Apr 2, 2020, 2:17 PM
by James Krieger
(gold)
The satisfaction of preferences tend toward equilibrium in that the utility produced by the satisfaction of the marginal preference, ceteris paribus, never exceeds the cost of satisfying the marginal preference.
Rule of Law ensures equilibrium by prosecution (via negativa) in the event of externality i.e. the law ensures that all externalities are internalized such that the social-optimum emerges from the optimizing behavior of individuals.
Markets for goods & services function to ensure equilibrium in private-consumption of consumer-goods & by extension allocative efficiency in capital markets through the production of price signals–via positva production; whereas the market for rule & commons ensures equilibrium by incrementally suppressing the satisfaction of preference at the expense of peers & commons–via negativa elimination of externality.
(Smith was wrong. The ‘hand’ that guides the division of perception, cognition & labor is iron, not invisible.)
—CD—
Stated in P-law: Economics is a measure of the group’s success at suppression of irreciprocity with the rule of law.