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Sustainability thoughts 135: How can a general paradigm evolution model aimed at capturing all possible market evolution routes in response to binding sustainability gap pressures be stated step by step?

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  • Independent QLC researcher

Abstract and Figures

Abstract When markets are created, sustainability gap pressures associated to cost externalization dynamics embedded in them are also created. At the beginning, sustainability gap pressures are minimal, which seems to be one of the reasons why Adam Smith provided us with a traditional perfect market model in 1776 that works under externality neutrality assumptions; and therefore, there are no limits to economic growth. As the market expands its related sustainability gaps expands too, and it begins to affect the sustainability of that market. When markets have expanded to a point that their associated sustainability gaps may bring them down, then dealing with those sustainability gaps pressures becomes binding too in order for those paradigms to persist or avoid collapse. Now business as usual is no longer possible as if business as usual continues the market will collapse as the externalities previously assumed irrelevant are relevant. Moreover, the inability to fix or patch or the unwillingness to fix or patch binding sustainability gaps affecting the market can also brings along other paradigm evolution pressures such as flips towards authoritarianism or flips towards inverse opposite competing development paradigms, as then these paradigm evolution routes become more likely to take place as ways of addressing the same sustainability issues. Therefore, in response to binding sustainability gap pressures the market can subjected to calls for action by stakeholders such as the following: a) calls for implementing full cost internalization policies to fix fully the sustainability gap problem affecting the model; b) calls for implementing externality management programs to patch the sustainability gap problem; c) calls for flipping the model towards an inversely opposite market model, perfectly or imperfectly, to deal with the sustainability gap problem; and d) calls for flipping to a dictatorship based market model as a better way to address the same sustainability gap problem. Understanding which response route markets such as the traditional market, the socialism market, the environmental market, the red socialism market and so on would take when dealing with their associated sustainability gap pressures is important, but this understanding is currently unclear. Hence, there is a need to develop a general model that captures all the possible response routes mentioned above that any market can take when facing binding sustainability gap pressures, which raises the question: How can a general paradigm evolution model aimed at capturing all possible market evolution routes in response to binding sustainability gap pressures be stated step by step?. Among the goals of this paper is to provide an answer to that question. Key concepts Sustainability, perfect markets, imperfect markets, sustainability markets, externality management markets, sustainability gap, paradigm fix, paradigm patch, paradigm shift, perfect paradigm flip, imperfect paradigm flip, dominant paradigm ------ ------ Resúmen Cuando se crean mercados, también se crean presiones de brecha de sostenibilidad asociadas a las dinámicas de externalización de costos incrustadas en ellos. Al principio, las presiones de la brecha de sostenibilidad son mínimas, lo que parece ser una de las razones por las que Adam Smith nos proporcionó un modelo de mercado perfecto tradicional en 1776 que funciona bajo supuestos de neutralidad de externalidades; y por lo tanto, no hay límites para el crecimiento económico. A medida que el mercado se expande, sus brechas de sostenibilidad asociadas también se expanden y comienzan a afectar la sostenibilidad de ese mercado. Cuando los mercados se han expandido hasta un punto en que las brechas de sostenibilidad asociadas a ellos los pueden destruir, entonces la necesidad enfrentar esas brechas de sostenibilidad se vuelve relevante para que esos paradigmas persistan o eviten el colapso. Ahora, el negocio como de costumbre ya no es posible, ya que si el negocio continúa como de costumbre, el mercado colapsará ya que las externalidades que antes se asumían como irrelevantes son relevantes. Además, la incapacidad corregir o parchear o la falta de voluntad para corregir o parchear las brechas de sostenibilidad relevantes que afectan al mercado también puede traer consigo otras presiones de evolución de paradigmas, como giros hacia el autoritarismo o giros hacia paradigmas de desarrollo inversamente opuestos, ya que estas rutas de evolución de paradigmas se hacen más probables si se miran come mejores alternativas para abordar los mismos problemas de sostenibilidad. Por lo tanto, en respuesta a las presiones relevantes de la brecha de sostenibilidad, el mercado puede estar sujeto a llamadas de acción por parte de las partidos o grupos sociales interesados, como las siguientes: a) llamadas a implementar políticas de internalización de costos totales para solucionar completamente el problema de la brecha de sostenibilidad que afecta al modelo; b) pedidos de la implementación de programas de gestión de externalidades para solucionar el problema de la brecha de sostenibilidad; c) llamadas de un cambio de modelo hacia un modelo de mercado inversamente opuesto, perfecto o imperfecto, para abordar el problema de la brecha de sostenibilidad; y d) llamadas a cambiar a un modelo de mercado basado en la dictadura como una mejor manera de abordar el mismo problema de brecha de sostenibilidad. Es importante comprender qué ruta de respuesta tomarían los mercados, como el mercado tradicional, el mercado del socialismo, el mercado ambiental, el mercado del socialismo rojo, etc., cuando enfrentan las presiones ligadas a la brecha de sostenibilidad, pero esta comprensión no está clara actualmente. Por lo tanto, existe la necesidad de conceptualizar un modelo general que capture todas las posibles rutas de respuesta mencionadas anteriormente que cualquier mercado puede tomar al enfrentar presiones relevantes de brecha de sostenibilidad, lo que plantea la pregunta: ¿Cómo se puede conceptualizar paso a paso un modelo de evolución de paradigma general destinado a capturar todas las posibles rutas de evolución del mercado en respuesta a las presiones de brechas de sostenibilidad? Uno de los objetivos de este documento es dar una respuesta a esa pregunta.
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Citation:
Muñoz, Lucio, 2021. Sustainability thoughts 135: How can a general paradigm evolution
model aimed at capturing all possible market evolution routes in response to binding
sustainability gap pressures be stated step by step?, In: CEBEM-REDESMA Boletin, Año
15, Nº 6, June, La Paz, Bolivia.
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Sustainability thoughts 135: How can a general paradigm evolution model aimed at
capturing all possible market evolution routes in response to binding sustainability gap
pressures be stated step by step?
By
Lucio Muñoz*
* Independent Qualitative Comparative Researcher / Consultant, Vancouver, BC, Canada Email: munoz@interchange.ubc.ca
Abstract
When markets are created, sustainability gap pressures associated to cost externalization
dynamics embedded in them are also created. At the beginning, sustainability gap pressures are
minimal, which seems to be one of the reasons why Adam Smith provided us with a traditional
perfect market model in 1776 that works under externality neutrality assumptions; and therefore,
there are no limits to economic growth. As the market expands its related sustainability gaps
expands too, and it begins to affect the sustainability of that market. When markets have
expanded to a point that their associated sustainability gaps may bring them down, then dealing
with those sustainability gaps pressures becomes binding too in order for those paradigms to
persist or avoid collapse. Now business as usual is no longer possible as if business as usual
continues the market will collapse as the externalities previously assumed irrelevant are relevant.
Moreover, the inability to fix or patch or the unwillingness to fix or patch binding sustainability
gaps affecting the market can also brings along other paradigm evolution pressures such as flips
towards authoritarianism or flips towards inverse opposite competing development paradigms, as
then these paradigm evolution routes become more likely to take place as ways of addressing the
same sustainability issues. Therefore, in response to binding sustainability gap pressures the
market can subjected to calls for action by stakeholders such as the following: a) calls for
implementing full cost internalization policies to fix fully the sustainability gap problem
affecting the model; b) calls for implementing externality management programs to patch the
sustainability gap problem; c) calls for flipping the model towards an inversely opposite market
model, perfectly or imperfectly, to deal with the sustainability gap problem; and d) calls for
flipping to a dictatorship based market model as a better way to address the same sustainability
gap problem.
Understanding which response route markets such as the traditional market, the socialism
market, the environmental market, the red socialism market and so on would take when dealing
with their associated sustainability gap pressures is important, but this understanding is currently
unclear. Hence, there is a need to develop a general model that captures all the possible response
routes mentioned above that any market can take when facing binding sustainability gap
pressures, which raises the question: How can a general paradigm evolution model aimed at
capturing all possible market evolution routes in response to binding sustainability gap pressures
be stated step by step?. Among the goals of this paper is to provide an answer to that question.
