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Tag Archives: money

The Problem of Rent-Seeking

Money is in theory just a liquid means of exchange so every bit of it should represent real world wealth.
The core problem of a society based on financialization is everyone starts to believe money itself is wealth.  Then society rewards the manipulation of money more than it does the creation of real wealth that actually helps people.

Why would anyone of means do anything productive if they can just collect interest and rent?
Rent-seekers use property to extract wealth indefinitely, making their living from a distortion of reality.
In the world of material things, there is no such thing as a gold mine that never runs out.  There is a limit in value to all things.  Yet those who control property can extract rents in perpetuity.

Patent law recognizes a limit in the claim to the rights of an idea or invention.  In time, the patented material becomes the natural inheritance of those who benefit from it.  So by what principle then does rented property stay forever in the hands of an owner who never uses it for themselves and never produces anything?

In Cincinnati, where I currently live, I noticed there are small patches of land used as paid parking in downtown.  Someone bought a small lot, threw down some asphalt on it, installed a ticket machine and voila, they can rake in cash every day.
The person who provides the parking lot, I thought, provides a useful service.  Not to mention most of these lots are cheaper than the parking garages, so they can save people money too.
On the other hand, I noticed these lots were minimally maintained. The asphalt was worn down, cracked, with weeds growing through it.  I supposed other than checking for freeloaders every once in awhile, there was no incentive for the property owner to do anything else while they reaped their dividends forever.

So the problem here is we need people to develop property and provide services but the value they bring to the table must also be recognized as finite.
The property owner must make a reasonable profit if we want them to bother but it is unnatural and improper for them to bring in an indefinite and infinite harvest once they have long since ceased to contribute new value.

So would it not make sense if there were limits to ownership of property that collects rents?  Like patents, you profit for awhile, but eventually it passes on into the public domain.
This could be especially relevant where there is opportunity cost.
Those little flat, run-down parking lots in Cincinnati are surrounded by 10 story buildings.
So while the land is put to a use that creates some value, surely it would create far more value if it re-entered the market and was used for a multiple story building owned and used by a business that actively creates new value every day.

The total gain appropriate to a renter could be determined by a number of factors.

-Absolute quantity of wealth invested in the property.(Did someone spend millions or billions of dollars on it?)
-Percentage of personal wealth invested.(Did someone put a lot of their money into the property?)
-Riskiness of the investment.
-Amount of effort to develop and maintain.
-Value the property gives back to society.(Penalize houses that sit empty just to get flipped later and/or keep rents artifically high.)
-Opportunity cost to society based on the property’s location.
-Is the property a strategic chokepoint that people have to pay for and therefore easy to command unreasonably high prices for?

The point would be to impose especially harsh penalties against large, lazy property holders who try to be dogs in the manger using the state’s monopoly on force— without which they own nothing—to parasitize others.  Without the threat of armed enforcers, they would probably be shot in the head trying to impose their will.  Why do they deserve state backing that not only hurts society, but delegitimizes the state by association?

Money acquired through parasitism is heresy.  Not only is the sacred relationship of money and wealth desecrated and distorted, every penny of false money-as-wealth is real wealth stolen from those who are trying to help the social order.  Once a society rewards clever defectors, while punishing honest cooperators, it is doomed.  Society cannot exist without maintaining the integrity of its wealth.

A worthwhile society understands that money used as counterfeit real-world wealth is nothing but theft and fraud—not just against one person but against the entire social order.  There could be a generous grace period after implementing such rules after which, perpetrators would be regarded as far worse than mere murderers.

See Also: White Collar Criminals Are Worse Than Street Criminals

Money Should Only Belong to Cooperators

Every dollar is a vote—so it is of supreme importance to make sure these votes are given into the right hands.  Someone of low character with millions of dollars can cause great damage to society just by influencing the market with their preferences.  Imagine a political election where ambitious psychopaths get super-ballots worth 10,000 normal votes.  It sounds bizarre if we think in terms of elections for political office, yet this is how the economy works and most of us are okay with it.
We approve of parasitic financiers hoarding away millions or even billions of dollars.  So long as someone “earns” their wealth, we don’t care if they’re being awarded in proportion to the value they contribute or even if they intend to use the group’s very lifeblood to defect.  In a system of economic nihilism, where economies are left to drift without guiding purpose, nothing matters so long as you get money while managing to stay out of a jail cell.

