Organic Personal Economics

Economic behavior is perhaps best described as the most natural form of interpersonal behavior.  Remember, I’m referring to personal economics not just stock indices, so any exchange of value works.  Status being the most traded commodity in social interactions.  My intent is to convince you that human economics “just works” without any need to control or use coercive force.  It is an automatic balancing feedback loop which corrects itself against objective reality all the time.  One person, or even a large group of people, is unable to compete with such a swarm intelligence.

Consider the law of supply and demand.  While hailed as the fundamental principle of monetary economics, if it’s taught as such then the students will fail to see that the same principle applies in countless other situations.  Supply and demand is simply one instance of a self-correcting system to maximize the gain of the seller by maximizing the value given out to buyers.  The guy who wants the last iPhone the most can prove that quite simply by being prepared to pay the most for it.  If prices are too high, competition drives them down because supply is too high, if they’re too low then supply diminishes, increasing price until an equilibrium is reached.  This same type of system applies to everything from evolution to the water level in a toilet.

I’m going to make an extravagant claim.  I don’t have any problem with vote-buying as a concept.  This is a perfect example of a self-correcting (and therefore adaptive) system- i.e. the market, working within an artificial environment created and manipulated by a government.  The government has created a commodity that did not before exist- votes.  They clearly have personal economics implications on everyone, including within that the fiscal economics effects of voting.  So votes clearly have value.  Everybody has one, and indeed gets another one in each election.  Just as a thought experiment, what would actually happen if vote-buying was completely legit?  Well, you say, the rich people get all the power because they can just pay anyone they like and they’ll vote however their buyers want.  Me: Yeah.  So?  It’s a completely voluntary exchange, obviously the person with the vote in question was only invested in their first choice to the extent they are prepared to be bought.  Proper forms of value for both parties will be created, even if a little creativity is required.  For example, I imagine a third type of commodity would appear- the purchase of a non-vote, cheaper than a positive vote in the opposite direction, but gives voters the feeling of not having helped the enemy.  What about maybe a futures vote market, trading on the value of a vote.  I’m not going to even guess what price the market would find for the average Presidential vote- there’s an absolutely impossible Fermi problem if I’ve ever seen one.  But let’s just say that the going rate is $1,000.  Clearly, buying other peoples’ votes is therefore an expensive proposition, because you need to win or else you pretty much wasted $1k for each ineffective vote.  If you’re part of the ultra-wealthy class, and you stand to gain a ton of money by electing some uber-corrupt politician, I say by all means pay people like me to make that a reality for you.  It’s not going to be cheap, and the more corrupt that politician is, the more you’re going to have to pay me, but I can be bought.  Let’s look at the 2000 election.  I hate Bush with a burning passion, but if he offered to pay me $80,000 to vote for him I’d be on the fence.  If he made it $100,000 then I’m his.  I don’t like him, never agreed to support his Presidency, but unless Gore was prepared to give me some competitive compensation I’d have to go with the $100k.  Of course, at that price the man is completely unelectable.  You can’t pay off, say, ten percent of the country at $100k apiece- that’s 30 million Americans, totaling $3 TRILLION.  Not to mention the fact that every opposing party is going to be using the same tactics, both driving up the price of the otherwise neutral votes and decreasing the number of those votes available.

Going back to the self-correcting system.  If we have the problem of an ultra-rich upper class taking advantage of all the poor people, then the way I see it, allowing those rich people to get value from their money by buying votes seems like a damn good way to even out the class divide.  Think about it.  The poorer you are, smaller amounts of money have a greater amount of proportional value.  That’s why poor people are prepared to work more cheaply.  The same principle applies to the starving man being prepared to pay more for food.  So we have the ultra-rich, interested in a commodity which the poor people will have a large quantity of, in direct proportion to the class inequality currently present.  If we have an extremely unbalanced society where 1% are billionaires and everyone else is broke, we have lots of people prepared to sell their votes to a small number of people with all the resources and motivation to buy lots of votes.  If it’s more equal, we have fewer people with mass-vote-buying capability but at the same time we have fewer people whose votes can be bought cheaply.  Self-correcting.  You can never arrive at a more equal, fair, and free society through centralized control as a Communist would have you believe, because they are ignoring the stark reality of personal economics.  If prices are fixed to be affordable, they’ll disappear and then the good in question will be unavailable- and obviously if they’re too high nobody can afford it.  Centralized control creates self-reinforcing loops increasing the inequality in society.  Letting go of control creates self-correcting loops, decreasing the inequality in society.  This entire mechanic is a product of free choice, in bold because it is damn important.  If you have choice, you will pick the option you prefer.  If you can’t, you don’t.  It truly is that simple.

