5 Levels of the Economy

[Havet]

I read an interesting article. It said that the economy had five distinct levels: red, pink, white, grey, and black. The red market is the market of legal overt violence, value destruction, and wealth confiscation. The pink market is the market of government-endorsed monopolies and oligopolies of useful services. The white market is legal productive activity. The grey market is activity that would otherwise be legal, conducted off the books. The black market is forbidden activity.

The red market is the market of legal overt violence, value destruction, and wealth confiscation. Wealth can be destroyed directly though violence, or indirectly through waste. Wealth can be confiscated via taxation, regulation, inflation/deflation, the Compound Interest Paradox (http://fskrealityguide.blogspot.com/2007/06/compound-interest-paradox.html), and other financial tricks. The red market includes government, judges, lawyers, police, accountants, tax collectors, education, the financial industry, the military industry, and the pharmaceutical industry. Most of these industries are incredibly profitable, and its practitioners are very well paid. The hallmark of a red market participant is someone who does not create wealth, and leeches or destroys the wealth of others.

The pink market is the market of government-endorsed monopolies and oligopolies. Pink market products are useful but expensive. These industries are subject to extensive regulation and have their market position backed up by government force. The pink market includes transportation, energy, telecommunications, television, radio, entertainment, and doctors. These industries actually provide useful services. However, their monopoly/oligopoly position makes them very inefficient. Prices are far higher than they would be in a freed market.

Extensive regulation moves industries from the white market to the pink market. The defects in the financial system, taxation system, and government regulations favor large corporations over small ones. Large corporations have an advantage over small businesses because the cost of regulation compliance is typically fixed. Large corporations have an advantage due to government-subsidized artificially low interest rates.

The white market is the market of value creation. This is where most of the productive wealth of society is created. The red market could not exist if it didn't leech off the white market. The white market includes engineering, manufacturing, construction, agriculture, and food service. A lot of white market activities are leaving the USA, especially manufacturing and engineering. Construction, agriculture, and food service cannot be effectively outsourced. Government subsidies and regulations make construction and agriculture almost in the pink market. The workers in this area make a decent living, but not as great as the red and pink market practitioners.

I'm actually kind of disturbed. When I tried to make a list of white market jobs, the list was surprisingly small.

The grey market is activity that would be otherwise legal, but conducted off the books. For example, you hire someone to mow your lawn, pay them in cash, and they don't report it as income. Another example is hiring illegal immigrants. Most grey market activity is unskilled, low-paid labor. By avoiding taxation, the effective income of grey market laborers is raised. For example, some poor people can work in the grey market and collect welfare at the same time. Grey market activity tries to avoid detection by the government. Since these activities are otherwise legal, they don't draw much attention. Someone mowing your lawn is not, by itself, suspicious.

The black market is activity that is illegal. This includes drugs, prostitution, and illegal gambling. Any non-government-sanctioned violence is also black market, such as a gangster-directed assassination. Like the grey market, the black market benefits from avoiding taxation and regulation. However, they're the direct targets of a lot of the red market. Perversely, the red market likes having a sizable black market, because fighting the black market lets the red market increase its size and influence. The red market tells the white market "We need more resources, so we can crush the black market." The laws that prevent money-laundering by black market participants are also used against people attempting to work in the grey market. The black market frequently survives by bribing red market workers into ignoring it. All the red market accomplishes is that it raises prices in the black market. That's greater profit for the black market workers who pay bribes or avoid detection.

The primary distinction between working in the grey market and the black market is the risk level. Grey market activity is much less risky than black market activity. If you grow and sell marijuana, red market enforcers will view possession of marijuana as evidence that you committed a crime. If you hire someone to mow your lawn and pay them off the books, red market enforcers will only find out if the person you hire complains. The person you hire won't complain because he is also benefiting from tax avoidance. In a grey market transaction, both the buyer and seller benefit from avoiding taxes and regulations; prices are lower and wages are higher. It isn't too hard to convince someone that mowing your lawn and paying them off the books is acceptable. It's harder to convince people that growing your own marijuana is no big deal. If you get busted for grey market work, your maximum penalty is probably a fine; the fine may even be smaller than your actual profits. You probably can settle for back taxes owed. If you get busted for black market work, you probably will spend time in jail.

