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A network connected by the warp and weft of space-time

We have briefly examined the dazzling economic growth that followed the “Age of Merchants” from the perspective of “competition and imitation.” This is akin to threading a few strands of historical weft onto the warp of growth and distribution.

In reality, things are much more complex. The present is connected to the past through a relationship of “cause and effect,” and today’s world is woven into a large network of interactivity. This network is not just a single layer but consists of multiple densely woven layers.

To gain a realistic understanding of even a part of the economic phenomena occurring in today’s global village, we need more warp and weft. However, it is impossible to explain all that economic theory in just one book.

Knowledge is expanding at a rapid pace, much like the universe, and this space is being filled with new integrated knowledge. There are both positive and negative aspects to this fact. The positive aspect is that we have more information that helps us understand the world. The negative aspect is that utilizing that knowledge requires endless learning, and we must compress it into our own understanding. This is not an easy task.

Academics must provide specific explanations using mathematics, statistics, and well-defined terms for accuracy. They often delve into very narrow topics. However, our goal is to understand today, even in a general sense, and to envision tomorrow. Fortunately, much of that vast knowledge is derived knowledge created by combining, integrating, or slightly evolving existing knowledge, much like how derivative financial products are created. Most of what scholars explain in complex terms can be understood as common sense with a little closer examination. And it should be that way.

From now on, we will seek relatively thick warp and weft that connect various theories about today’s economic phenomena in the “real economy” and “financial economy.” We will attempt to explain the complex world in a few simple words. This may seem like an unreasonable endeavor. However, well-compressed simplicity often proves more powerful in explaining and understanding the world than the confusion caused by ambiguous knowledge. When the time for action comes, simple principles tend to be more effective than complex strategies. Of course, behind that, more accurate and in-depth knowledge is needed, and at that point, one must encounter another book and teacher.

Let’s start unraveling the clues from the real economy. The real economy originally refers to the economy of reality rather than theory, but here it refers to the activities of production, sales, and consumption that create actual added value in comparison to the financial economy. In any case, the real economy is directly related to the quality of our lives.

The central warp of the real economy is demand and supply, along with the market where they meet. We will understand the market through these two words, demand and supply, and examine how the market can generate economic growth and why the economy fluctuates.

The development of finance has also accompanied economic growth. This means that finance has been helpful to the real economy, and that the financial economy is also a part of the real economy. However, given that the financial economy occupies a significant part of today’s economic activities and is often a source of economic instability, it is necessary to understand the financial economy separately from the real economy. The central warp of the financial economy is money. Not all money is the same. We will start by examining aspects that are closer to the real economy. We will also speculate on the limits of government intervention in the financial economy and the costs that must be paid for it.

With this organized knowledge, we will revisit several economic crises we have experienced. In a sense, this can be seen as a practice ground for the knowledge we have learned from the real and financial economies, where we will also find a few wefts to thread onto the warp.

Various theories and doctrines help us understand the world, but even more influential are the concepts that have unconsciously taken root in our consciousness. These unclear thoughts sometimes become values or philosophies, often taking precedence over well-organized logic or theories wherever debate is needed. Many social conflicts stem from this. Based on the knowledge we have woven together, we will examine a few topics that have become subjects of social debate.

In fact, what is more important is that in the process of studying the past, we must imagine the future beyond our understanding of today. It may be idealistic or hopeful, or it may be despairing. In either case, we must repeatedly think about what is blocking that ideal and hope today, or what we must do today to avoid a negative future. This is not something that can be done alone or completed in one go. It is a space of knowledge that develops by stimulating each other’s thoughts.