Reciprocal System #570 "The Road to Permanent Prosperity" ch21-From Theory to Practice A

Transcript

hello everyone and welcome to my channel uh thanks for tuning in and um this is an educational Channel we try to uh Spotlight great theories of [Music] everything and um you know uh go deep into them and um show how show you how you can use these things uh to the best benefit for your own life today is our 570th video that we've done on the reciprocal system of theory from Dewey B Larson and um Mr Larsson was an American engineer who lived in the 20th century in 1959 he proposed his two fundamental postulates about how he believed the universe operated and from there he derived a theoretical Universe about what his Universe would look like if his postulates were correct and then he compared his theoretical Universe with the empirical universe of the modern scientists and um Larsson was able to um virtually recreate many of their scientific tables strictly from his theory and uh so that leads me to believe that he was uh on the right track not saying that he got everything right but um that he has a generalized Theory um that is correct and now the question is how to apply the theory and LaRon was able to apply the theory to many different subjects he has books on physics and chemistry and E astrophysics but also on metaphysics uh including Rel religion and philosophy and psychology biology and he also has two books on economics so he attempted to apply it pretty broadly he's got Associates who've applied it to other subjects as well geology and meteorology um and um you know not all the Kinks are worked out and hardly anybody knows about the theory because it's pretty difficult to get into and uh the powers that be um maybe sense its power and uh have done the ignore ignore approach to it um but Larsson was one of the only s scientists are not the only but one of the only um to propose a um cosmology that is based on motion not matter not energy but motion the universe is composed entirely of one component motion existing in three dimensions in discrete units and with two reciprocal aspects space and time okay that's where the reciprocal part comes from the uh motion is the relationship between space and time and that is a reciprocal relationship uh basically you can think of um motion as a fraction with space or time as the numerator and time or space as the denominator and you can think of motion as everything so all of our scientific quantities Force matter energy acceleration momentum power pressure capacitance electric charge these are all forms of motion and they all can be expressed in fractions now when Larson is referring to motion he's referring to a generalized kind of motion that he calls scalar motion or generic or intrinsic motion um you can Envision SCA a scalar motion is motion that has a magnitude but it has no specific Direction so so uh a a motion with a direction is what you call a vector or vectorial motion um a scalar motion you can Envision using a balloon that you put dots on with a magic marker if you blow up the balloon all the dots are moving away from each other every dot is moving away from every other dot but they're not moving in any specific Direction every dot is basically moving in every Direction um it every direction outward because that balloon is going outward if you could contract the balloon then every dot will be moving toward every other dot they'll be coming closer together but no particular direction so that is helpful at least for me to think of motion as that that motion it's really the motion of the surface of that balloon the fabric of the surface of that balloon is expanding uh uh getting farther and farther apart so it's really like that motion is it that motion is coming from the inside um it's always there Larson calls that the progression that outward motion of the balloon is called the progression and when it occurs at a rate of one unit of space per one unit of time that is what he calls the progression of the natural reference system and that is omnipresent and eternal it's always occurring and um it is the source of everything and uh but it is unmanifested uh manifestation occurs by reversing that Source um and really it must be reversed in three dimensions and then um you get to what would be the contraction of that balloon which you refers to as gravity which is you know your basis for matter and U that's kind of how it works now uh we are looking at at um one of larsson's books on economics today um the book is called the road to permanent prosperity and uh he wrote it toward the end of his life um sometime after he wrote it SEC his first book on economics which is called the road to Full Employment and uh we are about to start chapter 21 of this book called from Theory to practice and I'm hoping that in this chapter Larson gets into his theory a little bit um so I'm not going to rehash it but basically Larson is using uh a universe of motion approach to economics and a scientific approach to economics he sees the economic system as a system in motion and a system that can can be um you know set to mathematical equations that are exact and um an economic system that can be controlled um just like an engineer would control something um by understanding how it works and um permanent Prosperity can come from the judicious um monitoring of the economic system and kind of uh putting your finger on the scale at uh proper times and places to kind of smooth out your boom and busts um cycles of Economics so that you always have a system that's like kind of humming and um I think Larson is going to get into that that quite a bit here in the last couple chapters of this book now if you'd like to get a um thorough um going over of uh this book The Road to permanent Pro Prosperity uh you probably want to go back about six weeks um and start with chapter one and if you'd like to understand more about the reciprocal system my first 474 videos all kind of go into it a little bit deeper and give a little bit of an explanation of the postulates and and their ramifications uh so check out any or many of those um but for now we're going to get into chapter 21 of this book The Road to permanent prosperity and chapter 21 is called from Theory to practice in the domain of the physical sciences the individual who deals with specific everyday problems is not ordinarily called upon to develop the underlying Theory before he tackles the job immediately at hand the engineer who is commissioned to design a structure to meet a particular need the bridge that we have been using as a typical engineering problem for example merely reaches for his handbooks and plunges into the details of his task secure in the knowledge that the principles outlined in his works of reference are accepted by all those who labor in his field and represent the most advanced thinking of a science that consolidates its gains as it goes along and moves ever forward toward the ultimate truth he does not need to concern himself about where to find the basic data