Abstract ideas, economic reality and philosophy of the science

Index
1. Two different systems of thought
2. Difference between scientific knowledge and intuitive knowledge
3. A review of the social sciences concept
4. Origin of the philosophy and science advance
5. Theory of the knowledge, how do we know?
6. The two hemispheres of the brain
7. Philosophical base of the economic knowledge
8. Abstract ideas and economic reality
9. The economy and the mathematics
10. The Philosophy of the science
11. Conclusion
Introduction
It is necessary to say that one thing is the philosophy and other different is the religion. One and other should not be confused. The philosophy encompasses the essential affairs of the religion but not vice verse; the religion do not encompasses the essential affairs of the philosophy.
1. Two different systems of thought
When in the western world the people think in the word philosophy, immediately the word is associated to the great thinkers like Socrates, Plato, Aristotle, Descartes, Kant, Hegel and others.
In the western world the people usually forget that exist other important philosophical conception which has dominated a good part of the world. That philosophy is the Confucianism, adopted as the official ideology of China in the year 136 BC until the beginning of the 20th century.
Confucianism represents an ideal approach, an especial manner of tackle basic affairs of the life. It recognizes the ontological dimension, the existence of God, the being and the abstract entities by a side and, also, the epistemological dimension, this mean the different forms of understanding or theory of the knowledge, but those two great issues did not constitute the principal object of their attention.
Confucius (551 BC- 479 BC) that is the most important figure of the eastern philosophy concentrated his attention in two great affairs: a) The duties of the statesmen and b) The main values of the human beings. His philosophy was a philosophy referred to the reality of the life, to the here and now and not a reflection about the eternity.
Confucius spoke about the clarity of the ideas as the essential condition of the philosophy and the knowledge. A similar idea was expressed hundred of years after by the apostle Pablo, when assured that the most important is the comprehension of the doctrine. Indeed, this comprehension can be achieved only by mean of the clarity of the ideas. The western philosophy did not give importance to that concept. Hence, to understand the western philosophy has been ever a difficult task.
The western philosophy concentrated its effort in the study of the being, the study of why and for what do we exist, the live after the death, the existence of a superior being, God, and the laws that govern our thoughts or theory of the knowledge. Albeit Confucianism does not explain the previous mentioned great affairs, it has been a strong moral force that has influenced a good part of the world population. Philosophically, the Confucianism might be considered a Rationalist conception; this is a creation of the reason and the feelings. In change, the western philosophy is a complex system of thought integrated, in turn, by different sub-systems of analysis. Over that complex structure of thought has been built the western system of philosophy and science.
This reflection and comparison between the eastern philosophy and the western philosophy is important because it complements and gives the real idea of the world, the idea of its integrality. So we do not see only a part but the global conception.
2. Difference between scientific knowledge and intuitive knowledge
The scientific knowledge research and explains in systematic, logic, rational and permanent form the essence of the things and the relation existent between them. The intuitive knowledge is the natural wisdom that all the human beings possess. Some philosophers consider that that is the highly grade of knowledge.
3. A review of the social sciences concept
The concept of science gives the idea of precision, regularity and permanent action.
The scientific truth is a constant truth that do not change in the time: the Earth rotation movement occur each 24 hours, the movement of translation each 365 days. It is a truth that may be verified in any moment.
It do not occur the same with the social sciences, which postulates are temporal and relatives; this is the negation of the basic principle of the science: their validity in the time. So that speak about social sciences do not respond exactly to the orthodox concept of science that mean precision and stability along the time.
4. Origin of the philosophy and science advance
The creative minds are the driving force of the philosophy and science advance.