Key concepts
Sustainability, perfect markets, imperfect markets, sustainability markets, externality
management markets, sustainability gap, paradigm fix, paradigm patch, paradigm shift, perfect
paradigm flip, imperfect paradigm flip, dominant paradigm
Introduction
a) Markets and cost externalization
When markets are created, sustainability gap pressures associated to cost externalization
dynamics embedded in them are also created. This situation is indicated through the use of a
dummy market Mi driven by dominant component Xi as indicated in Figure 1 below:
We can see in Figure 1 that there is a sustainability gap SGi embedded in the creation of
the market Mi affecting its driver Xi so the structure of market Mi under sustainability gaps is Mi
= Xi(SGi) and its structure under no sustainability gaps is Mi = Xi. This is because if we assume
that externalities associated to production in market Mi are irrelevant they can be left out of the
model Mi as then the market can expand without producing externalities, which is the market
illusion associated with all markets that work under externality neutrality assumptions. The idea
that cost externalization drives market towards more unsustainable paradigm evolution dynamics
has been recently highlighted(Muñoz 2021a) as well as the thought that externality neutrality
assumptions lead to market illusions(Muñoz 2020a) and that cost externalization and market
pricing mechanism are linked(Muñoz 2020b). Hence, we can see in Figure 1 above that if there
are no sustainability gaps, the expansion of driver Xi leads to an expansion of model Mi without
creating sustainability gaps; and we can also see that if there are sustainability gaps then an
expansion in Xi leads to an expansion of Mi as well as to an expansion of its sustainability gap
SGi.
At the beginning when markets are created, sustainability gap pressures(SGi) are
minimal, which seems to be one of the reasons why Adam Smith provided us with a traditional
perfect market model in 1776(Smith 1776) that works under externality neutrality assumptions;
and therefore, it assumes no limits to growth so the traditional market(TM) has the structure of
market M without sustainability gaps TM = M = Xi. With this structure the traditional
market(TM) can expand without creating sustainability gaps. We know now by fact that
assumption was wrong as indicated by shift in thinking from traditional market to green market
thinking that started with the publication of Our Common Future(WCED 1987) and which was
materialized later with the 2012 Rio + 20 Conference on Sustainable Development(UNCSD
2012a; UNCSD 2012b).
b) Market expansions and sustainability gap pressure expansions
As the market Mi expands from X1 to X2 its related sustainability gap SGi also expands
from SG1 to SG2, and the expansion of sustainability gaps begins to affect the sustainability of
that market, a situation that can be appreciated in Figure 2 below:
As indicated in Figure 2 above, the expansion of market Mi from point X1 to point
X2 leads to an expansion of its sustainability gap from SG1 to SG2, which now begins to affect
the long term sustainability of market Mi. Since at point X1 the market structure of Mi is M1 =
X1.SG1 and at point X2 the market structure is M2 =X2.SG2, so the expansion of M1 to M2 comes
from the expansion of the drivers and the expansion of sustainability gaps. The expansion of
sustainability gaps goes one to one with the expansion of unsustainability(Muñoz 2019).
c) Markets under binding sustainability gap pressures
When markets such as market Mi have expanded to a point that their associated
sustainability gaps becomes binding(BSGi) so that Mi = Xi(BSGi), meaning that those
sustainability gaps pressures may bring the model down if left unattended, then dealing with
those sustainability gaps pressures affecting the market now becomes binding too in order for
those paradigms to persist or avoid system collapse, as situation shown in Figure 3 below:
Figure 3 above indicates that now the market Mi is under a binding sustainability
gap(BSGi) threat and it needs to address it right away by either a full paradigm fix or by a
paradigm patch as business as usual is no longer possible if we want to avoid system collapse as
its market structure now is Mi = Xi(BSGi). In other words, binding sustainability gap
pressures(BSGi) lead to the need to fix or to patch the market model to avoid a market collapse.
For example, environmental inclusion was taken seriously at the 2012 Conference on Sustainable
Development(UNCSD 2012a; UNCSD 2012b) to recalibrate the business as usual model in order
to avoid the traditional market being brought down by its embedded environmental sustainability
gap, a process that culminated with the Paris Agreement(UNFCCC 2015). However, instead of
moving towards perfect green market thinking to fully fix the environmental sustainability
problem highlighted in 1987(WCED 1987) development stakeholders concerned about
environmental impacts have moved towards patching the problem through externality
management frameworks instead. How green markets would have looked like if the World
Commission on Environment and Development(WCED) would have recommended a full fix has
been recently highlighted(Muñoz 2020c) as well as the idea that perfect markets shift to higher
level perfect markets when fully fixed such as the shift from the perfect traditional market to the
perfect green market(Muñoz 2021b).
Moreover, the inability to fix or patch a paradigm due to paradigm shift knowledge gaps
or the unwillingness to fix or patch the binding sustainability gaps affecting the market can also
brings along other paradigm evolution pressures such as flips towards authoritarianism or flips
towards inverse opposite competing development paradigms as then these paradigm evolution
routes become more likely to take place or be followed under the pretext that mainstream market
thinking is not working. It has been pointed out recently that if paradigm shift knowledge gaps
do not allow for a specific paradigm under sustainability gap pressures to be fixed or path, then
that paradigm will flip towards a competing market structure(Muñoz 2020d). For example,
authoritarianism is often sold as a better way to address sustainability gap pressures to the
masses or socialism, democratic or not, was sold as a better way to deal with social sustainability
gaps found in capitalist countries given that capitalism based countries were not interested in
addressing their social sustainability gap issues.
Therefore, in response to binding sustainability gap pressures a market can be subjected
to calls for action such as the following: a) calls for implementing full cost internalization
policies to fix fully the sustainability gap problem affecting the model; b) calls for implementing
externality management programs to patch the sustainability gap problem; c) calls for flipping
the model towards an inversely opposite market, perfectly or imperfectly, to deal with the
sustainability gap problem; and d) calls for flipping the market to a dictatorship based market as
a better way to address the same sustainability gap problem.
d) The need to understand those response routes to binding sustainability gap pressures
and place them under the same framework
Understanding which response route markets such as the traditional market, the socialism
market, the environmental market, the red socialism market and so on would take when dealing
with their associated sustainability gap pressures is important, but this understanding is currently
unclear. Hence, there is a need to develop a general model that captures all the possible response
routes mentioned above that any market can take when facing binding sustainability gap
pressures, which raises the question: How can a general paradigm evolution model aimed at
capturing all possible perfect market evolution routes in response to binding sustainability gap
pressures be stated step by step?. Among the goals of this paper is to provide an answer to that
question.
Goals of this paper
a) To point out the structure of markets when being fixed, patched, flipped to inverse
opposite and when flipped to authoritarianism in response to binding sustainability gap pressures
one at a time; and b) to link all market structures to state a general paradigm evolution model that
captures all those responses.
Methodology
First, the terminology used in this paper is introduced. Second, the operational concepts
and typology of paradigms and paradigm evolution rules are shared. Third, the structure of
markets when under full paradigm shift pressure is indicated. Fourth, the structure of markets
when under paradigm patch pressure is described. Fifth, the structure of markets when under
perfect and imperfect paradigm flip pressures is highlighted. Sixth, the structure of markets
when under authoritarianism pressures is given. Seventh, the structures of all market pressures
are linked together and place in the same framework to highlight the general paradigm evolution
model. And finally eight, some food for thoughts and relevant conclusions are provided.
