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Abstract:
When there is paradigm death and shift the issue underlying the sustainability gap that led to the death of this paradigm must be internalized in the price mechanism to arrive to a new higher level perfect market. Otherwise paradigm death and shift takes place, but they shift towards dwarf markets or non-perfect markets. And when you are in a non-perfect market world you are operating outside the scientific method as the externality has not been fully internalized yet in the price mechanism, which is the reason why you need to tax your way out towards perfect markets. Under perfect markets you do not need government intervention. When Karl Marx's red socialism model died in 1991 and shifted towards socially friendly capitalism or red markets they internalized an economic margin plus profits in the price mechanism of the red socialism model to produce at the level of the perfect red market, they internalized capitalism. When Adam Smiths model died in 2012 and shifted towards environmentally friendly capitalism or green markets, they did not internalize a green margin in the price mechanism of traditional markets to produce at the level of the perfect green market. And because of this they are operating at prices lower than green market prices in the form of dwarf green markets such a low carbon or carbon pricing based markets. Because dwarf green markets are not green markets they require heavy ongoing government intervention through an array of green taxes. In other words, green markets work under perfect free market thinking, dwarf green markets do not. Under perfect markets you do not need government intervention; under dwarf markets you do. But Adam Smith's model could have shifted towards perfect red markets too in 2012 had mainstream economists and policy makers wanted so by internalizing social issues in the price mechanism of perfect traditional markets to produce at the level of perfect red markets. Hence, there are two possible ways to shift towards perfect red markets: a) correcting the red socialist model of Karl Marx to reflect economic concerns; and b) correcting Adam Smiths model to reflect social concerns, both corrections leading to the same perfect red market and its perfect red market price. The above highlights the duality of red markets. However, nothing seems to be www.ijaemr.com Page 547 written about red markets neither in the former socialist countries from the red socialism's point of view or in all the old capitalist countries from the economic point of view, which raises the question, what is the structure and implications of the perfect red market? Among the goals of this papers is to provide an answer to this question.
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