1)      If you look after your own self-interest society will automatically order and balance itself

2)      Market forces are just like the forces that maintain the planets in their place

3)      It is in everyone’s best interest to insist on the ‘lowest price’

4)      The ‘invisible hand’ of the market will inform us in matters economic

5)      Collateral is a necessary element for obtaining financing to start a new enterprise

6)      Economics is primarily about allocating scarce resources

7)      ‘Oh, it is just a matter of supply and demand!’ What about Katrina and a little “Circulation”?

8)      Unrestrained competition is the best way to sustain and balance economic life

9)      A sustainable economy must be able to increase and produce more and more each year - growth

10)   ‘It’s just the business cycle! Duck if you see it.’

11)   Human beings are but ‘noise’ in the equations

Using color chalk and narrative, the speaker expanded on the old economic aphorisms and pictures listed above by offering new alternative images for understanding economic life – Including yet expanding on the conventional view. “Do more drawing and less talking”, was the assessment by more than one participant. The images, even though hard to see at times, seemed to touch a nerve and helped ignite a lively conversation, especially for such a potentially ‘dismal’ subject. According to the presenter, it is the ‘human exchange of value’ that is the true starting point in economics. The first drawing depicted the fact that, in any economic exchange, it is possible and desirable to take into account not just one’s own interests but also the interests of others and the needs of the specific situation itself. The image used for this was simple but evocative. One science buzz café regular anticipated the presenters image by making the startling comment, “It is possible to have an enlarged view of self-interest that includes the interests of others.” The image attempted to show an expanded view of the human being that can be motivated not only by instinct and self-interest, but ideals and the well being of others at the same time. The second image depicted the one earth we all inhabit and rely upon. This was shaded with red chalk and represented the economic value created from nature – tangible goods and trade – operating under the laws of a closed system with limited growth (Land). The third earth globe was shaded blue and represented the economic value created from the intangible and invisible world of new ideas, innovation and credit – operating under the laws of an open system with unlimited growth (Capital). The point then is to perceive which one is at play at any given moment and how to make conscious objective adjustments. The question was posed: Are we citizens of two worlds with different but valid logics?

He never did tell us what he meant by the ‘mystery’ of human exchange, it must have something to do with the question asked of the crowd of faithful science buzzers, “What is Capital?” The many and varied responses were listed on a white board for all to see; From 1) capital equals money, 2) to left over savings as capital, 3) capital as a unit of value, 4) capital as potential future growth, 5) land as capital, 6) or capital is an asset, and the last suggestion, 7) capital is the collection of resources used to produce further goods.

Using only four PowerPoint slides, a better question with a more dynamic answer was put forth by Mr. Osmer, “What is the capital formation process?” The material for the slides about capital came from ‘Prelude in Economics’ page 16 (www.cfae.biz). “The image behind capital in this book is that it is a kind of crystallization or materialization of capacities that people first experience as talents or gifts with which they have been born (Potential Capital). These talents can then be honed or educated to become consciously applied skills (Kinetic Capital). It is the application of such skills to nature that results in capital in material form (Manifest Capital).” This is just a wider and more comprehensive view of capital articulated in Associative Economics.

Someone from the participants asked a question that prompted a fourth drawing on the strange looking black paper taped to the wall. A horizontal white ‘timeline’ was created in the middle of the temporary ‘blackboard’. From left to right, the steady red line going way back in time represents the ‘goods market’ of normal world trade, while the other blue line, just beginning to appear around 1810-15, represented the newly forming ‘money markets’. Significant dates and events were marked on the timeline – 8,000 BC, 340 BC, 1202, 1494, 1776, 1797, 1810-15, 1971, 1973, 1985 and 2008. The blue line (surplus, money markets and the world of finance) took a noticeable leap upward in the early 1970’s and really took off in 1985 and then zoomed exponentially as 2008 approached. Back in 1815 the goods economy was 99% of world trade and the world of finance was a paltry 1% at best. Now it is reversed. Now, 97% of world trade is the financial economy as compared to the goods market. That means there is not enough red money for purchases and excess blue money for investment – but investment into what and for what?

Towards the end of the presentation the punch line leaked out. It is the potential development and education of all the children in the world that makes up the future economy and the true capital of the world – our children’s, children’s, children. The message was, take the long view and shape our economic life around basic principles that we can all own. After all, “It is the economic task of the cultural life to use up values by transforming capital into new capacities. These new capacities will in turn create new values when they are employed in the economic realm.”

As the ‘spectator’, I found it interesting to hear at least two participants mentioning education and potential development as key ingredients for a healthy economic life and the source of capital. They get the prize for being economically awake and recognizing the role of the innate creative intelligence of the human being as the source of capital and economic value. Economic life is now the shared responsibility of all human beings, not just the province of bankers and financial planners.

The many people in attendance recognized that in economics it is the invisible exchange of ‘values’ that is considered and not the physical goods. For values ever fluctuate with place, time and the specific individual. Also accepted, was the fact that in considering economic value, there is no such thing as ‘intrinsic’ economic value, for in economics; it is the external relationship to other values that counts. Intrinsic ‘inner’ virtue of a thing may stay consistent and constant, but the intrinsic economic value depends on its relationship to other things and the changing needs of human beings. This is not to exploit or treat the environment, human labor or even capital as an economic commodity subject to arbitrary pricing and thoughtless profit. In associative economics, land labor and capital are not commodities within the economy, but more clearly seen; they are the boundaries of the economy and not ‘in’ the economy. Some things are just priceless.