2017-09-14

The Eric Tetralogy: 4: Ideas as Monops

A subsaga of FTC the Fairy Tale of Capitalism

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Hansen, "Coronation of Eric of Pomerania" (1884, Public Domain)
Who could object when governments, such as Elizabeth I of England and Eric of Pomerania, granted or allowed Monops to their subjects, their citizens or themselves? Complaints did arise, as we saw a few episodes back. The government receives the loyalty of the Monop, possibly taxes or part ownership, political campaign contributions, opportunity to trade on the Exchange in advance of news, and perhaps some undisclosed deposits in foreign bank accounts. The Monop receives suppresson of competitors by the coercive powers of government. As with all fair trades, both parties gain benefits from the trade. Some governments, citing the peoples’ right to pursuit of happiness, didn’t generally require advance grant of permission to operate a Monop, and benefits to government weren’t visible.  


Each gets something valuable in the trade for something less valuable. From where do complaints arise? While the counterparties to a trade do benefit, the trade may have pros and cons, called “externalities”, for people who don’t participate in the trade. If your neighbor establishes a bakery on her premises, you may enjoy the “free ride” (positive externality) of delicious aromas when she removes bread from the oven each morning, though you never buy anything. If your other neighbor establishes an unlicensed retail pharmacy, though you never buy the wares, you may suffer the negative externality of strange people shooting each other in your neighborhood at all hours to resolve customer service issues.

The Monop’s customers don’t participate in the cozy trade between the Monop and the government. With each customer trade, the Monop gathers Rent, which diminishes the net benefit the customers receive. Their diminution of benefit, which Sam Adams called tantamount to tax, is a negative externality of the Monop’s trade with the government.

With sufficient political opposition to negative externalities, governments acted against Monops. Sometimes, governments broke them up into multiple smaller firms, as with Standard Oil Company and AT&T. Among other actions were monetary fines, regulation, mandated sharing of intellectual property or changes in operations, requiring compatibility with component parts from other companies, and disclosure of secret business information and software.

On the other hand, governments protected, even enabled, some Monops, like the IPRs we mentioned in the last episode. A government granted to an applicant an IPR on an idea. Of course you know what an idea is. You probably had an idea recently, like today, and maybe it was “original”, that is, no one ever thought of it before. The government granted IPRs only for original ideas. If a person had an IPR, then government protected the idea like property, and no one could use the idea without permission from the holder of the IPR. Before governments began granting IPRs, anyone could use a idea, whether they thought of it themselves or knew of it from someone else.

With the IPR, the protected idea became artificially scarce, thus enabling a Monop. Before the great wars, the grand Monop J. P. Morgan said

A man always has two reasons for what he does --
a good one and the real one.

J. P. Morgan (Public Domain)
The “good” reason for IPRs was to reward persons with good ideas by giving them a potentially lucrative Monopoly, and the reward would enable people to think. Security had to escort out a few impolite people who observed that humans thought for thousands of years before IPRs were granted. The “real” reason, of course, was the IPR allowed unlimited income from Monopoly Rents. After the great wars, the most esteemed dean of the Staffs, himself an unintelligible Economist, asserted that “conceptual products” (IPRs) increasingly dominated “the economy” (GDP). The Staffs acquired and tended and leased IPRs for their client Aristocrats, thereby increasing Firehose Up capacity, making more likely they could describe increasing after-tax income in their quarterly reports to their Aristocrats, and thus Staffers anticipated enhanced future personal income.

If 40% of the workers in a small town work for your company and can’t easily get jobs elsewhere, or if you own nearly all the oil refineries in America, or if no one can buy tea unless they buy it from your company, or if 90% of all new computers won’t work except with software sold by your company, or if every telephone call runs through your company’s switching network, or if all the merchant vessels must pass through your strait and pay your toll, then you have a Monop, by which the Firehose Up delivers a stream of Rents to you.

As a professional courtesy, the other Great Powers didn’t object to the negative externalities of King Eric’s magnificent Monop, for they also had Monops to enrich their treasuries and keep their wealthier nobles compliant.

Further, the monarchs tempered professional rivalries with nepotism. When Eric was in his twenties, his aunt Margaret arranged Eric’s marriage to the twelve-year-old Princess Philippa of England. Their marriage continued 24 years. Philippa died.

Love blossomed publicly between the recently widowed Eric and Philippa’s lady-in-waiting, the beautiful Cecilia, scandalizing the kingdom. Seeking relief from the critics, Cecilia wed Eric with a brief pre-nuptial agreement by which she got nothing but Eric, which was all she wanted. But the scandalmongers persisted. Ten years after Philippa’s death, exasperated, Eric said “Cecilia, the scene drags. Let’s split.” Cecilia said “We can’t. You’d lose the Sound Dues Monop and the throne.” Eric said “But I’ll have you.” Cecilia gasped and threw herself into his arms.

He was heard to mutter something like “fake news”, and off they went to Visby on the island of Gotland in the Baltic Sea, a centuries-old pirates’ and smugglers’ hideout. Supposing the ever-intemperate Eric had yet another tantrum, the nobility waited for him to return to Copenhagen. But he didn’t. Eric took up piracy. The nobility elected Christopher of Bavaria to the throne.

Epilog

Monops are components of the Firehose Up, conveying streams of Rents extracted from trade counterparties. The Monop gets a better price than would prevail in competitive markets.

Tea Party votes politically supported Staff efforts to enhance the Firehose Up, the Aristocracy’s stream of income.

Royal officers collected the Oresund Sound Dues until, four centuries later, Denmark limped, diminished by wars. The Great Powers demanded and got zero toll for their vessels, in exchange for a one-time payment. Likewise, the young government of the United States paid $400,000, which was less costly than sending a warship to Denmark. Made ineffective, the Sound Dues Monop ended.

In Eric’s time, a contemporaneous Silk Road bandit might have started with ambushing travelers in a defile, then building a fortress on a high hill to secure the takings, then driving competitors from the lands visible from the fortress, then establishing orderly customs houses for bloodless loot collection at the periphery of lands he claimed. He would end his life the greatest and most serene of kings.

But Eric lived his kaleidoscopic adventures in reverse. He ended his life a pirate commandeering merchant vessels in the straits, preceded that with a levy on travelers passing his tax collector in the fortress at Helsingor. Before that were wars with contentious foes, and he began his life as the splendid dashing Prince and King of the unsurpassed Kingdom of Denmark, Norway and Sweden.

In our future episodes of FTC the Fairy Tale of Capitalism, we’ll meet Ayn Rand and Karl Marx and tell the story of the Downward Trickle, the Aristocracy’s waste stream.

The Workers told their children that money can’t buy love.

Thus ends the Eric Tetralogy. Cecilia and Eric lived happily every after.



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I appreciate friends. Their criticisms of prepublication drafts improved FTC.



2017-09-09

The Eric Tetralogy: 3: The Firehose Up

A subsaga of FTC the Fairy Tale of Capitalism

Our planet is much like the Fairy Tale of Capitalism, but not quite.


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Oresund Map (1888, Public Domain)
In our last episode we envisioned Eric’s future Monop emerging from a future war. We saw the Boston Tea Party disrupt the British East India Company tea Monop. We saw Rick Santelli’s modern Tea Party align Workers with the Aristocrats and their Staffs to influence government. The Workers brought votes, and the Staffs brought intellectual charm. The Tea Party gained political power via seats in the legislature. The Staffs used that power to minimize government interference with the income source for their patron Aristocrats, the Firehose Up.   


