Global Wealth Tax is Inevitable to Sustain Capitalism

This is a new policy which should be "inevitably" introduced to this globalised economy. As the economic activities of individual economic agents have become so globalised that richer individuals transact their income and wealth across national borders frequently. Therefore, taxing rich has become more complicated and the income tax organised by one nation is not able to tax on richs' income efficiently. If individuals have freedom to move their wealth across the border, the nationally based tax system is not longer able to tax on their income efficiently and even fairly.

Furthermore, managements of the public goods (natural resources, environment, and very externally contingent industries such as nuclear technology and air traffic) have become globalied as well. It seems to be more necessary to manage these public goods usage and distribution in a globalised scale than national scale than the past as the economic activities are globalised more than the past. Therefore, there needs a public fonding resource based on a global scale i.e. Tax by a global institution to spend for global public goods.

Some monetarist zealots may claim that this is a socialist system which disturbs an equity of rich individuals. Nonetheless, if they blame this introduction of the new policy as a socialist idea, we also should abolish the progressive income tax based on national and regional scale. If they supported the complete abolition of tax system, government, public sectors, corporations, and nation states, I would agree with them. However, as long as they still stick to keeping these institutions in our community, the claim against the global wealth tax is not convincing.

I believe the progressive income tax is a necessary evil. As the world now still requires us to tax system, government, public sectors, corporations, and nation states to maintain a healthy usage of public goods, we inevitably need the progressive tax at the "minimum but optimum" level in order to be able to manage the public goods well. The income tax is the unfair tax, but the most efficient tax to take it by means of marginal propensity of saving. It is a macro economic issue. The richer individuals tend to split their disposable income into saving which does not goes into the economic stimulus. By contrast, the poorer tend not to be able to split their disposable income into saving. So, the higher income tax on richer is less likely to reduce their income expenditure into economy and reduce their utility by taxing on their income. So they are more likely to maximise their utility at the given disposable income level after the newly increased income tax. On the other hand, the higher income tax on poor reduces their income expenditure into economy and reduce their utility because their disposable income is reduced from the level maximing their utility.

As a matter of fact, the introduction of the Global Wealth Tax may reduce the bureaucracy rather than keeing the income tax collection based on national and regional level. It would be easier to tax some rich individuals transacting their wealth across the national borders than national governments cover the cost of scrutnise how these rich individual keep their wealth. This new tax also keeps the cost for rich individuals to move across countries by means of the different tax systems and the credit rating in each different countries. It will be possible if the introduction of the Global Income Tax system enables them to exempt from national income tax and maybe regional income tax as well. The middle and the lower income individuals will be taxed nationally and regionally, but the high income individuals should be taxed globally and exempted from paying national and regional income tax, or exempted just from national income tax and still paying regional income tax. The global economic institution should then distribute the Global Wealth Tax revenue to both the expenditure for global public goods and the government expenditure for national government and regional local authorities.

J.M. Keynes was actually the savor of capitalism because he said that, as capitalism grows, the wider scale of intervention becomes inevitable like establishing the IMF in 1944, and establishing the EMU in 1990s and 2000s (and possibly the European federal government). This is a next step of what J.M. Keynes described about an evolution of the global economy. I definitely think this global tax on rish is rather a capitalist idea. The reason why is that in order to make a process more efficient, fair, and effective, the progressive tax system has to be revised and evolved in order to sustain capitalism.

If we support capitalism going on, we inevitably need to support introduction of some globalised public economic system. Otherwise, the negligence of introducing a new global based policy causes instability of economies in this globe, causes economic catorophe, and then rising socialism. In order to stop socialism rising, we must adapt the inevitable global public policy and the institution controlling over it. Capitalism is only one most liberal alternative economic system which distributes the highest sum of utility as much as possible. Socialism and Cultural-Conservativism, the counter-part of Capitalism = Liberalism, are the opposite: retarding, supressing the sum of utility, and idealised system ignoring the natural geometry of market mechanism which inevitably exists in our living world. Hence, the monetalists' and bandit libertarians' objection against the new global capitalist order may help socialism and cultural-conservativism coming into the power. Capitalism inevitably evolves, and we must adapt into the new order following this evolution process as Prof. J.M. Keynes taught us...!

