As I shared in my last post, I see the current conflict in eastern Europe as a milestone in the United States government’s move toward a post petro-dollar world. The jury is still out on the Biden-Harris administration’s ability to map out the best route through uncharted waters where the U.S. dollar is no longer the world’s reserve currency or finds itself sharing that status with the currency of an emerging China. The first step the private sector can take in getting ahead of the U.S. government and helping direct a soft landing into the second half of the 21st century is by redefining the narrative on the role of the U.S. government.
The current narrative bought into by the electorate is that the federal government is a protector of individual rights and freedoms; inalienable rights of free speech and press; the freedom to choose their political leaders; the freedom to assemble and criticize government policy; the right to have a jury of their peers; and of other personal or commercial liberties. Maintaining these narratives is necessary on the part of the federal government if it is to get the electorate to buy in to what I deem as the federal government’s primary mission:
- To maintain the tax base;
- To maintain the physical and social infrastructure that facilitates and expands the tax base; and
- To define, design, and deploy money that transmits to domestic and global societies the underlying value (currency) of the U.S. government, a value created and supported by the government’s ability to coerce and extract taxes.
The private sector is charged by the federal and state levels of government to operationalize government’s primary mission. Labor is converted into a source for taxes when the private sector employs it.
The private sector accounts for and submits to the government payroll and income taxes derived from labor’s compensation. The firms that comprise the private sector also submit taxes to the federal and state levels of government, also contributing to the tax base.
The private sector employs human, financial, and natural resources to construct and deploy the physical infrastructure that facilitates the discovery, extraction, processing, and distribution activities necessary for getting goods and services into the hands of the consumer/electorate. The ability to efficiently move goods and services into consumer/electorate hands helps to encourage or incentivize the consumer/electorate’s compliance with taxation and laws.
Private social agents are primarily operationally responsible for maintaining America’s social infrastructure. Schools, churches, mosques, and families are the primary suppliers of narrative, philosophy, and teachings consumed by individuals. Unlike the commercial private sector that operates via state-issued license or certificate of public convenience, social agents, for the most part, receive their “license” from heritage, lineage, traditions, or other social customs. Where government attempts to supplant lineage, traditions, customs, or philosophies is where the trouble starts, but more on that next time.
The last prong of the mission, the definition, design, and the deployment of money is also carried out by the private sector, specifically the banks. The banks resell and distribute money by lending money to the consumer/electorate and business associations (firms).
I define “money” as the physical representation of the acknowledgment of the economic value you have generated for exchange with a counterparty. “Currency”, on the other hand, is your knowledge, data, or intrinsic value, that you put into generating economic value.
The private sector in assisting government’s navigation of the 21st century has to first acknowledge an inconvenient truth. The private sector is an agent of government. The private sector is the creation of a public policy called “capitalism.” As an agent, it advises the government on what the transactional portion of society is prioritizing. Also, as an agent, it should advise the government on whether policies government wants to pursue actually facilitates the government’s aforementioned mission.
The private sector must re-evaluate the narrative behind its and the government’s existence and roles.
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Disclaimer: The above is provided for informational purposes and should not be construed as financial or legal advice or as creating an agreement to provide financial or legal advice.