Author Archives: tarran

Keeping What What We Make Away From the Tax-man

The furor over the Tea Party movement has been quite exciting.  While I love watching government officials and their sycophantic propagandists energetically denounce people for daring to suggest that people should be permitted to keep their earnings,  I, like others, think the protests – in and of themselves – are insufficient to meaningfully change the vampire economy that has seized the U.S. in its fangs.

The people protesting are not, however, wrong.   The basis of a free society is the independence of the people: their ability to choose how to conduct their lives, what professions they will pursue, where they will live, how they will order their lives.  The more resources a person has at their disposal, the wider the range of choices available to them. Freedom from taxation is as fundamental a human right as choosing whom we love.

The protesters are, however, seemingly oblivious to the real problem, the control the state has over the institutions of finance, banking and trade.   It is this control that not only allows the state to plunder without any limits, but also encourages people to acquire wealth through dishonest means – through rent seeking, wealth distribution, or other forms of special privilege.

If we wish to be a free people, we must build the institutions and the cultural habits that encourage individuals to amass these resources through peaceful commerce and production. The fundamental act by which people stockpile these resources is called saving. In a simple economy, such as an agrarian one, the importance of having people stockpiling seed-corn, or hay for feeding their herds during winters or periods of famine is obvious to everyone.

In a complex economy, people typically stockpile money, since there is a degree of uncertainty as to how those savings will be put to use in the future, and money is provides them with the most options when looking to consume savings to satisfy some present need. Unfortunately, people have stopped saving, largely because the current monetary regime makes saving a sucker’s game. A dollar stuffed under a mattress exponentially loses its value. A dollar deposited in a bank also steadily loses value, albeit at a lower rate; the bank typically makes up much but not all of the losses do to inflation by paying interest.

The story of the 20th and 21st centuries are, if nothing else, the capture of the banking system by the state. It is becoming increasingly difficult for people to amass wealth that is securely theirs. Bank accounts can be confiscated. Their money can be held hostage via a banking holiday. Regulators can learn intimate details of the private affairs of individuals by reviewing the banks’ records.

Those of us who wish to reverse the trend towards an ever more powerful and intrusive state must take the lead to restoring the ability of people to stockpile savings.

How can we do this? There are several ways:

  • Create new forms of money that are easily stockpiled. This does not have to be gold and silver, but can be things like cell-phone minutes
  • Create new markets to trade without interference
  • Create new systems for storing forms of money safely

Building these institutions will not be easy. They cannot be imposed from outside. They cannot depend on some messianic leader to encourage their adoption. They must attract users who have no interest in the political agenda, but because they satisfy the users’ personal needs. It is important to bear in mind that this regime has existed so long that for most of us who are alive today have no idea that it could ever be otherwise. Furthermore, the public is the target of a pretty comprehensive propaganda campaign that pervades all forms of mass media that distorts history and aggrandizes the growth of the state. At this point, the vast majority of people are absolutely convinced that a free society is at best doomed to economic collapse and in all likelihood a violent, brutish, dog-eat-dog dystopia.

While I don’t have a particular “magic bullet” to restore the vital freedom to amass wealth without having to fear government confiscation or debasement, I do have some suggestions:

  • Accept as wide a variety of currencies and goods as payment as you can.
  • Likewise be prepared to proffer as wide a variety of goods and currencies as possible.
  • Store some of your savings in places that others do not have access to. Limit knowledge about the size of your savings on a strict need to know basis. Loose lips sink ships! (NB. Safety Deposit Boxes don’t count; FDR had his thugs systematically go through people’s safety deposit boxes throughout the country, confiscating the newly illegal gold) .
  • Do not cooperate with the state any more than your conscience, or willingness to engage in civil disobediance permits. Keep in mind, though, that principled non-cooperation with the state can easily lead to being thrown in jail, beaten, or even murdered.
  • Keep your eyes peeled for new ways of doing business, new products, and new marketplaces that increase your independence. When you find something, publicize it as widely as is appropriate.

In the end, the current system cannot last. The United States Government is consuming resources at a rate that is unsustainable. Using the collapse of other states as a guide, it is quite likely that its officers will wreck a large portion of the U.S. economy in their efforts to delay the inevitable. How destructive the collapse is, how vulnerable people are to the destructive edicts issued by government officials will be a function of how well we do in fostering the growth of alternate institutions. Shielding ourselves from harm is but a first step. If we wish to avoid experiencing that which Germans did 100 years ago - the destruction of an enlightened culture by a voracious predatory state leading to totalitarianism, death and war (see here for the illustrated version)- we must also figure out how to shield our neighbors too.

So I have a homework assignment for you, dear reader, what will you do to build the institutions that make it easier for you and your neighbors to keep what they make away from the tax-man?

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Responding to Piracy on the Somali Coast

Somali pirates have been in the news a great deal lately, and there is a great deal of controversy as to how to deal with them.  To date, the proposed solutions seem to be a simplistic calls for a) intervention to build a stable state in Somalia, b) send in various national navies to engage and destroy the pirates, c) arm merchant ships for self defense.

The reality is, though, far more complex, and much of the proposed interventions are actually counterproductive.  To understand the scope of the problem, we must understand first why there is so much piracy in and around the gulf of Aden.

Piracy and lawlessness go hand in hand.  Piracy arises pretty spontaneously wherever relatively unprotected and valuable cargos are being transported through an impoverished area, and the inhabitants have the weapons to pull off the raid and a reasonable chance of  getting away with it.

In the case of the Gulf of Aden, piracy has long been an issue.  But, the number of people taking up piracy spiked as a result of the recent U.S. backed invasion of Somalia by Ethiopia.  Many people have been driven off their land, or have lost their ability to earn a living due to the economic collapse that followed the invasion and the rise of an anti-Ethiopian resistance.  Moreover, the plundering of Somali fishing grounds by foreign fishing fleets has resulted in a large pool of desperate fishermen who no longer can feed their families through honest labor.

The poverty and desperation of the Somalis, their ready access to weapons, and the existence of shipping routes connecting the valuable markets of South and East Asia with the Mediterranean running right off their coastline have predictably encouraged many locals to take up lives of piracy.  There will be no simple solution that ends the threat of piracy.  Rather the problem will persist so long as the root causes are unaddressed, and merchants are prevented from adequately defending themselves.

The first step is to listen to the merchants themselves:

TYPICAL ATTACK PROFILES AND LESSONS LEARNT

1. During 2008 significantly increased pirate attacks on merchant ships occurred throughout the GoA [aka Gulf of Aden] and off the coast of Somalia. The majority were clustered around the northern side of the GoA
but some attacks have occurred further off the east coast of  Somalia.

2. Analysis of successful attacks indicates that the following common vulnerabilities are exploited by the pirates:

a. Low speed

b. Low freeboard

c. Inadequate planning and procedures

d. Visibly low state of alert and/or evident self protective measures

e. Where a slow response by the ship is evident

3. Commonly two or more small high speed (up to 25 knots) open boats/ “skiffs” are used in attacks often approaching from the port quarter and/or stern.