In his work, Philosophic table of successive progress of the human spirit (1750), the French philosopher Anne-Robert- Jacques Turgot (1727-1781) spoke about the existence of spirits to whom the nature give a great memory able of accumulate a big amount of knowledge’s and the capacity for compare and order those knowledge’s. But the same nature usually denies to those minds the genius for invent and to open new roads. They are brilliants, but brilliants that do not shine with own light but with borrowed light, he said.
Turgot thought that that kind of minds makes a very important work but they do not change the things, they keep the establishment. On the contrary, in a minor proportion it exist the creative minds; they are who change the world.
5. Theory of the knowledge, how do we know?
The objective of the philosophy is the knowledge of the reality as a whole; in a general sense, the objective of the science is the knowledge of the different parts that encompasses the reality. Each one of those parts integrates the specific sciences.
The human knowledge has its origin in two essential forms: a) the ideas and b) the practice, the experience.
The philosophers named the first form of knowledge Rationalism and the second one Empiricism.
The Rationalism believe that the knowledge come from the reason, from our thought and intelligence. The main first exponents of this trend were Plato (427 BC- 348 BC) and Saint Augustine (354-430).
Plato thought that the world of the experience is in constant change and hence it can not give us a true wisdom. The senses can not lead us toward the knowledge, he said. He explained that there is a supra sensible world where our conscience obtain knowledge; that supra sensible world is the world of the ideas.
The other great leader of the Rationalism, Saint Augustine, preached that the trues and supreme concepts are irradiated by God to our spirits. He believed that the knowledge come from the human reason or from the divine illumination. His conception is known as Theology of Rationalism or Theory of the Divine Illumination.
In the Modern Age, the philosopher Rene Descartes (1596-1650) developed the Theory of the Innate Ideas. He assured that moreover of our experience we have innate ideas that are an original patrimony of the reason. Those ideas represent a basic source of our knowledge. The philosopher Amadeus Leibniz (1646-1716), continued and improved the work of Descartes. Other rationalists were Baruch Spinoza (1632-1677), Emmanuel Kant (1724-1804) and George Frederic Hegel (1770-1831).
The Rationalism found a solid point of support in the mathematical knowledge. Indeed, the mathematics is a conceptual and deductive knowledge which origin is our creative capacity, our imagination. Who has seen, tasted, touched, felt or smelt a point, a number, a geometric figure? Why one is one and not two or eight? Why a point is a point and not a triangle? What really is a number, a point or a triangle? Those are concepts created by the rationality our minds. The time and the space are too mathematical dimensions created by our minds. The mathematics is the unique exact science based exclusively in the creations of our thoughts, in our capacity of abstraction.
The Empiricism point out the contrary thesis of the Rationalism, this is that the source of the human knowledge is the experience. The defenders of this thesis were Francis Bacon (1561-1626), John Locke (1632-1704), George Berkeley (1685-1753), David Hume (1711-1776) and John Stuart Mill (1806-1873).
John Locke was the principal figure of the English Empiricism; he combated the theory of the innate ideas of Descartes and assured that all our knowledge’s are acquired by mean of the experience, by mean of our five senses or the internal sense of reflection; this internal sense let man create the abstract ideas. But that conception of Descartes, the doctrine of the abstract ideas, was rejected by other important philosopher of that time, George Berkeley, who assured that that doctrine do not reflect the reality of the things. In the 19th century, other philosopher, John Stuart Mill, would assume a most radical position. Mill said that until the mathematical knowledge come from the experience. He wrote the logic of the Empiricism and the induction.
A synthesis of the two mentioned contradictory theories ---Rationalism and Empiricism--- was developed by other philosophers. The Intellectualism was the first synthesis and his principal exponent was Aristotle, in opposition to his teacher Plato; after, in the Middle Age, Saint Thomas of Aquino (1225-1274) followed the same way. The Intellectualism consider that the human knowledge come from the reason and the experience.
Emmanuel Kant (1724-1804) developed a similar theory about the knowledge; he recognized the paper of the reason and the experience but he said that we have empiric knowledge in our minds, an a priori knowledge, it means previous to the experience. This Kant’s position is known in the philosophy as Aprioristic Theory.

