The Economic Illness and a Radical Cure

The economic catastrophe we are now facing is analogous to an illness.  Time will tell if that illness is benign or malignant.  What I offer is a cure.

Revitalizing the Economy is now the most important national issue facing not only the United States, but all the leading economic nations, including Japan, France and Korea, as well as the new giants, India and China.  Even though each country has attempted through policy efforts and investment to revitalize their respective economies, most of them have not been effective.  Rather, they have made the situation worse. We do not know which policies to adopt, even as the world is slipping into an ever spiraling stagflation.    

Why have the existing policies not been effective?  Why did this situation happen in the first place?  Even though many experts are studying this issue, none have found the clear answers let alone a solution.  Could they be looking in the wrong places?

I believe the economic situation is analogous to a serious diabetic disease. Generally, it is difficult to detect diabetes from a single, simple symptom until it develops into a serious complication. It is because the one symptom, apart from the others, does not look to be harmful to the body or because it is not easy to connect the relationship between the symptom and a disease. Likewise, we can say that it will not be easy to determine the real causes for the current economic conditions which afflict us.  If each complication is treated separately, the real treatment will escape us.  Moreover, it may also cause other potential, perhaps fatal, complications.

I believe I have found the real cause of the problem.  Because of recent developments in the modern information age, we all have greatly benefited from the rapid flow of economic information. Thereafter, the marked improvement in productivity and the significant increase of product development and its commercialization have been achieved in the supply side, and the expansion of needs and wants has been experienced in the demand side. We have had ample opportunity to expand employment opportunities under this situation, and also to significantly increase the consuming effect.  But, sadly, we didn’t.  It seems that the employment condition has actually worsened, and the consuming effect has increased far less than expected.              

It is time to question the efficacy of the “Invisible Hand”, and the numerous economic theories and policies it has spawned – though some may find that bordering on sacrilegious.  Yet, I believe we are no longer justified in thinking that the “Invisible Hand” will automatically bring a balance and development to the market.

            

Furthermore, if there is a serious problem in the market process, no matter how powerful and aggressive economic policies are adopted, they will not be effective.  Rather, they bring the likelihood of causing greater ill effects. 

Every western nation has adopted policies for economic revitalization with greater urgency over the past year, but I believe most of them have been ineffective, and created instead numerous abnormal phenomena in the market.  A cold and objective review of the current conditions in the market leads one to conclude that there must have been a serious problem in the market process. That is, the existing market systems, which realize the market process, might not have been able to satisfy the requirements of the modern information market. In other words, the outdated existing market systems could be the real cause of the serious economic situation which now engulfs us.  

If this hypothesis is correct, and I contend that it is, it means that we must develop new market systems with infrastructure, the sooner the better, which can satisfy the requirement of the modern information market.  Then perhaps “the Invisible Hand” can perform its role appropriately in the market process again. That is, until new market systems with infrastructure are developed, no matter how powerful economic policies are adopted, we will not get out of the current serious economic malaise which engulfs us.

Therefore, in absence of a better alternative, I strongly recommend governments initiate a plan to develop more suitable market systems with infrastructure for the modern information market as soon as possible and apply them to the market quickly and effectively, with the close cooperation of leaders in the private sector.

Ubiquitous Market System is just such a market system with infrastructure, and was designed for that purpose.  Through it, the employment condition could be improved practically overnight, and at the same time the consuming effects could also be increased significantly. The “Invisible Hand” could then work its magic again in the market process, and this will make the economic policies effective as they were originally intended.

The disease is serious, but not malignant.  But the time to “operate” is now.

Author:    Ho-Hyung Lee (luke.h.lee@gmail.com) - Ho-Hyung (“Luke”) Lee is by training a lawyer, an international businessman and entrepreneur – and an inventor.  He is currently the president of Ubiquitous Market System, Inc. (UbiMS).