Employment security is not an optimal choice.

Most HR departments boast about providing workers with stable and secure jobs… because people seem to demand such positions. People do not like changes.

Meanwhile, as most workers confirm, it’s much easier to find higher-paying job elsewhere, than in the current workplace. Where raises and bonuses typically are only a few percentage points above current pay.

Then why do so many people stay so many years at their current job? Isn’t it more affordable to move? Let’s compare a typical example.

Worker A (resident).
Year 1 – 2000$ a month.
Year 2 – 2100$ a month (5% raise)
2 year sum: 49200$, for 24 months of work.

Worker B (jumper).
Year 1 – 2000$ a month, but needs to learn and refine application documents.
Year 2 – 1 month vacation, then 2500$ (25% raise)
2 year sum: 51500$, for 23 months of work.

It pays to be a jumper. Unless residents are remunerated fairly. Which is never the case, because people are afraid of losing their jobs.

Differently about inequality.

Some factors of income inequality stem from background.

Being a child of a doctor, businessman or lawyer significantly and positively affect someone’s future success. That’s the fact, and I’m not gonna negate it.

Given the same starting points, people can differ too. Sometimes it boils down to intelligence. You can be incredibly smart and then all kinds of careers are for you. You can be an architect, a programmer, a manager, a doctor, a lawyer. You will then prime your kids in a good direction – if you also make a good job raising them.

But what about people that are equally smart, and not equally rich? There are additional factors in play of course:

  1. Choice of occupation. If you decide to become a worker in a more commercially valuable branch of economy, where you are highly mobile, you are set.
  2. Grit and perseverance. Some people become satisfied with the income of their 9 to 5 job, and come to house to have a rest. Some others not – they will work for their-selves in their private time, even on weekend and vacation.
  3. Spending and investment. Some people prefer spending their money on luxuries. They will buy elegant clothes, go to parties and concerts. Some of them like alcohol and drugs more than the other…. and some buy gold, stocks, bonds, real estate, cryptocurrencies, and are not afraid to waste time on writing blogs, learning to record videos, or trying to start a side business.
  4. Luck. Some people just win, by coming into contact with influential mentors, or by getting a good client, who pays much more than average.

Is it fair to punish more lucky for their luck? Maybe… but is it fair to punish more disciplined people for their discipline? Or punish savers for their savings? Absolutely not!

And this is what socialism does. All the time.

For the sake of efficiency: road metering.

There used to be public unmetered water supply in our country. Everybody paid a lump sum (with the assumption of using “x” quantity of water every month).

Then, authorities have introduced water maters, and it turned out people only need half of the water previously assumed. Metering on the individual household level turned out to increase efficiency, and decrease usages, thus making the cost of water smaller for everybody but the moonshiners.

Then why do we have to only approximately calculate road use? We of course do have road tax in fuels, but that’s not an exact measure of neither miles driven, nor congestion created, nor pollution.

Miles driven are not calculated exactly via road tax, because someone with a more efficient car drives for less road tax paid.

Congestion is not measured, because fuel tax is not dependent on the road chosen, or the time of day chosen for driving.

Pollution also is not measured well, as there are more and less polluting vehicles, and driving in the city causes disproportionately more external health effects than country driving.

To better incentivise efficient road traffic, and lessen the public burden of subsidized driving, we should tax drivers of vehicles by measuring how they move trough the City. Instead of fuel tax, which is not just, we would propose recording license plates every time a car moves through a given road or crossing.

