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Obviously, our modern scientific, technological, industrial, and cultural infrastructures are vastly more advanced than those in the early ages. Education plays a large role, today, in increasing the efficiency of our economy. Educational development, which is one of the foundations for society's scientific development, which in turn is the foundation for technological progress and industrial efficiency. We have a vast economy operating today, that delivers food to our table, that provides our clothing, transportation, housing, health care, even relaxation. Nevertheless, the fundamental truth that is found in the modern economic system, is measured the same it was measured in the early ages, in the increase of the potential population density of an area, a region, or a world. The proof of the pudding is in the eating.
Defining the elements of the principle of economics.
With the proof of the principle of economics now understood, we can begin to think about defining the elements of the principle of economics. What are the natural principles that we can utilize for economic action? We have found that zero economic action had rendered the early societies stagnant and always existing at the edge of starvation. But as soon as the economic activity increased, humanity suddenly moved away from the edge of starvation. This happened because the potential population density increased in general more rapidly than the society's need to utilize the increased potential.
It can be said that the trend shown in the above graphics reflects the natural tendency as related to the human economy. If one plot this interrelationship graphically, one comes up with two curves shown that follow a hyperbolic progression. Please note that the blue curve, which represents the normal increase in the potential population density, is leading the brown curve, the actual population increase, by an ever widening margin. These two curves reflect the nature of humanity's actual increase in population density, and its potential increase in population density. The brown curve should therefore match closely the actually observed increase in population density throughout World over the last 3000 years as previously presented.
The factor of money.
When we talk about the principle of economics in modern terms, we must also consider other movements behind the scene, most of which are shaped by a complex array of forces. One of these is money. Money facilitates the interchange of physical values in an economy. The increase of this value, of course, must correspond to the natural increase in the physical economy which corresponds with the increase of the potential population density that the principle of economics brings about.
If we plot the interrelationship between a society's needed money supply, in the for of credit for industrialization and development, then the economic product of the physical economy would be increasing. But What would be the interrelationship between the two?
In this graphic presentation two hyperbolic progressions are shown, one of which (the green one) is increasing slightly faster than the other. It represents the economic product of society. The other curve, the brown one, represents the increase in the money supply of society. One would assume that the money supply should be larger at first, during the initial stages of development, but then should be overtaken once the infrastructural development is complete. It is tempting to believe this, except this concept will never work in practice. It would be entopic in nature. Development would slow down, then stop, and finally reverse itself. This is contrary to the principle of economics where development is an unending and literally infinite process. Which means, that society must always provide itself with a rich measure of development credits, without any limits being imposed.
These credits must be forever leading the process.
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