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Friday, July 8, 2016

Render Unto Caesar what is Caesar's

Ultimately all taxes come out of exchange and production mediated by exchange of tokens. Income comes from receiving those tokens. Taxes and rents compete for the same pool of surplus value because people charge rents on the properties they control, in the form of those same tokens. If they have surplus tokens they rent the tokens to others and that is a form of rent on money we give the name "interest." Government, rentiers, businessmen and bankers all compete for those tokens called "money." It either comes out of folks surplus income (like shearing a sheep in the springtime) or it is hacked out of their "arms and legs."

We call it Money but you can't eat money.

We call those tokens "money." At one time the wealthy required them to be of Gold or Silver, and people fought over them. Ships set sail out of Europe hunting Gold or silver. Indeed the indigenous were so impressed by the "gold hungry" behavior of European Explorers here in the Americas that they sometimes punished particularly ruthless and greedy "explorers" ("Conquistadors) by feeding them molten Gold. You can't eat Gold. But Gold tokens, money, can be exchanged for a lot of things, rented to others, or paid out to pay taxes or debt.

Money doesn't have to be Gold or Silver. The powerful Roman Empire made money of Bronze, and as long as the Roman Empire controlled it's markets and economy, that money was remarkably valuable. The Roman Empire's bust was usually on that money. And when Jesus reportedly said "Render unto Caesar what is Caesar's" and "unto what is God what is God's" he was making both an exegetical point referring to Mosaic law about donations to the Temple and a political economic statement. The money belongs to the Government. Not God. Not the Temple. Not the Church. Or the money changers. It's got the Emperor's face on it. In modern times it usually has some more abstract image, but the point hasn't changed. Fiat Money is rightly issued by and comes from the Government. Bitcoin sounds kewl. But I don't trust privateering money and I think it's a scam. Bitcoin as something the treasury controls is fine.

Jesus was fine with folks taking their money to make donations to the Temple. He also was fine with folks recognizing we are interdependent and that the tokens we call "money" come from functional government.

Privateers and Bankers

When money originates privately or falls into private hands that is private money. Private money is usually less secure than that produced by Governments. But when private persons become Government they are either privateers or once it becomes official, nobility. Private money is governed by private individuals and gangs. When it is governed unjustly (for private separate advantage) then the private governance is simply privateering. J.P. Morgan and other famous bankers from the 19th century were quite proud of their relationship to the "Sea Dogs" and conquistadors of past generations. Modern Privateering is perfectly legal and they can wear Armani Suits and not need peg legs or eye patches.

Usurpation of a Public Good by Privateers

Private money rapidly becomes the usurpation of a public good by private individuals, when it is not regulated or taxed. When folks have surplus tokens or commodities that can serve as money, they tend to loan them out and live on the charges for renting them or the properties they buy with them. When they do that money becomes the property of the "money men" and they essentially become the legislature, executive and judges of those tokens; again privateers. They become private government, for private separate gain and the artificial scarcity of tokens hurts those not in the privateers clubs. The term is "rent seeking" and the privilege of living on rents is one that is granted by governments through corrupt courts and legislatures - or simply an artifact of being the first to arrive at a formerly vacant or recently conquered property.

If people can't get their tokens without paying massive rents, then some people an live on the unearned tokens they possess. While others finding out they increasingly don't own anything. In the past common folks would wind up enslaved when those controlling the tokens found they could control the availability of the commodities everyone else needed to survive. The bible recounts how Joseph was able to enslave both Egyptians and his brother Hebrews by controlling access to surplus food.

The Tokens belong to the Community

Thus there is real value to those tokens. When valued properly they provide a universal markup or accounting for the relative value of things people need. Of course, if there were no material goods and services to exchange then taxes come out of hoarded goods or compelled labor -- or those constituting the government would starve along with consumers and producers both. The whole apparatus of government can exist only by creating and allocating surplus goods, and that is dependent on creating and regulating money tokens. The good here is that marking up value in terms of tokens and notches on a stick lets people delay gratification and makes communications, exchange and availability of necessities more efficient and possible. Money as "unit of account" for measuring value becomes something useful or allocating resources. Markets aren't possible without uniform weights and measures. And essentially money can and usually does perform a function where markets would not be possible without those tokens in some form.

Taxes necessary for Regulating Commerce/Society

Taxes are necessary to regulate privatized (privateering) money, keep it in circulation encourage valuable spending (investment) and recapture superfluous or waste tokens. It also is needed to provide tokens governors can spend to do their governing business and provide public services to their constituents. The enemy of a prosperous and well governed realm therefore, is excess privateering money. Governments must be able to prevent or mitigate the power of money to make money and monopolize its possession and to bind surpluses to the wasted purposes of a self selecting elite. Surplus money has to be taxed and redistributed or it undermines the functionality of the societies that depend on markets and exchange of tokens to survive.

Taxes, rents and financial charges all come from those tokens and the same pool of production. Let that wealth be wasted by being monopolized and it will be misallocated. Since those tokens are almost entirely fiat money ultimately all the income of any country comes from Government mints and notes printed by banks ostensibly backed by those mints. The wealth of a country has to belong to all the people, not just a sliver elite of super-wealthy.

Income taxes are paid out of surplus tokens. The term for the surplus is either profits or "net income" depending on whether one is parsing business behavior or referring to a family. Taxes should be paid out of net income. And a fair tax system would not be taxing wage compensation at a higher rate than it taxes net income from rents or sales. The government needs to recapture its surplus tokens and control the money supply. The wealthy want to BE the government. So they invent all sorts of fancy sounding sophisticated arguments. But that is the reality.

We need income taxes to recapture tokens not needed for production or for individuals to pursue happiness. Without taxing surplus tokens, the happiness of the few becomes a yoke on the happiness of the many. Those who control surplus money use it to generate (consciously or unconsciously) private separate advantage, inequity, inequality and to arrogate and usurp powers that ought to belong to the people.

This is a meditation and I'll probably rewrite it later.

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