As we discussed in Lesson 7, Economics is not math, as commonly misperceived. It is the study of people, primarily the behavioral patterns of people in the face of limited resources. Those patterns are governed by several instincts, as summarized in Lesson 15. This lesson attempts to explain how Economics is not just Psychology but also Biology; and that the Free Market is a biological system.
Dr. Bruce Lipton is a cell biologist and a genius.* One of his teachings is the redundancy of life, (based on the theory of Fractal Geometry.) That means that at each level of organization, living things tend to get the same ideas and follow the same patterns. The cell, for example, has a circulatory system called cytoplasmic streaming whereby it circulates nutrients around the cell. It also has its own nervous system (the membrane), reproductive system (the nucleus), respiratory system, digestive system, defense department, maintenance department and waste removal.
Over time, our cells developed specialties and organized into communities. Ultimately, they organized into creatures like you and me, using the same blueprints and same parts for each system. Your immune cells, for example, are soldier cells. They are heavily armed with chemical weapons and highly organized for rapid-response combat with an invading virus or bacteria.
Over time, people have also specialized and formed communities, and we are following the same patterns that cells did. We have a circulatory system of highways and trucks. We have wired up a nervous system, first with switch boards and telephone wire; now with cables, computers, cameras and satellites. We have formed armies and farms and dumps. People are gradually forming most of the systems that our bodies and cells already have, and we are organizing into a higher, living being.
The organs in your body that get the most blood are your lungs. Half of your heart is dedicated to pumping blood through them. Your lungs contain thousands of miles of blood vessels with one job: carry oxygen from a half billion tiny air sacs called alveoli.** The problem is that a half billion air sacs are not perfectly, equally ventilated. Some are up high in your chest, where the oxygen is rich. Some might be in an area where the bronchioles did not develop properly, or were damaged by smoke, or are plugged up with mucous. It’s a problem because if you deliver too much blood to the wrong area, it comes back to the heart without enough oxygen. The amount of blood flow (Q) to any part of your lung has to match the amount of air ventilation (V) to that area. Your giant community of vessels has developed an elegantly simple system of doing that. Each tiny arteriole simply constricts when it senses that oxygen is low and dilates when oxygen is high.
During the Iraq war, NBC reporter David Bloom sat in a tank for so long that a clot formed in his leg. A piece broke off and sailed downstream until it lodged in an artery in his lung. Because of that, he suffered a “VQ mismatch.” Too much of his blood was diverted from areas of good ventilation to other lung areas, and the total amount of oxygen returning to his heart was too low for him to live. He died quickly.
We people have also organized a system for labor and resources that matches distribution with need. Just like the pulmonary vasculature, it is not regulated centrally, but instead regulated by the greedy and charitable instincts of individuals. And just like David Bloom’s clot, when we interfere with this system with schemes such as stimulus packages, price controls, subsidies, and other forms of artificial redistribution; then the community starts to die, just like Cuba, the Soviet Union and Urban America. And just like China, it can be saved by dissolving those clots.
* He is also a California hippie and probably won’t like my referencing him. ** For the nit-pickers, delivering CO2 is the other half of the same job. The pulmonary vasculature has other jobs as well, such as fighting infection.