Reciprocal System #531 "The Road to Permanant Prosperity" ch5-Concepts and Definitions B

Transcript

hello everyone welcome to my channel it is uh a great day and this is an educational Channel and um we take a look at Great theories of everything ancient and modern and uh try to highlight them uh show you their potential um what you can do with them to help out your life your Awakening to 5D Consciousness your formation of a holistic worldview and today is our 520 531st video that we've done on the reciprocal system of theory from dweb Larson Mr Larson was an American engineer and and around 1959 he proposed his two fundamental postulates about how he believed the universe operated and uh then he through a process of deduction he derived a theoretical Universe uh what his Universe would look like if his postulates were correct a lot of that was in chemistry and astronomy and then he compared his theoretical findings with the experimental determinations of modern science and you know so um uh we saw well looking at his book on chemistry basic properties of matter how he was able to in some sense recreate scientific tables strictly from theory he is able to come up with equations um right out of his head right out of his theory that um generated uh values for some of the basic properties of matter such as the melting point and the specific heat and so on for various um atoms and molecules that were uh strikingly accurate um but uh Larson didn't only write books on science he does have books on chemistry and physics and astronomy astrophysics and uh but he also has a book on metaphysics where he delves into philosophy and religion and psychology and a little bit of biology um and some of his some of his uh colleagues have written on meteorology and geology and um archaeology crypto archaeology um but Larsson also wrote two books on economics uh the microeconomic book is called uh the road to Full Employment and then uh the one we're looking at today um and have been looking at for the last couple weeks is his macro book uh that is called the road to permanent prosperity and um so you know we try to do broad coverage on this channel where we can take a look at Larson's Theory um kind of in its entirety look at all of the different subject all the different subjects that he covers um and that his colleagues cover and so we can get a sense of how to use use Larson's Theory because it is a generalized Theory it's a theory that you can plug into every subject and so certainly you might have you must have some kind of pet subject that you would like to apply it to you would like to have more clarity about and Soh we're trying to um illuminate how to apply larsson's Theory okay now we are in uh chapter five of this book here called uh Concepts and definitions uh we started that yesterday so um and again uh you can go back about two weeks to get to the start of this book um lson develops um you know he he's uh trying to develop you know this economic science or what ronat called Econo physics um and he strikes that in in contrast to the sociological economics of you know um most of the modern schools the Keynesian and the John Kenneth galra uh who are policy makers you know they they put together their economics based on politics based on their you know kind of ideological standpoints or perspectives and Larson is really saying well you know that's all well and good but you need to put together your economic system based on facts um just like if you were building a bridge or a building um you know you might you might say oh this looks nice I I'd love to have a building that looks like this but if it doesn't if it's not architecturally sound if it doesn't comply with the laws of physics um you know you can have a incredibly beautiful ideas in your head but if they don't uh if there isn't some science behind it then the building is going to collapse or the bridge is going to collapse it has to be sound and so Larson is really looking at you know putting into place sound Economic Policy based on facts and you know he cites probably the Bedrock fact is that um you know the work or starve you know you either work or you starve um and he uh he abstracts it back to what he calls Robinson cruso economics where you have econ uh economic economics of one person um you know to get to the nuts and bolts of it the brass tacks of it um now just to give you a sense of larsson's theory if you want to get any deeper into Larson Theory you probably want to check out uh one of my earlier videos probably the first four 474 of my videos goes a little bit more in depth about larsson's Theory I'm just going to explain it briefly right here he's um one of the few scientists to uh propose a universe based on motion uh the universe is not made out of matter not made out of energy but it is made out of motion and in particular motion is um uh what he calls a scalar motion scalar motion is a motion that has a magnitude but has no specific Direction it's kind of like an internal motion or implicit motion um inherent motion um you can visualize that with a balloon that you put dots on if you blow up the balloon all the dots are moving away from each other if you contract the balloon all the dots are moving toward each other but they're not moving in any specific Direction every dot is moving in every direction away from every other dot or toward every other Dot and um it's really like the space itself the fabric of the balloon is what's moving um and um then also um motion for Larson is the relationship between space and time which is a reciprocal relationship uh just like uh in your uh Elementary School math class your reciprocal the reciprocal of 3 over two is 2 over3 and so on um and for Larson all of our scientific quantities are fractions with space or time as the numerator and time or space as the denominator so for example speed I was walking at 3 m Hour 3 mil of space in 1 hour of time space over time is speed if you double the speed say I was power walking at 6 miles hour um six miles of space in one hour of time or you can equivalently say that I was walking at 3 miles per half hour um that is the same you can multiply the space or you can divide the time and so Larson kind of plugs this into his theory of Economics this reciprocity he just got done stating this here in chapter 5 that consumption is the reciprocal of production so I think that's where he that's his starting point where he's going to try to plug in his reciprocal uh relationship here production is the um reciprocal of consumption and in both cases you're talking about Goods consumption of goods uh production of goods but that is also called purchasing power so you have purchasing power on one hand when it's production and goods on the other hand okay now we're going to get right into uh about halfway through chapter five uh where he's talking about some new some more definitions here on the forging basis we have these definitions price is a value placed on goods for purposes of economic transactions sellers value is the minimum price that the owner of goods is willing to accept for them at a specific time and place buyer's value is the maximum price that an individual or agent is willing to pay for Goods at a specific