An experimental (philosophical) political compass.

An experimental (philosophical) political compass inspired by http://www.facingmyownreflection.com/concepts-and-estimates-of-the-new-political-spectrum/

The vertical axis indicates the ethical point of view. This is measured by what kind of means of their political achievement they select. The top side of this scale represents the view that there needs to be an objective principle of what is right and wrong. So, those who are on the top side of this spectrum suggest that all individuals are judged and treated under the agreements made by an agreeable justice such as law and contract. By contrast, the bottom side of this spectrum represents the view that those who are in the power create the rule for all.

The horizontal axis indicates the world view of these philosophy. The left side of this scale represents the view that there will be an alternative world which has not yet existed in the current natural world. So, those who are on the left side of the spectrum have a strong devotion to aspire creating their dreaming ideal world. By contrast, the right side scale represents the view that there is an inevitable nature of both human individuals and their world which cannot be eliminated. Those who are on the right side of the spectrum regard highly of the already established order of human politics.

ABL Political Compass (Legislative and Judicial axes) to the Unknown-Ideal

When people talk about anarchism (Zero control) and the low control level, many of them tend to be confused with a chaotic or primitive state. A chaotic and/or primitive state often implies the low or no control. But, anarchism does not always imply either chaotic or primitive. There are several forms of control-ship as well as there are several forms of no/low control-ship.

However, there is a significant difference of an economic political structure between controlled and less/non-controlled. The characteristics of the economic political control is created within a relatively short time period meanwhile the characteristic of non/less controlled economic political structure is created through various influences of cultural and technological new inspirations unless it is a collapse of civilisation going back to chaos/primitive. The control is artificial meanwhile the counterpart is spontaneous. The spontaneity cannot be artificially created all the sudden: Individuals and their living civilisation need to experience various cultural and technological influences enough to obtain the wisdom to live without an artificial economic political control.

The controlled structure can be sustained as long as a few powerful individuals in charge of the control are wise enough. By contrast, the structure with no/less control requires majority of individuals to be enlightened and already wise enough to be self-autonomous. The root motivation of individuals enabling to establish no/less controlled state can be religion and other forms of strong ideologies. However, this project also adds another form of no/less controlled state which is free from not only the physical (economic) control but also the moral (political) control, and this is the unknown ideal which I, the author of this blog Art&Blue-Liberalism (ABL), is aspiring to discover.



The following charts explains how the new political compass based on the political map of various already-existing forms of civilisation and the unknown ideal together:



There are two axes, the legislative side of politics mainly in charge of regulating economic policies and the judicial side of politics mainly in charge of regulating moral policies.

There is only one the most economically and morally controlled state. It assumes that the objectives of all rational individuals in this world is to achieve in material as well as spiritual prosperity. So, regardless of ideology basing the control-ship, the main-objective is prosperity and the degree of control is adjusted to achieving it.

The spectrum of the old political compass is based on the straight forward high-low control. By contrast, both the ends of this new compass are low control and the centrist indicates the highest control.

* Legislative: Economics side *

This project regards that the pure command economy, such as Marx-Leninism, is equivalent to the primitive economy, and the high economic control implies the positive planning of economic policy such Keynesian economy. So, it does not measure by means of the size of public sector: it measures by means of the active role of government and big corporations directly intervening into the business cycle and the overall economic climate.

Furthermore, it indicates the clear difference between two low control levels: The one where majority of individuals are less aware of market mechanism and the other is majority of individuals are aware of market mechanism without an instruction provided by rational authorities.


* Judicial: Moral side *


An intense autocratic government always requires its citizens' worship to it as though it were only one God. Even an authoritarian government with theological ideology, they often use religion and morality as their political instrument. The pure religious community represses the excess control of government, and individuals follow moral disciplines without any paternalistic intervention by a political autocracy.

The third characteristic of this spectrum is the freedom from both government or any moral entrepreneurs' moral intervention. Many Continental European states are close to this category. The extreme side of it is the anarchism existing in political theories.




The teaching of Islam contains a full knowledge about the market mechanism, and citizens of various Islamic nations achieve in a reasonable level of economy. Their government often intervene into economy to stabilise their business cycles, and the big corporations and the Islamic banks are highly encouraged to voluntarily help the economic adjustment.

Jewish community is not restricted by a nation state, and their holy nation Israel was established relatively new compared to Jewish people's own long history of existence. They are only controlled by the moral entrepreneurship which is free from any artificially created autocratic form of politics. Majority of Jewish are aware of market mechanism, and self-autonomous enough to cope with any havoc challenging them.

Asian nations tend to prefer a high control for both economy and morality. Their culture to follow rational authorities enables them to stimulate rapid economic growth and political stability. The weak point is their low self-autonomic level which hardly promotes a self-autonomous state.

The moral entrepreneurship in Latin America is intense even nowadays. The degree of economic intervention varies across different Latin-American nations. They are less secular than majority Asians but less religious than Isramic citizens.


In the Western nations (except Latin-Americans), there is a big divide between the Continental Legal Positivist states and the Anglo-American Common-Law states. The former is a rational secularist nation which promotes morally neutral policy with an effective economic intervention. The latter remains a strong moral entrepreneurship but a laissez-faire economic policy. The latter puts emphasis on the self-responsibility of all individuals for both fortune and misfortune, and the flexibility promoted by this emphasis has strengthened their strong financial management. The former put emphasis on the safety net helping individuals accidentally trapped into misfortune, but demands on individuals' tax contribution and strict legal codes which disrupt the flexible flow of the financial market.

Scotland is one of the former states even though she is a part of the United Kingdom of Great Britain and Northern Ireland. Jeremy Bentham aspired to establish a perfect legal-positivist state and ardently challenged against the traditional commonlaw of his own mother nation. Bentham 's ideal state is to promote the maximum secular freedom of individuals protected by the reasonable level of positive government intervention and the fair judicature based on the logically and explicitly coded legal codes. Murdock empire is not a nation but its media influence is often superior to any national propaganda. The media empire of Murdock is highly secular meanwhile it still remains its business ethics based on the common law states requiring all individuals to be responsible for both their fortune and misfortune.

The unknown ideal is something combining the secular-rationalism of the legal positivist states and the self-autonomy and the strong financial management of the Anglo-Saxon and Jewish culture. In order to accomplish the unknown ideal such as Max Stirner and Ayn Rand had aspired for, the combination of the flexible flow of the financial market promoted by both Anglo-American Common law and Jewish culture and the morally neutral rationalism promoted by both the Continental Legal Positivist Europe and Asian nations seems to be demanded. The practical method to achieve is not created yet, but there is already an idea leading to keep looking for the solution.

Dilemma between Democracy and Technolocracy

1. Dilemma
Recently, there has been a debate about technocracy since the beginning of this ongoing world economic crises. Many political economists claim that introducing technocracy as the substitute of democracy because of its efficiency to decide and apply effective policies to tackle with the emergency problems. This idea is not new, and it has been expressed by Plato, one of the core-founders of the Western philosophy, since more than thousand years ago. Plato argued that the chosen elites called the guardians or the philosopher-kings ought to be in charge of handling all major political decisions and their practices by preventing all the noise from the relatively ignorant rests of citizens.

