7.24.Constitution: The Economy
“The Market for the Production of Goods, Services, and Information”
2. All Human Life, including both action and inaction consumes Time.
3. By expenditure of Time, Effort, and Resources, humans seek to produce sufficient returns on actions in Time that they survive, prosper, and reproduce.
4. Man can sympathize with the intentions of others.
5. And by cooperating man reduces the Time expended in the production of his wants and needs thereby accumulating Interests.
4. To choose to Cooperate, Man requires a coincidence of wants with Others.
5. To choose whether or not to Cooperate from the options to cooperate available, Man chooses by greatest reward, with the least effort, shortest time, lowest risk, greatest certainty.
6. And because he must always bear costs, or act to gain returns, or conserve to limit his costs to speculate on future opportunities, therefore all costs are opportunity costs between the action or inaction chosen, and that not taken.
7. By cooperating in a division of labor, humans increase their productivity in time further – disproportionately greater than any individual effort.
5. Because of that increase in productivity of Time, we can produce surpluses beyond what we can consume.
6. By the acts of either consuming that production, or exchanging for other goods, services, and information, we determine whether our expenditure of time, resources and effort was wasted, unproductive, mere subsistence, or productive.
7. Whether productive surplus, subsistence, or unproductive waste, is determined by the actions of the consumer’s factual action (buyer) not the producer’s theory or costs (seller).
Wealth is Control of Calories Stored as Time, that may be put to use to encourage others to put their time to your preferred use over the alternative.
We are compensated by the scarcity of our abilities, resources, time, trust, and loyalty.
Consequence is Pareto hierarchy.
1. The only resource we are born with is time: three minutes without air, three days without water, three weeks without food, and three months without shelter.
2. By cooperation in a division of labor we save time.
3. To Cooperate, Man requires a coincidence of wants to choose whether to cooperate
4. … (and if so, to choose among the options to cooperate. )
5. … (All costs are opportunity costs)
6. A division of labor is so disproportionately productive that no other human action can compensate for it.
7. Because of that increase in productivity, we can produce surpluses beyond what we can consume.
8. These surpluses store time saved by the process of cooperation in a division of labor.
9. But we only know we have saved time if others will trade something with us for it. Until then we have consumed and possibly wasted time.
10. When people voluntarily trade, they only do so if they have more after doing so than they did before.
11. Ergo, all value is created during exchange, at which time, time is saved.
12 – And All value consists of saved time.
7 – All goods obtained in trade therefore save time, and demonstrate a creation of value or they would not have been traded.
8 – Any goods obtained by trade therefore serve as a store of value (no matter how small).9 – Money (commodity money) not only stores value but is in universal demand for the simple reason that it is in universal demand.
10 – Money reduces the cost of opportunities to discover a coincidence of wants, because it is both light, divisible, commensurable, and because of the formation of prices ‘production is calculable’, and as a consequence ‘plannable’. And risks can be taken to produce for the market.
some people are not capable of production: whether young, old, infirmed, or unable, or incompetent.
Poverty didn’t evolve, wealth and money evolved.
Poverty is merely a relative assessment of one’s ability to consume.
Hence why indigenous peoples commit suicide in droves once aware of their
Prosperity (wealth) evolved from the division of labor.
Money of some kind (commodities) is necessary to remove frictions to the coincidence of wants in a division of labor.
Prices are necessary to allow planning, complex production of multi-part products and services, credit, and debt.
Non-Commodity Money is necessary to reduce frictions to the coincidence of wants, that limits the expansion of trade.
The Red Queen of Prosperity and the creation of differences.
Disequilibration and correction
(Counsel: “Our only asset is time. We are not wealthier than cavemen. We have simply made all goods, services, and information cheaper, through the division of knowledge and labor using the information system we call money and prices to provide us incentive and sufficient knowledge to choose which opportunities to act on in real time. This is the most important lesson of economics. All understanding of wealth exists in this one paragraph.”)
Regarding The Economy
The Economy refers to the results of human cooperation in the production of goods, services, and information, using time, effort and resources.
The Discipline of Economics consists in the study of demonstrated human behavior in the pursuit of the means of creating, maintaining, and improving returns on time, effort, and resources.
The discipline of Microeconomics consists of the study the behaviour of individuals and organizations, and the making decisions regarding the allocation of scarce resources and the interactions among these individuals and organizations.
The Discipline of Macroeconomics consists in the study of the aggregate performance of economic networks of specialization (“sectors”); the interaction between those sectors, and the consequences of the economy as a whole: the consequences of microeconomic action.