As you probably know, the Fairy Tale of Capitalism sometimes uses one term for two meanings. One meaning of "Firehose Up" refers to the more or less complex system of an Aristocratic household’s incomes from Capital (owned properties and wealth), Supercompensation, and all other income. The household employs a Staff, also known as the “family office”, of accountants, investment advisors, business managers, lawyers, portfolio managers, and lobbyists (or contracts with providers of some of these services) to assure the assets are well managed, with optimal accounting and legal practices applied to the Capital and Labor income of the household. Thus the Staff assures they can give quarterly reports of increasing after-tax income from the household’s well-maintained Firehose Up. King Eric’s Firehose Up evolved from ancient customs maintaining the King’s property and incomes by the might of the King’s ships, soldiers and police. With centuries of improvements, the modern Firehose Up became a system of complex conveyances transporting portions of GDP and the greater part of GDP growth to the Aristocrat, with legal authority maintained by the might of the government’s ships, soldiers and police.


The other meaning of "Firehose Up" refers to all Aristocratic income sources as enabled and optimized by law, regulation, public policy, custom, convention and tradition.


In generations preceding Margaret and Eric, after disappointing results from war, hard times befell the monarchy of Denmark. To make ends meet, the King pawned southern counties. After a large part of these debts were paid, Margaret presented the pawn tickets. She wanted the lands back. Many kings and Aristocrats who loaned money to Denmark conveniently forgot the pawns and repayments. They said “What collateral? Those weren’t loans. Those were sales!”  Via many meetings, letters and conference calls, she reacquired some lands, but negotiations continued tediously.


On coming to the age of majority, the handsome, strong, daring and impetuous Eric of Pomerania lept to the saddle without touching the stirrups, like a western movie white-hat pursuing the bad guys. He declared diplomacy had produced little, and something about “make Denmark great again”. Then he went to war to get the lands back. The wars drained the treasury, weakened the military, and lost a little more land rather than reclaiming it.


King Eric retreated to long, sulking strolls on the cold, foggy beaches of northern Denmark. One annoyingly sunny day, he saw the bluffs of Sweden on the far side of the Oresund and a merchant ship moving through the strait, having no other way to navigate from the Baltic to Holland and Britain. For centuries, pirates had waylaid vessels in this strait. In a flash of insight, King Eric realized he could chase out the pirate riff-raff, and make the strait safe, and make the Oresund a valuable thing no one else had, and collect Monop rent! “Set up a toll booth!” he ordered an officer.


Eric levied a clever toll. He required masters to stop their vessels at Helsingor and declare the value of the hull and cargo to the officer there. Eric’s officer determined the Sound Dues rate depending on origin and destination of the voyage, the nature of the cargo, applicable treaties, bribes and other considerations, but in any case a small fraction, like 0.5% or 1%. Multiplying the rate by the master’s declared value gave the amount of Sound Dues the master had to pay to transit the Oresund. But there was a catch. The officer could choose to buy the hull and cargo at the declared value. If master declared a low value to minimize the Sound Dues, and if the officer chose to buy, and if the declared value was less than costs, then the master couldn’t repay his investors. If the master declared too high, then the amount of Sound Dues was high, then the officer took the toll, and the master kept the vessel, and the high toll reduced the profits of the voyage. These incentives kept the masters’ declarations close to marketplace value. The masters grumbled and paid the annoying but tolerable toll.


The Sound Dues conveyed robust royal income from the merchants to King Eric’s treasury. Eric used his possession of scarce feasible alternate trade routes to shift to himself part of what would otherwise be the merchants’ profit from each voyage. Eric was a Monop. Eric was an Aristocrat. Eric had an excellent Firehose Up.


Elizabeth I of England (circa 1590,
National Maritime Museum,
noncommercial use with attribution permitted)
As with Eric, Monops dated from the most ancient times, though FTC tends to overlook them. A monarch (as with Eric) or local gangster (as also with Eric as we will later see) would protect an underling in her role as sole provider of some article of trade. The monarch would get a devoted ally, and maybe an additional source of revenue. On the other side of this trade, the underling gets the services of some police or soldiers to suppress competition and the opportunity to maximize profits without limitation.