By contrast, there is a counter-argument against the centralised politics of technocracy which permits only a certain cohort of individuals to monopolise the political power. They claim that the previously mentioned reason of introducing technocracy based on its centralised politics is hypocritical because none can be perfect to be in charge of intervening to both economy, politics, and possibly individuals' daily life. John Dewey, an American pragmatist political philosopher as well as a devoted advocate of democracy, has claimed that it has never been known what policy is reasonably functioning as it is initially planed. So, politics needs to be wide-opened to test and accept various opinions and attempts without restriction by the ivory tower autocracy. Therefore, a decentralised direct-democratic form can be ideal to increase the benefit of politics.

This centralisation of power is about not only government and its public sectors but also the private corporate structures. As a matter of fact, the size of corporation has been expanding more and more since the industrial revolution, and the scale of the expansion is way faster and wider than government and public sectors. Majority of the modern corporations are based on technocracy so it might sound nonsense to debate about pros and cons about technocracy. This essay's focus is on the market structure and measuring whether the market is based on massive number of small enterprises or the market is centralised into one or few technocratic massive corporation(s). When the market competition is intense among outnumbering small enterprises and/or democratic cooperatives play an active role in the market, it is seen as significantly decentralised. By contrast, when institutional integration of private industries is intense and/or a state/government public sector plays an active role, it is seen as significantly centralised.

In this essay, the centralisation does not simply imply the collectivisation of economy because it does not take account of irrational planning of economy by socialists. The centralisation here implies that the stronger role of a central banking system, government interventions, and thriving nation-wide scale and transnational corporations caused by the expanding scale of economic activity. Therefore, the intensity of market competition does not vary across different levels of this centralisation measure: The scale of economic activity varies across this centralisation measure.

The following explains the analysis to estimate the benefit from technocracy (The centralisation) and (direct) democracy (The decentralisation), and the optimum point where the net benefit from the equilibrium point of the certain degree of technocracy and the certain degree of democracy.


2. Economic productivity



Adam Smith, the father of economics, thought highly of the division of labour. When one smith can manufacture 100 pins a day, 10 smiths with the same skill can join together to produce more than 10,000 pins when the labour is divided to each smith. The scale of this institutional integration of labour force to produce a particular product is called the economic scale. The economic scale expands when the higher production capacity becomes more available and demanded.

Smith put emphasis on the market competition which should be encouraged to increase the motivation of individuals and their firms to produce more efficiently and effectively. These individuals are motivated by a higher reward i.e. their higher profit than others when they can produce better than the others. He also claimed for not only the competition of production but also the competition of ideas among individuals. Then, free open trades in a wider area provide them with more opportunity to compete and gain more productive ideas.

David Ricardo claimed for the specialisation of industries in a wider scale than Adam Smith. He argued that each different country should be specialised in producing what they are good at producing so that the aggregate productivity. In an international trade, the productivity can be maximised due to the division of labour available to be concentrated on producing higher quantity. This idea has provided an opportunity for countries with a relatively lower aggregate productivity to join the international trade.

The size of private sector industries has swelled by taking an advantage of the trade route expansion and the division of labour applied to their production methods as a new management tool. Firms have enlarged their production and management scale, and their business have branched out over the nation-wide and even the world. Then, they have started employing more labourers and their management structure has become more complex and structured. Then, their organisational structure has become more centralised under an authority of one opinion lead with a technocratically selected elites, called the executives, in order to maintain the decision making process consistent and efficient. The executives are usually selected by their merit and responsibility for their company management so that it is a technocracy. When their business management scale expands and centralised, the number of technocratically selected executive per head of the entire population of not only the company members but also all the civilians living in this economic region becomes significantly smaller. So, the entire community structure is considered to be more centralised.


Alexander Hamilton, one of American founding fathers and the first minister of finance in the independent United States of America (USA), insisted on the need of the sufficient degree of the intervention of government authority to economy. He supported the open free market trade among individuals and countries. But, he argued that, unlike the United Kingdom (UK) where the government and the royal intervention and regulation were already intense, the newly born USA needs more regulation and intervention were required. He mentioned that the shared public infrastructure and the public safety network are required to enable individuals and their firms to freely as well as fairly compete and cooperate together.

For instance, Hamilton put high emphasis on need of the central bank and the unified currency supplied by it. Establishing the consistent and legitimate intermediary of exchange is essential for the wide open active free trade. The currency ought to have its credibility enough to encourage saving to increase the aggregate wealth and stimulate the investment flow, and also motivate labourers to feel happy to exchange it with their labour. Furthermore, the unified public sector authority is required for establish a strong defence force and the consistent and fair legal system conducted by the rational authority. These two institutes function for protecting the public safety where individuals are enabled to peacefully trade, thrive, and live happily in their daily life.

Rational authorities, who are in charge of planning the defence strategy and the law enforcement, and interpreting the legal codes, are generally technocratically appointed by means of their qualification measuring their merit such as ability, competence, and knowledge so they are not generally directly elected by the popularity of the general public. Even under the majority modern democracy, these technocratic rational authorities are responsible for administrating these defence and legal process. The candidates directly elected by means of their personal favour of the general public can influence the decisions and the actions of these rational authorities to restrict the excessive centralisation of political decision making. But, the processes in a wide scale modern developed politics require the sufficient skill set gained in a long term training so that it is inevitable that these rational authorities are more likely to be demanded for the core executors of the political administration.


When the economic scale is enlarged and the population of economic agents there increases, the business cycle becomes more dynamic and fluctuating. At the level of the technology available in 19th and 20th century, it became difficult to leave the free market alone to grow itself because of the turmoil of its business cycle fluctuation. As an entire economy of one nation is easily affected by the sudden spontaneous shock, which can be either overheat or downfall, which starts taking place in one part of this national economy. The shock became more contingent than used to be. Therefore, the government's positive intervention reacting against this turmoil started to be required at that time period.

John Maynard Keynes reformed the concept of the market economy. He argued that it is important to keep the basic concept and the nature of the free market economy while he also affirmed that some form of the error correction of this wide fluctuating business cycle to stabilise the economy to enable the market economy overcome from the catastrophic turmoil. The self-proclaimed Keynesian economists support increasing the active role of government. They support increasing the public sector share of economy to the certain extent and the frequent discrete fiscal policy intervention by using the flexible tax rate and the national debt issuing. Milton Friedman and his followers called Monetarists support the monetary policy conducted by the central bank without relying on the government role.

The reason why this kind of the positive intervention toward business cycle is often required is that one shock in one area of a national economy is so high contingent in the modern developed economic structure. When some area economically stagnates, the national economy should deal with stimulating this stagnating area by splitting the resource from better-off areas and/or with the national-wide level stimulus package stimulating the hole national economy together. By contrast, the economy of an overheated area should be tightened by the monetary, fiscal, and supply-side policy. Regulations of labour and capital mobility also plays a big role in controlling the business cycle to either restrict or open their flow to adjust the business cycle. All in all, the rational authorities who are selected by their knowledge and merit of conducting economy, not by the popularity of the majority mass, are desired to be in the government position in order to manage this economic policy. Thus, the community structure is more centralised when the scale of economy at the current level of technology and ideas available.