6. The two hemispheres of the brain
It is important to say, moreover, that at middle of the 18th century the psychiatry, and the psychology after, began to speak about the two hemispheres of the brain.
Since then the researchers has discovered that the left hemisphere is responsible of the reason, the logic, the organization and the verbal communication, among other
capacities, while the right hemisphere is responsible of the emotions, the intuition, the creativity and the gestural communication.
In the western world our education has made emphasis in the abilities that the left
hemisphere give to us. This explain the preference by careers linked to the mathematics as engineering, informatics, the social sciences and the lesser interest in the research and the innovation.
I asked to a recognized psychologist, Doctor Luigi Alberti, his opinion and this was his answer:
The two hemispheres of our brain are like the two wings of a bird; if our education
emphasize the development of one wing then the flight will be irregular, not
harmonious.
We must learn to have two good wings, but for achieving that goal we need to develop
our right hemisphere, he said.
The conclusion is that that recommendation should be an important objective of the
modern education.
Doctor Luigi Alberti remember that thousands of years ago, the Mexican Toltecas Indians spoke about the two sides of the human body; they assured that the left
side was linked to the present, the live, the here and now while the right side was linked to the unexplainable, the intuition, the Gods, a similar concept like the expressed by the modern psychology.
Coincidence?, Innate ideas?, Aprioristic ideas?, What do you think?
7. Philosophical base of the economic knowledge
The economic knowledge is an outcome of the world of the ideas albeit it must be recognized that the human beings have a natural practice economic awareness, an innate knowledge of the economy.
We can say then that, historically, the Rationalism has been the support of the economic knowledge. This means that the economic knowledge has been based, essentially, in the ideas of their creators.
8. Abstract ideas and economic reality
One of the basic postulates of the economy is the existence of the market; this conceived not as a concrete place where coincide producers, sellers and buyers with total freedom for making economic transactions, but a conceptual creation of the human reason for explaining the economic behavior ---supply and demand--- of the individual people and its social organizations. It is then, an intellectual conception.
The mind of the economists created the laws of the market, the law of supply and the law of demand. As a result of that invention appeared the third key element: the price.
But the market is not an aseptic institution influenced only by the laws of the supply, the demand and the prices, no, there is a fourth decisive factor that determine in last instance the behavior of the market: that decisive factor is the State, in all the political regimes, even in the extreme capitalist societies.
From the Rationalist method of analysis the economy obtained the abstract idea of the market, the perfect competition and the use of the mathematics to explain some economics issues.
An abstract idea might coincide or not with something practice. One thing is the ideas and other completely different may be the reality. This occurs clearly in the economy. For example, in the economy of the common life the perfect competition does not exist. This concept is a fiction of the mind. Notwithstanding, the economic science was founded taking that idea as one of its principal concepts.
John Stuart Mill in his Principles of Political Economy with some of their applications to social philosophy, book II, chapter II (1848) make an important reflection on the competition that deserve to be quoted; this is:
Of Competition and Custom