Monopolies emerged in grand style during the reign of Elizabeth I of England, decades after Eric’s Oresund Sound Dues got underway. She’s dead now. She granted a variety of monopolies. Interesting among others was what later people would call an IPR Intellectual Property Right granted to Tallis and Byrd to print and publish music. But that’s another story.


Luridly and directly affecting matters of state, Elizabeth loved the 2nd Earl of Essex. No one could imagine why, since his volatile personality made Essex the most ill-behaved courtier in her realm. Anyway, he needed an income, so she gave him the Monopoly on sweet wines, by which he received the taxes levied on the wine. When he rebelled and attempted to depose her, she came to her senses and chopped his head off.


Elizabeth ruled long before the Old Ones. You may remember, for the Old Ones, competing buyers and sellers always existed, and so it is in FTC. However, some heretic Professors deviated from orthodox FTC with apocryphal songs about Monopolies and Monopsonies. The more elaborate songs told how these existences were trivial or beneficial to the Society. These songs spun off a subgenre on “natural Monopoly”, Monops for which the scarce good is a huge network, but that’s another story.


Even in Elizabeth’s time, complaints of abuses of Monopoly were heard in the House of Commons. During the decades before the great wars, legislatures began emitting general anti-Monopoly laws. Governments used these laws to constrain or take control of Firms acting as Monopolies.


Even so, Staffers would tell their children “Wise children try to corner a market.”


We come to the end of another episode. Will Eric find happiness in Cecilia’s arms? What happens when ideas become Monops? Who is Cecilia anyway? All will be revealed in the next episode of FTC the Fairy Tale of Capitalism.


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Several friends read my prepublication drafts. They provided criticism and comments that improved this article. I'm grateful for their help.





2017-08-29

The Eric Tetralogy: 2: The Tea Party

A subsaga of FTC the Fairy Tale of Capitalism

FTC’s important characters and concepts appear in the titles of episodes that describe them, and are Capitalized wherever they appear in FTC.


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Image: Cooper (1789, USA Public Domain)
In our last episode King Eric became King of Denmark, Norway and Sweden. With his ships and shore batteries, he would one day acquire and enforce a Monop controlling passage through the Oresund and the Denmark Straits. For large merchant ships, there was no feasible passage from the Baltic to the North Sea other than the Oresund. To obtain the safety and speed of passage that King Eric could make scarce, the master of a vessel had to pay Eric’s toll, the Sound Dues. King Eric would collect Monop Rents, reducing the benefit of the trade for the master and increasing the benefit of the trade for himself.


In other kinds of products than marine shipping, and the agricultural Land of Old One Ricardo’s Tales, a Monop escapes the constraints of competition and, within limits, controls the trade. To oversimplify slightly, the Monop names the price at the expense of the counterparty. The difference between the Monop’s price and a hypothetical competitive market price is the Monop Rent, the benefit of the trade the Monop shifts from the counterparty. Consider tea, for instance.


One night, the Sons of Liberty, a political group, dressed as American Indians and rowed into Boston Harbor. They sneaked aboard ships of the British East India Company (chartered by Queen Elizabeth I as the first limited-liability corporation). They tossed the cargo of tea into the water, an event remembered as the Boston Tea Party.


British East India Company Flag (William Downman, 1685)
Most inhabitants of the Massachusetts Colony lived in Boston, the third largest city in British America. Massachusetts had no representative in the British Parliament, which recently had enacted the Tea Act of 1773. By the Tea Act the East India Company paid an import tax on tea, and the Company got a Monopoly importing tea to the colonies. Ships and soldiers of the Crown prevented smuggling and competition.


Eric’s Sound Dues toll was intentionally small to avoid provoking significant opposition. Likewise the British Parliament intended the Tea Act duty would arouse little opposition.


Though the Tea Act tax was small, “No taxation without representation!” became a slogan of the Sons of Liberty. Sam Adams, one of their leaders, said the Monopoly, even without a tax, was tantamount to a tax. He recognized Monopoly as a burden the State enforced on the people who could buy only from the Monopoly. The Boston Tea Party was a foreshock of the American Revolution, but that’s another story.