When the entire economy is still immature and struggles to achieve in a stable growth and suffer from a considerable deprivation without any positive planning, one centralised opinion leader-like institution may need to emerge. In order to achieve in the rapid economic growth to overcome from such under-development and the goal is clear and achievable as long as the resource and the motivation are available, only limited number of authorised individuals of one ideologically unified institutional body ought to conduct the entire economy and politics. A selected cohort of intelligent individuals should directly command economy and private citizens to allocate their resources optimally for the development purpose. The conflict of opinions should be prevented because democracy, promoting freedom of choice and opinions, can be conditionally hindering especially under such an unstable immature state.

This is called the Development-Dictatorship which maintains the decision-making process efficient and unified until this nation is materially developed. When economy is developed at the certain level enough to require more flexibility encouraging freedom of thought and new innovations, any political dictatorship stagnates or even depreciates the growth. However, when economy is critically deprived by means of the material development, the priority is copying and adapting the already existing ideas and the resource concentration. Therefore, in this case scenario, the Development-Dictatorship is conditionally often functional for increasing the aggregate productivity.


Nowadays, it has come to the new era of the new economic paradigm. The world economy has become rapidly globalised so that regions in this world has become economically and politically interconnected with each other. Then, the national governments to struggle with stabilising their business cycle themselves. The transnational monetary institution has become necessary to intervene into the world economy by conducting each state economy because burdening responsibility on each nation state has become beyond the capacity of one nation state. The World War 2 (WW2) taught the lesson about the consequence of burdening full-responsibility on one nation state for its economic depression induces a world wide catastrophe. Then, the more centralised public institutes like the World Bank and the International Monetary Fund (IMF) have emerged as the intermediary of negotiation, policy-making, and transnational direct investment programmes. The authority and the role of these transnational public institutes are still relatively insignificant at the current situation. Nonetheless, as the speed of the globalisation has much faster since the end of the Cold War, and its speed acceleration has been more remarkably high since the last information technological innovation. Therefore, the role of the transnational institutes will become more active, and economic agents of this world might expect for the higher responsibility of them for the world-wide level economic intervention.

There has also been a radical attempt in a shifting paradigm from the age of nation states to the new age. Some member states of the European Union (EU) have adapted their shared common monetary policy and its currency called Euro, and the European Monetary Union (EMU) member states form the Eurozone. They attempted to reduce the menu cost incurred due to the fluctuation of the currency exchange when the international trade between two or more states have increased dramatically.

The currently ongoing economic crisis in the Eurozone occurs due to the systemic shock shown in the picture below:

As each Eurozone member state no longer has its own monetary policy controlling the interest rate and the money supply volume, they struggle in the positive intervention adjusting to stabilise the business cycles. Many economists claim that something like the US federal government conducting the fiscal policy to harmonise the business cycles of states in the USA should be establish to solve the ongoing crisis caused by the dis-harmonisation. Otherwise, it requires to whether bringing back to the system before the EMU was established or ostracise one or few remarkably troublesome members disturbing the harmony. Sum up, the stable solution will be either not only monetary but also fiscally integrating the Eurozone under a more centralised system or decentralise it to minimise the EMU scale enough to be stabilised without a fiscal unification.

There is my econometric analysis assessing the business cycle harmony among the Eurozone states.
The European Monetary Union is inevitable, but has to be fundamentally revised
Published on 23/07/2011 09:18 British Summer Time

The result indicates that all the members except for Ireland are harmonised (The business cycle shock is contingent to each other and the inter-border trade frequency among them is high) enough to cause any of their productivity decline after leaving the EMU except for Ireland. Greek cycle is strongly harmonised with the majority of the Eurozone members, and the significant difference of Greek economy from them is that Greek cycle tends to be exaggerated. This means that Greek economy may become overheated when the entire Eurozone is in boom meanwhile Greek economy falls into the severe economic depression when the entire Eurozone economy experiences the economic recession.


Overall, it seems to be able to affirm that the centralisation of institutes is an inevitable process to increase the aggregate productivity, and majority of the mainstream economists nowadays tends to agree with it. The productivity, representing the material well-being, is essential for individuals to become happy because they need material-resource to survive, live well, work in a productive and creative industry, and enjoy leisure. Nevertheless, this is questionable to regard that increasing the productivity is only the essence of being happy for individuals.



3. Happiness

From the ancient era, the objectivity of philosophy is to discover ways and ideas for individuals to become happy. In Ancient-Greece, all the remarkable philosophers after Socrates agree that the ultimate goal of philosophy is happiness even though they disagree with each other regarding to the process and the tool to induce this goal. Originally, all academic disciplines used to be more synthetic and based on philosophy before the modern era so that their objective of learning and developing used to be unified as pursuit of happiness. The spiritual aspect of individuals is never negligible. When they are used to the reasonable level of material sufficiency in their life, they may take their material well-being for granted, and be more likely to seek their own philosophical reason, which is not provided by the others, and their spiritual means of living. Then, the freedom of their own expression seems to be essential to achieve in happiness.

The centralisation stratifies individuals and their living community, and distinguish them between those who are authorised to conduct and the rest who obey more than the formers. This is suspected to increase the frustration of individuals who are discouraged from being free from the central authority to keep an autonomy. The excess focus on the centralisation for the productivity development purpose, and this might lead to the unrest caused by the frustration of the general public or the annoy-syndrome caused by the loss of meaning of life for majority individuals.


Jeremy Bentham, the father of Utilitarianism as well as a strong advocate of direct-democracy in the modern era, could be the pioneer having quantified the level of individuals' happiness. He generalised happiness to be equal to pleasure minus pain, which he called utility. It could be oversimplified as happiness can be more complex than being expressed by only pleasure and pain. Nevertheless, his assumptions has provided a strong insight to quantify and measure the variables influencing happiness.

* The following part is based on my econometric analysis about the happiness/utility correlated to both the climate and the political effects:


Bentham attempted to explain how the sum of utility is affected by the political structure with the following algebra.

He broke down the modern political structure into these main three elements, monarchy as the rule by one, aristocracy (It was referred as the synonym of oligarchy) as the rule by a few, and democracy as the rule by majority. Each element has its own advantage to provide individuals with their utility such as that monarchy is powerful with the charismatic authority, aristocracy enables elites to use their wisdom in politics, and democracy permits majority individuals to represent their wills in politics. He also affirmed that the element of democracy offers the greatest sum of utility due to its availability of allowing the greatest number of individuals to participate in politics to represent themselves.

At the contemporary time period when Bentham was alive, there was little objective ways to measure the sum of individuals' happiness in each nation in the world. By contrast, due to the development of the information technology, we have become able to collect some peer assessed numerical indices of various social scientific data sets. This happiness index is also collected by objective view points and survey methods under an academic peer assessment. Thus, it is interesting to assess Benthamite calculus owing to this world happiness index.

