Author: Siize Punabantu

Markets are useful tools for managing economies, but how they work needs to be better understood; there is a grand myth and misrepresentation surrounding them.

Resistance to growth in the SRT economy is very easy to identify. A zero growth equilibrium in macroeconomics will be established where aggregate supply equals aggregate demand. Should companies try to grow by increasing supply the aggregate economy will resist this growth by lowering price (deflation) by which profitability is killed off forcing firms to cut production thus returning the economy to the zero growth equilibrium or normal profits. Should growth be attempted by an increase in demand, the aggregate economy will naturally counter this by increasing price (inflation)  until it becomes too costly to consume forcing consumers to stop buying; demand is forced back to the natural zero growth equilibrium. In CE this is referred to as ‘overheating’. Rising demand is countered by the economy’s natural resistance to growth using this approach as the economy attempts to grow rapidly against the market’s resistance, that is, its equilibrium or zero growth position. This phenomenon is common in fast growing economies that may inevitably have to slow themselves down despite the fact that they have not reached their desired per capita income and growth targets. To achieve growth increases in demand and supply need to take place simultaneously, however, the operating structure of the CE model [in the circular flow of income (CFI)] requires demand and supply factors to compete for the same scarce resources thus effectively heading off this avenue through which growth may take place.

Businesses backed into a corner may then attempt to increase profitability by reducing supply side costs – a common method for escaping the crunch of market forces. However, cutting supply to increase price or reduce costs and thus induce profitability will generally cause a decline in demand at the industrial level thus restoring zero growth. This is due to the fact that if a business cuts costs to lower TC (or the cost of supply) this raises internal profitability, but the external economy kills growth in this way by causing supply side factors to be dumped such as jobs, machinery, plants, factories and so on. Hence, unemployment levels begin to rise in the economy.

The market system is so efficient at preventing growth that no sooner is one hole plugged it opens another.

More Market Myths

Some may argue that when demand exceeds supply price goes up encouraging new businesses to enter the market hence stimulating growth. However, when it does, supply increases and price declines to original levels forcing them back out. Inevitably the economy’s equilibrium may close them down or force them to relocate due to lack of profitability.  The so called equilibrium [of the free market left to itself] is never stable or able to sustain long run confidence in the market.

Similarly, there is a belief that excess supply is naturally discouraged by falling prices, which forces businesses out of industry. Supply is reduced by the equilibrium to a level equal to lower levels of demand, but how is this beneficial? Shrinking supply is an indication of declining growth. It means industries are closing, plants are shutting down, employees are being laid off and the economy is declining or contracting. The [free market] equilibrium is thus working against businesses and stunting growth yet the interpretation in CE is that it is achieving something desirable as it is maintaining a ‘balance’ [sic financial stability and therefore should not be interfered with .e.g. by providing a stimulus]. This reasoning is ill conceived.

Market forces in the economy naturally challenge growth at each level. It is strange that this limitation is not appreciated [or openly taught] in the laws of demand and supply.

Despite this CE continues to believe and teach that market forces and the equilibrium condition they maintain (that encourage zero growth) are a positive economic condition economies must strive to uphold.

This is a very serious myth or is simply a well propagated and respected mistake.

The aggregate economy creates a System that is a powerful enemy of businesses…

Are markets useful and what purpose do they serve? This can be answered with another question. Are brakes on a car useful, or do they just slow it down?

Market forces are and will remain very useful in managing economies for stalling or restraining and preventing them from growing when this growth may exceed recommended targets or is required to remain at the market equilibrium where growth is constant at zero.

The real problem today is that it is likely most policy makers are taught to  believe free or liberal markets and the forces at work within them are the gas pedal, and the ‘good feeling’ of ‘perceived stability’ of an equilibrium equates to ‘growth’. Managing an economy is not this simplistic. This is a distortion of facts and a myth that needs busting if sources and causes of real growth are to be identified.

