Thursday, August 08, 2013

The Overarching Policy – The Moral Authority of the Divine Economy

To quote Ludwig von Mises: ‘The first condition for the establishment of perpetual peace is the general adoption of the principles of laissez-faire capitalism.’[16]

I would like to modify his recommendation slightly.

· First, we can rest assured that the prosperity of an ever-advancing civilization emanates from the divine economy.

· Second, we can trust in the equilibrating power of the divine economy.

· Third, we can trust in the divine justice that comes from protecting property rights and that comes from recognizing that property rights are human rights.

 Those who fail to admit their own limitations and then expect others to believe their assertions that they can comprehend all that is going on in the economy — thereby 'giving themselves the right' to interfere — these are the ones who are now without authority. It matters not what position of influence one holds or what degree one has or what record of publication one has. There is no human act of intervention in the economy that is not feeble-minded when compared with the infinitely dynamic and ever-pervading market processes which happen to be intricately connected to each and every subjectively-perceiving and acting human being. All interference with the economy is necessarily ego-driven; and it lacks moral authority.

Policies that convert latent entrepreneurship into active entrepreneurship and policies that encourage alertness and discernment expand the overall potential of entrepreneurship in the minds of all. When market information is free from the distortion caused by intervention it is then that the divine economy is in a charged state releasing an increased power of human creativity.

Policies that are conducive to building a link between capital and entrepreneurship complete the transformation implied and described by the recurring designation ‘Ever-Advancing Civilization.’

Policies that foster the nature and role of knowledge in the individual and in the market carry forward an ever-advancing civilization. Implied in the ‘nature of knowledge’ is the refinement and progress of human learning. And implied in the ‘role of knowledge’ is economic communication by the means of market prices and voluntary worldwide trade.

Policies that promote justice and unity universally stem from the preservation of both the nature and the role of knowledge; that is, preservation and protection from those who have ego-driven motives. It is the ego-driven who try to interfere with the nature of knowledge since they are the ones who benefit from the existence of prejudices, superstitions, and ignorance. Likewise it is the ego-driven who try to manipulate the economy through intervention, all for the purpose of benefiting themselves directly or indirectly.

Each of the following eleven simple policies fall within the overarching policy of the moral authority of the divine economy and will effectively promote an ever-advancing civilization in various ways. All of them also compliment each other. Of keen interest is the fact that all of these policies represent positive changes that have been brought to the forefront of our attention by the divine economy theory.

The Eleven Simple Policies

1. Well-defined and continually refined property rights

2. The right of secession

3. Market forces will moderate business sizes

4. Enforcement of property rights

5. Education about entrepreneurship

6. War and inflation violate property rights

7. Gold passes the market test

8. Counteract the misinformation about capital

9. New capital is a good start

10. International free trade

11. Minimal taxation

There is no macroeconomic theory that is more specific in its policy. Nor is there a macroeconomic theory that is as well-grounded in both theory and in the classical liberalism tradition as is the divine economy theory.

This then represents a challenge to all economic theorists. Is there a better theory, more cohesive, more succinct, more clear, more doable? The answer is "No".

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Thursday, August 01, 2013

Defining And Refining Macroeconomic Terminology.

Active Entrepreneurship: A state of alertness where opportunities are easily discerned to be acted upon.

Capital: The financial resources which are necessary for the production of most current goods and all future goods.

Disequilibrium: The real economic condition that exists in the world because of uncertainty and imperfect knowledge.

Disutility of Labor: Of the three qualities of the human reality — physical, intellectual, and spiritual — humans least prefer to occupy themselves with physical labor.

Divine Economy: The equilibrium force that is at the center of the divine institution — the economy — that has been bestowed upon humankind by God.

Divine Economy Model: A subjectivist model that describes the economy in the following terms: human spirit, transformation, law, order, purposeful action, capital structure, market, property rights, justice, and unity.

Divine Economy Theory: The theory that uses the subjectivist methodology to explore how the human identity of being created in the ‘image of God’ helps us to understand how the economy works.

Division of labor: Since every human being is unique, as they pursue their goals there is the potential that they will make a unique contribution to production.

Empiricism: The use of data rather than theory to explain things.

Equilibrium: The tendency towards balance and harmony.

Ever-advancing civilization: Humans, individually and as a whole, always aspire towards and potentially achieve greater perfections.

Hampered Economy: This is an economy where acts of intervention interfere with the equilibrium forces.

Human Operating System: All of the inherent human faculties that serve as the means to fulfill our human purpose, which ultimately is to know and love God.

Inflation: Artificial expansion of the money supply.

Intervention: Imposition of finite human acts of control onto an infinite and divine system.

Laissez-faire: An economic philosophy based on the insight that the economy works best when there is no intervention.

Latent Entrepreneurship: A state of potential unachieved due to discernment dormancy.

Leisure: The desire to satisfy one’s highest valued physical, intellectual, or spiritual aspiration instead of working.

Macroeconomy: A term used to indicate that aggregate indicators in the economy are being looked at.

Market: The place and process where information flows between and among participants.

Market Process: A natural and universal process that functions like a language does to facilitate the making of exchanges.

Production Possibilities Frontier: A macroeconomic tool using two opposing aggregates to explain the limits of production.

Purchasing Power: A measure of the value of the medium of exchange in terms of the goods that can be purchased per unit of money.

Savings: The portion of income set aside for future consumption.

Secession: The right to leave a jurisdictional arrangement in a contractual society.

Standard of Living: An aggregate reference point assessing the degree of well-being and prosperity in relative terms.

Subjectivism: The scientific approach that recognizes that humans act subjectively, and this then leads to realistic and relevant scientific discoveries.

Taxation: Coercive extraction of wealth by government.

Time Preference: The universal law of human action that states that people prefer to have a good now rather than that same good sometime in the future.

Unhampered Economy: A synonym for a laissez-faire economy and a free market economy. It is also the condition that exists in a divine economy.

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