The econometric analysis based on the Happy Planet Index (HPI) regressed on the climate effect, represented by the altitude of countries and its square, the binary variables, monarchy, aristocracy/oligarchy, and democracy, and their interaction effects, and the algebraic equation below is used.



The coefficients and their significance is as follows:



The coefficients of the variables showing the climate effect are 0.02256 for the coefficient of the absolute value of Latitude and -0.0004 for the squared variable of the latitude. Then, the formula shapes an upward parabola shown in the picture below.



Therefore, the place where the latitude is either +31 or -31 maximises the happiness of people living.


All the three binary variables denoting the single effect have a significant and positive coefficient. Both the interaction of Monarchy and Aristocracy and the interaction of Aristocracy and Democracy have a significant and negative coefficient. The coefficient of the interaction of all three variables is non-significant, so that the half of the coefficient value is used. The HPI derived from each different political structure is as follows:



This is a bar graph showing the policy effect on the H.P.I.:




These trends can be roughly visualised in a picture graph like this:



A nation with the direct democracy (Monarchy = 0, Aristocracy = 0, Democracy = 1 ) produces the highest HIP. But, Switzerland is the only nation with such a system in the world. So, it is not sure if it is still significant number of the sample to prove its superiority.


By only means of political structure, this seems to be plausible to conclude that a more decentralised political system provides individuals with the higher sum of happiness than the centralised counterparts. As shown in the previous chapter as well as the algebra introduced in this chapter, the centralised political structures have their unavoidable advantages such as the charismatic power of stabilising individuals and their community and the wisdom rationally conducting a positive planning of economy and judicature organised by the elite rational authorities. Nevertheless, this econometric analysis of happiness indicates that the centralisation seems to induce the frustration caused by the repression of majority's representation in politics. This analysis claims that individuals seek the satisfaction from directly representing their needs and desires in politics, and its availability of the representation is beneficial to increasing individuals' happiness overall.

John Dewey also argued that democracy (if possible, more direct for is more desirable) is pragmatically the best political system for both the material and the psychological/spiritual aspects. The reason why American democracy has been successful is that her decentralised political structure does not limit the opportunity of representing new innovative ideas to only few individuals. The decentralised system has enabled various obscure but talented individuals to represent their opinions and inventions into practice. Perhaps, the upward curve denoting the aggregate productivity curve, positively correlated to the rational centralisation, can be more flexible than it is assumed in the previous chapter. So, in the longer run than it is assumed in the previous chapter, the upward aggregate productivity curve may shift rightward as more technological innovations will become available in a decentralised politics.



On the other hand, the concern is that the excess decentralisation can be not optimum as the centralisation seems to be still partially beneficial. Therefore, the optimum equilibrium point which maximises the benefit of both the centralisation and the decentralisation. The next chapter explains about the equilibrium point.


4. The equilibrium



This project assumes that there is an equilibrium point which indicates the optimum point maximising both the aggregate productivity and the greatest sum of happiness together. The excess pursuit of the aggregate productivity increases the political cost which is the frustration caused by the individuals' unhappiness due to the excess control over their life by governments and big corporations. The excess pursuit of the individuals' happiness stagnates the aggregate productivity which supplies the material needs and the public safety. There is a balance matching both demand within the limited supply of resources and the level of enlightenment which encourages their individuals' self-autonomy.

However, the equilibrium only indicates the situation which is inevitable due to the resource limitation and the popular supports. So, this equilibrium point guarantees neither the stable growth and the happiness for all: This only indicates what individuals and/or their authority figures have decided and settled in. For example, the EU citizens and politicians are currently still suffering from the dilemma between the further centralisation needed for stabilising economy and their wishing further peaceful European integration and limiting centralisation for avoiding the monopolisation of political power and opportunity of representing opinions. For the current EU situation, her equilibrium point may merely indicates the possible but undesirable state. The equilibrium point for the EU may need to shift to overcome from this ongoing dilemma. They may expect for the further technological improvement or their change in political preference.

The place of this equilibrium must be different across each different country and culture depending on their market potential enabling their productivity rise and the preference over decentralisation or centralisation. The followings are the case studies of the equilibrium point.

* Case studies

Russia



Russia suffers from a lack of the market potential increasing the productivity rate. The low population density and the hard weather condition hinder the rapid productivity growth. The enlightenment to democracy and individualism hardly prosper despite the remarkable Russian wide spread literature and philosophers promoting. Each individual Russian individual has the ability and the spiritual hardiness to be self-autonomous and self-sufficient due to Russian hard weather breading their hardiness. By contrast, the division of labour is hardly accomplished due to the low level of aggregation of productivity owing to their inefficiency of transportation for distribution and capital development.

Furthermore, Russian citizens are well-cautious of defending themselves from their surrounding troublesome neighbouring nations. Due to the low population density and the low individual productivity level of individual Russian regions are very fragile against the invaders' attack. Russian low population density requires a strong assistance from the strong central authoritarian government conducting to aggregate and conduct the aggregate power of Russian regions spread across the wide Russian land mass.

All in all, Russia requires an intense centralisation to compensate her innate inefficient production capability. For the time being, Russian may need a collective productivity method gather her resources all over Russia and encourage individuals and their regions to collaborate by re-distributing both natural resources and individuals' resources to optimise Russian aggregate productivity level.

Nevertheless, when Russia obtains an opportunity to improve the efficiency of the transportation of distribution and the urbanisation process, Russia has a high potential to rapidly encourage individuals' emancipation from the authoritarian centralisation while increasing their aggregate productivity level. Majority of Russians are creative enough to have produced remarkable literature, arts, and scientists. Then. the positive exogenous shock of the aggregate productivity level combined with the free-entrepreneurship backed up by the more democratic/decentralised political structure will stimulate more innovative Russian individuals to contribute to the benefit of the entire Russia.


Africa



Africa suffers from both the inefficient environment of improving the aggregate productivity owing to the harsh tropical weather and the constant strikes of various epidemic disease threatening the population. In addition, African people's preference for their traditional tribunal community over the modern urbanisation process remains their productivity level low. In this case, the aggregate productivity level is critically low enough to discourage African people enjoying their happiness in their daily life. Even with a relatively decentralised political structure, their physical barriers of propping up their healthy life. Therefore, before enjoying their psychological/spiritual happiness in the decentralised political structure, they simply tend to physically suffer and pass away before enjoying it.

Regarding to the correlation between the decentralisation and the aggregate happiness, their preference for the decentralisation is not based on the enlightenment of self-autonomy seen in the Western nation: It is based on the very traditional sense of their good-old communitarian mind. The reason why the level of their centralisation does not rise is simply because of their disadvantage of constructing their modern centralised political structure. This is caused by their natural environment and their traditionalist characteristics, and they hardly achieve in the centralisation correlated to the aggregate productivity growth taking place in both the Western and Asian nations.