“1. Under the rule of individual property, the division of the produce is the result of two determining agencies: Competition, and Custom. It is important to ascertain the amount of influence which belongs to each of these causes, and in what manner the operation of one is modified by the other.
Political economists generally, and English political economists above others, have been accustomed to lay almost exclusive stress upon the first of these agencies; to exaggerate the effect of competition, and to take into little account the other and conflicting principle. They are apt to express themselves as if they thought that competition actually does, in all cases, whatever it can be shown to be the tendency of competition to do. This is partly intelligible, if we consider that only through the principle of competition has political economy any pretension to the character of a science. So far as rents, profits, wages, prices, are determined by competition, laws may be assigned for them. Assume competition to be their exclusive regulator, and principles of broad generality and scientific precision may be laid down, according to which they will be regulated.” End of the quote.
In the paragraph may be observed how John Stuart Mill doubts about the character of science given to the economy and how the principle of competition is one of the most important concepts employed by the founders of the economy.
In the economy of the diary life the decisive factor is the state and not the market. The state decides the key economical issues in all the political systems. First of all it decides what kind of economical regime will be applied in the society: free or regulated market. But the same decision regarding the free market is a form of interventionism because the state can resolve the contrary.
In the most radical societies of free market the state determines, moreover, the other basic aspects of the economy: the monetary policy, the financial policy and, in consequence, the interest rates, the commercial policy, the imports and exports and the rest of the essential economic affairs.
The merchants and bankers this true realize perfectly and for that reason they has invented ways for influence the politics and the statesmen. Nonetheless, the true power of the market is in the hands of the statesmen. This is a proof more that the abstract idea of the market and the competition does not correspond to the reality of the things.
The economic freedom is an abstract idea, a fiction of the mind because the real behavior of the economy is decided by the politics, the states, the statesmen through the legal systems of the countries. The statesmen make the laws, all the laws, including the economics laws.
9. The economy and the mathematics
The preference by the use of the mathematics confirms the Rationalist trend of the economy.
One of the pioneers intends for using the mathematics to support the economical knowledge was made by William Petty (1623-1687). His Political Arithmetic was written in 1676 but was published in the year 1690 after his dead. Petty is one of the most important figures of the economy. In a concept of his book he express that one of his most important objectives was to express his opinions in terms of exact magnitudes, in terms of numbers, weight and measurement. He thought that the economic reality might be represented through the mathematics.
82 years after, Francoise Quesnay, principal exponent of the Physiocratic school, published his Tableu Economique (1758), which constitute an important step toward the employ of the mathematics in the economy.
The Tableu Economique was a system where was presented the annual total production of a country and the resources needed for the reposition of those resources each year.
Those two experiments, the work of Petty and the work of Quesnay, were the base for the development of the econometrics in the 20th century, from the hand of Alfred Marshall (1842-1924), who separated the economy of the politics and created the modern economics, based, in a good part, in the mathematics.
The mentioned facts confirm the Rationalist trend of the economy. Why?
Because the mathematics is a science that has been created by our reason, our thought, as already was said in previous paragraphs, but it is important to repeat it for a best comprehension of the idea.
10. The philosophy of the science
The philosophy encompasses the totality of the knowledge. The science as a whole is a part of the philosophy and the special sciences, the particular sciences, a restricted portion of the global science; in consequence, an expression of the philosophical knowledge.
The philosophy of the global science and of the particular sciences has the same objective of the philosophy.
Which are those objectives?
The objectives are to discover the reality of the world and the universe, this mean to understand the laws that govern that reality and the relations between each one of the parts that integrate that reality.
The philosophy of the science might be more useful and to adapt their action to the true needs of the humankind. It should give the analytical support for the development of the knowledge to enhance the quality of live of the people. The first lesson that the philosophy of the science should give to the world is to teach the love for the Earth and to love the life.
The life is a miracle. God has given to man the ability for realize a part of that miracle but not the license to destroy it.
Man has advanced very far in the way of the destruction. The atomic weapons are able of to disappear the Earth. But now he wants to intensify the destruction affecting directly the creation of the life through the new experiments in the biology.
God is the unique creator; man should not create artificially the life. The philosophy of the science should help man to understand this true.
Man can reach more advances in the medicine, defeat the illnesses’ and to extend the longevity; but, for achieving those goals, first of all he need to reduce the poverty and to develop a global program of demographic restriction in the developing countries. This is the other great knowledge that the philosophy of the science should teach us now.
The population growth is the most important issue that the humankind will face in the coming years. The natural resources scarcity, especially the water stress and the contamination reduce the possibilities of the Earth for producing the food that the high population growth requires. To spread that knowledge should be other important task of the philosophy of the science.
The great challenge of the future will be producing food and to distribute that food. It is something unfair and unbelievable that while million of people are undernourished and thousands of children die by hungry, millions of tons of food stay in the granaries of the big producers, waiting by an increase of prices.
Other great need of the world is to moderate the extremist mercantilist conception of the medicine and the health; for example, the science might find the cure and to reduce the morbidity of many illnesses, but for reaching that goal it is necessary to see the medicine and the health not only as a business but like a scientist and moral duty of helping our neighbors.
Finally, it is necessary to underline the need of preserve the nature and the environment. Man should find ways for reducing the contamination of the land, the air, the rivers, the oceans. Currently ---May and June 2010--- the world is facing one of the most ecological disasters by a big oil spill in the Gulf of Mexico. This kind of mistakes should not continue in the future.
Man should protect the forests and develop a global program of reforestation; that is the unique way to keep the live at mid and long term. The philosophy of the science should help to the comprehension of all this reality.
Conclusion-
- It must not be confused philosophy and religion; they are different.
- The eastern philosophy ---Confucianism--- represent a scale of values that deserve be known by the western world.
- There is a key concept of Confucius: the clearity of the ideas, as essential condition of the philosophy and the knowledge. The western philosophy does not practice that concept.
- The social sciences do not comply with the basic principle of the science: their validity through the time because the social sciences are in permanent change.
- The creative minds are the driving force of the science progress.
- Our education should make more emphasis in the research, the development of the creative capacity and the innovation.
- The economic knowledge is a rationalist knowledge, an outcome of the world of the ideas.
- The economy has stressed abstract concepts, fictions that do not exist in the reality.
- The preference by the use of the mathematics confirms the rationalist trend of the economy.
- The philosophy of the science might be more useful and adapt their action to the true needs of the humankind. There are essential issues like the preservation of the forests and the development of a global campaign of reforestation; that is the unique way of to keep the planet. The other essential measure is to develop a global program of demographic control because the overpopulation is and will be the gravest problem of the world at mid and long term. The other great problems: poverty and contamination are a consequence of the overpopulation, this mean the lack or scarcity of resources for attending the human needs.
What do you think?