4. The use of a pirate “mother ship”, which is a larger ship carrying personnel, equipment and smaller assault craft, has enabled the attacks to be successfully undertaken at a greater range from the shore.

5. Vigilance should be highest at first light and last light, as the majority of the attacks have taken place during these periods.

6. To date no successful attacks have occurred on ships at 15 knots or more.

7. The majority of attempted hijacks have been repelled by ship’s crew who have planned and trained in advance of the passage and employed passive counter measures to good effect.

Reading discussions by mariners, it is pretty clear that what mariners want are options, and the access to experts who can defend them.     Many sailors complain that when they call for help, national navies are slow to respond.  Many countries limit merchant ships entering their ports from carrying any weapons other than a side-arm locked in the captain’s safe.  Moreover, the navies can be quite destructive, sinking ships that are not engaging in piracy.

There is a nascent security industry dedicated to protecting merchant ships.  The problem appears to be manageable for prepared crews.  If they transit the area quickly, they appear to be relatively safe.

Somali motivations into taking up piracy are quite complex.  Essentially they are the product of the unwillingness of surrounding nation states to accept the existence of a stateless inhabited portion of the world. Somali piracy started out as a response to the loss of access to the rich fishing grounds off the Somali coast.  Korean, European and Yemeni fishing vessels would haul in rich catches in Somali territorial waters, effectively denying the Somali fishermen who had homesteaded those fisheries from access to their property.  Deprived of their livelihood, they turned to opportunistic piracy, using the same system as that of the Barbary Pirates (with the exception that they treat their captives well).  Unfortunately, what started out as an act of desperation has mutated into an institution:  piracy rings have turned into big business.  Pirates supply wealth and weapons to various factions fighting the U.S. backed state. Members of the U.S. backed state are also on the pirate rings’ payroll.  The invasion has disrupted the traditional economy, making people even more dependent on piracy.

“Millions in defense, not one cent in tribute” – Thomas Jefferson

Breaking up these crime rings will require a combination of concessions and steadfast resistance.  Merchant ships should be permitted to arm themselves as they see fit to defend themselves.  A few AK-47’s or .50 cal machine guns on board a maneuvering ship should be sufficient to keep small boats from closing to the point where they can board. Ships must be allowed to do what they need to do able to transit

However, the same should not be said for the large foreign vessels plundering the Somali coastal waters.  The fishing grounds are the property of the Somali fishermen who have, in a Lockean sense, homesteaded them.   Outsiders should respect those property rights.  This would not represent some dramatic special consideration given to the Somalis; under International Law, those fishing grounds are off limits to the foreign fishing fleets since they are Somali territorial waters.

The U.S. government should end interference in Somalia.  While there is nothing wrong with punitive expeditions against professional pirates, the conquest and subjugation of non-pirates who happen to live near pirates and the disruption of their farms and industries are absolutely unjustified and counterproductive.

By geography, Somalia should be a wealthy state.  It is well positioned to be an outlet of African goods being shipped to South and East Asia.  Its poverty is the product of the nearly continuous attempts by outsiders to impose external rule on a people who don’t want it – interventions that started when Mussolini sent Italian troops to conquer the Horn of Africa.

Early this year, the Ethiopian army retreated from Somalia.  The nation state that they left behind is now run by many of the same Islamist political factions that the U.S. government was trying to suppress when it arranged for the Ethiopian invasion and attempted to install a puppet state.  Accepting this ‘defeat’, and switching from a policy of nation-building to  working diplomatically with clan leaders to address and legitimate grievances they may hold against U.S. nationals, while refusing to accept crimes committed against peaceful vessels transiting the area would do much to improve the situation.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Obama Encourages Corporate Malfeasance

The trainwreck that is the Obama administration continues with his support for caps on executive pay. This bad idea has been tried before, and had the disastrous result of enhancing the power corporations wield over their employees, particularly with upper and middle management. It contributed to many of the instances of corporate malfeasance.

The problem is that the Obama administration is attempting to cap executive compensations at below market rates. Whenever the government does this, people come up with alternate forms of compensation to offer in lieu of the salaries or bonuses that are now illegal. A company may, instead of paying its management a high salary, offer them a lower one and buy them a house. It will buy them health club memberships, or give them no-cost vacations at company-owned resorts. The end result? People who don’t own their homes, but are dependent on their employers for their housing, their memberships, or even their kids’ schooling.

Many corporate scandals progress until someone is brave enough to blow the whistle. When blowing the whistle merely only the loss of a paycheck, people are still reluctant to do it.  A loss of a paycheck and the loss of one’s home, one’s social circle, access to the kids’ schools etc, and the incentive to turn a blind eye to criminal behavior, or even to participate in it is heightened.

One would think that one of the major lessons of the current meltdown would be do decentralize economic power by reducing the competitive advantage handed by the regulatory environment to large, hide-bound companies. Instead, the Obama administration is attempting to tilt the playing field further in their favor. Assuming that he is sincere in attempting to curb malfeasance and dereliction of duty amongs corporate officers, this bill is definitely an own goal.

I thought it would be many decades before we saw an administration as incompetent as that of George Bush. I was wrong; it took no time at all to get one that was even more incompetent.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

You, Sir, Are the Devalued Prime Minister of a Devalued Government

Would that we had an articulate defender of freedom in Congress as Daniel Hannan, Minister of the European Parliament for South East England.

Here is a video of him confronting the Prime Minister of England.

The truth, Prime Minister, is that you have run out of our money. The country as a whole is now in negative equity. Every British child is born owing around &#163 20,000. Servicing the interest on that debt is oing to cost more than educating the child.
Now once again today you tried to spread the blame around; you spoke about an international recession, an international crisis. Well, it is true that we are all sailing together into the squalls, but not every vessel in the convoy is in the same dilapitated condition. Other ships used the good years to caulk their hulls and to clear their rigging – in other words to pay off debt. But you used the good years to raise borrowing yet further. As a consequence, under your captaincy, our hull is pressed deep into the waterline under the accumulated weight of your debt.

Now it’s not that you’re not apologizing. Like everyone else here, I’ve long accepted that you are pathologically incapable of accepting responsibility for these things. It’s that you are carrying on willfully worsening our situation wantonly spending what little we have left.

Prime Minister, you cannot carry on forever squeezing the productive bit of the economy in order to fund the unprecedented engorgement of the unproductive bit. You cannot spend your way out of recession or borrow your way out of debt.

Watch the whole thing. Much of it applies to all the Democrat and Republican politicians in government today.

Hat tip, Lew Rockwell

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Abandoning the Rule of Law

The United States is a banana republic. The Jeffersonian ideal of a series of republics built upon enlightenment values of freedom and reason has died. It wasn’t a sudden death, like that which occurs in a car crash; where one can pinpoint to the second where death occurred. Rather it was a slow lingering death, with organ after organ gradually slowing, a long twilight that ended in the dark of a moonless night.

