morbius glass

Reviews – Comics, DVD’s, Books. Finance – FX markets, Stocks, Economics. Culture

The wrongs of Government intervention in the free markets, biology and survival of the fittest – Governments may become totalitarianism based.

Posted by Adrian on February 11, 2009

The biggest errors made in this current economic crisis, or also known as the severe global recession or depression, is intervention into the free markets. Not only was there an exasperation of financial bubbles attributed by loose monetary policies, in the last 11 years of global economics; but an environment of excess that was created and fed into markets. We have all lived through a time of easy money and credit, the debt burden of society increased and therefore became the biggest credit bubble in history. When markets contract and shed their liabilities they do this for one reason to survive. The stimulus plans that all the governments of the world have shoved onto the public and the dreadful ad hoc way of using tax payer funds to buy the toxic junk from financial institutions is causing more problems. As the companies put their hands out for government or tax payer bailouts, a distorted view of survival of the fittest in the free market’s is perpetuated.

In the history of capitalism or free market interaction is the collapse of old to be replaced with new efficient industries and innovation. This is now being avoided by all costs (literally) by the governments around the world and their central banks. Which in turn has not only distorted aspects of the market it has also caused stock markets around the world to become very volatile and uncertain. I remember reading an essay by a biologist the mentioned he felt that we live in a ‘fitness fake’ world, his assertion was based on the evolution biology that fitness has been fabricated with a form of biological faking, in other words communicating, interaction has been effected by the internet and electronic mediums. His argument was the humans could no longer in an evolutionary sense pick out the fittest mate, access threats and advantages, instead the fitness fake environment was perpetuated by online dating, myspace and other social interaction networks that faked millions of years of human interaction. We no longer could really tell the overall fitness of someone (in his opinion in a biological sense). Of course this is a theorized topic, and at times seen as a dubious way of looking at human interaction. But the point I am making is with natural organic cycles of life, is it possible that interference can actually cause a greater problems. Whether biologically or environmentally based. It is now harder to determine advantages and disadvantages due to modern meddling. So to equate that form of meddling in the markets, as opposed to biological meddling in human determinism, it could be asserted that the markets are trying to factor in a global depression, but they can’t per se as governments are delaying the inevitable. A pre fabricated ‘fake’ screen of money printing and intervention. The argument of organic flows within the financial markets could also show up as survival of the fittest regardless of intervention. Meaning that even though government intervention allowed businesses that should have disappeared, say large aspects of the car industry, have now been zombified by government bail out packages. This has kept the top management in place and shareholders happy. As we now know General Motors now wants to sack staff and cut back staff salaries and other benefits all to survive as a company. The wrong picture here is the survival mechanism of the company has kicked in, even though General Motors shouldn’t exist in free markets terminology, the incompetence that was shown to markets has now been saved by the taxpayer via government. But with survival mode now kicking at General Motors, the company is now restructuring or shrinking down operations. To add insult to injury for the taxpayer, the company will obsessively want more cash lifelines from the US government.

But eventually governments that have left themselves extremely vulnerable by running massive deficits and carrying a lot of toxic assets that they required from bailing out the banking sector (namely the US government). Also a survival mode will kick in as they will need to raise capital on long term treasuries, to do this and to avoid going bankrupt they will need to have inflation return. Either way, us (the public), the private sector and the government are all going to be fighting to survive; at this point the government is causing massive amounts of long term problems with the stupidity in printing money and bailing out out banks. The hypocrisy will be complete when the average person in the street gets no benefit from a decayed financial system kept alive by government intervention. Rather, we will attempt to survive too, which means a retraction from consumption. The banks won’t lend in earnest, even under the assumption that ‘bailouts will get credit flowing’ which is a huge fallacy by out of touch and delusional policy makers. Instead they (banks) also will aim to survive, the private sector will continue to shrink down operations with governments desperately trying to avoid going bankrupt will ensure that inflation will return in a brutal way.

I strongly believe that environments contribute to human/societies well being. I am not entirely convinced that we are completly hardwired to our genes, so the fitness fake argument holds degree of validity as far as creating a (fake) environment that may be more detrimental than helpful. But whether this is meddling with our instincts of human interaction is disputable, especially if based solely on the belief of gene determinism. But I believe that blinding excess and naivety have caused our own mental perception of risk, instincts and calculations to cloud our ability to access risk/gain in our environments. Although now with the financial market crash in 2008 and 2009, excess has been stripped away and the easy money has been removed. In saying that, as mentioned before, a survival instinct has been activated; hence the current recession.

If we look at the free markets and our behaviors within the markets, it has to be realised that essentially it is perpetuated by the desire of gain. I actually think that we (humans) are good at determining value and gain, especially when we have to work hard to obtain it; this of course allows the pursuit of value or gain in innovation. I also believe the markets when allowed to operate unobtrusively or without intervention from governing bodies actually correct themselves very well. This is the argument that world allow a recession to continue through, allow the system to clean out and then begin anew. As dramatic as that may sound it a recession may not need to be as harsh; but when a system or monetary policy has been as excessive (like our current one), the recession can be more painful. If we then look at a survival of the fittest example, from the biological definition, the markets would factor in the surviving business as the fittest and hence they would survive a recession. What is going to occur now is the survival of the fittest definition will be more extreme, more than it need to be; this can be blamed on the environment that is now be laid down from government monetary policy of printing money and bailing out companies. If anything it will show a more brutal side to the survival of the fittest in economic sense, as it will be the government that will eventually fight to survive, sans the people who have been forced to bail out everything. So in other words the government and it’s policy makers now in survival mode will literally sell out it’s citizens.

This may lead to civil unrest on a global scale, as governments will then ignore the average person needs and become totalitarianism and dictatorship based as they try and hold onto power and attempt to survive.

Advertisements

3 Responses to “The wrongs of Government intervention in the free markets, biology and survival of the fittest – Governments may become totalitarianism based.”

  1. pochp said

    That was scary because it would possibly happen!

  2. Adrian said

    people are now looking at Zimbabwe as examples (albeit extreme) and other countries where goverments have intervened and overly regulated free markets and economies. It is a dangerous road developed countries are now going down.

  3. […] But also adding cultural/economic power structure of survival of the fittest. As I discussed in The wrongs of Government intervention in the free markets, biology and survival of the fittest – Gov…., the theory that was reached, which could be a shock in someways. Is with governments of the world […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: