Vote with your Feet and Join a Club of your Choice with a balanced Balance Sheets

The Case for Business, Evolutionary Economics & Subsidarity



Moral Sentiments

Charles Darwin -

'I fully subscribe to the judgement of those writers who maintain that all of the differences between man and the lower animals, the moral sense or conscience is by far the most important'

Deep down in the human skull there lurks an independent spirit relentlessly seeking the discovery & accumulation of 'survival know how'; the synergies of specialisation & scale.

In the same way as the genes work in teams to build organisms, so too folk work together in groups to build institutions & cultures. Folk are social animals. In this way the human gene pool builds an ever expanding network of interdependences which benefits everyone ... not only kith & kin, but also friends & associates ... and even strangers ... the gene pool is part of one whole throbbing shebang & caboodle.

Celebrate DiversityDiversity

Such striving for survival know how feeds a ground swell of suspicions against the impositions of Bishops, Princes, Generals & bureaucrats ... who all have different ideas about what is best for our survival welfare.

And until someone fathoms out a way to stop evolution ... different folk, at different times, in different places, have different ideas and behave differently ... diversity is both the outcome of evolution and necessary for the process ... OK that might be a tautology? ... but clones can't evolve, one size can never fit all ... think about it?

Survival Know HowSurvival Know How

This evolutionary process, the discovery & accumulation of survival know how, is the way of the world, the way of folk and the way of business. We don't 'see' the failures of the past, they are dead, ignominiously discarded ... everything we 'see' is a success by evolutionary definition ... and consequently successes have all the appearance of 'design' ... here & now is the only place to start ... where we are now now ... but the debate is all about where we are going. 

Darwin called it natural selection; adaptations are the surviving outcomes of interactions.

Adam the Smith explained both the 'moral sentiments' which underpin social interactions and the beneficial 'synergies' resulting from such interactions.

Trial & ErrorTrial & Error

We are all ignorant about the unknowable future ... no one can intelligently design 'success' its too damned complicated ... we haven't a clue ... but Darwin's insight explained how folk can learn and contribute to survival know how by experimental trial & error. We learn by failure not by design. The intentions of 'the powers that be' ... and everybody else ... become mere experiments. Behavioural interactions always involve the different responses of different others, making the unfolding of the tale unknowable. 

Bishops, Princes, Generals & bureaucrats, like everybody else, can only intelligently design in the same way ... by experiments ... but if they exploit physical & spiritual violence their experiments can be big ... enormous.

The Greeks called trial & error experiments heuristics ... and it is physically impossible to exclude out the different others ... it is one whole throbbing shebang & caboodle.

The Calculus of ConsentExperts Disagree

Alas 'the powers that be' often seek to command & control economic activity 'as if' they possessed privileged access to survival know how ... 'as if' they had a divine right or tablets of stone which revealed 'the truth' ... but the problem is that the experts disagree and failure is anathema to experts ... they are 'expected' to know.

So why do the 'experts' always disagree?

Science - observation, mathematical theory, provable hypotheses, experimental validation, peer review - settles disagreements by getting at the truth ... the facts under the conditions of the test.

Evidence of simple facts can come from science and controlled repeatable experiments. But out of the laboratory in the real world the experts often can't 'control' their experiments as the changing environment interferes with the action. Other different experts can always dispute the initial assumptions before start of play ... and then, infuriatingly, during the dispute the numbers change. Beliefs trump disputed facts ... and the truth is that Newton's Laws didn't work too well in black holes. This, of course, did not invalidate Newton's reliable expertise it merely motivated Einstein to work harder at a new paradigm. 

Experts find it very humbling to explain why future outcomes are unknowable in advance ... after all they are supposed to be experts who believe that 'God does not plat dice'. The explanation of such ignorance is not because of immense complexity but rather because -

mutations must 'random' for evolution to work and nobody knows which? where? what? who? when? or how?

nobody can foresee the 'emergent' novelty of the dynamic, contemporaneous & interconnected & interactive & interdependent happenings and associated intended nor unintended consequences

nobody knows how the 'flip flopping' emotions of other folk will respond to interactive happenings?

And there are always new fangled ideas coming along to muddy the waters. Theory of Mind ushered in a golden age of ignorance when it was discovered everything depended on everything else and it proved impossible to 'forget about the Chinese' ... we hadn't a clue.

But who, how many, 'got it'? And all to often if you didn't agree with me and my mates ... you were lying.

And wot about beer which was purported to be both a poison, a cancer risk and a relaxant for social benefit? Science often compounded the problem by providing 'facts' in evidence supporting for both the defendant and the prosecution ... often resolved only by the beliefs of 12 good men and true.

Everybody got excited about cause & effect but few could cope with the fear of effects that were also causes.

No wonder there were so many dodgy dossiers, so much fake news and alternative facts and post facts ... and even the judges and the referees could be 'enemies of the people'? Scare mongering and conspiracy theories were easy to propagate especially when Twitter gained easy access to brains and the 'reputable' BBC and New York Times lost their balance to the highest bidder. Some even suggested that the Supreme Court was up for sale?

