Real change requires a fundamentally different approach from what we have now. What we have seen so far is policy based on either the ideology of the left, the ideology of the right, or on a compromise somewhere between the two. To allow the United States to operate at maximum prosperity requires policies that are correctly matched to each economic component of the goal being addressed. Sometimes the correct solution would appear to be taken from elements of the right, and other times it would appear to come from the left. And sometimes the best solution would come from combining segments from the left and the right to create an outcome that vastly exceeds what has been possible before. In a similar vein, sometimes the best outcome is best achieved by utilizing private enterprise and free market dynamics, and other times only government can properly execute the solution. Parallel to these choices, sometimes a minimum of regulation is necessary to make a solution work properly, and at other times it is best to institute very tight regulation to prevent damaging consequences. Real change will only come when we properly combine each of these seemingly contradictory positions into an economic policy which optimizes our national economy in ways that have never been imagined.
Making change that actually works requires making choices that take into consideration the interlocking relationships within all of the systems in the world. These systems include all of the sociological, economic, agrarian, political, legal, ecological, educational, scientific, military, governmental, and business institutions on the planet. These systems can be made to work together symbiotically to create massive wealth and freedom, or incoherently thrown together in ways that work against each other.
Much of the problem is that most people rely on “conventional wisdom” or “consensus reality” to form or adopt their opinions. But the complex world economic systems require expertise that must greatly exceed “conventional wisdom”. The reason for this is that the correct solutions are often paradoxical and counter-intuitive to what straight-forward thinking would guess. An example can be found in the realm of science. If common sense worked well, then, we would expect that reason could be relied on to efficiently discover new scientific knowledge. But most advances in science occur because of either observation, or by lucky accident, rather than reason. A simple example would be the fact that ice floats. Almost every other substance can be observed to continuously contract as it cools. In the case with water, it was observed that at the freezing point, it expands, causing it to float upon its denser, yet warmer, liquid state. We then went for thousands of years trying to discern the cause of this anomalous phenomenon. But, it was the observation of the anomaly that led us to tackle finding the solution. It is in this fashion of observation that the large and arcane body of scientific knowledge was discovered over thousands of years. This is why scientists go to school to learn about these mysteries, rather than being able to use conventional wisdom to figure it out for themselves. The situation with economics is similar to that of the scientific world, in that there are many incongruities that will trick those without the knowledge into making the seemingly obvious, but wrong, choice. Because the economic landscape is so large and complex, the bad choices can continue without discovering the linkage between the bad choices and the bad outcomes.
An example of our common sense solutions having a disastrous outcome was seen when alcoholic drink was outlawed in the United Stated from 1920 to 1933. The goal of this change was to stop the destructive effect that alcoholic drink had on the lives of many individuals and families. But, it turned out that the outlawing of alcohol created more problems than legal alcohol ever had. The supplying of alcohol became an underground industry that was operated by criminals and organized crime syndicates. There ensued widespread corruption of the police, and of various government officials, who could not resist the temptation of the bribes from the criminals. It is even debatable whether consumption of alcohol decreased or increased during this period.
As wrongheaded as Prohibition turned out to be, we need to remember that at its inception, “conventional wisdom” had total confidence that Prohibition would usher in a golden age of vastly reduced crime, immorality, violence, illness, and unemployment. We need to keep this example in mind in order to understand that popular sentiment based reason does not necessarily predict the actual outcome. We must choose the course of our endeavors based on the knowledge which has been discovered and understood through observation and analysis. In national economic matters, it is necessary to apply the best available knowledge in order to have any reasonable chance of success.
Real change can be achieved when we choose to go against our intuitive and ideological positions, and allow the use of the tools that will provide the best solution that our best knowledge can provide.