35 posts tagged “freedom”

BLOG NOTE/EDIT: I have decided to delete the old version of this entry (Sep 22) and repost a new edited version. I did not proofread the last one that well. I am a dummy. My apologies. The revision of the old entry into this new one, I hope, has been substantially improved.

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“Is government really necessary?”
“Is government our protector . . . or our destroyer?”

Such fundamental questions are rarely asked or thought about, if ever. It is an unmentionable subject. Since it radically departs from majority opinion, it must be rejected out of sight. But, as history should teach us, conventional wisdom is often dead wrong. One day, for example, Albert Einstein came along to overturn conventional wisdom in the subject of physics. He overturned Newtonian Physics. Instead of seeing space and time as rigid absolutes on a stage with an 'absolute' frame of reference, Einstein demonstrated by upholding two axioms which consist of the invariability of the speed of light (from all reference points) and the so-called general principle of relativity (i.e., all frames of reference are 'equally' valid, so to speak, for those traveling at a constant velocity), that space and time are relative concepts that must be bent to make those two axioms hold. The stage of physical reality was turned upside down! (If I recall correctly, he wanted to call the theory the theory of invariability to display the invariability of light; not the theory of relativity.)

Relativity is a radical thing to think about. (And much enjoyment comes from contemplating it.) But this does not give us reason to reject it; anymore as one should reject thinking about a libertarian society (a stateless order), another radical concept. The point is that conventional wisdom so often is shown to be incorrect by a minority, while the majority are stubborn and unwilling to change easily. Science has past through major stages in often this way, with one giant leap after another. One group in the minority of political economy is the "Austro-libertarians." They subscribe to the Austrian school of economics and are libertarians (paleolibertarians), or anarcho-capitalists. Walter Block, the author of Defending the Undefendable, is an example. Hans-Hermann Hoppe, Lew Rockwell, Thomas Woods, Robert Murphy, are some others.

By default people accept government as a necessity of life. They cannot conceive of any other order. (Orders, by the way, that have existed in the past close or even very close to libertarian principles.) Such taboo questions are hammered and molded out in government education camps. And forums are not given to such topics.

Anarcho-Capitalism

But one must be careful in defining and defending a libertarian-stateless society. It does not mean a world with zero laws or rules. Neither does it mean that all property is somehow collectively owned by everyone, where money and profits disappear. (An absolute ludicrous absurdity propagated by commie-anarchists.)

Generally I do not like the word "anarchist." To most people it just means someone who believes in chaos or some form of collective communism. This is why the great Murray N. Rothbard used the term "anarcho-capitalist" to distinguish it.

Other terms for anarcho-capitalism have been floated about, such as: market anarchism, natural order, radical capitalism, private law society, etc.

Here is what the great Lew Rockwell has to say on the subject:

Power and Market by Murray Rothbard

The term anarchist is mostly used to mean someone who believes that if the state and law are gotten rid of, all property would become collectively owned. It was the great insight of Murray Rothbard that this is not the case: private ownership and the law that support it are natural, while the state is artificial. So he was an anarchist in this sense but to avoid confusion he used the term anarcho-capitalist. This doesn't mean that he favored somehow establishing a capitalist system in place of the state. What he said is that capitalism is the de facto result in a civilized society without a state. Has this position made advances? Yes, but not so many that we can use the term anarchism without causing confusion. If the purpose of words is to communicate, I'm not sure that the term does that well.

As to my own views, I do believe that society thrives best without a state. But I'm with Rothbard, Nock, Molinari, Chodorov, and others who believe in law and private government, such as we find in corporations, housing subdivisions, and church hierarchies. So if by anarchism we mean a society without law, I'm completely against that idea.

[The following is a partial summary of The Market for Liberty. It also contains some of my own thoughts and/or reflections that I have added. There are some other topics in the book that I do not cover in this summary, so you will have to read the book yourself. It is available at Amazon. You can also download it, for free, here (pdf) at the liberty loving Mises Institute. It is a wonderful book for its limited focus.]

The Market for Liberty

A good beginner's book that exposes government as an unnecessary evil is The Market for Liberty by Linda and Morris Tannehill. Its focus is on how market's produce order and security, which makes this book, a great way to start thinking about anarcho-capitalism. It is not completely a rigorous book, and has areas of pure speculation, but it is an essential book to read, and will help to open one's eyes to a degree to which one cannot be so instinctively dismissive.

(For some source of disagreements, see the end of this blog entry. In particular, their view of radical individualism and the lack of any emphasis of the importance of community or social intermediate institutions. But if one leaves these things aside---be they important---, it is a outstanding book.)

Ayn Rand's philosophy is inserted into the book, but here it is used to argue against even the statism that Rand promoted.

But... before us libertarians get accused of being unrealistic utopians, you must understand that we do not see a perfect world even in anarcho-capitalism. Man is what he is: imperfect. There will always be evil men. No one denies that. But what we propose is something that will minimize the evils and maximize the goods of the world. This is based on private property and capitalism. It rewards good and punishes bad, as to the extent man allows.

Linda and Morris Tannehill say that overwhelmingly people are dissatisfied with the current political world. Youth in particular are unsatisfied. But before we can try to alter the world for the better we have to understand man. We must recognize what makes men most happy and what the requisites are to accomplish that.

Libertarians believe in a society that, write the Tannehills:

is based on one fundamental principle: No man or group of men----including any group of men calling themselves “the government”----is morally entitled to initiate (that is, to start) the use of physical force, the treat of force, or any substitute for force (such as fraud) against any other man or group of men.

Statists believe that man can be molded into whatever they want. Ultimately it will always lead to practical failure because, as Linda and Morris write, man does have a nature. There are natural laws. Futile it would be to make-believe that gravity can be changed, as it would be to change the natural laws of man: that is, of self-ownership and property.

Our authors say that life requires expending energy and making choices. Sustaining life is not a given to man. He must act. Only an individual in question can expend energy, and only he can make choices in his own life. To make choices requires the use of reason and good judgment. Rational judgment must be used in the making of individual choices. Clearer judgment generally leads to better outcomes, but the initiation of thinking can only come from the given individual. It starts with him. Just as sustaining one's life is not inherited, this is also true with rational judgment. This one must learn in life and, to do this, the individual must exercise himself in this development. For man to think, he as an individual must exercise the thought process.

He must have the freedom to do this! It is necessary for man to grow and learn. Statists of the left and right try to diminish this in one form or another. And, it seems to me, whatever area the government takes over, only lessens man's overall ability in that area. We could be talking about economic rationality or (yes, even) moral rationality. The more the State takes over these functions, the less man will be rational in these individual functions. Socialism in economics and socialism in morality must be rejected.

Thus, say the Tannehills: "This means that no man can successfully run another man's life." To find happiness requires one to individually seek it. (Who but you will make you happy? It starts with the individual.) We must also suffer the consequences of our actions, just as we gain the enjoyments of successful actions. This is required to learn and grow.

Society must harness this and allow man to pursue bettering himself without others controlling him by the point of the gun. He must enjoy the fruits of what he earns. When those are taken, they are taken by someone who has not earned them. The mugger has taken them by coercion. One that must act in accordance to a majority gang or government by the threat of physical coercive force----in violation of private property rights----is to put men in the position of slavery.

They reason that a complete laissez-faire society is possible because it corresponds to the nature of man. This is why it is attainable. We do not have a free society because people have accepted that it is "both proper and necessary for some men to coercively rule over others." The great conflict of freedom versus slavery, our authors say, is expressed through the battle of the free market versus government.

What is the free market? Here is what they write...

The free-market system, which the bureaucrats and politicians blame so energetically for almost everything, is nothing more than individuals trading with each other in a market free from political interference. Because of the tremendous benefits of trade under a division of labor, there will always be markets. A market is a network of voluntary economic exchanges; it includes all willing exchanges which do not involve the use of coercion against anyone.

Regulating the market is "people control," as the Tannehills so correctly state.

When politicians and so-called economists speak of “regulating the market,” what they are actually proposing is legislation regulating people----preventing them from making trades which they otherwise would have made, or forcing them to make trades they would not have made. The market is a network of trade relationships, and a relationship can only be regulated by regulating the persons involved in it.

Prices do not arrive out of nothing. They arrive from sellers and buyers. There are two sides of the equation, so to speak. Government forces people to act differently then they would otherwise act, if it sets up such a thing as a price control. If this were not the case, then the government law would not exist or need to exist in the first place. Government intervention invariably causes people to act not in their interests and causes loss in their freedom.

As the authors tell us in The Market for Liberty, there are those that want to control people and believe that government should have this power.

Statists must then believe that the government knows better than people----than individuals. Because they want to take freedom away from them.

Linda and Morris Tannehill refute this:

1) You, as an individual, know better than anyone, especially someone far away, to run your own life.

You may make mistakes in your market dealings, but the bureaucrat’s isolation from direct and immediate information about your situation and his lack of a strong personal interest in your affairs absolutely guarantee that he will make a lot more and bigger mistakes, even if he’s honestly trying to help.

2) Those to be regulated "against their interests are a part of the very public which is supposed to benefit from those governmental controls."

Advocates of government regulation usually accept the idea of imposing some losses on those who are regulated, but they fail to take into account the fact that those losses will inevitably diffuse throughout the economy like ripples spreading in widening circles over a pond.

The market is not some tangled up mess. It is actually very orderly. Instead of politicians judging what should and should not be made, the free market allows consumers to decide. Due to its expansiveness and flexibility, it is not just restricted to please the majority of people, but it also fulfills the endless desires of specitaly items and services to the minorities that demand these specialty things.

Government---An Unnecessary Evil

What is government?

Government is a coercive monopoly which has assumed power over and certain responsibilities for every human being within the geographical area which it claims as its own.

A few have argued that government could (somehow) exist without taxation. Under this scenario it would supposedly be non-coercive. This is faulty and muddled. Government exists as a territorial monopolist, be it a democracy or a dictatorship. It bars open competition with its functions, and to govern it must have some governing functions over a given territory, and must protect this status with the use of coercion. Hence, governments are and always will be coercive institutions. It must use force in order to prevent a free market developing in the areas it has chosen to claim to be under its sole responsibility and control. Such things include roads, mail, courts, police.

"Checks and balances" do not work. The problem with statist reasoning here is that these so-called checks and balances are part of the very institution that is meant to be limited! And history shows that such things do not work. The United States being the primary example. It was an experiment that failed.

"Further," writes the Tannehills, "a position with even a small amount of power over others is attractive to men who want to wield power over others." Since bad and evil men will always exist: Which is better? Voluntary relationships or dictatorial relationships? And, as our authors say, who will be more inclined to be attracted to the use of power? Certainly not an honest or moral man. Gosh, just take a look at the creeps in office today.

To maintain its existence, governments must use force:

The more areas within its boundaries a government seeks to monopolize . . ., the more repressions it will have to use against its citizens, and the more bloody and violent these repressions will be. The more areas outside its boundaries a government seeks to control (that is, the more imperialistic it is), the more wars it will have to engage in, and the more prolonged and destructive these wars will be. . . . Wars and repressions are inevitable so long as governments continue to exist. The history of governments always has been, and always will be, written in blood, fire, and tears.

They also argue that government's operations will be "arbitrary and, therefore, without reason. Any institution which is not a part of the free market" is "not subject to the rules of the market, must be set up and operated on the basis of arbitrary rules and thus cannot be just and reality-oriented." Under statist control, there is no check to see if its operations are reality-oriented. In a free market institution, what you see are input-and-output costs. You see profits-and-losses. This is what guides private market activity. All things being equal, it always pushes the allocation of finite resources to their most productive uses. (That is to say, this is what its tendency will tend to be.)

A businessman has to please people. He earns wealth by bringing wealth. He does not force anyone to buy his products or services. He must convince people to voluntarily come to him. At the same time, he must be aware that others may enter the field of competition. This helps keep him in check to provide the best product or service that he can. He knows a better guy can come to town to out compete him. But government does not convince individuals to voluntarily come to it or anything of the sort. (Stop paying your taxes, and see what happens.) It is based on coercion. And government does not have, and cannot have, competition.

Even a government (somehow, mysteriously) limiting itself to just "protecting" its citizens is still dangerous, and contradictory. How can this institution----by its very nature one that violates men's life, liberty, and property---protect us? It first must mug us and then protect us!? Secondly, how much "protection" must it give to its subjects? The justification of "protection" could justify a massive Leviathan State. (For example, government could argue that its increasing invasions into our properties are "justified" because they need to "protect" us from terrorism, and hence justifying a massive government. This is why "limited" statism is a false idea.)

The question Linda and Morris Tannehill ask: "Who will protect us from the governmental 'protectors'"?

A Free and Healthy Econ

Invariably one question that comes up by some left-liberals and some conservatives is: "What about the poor?" Well, what about them? Just because one would, in a truly free market economy, have to buy X, Y, and Z to which was previously and seemingly available for "free" should be turned on its head:  What about the products they now have to buy on the market? Because there are poor people does not justify that these goods be nationalized.

Left-liberals often get irrationally angry by mentioning this, but private charity would not just go away. (Right now, for example, there is more private charity that leaves the U.S. than what the government spends on foreign aid. Although, foreign "aid" really is in support of foreign governments and not people.) In a free market, private charity would increase. As has been documented time and again, when people have more money they give more money to charity. A fact that many leftists would rather ignore. Another area that many left-liberals like to ignore is how the "war on poverty" has just increased poverty. They continue to want to wage their wars with governmental schemes, but they have only made the problems even worse. More meddling has only increased it. The laws of economics say that this has to be so by statist intervention. However, unlike government's top-down approach, private charity is astronomically better. It does not distort the market by subsidizing more poor.  It tries not to reward people for being where they are, facilitate dependence, or whatnot. Those really in-need are looked for and those, who are capable of helping themselves, would be cut loose as unworthy parasites. It is quite the opposite from government so-called "charity" or "welfare." (What is charitable about charity by the gun? Welfare is not moral, but immoral and disgraceful.)

One interesting thing in particular that Linda & Morris Tannehill discuss is "market" monopolies versus coercive monopolies. Besides the "obvious" fact that, as has been discussed before on this blog, no such thing as a market monopoly exists on a truly free market, is how the authors indirectly attack the concern some people have when it comes to the possibility of coercive monopolies developing in anarcho-capitalism. The thing these concerned people fail to take into account is that such activities are very expensive. There is always a threat from new rival competition on the market. Even large companies need to stay cost efficient to "stay on top." Once they fail to do this, the market will penalize them.

Compare this to government protected and created monopolies and cartels. The market is not allowed to penalize them. Unfortunately the higher you go up in the business world today, the more likely government has created laws to protect them from competition. This, in fact, is the very reason for all of today's regulations and controls on the market. It is not in protection of consumers or us "little people." Mr. Lew Rockwell is right by saying that politics is a rich man's game. It is indeed.

Now to go back to the Tannehills, the moment a "market" monopoly applied coercion, consumers would react along with other companies and entrepreneurs. The given company would dry up from the expenses of such an activity (i.e., engaging in the very activity) and from the reaction. Under market conditions there are always rivals and potential rivals. Anti-market (i.e., coercive) activity is punished by the forces of the market place. In addition, the development of super-super sized companies would be riddled with calculation problems placing natural market limits (see above link).

Property----The Great Problem Solver

Government has no right to force people to pay taxes. An owner of a property is the owner --- not the renter to the government master.

Because a man must use his time----which is part of his life----to acquire, utilize, and care for property, he has a right to own and control that property fully, just as he has a right to fully own and control his life (so long as he doesn’t use it to coerce any other man). Any form of property tax or regulation denies the individual’s right to fully control his own property and, therefore, his own life.

Material property can be possessed "by producing it, by exchange with others, as a gift, or by claming an unowned value."

Claims made on land property can and will become open to dispute between men sometimes. This is why a market of arbitration services would come into being to hammer out land-property titles. It is open entry and competition that will excel these agencies to be as fair and efficient as possible.

Businesses in a free market would take over this function, since it is a salable service. These companies would keep records of titles and would probably offer the additional service of title insurance (a service already offered by specialized insurance companies today). Title insurance protects the insured against loss resulting from a defect in the title of the property he buys (as, for example, if the long-lost niece of a deceased former owner shows up and claims the property by inheritance). It would substantially reduce the problems of conflicting claims, since title insurance companies would be unlikely to insure a title without first checking to make sure there was no conflict.

Homesteading or "mixing one’s labor" with land is arbitrary to prove ownership, they argue. It is not absolute. This is a reason why these arbitration and insurance companies would be so vital. Improving and transforming a given land in some way will of course help one's proof that they are the owners. But it would not in itself prove ownership.

Private property ownership creates a wealth of new possibilities, if only government got out of the way. Lake bottoms would be an example. Why cannot they be privately owned? Off-shore drilling show that they can.

Another area that would be turned into private property would be public property. As the Tannehills write, there is nothing "public" about public property. It is still controlled and "owned" by the government, but "owned" illegitimately and unjustly. For this reason it must be open up to private claims of ownership.

Society that switched to full private property ownership would solve many problems. Bums and other unwanteds or disruptors would be forced to live on the edge of society, obtain residence and help from other voluntarily agreeing individuals, or civilize themselves in the productive economy. Privately owned streets and sidewalks by private companies would have an interest to provide good security. They would thus prohibit "drunks, hoodlums, and any other such annoying menaces, hiring private guards to do so if necessary."

Pollution problems would also be cut down. Actual measurable pollution in one's property (damaging one's property) is trespassing. Natural resources would also be used more efficiently. Environmentalists concerned with earth's resources fail to see that allocation of scarce resources requires market activity. It is the market that uses resources to their most efficient use: both short and long term. Capital stock ownership, unlike governmental or public ownership, gives a long-run incentive for good and efficient use.

Arbitration of Disputes

"A governmental judge depends on political pull." --- versus --- "A free-market arbiter depends for his livelihood on his skill and fairness at settling disputes."

Society needs law and order, no doubt. One with no rational arbitration of disputes would produce a chaotic society.

It is, however, a myth that government is the only way to provide law and order. Competition always improves efficiency and accountability. This does not change with the arbitration of disputes between two or more individuals. Under a free market, specialization would occur for particular kinds of disputes. These arbitrators with these specialized skills and knowledge would be far better than incompetent governmental boobs who have no such knowledge of specialized subjects.

For illustration pretend a "simple" contract dispute occurs. Two individuals that have some (title-property) contractual relationship would probably have an agreement, in the contract, to go to disinterested third party arbitration company X (which is in the business of being disinterested or unbiased in the competitive market!) if they ever got into disagreement over the terms of the given contract. And in so going to arbitration X would be bonded by contract to abide by its decision. It is also possible that they would decide to go to more than one agency.

Those who needed arbitration would thus be able to reap the benefits of specialization and competition among the various arbitration agencies. And, since companies must compete on the basis of lower prices and/or better service, competition among arbitration agencies would lead to scrupulously honest decisions reached at the greatest speed and lowest cost which were feasible (quite a contrast to the traditional governmental court system, where justice is often a matter of clever lawyers and lucky accident).

Arbitration agencies would employ professional arbiters, instead of using citizen-jurors as governmental courts do. ... Professional arbiters would be highly trained specialists who made a career of hearing disputes and settling them justly. They would be educated for their profession as rigorously as engineers or doctors, probably taking their basic training in such fields as logic, ethics, and psychology, and further specialization in any field likely to come under dispute. While professional arbiters would still make errors, they would make far fewer than do the amateur jurors and political judges of today. Not only would professional arbiters be far better qualified to hear, analyze, and evaluate evidence for the purpose of coming to an objective judgment than are our present citizen-jurors, they would also be much more difficult to bribe. A professional arbiter who tried to “throw” a case would be easily detected by his trained and experienced colleagues, and few men would be so foolish as to jeopardize a remunerative and highly career, even for a very large sum of money.

Justice is an economic service. It deals with labor and scarcity. Instead of unqualified citizens becoming jurors, professionals and specialists would develop and compete with each other on the open free market. Those that are the brightest and judge fairly would get a following of customers and would make a good salary.

Private insurance companies would develop to help prevent contract breakers. They would indemnify losses of their customers who were victimized-------that is, who were robbed by someone who broke a contract in the case of debt. It be these companies that would put enormous pressure on those who do not fulfill their agreements to pay their bills. Credit history is an example of how credit card companies try to avoid irresponsible people. Such systems would develop when it comes to those that cannot be trusted in dealing with. There are powerful market incentives for these systems and for law and order in general.

Protection of Life and Property

Man owns his life. This gives him the right to defend that life from aggression. He also owns his property possessions. This gives him the right to defend them.

Pacifism is an anti-human, anti-life doctrine. It asserts that one cannot defend himself from aggression. He who does "sinks to the same level as the attacker." This is to make the line between self-defense and an attacker on the same level. It blurs completely right and wrong. A society of individuals that embraced pacifism would let loose criminals.

Reasoned men defend themselves. But more than self-defense is needed and demanded by people. Just as the division of labor makes possible doctors, so too would it be opened up for the production of private protective services. (We are not "atoms"! If we were, no division of labor or society would exist.) Such hired agents would have all the rights that you do----no more or less.

