Kinesian Economics:


There's a big difference!


NOTE: This is based on Kinesian (kin-eez-ee-an) Economics, the theory that work is the source of almost all economic value. Its name comes from Kinesiology, the study of human motions.

Kinesian Economics is not to be confused with Keynesian (Keen-zee-an) Economics, the theory that government is a major source of wealth. Keynesian Economics is named after economist John Maynard Keynes. Keynesian Economic Theory doesn't work, because it fails to consider work as the source of wealth.

Politicians often believe that if a person has money, he has wealth. That is not always true. Here are the differences between wealth and money:

The properties of money:

  1. Creation of money:
  2. Consumption of money:
  3. Expansion of money:
  4. Trade without money:
  5. Destruction of money:
  6. The necessity of money:
  7. The limitations of money:

The properties of Kinesian Wealth:

  1. Creation of Kinesian Wealth:
  2. Consumption of Kinesian Wealth:
  3. Expansion of Kinesian Wealth:
  4. Non-production of Kinesian Wealth:
  5. Destruction of Kinesian Wealth:
  6. The limitation on the supply of Kinesian Wealth:
  7. The necessity of Kinesian Wealth - a chain of necessities:
    1. The earth cannot produce enough food for the population without the work that farmers do.
    2. The farmers must be compensated for the work they do.
    3. All of the people must do work in order to compensate the farmers for the food they eat.
    4. The work done by the farmers, and the work done by others, produce the Kinesian Wealth necessary for the economy to work.
  8. The impossibility of creating Kinesian Wealth out of nothing:
    1. Most socialist and "living wage" plans rely on a law to force businesses to pay workers more than the wealth they produce when they work.
    2. Since a business cannot create wealth out of nothing, paying out more wealth than the workers create causes a net loss of wealth.
    3. Since the business loses wealth, it cannot possibly last very long. Once the assets are gone, the business folds.
    4. Since government cannot create any wealth, there is no source of wealth left to feed the people with.
    5. Eventually the system, instead of making things better as it promised, destroys all of the wealth in the country.
  9. More about wealth:

The interactions between money and wealth:

  1. Changes in the money supply do NOT change the amount of Kinesian Wealth. Instead, a change in the money supply makes each individual unit of money change the amount of wealth it will buy. If the money supply increases, each unit of money will buy less wealth.
  2. Changes in the amount of Kinesian Wealth do NOT change the supply of money. Instead, a change in the amount of wealth makes each individual unit of wealth cost a different amount of money. If the amount of wealth in the economy increases, each unit of money will buy more wealth.
  3. The amount of money in the world is a lot smaller than the amount of wealth, because the same money is constantly exchanged again and again during the production, sale, consumption, and destruction of wealth.
  4. The amount of wealth in the world is a lot larger than the amount of money, because wealth is constantly being produced, sold, consumed, and destroyed, while the same money circulates again and again.

Why individuals end up paying most business taxes:

Here is the chain of how business taxes must be passed on to workers and consumers:

  1. Taxes must consume Kinesian Wealth.
  2. Businesses do not by themselves produce much Kinesian Wealth. The workers the business hires produce most of the wealth produced by business.
  3. Since the business has very little Kinesian Wealth of its own to be taxed, the wealth needed to pay business taxes must come from either the worker who made the product (through lower wages), or from the consumer who worked somewhere else to create the wealth and earn the money to buy the product, or from both.
  4. The individual ends up paying the tax when he works at a reduced salary (because of business taxes reducing the amount available to pay workers) and also when he pays increased product prices (which include business taxes passed on to consumers).
  5. Most businesses MUST pass on all business taxes to consumers and workers, because the business has no independent supply of wealth from which to draw such funds from.
  6. So the workers, being the only major source of Kinesian Wealth, ends up working harder to pay all business taxes.

Why living wage legislation is an impossible dream:

The only way to make a living wage exist is to cut taxes to the point where both of these are true: