at best.

More important than what he said, however, is what he did not say.

The Fed chair did not say that no wage inflation is actively derived from networking the externalities. Nor did any Senator attribute the value to deliberate consolidation of industry and markets.

Consolidation is preached as the model for causing efficiency, not deficiency. This model of causal efficiency is supported by the Federal Reserve Bank and Mr. Powell says the banking system has attained the dual mandate of using currency reserves to gain full employment with price stability.

Networking the externalities is a deliberate, derivative device. It is being used to drive down wages and salaries worldwide while maintaining pricing power (i.e., price stability). The result is what the “efficiency of markets theory” describes as a stable, naturally occurring, predictable pattern of risk and reward. It naturally resists the unnatural occurrence of a declining rate of profit, which classical economists verifiably contend naturally occurs.

According to the classical concept of the efficient cause, prices naturally adjust to income by means of the invisible hand. The correction occurs to resist inflation and thus cause price stability without the need for a board of governors. It is not necessary to command the economy with a dual mandate, restructure the externalities, and cause the correlation by “accommodation” of financial, derivative devices, existing on demand.


About griffithlighton

musician-composer, artist, writer, philosopher and political economist (M.A.)
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