By working in the white market, I'm supporting the red market. Anytime I create something, the red market steals a large percentage through taxation or inflation. The red market enables the pink market to steal part of what I produce via higher prices; their government-endorsed monopolies and oligopolies give them pricing power. What right does the red market have to steal most of what I produce? For example, even if I object to the Iraq war, the very act of working supports the government and its war.

The red market survives because it's convinced the white market that it's on its side, even though it's really the enemy.

A lot of skilled workers choose the red market over the white market. They know that the real power and influence lie with value destruction, not value creation, even though that's never explicitly stated. There are many more opportunities for a smart person to make a fortune in the financial industry or as a lawyer, rather than doing white market work. A lot of red market workers delude themselves into thinking they're performing a useful service. The white market is thus cheated out of a lot of talented workers.

The cost of the red market is not just the wealth its steals. The red market also steals talented workers, who are tricked into performing wealth destruction instead of value creation. The red market says "The smart people are working for us. That's why we're important."

It might be a good idea for value creators to leave the white market for the grey market. Currently, the only grey market labor opportunities are for unskilled labor. If enough workers left the white market for the grey market, it would be possible to make a decent living working in the grey market. However, the red market will resist the creation of a sizable grey market, because that would be wealth they could not easily destroy or leech. An established grey market would have an advantage, because its activities could be concealed as white-market work.

The easiest way to make the transition to grey market work is to do a few hours a week. If everybody who's interested performs a few hours of grey market work per week, eventually there'll be a critical mass. People would be able to work full-time in the grey market. Some people would have simultaneous white-market and grey-market businesses, facilitating operations. For example, your white market business could show a small profit while your grey market business is incredibly profitable. An alternate monetary system needs to be developed, because there are too many government spying capabilities built into the official financial system. Until the red market collapses, grey market workers will still need to acquire dollars to pay certain taxes and for other purchases.

The primary difficulty is that would-be grey market workers have no convenient way to find people to trade with. People might be willing to risk performing grey market work, if it was done in private and they knew their trading parter wouldn't rat them out to the red market. The cost of taxation, inflation, and regulation is so high that there's a tremendous incentive for grey market labor.

[Demogorgon]

If you follow the suggestion at the end, that we all do a bit of grey market work, you will end up being done for tax evasion, because if you try that with a higher paying profession, it will be difficult to explain where the money comes from.

At any rate, I found your post interesting, but not necessarily correct. There are some suggestions there that are thought provoking but it relies far too heavily on the same old "Government to blame" simplification. To your credit, you include some non Government actors as well, including banks crucially, though in reality all corporate power should qualify here. You rather spoil things by including education as a "red market" activity. Maybe that was just a mistake, but saying education is parasitical is pretty absurd.

Through the rest of your analysis we see some useful insight (oligopolies driving up prices) and some fairly lazy thinking (Government is invariably the cause). People of your political persuasion explain monopoly, oligopoly and so on as the result of corporate interests cosying up to Government and getting them to use regulation to protect them. That happens, but it is not the only factor at play. Government is just one of many weapons in the corporate arsenal and probably their least reliable at that given that it sometimes turns on them. By way of example when Britain heavily deregulated in the eighties most markets became less competitive as smaller competition was bought out and privatised industries become private monopolies. All that regulation supposedly working against competition was actually keeping the market more open because it stopped a few big companies gobbling up the competition and raising private barriers to entry. Now you could argue that deregulation in Britain was done in such a manner as to give maximum benefit to the big corporations at the expense of all else and you would be completely right. Nonetheless it is a strong case of deregulation increasing rather than decreasing corporate power.

