Saturday, October 9, 2010

The Real Cause of Economic and Social Problems in the Modern Information Age -- and a Solution for them

A Discovery of an Important Fact

If I were to say 1+1 is 2, people will quickly agree I’m right. But, if I were to say 1+1 is 5, 10 or even 20, most will not agree with me at once, and vehemently deny it.  However, I intend to prove 1 + 1 = more than two. 

The development of information technology and networking technology in the modern information age has made possible the development of numerous synergy systems, which could produce geometrically progressive (or synergy) effects. We have already used, wittingly and unwittingly, numerous synergy systems, such as Google, Internet Explorer, numerous software applications, digital contents and digital synergies, and numerous automation systems with information devices.  Almost all individuals and market units could have increased their productivity significantly by using these synergy systems. 

If the present market process is closely examined, it will be seen that the synergy systems have not been developed as fully as they could have been. For the existing market process does not allow for geometrically progressive (or synergy) effects in the market – but it could.

Structural Problems in the Modern Information Age

From this gap of synergy effects, many structural problems have accumulated in the market as a whole.  These structural problems are staggering.  For all the benefits the Modern Information Age has produced, we are now faced with problems of monumental proportions.  They include:

1.      The steady worsening of employment condition for lower- and middle-income people
2.      The slow increase of consuming effects
3.      The abnormally intensified price-oriented competition
4.      The increasing “Missing Class”
5.      The abrupt increase of welfare expenses

These structural problems are all related to each other, mutually and complimentarily, to constantly worsen economic conditions.

If these structural problems were left as they were, a vicious cycle, ever spiraling, between the supply side and demand side would occur.  This would be directly linked to a recession. To avoid the possible recession, and revitalize the economy, western countries must have insisted on adopting the expansionary economic policies they had typically adopted under similar circumstances.  Most of these policies have not worked, nor will they work now.  Rather, they have exacerbated the conditions for economic and social problems.  In fact, current economic problems such as the housing market crash, sub-prime mortgage failures, credit crunch and financial market meltdown point to the failures of those economic policies.    

Economic and social unrest is appearing in all quarters of the world. That is, the high monetary liquidity, which has been accumulated over the last several years has moved from the slumped real estate and financial markets to the oil and gas crisis, food and natural resource price increases, and inflation generally.  Together with this, the “missing class” is falling into the poor class, and this will cause numerous political and social problems that will have economic consequences.

Yet, it seems that politicians and policymakers are still clueless about the real causes for the current economic and social malaise.  It seems to me that their policies are far from revitalizing the economy; rather they are worsening it.              

A Discovery of the Real Causes and a Proposed Solution 

The real cause of the structural problems we have cited is the outdated existing market systems. Market systems are the systemic series of individual actions that realize the market process. The existing systemic series of individual actions do not or cannot produce enough geometrically progressive (or synergy) effects.

The solution starts with the development of new market systems, which can produce enough geometrically progressive (or synergy) effects.  Until these new synergy market systems are developed, none of the old economic policies can be effective.

But, if these new synergy market systems are developed, before it’s too late, the competitiveness of the nation and individual companies will be strengthened significantly.  The real modern information age could be realized at last.

Author:  Ho-Hyung Lee ( - 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). Ubiquitous Market System is nothing less than a new synergy market system that will put us on the real path to prosperity.  1 + 1 truly equals more than 2.

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