Terminology
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M1 = Perfect market M1 [M1] = Imperfect market M
[M1] = Authoritarian market M1 MM1 = M1 under externality management
PS = Perfect shift IS = Imperfect shift
PF = Perfect paradigm flip IF = Imperfect paradigm flip
M = Perfect lower level market M N = Perfect lower level market N
L = Perfect higher level market L [ ] = Authoritarianism
[M] = Market M under authoritarianism [N] = Market N under authoritarianism
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Operational concepts, types of market structures and model evolution rules
a) Operational concepts
1) Perfect market, a market where there is dominant component equality and freedom
2) Imperfect market, a market where there is component equality, but not freedom
3) Perfect paradigm shift, a shift from a perfect market to a higher level perfect market
4) Paradigm management, the handling of cost externalization through externality
management
5) Paradigm flip, a flip to the inverse opposite paradigm
6) Perfect paradigm flip, a flip to the perfect inverse opposite paradigm
7) Imperfect paradigm flip, a flip to the imperfect inverse opposite paradigm
8) Authoritarian market, an imperfect market
9) Sustainability market, the perfect market where there is full co-component equality and
freedom
10) Externality management market, the market where there is partial co-component equality,
but no freedom.
b) Type of market structures
Given the dummy market models M1= Xy and M2= xY, the following can be said about
different market structures:
1) Perfect markets
There is dominant component equality and freedom
M1 = Xy = A dominant component X perfect market
M2 = xY = A dominant component Y perfect market
2) Imperfect markets
There is dominant component equality, but no freedom, they are dictatorship based
markets
[M1] = [X]y = A dominant component X imperfect market
[M2] = x[Y] = A dominant component Y imperfect market
3) Externality management market
They are ongoing government intervention based markets
MM1 = XYM = A dominant component X externality Y management market
MM2 = XMY = A dominant component Y externality X management market
4) The sustainability market
The perfect market where there is full co-component equality and freedom
S = M1.M2 = (Xy)(xY) = XY
Details about paradigm merging rules and paradigm shift rules can be found in the
publication about paradigm evolution and sustainability thinking(Muñoz 2019).
c) Model evolution rules
i) Perfect paradigm shift
The externality gap affecting the market, y or x, is fully closed and internalized
PS
M1 = Xy-------------- M3 = XY
PS
M2 = xY-------------- M3 = XY
ii) Imperfect paradigm shift or imperfect dominated component flip
The externality gap affecting the market, y or x, is patched and managed as an externality
problem
IS
M1 = Xy-------------- M4 = XMY
IS
M2 = xY-------------- M5 = MXY
iii) Perfect paradigm flip
Paradigms flip to the perfect inverse opposite model
PF
M1 = Xy------------- M2 = Xy
PF
M2 = xY------------ M1 = Xy
iv) Imperfect paradigm flip
Paradigms flip to the imperfect inverse opposite model
IF
M1 = Xy------------- M6 = x[Y]
IF
M2 = xY------------- M7 = [X]y
Linking market model Mi to perfect market thinking
If we assume that model Mi described in the introduction is of the form perfect market
Mi = M = M1 = Xy so that the perfect market Mi = M = M1 is under the influence of the binding
sustainability gap BSGY = y, which means so that Mi = M = M1 = X(BSGY) = Xy, then we have
a situation as indicated in Figure 4 below:
Hence, we can use model M = Xy in Figure 4 above to capture all the different calls for
action related to how to deal with the unsustainability generated by the binding sustainability gap
y affecting the dominant component X as it is indicated below, step by step.
The full fix market response structure
The call to fully fix the sustainability gap affecting model M relates to the need to fully
internalize the externality cost y in the pricing mechanism of the one dominant component
market M, as when doing that the market shift towards a higher level co-dependent market,
which can be indicated analytically as follows:
PS
1) M = Xy----------- L = XY since y----Y
Expression 1) above simply says that when we close the sustainability gap y through
full cost internalization, then y becomes Y as market M shifts to perfect market L, a situation
that can be expressed graphically as in Figure 5 below:
We can see in Figure 5 above that when the sustainability gap y in model M is closed,
there is a perfect shift to market L so there is a perfect shift(PS) from a one dominant component
market to a two dominant component market. In other words, full cost internalization induces a
perfect paradigm shift from model M to a higher level sustainability model L.
The partial fix market response structure
The call to patch the sustainability gap affecting model M relates to the use of externality
management tools where instead of internalizing externality cost, they are managed and when
doing so the market shift towards an imperfect externality management market, which can be
stated analytically as follows:
IS
2) M = Xy----------- MM = XMY
Expression 2) above simply tells us that when we manage the sustainability gap y
through externality management, then y becomes MY as market M shifts to imperfect market
MM leaving the sustainability gap affecting X still active as cost MY < y, a situation that can be
shown graphically as in Figure 6 below:
We can see in Figure 6 above that when the sustainability gap in model M is managed
through externality management MY, there is an imperfect shift(IS) from market M to market
MM, a shift from a perfect market model to an imperfect one as the environmental management
market model is not a free market.
The inverse flip market response structure
The call for market flip to address the sustainability gap affecting model M relates to
taking the inverse opposite competing paradigm structure, both perfectly and imperfectly as
indicated below:
i) The structure of the perfect flip:
If the structure of perfect market M is M = Xy, then the perfect inverse opposite model is
model N = xY, so the perfect flip has the form:
PF
3) M = Xy----------- N = xY
Expression 3) above is telling us that when we trade full component dominance and core
values of one market for those of the inverse opposite market to leave sustainability gap
pressures behind we have a perfect flip from a perfect market to another same sustainability level
perfect market. Notice that the core values of market N are fully the inverse opposite core values
found in market M.
ii) The structure of the imperfect flip:
If the structure of perfect market M is M = Xy, then the imperfect inverse opposite model
is [N] = x[Y], so the imperfect flip has the form:
IF
4) M = Xy----------- [N] = x[Y]
Expression 4) above shows that when we do not trade full component dominance and
core values of one market for the inverse opposite market to leave sustainability gap pressures
behind then we have an imperfect flip, a flip from a perfect market to an imperfect market.
Notice that the core values of market N are not fully the inverse opposite core values found in
market M as in model [N] there is no dominant component freedom, only equality as it is an
authoritarian based model.
The structure of the perfect and imperfect flip can be indicated graphically as shown in
Figure 7 below:
We can see in Figure 7 above two things: a) the perfect flip from perfect market M to
perfect market N requires a perfect full flip of dominant and dominated components at the same
time since X flips to x; and y flips to Y; and b) the imperfect flip from perfect market M
to imperfect market [N] needs a full flip of dominant component and a partial flip of the
dominated component as X flips to x, but y flips to [Y]. In other words, the perfect flip
from M to N is a flip from component X equality and freedom to component Y equality and
freedom while the imperfect flip from M to [N] is a flip from component X equality and freedom
to component [Y] equality, but no freedom.
The authoritarian flip market response structure
The call for authoritarianism flip to address the sustainability gap affecting model M
relates to flipping the perfect market M to an imperfect market or authoritarianism based market.
If the structure of perfect market M is M = Xy, then the imperfect structure of market M is [M] =
[X]y so the authoritarianism or imperfect market flip has the form:
IF
5) M = Xy----------- [M] = [X]y
Expression 5) above shows that when we trade market freedom for no market freedom
we flip from a perfect market M to an imperfect market [M] as only dominant component
equality remains. Notice that the core values of in market M are dominant component equality
and freedom and the core values in market [M] is dominant component equality only as they are
non free markets.
The structure of the imperfect flip from perfect market to authoritarianism can be shown
graphically as in Figure 8 below:
We can appreciate using in Figure 8 above that the imperfect flip from perfect market M
to imperfect market [M] needs only a partial flip of dominant component as the sustainability
gap y stays the same since X flips to [X]. In other words, the imperfect flip from M to [M] is a
flip from component X equality and freedom to component [X] equality only as this is not a free
market.