Some may disagree, as the Tannehills write in The Market for Liberty, and say that the use of force is fundamentally different than all other market transactions. That it cannot be handled by the market and so must be handled by a government. But, say our authors, this thinking "springs from a failure to distinguish between initiated force and retaliatory force." [emphasis mine] Force for retaliatory or restitutory reasons is in protection of man's liberties----in protection of the free market.

A market phenomenon is a willing exchange of goods and/or services which does not involve the use of coercion by the parties to the transaction against anyone. It is true that initiated force is not and can never be a market phenomenon because it acts to destroy the market. But, retaliatory force not only does not act to destroy the market, it restrains aggressors who would destroy it and/or exacts reparations from them.

The free market would provide the very best of protection. Like any other business, they would have to offer the very best services at low cost or go out of business or lose their customers to other more efficient protection agencies. This competition would help keep these companies honest, efficient, and cost competent.

All of these are the incentives that government does not have and can never have. Government has no such incentives. Police rarely are preventative of crime. They show up after the fact. Do not help recover loot. Penalize the victims. (They, not the criminals, have to pay part of the bill via taxes!) Worse still, they do not provide protection but try to "protect" us from ourselves! Police go after victimless "crimes" more than genuine crimes. They ban things that are contra to individual actions. By coercively and monopolistically banning things like drugs and prostitution, they create dangerous black markets. These black markets create an atmosphere of crime, which would otherwise not be there. Thus, instead of protecting us, police create more crime and danger. They make us more helpless and defenseless in a more dangerous environment.

On top of that, they make individuals ever more vulnerable and weak by taking away all means of self-protection. In many locations one cannot protect oneself with a gun because of government imposed law. Imagine this happening with a private agency! Who would ever agree to hand over all of their means of self-defense to a private-defense company and then also sign over their very life to be a slave to it!?

The vast majority of the functions, the Tannehills write, do not deal with genuine defense and protection. Today's system does little to nothing to prevent crime. Private defense companies, on the other hand, would provide genuine protection. They would want to prevent crime, as much as possible. After all, it would make them more wealthy. Here are some of the things they might do...

Since the main aim of defense service companies would be to protect their customers, their primary focus would be on preventing aggression. They would furnish guards for factories and stores, and men to “walk the beat” on the privately owned streets. They would install burglar alarms with a direct connection to their office in both businesses and private homes. They would maintain telephone switchboards and roving patrol cards and perhaps even helicopters to answer calls for help. They would advice customers who felt themselves to be in danger on the most efficient and safest protective devices to carry in their particular case (from tear gas pens to pistols) and would offer help in obtaining them. ... Besides these more ordinary services, each company would strive to develop new protective devices that were better than anything its competitors had . . . which would lead to tremendous frustration for would-be crooks.

These private companies would also be held responsible for their actions. Instead of police being shielded, private companies and private police must redeem and be held responsible for any acts of aggression or brutality.

As many other libertarians construe, a free society would have insurance companies helping to prevent violence. It has been reasoned or deduced that there is a strong tie or connection between insurance companies and law (security). People, of course, have such an interest for such business institutions to exist. But insurance companies would too because more stability means greater production and profits. The better protected their customers; the better they are off as well.

Instantly these companies would redeem their clients in case of damages due to aggression----similar to fire and auto insurance are issued and used. Since they would be in the business to make profits (to please customers), they would want to promote good protection. Customers that are better protected will be less likely to be aggressed upon. Such damage costs that do occur will thus be limited. The better protected, the more limited those costs for the insurance companies and the more profits. Such insurance companies will furthermore promote a tendency for family households and communities to increase property values and development.

It is "[t]his close affinity between insurance and defense" that would provide a check against coercion. "Coercive acts," as they write, "are destructive to values, and value-destruction is expensive for insurance companies." --- These are major points, and points that one cannot so easily or so simply dismiss. And this goes many times over for those individuals who already subscribe to some free market principles. Market principles apply across the board because they work.

Just as other products and services behave on the free market, the economic service and production of security too "constantly moves toward a situation of maximum order and productivity."

Dealing With Coercion

Man that commits a genuine crime does not do so against "society," but to an individual or to a group of individuals. Vengeance, say the Tannehills, is not justice. It creates a double loss: for the victim and the criminal. Instead, the criminal should be forced to pay (reparations) for all of the damages he has caused, as far as possible.

Private insurance companies would instantly redeem their clients, as their contract spells out. For example, if a car was stolen, the company may give the victim a temporary car for the time being. The company would gather up all evidence it can and go after and find the thief and car. If they caught the car and the criminal, they would take the car and get the criminal to pay for the expenses of getting the car back. If the car was damaged, they would get the criminal to pay for the damages and expenses of the company to perform this. Etc. He also would be fined additionally for any other kinds of losses that he directly or indirectly brought upon his victim.* The criminal might disagree with the expenses. He would presumably (but not a requirement) belong to another insurance company. The insurance companies would have both the parties go to a third party arbitration service.

[T]he arbitration agency’s service would be the rendering of just decisions, and since justice is the basis on which they would compete in the market, the arbiters would make every attempt to fix reparations at a fair level, in accordance with market values. For instance, if the defense company had run up an excessively high bill in apprehending the aggressor, the arbiters would refuse to charge the aggressor for the excessive expense. Thus, the defense company would be forced to pay for its own poor business practices instead of “passing the buck” to someone else.

A possible protest someone may have is that an innocent man may go down by someone richer or whatnot. One must, however, keep in mind that cronyism is just as likely under the current climate, but it is more likely now because the court systems are monopolistic versus competitive. As long as people demand services that are fair, as most people do today, such concerns will be minimized in a free market. Competition is what will keep them in check. For example, a company could watch its neighboring competitor and advertise if it does something (intentionally or unintentionally) bad.

A further guarantee against the possibility of an innocent man being railroaded is that every individual connected with his case would be fully responsible for his own actions, and none could hide behind legal immunity as do governmental police and jailers. If you knew that a prisoner put your custody to work off his debt could, if innocent, demand and get reparations from you for holding his against his will, you would be very reluctant to accept any prisoners without being fully satisfied as to their guilt.

The criminal will also have to suffer consequences of increased discrimination against him. An insurance company would increase his rates. His "credit history" (see above), so to speak, would isolate him pushing him (giving him a incentive) to fix his act to a civilized man.

There are things, true, that cannot be replaced or judged as to the monetary value. "To demand that justice require the impossible is to make justice impossible." Something destroyed or killed may not have a direct monetary value, but this does not disprove the reparations system of justice, as our authors reason.

The highest possible limit on the amount of reparations is, obviously, the aggressor’s ability to pay, short of killing his incentive to live and earn. The lowest limit is the total amount of economic loss suffered (with no compensation for such non-exchangeables as anxiety, discomfort, and inconvenience). The reparations payment must be set somewhere in the broad range between these two extremes. The function for the arbitration agency would be to aid the disputants in reaching a reasonable figure between these two extremes, not to achieve the impossible task of determining the monetary value of a non-exchangeable.

Through the competitive free market, such things would be eventually standardized to the market’s configuration to please customers. Language and grammar need no dictator-----law does not either.

Each reparation claim would be a complex combination of compensations for losses of various kinds of exchangeable and non-exchangeable values. For example, if a hoodlum beat a man and stole $100 from him, the aggressor would be required to pay not only to return the $100 but also to pay the victim’s medical bills, his lost earnings, compensation for pain and suffering, and reparations for any permanent injuries sustained. . . . Each reparation claim is also a highly individual matter, because the destruction of the same think may be a much greater loss to one man than to another. While the loss of a finger is tragic for anyone, it is a much more stunning blow to a professional concert pianist . . .

Murder too would be dealt with. Obviously, the murder would be dealt with those that are connected with the deceased victim, such as the family. (The same above reasoning applies.) But what about a person who cannot be so easily tied into connection with other individuals? First, one's insurance company would want to go after such an individual. (Plus the public would demand that they do.)  But what if someone did not even have such an insurance agency?

[T]he aggressor would still owe a debt . . . In a free-market society, unowned wealth [such as the land property that the victim owned] would belong to whatever person first went to the trouble of taking possession of it. In regard to the debt owned by an aggressor to the estate of his victim, this would mean that anyone who wished to go to the trouble and expense of finding the aggressor and, if necessary, proving him guilty before professional arbiters, would certainly deserve to collect the debt. This function could be performed by an individual . . . or by a defense agency or an insurance company. Insurance companies would be most likely to take care of this kind of aggression in order to deter violence and gain customer good will.

Rectification of Injustice

Depending on the criminal in question, one might be able to act rationally enough to pay his debt to the victim in payments while working in normal conditions. Others might have to be forced into paying back their debt by going to a "debtors workhouse." They (not the victims) would have to pay the expenses of living there and the transportation back and forth to work. The level of security would depend on the given criminal.  "[S]ince no arbitration agency could afford the reputation of sending aggressors to a debtors workhouse where there was ill treatment of the inmate" foul play would be minimized far more than they are now. (Just think of the rotten conditions that today's government manages them. It's socialism in action.) Secondly, what these companies are looking for is for the recovery of losses they have suffered. They want to redeem their losses as quickly as possible. They would be crippling that possibility by mistreatment.

Such a system would also lower the "gains" any criminal was trying to make. Not only would he have to pay his debt back, but also that of arbitration and any kind of losses that the victim consequently suffered as a result of the initial aggression. (*Respecting and deriving property rights also implies that the criminal should lose his rights to the extent he has taken them away from his victim. How far this would principle would be used would be worked out in the competitive market, but it would be an underlying principle. See Rothbard's Ethics of Liberty.)

Because it would be in the insurance company’s interest to have the aggressor’s reparations installments as large as possible, it would have him confined to no greater degree than his own actions made necessary, since closer confinement means greater expense, which means less money left for reparations payments. Thus, it would be the aggressor himself who would determine, by his character and his past and present behavior, the amount of freedom he would lose while replaying his debt and, to a certain degree, the length of time it would take him to pay it. Furthermore, at any time during his confinement, should the aggressor-debtor show himself to be a good enough risk, the insurance company would find it in their interest to gradually decrease his confinement----and excellent incentive to rational behavior.

What about a guy that commits small acts of robbery? Like the Tannehills write, if he got caught, he still would have to pay for things like arbitration or the detectives. (*See above.) And, perhaps even more importantly in a case like this, he would lose his reputation. This would make him isolated, weak, and vulnerable. No insurance company would do business with him unless he tried to fix his act and, if he did, he would have to pay high rates because he would be such a liability.

It may be objected that some men will attempt to take advantage of a free-market system of dealing with aggression. This is true, as it is true of any other social system. But the big advantage of any action of the free market is that errors and injustices are self-correcting. Because competition creates a need for excellence on the part of each business, a free-market institution must correct its errors in order to survive. Government, on the other hand, survives not by excellence but by coercion; so an error or law in a governmental institution can (and usually will) perpetuate itself almost indefinitely, with its errors usually being “corrected” by further errors. Private enterprise must, therefore, always be superior to government in any field, including that of dealing with aggressors.

Utopia is impossible. Mistakes will happen-----that is life. Just as government judges can make mistakes, so too could private ones. Again, the fundamental problem and limitation for governmental management is there exists no market competition to increase their efficiencies or cut their mistakes.

Warring Defense Agencies and Organized Crime

Would not "anarchy" and chaos break out because there is no ultimate judge? There are several problems with believing that. Many assume, the authors write, that libertarianism would be like two (or more) governments competing with each other. It is incorrect to believe this because governments are coercive territorial monopolists. When they get into conflict with each other, it is eliminative. That is, only one can stand in controlling one territorial area.

As said earlier, under libertarianism one can respond to physical violence and, if necessary, retaliate to receive stolen loot. This is always true under a free market system. Under statist conditions you cannot do this, and you obviously cannot get back loot stolen from government itself.

Any defense companies that were to enter organized crime would be handicapped by the forces in the market place. Unwarranted aggression is costly. It is expensive. States can externalize the costs on people that must be forced to pay into it. This is not true under the market. People would withdraw being a customer to such a criminal organization. They would withdraw their funding of it. As long as there are some rational people that do this, aggression of this nature will be limited. This cannot happen in a society governed by government. It thus would make a free society less war-like. (I myself would never claim that no "wars" would never occur, man being what he is. Just like monarchical wars are better than democratic wars, stateless wars would be preferable to state wars. Likewise this is the same for frequency.)

Other companies would be on the lookout to isolate an aggressive company and when/if necessary retaliate against it if it aggresses against their clients. Insurance companies would withdraw their support and have their customers avoid any affiliation with the outlaw company or those that support it.

Furthermore, people that work in such an aggressive company would be more likely to quit, otherwise they would have to pay the consequences of their actions, just as those "higher up" would also. Compare this to the government's police or soldiers; they are protected from brutal aggression in so many cases. Unlike "relativists," libertarianism does distinguish between aggressors and combatants or nonaggressors and noncombatants. This gives the network of insurance companies such an advantage over states.

The Tannehills call crime a form of parasitism: it can only live off the productive. And so in a completely free market society "in any long-range contest between looters and non-disarmed producers the weight of wealth and power must be on the side of the producers." The reasoning from the authors explains why wars would be much more limited. It is also why a huge large gang could not exist or easily exist in today's numbers in a free society. The large gangs today are promoted by the government by creating dangerous anti-market black markets. Government also promotes bad neighborhoods by subsidizing them contra good neighborhoods.

"The objection that a tyrant might take over is actually a devastating argument against government."

Foreign Aggression

Would a libertarian (anarcho-capitalist) society be helpless to an attack by another government? They answer that with a No.

Threats of nuclear, biological, or other "WMDs" are a real threat, of course. But even "defense" by government cannot assure protection under these kinds of attacks. It is also unlikely that a government would use weapons of mass destruction on a free territory. All governments, even the most despotic ones, depend on popular support. This popular support can range from passive acceptance to full-blown worship of the State. Attacking a free territory, a non-interventionist society which has not engaged in aggressive activity, is extremely unlikely to win support with the public. Any attack would be much more likely to be conventional.

A government that wished to take the territory over or control it by a puppet government would wish to instead occupy it with troops. But it is this that would give the free people a tremendous upper-hand. There exists no central government to takeover and control. Where would the aggressive state attack? The aggressor would be in a Vietnam (or Iraq) situation. Even an inferiorly armed population can beat an occupying force. History provides an abundance of examples. Private groups win over government ones. (It is when we speak of conventional wars between one state and another do we see a clear victor.) And, due to the fact that these private groups will have developed on a competitive and always unifying free market to help provide law and security, these groups will be much stronger than anything we have seen. Moreover, people in a free society would be far more armed than they currently are today. They will be ready.

Families and large businesses would want insurance and protection from foreign aggression. When it is felt that the chance of aggressive attack is high, people would invest more in insurance and protection. We can only speculate on what this may entail. It may mean several missile defense systems, for one. It may mean insurance coverage and incentives for building better infrastructures. The possibilities are endless in competitive conditions when men are free to specialize in the division of labor, and when the bulk of the people have adopted libertarian ethics, which is the prerequisite of a free society.

'Freedom's The Answer. What's The Question'?

Libertarianism, property understood, is a "radical" concept. This is true. Someone just stumbling into The Paleo Blog would almost certainly respond negatively, at least at first. That is completely understandable. And someone hearing this for the first time probably has dozens of questions. For myself, the more I read and study economics, history, political philosophy and studies on the economics of the production of security (defense), the more I get convinced.

I do not believe someone's journey can start and end by just reading The Market for Liberty. (Nor could it end with this entry!) This is why I recommend people to research more. Chaos Theory [pdf] by Robert Murphy is good company with the Tannehills' book. Rothbard's Ethics of Liberty and For a New Liberty are too very important in this field.

While I myself have disagreements with The Market for Liberty, I give it my high praise. If you keep an open mind, it might just radicalize you into a anarcho-capitalist.

For a technical note, I agree with their view that some of the libertarian principles of an "absolute" theory of justice (that appears in The Ethics of Liberty) cannot solve everything. So I agree with Tannehills on that. I also agree, then, with Robert Murphy, and his two essays in Chaos Theory too, then. (Although, my view is somewhat in the "middle ground.")

I disagree on a few parts with this book. One of which is their view of radical individualism...

People forget that the State has taken over the features of the social and cultural intermediate institutions. By doing that, atomized individualism occurs. So in a free society, these (voluntary, "market") institutions would reassert themselves. A major source of private law would come from them. Community would develop in a free society. Voluntary social hierarchy, like in business, would exist. I find it somewhat destructive not to talk about such things. Maybe it is a Ayn Rand thing(?), I don't know. And here it is where I do not blame many traditional conservatives for looking badly at anarcho-capitalism. It is not family-church-community that is artificial; it is the State. When we substitute the State to replace the extended family, for instance, it only calls for its destruction. The "loose individual" is created-----a point that the late conservative Robert Nisbet constantly and relentlessly hit on and shown.

"Nation," and I use this term loosely, too is not entirely artificial. It would just take on a different meaning in anarcho-capitalism. Obviously, different parts of the world have different cultures and languages. These are natural outgrowths. A nation is an outgrowth of extended families to clans to nations. Is a "national" identity important? To a certain degree, yes. After all, a division of labor needs the glue of communication (language) to be diversified and complex.

See: A Moral Imagination to a Diabolic Imagination / Government’s Brutal Attack on the Family / Culture, Literature, and Private Communities / Speaking of Left-Libertarians / Joe Sobran on The Age of Nonjudgmentalism / Ideas, Consequences, and Libertarianism / Culture - Social - Language - Religion Ties Matter

"Most people, writes Murray Rothbard, including most political theorists, believe that once one concedes the importance, or even the vital necessity, of some particular activity of the State — such as the provision of a legal code — that one has ipso facto conceded the necessity of the State itself. The State indeed performs many important and necessary functions: from provision of law to the supply of police and fire fighters, to building and maintaining the streets, to delivery of the mail. But this in no way demonstrates that only the State can perform such functions, or, indeed, that it performs them even passably well."

Read Here. (And Listen Along.)

Law and order was not always through government and statism. A difficulty that arrives for libertarians is to try to have people think about other possible social arrangements. Thinking about the possibilities of a stateless order, which is the full expression of libertarianism, is too much for most people to even consider. They cannot see beyond the present social arrangement, as if it were the only one that existed and could ever exist.

Take, for example, Old Rightist Frank Chodorov in his book The Rise and Fall of Society, where he quotes and examines Judges 17:6 where the Bible says; "In those days there was no king in Israel, but every man did that which was right in his own eyes." Authority and judges were there, though. Law existed. Tradition and custom helped hammer them out. It was a conservative order. But these private authorities did not have the "power of coercion." This order lasted four centuries. As nomads and tribes started to settle down, "sheepherding was giving way to agriculture." The economic order changed. But then, two emergencies, says Chodorov, occurred during this time. First being that the Philistines "beaten them roundly in battle" and the second being people "lost faith in their leadership." According to the Bible, they "turned aside after lucre, and took bribes and perverted judgment."

It was because they had forsaken the rigorous tradition of their forefathers, with its insistence on self-reliance and personal integrity, that they had lost the victorious touch which carried them from Egypt to the outskirts of the Promised Land; the breakdown of the Judge system could be traced to the same lack of self-discipline. Therefore, said Yahweh, give them what they ask for [a king], but as a parting shot you might “shrew them the manner of the king that shall rule over them”; and tell them also that when they realize their mistake it will be too late to regain freedom: “The Lord will not hear you in that day.” This is an interesting comment, seeming to stress the point that when a people put their faith in a State, rather than themselves, there is no way for them to remove the noose from their necks.

So a kingdom was set up. Conscription and (limited) taxation was introduced.

Chodorov continued:

One could go behind the returns and make out a case against these revolutionists: perhaps they constituted a newly arisen landowning class and hoped to solidify their position under a kingship. More likely, fear had entered their hearts, as is usually the case when a people accustomed to success are faced with adversity, and they were quite willing to swap freedom for the promise of subservient security. The search for a demigod is inherent in the human makeup; fear of the problems of life tends to weaken self-reliance and to encourage belief in a deliverer. Faith in political power is a comfortable flight from reality.

The adoption of a government did not help matters...

From the very beginning of the royal establishment the troubles of Israel multiplied. There was the usual spate of wars with the Philistines, with varying degrees of success; internal dissension, heretofore rare in the experience of the tribesmen, became common. Some followed Saul, others revolted against his rule; more exactly, they resisted the establishment of those institutions which Samuel had warned them would come with a king. But, as Samuel said, there was no way of regaining freedom once the State had made its appearance, and the Judge was soon on the lookout for a new deliverer. . . .

Later came the rise of David and Solomon. Chodorov says that one of the lessons to be learned from this is that the acquisition of political power creates the impression for the ruler (or the one seeking to rule) of having "a surpapersonal quality and to become in itself . . . a shine for public worship." The ruler acts and rules as if shielded from the consequences of his actions.

As the king was first adopted here, people still had some concept of freedom. There was some resistance to expansions of power. The propaganda of the king being ever wise and supreme takes time.

As his [the king’s] quest for power reaches beyond his purview, as it always does, he finds it necessary to delegate some of his power to and share his prerogatives with a supporting oligarchy----military, ecclesiastical (or intellectual) and, in time, commercial or industrial groups which lend themselves to his purpose in return for the special privileges he grants them.