Africa is essentially in a severe environment of developing both their aggregate productivity and their happiness gained from the decentralisation. This situation seems to be extremely difficult to expect Africa to endogenously develop themselves to improve both their aggregate productivity level and their aggregate happiness level. Moreover, the exogenous shock suddenly improving their living standard also seems to hardly occur in the near future. Therefore, the supports from outside Africa, such as the foreign direct investments, the instruction by the global intelligence units, and various international charity organisations, seem to be the key to improve their living standard. The graph demonstrating the rightward shift of the aggregate productivity curve represents these physical supports from outsides Africa.


East-Asia



The East Asia is where the Confucian cultural influence of respecting orders and authorities and diligent and hard-working spirit is strong. This enables the East Asian nations to encourage individuals to stabilise their economy and politics enough to encourage rapid economic growth. Their diligence to commit themselves to learn and to work hard together by following the market mechanism and the legal codes. They naturally have a strong sense of meritocracy which encourages an efficient distribution of resources to the most effective individuals and organisations. Due to their ethnic characteristics of the autocratic culture, the negative impact of the centralisation is less significant than the other nations in the different culture. This characteristics promote the centralisation increasing the aggregate productivity by sacrificing little happiness. Therefore, the East-Asia has enjoyed the high material prosperity since the ancient time period, and their wisdom still prevails in the modern days.



Nevertheless, this unique characteristics of the East Asia with a high preference for the centralisation involve the disadvantage. As shown in the diagramme, when the positive shock of the aggregate productivity curve such as a new technological innovation and the sudden improvement of trades takes place, the positive impact is low or slower to appear than the other cases. As explained by the previous chapter, the decentralisation promotes individuals' self-autonomy and creative thinking. The centralised structure is effective to utilise the already existing ideas and technologies efficiently by optimising them in the division of labour and the political stability. By contrast, the centralised structure can be difficult to encourage individuals to think uniquely, differently, and innovatively to invent something not having existed. The decentralised structure allow more individuals to promote and represent their own opinions regularly so that the new innovation and inventions can be spontaneously discovered much easier than the centralised structure.


Latin-America



The Happy Planet Index (HPI) invented by the New Economic Foundation indicates that Latin-Americans generally achieve in a high HPI score than the others regardless of their economic and political environment. It is supposed that the climate efforts and their ethnic characteristics naturally promote their happiness. So, the dummy variable for the aggregate happiness is added on to the graph, which pushes the aggregate happiness of Latin-Americans higher than the others.


Unknown-Ideal



This attempts to explain one case scenario when it becomes possible to decentralise the economic political structure while sustaining a high aggregate productivity level introduced in one of the blog entries Pathway to the new economics and political theory.

After the end of the nation states, there will be an alternative economic political structure prop up and administrate the public sectors. The classical example of the cooperative has been seen as inefficient as well as ineffective in a wide scale economy and politics so that it seems to sacrifice the benefit from the productivity although it seems to promote a high benefit from the happiness.

However, as written in Pathway to the new economics and political theory, the development of the information technology and the demand for this alternative in the currently ongoing inevitable globalisation. The developed information technology may support the administration for determining who is responsible to pay for the coverage and how the coverage should be collected. As activities of individuals for both their business and private life are active enough to break through the constraint of national borders, it has become more difficult to determine which nation-state is responsible to collect tax from and provide benefits to a particular individuals as well as to judge which individuals is responsible for contributing to a particular nation-state.

There is an idea of establishing a transnational government tracking down individuals' activities and responsibility for the coverage of using public goods and services. But, this extreme economic political centralisation will substantially reduce individuals' happiness in a world scale. Therefore, the alternative option such as reincarnating the cooperative governance introduced in the classical economic theory might be worth-off to take into the consideration. Even though it is still not yet invented and successfully adapted, there might be an opportunity to physically put this plan into practice in the future. Any innovation, invention, and brave-attempts are encouraged and created when there is a strong desire of individuals for it. Without an idea induces individuals' aspiration and opportunity to discover the new resources, technology, and economic political system.

With the best wish of accomplishing the further enlightenment exploring the higher aggregate happiness on the bottom right side of this diagramme of this essay.












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Analogy of how Greek, Irish, and German monetary union works

In the past:
A Greek man used to drink a lot in a relaxing traditional inexpensive pub.
An Irish man used to drink in a narrow rought working class bar while a British man drinks in a wide classy middle class salon beside where this Irish man is (both places are next to each other but separated by a partition.)

Now:
This Greek man and this Irish man started to go to a modern urban-like expensive pub where a German man goes. This Greek man and this Irish man are not used to the culture of German man's pub. So, this German man doesn't like this Greek and this Irish manner so this German wants to teach them his own way in his regular pub!


* I don't way this German man is always right. Personality takes all kinds. Only the thing I can say is that "When in Rome, do as the Romans do".

Greek Crisis: Yes still to Euro! No to Greexit!

I am against Greexit! This is purely a cost and benefit analysis. The current situation hinders Greek macroeconomic situation (The volume and the climate control of economy). But, Greek will certainly lose her microeconomic advantages (international trades of the currency exchange and tariff"e and of labour and capital) after leaving from both the Euro and the Maastricht treaty.

My research has already shown that the business cycle of Greece is highly correlated to the entire Eurozone counterpart which implies that the international trade frequency between Greek and the rest Eurozone is high. This means that Greexist will definitely impact on the microeconomic situation, and the macroeconomic condition is still heavily influenced by the Eurozone performance even in the aftermath of Greexist.

↓ My econometric analysis ↓

How Marxism fails

I do not hate Karl Marx and his political philosophy Marxism. I actually have a strong sympathy to his ideology to change the world to relinquish the national borders among individual citizens of the world and then to provide them with their ultimate sovereignty completely free from subordination to the traditional superstitious authorities. The rulers of the modern politics maintain the surplus value which represses the reward for majority individuals by introducing their complex economic and legal system. Individuals' sovereign is in crisis more than the past due to the intolerance of individuality in such a more collectivised world politics and modal code. More humans have lost their authentic loyal ethical principle in their daily life because they have chosen to obey and been secured by their superior authority at the sacrifice of their individual sovereignty. Marxism might be right to diagnose these illnesses; but, it seems to be the wrong method of prescription to tackle with these illnesses.

However, there are several objections to Marxism, and Marxism theoretically fails to explain about economics and ethics. First of all, Marx and his fellows had often described the modern world hegemonic political structure as Capitalism, which I strongly doubt about. Secondly, capitalists no longer control over the means of production in the modern world economy and politics. Finally, his loving united proletariat are more servile than he assumed, and his hating rich capitalists, individualistic nonconformists, and honest egoists are virtuous unlike he condemned.


Marxists affirm that, in the market economy, the rich minority individuals as known as the bourgeoisie monopolise the market with their power of controlling their means of productions. But then, what happens when the bourgeoisie start not being able to sell their offering products when majority become too poor to afford to purchase? Well, these bourgeoisie may invest their money to the financial market instead of investing to the good&service market. But, they also need to watch out and analyse the financial market trend not to lose their financial game. Some may argue that the bourgeoisie may protect their wealth by defending their property right of lands and the other assets. But, without a political stability where majority citizens are not too frustrated to be stabilised so they eventually need to find the way to redistribute their wealth for the communal security. The bourgeoisie may buy a huge militant force to form their own private militia to oppress their existing as well as potential enemy-proletariat to defend their monopolistic interest. But, the excess expenditure on the military and the low motivation of their subordinate proletariat impoverish the aggregate productivity of the economy they are living in. While lacking an abundant extractable resource from their economy, their state is always threatened by the invaders.

