Economic Friction

There is a naturally occurring economic frictional force that increases cost above its fair value. This virtually guarantees that goods and services that are in high demand can be sold at a cost that far exceeds their fair value. The cost of the friction has been historically paid to suppliers by consumers, in addition to the fair value of production. That portion of every sale that is produced by friction must be spent on removing friction if an economy is to sustain itself.

One form of friction is created by manipulating or monopolizing resources. These can be mineral resources such as oil, water, or metals; they can be human resources, such as labor, education, or healthcare; or they can be monetary resources such as money, investment vehicles, banking, and governmental policies.

Fair value is the cost of the effort plus the fair cost of the materials. The cost of the fair value is the exact amount that producers should receive. Frictional costs that are received by the supply side, leak monetary value from the economic balloon, or cause the economic balloon to burst.

Kindness is the ethical reason for economic activity. It is the lubricant that reduces friction in economic machinery. Exploiting economic friction is unkind, therefore unethical. It is also economically unsustainable.

5 thoughts on “Economic Friction”

  1. Hеllo there! Тhis post couldn’t be written any better! Reading through this post reminds me of my previous room mate! He always kept chatting about this. I will forward this article to him. Pretty sure he will have a good read. Thank you for sharing!
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