The general paradigm evolution model structure
If we link all the possible paradigm evolution pressures discussed above to model M =
Xy, then we frame the structure of the general paradigm evolution model as described
graphically in Figure 9 below:
Figure 9 above indicates the unsustainability created by the binding sustainability gap y
affecting model M can lead to a) in terms of model structure, to a full fix(model L), to a
patch(model MM), to a perfect inverse opposite model(model N), to an imperfect inverse
opposite model(model [N]), and to an imperfect market M or dictatorship based market M(model
[M]); and b) in terms of paradigm dynamics, to a perfect shift(PS) to a co-dominance
market(model L), to an imperfect shift(IS) to an externality management market(model [MM]), to
a perfect inverse opposite flip(PF) to model N, to an imperfect inverse opposite flip(IF) to model
[N], and to an imperfect flip(IF) to authoritarianism like mod el [M].
Implications:
Based to Figure 9 above three main implications can be highlighted: i) to keep its full
dominant core values while addressing the binding sustainability gap y model M = Xy has two
choices, a full fix or a patch. If there are no paradigm shift knowledge gaps, we should expect
model M to implement a full fix so it can keep the core values of driver X. If there are paradigm
shift knowledge gaps or paradigm M simply refuses the full fix option it has to go the way of
paradigm patch, which allows it to still keep the core values of X intact; and ii) when paradigm
M goes the way of paradigm flip, be it the inverse opposite paradigm perfectly(model N) or
imperfectly(model [N]) or the imperfect authoritarianism based market([M]) it loses the core
values of X either fully or partially; and iii) If instead of model M = Xy at the centre at the
general model we had model L or model MM or model N or model [N] or model [M], then that
general model, given the existence or not of paradigm shift knowledge gaps and/or given the
existence or not of paradigm flip choices and/or given the existence of the will or not to
implement full fixes or externality management programs, can be used to appreciate the choices
or paradigm evolution routes(likely or most likely) available to paradigm evolution dynamics.
Food for thoughts
1) Was the red socialism market an imperfect social market? I think Yes, what do you
think?; 2) Was an imperfect paradigm flip back what allowed China to keep its loyalty structure
in the hands of the communist party intact when red socialism fell in 1991 and flipped back to
capitalism? I think Yes, what do you think?; 3) Are externality management based markets
perfect markets? I think No, what do you think?; 4) Is democratic capitalism consistent with
perfect market thinking? I think Yes, what do you think?; and 5) Is non-democratic capitalism
consistent with imperfect market thinking? I think Yes, what do you think?
Conclusions
First, it was shown that under sustainability gap pressures when they become binding
paradigms can be fixed, can be patched, can be flipped perfectly or imperfectly to the inverse
opposite paradigm, and they can be flipped to authoritarianism. Second, it was pointed out that
when we place all possible actions that can be taken to address those sustainability pressures
affecting specific market paradigms we frame a general paradigm evolution model. And third, it
was highlighted that this general model can be used to assess all the possible paradigm evolution
routes given the structure of the specific paradigm under pressure at the centre of the general
paradigm evolution model.
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Paris Agreements, December 12, Paris, France.
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Oxford University Press, London, UK.
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Citation:
Muñoz, Lucio, 2021. Sustainability thoughts 135: How can a general paradigm evolution
model aimed at capturing all possible market evolution routes in response to binding
sustainability gap pressures be stated step by step?, In: CEBEM-REDESMA Boletin, Año
15, Nº 6, June, La Paz, Bolivia.
... If we have a dominant component based perfect market of the form M = X y , where X is the dominant component driving the market; and "y" is the passive component, then all possible evolutions routes if under externality pressures available to this market M can be summarized as previously indicated (Muñoz 2021) as it is done in Figure 1 Therefore, Figure 1 above summarizes all possible paradigm evolution routes for all possible dominant component based perfect markets. In other words, the paradigm evolution routes for perfect market M in Figure 1 above hold for any dominant component based perfect market such as the perfect social market or the perfect economic market or the perfect green market or the perfect red market, and so on. ...
... Muñoz, Lucio, 2021. Sustainability thoughts 153: How does a general perfect green market paradigm evolution model is expected to work? ...
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Full-text available
Abstract If we place a general perfect market evolution model under externality neutrality assumptions, we can extract the environment under which a dominant component perfect markets operate, which allows for the possibility of forever growth and no collapse. However, if we place it under a framework of no externality neutrality assumption, then the model shows limits to growth and the possibility of collapse. And if the risk of collapse is real, the dominant component market model can either be saved or it can collapse if it cannot be saved. The saving mechanism allows for either a full fix or just a patch, but it all depends on whether or not there are paradigm shift knowledge gaps as well as political and academic will. If the market cannot be saved, it will flipped perfectly or imperfectly to opposite and inverse opposite forms, and if possible they will flip towards a market form that still allows them to keep at least some of the core values they had before the flip. The above holds true for any dominant component based market, and this paper focus its attention on the perfect green market model, which makes the following questions relevant: How does a general perfect green market paradigm evolution model is expected to work? The cases of expanding green markets, of saving green markets from collapse, and the case of the fall of green markets due to binding social sustainability pressures. Key concepts Perfect markets, imperfect markets, perfect green markets, imperfect green markets, externality neutrality assumption, binding social sustainability gaps, paradigm evolution, dominant paradigm, market expansion, market collapse, fully fixing markets, partially fixing markets, paradigm shift, paradigm flip, perfect paradigm shift, perfect paradigm flip, imperfect paradigm shift, imperfect paradigm flip Resúmen Si colocamos un modelo de evolución de mercado perfecto general bajo supuestos de neutralidad de externalidades, podemos extraer el entorno en el que operan los mercados perfectos de componente dominante, lo que permite la posibilidad de un crecimiento permanente y sin colapso. Sin embargo, si lo colocamos bajo un marco de suposición de externalidad sin neutralidad, entonces el modelo muestra límites al crecimiento y la posibilidad de colapso. Y si el riesgo de colapso es real, el modelo de mercado de componentes dominantes puede salvarse o puede colapsar si no se puede salvar. El mecanismo de salvación permite una solución social completa o simplemente un parche social, pero todo depende de si hay o no lagunas de conocimiento del cambio de paradigma, así como la voluntad ética política y académica. Si el mercado no se puede salvar, cambiará perfecta o imperfectamente a formas opuestas e inversas opuestas y, si es posible, cambiará hacia una forma de mercado que aún le permita mantener al menos algunos de los valores fundamentales que tenían antes del cambio. Lo anterior es válido para cualquier mercado basado en componentes dominantes, y este documento centra su atención en el modelo de mercado verde perfecto, lo que hace que las siguientes preguntas sean relevantes: ¿Cómo se espera que funcione la evolución del paradigma del mercado verde perfecto? Los casos de expansión de los mercados verdes, de salvar los mercados verdes del colapso y el caso de la caída de los mercados verdes debido a las presiones serias de sostenibilidad social.
... Notice that if no academic consensus CC is reached to address the extreme paradigm crisis PC in Figure 2 above, the status quo model SQM will fully collapse and die reaching the paradigm death status PD. It has been pointed out that when a paradigm like the status quo model SQM dies due to extreme abnormality pressures, it flips to the opposite paradigm structure or to the inverse opposite paradigm structure, perfectly or imperfectly (Muñoz 2021a), losing in the process some or all of its core values. ...
Article
Full-text available
Abstract Thomas Kuhn shared with the world the working of scientific revolutions, which can be simplified with six components in an evolution loop: the status quo paradigm, the abnormalities, the paradigm crisis, the possible paradigm failure and death, the academic consensus to change paradigm, and the paradigm shift. When consensus is reached, Kuhn implicitly assumes that academic integrity will ensure the actual implementation of the paradigm shift that has been agreed upon to stimulate the growth of knowledge as it is difficult to think that true scientists will join the academic consensus to change paradigm and then go later in a way i) that blocks the growth of scientific knowledge that comes from closing paradigm shift knowledge gaps, and ii) that coexist with the paradigm crisis they are trying to solve, but under willful academic blindness what in Kuhn’s loop is inconceivable actually happens. And this raises the question, what happens to the Thomas Kuhn’s paradigm evolution loop under willful academic blindness? What are the implications of this? Key concepts Scientific revolutions, status quo model, model abnormalities, paradigm crisis, paradigm death, academic consensus, paradigm shifts, academic integrity, willful academic blindness, scientific truth, academic facts, alternative academic facts, golden paradigm, flawed paradigm, new paradigms, paradigm evolution loop.
