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Should we trust economists? Not unless they know the origin of our economic system and understand the dynamics of its evolution. If you don't know the nature of the beast, your chances of predicting its actions are virtually nil.

Fortunately, the economy is not a complicated system. To understand why it works the way it does, you only have to remember three things:

1. Ten thousand years ago you could only buy one thing with money.
2. Money is a promise.
3. Church and state were created to enforce the promise.

The economy began when one man and one woman conceived the idea of mutual care. Man would feed, clothe and shelter woman. Woman would bear his children. Based on their common needs, they created a promise to serve their mutual interests. When they recorded that promise, it became a contract. The earliest known record of that contract is about 10,000 years old. Human society (and our global economy) stands on a foundation of contractual agreements.

Prevailing economic theories interprets "promise" as an obligation to satisfy the terms of a contract. The institution of church was conceived to formulate moral codes in support of that interpretation. State evolved to enforce those codes.

Today every internationally traded currency is based on the assumptions of obligation (and its reciprocal, entitlement). They are regulated by more than 10 major governments which derive their laws from the moral codes of at least seven different religions.

In computer parlance, our current economic turmoil stems from a kernel level branch point in our social programming. The branch point in question determines how the members of human society deal with daily decisions, specifically: how we decide which is more important, what I want, or what we both want? That branch point governs whether the benefits of the decision will flow to a private interest or to the common interest.

The good news is our economic problems are soluble, but they are inextricably bound to the social fabric of family, commerce, church and state. Symptomatic treatment will not solve the problem. Our economy requires a holistic solution, a single currency based on the only commodity of universal value that everyone possesses, time.

Ultimately, a global economy requires a global currency based on common interest and voluntary participation. The obstacle preventing that is our attachment to the concept of entitlement. As long as you think you are obliged to pay, I am entitled to collect, just like Ken Lay, AIG, Bernard Madoff, etc., etc.

What does your economist say?

Learn more about this author, Marc Kramis.
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