GENIUS OF THE PAST SHINES A LANTERN ON TODAY'S DECEPTION. LESSONS ON THE SOCIALISM OF OBAMACARE, PURPORTED FREE TRADE AGREEMENTS AND SOCIALIST REVIVALISM OF GREECE AND EUROPE

Yesterday, in , CONTEMPORARY ECONOMICS. ITS TRUE ORIGINS AND WHY IT IS FAKE, I gave you the first part of an essay, On the Science of Economics and Its Relation to Free Exchange and Socialism, written by the brilliant Henry Dunning MacLeod, an eminent banking lawyer of his day and a man who knew more about trade and reality than all those who have since lived and died who have called themselves "economists".



Today, I give you the second part of the essay, itself in two parts. In the first part, MacLeod is gives a lesson on free trade. This lesson holds true whether such trade is insular or foreign. In the second part, MacLeod is gives a lesson on the foolishness of socialism.

When reading this lesson you could apply his lesson upon Obamacare, an example of regulated insular trade, or any so-called contemporary "free trade agreements," which, long ago, all thinking men recognized as treaties of reciprocity designed to promote particular interests.



Here MacLeod begins to lay down his argument that while free trade is inherently right, any force that interferes in free trade between two is little more than robbery by another name.



And here MacLeod lays down what libertarians would recognize as the non-aggression principle long before 20th century libertarians existed.



And then MacLeod reveals how the interference by legislators in the trade of property to the benefit of favored parties amounts to robbery by other means.



To help the reader understand, MacLeod provides an example.



From here, MacLeod dives into his argument.




Though in other writing, MacLeod finds fault with Adam Smith and his many confused, false beliefs, MacLeod praises Smith for his work on free trade.



MacLeod then describes the rise of the dangerous and harmful doctrine of socialism in France.



MacLeod then reveals how “reciprocity” and “fair trade” are merely protectionism under different names.



MacLeod further exposes socialism.



MacLeod reveals the true meaning of value. It's a ratio.



MacLeod reveals that property known as wealth becomes wealth precisely because of trade and by no other means. Said another way, nothing in itself has value but a value arises from the trade rate as expressed by the ratio of one thing traded for another.



MacLeod reveals how the otherwise smart John Locke blew it when it came to economics.



And then MacLeod reveals the errors of Adam Smith, errors that David Ricardo would repeat and from which Karl Marx derived his entire erroneous theory.



MacLeod shows how David Ricardo erred much like Adam Smith. Ricardo's errors provided the basis for Karl Marx's beliefs.



And here MacLeod connects the Socialists with the fallacies of Adam Smith and David Ricardo.




MacLeod shows how the existence of credit exposes the foolishness of socialist belief.



MacLeod sums up his thoughts here.

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SOCIALIST-COMMUNIST POLITICS IS BACK EN VOGUE IN EUROPE.

Today the socialist-communist party of the Spanish, Podemos, led by Pablo Iglesias, published the main points of their neo-communist manifesto. Iglesias and his Podemos cohorts have managed to surge in popularity



The plan reads like a 16-point plan of expressed stupidity, a plan that is blind to the nature of mankind and of progress.

There is so much fallacy wrapped up in the proposals as to reveal the childish minds of those who thought up the silliness.

Points of Reality

1. There is no such thing as "the public." Thus, there is no such thing as public service.
2. Credit and finance are useful to individuals, not to any abstraction.
3. A wage is price. Blocking price discovery distorts. It leads to abundance in one area and dearth in another.
4. To be solvent, a payer of annuities must know the terms (the time limit and the sum limit).
5. All income is the same.  If income taxation exists, the rules must be the same, whether for an individual or for a firm. The lack of depreciation schedules for individuals reveals that both capital outlays and income gained gets subsidized for firms.
6. Mortgage-backed securities amount to a subsidy to bankers' risk. Political subsidy of mortgages distorts prices. Politicians should be prohibited from underwriting mortgages.
7. It's insanity for legislators to incur debt to fund salaries and welfare. Worse, it's immoral to force others to pay taxes to fund interest on debt that pays for bureaucrat salaries and welfare. Politicians should be prohibited from incurring debt except to fund revenue-enhancing infrastructure like ports, roads, bridges and tunnels.
8. No woman needs to marry and subjugate herself to a man. It's mere rhetoric and parroted stupidity to claim housework is unpaid labor. To whom is the housewife selling her skills through time (labor) in a purchase and sale? Who is buying from the housewife in a purchase and sale?
9. Anytime, employees are free to pool their wage profits and credit into capital and start their own competitive firms.
10. Legislative debt problems arise from bad borrowing and spending practices by politicians. Countries don't need debt restructuring. Citizens everywhere need political restructuring, which would strip power and authority from politicians across a wide swath of activities.
11. "But it's for the children" is one of the dirtiest and oldest political tricks from the book of political tricks.
12. Citizens already have minimum incomes that comes from subsidized rent, food and the like. Often, those minimum incomes are quite high.
    
