Friday, September 14, 2012

Towards an Integrated, Comprehensive Systems Theory of Economic Behavior

Key to this discussion is the assumption that human economic behavior is a self-regulating ecosystem of material existence. This assumption is made on the basis of observable facts involving market economies where resource scarcity leads to higher commodity prices and those prices modify economic decisions and behavior. That is definitely a feedback loop and that is where this paper begins, with a definition of the feedback loop in human economic behavior.
The feedback loop consists of five elements:
1.Discriminating disjoint system
This is a special usage of disjoint from mathematics and means no more than that a human being in the role of economic agent is possessed of integrity and judgement.
2. Entanglement
Taken from quantum mechanics, the usage is here simpler and more intuitive. Human beings, in other words, are entangled by language, monetary system, and quantifying methodology which provide the common basis for the measurement of economic behavior.
3. Information operations
This is simply the codification of the value adding task which involves a modification of information.
4. Discovery
This is the point at which markets define the feedback loop. A market is a game in which the relative value in currency of a value addition is discovered. Markets function under conditions of imperfect information and are therefore approximate and mercurial in the moment and efficient over unspecified time periods defined by changing conditions of material existence.
5. Feedback
Discovery information applied by an economic applied by an economic agent to future economic behavior.

The element of interest in this discussion is that of entanglements since that is a term from another discipline applied in a novel fashion through information theory to systems theory. Entanglements involve no more than roles and relationships. If I am another human being standing directly to your left, then you are a human being standing to my right. We are entangled. Similarly, language involves roles and relationships in any communication as does the more or less of a monetary system.
Human economic behavior, then, consists of an information loop involving modification, discovery, and feedback among disjoint discriminating systems. It is no more or less than that. Economic behavior is the primary social behavior of human beings and is conditional upon meaning defined psychological space, integrity, and informed mental discrimination, judgement.