Monthly Archives: September 2013

The political versus the economic

Human values are individual and subjective, but in modern society, money is a used as a proxy of value, in both the market and the political system. We can speak of the aspirational, world-changing dreams of both entrepreneurs and politicians, but it is money which gives their values power to act. In this way, we can see the politics and the market as mirroring each other, driven by the same self-organizing principles of individual value maximization. Many people see the political and the economic spheres as collaborative, with each making up for the gaps of the other.

There is a fundamental difference between the market and the political process however:

The market system is driven by the pricing mechanism and therefore selects for maximization of consumer value. The political system is driven by the electoral-bureaucratic process, and therefore selects for the maximization of political influence.

To succeed in the market, entrepreneurs must reorganize labor and capital and delivery sufficient value to consumers to cover their expenses.

Politicians must reorganize labor and capital in a way that maximizes their power to redirect assets from those engaged in profit-making activity (which includes every market participant) to actions which maximize the support the support of their funding base. The crucial point is that this has nothing to with intention – the capitalist may be malicious and the politician benevolent, but to the extent that they are successful in their respective spheres, they must respond to incentives. The market process incentivizes the satisfaction of consumer values, whereas the political process incentivizes the redirection of values from the voluntary sphere or consumer choices, to the involuntary sphere of political authority.

Thus, though they are closely linked, the market and the political arena are linked directly in opposition to each other: politics feeds off the market, and cannot grow independently, as it has no capacity for independent existence. A society which forbids the market, or redirects too much market value towards the political realm quickly loses the power for political action as well. The firm exists solely for its own sake, but the State exists at the mercy of the market from which it gains its power.

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Self-organization in markets and politics

Most people take it for granted that the market system is a self-organizing entity.

We understand that no master plan is needed for the entire economy to work as an integrated whole, without the need for any one participant to know more than two sets of links: his suppliers and his customers.

Immensely complex structures develop to provide the most mundane and basic consumer goods, all driven by the decision making of individual entrepreneurs based on firsthand information.

The political process is also a self-organizing entity. Just as the market system, it is an immensely complex system in which any participant needs only to have a relationship with those who provide his funding and his authority. As with the market, large-scale events and patterns develop without the need for conspiracy, collaboration, or awareness.

Wars and other political atrocities happen not because of evil geniuses or secret conspiracies, but simply because the political process facilities the organization of evil activity on a large scale in the same way that the market facilitates the self-organization of value-producing activities on large scales.

The great butchers of history were not especially smart, ruthless, or capable – they just happened to be in the right time and use the political machine that their political-economic system generated.

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There is a sick value inversion between the image of the capitalist ruthlessly seeking profits and the benevolent politician working for the betterment of society.

*The capitalist succeeds only to the extent that he can produce more consumer value than the resources he consumes.
*The politician succeeds only to the extent that he can steal from productive workers and redistribute the wealth to his power base.

*The capitalist is empowered by consumers voting directly with their dollars and receiving immediate rewards for their votes.
*The politician sells promises to votes, but is actually owned by the pressure groups who pay for his campaigns.

*The capitalist is the ultimate humanitarian, working tirelessly to create wealth and maximize consume value.
*The politician is the ultimate parasite, existing solely on wealth he steals from the productive and redistributes to those who offer the largest bribe or protection money.

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September 20, 2013 · 5:06 pm