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Advantages of an Economy Managed using an SV-Tech system

Sunday 14th July 2019

When it comes to the management of national economies anywhere in the world it is unlikely there is any approach, system or technology more effective than a Split Velocity system (SV system) that unlocks resources for economic growth in the circular flow of income (CFI). As mentioned earlier, governments should view any strategy for real growth that does not involve advancements to the CFI that counter subtraction with suspicion. They are not reliable as they represent the transfer of wealth rather than the genuine creation of new wealth in an economy.

Approaches to economic management offered by the IMF, World Bank or other development organisations presently in use or currently offered to countries are unlikely to match the effectiveness, lack of negative side effects, power and robustness of an SV system when it comes to driving growth with development. It is therefore only pragmatic for development agencies to seriously begin to consider engaging an SV system in their operations in the genuine effort to assist countries.

Cruising Velocity Scenarios 14%-48%

“Cruising velocity” is the preferred long-term rate of growth set for a Split Velocity system. Like cruise control in your car, when it comes to the national economy the cruising velocity can be adjusted, but is expected to be maintained at the desired growth rate or at a similar range for a period lasting one year.

For instance, if the SV system were running fully rolled out in the United States at a Cruising Velocity of 20%-25% the US economy would be expected to be able to double in size from US$20 trillion to US$40 trillion in 3.5 – 2.9 years. Applied in China, the economy of China would be expected to double in size from US$14.2 trillion to US$ 28.4 trillion in 3.5 – 2.9 years. If a more aggressive growth rate (36%-48%) is set on the system doubling time for these countries could be reduced to 2 to 1.5 years (this is dependent on the Technology Paradigm). A growth rate as low as 1.9% anticipated for 2020 in the United States caused by a zero growth position in the CFI of neoclassical economics is cause for great concern and a clear indication new more appropriate approaches to economic management are important and long overdue. The world needs faster growth rates in the USA.

Rather than ratings agencies like Standard and Poor or Moodys downgrading sovereign credit in African countries like South Africa and Zambia, what these ratings agencies should be doing, realistically, is downgrading the theory and implementation of neoclassical economics, where growth is concerned, to junk status. It is simply no longer pulling its weight, has become stagnant, redundant and is retarding economic growth unnecessarily in both developed and developing countries.

An SV system can grow an economy of any size. The size of the economy is not significant when it comes to accelerating growth. Large or developed countries and regions such as China, the US and EU today and their citizens are simply no-where near as wealthy as they could or should be and should consider an SV system. This is necessary for ensuring the good health of the global economy.

Developing countries in Africa, like Zambia, South Africa, Tanzania, Botswana and so on require faster and more reliable growth rates in developed countries to ensure the demand for copper, cobalt, iron ore, diamonds, emeralds, gold, silver, nickel, uranium, oil, tin, rare earth and other minerals are maintained at a good price and remain consistently in high demand when traded in international markets through agencies such as the LME. Current neoclassical economic management systems applied to national economies (with zero growth 0%-10%) cannot be relied upon to provide this kind of growth or stability.

Unlike the present ineffective method for economic management of national economies in use around the world the SV system growth rates are not estimations, they are expected to be as reliable as a government bond or guarantee.

After full roll out, when a Split Velocity system is available to the whole economy (a capture rate of 100%) and distributed as a financial product through commercial banks the growth rate in the economy is now controlled. It is not left to chance. The annual rate of economic growth on a Split Velocity system is not expected to fall below 14% p.a. which will be considered the slowest double-digit growth rate for any economy managed on the system. Nevertheless the SV system can drop growth to 0%, the setting of a normal CFI, if this is required.

Resistance to economic shocks

Even at what would presently be regarded as a “blistering-speed”, a growth rate of 25% per annum is effortlessly achieved by an SV system. Neoclassically trained economists would assume these growth rates are unrealistic only because they have been raised on the mediocre zero growth rates of a modern economy which works against businesses, commerce and productivity and would need to be re-trained. However, even at this speed the system is still only using a small value of its potential leaving 75% of its capacity to stimulate economic growth in the national economy untapped. This means that the risk of recessions be they man-made (e.g. subprime mortgages, epidemics, global warming, war, conflicts etc) or natural disasters (earthquakes, floods, droughts, etc) can be immediately addressed by generating more resources to counter them and shorten the time to recovery. To counter recessions the growth rate can simply be adjusted upward until the cause of recession is removed. Greater economic stability of this kind is good for business and ensures populations are protected from unnecessary hardship.   