If the economy gives great rewards to people who contribute relatively little value, we can envision the heart sending the best of its blood supply to the appendix, or in the case of someone who harms society, to a tumor or tapeworm.  We see this circulatory system acts against the interests of its own body.  It’s a violation of natural law that strikes us as repulsive and wrong in living things, but most of us are unable to make the abstract leap from what we understand viscerally.
That is how the lower castes have always been subjugated, not primarily through force, but through their inability to extend principles.  Under the influence of economic nihilism even those capable of deeper reflection have forgotten that the distribution of society’s influence points is one of the most important and sacred tasks, vital to the success and continuance of a people.

We are told, for instance, that the job market is about giving jobs to the most competent and hardest working.  In practice, this really only applies to the most skilled and important work.  The vast majority of work can be done somewhat competently by most people with a bit of training.  So in practice, jobs are foremost billets we use to support members of society.  The act of hiring someone isn’t “just business,” it gives someone a sacred mandate to exist in society and benefit from its fruits.  Even with low pay, a worker is given money that will supply at least some of the necessities of food and shelter by permission of the many.  If we buy a sack of potatoes rather than stealing it or growing it for ourselves, we do so by accumulating enough dollar votes, each of which is a material token of the collective will.  What could be more amazing than a piece of such abstraction made into a solid thing?
To pay someone well carries even greater meaning.  It allows a person not just to survive but to have surplus needed for offspring and the leisure and buying power required to exert influence on society.  This is to plant the seeds of a garden, to elect someone who will form the character of society for generations to come.  Yet we ask only if they can do the job the best, not whether they are deserving of the distinction of holding society’s precious wealth or whether they will handle that responsibility well.
More important than doing the job as well as possible is to be a cooperator with the group’s mission.
This is why the owner of a small business hires a friend even if the world is full of people who may be better qualified.  The owner trusts his friend and his wealth goes to an ally rather than a stranger.
This is why in the long run a nation that prides itself on “work ethic” over allegiance loses to tribes that put allegiance first. Thus, the nation-state model that’s gone global since the 1860s is now challenged by the tribe-state.
A small tribe doesn’t have a “job market” with little worker atoms floating around. It has slots with roles that need to be filled and those slots are given to the best and most loyal. The choice of who is appointed to those posts and how many influence points they’re given decides success or disaster. Who we hire selects our tribe.
Conversely, there is a clear duty to deny influence points to those who will hurt the group and to hunt down those who abuse the points system.

What Money Rewards, We Get More Of

In a tribe, status is determined by individual deeds and attributes.  Let’s imagine a tribe where the best hunter gets the best cuts of meat, the best women, the best of everything.  He enjoys the rewards of being the most effective at helping his society survive. The social order is kept strong.
In a nation of anonymous millions we require money as an abstract standin for tribal status and reputation.  It’s how we organize in economic groups far larger than our monkey instincts can handle.  If I walk into walmart and grab a bunch of bananas, there’s no way the cashier can know if letting me walk out of the store is a net benefit to society or if I have social value and credibility greater than the value of the bananas.  So we all default to money.
Money is a good behavior points system.  In 1st grade there were gold stars, as adults, there’s dollars.   Money measures how valuable we are to society.  How many dollars you have is how much every other holder of dollars wants you around.  If you can’t be valued enough in money points to survive, you’re effectively “voted off the island.”  Ideally, it’s equivalent to being exiled from a small tribe because you hurt the group or just didn’t contribute enough.  Because money is an abstract construct in place of the real thing, it is in practice naturally vulnerable to abuse.