I confess I am getting tired now, so I will have to make this last bit considerably less detailed, but when you talk about the grey market you make two errors. For one many workers who work in those jobs you identify work in what you call the white market anyway because of the job protection they get. Often those working off the record are doing so because they have to-due to immigration laws for instance. And they certainly aren't benefitting from doing so. There isn't much benefit from avoiding the tax man, people on low incomes don't pay a huge amount of tax anyway and what little there is is often heavily outweighed by the conditions they have to work in. I don't mean across the board. A handyman who does a job for you, doesn't tell the tax man and splits the money saved with you is going to win, but a poor immigrant forced to work for some shady character because racist laws won't let them work on the record is in a different position.

The other problem though is that you presume that the grey market is naturally better because it isn't taxed. I don't share your blanket opposition there. I agree that people on low incomes should not pay tax (indeed they ought to be getting extra) but saying higher earners shouldn't either, doesn't sit well with me. Some goods have to be provided publicly or else many will suffer and that means some form of taxation.

Also I think your model doesn't approach the question from the right angle anyway, which is how different power structures operate in the economy and how they fit into wider society in general. Still a much more interesting post than what we usually get around here. :)

[Havet]

First of all, thank you for such a long and considerate post.


though in reality all corporate power should qualify here. You rather spoil things by including education as a "red market" activity. Maybe that was just a mistake, but saying education is parasitical is pretty absurd. Yes, all corporate power should qualify here. When I say education is parasitical, its because it doesn't produce wealth. It takes wealth from the taxpayers and provides (very badly currently) a service. Decentralized cooperatives could handle the public schooling issue much more effectively, for example.



Now you could argue that deregulation in Britain was done in such a manner as to give maximum benefit to the big corporations at the expense of all else and you would be completely right. Nonetheless it is a strong case of deregulation increasing rather than decreasing corporate power.

Yes, I would argue precisely that. This is why I, for the most part, am extremely sceptical of any privatization. Because state - monopoly is often traded, not destroyed. A good video on the subject:

http://www.youtube.com/watch?v=xWWOb7Pzems&feature=channel_page


A handyman who does a job for you, doesn't tell the tax man and splits the money saved with you is going to win, but a poor immigrant forced to work for some shady character because racist laws won't let them work on the record is in a different position.

Of course, right now the grey market is very dangerous to lower classes and unskilled labor. There isn't the same established protection than in the white market. But when i call for more people going into the grey market, this is intended so that this oversupply of workers will find more productive ways to produce and keep the results, effectively becoming non-workers ãnd sself-sustainable people who provide a service. Unfortunately, there is still risk, but not as much as in the black market.

And to take care of the disadvantaged there would need to be developed effectively voluntary systems that actually work at helping poor people, like cooperatives for instance, instead of this government apparatus where millions dissappear each day misteriously.

[Demogorgon]

First of all, thank you for such a long and considerate post.

Yes, all corporate power should qualify here. When I say education is parasitical, its because it doesn't produce wealth. It takes wealth from the taxpayers and provides (very badly currently) a service. Decentralized cooperatives could handle the public schooling issue much more effectively, for example.

Maybe they could, maybe they couldn't. I won't answer that until I have looked at it further, but I will say it is absurd to say that education does not produce any wealth. How much wealth would we produce as a society if we were not educated?


Yes, I would argue precisely that. This is why I, for the most part, am extremely sceptical of any privatization. Because state - monopoly is often traded, not destroyed. A good video on the subject:
That fellow has fantastic facial hair. At any rate though, it isn't just privatisation I refer to, it is the entire deregulation that went on. Even if it were carried out in a cynical manner (which it was), it still led to less regulation than there was previously. Yet the result was less competition.


