Cultivating "Organic Growth"

The economy, simply, must be organized for "organic growth" that is clearly identified with expansion of the pie (the proliferation of firms and dissipation of risk, not the consolidation of firms with proliferation of risk and dissipation of industry and markets).

Expansion is clearly verified with employment. It does not rely on the abstruse quanta-phenomenologies of an elite regulatory authority. By the same measure, simply organizing for "organic growth" will not be indicated by consolidation of firms (the merger and acquisition activity that precedes economic recovery) and continued economic contraction verified with unemployment.

Expanding the pie is supposed to expand the market in which to be shared, literally increasing the number of "shares" in the market to demand the increased supply. The result is growth without inflation and/or unemployment instead of the crisis of overproduction.

Overproduction is demand reduction that results from over-accumulation of the capital, or liquidity crisis. The crisis is easily, simply, resolved by not allowing industry and markets to consolidate with a false economy-of-scale efficiency argument.

It is a critical error to reform financial markets, for example, without deconsolidation of firms too big to fail. The tendency of reform is to eliminate the "failure" component and retain the "too big" component. That is a "big" mistake!

Resolving the financial sector to prevent crises requires deconsolidation. The sentiment expressed by interests close to the reform is that predicting and preventing crises is not possible, indicating that the critical size factor will not be resolved. The capital will then continue to over-accumulate, along with the errors. The result is easily predictable--crises of overproduction; and if it is easily predictable, it is just as easily, simply, preventable.

Mired in technical complexity, the critical, causal factor will be conserved through public process. The critical errors will be maintained as best practices best determined by the private sector which is, of course, being too big to fail. If, however, the only reform is to allow for failure without the resolve of a deconsolidated free-market, all that is left is the unresolved risk (what cultivating a free marketplace dissipates, or resolves, in priority). The accumulation of errors will present as catastrophic liquidity crisis and the need to prevent it in posteriority.

Maintaining the status quo by allowing the possibility of failure is not real reform. It allows for the business cycle to operate according to the classical model of capitalism which, by empirical trial, is an ontology for the consolidation of wealth and power into the very highest degree of crisis proportion. The empirical back test on this macro dynamic fully indicates that "too big to fail" will continue as the best organizational practice. Valuations will reflect the organizational practice.

Defining "organic growth" defines the problem to be solved or, in the case of financials, "resolved."

Resolution authority, which is suggested to be the primary means of financial regulation, does not suggest a free-market ontology, but an authoritarian regime that affirms the legitimacy of an elitist practical model, not pluralism.

If we want to cultivate "organic growth" of our economy, rather than firms that are too big to fail, we must switch to a pluralist model.

No change at all is certainly not the change we need if we want to expand the pie.