If I can steal a dollar from someone and get away with it, society values me a dollar more for my ability to do it.  If I could get away with selling illegal drugs or human organs, I would be making big money enjoying society’s best luxuries while actually hurting the abstract mass tribe.  It would be the equivalent of a small tribe richly rewarding a traitor.
Or imagine someone who gets the best rewards merely by gaming the money system within the letter of the law.  Maybe he just shuffles around securities producing no value for others. Maybe he buys up drug patents and charges hundreds of dollars per pill to desperate dying patients. Or spends 4 decades grinding in a cubicle. It doesn’t matter how he gets money so long as gets it.  In a small tribe he’d be like a guy who just pretends to work all day yet gets the best rewards!  Worse, each dollar gives the traitor or  the scammer more gravitational pull, more votes over what shape society is to take.  Once the defector-parasites are powerful enough to reprogram society’s immune system in their own interests everything good is finally drained and used up.

Worst of all, seeing defectors rewarded destroys group morale.  Why work hard to do things the right way, when parasites get ahead?  When people see the unproductive are most successful they eventually will want to join them.  A society that rewards unproductive or harmful people doesn’t deserve anyone’s dedication or loyalty anyway.  Once athletes, entertainers, and financiers are in the top levels of the hierarchy, that society has lost its mandate of heaven.   In a small tribe where a traitor was rewarded best everyone would eventually become traitors.

 

Money Only Belongs To Its Masters

Holding a currency is like holding the one ring.  It still belongs to, and exerts the power of its master over you.
Hold the master’s money, the master exacts a price.  For the money is a piece of the master.
As children money seemed like a magic resource because our parents paid the bills.  As adults, money is always given us in the understanding most of it will be immediately returned in the form of rent and taxes.  A worker that lives from paycheck to paycheck lives as a slave in the sense their labor is effectively unpaid.  Only surplus is income.  Someone who earns less than they need to live is effectively lesser off than even a slave provided the basics.

The master protects the monopoly of its money jealously.  It’s no mistake that the same body that protects the lives of the leaders also protects the monopoly of its currency.
It is hard to challenge the master for power over its own ring.  It is just as hard to make one’s own ring of power.
To worship the money is to worship the master.

How convenient to shear the flock when everyone grows the same standardized wool.  Imagine the master having to send collectors to seize actual physical assets!  Would most people anymore even have physical tribute worth seizing?  It’s a lot easier when they can just sit back and watch electronic units of wealth rush to their waiting hands.  It was never easier to be king.
We are like a whole world full of Gollums obsessed with the power of the One Ring even as its master dominates and consumes us.

Crowdsourcing, A Modern Patronage System?

Last post, I discussed the difference in creative output between an older system of patronage and a modern system governed by the mass market.  Older societies could turn out brilliant creative work with far fewer resources and people because a limited number of people called the shots. What’s for everyone is for no one.

A creative work that’s commissioned serves the vision of a patron, a work exposed to the forces of the mass market merely tries to please the most and offend the fewest becoming a grotesque Tower of Babel.
The internet has enabled a phenomenon known as crowdsourcing, a process by which an idea gets funding from just the people who want it.
This process has the potential to create a modern sort of patronage.  The idea that gets created exists to serve a limited group rather than the entire aggregate mass of humanity.

I have found an inspiring example in a youtube channel called The Great War.  The founder, Indie Neidell covers each week of WW1 as it was happening 100 years ago with lots of special episodes in between.
The show is filmed in a studio with a production crew and gets its funding from a crowdsourcing site called Patreon.
With a fraction the funding of a third rate History Channel special, they have done more than the History Channel could ever have aspired to.  The Great War now has many hours of runtime, hosts active discussion on its videos and reddit, and caters only to those who pay for it.  So if enough viewers want an episode about Bulgaria in WW1 or French WW1 Uniforms the episode appears.
Even as a kid, I referred to the History Channel as “The Lost Secrets of WWII Channel”  or the “The Lost Secrets of Nazi Superweapons Channel.”  And this was years before they descended into airing little more than reality shows.
Shackled by the tyrannical mass market, the History Channel was slave to the few events and passions that register on the popular consciousness.  They can cover a comic book WW2 endlessly, maybe get away with the American Civil War every once in awhile.  Other than that, conspiracy theories about Atlantis, the Bermuda Triangle, the Knights Templar, and lost tribes of Israel sell far better.  They no doubt have millions of dollars to spend, but by comparison to The Great War, they’re a joke.  We can see how commissioned creative work can be orders of magnitude more efficient with results that can be exponentially better.  This gives us a glimpse into how relatively impoverished societies of the past did as well as they did.

