Friday, February 17, 2012

Economics as an ecosystem part 2

Given my model of a ecosystem, (and i encourage debate on the validity on the whole or in parts), how do banks and the bank bailouts fit in?

I see banks as near apex predators, they evolved from helpful benign organizations, into new roles as selecting agents. Now before people start assuming this is nothing more than a smear job against bankers, lets look at how apex predators fit into a healthy ecosystem.

Apex predators represent a strong selection pressure in the natural selection concept. They cull the weak and unfit from the herd to make the overall average health better. Banks should exist to cull unfit businesses from the economy. (you may recall my "Capitalism and Evolution" essay where I mused about what "Fittest" really ment.)

So what kind of event did the bank bailouts represent? Basically what we did was gather up all of the base of the food chain and stuffed it in the stomachs of the apex predators. This was a really bad idea. Apex predators generally don't produce the kind of effluent that "harvesters" need to survive. Like wise, I doubt any of the bankers are really thinking about what they can do two kick start the economy for the good of us all. So now, the apex predators might have a full gut, but the prey they usually feed on is starving because the energy didn't travel through all of the tiers to get to them.

That meal won't last forever, and once the hunger pangs start up again, they may very well find that there is nothing substantial around to eat. Furthermore apex praetors aren't really designed to eat that way, they digest the proteins of prey animals. Banks best digest failing business models.

What we should have done. If that money was spent at the bottom, to fund repair and replacement of our failing infrastructure for example, that would have meant jobs for a lot of "prey". The banks would have still gotten the money, but it wouldn't have come to them as empty calories. Now the only way for the "energy" to reenter the system is for the banks to die and be fed upon by the base organisms that turn decaying matter back into nutrients for the harvesters.

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