Meanwhile Joe Sixpack who was beavering away at the coalface suffered a double whammy -

taxation - 'the powers that be' derived their 'power' from the 'legal' confiscation of other folk's resources ... often through 'a rigged system of violence, corruption & waste' ... and secondly

regulation - top down elitist 'command & control' hubris distorted & impeded the bottom up business of business.

For sure, everybody is different, democracy is not never about voting so that 51% can impose their taxes & regulations on 49% but rather democracy is about the protection of folk and minorities from tyranny & oppression so that 100% of everyone could be free to pursue their lawful experiments ... some of which may even turn out to be useful?

So counting the 'votes' never worked to resolve disagreements over fugitive facts. And worse the majority always believed last year's paradigm ... even though, by evolutionary definition, next year's paradigm started off as a random experiment albeit with a path dependency ... confusingly the path dependency trends had lots of support from the sages ... but the new experiment was new ... without any support at all.

Wot a mess. Some were biased & frit ... and some were biased & excited ... and some believed there was an alternative to the pap of intelligent design served up by the Bishops, Princes, General & bureaucrats ... and some believed business solved problems 'cos if business didn't solve problems business would go bankrupt ... that is unless there were turned into Zombies and bailed out. 

For certain amongst all the angst and intrigue and disagreement many many folk voluntarily purchased solutions from profitable businesses ... and purchased them again ... if they worked and satisfied customers? The customers voted with their shillings and their feet ... it proved impossible to stop them ... such folk even managed to find their way through an iron curtain.

EntropyHard Work, Honesty & Thrift

Ingenious folk are always resilient and will always try for longevity and go for lots of thriving youngsters; folk will always try to do their deals and discover the synergies. Folk nurture more & larger associations ... going for more & more synergies of specialisation & scale.

It is the deals of folk that grew the institutions of Liberal Democracy which evolved from the failures of the alternatives.

Deals will always discover a price & a value which clears markets ... after all nobody is happy to pay for expensive gluts & queues.

Winston Churchill told the people,

'Liberal Democracy is the worst form of government apart from the alternatives that have been tried from time to time'.

Lord Melbourne told the Queen,

'for Gods sake leave well alone'

This was not a plea for idleness but rather a plea for the freedom to beaver away; a plea for hard work, honesty and thrift.

Globalisation of free & fair trade brings abundant mutual benefits. But the stocks of goodies are continually under threat from parasites and predators belonging to different clubs.

Restraint of TradeParasites & Predators

But don't get it wrong ... there is a sting in the tale of enterprise ... as soon as there are stocks of goodies from the synergies there are opportunities for parasites & predators ... and such parasites & predators themselves will evolve ... it's an arms race!

'Money' perhaps the most flexible goodie of all ... is also easier to thieve than stocks -

'why do you rob banks, Mr Smith?', 

'that is where the money is, Sir!'.

Thieves survive, and always will, but wot a risky deal? Larger folk groups deliver economies of scale and more goodies and improved defence against predators ... but more opportunities for theft

But all is not lost as institutions & rules which provide some immunity from parasites & predators, will differentially survive.

In the early days the terrorists threw their evil weight around and death & destruction was commonplace ... but later the law courts and the ballot box provided an cheaper alternative to violence and slow slowly liberal democracy emerged.

Nothing stands still and today some of the 'checks & balances' and 'separations of powers' have been subverted & eroded by the panic & knee jerk hysteria of the 49% who lost and the arrogant hubris of the 51% who won.

There exists a fine principle of subsidiarity for the democratic institutions of civil society ... the churches, the clubs, the associations, the companies ... but subsidiarity can easily be lost following the hysteria and hubris associated with the polarisation of 'voting' systems.

In the absence of Subsidiarity, Democracy itself becomes a licence for 51% to screw 49%?

Restraint & RestrictionRestraint of Trade & Restrictive Practices

In an attempt to avoid the inevitable abject failures, all manner of ‘Restraints of Trade’ and ‘Restrictive Practices’ have been erected by intelligent designers ... always State Intervention in the name of 'improved designs' intended to rid ourselves of parasites & predators. But the ‘Restraints of Trade’ and ‘Restrictive Practices’ from above invariably inhibit the lawful freedoms of Joe Sixpack and his mates to go about their lawful business and discover their own innovations & improvements ... delivering distortions and imbalances. 

But here is the key. Because of synergies, the dice of natural selection are loaded against the parasites & predators ... deep down in the skull the moral sentiments of Adam the Smith, the innate feelings 'resentment of cheats' and 'fairness of shares' pushes human behaviour towards economic cooperation, towards the synergies of specialisation & scale and positive sum activities rather than a downward spiral of beggar thy neighbour and zero sums.

It is 'as if' the genes did cost/benefit analysis and knew it was profitable to cooperate.

