Pathway to the new economics and political theory

1. Globalisation
The expansion of borderless globalised business activities and communication network have been lowering significance of nation states since the end of the Cold War. This phenomenon of the world transformation seems to be controversial but yet hardly discouraged. So, regardless of this controversy, this globalisation process seems to be an inevitable evolution of humans’ activities and daily life. The modern politics and their base modern philosophies have become less effective and less benefiting to majority humans and their interest since the globalisation started overwhelming the power of nation states. Therefore, all modern political theories regarding highly of nation states and their government now tend to be undermined.

An idea of the world or any transnational government, replacing or overpowering national governments, emerges as the aforementioned phenomenon takes place. However, there are many strong opposing views of allowing one or few authorities to control a massive human population. This will be significantly costly to select representatives, collect tax, donation, and investment with an equitable as well as efficient rate, survey for problems, and establish an ideal but also functional political principle avoiding conflict of believes and interests among human individuals.

After having considered about this matter, there is an alternative proposal fitting in with the trend of the globalisation. The proposal to let these human individuals to do what they want, instead of keeping constantly monitoring them, by following the spontaneous flow of their harmony. This shall be a new innovative form of anarchism which fits in with this constantly being globalised humans’ life style. Anarchism has been referred to as an antithesis of this globalisation process and the civil technological development. By contrast, the alternative form of anarchism shall be invented as a functioning and evolved form of the constantly evolving human civilisation.


2. Purpose & Objective
The main purpose of this attempt is to encourage (Classical-/Neo-) Liberalism thriving in this globalisation process while stabilising the public sector management and the business cycles. By taking the decaying effectivity of national governments and the ineffectiveness of the transnational governmental authority, the progressive anarchism proposed here is suggested as the antithetical alternative of both nationalism (led by national governments) and the global collectivism (led by the transnational government).

Since individuals’ activities become more active and dynamic, the size of public sectors has become bigger. At this time, individuals’ reliance on their paternalistic authorities in charge of administrating the public sector has become heavy, and the political structure has become more stratified. When this growing spiral is kept perpetuated, more individuals sacrifice their individual autonomy to expending for propping up this system. Otherwise, no defence and no judicature which are necessary to maintain ones of the liberalist objectives will not be sustained in this already developed and expanded scale of economy and politics.

The objectives which Liberalists pursue are individuals’ autonomic sovereignty encouraging their freedom of choice, voluntary participation to their exchange of their labour, goods, and services with the others, and the fair (agreeable), functional, and rational justice. As the modern world has become more reliant on a bigger scale autocratic paternalism, all the Liberalist objectives have become difficult to accomplish all together at once. Then, under the current world political structure, some of these objective need to be compromised to sustain the current technological and structural development. It is either keep expanding or start repressing the currently growing world economic and political network growth.

Nonetheless, there may need to innovate a new political structure which will attempt to maintain the political network growth while encouraging individuals’ self-governability in the world wide scale. Individuals should not forfeit their Liberalist ideal, and should invent their new innovative political structure adapted to the new economic and political environment. The key stimulus of this new attempt is their power of aspiration encouraging them to aspire their Liberalist objectives which will never be compromised in any occasion. Without the power of individuals’ aspiration, no voluntary mind and movement will take place to attempt to establish the unknown ideal.


3. The Evolving Utilitarian Formula
Please take a look at this algebra following Jeremy Bentham written in Fragment on Government:

This formula denotes the three main political functional bodies of politics from the ancient to the current postmodern world. As each body has its own costs and benefits, the political administrators optimise the power weight of each body to match with what they and/or their fellow citizens demand. The sum of their utility is maximised when the chosen power weight on these bodies is optimised to match with their demand.

