Beating the truth

Roberto da Silva Rocha, university professor and political scientist

Beating the truth

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The naked truth needs to be beaten, tortured, squeezed and shaken to confess its weaknesses and shortcomings.

Case of Philosophy, where to find the absolute truth.

Kant, wrote two opposing works on the search for absolute truth: "Critique of Pure Reason" and "Critique of Practical Reason", the former thought about absolute universal values that are perennial on the timeline, always inviolable, the latter was based on relativistic morality, weighted by society, by the timeline.

Karl Popper's scientific epistemology and its refutationist method based on hypothetical deductive criticism forces the researcher to beat his truth and torture it until he confesses his faults, if he does not get the confession certainly time will do.

Often my former students - I no longer teach regularly due to my retirement - ask me to record videos and podcast audios. The generation that hates deciphering random symbols ordered into strings by rigid rules of grammar and semantics called the written language.

Listening does not require the same cognitive ability as reading, or watching through video is a bit easier, after we were socialized to decipher the language of cinema invented by the brilliant French Lumiérè. 

But it was not easy, the first cinemas had the explainers for the spectators to understand the timeline of the new language, mixing asynchronous past, present, future.

So a student belonging to another class and of the new generation asked me to explain the phenomenon of price inflation in the economy, it was part of a seminar, and no Google or Economics book could satisfy in words and simple ideas this crucial understanding.

I gave a very simple, simplistic answer, without having to use any supply X demand model, marginal cost, consumer behaviour, let alone talk about market.

My belief is to deconstruct the idea of market; it is difficult for a political scientist, an admirer of Von Newman's theory of games, to believe in isoteric things such as the free will of the consumer, without being able to imagine that nobody would try to influence prices to take advantage, and that Adam Smith's invisible hand, supposedly, would correct this distortion with great naturalness and organic mechanical automatism.

Inflation is a social disease, a kind of disorder that is cured when society stops trying to gain advantage without work, without production, without effort.

Then turning to myco-economics, we bring in the category of goods of inelastic demand, which are the products and services that have no substitutes and that the consumer cannot survive without them, it is these products that can be used for some unscrupulous economic agent to start a sick process of inflation.

Once the race of prices upwards has begun, everyone runs to compensate for the disadvantage, then the whole process loses control because it is asynchronous, that is, each economic agent raises its prices on different dates because it has products and services with greater or lesser market needs and demands, those of lower demand and lower consumption needs are the first to succumb, and wages are the last on the list of demands to be compensated by the race of inflation.

Bingo!

The secret is the asynchronicity of price misalignment!

The state does not try to stop inflation because taxes are indexed to prices, the higher the price the more tax can be collected, so something needs to bother the state and sellers of inelastic demand goods to stop inflation.

Inflation starts with irreplaceable and essential products like: energy, water, medicines, cigarettes and alcoholic beverages.

Bingo!

When the misalignment produces strikes in transportation, hospital care and paralysis, the paradism causes in the first moment the election of the visible culprits, - the strikers -, and after many casualties, break downs, arrests and social delinquencies, riots, the State does the only things that can stop inflation: increase wages, and nominal reindexation of the currency.

The inevitable question is: how to stop inflation?

We know how it starts, we know how it ends. We know how to end it. 

If wages were increased at the start of inflation agents would immediately stop the whole chain of the inflationary cycle, but that would be counter intuitive, counter market, the weakest link in the chain of inflationary events are the wage earners. It is as simple as that. Synchronize wages with prices, no one would gain from inflation, cease the reasons for it, inflation, to exist.

*** Translated with www.DeepL.com/Translator (free version) ***