The sifting out of the parasites & predators in business is played out with endless competition & bankruptcy. Profitable businesses have great difficulty screwing customers ... of course licensed state monopolies manage to screw customers for longer periods ... but later or sooner the wall will collapse.

The unknowable outcomes of evolution need not be characterised by 'nature red in tooth & claw' but rather by a better description ... the evolution of evolvability ... as social interactions discover cooperative synergies.

Dancing BackwardsCooperative Synergies

Don't get your knickers in a twist of misunderstanding ... parasites & predators will survive but cannot 'win' zero sum games indefinitely when they are up against those who learn from positive sum games ... those who deal in synergies have more surviving babies ... the dice are loaded ... and lots of parasites & predators survive in the end by cooperating ... the poacher often turns gamekeeper to survive.

Does morality itself have a direction? ... think about it?

'Liberal Democracy' was never about the freedom to harm others with a zero sum game of 2-2=0 but rather all about the freedom to deal with others with positive sum synergies 2+2=5 ...

Liberal Democracy is about self organising regulation ... regulation by moral sentiments and cooperation,

freedoms to vote with your feet and join a club of your choice

Free Market InnovationThe Case for Business

Evolutionary Economics, Subsidiarity & Balanced Balance Sheets

The case for business rests on the science of evolutionary economics and is underpinned by natural law and the diversity of free trade. The natural selection of the trade synergies.

Business 'works' only because businesses that don't 'work' go bankrupt.

And business 'works' by doing mutually beneficial deals with others ... no compulsion, no compromise ... with the safety of natural competitive alternatives.   

The Law of the Land must be fair and trade must be free otherwise business wouldn't 'work' ... businesses couldn't survive under arbitrary law. 

Lawful free trade involves a simple rule of thumb - 

all trade between consenting adults and their companies of choice must be lawful free trade to avoid costly distortions, imbalances and gluts & queues.

Lawful free trade is justified by two fundamental ideas of economics -

synergies of specialisation & scale == comparative advantage == everyone can participate  - David Ricardo 

market prices minimise costs == supply & demand == men of system cannot calculate prices   - Adam Smith

As evolved systems the institutions of Liberal Democracy nurture lawful free trade and must offer some immunity from parasites & predators ... institutions protect  -

individual human rights and the choices of folk & minorities and

synergies of specialisation & scale from trade & associations 

Human economic activity discovers & accumulates 'know how' from the trial & error of natural selection ... scientific methodology.

The necessary diversity for natural selection results from the individual experiments of cooperating folk as they vote with their feet and join a club of their choice.

Thriving businesses always interact with different others and environments including the institutions of state which become restlessly involved - 

Laws of the Land, Common Law & UDHR, morality & cooperation emerge from biological & cultural inheritances based on 'fairness of shares and resentment of cheats' rather than from the arrogance of intelligent design, political correctness & regulatory distortions.
NB Malarkey & tomfoolery of the 'powers that be' == command & control of human moral behaviour
Don't get it wrong ... business is not laissez faire ... 'moral sentiments' evolve.

Opportunities & Profitable Projects, bottom up discovery & accumulation is a trial & error process of wealth creation in commercial cities. Specialisation grows from subsidiarity & initiative == scale grows from Joe & Jane Sixpack, to clubs & companies, to countries & states, to UK & USA == 'survival know how' is growing @ 3% compound as a science knowledge base, a growing launch pad for further growth == compounding opportunities as a positive sum game == 'jobs, jobs, jobs' == 'education, education, education' == exchange trade == economic growth == high value job vacancies == immigration of high value skills == tax revenues from the synergies embedded in hard work, honesty & thrift == funding the 'civilised' Welfare State.
NB Malarkey & tomfoolery in business == bankruptcy.
Don't get it wrong ... business learns from mistakes not from intelligent designs. 

Institutional Immunity from Parasites & Predators, top down impositions of costs & regulations from Bishops, Princes, Generals & bureaucrats == rent seekers & free riders are parasites & predators == confronted by constitutional/institutional checks & balances on 'powers that be' == folk learn and it is difficult to bribe interest groups for votes with tax revenues from others ... such an arbitrary zero sum game fails.
NB Malarkey & tomfoolery of Bishops, Princes, General & bureaucrats == bribery & corruption & rigged elections as 'excess burdens' reduce output and reduce real wages.
But don't get it wrong ... we're biased ... as soon as wealth stocks appear parasites & predators also appear and must be confronted ... otherwise stocks don't survive.

 Cooperative synergies of specialisation & scale load the dice.

Rules of ThumbSimple Rules of Thumb  

Folk learn from simple Rules of Thumb == tit for tat & satisficing == cooperation evolves and institutions gain from synergies and find some immunity from treachery. But the parasites & predators are relentless ... it's an arms race -

'if it's free put me down for two please' == economic immigrants seek welfare state benefits without paying the premium ...  and

'turkeys never vote for Christmas' == the 'powers that be' are locked into their attempts at intelligent design ... what else can they do ... admit ignorance?

