If The World Were Static, Politicians Would Be Geniuses

Sometimes the obvious isn’t so obvious.  Example: If someone is selling 10 apples a week for a dime, and he raises his price one cent, how much more money will he bring in?  The obvious answer would be ten more cents.  But to conclude such one must hold a static view of the world.  In other words, one must assume that the number of apples sold is a static number and that a higher price would have no impact on that number.

So let’s try again.  How much more will the vendor bring in if he raises the price per apple to, say, $10.00?  Here it is obvious that he would most likely sell no apples.  That would be 100% less, obviously.

But if the world actually were static, imagine the problems that could be solved.  Rather than file for bankruptcy companies could simply raise their prices to meet expenses.  Moreover, the companies could become the golden goose for government to solve its fiscal problems as well.  Higher taxes?  No problem.  We’ll raise prices.

One problem overwhelming the West these days is runaway debts.  But in a static world this would be no problem at all.  The geniuses in government could simply raise taxes until deficits were gone.  If 10% produced $10 billion, then 20% would produce $20 billion.  Problem solved.

But we all know that the world is not static.  We know it because it’s obvious.  One change over here will have ramifications over there, and over there… and even way over there where we never imagined that it would; and in ways that we had never considered or intended.  But knowing this ought to make us think about such things when someone suggests embarking on a new direction.  Yes, we should not only think about it, but we also ought to be willing to stop it when that direction proves insane.



Filed under Economics, Government, Politics

2 responses to “If The World Were Static, Politicians Would Be Geniuses

  1. I think people can often forget this point, I probably do it as well sometimes – we say things like why didn’t the politicians foresee this or why are they not focusing on this issue right now, why that one? Like you say, politics is not static, if it were each issue would be dealt with slowly and methodically but instead it all boils down to last minute decisions and instinct.

    • I think that many also forget-or perhaps never consider-that politicians are motivated by different things, one of which is re-election. These motivations are no less powerful, or based on greed, than are those of the rich and much maligned CEO. As a result it seems that much that happens happens haphazardly; the decisions being driven by expediency or the pressures of the moment. The economic “ecological” effect, many times, is the last thing on their minds.

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