Road to Serfdom or Path to Prosperity

The politics of demand destruction reduces to tax policy because paying taxes pays the economic rent.

Since the best way to have more of something is to tax it less (reduce the rent, which is what the kind did, and later the middle class who became rich like the king with the development of capitalism), if we want more millionaires, which indicates being on the path to prosperity, tax it less.

If we want to add supply, it is necessary to reduce the rent. No, this does not mean a broader and flatter distribution of income to demand the supply, which resists deflationary risk and rising rents. It means a broader and flatter tax burden against a zero-sum reduction of income for the lower classes, which regresses the tax burden, raises the rent (increases debt to demand the supply) and results in less productivity. It puts us on the road to serfdom described and explained as the path to prosperity.

According to efficient-markets theory, remember, we always encounter a detour along the path to prosperity. Debt increases to demand the supply. Margin compression occurs because a free market creates plenty of wealth but does not sustainably distribute it, which always puts us back on the road to serfdom.

Since capitalism considers redistribution of wealth to be a moral hazard because it reduces productive incentive, to cure recurrent crises of overproduction requires making the market more efficient.

(Keep in mind that the cure is a psychological trick utilizing the anchoring effect. Since the wealth does not trickle down enough to demand the supply, which results in oversupply at high prices, capitalists are quick to warn us that taxing the surplus will make it even less likely the wealth will trickle down. A more progressive tax rate is a hazard because it steals value and distributes it to people that did not earn it. Stealing is immoral, and this immoral act results in the hazard to be avoided--deflation. Thus, the moral hazard.

Avoiding the hazard is not a function of deconsolidation because consolidation is what makes the market more efficient, and raising the rent at the margin is as bad because it loots the value efficiently produced. Instead of adding the supply that cures the chronic shortages we had before capitalism, pillaging and plundering the wealth of nations like in days gone by deters the incentive to add supply. Financiers will not try and make markets more liquid and, hence, more expansive, but instead hord their cash like they are doing now, compressing the marginal product, causing shortages and rising prices.

Managing the risk with propriety requires the special understanding, the secret knowledge, needed to be a member of the ruling class, and its administrative bureaucracy ruled from the top down, both public and private. In order to not induce the risk being avoided, and make things worse, it is necessary to do the right thing and do the wrong thing no matter how immoral and hazardous it may be for the huddled masses in service--indebted--to their overlords, serving up the oversupply--the cure for shortages--on demand.)

Originally, during the Clinton administration, the market was made more efficient by progressing the tax code. The margin, instead of compressing into the hands of a few, wealthy plutocrats, was taxed so that it accumulated a budget surplus instead of debt on demand.

The Bush administration then returned the surplus to its "rightful owners" with tax cuts for the rich. The margin re-compressed in the private sector, but not to worry. A market that is deregulated--without deconsolidation because that reduces efficiency--self-corrects for abuses because a free market demands propriety, but without deconsolidation there is little or no incentive to correct without government intervention and the coercion that supposedly causes all our problems.

It is important to recognize that in both cases risk-value is kept consolidated for its "proper" management by elite, administrative authority both public and private, and consolidation of risk-value is exactly what a free market is not. The result of consolidation is, for example, being dependent on jobs "created" and compressed to expand the margin rather than demanded.

Without margin compression that occurs in small, disinflationary, non-catastrophic proportions on demand, we end up with one, big catastrophic, deflationary proportion that demands markets be commanded into efficiency. Instead of avoiding risk, we demand what we are supposedly trying to avoid--the need for big government.

It appears that free markets cannot, will not, work to sustainably distribute value. It appears that adding debt is the only way to demand the supply, and since adding debt is considered to be added risk, when it isn't, it appears that eliminating deficit spending with tax cuts will render free-market economics, when it won't.

Indications a free market doesn't exist doesn't mean it doesn't work. Just because the means for immediate accountability does not occupy political space with less and less need for government doesn't mean it can not. Quite the contrary. There is every indication that it works and so every attempt is made to avoid it.

By trying to avoid margin compression, which is unavoidable, we suffer free-market repression and a tax burden in regression to relieve our oppression.

At the forefront of a more regressive tax burden are Ivy-League advocates who say the reason big businesses are hording (repressing) record amounts of cash (capitalizing the distribution of rents needed to demand the supply, which increases the demand for debt) is because there is too much uncertainty over tax policy (who pays the rent). However, consolidation of value (who collects the rent) is all but uncertain--it has a deflationary effect with high debt and rising unemployment...just exactly what benefits the want-to-be gods of wealth and power to the detriment of everybody else. If unemployment does abate because the gods command they pay no taxes in order to distribute the accumulated value, that will be when the debt is paid, which destroys the demand necessary to resist the detriment--deflation--and demand propriety. This is called "rigging the market."

Relying on the theory of efficient markets, the capacity to demand propriety is highly improbable.

Being determined by events that cannot be foreseen or prevented, with matters virtually popping in and out of existence, risk management at the level of the individual can be highly probabilistic. At the macro-economic level, however, with the utility of efficient-markets theory and the tools of quantum mechanics, the probable direction of the risk can be made to move by creating distortions in the free space called the market with massive accumulations of the capital like never before.

With the invention of the calculus and harnessing god-like forces of nature, you would think we had interchanged the road to serfdom for the path to prosperity. The path is paved, however, with the capacity for complete self-destruction, and while we should be wise enough to construct a risk ontology that reduces the probability of the risk without going MAD, the road to ruin is paved with good intentions. You would think that with so much productive capacity (referred to by the "job creators" as "creative-destruction" that infers a god-like potential for exacting unacceptable amounts of harm if we do not avoid the moral hazards) we could not only cure shortages, but cure want in the shadow of death, which is what it means to say, with propriety, "I shall not want."

A massive distortion of market space is created over time by organizing to avoid the strong force of proprietary (alpha) risk, which cannot be avoided on command (as the king found out, for example) because its value derives from the risk on demand. With accumulation of this risk value (supposedly to make the market more efficient), the probability the vast majority will be able to resist the gravitational field of the capital and determine the direction of the risk is highly improbable at the quantum level despite being the stronger force. At the same time, while the powers that be (the "job creators," for example) think they have cleverly commanded nature and de-ontologized the risk with value at the quantum level, the relative value of the risk is fully maintained in the macro dimension with an ontology that is all but uncertain.

Although the weaker force ("job creators" being fewer in number, for example) dominates and directs traffic with gravitas, eventually we learn how to read the signs. "We" discover the path to prosperity, without self-determination in the alpha dimension, is really the road to serfdom.

Following directions that take us back to gain the future, we gravitate down the road to serfdom with the false ambition of gaining strength in fewer numbers. Gaining what cannot be simultaneously had in large numbers is not at all probable within the fabric of the free market, however, and when we try, the risk of loss is fully assumed.