Misconceptions that can degenrate our Economy

Misconceptions that can retard progress of an Economy.

To build an economy is not an easy joke. So many changes need occur including change in perceptions of value, functionality, outcomes and even our own behavior.

What we see around is ‘misconception’ in our view of outcomes, which degenerates the efforts we put up to generate some desired outcomes in the Economy. This can be due to lack of perception as to how things should work following certain regulations, which are ill conceived due to misconceptions about value or perception error regarding sciences utilized to generate the particular policy.

There are  lots of such misconceptions visible in our economy, though I will share a few ones.

1)      Misconception about human Labor. Though we may detest Marxian theories for the violence it manifests for which it is considered not concurring with physical sciences, many other dicta of those theories are valid, based on which Western developed economies are built up. ‘Estrangement’ or ‘Alienation’ of Labor when physical and mental work is executed is one. A laborer on a hard days physical exertion can feel drawn out or estranged which is pure physical law, that is expending energy to generate work. The solution prior to Marxian dicta was by Adam Smith in ‘Wealth of Nations’, where he directed future leaders to allot a Laborer of his daily quota of ‘Meat’ and ‘Liquor” which can pump back life into him estranged by days rigor of physical excursion.

This too is the reason why ‘welfare’ is a necessary nature of the economy where day laborers and capital laborers can rejuvenate their spirits and mind for next days work and value addition in work which again is pure physical science.

2)      Misconception about any work execution believing in ‘cause and ‘effect’ is another fallacy visible in our regulations and culture. These economic theories by itself, Adam Smith’s or Keyne’s or any other won’t produce the desired outcome if the environment for that particular dicta to work, also is not worked up. For example if the Labor is supposed to pump ‘value’ into the product or service he renders, this doesn’t happen because of the reasons given above where the environment is devoid of an infrastructure like the one mentioned above. Physical exertion and lack of nourishment kills the value generation potential of their work capital or day laborer.

3)      If the economic policies are to work, then if ‘consumption’ is a necessity one has to plan the economy in such a way that the citizen or the economic agent can consume in the purchasing or buying power he is entitled or endowed with. One, if the citizen is not endowed he cannot consume and two, if he is charged disproportionate value for the goods exchanged so many ill effects or externalities generating unintended consequences arise. Like, there won’t be one, mass production leading to unemployment, two, one product cannibalizing another product by another producer leading to production failure, monopolizing and unemployment ultimately and four these all are signs of Market failure or failed market mechanics.

The list is exhaustive in our environment, let me stop here, I just wanted to mention