Tuesday, August 9, 2011

Honey Bees, Ants, Macro and Micro Economics

With the big economic crisis, we need to step back and see if we can see the "Forest". I have studied Economics like many of you in our major universities and have never felt that they had the answers that they claimed. In the Ivory Towers, the heads of those running the place seem to grow with the size of their budgets. Did you ever hear one of the them say that they did not really understand what was going on in the area of economics? No! Their heads were too big to admit that they did not understand the situation. Notice, also, that they all teach the same thing and that is some kind of central control. Isn't it also interesting how we have much the same with religion, central control. My point is that if there is central control, then there is a place where a person with a big head can command power. We all want power don't we? Some more than others and if there is no need for central control, then there can be no central power and we all know that central power is stronger than non-central power. What we need to do is to test this whole idea of central power and see how well it has done in running things. I am going to use some simple examples that I hope with carry the point.

First, let's take an inanimate problem. It has just rained a lot here and I noticed that most of the water has ended up in the river next to my house. Now, I know that rain is just water that fell from the sky and each molecule is separate and has no brain or what to communicate with other molecules of water, but the rain ended up in the river. How can that be? Don't we need some central government telling each molecule of water what to do? No! The reason why is that the movement of water is a distributed system with each molecule of water already knowing what do do. Each rain drop follows the rules of physics and runs down hill. When it comes to an obstruction, it accumulates there and each molecule waits its turn to flow on farther down stream. Did you ever see a stream running up hill? I don't know of a system of control that works better than rain water running down hill. The problem with this concept is that there is no place for one molecule to have power over another. Man wants power and trys to dam up the flow, but it still follows the same old rules and tries to run down hill. Dull, but I have my point.

I am a bee keeper and like to watch the bees collecting honey. There is a Queen bee in the hive and a bunch of boy bees called Drones, but they don't run the hive. No one runs the hive. Each bee already knows what the do and they do it all by themselves. Nature is full of systems like this and the key point is that they have worked just fine for millions of years. Can you think of a single human system that has worked for even 500 years? No! The problem with human systems is that someone always wants to get hold of power and run everyone elses business. Wives try to do this and so do mother in laws. It is a natural thing for us humans to want to have power and run things and tell others what to do. In the end it never works.

We all have our individual motivations. Think about this. How can a person in Washington DC command you to get better grades in school or go get a job or to work harder on that job? They can't, but they keep trying and many think that they are smarter than you. Even if they are, it does not make any difference, it still won't work. The honey bee did not need a Queen telling them to haul a bigger load of honey or to search farther out for better flowers. The single bee with his small brain figured all this out and did the right thing. Look at an Ant hill and you will see the same thing. Most people don't want someone telling them what to do, but some people with very big heads still want to try. Many have convince themselves that it is for your own good and no matter how much it hurts, it is still good for you.

The problem with Macro Economics is that it never answers the question of what make a person get up at 5:00am and go out and milk a bunch of stinking cows and do that twice a day 365 days a year. Macro Economics is like a rope. It can stop the person from getting up at 5:00am, but if the person does not want to get up they can't push him to do it with the rope. I used to teach Micro-Economics and that all made perfect sense, but Macro-Economics never made any sense because I could not connect it to the individual actions of people. You hear about the "invisible hand". Why does it have to be invisible? If they know what they are talking about, then just come right out with it.

Our country and the world have serious problems and Macro-Economics will not be the answer unless it is to get government and those who want power over people out of the way. We need to revisit the rules of nature and see why they don't seem to be working. These are the rules that affect individuals, independent of government. Why do so many of our kids drop out of high school? We need to answer that. Why do our kids do drugs? Why? Why do parents allow their kids to take college degrees that are worthless? Why are we not more like the honey bees? Do we need some kind of King or Queen in Washington DC to tell us what to do and think? Everyone seems to be focused on the King in Washington DC when they should be looking at their selves in the mirror. Remember my blog on Vince Lombardi? This is a "one on one" game that we are in and don't you forget it. Remember the honey bee system has worked for millions of years and no human invented system has worked for more than 500 years.