    Rather than institution of a minimum income, which never would be enough according to its proponents, a maximum payout of welfare should be imposed both on a yearly basis and a lifetime basis. Never should welfare take the form of cash or bank credits.
    
    Food should be dispensed from soup kitchens imposing a strict diet upon recipients. Meal times should be curbed with doors abruptly locked at closing time.
    
    For those needing shelter, bunk houses should be built. Children should be segregated from adults.
    
    No able-bodied individual ought to receive welfare without also receiving skills training and psychological training.
    
    Welfare, which is another way of saying minimum income, ought to be a tough-love experience used to help anyone fix himself or herself upon a new path of betterment.
13. If politicians levy taxes on the sale of property, which is the right of ownership and never what is owned, on cars, on clothes, on concert tickets, there is no legit reason to not also tax the sale of property in stocks or bonds.
    
    As I explained in WHY IS THE ECONOMY SO HORRIBLE? BECAUSE ACADEMIA ECONOMICS IS FAKE,
    
    Though most think of property as things possessed, property always has meant the right of ownership and never the thing owned. Only when property gets created, can trade arise between two persons.
    
    The name for property put to making stuff is called capital. The name for property put to purchase and sale for cash and credit is wealth. The name for property that can be sold to satisfy debts is asset. The name for property pledged against a debt is collateral.
    
    As I explained in The Theory of Trading Property for Profit,
    
    Stocks and bonds are known as corporate securities. Legally, stocks evidence property (ownership) while bonds establish liability on property.
    
    That said, corporate organization through securities does what instruments of property transformation do and that is to upgrade property making it merchantable.
    
    Improved land for purpose, purpose-built buildings, and specialized machinery stand fit only for purposes as designed. As highly specialized property as capital, such property loses its merchantable qualities through specialization.
    
    However, when split into fractional property of partial rights as represented by stocks and bonds, such property becomes highly merchantable.
    
    As a credit instrument, a bond give evidence upon a promise to pay principle and interest from future profit. A stock gives evidence of ownership but promising nothing with respect to profit.
    
    The holder of a bond becomes a creditor to those who issued that bond. The holder of a stock becomes part of the company who issue it and thus a fractional debtor for all liabilities of the company, including bonds.
    
    Since stocks and bonds are mere property, and if politicians levy taxes on the buying and selling of other property in purchases and sales, then no legit excuse exists to not also levy taxes on the buying and selling of stocks and bonds.
    
14. For a bonus, quickly learn about the reality of taxes in IF YOU DRIVE A CAR, I'LL TAX THE STREET. IF YOU TRY TO SIT, I'LL TAX YOUR SEAT. MR. WILSON. MR. HEATH.
    

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THOMAS PIKETTY, REVIVALIST PREACHER OF BORN-AGAIN SOCIALISM. THE SECOND GREAT AWAKENING OF SOCIALISM HAS COME TO AMERICA

Socialism Revivalist preacher Thomas Piketty has written the new millennial age bible for crypto-socialists everywhere luring them from the shadows to the new socialist church.

This Second Great Awakening of Socialism is sure to stimulate reformers seeking to remedy the evils of society, which they believe capitalism drives, as they strive to usher in their anticipated Second Coming of progressive Utopia.

This Second Great Awakening, this socialist resurgence could alter life, worsening life for working Americans unless stopped.