This is exactly what Solomon did. He dressed up his temple so that the "kingship [had] an aura of omnipotence" and tied naturally arriving authorities in his pockets. Leviathan needs ideological support, after all.

Rehoboam institutionalized heavy taxation.

The designation of taxation as a yoke is a nice piece of biblical directness. A yoke is worn by an ox, a beast of burden, which by nature is incapable of claiming a property right in the products of its labors. It follows that when a human being is deprived of that right his status approximates that of an ox, and if taxation takes all he produces beyond that needed to sustain life (the wages of an ox), it can rightly be called a yoke.

Debates between Democrats and Republicans in the mainstream media are subterfuge. It is largely a distraction from the more fundamental issues. It divides men up and pins them against one another into some kind of binary, partisan debate of "Republican good" and "Democrat bad" or vice versa.

And it feeds on emotions. Perhaps it is just a sad fact of human nature to become emotionally attached in a partisan way to "one's team," so to speak. Watching political debates is often like watching a debate between two sports fans of opposing teams.

Emotions are so strong, also, because man has invested so much of his energy into the political world. With a democratic and super-centralized government micromanaging society in a multitudinous of ways, men invest less and less of their energies in voluntary civil society and more and more of their energies into political plunder. Surely, the upshot of this is a degeneration of men as they put more effort to develop their political personalities.

Against such pusillanimous and daft men is to be a "radical." To be radical, in its etymological sense, is to strike at the root; it is to boil things down to their essence. To be radical is to see things for what they really are; it is to ignore the thought police and the current taboos. The only thing that politics today promotes is the status quo and the ignoring of giant problems, such as the current monetary system. Such problems become so big that men become blind to them. It requires a man to step back, see the big picture, and to analyze. Apparently, the traits to do this most men don't have, as they are conditioned by public education and their boob tube. The masses don't think; they follow current trends and current elites.

So, as a replacement for getting caught up in the trivialities of the daily political circus, we will be looking at more fundamental issues in a radical way. However, because of the fragility of today's faulty monetary system, this subject will become increasingly important in open debate in the coming years. This concise overview of some of the issues concerning money and politics is written for those who can rise above the common man. It is only those who can lead that shape future direction. If future conditions go the way they have been going, then we can expect much financial trouble ahead. It is those who are prepared for such conditions and who understand what brought about those conditions that can lead society in the correct direction.

This essay is appropriately enough dedicated to the Remnant.

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Money and Politics

I.

The most important thing to understand, as M. Rothbard would say, is that money is just a commodity. In this sense it is no different than any other commodity on the free market. It exists with a certain finite supply and there exists a definite public demand for it. The difference is that this particular commodity is most often used as a general medium of exchange. Men use it so as to participate with others in trade and division of labor. It is not independent of the market (or have a "neutral" affect on the market), but is derived from it as a solution to overcome the many problems and limitations of a barter (non-money) system.

Why is barter filled with problems and limitations? Imagine Bob has good "x" and Mike has good "y." Bob wants "y" but Mike does not want "x." In this case Bob is stuck. No direct exchange can take place. This is why indirect exchange develops. Bob starts to think about how he could get "y." He could run all over town to see if someone has "y" and wants "x." He could also ask Mike what he desires and would be willing to trade "y" for. Say Mike answers "z." Bob could then, using this indirect method, look for someone who has "z," buy it from him, and then sell it to Mike for "y." Bob would then value "z" only insofar as it facilitated a trade with Mike. But in any case a double coincidence of wants still needs to occur. That is to say, for Bob to accomplish his objective, it will only happen if and only if he finds someone who is willing to trade for "x." This is a very disorganized and inefficient system, as we can see. Another problem that can often develop is a problem of indivisibility.  Say that "x" is an object that cannot be divided. Bob this time wants "b," "c," and "d." Say that he finds three people that offer these things separately. Again, Bob is in trouble.

In a barter economy it is almost instantaneous, as we can reason based on the analysis of the above paragraph, that men will be trading via indirect methods. This is what sets into motion the adoption of money, i.e., a generally used medium of exchange. For wanting to engage in many trades, entrepreneurial men look for goods that are highly marketable. These are goods that are greatly desired in the community. These goods have a high demand as a consumer good. But these entrepreneurial men value the acquisition of these goods as just a facilitator of trade. This adds a new "layer" of demand for these goods. In turn, this increases their marketability even more. An accretion of men will thus shift to this commodity as a medium of exchange. In turn, the marketability will go up even more. This process is what brings to life moneys that are used as general and universal mediums of exchange. The problems of barter disappear. Practically all trades start to take place with money. And owing to this development of money: more interactions between men can and will take place; all men will have a common "store of value;" and all men will have the ability to calculate monetarily their finances.

The incipient purchasing power of money relies upon the purchasing power yesterday (y) and the purchasing power yesterday relies upon the purchasing power yesterday minus one day (y-1) and so on. Money originates on the free market as a commodity with a pre-money barter demand and "price." So, not only has no money ever developed as fiat paper in any of recorded human history, but it is a priori impossible. A nascent money, shown with a regression proof, must have had a high non-monetary value on which to base its purchasing power.

Rothbard writes:

Economic analysis is not concerned about which commodities are chosen as media of exchange. That is subject matter for economic history. The economic analysis of indirect exchange holds true regardless of the type of commodity used as a medium in any particular community. Historically, many different commodities have been in common use as media. The people in each community tended to choose the most marketable commodity available: tobacco in colonial Virginia, sugar in the West Indies, salt in Abyssinia, cattle in ancient Greece, nails in Scotland, copper in ancient Egypt, and many others, including beads, tea, cowrie shells, and fishhooks. Through the centuries, gold and silver (specie) have gradually evolved as the commodities most widely used as media of exchange. Among the factors in their high marketability have been their great demand as ornaments, their scarcity in relation to other commodities, their ready divisibility, and their great durability. [Man, Economy, and State: A Treatise on Economic Principles, p. 164, emphasis has been removed.]

Clearly, then, a free market production of money is natural because that is where money originates. This selection process of money is also by nature competitive. Commodities which better serve as money will out compete and replace commodities that do not. It moreover gives men financial security since they have the freedom to pick and reject moneys they want and do not want. The competition in money production will thus produce the best moneys that men desire. Under a monopolistically managed money, though, this market mechanism is absent. Monopoly money, backed by legal tender laws, that is being debased and abused, for instance, cannot be replaced by a competitor's production of better money. Cheating, coin-clipping, and counterfeiting can only be much more intense than it otherwise would be under such monopolistic conditions.

Now we have a simple and straightforward reason governments have always tried to take control of the monetary system: They want to obtain more revenue. Cheating, coin-clipping, counterfeiting, and the like serve this purpose. What better way then to take control of the supply and management of the "lifeblood" of the economy, i.e. money? And in contrast to all forms of direct taxation, the bonus of appropriating revenue via monetary means is that it is indirect and unseen.

II.

It is now appropriate to go into a bit more extensively the economics of money production.

As already touched upon, money is basically like any other good that is being produced right now. It is a "hard" and "real" thing that needs to be produced. It is a commodity and hence has a "price." This price is shown daily in a man's financial transactions at the store. The man buys some bread and the store buys some money. The price of money is accordingly seen in the countless arrays of exchange ratios. Money's supply is the quantity of money in existence. And the demand for money is how much or little men are willing to give it up in exchange for other things or how willing or unwilling men are to forgo this action to save instead.

To repeat one more time: the difference between money and a "normal" good is that it is primarily used as a medium of exchange. Thus, this difference implies that once money is established in society, an increase or even a decrease in the supply does not give any social benefit or social loss per se. Therefore the production of money will be limited and slow. The supply will be more constant and steady than all other goods.

On the free market, money producers will produce money to the degree that it turns in a profit. Meaning in this case, it will be produced to the extent that men demand more money and less consumer goods that could have been produced with the same factors of production.

Private coinage will be the primary business of these producers. They are more costly to produce than bullion but they are also more valuable to consumers because they economize. Weighing and melting down to figure out quality becomes less needed with trusted private coins. In the past there have also been private insured coins. Naturally, these coins are more valuable than uninsured coins.

It is important to keep in mind that in a free market man is free to choose his money. Therefore, if a given money becomes unusable because, for example, it is later found to exist in an almost unlimited supply, man is able to shift to another money. Furthermore, even though the scarcity of a supply of money above a certain threshold in no way limits the facilitation of trade because money is only a medium of exchange relative to the things it is bought with, for purely practical reasons a given money supply might stop being used for the reason that the purchasing power has become far too high. It would then become unpractical to carry around and use microscopic coins. Man might use property title substitutes for this money, but he might also switch to another money altogether. Incidentally, as economist J. G. Hülsmann has explained, this is why if we today had a free market in money silver, versus gold, might be the primary money in use.

Man lives in a world of scarcity. His time is limited, he has only one body that has a temporarily finite existence, and most of the things he desires have a finite supply. Not everything that a man wants can be gotten. He must therefore make choices in what objectives he seeks to obtain, and these choices imply the cost of curtailing other possible objectives that he could have alternatively aimed at. Man thus aims at objectives which he (subjectively) perceives as more valuable than other possible objectives. So, obtaining an additional homogeneous unit of a good (g+1), all other things being equal, will be put to use only to ends less valuable than what the previous unit (g) was. Harmoniously, an increase in the supply of a man's money will make it less valuable than otherwise. And it will be less valuable vis-à-vis other goods than otherwise. Hence, all other things being equal, the purchasing power will go down and the buying and selling prices of goods will go up.

A redistribution of wealth will occur as the supply of money increases. Those with higher cash balances will spend their new money. They (men A) will be able to buy more than they otherwise could. And those who receive this new money (men B), from the first users, will also have higher cash balances. They, as the second users, too, will be able to buy more than they otherwise could from other market participants (men C). As a consequence early receivers will benefit and late receivers will lose. Step-by-step prices will be bid up until the economy as a whole has been adjusted to the larger supply of money.

The Catholic Spanish Scholastic Luis de Molina---a member of the founders of economic science---explained in the 1550s as follows: "Just as an abundance of goods causes prices to fall (the quantity of money and number of merchants being equal), so does an abundance of money cause them to rise (the quantity of goods and number of merchants being equal)."

Just as the supply is important, the demand is important, he also said:

Wherever the demand for money is greatest, whether for buying or carrying goods, ... or for any other reason, there its value will be highest. It is these things, too, that cause the value of money to vary in the course of time in one and the same place. [Quotes from Faith and Liberty: The Economic Thought of the Late Scholastics by A. A. Chafuen, pp. 64-5.]

