Feedforward Transaction

In the previous posting I discussed the basic operations of the action of a subsistence human culture.  Since we are considering the ramificiations of Human Action we will ignore other species. While it can be argued that other species show some of the behavior (eg squirrels store nuts for their own future consumption but do not trade) of Human Action that do not show the complete range of the behaviors and for future arguments will not be discussed. This is not a discsussion on biological altruism.

The feedforward control demonstrated the basic principles involved in Human Action. Dissatiafaction exists which motivates action deisgned toward satiation of the dissatisifed mental state. A path is followed in order to achieve this goal. A transaction occurs and after the transaction anothre path is followed. This is correctly modeled using a branch of mathematics called Graph Theory. Graph Theory belongs in the domain of mathamtics called Combinatorics. A basic graph consists of vertices and edges. A directed graph the vertices have arrows. The arrow determine the before and after relationship which can be correlated with time. A cyclic graph is not allowed in this theory, but all graphs must be directed. A transaction is always history even if it is history of the very last moment. The transaction has two values 0 and 1. A value of zero means that no transaction occurs, and a value of 1 means that a transaction did occur. There no indeterminate state of a transaction. The mathematical representation of a transaction is the Dirac Delta functional. A transaction is always voluntary it represents an agreement between a producer and a consumer to have a transaction. The transaction represents the change in state between producer and consumer, even if the source/producer and the sink/consumer are the same actor.

A transaction is the fundamental operation of the Free Market Economy. All human beings motivated by unsatisified desire give reification of their Human Action by participating in the market. The market is nothing more than the set of all transactions. The Free Market is the set of all voluntary transaction between supplier and consumer as represented by the set of all transactions.Transactions are always postivie and integral. The set of all transaction can be put into one to one correspondence with the set of natural numbers and are this denumerable in principle. Profits and satisfied desire are the expected, but not guaranteed outcomes of a transaction.. The producer/seller seeks a profit and the consumer seeks satisifaction. The profit is feed forward into the future as is the satisfaction, even if it is the satisfaction of the next moment.

References:

1. Brief Introduction: http://mathworld.wolfram.com/Graph.html
2. Rigorous Introduction: http://diestel-graph-theory.com/GrTh.html (much thanks for Dr. Diestel's Human Action in making this book, the product of thousand of hours of labor available for free)
3. Human Action: http://www.mises.org/books/humanaction.pdf
4. Money and Credit: http://mises.org/books/moneyandcredit.pdf