Thursday, August 15, 2013


For all those Nadias of this world who don't know, trade, or said as commerce, or said as authentic economics,  is all relevant matters of mankind regarding the purchase and sale of property. Said another way, it's the theory of trading property for profit. 

It is this right of ownership, which we call property.  Property means ownership and never the thing own. Property is a bundle of rights — Jus Possidendi (right for possession), Jus Utendi (right for using), Jus Abutendi (right for destroying, alienating), Jus Vindicandi (right for recovery when found in the wrongful possession of another.

There is one great, infrangible law that undergirds the whole of trade — the Law of Prices. The Law of Prices holds the winning bids of purchase and sale in the face of offers set the price.

There is one great axiom that goes along with the great law — the Axiom of Profit. The Axiom of Profit holds the sum of sales must at least equal the cost of production otherwise the producer goes to ruin.

Currently, politicians the earth over at the behest political entrepreneurs attempt to override the Law of Prices and the Axiom of Profits.

For the Law of Prices, pols will try to curtail supply through regulatory hurdles or granting outright monopoly. Also, pols will confiscate earnings from some to be given as buying power to others for specific things.

For the Axiom of Profit, pols will subsidize inefficient production, thus the cost to produce and hence keep inefficient capital structures working. Or pols will buy outright, production and do so at inflated prices.

So who are political entrepreneurs? Political entrepreneurs are those who lobby for rules so they can win rather than winning through efficiency.

When politicians subvert the Law of Prices and Axiom of Profit for interested parties, politicians violate the rights inherent in each individual:

  • anyone is right to live
  • anyone is right to live without an overlord
  • anyone is right to pursue that which gives that one pleasure

For those are the only authentic rights and the only authentic basis from which to create rules for anything else. Those inherent rights come from human nature itself, the nature of survival and can lead to the nature of loving.

Yet millions want to parrot the misguided phrase spoken from ignorance — crony capitalism. The horrible, wrong label, crony capitalism, implies there is something wrong with capitalism, when never there is.

Capitalism means living by using capital in pursuit of ongoing exchange of buying power. Said another way, capitalism means living by using products to produce a surplus of another product and hoping to sell that surplus for a price such that the sum of sales exceeds the cost to gain those sales. There is no other kind of capitalism.

The problems always are Crony Politics, Crony Governance and Crony Regulatory Capture.The problem rests in politics and governance rather than free people in pursuit providing wanted products efficiently.

When exchange is not hampered by artificial restriction of supply, nor inflated by artificial giving of buying power, the righteousness of a free market prevails. Only through markets free from Crony Politics, Crony Governance and Crony Regulatory Capture can all benefit owing to efficiency.

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