Sub: Discourse of Inefficient, Unstable and Unconstitutional System in Business Schools
Date: February 11, 2013
The currently established system of money and finance is economically inefficient, unstable and unconstitutional. This truth has been now accepted by the Journal of Financial Transformation, which (i) is edited by top professors in eminent universities and top executives in the industry, (ii) has 18 Nobel Laureates as its authors and (iii) is recommended by the American Economic Association, as per the attached JFT circular.[1]
That the established system is inefficient, unstable and economically disastrous became obvious once it crashed in 2008, with the true unemployment among the employable Americans soaring beyond 30%. The Federal Reserve has rightly considered this systemic crash worse than the Great Depression because of the unprecedented runs on $3.5 trillion money markets and $7.8 trillion in uninsured bank debts. The US Congress found in 2011 that the crash was manmade (avoidable) due to a failure of experts who established and ran the system. The looming crisis was presaged in my research on first-best efficient system of money and finance, which proves that the established system is second-best (inefficient), unstable (not in equilibrium) and unconstitutional. My research was first mimeographed at the Board of Governors of the Federal Reserve System in 1991 within a math model of the mega game of the economy and then articulated and communicated in plain English to the US Congress in 2003, with several follow-up memos since then. The domino of crashing financial markets could be stabilized in 2008 only by adopting the policies which have emerged from this self-less research on first-best efficient and constitutional system.
The guardians of the second-best system maybe highly 'qualified' and 'accomplished' by yardsticks set by them. But they were blinded by the self-serving systemic indolent usurpation of hard-earned wealth of those who persevere to produce, innovate, create and serve and prop the national currency and security. Since 1991, they failed to see (even when presented to them in their language) the existence of a stable, efficient and constitutional first-best system. After the crash, they lied to the U.S. Congress that no human being in the academy, industry or government saw the crisis coming and so it ought to be an act of god. They lied because I, as a human being, had presaged the looming crisis and proposed first-best efficient policies to avert it. The US Congress had to adopt these policies to stem the domino of crashing markets in 2008, and, so, blamed the guardians for their failure and for causing a manmade (avoidable) crisis.
The progress in recognition of the existence first-best efficient management/governance raises a crucial policy issue for responsible governments: Should formal business education–especially in government-established institutes–be based on a failed second-best economic paradigm which is unconstitutional? The Supreme Court of India may perhaps answer "NO." Any objecting B-School faculty in government-established institutes or the associate alumni or business sponsors, should, however, be given an opportunity to disprove my theorems. I welcome every stalwart economist, non-economist, academic and practitioner to discourse and refute my findings in a formal model of general equilibrium.
To facilitate accessibility of the discourse to common people (the supreme empires), I have summarized my research in plain English in a short paper, entitled, "Constitutional Capitalism [First-best Efficient Governance]."[2] This paper presents (a) how the academy of economics and finance is plagued by four gravely false dogmas which have roiled economies around the world, (b) how the current system of money and finance based on these dogmas abjectly crashed in 2008, (c) how the US Congress blamed the established experts' failure for the crisis, and (d) how seminal, peerless research on first-best efficient governance obviates these grave dogmas by obtaining a new system to preserve the hard-earned capitals of principals (citizens) to stabilize the economy efficiently and constitutionally.
In fact, I have received requests from some IIT undergraduates for continuing this research. I was startled to hear from one of them that my website was a required area of discourse, maybe by some professor in a class. In any case, the era of politicizing economics is over. Common people now know the design of political economics as sophisticated schemes of usurpation of private and public wealth by burdening the public exchequers with enormous debt that cannot be repaid without printing money and causing inflation. First-best management/governance should (and will ultimately) be the leitmotif of every program which trains administrators and managers, especially in government-established institutes.[3] I have written about it to AICTE Chairman. If India leads in this sphere, it can emerge faster and stronger from the ongoing global depression.
With profound regards,
SankarshanAcharya
MTC GLOBAL- Educate, Empower, Elevate
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