Fed's Monetalism will fail: It cannot save the world economy

.... This is "Nothing but a drop in the bucket"! I really detest the fact that there is still a fundamentalist intiutive ideology of monetalist theory dominating this world economy....! We've got to learn what J.M. Keynes mentioned about the "liquidty-trap"!

Speaking of European mal-functioning economy, the fundamental reason why Euro failed was the compromised role of fiscal policy and financial market regulation. Therefore, the further liquidity into the current European economy will not be effective enough, and only leaves negative changes more than positive changes.



I am sure that these money injected without any fundamental reconstruction of the fiscal structure will just flow into the "saving" rather than averting a further recession or even a depression!

Futhermore, this injection of US$ will definitely cause the further depreciation of the long run US bonds!

The hypowered money theory offered by the monetalist theory does not work because the velocity of money flow is already very low! Extra supply of the hypowered money does not induce a high velocity of money; it is an opposite! The hypowered money only works in the situation that the velocity is already high! The velocity of money is exogenous; not endogenous like what the monetalists say!




As I am now reading a wonderful book written by Prof. Stiglitz about the paradigm of monetary transactions, I know the monetary policy by central banks' role is too weak to influence/control over the monetary transactions in the market. The interest rate, reserve requirement, and money supply are less likely to direct the flow of the monetary transactions. The monetarist theory completely ignores the different characteristics of individuals and financial institutions; they only assume all of us are risk neutral, there is no risk of bankruptcy taken for account, and influences from the information about credit rating!

Monetarists believe that the interest rate and the volume of lending activities are determined merely by the supply of money available. However, in the real world, private banks and financial instutitions are more likely to set their interest rate and control their volume of lending activities by means of the risk premium of borrowers (consisitency and volatility of change in their profit rate, risk of bankruptcy, risk of assymetric information about borrowers, credit rating of borrowers, etc). This fact infers that the traditional macroeconomic policy via the monetary policy seldomly works to control the macroeconomic environment. The characteristics of each individual economic agent is the key issue to analyse the money lending activity.

Majority of these lenders, assisted by the central banks, have already become risk averse so that they are less likely to increase the volume of their lending activity. But, even though, they keep themselves as either risk neutral (acting as what Monetarists assume) or risk lover (becoming more active to invest in a tough economic climate), and then they lend high volume of funds, the risk of bankruptcy still remains same unless the structural change in the real market takes place. They may probaly invest more funds even though these targets of their investment become riskier. However, they will either charge the high interest to cover the unseen risk of these borrowers or charge a moderate interest rate and burdern a high risk of the bankruptcy of themselves. Either case scenario is tough because it is either increasing the cost for borrowers (and eventually induces borrower's bankruptcy, and then loss or even bankruptcy of lenders) or increasing the risk of bankruptcy of both lenders and borrowers. The market becomes more voluatile when the economic sitations becomes worse, the balance sheet of both lenders and borrowers becomes very inconsistent i.e. their profit/loss is unpredictable. In this case, even though the volume of money transaction is stimulated by the central banks' monetary policy, it will end up with the high interest rate (for the security of lenders) or gambling of lenders (welcoming risk of investing with a moderate interest rate to risker borrowers).

All in all, even though the central banks' action offers the sizably low interest rate and/or the high volume of quantitative easining, private banks and any other financial institutions may increase their own interest rate due to the high risk of bankruptcy involved in this investment under this current economic climate. Borrowers still suffer from unchanged or even increased interest rate. The exective members of banks and financial institutions gain benefit from securing the existence of their work place due to the central banks' assistance to their corporate finance by the quantitative easing. Those who can spread their aggregate income to their saving will be benefited, but this kind of individuals tend to be minority under such a tough economic climate. Thus, this action is irrelevant to encouraging the high volume of money lending.

