Sapere aude! "Have the courage of your own understanding."
Kant adds: "This is the motto of the Enlightenment." This is found, in fact, in his Answer to the Question: What is "The Enlightenment"? of December 17841.
Despite its modern advancements, economic thought remains heavily influenced by archaic assumptions such as “that which is expensive is scarce”, that stifle rational analysis. This work argues that the alternative of an 'Objective Political Economy' is both a methodologically robust and politically viable solution.
Our most comprehensive dictionaries catalog the vast spectrum of human exchange. These interactions range from the symbolic—words following handshakes, gifts cementing occasions—to the foundational, where the exchange of intentions solemnizes marriages and contracts. We cultivate affinities through traded affections and rally around sports built on the exchange of a ball. Yet this tapestry also includes darker threads: accusations that fray commitments, and the professed necessity of exchanging blows by military and police. For many, politics itself is constituted by the exchange of promises for votes.
Amid this entire ecology of social exchange exists the distinct subset of offers made in return for money. Due to its profound consequences, both beneficial and harmful, this monetary domain has achieved a position of overwhelming dominance.
For the sale of any good or service, the legislator has established that monetary payment is non-refusable—and often mandatory. While a barter transaction involves no direct exchange of money, the monetary economy remains functionally identical to a system of universal barter. This is because all goods and services sold are ultimately, and exclusively, traded for other goods and services. This principle is an inviolable, universal law. Consequently, social exchange consists of transferable goods and services being traded against each other, a process typically mediated by money.
Now, the set whose only elements are these exchanges, including barters, possesses the remarkable property of being strictly formalizable.
Although these transactions could justifiably be termed "market exchanges," we adopt the more fundamental label of economic exchanges. This choice is methodological: it provides a sharp delineation within the universe of social exchanges, circumscribing those—and only those—that constitute the proper domain of the economy.
Gifts, taxes, and most thefts are also economic acts. The word "transfer" is well suited for their generic labeling, subject to three conditions, however:
Labeling an allowance a "minimum income" or "solidarity income" demonstrates how the confusion between transfers and exchanges is harmful. Receiving aid and receiving a job offer are never equivalent. Blurring this distinction is unfair to those who work to relieve the community of their burden. Income is one thing, a subsidy is another.
Economic exchanges and economic transfers, while both being economic transactions, are fundamentally different in nature. This is because only economic exchanges result in the creation of new economic wealth.