Of course, right now the grey market is very dangerous to lower classes and unskilled labor. There isn't the same established protection than in the white market. But when i call for more people going into the grey market, this is intended so that this oversupply of workers will find more productive ways to produce and keep the results, effectively becoming non-workers ãnd sself-sustainable people who provide a service. Unfortunately, there is still risk, but not as much as in the black market.How exactly will this work? The "grey market" as you call it largely exists because it fulfills a means to meet demand that cannot be met on the "white market". I'm not sure where you think the additional demand is going to come from.


And to take care of the disadvantaged there would need to be developed effectively voluntary systems that actually work at helping poor people, like cooperatives for instance, instead of this government apparatus where millions dissappear each day misteriously.
Experience shows that this is rarely adequate.

[Havet]

Maybe they could, maybe they couldn't. I won't answer that until I have looked at it further, but I will say it is absurd to say that education does not produce any wealth. How much wealth would we produce as a society if we were not educated?

Depends on whom you consider produces wealth. I for once think manual workers are completely important, but even more important is intellectual labor at this point. Consider the current public education. Most fellow students are taught a skill in order to be employed. They are taught to serve others and never consider the option of not working for a capitalist, and of doing something else (which, at this point, is already hard enough due to restrictions imposed by capitalists).


How exactly will this work? The "grey market" as you call it largely exists because it fulfills a means to meet demand that cannot be met on the "white market". I'm not sure where you think the additional demand is going to come from.

The demand will simply exist. But by going to the grey market, the demand will be met with less supply (cheaper services due to grey market being "off the books"), so in the long run (not short run, of course), things will improve. However, we cannot predict the response of the red market when this happens. Of course, a black economy is preferable, but since the white market will be decreasing, the red market will become more agressive in order to collect the revenue that keeps it alive.

Consider the historical example, taken by the New Libertarian Manifesto:


In the Soviet Union, a bastion of arch-statism and a nearly totally collapsed "official" economy, a giant black market provides the Russians, Armenian, Ukrainian and others with everything from food to television repair to official papers and favors from the ruling class. As the Guardian Weekly reports, Burma is almost a total black market with the government reduced to an army, police, and a few strutting politicians. In varying degrees, this is true of nearly all the Second and Third Worlds.

What of the "First" World? In the social-democrat countries, the black market is smaller because the "white market" of legally accepted market transactions is larger, but the former is still quite prominent. Italy, for example, has a "problem" of a large part of its civil services which works officially from 7 A.M. to 2 P.M. working unofficially at various jobs the rest of the day earning "black" money. The Netherlands has a large black market in housing because of the high regulation of this industry. Denmark has a tax evasion movement so large that those in it seduced to politics have formed the second largest party. And these are only the grossest examples that the press has been able or willing to cover. Currency controls are evaded rampantly; in France, for example, everyone is assumed to have a large gold stash and trips to Switzerland for more than touring and skiing are commonplace.

To really appreciate the extent of this counter-economic activity, one must view the relatively free "capitalist" economies. Let us look at the black and grey markets [5] in North America and remember this is the case of lowest activity in the world today.

According to the American Internal Revenue Service, at least twenty million people belong in the "underground economy" of tax evaders using cash to avoid detections of transactions or barter exchange. Millions keep money in gold or in foreign accounts to avoid the hidden taxation of inflation. Millions of "illegal aliens" are employed, according to the Immigration and Naturalization Service. Millions more deal or consume marijuana and other proscribed drugs, including laetrile and forbidden medical material.

And there are all the practitioners of "victimless crimes." Besides drug use, there are prostitution, pornography, bootlegging, false identification papers, gambling, and proscribed sexual conduct between consenting adults. Regardless of "reform movements" to gain political acceptance of these acts, the populace has chosen to act now - and by so doing are creating a counter-economy.

But it doesnt stop here. Since the 55 mph speed limit enacted federally in the U.S., most Americans have become counter-economic drivers. The trucking industry has developed CB communications to evade state enforcement of regulations. For independents who can make four runs at 75 mph rather than three runs at 55 mph, counter-economic driving is a
question of survival.

