Flaws of GDP, Factors of Inflation, and Velocity of Money

What the GDP measures

GDP (Gross Domestic Production) measures the total money used to purchase newly produced, finished goods during a year. The GDP, however, does not measure the money used to purchase used-goods.

A commonly cited refutation of GDP involves the breaking window fallacy. Breaking and repairing windows increase expenditure, which increase GDP, even it harms individual. Breaking windows forces an individual's money to spend repairing instead of using the opportunity costs things that the individual actually desire.

GDP, additionally, does not measure economic distribution. Some individuals may have a poor standard of living or also unemployed, even if the aggregate GDP compares greater than other nations. This seems true for highly corporate-capitalist economies, in which the CEOs of the corporations steals almost all of the income from others.

GDP, also does not measure the underground economy.

A more important refutation deals with the GDP measure on production without any consumption. However, production and consumption overlap, so the GDP has to judge whether production or consumption occured in its fuzzy circumstances. Volunteer work, increases both production and consumption, because the individual find it psychically pleasing to do this work. Some individuals may enjoy producing open source software, so they consider producing open source software as also consumption. For instance, individuals may use open source software as consumption since he learns how to code software better by programming open source software, but open source software has a side-effect of production. In order to measure production, the state has to arbitrarily define which products constitute production, and which products do not. But as some activities fits in between production and consumption and does not have a distinction, the state can have the power to manipulate measurement to artificially increase GDP by defining a wider variety of products as productive processes.

Taxation, may even increase GDP, since individuals must work harder to pay these taxes. If we subtract government spending from the GDPs of the Nordic states, these GDPs will literally halve.

The mainstream media commonly speaks propaganda that deals with ``growth rate" as fast or slow. We cannot judge whether an economy grows fast or slow only by its ``growth rate." Underdeveloped economies have a potentially much higher growth rate than more developed economies. As the amount of technology stays the same level in all economies, the underdeveloped economy grow faster by accumulating technology. The underdeveloped economy would grow fast not because its economy ``grows," but its economy catching-up from previous state inhibition of growth.

The growth rate of the underdeveloped economy would eventually decrease as its economy catches up with the developed economy, due to diminishing returns.

Cultural influences to GDP

Differences in culture, knowlege, and preferences of individuals may have a greater impact on GDP level. Individual ignorance, religion, and other cultural preferences like the birth rate may have a greater impact on GDP than economic.

On health care issues, the Western individual may eat much processed food, which may increase the prevelance of certain diseases. These, however, raises health care spending, which, in turn, increases overall GDP. Should individuals eat healthy, the overall GDP would decrease, as the level of health care expenditure decreases.

The pharmeceutical and psychiatry industries may increase the GDP by a lot. These industries defraud its consumers to take expensive medication, which have no beneficial use to them. As many individuals spend a great deal of money on medication, the GDP may increase by much.

Cultural traditions may also impact GDP. Holiday tranditions such as Christmas, may have a larger impact on individual spending, and may also increase GDP. Spending time in churches may increase GDP due to greater spending. If the population does not believe in religion, the GDP would decrease due to lesser consumption.

We should use birth rate as another factor. The greater the birth rate increase, the lower the per capital GDP, even if the aggregate GDP did not change. As the state records the children born to mothers in a census, the higher the birth rate, the greater the population, which would make the per capita GDP decrease.

Other factors of price increases

An increase in the price of oil, in fact, may increase the culminative prices of all goods, even in the case in which the total money supply stays constant.

The oil price increases the opportunity costs of oil consumption, which produces a net deficit of oil utilization, and also the the underutilization higher-order machinery, such as cars, that consumes oil. This underutilization of goods and services that uses oil, due to increased costs, would result in a net decrease in gross production. Since the proportion of gross production compared to money supply decreases (or the velocity of money), the overpricing of oil would result in apparent price increases through all goods and services in the economy.

We should take caution not to interpret the above paragraph as the Keynesian idea of ``cost push inflation." Their theory sets the false assumption that even if gross production stays constant, the culminative prices will increase. Our theory, however, depends on the decreases in the gross production relating to oil.

In order to demonstrate more fully why decreases in gross production would cause price increases, let us set a clearer example: If it suddenly costs several times more to produce all kinds of goods, such as food, clothing, and services, the gross production of the economy decreases. If the money supply stays constant, the ratio of goods over the supply of money would decrease, hence would result in culminative price increases.

Our former example sets an increase in the price of oil as the factor of raising the costs of production of several goods in the economy. An increase in oil would increase transportation costs, which would, in turn, raise the costs of food redistribution, and also many other goods transported throughout the economy.

This idea elaborated in the above paragraph does not contrast Austrian economics. In fact, Austrian economists well know that a decrease in GDP, while the supply of money stays constant, will raise the prices throughout the economy. We just modified this idea with the assumption that an increase in oil price results in a decrease in GDP.

But the reverse can happen too---an increase in oil prices can also increase GDP. If the demand of oil does not change much according to the prices of oil, also known as the idea of ``low elasticity of demand," then it may result in an increase in GDP, and hence decreases in prices throughout the economy.

The velocity of money

The strength of the currency, in addition to gross production, also depends on its velocity. We define the velocity of money as the total flow of money divided by its population size in a specified period of time. Different definitions exist for the velocity of money, and we should not use other statistics for the velocity of money. Other sources define the ``velocity of money" differently from us, such as the GDP divided by money supply.

We should not, however, equate the velocity of money as the gross production divided by money supply. These two unrelated units do not correlate with each other. The velocity of money may increase without any increase in GDP. For example, the velocity of money increases if individuals sell more used goods, which the GDP does not take account. An increase in the velocity of money would cause price decreases in the economy, since the demand of money increase relative to the demand of goods. A fortiori, selling more used goods, would result in a net decrease of prices in the economy, since it would increase the velocity of money while the GDP stays constant.

The velocity of money, may influence the general price level. Assume that all of the economic production halted. This causes the GDP to equal zero. But individuals would still use money to exchange used goods. This encourages the demand of money, which make the currency have a ``value" caused by a demand of used goods.

The velocity of money, however, may have no effect on the general price level. Suppose two people, Alice and Bob, prepare to deal with transactions. Alice possesses 10 ounces of gold. Bob possesses a tractor also worth 10 ounces of gold. Imagine that Alice wanted to purchase Bob's tractor for 10 ounces of gold. However, after Alice purchased it, Bob wants to reclaim his tractor by purchasing his tractor back from Alice. Now, as Alice has her 10 ounces of gold and Bob has his tractor back, this situation remains the same as the original case. However, the velocity of money has just increased by 20 ounces of gold, since Alice and Bob transferred gold twice. If Bob sold his tractor and repurchased it again, for the second time, the velocity of money would increase by 40 ounces of gold, even if both Alice and Bob now possess the same stuff as in the beginning. New imagine that Alice and Bob did the same transaction for the third, fourth, and up to an infinite number of times. They would both still, would have the same possessions, but the velocity of money has just increased tremendously. This shows that, even if the velocity of money increased multiple times, it may still have no influence other prices. Therefore, we should not consider that the velocity of money only influences the general price level.

So as we have shown above, in certain cases, the velocity do have an effect on the general price level, but in other cases, it does not have any effect at all. So, specifically, what influences the general price level besides inflation and GDP?

Answer: The proportion of money used for used-goods compared to the proportion of money used in new goods. We will show two examples of how the proportion of money used in used-goods would cause a change in the general price level (or the strength of the currency) without any change in GDP or money supply. We will show that ``recessions" and taxation can also cause an impact on the strength of the currency.

During a ``recession," the prices in the economy may decrease depite the fact that the money supply simutaneously increases. We explain this by citing the massive amounts of business liquidations during a ``recession." As liquidations involve selling business assets and thus increase the velocity of money, an increased amount of liquidation would make the currency appear stronger during a ``recession."

Many factors that influences GDP also influence the strength of the currency. High taxes, may also strenghten the currency since the GDP includes government spending as a component. An increase in savings may strengthen the currency since savings lowers the velocity of money.

The growing parasite

According to various Internet statistics, these suggest that the rate of monetary expansion in the United States exceed over 15% per year. Many observers, however, see the rate of monetary expansion as much lower.

Many countries measure its GDP according to the international dollar. International organizations set the current international dollar as equivalent to one Federal Reserve note. As the rate of monetary expansion exceeds over 15% per year, the international dollar, equivalently, loses its strength about 87% per year. Because many countries measure their GDP using the international dollar that expands 15% per year, their nominal GDPs should also increase by 15% per year, to retain a constant real GDP.

However, as we see it, the nominal GDPs in most countries do not, however, increase by 15% per year. This signifies that their GDP has decreased over the years.

To give a summary to which nations have a increasing or decreasing GDP, we test it by using this: every nation that has a nominal GDP ``growth" rate less than 15% has a decreasing GDP.

The parasite has gained tremendous momentum of leeching off an increasing 15% of income from working man annually, thus demonstrates the impossibility of reversing that trend by working within the system.

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A Primer on GDP

As Kevin Carson argued, GDP includes the cost of repairing the windows.

