Financialization, and how to deal with it

Financialization is a process in which things ordinarily not considered tradable becomes a commodity that can be exchanged for money. This process has taken off in a big way in the west, and is the reason so many feel trapped in a system they don't like. Everything, it seems, is now regulated and taxed.

It used to be that a household consisted of one breadwinner and one stay at home parent. Nowadays, this arrangement is rare. Both parents have to be out working in order to make ends meet. The reason for this is that the state has traded their tax-base for money by the issuance of large amount of government debt. It is the ordinary man in the street that has to pay the interest on this debt through taxation, and not a penny of it is returned to us in the form of better services.

The biggest driver behind the financialization of our economy is the state, and the state is also the biggest direct participant. Once we realize this, we see that the most significant thing we can do in order to better our situation is to avoid the taxman. Key to this is to realize a few things about the tax system, and how financialization plays into it.

The state has now a tax on just about everything we do or own. However, there are still things of value that are not taxed. There's no tax on household activities. There's no tax on making good food for the family. There's no tax on time spent with the kids. Walks in the park, and a lot of other valuable activities are tax free.

The state's push against conservative family arrangements where one parent stays at home to take care of things isn't so much due to a hatred of conservatives per se, but because there's no taxes associated with the stay at home parent. A lot of value is produced, but none of it can be taxed. Hence, to the state, the stay at home parent is worthless.

Herein lies the clue as to how we best deal with the financialized state. Instead of buying things that can be taxed, we buy things that cannot be taxed. Instead of spending time on the acquisition of taxable product and services, we focus on things that cannot be taxed. We can for instance learn to cook like a pro, and thereby eat well for a pittance compared to a restaurant. Instead of a second home for summer vacations, we spend time in the local park. We can go for outings, even rent a cabin for a week, and still end up spending less than what we have to pay in taxes and fees on a summer house.

Once we realize the importance of reduced taxation, we also realize that going down from a 100% position to a 50% position doesn't mean a reduction of income by 50%. Progressive taxation hits both ways. Working 50% reduces net income by less than 50%, and the time freed up can be used to create value that cannot be taxed.

Quality time that cannot be taxed