OK, let’s look at another one.  Crime.  If there is a problem of any kind, then you should have the free choice to respond to that problem in any way that your heart desires, be it retarded or brilliant.  This is really just a specific case of the above example that you should be able to do whatever you want anyway.  In the case of crime, maybe you want to hire a security guard, maybe get an alarm system.  Maybe you think that all the options available are too expensive to be justified for a small risk in your area, I don’t know.  However, what I will tell you, is that there exists a solution which you, yes you, will pick in response to your environment, even if that solution is to do nothing.  If there are no solutions available then the incentive is there for you to go out and make one to sell to other people.  Even if it sucks, there are no other options, so you’ll make an absolute killing.  And then someone else has the fantastic idea of doing the same thing a little cheaper, and random guy #3 says no, I have a better idea, etc. etc. ad infinitum.  If crime is a problem, you will take steps to address that problem while taking into account the exact nature of the issue, the circumstances, and all other factors which might contribute to your own personal utility.  To touch on a current issue, perhaps that means acquiring a weapon of some sort.  If lots of people make that choice then the burglar’s personal economics obviously changes, like it does for all changes in their environment.  If X% of the houses they burglarize contain angry and armed homeowners then Y% of burglars will stop being burglars, or never become burglars in the first place.  The same clearly applies to muggings, bank robberies, and all other types of crime, or even any other problem at all.  The institution in question will simply take steps to safeguard themselves relative to the risk.  If the risk is high because security everywhere else is low then it pays to have lots of security relative to elsewhere.  After that, the institution really doesn’t care, whether everyone else increases their security as well.  However if they do then crime becomes a crazy strategy and falls to negligible levels, and then security can be relaxed.  If you’re guarding priceless artifacts then obviously you need more because the potential payoff is greater.  If it’s just your house you can have less, but if you choose to outfit your house with proximity activated popup autofire machine gun turrets, that’s fine, whatever floats your boat.  However, it may turn out that your popup turrets themselves represent a problem which I need to solve.  So I decide to ask you to not use machine guns to defend your property in case my dog should run into your yard.  Perhaps my gratitude is insufficient payment, and it may be worth my while to give you outright compensation in exchange for depriving you of your gun turrets.  Maybe I go door to door in the neighborhood asking for donations to end the tyranny of the machine gun turret maniac down the street.  Perhaps I just buy a mortar and blow up whatever gun turrets you may happen to purchase.  Not a realistic choice, especially for me, but a possible choice, so why not?  Then you decide that that is just too much and you pay some organization with an economic interest in being arbitrary (DRO perhaps) to mediate our argument, and get you some compensation for the blown up gun turrets.  Hey, maybe you even pay them off.  Then I tell the world that this or that DRO is getting paid off, here’s my proof, their entire enterprise is shot and they are out of business.  Or, you pay all the legal fees and whatnot and I am charged with blowing up your stuff.  I hire someone to represent me, and so on and so forth.  We can do whatever we want, and we aren’t harming anyone but ourselves.  However, the moment you implicate some huge centralized control agent such as the government, our little dispute involves everyone in the entire country to some degree in the form of courts, consistent laws, and taxpayer money.  Get rid of it all- back to a state of nature, baby!