While big individual patrons like the Medicis or Carnegie remain in the past, the internet is enabling people who want the same things to get together and create sheltered markets protected from the insipid Many.
Without this protection, people who want a show about Lettow-Vorbeck’s brilliant campaign in German East Africa in WW1 have nowhere to turn, for they are a drop in a great ocean, swallowed up unless they find a way to escape.
Furthermore, The Great War shows us how crowdsource patrons can form a community around the work they sponsor.  Those who watch enough episodes see how repeat commenters gain a reputation and begin to notice the recurring in-jokes.  It’s an environment where participants feel a sense of ownership and belonging, at least far more than most of us can feel towards impersonal modern institutions.  I could see these sorts of affiliations among the possible catalysts for cultural secession and the creation of new tribes within obsolete nation-states.

All Mass Societies Are Built on Coercion

To suppose coercion would go away without governments is foolish.  Those who rail against tax collection forget that if there were no large government, small governments would quickly take over.  Instead of paying taxes, we’d pay protection money to the local gangsters.  Then, over time, one gang would centralize power and eventually grow into a state that collects taxes. We’d be right back where we started.

One of the hard facts of being human is all our societies are founded on parasitism.  Since the foundation of agricultural settlements most people have lived in poverty while a small, dominant group extracted tribute from everyone else.
Before farming, there may not have been parasitism on the same scale, but those who got in the way of the strong were simply killed instead.
There’s never been a paradise because a tough grind with high attrition has always been the normal state of the natural world.  Humans are just another animal in the wild.

To change this state of affairs we’d have to transcend the trap of natural selection which thrives on scarcity and suffering to select ourselves instead.
Since transhumanism will remain science fiction for some time to come, it remains incumbent on anyone who wants to change anything to find ways to identify and enfranchise the best people and mitigate the damage done by the worst.
For the individual human, it is impossible to change the nature of billions of people, it is reasonable perhaps to form tribes of those with similar temperament and create within that sphere the world they wish to see, and that sphere finally formed, devise a means of its further transmission.

North Korea Black Markets Could Take Over Economy, Undermine Kim Regime

“North Korean citizens, unable to count on a stable income or rationing, are moonlighting as security guards or coal haulers to make ends meet, eroding their allegiance to state authorities.

A South Korean research institute estimates that unauthorized economic activities, such as side businesses, account for 40-70 percent of citizens’ daily lives.

Experts say as much as 75 percent of the North Korean population does not depend on the state-owned economy at all.

The prevailing view is that the regime will lose more of its ruling power unless Kim Jong Un, who succeeded Kim Jong Il as North Korea’s new leader after his death on Dec. 17, reforms and opens up the economy…

At a shoe factory outside Pyongyang, only about 100 of the 750 employees report to the factory. Others buy materials, make shoes on their own and sell them in markets…

North Koreans at the dinner table used to talk about what Kim Il Sung, who founded the country, did and said. Today, they talk about how to make money instead.”

LINK

How Girls Handle Money

“I held up a $20 bill and asked who wanted it. No one moved. A good 30 seconds later, one of the girls raised her hand and said, “We should make a rule about who gets it.”

Another girl raised her hand and declared, “It should go to the girl that got here first.”

Everyone looked around, and they all nodded in agreement.

We spent the next hour discussing how girls think about money and make decisions. Even when rules weren’t necessary, the girls refused to act and instead focused their energy on creating rules about who got the money.

Clearly, if men had been in the room, the women wouldn’t have stood a chance.

I asked, “Why?” The group preferred rules because rules establish a system of norms. “Then,” one astute girl laughed, “we can play within established parameters and still manipulate the rules to get our way.”

Instinctively, I responded, “And still be considered good girls?”

Without missing a beat, the group nodded in agreement.” Link

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