* If you would like to know why and how the structural change of EU economy is emerged, please read "Friday, June 03, 2011
Europe in crisis...! (Click here to read!)"


I often wonder why these big guys in these superior positions have never learnt from history although they are supposed to be educated? When we learn from the history, only relying on the monetary policy channel does not work under the deflationary pressue i.e. the recession period = socio-economic stagnation. The perpetuation of it always caused rise in the oppressive political groups such as Natiz and Japanese National Shintoists.

Only the remarkable legendary economist claimed the danger of deflation is J.M. Keynes. Unfortunately, majority of economists in the history tend to underestimate the impacts of deflation. It is because the deflation is a unique phenomenon which can be only seen in the nations and the globe whose capitalism is developed and spread out. So, many classical economists had not seen deflation during they were alive. The first experience of the recession (and then deflation) simultaneously taking place in the entire globe could be the depression from 1920s to 1930s. J.M. Keynes was the first and probably the last economist who warned the danger of deflation.... When we forget about what Prof. Keynes warned, this world will inevitably be drawn into the "depression"...!

On Striking Action by Trade Unions: Unconfortable Proletariat Culture...

All those went for strike should not be paid! Although I don't say the union bargaining power should be zero, I despise trade unions' influences on economy and their style of living....! Oppresive trade union is one of the notorious obstacle in both macro-economic environment! If I were one of these workers, I would rather choose to go to work at the work place or quit working to go to another place rather than joining this collective bargaining with the comrade proletariats! Although I am not particularly a bourgeoigie, I detest scrumming with these proletariats.... :( I'd rather be a private individual than a tiny member of these proletariats calling themselves "loving comrades" in this uncomfortable collective action :(



If there is not an unnecessary strong proletariats' wage bargaining power, it does not need to have a wealth re-distribution through an intensive fiscal policy which is conducted by a big government. If this excess resistance by proletariats is diminished, we just only need the spontaneous mechanism of free market plus only a little fiscal policy intervention to correct the business cycle movement :)

... It is definitely the time to de-regulate the labour market! We should adapt a further more flexible labour market! Also, they should set a common unified financial regulation of transactions in the financial market in the enture global economy in order to encourage the efficient and stable flow of capital inside the globe! Reduce all the national trade unions in to establish a flexible flow of labourers and capital in the entire globe!

The moment to know soul and spiril certainly exist in humans...

Today, I found and realised that something like soul and spirit exist certainly in this terrestrial world .... It's found in an immediate moment when a person encounters another randomly in an odd place in a transient time zone... Body, face, voice, and action in an immediate moment inspires us like static electric goes through out body.... The action taken by the person was not special, but something like a special spiritual contact certainly took place. It took place in an unusual place. I felt a unique shock when I entered into the space where is isolated from a repetitive daily life. It was like going into a hidden place in a darkening shift from day to night where the unknown mystery is hiding in...




When there is an opportunity to communicate with people from different civilisations, ethnicity, and religions (or ideologies), it makes more possible to feel and understand the quality of soul human-beings are endowed with. Then, it makes also possible to observe the soul of others from our own native background. This experience may lead us to either gain a confidence or become disappoint in people and civilisation of our own. The true strength of human-beings may come from such a quality of soul: The guarantee of obtaining the true happiness and the long term survival of this person and his/her family shall depend on the quality of soul regardless of their physical strength, material wealth, intelligence and knowledge, authority, recorded historical backgrounds, and pleasure coming from subordinance...