Basic Growth Projections or Scenarios for an economy managed on an SV system

Conservative (Slow) economic growth 14%-15%:

This is where the cruising velocity or economic growth rate is set between 14%-15%. This leaves 85% of the economic resources available to the national economy through the Split Velocity system untapped. At this speed with full roll out at 100% capture rate the economy is expected to double every 5.1 to 4.8 years. Neoclassical economists would be more comfortable with growth rates in this range, however, they represent the lower end and an unnecessary under-utilization of the SV system’s capacity to stimulate growth. Growth rates as low as 0%-10% are too slow and generally too mediocre to be realistic for an SV system.

Considering that the fastest growing economy in 2019 is at 7%, the growth rate on the SV system of 14% (considered slow on the SV system) is much faster. The system does away with mediocrity and is much more efficient and effective when it comes to managing growth in a national economy.

Mild economic growth 20%-25%:

This is where cruising velocity on the SV system is set between 20%-25%. This scenario on the SV system leaves as much as 75% of its capacity to stimulate growth untapped. At this speed with full roll out (at 100% capture rate) the economy is expected to double in size every 3.5 – 2.9 years.

Aggressive economic growth 36%-48%:

Cruising velocity is set between 36%-48%. The SV system leaves 52% of its capacity for growth unutilised. At this speed with full roll out at 100% capture rate the economy is expected to double in size every 2 – 1.5 years depending on the desired growth rate.

[It should be noted that growth in an SV System is scalar where every business unit in the economy is growing in a synchronized manner. Due to increased economic activity, the economy no longer working against commerce and continuous re-balancing of demand/supply the success rate of businesses in the economy is expected to rise dramatically. There can be thousands of businesses formally registered in an economy but only a small percentage of these actually functioning and contributing to growth. With the economy now working for businesses rather than against them, due to an SV system, the majority of these businesses are expected to turn around, become viable and begin contributing to the national economy. There is little or no pre-requisite waiting time to initiate growth and there are few bottlenecks created by time intervals observed in the current linear system of neoclasscial economics, most economists are used to, that are based on resource transfers, therefore economic growth takes place much more quickly than would be anticipated and expected of a normal modern day economy.]

It will be possible to have developing countries on a slightly more aggressive growth setting so they can play catch-up. This will allow per capita incomes and development to rise faster in disadvantaged regions until such a time global living standards become fairly even.

This growth is low risk

This faster economic growth is achieved through businesses and their productivity. An SV system powers commerce in an economy.

Projected SV growth rates on an SV system are expected to be as reliable and dependable as government bonds and guarantees. For instance, if the economy is set to run at a growth rate of 25% per annum businesses and stock markets can rely on this growth projection to plan their investment portfolios and earnings for their clients based on the projection for the prescribed period. An SV system is powerful enough to eradicate poverty and unemployment as well as improve income for all income groups in an economy. It not only distributes income in a national economy more effectively, but also rapidly raises per capita income levels ensuring growth takes place in tandem with development. No one is left behind.

Technology Paradigm

The technology paradigm is the rate at which an economy’s industrial and technical competence converts money into output.  It should be noted that a well-financed technology paradigm is constantly shortening turnaround times thereby increasing the rate of productivity due to improvements in the learning curve as businesses continually find faster, cheaper and more efficient production methods. The rate of economic growth on an SV system has to be adjusted higher to maintain parity between the growth rate and technology paradigm, a feature impossible to achieve using current methods used for managing the national economy.