GDP is the measure of the output of a country. The equation for GDP is: C + I + G + (X-M)

The "C" in the equation also includes the costs of repairing a broken window. In order to have the money to pay, individuals have to work harder.

The "I" also includes malinvestment from expansion.

GDP includes the cost of government theft: taxation. GDP is the income of individuals before tax. To exclude the theft that increases the GDP, the "G" in the equation must be removed. The government spending should be substracted because individuals work harder to compensate the theft by government.

GDP increases if exports increase, and decrease if imports increase. This should be reversed. Individuals would have greater purchasing power to buy the imports if imports exceed exports. So (X-M) should be turned to (M-X).

FSK uses the median household income to estimate the GDP. He should have left out the government spending portion of the GDP and reverse the exports and imports. Besides his fallacy of using the inaccurate GDP to measure the economy, his use of "median annual income" is flawed because it is actually the median household income.

The "median household income" is inaccurate because the average number of individuals per household has became smaller.

For example, there were 108,209 households in 2006 and 94,312 households in 1900. This is an increase of 15%.

However, the population has increased from 248,709,873 to 281,421,906, which is 13.1%.

Labor Unions as Cartels

Libertarians, in general, accept the fact that the state privileges the capitalists at the expense of the workers. Even in the current state-capitalist system, we should not, however, advocate ``labor unions" to ``take the stolen wealth back." We should see labor unions as unethical.

An ethical method to compensate the ``workers" stolen wealth, involves building alternative institutions, not to work within the system. Working within the current system, would not make the workers to have any motivation to ``solve" the problem if ``labor unions" provided the stolen money back.

Working within the system, has another unethical context. As you may know, labor unions, though may raise wages for the majority of workers, causes unemployment amongst the less productive workers. Unions, therefore, constitutes as a form of aggression against the less productive. Using ``labor unions" to take the wealth ``back" equates forcing unemployment to other individuals.

Additionally, besides the fact that labor unions hurts some less productive workers, it also hurts some other innocent individuals. Suppose if some individuals work for a capitalist, who, coincidentally, does not privilege from the state. Using labor unions against all capitalists, therefore, may hurt the innocent capitalist who does not privilege from a state. We should consider labor unions as a form of collective punishment, and we should never use them as a form of ``defense" against the massive robbery. This matches with the libertarian ethical claim: ``As long as we hurt innocent individuals in the process, this constitutes aggression, and never constitutes as defense." We, thus, may consider labor unions as ``gangs" or ``cartels."

Some dispute ``aggressiveness" as an inherent attribute of labor unions. They defend the that voluntary types of labor unions may exist in a free society. Yes, we should not have any problem of them within a free society, but unions, in a free society, would probably not exist too much. Co-operatives and self-employment would replace labor unions, for example. Additionally, labor unions, even in a free society under the situation of corporations employing workers, might not even increase the wages of the workers, because of greater competition between employers. So why should we advocate labor unions in the current statist society, while, in contrast, in a free society, labor unions would probably not exist to a significant extent? We should never advocate them, as it would probably imply using the non-voluntary types of unions and as ``working within the system."

Environmentalism Leads to Starvation

The environmentalists, conservationists, and population controllers all have irrational policies of attempting to make society a better place. These three ideologies relate closely to one another, and those who believe in one of these three would probably also care about the other two. Many of them opposes technology and opposes change.

The environmentalists, conservationists, and population controllers all presume the existence of the state, heavily regulated against environmental ``exploitation" while advocating the same type of exploitation by itself. They set policies that appears to reduce pollution and poverty, while these only work as minor cookie-cutter fixes while ignoring the origin of these problems: the state.

The state works by exploiting the individuals by taxes, regulations, interventions, and slavery. The state steals from the individuals, while forcing individuals to work inefficiently, unproductively and wastefully. Without the massive waste that the state has caused, poverty will exist much less than it exists today.

In the following sections, we will discuss that we do not need a state to solve all the environmental and overpopulation problems. Though we deny that global warming and overpopulation present a problem to society, we will nevertheless present solutions of reducing of these in a free society. We will do these, just to convince those radical environmentalists to a libertarian-compatible position. (It is hard to enforce morality, unless you present consequentialist arguments defending the deontology.)

The primitivists

The philosophy of primitivism, also advocates these three policies---environmentalism, conservationism, and population control---as the three tenets of their philosophy. The primitivists advocate population reduction, to apparently reduce the supposedly ``high" demand for natural resources and food, and opposes technology as they see it as damaging to the environment. The primitivists lacks the obvious flaw that technology actually helps the environment, since it reduces waste and increases the efficiency of production.

An important policy advocate by most of the proponents of the environmentalists alike, resolves in the tariff policy. Although they have a moral stance of opposing the so-called ``free trade agreements," they also want to raise tariffs afterwards. They say that tariffs reduce pollution and the exploitation of natural resources, and almost all of the governments and organizations believe in just that. All of the organizations practicing environmentalism, including the Green Parties, actively wants to raise tariffs attempting to reduce pollution, but they just do the reverse. They say that raising tariffs would reduce the transportation of products, which would reduce gasoline and reduce carbon dioxide emissions.

However, their policy of raising tariffs does the reverse, and much greater harm to the environment than it minusculely fixes. Raising any tariff, would reduce the efficient allocation of production, which might mean that machines might even increase amount of gasoline consumption due to inefficiency.

The overpopulation solution

Raising tariffs also cause another important inefficiency: inefficiency in food production. Whenever states like China and India produces food, the state actively enforces the inefficient production of food. If one wants to see the inefficiency of food production in these states, one would see the primitive tools that they use. The high tariffs prohibit the importation of advanced farming equipment. The missing advanced farming machinery, which might even use less energy the primitive tools, has outweighed by far the presumed gasoline savings from tariffs. This sets another example of how the environmentalists harm, rather than help, the environment.

Farmers in China and India use ridiculously simple tools for farming, probably even hundreds of time as inefficient than the currently available technology would do. If the state does not exist, then tariffs forbidding the importation of machinery will ease, and the agricultural output would increase by multiple times. Food prices will lower, and much more individuals would feed themselves.

In the current world, farmers only use a small fraction of the total arable land. If farmers used all of the currently existing arable land, then food production would multiple. Non-arable land can also turn into arable land by irrigation, so increased production may form from more land for farming, in addition to the unused arable land and importation of advanced machinery.

Furthermore, the increase in technology would let farming productivity rise. Innovations in farming equipment, biotechnology and genetic engineering would increase food productivity at a rate higher than population growth.

These changes, available from current technology, would occur when the state collapses. Food productivity may increase by hundreds of times by these changes, so population a hundred times larger the current population seems not a problem.

According to the laws of economics, food prices will automatically rise when the demand of food increases. Accordingly, individuals will have less children if the population gets unsustainable, due to expensive resource costs from high demand. The population would adjust itself.

Even before the population has multiplied hundreds of times, we will probably colonize space by then.

The demographic paradox

We should even suggest that if the population grows in the first place. In fact, the population declines in the most developed nations. Birth rates falls below replacement level, meaning that the population would eventually shrink. Many economists called this phenomenon as the demographic paradox.

You may wonder the reason behind the population decline in the most developed nations. In developed nations, parents have more incentive to invest their children in education. The rate of return gained from investing additional education compares far greater than the rate of return gained from having more children. Thus, individuals see that having one highly educated child as a more economical investment than having many uneducated children.

In undeveloped nations, by contrast, parents like to have as many children as possible to help them with subsistence farming. As in the last section, the lack of farming equipment causes an inefficient proportion of human labor instead of machinery, parents in the undeveloped nations like to have as much labor as possible by having lots of children.

Unless the farmers in the undeveloped nations import advanced farming equipment, they will have many children instead of using machinery to help them farm. As productivity might increase by hundreds of times as described in the last section, individuals in the undeveloped nations would have less children when the state collapses.

As farming productivity increases in the undeveloped nations, less individuals would work as farmers. But currently, the individuals in the undeveloped nations do not have enough resources to educate their children, due to state taxes and regulations. When the state collapses, however, these individuals would instead invest their children in education instead of farming.

The reverse demographic paradox

In the last section, we have analyzed how education decreases birth rate. Parents find having less, but better educated children as a better investment than lots of children. But other factors might even increase the number of children when the state collapses. Examples includes the increased wealth when the state does not confiscate or regulate, the lack of child labor laws which motivates parents to have children work instead of consume, and the lack of compulsory education laws.

A good example of more children involves increasing wealth. Since the state taxes and regulates individuals, when the state collapses, the wealth of each individual may increase by five times. Richer individuals will have more children, as they can afford to buy resources for their children to consume.

Another side-effect of increased wealth includes less time that individuals work. Due to increased productivity in a free society, individuals do not have to work as long every day, and have more time to spend on their children. It becomes increasingly more common for only one parent in the family to work, in addition to the shorter time and longer weekends that he or she would work every day.

The lack of child labor laws would also increase wealth. The money earned by a child may outweigh the money spent on taking care of the child. Thus, some individuals might have children just to increase wealth.

Population growth benefits the economy

In a free society, the economic quality will depend solely on the current technology levels. The state will not meddle with the economy anymore and would not produce fake growth by manipulating growth statistics. In the absence of the state, the economy will only grow by increased innovation.