In a state of nature, personal economics rules.  The problem with “state of nature” is some arbitrary connotative association that in order for us to live in a state of nature, we have to be savages who just barely invented the wheel.  There was absolutely nothing wrong with the economy when we were, in fact, savages who just invented the wheel.  Absolutely nothing- it worked perfectly.  There wasn’t a hell of a lot to trade, there was no useful medical technology, and a whole myriad of other problems.  But the personal economics of the day were absolutely without parallel in the modern world.  You could do anything you wanted.  It just so happened that the environment made severe demands upon you which led you to choose certain courses over others due to the risk of death, which nowadays we find barbaric.  You don’t decide if you want to eat pizza or a sandwich and worry about risk of death in either choice.  We are living with the products of thousands of years of personal economics, and the further we go the more we distort those personal economics with coercion.  This is why all countries and empires must fall.  Very simply, an agency of centralized control has, by definition, sufficient power to increase its own control.  If the controlling agency lacks the ability to actually do anything in either direction then it’s not much of a controlling agency, is it?  And, anyone given a choice will pick the one they prefer.  Therefore any group given controlling power must therefore use it maximize their own value.  Depending on everyone involved with coercive power to consistently choose to act against their own interests, indefinitely, is a losing bet.

Allow me to reframe this in a different context.  Consider your average corporation, I often use McDonald’s as a corporate empire example (I never eat their food, but they’re an interesting empire).  Is there corruption in McDonald’s?  More importantly, do you care?  Your choice is very simple: they offer you food products and you offer them money.  Nobody is forcing you to buy their stuff.  After you’ve made your deal, your business is concluded.  What they do with the money is no longer your concern.  They could burn it for all you care, in the same way that you could just burn your Big Mac- they don’t care.  If it should turn out that a couple McDonald’s executives stole $100 million from their company, why should you care?  If the corruption ever gets so bad that their products increase in price, or their employees quit, or whatever else should happen, then that’s just a few more of those factors that go into your decision to buy or not buy.  Even if you work at McDonald’s, you are offered a certain pay in exchange for specific services.  As long as those executives don’t cut into your paycheck one cent, or make your job one whit more difficult, why do you care?  Now compare this situation to the government.  If a couple government officials ran off with $100 million there would be an uproar.  This type of thing actually happens all the time, they just don’t ‘run off with it’ because they have more creative, subtle, and above all effective ways to profit.  But if they out-and-out stole it there would be a storm.  This is because the government applies an interesting abstraction to taxation which decrees that, while you must give them the money or be thrown in jail, you also have some claim over it even after you have given it to them.  This makes it that much easier to take, and also leads you to believe that you aren’t actually being coerced.  A bunch of other people voted to say that your money should be taken and used to do X, but the spin is that you have the power to vote as well so it all evens out.

Of course, if they actually were providing you with value for value then the government would be completely optional in the same way McDonald’s is.  I hate McDonald’s food, but they aren’t going to throw me in jail for not using their services.  The government, however, will.  And they will go so far as to use the money they stole from me to pay for the cops to go get me, the cell they would keep me in, and to line the pockets of the legislators who mandated that I should be jailed.  If the government actually did provide useful services such as law and order, a just court system, health care, and whatever else, then let them make participation completely optional.  Let’s have multiple available citizenship plans.  Liberty service has no taxes, but you agree to abide by the laws and regulations and in return you will be defended by the police and military, and given fire services, hospital service, and a number of other vitals, including 1 vote.  Bronze service costs 10% of your income, you get 2 votes, and several other services such as school services, libraries, etc. plus everything on the liberty plan.  Silver service is 25% of your income, you get 5 votes, free health care, whatever, you get the point.  Gold service is 50% of your income, you get 10 votes and a number of other services to compensate for the increased.  Then there’s Patriot service, for 75% of your income plus optional donation-based bonuses, you get 30 votes plus direct contact rights to your representatives, the option for low-level leadership positions within the government, guaranteed employment, whatever you like.  You don’t have to buy any of them, of course.  But if you want, you can.


2 Responses to “Organic Personal Economics”

  1. police » Blog Archive » Organic Personal Economics Says:

    […] Jagmeet Y. Ghuman wrote an interesting post today onHere’s a quick excerptConsider the law of supply and demand. While hailed as the fundamental principle of monetary economics, if it’s taught as such then the students will fail to see that the same principle applies in countless other situations. … […]

  2. Steven Says:

    An interesting take on the matter. I enjoyed reading most of it.

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