Cutting edge thinking by certain economists that have de-bunked general equilibrium theory is correct. The macro economy is in fact in a radical state of disequilibrium. The final two questions disequilibrium theorists need to ask themselves are: Why does this disequilibrium exist? and What needs to be done about it? The answer to the first question has always been with us the same as the new paradigm of Grace the free gift has always been there, waiting to be discovered. The answer to the second question is: So that we can have both true individual freedom and a free flowing system…and so a truly ethical system as well. That’s actually three “things”. Keep that in mind as you read further on in this book. But back to the first question

Allegedly the most basic concept of physics and the cosmos is entropy. There may be a concept that includes and encompasses even that, but that is a discussion for another time. The analogous most basic concept of the micro economy is cost. If there are inherently more costs continuously created by the economic and monetary systems themselves, than there is money with which to liquidate those costs…then the system left to its own unfettered operations…cannot be in equilibrium. This fact is revealed in the cost accounting data and their relationships to each other…in the “books” of each and every enterprise in any economy…and is enforced by the convention of cost accounting which says that: “All costs must go into price.”  This convention is in force for each and every enterprise…and at all times. Thus it is not only a ubiquitous micro-economic factor….it is a constant and dynamic macroeconomic factor as well. The factor of Cost rules the micro economy and points at the problem that macro-economics must solve.

So if costs/prices inherently exceed money created to liquidate those prices, and cost  is the monetary/money and economic/price reflective concept of entropy, what is its counter balancing non-entropic concept that will establish balance, equilibrium and flow?

Monetary grace, the free gift of money.