Monday, June 16, 2014

The Western ethics, Asian Life, Japan, and Libertarianism: Part 3

8. Concern on the interventionists’ view on the free market economy
Without a doubt, the free market economy is the most productive form of economy. The free market economy promotes individuals’ free voluntary will motivating them to do what they are the best at doing and/or they desire to do. It also allows individuals to freely trade their goods and services so that they offer the best possible rewards for their best possible efforts and merits put into practice. Therefore, this economy naturally encourages individual humans to provide their best possible commitments increasing the aggregate productivity without any artificial forcible enforcement.

The majority of nations nowadays have partially adopted the free market economy to their national economy to a certain degree because they have realised its previously mentioned huge benefits especially since the fall of the command economy in the socialist collectivist nations. The USSR-style socialist/collectivist economy, the big historic experiment using several national economies themselves, failed. Then, this historic event has proven that the command economy is materially and ethically failure.

Some of these nations experienced in the radical political transformation in which their mainstream political regime was replaced by another. The other nations sustained the regime of their status quo by simply replacing their command economy with the mixed economy. Only Cuba and North Korea are the nations remaining their staunch command economy. But, North Korea is still suffering from crucial despairs such as famine, high mortality, and considerably low standard of cultural living. Cuba has gradually been adapting the market economy so that her economy should be categorised more as the mixed economy nowadays.

The mixed economy, the blending of the command economy and the free market economy, seems to be the popular form of national economies nowadays. The reason why most of the all nations do not encourage the pure free market economy is the misguided scepticism created by Marxist and the self-proclaimed Keynesian economists. Even though there are critical theoretical failures and deluded judgements in their theories, their teachings were cogent enough to convince many people to believe as though they were true. The contemporarily popular Reactionism against the virtue ethics and individuals’ free voluntary will also reinforced the cogency of these theories.

Their scepticism is based on their prejudice about the world economic crisis in 1929. As mentioned in the previous chapter, both Marxists and the Keynesians disagree with the pure market economy. So, as soon as they observed the world economic crisis, they seriously thought that their predicted failure of the free market economy became true, and they were happy to observe that event. In addition, regardless of their diagnosis, their prescription was deluded as explained in the previous chapter. But, they thought that the crisis was just the opportunity to advertise their prescription to put it into practice in the real world. This is a typical repugnant personality of theoreticians explained by Lev Tolstoy in his novel War and Peace. These theoreticians expect to observe that the world encounters with troubles when the world does not follow their theory. Then, they take an advantage of this situation to promote their theory as the right salvation.

In 1929, the spirit of the free market economy was already deteriorated due to the epidemic influence of the previously mentioned Reactionism originated from Kantian philosophy and innovated by the other modern idealists and the nihilists. Even though the contemporary world still partially retained the free market economic structure, the free market economy was compromised under the decaying spirit of the virtue ethics and the free voluntary will. The other forms of economic policy do not necessarily require individual citizens’ voluntary participation into sustaining and developing their economy because their appointed authorities and specialists manage handling their economy and politics. By contrast, the free market economy requires individual citizens’ competence and commitment are unavoidable to sustain and develop economy further as well as stabilising their politics.

These interventionists, supporting the mixed economy, who are nihilistic about the free market economy blame the market structure of the pre-crisis period where the monopoly by few big enterprises prevailed. They argue that the reason why the contemporary Anglo-Saxon countries the USA and Great Britain experienced the crisis was due to their free market economy. They insist that the monopoly, causing the unequal distribution and the deprivation of majority citizens, naturally takes place in the free market economy in the pre-crisis world economy.

Nevertheless, this is totally a fallacy because no monopoly can be naturally created as long as individuals’ free voluntary will is largely permitted. When the monopoly dominated in the pre-crisis period, the free market had already being compromised since the state government in these Anglo-Saxon countries operated the protectionist policy preventing their enterprises from the world free market competition. This protectionism prevented their citizens from the opportunity to purchase the inexpensive products from abroad. Furthermore, the state governments’ recommendation for their favourite enterprises to do their public work projects caused the discrimination between suppliers in the domestic market. Even before the New Deal programme started, the government subsidy and the government assisted privilege for a certain social status existed to artificially prevent the new market entrants. All in all, the monopoly was artificially created by the government intervention in these countries at the pre-crisis periods.