that he requires for he knows that except for Minor Details he will get the same information from from every Source if he prefers one handbook to another it is not because the contents differ but because the arrangement of the material is more to his liking this does not mean that the engineer's ultimate results are immune to controversy from his reference material he can determine the strength that his Bridge members must have in order to withstand the stresses in which the sorry the structure will be subjected and the community would never consider making any reduction in the beam sizes or ordering tension members to be redesigned as compression members the citizens recognize that the basic engineering principles are valid and binding and that they must be adhered to no matter how much someone might like to deviate from them in order to reduce the cost or change the appearance of the structure but the purely theoretical bridge that emerges from the engineer's calculations cannot be built the actual structure must have a definite form it must be built of some specific materials and it must have a particular location none of which can be drawn from a textbook all of which and all of which are sub subject to controversy and differences of opinion Theory merely requires that a particular Bridge member have a certain specific strength does not tell us whether the member should be made of wood steel concrete aluminum or any other material that can meet the requirements the choice between these alternatives as well as the choice of location and other similar decisions must be made on the basis of cost appearance convenience or other considerations outside the realm of science the engineers can and do evaluate these items according to their best judgment in the course of preparing their recommendations but as pointed out earlier it is entirely in order for the community to disagree with them as to the relative weight that should be assigned to the different considerations that are involved and to alter the plans accordingly for instance the engineers May recommend the use of Steel on the basis of lower costs but the community would be justified in ordering a change to reinforce concrete if the citizens concluded that the appearance of a concrete structure would be more in harmony with the surroundings and for that reason would be worth the additional cost cost one of the major reasons why econ uh economics has never fully emerged from its infancy is that the important distinction between these two kinds of issues has not been recognized either by The Economist or by layman in economic life as in the physical world of the engineer our everyday contact with practical problems involves the making of decisions between various Alternatives all of which may be theoretically sound questions of tax policy for example are generally analogous to the selection of materials for Bridge construction we cannot argue that an excise tax will not raise revenue anymore than we could contend that it is impossible to build a bridge of aluminum if we are opposed to the tax we must base our argument on some other ketu perhaps that the additional revenues are not necessary or that some other method of Taxation would be more advantageous but in economic Affairs there has been a general failure to realize that there are also many economic issues that are governed by fundamental principles which are beyond our control and are no more subject to alteration by majority vote than the sizes of the bridge members this lack of recognition of the necessity for conforming to basic economic laws is responsible for the collapse of many a well intentioned socioeconomic program just as a bridge constructed in Defiance of the basic principles of mechanics soon becomes a pile of wreckage so any economic program formulated in defiance of or in ignorance of the basic principles of economics also goes down in Failure regardless of how commendable the motives of its sponsors may be as stated in chapter 3 the two major economic problems for which economic science can be expected to Pro provide Prov Solutions are unemployment and economic stability contrary to their to the prevailing opinion of the economic profession we find that there is no necessary con connection between these two problems and that each can and should be treated independently of the other the entire employment study including both both the theoretical development and the identification of available practical methods of applying this newly developed theoretical understanding has therefore been separated from the remainder of the work and has been published under the title The Road to Full Employment this present volume is concerned with all of the other aspects of the operation of the economic system but the concluding chapters will concentrate mainly on the second of the two major problems how to stabilize business conditions and avoid booms and recessions this is a practical not a theoretical problem and it is analogous to the tasks of the engineer rather than to the work of the pure scientist if it were a physical problem the engineer who attacked it would have no concern about the theoretical fun fals he would find adequate sound and tested Theory available at his elbow but economics provides no such background of established and accepted Theory instead of giving us substantial agreement among all reference books such as we find in the engineers Library the literature of the economic profession is notorious for the diversity of its views quote economic uh economists are still of many schools and Clash heatedly on a thousand issues reports Arthur F Burns in large part this lack of agreement stems from the absence of any definite correlation between the hypothetical economic world of the academic theorist and the real economic World in which we live and go about our daily tasks quote for the purpose of academic theorizing says Jacob Viner who was not a zealous critic of the economic profession as his words might suggest but a prominent member of the economic establishment uh continuing the quote the premises the theorist starts from May without serious penalty be arbitrarily selected narrowly restricted in range and purely hypothetical in nature end quote in the same connection he admits that quote for purposes of teaching or of acceptable writing for his restricted audience of fellow theorists his conclusions are of little importance and what matters above all is the rigor and elegance of his manner of reaching them end quote but these theorists who are interested primarily in Elegance of treatment and regard conclusions applicable to real economic problems as unimportant trivia are at present our only source of economic theory and they cannot give the public official or the public official or businessman who needs answers to concrete practical problems the kind of help that is needed again according to Viner quote the theorist habitual methods of analys of an uh of analysis are such as to lead to quote right or wrong answers to Manufactured