Financial Benefits of an SV system to Central Banks

Normally maintaining money supply can be an expensive exercise for a central bank. This includes general increases in money supply as well as the need to replace old or soiled bank notes with new notes. When a central bank increases money supply via a Split Velocity system it earns rather than loses income from the exercise of supplying money into the economy turning money supply (or currencies in general) from a liability into an asset. For instance, instead of the US Federal Reserve supplying the US economy with money at a cost to itself, it now uses an SV system to cover the cost of this supply and earns a profit of 1.8% for any money it supplies the US economy. The US Federal Reserve turns the need to supply money from a very costly liability into an asset for the central bank which will now earn rather than lose income from supplying money to the economy. This greatly improves the central bank’s balance sheet. The advantage of a central bank issuing money through a Split Velocity system is that:

• This money enters the economy without causing inflation (a cheaper and more efficient operation than buying and stocking gold to back national currency).

• The central bank gains a new revenue stream by earning income from the money it supplies to the economy through the SV system.

• An efficient and robust stimulus is applied to the economy

• The SV system is more stable and robust than a gold standard

The SV system makes currencies and their ownership a huge new asset class and source of income for the owners or developers of robust currencies. This is advantageous for central banks that have an obligation to ensure there is sufficient money in circulation. The standard rate for supplying money to the economy through the SV system is where the profit margin for the central bank is approximately 1.8% of the face value of money supplied. The lower the cost of the method the central bank uses to supply money to the economy through the SV system, the better for the economy and the more profitable it is for a central bank. Emoney is the preferred currency format for an SV system as it is unlikely fiat money alone can keep pace with the new enhanced rates of economic growth (14%-48%) which are hungry for efficient, robust and consistent money supply to support economic expansion. The higher growth rates on an SV system in comparison to a conventional neoclassical economy require a significant supply of money.

If central banks feel they cannot keep up with this supply, to encourage technology transfer, growth and diversity in this new industry, they can opt to offer portions or small segments of market share. For example, 1%-10% of the money supplied to the economy can be offered to private sector currencies owned by reputable financial institutions with proven token currencies so they can become mainstream institution as well as begin to participate and compete in this new market. This will allow the advancement of secure payment technologies such as those that use blockchain technology, which a central bank may adopt for its own secure operations in future. Blockchain, though secure, presently uses an energy intensive mining process to manage its ledger and still needs a great deal of investment in innovation for continuous improvements to be made to the technology to bring its processing costs down. By central banks allowing a choralled and supervised market share for private currencies to go public in terms of normal everyday use many of these new innovations and advancements in money can begin to earn the revenues they need to invest in research and development. Advancements in currency will in future likely be adopted by central banks in their own supply of a national currency to the economy. This sector would be supervised much the way central banks supervise banks and non-banks.

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Financial Benefits of an SV system to commercial banks

Commercial banks that distribute wealth creation alongside credit creation are expected to earn close to the same income from wealth creation that they currently earn from credit creation. This makes the SV-Tech system and the end user product, namely wealth creation, an important new source of revenue for commercial banks. Since wealth creation increases the demand for credit, and lowers credit risk, the two products complement one another.

This wealth is already inherent in the economy, however, it is locked away by flaws and inefficiencies in the CFI that cause financial losses due to subtraction taking place at any point in time, a loss that is currently unaccounted for in neo-classical economics. Wealth creation is a financial product that compliments credit creation that is designed to counter these flaws and generate new resources in the economy at constant price that lower credit risk by moving it from being an asynchronous to a synchronous financial system.

Wealth creation as a financial product that, by correcting flaws and inefficiencies in the CFI, will basically allow businesses, regardless of their size, to spend as much as 100% of their earnings or total revenue on non-human capital that enhances and increases the quality of goods and services, as well as increasing output and productivity.

Monday 8th July 2019

Planning Paradoxes:

