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The Trade Principle

Swimming Pisces

"Humankind cannot gain anything without first giving something in return. To obtain, something of equal value must be lost. That is alchemy's first law of Equivalent Exchange." ~ Full Metal Alchemist

Just about anyone who's studied elementary physics in high school is familiar with the Law of Conservation. The idea that things like matter, energy, and momentum are neither created nor destroyed, but simply transferred from one place to another.

It's sort of the first law of the universe apart from maybe the Law of Causality. Most things can be understood just from a simple, prolonged meditation on this one principle, even including the very existence of God and the creation of the universe itself. It explains the Natural Law, as well as those more abstract philosophical concepts like justice, karma, and markets.

Likewise, most people - though still far too few for my liking - are equally familiar with the basic idea of supply and demand. That the cost of something, whether we're talking in terms of monetary value or just an abstract notion of desirability, is proportional to the amount of that thing that exists and how many people want it.

It's sort of the first law of economics.

I have my own law of economics - what I've affectionately termed Dark's First Law of Economics. I'm not sure if I'm the first one to have ever come up with it (probably not), but it's basically a statement about human nature, incentives, and a tendency towards efficiency. It says that everyone seeks to maximize gains while minimizing costs.

Essentially, I hold it as a rule as sacred as supply and demand that:

Everyone always wants more for less.

You know this to be true at an experiential level. All else being equal, if the only difference between two things is that one of them costs more than the other you will most assuredly pick the one that is less costly. It's been my experience that many a moron will ignore the phrase, "all else being equal" and try to rationalize why someone would pay more for something, like maybe the more expensive thing is of better quality, but again that goes against the spirit of the rule.

It's something of a variation on the principle that energy always takes the path of least resistance.

Likewise, all else being equal, if two things cost the same amount, but one gives more net benefit than the other, you will always pick that one.

Because why wouldn't you?

Again, note I said, "all else being equal," because of course your mind is prone to rationalize that any difference in price must come with a trade-off of some kind. Typically, things that cost more are rarer, more heavily desired, and have all these extra perks compared to things that don't such as would justify the increase; but as a measuring device, my rule controls for all that.

Cost and benefit here doesn't just mean money either. It could just as easily be time, energy, physical, mental, or emotional strain, opportunity, power, relationships, principles, or whatever else you have to sacrifice to get something else.

In his Maps of Meaning lecture, Jordan Peterson does a good job describing the phenomenon of value systems as a way all humans view and interact with the world. It's a very good description and quite relevant to what I mean by value.

Karma operates in much the same way - a form of accounting of energy that adheres to the laws of conservation - and I would argue that our notion of money is simply a mundane version of this higher form of spiritual economics.

To obtain, something of equal value must be lost.

Value, of course, is relative. People trade for things because they value what someone else has more than what they currently have. They put forth effort towards things, expending time, energy, and labor to have things, do things, and be things in the hopes that what they wind up with will put them in a better position than where they started, leaving them more fulfilled and satisfied with their life decisions. They might even value the same thing differently at different times or in different circumstances as their needs and their environment change or for different reasons.

I'm sure you can think of many examples - gold is less valuable than water when you're in the desert and you're thirsty, for instance. All of this is still basic economics.

Now for my Second Law of Economics:

Nobody wants to share their own stuff,

but they'll happily share other people's stuff.

Sort of an Objectivist idea, I guess. I never read much Ayn Rand. Most of my knowledge of Objectivism admittedly comes secondhand from people like Stefan Molyneux and Yaron Brooks, but that sounds like something she'd say, right? If nothing else, it seems to fit the whole "virtue of selfishness," "greed is good," mindset.

George Carlin talked about this too. I simply view it as a product of my own observations.

No one wants to share their own stuff, because sharing implies taking a loss without gaining something back. It violates the Law of Conservation. But they're more than willing to share if it involves other people losing their stuff because they can only gain from that, or at least they can't lose ... in the short run, that is.

Remember that, to obtain, something else has to be lost, and vice versa. Karma's a bitch like that.

If you want an example of my Second Law in action, look no further than your nearest democratic socialist who wants a graduated income tax, wealth redistribution, and a heavy welfare state.

(Or if that offends you cuz you are one, some rich corporatist CEO looking for a golden parachute.)