time or place the cost of goods is the price paid to obtain them or if self-produce the values expended in production this brings us to the question what determines value on first consideration it might seem that utility is the primary Criterion since the aim of all economic activity is satisfaction of wants and utility as here in defined is that property of goods by which uh they are able to supply such satisfactions it can hardly be denied that measurement of utility also measures the total results obtained from economic activity but for present purposes we are not interested in the sum total of the material satisfactions that are realized what we want to know is the size of that portion of the total that takes part in economic life the portion of the utilities that in the modern economies can be uh can be bought and sold in the markets although inherently subjective value as we have defined it has a def definite relation to utility an objective property in order that there may be value the individual concerned must believe that there is some utility to him either directly or because of the possibility of exchange uh for other Goods that he can utilize it is not necessary that any actual utility exists nor does the existence of utility automatically result in the existence of value the essential requirement is a belief in the existence of utility many ineffective medicines have value because there are those who think that they are being helped by these concoctions and therefore willing to buy them on the other hand anthy coal had no value until someone discovered that it would burn the perceived utility of economic Goods is a factor in determining their value because it affects the individual's willingness to make the expenditure that is necessary in order to obtain them an equally important factor is his ability to pay the price in kuso's situation the limiting factor is physical his capacity for productive labor if he finds it impossible to work more than an average of uh 10 hours per day then his average consumption of goods cannot exceed the equivalent of 10 hours labor when we examine some particular item such as the maintenance of comfortable temperatures in his house we can see that both ability and willingness enter into the determination of the value of firewood part of kuso's time must be spent in obtaining the necessities of life and these items must be given precedence over the Comforts if half of his total labor is required for such purposes the factor of ability limits him to 5 hours per day for obtaining firewood but cruso is not willing to spend all of his time to obtain War warmth to the exclusion of all other non-essential objectives and we will find that he sets a lower figure perhaps something on the order of 8 hours per week as a maximum if it requires more time than this to maintain a supply of firewood he will accept the discomfort of a cold house and apply his labor elsewhere we thus find that whereas cost may vary almost without bound value has an upper limit if the cost of production is above this limiting value which we will call the potential value to emphasize the analogy with potential utility these particular goods are not produced or bought the difference between this concept of potential value and the value concept that econ uh economists call Value in use is in this limit imposed by a finite ability to pay like costs quote value in use has no upper limit uh it is this concept of value uh that's the end of the quote uh it is this concept of value to which Joseph shumer refers when he says that quote total value will very often be infinitely large but this value has no economic significance and bringing it into an economic discussion merely confuses the issue issues willingness to buy means nothing without ability to buy it should be noted that this limitation imposed by inability to pay any higher price is always effective even in the case of absolute necessity of the absolute necessities of life the potential value of these Necessities uh food for example is relatively high but it is still finite not infinite as shumer claims because no matter how willing an individual may be to pay whatever price is necessary to sustain life there is always a point at which he is no longer able to pay more this is the potential value and if the cost of food exceeds this level by definition of value to to a particular individual and at a particular time this individual and those dependent on him must starve unless others come to their assistance even though there is food somewhere which he could obtain if he were able to place a greater economic value upon it that is pay a higher p a higher price we may deplore this situation but it exists and it is the function of economic science to analyze things as they are not as we would like them to be or as we think they ought to be the potential value is the maximum amount which an individual is willing and able to spend to obtain a particular economic product if necessary but ordinarily this great an expenditure is not required and the actual value the amount which he is willing to spend under the existing circumstances is determined by those factors which make the maximum expenditure unnecessary the first of these factors is the price at which similar goods are available a certain article may have a potential value of $10 to the prospective purchaser but if an equivalent article can be bought for $1 elsewhere in the same General Market then the actual value of the article in question cannot exceed $1 a second determinant of actual value is subst substitutability on first consideration it may seem absurd to say that the value of Oats is determined largely by the cost of wheat one naturally expects value to be a characteristic of the commodity itself self on the order of density viscosity or some such physical property poent potential utility as we have defined it is such a property an inherent characteristic of the goods but value potential or actual is not except in the limiting situation where no acceptable substitute is available value in the sense in which the term is used in this work is dependent to a very large degree on the cost of possible subst substitutes summarizing the foregoing we find that potential value is determined by a utility and B ability to buy or produce actual value is determined by a sellers offers or minimum production costs and B uh B availability and cost of substitutes and C potential value as a limiting factor in an exchange economy the cost of production does not enter into the the determination of values directly but it does so indirectly through the sellers offers that is sellers will not continue to offer products at less than the cost of production whenever a deliberate economic choice is made the decision as to what goods to buy or produce depends on the ratio of potential value to cost how much value we get for our money as the Layman puts it the most essential wants are satisfied first because the value cost ratio is highest there indeed nothing else has any value until the necessities of life are provided for this fact uh that less essential items may have little value or perhaps no value at all in spite of having considerable utility is one of the peculiarities