Top down command & control fails but bottom up solutions are the business of business -

don’t vote for them it will only encourage them ... stop ... top down, public imposition of arbitrary prices & regulations ...

so vote with your feet and join a club of your choice ... try ... bottom up, private voluntary experimental initiatives of clubs ...

The economics of competitive business majors on the principles of subsidiarity & privatisation and the imperative of survival by maximising the satisfactions of customers.

The economics of the alternative of state corporatism majors on economies of monopolistic scale in the public interest.

Licensed monopolies have little immunity from tyranny & oppression and corruption & deceit ... and public interest doesn't exist ... customers do deals by 'voting with their feet and joining a club of their choice'

Choosing in GroupsClubsThe Nature of Clubs & Companies

 Different folk, in different places, at different times,  interact differently with different people with different results.

Diverse Clubs with their own rules seek to discover synergies from specialisation & scale through 'natural cooperation'.

Characteristics -

voluntary membership - like minded folk join the club of their choice, pay their subscriptions, accept the rules & exit possibilities; free riders, parasites & predators are excluded by ostracism & expulsion. Prior acceptance of rules is the effective way of minimising the costs of squabbles, disagreements and bloody violence.

rules of procedures - constitutions define the umpire and procedures for changing the rules ... and if the umpires decision is not accepted there are alternative clubs

trust & exit - contracts are impossible to fully specify long term. Slippage, backsliding & drift in the rules demand 'amendments' possibilities.

Business & market failure is natural selection == competitive differential survival == bankruptcy .

State & monopoly failure is intelligent design == price fixing & regulation == zombies.

The vast majority of associations in civil society can be private & voluntary hence the 10th Amendment. Very few activities apart from defence of territory need to be 'public'. The principle of 'subsidiarity' keeps the size of the group in line with the size of the public good. However the nature of the state, as the custodian of the power to defend territory, although voluntarily delegated initially ... such power in the end corrupts and monolithic defensive Leviathans start to impose their arbitrary rules on the clubs of choice.

In this way the Washington elites began to use the Jefferson elections to circumvent the 10th Amendment and fight over revenues as 51% lorded it over 49%. Tax revenues were seized over and above the legitimate needs of the Commanders in Chief and his army. Elections became 'uncontested', as one faction of elitist Washington fought with another, and the associations of civil society became sidelined 'interest groups' to be bribed to join the 51% or with taxes raised from the 49%.

Darwinian diversity and associated liberty suffered when faced with such intelligently designed inequality.

Berlin Wall 1989The Failure of Intelligent Design = Anti Business Rhetoric

Long after the rhymes of history were being played out in globalisation, the Berlin Wall, 9/11, the 2008 financial crisis and Brexit & Trump ... some folk still clung on to ancient myths ... just like all the old Bishops, Princes, Generals and bureaucrats 'this time was different' ...  where economic success was deemed to be the result of intelligent design by skillful draughtsman ... very few remembered the long necked giraffes and very few explained how businesses learn from failure.

Evolutionary economists were not surprised when the Queen said,

'Why didn't anyone see the financial crisis coming'?

And again,

'Why didn't anyone see Brexit and Trump coming'?

But we all have an inkling that Robbie Burns was right,

'The best laid plans of mice and men often go awry'!

Of course there was failure ... there must be failure ... that was the only way ignorant folk learn.

So in 2016 how did folk vote?

against past failures - 'half baked Euros and ever closer union' and 'Crooked Hillary and the Washington swamp'


for future plans - 'the best laid plans of mice & men oft go awry'

Folk had better grip on past failures than future plans ... the evolutionary bias of human nature was to learn from past mistakes and try something new ... few folk invest in bankrupt companies?

Nevertheless intelligent design of the future and the anti business rhetoric were very plausible ideas ... ideas as old as the first glimmers of self consciousness ... when frightened folk saw designer Gods behind every tree?

Darwin had a tough task in championing failure as a route to progress,

'I must be a very bad explainer, I suppose natural selection was a bad term'?

And after 150 years the Darwinian conjecture remains unacceptable to many (or perhaps the penny hasn't dropped?).

Today 'political correctness', 'managed trade' and arrogant 'intelligent design' still involve price fixing and ever more regulation which inevitably lead to distortions & imbalances in the Balance Sheets of business & commerce ... and the Balance Sheets of Nation States.

The result of price fixing was always the excess costs & wastes of gluts & queues ... nobody knows the price which clears the markets ... such prices have to be discovered ...

The difficulty with acceptance of the Anti Business Rhetoric was the norm of failure when folk were confronted with unavoidable ignorance. Future outcomes were unknowable in advance, not because of immense complexity but rather because -

mutations must be random for evolution to work = nobody can ever know the which? where? what? who? when? or how?

nobody can foresee the emergent novelty of the future = unintended consequences make a mockery of intended consequences

nobody knows how the flip flopping emotions of other folk will respond to any interaction = animal spirits ... 