In order to strengthen these minority bourgeoisie, their political economy eventually enriches and motivate the rest majority proletariat, the majority citizens. Also, these ruling class bourgeoisie constantly monitor and compete against their rival bourgeoisie group to survive their games of the financial market and the foreign diplomacy backed by their military force, which are never be easy to keep winning. Furthermore, they may also want to remain this system enabling them to revenge when they lose. So, this implies that some proletariat may also have a chance to revenge to be promoted to become a member of the bourgeoisie. All in all, the ruling class individuals are also struggling in a competitive market system so that capitalism does not always deserve the capitalists. The market mechanism is abstract to explain but it certainly exists as something objective as Adam Smith described as the invisible hand of God. None has ever known what the next market trend in the future: Only what they may do to survive to thrive is to analyse how individuals' behavour and mind and the surrounding natural environment remain and change.


When the distribution flow and the overall economic activity are stagnated, a more visible and collective political force is affecting to stratify this economic and political structure than what Marx assumed. Neo-Marxists admit that capitalists are more proletarised than the past; this means that many traditional capitalists have lost their control over their capital because of the rise of two new capitalist classes called transnational entrepreneurs and national bureaucrats. Transnational entrepreneurs take advantage of this globalised world politics to gain the wider scale monopolistic power. National bureaucrats take advantage of their regulatory power and their authority of the government economic intervention. The name value of transnational entrepreneurs and the charisma of elite bureaucrats of a nation maintain their authority which is powerful and influential enough to enable them to accumulate their capital and its means of production.

Money is an intermediary of exchange: Money follows into where the exchangeable quantity and quality are located. The power of gathering money of the previously mentioned two ruling class groups is their authority to authorise what and where are legitimately exchangeable. This legitimacy authorised by their new authoritarianism is the means of their production of their capital to maintain their wealth and political power. So, only earning a huge amount of money itself to own a huge amount of capital does not enable individuals to have an authority to control over capital and its means of production.

Nevertheless, these new ruling class also do not have the full control of their means of production enough to prevent the pressure from the market force. Despite the significantly huge influential power in the market, these transnational entrepreneurs also need to constantly inject their own resource investments into analysing the current market mechanism and trend enough to maintain their wealth and preventing their potential predators against their dominance. National bureaucrats also need to constantly take enough attention to their resource allocation of the public sectors to optimise the level of taxation and regulation. The excess regulation causes the stagnation in the overall national economy, the extractable resources for these bureaucrats, and the loyalty of their fellow individual citizens to the national bureaucracy. Overall, these ruling class are always under the pressure of various external forces threatening their dominance, and the controlling capital and the means of production is not a permanent political power of reign.

So then, which human individuals control over capital and its means of production? The answer should be that none actually holds the ultimate economic and political power to maintain their dominance. Under the modern structured politics, even the ruling class individuals are constantly under the pressure of maintaining their status-quo a nation and/or a transnational institute. All of them live to survive as the cogwheel parts of their belonging institute. As they are already integrated into the structure, they unintentionally keep serving for their non-human machine-like structure in order to keep themselves surviving in it. In order to escape from this structure, the member individuals will be expected to become considerably brave and somehow deviant enough to challenge and escape from their accustomed modern structure of economy and politics.



Marxists put emphasis on the diversification of power enabling the majority citizens called the proletariat to replace the current ruling class minority with the proletariat majority rule. The old types of Marxists insist on persecution against the ruling class of the current status-quo as their revenge against the exploitation for a long time. Neo-Marxists insist less on what this old ideology but they still affirm to replace the ruling class with the proletariat rule by the diversification process. All Marxists agree to hate the minority rich for the cause of the proletariat. Furthermore, the proletariat class individuals not agreeing with Marxist cause are highly humiliated by Marxists as traitors, uneducated, and/or whores of the ruling class. Marxists claim for a strong altruism and devalue egoism to forcibly encourage citizens to unite. By contrast, there is always a question about why the rich individuals are evil enough to be hated and why all the majority citizens need to keep feeling miserable with their daily life.

These proletariat are frustrated due to their lack of satisfaction caused by the low reward for their high effort in their daily life. Marxists argue that this is a productive motive to challenge against the status-quo to diversify the ruling power to provide the unsatisfied proletariat with their right to improve their life. Marxists tend to blindly assume that all the privileged rich are selfish and brutal enough to keep exploiting the majority citizens to accumulate their wealth and political power furthermore. However, this has been questioned by the classical Liberalists from the British classical economics.

The following graph simulates the correlation between income and happiness=utility. An extra-income gain makes individuals significantly happy when their income level is lower than the certain point meanwhile its marginal rise of happiness=utility diminishes after exceeding this point.

In this graph, the income boundary is divided into this certain point where the marginal utility starts diminishing as the extra income gain increases. As shown in this graph, the marginal utility based on the income gain is higher than the marginal income at the relatively lower income level. The area chat shows the imaginary population distribution assuming the 10% rich individuals enjoy their "high income enough to be happy enough" and the rest 90% enjoy "extra income gains" more than the 10% rich.

The remarkable British classical economists such as Adam Smith and Alfred Marshall argue that these rich individuals tend to become altruistic because their own personal ego is already satisfied under the market economy described as capitalism by Marxism. The market economy is the first political economic system which provides individuals with the opportunity to accumulate their wealth so massively that it is not impossible to fulfill their egoistic interests. Furthermore, the market economy is a magical system where individuals' egoism turns to be an altruism because they exchange for their demanding reward for the others' needs. Then, rich individuals start redistributing their wealth voluntarily without relying on the government involuntary force in order to acquire their heroic honour. In addition, the rich individuals could not become rich without injecting enough efforts and using their wisdom due to the constantly competitive market economy. So, they have more experiences, knowledge, and wisdom to run big projects which the low income citizens have seldom had the opportunity of. Therefore, it is worse off to remain these rich individuals thrive rather than defeating them by the political power diversification.

At the same time, Marshall was afraid of the proletariat suddenly taking over the political power by replacing their hating rich with their sudden diversification. Even though these proletariat started doing good for all at the beginning after the diversification process, it is suspected to be the case that these proletariat violating the system to deserve for themselves. Marxism simply implies replacing the bureaucracy of the old regime with the bureaucracy hijacked by the Marxist proletariat coup. As the proletariat coup have been frustrated due to their lack of the marginal utility, they are more eager to cling to their irrational egoism by violating the politics. These bureaucrats of the proletariat coup seem to be too vulgar to maintain their rationality after suddenly acquiring such a monopolistic power of capital explained in the aforementioned paragraph.