problems the premises and the criteria of rightness being so chosen as to make this not only possible but necessary for the policy maker however the problem are for the most part not of his own devising but are presented to him by outside sources in vague and illd defined fashion and what he asks of his advisors consists as much of help in determining what the problems are as of helping help in finding solutions for them the theorist here is likely to find himself uninformed and unskilled end quote the first task of the present project has therefore been to supply the Practical usable economic theory that we cannot get from the theorists to whom Viner refers to sift the great mass of material available in the economic literature separate the grain from the chaff and build from the ground up the sound theoretical structure that is essential for any real progress toward the defined goal the results of this effort continue the preceding 20 chapters of this work no answers to practical problems were developed in those pages although the solutions for many of our present difficulties are clearly foreshadowed by the the theoretical relations and principles that were there formulated the work up to this point has been confined to producing the equivalent on a limited scale of the engineers handbooks a compilation of pertinent rules and principles that will form the background for our approach to the problems at hand the most important of these are the general economic equation and and the 17 basic principles which are here recapitulated for a convenient reference okay and um we've got kind of a jumble here of the text that I'm attempting furiously to correct right now so that we can read it off but the general economic equation uh I believe States that b equals PV B is buying power or purchasing power um p is price and V is volume so b equals PV the purchasing power equals the price times the volume the basic principles governing primary econ omic processes principle one purchasing power is created solely by the production of transferable utilities and it is not extinguished until those utilities are destroyed by consumption or otherwise principle two only Goods can pay for goods principle three purchasing power and and goods are simply two aspects of the same thing and they are produced at the same time by the same act and in the same quantity principle four exchanges between individuals or agencies at the same economic location the same location with respect to the economic streams have no effect on the general economic situation principle five the income to the producer from Goods produced is exactly equal to the expenditures for labor and the services of capital the net result to the producer is zero principle six the circulating purchasing power arriving at any point in the Stream is equal to that leaving the last previous processing point plus or minus net r Reservoir transactions principle 7 except as Modified by Reservoir transactions the purchasing power money or re available in the Goods Market is equal to the purchasing power expended in the production Market principle eight any net change in the levels of the consumer purchasing power reservoirs results in a a corresponding change in the money price level in the Goods Market except in so far as it may be counterbalanced by a net change in the levels of the goods reservoirs principle nine the market price levels are independent of the volume of production principle 10 any net flow of money from consumer reservoirs to the purchasing power stream or vice versa causes a corresponding change in either production volume production price or both principle 11 arbitrary increases or decreases in wage rates have no effect on the volume of production or the ability of consumers as a whole to buy Goods principle 12 voluntary market price changes by producers have no effect on the volume of production or the ability of consumers as a whole to buy Goods principle 13 all consumer purchasing power must be used for the purchase of goods from producers it cannot be used for the purchase of goods already in the hands of consumers or for raising the prices of such Goods principle 14 the quantity of money existing within an economic system has no effect on prices or on the general operation of the system except in so far as the method by which money is introduced into or withdrawn from the system May constitute a purchasing power Reservoir transaction principle 15 credit can make Goods available to one individual or group of individuals only by diverting them from other individuals principle 16 the cost of the services of capital is fixed by competitive conditions independently of productivity and principle 17 average real wages are determined by productivity and are equal to Total production per worker less the items of costs that are determined independently of productivity taxes and capital costs okay that is all 17 uh back to uh the text uh that was the text but that was U Back to larsson's discussion here in these 17 basic principles and the general economic equation are the teachings of economic science as they apply to the subject matter under consideration these principles rest firmly on solid facts not on assumption speculation or guesswork and they have been derived from those facts by processes which are logically and mathematically exact even though extremely simple because of their factual nature they are specific in their statement there is none of the hedging or evasion that characterizes much of the usual treatment of economic subjects all relations are set forth in in positive terms not as Tendencies or propensities in addition to being specific these principles are Universal unlike many of the conclusions of conventional economics they are not limited to any particular economic system or to any special set of conditions they governed the cave dwellers in their strenuous efforts to earn their living at the dawn of history and they will apply with equal force to the streamlined multi-cylinder economic machine of the far distant future they govern economic processes not merely the systems of which these processes are constituent parts and they are applicable to the processes wherever and under whatever system they may appear the familiar contention that a social uh socialistic economy is subject to a set of principles that differ from those which rule our individual enterprise system is as absurd as if we were to contend that the laws of physics applicable to a concrete bridge are not the same as those which apply to a steel structure okay um I think we're going to stop right there um as you can see that is a very fundamental uh aspect of uh this book here chapter 21 uh this is videos 570 so this is kind of where um a lot of larsson's uh ideas get articulated now applying all of those 17 postulates are principles are is a different matter and we'll get into some of those applications and we've gotten into some of those in the past but um this is a great place to start so thanks for tuning in and have a great day