The Darwinian insight leads to thinking about two 'successful' evolutionary experiments -

long neck giraffes were bad news for short necked giraffes and similarly the large human brain was bad news for other apes ... and

differential survival of the large brain over the long neck is an evolutionary experiment that is still being played out ...
and, perhaps, further, the large human brain was bad news for the now extinct ancestral cows ... an evolutionary experiment that has been played out ... ancestral cows no longer exist as the 'Milking Shorthorn' proliferates ... Google it?

Perhaps the arrogance of intelligent design all started with Rousseau's idea of a 'general will' ... a consensus ... an impossible idea for Darwin, because evolution produces diversity ... and no diversity no evolution ... no change.

The Bishops, Princes, Generals & bureaucrats made the 'general will' their own and used 'the will of the American people' to justify their impositions and manipulations. At the same time as businesses were experimenting ... and failing ... and going bankrupt ... and learning ... the 'powers that be' clung on and continued their intelligent designs -

Price Fixing - 'restraints on trade' & 'restrictive practices' became the focus of interest group politics.
Price fixing by monopolistic state elites who seized taxes to subsidise their Balance Sheets and bailout cronies in return for votes. Thus perpetuating zombies which avoided the natural sifting of bankruptcy.
Manipulating FX? Tariffs? Regulations?

Tax Resources - 'resentment of cheats' & 'fairness of shares' became the focus of interest group politics.
Crowd trouble erupted because tax funded 'Leviathan' public services failed as one size never fitted all. Tax funding became the problem not the solution as 51% had no moral right to tax 49% ... but rather everyone had a moral obligation to protect human rights and protect minorities.
Arbitrary taxation?

Gluts & Queues - 'imbalances' in trade and Balance Sheets escalated as regulation, taxation & prices became the focus of interest group politics.
Chinese & Russian money poured into real estate in San Francisco, London & Cyprus because of the fear of the looting machine back home.
Supply & Demand?

Unprofitable Projects - 'politically correctness' and 'managed trade' became the focus of interest group politics. Productivity and real wages declined. The surplus after costs was not measured. 
Tax was a cost on good gotten gains and you get less of what you tax?
Profit from comparative advantage lost out to subsidies for Zombies?

But don't get it wrong ... there were votes from bailouts & subsidies but all price fixing and arbitrary taxes perpetuate unprofitable projects and produce distortions, imbalances and gluts & queues ... and worse still such shenanigans result in a political polarising schism; a 51% v. 49% society and gridlock ...

Whatever ... voting produced polarisation as like mended people flocked together for advantage ... in the same old way as 'tribalism' of the past ... a new schism emerged not Catholic v. Protestant, nor Sunni v. Shiite, nor left v. right, nor socialism v. capitalism ... but rather intelligent designers v. businessmen ... two different breeds ... the question became how best to drain the swamp of corruption & intrigue?

'modern liberalism' of the 'snowflakes' v. 'classical liberalism' of the 'businessmen' ...

Classical Liberals had their roots in the Scottish Enlightenment and universal 'moral sentiments'.

Modern Liberals actively seized the moral high ground and infiltrated the legal system and reinterpreted the Constitution to enforce an arbitrary morality on 'we the American people'. 

New Economics

Emerging Policy = vote with your feet and join a club of your choice

The pro-business model is bottom up subsidiarity as competitive businesses with healthy Balance Sheets wrestle with the discovery & accumulation of survival know how ... the synergies of specialisation & scale.

The process of evolution involves diversity and the understanding of the natural selection of outcomes suggests that many alternative 'clubs' are necessary for this diversity.

Some clubs play positive sum games and choose hard work, honesty & thrift and secure benefits and rainy day funds for the education & the health of family & friends ... and the gene pool!

Strange newcomers and immigrants flock to join the party and the jobs.

Some clubs play a zero some game and choose not to trade specialised skills and suffer low wages/unemployment but fix prices and regulate to produce gluts and queues.

Crowd troublers and emigrants abandon the ship as the rules can't be changed when redistribution is an alternative to education, education, education ... and jobs, jobs, jobs.

The terror of 9/11 and the financial crash of 2008 shook the cosy atmosphere of consensus and globalisation as the rhymes of history confirmed eternal vigilance and two well worn issues which cannot be resolved by 'voting' or 'negotiation' - 

cultural competition as tit for tat behaviour leads to cooperation & synergies, the dice are loaded == Brexit means Brexit

business competition as Balance Sheets must balance, it is illegal for insolvent companies to trade == free trade means free trade  

 Vote with your feet and join a lawful club of your choice == cultural clubs and business clubs == free to choose but not free to harm others.