This excerpt from the GPWN (2010) urges African nations to be cautious when they attempt to analyse why they are poor or how economies grow and what creates growth. A careful study of the modern Circular Flow of Income or CFI referred to as an “operating system” or “economic operating system” in the GPWN shows that the modern economy does not create growth or does so in a very meager fashion. It fundamentally functions from a zero growth position and its allocation process between factors of production is in direct conflict with productivity which adversely affects commerce. This means that the distribution of wealth in the world today is transferred and has a benefactor. If nations are poor, it means they are not considered important, they do not have a benefactor that identifies with them or they do not tow a benefactors line and therefore have insignificant financial and other resources transferred to them. This is the reality. Developing nations need to revise their understanding of economics and developed countries need to be fair and less judgmental when it comes to their willingness to bring poor countries into their fold if international development and wealth is to truly become evenly distributed across the world. The simple rule is that any nation today that is not making progress by correcting losses in the CFI caused by subtraction that appears to be growing quickly or that is doing “great things” in its economy is not doing anything special, so don’t be fooled or avoid being too impressed: its gains are taking place because it is having financial and other resources transferred to it by a benefactor, and any nation doing badly is having those transfers or resources denied.

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Excerpt GPWN (2010):

3^rd Rule of
Planning (or 3^rd Paradox) 

Any economic approach, system, argument or school of thought that does not equate growth with financing, in its diverse forms, will be unable to provide a complete solution to the problem of sustainable growth and development. It will simply create a new opposing argument and a new approach or dispensation that is itself confined to the same operating system’s [circular flow of Income’s] resource constraints, except in an alternate more fashionable position of discomfort and resource limitation.

Like the spring collection on fashion runways in Paris CE economics goes through periods when everybody becomes fascinated by a new concept that is thought to have a reason and a solution for decline or success in economics. It might be aid that is the solution or doing away with it, or money market operations or restructuring and so on. However, as long as the operating system [circular flow of income] remains the same (CE) there is no real change in the economy only a reorganization of how resources are distributed. The 3^rd Rule of planning identifies this paradox. The paradox creates economic stagnation in the midst of progressive economic theory and policy. It is also the reason why every so often there will be excitement about a new theory or approach in economics that takes people by storm only to either fizzle out or eventually bring about little or no real change to the poverty and suffering experienced in the world. Economic theory confined to a specific operating system [CFI] where scarcity has become a reality is like a closed economy where productivity flourishes as producers have learned to make do by producing and consuming with whatever internal resources they can find. Despite the fact that they are poor they remain productive and, as observed in developed countries, may believe themselves rich whilst in fact being much poorer than they may think they are and much less wealthy than the wealth they could have. Like urchins discussing how to invest the only penny amongst them, it is the Achille’s heal of all genius in economics.

Arvind Panagariya, professor of economics and co-director of the centre for International Economics at the University of Maryland (2003) explains that having open economies creates newly industrialised economies such as those of Hong Kong, Singapore, South Korea and Taiwan. It may be prudent to make note that contemporary economics (CE) is founded on resource transfers or allocation, not resource creation. These fundamentals are taught regularly in colleges and universities across the world. Certain aspects of what is taught are not consistent with the fundamentals of CE and in fact create a conflict within CE theory that make some of the assumptions in economics fallible. 

To remain consistent with CE theory, resources must remain persistently scarce, as a result, wealth is created primarily by the transfer of resources. Unlike resource creation, the transfer of resources must have a benefactor. The benefactor must have a reason for transferring those resources to the recipient on the scale observed. The recipient should also have the capacity to absorb and retain the resources provided by its benefactor. Scarce resource theory therefore influences not only the behaviour of benefactors, but recipients of transferred resources. Transfer of resources will take the form of extensive grants, technology, technical aid, loans, FDI and ‘buying and selling’, that is, access to consumer markets offered by the benefactor until a permanent symbiotic relationship characterised as self sustained development is formed. In the case of the aforementioned countries their dramatic growth and elimination of poverty will be linked to a benefactor and their willingness to tow the benefactors political and ideological line, in this case, either that of the United States or Great Britain who for strategic military and or political reasons may have felt it necessary to initiate and sustain the transfer of wealth in the mentioned forms to these nations in the manner, format and volume experienced. The Marshall Plan used to resuscitate West Germany and Western Europe, the economic intervention in Japan after the 2^nd World War and economic intervention in Russia after the collapse of the USSR provides historic evidence of this strategy. The rules of the 2^nd Paradox where closely followed. The most recent example is likely to be the post war reconstruction of Iraq, if the political will and economic gains from this intervention are justified by United State’s capacity to retain post war economic and political influence over the country.