The ancient custom of smuggling thrives today from boatloads of marijuana and foreign appliances with high tariffs and truckloads of people from less- developed countries to the tourists stashing a little extra in their luggage and not reporting to customs agents.

Nearly everyone engages in some sort of misrepresentation or misdirection on their tax forms, off-the-books payments for services, unreported trade with relatives and illegal sexual positions with their mates.

To some extent, then, everybody is a counter-economist! And this is predictable from libertarian theory. Nearly every aspect of human action has statist legislation prohibiting, regulating or controlling it.


Experience shows that this is rarely adequate.

Well my experience just showed that my grandfather had a stroke, he went to public hospital, got diagnosed the problem, but they didn't have any physiotherapy department, so he is now at a cooperative elderly institution which has a contract with some physiotherapists. The only thing I regret is that there are so few of these cooperatives (largely due to tax-benefits by the government if institutions decide to organize themselves as hierarchical).

[Demogorgon]

Depends on whom you consider produces wealth. I for once think manual workers are completely important, but even more important is intellectual labor at this point. Consider the current public education. Most fellow students are taught a skill in order to be employed. They are taught to serve others and never consider the option of not working for a capitalist, and of doing something else (which, at this point, is already hard enough due to restrictions imposed by capitalists).

Well if intellectual labour is so important, then evidently education is also of vital importance. You can't do much intellectual work without knowledge, can you?


The demand will simply exist.Stop right there. Demand never "simply exists". If it did the economy would look rather different from how it does today. You may be alluding to Say's law, but it doesn't hold true. Suppliers respond to demand, not the other way around.


Consider the historical example, taken by the New Libertarian Manifesto:

A lot of that is simply not true. The examples from Europe at any rate are complete nonsense. Everyone in France having a large gold stash? :lol:


Well my experience just showed that my grandfather had a stroke, he went to public hospital, got diagnosed the problem, but they didn't have any physiotherapy department, so he is now at a cooperative elderly institution which has a contract with some physiotherapists. The only thing I regret is that there are so few of these cooperatives (largely due to tax-benefits by the government if institutions decide to organize themselves as hierarchical).
Well it is good that it worked out that way, but most people will find themselves in a worse position. There is a limit to what such enterprises can achieve.

Anglo-American legal systems discriminate against non-hierarchical legal systems as you describe, including in the way taxes work, but in most European systems that doesn't happen and while co-operatives do much much better as a result, they still fail to achieve what you expect them to.

Plus there are some things they simply cannot do. There are some services that have to be organised on a large scale basis.

[Havet]

Well if intellectual labour is so important, then evidently education is also of vital importance. You can't do much intellectual work without knowledge, can you?

And the amount of intellectual stimulus students are receiving only directs them to one alternative: being employed.

Most kids today are trained to think that the only purpose schools serves is to "learn" something to trade to an employer. Very rarely it is even mentioned that anyone can become an employer, or self-sustain himself without hiring or being hired by anyone. The whole concept of an employer is somewhat mystical to most people, partially because they don't question their power (which currently is artificially increased), but mostly because they can't conceptualize that one does not need to become employed by someone else in order to survive or to have a good life. The thought of self-employment, entrepeneurship and innovation is often repressed (both by public schools and by private schools which follow government regulations), and many people live somewhat at the mercy of the guillotine of unemployment coming down onto them.

The idea of creating communities and gathering similar people to "trade" without money or according to need, like many communists propose is even less mentioned.


A lot of that is simply not true. The examples from Europe at any rate are complete nonsense. Everyone in France having a large gold stash? :lol: Well of course there are large generalizations in that document, also keep in mind it was written in the 80s.