In an absolute monarchism or dictatorship, only Monarchy exists as long as only one monarchy or dictator holds her/his absolute power over all. In a pure technocratic regime, such as Marx=Leninist socialism, where a group of selected individuals control over all, only Aristocracy exists. In a constitutional monarchism, Monarchy coexists with Aristocracy and possibly with Democracy. Great Britain is a typical example of all these political bodies coexist together with a stable balanced harmony. Arab Emirates can be considered as Monarchy combined with Aristocracy where Democracy does not exist. The democracy shown in this formula (Democracy) denotes the degree of majority citizens’ voice in politics. This degree is decided how possible citizens are allowed to influence a political decision by casting their vote, directly participating a political forum, or various indirect methods. Anarchism may be described as a direct democracy where only the body Democracy exists.

When the strength of the monarchy shown in this formula (Monarchy) is demanded, then the monarchy should be supplied. In the modern world, even in a republican nation, a resemblance to monarchy exists as a charismatic figure called dictator. In the current world situation, since this world became globalised, the strength of monarchy has been less significantly demanded due to the development of the world diplomacy based on commerce rather than military might and tribunal identity.

The aristocracy (Aristocracy) mentioned in my article and Bentham's Fragment includes oligarchy, bureaucrats, elites, and elected ones in meritocracy. Also, meritocracy is simply the matter of functioning, and the inheritance is accepted as long as their cultural norm encourages or it is only the financially and politically affordable option. The democratic base of meritocracy is superior to the inheritance base when it is affordable because it is more effective to elect the competent representatives.


The transnational government certainly requires a way higher weight on this aristocracy because the citizens of this world literally need to select their representatives for the administration members from much winder space than a nation. The number of their representatives might be higher in the transnational government than a national government meanwhile the number of citizens under its political regime is massively higher in the former than the latter. Therefore, the power weight of (direct) Democracy is relatively repressed in comparison to the power weight of Aristocracy.

The wisdom of Aristocracy can be highly demanded to maintain stable and functional economic and legal policies in a wide scale as the scale of individuals’ activities and life style expand at the current time period. So, it may indicate that the pure oligarchy where the entire political power is weighted toward Aristocracy offers the high sum of utility due to the material prosperity derived from the stability and the logistical efficiency.

On the other hand, there is a counterargument against the excessive political power weight towards Aristocracy, which is described as the centralisation of political power. There is a concern that the maximum utility which Aristocracy derives is lower than Democracy does. In a plain explanation, the centralised oligarchy (An intense Aristocracy) is less able to make people happier than a more decentralised and more democratic political structure.

The following charts display the statistical research outcome based on the Happy Planet Index (HPI), the climate effects explained by latitude of where each nation’s capital is located, and the binary variables representing these three political bodies introduced by Bentham, Monarchy, Aristocracy, and Democracy.



Ref. Happiness related to Monarchy, One Party, and Democracy
Published on 12/07/2012 12:57 British Summer Time

After extracting the climate effects (Latitudes of countries) from the HPI, this regression analysis indicates that Democracy tends to increase the HPI more than the other variable and the Aristocracy tends to suppress the HPI rather than stimulating.

This analysis seems to infer that even though an oligarchic political structure (An intensive Aristocracy) is less likely encourage human individuals to become happier. Although the oligarchic policy produces a high material prosperity and stabilises a political stability in a wide scale, majority individual citizens are less likely sense much happiness from the material prosperity and the political stability. Therefore, there is a risk that the further centralisation of political power may sacrifice a high degree of happiness of majority human individuals: It would be better to revise the evolution process to reincarnate and maintain a decentralised and democratic alternative while remaining the globalisation process going on.


4. The Problem of Administrating Public Sectors

In a traditional sense of modern economics, each nation is responsible for administrating its own public sectors operated in this nation. On the other hand, this form pattern started encountering a new problem in this globalised world with economic agents with a more active and wide life style and more affluent sets of choice than the Cold War period. This phenomenon encounters with the problem of claiming who is responsible to pay for what they have used. Majority of countries operated by modern macroeconomic concepts operate their fiscal policy based on a national level and two or various regional level in inside a nation. So, there has not yet solid transnational fiscal policy concept emerging yet. There is a proposal to introduce a solid and well-defined transnational fiscal policy nowadays. However, this encounters with the high administration cost and the lower sum of utility which are mentioned in the previous chapters.

