The Austrians Monopoly Calculation II

Last time we visited this subject, we were after the minimal Austrian emergence of monopoly government. Our approach was to simply find the result, and skip the dangerous approach of getting there by philosophy. We found that under normal human assumption, the government emerges in the form of a sparse spectral decomposition of the government channel, and we investigated the rank two model.

We found that local communities desire the least amount of government needed and charged a per use fee, a flat tax. No further government was formed under the minimalist principle. But there arose a need for local communities to see the spontaneous need for some large government monopoly, and assumed this minimal government formed with a flat fee for each community. So far so good.

We found that local tax rates were adjusted by population growth and decline, all other things being equal, such that the rate for any community was r+M/p where M was the flat rate for central government services charge to the community, r the local government flat rate, and p the local population.

This is the minimal, sparse formation of the government channel under the minimal redundancy principle, the same principle that human agents use.

What happens when very wealthy individuals form small communities?
1) They have closer control over local government, and 2) they pay a higher per person fee to central government. They have no way out, if the wealth wants smaller local government, they end up with higher rates for central government. No way out, all domestic wealth lands in some local community. If the wealthy try to sneak wealth into a poor community then government emergence is no longer minimal, and Austrians become socialist.

The communities will band according to wealth, we get progressive income tax rates.

Sorry Austrians, it is your math, your stuck with it unless you want to plead ignorance. The other possibility is that the rich hire an economist to lie and cheat in order to get central government on the cheap.

Progressive tax rates will equalize the government channel and minimize it, no amount of bad math from Harvard, or terrible philosophy from Harvard changes the result.