Expanding economy, inflation and corruption

Paradox of  Expanding economy and inflation.

If a country leaves its market underdeveloped or environment exerting demands larger than the income available to each agent to meet the demand the consequences are inflation and circumstances ripe for corrupt practices to sprout up, so that the labor can raise enough funds to meet the demand exerted on them by ill-kempt environment and social prerogatives.

Corrupt practices lead to over demand of products which leads to inflation. The wages paid determine the demand existing in the environment. Corrupted money exerts demand beyond this threshold production level and manufacturers has no choice other than raise prices causing inflation, since this disurupts the demand/supply equilibrium synthetically rather than through market determined forces.

For example if the environment is not scientifically planned, for cashing a cheque one need to take his car to the Bank, or take an Auto and due to inflation the price for these are higher than the normal costs for cashing cheques, which is none other than ‘private consumption’. Private consumption is another reason for rampant inflation and need for goods privately priced lead to corrupt practices.

Another example is a labourers blue or white collared, the wage is fixed for public consumption, for example a hospitalisation, where his wage allow him or her to go to only a general hospital run by government where as since they are so dirty and ill-kempt one need to find resources to to go to a private hospital where the cost is high and tantamount to ‘private consumption’. Only the former the labourer can afford from his wages where as fear of life risks involved make him corrupt to gather enough resources to privately consume. So those who clamour for socialism forget than even for them to remain safe they need private wealth to maintain their high standard of life and prevent risk of extinction.

If we audit the economy we find that only 15% of the possible market is developed and the process of developing the rest can lead to heavy inflation too.

Another bug we see in the economy is existence of ‘lags’ and ‘leads’ in every processes in the economy which again lead to corruption and inflation.

Unless these are not attempted our efforts to lead a civilised life will be under threat.