This state voted on two referendums this week, one surprising and one ordinary. Surprisingly the voters STRONGLY approved a new law against boys cheating in girl’s sports.
The ordinary ref was an attempt by billionaires to repeal a tax on billionaires. The “voters” rejected the repeal as expected, leaving the tax on billionaires in place. Now the billionaires are trying to overturn in court as expected. Today’s Spokesman goes into detail on the arguments, revealing a basic flaw in old state law. The flaw is easy to see if you treat economics as a verb, maybe not so easy by the usual way of thinking. The arguing sides don’t seem to be noticing it.
Here’s the relevant passage in the state constitution:
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All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. The word “property” as used herein shall mean and include everything, whether tangible or intangible, subject to ownership.
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Later law pivots on Culliton vs Chase, a court decision in 1933 after the legislature tried to enact a federal-style progressive income tax. The court ruled that income is property, so an income tax with variable rates must be illegal. The billionaires are arguing that the new tax is also variable so it should be illegal by the same standard.
Seen from real world math, the Colliton decision is just BLATANTLY DUMB. Income is not property, income is THE MOVEMENT of property. A house or a skill or a stock is property. When you move a house or skill or stock from seller to buyer, money moves the other way from buyer to seller. The money itself was property when it was in the hands of the buyer. The FLOW of money is income.
Easy analogy: A car is property, so a progressive tax on car value would be illegal. The MOVEMENT of a car is not property, so a variable speed limit law is fine. Fine $100 for 30 over limit, fine $200 for 40 over limit. Nobody would think of this as taxing the ownership of the car.
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As an old pen-and-ink bookkeeper, I have a feel for how ledgers are supposed to work. Ledgers aren’t supposed to be accessible and changeable by everyone in the world. Ledgers are supposed to be an accurate and unchanging record of the Debits and Credits, the outputs and inputs, of ONE business or organization or individual.
Modularity is IMPERATIVE and BASIC to the functioning of an organism, and thus to the ledger that records the functioning.
Without modularity, without borders and layers and hierarchy, you can’t even define inputs and outputs so you can’t have a ledger. You can’t have any sort of schematic or equation or model unless you have a boundary.
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Value is an increase in order. Value is an increase in life and beauty.
In the most basic agricultural forms of commerce, the CRedit is CReated by plants, who turn sunlight and water into infinitely ordered life, and secondarily by animals who eat the plants and transform the order into a more condensed order.
CR represents an increase in order.
Within the boundaries of the ledger, CR is measuring the number of currency units paid to the farmer or miner or oil driller or supplier, but it directly represents an increase in order, an increase in life.
DR is also an increase in order.
The business processes the raw input, using human labor and machinery, and turns it into a more complexly ordered object, or makes it more convenient to use, or more attractive to buy, or more STORABLE. Storage is probably the most important increase in order.
DR in the ledger measures currency units coming into the business from the customer who gains convenience or storability.
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I’ve often cited Steinbeck’s analogy: Real value business brings in salmon, puts it in cans with human and machine labor, and sells it. Capitalists HATE human and machine labor. They would rather can salmon with ledgers, and now they’ve finally managed to do it.
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Using salmon, Polistra shows how the REAL-VALUE ledger measures the increase in order on both sides of a REAL-VALUE business.
On the CR side, Nature increases order by growing a salmon. The fisherman brings in a salmon, adding a unit of life-order to the business. The ledger represents this CRedit as money going back to the fisherman.
On the DR side, the business increases order by filleting the salmon and placing it in cans, then selling it to customers. Canning makes the salmon more convenient for ordinary people without butchering skills, and it makes the salmon STORABLE. The ledger represents this increase in order by showing the money flowing from customers to the business.
A business wants to have input money exceeding output money. Profit means that the business is creating more order than it consumes from its suppliers. In other words, the business is alive. And this accumulation of increased value is where the money supply really increases. The Soviet system recognized this basic fact by using VAT to determine when the national money supply would increase.
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From this viewpoint we can see how debt is actually a LOSS of real value. When a business rents money from a bank, the incoming money was NOT generated by nature or labor. It was counterfeited by the bank. The business gets nothing but an obligation to repay the money, which limits the freedom of the business. The interest paid to the bank must be sucked out of the real value accumulated by the business.
Modern economics turns the whole picture upside down by treating the sucked-out interest as the “creation” “of” “value”.
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