... If we have a dominant component based perfect market of the form M = X y , where X is the dominant component driving the market; and "y" is the passive component, then all possible evolutions routes if under externality pressures available to this market M can be summarized as previously indicated (Muñoz 2021) as it is done in Figure 1 Therefore, Figure 1 above summarizes all possible paradigm evolution routes for all possible dominant component based perfect markets. In other words, the paradigm evolution routes for perfect market M in Figure 1 above hold for any dominant component based perfect market such as the perfect social market or the perfect economic market or the perfect green market or the perfect red market, and so on. ...
Article
Full-text available
Abstract If we place a general perfect market evolution model under externality neutrality assumptions, we can extract the environment under which a dominant component perfect markets operate, which allows for the possibility of forever growth and no collapse. However, if we place it under a framework of no externality neutrality assumption, then the model shows limits to growth and the possibility of collapse. And if the risk of collapse is real, the dominant component market model can either be saved or it can collapse if it cannot be saved. The saving mechanism allows for either a full fix or just a patch, but it all depends on whether or not there are paradigm shift knowledge gaps as well as political and academic will. If the market cannot be saved, it will flipped perfectly or imperfectly to opposite and inverse opposite forms, and if possible they will flip towards a market form that still allows them to keep at least some of the core values they had before the flip. The above holds true for any dominant component based market, and this paper focus its attention on the perfect social market model, which makes the following questions relevant: How does a general perfect social market paradigm evolution model is expected to work? The cases of expanding social markets, of saving social markets from collapse, and the case of the fall of social markets due to binding economic sustainability pressures. Key concepts Perfect markets, imperfect markets, perfect social markets, imperfect social markets, externality neutrality assumption, binding economic sustainability gaps, paradigm evolution, dominant paradigm, market expansion, market collapse, fully fixing markets, partially fixing markets, paradigm shift, paradigm flip, perfect paradigm shift, perfect paradigm flip, imperfect paradigm shift, imperfect paradigm flip
... If we have a dominant component based perfect market of the form M = X y , where X is the dominant component driving the market; and "y" is the passive component, then all possible evolutions routes if under externality pressures available to this market M can be summarized as previously indicated (Muñoz 2021) as it is done in Figure 1 Therefore, Figure 1 above summarizes all possible paradigm evolution routes for all possible dominant component based perfect markets. In other words, the paradigm evolution routes for perfect market M in Figure 1 above hold for any dominant component based perfect market such as the perfect social market or the perfect economic market or the perfect green market or the perfect red market, and so on. ...
Article
Full-text available
Abstract If we place a general perfect market evolution model under externality neutrality assumptions, we can extract the environment under which a dominant component perfect markets operate, which allows for the possibility of forever growth and no collapse. However, if we place it under a framework of no externality neutrality assumption, then the model shows limits to growth and the possibility of collapse. And if the risk of collapse is real, the dominant component market model can either be saved or it can collapse if it cannot be saved. The saving mechanism allows for either a full fix or just a patch, but it all depends on whether or not there are paradigm shift knowledge gaps as well as political and academic will. If the market cannot be saved, it will flipped perfectly or imperfectly to opposite and inverse opposite forms, and if possible they will flip towards a market form that still allow them to keep at least some of the core values they had before the flip. The above holds true for any dominant component based market, and this paper focus its attention on the perfect red market model or perfect socially friendly capitalism, which makes the following questions relevant: How does a general perfect red market paradigm evolution model is expected to work? The cases of expanding red markets, of saving red markets from collapse, and the case of the fall of red markets due to binding environmental sustainability pressures. Key concepts Perfect markets, imperfect markets, perfect red markets, imperfect red markets, externality neutrality assumption, binding environmental sustainability gaps, paradigm evolution, dominant paradigm, market expansion, market collapse, fully fixing markets, partially fixing markets, paradigm shift, paradigm flip, perfect paradigm shift, perfect paradigm flip, imperfect paradigm shift, imperfect paradigm flip Resúmen Si colocamos un modelo general de evolución de mercado perfecto bajo supuestos de neutralidad de externalidades, podemos extraer el entorno en el que operan los mercados perfectos de componentes dominantes, lo que permite la posibilidad de un crecimiento permanente y sin colapso. Sin embargo, si lo ubicamos bajo un marco de supuesto de no neutralidad de externalidades, entonces el modelo muestra límites al crecimiento y la posibilidad de colapso. Y si el riesgo de colapso es real, el modelo de mercado de componentes dominantes puede salvarse o colapsar si no puede salvarse. El mecanismo de salvación permite una solución completa o solo un parche, pero todo depende de si existen o no lagunas en el conocimiento del cambio de paradigma, así como voluntad política y académica. Si el mercado no se puede salvar, cambiará perfecta o imperfectamente a formas opuestas e inversamente opuestas, y si es posible, cambiarán hacia una forma de mercado que aún le permita mantener al menos algunos de los valores centrales que tenían antes del cambio. Lo anterior es válido para cualquier mercado basado en componentes dominantes, y este documento centra su atención en el modelo de mercado rojo perfecto o capitalismo socialmente amigable perfecto, lo que hace que las siguientes preguntas sean relevantes: ¿Cómo se espera que funcione un modelo general de evolución del paradigma del mercado rojo perfecto? Los casos de expansión de los mercados rojos, de salvar los mercados rojos del colapso y el caso de la caída de los mercados rojos debido a las presiones serias de sostenibilidad ambiental.
... It has been highlighted that traditional market thinking under externality neutrality assumptions is based on the idea that a dominant market component drives economic activity without producing externalities as under externality neutrality assumptions a market M can expand for ever (Muñoz 2021a), a situation that can be summarized in the following model: ...
Article
Full-text available
Abstract When we link dominant component based theory under externality neutrality assumptions and under no externality neutrality assumptions with perfect market variability theory we can identify the four structures each perfect market can have in terms of equality and freedom, namely the fully unsustainable market structure, the dictatorship based market structure, the liberalism based market structure, and the true perfect market structure. And this raises the question: How to highlight the four market structures that all dominant component markets can have in terms of equality and freedom variability when under externality neutrality assumptions and without them? Among the goals of this paper is to provide a detailed answer to the question above. Key concepts Perfect markets, perfect market variability, true perfect market, true imperfect market, fully unsustainable market, dictatorship based markets, liberalism based markets, true imperfect markets type 1, true imperfect markets type 2, market equality, market freedom, Adam Smith’s perfect market, Karl Marx’s red socialism market, market structure. Resúmen Cuando vinculamos la teoría basada en el componente dominante bajo supuestos de neutralidad de externalidades y bajo supuestos sin neutralidad de externalidades con la teoría de la variabilidad de mercados perfectos, podemos identificar las cuatro estructuras que cada mercado perfecto puede tener en términos de igualdad y libertad, como la estructura de mercados totalmente insostenibles, la estructura de mercados basados en la dictadura, la estructura de mercados basados en el liberalismo, y la estructura de mercado perfectos verdaderos. Y esto plantea la pregunta: ¿Cómo resaltar las cuatro estructuras de mercado que todos los mercados con componentes dominantes pueden tener en términos de variabilidad de igualdad y de libertad cuando están bajo supuestos de neutralidad de externalidades y sin ellos? Uno de los objetivos de este documento es proporcionar una respuesta detallada a la pregunta anterior.
... If on the other hand, stakeholders failed to act to save it, the market will collapse and flip to inverse opposite models, perfectly or imperfectly or will flip towards authoritarianism. It has been pointed out recently that when externality threats affecting the working of a market become binding threats the market affected has then five evolution routes available for action (Muñoz 2021a): i) The perfect paradigm shift route; ii) the imperfect paradigm shift route; iii) the perfect flip to the inverse opposite paradigm route; iv) the imperfect flip to the inverse opposite paradigm route; and v) the authoritarianism flip route. ...