A larger population benefits the economy. A larger population implies that more individuals would spend their time to innovate, thus helping the economy to grow further. The increased leisure time from increased productivity will magnify the amount of time individuals would spend on innovation, instead of sustenance.

Ultimately, we should not see population growth as a vice, but a virtue.

The environmental solution

Many libertarians advocate a private rights approach for environmental pollution. The protection of property rights would give individuals an incentive to not dump waste on someone else's property. Individuals may also own portions of water, as it may reduce overfishing---a solution to conservation.

But the property rights approach to environmentalism has a fault. It suggests no solution to global warming, caused by carbon dioxide emissions. Since releasing a moderate amount of carbon dioxide does no apparent harm to neighbors, courts would not likely sue the the polluters. Under current technology, it seems difficult to measure the amount of carbon dioxide released. This also makes individuals difficult to estimate the amount of global warming, and thus impossible to reclaim monetary compensation proportional to the amount of carbon dioxide released.

The global warming solution

Proponents of a state suggest that it would solve global warming caused from carbon dioxide emissions. They suggest that without a state, individuals would still pollute since an individual derives no benefit by reducing emissions. Only in the case that most of the population in the world reduced pollution, everyone would benefit. But the some individuals would free ride, or ``cheat" by letting others reduce emissions while refraining from reducing this themselves. So they conclude that only a state can prevent the free rider problem by forcing every individual to reduce emissions.

However, solutions to this free rider problem does exist even without the state. A method to solve global warming involves the boycott. The individuals who reduced emissions can agree with each other to boycott those who not practice that themselves. To enforce the treaty, the members agreeing with the reduced emissions agreement, would also agree to refrain from trading with the non-members. This would encourage the non-members (the free riders) to agree reducing their emissions, to freely trade with everyone else.

Conclusion

We have shown that the society does not need the state to solve all three problems: global warming, conservation, overpopulation, and poverty. Most importantly, we have appeared to solve the problem that even most libertarians find it as impossible: global warming.

The primitivists has turned onto the wrong direction, hurting individuals from their policies that supposed to help.

Anarcho-Mercantilism over Market Anarchism

Whenever I see the term market anarchism, I see an oxymoron. However, many anarchists do not notice this, and frequently use the term “market anarchism” over anarcho-capitalism, in blogs and web pages. They claim that the use of this term improves the term anarcho-capitalism, because the original definition of capitalism, as coined by Karl Marx, implies heavy state intervention. Thus, the so-called “left-libertarians” use the term market anarchism over anarcho-capitalism, and emphasize this as more consistent. Still, however, they have no knowledge that even the term “market anarchism” etymologically originates from collectivistic ideas.

Upon first looking at the term “market anarchism,” one first notices the word order. In question, one wonders why most individuals prefer to use the term “market anarchism” over “anarcho-marketeerism.” As in English grammar, the first term, “market,” implies an adjective, and the second term, “anarchism,” implies a noun. As one may notice, the term “market anarchism” implies it as a type of anarchism; the term “anarcho-marketeerism” implies it as a type of marketeerism. One may question the reason behind this distinction.

First, we will demonstrate the contradiction of “market anarchism.” This term, as shown above, implies it as a type of anarchism. It further suggests that a broader ideology, called “anarchism,” does not necessarily require a market. Thus, as “market anarchism” suggests, there exists an ideology, called “anarchism,” in which even market-bashing individuals may identify themselves as. These non-market ideologies might range from anarcho-communism to anarcho-collectivism, in which I deny the compatibility of these to anarchism at all. As some might say it, using the term “market anarchism” implies that you like all kinds of anarchism, including the collectivist types; and the adjective “market” before anarchism, implies merely a preference for a market system in anarchism.

Second, we notice that the term “market” does not function as an adjective. The term “market” functions as a noun. To confirm the grammatical correctness of English, two nouns may not position right next of each other. So, in a grammatician’s view, he or she would not consider “market anarchism” as grammatically correct.

Even though some may consider it ungrammatical, the “market anarchists,” rationally see the term as grammatical. They seem to view the term market before anarchism as an adjective. Since a clear distinction between nouns and adjectives does not exist,^[1] the “market anarchists” may still rationally view the term market as an adjective. Therefore, even if market functions as a noun, the market anarchists may still consider their ideology as compatible to “anarchism without adjectives.”

We have proven that using “market anarchism” seems to imply the individual supports “anarchism without adjectives.” However, we have not proven that using the term “market,” in any circumstance, implies a collectivist view.

We will first start defining the word market. The dictionary definition of market, in the general sense, means a public gathering of buyers and sellers. Seeing this definition, one would conclude that buying and selling equals trading, thus we may replace this phrase with trading. Also, as “public gathering” seems too concrete, we will replace it with “association,” which in turn, means “group of individuals.“

We have now redefined market in a more abstract sense, as “a group of individuals who trade.” We now have a formal definition of market.

We may now formally define a “black market” as “a group of individuals who trade outside state jurisdiction”; define “white market” as “a group of individuals who trade within state laws”; and define “free market” as “a group of individuals who trade freely” (as in both the positive and negative sense of freedom^[2]); and define “market” as “a group of individuals who trade within this world.“

As the dictionaries seem to define a market as “a group of individuals who trade,” then why should we use the word market when we may just use the word trade? After all, why do we not use “anarcho-trade” instead of “anarcho-market”?

We will instantaneously see the term “anarcho-market” as redundant, as the term market means “a group of individuals who trade.” Besides this, we will note a more important consequence of using the term “market” instead of “trade” after “anarcho.” One will eventually see the term “group” in the definition of market. One will further see that using “group” implies a collectivist mindset. “Anarcho-market” refers to a collectivist ideology, in which groups of individuals trade freely. “Anarcho-trade,” however, refers to free trade, unrestricted by intervention. One would simply abandon the term “anarcho-market” in favor of “anarcho-trade” to avoid the collectivistic denotation of the former term.

Upon abandoning the term “anarcho-market,” one would notice that “anarcho-market” requires “anarcho-trade” (as in free trade), but “anarcho-trade” does not require “anarcho-market.” Therefore, we will conclude “anarcho-trade” as a more general ideology than “anarcho-market”: the latter requires a group of individuals, while the former does not necessarily require a group of individuals.

To show this more clearly, the “market,” by definition, equals the sum of all trade relations. Similarly, as Austrian economists define society as the sum of all individuals, the market represents a society whereas trade represents the individual. Because the market would not exist without trade, and society would not exist without the individual, we should use “trade” instead of “market” where possible to avoid the collectivist denotation of market.

We have finished arguing that we should view “anarcho-trade” as more semantically correct than “market anarchism.” “Anarcho-trade,” however, does not seem like an ideology since the word “trade” functions as a verb, not a noun describing an ideology. We will show a solution using the controversial word “mercantile.“

If one sees “mercantilism,” he or she might refer it to a “protectionist ideology favoring high tariffs.” However, this shows only one definition of “mercantilism.” Prior to Adam Smith using “mercantile system” to refer to the protectionist system in the 18th century, mercantile meant anything related to merchants or trade. All mainstream dictionaries provide two definitions of “mercantilism,” the first one relating to commerce or trade, and the second one relating to the mercantile system. (The Webster and Random House dictionaries list the original meaning first, and the Encarta, Wordsmyth, WordNet and American Heritage dictionaries list the original meaning second.) Thus, in the original form, mercantile refers to a synonym for trade.

Therefore, we may interchangeably use “anarcho-trade” and “anarcho-mercantile.” Appending “-ism” to each would result in “anarcho-tradeism” and “anarcho-mercantilism,” respectively. However, since the word “tradeism” does not appear in any major dictionaries, we should use mercantilism instead. Hence, we should use “anarcho-mercantilism” and “anarcho-mercantilist” to refer to an ideology and a supporter of the ideology, respectively.

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Footnotes

1. We show this on the type-token distinction. We cannot distinguish adjectives (types) and nouns (tokens).
2. We show that positive and negative liberty behave complementarily. Positive liberty: do any non-aggressive act without aggression. Negative liberty: do any non-aggression act with non-aggression.

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Capitalism

I think the term "free market" has more ambiguity than "capitalism." Let us look at the three definitions of "free market":

1. The current corporatist system, as the mainstream media defines it.
2. A system based on "sticky" ownership of capital and land, as in the neo-Lockean sense.
3. A system based on occupancy-and-use of capital and land, as in the mutualistic sense.

In the anarchist blogosphere, both the mutualists and the "anarcho-capitalists" use "free market," which can cause some misrepresentations.

Both the mutualists and the "anarcho-capitalists" define "capitalism" as a free-market with neo-Lockean land ownership. For instance, Kevin Carson, looking at his analysis of Tucker's "land monopoly," defines "capitalism" as a system that has "sticky" land ownership. Shawn P. Wilbur on his blog defined "capitalism" as "sticky ownership of land" too.

Richard Williams on his blog explicitly defines "capitalism" as requiring the "sticky" ownership of land:

For capitalism to become consensual, private land ownership would have to be abolished, so that land "ownership" would become contingent on use of the land.