All human action implies changes in society's distribution of wealth. E.g., the increase in the supply of television sets or the decrease in the demand for fax machines implies a change in wealth distribution. These changes are hardly bad per se. And, from a practical point of view, it would be impossible to regulate society in such a way that no one lost value in their respective properties. Ex ante, we do not know if our actions will negatively affect the (subjective) value of someone else's property. This cannot possibly be controlled from an ex ante point of view. For these kinds of reasons private ownership can not be said to include the ownership of "value." Instead, ownership can only be ownership in the physical-objective integrity of "real" and "tangible" things. In this case, we do know (or can know) ex ante if our actions trespass or do not trespass against the physical-objective integrity of someone else's property.

Hence, the shifting of wealth through the private production of money is not per se bad or wrong. A shifting of wealth in money production, however, is bad and wrong if it is done through violations of private property rights. This, for example, is implied when one is forced to stick to a certain money because of legal tender laws. Man cannot protect himself and move from one money to a better money in such a case. In addition, even if one is to reject the vital and unambiguous distinction between ethical and unethical money production, from the point of view of someone that wants to minimize such shifts of wealth one must conclude that the private production of money would be vastly superior to government production. Monopoly money, which can be turned into pure fiat paper money, can be more easily debased and expanded in supply than competitive money, which can only last in competition because it is scarce and costly to produce. Paper money can drop down to a value of zero whereas a commodity cannot. (Which, then, is a safer and better money? The answer is obvious.) Besides, being a monopolist in paper money production gives one incentive to be more and more inflationary (i.e., expansionary) through time. Just imagine being a money monopolist, where money grows on trees! Only the possibility of hyperinflation curtails those in this position.

We can also conclude that under a free market "the norm" would be prices falling through time versus rising through time. A robust economy would be producing lots of goods. Market money would only be expanding slowly and predictably. As a result, the purchasing power of money would increase as it is being used for a larger amount of goods. Although today we see just the opposite, this is the result of a monetary system that is socialistic and fascistic. We would not see it in a freer and more moral society. Though, this no doubt begs questions concerning deflation and hoarding.

Defining deflation as simply the overall fall in price levels is something that much of history has seen during periods of tremendous growth and prosperity. Empirically speaking, then, we can refute the notion that deflation is necessarily "bad." Even today we can see industry-specific "deflation," e.g., in computers. These industries refute the notion that deflation leads to the stoppage of consumer purchases or the stoppage of wealth production. Men often buy an expensive computer despite the fact that they know that in a year that same computer will be less expensive. This can easily be explained. Man, all things considered, prefers present goods over future goods. In his actions, he acts through time towards the fulfillment of his objectives. Man works to get closer and closer to enjoying his goals. His actions show that he would rather get to his goal sooner rather than later. While the intensity of one man's preference for present goods over future goods differs with another man's (and differs with respect to himself at different points in time), all men have this preference----that is, time preference----given man's finite temporal existence.

Money not spent on consumer goods is saved and invested or hoarded. It is generally more profitable to save and directly invest than to hoard, even in a deflationary depression. Since we save for something in the future, this activity is in no way a net loss to the economy. On the contrary, more production and wealth will be present in the future than there otherwise would be. There will be more transactions between savers and entrepreneurs, a decreased interest rate with a larger supply of savings, and more investment. Only a readjustment in the "structure" of the economy would be required to adapt to the increased savings. In place of a market economy that relatively panders to the selling of present consumer goods (e.g., the electronic store), the market economy will relatively pander to the production of areas (e.g., research and development) remote from such selling and remote from stages of production close to such selling. The future result will be an even larger amount of consumer goods than otherwise. This is why such processes are undertaken. Capital accumulation, after all, is the road to prosperity. This will be explored more in Section IV.

Hoarding is a "withdraw" of money from market interactions. In and of itself it has no net macro consequences because, recall, economically speaking any amount of money is equally servable. A decrease in the amount of money being "used" results in an increasing purchasing power. Plus keep in mind as well that money is always "sitting" in one's cash balance. It just moves from one man's cash balance to another man's. In doing its "sitting" it's doing its job, so to speak. Additionally speaking, man is not a hermit. And a man who becomes one does not "rob" society.

It is true that deflation has often followed depressions. But this deflation is the result of shrinkage in the money supply which is partly or fully based on paper money and fractional reserve banking. When a man takes out his money from the bank he also takes out the money that the banks pyramid off of that via fractional reserve banking. For example, banks might have a reserve ratio of ten percent. The man that takes out $100 to hoard in actual practice gets "rid of" a total of $1,000 (which is equal to his $100 plus the $900 created via fractional reserve banking) from the economy. This is because when this man deposits the $100, the central bank will be sent $10 as reserves, and the $90 it will lend. The borrower with this $90 spends it and this hence goes into another bank which then puts $9 into reserves and lends out $81. Etc. When thinking about it in terms of money as gold it is straightforward: more property titles exist than actual property with fractional reserve banking. This is fraud. Secondarily, another reason for deflation is the increased financial uncertainty. It is uncertainty, specifically, that explains why man holds any cash at all. It is the uncertainty of knowing if one, for example, is able to trade with another due to a double coincidence of wants. In an economy where everyone knew exactly what everyone wanted and so forth, then everyone could engage with each other without money. (At the very least there would be no reason to hold additional cash in one's balance.) The real world is not like this. When times of uncertainty increase, men want more protection and this protection logically wants the most salable good available; that is, money. As H. H. Hoppe explains: "Because money can be employed for the instant satisfaction of the widest range of possible needs, it provides its owner with the best humanly possible protection against uncertainty." ["'The Yield from Money Held' Reconsidered."] Accordingly, the demand for money cash holdings increase, the purchasing power goes up, and overall prices fall ("deflation"). Increased certainty results and men are better off.

The only group that needs to be fearful of deflation----as a shrinkage in the supply of money by the extirpation of fiat paper money----is the power establishment. As Hülsmann writes:

Political entrepreneurs are ... right to fear deflation. For deflation takes away the source of their illegitimate income and puts them finally back on equal footing with all other members of society, whose incomes are based on efforts and services provided in a competitive environment. ["Deflation: The Biggest Myths."]

III.

Monopolization of minting operations has often gone hand-in-hand with having the face of government officials imprinted on coins. Weight and quality start to decrease, as officials enrich themselves at the expense of the public at large. Legal tender laws are put into place to force all contracts to accept such debased money on par with un-debased money. Of course under free market conditions, in direct distinction, such activity would be considered fraud and even if it did occur (man being what he is----imperfect), it would be harshly limited to a complete stop because of competition. Competitive conditions would allow men to seek honest and high quality companies. Such a possibility is, by definition, not possible under governmental management. Moreover, no legal tender laws would exist, by definition, to force men to accept such inferior money.

New coins introduced into the market via government that have a real weight of Z start to be labeled with a weight value = to Y, where Y is > Z. Y is the weight of the old coins which are labeled properly. Because of legal tender laws these old and new coins become legally equal to each other. Mathematically, so to say, we know that this is unmistakably impossible from the outset. Men will discriminate between coins. The old coins (which have a weight of Y = to their label) start to be hoarded and the new artificially overvalued coins in circulation (which have a real weight of Z which is < Y despite their label saying it is > Z and = to Y) start to become the only coins traded. In trading and contracting it only makes sense to trade with the inferior money. In a way, one can say that this makes robbery legal. One man's contract with another can be fulfilled using this new money. Matching this, bimetallism----in comparison to freely floating parallel standards----is a vivid illustration of this kind of interventionist policy. Here a fixed exchange ratio is set by law between two moneys, say, gold and silver. But, clearly, this form of price control will only sooner or later conflict with reality. Supplies and demands are not constant. How one exchanges into another will change.

"Gresham's Law"----[tells us] that an artificially overvalued money tends to drive an artificially undervalued money out of circulation----is an example of the general consequences of price control. Government places, in effect, a maximum price on one type of money in terms of the other. Maximum price causes a shortage----disappearance into hoards or exports----of the currency suffering the maximum price (artificially undervalued), and leads in circulation by the overpriced money. [What Has Government Done to Our Money? by M. Rorthbard, p. 72.]

Flip-flops will take place, too, in terms of what is being undervalued and overvalued. The market will become chaotic----all in the name of public officials saying that they are making moneys "stable" vis-à-vis each other! When one money is driven out of the market, another effect will be produced. This will be artificial deflation. As a massive readjustment process takes place to handle the price control's sudden effect of taking money off the market, business calculations will be massively thrown off. Many bankruptcies and readjustments will thus take place. Moreover, the incentive to use fractional reserve banking will increase so as to stabilize this process. Such bimetallism, therefore, has an indirect result of shifting man to use more and more notes that are not 100% covered by what it is meant to represent, viz., a "hard" commodity.

Juan de Mariana, another Late Spanish Scholastic, called these kinds of debasements and manipulations "systematic robbery" and "barbaric," and that they are a "plague in the republic." He said that it additionally produces "distrust" in commerce and the thus the reduction of interaction. He wrote:

I understand that any alternation of money is dangerous. It can never be good to debase currency or to fix its price higher than its natural valuation and common estimation. [Quotes from Faith and Liberty, pp. 66 & 68.]

As is always the case, one interventionism leads to another. Government comes in and all of these bad consequences and unintended consequences occur. Next the call for more government involvement is asked for. Then more bad consequences occur. Next more government is called for. ... Etc. From the point of view of the government and its allies, this is generally wonderful. Those who consider the welfare of the public at large as more important, though, see this as something else entirely. Government obtains its revenues parasitically from those who actually produce wealth and improve society. Production is logically prior to government. Hence, government can only be viewed as a parasite. All of its activities are based on this parasitism. Its interest in expanding its wealth is more or less like any other man's, but it can expand its wealth not by serving voluntary consumers (which proves it is actually serving them well versus competitive alternatives) but by expropriation and exploitation (which proves that it is obstructing consumers by destroying their "sovereignty" and by destroying competitive alternatives).

This interventionist road led to banks increased use of fractional reserving banking (FRB). This pestilence played the key role in the devolution of money. FRB is inheritably unstable because it opens up the possibility of a bank run. A bank will not be able to fulfill its contracts in such a case. And the bank run of one bank leads to a chain reaction that will generally cause the run of another bank and another. In some sense, then, all have a collective incentive to prevent such a thing. This gives an impetus to form a cartel-----a central bank. In actual practice, the formation of one requires the protection of government. Government, motivated by self-interest, agrees because this will increase its revenue and control over men. Inflation as a way to increase its income starts to have essentially no limitations. Printing up more money or, even better, adding more money electronically has a cost of almost zero.

Another advantage, from the point of view of government, of fiat paper money is its constant homogeneity in comparison to commodity coins because men cannot evaluate and discriminate between the newer and older money. An increase in fiat paper money therefore does not lead to artificial deflations, as has been covered above.