Some would argue that this is a melodramatic claim, made by some bitter conservative in reaction to the evolution of society, the rantings of a “dead-ender” in knee-jerk opposition to the inevitable and gradual improvement of society. We can test whether or not they are right by comparing the principles of a free society to those dominating the U.S. right now.

The Principles of the Rule of Law

First let us examine whether or not we live under a rule of law.

Joseph Raz described the rule of law as possessing the following properties:

  • Laws are prospective rather than retroactive.
  • Laws are stable and not changed too frequently, as lack of awareness of the law prevents one from being guided by it.
  • There are clear rules and procedures for making laws.
  • The independence of the judiciary has to be guaranteed.
  • The principles of natural justice should be observed, particularly those concerning the right to a fair hearing.
  • The courts should have the power to review the way in which the other principles are implemented.
  • The courts should be accessible; no man may be denied justice.
  • The discretion of law enforcement and crime prevention agencies should not be allowed to pervert the law.

Clearly most of these principles are currently violated, blatantly and routinely:

  • The list of retroactive laws are legion.  Two that leap to mind are the new tax on AIG bonuses, and the Lilly Ledbetter Fair Pay act.
  • Anybody who has watched the legislative process in Congress closely would recognize that the laws are not only not stably maintained, but are changing bewilderingly often, with little notice and even less opportunity for people negatively affected by the law to present their case to legislators
  • The rules and procedures for making laws are anything but clear.  Witness this essay on the Master Resource blog concerning how the Federal government is going to establish regulations on CO2.
  • In an era when any prosecutor could indict a ham sandwich and make it stick, the nominal independence of the judiciary is meaningless. Furthermore, many of the judges in the U.S. legal system abrogate their independence routinely, witness the “deference to the executive” given in numerous critical cases concerning the limit of government power
  • The principles of natural justice have been thrown out of the window.  How can people contest the charges against them, if the evidence is kept secret from them and their lawyers?  How can a government that passes laws allowing contracts to be retroactively rewritten and used as the basis of fines claim to respect any natural law? How can a government that denies people the right to publish what they want, to own weapons for their own defense, to enter into contracts with anyone they want lay any claim to respecting natural justice?  How can a person obey the law, when even the legislators and the executive branch are ignorant as to what the law is?  How can asset forfeiture, where people who have not been convicted of any crime have their property seized by the government which then sells it or uses it for its own pleasure, be compatible with any notion of due process?
  • Nor are the courts accessible…  The laws and procedures of the legal system have become so byzantine that only an expert can navigate them.  And, sad to say,  a handful of people have been detained in a manner that was clearly designed to prevent them from reaching any court, and few people in government have protested.
  • There are two ways that law enforcement may abuse their discretion in such a way as to pervert the law.  One is to turn a blind eye to violations of the law, such as that which occurred in the 19th century when a group of white men murdered a black man.  This is out of fashion – with the famous exception of the “blue wall of silence“.  The other is to “charge stack” – to use its powers to detain and investigate to pursue people frivolously and maliciously  despite its foreknowledge that such an investigation would not in fact turn up a serious crime.   This abuse is systemic.  People are over-charged with tens or even hundreds of charges for a single act by prosecutors who hope to coerce a guilty plea out of a defendant facing hundreds of years of jail time. Often the frivolous investigations are directed against the family members or loved ones of the prosecutor’s target. Take the prosecution of Greg Anderson for his refusal to testify against Barry Bonds; prosecutors are investigating family members in an obvious attempt to coerce his testimony.  This is not a new problem, the IRS is notorious for this tactic.

Now that we have established that the rule of law is effectively dead, the next question to ask is whether or not the rule of law is worth defending?  One can even argue that the rule of law is some unrealizable ideal, laws don’t enforce themselves, they are enforced by men.  So why should we bemoan the failure to live up to some unrealizable ideal?  The answer is, of course, that how well the lawmakers, and law enforcers adhere to the principles of the rule of law is a necessary precondition of how wealthy, prosperous, and pleasant a society is.  All of the principles of the rule of law have at their root a governing set of axioms:

  • The law applies to all equally.
  • The law is not capricious – people can know beforehand which actions are lawful and which are not
  • The law is generated in a manner that allows all affected people to have a voice in crafting it, and that it is not produced by a special class of people for their own interests.

You cannot violate Raz’ principles without producing a society that fails to satisfy those axioms.  A society that applies the law differently to different people, or is capricous and unpredictable, where the laws are crafted for the benefit of some at the expense of others is a society that discourages productive activities and encourages predatory activities, one that is on the fast track towards tyranny.

Where to Now?

I am not concerned with pointing the finger of blame at any individuals or classes of people. Nor am I concerned with reestablishing the past. Murray Rothbard famously commented the the rot set in before the Treaty of Paris was signed. L Neil Smith pointed to the convention which wrote the U.S. Constitution as the moment the death began, calling it a coup. It is clear that the death began in the 19th century, and has been accelerating in the 20th. Merely dialing the clock back will not address the root causes of the death.

The root cause of the death is the fact that the vast majority of the U.S. populace is completely ignorant of what the rule of law is, and the dangers that accompany its abandonment.  Too many people are willing to make deals with the devil for their own benefit, or out of a desire to be left alone.  Too many people are interested in short-term gain to recognize how destructive these policies they accept, or even cheer at will be in the coming months.  Convincing them to change their ways is a difficult, and even quite likely an impossible task.

The change that must happen is not simply the election of a different president, or exchanging one political party’s control of Congress for that of another.  It is not a question of impoved ballot access laws.  Nor is it a question of storing a shotgun loaded with deer slugs in one’s closet.

What is required is a divorce.   Seccession.  Emigration.  Passive disobedience.  The construction of alternate institutions that bypass the state.

Such actions come at a price, people lose their income, friends, and even their families’ support.  But, as unprincipled government takes its toll, those losses will become less and less significant for larger numbers of people, and our numbers will grow.  The more the state takes, the more people will resist.  Four hundred years ago, monarchs whose treasuries had been emptied by the religious wars of the Reformation began selling charters to colonies in the New World as a means of raising money.  The flight of people to the New World, and the tax competition it trigerred led to the flowering of liberty and the spread of Enlightenment values.  If we lay the groundwork now, the coming collapse can be turned to our advantage.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Obama: Third Term for Bush

Barack Obama is making the same disastrous mistake that George Bush did, and I am amazed that neither he nor his advisers are aware of it.

Many people have commented that Obama has effectively given Pelosi and Reid free rein to insert as much prok as they wish into their spending bills while pontificating in mock outrage about the need to reduce pork.  The question on many people’s minds is ‘why?’