We have shown that the term "free market" can mean the second or third definition, when "capitalism" only means the second definition. Hence, many Austrian market anarchists like to use the less ambiguous term "capitalism" rather than "free market" to describe their thoughts.

Likewise, many "anarcho-capitalists" consider the term "market anarchism" as umbrella term for mutualism and "anarcho-capitalism." The "anarcho-capitalists" therefore dislike the term "market anarchism" and choose to continue using "anarcho-capitalism."

Furthermore, Kevin Carson considers "sticky" (neo-Lockean) land ownership as a form of corporatist privilege (see Carson's comments on Tucker's "land monopoly"). Hence, Carson will probably use the label "vulgar libertarian" to any market anarchist who also support "sticky" ownership of land.

Alex in his past said that he opposes "private property." As predicted, Alex has strawmanned Cork on "private property."

Think about it: those who question "private property" would be free to organize as they see fit if they - accept "private property". This isn't actually a compromise then, it's rather one-sided.

I think Cork use "private property" to mean the "non-aggression principle."

However, I choose to avoid the term "capitalism" too because I dislike to describe things with two or three word labels. I also notice the ambiguity of the terms "private property" and "property rights." Because even neoconservatives use "private property," I consider the term "private property" as a glittering generality.

Unlike Alex, I support "private property" in certain contexts of the term and oppose it on other contexts. Also, I support "corporations" in certain contexts of the term and oppose it in other contexts. Similarly, I support "economic egalitarianism" in the sense of the "equal pay for equal work" doctrine but oppose "economic egalitarianism" in the sense of violent intervention in the marketplace. I do not view words to only have one meaning.

Individualism Anarchism

An Anarchist FAQ seemed to have influenced many prominent "left-libertarians." Roderick T. Long and Charles W. Johnson, for instance, uses the term "individualist anarchism" to refer to only the 19th century anarchist philosophers who advocated economic individualism, and excludes 20th century market anarchists. However, such strange definition of "individualist anarchism" originated from An Anarchist FAQ.

Therefore, for historical consistency, I like to define "anarcho-capitalism" as a branch of "individualist anarchism." An Anarchist FAQ's "anti-capitalist" bias has redefined the term "individualist anarchist" to only refer to those 19th century individualist anarchists.

Lysander Spooner, a 19th century individualist anarchist, supported sticky land ownership and advocated almost the same economic policies as Murray Rothbard. The FAQ, however, did not admit Rothbard as an "individualist anarchist" just because Rothbard use the word "capitalism" in the positive sense.

Ironically, both Tucker and Spooner themselves had never used the term "individualist anarchism" nor "individualist anarchist," not even once. Only later writers coined the term "individualist anarchism" to refer to variety of anarchism that advocates economic individualism.

Spooner, at that time, used "capitalism" in the negative sense because the word meant that way during the 19th century. However, the definition of "capitalism" changed during the 20th century, so individualists anarchists had begun to use "capitalism" in the positive sense starting from the 20th century. The FAQ therefore misinterpreted Rothbard's and Spooner's different usages of "capitalism." The FAQ seems to not actually understand what Spooner and Rothbard meant by "capitalism." The FAQ denied Rothbard and all other 20th century market anarchists as "individualist anarchists" just because those 20th century anarchists use the new definition of "capitalism."

Inconsistency between the Definition of "Capitalism"

Many individuals have a positive view of capitalism, but a negative view of state capitalism. Capitalism and state capitalism are synonyms. A state means a monopoly on the use of force. Statism means the advocacy of a state. Therefore, state capitalism is no more than the advocacy of a state and capitalism. The state may be minimal or may be huge. It is still a state. Therefore, laissez-faire capitalism is a subset of state capitalism. Individuals who are supportive of laissez-faire capitalism are state capitalists.

Some anarcho-capitalists also differentiate capitalism and state capitalism. If anarcho-capitalists do not equate capitalism with state capitalism, then capitalism must be a synonym anarcho-capitalism, since the only other kind of capitalism other than state capitalism is anarcho-capitalism. Then why do they use the redundant adjective 'anarcho' to differentiate the word capitalism? There must be a drive to use 'anarcho.' Therefore, state capitalism must be a synonym for capitalism if the word 'anarcho' is not redundant.

It is also weird that some defend the existence of corporations but oppose corporate capitalism. Corporate capitalism means nothing more than capitalism with corporations. Those who defend the existence of corporations, thus, must support corporate capitalism.

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Contexualism

Many people consider the word "free market capitalism" to be a contradiction. This is because the word "capitalism" for some means an economic system for state exploitation. In that sense, they may be correct if they define them prior to their argument. But a combination of words is not just the worst of both meanings. The term "free market" before "capitalism" is a modifier-adjective. Why do some left-libertarians reject modifier-adjectives?

The modifier-adjective before the word "capitalism" represents a nonlinear transformation, which results in an entirely semantic meaning of the phrase. The phrase should be treated as a different meaning, not just a combination of the words. This is equivalent to the modifier "American" in the word "American liberalism," which is entirely different from liberalism, the European definition. However, in America, the modifier "American" is ommitted, because it is an abbreviation. This is similar to the ommission of "American" in "American football." These two sports are entirely different, yet the same word. Capitalism may be a free market, just like European liberalism. If they reject modifier-adjectives, why don't left-libertarians omit all modifier-adjectives? It is impossible to speak if they omit all, thus it is irrational to omit some modifier-adjectives but not others.

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Anarcho-freemarketeerism is composed of the parts "anarcho," meaning an- ("not") and "archy" (meaning "authority" or "ruler"). It is known to socialists as both anti-state and ant-capitalism, while to free-market libertarians as anti-state. The other part "freemarketeer," meaning advocacy for free markets. The word is the reversed version of "free market anarchism," which is similar to the structure of "anarcho-capitalism," with the adjective "anarcho." If "anarcho" is the adjective, then it describes an anarchist version of the ideology. If "anarcho" is the ideology, the adjective means a subset of it. However, many words, expecially relating to anarchy, can be reversed without any modification in semantic meaning. A common example is "social anarchism" and "anarcho-socialism." These mean exactly the same version of "libertarian socialism." The word "free" means freedom and the word liberty is a word from the French word "liberté." The word "free" does not exist in France, so the France use the word "Marché libre" (meaning "liberty market") in substitute for "free market." The absance of the word is common in many European languages. 1 Other philosophers, such as Jean-Paul Sartre, would argue that humans are always free. This originates from the belief in "free will," which is a mental phenomenon. Free-market libertarians define "liberty" as "free from physical constraints," which would mean non-aggression.2 The word "marketeerism" sounds ungrammatical, but it is logically consistent. The word "marketeer" means someone who supports free markets. The -eer suffix implies someone who engages with the activity. 3 The phrase "free market" is a noun, and the hyphenated version, "free-market" is an adjective. 4 Appending -eer at the end would make it a noun. Is it correct to add an -ism as the suffix of the word? The suffix, -ism usually means a doctrine. In other words ending in -eer, it is sound to add the suffix "-ing," similar to "engineering" and "mountaineering." The word "libertarian" has a definition meaning an adjective, and appending -ism make it a doctrine. But the noun definition would not work. Adding -ism to "freemarketeer" is in the sense of adding -ism in "Rothbardian" + "-ism" = "Rothbardianism". Both of the words "Rothbardian" and "freemarketeer" are describing an attribute of a group of individuals who identify themselves as "Rothbardians" and "freemarketeers." In that sense, "freemarketeerism" has the same sense as "Rothbardianism." This is the same as "heroism," describing all heroes.

Common Errors in Austrian Economics

National debt problem

Paying the national debt would cause deflation, since 40% of the debt goes to central banks as interest payments. Paying the national debt, per se, would not lower average income if each individual proportionally pays his or her income to pay back the debt, since the "value" of money goes up from deflation while paying the debt.

Also, "we" owe no money to pay the debt owed to foreigners. Paying this debt equals collective punishment.

"Adjustment" occurs during a recession

Malinvestment and underinvestment already exist, since the state enforces regulations and taxes that undermine the economy. More generally, if the state exists, then distortion and malinvestment must exist. During a bust, many Misesians view that as "adjustment." "Adjustment" just shifts some malinvestment in one sector to another sector, within the already distorted system. So, in a statist society, one should call the "boom" phase of the business cycle as increased malinvestment, not just malinvestment, since the state always causes malinvestment.

Businesses misled during the "boom" phase

Malinvestment, per se, does not originate from poor business decisions. During the "boom" phase, businesses make sound decisions to invest. Contrary to the Misesian understanding of the business cycle, businesses actually overinvest in long-term assets during the boom phase because it actually profits them.

Inflation causes malinvestment.

Inflation, per se, does not cause increased malinvestment. The lower real interest rates than the "equilibrium" rate causes malinvestment. The lower real interest rates encourage firms to invest in long-term assets at the expense of short-term assets, distorting the "optimal" ratio of long-term assets and short-term assets. Thus, this un-"optimal" equilibrium would result in more opportunity costs for individuals.

Only in the "boom" phase of the cycle, malinvestment occurs. In the "bust" phase, the "adjustment" occurs. The ratio of long-term assets to short-term assets approaches the "optimal" level during the bust. Therefore, the bust phase makes consumers wealthier! Then why do some consumers get poorer in the "bust" phase? The individuals who has a loan during a monetary contraction would not have enough money to pay back to the banks.