In addition, these anti-free market interventionists tend to assume that all economic agents in any market participate into their economy with a passive attitude. They hardly realise that economic agents often become very proactive to influence their market situation. For example, they create their product advertisements to attract customers when they consider about newly entering into a particular market. The blockage of the information flow disrupting these new market entrants’ advertisement is not a free market mechanism. Therefore, when the market entrants struggles to enter the market, it can be because either their goods and services are not attractive to the potential customers or the market freedom is disrupted by the tyranny of authority or mobs.

These interventionists also excessively focus on the real market whereas they tend to neglect focusing on the capital/financial market mechanism in the free market economy. The investors are willing to invest to the assets whose future growth expectation is at least positive, and avoid concentrating on investing to the safety assets and the already high value assets. These assets’ value tends to have already reached at the significantly low marginal growth rate. By contrast, the asset value of some small and medium sized enterprises and the low value assets still have a potential to increase their value with a high marginal revenue of investment. So, even though some new entrants do not have their own saving enough to spend for their initial investment cost, the rich investors will be willing to invest to them as long as their business looks becoming prospering.

Regarding to the ethical issue about the monopoly, it is really questionable to categorise the monopoly as the cause of the stagnation. For example, the contemporary market share of the oil industry was significantly small that the monopoly of this market share was not significant to the market competition. Also, this industry required the big scale enough to diminish the marginal total variable costs so that the investment needed to be concentrated into one or few companies into this kind of industries. When several companies participate into to that kind of industries, the total cost per company will be high because their business scale is too small to diminish the marginal costs. Therefore, the monopoly by one or few can occasionally offer more reasonable prices than the competition by many.

Moreover, when the product price becomes high relative to income, this simply means that the demand exceeds the product supply capacity, which causes the price rise, and/or the excess supply of the unproductive labour force, which causes the income down fall. The excess demand and the unproductive labour supply are also related to the excess human population relative to the natural resource available. After the industrial revolution, the human population has been exponentially growing meanwhile the technological growth offering the high product supply has been only growing arithmetically. Since then, the labour supply has become more exceeding the product supply capacity. In the free market economy, individual citizens are allowed to bargain their wage in order to match their need and want as they are no longer enforced to participate into economic activities as slaves with the fixed wage. Only in the command economy, of either feudalism or socialism, the slave labour exists because they are commanded to work under the wage fixed by the tyranny.

The naiveness discouraging the self-esteem of individual humans prevents the liberalisation of both market structure and personal life style. Their false belief imprinted by both the modern idealism and the postmodern nihilism. The current compromised form of the world market and political economy remain to be stagnated. The haunting economic and communal stagnation is bad for not only the material wealth but also the mental/spiritual state. This stagnation induces people to suffer from boredom, which is the true root of all the evils (Kierkegaard, 1813), and the loss of their means of living which results in the anomie causing people committing suicide and many kinds of dysfunctional behaviour (Durkheim, 1897).

In order to expect the growth i.e. the progress whose level was seen in the ancient Greco-Roman civilisation and the early modern Western world, the following two conditions are needed. The world market needs to be more liberalised. The virtue ethics motivating individuals’ self-confidence in their free voluntary will needs to be reincarnated. Thus, the ethical counter-revolution against the mixed economy promoted by the interventionists, the materialistic nihilist against the free individualism, shall be held out.

9. Population: Rising British Industrialisation and Failing Japan
Thomas Malthus, the remarkable British classical economist, thus had warned of discouraging the excess population growth during his time period when Britain enjoyed their material prosperity in her post industrial revolution time periods. Socialists whinge how miserable deprivation the contemporary working class citizens were in then. However, their analysis to conclude as they whinge is very questionable and sound awfully superstitious.

The socialist mythology about the industrial revolution and the post industrial revolution world is simply a propaganda scripture. Pseudo-intellectuals and irrational mobs are frustrated due to their madness but want to believe they are suffering from a conspiracy plotted by some others. So, this socialist propaganda accusing the post industrialisation world is based on the conspiracy these mad people wish to believe in. Then, they have become socialists after being deluded by socialism i.e. the anti-industrialisation. This is also called the historical revisionism because these socialist revisionists revise the interpretation of the world history to translate into their favourable way of understanding. This is why their anti-industrialisation perspective contains plenty questionable stories and illogical superstitious fallacies.

The working class population was dramatically rising even at the level that Malthus warned of the excess population growth. The infant mortality dropped down due to the notable aggregate productivity after the industrial revolution. Human-beings in civilisation feel secured to reproduce when they are optimistic about future. It is the same rationale as the financial investment. These people at the contemporary time period were so optimistic about the future of their prospering nation that they were relieved enough to manipulate their population fast.