Industrial production was disproportionately high in the Soviet Union compared to Western economies. However, the production of consumer goods was disproportionately low. Economic planners made little effort to determine the wishes of household consumers, resulting in severe shortages of many consumer goods. Whenever these consumer goods would become available on the market, consumers routinely had to stand in long lines (queues) to buy them. A black market (http://en.wikipedia.org/wiki/Black_market) developed for goods that were particularly sought after but constantly underproduced (such as cigarettes (http://en.wikipedia.org/wiki/Cigarette)). http://en.wikipedia.org/wiki/Economy_of_the_Soviet_Union#Planning

Netherlands, housing and black market (http://books.google.pt/books?id=dnUM_0BDsswC&pg=PA113&lpg=PA113&dq=netherland++black+market+housing&source=bl&ots=tXyZzcnql3&sig=R4hRfIySIH0xuxiquxPKY32RLbU&hl=pt-PT&ei=MhyDSs-wJ6GRjAfTnuX-CQ&sa=X&oi=book_result&ct=result&resnum=1#v=onepage&q=&f=false)

Italy and its thriving black market (http://www.nytimes.com/1997/07/03/business/in-italy-s-piracy-culture-black-market-is-thriving.html)

Denmark's tax evasion, despite having world's highest taxes (http://www.cphpost.dk/business/119-business/46504-denmark-a-new-tax-haven.html)

Burma's black market (Black market petrol stands are everywhere in Burma) (http://news.bbc.co.uk/2/hi/asia-pacific/5071966.stm)



Anglo-American legal systems discriminate against non-hierarchical legal systems as you describe, including in the way taxes work, but in most European systems that doesn't happen and while co-operatives do much much better as a result, they still fail to achieve what you expect them to.

Plus there are some things they simply cannot do. There are some services that have to be organised on a large scale basis.

I'm aware that cooperatives are underperforming. But that isn't because of the nature of the cooperatives (except in large scale services), but by the conditions that restrict these cooperatives from appearing.

[Demogorgon]

And the amount of intellectual stimulus students are receiving only directs them to one alternative: being employed.

Most kids today are trained to think that the only purpose schools serves is to "learn" something to trade to an employer. Very rarely it is even mentioned that anyone can become an employer, or self-sustain himself without hiring or being hired by anyone. The whole concept of an employer is somewhat mystical to most people, partially because they don't question their power (which currently is artificially increased), but mostly because they can't conceptualize that one does not need to become employed by someone else in order to survive or to have a good life. The thought of self-employment, entrepeneurship and innovation is often repressed (both by public schools and by private schools which follow government regulations), and many people live somewhat at the mercy of the guillotine of unemployment coming down onto them. Well in this country there is plenty of stuff about "teaching entrepreneurism" and that kind of thing. I don't think it should be there though. Trying to tell people it is natural to be, in effect, either an exploiter or exploited is not acceptable.

I agree education tends to be lacking, but to say it is parasitical is absurd.


The idea of creating communities and gathering similar people to "trade" without money or according to need, like many communists propose is even less mentioned.Given how impractical that generally is, there would be little point in teaching it.


Well of course there are large generalizations in that document, also keep in mind it was written in the 80s.

http://en.wikipedia.org/wiki/Economy_of_the_Soviet_Union#Planning

Netherlands, housing and black market (http://books.google.pt/books?id=dnUM_0BDsswC&pg=PA113&lpg=PA113&dq=netherland++black+market+housing&source=bl&ots=tXyZzcnql3&sig=R4hRfIySIH0xuxiquxPKY32RLbU&hl=pt-PT&ei=MhyDSs-wJ6GRjAfTnuX-CQ&sa=X&oi=book_result&ct=result&resnum=1#v=onepage&q=&f=false)

Italy and its thriving black market (http://www.nytimes.com/1997/07/03/business/in-italy-s-piracy-culture-black-market-is-thriving.html)

Denmark's tax evasion, despite having world's highest taxes (http://www.cphpost.dk/business/119-business/46504-denmark-a-new-tax-haven.html)

Burma's black market (Black market petrol stands are everywhere in Burma) (http://news.bbc.co.uk/2/hi/asia-pacific/5071966.stm)

I agree that Burma and the Soviet Union are good examples of Black Markets, but to take your Western European examples, the article on Denmark makes clear that the tax dodging is caused by lack of regulation on business, not due to constricting Government forcing people into the grey market. Don't forget that in Scandinavia the norm is to have high personal taxes and low business taxes. And as the article makes clear it is corporate rather than personal taxes that the trickery is going on with.

As for Italy, well I need hardly point out the high levels of corruption and organised crime there. The case is pretty unique in Western Euope because while organised crime is a problem everywhere, it has not reached the overwhelming levels found in Italy. That is the cause of the italian Black Market. This has been a constant pretty much since Italian Reunification regardless of the economic policies followed.

I don't know enough about the Dutch example to comment. I will get back to you when I do.


I'm aware that cooperatives are underperforming. But that isn't because of the nature of the cooperatives (except in large scale services), but by the conditions that restrict these cooperatives from appearing.
I don't think coops do underperform as it happens. They tend to better than standard businesses despite the difficulty in starting them up and it the Italian Province of Emile-Romagna, they have driven out most corporate business, probably accounting for the fact that the standard of living there is much higher than virtually anywhere else in Italy. I just don't think they can achieve the levels you think they can.

[Havet]

Well in this country there is plenty of stuff about "teaching entrepreneurism" and that kind of thing. I don't think it should be there though. Trying to tell people it is natural to be, in effect, either an exploiter or exploited is not acceptable.

I agree education tends to be lacking, but to say it is parasitical is absurd.
Given how impractical that generally is, there would be little point in teaching it.

Well, the thing about entrepreneurism, is that I don't want to tell people it is natural to be exploiter or exploited. By bringing more entrepreneurs (therefore less wage laborers), you decrease the bargaining power of entrepreneurs and increase the bargaining power of wage laborers, effectively making the whole notion of exploiter-exploited disappear in the long run, and making each person engaging in business like equal peers, seeking nothing but mutual aid to mutual interest and mutual advantage.

Also, I apologize for having claimed education is parasitical. Its certainly not. Its a great way to waste a country's tax revenue's without any real advtange, but it has some pros (espcially for poorer people) at the very least. What i'm saying is that this should not be our goal, and our goal should be to improve education, reduce its costs, and decentralize it basically.


I agree that Burma and the Soviet Union are good examples of Black Markets, but to take your Western European examples, the article on Denmark makes clear that the tax dodging is caused by lack of regulation on business, not due to constricting Government forcing people into the grey market. Don't forget that in Scandinavia the norm is to have high personal taxes and low business taxes. And as the article makes clear it is corporate rather than personal taxes that the trickery is going on with.

But of course, if the white market is less regulated, then tax evasion will be more easily done in the white market, without need to go into grey/black markets. In any case, my original point is that I believe counter-economics are a good way to "destroy" the white market, where the red market leeches of, and the white market peers would then go into grey and black markets, where red market disturbance occurs less often. It would then be a good time to practice a revolution (because the state has now been reduced in size) to get rid of the red and pink markets once and for all, to end exploitation and to achieve greater freedom of organization, action, cultural practices, etc.


I don't think coops do underperform as it happens. They tend to better than standard businesses despite the difficulty in starting them up and it the Italian Province of Emile-Romagna, they have driven out most corporate business, probably accounting for the fact that the standard of living there is much higher than virtually anywhere else in Italy. I just don't think they can achieve the levels you think they can.

If they can't achieve the levels I think they can, no problem. There are other alternatives, such as independent firms, decentralized voluntary public services, etc. Even if these could not appear, wouldn't it be fairer because they didn't rely on exploitation?