Long after the Boston Tea Party, and some old timers said it was even later than the great wars and the death of Reagan, clouds darkened the windows of banks throughout the world. The banks had lent money to many people who now lacked income because their employers, the Ingenious Innovative Job Creators, had dismissed them from their jobs. The dismissed employees stopped paying the banks.


For a long while, the bankers were certain all would be for the best. The bankers had bought Puts. They had confidence, financial expertise, and many reasons why Puts reliably rise when other investments fall. “The risk actually undertaken is very modest and remote,” the bankers said. Despite the confidence, sellers emerged. In October, prices of shares on the Exchange hit a record peak, then meandered downward day after day for many months, a period remembered as the year of the confident bankers.



On a Thursday in February more than a year following the price peak, television journalist Rick Santelli, reporting on current trading from the floor of the Chicago Mercantile Exchange, expressed exasperation that governments were giving money to people who seemed undeserving, because they should have the wisdom and personal responsibility to provide for themselves. Mr. Santelli pronounced an unusually entertaining and memorable editorial, culminating with “We’re thinking of having a Chicago Tea Party in July”. In these few words, Mr. Santelli ignited a new political movement, called the Tea Party.


In the Fairy Tale of Capitalism, we often find one term with two meanings. In this case, Santelli’s Chicago Tea Party opposed taxes and the government giving money to people they thought didn’t deserve it. The Boston Tea Party opposed taxes and the government giving a Monop to a Firm, which was utterly different. Incidentally, each week, King Eric’s job included sending soldiers some place or other in his vast realm to suppress peasant uprisings and rebellious nobles. The chronicles are silent on rebel opposition to Eric’s taxes.


In the year of the confident bankers, the bankers explained that the declines in prices reflected mere paper accounting losses. In the second winter after the October peak, many mere paper losses became real money losses.  Some people, such as bankers and householders, urged government intervention to make good the debts the dismissed employees stopped paying, especially after some Puts failed. Then, less than a month after Santelli’s proclamation, prices’ long meander downward became a financial cascade. Prices on the New York Stock Exchange sank to their lowest level following the peak.


The Tea Party favored minimal taxation, because with less taxation, they would have more money to spend on cars and houses in foreclosure, as Mr. Santelli had explained. They favored property rights, Capitalism and minimal government. They disfavored ideas like government economic stimulus spending, universal public education, universal health care, public fire departments, government food for starving children, and other undeserved or unnecessary government expenses that taxation would ultimately fund.

Image: Nathaniel Currier (1846, Public Domain)
The next episode describes the Staffs (yes, plural) more, but for now, know that each Aristocratic household had their own Staff of people to care for its Firehose Up, the household’s income stream. The Staffs applauded the rise of the Tea Party. Property rights, Capitalism, minimal government and minimal taxation favored their work on the Firehose Up. If a Staffer did her job well, then she could describe increasing profits in her quarterly reports, which would please her Aristocrat employer, who would keep her on the payroll and increase the Staffer’s pay. But a disappointed Aristocrat could dismiss a Staffer from her job.


Property rights meant governments would protect the Aristocrats’ Capital, so no one else could divert it. Capitalism, of course, was that virtuous confluence of free markets and private property that the Old Ones Smith and Ricardo had described and the Old Ones Marx and Engels had named. The Firms owned by the Staffs’ employers, the Aristocrats, manifested the virtuous confluence.  


The Staffs valued minimal government. Big government would impose laws regulating how the Managers treated the Workers. Big government forced them to do something with production waste other than release it in the convenient river adjacent to the factory. Big government required they expose their accounts and explain their Firms in public disclosures.  Government regulatory meddling required truckloads of reports implying expenses of document preparation and handling. Regulation by big government helped sometimes, but mostly it caused significant expenses from unnecessary (because honorable Managers ran the Firms) work.