Every club has rules, defence systems and synergies otherwise they wouldn't exist -  

Supreme Court = Law & Order = lawful protection of the constitution and Liberal Democratic institutions, checks & balances and separation of powers 'to make the world safe for diversity' and arrest backsliding into deliberate, rational, purposeful, intentional, plans.
Stop the arrogant drift from the humble Classical Liberalism from Jefferson to the hubristic Modern Liberal from Hamilton Levianthan 'to protect ourselves from ourselves'.
Freedom to lawfully experiment trumps orchestrating equality of outcomes.

Foreign Policy = Rice doctrine encourages Liberal Democratic clubs and confronts clubs threatening terrorism.
Cultural tit for tat nurtures cooperation.

Lawful Free Trade = deals at market prices promotes the undistorted discovery & accumulation of global synergies of specialisation & scale.
Trade, comparative advantages, market prices. 

Eliminate Business Taxes = lower taxes on business & remove deadweight burdens = more output, more investment, less cost and less waste == 3-4% growth in 'know how' == real jobs.
Why tax business? Business can't pay taxes, only folk can pay tax? ... think about it.

Health Care & Education & Energy = 'if it’s free put me down for two please', health & education & clean air queues.
Technology provides solutions; subsidies result in imbalances.

The WTO is a club? Can the WTO stop the hubris of price fixing? Why the endless agonising over free trade?  

Can the WTO be built from the bottom up = individual initiatives & subsidiarity in the clubs = efficiently functioning families & clubs don't need the help of rent seekers & subsidised zombies ... blow them up and drain the swamp.

Comparative AdvantageWorld Trade Organisation?

The case for business rests on the profitable projects which create the mutual benefits of lawful free trade.

It is profitable to cooperate; lawful free trade at market prices is in everyone's interest.

But if free trade was such a no brainer ... why did the WTO always seem to end up in the political quagmire of 'negotiated managed trade' ... negotiation was the wrong word for the discoveries & accumulations of natural selection?

Can freedom & democracy in the cities be negotiated at the WTO; a club which is 'open for business'?

Or perhaps the WTO was just a collection of polarised politicians who disagree? 

The machinations of the World Trade Organisation and other global economic institutions exposed the difficulties faced by the men of system in policy implementation. Sooo ... a 29,000-page treaty, a bureaucrat’s dream of tariffs, regulations & quotas to protect interest groups against competitive value for consumers.

But it should be easy -

'all trade between consenting adults and their companies of choice must be lawful free trade to maximise efficiency'.

The principles were agreed but they proved almost impossible to implement by bureaucrats who disagreed -

no discrimination and restrictive practices

no restraint of trade

no arbitrary interference

competitive market prices

help others to trade through education and dispute resolution

Such was a foul predicament 'cos it seemed free trade did the bureaucrats out of a job. No one could expect turkeys to vote for Christmas. It was difficult for politics to be pro-business and pro-free trade?

Following the lead of Walter Bagehot, in 2014 the Bank of England reiterated the WTO principles; a strategy of confronting lethal debt with continued path dependent evolution which rode on the ongoing inevitable cycles of the boom & bust of human emotions. The central bank was to specialise in the provision of high growth, high value, financial services in cahoots with economies of scale from global time zone synergies in the USA & China -

global commercial banks were to be diversified equity capitalised institutions with failure absorbing capacity so they didn't become zombies but evolve as risk taking innovators seeking to discover profitable projects for the investment of rainy day savings ... 

global competitive markets were to be based on transparent asset valuations of profitable projects, avoiding the costs of gluts & queues and avoiding fake money created out of nothing ...

global central bank services were to orderly administer transparent market failures, to back diversified currencies & risk taking banks funding profitable technological innovation projects for customers everywhere ... encouraging folk to save & invest and restraining tax & spend ...

Tort Law, Trade & Technology drive policy - no bailout schemes, no ponzi schemes, no job creation schemes, no money printing, no moral hazard, no restraint of trade, no restrictive practices, no barriers to business but deep structural reforms freeing up clogged markets, diversified privatisation, enabling technological business cycles which create real jobs.

Education and simple rules of thumb - chase profits and cut losses, celebrate diversity, think the unthinkable and go for hard work, honesty & thrift, expose the myth of promises & manipulation of the instinctive emotions of the business cycle and invest personal rainy day funds in the innovative technology of choice ...

In the absence of knowledge about the future, cycles of excitement & fear inevitably drive the heuristic evolutionary progress ... the evidence is in history; relentlessly the booms are bigger than the busts as 'know how', economic interactions, science & technology and complexity grow at 3% pa compound.

Sure social folk get excited & frightened together, that is the only way economics ... & sex ... worked ... think about it?

But perhaps the stirrings of adaptation appeared after the latest crisis ... the next time will be different ... the baby survived ... the rhetoric started to change?

Different folk at different times in different places have different ideas and behave differently ... girls dance backwards ... celebrate diversity the feedstock of evolutionary change.

Diversity in social animals is mediated by universal biology, innate empathy; Adam the Smiths 'moral sentiments' underpin the vast scale of human productive interactions.