So-called: Boom, bust, growth, and recession

The Misesians misnamed the terms such as "boom" and "bust," and "growth" and "recession." Actually the only variables that define the boom and bust phases include violently lowering and increasing interest rates, respectively. Monetary expansion has nothing to do with "booms" and "busts." We should define "boom" and "growth" as lowering interest rates, and define "bust" and "recession" as raising interest rates.

Malinvestment causes loan crises

Note that during a bust phase, one should not view the two concepts: malinvestment and unpayable loans, as related or correlated with one another. In a "bust," malinvestment may occur without a loan crises, and vice versa.

Monetary contraction causes unpayable loans. Monetary expansion, per se, does not cause increased malinvestment. Lower than "optimal" interest rates actually causes malinvestment.

Without monetary expansion, malinvestment may still occur by lowering real interest rates. Conversely, without lower interest rates, loan defaults may still occur due to not enough money to pay the loan from monetary contraction.

Artificially low interest rates

One should also note that in a free society, interest rates will probably decrease, since a free society does not have lending restrictions and taxes that increases interest rates.

Central banks cause depressions

The common Misesian folk thinks that central banks caused the Great Depression. Labor union regulations actually caused the Great Depression. The "closed shop" regulation in labor unions violently forces each individual to join the labor union, even if he or she does not want to. Also, as labor union regulations guarantee a "minimum wage," it would cause unemployment. During a monetary contraction, the real "minimum wages" guaranteed by labor unions increase above the market rate. The forced real wage increases during a monetary contraction makes the employer to fire many, thus causing massive unemployment. Thus, central banks did not cause the Great Depression, labor union regulations did.

Only abolishing minimum wages would abolish unemployment

The common paleolibertarian, especially those at the Ludwig von Mises and the LewRockwell.com institutes, thinks that only minimum wages cause unemployment. Others would refute that by citing high unemployment rates in states that do not have an official minimum wage law, such as Hong Kong. Hong Kong's strong labor union regulations caused their high unemployment rates, even they do not have any official "minimum wage." For a more obvious example, labor unions caused massive unemployment during the Great Depression, even when the official minimum wage did not "exist" at that time.

The trade deficit

Various paleolibertarians in the Mises and LewRockwell institutes, such as Bob Murphy and Peter Schiff, view the trade deficit as a harm. First of all, an actual trade deficit might not "exist". Since the state estimates the imports and exports, we should not see it as accurate. Second, trade deficits do not cause offshoring and unemployment, and vice versa.

Increased taxation forces corporations to raise the nominal prices of their products to cover their costs

Wrong. If the money supply stays constant during a corporate income tax hike, prices will stay constant. It would only decrease the nominal wages to the employees, since the money supply stays constant. Constant money supply during almost any tax hike would not cause corporations to raise their prices since the supply of money does not increase.

Also, since most corporations have tax loopholes, it would have a very small effect on the wages of the employees.

The variations of interest rates have a larger influence on employee wages than corporate taxation. If the central bank lowers interest rates, corporations would borrow more to invest in more long-term assets. This would lower the real wages of the employees since the un-optimal long-term/short-term asset ratios caused from lower interest rates does not reflect consumer preferences.

Most of the self-identified left-libertarians view anarcho-communism as compatible

Even some so-called left-libertarians deny anarcho-communism as compatible with anarchism.

Left-libertarians hate corporations

Even though that some libertarians oppose corporations as they define corporations as charters from the state, some left-libertarians defend the existence of corporations.

Not all left-libertarians hate corporations. Lee McCracken defended the existence of corporations at anti-state.com, and Kevin Carson defended the existence of corporations.

Foreign nations as economically free

Various individuals who have read Peter Schiff's book, Crash Proof: How to Profit from the Coming Economic Collapse, have brainwashed his into incorrect China-bashing views.

Many individuals who read his book, especially those Ron Paul advocates, seem to hold a belief about Peter Schiff's cult that China has more economic freedom than the United States. Schiff, the neo-mercantilist, mentioned in his book that China possesses more economic freedom because, empirically, it appears to have a larger manufacturing sector than the United States. Schiff's neo-mercantilist beliefs include that if the U.S. falls into an economic depression, China will prosper because it would not export "useless" goods but instead produce goods for their own consumption. Peter Schiff holds an idea of self-sufficiency that nations which have a large manufacturing base would supposably increase wealth. I view that as protectionism.

Foreigners have more economic freedom

Specifically, many racists believe that non-whites possess less intelligence than white people. Why does "developing" economies apparantly grow "faster" than "us" when they have less intelligent than white people? They realize that this why does the "developing" nations grow "faster" than the United States when the foreigners possess less intelligence. Finally, they concluded that the supposed superior economic "freedom" of the developing nations made their economy grow faster.

Also, the racists often possess an inferiority complex that non-white nations have more economic and political freedoms than white nations. Even though the supposably "developing" nations have massive economic regulations, high tariffs, much more corrupt, and monetary expansion much higher than the United States, the racists still concluded that the "developing" nations have more economic freedom than the United States.

This inferiority complex additionally reinforces the confirmation bias that foreign nations have more economic freedom than the United States.

Additionally, the domestic bailouts in the U.S. reinforced their confirmation bias that foreign nations have greater economic freedom than we possess.

One should view economic "freedom" as subjective. At least the foreign nations have a large counter-economy.

Definitional...aggression, coercion and violence as interchangeable

One should not confuse nonviolence, non-aggression and non-coercion. Non-aggressive violence exists: retaliation from self-defense. Murray Rothbard even defined self-defense as a violent act, even though it does not contradict non-aggression. Non-aggressive coercion exists: Threatening a criminal.

The Unintended Consequences of School Vouchers

Individual progress

The individual works for real progress. Inflation, or monetary expansion, behaves like a tax. In the absence of inflation, incentives to save arise. Without the threat of inflation destroying the individual's savings, he or she would invest more. 

Workers will work their way up with a true free education system in a free society. Without the constant theft from inflationary, regulatory and tariff pressures, workers will accumulate wealth to invest in real education, not the state "education" in which it wastes and too expensive.

In the current system, the state regulates education, even the so-called "privatized" voucher schools. Amazingly, these voucher schools function similarly to the state-funded "public universities." The state funds voucher schools similar to how the state funds the "public universities." We cannot distinguish between the terms "private" and "public." This exemplifies that we should use "private" and "pubic" relatively.

In the "developing" countries in Asia and Latin America, the worker currently works for long hours in slave conditions, with little income. Inflation destroys the worker's savings, preventing him or her from stepping up the ladder. Their subsistence quality of life impedes their progress, as it prevents them from getting an education. The "free" trade agreements, which set special quotas, tariffs, patents, and regulations, privilege the monopoly corporations at the expense of the worker. 

Subsidized education, or any education funded by vouchers by the state, harms the workers more than it helps. The state must implement all its subsidized services with regulations,  otherwise subsidies would misdirect. The state must specify the criteria required by these services to subsidize them, to prevent misuse of funds to firms that fail to pass the criteria. For example, the state must specify the curricula for voucher-funded schools, otherwise the voucher-funded schools would misuse their funds to teach something unrelated to education. The state must regulate student loans the equally as subsidized education. When the state gives a student a loan, it must regulate the schools that the student uses the loan. The state must regulate the curricula by these schools. Otherwise, the student would spend it on something else unrelated to "education," such as an athletic school.

Besides the regulated curricula, the state must perform some tests to test the effectiveness its education subsidies. In that way, the state will not fund any school that fails to pass the test. The state uses tests as a strategy to avoid wasting funds to the "bad" schools. However, since the state makes the "tests," it can choose any question to test that it want to ask. The state controls the curricula that the subsidized schools teach by a curricula or standardized testing. These curricula and tests might contain propaganda.

Proponents of "school vouchers," particularly the so-called "free market" economists, cite that it results in more freedom than "state-regulated" education. We proved that "school vouchers" function the same as "state-regulated" education, as the state must regulate the curricula and provide tests to prevent misuse of the "voucher funds." 

We see the "developing" countries as highly corrupt and frequent abuses of power. In a less totalitarian area, such as the developed countries, we see more sole proprietorships and small businesses than the corporations. However, the reverse occurs in the "developing" countries. Corporations vastly outnumber sole proprietorships and small businesses. In the "developing" countries, we see a few multinational corporations dominating the country.

The corporatist "free" trade agreements only defend the existence of multinational corporations. The written agreements contain special privileges, such as favorable regulations and patents. Corruption and the favorable treatment to the large corporations arise at the expense of small businesses. This results in a monopoly, a state-granted privilege prohibiting competition of the large corporations with smaller businesses. These corporations can charge as high and pay as low to the workers as they want. 

Until the state-privileged corporations can compete with new businesses entries, they will continuously enslave workers. Until the state withdraws all funding for "education," workers will not really learn. The workers cannot pay for even low-quality state-education.

As we proved that the free society will provide higher quality education from the lack of state controls, and the free society also will make individuals afford education as the privileged corporate monopolies paying slave-like wages would not exist.