The essence of Capitalism might change, political economy theory

The financial system is the core of the Capitalism. Money is the God of the system.

The wealth is the money and not the material resources that stay in second place. This is the cause of the crisis and also the cause of the solution of the crisis.

The Capitalism fixes all its problems through a formula: the creation of money. With money you can buy anything. Everybody accepts money. But ---the evolution of the facts during the last years--- are demonstrating that perhaps those concepts ---that are the essence of Capitalism--- might change at mid term because of a new reality: the natural resources crisis.

Water, food and petroleum have begun to be scarce goods and during the year 2008 signs that confirmed those trends emerged.

By the year 2008 the price of those vital goods reached unbelievable averages and this contributed to accelerate the global recession. There is, then, a direct relation between the commodities price increase and the recession as was demonstrated during 2008.

The availability or the scarcity of natural resources will have an expression in their prices. Nevertheless, a moment might arrive when the money would not be enough for buying the scarce goods. In history there have been moments like these before. For example, during the Second World War, for people in Europe a small amount of salt, a potato, or a piece of bread had no price. Money had no value. True wealth was the food and the peasant was the richest. I know it because I had the testimony of European persons that lived that reality.

Will these situations repeat again?

If the financial system continues their failure and the economies continue their disdain for the real economy, the radicalization of the economic crisis might be a reality in the future, changing the essence of the capitalism.

The capitalism will survive, because its leaders resort to socialism measures when the system is in peril. The best examples are the policies applied by the governments of the United States and Western Europe to attack the financial crisis of the years 2008 and 2009.

But, it is possible that in the future the consequences for the capitalist regime would be different: the participation of the State in the rescued companies perhaps will remain ---creating a new form of Capitalism of State--- and a more effective system of the benefit distributions.

The crisis of 2008-2009 has demonstrated a new reality: that at long term, the private sector can not survive alone without the help of the State.
Other important lesson is that the State has the duty of exert a severe control over the private sector, especially over the financial system.

In the future a free capitalism without the participation and control of the State will not be possible. This fact will represent a total change of the political and economic concepts that have survived until now.

So far, the lovers of the free market can not explain and justify their thesis.
The reality ---the economic failures of the 20 century and the 21st century--- has proven that the free market has an insurmountable difficulty: the human being avidity for wealth; and that the participation and control of the State is necessary for guarantee the economic development of the society.