Now it is often complained that before the Federal Reserve System there was "wildcat banking." In several different periods of American history this is basically true and is what led to the formation of the Fed (and its short-lived predecessors). However, it was only the logical step resulting from previous interventions. Not only did the government legitimatize FRB, it tremendously encouraged its practice, and it often allowed banks to "suspend species payments" when a bank run occurred. As far as the last thing is concerned, this gave a given bank the ability to cancel its contractual obligations, at least for a period of time. This set a precedent and encouraged more and more reckless behavior on the part of banks. In fact, FRB combined with government protection creates moral hazard on a massive scale. It is only through the power of government and its violations of the free market that allow FRB to reign.

One major factor to FRB has been war funding. The War of 1812, for example:

Most of the country's banks were located in New England, a section unsympathetic to America's entry into the war. These banks refused to lend for war purposes, and so the government borrowed from new banks in the other states. These bands issued new paper money to make the loans. These banks issued new paper money to make the loans. The inflation was so great that calls for redemption flooded into the new bands, especially from the conservative nonexpanding banks of New England, where the government spend most of its money on war goods. As a result, there was a mass "suspension" in 1814, lasting for over two years (well beyond the end of the war); during that time, banks sprouted up, issuing notes with no need to redeem in gold or silver. ... This suspension set a precedent for succeeding economic crises; 1819, 1837, 1857, and so forth. [What Has Government Done to Our Money?, pp. 78-9.]

To quickly skip ahead, 1913 saw the creation of the Federal Reserve System (Fed), with the help of major banks and businessmen (e.g., J.P. Morgan and John D. Rockefeller) seeking to enrich themselves at the expense of the public. Ultimately, it allowed all banks to expand their money supply more uniformly. It became the "bankers' bank" because all of the banks were forced to deal with it and only it. Banks could then only create deposits on top of these monopoly notes (based on the reserve ratio). The Fed additionally became the "lender of last resort."

Although this did not really solve the problems that previously existed. For instance, a bank run can still occur, in principle, on the Fed. It is only when the money in existence completely turned into pure paper money backed by nothing that this was absolutely prevented. Then the Fed can never go bankrupt. (This is exactly what happened in 1971 with the collapse of Bretton Woods. The U.S. central bank could not redeem its dollars to other central banks with gold. This was entirely predictable from the start because Bretton Woods allowed the Fed to get away with more inflation than it could before. And so it was later finally facing a run and thus cut its ties to gold.) On the other hand, it now has the ability to print up money with no technical or practical limitations that can result in hyperinflation and the complete break down of the economic system. Natural market checks on reckless behavior have only decreased more with this money devolution.

IV.

A Fed can bail out any bank or any business simply by printing money. Given the interconnection much of big business has with big government, such activities are to be expected. Big business by itself has no power. It becomes "big" by profiting voluntary consumers (who can boycott at any time).* Government has power (which no one can boycott without going to jail) and that is why big business comes to it seeking privileges. And government agrees because it can then expand its role in civil society.

More fundamentally, a large scale bankruptcy can have the result of bringing down the unstable, pyramid-based banking system. This is why the Fed has the incentive to bailout. But this is what creates moral hazard. Businessmen start to behave recklessly knowing that a bailout is likely if many of them fail consumers. The monetary system is ubiquitous; it should thus be expected that its negative consequences are economy-wide.

Furthermore, businessmen become more credit dependent and bank dependent, as the work of economists such as Hülsmann show. Credit will be cheaper and more abundant than otherwise, and hence this is the area competition will pressure businessmen to. Equity (real cash holdings) will thus decrease whereas liabilities (credit) will increase and make businessmen more fragile to any miscalculations on their part concerning future market conditions. Likewise, private men will become more debt orientated in their finances.

FRB and its centralized nature via the Fed will put the economy through violent swings of booms and busts as well.

We have already demolished, at least in rough form, the idea that saving is a "bad" thing for the economy. A society that moves from the position of saving little to saving much results in a change in the capital structure of the economy, as shown in Section II. The upshot of this shift will result in a society that will be more prosperous in the future than if this shift did not occur. We have also showed that money gets its primary value as a medium of exchange. So real wealth, as should be more than clear, is not created by growing money on trees, or printing it up. Producing desirable goods for consumers is wealth creation.

To further this process requires capital goods, which are used to create consumer goods. The growth thereof depends on technological innovation and the holding off of present gratification, to save and invest. Such production aims at a higher total of consumer goods in the future. Savings is what allows this to happen. It is a freeing up of resources to devote to such production instead of being used on present consumption. Man cannot logically consume X and invest X at the same time.

With a bank acting as an intermediary, men's savings can be transferred to entrepreneurs as a loan. It is the supply (savings) and the demand for such loans that determine interest rates. Consequently, the more savings, all other things being equal, the more to loan and thus the lower the interest rate is. Printing up money and creating "imaginary savings," to be sure, can lower the interest rate. But it is a lowering of the interest rate independent of true market conditions. It ignores the proportions men are saving versus consuming. Such artificial lowering of the interest rates through the banking system's centralized top-down nature will therefore push entrepreneurs to invest in long-term projects far removed from the consumer at the same time consumers are continuing their consumption versus savings activities. That is, men will be consuming, and, accordingly, a freeing up of resources (e.g., equipment and labor) will not be occurring to sustain these projects for the long-term. On top of this, men will actually be saving less than they would be because it will pay less to loan. An unsustainable boom has occurred which will go bust as soon as the new money flows through the economy reestablishing interest rates that reflect real market conditions. As a result, resources will become scarce for these investment projects and profitability will be destroyed. In addition, due to the location of the "boom," many investments and projects will even have to be completely abandoned. They will not be able to be moved to other areas of the economy because they are so capital-specific in their location.

Money calculation is essential when understanding this subject. Quoting D. Mahoney, money, as it allows for cardinal calculations so as to compare things based on a common medium, is a "'measure' of the amount of property available for production processes." ["Austrian Business Cycle Theory: A Brief Explanation."] Hence, an artificial lowering of the interest rate will bring the illusion of a larger pool of savings. There will be, in other words, a mismatch between time preference (as it is represented in the public at large) and investment. This in turn will distort entrepreneurs to start up more projects than can be temporally maintained. Now, keep in mind, to engage in capital production requires savings so that temporally lengthy roundabout methods of production can take place. So from the very outset, a greater amount of projects will be started than reality will allow; hence, a bust after the "boom."

L. v. Mises writes:

The whole entrepreneurial class is, as it were, in the position of a master-builder whose task it is to erect a building out of a limited supply of building materials. If this man overestimates the quantity of the available supply, he drafts a plan for the execution of which the means at his disposal are not sufficient. He oversizes the groundwork and the foundations and only discovers later in the progress of the construction that he lacks the material needed for the completion of the structure. It is obvious that our master-builder's fault was not overinvestment, but an inappropriate employment of the means at his disposal. [Human Action: A Treatise on Economics, p. 557.]

*[Put in another way: in a genuine free market, getting rich is dependent---versus independent, as under government---on getting others rich. The very rich man gets rich by making the masses rich. The market makes us think about how we can better serve our fellow man, since a man must use the goals of others as economic means to achieve his own goals. It is therefore untrue, as many dullards claim, that the free market promotes egotistical selfishness. The diminution of the division of labor would help to accomplish that. Increased statism, likewise, would do that. After all, under a voluntary system---where violence against the non-violent is viewed as unethical---you can always cancel your interaction with or membership to an organization. This is impossible under statism. States, for this reason, do not really have to directly serve their constituents well. They do not have any direct competition in the area they are monopolists. Nor are they directly dependent on changing and heterogeneous consumer demands, since they can easily expropriate property. No requisite exists, unlike free enterprise, for them to be cost-effective or to put maximum effort into improving the quality of their services. Hence a State enterprise often grows not because it is being cost efficient and is being ever better in its quality of services but despite it, as economist Hoppe has shown. Given that man is no angel, increased perversity should be expected as the outcome of increased government. Moreover, allocations of the State will always have to be arbitrary and wasteful with no profit - and - loss. When a true economic businessman fails, he then suffers a loss and perhaps disappears. It promotes correct allocations. On the other hand, when the State fails nothing often happens. There is nothing that helps divert resources into productive uses, which can only be done on the market with the pricing system. No continuous mechanism would exist so as to rationally and non-arbitrarily filter out bad lines of production and promote good lines of production. The State that does X activity necessarily does it at the expense of other things. It is absolutely impossible to judge if alternative Y or Z or A or B, or a combination of them, is more or less wanted by the public----a public that is heterogeneous. And its simplistic top-down nature cannot manage a complex world in an effective manner.]

V.

In this essay we have shown: (1) how and why money enters into society; (2) the superiority of competition in money production; (3) the redistributionist effects of changes in the supply of money; (4) that there is no reason to fear deflation; (5) why savings is the road to prosperity, even in a depression; (6) the non-problem of hoarding; (7) Gresham's Law; (8) the tendency of monetary interventions to lead to further interventions and further instability; (9) how the current monetary system leads to debt and enervates the economy; and (10) the economy-wide distortions of credit expansion in the structure of production.

We conclude, therefore, that there is a vital need to eliminate the current monopolistic system to allow a competitive market order as its replacement.

***

Notes and References: This essay was completely rewritten in Oct 2009 as the result of e-mail conversations I have had. My attempted answers to certain questions resulted, at least in part, in this essay. Now the essay itself has been greatly influenced not only by the late Murray Newton Rothbard but also Jörg Guido Hülsmann, a German economist teaching in France. He has written some outstanding essays on the economics and ethics of money production. Here are some of his essays, which have heavily influenced this essay:

• "The Political Economy of Moral Hazard"
• "Optimal Monetary Policy"
• "Legal Tender Laws and Fractional-Reserve Banking"
• "Deflation: The Biggest Myths"
• "Deflation and Liberty"
• "Toward a General Theory of Error Cycles"
• "Nicholas Oresme and the First Monetary Treatise"
• "The Cultural and Spiritual Legacy of Fiat Inflation"

Furthermore, for a further analysis of Late Scholastic thought on this subject, see "New Light on the Prehistory Theory of Banking and the School of Salamanca" by Jesús Huerta de Soto. (Though it should be pointed out that Luis de Molina versus Juan de Mariana, de Soto argues, was part of the group who were "most confused on the doctrinal treatment of the contract for the monetary bank deposit," viz. fractional reserve banking.)

Mr. Stefan Molyneux has a good article at Strike-The-Root.com.

Read it here.

Difficult Truths:

* Going to Iraq to shoot Iraqis is murder, since it is not violence for the sake of immediate self-defense.

* US foreign aggression is responsible for the hatred that foreigners bear towards the US.