The strong soul with a good quality will make a strong sense of feeling a spirit revealing out from each human-being. The characteristic of these spirits can be either weak or distinctive. Human-beings with a weak spirit are those who are made to live rather than live themselves: They live as though they are died. The distinctive ones are either cursed or vital. Cursed spirits harm others by encountering them. The human-beings with a cursed spirit harm us even though they protect us with a physical strength, distribute us an abundant material wealth, provide various kinds of knowledge with their intelligence, hold a strong authority over us, record a long history of survival, and subordinate us to please us. By contrast, the human-beings with a vital spirit lead us to a miracle. The human-beings with a vital spirit impress us even though they are deprived of physical strength, material wealth, intelligence and knowledge, authority, and prideful history, and ability to subordinate.

As Greco-Roman philosophers argued, a priori of human-beings' quality is their soul forming their spirit. We cannot change the quality of our soul within a short time period. The quality of soul is built in our innate nature such as our environment surrounding us, family, culture and civilisation we are from, and the luckiness to have an opportunity to encounter with those who improve our soul. Those without spirit are gradually ceasing away; those with a cursed spirit are rotten in their life and/or starve until they die; and those with a vital spirit thrive with hope even in poverty, deprivation, oppression, and fear...!

Political Philosophical Compass (Spectrum) --- Part 3

... contuned from Part 2:

Hobbes' work had influenced many remarkable political philosophers such as John Loche, David Hume, and Jean Jacques Rousseau. As Loche's philosophy highly influenced David Hume, and Jean Jacques Rousseau, Jeremy Bentham and Immanuel Kant, it can be said that Hobbes, who influenced Loche, influenced Jeremy Bentham and Immanuel Kant as well. All in all, without Hobbes. all these political philosophers in the modern time period would not have existed. In other words, all these modern political philosophers' works were the footnotes of Hobbes' work.

Hobbes had learnt from a lot from two mainstream Antiquity philosophers, Plato and Aristotle. He adopted a theory of Platonian ideal state and Aristotlean virture theory to his own philosophy. However, the clear distinction of Hobbes from these two Antiquity philosophers is that he had never considered what the true moral should be. All philosophers previous the modern ones, not only Plato and Aristotle but also the other ones having existed in the previous and the later time periods, always considered what is the nature of human-beings should be and what is the moral objective of human-beings. Furthermore, majority of these Antiquity and Medieval philosophers always tried to define the existence of the universe and how outcomes of this world are derived to form the universe. One of the few remarkable philosophers who were more apathetics about clearly defining the existence of the universe was Macus Aurelius, the Roman Emperor. Marcus Aurelius stated that the universe is formed by the random outcomes which we cannot exactly discover what and how these outcomes are derived from. Although Marcus Aurelius did not stick to spending a lot of time on defining the existence of the universe, he still yet put emphasis on the universal moral which human-beings ought to follow. As same as Marcus Aurelius, Hobbes also thought the universe is composed of the random outcomes derived from unknown reason. But, unlike Marcus Aurelius, Hobbes did put emphasis on neither the universal moral human-beings ought to follow nor how human-beings ought to be regardless of different situations across time, place, and occasion. Meanwhile, all these Antiquity and Medieval philosophies are solid, synthetic, and focusing on a massive picture, Hobbesian philosophy is flexible, analytic, and focusing on human-beings and their cummunities by parts.

Hobbes insisted that human-nature is permanent and cannot be changed as same as Aristotle mentioned. This aspect shows Hobbes is moral-naturalist as much as Aristotle. But, Hobbes was certainly modest about human-nature than Aristotle. Aristotle stated human-beings are naturally social so that they can govern themselves by letting them alone to decide what to do. By contrast, Hobbes did not agree with what Aristotle defined human-nature. Hobbes claimed that human-beings will hinder each other when there were no particular role to order them to be harmonised, and then fall into chaos. Hobbes strongly put emphasis on necessity of strictly coded laws which bring an order to govern human-beings instead of expecting the human-nature to self-govern human-beings. Laws are created differently according to what form of laws is suitable for different time, place, and occasion to bring an order. Unlike Aristotle put emphasis on the moral objective as "being social" to be humans, Hobbes argued that needs to be good human-beings are different across time, place, and occasion. In addition, there is no clear objective measure to define what is the moral for human-beings to follow. Only the objective for human-beings is to follow the laws bringing them an order whose objective measure also depends on time, place, and occasion. This aspect makes Hobbes to be more subjective than Aristotle, but it yet remains a little objectiveness than Machiavelli.