Already we have seen mass-scale camp meetings such as Occupy Wall Street. Those who flocked to Occupy Wall Street listened to revivalist oratory and sang hymnody. Many unwitting Americans who watched on their taxpayers' financed, welfare-funded, big, flat screens have been converted to socialistic thought through this enthusiastic preaching.

Second Great Awakening socialist revivalists pull chapter-and-verse from their playbook of trickery railing against purported evils of capitalism, damning capitalists and crying for mercy for all of the down trodden workers and welfare needy-greedies.

Piketty has become the Henry Ward Beecher of the Second Great Awakening of Socialism, luring many to come forth and become worshippers, baptized into a Born-again Socialism.

Piketty's Postmillennialist socialism theology is a call to purify society of capitalism as preparation for the return of Socialist Utopia. This is why Piketty calls for Progressive reforms.

Yet, Piketty's demonic false religion is easily exposed, which I have done in these:

• Thomas Piketty, 696 Pages Of Foolery Destroyed In Less Than Five Minutes
• Ut Oh, Someone Better Tell Thomas Piketty About L > G Too
• More Bad News For Thomas Piketty P > G Too!

SERMON OF THE PAST DEVOURS THE FUTURE

Piketty preaches a fire and brimstone sermon of "the past devours the future." Piketty strives to seduce the minds of seekers with such phrases as 

"A market economy based on private property, if left to itself, contains powerful forces of convergence, in particular with knowledge and skills; but it also contains powerful forces of divergence, which are potentially threatening to democratic societies and to the values of economic and social justice.

"The principal destabilizing force has to do with the fact that the private rate of return on capital, signified as "r", can be significantly higher for long periods of time than that rate of growth of income and output, as signified by "g". 

"Hence, since inequality r > g implies that wealth accumulated in the past grows more rapidly than output and wages, this inequality expresses a fundamental logical contradiction. The entrepreneur inevitably tends to become a "rentier", more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. i.e. the past devours the future."

Few know that Piketty stole his now famous line from the late 19th century-early 20th century French philosopher Henri Bergson (1859–1941) who said, “The pure present is an ungraspable advance of the past devouring the future." 

Bergson is the guy who believed in élan vital, an invisible force that could be harvested, embedded into an inanimate thing, and activated with electricity to create life!

But is it true? Does "wealth accumulated in the past" that becomes capital devour wages and output? It turns out, this is the central contradiction of Piketty rather than capitalism.

According to reality, rather than hoarding their wealth, rentiers take their year before return, levering up their wealth to create more capital, putting their wealth at risk!

In short, the present creates the future! And that is what capitalism and credit is all about. 

In 77 of 84 years, rentiers — landlords and dividends earners — for every $1 rentiers earned, spending on capital rose by more than $1 in the following year. In 69 of 84 years, spending on capital by entrepreneurs — farmers and proprieters — rose by more than $1 for every $1 earned. 

In short, through the genius of credit, capitalists leveraged their wealth to bring forth capital into the now. This is how an economy grows.

Credit is expected profits of the future embodied in property. Thus, credit is a kind of conditional property. Credit embodies estimates of prices for future sales and prices for future outlays.

Credit arises from worthful rights, rights to existing goods, rights to expressible services, rights to future profit should such materialize. The one who extends credit, in truth, buys a right of action against the borrower for a preferential share of profit, should profit materialize.

Reality reveals the irreality of the socialist revivalist preacher Piketty. The irony of it all is that Piketty preaches heresy relative to the reality of trading property for profit, but his preaching gets absorbed as orthodoxy as standard academia economics.

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THOMAS PIKETTY, 696 PAGES OF FOOLERY DESTROYED IN LESS THAN FIVE MINUTES

A French egghead academician with no business experience, Thomas Piketty, believes he has discovered the fatal flaw of capitalism so much so that Piketty wasted time writing an almost 700-page book about it and something like a whopping 15 years of his life researching it.

Piketty believes there is relationship between the rate of growth of an economy as expressed by GDP and the rate of return enjoyed by capitalists. 

Piketty calls the rate of return earned by capitalists R and the GDP, G. Piketty claims that when the return to capitalists is greater than GDP growth (R > G), "the past devours the future." 

The return to capitalists (their share of profit) can grow faster than GDP, easily. However, there is a limit, a limit Piketty fails to see precisely because Piketty knows nothing of trade and thus authentic economics.