Article
Full-text available
Abstract Markets that expand continuously under externality neutrality assumptions reach sooner or later a point of possible collapse when the assumptions turns out to be wrong as suddenly the threat that was assumed away at the beginning now becomes a binding current threat to the survival of the market, and this is true if we are dealing with environmental externality neutrality assumptions or with social externality neutrality assumption or with socio-environmental externality neutrality assumptions. When the market is under a binding threat, it can be saved if we take action to fix the relevant binding externality problem affecting it or it can be patched. If on the other hand, stakeholders failed to act to save it, the market will collapse and flip to inverse opposite models, perfectly or imperfectly or it will flip towards authoritarianism. The above holds true for any market including the traditional market, in this case the traditional market under binding socio-environmental externality threats. This paper focuses on the socio-environmental externality threat incrusted in the perfect traditional market model due to the socio-environmental externality neutrality assumption; and the failure to fix it or patch it to prevent the perfect traditional market model collapse when under binding socio-environmental externality threat. And this raises the questions, which are the paradigm evolutions routes available in the case perfect capitalism is brought down by binding socio-environmental sustainability gap pressures? What is the nature of the market structure associated with each of those routes? Among the goals of this paper is to provide answers to these questions. Key concepts Sustainability, perfect markets, imperfect markets, sustainability markets, externality management markets, sustainability gap, paradigm fix, paradigm patch, paradigm shift, perfect paradigm flip, imperfect paradigm flip, dominant paradigm, paradigm evolution, traditional market, sustainability market, socio-environmental externality based market, authoritarianism based market, perfect socio-environmental market, imperfect socio-environmental market. Resúmen Los mercados que se expanden continuamente bajo supuestos de neutralidad de externalidades llegan tarde o temprano a un punto de posible colapso cuando los supuestos resultan ser incorrectos ya que de repente la amenaza que se asumió al principio irrelevante ahora se convierte en una amenaza actual seria para la supervivencia del mercado, y esto es cierto si estamos tratando con supuestos de neutralidad de externalidad ambiental o con supuestos de neutralidad de externalidad social o con supuestos de neutralidad de externalidad socio-ambiental. Cuando el mercado está bajo una amenaza inescapable, se puede salvar si tomamos medidas para solucionar el problema de externalidad seria relevante que lo afecta o se puede reparar. Si, por otro lado, las partes interesadas no actuaron para salvarlo, el mercado colapsará y cambiará a modelos opuestos inversos, de manera perfecta o imperfecta o se inclinará hacia el autoritarismo. Lo anterior es válido para cualquier mercado, incluido el mercado tradicional, en este caso el mercado tradicional bajo amenazas inescapables de externalidades socio-ambientales. Este artículo se centra en la amenaza de la externalidad socio-ambiental incrustada en el modelo de mercado tradicional perfecto debido al supuesto de neutralidad de la externalidad socio-ambiental; y el hecho de no corregirlo o parchearlo para evitar el colapso del modelo de mercado tradicional perfecto cuando se encuentra bajo una amenaza de externalidad socio-ambiental seria. Y esto plantea las preguntas, ¿cuáles son las rutas de evolución de paradigmas disponibles en el caso de que el capitalismo perfecto sea derribado por las presiones serias de la brecha de sostenibilidad socio-ambiental? ¿Cuál es la naturaleza de la estructura del mercado asociado con cada una de esas rutas? Uno de los objetivos de este documento es proporcionar respuestas a estas preguntas.
... If on the other hand, stakeholders failed to act to save it, the market will collapse and flip to inverse opposite models, perfectly or imperfectly or will flip towards authoritarianism. It has been pointed out recently that when externality threats affecting the working of a market become binding threats the market affected has then five evolution routes available for action (Muñoz 2021a): i) The perfect paradigm shift route; ii) the imperfect paradigm shift route; iii) the perfect flip to the inverse opposite paradigm route; iv) the imperfect flip to the inverse opposite paradigm route; and v) the authoritarianism flip route. ...
Article
Full-text available
Abstract Markets that expand continuously under externality neutrality assumptions reach sooner or later a point of possible collapse when the assumptions turns out to be wrong as suddenly the threat that was assumed away at the beginning now becomes a binding current threat to the survival of the market, and this is true if we are dealing with environmental externality neutrality assumptions or with social externality neutrality assumption or with socio-environmental externality neutrality assumptions. When the market is under a binding threat, it can be saved if we take action to fix the relevant binding externality problem affecting it or it can be patched. If on the other hand, stakeholders failed to act to save it, the market will collapse and flip to inverse opposite models, perfectly or imperfectly or it will flip towards authoritarianism. The above holds true for any market including the traditional market, in this case the traditional market under binding social externality threats. This paper focuses on the social externality threat incrusted in the perfect traditional market model due to the social externality neutrality assumption; and the failure to fix it or patch it to prevent the perfect traditional market model collapse when under binding social externality threat. And this raises the questions, which are the paradigm evolutions routes available in the case perfect capitalism is brought down by binding social sustainability gap pressures? What is the nature of the market structure associated with each of those routes? Among the goals of this paper is to provide answers to these questions. Key concepts Sustainability, perfect markets, imperfect markets, sustainability markets, externality management markets, sustainability gap, paradigm fix, paradigm patch, paradigm shift, perfect paradigm flip, imperfect paradigm flip, dominant paradigm, paradigm evolution, traditional market, red market, social externality based market, authoritarianism based market, perfect social market, imperfect social market.
... If on the other hand, stakeholders failed to act to save it, the market will collapse and flip to inverse opposite models, perfectly or imperfectly or will flip towards authoritarianism. It has been pointed out recently that when externality threats affecting the working of a market become binding threats the market affected has then five evolution routes available for action (Muñoz 2021a): i) The perfect paradigm shift route; ii) the imperfect paradigm shift route; iii) the perfect flip to the inverse opposite paradigm route; iv) the imperfect flip to the inverse opposite paradigm route; and v) the authoritarianism flip route. ...
Article
Full-text available
Abstract Markets that expand continuously under externality neutrality assumptions reach sooner or later a point of possible collapse when the assumptions turns out to be wrong as suddenly the threat that was assumed away at the beginning now becomes a binding current threat to the survival of the market, and this is true if we are dealing with environmental externality neutrality assumptions or with social externality neutrality assumption or with socio-environmental externality neutrality assumptions. When the market is under a binding threat, it can be saved if we take action to fix the relevant binding externality problem affecting it or it can be patched. If on the other hand, stakeholders failed to act to save it, the market will collapse and flip to inverse opposite models, perfectly or imperfectly or it will flip towards authoritarianism. The above holds true for any market including the traditional market, in this case the traditional market under binding environmental externality threats. This paper focuses on the environmental externality threat incrusted in the perfect traditional market model due to the environmental externality neutrality assumption; and the failure to fix it or patch it to prevent the perfect traditional market model collapse when under binding environmental externality threat. And this raises the questions, which are the paradigm evolutions routes available in the case perfect capitalism is brought down by binding environmental sustainability gap pressures? What is the nature of the market structure associated with each of those routes? Among the goals of this paper is to provide answers to these questions. Key concepts Sustainability, perfect markets, imperfect markets, sustainability markets, externality management markets, sustainability gap, paradigm fix, paradigm patch, paradigm shift, perfect paradigm flip, imperfect paradigm flip, dominant paradigm, paradigm evolution, traditional market, green market, environmental externality based market, authoritarianism based market, perfect environmental market, imperfect environmental market. Resúmen Los mercados que se expanden continuamente bajo supuestos de neutralidad de externalidades llegan tarde o temprano a un punto de posible colapso cuando los supuestos resultan ser incorrectos ya que de repente la amenaza que se asumió al principio neutral ahora se convierte en una amenaza actual seria para la supervivencia del mercado, y esto es cierto si estamos tratando con supuestos de neutralidad de externalidad ambiental o con supuestos de neutralidad de externalidad social o con supuestos de neutralidad de externalidad socio-ambiental. Cuando el mercado está bajo una amenaza de externalidad seria, este se puede salvar si tomamos medidas para corregir el problema de externalidad seria relevante que lo afecta o se puede reparar. Si, por otro lado, los tomadores de decisiones no actúan para salvarlo, el mercado colapsará y cambiará a modelos opuestos inversos, de manera perfecta o imperfecta o se inclinará hacia el autoritarismo. Lo anterior es válido para cualquier mercado, incluido el mercado tradicional, en este caso el mercado tradicional bajo amenazas serias de externalidades ambientales. Este artículo se centra en la amenaza de la externalidad ambiental incrustada en el modelo de mercado tradicional perfecto debido al supuesto de neutralidad de la externalidad ambiental; y el hecho de no corregirlo o parchearlo para evitar el colapso del modelo de mercado tradicional perfecto cuando se encuentra bajo una amenaza de externalidad ambiental seria. Y esto plantea las preguntas, ¿cuáles son las rutas de evolución de paradigmas disponibles en el caso de que el capitalismo perfecto sea derribado por las presiones serias de la brecha de sostenibilidad ambiental? ¿Cuál es la naturaleza de la estructura de los mercados asociados con cada una de esas rutas? Uno de los objetivos de este documento es proporcionar respuestas a estas preguntas.