We omitted the situation in which an individual who possesses relatively diminutive wealth wants to make money in a field requiring a long time of expensive education, but he or she lacks the patience to save. We see three advantages in a free market:

• In a free society with free competition, the corporate parasites will not confiscate the individual's wages, thus letting he or she save the education sooner.
• The state will not regulate the curricula, which will let the free market education services compete until the education costs reduce to a fraction of the state-regulated or subsidized, while providing higher quality education. 
• In a free society, individuals can freely start working without state-required licenses. In a closed society, however, the state requires individuals to own a license before working. The licenses often contain special provisions mandating the individual to study at a school for a long period in order to work. For example, the state forces individuals who wants to work as a medical doctor to study in an university for ten years. This increases the costs of education tremendously.

The individual will easily get his or her education, and these three reasons may make him or her well sufficient. In a free society, even more advantages will make everyone, including the ones who resided in the "developing" countries, to afford an education. As discussed in the previous section, in a free society interest rates will significantly lower. The impatient individual can afford education even sooner, by borrowing at significantly lower interest rates. After completing his or her education, the individual would directly benefit in the increase of productivity. The individual could easily pay back the loan from his or her directly increased productivity, and in the absence of the opportunity losses from taxes and regulation. This encourages a productive society.

If the free society suddenly arose from a fast, peaceful Agorist revolution, we would indeed see a temporary adjustment to a more equal wealth and income distribution fixes. We see the temporary adjustment as fast, as individuals would possess the incentives and the freedoms in the absence of the parasites. Any worker would use the cheap, high-quality and fast free education to raise his income more quickly than anyone can guess.

The productive society

As incomes approach more equality in a free society, workers will increase productivity. As noted in Artificially high interest rates?, the state taxes individuals 50% of their income and an 80% opportunity loss exists in the parasitic society.

We should not imply that income will double due to 50% less tax. We should not imply that income will increase by a factor of five due to 80% opportunity cost. As productivity increases, individuals work less. Some individuals will work as hard in a free society as they worked in a parasitic society, to amass great wealth. Some individuals will reduce their work time by half, as they still can receive wages 2.5 times than they live in the parasitic society. Some individuals will reduce their work time by five in the absence of 80% opportunity cost, while still resuming the equivalent pay as they worked in the parasitic society. 

GDP, or gross domestic production, measures the gross production in a select number of individuals who happens to locate in the same geographical territory. As GDP measures production, it lacks opportunity costs. Lower opportunity losses mean higher productivity. For example, open source "free software" increases productivity, but decreases GDP. Taxes increase opportunity losses, but might increase GDP, as individuals might produce more for the state to confiscate.

I wrote this article as valid E-Prime, avoiding the "to be" inflections (be, is, am, are, was, were, been and being). In addition, to avoid redundancy, I avoided the terms: (has, have, had, does, do, did, becomes, become, became, left-wing, right-wing), the ontological terms (belong, type, kind, class), relative terms (most, overall, generally, very, few, many, majority) and all the terms that ended in -ism, -ist and -ian (capitalism, communism). I tried to use avoid the passive voice if possible, and including the actor if possible. Although I believe in abstract thinking, I wrote unambiguously, concretely, and precisely as possible, to avoid potential conflicts in communication. I avoided abstract terms such as Malthusian, Darwinian, and Marxian. 

Extensions of the State

An inverted index of List of Fully Parasitic Sectors, ordered by level of state fusion. When the state fully expands itself, it would be considered level 1. Levels increase by less state fusion.

level 1 (red market)

Extensions of the state. Contains government-granted sectors. This also includes state subsidized sectors, directly and indirectly funded. Because the state subsidizes or buys services from these sectors, firms cannot control price and quality.

The state must specify the criteria required by these services to subsidize them, to prevent misuse of funding to firms that do not validate to the criteria. For example, the state must specify the curricula for voucher-funded schools, otherwise the voucher-funded schools would misuse their funds to teach something unrelated to education. The state also must regulate the curricula to the schools that they give student loans to.

democracy

Self-explanatory.

military-industrial complex

Private contractors lobby the state for wars. It funds war propaganda for the state to fund war.

security-industrial complex

Unneeded, free market security firms would provide them.

prison-industrial complex

These lobby victimless 'crimes' such as drug laws to get more prisoners to profit.

university-industrial complex

The state funds universities to spread propaganda. An article

Internet sector

Net "neutrality" regulations prohibit competitors.

roads

The energy companies fund roads specifically designed for cars so cars would use energy. Claim hundreds of deaths and injuries.

education vouchers

Purely extensions of the government. Restricts these curricula to prevent abuse of funding that they do not approve.

state granted organizations

Public universities, etc.

student loans

central bank

banking sector

The central bank funds these.

law

They lawyers make laws more complicated so they would benefit because they make the laws. The lawyers indoctrinate individuals to be agents to report every violation to the police. The low supply of lawyers limits the number of firms that employ them. And creates artificial economies of scale for firms that employ them due to high prices due to high demand. If everybody is an independent contractor or if there are many small businesses, the number of lawyers too small and little.

accountancy

Similar to the lawyers limits the number of firms and creates artificial efficiencies.

tax preparation

Tax preparation companies legislate complicated tax regulations so they would profit. They own many "tax patents" so they retain a monopoly in efficient tax preparation.

trade agreements

labor unions

Labor unions control pricing and hence controls quality of the jobs

urban planning

The urban planning sector restricts business development in residential areas. This would make workers consume more energy to drive to their business everyday. The energy companies lobby the urban planning sector to profit from selling energy to workers everyday when they drive to work.

patented sector - drugs, machinery, electronics, equipment, business methods, etc.

Bureaucrats working to legislate government regulations would hold stocks of a corporation, then legislate a monopoly on the corporation so they would profit from the stocks that they hold in a corporation.

Federal employees own stocks of many companies and then make regulations to benefit the company so he would profit.
Patent examiners would own stocks of a company and then grant that company patents so he would profit.

subsidized housing

Examples include Fannie Mae and Freddie Mac. Bailouts to inflate.

level 2 (pink market)

The state goes through a highly restricted approval process, but does not fund or buy these services. The approval process and regulations restrict the supply of firms, which results in high prices, but firms still have the ability to compete for prices. Ergo firms have some degree of control of price, but not quality. Price and quality may still be thousands of times worse - same as level 1.

medical-industrial complex

The whole medical sector is parasitic. Physicians are licensed to prescribe drugs for the pharmaceutical companies. The licenses are written by big-pharmacy. The damage done from high prices from licensing that restrict the supply of doctors is very little compared to the damage done from physicians who diagnose false. When the physicians diagnose false, it results in drug addiction which causes side-effects. In order to correct the side-effects, more drugs are addicted.

civil engineering

The government subsidies these industries, and due to huge corruption and bureaucratic inefficiency, it parasitically robs a large fraction economy to the civil engineers.

construction

Due to building codes, it suppresses smaller businesses to compete.

psychiatry

Psychiatrists that study non-existent disorders such as autism, ADHD, bipolar disorder, schizophrenia and others legislate regulations so psychiatrists would diagnose them. Psychiatry is pseudoscience. They conflate correlation with causation.

dentistry

The strict certification process.

non-subsidized "private" education

The state strictly controls the curricula taught in these schools.

The "free trade agreements" contain corporate privileges, quotas, duties, licensing and regulatory requirements. This industry lobbies favorable tariffs that raises the price of imports and exports by hundreds of times.

Telecommunication

Net neutrality regulations raises costs of lines and inhibits innovation.

Electricity

The state regulates electricity companies

Water supply

Agriculture

Highly subsidized, confiscation of money

level 3 (white market)

The general white market, moderate state regulation distorts and creates inefficiencies. Firms have a relatively large degree of freedom to behave similarly as they would in a free market, with the oligopolies and artificial economies of scale. Frequently lobbying the state, these actions considered as parasitic.

non-profit firms

The state arbitrarily exempt taxes on some activities but not others (basically limits the activities)

corporations

The state exempt taxes on "capital goods," Government arbitrarily determines if a good's category fits in "capital goods," basically distorts goods and services

financial industry

Though the current financial industry likes to steal money, such as parasitically lobby government to inflate, the financial industry, intrinsically, does a useful job in the free market. The speculators know internal information about the interest rates. They has grown too large, and embezzeles the majority of the wealth.

regulatory capture

food industry

limits some non-FDA approved foods

level 4 (black market)

The black market, state does not control these, but due to risks to state takeover, these firms operate less than their maximum efficiency.

unlicensed businesses

high prices due to risk of state

immigrant transport industry

too risky

illegal drugs

high prices & monopoly

prostitution

high prices & monopoly

level 5 (free market)

Market anarchism, no threat of state, optimal efficiency.

Religion--although religious individuals advertise this fraud, the existence does not depend on the existence of the state. Less intelligent individuals do not realize the obvious contradiction in religion.

Pandemics, such as AIDS--This does not depend on the state.

Authoritarian parenting--This does not depend on the state.

Rent and Interest Will Shrink

Artificially high interest rates?