In practice, the financial system of the main developed countries is in the hands of the States that have given the necessary money for their survival. This reveals once more the failure of the free market policy.

Many leaders do not want recognize that failure and insist in maintaining the free market policy. But the reality is above all wishes and the truth is evident: the free market concepts can not be sustained without the support and the help of the States.

The free market is utopian. Even Adam Smith recognized that from a meeting of merchandisers can not result anything different than a conspiracy to enhance the prices.

The avarice does not have limits. The avarice is in contradiction with the global wellbeing of the society. For this reason the capitalism system must be reformed and must establish limits to the unlimited accumulation of wealth of some few groups in detrimental of the majority.

The leaders of the twenty most developed countries have recognized this reality and in the Summit of April 2, 2009 they expressed the necessity of adopting measures to exert a most severe control over the financial system in their countries, among other actions.

Why the Communism did not survive, political economy theory

Capitalism survived because it was able of adopting radical measures taken from its ideological antagonism: Socialism; a contradiction itself.

It can not be denied that the New Deal of President Franklyn D. Roosevelt during the thirties and forties years of the twentieth century was a combination of liberal and socialism measures that promoted the intervention of the state in the most important social and economic activities of North America. This intervention of the state made possible for Capitalism to survive in this country. If you analyze each one of the policies of the New Deal you will verify that most of them were interventionist policies.

The intervention of the state was the vaccine that saved the Capitalism in the thirties and in the other crisis that this system has suffered since then. And what is a vaccine?

A vaccine is a product obtained from the same virus which eventually destroys.
Well, the Capitalism obtained the vaccine that saved itself from the virus of the Socialism, applying Socialist measures in the economy and in the society.

Orthodox Soviets leaders were not able to understand this reality and for that reason the Soviet Union collapsed in the eighties. If the Soviet leaders would had applied the same principle and had used Capitalism measures, perhaps the Soviet Union would had survived. But, on the contrary, they radicalized the Communism and the system could not resist. Chinese leaders understood this reality many years ago, and after Mao Tse Tung die in the seventies they applied a new method to guarantee the survival of their communist system. The Chinese leaders have applied the contradictory method that their Soviet colleagues were not able to accomplish. China is formally a Communist country but with liberal economic institutions open to the global economy and this has preserved the Chinese regime. How is this contradiction possible?

Theoretically it is not possible but in the reality it works. This demonstrates that sometimes there is a great difference between the theory and the reality.
The effect of this contradiction that occurs in the reality deserves to be deeply studied by politicians and economists worldwide.

Theory of the political supremacy, on the economics subordination

The state is the main economic actor. It does not matter the economic model: in the capitalism of free market, in the moderate socialism and, obviously, in the communist regimes.
This reflection is very important because it let to be aware of the true reality. The free market is an illusion. It does not exist. The states adopt the principal economic decisions still in the most advanced capitalist societies.
The free market is an appearance. Who determine the economic model? Who determine the fiscal, the financial and the monetary policy? Who decide the commercial policy, the regime of imports and exports? Who decide the policy of prices, the minimum wage and the policy of employment? Who decide the agricultural, industrial and environment policy?
You know the answer. And this confirms the economics subordination thesis. The politicians have in his hands the most important economical decisions in all the countries.
The politicians are the lawmakers and the laws define the organization and the functioning of the society.
The entrepreneurs and the workers are essentials for the economic development but its actions are conditioned by the state; their freedom is relative and limited. One entrepreneur needs the permissions and the licenses of the state for developing its business. Without those permissions and licenses none entrepreneur can realize its activities.
The business climate is determined by the big official’s policies. The state must exert their authority, however, sometimes adopt an attitude of indifference toward the other actors of the economic process; when this happen the consequence is the economical disaster. The recent financial crisis is a good example of that indifference.
But when the state exerts their role of supervision and control of the economic activities the situation is different and the society receives the correspondent benefits.
The great mistake of the last years has been the lack of control on vital sectors as the financial system. The balance between control and freedom is the key of the economic development.

The politics dominate the economy, elements of a different theory of the power, Theory of the Political Supremacy

Aerial view of the Capitol Hill [1]
The economics is not an autonomous discipline. It is subordinated to the politics. The most important economic decisions ---in all the countries--- are adopted by the politicians, this means, by the governments and not by the economists neither the economic sectors.
For example, the basic economic decision, that is the type of economic model that each society choose ---Free Market, Mixed Economy, Socialism or Communism--- is decided by the political factors of the countries. Obviously, they are influenced by the economic factors but these do not determine the definitive course of the economic policy.
The political factors ---governments and political parties-- represent the most powerful sectors of each society; they are the first power followed by the armed forces, the economic sectors, the mass media and the workers. Those are the real power of the society. They determine the composition of the formal powers.
After the political factors, the military power is the most important in all the societies: in the democratic advanced countries and in the rest of the political systems. It is hypocrisy to say other thing. In a first impression this seems not be true but in the reality that is the true. The following example illustrates very well this appreciation.
I remember to have read how ---in the days before the Pearl Harbor attack on December 7, 1941--- Washington warned to the Pacific Ocean Fleet about the imminence of the war. In the final days of November of that year the Secretary of State, Cordell Hull, said to the Secretary of War, Stimson that he had abandoned the negotiations with Japan and that since that moment the situation would be in the hands of the military forces. [2]
What means this? This means that Hull recognized that the time of the politics and the diplomacy had ended and the time of war was beginning.
In the democratic societies normally the armed forces do not participate in the politics. But an opinion of the armed forces in regard to any important affair is something that the structure of power can not disdain.
How the politics dominate the economy?
The laws of the economy are intellectual abstractions because in the reality the politics determines all the economic behavior in all the types of economic regimes.
The politicians, it means, the political parties and governments, are who decide the big economic policies; those are:
- The monetary policy (the value of the currency and the amount of liquidity in the economy)
- The financial policy (rates of interest)
- The fiscal policy (taxes, exemptions, including the bailouts to the banks)
- The commercial policy (regime of imports and exports)
- Wages Policy (minimum salary)
- Policy of prices (control or not)
- Agricultural policy
- Industrial policy
- Energetic policy
- Environment policy
The question is: what does really decide the private economy?
All the laws and rules that determine the economic behavior are decided by the governments. In consequence, the economy is a dependent discipline which laws and action in last instance depends of the politics factors.
Conclusion: these concepts might be the elements of a different theory of the power: the Theory of the Political Supremacy.
[1] Photo source: Commons.wikimedia.org/Wiki/file:aerial_view_o…
This work is in the public domain in the United States because it is a work of the United States Federal Government under the terms ofTitle 17, Chapter 1, Section 105 of the US Code. See Copyright.

[2] Daniel Yergin. La Historia del Petróleo. Page 428. Javier Vergara Editor. Buenos Aires 1992.

A radical change in the economic theory

The concepts of the book Running Out: How Global Shortages Change the Economic Paradigm, (Algora Publishing, New York 2006 and 2008), represents a radical change for the economic theory. The main idea of the book is that the world is facing an unprecedented situation: the global scarcity of natural resources, especially water and petroleum.
The phenomenon already has begun to be visible in many regions of the planet. An oil producer as Indonesia, for example, has exhausted their reserves and had to retire from the OPEC recently.
The oil reserves of the North Sea are in critical situation; the same happen in Mexico and in the United States. The situation of the water reserves is not best. In many regions of the world the water scarcity is already a reality.
The book assures that capital will not be the main scarce factor of production as has been until now. In the near future the natural resources will be the scarce factor of production and this means a complete change for the traditional economics concepts.
The overexploitation of the resources and the contamination of the environment are the causes of the situation.
Only the development of new sources of energy less contaminants, the massive construction of green cars and a policy of reforestation and conservation of the forests that still survive might diminish the impact of the problem. But it is necessary a global effort.
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