How Political Democracy Can Be Compatible With Austrian Economics, Unthriving Bad Ideas, What We Learned From The Swiss – November 6, 2021,

Because I write books on this topic and this blog post is merely a preview or practice to keep my mind fresh, in this post I’ll limit Austrian economics to Price Determination based on Investopedia’s Austrian economics definition.

Price Determination
The Austrian school holds that prices are determined by subjective factors like an individual’s preference to buy or not to buy a particular good, whereas the classical school of economics holds that objective costs of production determine the price and the neoclassical school holds that prices are determined by the equilibrium of demand and supply.

The above embodies my personal ideology when it comes to prices, just the other day, I felt as though I got ripped off at Costco, because I paid an inflated price for 30 eggs, merely because I failed to do some common sense math in my head, to figure out the price of each egg, which I then could compare to Costco’s competitors, in which there are PLENTY nearby my residence.

Now, although I felt like a sucker after realizing that I paid an inflated market price for eggs, I didn’t feel the need to run to the government to make me whole, instead, I accepted the fact that at least for me during that day, because of factors that I hold myself responsible for, I made the decision to pay an inflated price for eggs.

This stuff happens in a market economy, people enjoy fire sales one day and inflated prices the next, and this is why for MOST they want some sort of equilibrium created by a CENTRAL power source. Because I’m Canadian, I’m aware that my country has a supply management system that controls the supply of dairy, poultry, and eggs through production and import controls and pricing mechanisms.

Meaning that I’m paying an inflated amount for eggs even before Costco adds in its own profit mechanisms. This obviously leads to MAL-INVESTMENT or a lack of investment. The Canadian entities who enjoy the privilege of being sheltered from competition via the Canadian Dairy Commission (CDC), can legally opt to mal-invest because it’s almost illegal for certain competitors to exist in their industry.

Now, because the Canadian Dairy Commission (CDC) is a Federal Crown Corporation which is a State-Owned Enterprise, politically this assures every single province never enjoys a free market in dairy, poultry, and eggs. So in Canada, there are incorrect pricing signals everywhere, because as we know, dairy, poultry, and eggs stretch into all sorts of industries that will then alter their pricing mechanisms to match that of the CDC.

Now, here’s the kicker, Generally speaking, essential items like food and medical supplies are not taxed in Canada? That’s the claim, but clearly, it’s not the truth, Because it’s not like the Canadian Dairy Commission works for free, Government people in Canada often make some of the best salaries in the nation. And as we know government gets money via taxation, whether that taxation be the silent inflation tax, sales taxes, tariffs, income taxes, or in 2021 carbon taxes, all of these taxes distort prices for EVERYTHING, which actually makes the poor poorer.

Now, if I’m to be honest, I personally believe that socialists should be allowed to try their stupid ideas, with the confines of the regions of people who want socialism. If you’re a believer in the equilibrium of demand and supply and think the municipality in which you reside has the right to enact its own laws that are reflective of the political demands of that region.

In Canada, you can vote for municipal, Provincial and Federal representation, now under the Democracy I’d like to see imposed, I’d like the municipalities, not the Federal or Provincial Government to have the ability to enact their own supply management system. If multiple municipalities are in agreement that they want a supply management system, those municipalities can harmonize their system and raise prices based on the demands of those people.

But if there are municipalities that disagree with supply management, then those municipalities will have laws that reflect the political demands of those people. The roles of the provinces should not interfere with the political demands of the Munipalities, the provincial leaders in my democracy would merely be there to relegate or delegate provincial trade or other provincial issues and would not be allowed to supersede municipal demands, staying true to form, the Federal Government could only be involved in international trade issues, if we’re to be using a Fiat system, tariffs if any would be dependent bilateral trade agreements.

The Federal Government would then be given a mandate by the municipalities and the Federal Government would merely be there to enforce such mandates. If let’s imagine one province via all of its municipalities uniting on an issue want a supply management system well then the Federal Government would enforce that mandate. It might seem complicated at first, but if you know foreign eggs are banned province-wide in the nation of Quebec well then that’s the law and countries wanting to do with trade with Canada, would know not to bother selling eggs to Quebec.