* Muslims do not "hate America for its freedom." Americans were far freer in the 19th Century, and suffered no Muslim attacks. Switzerland is also free – and far closer – yet suffers no Muslim attacks, because the Swiss keep their guns inside their own borders

* The US government is by far the world's largest arms seller. The idea that your government exists to protect you from foreign enemies, while assiduously arming foreigners, is too ridiculous to be believable.

* Like the institution of slavery, the state is an agency of violence, evil to the core. It cannot be reformed, but must be abolished.

* Almost everything you were told about society in public schools is propaganda, directly detrimental to your own self-interest.

* Policemen are not primarily there to protect you, but to threaten you if you do not pay your taxes.

* Our existing system is utterly unsustainable, and will collapse within 10 to 15 years at the outside.

* There is nothing accidental about the fact that you were – and are – told all these lies.

Good article...Only one general comment: Will our current system collapse within 10 to 15 years? The empire will bankrupt itself. I do agree. But I do not think one can so easily put a date on it. Will it happen in those years? Maybe...maybe not. (Too many variables. Too many unknowns. And so on.) Will the entire governmental system go down in flames? I do not know. Perhaps only the federal government would. One thing to keep in mind is that statism has so corrupted us as a people. Under such a scenario, people too will (might?) be “going down in flames,” for lack of a better expression. Statism kills and so we have a morally dying and corrupt people. If only the brightest would rise above such a situation, then maybe there would be hope to embrace anarcho-capitalism. ... Well, sadly I am not so sure even that would happen.

"Liberals generally wish to preserve the concept of "rights" for such "human" rights as freedom of speech, while denying the concept to private property. And yet, on the contrary the concept of "rights" only makes sense as property rights. For not only are there no human rights which are not also property rights, but the former rights lose their absoluteness and clarity and become fuzzy and vulnerable when property rights are not used as the standard..."

Read Here. (Excerpted from chapter 15 of The Ethics of Liberty.)

Listen to it on MP3 by Jeff Riggenbach here.

Academics have two different liberties in mind to confuse the masses. Bet you probably could guess which of the two actually describes real liberty.

“Positive liberty” is the “freedom” you have when it is taken away from you by the government. That is what this term means in a nutshell. It sure is a positive thing, eh!?

Say government takes away my choice of investing my own money. (Of course, the government pretty much already does this.) They call this “positive liberty” because I am now “free” from the, oh so difficult process of making choices. All of those choices and decisions are so confusing, you know. I wish Daddy government would pick for me and tell me what to do all the time. (I need ”freedom” from making choices, after all.) Besides, government always knows best, as I am sure you know.

“Positive liberty” is also the “freedom from want.” ...Huh? Wants are unlimited. There is no end to a person’s wants. You know, I would love a beach house at that exclusive location. Only problem is, land there is limited. But, who knows? Government is so powerful that it might be able to pop everything in existence in superabundance. It can get rid of scarcity. All we need to do is just give the state more of our money! And give it more dictatorial power. That should solve that! (While government solves that problem --- here is another: I hate this thing called gravity. Maybe it will overturn the laws of physics as well. All we need to do is give it more power, right? . . . Economics? Physics? How are these things a match for government?)

But it is good to start out small. “Freedom from want” becomes the “freedom” to have a living wage, food, and a house. Yes, these things the former Soviet Union provided so well.  (Don’t you remember? The reporters and intellectuals told us that their visits over there showed it was paradise.) And, hey, government’s record in providing these things is so good. (The war on poverty has increased it, but it is the intention counts, right?) But, before government can bring about paradise from all conceivable wants and necessitates (and the invented “necessities” of tomorrow) it needs more money and control of our lives to accomplish them. After all, that is what it boils down to.

“Negative liberty” is awful --- just awful and evil. As the state’s intellectuals teach us, this liberty is the freedom of being selfish, bigoted, and all-around evil. It is the liberty that let’s the individual control himself. (That is, everyone owns himself. Only you own you. The property you obtain through homesteading and/or voluntary exchange you also own. You control it.) But, we all know, this should not be because the government is much more wise in telling us how to live. We the people do not own our respected selfs. We are the slaves to the masters, our government rulers. And look at how they, the politicians, live. Can’t top that for the best example of a moral and virtuous life.

Who wants that “negative liberty,” anyway? “Positive liberty” is the liberty I can have to rob you. (Or have the government rob you to give to me.) I want what you have. This “liberty” takes away all want, after all. “Negative liberty” is too restrictive. Living by the gun is the way.

When I take, with my “positive liberty,” something that you have and you take back what I took, then what? Both are justified under this arrangement. Well, we will deal with that when the time comes. This just comes to show, no doubt, that respect for person and property are non-existent. Violence is always justified and has no constraints to natural laws or morals.

All satire and joking aside. Politicians use this “positive liberty” rhetoric to justify all encroachments to our individual liberties. James Bovard says in his book Freedom in Chains, “Once freedom is equated with a certain material standard of living, confiscation becomes the path to liberation.” He says that it becomes a “license for politicians, rather than a declaration of rights of citizens.” There is no justification of the mystical creation of “positive liberty.” To justify it requires the justification that property rights do not exist, violence against non-aggressors is tolerable, and “positive liberty’s” contradictions in ownership of a specific property title is as “logical” that one equals two.

Take a look at the a couple of case studies of politicians using this rhetoric. Former President Bill Clinton referred to “freedom from fear” as the ”most important” freedom. And, of course, to accomplish this, the government needs to have the ability to break into your own house and steal your guns. It was then justified to kick down doors in Chicago's housing complexes to find drugs and weapons. (If was living at one of those places, I myself would want a gun under my pillow.) FDR gets the crown for coming up with the idea of “freedom from fear,” one of many invented freedoms by him. This was his justification for establishing the welfare state and put together an almost Soviet system government during the war.

Reference: Freedom in Chains by James Bovard

Murray Rothbard goes over how to dissolve the government to a society based on freedom.

1. Legalize the Black Market
2. Drastically Lower All Taxes
3. Abolish the Government's Ability to Create Money
4. Fire the Bureaucracy
5. Privatize or Abolish Government Operations
   

Read the essay here.

"It would be nice if both paleoconservatives and neoconservatives would honor their efforts, and expand the defense of individual liberty for future generations. Before they do, they need to understand the traps inherent in supporting even a limited government protecting our "natural rights." Only then can they warn themselves of the outcomes of policies that might look wise or politically expedient, but which do us all great harm in the end."

Beautiful Chaos
By P. Gardner Goldsmith

Read Here.

"Laws that forbid the carrying of arms...disarm only those who are neither inclined nor determined to commit crimes....Such laws make things worse for the assaulted and better for the assailants; they serve rather to encourage than to prevent homicides, for an unarmed man may be attacked with greater confidence than an armed man."

Shocking as it may be, a politician said that. It was Thomas Jefferson. Just comes to show that some of the framers were obviously much more wiser than anyone we have today, from either political party. (Ron Paul being one notable exception, of course.)

Too bad this wisdom is lost on many people these days. People possess a gun phobia. Their solution? Just get rid of those evil and scary guns. Suppress them. And, then what? We can hold hands and sing. Peace on earth with come.

There are lots of problems with this unfortunate attitude. For a start, these people obviously do not believe in ridding the world of all guns. Instead they believe that they should be handed over to the Bush gang (or whoever else is in office). This is particularly true of left-liberals. ... Funny. They sure are trusting of the Bush administration with a monopoly on guns! (I'm not! Yikes.)

The gun issue highlights one of my views about today's left-liberals. When it comes to prohibition laws they are much more dangerous than today's conservatives. (But conservatives today, overall, are more dangerous than liberals because most of today's statist conservatives are very pro-war and pro-Bush.) The sad fact is I do not hear liberals calling for an end to the drug way. But they are declaring wars or bans on tobacco or fatty foods (or ...guns).

...You know, ain't it wonderful that the politicians walk around crime infested Washington, D.C with armed body guards?

Us little people? No, we should be helpless and depend totally on the wonderful government savior.

Politicians are sipping their wine in Washington, D.C. armed with private guards with guns. What a world! Only the politicians should get some protection. The average Joe should not.

The McLaughlin Group confirmed my fear of the left-liberal reaction to the horrible tragedy in Virginia. A couple of the panelists said that guns are an "unfortunate part of American culture." What? Protecting oneself against criminals is unfortunate? Or something like hunting is unfortunate? . . . What?

Guns may be more than an average "tool," but it is a protective tool. Someone's security --- their family's security --- goes up because of gun ownership. They are more secure because they can fight off (or most likely scare away) any criminal that breaks into their property.

John R. Lott, Jr. has written extensively on this subject. His LRC article archives are here. In one article he talks about about an "armed Granny in a wheelchair" in NY defending herself against some mugger who started choking her. She shot him in the elbow. And that was the end of that.

I go to news places like Rational Review News Digest to get these stories day-after-day. Guns save lives. Does the mainstream media report this stuff? No....of course not. I do not completely blame them. Bad news is the news that they report. But they without a doubt have a bias against guns.

We have stories where someone, who has no criminal background whatsoever, owned a gun in a particularly bad neighborhood. They have had to defend themselves on more than one occasion. (Thank goodness those occasions they had a gun!) When they called the police, guess what happened? They took their guns away from them! We are in the land of the free, right? Well, that is what they tell us.

Banning something will never get rid of it. Banning guns will never get rid of guns. Maybe we should ban certain kinds of drugs too... Crime will go down and we will all be happier, right? Oh, never mind.... "Prohibition Blowback" occurs in dangerous black markets.

John Lott writes: "A police officer could have handled it, but cops can't be everywhere, and they virtually always arrive after a crime has occurred." Statists that want to take away guns, as an unintended consequence of theirs, will give gains to the criminals.

As the personal security goes up for the individual owning a gun in a microcosmic sense, it goes up in the macrocosmic sense. Several elderly people in my neighborhood own guns. Anyone that says that they are less secure as individuals is a foolish statement. They are much more secure as individuals. And, thus, groups of individuals are more secure too against the small minority of truly evil-criminal people. We can observe states and/or cities that have high regulations relative to those that do not. What we find is that crime is less in areas that are more "liberal" (in a classical sense) in guns laws.

Believing that government should have a monopoly on ownership is as bad as believing that government should have a monopoly on the media (e.g. the internet ---- watch what would happen). Cops cannot be everywhere (nor should they!). Giving them a monopoly on gun ownership --- what you will get is a less secure public because they are defenseless against criminals. It empowers criminals and does the opposite for good law abiding people.

Turning our guns over to the state also makes us more dependent on the state. The results will be an increase in government control in our lives. I cannot think of a better example of a police state then one that takes people’s guns away. And that is exactly what happened in New Orleans.