Peace and prosperity for everyone?
by Erik Vollstädt
I have outlined in several of my articles that the stateless, voluntary parallel societies , coming into existence through Bitnation‘s self-governance tools (DApps) and law and defense services, will see a tremendous increase of income per person and invidual purchasing power. The following serves as an economic development scenario of such a voluntary free market society.
1. Removal of taxes and government monopoly over public services
First of all, by choosing not to abide by government extortion anymore, the members of a voluntary society would be able to keep the money they used to pay to their government for themselves. Which means everyone could decide for themselves in what “services” they want to invest in with that money, enabling free market competition for those services. The fact that the new service providers are competing for customers on a free market that respects private property rights means that they have to use limited budgets and try to fulfill their customers wishes to make money. The “calculation problem” would be a thing of the past.
Furthermore, competition steadily increases quality of those services while minimizing prices, since every business that is trying to make money wants to win over customers from the market leader. As we can see, pure rational self-interest makes sure that society as a whole gets the best possible products at affordable prices, thereby steadily increasing the overall standard of living. The reputation mechanism ensures that the companies that break the society’s ethical norms (such as the Non-Aggression Principle) will be ostracized from the market, as market participants only use the services that suit their ethical beliefs.
2. Removal of legal counterfeiting & central banks
Ceasing to use legal tender as only accepted money also brings along several beneficial aspects for the whole of society:
Competing market currencies would mean that market participants can choose to use what they deem the most valuable money; whether that will be a currency backed by precious metals such as gold and silver, a digital cryptocurrency like Bitcoin, or something completly different, remains unknown – however, it will be the will of the people.
Contrary to our currently used fiat currencies, market moneys are likely to increase in value, making it a good idea to actually save some percentages of your income rather than spending it all at once before all the value is lost due to inflation. By using free market moneys, everyone in a voluntary society could let their money work for them by either lending their savings or investing in their favourite ventures. The successful loans and private investments in turn will earn new money, a part of which can be saved again, and so on.
3. Interest rates decrease organically
It’s just what many of us have learned in business schools: Decreasing interest rates will cause more private project investments as the cost of borrowing is minimal, and the money earned from those investments will flow back into the economy. The only problem here is that nowadays the decrease of interest rates is done artificially by central banks which are printing ever more fiat money. This sends wrong signals to the economy, as interest rates are supposed to be an indicator for each industries’ financial stability and capital accumulation, those borrowers who are trustworthy and rich are less likely to be illiquid and therefore their risk of payment default is marginal.
Economies steered by central banks however, have lowered the key interest rate to zero, and with it the interest rates private banks give out to borrowers are steadily decreasing as well, hence leading to fatal malinvestments in the economy, which will only be uncovered years later when the interest has already been paid to the banks and the economy seemed to be in a “boom“.
Thus, entrepreneurs in a voluntary free market society can use interest rates again to make financially viable decisions and thereby allocate resources correctly, leading to improved productivity and wealth generation.
4. Removal of government licensing & regulations
Opting out from the government law monopoly means that anyone can start their own businesses without being stopped by legal authorities and bureaucratic burdens. Hence, instead of appealing to big corporations like we have to today, anyone who is not satisfied with the current supply of services and products could either become an entrepreneur and reap the benefits of filling a market niche, or invest in a fund for new business that do so.
Contrary to common opinions, a market anarchy would still not be totally unregulated. It is merely a different approach to regulating market outcomes; instead of threatening everyone who does not conform with guns and federal agents, the market anarchy simply ostracizes the service providers that are not acting the way customers want them to. That’s would I would call true democracy: All market participants vote every time they choose to buy or not to buy a product or service. A much stronger and direct reflection of the will of the people than any government body ever could be.
5. Removal of tariffs and quotas
Since there are no tariffs and quotas in a global market anarchy, this “black market” would see a huge increase of international exchange and reduces the threat of wars and aggression as every major market protagonist would be contractually interconnected with the rest of the world. The market’s voluntary agreements hold a much more reliable prospect for world peace and stability than a supranational institution like the U.N. or even a world government.
Rational self-interest in a society that despises rulers and respects private property rights guarantees the best possible outcome for society as a whole. The invisible hand theory is only correct under these conditions.
6. Reduced transaction costs
The absence of regulatory bodies and the increased international contractual interconnectedness lead to a maximum amount of various suppliers and peace, both key factors for a successful business strategy. There would be no “small numbers” situation in which suppliers could benefit from artificial scarcities caused by government market regulations.
7. Decreasing information asymmetries
There would be a market for competing intelligence collection services and consumer protection organisations, whose success would be mainly dependent upon their reputation as valid source of information, making corruption impossible and forcing them to be as objective as possible. As mentioned before, market mechanisms will lead to ever increasing quality at affordable prices for these services, giving customers the best possible overview over market suppliers.
Given the aforementioned assumptions are correct, Bitnation will enable absolute wealth, world peace and the highest possible standard of living.
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