Generally, the people who push for this sort of policy aren't the giving types themselves. They're just virtue signaling in most cases, pretentiously dog whistling to those around them that surely they must be good and virtuous people who are simply looking to help the less fortunate. They want you to believe they really care about the needs of others, regardless of whether or not their actions actually reflect a genuine concern for anyone's wellbeing. Yet, if you tried to raise their taxes or get them to donate to a privately-run charity that accomplishes the exact same goal, their pockets are suddenly empty, apart from the sneers and cries of outrage and offense they'll give you for suggesting they be the ones to actually give up something to help someone else.

The problem with socialism is that eventually you run out of other people's money to spend.

These progressive types have no qualms about asking other people to foot the bill. When it's someone else paying, suddenly sharing becomes a virtuous imperative. But when it's their turn, suddenly now everyone is an Objectivist who believes wholeheartedly in the virtue of selfishness. Suddenly everyone cares about property rights and limiting the power of the State, just like in the CCR song.

Of course, that doesn't just apply to them.

Remember, my First Law that says everyone always wants more for less. The capitalist entrepreneur is just as guilty as the progressive socialist. He or she doesn't want to waste their own time and money doing menial tasks, no matter how essential they are. That's the whole reason they became a business owner in the first place is to leverage other people's financial and human capital for their personal gain.

It's why we build robots, to outsource costs onto anything but ourselves.

That's not a bad thing implicitly. There is no moral judgment to either of my rules, it's simply an observation about how human nature works. It's just a tool. Morality comes into play when we examine how people use the tool.

The only difference between the capitalist and the socialist, for instance, is that the former induces, while the latter coerces. One uses free and voluntary exchange to contract, the other uses the gun of the State to compel, even if everything else about them is the same.

So one system is clearly better than the other, but they both follow the same two rules.


Essentially, everyone is a stubborn, selfish, lazy, spoiled brat. Sometimes that's ok in that it's not hurting anyone, but other times it stifles progress or the opportunity for greater personal gains.

People with nothing tend to have nothing to lose, and people with everything can afford to lose a little, so those people are less risk averse; but people in the middle tend to have the highest aversion to risk, because while it's true they might win big, they could also lose big. They cling fervently to what little they have because that's all they have, and they will forego things potentially getting a lot better for them because of a perception - whether justified or not - that things could also get a lot worse.

Note I said that there are times when it's justified.

Clearly, it's not prudent to bet the rent money on a lottery ticket because the odds are so astronomically against you. Likewise, it's not worth retreading things like Flat Earth Theory because the odds of that being true are so low it's not worth risking your reputation. There are plenty of ideas that are just stupid and should never be tried.

Like communism, for instance.

But most people stay poor - whether financially, socially, intellectually, physiologically, or spiritually - because they aren't willing to take any sort of necessary risk. The kind where, if you try, you might fail, but if you don't try, you'll definitely fail and such failure could be fatal, or at least unfulfilling.

How, then, do we break that perception?

There are many tools at our disposal, from education to comfort zone challenges to AB Testing, but I would like to propose another one I call The Trade Principle. You may have heard of this idea referred to by other names, such as progressive training or iterative thinking or comfort zone challenges. It's basically a system for making directional gains that are small enough and easy enough to do that you feel comfortable making them, knowing the risk you take is quite small. If things don't work out, it costs nothing to go back to the way things were, whereas if you are moving in an otherwise positive direction and things go well, you'll often find yourself able to go a little further, perhaps even a lot further.

Have you ever tried to take something out of a dog's mouth? What happens? They bite down hard and snarl at you, warning you to back off or else. If you persist in trying to take it away, what happens? It doesn't matter if you're their best friend and they love you otherwise, if you try to take something out of their mouth that they don't want you to have, they will bite you.

Depending on what it is and how hard you push, they might even bite you to death!

A dog is an instinctual creature. It's not acting based on reason, but on pure emotion. To them, it's personal because the dog perceives you as a threat. How could it possibly know otherwise? It's not a mind reader and you can't talk to it and explain what you're doing. A dog doesn't understand delayed gratification, it lives purely in the moment. The fact that you gave it a treat five minutes ago and then realized it was a mistake doesn't change the fact that, to the dog, you are now a hostile enemy trying to take said treat away.

I'm sure you've come across stubborn people like that too. If someone has a particular attachment to something, it's because they value it; and in some instances it may be because that thing either is, or is perceived to be, vital to their survival and wellbeing, so of course they would fight you if you try to take it away from them.

Bill Whittle talked about this in his video on entitlements.