In the meantime, Obama has been stacking his administration with idelogues who are convinced that the only way to save the human race from extinction in the coming years is to radically reduce the amount of greenhouse gasses that are emitted by human activity by radically reducing standards of living.  In effect, much like George Bush secretly preparing for an invasion of Iraq from the outset of his administration, Obama appears to be preparing for a Great Leap Forward to radically alter the production and consumption of energy.

The early stages of these efforts can be seen in the effective take-over of the U.S. car industry with mandates to produce green cars that consume far less gasoline.  It also can be seen in the early promises to employ people in “green” jobs paid for by the government.  Banks that now have the Federal governemnt as a major shareholder are being encouraged to make loans to ‘sustainable’ projects.

And, in order to get these questionable and expensive bills passed, the government is breathlessly making announcements about the dire economic emergency we find ourselves in, despite the numerous statistics that imply otherwise.  More troublingly, the government has moved to cut off debate, painting people who are either skeptical of their aims, or who question the effectiveness of their measures to meet their stated goals as being reactionary ideologues who are obstructing needed reforms mindlessly or out of greed.

The manifold failures of the George Bush administration did not come as a surprise to many.  Every major policy initiative, every major hiring and firing decision, every piece of legislation was, to a greater or lesser degree, scrutinized by intelligent people who then accurately predicted the outcome, and publicized it nationally.  It was the ability of the Bush administration to marginalize opponents while buying supporters off with pork projects that allowed the Bush administration to veer so far onto dangerous ground before they were forced to rethink their position and alter course.  Had these voices carried greater weight earlier in the administration, the Bush administration would not have been able to engage in inflationary spending, and wreck the U.S. military to the degree that they did.

6000 years or so of written history stand in mute testimony to the danger posed by the hubris of kings. We know that the massive increases in government spending will wreck the economy – not improve it.  We know that the increased taxes and regulatory uncertainty will hinder investments in capital goods – not enhance them.  We know that when workers are diverted from productive tasks to make-work projects, we are all left poorer as a result.  We know that increased regulation and surveillance by the government will not result in greater happiness of the population.

We cannot afford Obama to get the same pass that LBJ did.  The destructive policies, once put in place, will do great long-term harm to the bulk of the citizenry.  We must all do our part to turn the public against the Obama administration’s adoption of Bush’s political strategies.

I call upon all of you reading this, work on the Obama supporters you know.  Point out calmly, non-judgmentally, all the dangerous warning signs surrounding his presidency.  Turn his base against him, and he cannot do anything but fall.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Václav Klaus Addresses the European Parliament

Václav Klaus gave a speech that U.S. politicians would do well to listen to:

The citizens of the Czech Republic feel that the European integration has an important and needed mission and task. It can be summarized in the following way:

– removing unnecessary – and for human freedom and prosperity counterproductive – barriers to the free movement of people, goods, services, ideas, political philosophies, world views, cultural patterns and behaviour models that have been for various reasons over the centuries formed among the individual European states;

– a joint care of the public goods, existing on the continental level, meaning projects that cannot be effectively carried out through bilateral negotiations of two (or more) neighbouring European countries.

….

This is closely connected with the question of prosperity. We must say openly that the present economic system of the EU is a system of a suppressed market, a system of a permanently strengthening centrally controlled economy. Although history has more than clearly proven that this is a dead end, we find ourselves walking the same path once again. (my emphasis – tarran) This results in a constant rise in both the extent of government masterminding and constraining of spontaneity of the market processes. In recent months, this trend has been further reinforced by incorrect interpretation of the causes of the present economic and financial crisis, as if it was caused by free market, while in reality it is just the contrary – caused by political manipulation of the market. It is again necessary to point out to the historical experience of our part of Europe and to the lessons we learned from it.

Predictably, his speech calling for less political centralization and more economic liberalization was poorly received, with a substantial portion of the parliament walking out on his speech after booing him:

Read the entire thing.

H/T Lew Rockwell

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Ignore the State

The Obama administration, having retained the basic elements of Bush’s disastrous n ational security policies, and having applied a similar political approach to the economy, has set the stage for the collapse of the U.S.

The number of laws that tangle us all continues to multiply. At this point it is probably impossible for us to survive, let alone prosper, without breaking one or more laws on a weekly basis. People seem to be helpless in the face of these out of control laws. Some people wonder how far people can be pushed before violent revolution takes place.

There will be no violent revolt. People have too much to lose, and we are not a violent people. Nor should there be – we can look to the fall of the communist states of the old Warsaw Pact, where the state collapsed and freedom spread with hardly a shot being fired. Violent revolution, such as that which led to Caucescu and his wife being gunned down by a firing squad, were the exception rather than the rule.

How did these states collapse? Simply put, the people stopped respecting the state, and began to ignore its edicts. They ignored the laws forbidding certain economic activity. They ignored the laws demanding the payment of taxes. They ignored the laws demanding people acquire licenses to take up certain professions. They ignored the laws mandating that young men report for mandatory military service.

Our salvation lies through systematic disobedience to the state.

In a way, Obama is doing us – those who love freedom – a favor. His policies will push the people to the ragged edge. Many people will come to hate and distrust the state. Like bitter soviet citizens, they become cynical, and develop a visceral understanding of public choice theory. And when a sufficient number of people recognize that the problem is not a conflict between Democrat and Republican but between the government and the market, between the alliance of politicians and rent-seeking big businessmen and the people, then the true revolution will begin.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Dr Michael West Filmed Committing Attempted Murder

Over at Reason, Radley Balko has published a damning article and video of Dr Michael West attempting to murder a man named Jimmie Duncan.

In 1993,  [Dr Michael West and Dr Steven Hayne]  conducted an examination on a 23-month-old girl named Haley Oliveaux of West Monroe, Louisiana, who had drowned in her bathtub. The video shows bite marks mysteriously appearing on the toddler’s face during the time she was in the custody of Hayne and West. It then shows West repeatedly and methodically pressing and scraping a dental mold of a man’s teeth on the dead girl’s skin. Forensic scientists who have viewed the footage say the video reveals not only medical malpractice, but criminal evidence tampering.

The dental mold came from the teeth of the man babysitting the girl at the time of her death.  The manufactured bite-mark evidence put the man, Jimmie Duncan on death row.  I am convinced that Mr Duncan, who was described by witnesses as being very remorseful and in hysterics with shame, was guilty of negligent manslaughter.  Nowhere in the United States are people executed for manslaughter through negligence.  In his attempt to make him look more depraved than he actually is, by attempting to send him to the death chamber without justification, Dr West was attempting to murder Jimmie Duncan, as surely as if he had booby-trapped Duncan’s car with a bomb connected to the ignition system.

This might seem like an isolated incident, except for the fact that Dr Hayne has conducted nearly every autopsy of crime victims performed in the state of Mississippi in the past 20 years.  In cases where Dr Hayne could not find evidence to help convict criminals, he frequently sent the bodies to Dr West, who had a special test for bite-marks that has never been reproduced by any other forensic specialist.  And, like any monopoly, the monopoly criminal apprehension organization operated by the Mississippi state government refuses to revisit all the cases affected by these men’s testimony.