of the value situation that is much easier to understand when we look at it in the context of the simple economy let us consider the case of an isolated person uh whose entire time is required for the production of the Bare Essentials of life either because his environment is unfavorable or because he is personally inefficient to this individual nothing outside of these Essentials has any value as here in defined since however we uh since however willing he may be to produce it he is not able to do so luxuries would still have utility of course and if there were any way of getting them without effort he would be glad to have them but he cannot devote any time to producing them or to producing anything else that he can exchange for them for if he does this he ceases to exist now let us turn our attention to another individual whose productivity is 50% greater in this case only 2/3 of the total available Labor uh time is required for producing The Bare Essentials and the balance can be applied to improving the scale of living here Comforts and conveniences begin to have a value a third individual whose productivity is 100% greater than the first would be able to assign a still greater value to the these luxuries that is he would not uh he would be not only willing but also able to devote more of his labor to the production to their production or acquisition in general we may say that the greater the productivity the higher the value that can be placed on non Necessities this is one of the places where scientific conclusions are distressing to some persons many economists and Layman wax highly indignant over the ability of persons with larger incomes to enjoy the good things of life that are denied to those not so fortunately situated and they object to any kind of a terminology which might imply some justification for the State of Affairs they tell us that the wants of the poor are equally as strong as those of the Rich and that consequently values are the same to all but this is merely confusing value with utility the utility of some Goods may be the same to all but in order to analyze economic processes we must have a concept that takes into account ability to pay the cost as well as desire to to enjoy the goods this does not imply either approval or disapproval of the existing situation which requires the use of such a concept it is simply a recognition of the facts the value which most of us are able to place upon a yacht or an original rembrand has no economic significance and nothing is gained by pretending that it does in this connection is interesting to note that the distinction between utility and value is recognized even by animals of presumably low intelligence not withstanding the fact that some of our savants managed to get them glorious gloriously tangled up when they attempt to harmonize them with their own emotional judgments the Hungry Cat will catch mice if there are is no other kind of uh food available but he will not put forth the effort if a tenderhearted mistress is susceptible to some Artful begging the utility of mice as food is just as great in one case as in the other but in feline economic life as well as in human economic life cost is compared with value not with utility and in accordance with the principles that have been set forth in the preceding discussion the value of mice as food is decreased by the availability of acceptable substitutes at a lower cost as already noted one of the principal determinants of buyer's value is the price at which the same Goods can be obtained elsewhere in the same General market under some circumstances sellers may offer limited quantities of particular items of abnormally at abnormally low prices especially if these goods are perishable but they cannot continue to sell at a price below the cost of production under normal conditions the minimum price of any particular kind of goods is therefore the lowest cost at which any producer can produce them and transport them on the market uh to the market area it follows that the amount of these Goods available for sale at this price in this market the supply is limited to the optimum output of this one producer if a somewhat higher price could be obtained additional producers would be able to enter the market and the original supplier might also be able to increase his output it follows that the supply at this higher price would be greater a still higher price would still further increase the supply thus the supply of a particular kind of goods in a market is not a specific quantity but a series of quantities a schedule as it is usually called corresponding to a similar series of prices the supply of an economic good in a specific Market at a specific time is a schedule indicating the amount of that good which will be offered for sale at different prices as indicated in chapter 4 the buyer's value placed on Goods by individuals must be above the sellers price in order to enable a transaction to take place at the minimum price the sellers value the number of consumers whose uh Value Estimate is above this price is usually relatively large the quantity that the consumers would buy at this price the demand for these Goods is therefore also relatively large at a higher price some of the consumers find that the price now exceeds the value that they have placed on the goods as buyers consequently they do not buy them a still higher price takes additional consumers out of the market thus the demand generally decreases as the price Rises the demand for an economic good in a specific Market at a specific time is a schedule indicating the amount of that good which will be uh bought at different prices in each case there is only one price at which supply and demand are equal this is the only price that will clear the market and it is therefore the price at which the transactions take place changes in either Supply or demand result in corresponding changes in the market price the supply and demand relationships have been extensively investigated by the economists and are well covered in the economic literature there is however a strong tendency to apply supply and demand reasoning to issues that are outside its range of applicability it is not too much to say contends one Enthusiast that almost everything we know about the behavior of the economic system can be illuminated by way of reference to the fundamental uh Cross of demand and Supply but this is too much to say far too much the truth is that supply and demand Theory does not illuminate all areas in economics on the contrary it has contributed greatly to the confusion that now exists in several important economic areas particularly such subjects as the origin and magnitude of the total demand for goods and the true significance of the money supply the reasons for the inapplicability of the supply and demand principles to these issues will be discussed in connection with the examination of the individual issues in the subsequent pages okay that is the end of the chapter um now the next chapter chapter 6 is called the money economy and I think Larsson gets into a lot of the meat of his work right here in chapter 6 which we will start tomorrow when we resume so thank you for tuning in today and have a great