AXIOM #2 – The Real Cost IS Exchange


The real cost is exchange.

In the first axiom we saw that no economic activities can occur without a government. Now we will address what the true cost is of forcing everyone into economic activities (exchange), what it means, and demonstrate how the only way to address these costs is not by more economic activities but rather less. This is particularly true for developed countries.

So we want to look at the ‘real’ cost of forcing everyone into economic activities which is not something that can be measured in money. Remember, because the first axiom states money is barter is government, then one cannot measure the cost of forcing everyone into economic activities ‘in money’, nor can anyone measure the cost of government in money.

The only way to measure any cost is to determine if the activity in question contributes to a whole communities needs or not. If it does, then there is no cost, if it does not, then there is a cost. Does our society today under its current system provide for everyone’s needs? The answer is obviously no. The true cost of our current system then is that it fails to fulfill the most common of all principles that has existed throughout the history of mankind.

So why does our current system fail to ensure all needs are met?

The reason is simply because all human needs, from land, dwellings, clothing, food, energy, water, education and health, are all now treated as commodities and are thus all owned. Because all these needs are now owned and thus treated as commodities, the only way to obtain a need is to compete for it. To compete for something (outside of illegal means), you need money and thus barter (exchange) and thus government. You cannot access needs any other way. Even welfare is constantly under competition from political forces.

In order for there to be a government, some of those commodities must go toward paying for that government. No person is willing to govern another unless that other is willing to give up some of their time and resources in order to provide for the needs of the governor.

This means for every person who now governs, there is one less person who is utilizing their time to provide for their own needs. This means, that all those who do not work for government, are now competing with each other not only for their own needs but also to pay for the needs of the government. The larger government becomes, the more ferocious is the competition between those of the non-government sector in order to pay for this government.

It is like an equation that looks like this:

n = n – g

…where n represents everyone competing for their needs and g is the size of government. It is obvious n can never equal n minus g. Everyone’s needs are taxed by the very existence of government.

Because a government must always be paid for, this inevitably creates failures, bankruptcies, poverty, homelessness and so on within the non-government sector. It is then the job of the government to bail out the failures. No one else is going to look after them. This means as competition increases, so too does bankruptcies and the need for welfare, and so too does the size of government. Now all non-government workers are competing against each other to provide for their own needs, the needs of government, and the needs of the failures and welfare recipients.

The equation now looks like this:

n = n – g – w

…where w means failures and welfare.

To further augment the problem, everyone, including those in government, wants more wealth, property, money, etc. Every day our expected standard of living is being raised higher and higher. What was once seen as a luxury item is now deemed a necessary. A high school student today cannot fulfill their education requirements without a computer and the internet. Most people cannot fulfill their work or their private commitments without a car. Most people need insurance. Most people want to consume more, experience more. All these extra things which were once only enjoyed by the few are now expected by everyone.

I like to think of property, wealth, money etc as like a human where all humans need feeding. All property needs feeding on economic food which is making money by treating a resource (including labour) as a commodity. If you own a home, a car, a building, lots of possessions etc, then in order to keep profiting from it you need to keep feeding it economic food. If you own a home, you need to pay rates, interest on the mortgage, etc – if you don’t feed it you will lose the house. If you own a car you need to pay for registration and insurance – if you don’t you wont be able to use it to earn income. If you own lots of expensive possessions you need to purchase insurance – if you don’t you risk losing all monetary value of those possessions. Anything which has monetary value to you, you will need to keep feeding it money in order to protect that monetary value or your ability to utilize it to make money. It always takes money to make money.

What this means is that for every person who is treating his needs as a commodity for the purpose of making money, they not only have to keep feeding the government, they also need to keep feeding the property itself. And just like before, the more property owners there are, the more economic food is needed, the more competition, the more failures and on and on we go.

So we have a continuously rising standard of living, which requires more and more resources, which we continue to treat as commodities which causes more competition, which causes more failures, which necessitates more government and welfare. A serious feedback loop if you ever saw one.

Some people may argue that an efficient government should ensure that it uses it’s time (the governments time) to the benefit of the whole community so that all its needs are met. But this argument is based on a false notion that it is possible to begin with whilst we continue to treat all human needs as commodities; it is not. You cannot ensure everyone has access to a certain thing if that certain thing is itself being competed for. The whole notion contradicts itself.

The equation now looks like this:

n = n – g – w – p

…where p represents the size of the economic food needed to feed property ownership. So now a communities needs is being taxed even further.

So what is the solution?

Capitalists pursuits always create failures, and the merchants, entreprenuers, and the captains of capitalism throughout history have always known this and have always accepted the risks involved. Today, everyone is a capitalist wanna-be wanting to own their own homes, portfolios of stocks, etc and yet don’t want the risk that comes with it. This is socialism and is not a good model because it creates a false sense of security. It is hypocritical to say I wish to enjoy the rewards of competition (i.e. wealth) and yet not accept the risk of losing it all.

However, if less people treated human needs as commodities (I am not saying all people, just some who knowingly and willingly choose to do so) and gave up any idea of wanting to pursue wealth, this would then mean that less economic food needs to be produced because there would be less property and wealth which needed feeding, which would reduce competition over economic food (commodities) and this in turn would place less burden on government and it would also create far less failures and welfare, at least relative to the total population. This then benefits all those who do wish to pursue wealth. It is like the board game monopoly. If 20 are playing, each player’s chance of winning is 1 in 20. If 5 decided to leave the game, each remaining player’s chances of winning have just got better.

These people who choose to renounce wealth have access to all those needs which the law requires individuals and families have access to ensure they are not at risk of breaking any laws, and they hold all the durable goods (land, dwelling, furniture, vehicle, etc etc) in trust for the whole community. They promise by some form of legal declaration that they will never treat any resource, including their labour as a commodity, and will instead act as custodians. The government purchases their needs using money that is issued by the central bank instead of from the treasurys consolidated revenue account, and when that money returns by way of taxes it is destroyed. No tax-payer’s money is ever used.



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