Given the thousands of people that Hayne and West helped put behind bars, there is a near certainty that many innocent people have been sent to jail for crimes committed by others.  One could argue that that amounts merely to malpractice.  However, the last time I checked, when one person tampers with a crime scene for the purpose of framing an innocent man with a crime while obsucring the actual guilty party’s role, it is called being “An accessory to murder after the fact”

I strongly encourage our readers in Mississipi to question the news media and government officials regarding the destructive trail of injustice left by Dr’s West and Hayne.  Their victims cry out for justice.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Another Looming Bubble: Higher Education

College enrollment has been booming. Schools have not only been adding new seats to existing programs but also adding new programs. And, unlike the free-market process where the supply of a good is expanding dramatically, the price of these seats has been increasing dramatically – much faster than the CPI. The increased attendance at increased prices is only possible through the dramatic expansion of loans to students.

The U.S. government and the banking sector are promiscuously loaning money to prospective students, and are fueling a bubble. Students are taking on huge loans, expecting to be able to pay them back thanks to the great job that lies in their future, thanks to their degree. However, as the number college graduates entering the market dramatically grows, the market clearing wage they can charge drops. An increasing number of graduates will find themselves trapped in the horrible circumstance of trying to repay huge loans from their low take-home pay.

This phenomenon will lead to huge unrest; at any given time 8 million U.S. citizens are attending college. Something like 90% of them have loans. We can expect that as their situation deteriorates, graduates will demand political action that will provide them with debt relief. And the politicians are almost guaranteed to react poorly.

The solution to this problem is for the government to stop providing subsidized loans. Better yet, the government might try to dismantle the disaster called public education, which has gone from spending $275 per student to $7,000 per student (figures in 2000 dollars) to achieve worse results. A free market educational regime would consist less of warehousing and more of useful education that prepares young people for professions that best suit their natures.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

An Economy Is Not About Jobs

One of the bizarre fallacies propounded by President Obama, the Congressional leadership, and their intellectual enablers such as Paul Krugman, is the notion that society should be organized to give people jobs, and that if the supply of jobs is insufficient to meet the demand, the government should step in and create an additional supply through economic policies.

Walter Block, restating an argument made famous by Frederic Bastiat, points out that nothing could be farther from the truth.

The purpose of an economy is to align production of goods with demand, so that people have their desires to consume goods satisfied.  Dr Block points out that if we lived in a society where 30% of the population dug holes that were filled in by the other 30%, with the remaining 40% laboring to supply food, clothing, shelter and tools for the hole-diggers and hole-fillers, we would be far poorer than if that 60% were redirected to other forms of labor that produced things useful to the other 40%.

This becomes obvious when you consider a thought experiment.  If you ask people to choose between having a job, and having the enough food, clothing, shelter etc, they will choose the latter in a heart-beat.  People work primarily so that they can produce what they need in order to be comfortable, either by making the stuff they want to use directly, or making stuff that they intend to trade to other people for the stuff they want to use themselves.

Much of the proposed stimulus project is makework that is little better than hole-digging and hole-filling in.  Absent the stimulus spending, the people who will be employed under the stimulus project would have to find tasks to busy themselves with that produced goods and services that people were willing to pay for.  Instead of working to identify what unmet needs were most urgent and in the greatest demand, now they will coast, “earning” a paycheck, while working on either less profitable tasks, or even unprofitable ones, where the resources they consume are greater than the product they produce.

No doubt that some people would read the above paragraph and say, “Aha! But what if they can’t find anything to do?  What if they can’t find anyone willing to hire them, don’t know how to subsistence farm, etc!  What, Mr Free-Market Anarchist, should they just hurry up and die – making sure that they starve to death out of sight?”

At first, this seems like a powerful argument, until one considers what percentage of the population is actually unemployable?  I would expect that they number no more than 5% of adults, perhaps 25 % of the entire population adding in the elderly and young children.  And, these people are probably unemployable even under a government make-work project.  Even if there was a massive shortage of workers, they would be unemployed and dependent on charity.  Rather, most of the people employed under any job-generation scheme will be able-bodied.

Nor will the able-bodied be unable to find work.  We humans live in a universe of scarcity.  We always have unmet needs, we want more shelter, better food, better cars, better streets, better entertainment etc.  Many of these needs are not met not because humanity lacks the raw materials or the land needed to realize these needs, but because there aren’t enough people around to satisfy them.

The only way to find out which of these unmet needs are th emost urgent is via the price system.  People will pay more for labor that is needed to satisfy more urgent demands and less for labor that satisfies less urgent demands.  The higher wages will act as a signal to the unemployed who can do the job to start doing the job.

The temporary unemployment that accompanies recessions occurs becasue the price system requires the passage of time to reach an approximate equilibrium.  Essentially, in a recession, people who were producing things that were not in heavy demand stop that undesired production and spend some finite period of time looking for othe rthings to do.  Simmilarly prospective employers need time to figure out where the shortages are, or to identify opportunities to start expanding production again.

By attempting to sabotage this feedback system, the proponents of the stimulus plan are setting the stage for long-term stagflation at best, and a future crash at worst.  Not only are they shifting the problem of what to do with the unemployed into the future, they are encouraging, though false price signals, people to abandon productive pursuits in favor of the make-work projects being promoted by the state.  If, for example, the state promotes the construction of dams, then people who otherwise would have chosen to become farmers or mechanical engineers or home builders will instead gravitate to civil engineering.  They will then form a political group which strives to keep the emergency programs going indefinitely, much as farmers continue to agitate for the price supports borne from the “emergency” of the Great Depression, of the California Prison Guards’ Union agitates against the repeal of anti-drug laws.  This would be bad enough if government official were to attempt, in good faith, to guess what the unmet needs in greatest demand were.  When one considers the inevitable corruption and rent-seeking that accompany the establishment of such emergency programs, the true scope of the danger to the economy presented by the stimulus project becomes clear.

Barack Obama has been in office less than a month.  The early signs are that he will prove to be a bigger disaster than George Bush.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

What It Feels Like To Be a Libertarian

John Hasnas of Georgetown University wrote What It Feels Like To Be A Libertarian:

…almost no one ever discusses what it feels like to be a libertarian. How does it actually feel to be someone who holds the principles described in Murray’s book?

I’ll tell you. It feels bad. Being a libertarian means living with a level of frustration that is nearly beyond human endurance. It means being subject to unending scorn and derision despite being inevitably proven correct by events. How does it feel to be a libertarian? Imagine what the internal life of Cassandra must have been and you will have a pretty good idea.

Imagine spending two decades warning that government policy is leading to a major economic collapse, and then, when the collapse comes, watching the world conclude that markets do not work.

