How States Tamper Markets (TEST POST 3)

The main sector of a market is born. Capital flows in & out of the sector & later grows a network of capital flowing into relevant areas, forming emergents (sub-sectors) which respond to flowing capital; building an ecosystem (X) that grows at a pace. Sub-sectors reinforce the main sector in a decentralized manner; each having nth-order streams that flow in a pace.

The state-model enters ecosystem X & wants a quota satisfied; it sees the slow pace of capital & imposes policy Y to curb competing ecosystems. This indirectly strains resource Z that ecosystem X depends on; pushing the state-model to intervene with “solutions” that capture ecosystem X.

Resource Z’s prices skyrocket thus the nth-order steams start to die; getting the state-model to impose more control.

Second-order effects include sub-markets A, B and C forming around policy Y; no need for nth-order streams when first-order rule can make capital flow faster.

Consequences include low-quality outputs from ecosystem X since sub-markets A, B & C would’ve kept quality high, meaning the state-model traded slow capital + high-quality output for fast capital + low-quality output.

The quota is satisfied, ecosystem X begins to die & the state-model moves on to new ecosystems to capture.