Global social and economic interactions are so diverse, dispersed & unknowable that it is physically impossible for Bishops, Princes, Generals or bureaucrats to mediate effectively through incorporation, regulation, interest group bribery and commands & controls on productive endeavour ... all in the name of unattainable solidarity, security & stability. Such hubris, never achievable, would stop evolution in its tracks.

Insights from biology lead inexorably to understanding economics ... not in impossibly complex detail but as a process of change ... genes do cost/benefit analysis.

Perhaps the WTO is destined to be resuscitated? It is always a great example of a profitable project that needs no tax funding but it was turned into a political football?

ImbalancesHistorical Rhymes = The Corn Laws & Mexican Car Capers

Agricultural interest groups lobbied for tariff protection on foreign imports and denied everybody the benefit of cheaper imported corn.

This reduced the welfare of all inside the tariff barrier.

In 1846 Robert Peel repealed the Corn Laws. A unilateral repeal of the tariff reduced the cost of corn.

The repeal of the Corn Laws was not a negotiation it was an understanding. Trade negotiations are irrelevant ... for better welfare for all businesses must get on with their job of providing innovative products & services for global markets ... otherwise they go bankrupt.

Bankruptcy sifts and feeds growth -

valuable resources are released for alternative profitable experiments and

some immunity is provided from 'rent seeking' parasites & predators ...

In 2017 The Donald had ago at repealing the Corporate Tax Laws on General Motors -

US Exports to Mexico = 20% Profits Tax in the US + VAT in Mexico = expensive.

US Imports from Mexico = low tax 'inducements' in Mexico + 0% Profits Tax until repatriated + 0% VAT in US = dirt cheap

Imbalances produced by the tax system = 'managed trade' not 'free trade'.  

Then there was the $14bn Brussells tax on Apple Corps which 'lawfully' was earmarked to go to the US Treasury on repatriation ... who owns the tax revenues?

No wonder the WTO treaty was 29,000 pages, a bureaucrat’s dream of tariffs, regulations & quotas to protect interest groups against competitive value for consumers.

The political quagmire polarised society and 'power' corrupted the Bishops, Princes, Generals and bureaucrats.

Stifling Regulation The business of Business is Business

Lower business taxes & deregulation to drain the swamp of corruption and rejuvenate business ... and productivity ... and real wages.

In 2017 The Great Repeal Bill had a go at free trade and making in roads into the stifling mountain of EU regulations ... for starters the size of the problem was unknown ... Brussels had for 40 years churned out streams of 'restraints of trade' and 'restrictive practices' in the name of protecting hapless Joe from tyranny & oppression.     

Managed Trade ==

NAFTA weighed in at over 2,000 pages, 900 of which are tariff rates. Under 'true' free trade, there is one tariff rate = 0%.

WTO involves a 29,000-page treaty, a bureaucrat’s dream of tariffs, regulations & quotas to protect interest groups against competitive value for consumers.

Dodd-Frank takes the biscuit ... in 2011 the FT reported the Dodd-Frank Bank Regulation legislation involved 2,600 pages, 243 new rules, 65 studies, 100plus committees with 100 page consultation documents with generated 25,000 legal memos & comments which can run to several hundred pages each, which, by law have to be read by the regulatory officials ... such complexity cubed makes 'collateralised debt obligations' look simple? ... and on & on it went, as of July 2013 two years after enactment, only a third of the required rules had been finalised. Those completed have added a further 8,843 pages to the rule book ... fighting dynamic complex adaptive systems with more complexity simply produce more zombies and more moral hazard ... making matters worse ... by 2014 the Dodd-Frank regulations were still producing paper. For implementation, Dodd-Frank required an additional almost 400 pieces of detailed rule making by a variety of US regulatory agencies.

Complexity leads to more complexity and crisis ... wot are they trying to do?

Free Trade ==

The economics is simple, Article 1, Section 9, of the Constitution of the USA -

'No tax or duty shall be laid on articles exported from any state. No preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another: nor shall vessels bound to, or from, one State, be obliged to enter, clear, or pay duties in another'.

y = c + i +g + x - m


x - m = savings - investment

This is true by definition of business accounting: Balance Sheets must balance ... and everything effects everything else ... it is illegal and long term impossible for insolvent companies to continue trading ... bills must be paid at market prices!

Simple simplicity leads to gross complexity, cons, corruption and confusion ...

Subsidiarity & SolidaritySubsidiarity == 10th Amendment, of the Constitution of the USA -

'The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people'.

The President == Administrator and Commander-in-Chief == constitutional checks & balances and separation of powers as a Common Law counterbalance 'the powers that be' ...

History continues to rhyme after 9/11 and after the financial crisis of 2008. As the cookie crumbled in 2001 & 2008 the Bishops, Princes, Generals and bureaucrats still refused to mind their own business and messed mine all up something rotten - 'Brexit means Brexit' and 'The Donald means Business' - 

'Folk have a moral duty to pay their fair share of taxes' - quite so, but as if Bishops, Princes, Generals and bureaucrats defined what is fair and what is moral ... is our morality any of their business?

