Any government must rely on taxation to finance its expenses or its squandering. Being the biggest monopoly, a government has total discretion on how to collect tax, without any need for justification. However, as government’s think tank, economists should offer some advice so as to make the collection more rational and convincing. But, are they capable of doing that? There are two tax collection principles: the ability one and the benefit one. The theory for the ability one is called tax ...

Karl Marx set profit to zero to obtain some maximum interest rate and called it profit rate. He further argued that interest rate must be lower than profit rate. That is Marx’s interest rate theory. This book disproves Marx’s profit rate, and hence his interest rate theory. It also advocates abolishing internal rate of return.

Abba Lerner was a very prolific economist, and his views were sometimes very thought provoking, but are they also correct? This volume includes three of his theories: The first is about how communist countries can catch up free market economy; The second is about how to improve trade deficit; The third is on how to pay import tariff. For the first question he recommended subsidy; For the second he suggested depreciation, except for a catch; For the third he claimed that paying by import or...

Merger & Acquisition can enlarge a business to take advantage of the so-called economies of scale, but there is another conspiracy. This book teaches you how to raid a company, poor or rich, and even your own company. But if you don’t want to be a raider, do you still buy or keep those stocks?

Modigliani and Miller (1958) advocated more borrowing for higher rate of return. This paper uses FinTech to update their theorem. It also proves that FinTech’s multiplier is more magical than the deposit one.

Auction aims for highest possible price, but economists made two wrong extensions. Some thought the price can be indefinitely increased according to demand; some recommended discount to the successful bidder. The former mistake stems from the misunderstanding that the vertical line is a supply; while the latter is actually the result of too much supply (it is not auction any more). When some scarce resource is auctioned, it may bring in revenue for a government. But, if the price is set to...

Unlike other economists, David Ricardo has produced some innovative theories. His most famous theory is the use of comparative advantage to explain international trade; his rent theory is also widely applied, but his most influential theory must be his explanation to the “diamond-water paradox”. How influential? Cost supply, tariff, protectionism, and communism all stem from this explanation. If this statement sounds blaming, rather than appreciating Ricardo, that is the purpose. Likewise,...

Economists like to brag about their demand and supply theories. For example, they claim there is a law of supply, with a positive relation between price and quantity. But can they derive such a relation? Some think utility or indifference curve can derive one, but I discover that most of the time they derive only a negative relation. Perhaps, some combination of the so-called income and substitution effects may make up a positive result, but then it is not a law (a law must be one that hol...

These two products first appeared in a story told by Adam Smith more than 200 years ago. Smith used them to explain something. What is that something? I denote it momentarily by p*. I use a symbol, rather than a name, for names are misleading. Even Smith was misled, for he could not decide to call it value-in-use or value-in-exchange. Below are other misleading names or theories around p*.Is p* is a price or a cost? Can we determine p* from some cost, or vice versa? Can we exploit ...

This book reproduces and corrects Hotelling’s “Stability in Competition”. His setup is contradictory and incomplete: he uses monopoly theory to explain competition, and fails to include production cost. This book introduces supply function to the two competitive firms, to come to the same stability conclusion. It also disproves Hotelling’s exploitation strategy, and offers a more profitable alternative.

Lagrange calculus claims to be capable of solving consumption and production problems. Although it does derive a negative input-demand relationship, this book points out that the results are inconsistent with the pre-ordered output or input, and cannot ensure output maximization or cost minimization. This book further proves that simple algebra or geometry can produce the desired results, making this kind of calculus completely redundant. Finally, this book proves that Lagrange calculus is...

Like most others, traffic economists also treat a vertical line for the capacity of a road. When traffic flow approaches the vertical line, there will be congestion, while the line itself is a gridlock. This book re-runs the traffic mathematics thoroughly, to derive some surprisingly new understanding of traffic-flow and capacity, which then help economize road size, prevent congestion, move cars smoothly and swiftly, object toll and speed control, and redefine the purpose of traffic.