Profits were the revenues, minus the expenses, and minus the taxes. (Technically, any payment by the Firm reducing the profit of the Capital is an expense, including Rents paid to landlords, wages paid to Workers, and taxes paid to government.) Not only did big government regulation burden the Firms with expenses, the Staffs explained, big government also required unnecessary government expenses, financed by taxes.


Without the “job-killing” regulation and taxes of big government, said the Staffs, the Managers might raise the wages of the Workers, and the Ingenious Innovative Job Creators might hire more Workers. The Staffs omitted to mention they might not. And, of course, expenses reduced the current quarter’s profits the Staffs reported to their Aristocrats.


The Staffs and the Tea Party fell in love from the start. The Staffs provided dazzling verbosity and graphs to the Tea Party. The Staffs urged Professors to sing “Growth of GDP” and other songs about how lower taxes increased government tax revenues and about how magnifying the flow of incomes through the Firehose Up, the Aristocracy’s income stream, enabled the Ingenious Innovative Job Creators to hire more Workers. The Professors sang innumerable ballads on the Firehose Up conveying GDP growth to Aristocrats so the Downward Trickle would benefit the Workers.


The Staffs arranged their Aristocrats political contributions so the Tea Party could get control of government. They arranged the charitable contributions to business schools to provide incomes for esteemed Professors. The Professors and the Staffs, having been educated by the Professors, provided intellectual allure to the non-intellectual Tea Party. The Tea Party welcomed anyone who favored Capitalism, ideologists of the respectable William Buckley and Ayn Rand styles, Supercompensated CEOs, Aristocrats, the Staffs, and small-government Libertarians, because these people saw the unnecessary and undeserved expenses of big government. They also welcomed survivalists, gun enthusiasts, religious zealots, advocates of unscientific points of view, anti-intellectuals, lonely people adopting new friends’ views, self-styled “conservatives”, and others. Together their large influential minority voting block had power. Tea Party members came mostly from the 90 Percent. In the Tea Party, the Workers aligned with the Aristocracy, the Staffs and the Managers.  


Every Staffer knew her future income could depend on the next quarterly report.


The chronicles tell us that on coming to the age of majority, the handsome, strong, daring and impetuous King Eric of Denmark declared diplomacy had produced little, and something about “make Denmark great again”. He made war for territory, draining the treasury, weakening the military, and losing a little land rather than gaining it. War for land would lead to his great Monop by sea, the principal component of his Firehose Up, about which we will learn more in the next episode.

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My deep thanks goes to editor and friends who critiqued my prepublication drafts.








2017-08-21

The Fairy Tale of Capitalism: Author's Note


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From the first episode of the Fairy Tale of Capitalism, readers sent me comments such as
“I understand GDP now!”, and
“Interesting and certainly topical”, and
“The capitalism that you are describing IS what happens”, and
“Another delight that kept me entranced.”
These were good words, because others liked my writing FTC.

Other comments included
“I understood neither the economic fundamentals described in the article nor its goals”, and
“It’s not clear that it’s sarcastic”, and
“Am I missing something?”, and
“This particular blog doesn’t seem to be a Fairy Tale at all”, and
“So what?”, and
“I understood this! Is there more to the story? What happens next?”
These were good words, because they signaled I might improve the story.

I know nothing with certainty. The reader should draw her own conclusions about the Fairy Tale of Capitalism. I see my vanity in my uncertainty and hesitation to state my conclusions. I don’t know what to do about it. Hence this note acknowledges my dear readers’ views, yet still offers no certainty.