If Piketty knew reality he would know this: 

The return to capitalists never can exceed total profit. All returns to capitalists are shares of profit and not sales.  

Profit is what is stands after paying expenses, including all wages and what politicians take as their taxes.

GDP is merely the sum of all sales. Alternatively, GDP can get calculated as the sum of all incomes. It means the same.

It's irrelevant if return to capitalists has grown at 9% or 90%. It's irrelevant that return to capitalists for any firm or all firms grows faster than GDP. 

Always, profit is a fraction of sales. Said another way, always, profit is a fraction of GDP. 

In the end, profit acts as limit. It's impossible to have a share of profit exceed 100%. 

Piketty needs a lesson in trade, or commerce, or what is truly authentic economics and not the foolery of academia economics.

The entirety of trade, or commerce, or real economics ties up with two words — property and profit.

All trade gets governed by one one, true, infrangible law and one axiom — the Law of Prices and the Axiom of Profit. The Law of Prices holds the winning bids of purchase and sale in the face of what is on offer set the price. The Axiom of Profit holds the sum of sales must at least equal the cost of production or the producer goes to ruin. 

The name for property put to making stuff is called capital. The name for property put to purchase and sale for cash and credit is wealth.  

Though most think of property as things possessed, property always has meant the right of ownership and never the thing owned. Only when property gets created, can trade arise between two persons. 

Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade. 

At less than break even, anyone would stop trying to produce property. No one works at a loss.

When profit is growing on the same sum of sales, this means producers are becoming more efficient. When profit is growing on increasing sales, this means ever more of the whole economy are gaining buying power and becoming efficient. This ever more includes workers and entrepreneurs.

What Piketty fails to realize that when he Piketty says "capital reproduces itself faster than output increases," in so many words, Piketty has said capital reproduces itself faster than wealth. 

This is good! All should want capital to grow faster than wealth! Without capital there can be no wealth! 

In CAPITALISM. BECAUSE WITHOUT IT, YOU WOULD BE LIVING AS A BARE SUBSISTENCE SAVAGE, I show how laborers would toil barely producing anything, living by bare subsistence without capitalism.

Again, because Piketty only understands the fake world of academia economics and doesn't understand the real world of trade, Piketty fails to see that when the rate of return to capitalists is growing faster than profit, capitalists are enjoying greater bargaining power against entrepreneur-adventurers.

Interest is a price and conforms to the Law of Prices. In the credit market, capitalists bid down in a Dutch auction against each other. Entrepreneur-adventurers bid up in an English auction against each other.

This better bargaining power of capitalists has arisen because there are not enough capitalists engaged in intra-capitalist competition and not enough entrepreneur-adventurers at all.

Entrepreneur-adventurers are futures speculators who ensure enough capitalists remain in business, but not too many. Thus, entrepreneur-adventurers are natural regulators of capitalists.

When there is too much bureaucracy with too much regulation, this pushes up costs and stands as a barrier to entry for too many would-have-been-otherwise entrepreneur-adventurers. The shrinking field of entrepreneurs leads to better bargaining power for capitalists.

Robert E. Litan of the Brookings Institute has revealed for the first time in 30 years, business "deaths" in the U.S. exceeded business "births" and only 600,000 net new jobs were created in each quarter of 2012 (Declining Business Dynamism in the United States: A Look at States and Metros).

So as a campus Marxist, what is Piketty's prescription to cure the ills of his false conclusion? Why Piketty sounds the socialist battle cry — Tax the rich! Off with their heads!

Of course, Piketty can't see implication of his prescription. Curtailing capital will result in far fewer products and thus far fewer ventures. Worse, curtailing capital will lead to less employment and much lower wages owing to more employment competition for fewer jobs on lower capital. 

Instead, the winning move would be to end all subsidy for the poor and end minimum wage laws. Subsidy to the working poor ends up being a subsidy to capitalists.

It is an unassailable fact of trade, that absent subsidy of workers in the form of welfare, wages would rise. No one would work at a loss (wages - living expenses). Market forces would force employers to pay more.

A wage is a price and conforms to the the Law of Prices. Even laborers get constrained by the great Axiom of Profit. 