But maybe province-wide all municipalities in the Province of Alberta don’t want price controls on dairy, poultry, and eggs well then the Federal Government using the Canadian Dairy Commission (CDC) could not enforce that law. Why many do not want to see this happening, in my opinion, is because it will show the inefficiencies of Government regulations.

One might imagine that allowing the market to determine the prices of dairy, poultry, and eggs will have a devastating effect on the Canadian economy, but what’s often ignored is that investing habits change in a market economy and people will often find markets for dairy, poultry, and eggs that didn’t exist prior. There is no incentive for entities protected by the Canadian Dairy Commission (CDC) to innovate, in fact, if you innovate while under the protection of the Canadian Dairy Commission (CDC) you might find yourself with some unexpected enemies.

I often point to why Socrates hated democracies as to the blueprint of future democracies, I personally think the growth of the FEDERAL government is inevitable if people aren’t able to compare ideas. If municipalities are able to hire representatives, I’m of the belief that those LOCAL representatives are far more important than Federal representatives.

Do you know who the President of Switzerland is? I challenge you to look it up and when you find out who the President or Prime Minister of Switzerland is, hopefully, you’ll figure out how the Swiss Federal Government managed to avoid so many wars!

In modern democracies nefarious actors can merely concentrate their attention on lobbying the Federal Government, in Switzerland, doing this is VERY difficult. Switzerland is obviously not a perfect country, but it’s a landlocked region that found itself to be one of the wealthiest nations in Europe primarily because of its direct democracy systems at the levels of the municipalities, cantons, and their federal government. Citizens in a direct democracy have more power than they do in a representative democracy.

I’m talking about making the municipalities more powerful than the cantons, why is that you ask? Because people tend to gravitate to Freedom and if ideas are working, chances are more people will flock to these areas. Now, as we all know, major cities often become the most Left-Wing places on earth, but they often become Left-Wing, because of the FEDERAL or State/Province/Canton WELFARE!

You’ll notice if you live in any State or Province that resources are often concentrated on the major city, which obviously leads to more seekers of government welfare flocking there, this changes when people know moving to a city looking for a handout does not and can not exist, because resources are limited to what people in that Municipality can produce in a free market.

Furthermore, because the Federal Province or State Government under my system could not manipulate the cost of housing, charitable housing would be left to the private sector, which would be more demanding of its residents than is the government. Government housing or Government support or regulations on housing has the ability to attract the wrong people to major cities, State and Federal government subsidies on housing also encourage laziness for receivers of government housing.

If I have to be poor or out of work to qualify for government housing, I might not even want to be working middle-class, because the State or Federal government is incentivizing me to be out of work. If a find a job, now I have to pay market rent and other quasi-market prices, that I didn’t have to worry about when the State and Federal governments considered me poor.

In order for my IMAGINATION to be enacted, I would not start from a blank slate, I would start my plan for the next great nation based on what we know about economic history. Some people imagine that we’re at the pinnacle of humanity, I personally imagine us as the pioneers for a better future. In order to expose bad ideas, people must be able to see the contrast, because let’s be honest, for most people economics is an EXTREMELY boring topic.

Because economics is such a boring topic, people who think it’s unimportant will run to the FEDERAL politicians to enact laws that they imagine will make their lives better. Because the neoclassical economic school holds that prices are determined by the equilibrium of demand and supply, it’s easy to manipulate the current economy to adhere to the demands of the Federal politician in power. We all know fiat money accelerates this problem, because in the modern era, as long as people accept fiat money, governments can go into ever-increasing debt for it.

Most people to date, still don’t understand that price inflation is a creation of government. It’s much easier to dispel myths when the Federal and even Provincial governments have to adhere to the demands of the Municipalities.

Interesting times ahead!