Will that be costly? Of course it will. Someone must build the system. But once deployed, it allows cities and states more efficient and just transportation systems, and more revenue, via the following mechanisms:

  1. Some traffic will switch hours. While rush hours such as 7:00-8:00 will still be occupied heavily, some people will be able to drive to work at 6:00 or 9:00, and save money in the process.
  2. Air pollution will at least be compensated. Vehicles with worse emissions will drive less, because it will cost more to drive them. Road owners (state or private) will be able to pay property owners in the vicinity for pollution damages.
  3. Country dwellers will fairly pay less road tax, as they only use highways, which are separated from inhabited areas. City dwellers will rightly pay more for driving and parking.
  4. Metering vehicle use allows road departments to raise more money. There will be less need for income tax, value added tax, excise tax and other unfair taxes. People will pay because they use infrastructure, not because they work or consume.
  5. It allows high-quality private roads to be built and maintained. Road owners will no longer be discouraged by “free” competition from the state (dumping).
  6. Bridges and other bottlenecks could be priced more. This will encourage ride-sharing, and public transportation, especially if heavy traffic is in place. If pricing is set right, it will also encourage cycling or walking.
  7. By strictly measuring traffic and traffic-relating pollution society will see roads as a profit and loss generating service… not as something absolutely necessary everywhere. It will promote living in denser cities by reducing cost. It will promote higher buildings. And most importantly, even if roads stay in the hands of the government, they will be seen more as a private firms, profitable if they attract customers, and accountable if their customers pollute too much with gases, particulates and sound waves.
  8. Pricing road traffic is a great chance for other means of transportation. It will promote railways, buses, or even automated inter-city gliders operated with electric glider winches… which too stand no chance if subsidized competition is in place.

So… if metering water could reduce it’s usage and cost, why not try it with public roads?

Environmental impact of cryptocurrencies.

Critics state that Bitcoin mining, being an energy hog, is a terrible thing to the global economy, because electricity is a vital resource that could be used for a better end… and because carbon emissions are not ethical, as they change the Earth’s climate unfavourably.

But let’s not forget the fundamentals of economics. Such a high energy consumption is only possible because of speculative value of cryptocurrencies. It’s value is derived from their superiority to traditional money and banking system:

  1. Political independence, payment channels which cannot be blocked by government, which promotes economic freedom and has potential to starve crony capitalism.
  2. Convenience, no need to transport money physically with use of heavily armored vehicles… no need to go to ATM to get cash. No advertising from Bank.
  3. No need for brick-and-mortar banks, no need to hire bank clerks, which is a waste human capital.
  4. Promotion of saving over spending. Potential ability to stop inflation, which in turn forces people to invest more into real estate, which costs much energy to build and maintain.
  5. Cost saving, because money can be cheaply sent worldwide. Of course Bitcoin network is a bit expensive now, but there are many alternatives to Bitcoin (such as Bitcoin Cash, Ethereum, Dash, Litecoin) with superior characteristics in terms of transaction cost… and potential to scale massively with no greater energy cost.
  6. Increased competition and access to global markets. Creative freelancers from around the world could now work for everybody in the global economy, just by using a computer. Private payment option allows an unprecedented freedom.

There are some drawbacks of course, which socialists and democrats like to point. Firstly, financial freedom allows people to freely support terrorist groups. But should that be the domain of blocking? In my opinion no… governments should rather inoculate people to dangerous ideas, educate, promote productivity and track actual bandits, than try to starve them financially. A criminal should be certain that he will get prosecuted in 100% of cases (because of cameras etc.) not blocked from having a gun and money.

Some say that trade sanctions are needed to promote a fair world, where rouge states don’t get to trade with the “noble” West, such as EU or NATO. But is that really an average Russian’s fault, that he or she lives under an authoritary government? Is this an African’s fault? No… rather I feel these people will behave nicer if allowed to trade and earn money by selling services to us. Starving people only promotes passivity and allows wrong systems to persist.

Then there’s a question of the environment. Firstly, the States that want to shut down cryptocurrencies have invested heavily in coal-powered generation themselves. They have subsidised energy, to let people run various industries, and then… if energy goes to Bitcoin they are upset about it’s environmental impact. Seriously? Better think of ways to account for CO2 and pollutants from the energy you produce. Higher energy price, ability to trade it freely, and demand from crypto miners can only help promote building of PV, wind and water-based generators. Energy market is not innovative partly because of administrative overhead of trading energy. Not because of lack of technical means of generating and storing them…

Energy will be even more sustainable, if you allow people to trade it between neighbors. Right now you cannot just sell electric current to a neighbor, or to a local factory. You need to sell it to a monopoly first.