[Demogorgon]

Well, the thing about entrepreneurism, is that I don't want to tell people it is natural to be exploiter or exploited. By bringing more entrepreneurs (therefore less wage laborers), you decrease the bargaining power of entrepreneurs and increase the bargaining power of wage laborers, effectively making the whole notion of exploiter-exploited disappear in the long run, and making each person engaging in business like equal peers, seeking nothing but mutual aid to mutual interest and mutual advantage. Not really. If too many people try to be entrepreneurs then some will simply fail. The market can only support so many capitalists and is very good at getting rid of a surplus. Those that it can't handle are soon sent back down the social ladder.


But of course, if the white market is less regulated, then tax evasion will be more easily done in the white market, without need to go into grey/black markets. In any case, my original point is that I believe counter-economics are a good way to "destroy" the white market, where the red market leeches of, and the white market peers would then go into grey and black markets, where red market disturbance occurs less often. It would then be a good time to practice a revolution (because the state has now been reduced in size) to get rid of the red and pink markets once and for all, to end exploitation and to achieve greater freedom of organization, action, cultural practices, etc.

Instinctively I fell there is something wrong with this, but it would be a disservice to you to rip into this now while it still lacks detail. Your suggestion is very vague, you would need to lay it out in much more detail before I can critique it as it is a view I have only come across occasionally and have never looked into particularly heavily.


If they can't achieve the levels I think they can, no problem. There are other alternatives, such as independent firms, decentralized voluntary public services, etc. Even if these could not appear, wouldn't it be fairer because they didn't rely on exploitation?
You mean taxes? I think it is simply inevitable that we have to trade off some of our wealth to be pooled to pay for public services rather than spending on goods for ourselves. In a socialist society we should receive the full value of our labour without surplus value but we should accept that we have to pool some of that for the common good. It is a necessary trade off. I tend towards a pragmatic approach to politics and therefore accept what might be seen as compromising a principal when I see it as necessary. However the Government certainly should be under far greater control by the people. I certainly don't favour the capitalist state or anything like that.

[Havet]

Not really. If too many people try to be entrepreneurs then some will simply fail. The market can only support so many capitalists and is very good at getting rid of a surplus. Those that it can't handle are soon sent back down the social ladder.

In the end-result-society, it would be certainly far easier to become an entrepreneur than it is now. So if one fails, it is easier to try again. Anyway, what's with these zero-sum talk of "the market can only support so many capitalists"?

You should try to understand something about markets: it depends on the market. For example, in computer processors market, it is natural there are few companies, because the actual product (intel cores for example) has very variety. People don't want much variety. The only thing that keeps progressing, therefore, its the power and capacity of the core. The same goes for cola-drinks markets. This is why you only see pepsi and cola. Do you know what the third most sold cola-drink is? No, or at least, very few people do, because those both companies are so far able to meet demand, and there isn't really a demand for much variety now. BTW, third most sold cola is Royal Crown Cola :P

Another market, say the car market, has much more variety, because a lot more people are willing to buy different things. You got sports cars, racing cars, family cars, safe cars, small-city cars, transport cars, vans, trucks, etc.

Anyway, I really don't understand this "the market can only sustain X number of capitalists". And remmember, we're not talking of capitalists, we're talking of entrepreneurs, which means they don't have a free legal protection system backing them up and they are not in any artificially-inflated power position.



You mean taxes? I think it is simply inevitable that we have to trade off some of our wealth to be pooled to pay for public services rather than spending on goods for ourselves. In a socialist society we should receive the full value of our labour without surplus value but we should accept that we have to pool some of that for the common good. It is a necessary trade off. I tend towards a pragmatic approach to politics and therefore accept what might be seen as compromising a principal when I see it as necessary. However the Government certainly should be under far greater control by the people. I certainly don't favour the capitalist state or anything like that.

The only thing I have against taxes is that some people who don't use the service are forced into paying for it (may or may not be rich people). I have nothing against taxes (which wouldnt be taxes anyway), if you pay collectively with every one else and get a service in return, and when you don't pay you don't get to use that service. Forcing people to pay for something they don't use is irrational imo.