There is also a remarkably significant macroeconomic problem related to this globalisation and the expanding individuals’ activities. Not only the fiscal responsibility issue but also controlling the entire macroeconomic climate such as boom and recession. Due to the globalised activity level of businesses and individual life style, the business cycles of nations are more and more harmonised ever than it used to be. Then, the macroeconomic intervention by the macroeconomic policy such as the monetary policy, the fiscal policy, the international trade policy, and various supply-side policies such as controlling and monitoring the labour and capital mobility is less efficient. This is because one nation’s macroeconomic climate is highly more influenced by the others so that it may rather require the macroeconomic intervention in a tremendously wide multi-national or even a world-wide level which simultaneously control over the entire targeted region of this world at once. However, as same as the previously mentioned responsibility issue, this encounters with the high administration cost and the lower sum of utility which are mentioned in the previous chapters.

Both the first responsibility issue (microeconomics) and the economic climate issue (macroeconomics) are concerned with the matters mentioned in the previous chapters. The administrators of these public sectors defining the cost coverage responsibility and the resource allocation are more centralised and become in charge of administrating a wider scale. Then, the politics tends to become more oligarchic so that this eventually encounters with the high administration cost and the lower sum of utility. This centralisation may be considered as the optimum only if individuals are happy with their high administrating cost and the potentially relatively low utility level compared to their possible decentralisation choice. Therefore, even though the centralisation may have a high advantage over the decentralised counterpart in some field, the opportunity cost of this choice is also high. In addition, this project aims at reincarnating the original Liberalist principle and anticipated outcomes so that the alternative possibility of seeking a decentralised form of politics shall be more desired than the centralisation option.

On the other hand, the problems of the public sector administration issues cannot be simply ignored. Some economists claim that it should be possible to put the decentralised politics in this global economy without taking these previously mentioned issues into consideration. Their claim is that the responsibility is spontaneously determined by all free economic agents fairly by following the natural free market movement toward equilibrium. Nonetheless, this equilibrium is not always a good equilibrium as many other economists affirm that there are both good and bad equilibrium outcomes.

The Game theory wisely indicates the bad equilibrium condition called the Prisoners’ Dilemma. The good equilibrium condition is where all individual economic agents pay for what they have used and how capable to contribute to meanwhile majority or a few influential cohorts of economic agents rationally counter-act against the deviating business cycles without relying on the collective macroeconomic policy. The bad equilibrium condition is where many economic agents are not contributing by means of their ability and responsibility, and then the economic climate is always in turmoil due to their disturbed unstable business cycles. The prisoners’ dilemma warns of the free riding which means that many take advantage of letting or even enforcing the others to cover for the service meanwhile they obtain the shared common benefit from this service. This Prisoners’ Dilemma takes place when nobody shares the same principle and objective to fulfil their mutual interests because of their ignorance about what is occurring in real and what they are supposed to do to overcome from their unwanted situation. Afterward, even a generous altruistic individual will eventually stop contributing to sustaining this system, or just be kept exploited until the end. Therefore, by perpetuating this situation, individuals tend to be diverted from the good equilibrium and then be converged at the bad equilibrium as long as the aimlessness and the ignorance prevail.

In the traditional sense, human individuals have kept their reliance on the collective rational authorities to direct their economic policies with their paternalistic wisdom. In the feudalism, the feudal lords and the divine authorities were their representative guardians in charge of this paternalism. In the modern world, nation states and their government are the paternalistic guardian institutes meritoriously selecting their representatives from their general public. This collective authoritarian method has been functional as long as these paternal guardians have their strong principle encouraged by their nobles’ oblige and the scale is optimum size.

Nevertheless, these paternalistic authorities are not often honest to serve for allocating all resources available to induce the good equilibrium. They may avoid the bad equilibrium as long as they are aware of the mechanism of economics because the bad equilibrium induces the bad condition for not only the majority individual citizens but also themselves. But, they often take an advantage of controlling this collective resource allocation to split the resources into their own profit. As far as the power of these authorities becomes stronger relative to the others’, the margin of their profit taking becomes higher as they are more able to monopolise their power from this political structure. Therefore, the further expansion of centralised collective governmental institutions increases a significantly high risk of reducing the sum of utilities in proportion to the political power centralisation.

