A Free Market Framework for Nation States

PRINCIPLE

THE UNDERLYING PRINCIPLE of a Free Market Framework for nation states is “distributive justice”[i]:

Distributive justice is the allocation of goods and utilities via the voluntary ubiquitous human interaction of self-actualizing individuals who not only recognize the human dignity of the self and other and the rights which flow from and guarantee it, but also actively will goods and utilities toward the self and other so as to manifest human dignity.

TAX POLICY

TAX POLICY WHICH is in alignment with the principle of distributive justice is the Value-Added Tax (VAT)[ii]. The Framework is grounded in the belief of a revenue-neutral replacement of all taxes on income with amended sales and use taxes.

FISCAL POLICY

FISCAL POLICY WHICH is in alignment with the principle of distributive justice is based upon the ideal of balanced budgets.

MONETARY POLICY*

MONETARY POLICY WHICH is in alignment with the principle of distributive justice is based upon the ideal of “commodity” money, which holds that one’s national currency is backed by a transferable, reliable, and non-volatile monetary commodity such as gold, silver, or a basket of commodities[iii], and that fiat money is hazardous[iv] to monetary policy since it is backed by nothing but trust.

TRADE POLICY

TRADE POLICY WHICH is in alignment with the principle of distributive justice is based upon the ideal of free & fair trade in which nations eliminate all trade barriers and adopt international standards for the exportation and importation of goods and services[v].

[i] Refer to Reber’s “Distributive Justice and Free Market Economics: A Eudaimonistic Perspective” in Libertarian Papers Journal 2, 29 (2010).
[ii] Refer to Missouri Senate Joint Resolution 29 Introduced by Senators Purgason and Cunningham as well as renowned economist Arthur Laffer’s essay, “The Missouri Compromise” and his testimony to the Missouri State Senate.
[iii] Refer to US Congressman Ron Paul’s book, The Case for Gold.
[iv] Refer to Andrew Dickson White’s book, Fiat Money Inflation in France.
[v] Refer to Frédéric Bastiat’s monograph, Selected Essays on Political Economy.
*On September 13th a hearing of the Financial Services Committee in the House of Representatives on H.R. 1098 “Free Competition in Currency Act of 2011” was held. It would be in the best interest of nation states and their banking systems to support this bill. For example, Japan should support the ideal of competitive currency due in part to a strong yen, and as Jesper Koll in the September 2011 ACCJ Journal states, the strong yen is the result of not only a weakened dollar but more importantly that “Japan Inc. remains relentlessly focused on innovation and keeps on pushing her competitive age” (p. 19). Therefore, in order for Japan to defend itself from a weakening dollar even as it increases its innovation, it should support H.R. 1098, as well as the overall principle of competitive currencies, and it should adopt the principle of commodity currencies and base its own yen upon a single commodity or basket of commodities such as gold, silver, or platinum. As the dollar weakens, and at worst collapses, an alternative currency or currencies will need to fill the currency vacuum, and it should be a commodity currency in order to maintain stability in the markets. Hence, it is proposed here that in the interest of safeguarding the livelihood and well-being of the Japanese people, a model of fiscal policy as stated in H.R. 1098 should be adopted in Japan and the yen defined as a commodity currency. (Refer to Larry White’s Competition and Currency.)
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One Response to A Free Market Framework for Nation States

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