Libertarians spend their lives accurately predicting the future effects of government policy. Their predictions are accurate because they are derived from Hayek’s insights into the limitations of human knowledge, from the recognition that the people who comprise the government respond to incentives just like anyone else and are not magically transformed to selfless agents of the good merely by accepting government employment, from the awareness that for government to provide a benefit to some, it must first take it from others, and from the knowledge that politicians cannot repeal the laws of economics. For the same reason, their predictions are usually negative and utterly inconsistent with the utopian wishful-thinking that lies at the heart of virtually all contemporary political advocacy. And because no one likes to hear that he cannot have his cake and eat it too or be told that his good intentions cannot be translated into reality either by waving a magic wand or by passing legislation, these predictions are greeted not merely with disbelief, but with derision.

It is human nature to want to shoot the messenger bearing unwelcome tidings. And so, for the sin of continually pointing out that the emperor has no clothes, libertarians are attacked as heartless bastards devoid of compassion for the less fortunate, despicable flacks for the rich or for business interests, unthinking dogmatists who place blind faith in the free market, or, at best, members of the lunatic fringe.

Cassandra’s curse was to always tell the truth about the future, but never be believed. If you add to that curse that she would be ridiculed, derided, and shunned for making her predictions, you have a pretty fair approximation of what it feels like to be a libertarian.

There’s a lot there, all well worth the read.

H/T Division of Labour

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

The Absurdity of the Lilly Ledbetter Fair Pay Act

The first bill that Obama signed into law is the Lilly Ledbetter Fair Pay Act of 2009.  The bill is designed to plug “holes” in the Civil Rights Act, Age Discrimination in Employment Act and the American’s with Disabilities Act, namely in the requirement that people sue within 180 days of the unlawful discrimination occurring.

The very premise of this law should warn people that the law is a bad one; usually victims are aware that they have been victimized, which is clearly not the case with the actions the law seeks to criminalize.  This law  attempts to protect  people who arbitrarily, possibly years after the fact, decide that a contract they accepted was suddenly unacceptable.

Good laws, ones that attempt to criminalize acts which harm or injure a victim don’t need such a clause.  A victim of assault and battery, for example, will become immediately aware that he or she has been attacked.  A person who is the victim of fraud can pinpoint when the other party failed do to satisfy their contractual obligations.    While on occasion, it may take years for the fraud to manifest itself, inevitably, the victim becomes aware of the fraud and can point to the contractual violation that took place.

The case of Lilly Ledbetter, after whom the law was named, shows the absurdity of the law very plainly.  Lilly Ledbetter worked for Goodyear.  Over the course of many years, they offered her an employment contract that paid her far less than contracts made with men performing the same or similar duties.  At the time, she voluntarily accepted the contracts, clearly meaning that she thought the salary was an acceptable payment for her services.  As she neared retirement, she became aware of the fact that male coworkers were paid more generously and sued on the grounds that she was the victim of unlawful discrimination.

Interestingly, had Lilly Ledbetter’s male coworkers been paid salaries that were approximately equal to hers, under the law she would not be a victim.  This highlights the bizarre nature of discrimination law.  Compare this law to laws governing assault.  If a person assaults someone, how many other people were assaulted, how consistently the attacker assaults people he comes in contact with are absolutely irrelevant to the question of whether or not a crime has been committed.  Under such a rubric, we could argue that Ted Bundy wasn’t really a murderer, after all he killed nearly every woman he picked up, thereby not unfairly signaling out any one of his victims for unusually harsh treatment.

Odds are that any person, at some point in their lives, will regret some contract they entered into willingly that seemed like a good idea beforehand.  The notion that the law can punish the other party after the fact for fulfilling the terms of an agreement that was freely entered is dangerous; it assumes that society is improved by making the legal system more arbitrary and capricious.

The authors of this law claim that it will improve commerce by making commercial transactions more orderly.  Nothing can be further from the truth.  This law makes the decision to employ members of protective classes to be quite perilous.   Under this law, a person can work for a company for decades, and then turn around an sue the company for discrimination and be awarded decades of back pay.  It will, if anything, make businesses more reluctant to hire women, minorities, disabled or gays or any of the other protected groups that the law seeks to protect.

The law is also unconstitutional, not only because it depends on an incorrectly expansive reading of the General Welfare clause, but also because the law appears to be retroactive (to me anyway).

While I applaud the goals of the law, to expand the options available to women, minorities, the disabled etc, this law is very counterproductive.  The bargaining power of workers is enhanced when they can more easily switch jobs and employers have to compete for the labor they hire.  When the government intervenes in the labor market by making employing certain people more risky, they are in effect making those laborers less attractive to people who are considering buying their labor services.   In short, this law will hurt women, hurt minorities, hurt the disabled, etc.  It is, in short, an own goal.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Bush Was a Dictator – And the U.S. Government Is a Dictatorship

A dictator is a monarch who is both law-maker and law enforcer, who also acts as final judicial arbiter in cases, and is not legally liable for his actions.

By such a standard, George Bush was a dictator.  He claimed the power to ignore the legislature, and to arbitrarily rewrite the law – citing the U.S. Constitution’s appointment of the president as the “Commander in Chief” of the United States Army and U.S. Navy as justification.  If the Congress passed a law he didn’t like, he refused to enforce it.  If it failed to pass a law he liked, he enacted it anyway. He successfully suppressed the courts’ power of habeas corpus throughout most of his term, effectively wielding the power to seize anyone off the street and to detain them arbitrarily with no review.  And, despite his many violations of the law, he never faced any credible threat of legal sanction.

Many of his supporters argue that since George Bush stepped down willingly at the end of his term, he was no dictator.  But a what characterizes a dictatorial government is how the leader controls the government, not how he got into power or left it.  A Roman appointed to the office of Dictator during the years of the Republic had his term expire after only a year, yet during that year no-one would argue that during that year there was no dictatorship, even though they often stepped down willingly at the end of their term. Nor do they have to come to power through violent means: witness Adolf Hitler’s appointment as Fuhrer by the German Parliament via the Enabling Act, which was all nice and legal and regularly renewed by parliament.

While many people have been outraged by Bush’s arrogation of power, there was been no serious attempt by the judiciary and the legislature to rein him in.  The judiciary did, very late in the game, start to protest against his more outlandish legal theories justifying his unilateral actions, but for the most part they deferred to the president.  In Congress, a few gadflies started impeachment proceedings, but they never amounted to anything.  To the contrary, throughout his presidency the other branches bent over backward to defer to this claim of authority.

Since he has taken office, President Obama has been busy issuing new directives limiting the power that he and his subordinates claim.  Many see this as an end to the unitary executive.  But, this personal arrogation of power is very similar to the homeowner allowing a friend to crash on the couch.  It can be rescinded at any time.  In the absence of any movement in the legislature or the judiciary, it merely amounts to the dictator announcing his intention to stay his hand, rather than a permanent abdication of power.

Furthermore, he has continued legislating by fiat, the latest of which is his executive order designed to force improvements in fuel efficiency.  Regardless of  whether one feels that this is a good or bad idea,  one must admit that the power to enact such a major change in government policy, which will likely impose billions of dollars in compliance costs, when on the shoulders of one man, is dictatorial.