All laborers also are capitalists as labor is the poor man's capital. Labor is the sale of work through time.  

Labor without capital results in bare subsistence savagery. It is to capital alone that profit can arise. 

Labor creates property. Capital creates property efficiently so profits might get earned. 

Profits whether realized or expected are the source of all prices. 

Piketty is clueless. Piketty doesn't understand reality. Piketty lives by irreality forged from indoctrination.

After the fall of the Berlin wall and the dissolution of the Soviet Union, all believed the idiocy of socialism at long last had died. Yet, campus Marxists are like cockroaches. You can't kill them. And the lie in wait for times to spread their diseases into the minds of the young and desperate.

For a look at Piketty and the numbers, check out UT OH, SOMEONE BETTER TELL THOMAS PIKETTY ABOUT L >G TOO.


For even more, read THOMAS PIKETTY, REVIVALIST PREACHER OF BORN-AGAIN SOCIALISM. THE SECOND GREAT AWAKENING OF SOCIALISM HAS COME TO AMERICA

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LIVING IN THE AGE OF IDIOCRACY

From the fallout raged against me by others in the comments of A Milestone to Celebrate: I Have Closed All My Businesses in Ventura County, California, it is clear that we have entered Mike Judge's Idiocracy. We're living in retrogression times. 

Those who have piped up in the comments have expressed, ordinary, parroted opinion, one formed of indoctrination, devoid of thought. 

The toadies of the Coyote herald him as some kind of free-markets capitalist-entrepreneur. One would be hard pressed to find further from reality than such belief.

The self-styled Coyote is a guy who blogs from the irreality of his mind about trying to operate businesses in various states of the USA. What the Coyote fails to mention is that all of his businesses arise because politicians have given him a monopoly license to use taxpayers' land.

Which such a monopoly grant, the Coyote has entered into business by risking the taxpayers' parkland capital risk-free to himself. As well as, since he terminates his employees off-season, the Coyote gets his payroll heavily subsidized by fettered taxpayers.

The Coyote isn't a free-markets capitalist nor a free-markets entrepreneur. The Coyote seems to be a fan of big government when it works in his favor, but all too stupid to know how to leverage it his favor. The Coyote seems to favor effeminate competition by having a monopoly license granted to himself rather than manly competition whereby he would buy land, set up shop and pay market wage rates.

The crazed fans of the Coyote, like so many hopeless ones, should learn the art of commerce and its science, that which some call trade, while others call economics. For if they did, they would know that only the one who has capital bears the risk. The parkland is the capital. The laborer risks nothing. 

An entrepreneur is a smart laborer. If the entrepreneur fails, it is the capital lent to him that gets lost. The entrepreneur fails to lose anything economic. He has staked nothing.

They would learn that Rent is a share of the profits. For where there is no profit, there can be no rent. 

They would learn that land the Coyote uses by grant of monopoly license is the land of legislators. As all risk is borne by capital alone in any venture, it is legislators who shoulder the risk at their expense. However, legislators can maintain their property in such land only by imposing taxes upon Americans. 

Since the Coyote doesn't pay market rate for that capital, legislators subsidize him there as well. Again, legislators can subsidize him only because first they can impose taxes upon Americans for their various schemes.

First, the Coyote fails to get his own parkland as capital. Second, without legislators bleeding Americans as taxpayers, legislators could not subsidize the labor costs of the Coyote.

If his fans would would learn that a wage is a price and that no one can work below break even for long unless subsidized, they would see the Coyote pays less than full wages for workers to break even. Legislators who force Americans to to pay UI who don't collect or cause others to collect UI, in effect, force these Americans to subsidize the Coyote's seasonal payroll.

If the Coyote wants to buy the land to make a go of it, so be it. Yet, taxpayers shouldn't be forced to own land upon which he profits. The Coyote is free-riding, using the capital of others (taxpayers), risk-free.

Socialists believe in community ownership of things managed by the government. Those who side with the Coyote, embrace the socialist concept of no property and community ownership.

As well, those who support Coyote, support the fascist concept of public-private partnership. 

The Coyote is a picture-perfect example of what is wrong with America and Americans today. The Coyote is whiny and greedy, wanting something — unearned profits — without having to give up anything in exchange to gain such — investing in capital, paying market prices that reflect true costs.