The poverty existed inevitably because of the previously mentioned population overgrowth in the contemporary Great Britain. Even in the prospering moment, the error such as an excess population growth relative to the production supply capacity so that there always needs some spontaneous error correction. The poverty inevitably takes place when the population becomes excess compared to the productivity capacity and the natural resource storage. Furthermore, the working class citizens tend to reproduce more than the middle and the upper class counterparts. The working class citizens tend to spend their energy and time for their sensual pleasure because their cultural standard is too low to pursue in the other forms of amusements. Therefore, the working class citizens were more likely to suffer from the poverty than the middle and the upper class counterparts. But, this problem would have eventually been solved by knowing they needed to correct their own error, the excess reproduction.

All the other negative interpretations about the industrialisation by socialist historical revisionists are misguided. In Great Britain, the rapid productivity growth stimulated by the market liberalisation and the philosophical enlightenment liberalising individual citizens’ mentality has improved the living standard for all British citizens. The sanitary condition was dramatically improved from the pre-industrialisation to the post-industrialisation. The literacy rate rose up due to the flexible information flow and the freedom of speech and competition in the free market economy. Despite the falling down working class wage, their real wage went up dramatically due to the average price decline caused by the aggregate productivity increase. The property right and its equal legal application to all the citizens, the fundamental complements of the market economy development, has been highly emphasised. So, all individuals in all the classes have been benefitted and enjoyed their freedom and autonomy.


The reverse case scenario has taken place in Japan after the economic bubble burst. Since the economic bubble burst in 1990s, Japanese population has been notably declining due to Japanese citizens’ pessimism about their future. This downfall has occurred due to the inevitable economic decline after the artificially stimulated economic growth in the post-WW2 era. Afterward, since this economic collapse only the remaining national debts and the loss in the future political direction have been left out, and all the other Asian nations’ productivity level were catching up with Japan. So, Japan has lost its initiative in the global economy and its uniqueness in Asia. Due to the lack of the virtue ethics and the individuality in Japan explained in the precious chapter, majority of Japanese have lost their own will to improve and enrich their life. All these aspects induced Japanese to feel a strong pessimism about their future.

The population decline itself is beneficial to a nation and individual citizens living there. Because Japanese life expectancy and health condition are high enough to be the world top level, the mortality rate is considerably low. Then, the birth rate should be rather restricted in order to avoid the excess population by comparison with the capacity of the natural resource reserve and the available technology. The negative aspect of the decreasing birth rate is that the working population is declining against the growing retirement population so that the tax contribution per capita of the workforce for looking after the retired elders has become painfully high. But, the low population implies less unemployment and more demand for the workforce. So, the average income per capita may rise unless the productivity goes down. Therefore, the population decline is not the cause of the fall of the productivity: The negative perspective about the expected future productivity growth decreases the motivation of reproduction. The productivity loss is fundamentally caused by the philosophical and political structural background.

The poverty in the current Japan takes place due to the dramatic fall down of the aggregate productivity whose speed is faster than the population decline. Japan used to maintain its noble ethics retained from the political transformation inspired by the Western legal philosophies and the Continental Confucianism in 19th century. This noble ethics has been the key engine to enable Japanese to become able to create their own objectives i.e. their life goals. But, as time passed, their competence of preserving this ethics became gradually deteriorated. Then, their aim to live something productive has been lost so that the power of their voluntary will is also lost out. Therefore, the nihilism has been spread among Japanese citizens, and their mental level has turned back to be primitive.

As long as a nation rely on the philosophically inconsistent mixed economy, the overall productivity capacity will be gradually ebbing. The voluntary will and the self-esteem of individuals are fundamentally necessary to enable them to be self-governable and self-sustainable to raise their own national economy themselves. In order to encourage the sustainable and active economic growth, each individual citizen must have their own voluntary will to create and follow their own clear objectives to achieve what they are good at. The currently ongoing ethical nihilism perpetuates the lack of strong mind growing their voluntary will. Unless Japan introduces a political economy encouraging Japanese self-governability based on a strong voluntary will, innovation and proactivity, the essential keys to stimulate their economy and their personal freedom, will stay stagnated.

The unavoidable problem of the whole Asia is that these Asian nations will inevitably import this harming characteristics of Japanese political economy when they imitate Japanese political economic model. Unfortunately, almost all Asian nations have adopted the Japanese style mixed economic model to their national economy, and the epidemic of the nihilism hindering the current Japanese political economy will gradually be spread.