In many ways, the U.S. has become the most dangerous kind of dictatorship – a democratic one.  While dictators are often quite violent and, well, dictatorial, they sometimes  do to take a long view, since they expect to experience the long-term consequences of any misrule.  On occasion, dictators can even be pretty decent,  recognizing that a hands-off approach will increase their power far more quickly that a hands-on approach.  I can think of no better example of this phenomenon in action than that of Singapore.

In the U.S., on the other hand, the rulers can only expect to stay in office for less than a decade.  Rather than worrying about long term consequences, they are far more likely to be concerned about how to maximize their use of the office in the short period they hold it. Rather than worrying about the long term health of the nation, under a democratic (the system of government, not the political party) dictatorship of limited duration, we expect to see decisions that are focused on a smaller time scale.

When the Roman Republic collapsed and was replaced by the imperial system, the old forms of the republic were maintained.  The senate appointed consuls and voted on legislation.  However, for the next few centuries, political power resided in the hands of the Emperor, who was named Dictator by the Senate.  While early emperors like Augustus had fairly sound economic policies, the history of the empire is a sad tale of failed economic policies creating new crises, of poorly though out intervention begetting stronger interventions, each multiplying the devastation of the unintended consequences of its predecessor.

The republican system of government is not completely extinguished in the United States,  It is, however, all but dead.  Absent a dramatic sea-change in the attitude the American people towards their government, we will increasingly be at the mercy of popularly elected dictators, who are not restrained by any significant limitation on their powers.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Another Permanent State of Emergency

Many people have expressed a hope that Barack Obama will be an improvement over George Bush and that he will roll back some of George Bush’s excesses.  They see in Obama a man who understands nuanced argument, who at least acknowledges that those who oppose his policies can have good reasons and arguments for doing so.  However, those who are so hopeful are doomed to have their hopes dashed.  Barack Obama may give of good vibes, but a review of his policy papers show nothing more than a few crumbs of freedom thrown to the people.  Make no mistake, under Barack Obama’s leadership, the federal government will seize more wealth, violate more liberties and wreck the economy more thoroughly than George Bush did.  The Obama administration will permit, nay encourage, the looting of the treasury by their cronies to a degree that not even the Bush administration dared to.  Reading his policy aims, I see that he offers us no quarter, no accommodation.  He demands that the American people hand over more of the wealth they create, and threatens them with more pervasive monitoring and violence in order to ensure their compliance with his edicts.  He wishes to rework society – to impose his vision of how society ‘ought’ to be organized – using the state security apparatus to impose his dreams.

In every policy proposal, one sees the same theme, the expansion of government, in size, in scope and power.  Typical is his proposal as to how the government will begin respecting civil liberties:  rather than ordering the justice department to respect civil liberties in the court system by voluntarily complying with historical precedents governing government power, rather than announcing his intention to rip out the listening rooms used by the NSA to eavesdrop on the communications of the citizenry, he announces his intention to create a ‘civil liberties board’, with subpoena powers.  If the attorney general of the United States lacks the power to enforce respect for civil liberties, or even worse, is disinclined to respect them, how will the addition of this board alter the calculus?  No, this board will provide sinecures to political allies and something to point to when questioned about his respect for civil liberties while allowing the Justice Department, the Defense Department and the Department of Homeland Security to continue the business as usual, that of exercising their powers lawlessly and without limit, in furtherance of the public and private aims of the officials staffing them.

Nowhere in his policies does he announce his intention to relinquish control of anything that the government currently controls.  That which the Federal Government controls today, the government will continue to control under the new administration.  Much of which is currently out of its control today they will seek to bring under its control.

According to the Obama administration, the current economic crisis warrants expanding government spending well beyond George Bush’s record-breaking levels.  Only in passing does he acknowledge the need to raise money for this spending, which will have to be either through increased taxation, borrowing or via the printing of new money.   The U.S. economy will not provide enough in taxes or in loans to pay for this spending.  It is incapable of it.  Thus, we will see the Federal Government borrowing from anyone who will loan it money, and when those sources of funding dry up, from the Federal Reserve, which pays for the bonds it purchases with newly printed money.  The ‘inflation rate’, so called, already near 10% according to the calculation method in use in the 1970’s will rise to much higher levels.  In the meantime the standard of living will stagnate, and in all likelihood decline.  Nor is there any plan to end this spending once the economy exits the crisis.  This, like the Global War on Terror, is yet one more open-ended emergency.

And when these policies fail to have their intended effects, as unemployment continues to soar and prices continue to rise, it is inevitable that the Obama administration will blame people who it sees as standing in the way of their policies.  The Obama administration will be tempted to go after bankers, intellectual opponents, industrialists, and corporate offices in exactly the same manner as when FDR excorciated bankers and industrialists.  And, like Wilson, FDR, Nixon, Clinton, and many others, the Obama administration will be tempted to use the state security apparatus against these enemies, citing the economic state of emergency to justify it. So now the U.S. will not only be under a permanent state of emergency against external enemies, it will be in a state of emergency.  This time the enemy won’t be people living a continent away…  It will be us.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Dismantling a ‘Libertarian’ Argument for Restricting Immigration

Few topics seem to trigger strong emotions like the question of immigration.  The body of classical liberal and libertarian philosophy is full of people who espouse laissez-faire positions on the movements of goods and investment across borders, then completely reverse this position when it comes to the free movement of people.  Much of the opposition seems willing to abandon liberty, even as it claims to be promoting liberty.

The Simple Argument in Favor of Open Borders:

I have a right to do business with whomever I want so long as they are willing and able to do business with me.

The Simple Argument in Favor of Open Borders Explained in Greater Detail:

I have a right to do business with whomever I want so long as they are willing and able to do business with me.  So long as that person does not trespass on someone else’s property or steal anyone else’s property in  order to do business with me, no one else has the right to physically restrain me from doing business with them.  As I wrote in an earlier post:

No, when confronted with a person who desires to leave Mexico, purchase a plane ticket from an airline, fly to Atlanta, rent an apartment from a property owner, find employment in a factory, all of which are peaceful transactions that any individual should be free to do, the vast majority of White Nationalists cheerfully and openly call upon others to thwart these peaceful transactions at every turn. They want armed men to prevent him from stepping off the aircraft, from being allowed to rent the property, from being allowed to enter an employment contract with the factory, from driving on public roads, etc. They wish to force all these transactions to be constrained for people who aren’t members of the White race.

When a person considers how limits on immigration are put into effect, one immediately can see that liberty is destroyed, not enhanced by such restrictions.  The armed man preventing an airline from permitting a paying customer from boarding, preventing a man from renting an apartment, or from selling his labor services to a factory is attacking not only the man whom they are trying to keep out of the country, but those with whom that man wishes to do business.  These restrictions inherently involve attacks on liberty.

