An economist friend tells me this morning that what I wrote in my blog yesterday (“Preparing for the post-industrial economy”) was the standard belief of economists until J. M. Keynes came along with his ideas.
Previously, economists such as Jean Baptiste Say and Adam Smith had already come to the conclusion that if governments would only stop trying to amass wealth and power and leave economic systems alone then the latter would look after themselves when in temporary difficulties. They’d be self-healing. Since Keynes, these economists are known as neo-classical economists.
Their idea was intuitive such as the simple statement “Supply will create its own demand” — assuming that what was on offer was either badly needed, such as food, or the fashion of the moment, such as modern ‘serious’ art as collected by the very rich — who can be as credulous as anybody else!
The only difference is that I supplied proof. It was not my proof, however, nor even that of Richard Feynman whom I quoted, but the fact that the world’s economic system, being physical, is part of the basic laws of physics.
And what they say is that, under constant energy inputs, any physical system will ultimately find its most efficient mode of operating. When in trouble they will be self-rejuvenating. So long as governments and central banks with their bright ideas stop interfering.