The goal of the State is to expand. One of the mechanisms it uses to expand its jurisdiction is the market. The market is defined, according to Black’s Law Dictionary, as a place of commercial activity in which goods, securities, services, etc., are bought and sold. It is also, according to Black’s the region in which any commodity or product can be sold.
( For my thoughts on multiculturism. “Take it from a Black Man: WASPs Need to Take Back Their Country” amazon.com/author/altondrew )
Black’s goes on to define “market” as, in a limited sense, the range of bid and asked prices reported by brokers making the market in over-the-counter securities.
Markets are tied to the concept of freedom, particularly the freedom to enter into negotiations and agree on the price of exchange. But I see markets as more than just a mechanism for moving goods and services. Markets, for political economy purposes, serve as nodes the State uses to extract energy in the form of taxes for the government.
(Ready to take your trading to another level? https://traderswithedge.com/?r=348 )
The markets, of course, are an extraction point for profits. Profit is the compensation that banks and commercial businesses receive for acting as distributors of currency and pass-throughs of sales taxes. Without the distributive effects created by these firms, the transactions economy that sustains government would not exist.
For government to expand, markets must expand. Markets should expand to a point of elasticity, the point where the consumer-taxpayer can no longer support revenue growth by spending and no longer support government growth via the payment of taxes.
How does government reconcile the pressures placed on the consumer-taxpayer to pay higher prices and more taxes with the State’s need to expand? I recommend two prongs.
First, the State should allow sell-side participants in the markets to keep as much of the spread they make when buying and selling securities. The more spread traders keep, the greater the incentive for the trader to continue transacting in contracts. The greater the level and amount of transactions, the more tax revenue available for collection.
Second, the three branches of State power as captured in the executive, judiciary, and legislature should be aligned in supporting State expansion. If a court opinion expresses the narrative that primary dealers can take competitive steps to purchase government Treasuries at the lowest price/highest yield and sell those securities at the highest price/lowest yield and keep those profits given that regulations regarding transparency of rates, non-collusion, etc., are met, thus supporting an optimal transactions market, then the managers of the two other branches of State power should create narratives i.e., executive orders and statutes, that are in line.
The above scenario should be considered when optimizing the State’s branches of power’s ability to expand and extract.
Alton Drew
17 August 2023
Disclaimer: The data and output from this blog post does not constitute investment or legal advice and is not a personal recommendation from Alton Drew. Nothing contained herein constitutes the solicitation of the purchase or sale of any futures or options. Any investment activities undertaken will be at the sole risk of the reader. Alton Drew expressly disclaims all liability for the use or interpretation (whether by visitor or by others) of information contained herein. Decisions based on this information are the sole responsibility of the reader. Any visitor to this page agrees to hold Alton Drew harmless against any claims for damages arising from any decisions that the visitor makes based on such information.
This page contains affiliate links. If you choose to make a purchase after clicking a link, I may receive a commission at no additional cost to you. Thank you for your support.
Lawyers Write the Bets. Bankers Sell the Bets. 