And finally, energy usage will have to be more in proportion to transaction volume if cryptocurrency inflation decreases with time. Bitcoin has a cap o 21 million units, and there will be never more Bitcoins than that. Now it’s energy use is high due to the simple formula:

MINING REWARDS = VALUE * (INFLATION + TRANSACTION FEES)

But as soon as inflation decreases and only transaction fees drive miner’s rewards, energy cost will have to be in proportion to it.

But you ask, how about energy poverty? How about people that cannot afford some electricity? Well… they do have to pay for monopolies currently anyway. And they do pay consumption taxes even for goods that don’t have many adverse environmental effects. And they do pay for bank fees, if they have an account.

And they cannot just produce goods and services for a populace. I would like to have my relatively poor neighbor to cook some food for me. Or to sell me wine, beer and other drugs. Or even go to the local wholesale grocery market, and sell some fruit/vegetables on the street as they used to do in the good old times. But now they cannot. You can park hundreds of idle cars in the street, but if you try to sell something from a van without a license – you will get a fine. Especially if you don’t want to pay taxes for that sale.

They get a welfare benefit if they are really poor, but as soon as they earn some money, they not only must legally stop getting benefits, they will get taxed. Especially if they try to work as an independent business, they will have to pay relatively high social security contribution, regardless of the profit they have. Despite theoretically progressive tax system.

What a sad world, which fights merit and production, but promotes cronyism, idleness and inflation.

Economics of tree ownership under socialist regime.

Socialist states care for the environment, if private owners can bear the cost. Rightly they want to protect nature, but unfortunately using coercive means.

If you inherit a parcel with trees, or if you allow trees to grow, you cannot just cut them down. You need consent from your local authorities. Even if it’s quick and cheap to obtain, it’s still mandatory or you can get a fine for cutting down your own tree.

That’s because having a tree in the immediate environment is advantageous to the society as a whole. Trees protect people against dust and gases, accumulate water, regulate temperature, and allow life of worms, birds and other animals.

So it’s fair to incentivise tree ownership… but it’s not fair to punish people for getting rid of one’s private tree! A better approach would be to compensate those that own trees, because they are environmentally productive. But how can we do that without coercing the rest of populace to pay more taxes?

Simply by accounting for positive environmental effects of trees as dust/smoke collectors, and taking that money away from polluters. It will provide incentive to plant trees and clean the air, as well as incentive to mitigate pollution on the polluters side. It will also improve public health, and lessen direct damages to health, because dust (and money) will from from polluters to the owners of trees (instead of only from polluters to the owners of lungs).

Freedom to plant and cut down trees is always good. Biomass is a great source of energy. But disallowing someone to cut down a tree is invasion of property. Even if property is prettier due to this invasion… how would you feel being forced to exercise, or to a plastic surgery, or to collect trash from the streets?

I would feel bad… innocent people should not be forced to do anything.

I love diesel clouds behind me…

For quite a long time I’ve been advocating for non-aggression and compensation of environmental effects as a rule of law… for taxing pollution instead of income, and for spending less public money on public roads.

Unfortunately, as much as I loved freedom and good natural environment, the world doesn’t want to follow my advice. I was never compensated for eating less meat than average, for cycling on dangerous roads, or for using little electricity. My purely intellectual work was always taxed, so that farmers and miners could enjoy special subsidies and privileges. My state invests heavily in non-renewable energy, and nobody cares how much smoke does any particular furnace and vehicle emit.

