Intuitive understanding often has a significant advantage over logical, subjective thinking. This is simply because intuitive understanding involves the whole self, with all its complexity, and is therefore far more capable of understanding similarly complex systems. Attempting to understand a system as complex, for instance, as a country’s economy, with the aid of logic and mathematics is inherently doomed to failure because the I-Subject and its available tools are far too simplistic for that kind of task.
Those who work with complex systems, however, intuitively understand them, generally so well that they know where effective changes can be applied, something that logic, mathematics, and even philosophy fails miserably at. This is the advantage of common sense. The problem is that when a system has a problem, the intuitive solution, while zeroing in on the area where the problem can be solved, can be intuitively right or wrong when it comes to precisely how to affect the system at its leverage points.
In areas where common sense intuitively gets things right, we barely notice the problems, because they’re quickly solved and we move on. The problems we notice are those that recur again and again despite every effort to prevent and/or reverse them. These are precisely the problems where the intuitive solution, although it has zeroed in on the right place where action can be effective, intuitively does the wrong thing in that place. The place where a solution can affect a system without an equivalent push back from another area of the system is correctly identified, but the solution itself is counter-intuitive, and since common sense can only rely on intuition, it intuitively does the wrong thing repeatedly without any idea of why it not only doesn’t solve the problem, it most often exacerbates it.
The economy, as it turns out, is a good example of this issue. While taxation is a lever, it’s a lever with limited influence, because other aspects of the system such as price hikes relative to wages, and profit margins relative to taxation, will generally nullify much of what is done in that area. Governments, economists and simply intelligent individuals intuitively understand where the more effective lever is, in economic growth, predominantly measured by GNP/GDP.
Intuitively, to increase overall wealth, GNP/GDP should be increased. However historically this has consistently worsened poverty, average income differentials, etc. The reason is not all that difficult to understand. Wealth is not the amount that flows in and out of an economy, which is what economic growth indicators measure, but the amount that remains. Increase in the former without increase in the latter will preferentially migrate a constant or even depleting amount of wealth towards those that have money, since economic growth preferentially grows prices and profit margins more than wages. The result is an economic situation that gravitates more and more towards a third world economy. In the U.S. we are already there in terms of how much is owned by a very small percentage of the population and the average income differential. Over the long term this has historically been disastrous for a civilization, since wealth can only be stripped from the already poor to a smaller and smaller degree, and the more that it is stripped, the greater the resentment of the median person, which eventually, and predictably, leads to a refusal to participate that may be peaceful or violent, but in either case destroys the economy itself by taking away its means of maintaining itself.
Countries that have maintained or grown median wealth over a sustained period, such as the Low Countries in Europe and the Scandinavian countries, have simultaneously maintained a low growth rate over a sustained period, as measured by economic indicators. Even in the short term, over the last ten years the growth in economic indicators has been higher in the U.S. than in Canada or Australia, yet the median income in those countries has grown by over 30%, while the median income in the U.S. has dropped by 8%. If we go back historically far enough tribal peoples maintained a median wealth consistently over hundreds, even thousands of years. In times of low economic input wealth would drop, but the kinds of drops in economic input caused by agricultural famines and economic depressions in agricultural and industrial economies have consistently been more devastating.
The difference between countries such as Canada and Australia versus the U.S. has to do not only with absolute growth according to GNP/GDP, but fundamentally the ratio between what flows into the economy versus what flows out. The U.S. has had higher growth primarily in order to create wealth that naturally flows out of the economy, via increased military spending and regressive taxation as the most cogent factors. While increases in the output of the military-industrial complex do increase GNP/GDP, since virtually all of that increase flows out with no equivalent increase flowing in, the natural tendency of high economic flows to increase income disparity is magnified by magnitudes, with regressive taxation only adding to the problem. By contrast, in Canada and Australia the increases are not only lower, but preferentially affect flows in, via increases in harvesting of natural resources, and are not nullified by increased military spending or equivalently regressive taxation, resulting in more retained wealth in the country.
To increase median wealth the end of regressive taxation is necessary but inadequate, since it simply redistributes a constant amount of overall wealth. The more important lever, as we intuitively understand, is to affect economic growth. But we need to push the levers the other way. Economic growth as a goal needs to be replace with a sustainable, maintained economic output, since economic input is largely determined by external causes that are not effectively controllable. Simultaneously the economic output has to be directed toward areas that tend to remain within the economy, such as infrastructure and long term social improvements, and directed away from areas that tend to flow out of the economy, such as spending on the military-industrial complex, movement of productive capability out of the country, and the creation of false wealth through the stock market and the real estate market that inevitably collapse in any case.
This counter-intuitive solution can only be arrived at by beginning with intuitive understanding and thinking on its results well. Since simple logic and mathematics remains inadequate to that task, it is only through the complexity of thinking well, the complexity of philosophy, that solutions to complex systemic problems can be arrived at.