Scale

To grasp how value is produced, think about an olive farm. Let's say we have a farm with 100 trees, and each tree produces a gallon of olive oil every year. If each gallon gives a profit of $20, then each tree generates $20 annually, and the whole farm produces $2,000 from selling the oil. This $20 from a gallon represents the value of a single product. However, since the tree consistently produces olive oil over many years, its worth isn't just that $20 but represents a continuous stream of products. Similarly, when we consider the value of the entire farm, it's not just the sum of the current year's profits ($2,000) but the accumulation of profits from the continuous yield of olive oil over time.

In the financial world, the future stream of value or profit from an asset is essential. For instance, if our olive trees are predicted to increase their yield in the future, their worth goes up. Conversely, if something threatens their yield, their value decreases. Investors use this concept when purchasing assets like homes or stocks. Let's say you invest in a house to rent out. The monthly rent is similar to the yearly yield of the olive tree. Over time, you expect the combined rent and the potential sale of the house in the future to be profitable. The entire system revolves around predicting the future stream of value. A larger scale, like a big company or an entire economy, can significantly amplify this value due to reduced risks and increased diversity. This principle of scale is seen everywhere, from our physical universe to our economies. The key is unity and diverse collaboration, ensuring growth and prosperity without harmful over-expansion, similar to how cells function in our body.

Network Effects

Network effects describe a phenomenon where the value of a network rises as more users join it. Think of it like Facebook: the more users it has, the more beneficial it becomes to its members. Similarly, a service like Netflix becomes more attractive as its customer base grows, allowing it to offer a wider range of content. In essence, the larger the user base, the more valuable and convenient the network becomes. Conversely, motivations drive our actions. While fear can prompt immediate responses, it's not sustainable as a long-term motivator. God's teachings in the Book of Malachi emphasize love and positive motivations over fear-based ones. Fear might change direction temporarily, but love maintains a steadfast path. Economically, positive motivations lead to more robust results. For instance, owners, driven by passion and commitment, outperform slaves, motivated by fear.

Network effects don't just apply to social networks; they have massive implications in the economic realm. Companies like Apple and Facebook have harnessed these effects to boost their values immensely. Businesses have been shifting to subscription models to capitalize on consistent revenue streams, further magnified by network effects. This is why giants like Apple command such high valuations. However, an economy truly thrives when its citizens are directly benefiting and are motivated to foster growth. In ancient Israel, God's design was for an economy that benefited its citizens directly, not just the governing body. This direct ownership meant that they had a vested interest in its growth and prosperity. Modern economies often miss this point, leading to a reliance on incentives to drive growth. In contrast, God’s design promoted decentralized action, where every individual could prosper.

Growth Rate

Historical analysis of Israel reveals a strategic underpinning to its rapid economic progression. Initially, the nation's swift territorial expansion played a role. Yet, the longevity of its growth was bolstered by an impressive birth rate, effectively doubling the male population over four centuries. This demographic boost amplified the nation's agricultural production, thereby elevating its overall economic stature. However, understanding the economics of growth requires diving into the nuances of growth rate, which can be positive or negative. The larger the positive growth rate, the more valuable future prospects become. Conversely, a negative growth rate reduces value, albeit not as intensely. This phenomenon owes its explanation to the principle of compounding, leading to surprising, sometimes non-intuitive results, making positive growth exponentially more impactful than equivalent negative declines.

Using a simplified financial example, consider a base amount of $1,000. When this sum grows by 10% monthly for a year, its monthly value reaches $2,853 by year-end due to the compounding effect. However, if the $1,000 decreases by the same 10% monthly, the value by year-end is only reduced to $314. This intriguing outcome demonstrates that a 10% increase has a significantly more profound impact than a 10% decrease. When extended over three years, a consistent 10% monthly growth leads to an astounding $299,127 in product value, showcasing the enormous potential of compounded growth, evident in tech giants like TikTok, which boasted monthly growth rates surpassing 38% between 2019 and 2021. Such rapid growth outstrips even the combined advantages of scale and network effects.

God's command to humanity, as depicted in the Bible, has always inclined towards growth, urging procreation and dominion over Earth. This notion inherently promotes economic growth, primarily via population increase. Israel's biblical economic model reflects this, emphasizing decentralization and unified protocols to facilitate endless scalability. While wisdom and effort would differentiate individual prosperity, the overall economic disparity would be considerably less than today's standards. The endgame of such an economy would see an increasing efficiency, eventually driving down the costs of goods and services. As we observe today's economic structures, it becomes evident that while some elite classes understand the potential of such a system, it directly challenges the interest-driven passive wealth accumulation model, as increased efficiency reduces the need for money.

Decentralized Scale

God’s vision, conveyed through Moses, revolved around a decentralized economic framework anchored on family units. These families, driven by love and reflecting God's essence, were to align harmoniously with neighboring families, forming cohesive communities bonded through shared culture and economy. These communities evolved into tribes, each showcasing unique strengths but unified as a nation by their shared culture and God’s chosen status. Central to this design was the land, owned perpetually by families and immune to permanent loss. The absence of a monarch ensured wealth and power weren't centralized, fortifying Israel against external adversaries who coveted its prosperity. Historically, thriving nations become targets, as their wealth becomes an irresistible lure. Israel, a prosperous land without a king, seemed vulnerable. Yet, its decentralized wealth made conquest challenging. Israel's ancient, decentralized economy, when followed, delivered powerful outcomes, serving as a viable business model today. Distributing economic activity staves off destructive economic black holes, while linking pre-existing resources yields compounded benefits.