2013-09-25

It’s a miracle! The housing market is bouncing back! Three cheers for our central planners:

US house prices rose 12.4% over the 12 months to the end of July, the biggest annual increase since February 2006, according to a closely-watched measure.

Are you ready for another bust? I hope so because that’s what we’re going to experience in the near future. Let’s discuss economics for a moment. Our glorious central planners have been busy shoveling money into the economy in the hopes of propping it up again. But it seems the more they shovel the harder the crash is. This fits with the Law of Erisian Escalation, which states that the imposition of order equals the escalation of chaos. Trying to instill more order in the economy only results in more chaos.

I’m going to put forward a theory. Do note that I’m not saying this theory is correct nor am I claiming that I have thought this through fully. But I’ve been considering it for a while now and I feel as though it’s worth putting out for others to consider.

History is noted by various paradigm shifts. These shifts can be caused by many things including technological advancements and the need to escape coercive control. The Industrial Revolution is an example of the former, the move away from serfdom is an example of the latter. Could it be that our societies are in the midst of an economic paradigm shift? Rick Falkvinge has an interesting theory he calls the Swarm Economy:

The industrial model with lifetime single-employer careers is dying, and it is not coming back. The first sign was a change from lifetime-marriage employments into its serial-monogamy equivalent, where people change jobs every three years at the most. The next change, one which is already happening, is that most people have more than one employment — or employment-equivalent — at one time: this is an enormous change to society, where people are going to be juggling five to ten projects at a time, some for fun, some for breadwinning, some for both. I have called this the coming swarm economy.

Although I disagree with his idea of a universal basic income, I believe his statements regarding the increasingly decentralized nature of our economy has merit. Technology has allows us, as a species, to become less tied to physical locations and specific employers. Independent contractors are great examples of this shift to more decentralized workplaces. Contractors often lack a specific employer. Instead they go from job to job and sometimes work on multiple contracts simultaneously. Advances in travel and communication technology allow for this.

If the economy is in for another paradigm shift what good will central planners do? Preventing change is what the state does but the more it tries to force us into the current economic paradigm the messier it makes the transition to the new paradigm. Instead of a gradual shift enabled by new technology we suffer under a series of very painful busts as the old paradigm continues to fail again and again.

Being an anarchist I’m obviously against any form of central planning. But even advocates of central planning may want to stop and consider the possibility of a complete paradigm shift. For all we know the entire world is in for a change and that change could bring economic prosperity of the likes we’ve never seen. I think we should step aside and let the economy move in the way it wants instead of trying to prop up the current shambling mess so many seem to worship.

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