Many people depend on them for their survival, so they don't care about the fact that taxation is theft or welfare is blood money. All they see is you attacking them. When they accuse you of hating the poor, the sick, the elderly, children, etc. it's because they genuinely believe it, because in their minds, you're a threat in as much as the dog views you as a threat.

How then do we deal with people like that?

The answer is, we offer them a trade. We give them something in exchange and frame it in such a way that persuades them that they value the thing we're offering more than they value what we have, so as to induce them to give it up.

Some examples would be helpful.

Let's say you have a small child with a dangerous object. Their natural curiosity leads to them want to explore things, so what happens if you try to take it away from them? They cry, right? So maybe you give them a toy they like to satisfy their curiosity as you remove the dangerous object from their custody.

Giving with one hand while taking with the other.

This also has the benefit of teaching them how to negotiate. That there is an expectation that when you get something, you have to give something up; but also that giving things up doesn't have to be hurtful, and in fact it could even lead them to something better.

Let's say you're a person who drinks lots of diet soda. You know that soda is bad for you, that drinking water is a lot better, but you still ingest all that diet soda because the taste satisfies your sense of instant gratification and to hell with the longterm consequences. We know that soda is deliberately engineered to be highly addictive, so even if you wanted to give it up, that's still hard because it tastes so damn good and your brain is overriding what little willpower you have.

Maybe you can't make the leap all the way from diet soda to water, but how about from diet soda to regular soda? It's generally better for you anyway, cuz of the excitotoxins in artificial sweeteners.

So you made that trade and your life is a little bit better, but you're still not there.

Maybe next step is to switch from regular soda to something like sweet tea and that's better still. Then you trade sweet tea for regular iced tea, but that's still got sugar, so you trade iced tea for juice and then finally juice to water.

Something along those lines, wherein a series of reasonable trades made over time gets you to your ultimate goal when you can't otherwise do it all in one shot.

My general view is that health and politics are not a matter of good vs. bad, but of gradients: good, better best, bad, worse, worst. You wanna be at best, but maybe you can't get to your ideal all in one shot, so you have a system in place that says you make a series of trades to put you in a better position than where you were. You make the best possible decision you can make and accept that until you feel comfortable enough to make another, and slowly but surely you'll make progress.

Welfare is another good example. Social security is often regarded as the third rail of politics, meaning you can't touch it without committing political suicide; and people often chant slogans like, "Keep your hands off my Medicare."

But why?

The answer is because, like the dog, the people receiving these benefits view you as a threat. You're taking food out of their mouth, so to speak, so of course they will lash out at you for trying to cast them out on the street and starve them. Of course they will throw a childish tantrum because they view they're being treated unfairly. And like the soda addict, we've become a society addicted to welfare, cuz who wants to suffer pain when they don't have to, regardless of how necessary it might be?

But the laws of mathematics tell us it is necessary for the long-term survival of our country that we end the welfare state, preferably sooner than later. The laws of mathematics tell us there are more people drawing from the system than there are paying into it, and so eventually we'll run out of money, which means these people will lose their benefits one way or another. The only question is, will it be a soft landing or a hard crash?

Obviously, if it's inevitable we're going down - and it is - we'd prefer a soft landing.

So how do we do that?

There are several possible solutions. One way would be to grandfather in those already receiving and say to them, "You paid into the system, you deserve something back." That tends to upset the younger generations who are basically subsidizing the old with the knowledge of not being able to receive in the future and who wants that?

Maybe instead of having the young pay for it, we simply stop the bleeding but divert funds from somewhere else and let it run its course. Marijuana taxes, for instance, or excess wasteful military spending. People would be less willing to fight you on repealing Social Security if they themselves won't take a financial loss for it. Again, recall my Second Law.

My preferred solution would be more along the lines of consolidating the entire welfare state into a single universal basic income. You tell people that they can get a guaranteed check every month, no strings attached, to spend on whatever they want, be it education, healthcare, food, drugs, or anything else, and in exchange, they have to give up the bloated, inefficient, wasteful, corrupt bureaucratic system we have now.

Put that way, does that sound like a hard sell? Give up something shitty to get something better?

I recently got into a heated debate with someone on Twitter. It started off as a conversation about Trump's remarks to John McCain over not being a war hero because he got captured. This person was outraged that Trump could insult the Senator like that. I pushed back, asking how they could defend someone who voted for the Iraq War and called for the bombing of Iran when you'd think a man who was captured in a bullshit war based on a false flag would know better.

Turns out this person was a single-issue voter.

They told me they were an epileptic who couldn't afford their medication but by the grace of Obama and his individual mandate. They liked that McCain supported the ACA and hated Trump for opposing it. I'm paraphrasing, but let's just say, it wasn't a pleasant conversation. I didn't appreciate their hostility towards me or their disregard for my rights in trying to use the gun of the State to compel me to pay for their problems; but I did have a great deal of sympathy for them, because I understand why they would act that way. They are literally fighting for their life and view Trump as a predator.

Sounds like a no-win situation doesn't it?

Well, after first conveying my sympathy for their condition, I pointed out all the policies Trump was working on that would lead to decreased prescription drug prices and reduced health insurance costs even in absence of the ACA. A form of trade, if you will.

Their main rebuttal was that reducing costs wasn't enough when they had been getting their medicine for free. Hard to argue with that, but it was still immoral.

About the best you can do in that situation is to use shame to change how they feel about what they're doing, fighting pathos with pathos. That just because you're sick and dying doesn't give you the right to initiate force on others. Like would you take a gun and go rob a rich person yourself just to save your life? Maybe, but I suspect a lot of people would see that as extortive. They'd prefer you just come to them and asked for help instead.

It's a hard problem to solve because you're again dealing with human life.

Holistic medicine happens to be a pet cause of mine, and I made the argument to this person that if people took better care of themselves, it would reduce the overall costs of healthcare such that they might not need government assistance to pay for it. We talked about various alternative treatments ranging from medical marijuana to chiropractics to diet and detoxing as avenues to try.

None of that really helped them in the moment, because of how deeply emotionally invested they were, but hopefully it at least gave them something to think about, that there were other possibilities besides drugs. I'm not a doctor, I don't know what their situation is, so that's something they have to investigate on their own. Hopefully the exchange also opened their mind to the idea that someone could be a Trump supporter while still caring about them as a person and still insist on enforcing morality.

Speaking of moral order, taxes would be another area in which you could use the Trade Principle to achieve directional progress.

As a libertarian, my view is that taxation is theft, extortion, and systemic oppression. It's the initiation of force, but I'm not a purist about it compared to, say, an anarcho-capitalist. I actually liked Trump's tax plan on the grounds that it was directional progress. To me, it's like the soda analogy going from diet to regular. Now he's talking about a second round of tax breaks, which is great. Going from regular soda down to sweet tea.

The next step from there might be to transition to a flat tax, then maybe we flatten all the taxes - corporate, sales, capital gains, etc. That would be the iced tea and juice levels. Then from there, maybe we make the finally leap and cut things down to either just a flat income tax paying for everything or just excises and imposts like we originally had.

Most libertarians and anarchists think we can just jump straight to the end without going through any of the intermediate steps and that's unlikely to work because people still view taxes as necessary to support vital services. They might be more inclined towards a series of trades, though.

How about the war on drugs?

Essentially, you have three camps arise around that issue. People who want all drugs legalized, people who don't want any drugs legalized, and those who fall somewhere in between.

Here again, some form of compromise might be in order. Most people at this point are ready for legalized weed though, so maybe we start with that and see how it goes. We can make the case to those still against legalizing drugs and say, "We'll keep everything else illegal for now, but just try this one."

We'll treat it like alcohol and keep it highly regulated for now. If that goes well, we can loosen up the rules a bit more over time, maybe extending to things like LSD and mushrooms.

Again, it's about reframing your ask to something more reasonable, because even though I'm a libertarian and would be in favor of legalizing all the drugs, all of them, a lot of people look at things like the opioid crisis or coke overdoses and shut down emotionally to any such notions. So we trade. Give us legal weed and you can continue to ban the harder stuff.

By this point, I think you get the idea.

The Trade Principle is about recognizing that people don't make logical decisions. They make emotional decisions based on their individual values and then defend them with rationalization. It's something we all do as human beings. To get what you want, you have to be willing to give up something else to create a win-win. Through a series of trading games, we can then make directional progress towards a better world.

Hopefully you found this helpful.


Speaking of trade, you might like reading my book because people that have all tell me they do. There's no commitment, you can read a free sample, just click the link. You can also support me on Patreon if you enjoy articles like this and want to read more. It really helps and I appreciate your generosity.

May you each find love, peace, purpose, happiness, and will in your lives.

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