There is a great deal of ‘loose theory’ in economics that sounds and feels good, but does not actually create resources. It is generally believed that those countries that have achieved large reductions in poverty are those that have experienced rapid economic growth spurred in significant measure by openness to international trade. However, for this to be true the transfer of resources would need to be considered the same as the creation of resources. The obvious result is a conflict in theory since the two cannot be one and the same. Countries that follow the same prescriptions and open their economies, like Zambia, experienced an increase rather than a reduction in poverty, the exact inverse of what some theorists believed. The logical reason for the conclusion he makes being incomplete is due to the fact that the transfer of resources, required to make the statement true for African nations, has not closely followed liberalization, neither has it been on a scale commensurate with the needs of poor African nations, most likely for the reason that they are not of political or strategic importance to benefactors. The resources transferred to African less developed countries (LDCs) have been meagre in comparison to need and have lacked the political will to eliminate poverty, the loans have had debt burdens that exceed domestic productive yields, loans have had self defeating strings attached, FDI has been meagre, market access has been closely restricted, balance of payments support is chronically withheld and the domestic political ethos has not consistently towed the line of the benefactor, thus bringing into focus the arguments of people like Professor Dani Rodrik and Professor Joseph Stiglitz.

Though some ideas on growth are persuasive, within the scope of the logic applied to them, like Professor Rodrik’s ideas, caution is required. CE is limited by scarce resource theory. What does this mean? As an African who must on daily basis see street children walking the streets begging, unemployed youth vending at the roadside, and read of orphanages filled with children whose parents would still be alive had anti-retrovirals been made affordable, one must analyse what people like Professor Panagariya and Professor Rodrik explain with even and practical clarity, to see whether their theories are as workable as they are sound. The resources that are available to the impoverished in their persistent suffering are the national cake that sits upon the table. Professor Rodrik explains that one should cut the cake using an anti-globalisation approach and scholars like Professor Panagariya explain that the cake should be cut in an alternative neo-liberal way. Both appear to assure the impoverished that they will have more resources or be better off by cutting the cake in the manner prescribed. However, the 3^rd Paradox clearly reveals that, regardless of which of the two professor’s approaches are used, the design of the slices of cake may be rendered different, but the volume of cake on the table will remain the same thus indefinitely prolonging and protracting their argument while poor nations like Zambia starve – an example of the 3^rd Paradox failing the outcome of analysis in economics.

Secondly, both approaches inadvertently fail the 2^nd Paradox, which reads, “No amount of planning will take the place of the resources or financing required for the successful implementation of what has been planned.” Both their approaches require full access to resources to become successful, but neither guarantees their availability. Once again the sound economic reason provided by the two professors fails the test. In the laborious process of describing the difference between compass directions west and east, it is futile to keep misrepresenting one direction with the other. The result is utter disorientation. For a businessman to claim that he has ‘created new resources’ for his company by sourcing a loan from a bank is technically wrong, since a bank will transfer the loan or this ‘growth’ to him, he has not created the loan independently. Wealthy and emerging markets transfer resources to one another, but keep poor nations out of their system, yet they expect the poor to grow outside it. When it was discovered that the former energy giant Enron transferred revenues from loans from external subsidiaries and claimed this as growth from earnings at its US headquarters this was considered a scandal of monstrous proportions, yet when contemporary economics claims that it can create resources (growth) it immediately contradicts its very founding principles, namely, scarce resource theory (SRT) [approaches to growth that do not correct economic losses caused by subtraction in the CFI] and opportunity cost [zero growth in the CFI], but nobody bats an eyelid when this serious contradiction is made. CE teaches that for anything gained, something must be foregone (real cost). Therefore, exchanges in CE are predominantly resource transfers. This is an error that is refuted by the expenditure fallacy (see the GPWN: the expenditure fallacy chapter 11) the financial loss it creates in economics are quite simple to show mathematically. It costs each developed and developing nation a yearly loss in potential resources for growth and development that is equivalent to its annual GDP (see theory of economic implosion). Hence, annual growth in modern economies is artificial, residual and phenomenally slow, often ranging between 0% to 10%. Clearly, scarce resources are not a genuine economic problem, albeit the brunt of the loss in resources caused by this approach is shouldered by poor resource constrained economies. It is simply of unacceptable proportions. What Operating Level Economic (OLE) theory does is strive to recover this loss before it causes irrecoverable damage, the “Operating Level” being simply the level where allocation to factors of production takes place in the circular flow of income.