Therefore… now I love heavily accelerating in my old diesel car. The harder I push the pedal, the more smoke it emits, and the better I feel. Why? Because people will not punish me for that. They will happily inhale my smoke in the name of neccessity, convenience and “greater good”.

I would love to be a bit more responsible but… some other moron can ride an old diesel car on public road so why can’t I do it? It’s “free” anyway. And nobody is accountable.

Small investments – in defense of capitalism.

The critics of capitalism rightly state that 1% of the population has most of the world’s wealth, and that owners of capital have monetary power to employ the working class, and then take away most fruits of their labor… cause the poor people are powerless to do anything other than work for the capitalists.

But hey, is that really the case? I think not, and the poor do have the power to change their lives… if they accept that wealthy people are wealthy for a reason.

Of course some rich people are cronies, that live of government’s support and externalize costs of their businesses to the society. But as the economy gets more sophisticated, it doesn’t neccessarily need to rely on one branch… and some of the seemingly monopolistic branches are fed by customers.

  1. Spend less than you make. That’s the crucial rule, that will allow you to put aside some money. It will also decrease the capitalist’s power, if you are able to avoid the charm of mass-advertising, and lets you choose what you will build with your money later. But in itself it is not sufficient.
  2. Work smarter, find ways to leverage your work, maximise it’s output and utilize it more than once. It starts with as simple steps as reading some books to specialize in one’s work and being better than that, to changing the employer once you gain practice if the existing one treats you poorly. Try placing yourself in the position of manager (if there’s a clear path of advance in your company and you trust it), or do something entirely different.
  3. Cut back on costly habits. A beer a day, which millions of average people drink, doesn’t seem like much, but it will decimate your already small savings. The same applies to smoking, going to clubs etc. Go work out and read a book instead.
  4. Cut back on TV, Facebook, blogs, YouTube and even Wikipedia. Choose quality content.
    While being informed and stimulated seems like a good idea, and is educational in general, it places you in the position of consumer of culture. And while you consume, you cannot produce. Meanwhile some wealthy people concentrate on producing more wealth.
  5. Live as efficiently as possible. Sacrifice bits of comfort.
    Not many poor people seem to care about the small savings or investments like energy efficient appliances. If the price of LED light bulb still turns you off, think about all the carbon emissions it will save, and the corresponding energy bill. If public transport fees or car costs bring you down, consider if you could live happily in a more cosy apartment, closer to the city center. It might seem costly to buy square meters at exorbitant price, but if you think you see some value in the city you live in, many people of your nationality will see it in the future.
    Maybe you’ll own a very, very small flat instead of a bigger one but hey, do you really want to pay mortgage, and heating, and tax, and transportation costs for something that large? Driving to and from work will take away at least an hour of your day so… it’s not worth it, however little you earn you’ll have less time for productive activities.
  6. Go beyond that, think like an entrepreneur.
    For sure you know something that could make your life, and the lives of people around you easier. Maybe it’s a service that you would happily use, and you know how to provide. Or a good which you would buy. Or some absurdity in the world, which could be fixed if a business got started, or if people used a product that doesn’t even exist.
    Than think again, and if it’s something that is legal, safe and you could do it… why don’t you give it a shot?
  7. Invest smart.
    There were many entities that change the world around us, from the established businesses (shops, cafes, barbers, hairdresses, florists, construction companies, mechanics workshops) to the technological disruptors (such as Uber, the Internet, cryptocurrencies etc.). Beware of tricksters and manipulators which promise you easy money in the things you don’t understand… but if you do understand some issues and therefore you think you are able to predict the future needs of the people, why not giving a business or investing a try?
  8. DON’T GIVE UP
    OK, some things that you will do will seem crazy and meaningless. Your friends and family might not believe in you, cause you might have some failed experiences. Maybe it’s not a perfect moment to dump your stable job but… if you feel that you can do something better than you did before, then do it! And please, be obsessed about reading and educating yourself in the right direction. It will pay sooner or later.