Some conversations from 20 or 30 years ago with people now passed echo through my head

GM its a beautiful day. Let's build!

Muslims need to convert to Christianity

I have no interest in the current discussion about shoving things in your ass

# A Systematic Tariff Regime Built on Menger’s Orders of Goods ## Executive Summary Tariffs administered at the **country level** create volatility and misallocate capital. A durable alternative is to **index tariffs to the economic order of goods** as defined in Austrian capital theory (Menger → Mises → Rothbard). Impose **the highest tariff on first-order (consumption) goods**, then **decrease the rate geometrically** for each more remote production order. This stabilizes expectations, anchors domestic final assembly, and preserves global competition in raw inputs without ad-hoc policymaking. ## The Capital Structure: Orders of Goods **Carl Menger, _Principles of Economics_ (1871)**: - **First-order goods**: directly satisfy wants (consumption goods). - **Higher-order goods**: inputs used to produce lower-order goods. The “order” is **distance from final consumption**, not “material refinement.” **Implication** - “Final products” (cars, phones, pencils) are **first-order**. - Inputs immediately upstream (steel sheet, display module, eraser tips) are **second-order**. - Inputs to those inputs (iron ore, machine tools, bulk chemicals) are **third-order**, **fourth-order**, etc. - The same physical good can belong to different orders depending on its role in a given production chain. > Terminology trap: colloquial “highest-order” often means “most refined/final.” > Austrian usage: **first-order = final**. This paper uses **Austrian terminology**. ## Policy Principle: Order-Indexed Tariffs (OIT) **Goal**: domestically anchor the stages closest to consumers (branding, customization, assembly, compliance, service), while leaving early-stage inputs subject to global price discovery. ### Core Rule Let \( \tau_1 \) be the statutory tariff on **first-order** (consumption) goods. For goods of order \( n \ge 1 \): \[ \tau_n \;=\; \tau_1 \cdot \rho^{\,n-1}, \quad 0 < \rho < 1 \] - \( \rho \) is the **decay ratio** (e.g., \( \rho = \tfrac{1}{2} \) = “halve the tariff each order back”). - Example with \( \tau_1 = 20\% \) and \( \rho = \tfrac{1}{2} \): - 1st order: 20.0% - 2nd order: 10.0% - 3rd order: 5.0% - 4th order: 2.5% - 5th order: 1.25% - 6th order: 0.625% **Interpretation** - **Maximum protection at the consumer frontier** (prevents pure labor-arbitrage importation of fully finished goods). - **Rapidly diminishing protection upstream** (keeps raw materials and basic intermediates globally contestable). ## Why This Dominates Country-Level Tariffs 1. **Stability**: Rates depend on **order**, not geopolitics. Planning horizons lengthen; CAPEX risk falls. 2. **Comparative Advantage Preserved**: Early-stage extraction/commodities remain subject to global competition. 3. **Value-Add Localization**: Firms gain predictable incentives to site **final assembly and finishing** domestically. 4. **Anti-Arbitrage**: Importing fully finished goods faces the highest rate; breaking them into assemblies merely moves them into higher-order categories with **lower** rates only if the transformation truly occurs upstream. 5. **Moral Externalities**: Reduces the payoff to late-stage offshoring that depends on wage suppression or weak safety regimes. ## Implementation Blueprint ### 1) Order Classification Engine (OCE) - **Input**: Harmonized Tariff Schedule (HTS) code, **declared transaction use**, and **bill of materials (BOM)** attestations where applicable. - **Rule**: Assign **order** by **minimum graph distance** from final consumption in a standardized **production network ontology**: - Create a directed acyclic graph (DAG) where edges represent feasible transformations from input code → output code. - The **order** of a code in a specific declaration equals the **shortest path length** to a first-order node (consumer sale). - **Ambiguity handling**: Many codes are **dual-use** (consumption **or** input). The **declared use** governs order, backed by audit. ### 2) Tariff Computation - Compute \( \tau_n \) via the **geometric decay formula** using the public parameters \( \tau_1 \) and \( \rho \). - Publish a **static schedule** (e.g., updated annually) to eliminate midstream policy shocks. ### 3) Compliance & Audit - **Order Certification** attached to each import entry: - Declared HTS code(s), intended use, and (where required) BOM role. - Randomized audits; willful misclassification penalties escalate superlinearly. - **Safe Harbor**: If a firm cannot or will not provide BOM attestation for a borderline item, default to the **lower** of two adjacent orders to avoid paralyzing trade, but retain audit risk. ### 4) Special Tracks (overlays, not overrides) - **National Security List**: Specific codes receive additive surcharges or quotas (separate from OIT logic). - **Externality Surcharges**: Measured carbon, toxic effluents, or forced-labor risk premiums—**additive** to \( \tau_n \). - **Development Preferences**: Time-limited abatements for