The Self-Healing Economics

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Photo by Markus Spiske on Unsplash

Everyone must ever be hurt and get pain. If there is no serious problem, our body will do its self- recovery and recuperate the scars. Our physique is a complex system and consists of many subsystems. Once a subsystem was hurt, the self-healing will do its magic soon and not disrupt the whole system.

Likewise, the economy is like a body as a system. Every part has its own mechanism and institutions. For example, the fiscal economy has regulation for levying tax and managing the state budget which is different from an environment based economy that needs to handle resources exploitation and green interest.

Each subsystem has interconnection with the others, making harmony so called equilibrium in the economics term.

I’m just interested that the subsystem has its own self-recovery like the body’s subsystem. When we get a tiny bloody hand, around two days later, our hand will be fine. So do in the economy’s subsystem. Once a bank customer has been caught fraud, as long as it is not significant, the financial system will do its self-healing by punishing the crime, regaining the loss and so, not destroying the entire system.

Furthermore, what can make the self-recovery work? Can we expand this mechanism to the bigger case?

First of all, we should scrutinise our physique’s mechanism. We have a brain as a conscious control, but many other organs and parts can do their task without any command from it. Blood circulates automatically every time as well as our nose breaths the fresh air.

The system can run regularly because of a natural process (law) that has been working for a long time, so that it is stable or in equilibrium. The sporadic intercept will not significantly harm the system unless it occurs for a long time and consistent, called evolution. The pre-condition for this stability is consistency.

Meanwhile, human evolution does not originate from a sophisticated substance. From the one cell material, humans have evolved to the complex system for million years until gaining our current complex body. The social-economy mechanism is similar. The first community is a primitive tribe which then developed to the more complex system. Every tribe and nation have their era and opportunity, from the beginning to the end, as long as they do not change the main characteristics. However, this is hard to be identified.

Our first concern is doing efforts for stabilisation. For our body we need natural law, but in society, we need institutions, which at least consist of regulation and regulator. For the solid community, we need a set of proper norms and laws that are enforced fairly and consistently. Compared to human evolution, developing and applying the regulation are like evolution from the simple substance to the complex one.

To be consistent, we need to define our goal clearly. Each subsystem has its goal. Therefore, the complex system is rooted to the simple components.

I believe that self-healing economics is more efficient than the system with composite regulations. We do not need to be too reactive with the actual condition and appoint the people precisely. We still need regulations, but in simple and clear form. It makes people understand their duties. Moreover, clear understanding makes enforcement easier. The agencies also need to be simplified in the subsystem area, so at the system level, the bureaucracy will not be complicated.

The development is step by step, which are:

1. Creating a subsystem and its regulation. We can start from the most important based on our needs and our strength. If we are an agricultural society, at least we pinpoint farm technology, financial, and commerce. Each subsystem has its own regulation and again, should be simple and clear.

2. Evaluate subsystems’ interactions. For example, the financial (sub)system’s reliability to support agriculture.

3. Consistent. After the interaction reaches its equilibrium, we should run the system consistently. If we want to make change, it should be gradual. Revolution is not the best choice if the equilibrium had been reached.

4. Let the system work. The authorities should not intervene deeply. Its task is ensuring the system works through law enforcement.