By contrast, there is a hope that human individuals might no longer need to reply on these collective paternalistic authorities as these individuals will become more self-governable than before. They are becoming more capable to gain their appropriate knowledge and skills due to the rapid development of the information technology. Then, as the surveillance technology has been dramatically developed, the cooperative model, as an alternative of the transnational government base, of running public sector might be more possible in the world wide. So, as long as individuals willing to prop up this cooperative public sector are voluntarily as well as collectively participate to be responsible for sustaining and operating it, it may function. If it is possible to operate, then something not able to privatise such as defence and judicature may be preserved even in an anarchist politics. However, this is still an unknown ideal which has never been experimented yet.


5. Modern Economics meeting with Philosophy
The critical condition is that citizens of this political structure have to become highly self-governable and maintain their relationship with their objective mutual interest. The public goods and services may be able to survive by introducing the public sector governed by a cooperative of autonomous citizens where all its participants voluntarily expense for the cost and voluntarily operate to provide goods and services. But, this challenge is considered as extremely difficult or even impossible due to its lack of certainty to collect their expenditure and define who is responsible to pay. Democracy (in particular, the direct democracy) is a privilege, rather than a condition, for a civilisation where majority of citizens are enlightened and a plenty capital/wealth is accumulated. In order to accomplish in such a difficult challenge to acquire this privilege, these individuals have to have a strong ethical principle defining their own ethical compass motivating themselves to maintain and develop their self-sustainability.

This ethical principle forming their ethical compass has to be something not only encouraging and sustaining the harmonious voluntary cooperation among all individuals together but also tolerating and fulfilling their egoism at the same time. Without a harmonious cooperation based on a voluntary participation to this politics, individuals and their surrounding environment fall into the bad equilibrium explained in the previous chapter. Without tolerating and actually encouraging egoism, an active market economy increasing the wealth of individuals and their civilisation and individuals’ voluntary spirit hardly emerging. Therefore, it requires to install an ethical principle fulfilling these two functions, harmonious cooperation and egoism, together.

In traditional sense, religion has been the main function to instruct human individuals about the virtue of peaceful harmonious cooperation since the establishment of human civilisation. If religion is already an outdated principle not fitting in with this current world situation, there may needs something substituting religion. In a relatively less democratic system where the weight on Monarchy and Aristocracy (The variables shown in the previously mentioned Benthamite algebra) is high, majority of individuals can live without always reminding of the ethical principle because the political system always provides them with its ready-made ethical compass directing the whole general public. By contrast, in a direct Democratic politics self-governed by autonomous individuals, majority of individuals must be aware of their own responsibility to guide themselves.

In order to keep the technological development and the progressive evolution of civilisation, egoism is an unavoidable key factor motivating individuals for being loyal to this cooperative politics. The success of the modern world development is encouraged by the enlightenment philosophy tolerating and fulfilling the individuality of human-beings and their egoism. By means of nature, human individuals cling to satisfying their own biological and psychological needs and wants. Moreover, as Napoleon Bonaparte said, they are more easily governed through their vices than their virtues. Therefore, the politics eventually is required to take these natural characteristics into its account. Otherwise, these human individuals simply become too castrated and nihilistic to be energetic because the voluntarily self-governed politics highly requires their energy motivating their competence.

All in all, both economics and politics will be necessary to adapt these philosophical concepts. Studies of modern economics nowadays tend to lack the philosophical insight compared to the classical economics including the one invented by Adam Smith. Modern politics are unavoidably compatible with the existence of the nation states and possibly some form of transnational government and their authority. At this current transitional time period, there shall need to be a completely brand new economic and political theory emerging to solve the problems and the requirement mentioned in this project. A form of anarchism might be no longer an idealistic politics, and it seems to be rather necessary to take putting this political philosophy into our consideration in real. Hence, the endeavour to this pathway to the new economics and political theory should exist as an interesting experiment, and it should be desired to be a practical theory in the near future.