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Tuesday 25th June 2019

Where this innovation is concerned, we are implementation ready and have made submissions, any apparent delays to implement the pilot are not to do with us as we await the technocrats’ responses from whom action is required to facilitate the movement of this initiative.

It is not uncommon to hear lamentations about how countries like Singapore which were once at the same level of economic development as Zambia at independence in 1964 are now far ahead in terms of wealth and economic ranking in the present day. These comparisons are of course uninformed. The transfer of wealth should not be passed off or misrepresented as being the same as the creation of wealth. Anyone who is gullible enough to believe, has made themselves a willing victim of game theory. Unless they have learned to defy conventional laws of physics, countries considered wealthy today, across the world, that are presented as marvels of “special” management or other abilities have merely transferred wealth to one another and hope that disadvantaged nations will never gain the powers of discernment to identify this. The time is up for using “game theory” to create subservience and make developing countries think their problems are self created. Any growth and development plan or approach prescribed to a nation by any credible development organization, whether local or international, that does not address and counter financial losses caused by operational inefficiencies in the circular flow of income (CFI) is either inherently disingenuous or patently incompetent.

When the actual factors and modalities for economic growth are understood it will become evident how easily a country like Zambia can achieve and even surpass the remarkable achievements of a country like Singapore. A Split Velocity system is capable of accelerating growth in Zambia to the extent that it can achieve the same development status as Singapore and do so in a shorter space of time. This growth can even be guaranteed.

[Excerpt from GPWN (2010)] : The challenge our age faces today is to address poverty at its core and this is at the systemic or operating structure of economic models. It is as important to be able to distinguish between growth and development as it is to distinguish between an economic operating system and an economic (management) system. Capitalism and socialism are economic management systems based on ideological approaches to resource allocation. They are not an “operating system”, which is based on the working mechanics of an economic model at the circular income flow (CFI) level. Therefore, when reference is made to the Operating Level Economics as an ‘economic system’ or ‘system’ (explained in later chapters) it is not in relation to capitalism or socialism which are ideological, but the scientific or mechanical, technological and systemic structure of the allocation process. This is what is meant by the ‘core’ of the systemic structure of economic models. [A Split Velocity system is based on science, not ideology. Ideologies do not guarantee economic outcomes.]

The management of recession, stagnation, underdevelopment and poverty at present is focused on damage control, that is, dealing with the symptoms without addressing the operating system (flaws in the CFI) that actually causes them that have nothing or little to do with human behaviour. This is due to the sum and consequence of poverty (excluding the human factor); it is caused by a flawed economic operating system that annually deprives businesses and economies in general of billions of dollars in lost productivity. These systemically wasted resources are what, by default, create unusually high levels of scarcity that make the elimination of scarcity through the management of poverty practically impossible and an important lesson in futility. Human beings and governments are doing the best they can often in very difficult circumstances. [If technocrats take the time to understand the loss taking place in the CFI due to operational inefficiencies there, which can be as high as 93% of GDP it immediately becomes clear that poverty and dystopia is a problem to do with economic and financial literacy rather than ideology or human weaknesses. Governments need support to be able to do the best they can for a nation and its people. Split Velocity is possibly one of the first scientific approaches to finance and business able to guarantee both economic growth and development when applied. It means a change in mindset that addresses and corrects these inefficiencies can transform economies.] Essentially, it is this scarcity that creates Pandora’s Box that spreads unemployment, underproduction, poverty, hunger, debt, slums, ghettos, famine, inner cities, insufficient shelter, squalor and so on. The approach to poverty alleviation has been to do what is possible to arrest these symptoms without including an approach that actually corrects what causes them.

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