Hobbes quoted a lot of phrases from Aristotle such as human virtue. Aristotle explained human-beings' virtue is to do what they are good at. Hobbes stated the ultimate virtue which is common among all human-beings is obeying laws and following order. Aristotle was more optimistic about direct democracy which enables all human-beings represent their opinion equally as much as possible. However, Hobbes was highly sceptical about Aristotlean direct democracy due to the problem to work politics out effciently and defining whose opinion is more legitimate than the others when they fall into conflict of decision making process.

Plato, Aristotle, Augustine, Aquinas, and Machiavelli drew a picture of human society by means of the nature of human-beings and how human-beings should be. Hobbes seems to the first person who mentioned something other than human-beings themselves, their nature, and the community structure. He was the first person who mentioned the existence of "law" to be a foundation of moral among human-beings and a stabiliser of their community. The philosophers previous to Hobbes did not consider about how law is given by nature, guardian, people, God, and/or sovereign, and did not define what and how law should be. Hobbes was the first
political philosopher who insisted that political philosophers whould firstly think about and define what is law before thinking about to know about human-nature, how community should be structured, and the existence of the universe. Plato talked about rationality when he talked about ethics (political philosophy). However, unlike Plato, Hobbes did not expect all people to be rational enough to establish an utoppia. Hobbes argued that it is impossible for all people to become perfectly rational beings, but people will be happier and their community will be stabilised as long as the law and the structure based upon it they are following are rationally constructed. Thus, rather than expecting human-beings and talking about an alternative world, Hobbes was the first political philosopher who focused on rationality of law instead of rationality of human-beings and a rationally imaged world view.


Hobbes argued that the best virture of human-beings is obeying the law and following the order, and sin is breaking law and order. Many later modern philosophers argued against this Hobbes' argument, but their theories seem to be just an different interpretation of what Hobbes said. These philosophers agreed with Hobbes for the point that political philosophies have to take an account of rationality and law (including physcially enforced, written, natural=spontaneous and/or any other form based on either a subjective feeling or an objective principle) in order to study about people, their community, and how they function. Therefore, they took a lot of ideas from Hobbes, and reformed Hobbes' theory into their own style.

Hobbes required to have an autocratic institution who is responsibility for legislating the law enforcement, and a strong charismatic sovereign, monarchy and/or any other form of premiership, who represents as a top authority of the autocratic institution. As long as law enforcements created by the autocratic institution are rational and the charisma of a sovereign attract both the institution and people obeying their order, the system will be stabilised, Hobbes argued.

By contrast, Loche, Hume, and Rousseau claimed there should be another form of body ensuring people following the law to stablise their community under order. These philosophers challenged Hobbes' authoritarianism, and suggested to create another form of principle brining an order rationally instead of relying on a strickly stratified autocratic system. Loche insisted on the fundamental principle of morality and the consitution defining what laws should be to convince people to follow. Hume claimed that there is a natural law people naturally adapt to keep themselves under order. Rousseu put emphasis on the existence of the "spontaneous" order which is different from the "enforced" order.


... to be contuned to Part 3:

Milton Friedman attacking hippocratic socialist medical service

This is a fabulous lecture criticising an overly state controlling health (medical) service. This clarifies why free market system is not bad for medical industries to operate unlike what socialists and any anti-freemaketists and financial repressionists describe as. This warns that, when people allow medical services to be marged into the public sector and the degree of government controll increases, peole rather suffer than gain benefit in spite of what socialist government promises.