Article
Full-text available
Abstract If we transform a general perfect market evolution model under externality neutrality assumptions into a general imperfect market evolution model, we can extract the environment under which a dominant component imperfect market operates, which allows for the possibility of forever growth and no collapse. However, if we place this imperfect market under a framework of no externality neutrality assumption, then the model shows limits to growth and the possibility of collapse. And if the risk of collapse is real, the dominant component imperfect market model can either be saved or it can collapse if it cannot be saved. The saving mechanism allows for either a full fix or just a patch, but it all depends on whether or not there are paradigm shift knowledge gaps together with political will and academic will. If the imperfect market cannot be saved, it will flip perfectly or imperfectly to opposite or inverse opposite forms, and if possible it will flip towards a markets form that still allow it to keep the same legal and political loyalty structure it had before the flip. The above holds true for any dominant component based imperfect market, which makes the following question relevant: How does the general imperfect paradigm evolution model is expected to work? The cases of expanding imperfect markets, of saving imperfect markets from collapse, and of the fall of imperfect markets due to binding sustainability gap pressures. Among the goals of this paper is to provide a detailed answer, both analytically and graphically, to this question. Key concepts Perfect markets, imperfect markets, externality neutrality assumption, binding sustainability gaps, paradigm evolution, dominant paradigm, market expansion, market collapse, fully fixing markets, partially fixing markets, paradigm shift, paradigm flip, perfect paradigm shift, perfect paradigm flip, imperfect paradigm shift, imperfect paradigm flip
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Abstract It can be said that a perfect market under binding externality pressures is the one where a dominant component rules while subject to sustainability gap pressures. For example, the perfect traditional market under binding social or environmental or socio-environmental sustainability gap pressures is the one where the dominant economy component rules while subjected to those binding sustainability gap pressures. However, there are many other perfect market structures possible beside the perfect traditional market such as the perfect social market or the perfect eco-economic market and so on. Yet not much seems to be written about perfect market variability under binding externality pressures to facilitate a view beyond perfect market thinking and competition and externality neutrality assumptions. And this raises the question, how perfect market variability based on component dominance and binding externality pressures looks like? Among the goals of this paper is to provide an overview of perfect market variability aimed at providing an answer to that question. Key concepts Sustainability, perfect markets, imperfect markets, dominant paradigm, perfect market variability, the perfect economy market, the perfect social market, the perfect environmental market, the perfect red market, the perfect green market, the perfect socio-environmental market, the perfect sustainability market, authoritarianism based market, externality, binding sustainability gap. Resúmen Se puede decir que un mercado perfecto bajo presiones serias de externalidades es aquel en el que un componente dominante gobierna mientras está sujeto a presiones de brecha de sostenibilidad. Por ejemplo, el mercado tradicional perfecto bajo presiones serias de brecha de sostenibilidad social o ambiental o socio-ambiental es aquel en el que el componente de la economía dominante gobierna mientras está sujeto a esas presiones serias de brecha de sostenibilidad. Sin embargo, hay muchas otras estructuras de mercados perfectos posibles además del mercado tradicional perfecto, como por ejemplo el mercado social perfecto o el mercado eco-económico perfecto, etc. A pesar de esto, no parece que se haya escrito mucho sobre la variabilidad de mercados perfectos bajo presiones serias de externalidades para facilitar una visión más allá del pensamiento de mercado tradicional perfecto y de la competición perfecta y de los supuestos de neutralidad de las externalidades. Y esto plantea la pregunta: ¿cómo se puede representar la variabilidad de mercados perfectos basada en componente dominante y las presiones serias de las externalidades? Uno de los objetivos de este documento es proporcionar una descripción general de la variabilidad de mercados perfectos con el objetivo de dar una respuesta a esa pregunta.
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It can be said that pareto optimality thinking works in parallel fashion across markets as it is associated one to one with the structure of the price of each market, which in turn is linked to specific production and consumption bundles in those markets. For example, pareto optimality in sustainability markets is associated with the structure of the sustainability market price, which is linked to sustainability based production and consumption bundles. In traditional markets, pareto optimality is associated with the structure of the traditional market price, which is linked to traditional production and consumption bundles. It can also be said that pareto optimality points can be linked by a pareto optimality sustainability line, which indicates two things i) the existence of higher and lower level pareto optimality points; and ii) the direction of optimality when we go from higher level markets to lower level markets or vice versa. For example, linking sustainability based pareto optimality with traditionally based pareto optimality through this pareto optimality sustainability line helps see that when the traditional markets were created we created socio-environmental sustainability gaps in the process that separates them from sustainability markets, and when traditional markets expand, they also expand this embedded socio-environmental sustainability gap as they move away from sustainability markets. The 2012 shift from traditional market thinking to green market thinking suggest a shift from traditional pareto optimality thinking to green pareto optimality thinking as green markets are higher level responsibility markets. If we would have shifted to sustainability market thinking instead then, that would have required a shift from traditional pareto optimality to sustainability based pareto optimality. The knowledge to go beyond traditional pareto optimality thinking and to understand the nature and implications of green market expansions or of sustainability market expansions or of any other possible type of market expansions is not yet here so we cannot link it to what we know about traditional market expansions. Hence, there is a need to close this type of paradigm shift knowledge gap. And a good way to start is by asking relevant questions such as how can the thinking behind sustainability based market expansions and traditional market based economic expansions be contrasted using pareto optimality thinking? How are these expansions linked to sustainability gap dynamics? What would be the resulting optimality point if we correct the traditional market optimality point to account for social externalities only or to account for environmental externalities only or to account for both types of externalities at the same time? Among the goals of this paper is to provide an answer to the questions posed above.
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It can be said that all market paradigms have a knowledge base that supports their model structure, their choice structure, and their price structure. We know that there are lower level market paradigms and higher level market paradigms. It can be said that the higher level the market is the higher level its model structure, its choice structure and its price structure are. According to paradigm death and shift expectations we expect that after death lower level market paradigm will shift individually to or will merge if in groups into higher level markets in order to preserve their core values. And when they shift or merge they create paradigm shift knowledge gaps, which can affect in different ways the expected evolution of market paradigms as decision makers do not have the correct tools and understanding needed to properly set up and manage a new market paradigm when paradigm shifts are taking place. In other words, the creation of knowledge gaps brings along different types of implementation problems. For example, under knowledge gaps decision makers may mishandle expected paradigm shifts as knowledge gaps may make it impossible if not difficult for decision makers to set up properly higher level market structures and supporting institutions or knowledge gaps may lead them to see market patching as a solution when the problem is not yet fixed or knowledge gaps can lead decision makers to flip the model under sustainability pressures and take the structure of another lower level model that has a knowledge base as they cannot see the way to manage the shift from the lower level market to the higher level market. Yet not much is written about how paradigm shift knowledge gaps come along and how they may affect the proper way to handle or manage expected paradigm evolutions paths. And this raises the question, how are paradigm shift knowledge gaps created? In which ways can they lead to the mishandling of expected paradigm shifts?
