Best Interest

For thirty years, while we were making hay in the 80s, chips in the 90s and who knows what in the 00s, we’ve been had.

Governments everywhere in allegedly free-market economies have grown, and grown, and become ever more entrenched as the biggest participants in those economies. At what point does a country stop being free if the biggest player doesn’t produce anything? Or worse, if it does nothing but crowd out innovation, labor of all kinds, and disrupt capital flows?

At some point – now long past – the government ceases to act for the people. That’s the time when it acts in its own self-interest, essentially becoming a rogue robot. The zombie has re-acquired life, and is looking to get bigger and stronger.

If you know how to stop a zombie, please let me know. Remember that it is the biggest zombie ever known, and it has a hand in almost every means available to kill it…so isn’t likely to allow us to do so. We’re essentially gonna have to rip out the thing’s heart with our hands.

Sidebar: Interesting to ponder that the ChiComs are behaving like democratic governments are supposed to ie: looking to do what they can to withdraw from daily life and simultaneously make that daily life better for as many of their people as possible.

Scarce and Profitable

What is scarce commands price.

What is abundant commands nothing.

What is profitable attracts capital.

What loses attracts government.

These are clear ideas for which I take no credit. They’re obvious canons of supply and demand, with the added kicker that we must consider governments because they’re both too meddlesome to ignore and too big to not influence.

There are no markets left, except in a few niches.

If you are inclined toward capitalism like me, what interests us is the scarcity. What is scarce thesedays? What will be scarce tomorrow? And – most valuable of information – what will be scarce at the end of 2019?

If we can answer the last question today, we can act tomorrow and reap some benefit in a few Christmases time. Even if we’re close, it’ll be good enough, because most folks look behind them, not to the horizon ahead.

Data Drivel

People paid to entertain us in media have been mouthing the Party Line viz: the FOMC was and remains data driven.

If this were the case, that x input meeting y requirement equals z rate rise or fall, then why do we pay these economic chimps at all? Why not have an appropriately programmed robot do the numbers and act accordingly?

Seems to me that the interest rate rise this week will be just in time for the ensuing recession, thereby allow Sister Janet to lower rates…in response to data, of course.

And another thing. When spokesmorons refer to our “full employment” can we please also make reference to the 94,000,000 million Americans (and proximate Americans who reside here ahem) of working age who are not even counted in these “data”.

None of this is particularly esoteric, but apparently no-one with a megaphone of any size wants to upset the neatly packaged system that’s laughingly called a free economy.

Capital, My Man!

Of all the economic systems, capitalism is the one that most fits.

I can say that breezily and without fear of contradiction because I am, of course, a complete amateur. Unrestricted by higher learning or dogma rammed down my neck by university-types, I’m free to figure stuff – and pontificate – away.

That, friends, is the nature of freedom.

But in this case I think I’m right. The basis of (pure) capitalism is the price-finding mechanism. Price is how we determine the value of something, whether it be a good, a service or something more abstract like happiness. This is not a perfect system. Ok, let me underline that: THIS IS NOT A PERFECT SYSTEM. No system is. But my observation of people’s behave over most of the continents leads me to this point.

Price is about normalization. When we say an orange is worth fifty cents, and a book is worth five dollars, we’ve normalized two completely different items. We can look at the relationship between them by saying, well, with this five bucks I can buy this book or I can have ten oranges. And vice versa. We bring a common denominator to bear.

There are a few big prerequisites for all this to work. We need an agreed transfer agent, in this case, currency. We need a ready way to exchange that currency. And for markets to be useful to everyone, the mechanism must be at least tacitly agreed. Your local supermarket works because we agree to swap currency for goods displayed at the stated price.

All over the world, this model occurs pretty much without anyone imposing it. We call it trade, but it’s really just shopping. Trade is at the heart of capitalism, because ultimately capital is useless without stuff to buy. You can’t eat capital. So the incentive for people to provide us with oranges and books and movies and iPads is because we have needs (and wants) and if we have the capital, we swap it for our stomach’s (and heart’s) desire. We get fed and entertained, they get some of our capital to do with as they choose.

It’s that simple.