The discipline of Political Economy consists in the study of demonstrated human behavior, for the purpose of making informed choices, whether personal, familial, organizational, or political, given that the information, causes, and consequences necessary for determining those choices, is beyond individual and organizational perception, by the discovery of categories, means of measurement, and general rules of cooperation, and the norms, traditions, procedures, rules, laws and institutions, that are necessary for establishment, preservation, and improvement of the returns on cooperation; and for doing so across a spectrum of favorable to unfavorable conditions.
The Discipline of Economic Policy consists in the study of the means by which the Government, as producer of commons, can use contract, capital, credit, to begin, maintain, or bring to closure, those goods, services, and information that cannot be voluntarily organized by existing incentives extant in the economy independent of government action.
We can seek … to produce information that is purely descriptive (rule of law), a means of improving the institutions (infrastructure) improving insurance, a means of improving production (investment), a means of producing human capital, and a means of deception (consumption).
We can seek a full accounting or we can engage in the fraud of cherry picking.
Spectrum of Action
Just as we exhibit a spectrum of decidability in jurisprudence, we exhibit a spectrum of decidability in economic policy.
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Creation of Economies
Trade has always existed. Marketplaces require concentration of opportunity, and Commercial Markets require production on Speculation, Money, Prices, Property, Contract, and Standards of Weights and Measure. Economies require military, political, financial, and
Economies are created by the use of tradition, norm, law, and force, to incremental suppression of means of parasitism leaving subsistence production and productive cooperation in the markets as the only means of survival.
Predatory, Parasitic, Command, property, entrepreneurship
The Centralizatoin of people to produce opportunty
The centralization of government to suppress local rents and concentrate capital.
The Law and The Economies
(limit people to markets of voluntary exchange )
The Organization of The Economies
Power to law law, pareto to assets, and nash to people
Measuement of Economies (capital, balance sheet), income statement.
The Spectrum of Economies
There exist no steady-state economic, political military, and environmental conditions upon which man can depend for consistency. Therefore both his…. political and economic organizations may depend upon a steady state.
No it just means that the working and middle class and upper middle class market of voluntarily organized production does not account for the various commons produced by the people who make possible the voluntary organization of production (the market) by NOT engaging in criminal, unethical, immoral, and conspiratorial actions – and paying a high cost of doing so. Nor does the middle class market account for the vast extractions performed by the upper and elite class market which appears almost entirely extractive, and of trivial if any value. The working and laboring classes and the underclass contribute mostly by consuming (creating demand), policing each other, policing the commons, and serving in various hazardous capacities. But this is costly for them. And if they have access to consumption but not access to production then the market is ‘failing’ to pay them for what the market needs of them: behaving in the interest of the market. The same is true for the upper and elite classes most of whom benefit from tax revenues of questionable if not negative value, and the financial classes who benefit from our archaic liquidity distribution system in which they actually provide zero if not negative value.(really).
SO that may be a lot to grasp. But the classical liberal economic system – as well as the keynesian and new keynesian, fails to account for externalities paid for by the underclasses, and rents privatized by the upper classes.
The point is not so much that we need markets, but that by cherry picking what we measure, we legitimize the positive externalities of the middle class market, but fail to compensate the lower class market, and unjustly compensate the upper class market.
So it’s not a matter of different law. It’s a matter of insufficiently accounting for the very different inputs and outputs of the different classes.
( … error of mono-economy … same as error of monopoly house of government … )
Regarding Weights and Measures;
( … )
measurability and decidability in govt
1. Fiat Currency consists of shares in the future productivity of the economy, owned by the citizenry;
2. Monetary rents are violations of reciprocity (under conditions…)
1. right to physical currency
1. No Right to appreciation of currency, can exist.
2. Only profits from the investment in increases in productivity, production, distribution, and trade.
3. Only the Treasury may issue Credit Money, and all issued loans or any facsimile thereof, shall do so only under 100% reserve.
Regarding the Treasury
( … )
( … )
( … )
(taxes are returns on successful production of the markets for cooperation)
(fees are to pay a debt incurred in the production of commons)
(burdens are to dissuade consumption or behavior)
(all produce demand for currency)
1. No taxes, fees, regulations or other encumbrances shall be imposed upon the transfer of assets between members of a family by one generation in any direction. Inheritance taxes in all their forms shall be prohibited. The right to families to accumulate and transfer wealth in all its forms between generations shall not be infringed.
2. Any tax on income directly or indirectly shall be apportioned by population density, with more dense higher, and less dense lower, in accordance with the decrease in opportunity costs as population density increases. The practice of penalizing those who are responsible for greater territorial commons per capita shall be prohibited.
3. Whereas Market Participation is more burdensome than Employment:
(a) In compensation for the self sufficiency, overhead, physical risk, and accumulated physical harms, in the conduct of the trades, and so that such men may limit their physical working life before incapacity arrives, all taxes on income up to the median, generated by the men in the physical trades (construction) shall be added to their retirement and health accounts in addition to whatever provisions are provided by Redistributive Benefits.