I first used the term “Fairy Tale of Capitalism” in an email to my good friend Dr. Stetson. I wrote that Republicans seemed to rely on the Fairy Tale of Capitalism. (In fairness, not only Republicans, but also Democrats and the smaller parties indulge in numerous economic fantasies.) My articulation of FTC didn’t then exist, but the term "Fairy Tale Capitalism" had been used. The Republicans asked us to believe that Capitalism (or something called “Capitalism”, or “private enterprise”, or something along these lines), with its Invisible Hand and Downward Trickle and other characteristics, will produce improved lives for all, if only the U.S. Congress will reduce regulation and income taxes. I noted the Republicans sincerely believed this, apparently, as did Joe the Plumber, many of the Tea Party, and many of Mr. Trump’s supporters in his presidential campaign. I think this notion of Capitalism breaks up on rocks of measured empirical reality.

https://eml.berkeley.edu/~saez/lecture_saez_chicago14.pdf
Empirically, historical tax cuts and deregulations hadn’t produced improved lives for all. In recent decades, in the United States, for the wealthiest ten percent of the people, incomes improved. For the next 40 percent, there was relatively little change. For the remaining 50 percent, incomes declined and one-eighth of households were “food-insecure” (that is, starving or nearly so) . For the wealthiest one percent, income growth and relative wealth were fabulous, spectacular and colossal. Where was the Invisible Hand distributing goods to the 50 percent? Where was the Downward Trickle’s distribution of prosperity? Instead, weren’t the Invisible Hand and the Downward Trickle in a class with Santa Claus and the Eight Flying Reindeer?

If my words are provocative, it is to challenge, not to insult. Competitive markets and private property are powerful tools. They can provide incentives and disincentives that encourage vigorous production and distribution of useful goods. Our society, collectively, devised them. Not to use them would be negligence, for the goods they provide are useful to many people. But they are merely tools. They aren’t innately virtuous. Both bad and good things have been accomplished with them. Some things they can't do. Let us seek wise usages.

One evening during a long bike ride, my brother Rock and Dr. Stetson and I stopped at the Third Base Tavern. While sampling a delicious unique house-made firewater, we conversationally arrived on the topic of Job Creators, a term widely (though incorrectly, in my opinion) used as a rough synonym for business owners or entrepreneurs. I said there was no such thing, that while business owners and entrepreneurs existed, they didn’t “create jobs”. My companions said on the contrary that, “obviously”, they did. I could only shake my head and inarticulately mutter “It’s just not so.” I felt I must find a better way to state my case. That moment was the call, and I answered the call. A few days later I returned home and wrote the first episode “The Fairy Tale of Capitalism: The 90 Percent”. Incidentally, that first episode isn’t about the Ingenious Innovative Job Creators, for that’s another story.

In the Fairy Tale of Capitalism, I want to describe some of the numerous regions of economics. The episodes of FTC should be understandable. Each should explain some arcane complexity. Sometimes I don’t achieve that, though I try. If the story begins to make no sense, just skip to the next paragraph. Much of FTC doesn’t matter much, for it is a dramatization and a comedy. Much of it presents central economic concepts. I flatter myself to think I write FTC with lucid infallibility, but as a child of the Enlightenment, I’m honored knowing read with skepticism. Ultimately, I want to explain how the Downward Trickle is merely a diminishing feeble trickle, how the Invisible Hand can punch you in the nose, and how the Ingenious Innovative Job Creators don’t create jobs. The episodes occur in random order, more or less. There is no conclusion but yours.

I hope you enjoy reading the Fairy Tale of Capitalism.

Dan
Petaluma, California, August 21, 2017


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I'm indebted to my friends who gave me the benefits of their comments on prepublication drafts, their corrections, their criticisms and advice, and their encouragements.



Images and Sources

Images may be freely used in reproduction of this article. They are my own or used in compliance with fair use doctrines of copyright law.

Alisha Coleman-Jensen, Matthew P. Rabbitt, Christian A. Gregory and Anita Singh, "Household Food Security in the United States in 2015" (Sep 2016, United States Department of Agriculture, https://www.ers.usda.gov/webdocs/publications/79761/err-215.pdf?v=42636)

Emily Eisenlohr, "Fairy Tale Capitalism: Fact and Fiction Behind Too Big To Fail" (2010, http://amzn.to/2x7cBqS)

Mihir Shah, "Fairy tale capitalism" (Apr 24, 2014, The Indian Express, http://indianexpress.com/article/opinion/columns/fairy-tale-capitalism/)