Moreover, Marxists are too accustomed with despising egoism so persistently that they are hardly enable to admit the ego of others. They often force the others to deserve them and their revolutionary ideal to prop up their altruistic political structure. Unlike the capitalist regime which does not intervene to the others' business and personal egoism, Marxists tend to be paranoid about other individuals. The market economy, capitalism, accepts or even encourages egoism as a form of individuals' natural need and desire meanwhile Marxism and majority forms of socialism do not. Marxism and the other form of socialism regard highly of the collective effort to achieve their ultimate goal with the altruism. They may not directly force but they will indirectly force the others to follow their altruistic command by treating those opposing parties as uneducated and/or misguided.


Soren Kierkegaard said that Marxists and all the modern idealists are unhappy individuals because they will never be content enough to be happy in their daily life. They are always in a day dream of being better in their anticipating future, and then devalue their inevitable past experiences and memories and neglect what they have already acquired and achieved at the present moment. Unhappy individuals tend to be convinced to Marxism and all the modern idealism meanwhile the other individuals who are reasonably happy in their life are not convinced. Marxists may think these already reasonably happy ones are uneducated and/or misguided so that Marxists often preach these general public with their ideology to "help" them to overcome from the false-consciousness imprinted by the status-quo. Nevertheless, these preached one may feel this is not help; it is simply an annoyance.

Monopsony caused by the excess government regulation

There is a new terminology invented for expressing the phenomenon that the buyers have a strong power for controlling the price and the quantity of goods and services enough to reduce the price under the market equilibrium value. This is called "monopsony".


The monopsony is suspected to occur when the labour market flow is stagnated, employers are excessively risk averse, and employees have little opportunity of changing their job with their free will due to the previously expressed causes. This situation provides employers with the excess power in the labour market enough to control over the price and the quantity for their favour.

*** Past and Present: Emerging Problem of the Relative Deprivation ***

In the past, the efficiency wage was high enough to prevent the absolute poverty when the supply of minimum necessities was more scares. So, the equilibrium wage was supposed to be not higher than the efficiency wage then. By contrast, due to the increased world market competition and the dramatic improvement of productivity supplied, the gap between the minimum wage enough to prevent the absolute poverty and the wage enabling individuals enjoy their average cultural living standard has become widened. Therefore, the relative deprivation caused by this dissatisfaction emerges.

This tension of increasing this dis-function caused by the increasing relative deprivation implies that the public sector cost will be increasing to tackle with increasing cases of crime and deviance. So, the simple regulation of wage floor preventing the excess wage decline can be more efficiently reduce the cost raised by the increasing dis-function caused by the relative deprivation than increasing the budged for police force and the overall cost covered for public security and insurance. The following explains about why the current market is difficult to discourage the lowering wage and to stimulate the meritocratic labour market flow.

*** Marxist Explanation Fails: Rise of Government Bureaucracy ***

The menu cost of employees changing their job has become dramatically higher due to the more bind employment contracts and more specialised labour market requirements than the past. Majority of job markets nowadays demand more precise job skill sets requiring a long term training to acquire. Also, each employing firm has become demanding its employees to learn and adapt to its own custom which is notably different from the other firm even in an identical industrial field.

The menu cost of employers examining their employees has also become dramatically higher due to the more complex labour contract laws and regulations imposed by government. Despite the old Marxist hypothesis, majority of firm owners have lost their power of controlling their means of production fulfilling their interests. Those who have a control over means of production are government bureaucrats whose power is growing due to the expanding government power over economy and a few super wealthy individuals whose wealth is inherited or obtained through political bribery in the current modern world. Employers, firm owners, and relatively wealthy individuals are taxed, regulated, and highly monitored by government and their peers.

Government attempt to maintain the static labour market flow. The tax collection scheme by government has more complex, and government have required more certain and detailed population census in a turmoil of the current modern day world politics. So, government tend to want to avoid the frequent need of regular employment and income surveillance required. When individuals frequently change their job and change their wage often, government are more required to spend time and resource to survey these individuals. Therefore, government attempt to keep the labour market more static in order to avoid the frequent employment and income surveillance.

*** Perpetuation of both Socialism and Misemployment ***

Socialist labourers form their trade union (labour union) to increase their wage above the market equilibrium, but their excess wage is confiscated as their union membership fee. So, the leading members of their union then exploit their share of wage for their own interest. Then, the rest majority can keep as same as or less than the market equilibrium rate. The productivity of their belonging firm is significantly lowered because of the excessively labour cost compared to the labour productivity. This infers that the economic system had better offer minimum wage before these socialists start making excuse to prepare for their union intervention.

This situation of monopsony in the mainstream market also perpetuates the misemployment. The misemployment means that individuals are employed under unhappy, unproductive, and/or criminal situations as following examples. Some individuals need to, although they do not want to, play the fool by a wearing funny costume for a street advertisement. Some individuals may work in a casino perpetuating gambling which tends to be considered as unproductive for both individuals' own household economy and the aggregate economic environment if this market share expands excessively. Mafia, a group of the main players in the underground economy, gains the higher chance of recruiting new members and its exploitable human resources as the competent potential human resources are expelled from the employment opportunity in the overground economy. Because these employment forms are far more labour intensive, the monopsony is far more likely to be prevented in these misemployment market than the healthy/productive employment counterpart. Therefore, it implies that the misemployment market tends to offer a higher wage than the counterpart under the monopsonic situation so that more labour forces are flowing into the misemployment market, which reduces the sum of individuals' utility even though the misemployment market may have increased the overall employment rate in an economy.

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A Critique of Anti-Trust Law and Natural Right Ethics

1. What economics is
In ethics, there has been a long debate to determine whether norms and values of action or the consequence of action is put priority on over the counterpart. Economics is the subject focusing upon the consequence i.e. Economics is a consequentialist philosophy. The mainstream economics puts emphasis on the positive statement firmly indicating what is, was, or will be caused, done, or happening instead of the normative statement indicating what “ought to” be done. Moral philosophy and psychology put emphasis on the normative statement because their interest is effect of human-individuals’ mind apart from their surrounding physical environment.

As economics is the subject to analyse causes and effects of human-individuals’ actions creating their surrounding physical environment. Even though the normative of their actions may become a means of the positive consequence of their actions, it is not always true because the intention of action does not always induce an initially intended consequence. So, realistic observations of outcomes induced by a particular action in consequence are eventually more practical than the meaning of these actions to know what should be done. Then, the logics developed from these observations implies the practical method to be done to induce a desired/planned outcome in consequence.


This consequentialist characteristics of economics is retained from the father of economics Adam Smith who is strongly influenced by Scottish culture of Legal Positivism, the school of law philosophy based on explicitly defined codes of actions designed to induce the desired consequence. Adam Smith was also a strong influence under his senior fellow David Hume, the remarkable Scottish enlightenment philosopher who was sceptical about any universal norm and value of actions because he claimed that morality defining norm and value is more relative than many moral philosophers claim. So, Hume claimed that the principle of actions is a mere interest of individuals, and interests are their desiring outcomes in consequence which these individuals are willing to induce.