partners meeting verifiable labor/environment thresholds. ## Worked Example: The “Pencil” Chain - **1st order**: Finished pencil → \( \tau_1 \) - **2nd order**: Eraser tips, ferrules, slats, graphite leads → \( \tau_2 \) - **3rd order**: Rubber sheet stock, aluminum strip, kiln-dried lumber inputs, graphite/clay rods → \( \tau_3 \) - **4th+ order**: Natural rubber latex, bauxite, roundwood, crude minerals → \( \tau_4, \tau_5, \dots \) Result: assembling pencils abroad just to avoid domestic labor costs **faces the maximal rate** at re-entry; importing earlier-stage inputs for domestic finishing faces **progressively lower** rates. ## Addressing Edge Cases **1) Multi-branch inputs** A chemical may feed fuels (short chain) or high-performance polymers (long chain). The OCE assigns order based on **declared downstream branch** for the shipment. **2) Capital goods** Machine tools are higher-order inputs. Under OIT, they receive **lower rates** than consumer goods. If they are imported to make first-order goods domestically, the system works as intended: cheaper capex raises domestic productivity. **3) Services and IP** Services, design files, and firmware are mapped as **non-tariffed** but tracked for **origin and value-add** to inform separate tax or credit policy (R&D credits, IP repatriation incentives). **4) Assembly “fiction”** Screwdriver-assembly to game the order is neutralized: the imported subassemblies still enter at their **true order**, and the **final import** of a fully finished good triggers \( \tau_1 \). ## Governance & Parameterization - **Public parameters**: \( \tau_1 \) and \( \rho \) are the only levers. For example: - **Industrial baseline**: \( \tau_1 = 20\% \), \( \rho = 0.5 \) - **Strategic tightening**: \( \tau_1 = 25\% \), \( \rho = 0.6 \) (slower decay) - **Liberalization**: \( \tau_1 = 15\% \), \( \rho = 0.4 \) (faster decay) - **Update cadence**: Annual, with five-year glidepaths published to stabilize investment horizons. ## Expected Outcomes - **Domestic re-anchoring** of final assembly, certification, customization, after-sales support. - **Upstream openness** limits cost shocks and preserves comparative advantage in commodities. - **Reduced policy volatility**: rate schedules follow the capital structure, not politics. - **Improved moral posture**: less reliance on late-stage labor arbitrage; more incentive to automate domestically. ## Objections **“Value-added tariffs already exist.”** OIT does not track value shares; it tracks **causal distance**. It is simpler, harder to game with transfer pricing, and aligns with how production actually unfolds. **“Orders are fuzzy.”** Yes; but fuzziness is **bounded** by the DAG and declaration. Audits and penalties make gaming costly, while safe harbors keep trade flowing. **“Won’t consumers pay more?”** Some categories, yes, by design—**consumption goods** pay the highest rate if imported finished. The policy’s purpose is to make **domestic finishing** relatively more attractive. ## References (for further study) - Carl Menger, _Principles of Economics_ (1871), Part I: Goods; higher vs. lower orders. - Ludwig von Mises, _Human Action_, on the structure of production and time preference. - Murray N. Rothbard, _Man, Economy, and State_, on capital, stages of production, and orders of goods. ## Appendix: Compact Specification **Order Assignment (per shipment)** 1. Identify HTS code(s). 2. Determine declared use and nearest feasible consumption nodes in the production DAG. 3. Set order \( n \) to the shortest path length to a consumption node. **Tariff Calculation** \[ \tau = \tau_1 \cdot \rho^{\,n-1} \;+\; \text{(security surcharge)} \;+\; \text{(externality surcharge)} \] **Audit Triggers** - Inconsistent declared use across consecutive shipments. - Abnormal jumps in order classification for the same importer and code. - Missing BOM attestations for codes with known dual-use ambiguity. **Publishing** - Annual OIT Schedule with public DAG snapshots and parameter values. - Five-year glidepath for \( \tau_1 \) and \( \rho \).

Some Bitcoin Core developers are pushing to expand OP_RETURN to allow 100kB arbitrary payloads. Their case is delivered less on technical merit than on condescension; an air of superiority mistaken for authority. But *arrogance is not authority*. Bitcoin’s ethos is truth over personality, consensus over coercion. When developers lean on posture instead of principle, they spend down their social capital. And when that capital is burned on arbitrary, unfruitful objectives, it erodes their legitimacy as leaders. Leadership in Bitcoin isn’t inherited by title, it is preserved through stewardship. Those who mistake arrogance for authority ultimately remove themselves from authority altogether. View quoted note →

Appendix L: Abortion > The root of the abortion controversy is not modern science or medieval theology. It is this question: **When does nefesh begin?** View article →

I shouldn't have eaten that thing today...

We are wandering into a meat grinder. View quoted note →

Fed chair Powell won't move on interest rates until Sept 17th. This is bullshit. Massive missed opportunity.