The current interest rates range from about 2%, the Fed funds rate, to 10%, the mortgage loan rate. The Austrian School economists that I encountered see this rate as artificially low. They think that the Federal Reserve, the central bank that counterfeits new money, artificially lowers interest rates which promotes malinvestment. They base their theory on the Austrian Business Cycle Theory, which suggests the artificial decrease of interest rates by the central banks. However, I see these rates as artificially high. Let me explain.

The burdensome lending regulations prohibits anyone to lend without a license. Less individuals would lend as a result, and interest rates raise in response due to low supply of loaned funds. Taxes also lower the supply of loaned funds and increases the demand of loans. The state directly confiscates about 50% of the workers' income through taxes. If one multiplies up both sides of the payroll taxes, tariffs, the federal, state and local income taxes, value added taxes, sales taxes, corporate income taxes, property taxes and the regressive excise and inflation taxes, one would get a taxation rate higher than 50%. Indirect "taxes" include the monopolized firms (we will explain this below), business regulations, and others mentioned in the index of fully parasitic industries, although workers see these "taxes" as loss of opportunity costs, not a decrease in production (as in gross domestic product, we will mention later). Including these indirect taxes would result in an 80% "tax" or, more accurately, 80% opportunity loss. Without these "taxes," individuals would lend more which lowers interest rates significantly.

The Austrian economists also avoided the uneven distribution of rates. In the current corporatist society, interest rates distribute unevenly throughout wealth and class levels. I see the privileged corporations borrow at the Federal funds rate, a nominal rate of 2% from the Federal Reserve.

Unprivileged individuals, such as the working class, borrow at a nominal interest rate higher than 6% for mortgages. I consider this unfair to the productive working class when the privileged corporations borrow at 2%.

Monetary expansion may also raise the real mortgage interest rates, to 10-30%. Monetary expansion discourages savings at the expense of increases in speculation and consumption. Suppose an individual wants to lend out money and earn interest. However, he or she cannot profitably invest by lending. The current monetary expansion rate looks closer to 10%-30% annually. The individual cannot profitably invest even if he lends out with an 8% interest rate. If the individual lends 8% when the rate of monetary expansion approximates 10%, he would lose 2%!

Besides the workers who unfairly borrow at a higher rate than the privileged corporations, the current system also treats Mom and Pop businesses unfairly. The Federal Reserve prohibits anyone other than the privileged corporations or banks to borrow at the Federal funds rate. Smaller businesses borrow at a higher rate. They could only borrow at a high interest rate of 20%, which allows the privileged corporations to crush them!

Many Austrian economists consider Hans-Hermann Hoppe as a respectable economist. He wrote an article theorizing the existence of the upper class, even in a free society, though many Austrians disgree with him. In his article, he mentioned that in the monarchical period in early modern period, the real interest rates averaged an amazingly 2.5%. Even in the feudal age, in which I consider as a highly corrupt period, interest rates averaged 5%. The state raised the interest rates since corruption begun in the 19th century.

If a free society exists today, individuals can borrow at a lower interest rate, such as 1%, much lower than the current Federal funds rate of 2%. Everybody will own a house!

Many Austrian economists assume that interest rates would rise in a "free" society. We proved that they made a mistake. They avoided about how corruption, such as regulation and taxes, raises interest rates more than the central banks would decrease. They failed to take note of the inequality of interest rates differing between the privileged corporations and the mortgage rates. We predict that interest rates will decrease.

Anarchist Communication Guide

Communication as a marketing strategy

Those who use communication to spread ideas commonly use verbal communication. All kinds of communication contains vagueness, semantic barriers and misunderstandings that cause unproductive conflicts. Communication requires an amount of common understanding and definition of language and its use.

Suppose if an individual thought of an idea. The first thing that he should do, involves researching the benefits of communicating his idea in the first place. If he wants to spread his idea to others as a larger strategy in achieving some goal, such spreading his idea of Agorism, he should adhere to the common marketing strategies.

Communication and groupthink

The process of multiple individuals collaborating to create ideas and to solve problems defines groupthink. Groupthink, since it requires a plurality of individuals, requires communication. Members should equip the same definitions of the terms to communicate thoroughly.

However, groupthink has its disadvantages. Because of the effort of communication, it often results in slowness of idea development due to time spent on communication. The time spent speaking and writing out ideas to others may lag the speed of idea creation by hundreds of times. The time spent on communication may constitute 99% of the time, while authentic thinking may constitute merely 1% of the time.

Research their audience

The effort on writing concise and non-vague text consumes too much time. Writers should explain clearly, even though the idea may seem obvious for him, to express his ideas. Writers should research their audience for their jargon and their definitions, in order to avoid semantic disputes and misunderstandings. They also should research the audience's background and knowledge, and define terms that they might confuse.

One thing that communicators often forgot, includes the style of their communication and the attractiveness of the text. They should research his audience's interests and include things that may interest them, in order for them to continue the reading. Using active voice instead of passive voice makes writing more interesting. For example, use The state enslaves people. instead of People are enslaved by the state. Avoid "nots," for example, use Inflation harms instead of Inflation does not help. Truth behaves objectively, instead of Truth does not behave subjectively. The state behaves evilly, instead of No state can behave morally.

Communicators often ignore marketing their text, which in many cases considered the most important step in spreading ideas. Forgetting their marketing strategy undermines their purpose of writing: to spread their idea to as many as possible to promote a cause, such as Agorism. If they do not market their idea as wide of an audience as possible, then why write at all?

Symbol grounding

In order to perform an accurate standard of communication without any semantic conflicts, communicators would often should define their terms concise enough. This challenging task, ironically, often results in incomplete and unclear definitions, due to the confusion within these words that defines the term. John Searle's Chinese room argument considers the theoretical impossibility of defining terms without going contradictory, while not assuming common assumptions.

A partial solution to reduce vagueness involves giving examples demonstrating the definition. Explain examples of physical actions demonstrating what the definition does and does not mean increases clearness. For example, defining defense requires the communicator to explain thoroughly various situations:

• If one physically hit the same individual who had hit himself without his permission, one has defended himself.
• If one put a fence around his property or locked the door to his home, one defended himself.
• No contract existed between Alice and Bob exempting punishment for threatening speech. Bob said a threatening statement I am going to hit you. Alice did not get offended. If Alice hits Bob, Alice has performed self-defense.
• No contract existed between Alice and Bob prohibiting non-threatening speech. Bob said a non-threatening statement: Women are stupid. Alice becomes offended. If Alice hits Bob, Alice would have aggressed against Bob. Therefore, if Alice hits Bob and then Bob hits Alice, Bob has performd self-defense when he hits Alice.

Use concise terms

Counterproductive aphorism

Whenever an anarchist saying aphorism like government is slavery, taxation is theft, or democracy is bad, these phrases would result in semantic disputes if interpreted incorrectly by the interventionist. Interventionist have multiple interpretations of words like theft, is, or government in these contexts.

The term government implies a broad range of definitions, ranging from a state government, to self-government, to corporate government. The latter two definitions can derive from voluntary associations, while the former implies an inherently aggressive association which does slavery. Thus, the phrase The state is slavery. feels more neutral.

Individuals from various backgrounds interpret the word is in this phrase differently. The is word may have interpreted as an inherent property of the "state." However, the term "state" does not possess any inherent positive or negative attribute; its behavior determines its positive or negative attributes. Therefore, Objects are Morally Neutral.

A more neutral method to rewrite the phrase The state is slavery involves replacing the meaning of "slavery" in this context, which equates the state and theft as inherent, to resemble a behavior, like "enslaves." The phrase becomes The state enslaves. However, it contains further vagueness since it does not acknowledge the object that it enslaves. Does the state enslave the working class, the capitalist class, or the bureaucrats? The state does enslave the former, and it does not enslave from the latter two. Appending "us," an object, to the phrase would look more neutral: The state enslaves us. This has clearly shown that the phrase The state enslaves us. looks much more neutral than the phrase Government is slavery.

Interventionists do not interpret the phrase taxation is theft as consistent because they irrationally believe that the state has resulted from a social contract, hence all members implicitly legalized taxation. Though anarchist realize that taxation is theft, the use of the word "theft" to the interventionist would confuse them. Counterproductive strategies such as repeating the vague phrase would do nothing than to incite further conflict and semantic disputes. A more rational strategy involves using concise words and logical arguments to derive that taxation harms rather than helps us.

Ontology

The word "is" in the phrase taxation is theft can imply synonymy for taxation and theft, hence taxation and theft becomes interchangeable.

The word "is" can also imply taxation as a subset of theft, which would imply the word "is" behaves as an injective relation.

The word "is" can further imply that there exist only one classification of the subject. For example, the look at the definition of a dog: A dog is a species of mammal. The "is" would imply that the term dog does not have any definition other than a species of mammal. Because individuals would interpret the word "is" as an injective relation, other definitions such as humans commonly keep dogs as pets, or dogs bark, should not exist. An ontological or ultimate categorization of "dogs" does not exist. Because this does not exist, this refutes the connotation that the word "is" behaves like an injective relation even though the definition of "is" in the previous paragraph defines "is" as an injective relation.

This demonstrates that the word "is" implies vagueness. However, all the verbs that means "to be," in addition to "is," also implies ambiguity. The word "to be" has derived from ontology, a theory of the ultimate categories of things. Since reason shows that "ultimate categories" do not exist, the use of the "to be" words imply an ultimate category of things.

Avoiding "to be" words (am, is, was, are, were, be, been, being) lessens the ontological concepts in writing, which would make sentences look more neutral. E-Prime uses this strategy. The use of E-Prime, though does not eliminate ontology in any way, lessens the use of it. Individuals still should reason non-ontologically and non-taxonomically to make objects neutral. More active voice sentences over passive voice sentences result from a side-effect of E-Prime, as explained above that active voice often makes writing more interesting.

Vagueness

Consider a statement used by Austrian economists:

While most people agree that computer science, physics and chemistry contains deductive truths, most people deny that economics contains deductive truths.

The use of the word "most" resembles a vague statement. The word "most" did not refer whether to most of individuals in the United States, the neoclassical economists, the majority of self-identified Austrian economists, or did it refer to the speaker. "Most" of the individuals in the United States, paradoxically, might believe that economics contains deductive truths because of their ignorance of the empirical methodology of mainstream economics. Thus the use of the word "most" interprets as highly vague and represents a subjective viewpoint, without any objective criteria of the usage (whether over most of the individuals in the United States or mainstream economist). The words "majority," "some," and "few" also interpret as vague words.

Furthermore, words that relate to size, time, speed, distance and other quantifiable concepts have differing interpretations. The use of "large" or "small" to denote an object implies a relative comparison to other objects within the specific category. A "large" dog means that it looks larger than the mediocre "dog." However, what if a person who, in his lifetime, looked at dogs that grew large? That person would classify the "large" dog as mediocre.

Numerical concepts often represent highly subjective, and even inaccurate interpretations. The mainstream media frequently referred that India's "economy" would become larger than the United States. What does "economy" mean? Does it refer to the nominal GDP or CPI-adjusted GDP, the total GDP or the per capita GDP, or does it refer to another measure of the "economy"? The Indian government, using extrapolation of empirical growth rates, deduced this numerical statistic that the "economy" would grow larger. The statistic did not realize that the relatively "high" growth rates would slow down after time due to lower economic freedom compared to Western nations.

The left-right political spectrum

See The Fallacy of the Political Spectrum

True definition

Common or generally accepted definitions do not exist. While the majority of the individuals in the United States believe that democracy synonymously equates with freedom, the Austrian economist would equate it with majority rule. Others, including the Bush administration, would equate it with "capitalism."

While the majority defines socialism in the Marxist definition as a transitional stage to "communism," bureaucrats would define it as a mixed economy. The majority in Europe may equate socialism as a "Third Way" of "Social Democracy," and the Austrian economist may refer socialism as synonymous to a planned system. Furthermore, others, including the "left-libertarians," and the Mutualist, refer socialism as any strategy achieving workers' equality.

Socialism, communism and progressivism, do not adhere to any generally accepted definition among all types of subjects. While progressivism originally meant as making progress, it became distorted by the popular individuals which means nothing than a synonym for "leftism" among the majority in the United States, while in India, it may mean some form of totalitarian and planned social system. Always use the true definitions, not the "popular" definitions that one subjectively accept. As these might mean vastly different in other states and ideologies, a centrally accepted definition does not exist.

Liberal and conservatism mean polar opposites as defined by the majority in the United States and mean synonyms as in Australia. The majority in the United States might see these terms reversed to mean opposites, such as in Europe. Even worse, the terms "left-liberalism" and "right-liberalism" do not have any well-defined general acception. Left-liberalism might mean an economically non-interventionist corporate capitalist society by a majority of European professors, due to different definitions of "liberalism" in Europe; while right-liberalism might mean some branch in the Democrat Party that endorses religious fundamentalist values, by a majority of Democrats who attended some college that defines right-liberalism that way.

Murray N. Rothbard's mistake in the use of left-liberalism in his manifesto For a New Liberty may have convinced a few for his apparent self-explanatory definition, while others, such as European readers, may mistakenly interpret this as some pure free-market system while advocating maximum personal freedom. He did not appear to research how his audience defines left-liberalism, which resulted in huge mistakes. No one knows what it means. It could mean anything. It can mean the positions advocated by the current United States Republican Party, since they have the same view on economic intervention as the positions of the Democrat Party except lesser "pork barrel spending."

Rothbard could have used interventionism in place of left-liberalism. He could have used statist in place. He could even have used conservatism, since its true definition meant status quo or status quo ante, which logically implicated its opposition to change, especially anarchist revolution.

One should the true definition, not some "popular accepted" one. As proved, a popular accepted one, no matter how popular, might mean the polar opposite in other countries or in differing occupations. As this would discussed later, individuals should avoid ideological words to avoid differing definitions.

Don't replace semantics with content

Well, what has the current "anarchist" debate fed up to? Anarchist within a wide range of economic positions, each and every day, clashing among each other with loud and roaring sounds IN ALL CAPS and in repetition, have become label warriors every day. Many Internet warriors, who on the forums, blogs, mailing lists and even on YouTube comment discussions, rant each other out on confusing and conflicting terms filled with "package deals" and negative connotations that rapidly incite heated attacks against each other, enough to make any reader offended without any reason, other than the simple explanation: caused by the communication incompatibilities and differing definitions that go unnoticed.

Don't ever go on these sites nor read anything, even in curiosity, unless one wants to have a mental conflict that forces one to reply against these apparent trolls. Never use any controversial terms like "capitalism," "anarcho-capitalism," and "objectivism," unless one wants to feed the collectivist "anarchist," and the Randroid trolls.

What causes the internal cause of these fights? Different definitions between the Randians and the non-Randians exemplifies the main cause of the objectivist-subjectivist conflicts. The clash of the word "Anarchism" of the Communist and the Free-Marketeers results in an ever-growing, ever-lasting debate among these, even in the original philosophers such as Murray Bookchin's essay: Social Anarchism or Lifestyle Anarchism - An Unbridgeable Chasm.

In his essay, filled with bizarre and obvious flawed assumptions, these flawed assumptions perform the major contributions!

He has renamed Individualist anarchism with Lifestyle anarchism for the very misunderstanding that Individualist anarchism does not even respect nor help the workers in any way--Bookchin perceived that the rich and the elite developed the "individualist anarchist" philosophy as a way to liberate from the traditional cultural restrictions on drugs and gambling, at an expense of the decrease in the living standards of the workers.

All the chapters in his book, filled with same-old arguments against the current state-capitalist order, have the same criticism sections in An Anarchist FAQ against anarcho-capitalism.

All the labels have become semantic, and the "anarcho"-communist who wrote the FAQ have become so informed that they do not even know the true concept of "individualist anarchism." If the philosophy "individualist anarchism" replaces its name to "free-market anarchism," the authors would quickly shun it. The self-identified "anarcho"-communist contain a diverse array of "anarcho"-communist philosophies, such as Mutualism, Anarcho-Communism, Anarcho-Collectivism, Anarcho-Syndicalism, etc., which internally differ much more greatly with each other than all the free-market anarchist philosophies combined!

Please ignore the Anarcho-Communist. Ignore them. Spend more time marketing Agorism instead of criticizing Anarcho-Communism, and then have everything done.

What do we do?

Instead of playing the "semantic game" with the statists who shun away whenever the word "anarchism" appears, focus on using more neutral words. As said, please avoid controversial words and words differing in definition, especially anarchism, capitalism, socialism, communism, libertarianism, and even free market if possible; in order to convert the maximum number of statists directly to anarchist philosophy without all the mess trolling in forums and in blogs.

To further and maximize the effect of avoiding as many connotations as possible, please avoid the ideologies that ends with "-ism," and avoid words such as "property." Avoid arguing abolishing "minimum wage" laws, as readers would often get shocked of how it might mistakenly yield a return to the "Robber Barons." Avoid any arguments defending Wal-Mart or Standard Oil, which would quickly shun away many readers, and even avoid the word "property."

It works! For a few examples, see Mary Ruwart's Healing Our World, with a free online version.

In her book, all the political philosophies ending in "-ism" do not exist. The term "free-market" does not even exist. The book defines the word "property" only after it argued that non-aggression against the products of the labor would result in fortune. Because her book avoids the semantic game by avoiding potentially conflicting terms, all of her book focuses on pure logic instead of semantics.

By emphasizing only one term--"aggression"--she refutes all the statist proponents without any other words.

However, mistakes encountered during reading includes the refutation of minimum wage placed too early in her book, which might drive away potential converters. Her defense of statist corporate firms such as Standard Oil would almost shun away anyone who opposes the current gas company profits.

Bad marketing practices for promoting Agorism include the promotion on web forums, blog comments, mailing lists and YouTube comments. Agorists consider that the vast quantity of Ron Paul spammers on YouTube damaged "libertarianism," though Ron Paul behaves like a fascist.

Good marketing strategies in promoting Agorism, if one exist, include marketing ideas and books as wide of an audience as possible. Marketers should use copywriting techniques to increase converters of Agorism. The main role of promoting the free market comprises of marketing strategies to spread it. Agorist should engage in marketing the free market.

Semantic links

For links, see:

• The Voluntaryist Jargon Handbook
• Linguistic arrogance
• Words to avoid