The study of economics started from challenging the authoritarian moral entrepreneurship dogmatically defining and suggesting individuals to act by means of the universal moral code defined by the authoritarian moral entrepreneurs. Economics is originally an ethics emancipating individuals from the prison of moral dogma and then enabling these individuals to develop their own rational inference skills determining their own mind and action plans. Then, the normative philosophy should purely a matter of each individual’s business for their own mind development, and the positive philosophy should be only taken into practice to plan actions influencing others and plans creating/development physical objects, e.g. buildings and products, and structured organisations in which various humans are gathered e.g. corporations and government.


2. Monopoly and Anti-Trust Law
Monopoly is the situation which one party owns and controls a particular good/service industry/market and its business share without any competitor. Monopoly is usually categorised into the two types, natural monopoly and pure monopoly. Natural monopoly is formed when monopoly is necessary and inevitable to provide the efficient and optimum level of goods and services. In the later parts of this essay, monopoly means pure monopoly. Many economists tend to affirm that monopoly is a negative factor as an antithesis of a good competition. Even conservative economists such as Monetarists tend to assume that monopoly is an economic stagnation discouraging competition.

Pure monopoly takes place where any artificial enforcement power exists in economy. There are two kinds of pure monopoly. The one is that a national government can form pure monopoly by nationalising or heavily regulating a particular industry. The other is that an influential economic agent such as a big corporation prevents competitors away by its control over price and quantity, merging and acquiring a potential competitor and/or bribing. Anti-trust law is designed to prohibit the latter kind of pure monopoly, the pure monopoly by private economic agents.

Socialists (including the self-proclaimed liberals) and other various Staticists claim that any monopoly by their own government is legitimate and virtuous whereas the pure monopoly by private ownership is unnecessary and vile. Even many conservative and libertarian economists tend to think that the monopoly by private ownership is something needed to be prevented at the best effort. The reason behind is the monopoly by their government sets its price and quantity according to necessity meanwhile the monopoly by private ownership does not fulfil the necessity and causes an uneven wealth distribution.

They claim that the monopoly by private ownership is purely motivated by profit and allows these private enterprises to discourage competition enough to reduce both quality of products produced. So that this monopoly causes an inefficiency of products’ distribution among individuals in need, and these anti-monopoly activists argue that the genuine free market perpetuates the monopoly Then, anti-trust law was manifested to prevent such a market outcome by both socialists and non-socialists.


Nonetheless, this claim about monopoly is questionable by means of the free market mechanism. In a free market economy where majority of industries are operated by private enterprises and new market entrants are not strictly prohibited, these entrepreneurs always face some degree of competition. Even natural monopoly is not permanent due to a newly invented technology in the future and a newly discovered resource supply line. Furthermore, unless there is a prohibition by government regulation and/or a cultural/religious tradition, there is often various substitute available. All in all, the antagonism against monopoly seems to be meaningless.

These anti-monopoly activists tend to neglect about the impact of the capital/financial market. Even though a monopolistic firm disrupts any new market entrant potentially becoming her/his competitor in the real (goods & service) market, this entrant will be able to join and compete in this market as long as this entrant’s product is more or equally favourable. The investors in the capital/financial market are keen to invest the assets whose value is predicted to dramatically increase so that this market entrant may gain the capability to compete with the already existing firm. Therefore, when a monopoly is perpetuated, the case shall be either the products produced by this monopolistic firm is demanded or this market is not free enough.

Regarding to the monopoly price and quantity based on the profit motive, the monopolistic firm is extremely difficult to maintain their price and quantity control in favour of its own interest. Even with a restricted supply of both substitute and investment, this monopolistic control is very difficult to maintain especially when the surveillance technology by majority of individuals is widely available. Under free market, information is freely and widely available because every economic agent is competing with each other to obtain a useful information set with their best competence. Therefore, as same as a totalitarian regime in politics, an oppressive monopolist regime is also fragile when majority of citizens start protesting against it.

In addition, by means of macroeconomic situation, the aggregate production share of a market which this monopolistic firm can be not significantly high enough to be considered as a tycoon. When the aggregate production share of this market becomes significantly high, only one firm may become too costly to produce the demanded production level under this market factors of production. Then, production by two or more firms may become optimum.

These anti-monopolists excessively condemn the existence of monopoly because they tend to think that preventing monopoly is the legitimate norm and value in their ideal economic system. By contrast, the existence of monopoly does not always cause the economically negative consequence while it is actually often beneficial to economy. When a monopoly takes place, the operation by one monopolistic firm is just adequate to optimise factors of production than by more than one at the current supply technology and the demand level. Thus, the ulterior motive behind the anti-trust law prohibiting monopoly seems to not be the reason of economics focusing on consequence of actions: It rather seems to be the moral philosophical reasoning focusing on norm and value of actions.


3. Natural Right’s Dogmatism
Restricting monopoly does not frequently cracking down on monopoly. Some monopoly can be wrongly justified as pure monopoly even though it is actually natural monopoly. It could also be not significantly necessary to crackdown some pure monopoly because its factors of production requires only one firm and/or its not significantly high production share in macroeconomic scale. Thus, crackdown on monopoly is not consequently effective for economy.

Anti-Trust law cracking down on monopoly is far concerned with moral philosophy and psychology than economics. The idea of anti-trust and any other anti-monopoly is simply a moral dogma putting a high priority on competition as virtue of individuals always ought to maintain and practice. The aim of anti-monopoly is simply their value of actions does not always derive a desired consequence of economy, and their believing value is not often a means of productive consequences. This is just a matter of their normative belief, and so not related to the positive analyses of economics.

This trend of putting excessive priority on the normative belief tends to be observed in many countries adapting customary laws including the common law in their legal system which regard highly of the existence of Natural law. Even in some countries whose legal system is based on the civil (positive) law nowadays adapt this trend of the normative belief as their constitution putting emphasis on Natural law. Natural law is a legal philosophical theory which claims that there is a universal ethical principle commonly existing at different time periods, places, and occasions. Legal structures based on Natural law hardly indicate the explicitly determined legal code of justice. So, they remain their flexibility of legal interpretation but they are often inconsistent and influenced by irrational whims of general public and charismatic authorities.

There is a derivation theory of Natural law which is called Natural right. Natural right claims that there is a universally existing impregnable rights for all human individuals. Natural right more clearly defines about the universal ethical principle than Natural law as it claims that this invincible right is the universal ethical principle. Natural law regards that human individuals are not able to perfectly know what the universally existing law and ethical principle are because they are not the perfect being like God. By contrast, Natural right defines that human individuals are capable to know what is truly right for themselves. Thus, those who support Natural right tend to assume that their traditional kept value of their invincible right basing their action patterns is the means of their well-being.

The legal positivists and the mainstream classical economists argue that these claims by Natural right supporters are merely prejudicial as their belief does not positively derive the consequences of economy. Natural right may be helpful for each individual’s self-discipline and their personal wish meanwhile it is not practical to positively analyse the estimate outcomes of economics. The typical example is the anti-trust law attempting to prohibit monopoly as the means of their economic consequence. All in all, it claims that anti-trust law concerns moral philosophy far more than economics.

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.