In the Age of Idiocracy, most don't get trade (commerce), nor capitalism, nor entrepreneurialism, nor business, nor property, nor society, nor the proper role of government, nor freedom.

Not until  faux capitalists like the Coyote disappear and all socialists disappear will once again Americans advance.

The libertarian approach to living is the right one — the non-aggression principle. Unfettered capitalism is the right approach to production. Protection of property of the individual from the mob is the right approach for progress, equity and freedom.

Idiocracy has become reality.






To read more about the Coyote:

Wile E. Coyote, Campground Businessman Super Genius
GREEDY CAPITALIST COMPLAINS ABOUT UNEMPLOYMENT INSURANCE EXPENSE AND QUITS HIS BUSINESS

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THE UNREALITY OF JESSE MYERSON, ROLLING STONE MAGAZINE'S USEFUL IDIOT OF COMMUNISM

Recently, Rolling Stone magazine published a silly-minded story with a dangling preposition in the title, from one of their writers, Jesse Myerson, Five Economic Reforms Millennials Should Be Fighting For

Alas, Jesse suffers from many false beliefs. He seems quite childish and his intellect stands still in arrested development.

Jesse calls for a land tax, a public bank, guaranteed government jobs for anyone who wants one, and guaranteed welfare from cradle to grave.


Debate on the land tax was settled more than 120 years ago! There are numerous works on the scheme of Henry George, all which reveal the silliness of it.

For the same, public banks were discussed and debated and refuted a century ago.

Americans already have "universal basic income" expressed in many programs — TANF, SNAP, Medicaid, Medicare, SSI, SSDI, Section 8.

The entire progress of people from the savage state of tribalism to clans and from clans to feudalism and from feudalism to burghers / bourgeois and thus individualism has been the advent of property (right of ownership) moving from all to the individual. And once property of the individual has been established, the furtherance of progress has arisen solely from the diminution and mitigation of uncertainty in the face of risk.

The entire basis of society, which means friendly association and never a people ruled, a nation, a country is PROPERTY.

Americans don't live in "a society". Americans live in society, in society of property.

Property means ownership, 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. All courts of the Anglo-American world agree to this meaning of property, a meaning first given to humans by the ancient Roman jurists.

Poverty is the default status of humans. All humans live at bare subsistence unless something ratchets them upward.

That thing is property (right of ownership) which gets used in production, which we give another name when doing so. That name is capital. 

And when capital amplifies effort, to produce property, which can be traded in a purchase and sale, we give that kind of property another name. That name is wealth.

Willett said, 

"It seems to be a self evident proposition that no one can assume a risk in economic affairs unless he has something to lose. As it is capital that is exposed to danger it would seem that it must be the owner of the capital that is the capitalist who assumes the possibility of loss.A society in which one class of people owned the capital and another class enjoyed the unrestricted privilege of exposing it to risk would soon suffer economic shipwreck. It is the possessor of capital who is interested in its safety and he seeks to protect it by demanding for its use a return commensurate with the chance of loss to which it is exposed.
In just what sense a man can be said to run a risk of loss who has nothing to start with and who therefore cannot fail to come out from his venture at least as well off as he went in it is not easy to understand. Only those who have capital can suffer the loss of capital."

Without property and persons who put their property at risk in pursuit of profits, how can anyone be responsible enough mitigate risks? Who and by what means would they elevate all humans above bare subsistence.

Trade or commerce or authentic economics means all relevant matters to mankind regarding the purchase and sale of property. Said another way, it's the theory of trading of property for profit.

Trade is about the acquisition of rights to own stuff and production of rights to gain the power of purchasing to acquire stuff.


Politics means anti-trade. Politics is the art of using rhetoric to steal property to gain and maintain power.



Why is it, in the history of humans, that no one living under tribalism of any kind, ever lifted themselves above bare subsistence?

Has everyone forgotten the 20th Century already? How did socialism, the doctrine of collective ownership of everything made, work out for everyone? Have the names Lenin, Stalin, Mao, and Pol Pol fallen through the memory hole? 



Former KGB agent Yuri Bezmenov explains who are the useful idiots, people like Myserson.

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