Do ‘critical points’ exist in psychology … and do they affect economics

The concept of a ‘critical point’ is something we see in many sciences … I wonder if it applies to human psychology as well?

First let’s review some examples of ‘critical points’

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From your freshman astronomy class, you may remember the event horizon that surrounds a black hole. It is the distance from the black hole’s core such that for any particle that goes beyond this point, it will never be able to come back out … it has become trapped in the black hole … it has fallen within the critical point distance.

Once a particle falls into a black hole, the only opportunity for it to escape is if some Magical Hand reaches into the black hole and pulls the particle back out.

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A more common example of a ‘critical point’ is the ‘freezing point’ of water (but it is based on temperature). When water falls below 32F, the molecules become trapped in solid form, incapable of moving … kind of like the particles that fall into the black hole.

Once a particle drops in temperature below its freezing point, it becomes trapped, unable to move, and the only opportunity for the iced molecules is if some external agent injects warmth into the system thus freeing it again.

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There also exists a critical point in human psychology … for all of us.

And once you or I or anyone falls below it we are no longer capable of functioning and behaving as would a normal, healthy individual. The only opportunity is if some external force helps us.

Simulated view of a black hole in front of the...

random picture of a black hole

I think that most of the lower economic class in our country are actually just individuals, even entire communities, that have fallen below this psychology critical point.

In the meantime, all the healthy people sit around and express their doubts about the members of the lower class: they’re lazy, they’re drug addicts, they’re criminals … but we have only observed them in their sub-critical-point psychology state, and we have done so from our own healthy state point of view. They struggle to function.

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Bubble-up economics has the potential to fix this, to directly inject positive influences into the difficulties that the lower class faces. It is a system that attempts to re-invigorate the lower class via productivity-oriented social programs, an array of types of programs, each with the similar expectation to benefit the struggling individual but also the taxpayer paying for the program through an applicable ROI.



What is “Bubble-Up” economics

A good way to visualize “trickle-down” economics is to watch the water bubbles in an aquarium that happens to be using a “power filter”. Power filters pour water over the top of the aquarium into the water, creating water bubbles that circulate down to the bottom of the aquarium.

power-filters-2

Frankly, most people already understand “trickle down” economics well enough that they do not need a visualization tool.

However, an aquarium visualization tool can teach us about more economic issues and systems than just trickle down. So I will use the basic “power filter” aquarium to establish a basis for an “aquarium metaphor”, and then introduce variations in an effort to learn about “trickle out” economics and “bubble up” economics.


For my diagrams:

  • an aquarium represents a country
  • water represents the population
  • water depth represents wealth stratum … … upper water = upper class, lower water = lower class
  • oxygen bubbles represent money.


This first diagram shows that trickle-down can and should work in a closed environment. Basically the wealthy class keeps their capital at tax time, but spends their money on employees and goods such that their money successfully permeates the full class spectrum.

The goal with trickle-down was that the best money managers would be enabled to make strong innovative decisions with their annual holdings and that money would make it to the lower-class via normal market mechanisms.


The problem with diagram A is that it only works in a closed environment … but America is not a closed environment.


If an aquarium (eg. America) is connected to another aquarium (eg. china), then the trickle-down process is disrupted as water bubbles (eg. money) flow out. This can happen when a member of the wealthy class buys stock in a foreign company, or when he buys an expensive foreign car, or outsources various aspects of his company. This is dangerous because the lower class will never receive the oxygenation necessary to maintain a healthy environment in the lower economic strata. (It should be mentioned that if an equal amount of water bubbles flow back into the aquarium, then balance will be maintained.)


Bubble-up economics, on the other hand, ensures that oxygen gets to the lowest classes.

aquarium_aerator

The oxygen is mechanically delivered to the bottom, where it is released. This bypasses the wealthy’s exploitable opportunity to trickle-out for their own profitability. Economically speaking, the money is mechanically delivered to the lower class via social programs, such as job training, small business investment funds, municipal projects, and other Productivity-Oriented Social Programs. Productivity-Oriented Social Programs are not the same thing as welfare.




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what are Productivity-Oriented Social Programs

Would productivity-oriented social-programs make everybody happy?

Liberals want a social net.
Conservatives want productivity and progress.
Poor people want access to the American dream.

Currently America primarily uses various forms of welfare for social net: food stamps, medicare, unemployment benefits, gov’t housing, etc. So the gov’t is already paying out the money, but not getting anything in return (though the money does get pumped back into the economy).

Three examples of productivity-oriented social-programs:
1 – gov’t funded job training … so if I am unemployed I can enroll in a job training program (for 2 years probably) that will be for some envelop-pushing position once I’m fully trained … this would be good for the country, because in 2 years there would be about 5 million bad asses ready to take America’s mfg into the 21st c.
2 – gov’t funded work … maybe workers can paint bridges, or maybe something better, but regardless at least the workers get to go to work, the society gets its necessary upkeep, and the gov’t doesn’t just spend money for nothing.
3 – gov’t funded mom-and-pop angel investment … currently the only people in society who really have a shot at true capitalism (creating new businesses, new ideas) are those that already have something such as collateral for business loan, a mgmt. team, a business track record, a social network that connects to investors. So for a couple who wants to break out of their apartment-life there is really no option (the SBA does not pander to poor people). These programs could be heavily overseen by gov’t consultants and accountants until the mom-and-pod get their own momentum going.

In all three examples, people who are in the lower rungs of the economic ladder get support, but they also produce something as well. Let me know your thoughts.



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