Ain’t Nobody Misbehaving


It’s not very contentious to say that the economy is populated largely with humans. If economics is the science and study of how people interact with value, and all people behave irrationally to some extent, or at least on some occasions, then the equations that actually express human behavior must be nonlinear; or, human behavior can only be modeled with equations that are unsolvable. If you’re wondering if that’s an impossible task, you are correct; it is impossible to solve unsolvable equations. If you’re wondering whether or not people actually do behave irrationally, they do, and you can think of it as economically misbehaving. A strong analysis of humans routinely misbehaving is thoroughly laid out in Richard Thaler’s book Misbehaving: The Making of Behavioral Economics, and it was the basis for the emergence of that very discipline. (The growth of the field also benefited from significant contributions from later Nobel laureates Robert Shiller, George Akerlof, Daniel Kahneman and the late Amos Tversky, among others, whose foundational intellectual work underlies many focal points of Capital Flow.) 

In short: people misbehave. If you’re wondering why wealth and income inequality exist, and why it’s so difficult to identify and counteract the forces that have caused it, add together irrational behavior with capitalism-as-usual and the math makes sense. Furthermore, human misbehavior, as globally ubiquitous as humans, emerges from the human condition, so it must be inherent in the global movement dynamics of capital flow, there on the interface between human psychology and the idea of money. Even if it were possible to convince humanity to behave a certain way consciously, we would all still frequently misbehave unconsciously*, almost always to our own economic detriment. Since we can’t change human nature directly, our greatest hope of improving the economic livelihood for the vast majority of people is to alter the human-made institution of capitalism-as-usual, something that we can actually accomplish by affecting the environment within which capitalism operates. 

Introducing new elements into a system changes the scope of the environment, and all of the variables in that system responsively adjust and adapt to that new environment. Since capitalism-as-usual rewards greedy behavior with money, and the LOPSIII model is a new “species” of business that performs alternatively to capitalism-as-usual, its introduction represents a new ordering of the economic landscape. A single LOPSIII operating in an area has the power to entirely reshape a few individual lives; networks of them at scale across the country have the power to provide an additional macroeconomic mechanism to the greatly overworked duo of taxation and public spending. As long as there are humans who are willing to accept an amount of earnings that is anything less than the maximum potential profit, there is still hope to develop a sustainable global economy.  

Moreover, the Income Inequality Inhibitor (III) component inherent in all LOPSIII businesses provides a continuous counteraction to the relentless transfer of wealth that occurs by default through capitalism-as-usual. This operational function, which is embedded in the Local Fund element and fundamental to LOPSIII commerce, continually facilitates the balancing of excess economic gains with those who are harmed in the process, and who have been harmed by capitalism-as-usual historically.. Maintaining a LOPSIII is to also maintain an engine of reparations whose current implementation is restricted only by the awareness of the individual, and the attention that is being paid to the opportunity. To this very concept of awareness we must again repeat how important the direction of attention is in economic affairs. Capitalism-as-usual (specifically, its profit motive) thrives primarily on the imbalances of knowledge present in the buyer-seller relationship, and the more attention the consumer pays to relevant details, the more difficult it will be for the seller to part her from her money, or phish her.

The direction of attention is a primary activity and, as Michael S. A. Graziano lays out in his book Rethinking Consciousness, it is the very dynamic with which we can measure the relative intelligence of members of the human species. The neuro-psycho apparatus which apprehends and directs our own personal awareness is the existence of consciousness itself, a theory that Graziano sums up nicely as the attention schema theory. With that framework in mind, human behavior can be more induced to be more thoughtful through improvements in the direction of personal attention and awareness, a process that directly counteracts the mindless misbehavior that permeates the present times. In short, paying attention improves results, including, we have found, in matters regarding financial literacy. Continuous learning is an effective activity.

(For more information on how to form a financially ethical business, see lopsiii.com)


*Economists do a mostly useful job of trying to model an irrational system with workable, rational, solvable models, but they are nonetheless imperfect and flawed representations that are forced to exclude real and present nonlinear elements, and nested hierarchies of complexity from increasing technological evolution further muddle the effort. 

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