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Numerous Interconnections that Cannot Be Reliably Predicted

The purpose of every theory is to simplify reality, and theories in economics are no exception. However, every researcher knows that perfect congruence between theory and practice is seldom found. The current economic theory assumes that each person wishes to maximize his or her personal benefit, and describes a system of relations between consumers, manufacturers, firms, and countries according to that premise.

The theory propounds that each element in the system has a different set of priorities and seeks to achieve the best results for itself. These elements join into more complex systems, such as firms, corporations, markets, and countries that function in a global and integral world. This last element, the global, integral world, is what poses the difficulties in building economic models that consider all the stages of decision making in the chain. This is one reason why the current economic theory is imperfect and limited in its applicability.

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