'I will change the culture of tax avoidance' - as if Bishops, Princes, Generals and bureaucrats defined what was our culture ... is our culture any of their business?

Subsidiarity or Solidarity? We need both, but whatever Balance Sheets must balance -

'Vote with your Feet and join a Club of your Choice'

End Note

The case for business?

Blame Games misunderstand business & Complex Adaptive Systems -

everything depends on everything else - (Darwin's Conjecture)

brains can't cope with multi levels of iterations - (Theory of Mind) 

Business copes by following very simple trial & error rules of thumb where competence is not comprehension ...

discover your product or service that is wanted when sold at a price which clears markets

bankruptcy sifts out the failures 

A simple 'game' of 'social tit for tat' ... 

Listen to my mate John Faulkner and understand Kewill Systems.

Read a story about hard work, honesty & thrift under the soap pans in Apapa

Xenophanes - 'A woven web of guesses'.

Plato's conundrum - 'Mob rule and emasculation of the wise' - ‘who will guard the guardians?'

Moral Sentiments & Wealth of Nations - Adam the Smith & The Scottish Enlightenment explained all about innate 'moral sentiments', 'resentment of cheats' and 'fairness of shares'. This 'inner light' of the Quakers, like the 'bad conscience' of the Jews was a universal human emotion; a survival aid, evolved over aeons from the abject failures of alternatives. There was a moral duty to make any unavoidable taxes ... simple, and easy to collect & understand.

Declaration of Independence Liberal Democracy - Tommy Jeffers was clear about political independence & human rights, 

'We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness'

Article I, Section 9, of the Constitution of the USA -

'No tax or duty shall be laid on articles exported from any state. No preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another: nor shall vessels bound to, or from, one State, be obliged to enter, clear, or pay duties in another'.

But Jefferson didn't even convince Alexander Hamilton ... 'Leviathan' backsliding was rife from the start ... 

Power Corrupts - Beware of Soothsayers and Bishops, Princes, Generals, bureaucrats and 'the powers that be'. One of the many who grasped the ubiquitous vulnerability of top down encyclicals was Lord Acton, 1887,

'all power corrupts and absolute power corrupts absolutely'.

The Dilemma of Democracy  - 2nd Viscount Hailsham, 1976,

'instead of Liberal Democracy we have an elected remote dictatorship'

Centesimus Annus  - Pope John Paul II, encyclical 1991,

 'the Welfare State contradicts the principle of subsidiarity by intervening directly and depriving society of its responsibility. This leads to a loss of human energies and an inordinate increase of public agencies which are dominated more by bureaucratic ways of thinking than by concern for serving their clients and which are accompanied by an enormous increase in spending'.

Historical evidence - Edward III in 1345 learned all about fickle fate as everywhere happenings rhymed ... take a little time to understand this memorable example of unpredictable shenanigans.

Since then, and before, claiming the moral high ground for their own, Bishops, Princes, Generals and bureaucrats have continued, relentlessly, in their attempts to manipulate innate moral sentiments and cultural inheritances from the top down ... and always got it all wrong. Repeated violation of human rights by 'the powers that be' who seized unwarrantable jurisdiction over us as they imposed taxes & regulations without consent. This folly of 'restraint of trade' and 'restrictive practices' was all imposed in the name of 'the general will' which never existed.    

Pure Theory of Local Expenditure - Charles Tiebout, 1956, first suggested,

'Vote with your feet and join a club of your choice'

Endogenous Growth Theory - Paul Romer in 1986 demolished the chorus of objections to Tiebout and suggested increasing returns resulted from know how ... discovered & accumulated from interactions in cities and companies ... more diversity, more trade, more ideas, more technology.

Stephen Hawking - optimistic in 1988 -

'Some individuals are better able than others to draw the right conclusions about the world about them and act accordingly. These individuals will be more likely to survive and reproduce so their pattern of behaviour and thought will become dominant' ...

We are both consumers & citizens - we have freedom to enjoy choice & we have cooperative social instincts ... both ... there is polarisation and no moral authority ... but there exists a moral instinct. So why can't ... the Scot Nats & the Brexiteers & the Wallonians & Texas & San Francisco & Heathrow & Gatwick & Amazon & Apple & Genentech & Unilever & Moorfield Hospital Trust & King's Chester & the Khan Academy ... choose for themselves and cooperate with their mates ... and do their own lawful things? ... Why not subsidiarity? Why not?

NB those who say it can't be done are overtaken by those already doing it!

Check it all out ... you never know, you may change your mind ...

Darwin's explanation didn't appear until 1859.

Read Richard Dawkins 'The Selfish Gene' Chapter 12, 'Nice Guys Finish First'.

Then try some Nobel Laureates & evolutionary economists - James Buchanan, Gene Farmer, Elinor Ostrom and Paul Romer.


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