(b) All sole proprietors, with income up to the one and a half times the median, shall receive a twenty percent discount on their income taxes as compensation for their risk and burden.
(c) All privately held corporations owned entirely by active principles who have encumbered their personal assets to obtain business credit, shall receive a twenty percent discount on all taxes on income up to two and a half times the median income as compensation for their risk and burden.
4. Taxes or fees on Capital Gains from investment sources other than the sale of a primary residence shall be permitted, but all dividends from stock or equivalent shall be paid either by the individual receiving them, or the corporation issuing them, but not both.
(Suggestion to the Governors: Given the behavior of late 20th and 21st C corporation, eliminating taxes on received Dividends is preferable when possible – although discretion necessary given variation in policy.)
( … )
1 – End employment taxation on the laboring classes.
2 – End taxation on sole proprietorships of craftsmen and laborers up to the median income.
3 – End consumer interest on capital purchases (appliances good for 10y+, Homes, Condos) for personal use.
4 – End all taxation on home use of data, electricity, and fuel for non-commercial purposes.
5 – End coercive collective bargaining – restore the market for labor, right to work universally.
6 – End all back tax liability and provide a fresh start.
7 – Allow use of paid taxes as an account without concern for rollover or loss.
(Dividends, and the incentive to limit the bureaucracy because of dividends)
1 – Nationalize Mastercard by purchasing a controlling interest, and issue one card to each citizen over the age of maturity.
2 – Bypass the financial sector when creating liquidity (monetary policy) by direct credit of citizen accounts.
3 – Provide 20% of median income (~12k in current dollars) to all citizens of age of majority, as direct quarterly distribution to said accounts.
4 – These accounts many not be promised or attached in any way for any reason, whatsoever, by any creditor, directly or indirectly as they are for the purpose of insuring the rest of the polity against the poverty of others.
Regarding Mandatory Savings
( … )
1 – All income deposited in such accounts up to a total of five times the median income shall be tax free.
2 – After the retirement account is five times the median income, deposits are no longer necessary.
Regarding Mandatory Work
( … )
1 – No one shall receive Redistributive Benefits without work.
2 – Redistributive Benefits can be lost (denied and permanently denied) by anti-social behavior either by not performing work, performing it consistently poorly, or annoying or creating conflict with coworkers.
1 – Work shall be provisioned primarily to the maintenance and improvement of the commons – from cleaning, to patrolling, to assisting in the orderliness of the people in the commons, to groundskeeping, to maintenance and construction of the physical plant (buildings roads etc).
2 – The people shall find work via technological notification, and application.
The purpose of charity is to provide a market for voluntary insurers of last resort, for that which markets for Private and Common(Public) goods, services, and information, cannot or do not satisfy.
- Charity shall include and be limited to:
Advancement of Condition by Relief of the poor and the distressed.
Advancement of Cooperation by Relief of community tension, deterioration and juvenile delinquency.
Advancement of the Physical Commons by Construction or maintenance of public territories, monuments, buildings, or works
Advancement of Health Research and Care
Advancement of the Physical Sciences.
Advancement of Education.
Advancement of the Fine Arts.
2. Charity shall exclude Advancement and advocacy of Commercial, Political or Religious interests.
(Counsel: The three means of coercion may not hide under the pretense of charity.)
3. Corporations may not engage in charitable contributions.
( Counsel: The practice of transferring shareholder assets for non market activity shall be prohibited.)
3. Charity consists and only consists of voluntary transfers; including organizations of volunteers and the collection and concentration of voluntary contributions. If anyone is compensated for volunteer work it is not a charity but a business and shall be treated as such, and as such shall be treated with suspicion.
4. All charities that collect donations, in whatever form by whatever means, and by whatever label, must transfer 90% of donations directly to recipients, and may not involve intermediary or disintermediating individuals or groups. Every single individual in the chain of money regardless of station shall be liable for adherence to this rule.
(Counsel: most charities, even the best, are largely scams.)
Regarding Domestic Production (practical Autarky)
1. Any work that can be done domestically shall be done domestically, with the sole provision of unbridgeable differences in technical competency. Differences in local prices of labor shall be ameliorated in trade policy. Those industries that require capital investment to produce local returns shall be. the practice of exporting skill and knowledge in exchange for discounted pricing on consumer goods shall be ended.
(note: “Yes i am completely aware of these consequences, and i am also completely aware of how successful the french have been with many of the policies i am recommending here and their success at near economic autarky, and conversely how unsuccessful americans and australians have been”.)