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We can look at markets in a general way as the place where producers and consumers exchange freely products and services generating in the process important production and consumption externalities. The way we treat those important externalities determines not just the model structure, the price structure, the choice structure, and cost structure of each market, but also the associated market illusions under which they operate as there is a direct link between market structure and market illusion. For example, the way Adam Smith treated social and environmental externalities determined the structure of his traditional market model as well as the nature of the traditional market illusion; and the way Karl Marx treated economic and environmental externalities defined the structure of the red socialism model as well as the nature of the red socialism market illusion. Among the goals of this paper are to provide an overview of all possible types of markets based on their specific treatment of externalities as well as to highlight the specific market illusion under which each of them operates. Resúmen Podemos mirar a los mercados de manera general como el lugar donde los productores y consumidores intercambian libremente productos y servicios generando en el proceso importantes externalidades de producción y consumo. La forma en que tratamos esas externalidades importantes determina no solo la estructura del modelo, la estructura de precios, la estructura de opciones disponibles y la estructura de costos de cada mercado, sino que también determina las ilusiones de mercado asociadas bajo las cuales esos modelos operan, ya que existe un vínculo directo entre la estructura de mercados y las ilusiones de esos mercados. Por ejemplo, la forma en que Adam Smith trató las externalidades sociales y ambientales determinó la estructura de su modelo de mercado tradicional, así como la naturaleza de la ilusión tradicional del mercado; y la forma en que Karl Marx trató las externalidades económicas y ambientales definió la estructura del modelo del socialismo rojo, así como la naturaleza de la ilusión del mercado del socialismo rojo. Entre los objetivos de este documento se encuentran proporcionar una visión general de todos los tipos posibles de mercados en función de su tratamiento específico de las externalidades, así como resaltar la ilusión específica del mercado en el que opera cada uno de ellos.
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Abstract It can be said that the traditional market is a free market that brings together traditional producers(K) and traditional consumers(L) under the assumption of full social and environmental externality neutrality. And this create a circular traditional economy illusion, the idea that production activity can take without generating production and consumption externalities. The fact that the social and environmental externalities associated with the traditional market are real leads to a disconnect between social and environmental externalities and traditional market pricing. In order to correct this disconnect, the 1987 Brundtland Commission recommended the use of sustainable development thinking, which was the wrong recommendation since the externality problem affecting the traditional market was and is a sustainability issue, not a sustainable development issue. There were 3 possible corrections to this sustainability problem: i) a full social and environmental externality correction or sustainability fix; ii) a partial correction through green markets or an environmental sustainability fix; and iii) a partial correction through red markets or a social sustainability fix. The discussion above raises some interesting questions depending of the type of fix that is recommended. With respect to the first possibility, the sustainability fix recommendation, the answer of how it would have looked like was recently shared in detail graphically and analytically(Muñoz 2020b). With respect to the second possibility, the question is how the shift from the traditional market model of Adam Smith towards green markets would have looked like had the 1987 Brundtland Commission recommended then an environmental sustainability fix? The main goal of this paper is to provide an answer to this question. Abstracto Se puede decir que el mercado tradicional es un mercado libre que reúne a los productores tradicionales(K) y a los consumidores tradicionales (L) bajo la suposición de una neutralidad total de la externalidad social y ambiental. Y esto crea la ilusión económica tradicional circular, la idea de que la actividad de producción puede ocurrir sin generar externalidades de producción y de consumo. El hecho de que las externalidades sociales y ambientales asociadas al mercado tradicional son reales conduce a una desconexión entre las externalidades sociales y ambientales y los precios tradicionales del mercado. Para corregir esta desconexión, la Comisión Brundtland de 1987 recomendó el uso del pensamiento de desarrollo sostenible, la cual fue y es la recomendación equivocada, ya que el problema de la externalidad que afecta al mercado tradicional fue y es una cuestión de sostenibilidad, no de desarrollo sostenible. Habían 3 correcciones posibles para solucionar este problema de sostenibilidad: i) una corrección completa de externalidad social y ambiental o una corrección de sostenibilidad; ii) una corrección parcial a través de mercados verdes o una corrección de sostenibilidad ambiental; y iii) una corrección parcial a través de mercados rojos o una corrección de sostenibilidad social. La discusión anterior plantea algunas preguntas interesantes dependiendo del tipo de solución que se recomienda. Con respecto a la primera posibilidad, la recomendación de solución de sostenibilidad, la respuesta de cómo se habría visto se compartió recientemente en detalle de manera gráfica y analítica (Muñoz 2020b). Con respecto a la segunda posibilidad, la pregunta es ¿Cómo habría sido el cambio de modelo del mercado tradicional de Adam Smith hacia los mercados verdes si la Comisión Brundtland de 1987 hubiera recomendado una corrección de sostenibilidad ambiental? El objetivo principal de este documento es proporcionar una respuesta a esta pregunta.
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It can be said that any non-full sustainability market requires some form of cost externalization to exist and persist as maximization is the rule. The type of cost externalization on which a market model depends on determines the market structure and the price structure of that market as well as its level of responsibility. As cost externalization tends to full cost externalization, the market structure and the price structure tend towards the market structure and price structure of full unsustainability: this is a world of fully irresponsible markets. On the other hand, as the cost externalization tends to zero the market structure and price structure of markets tend towards the market structure and the price structure of sustainability markets: this is a world of fully responsible markets. Therefore, there is a need to understand how cost externalization is linked to market structure and price structure so as to be able to figure out for example how cost externalization is linked to distorted market prices or linked to the nature of paradigm mergers or linked to the nature of sustainability markets. Among the goals of this paper are: a) to link cost externalization to all possible market structures and price structures using qualitative comparative means; and b) to show that only when there is no cost externalization there are sustainability markets and sustainability prices.
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When paradigm shifts they shift from free market to free market or from perfect market to perfect market to maintain or respect the theory-practice consistency principle. The necessary and sufficient condition for a perfect shift to take place is the internalization of externality costs in the pricing mechanism of the market. And when a shift takes place four things are expected to happen at the same time: a model structure shift, a price structure shift, a choice structure shift, and a knowledge structure shift creating in the process model, price, choice, and knowledge gaps. In 2012 there was a paradigm shift from perfect traditional markets to perfect green markets, which raises a very important question: If going from free markets to free markets is the science based approach: What is then the model structure, price structure, choice structure and the knowledge structure and related gaps of 2012 paradigm shift from perfect traditional market to perfect green market thinking?. The main goal of this paper is to provide an answer to this question.
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The history of science is one based on revolutions and discourse where a new paradigm arrives challenging the status quo with the promise of progress and if the evidence is there to justify paradigm shift on the basis of that promise the consensus will be to shift paradigms. Apparently the shift from Adam Smith’s traditional market paradigm to the eco-economic or green market paradigm formalized in 2012/RIO conference meets all the requirements for paradigm shift listed above, but it was based on the accumulated environmental evidence for change only (e.g. pollution and degradation) leaving out the accumulated social evidence for change (e.g. poverty and inequality), but a progress towards sustainability none the less. Not much seems to be written from the point of view of sustainability about paradigm changes such as paradigm death, paradigm shift and paradigm mergers. General goals of this paper are a) to introduce a sustainability inversegram that can be used to state paradigm death and shift expectations under win-win and under no win-win situations; and b) to use this expectation framework to show the structure before and after the paradigm shift from the traditional market to the green market under win-win eco-economic conditions.
The Wealth of Nations, W. Strahan and T
  • Adam Smith
Smith, Adam, 1776. The Wealth of Nations, W. Strahan and T. Cadell, London, UK.