The ‘Libertarian’ Argument Against Open Borders

An interesting argument is one leveled by Dr Hans-Herman Hoppe: » Read more

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

A Primer on Money

Money is critical to civilization. Without it, the capital improvements and complex economic processes are impossible, and there will be a very weak form division of labor. Money allows humanity to rise above the savagery of stone age existence. Yet most people don’t understand what money is, how it is created and how it can be abused by elites in a society to plunder the common men.

What is money?

Imagine you are a farmer. You want to purchase some shoes. You grow grain. To purchase shoes in a barter economy, you must find a shoemaker who wants some grain. If you want to purchase some eggs, you must find an egg farmer who wants grain. If you want to make a tractor, you have to find a tractor maker who wants to be paid in grain, or failing that, you have to find the tools and materials you need to build the tractor from scratch, finding suppliers who are willing to be paid in grain.
Of course, grain is perishable, so you can’t amass too much grain with which to pay for really expensive stuff. And of course, you are not likely to find a supplier who is willing to be paid in large amounts of grain since they fact the same problem. As a result, you will be limited to purchasing small items that are worth small amounts of grain.

All of these problems can be solved by trading your grain not directly for the stuff you want to consume, but for something that is
a) more long lasting than your grain
b) in wider demand than your grain

Whereas you might only find one shoemaker who is willing to trade shoes for your grain, you might find three shoemakers who are willing to trade shoes for this mystery substance. This allows you to chose the lowest cost supplier of shoes, who is willing to trade the most shoes for the least amount of your grain.

Additionally, you can stockpile this substance, storing it for later consumption, allowing you to save years of productions in order to purchase some very expensive item like a tractor.

Finally, if this substance is popular enough, you will be able to find many people willing to buy your grain by trading you this substance. This allows you to maximize the payment you get for your product.

Of course, given a choice between two substances that have these qualities, you will naturally choose the substance that has the best qualities you are looking for, choosing the more popular substance over the less popular one if you are looking for something to trade in the near term, and choosing the more durable item over the less durable one if you are looking to stockpile it.

If you are not a farmer, but a tractor maker, selling one tractor every few months, but needing to buy food daily you will of course have an additional quality you demand: you want something that is divisible.

Any human society where people engage in trade, some substance or small group of substances that are
a) homogeneous or fungible
b) durable
c) in wide demand

will come to dominate the trade. These substances are what we call money.

Inflation in a free market

Since money is merely a commodity that is widely demanded for trading purposes, it is produced like any other commodity. Farmers grow tobacco. Distillers distill whiskey. Chemists produce cocaine paste. Miners produce gold. The production is dictated by the demand for the commodity.

Of course, the larger the supply of money that is available for trade, the lower the price of the money in terms of other commodities. In other words, if the supply of gold expands, everything else being equal, the number of bushels of grain an ounce will purchase will go down. Of course, to a persons seeking to purchase things with the money, they see this as each bushel of grain having a higher price.

Rising prices erode savings. The faster the supply of a money commodity is increasing, the less useful it is as a way of saving. This reduction in the usefulness of the commodity translates into a reduced demand for it. The reduction in demand means that people will be less interested in trading other goods for it, which again results in a rise in prices, since a a grain seller will want even more of the stuff before he is willing to risk a trade.

There are two outcomes of rising prices due to inflation in a free market. The first is that production is reduced. As the money commodity becomes worth less, its production becomes less profitable. The production eventually slows until the effort involved in producing money is once again justified by the profit earned by selling it for other goods and services.

The second is that people look for more stable substitutes, and start switching to using alternate money-commodities for their transactions.

Deviation From Free Markets

Money standards
Of course, the producer of the money commodity would prefer that this not happen. Many would see an opportunity for great profit if they could produce the commodity as rapidly as possible without having to worry about people abandoning the money.
So they call for laws to force people to do business in that commodity. These laws are known as legal tender laws. These laws force people to settle debts in the commodities whether they want to accept them or not. The force is to the detriment of consumers and money users, who are forced to forego a better money in favor of the standard.
Taxation
Taxation can confine people to using a particular commodity just as legal tender laws do. If the government routinely levies taxes that are to be paid in fish-heads, for example, people will have to procure a certain number of fish-heads annually to pay the tax. The fish-heads being in wide demand, naturally they are used in indirect exchange. Other commodities are at a substantial disadvantage as far as their usefulness as a money.
Discriminatory Taxation
A government can also make alternate commodities even less popular by taxing transactions or saving in other commodities more heavily than the government approved money commodity. Her in the United States, for example, if you keep your savings in gold rather than in U.S. dollars, when you trade the gold for something else, you are levied a capital gains tax on the difference between the prices in dollars of gold on the day it was traded away and the day you acquired it.

The dangers of government control of the money supply

There are two properties that make governments especially destructive:

1)Governments are able to seize resources by force and to compel people to do buainess with them allowing them to continue economically unprofitable activities for far longer than free market enterprises.

2)Governments, being controlled by people who have little incentive to take a long term view, and a great deal of incentive to use their offices for short-term personal gain

When governments seize control of the money supply, the result is usually disaster. They overproduce money, usually by debasing coinage. They force people to use the state approved currency to the exclusion of all else. In extreme cases they wreck the economy so badly that saving because impossible, and the economy reverts to a barter economy.

Today, the United States government has engaged in massive amounts of spending. They are not getting this money through taxation. Rather they are borrowing it, and a good porioin of what is being borrowed is money created by the Federal Reserve. The production costs of U.S. dollars being almost nonexistent, the Federal Reserve can continue to create money profitably through a Zimbabwe like hyperinflation. The Soviet Union and Nazi Germany were founded upon the ruins of nations whose economies had been strangled by government mismanagement of money. Will the United States similarly succumb to tyranny? Time will tell.

Recommended Reading

What has government done to our money? by Dr Murray Rothbard

Milton Friedman and the Case against Currency Monopoly by G Selgin

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

Why Nationalization Damages Liberty and Prosperity

Many progressives are looking forward to increased government oversight over the auto industry. They see this as a chance to influence the types of vehicles that are produced and to dictate that production be turned to socially beneficial uses, including the manufacture of green cars that auto manufacturers are not manufacturing. These vehicles are not manufactured presently because car manufacturers see bigger profits in continuing to produce SUV’s and more cheaply built sedans. Viewing this judgment as short-sighted, progressives are overjoyed at the prospect of including non-monetary considerations such as ecology or social needs in deciding what to produce. We who oppose the nationalization are viewed either as being too stupid to recognize the benefits of introducing considerations other than profits to production decisions, or as being wed to outdated economic theories or to be apologists for fat-cat capitalists.

This is incorrect. Rather, the progressives who support nationalization are being very short-sighted and are threatening to return society back to feudalism and are threatening to destroy the development of new technologies, technologies that will be vital to improving our standard of living while reducing the amount of pollution and natural resources needed to maintain such comfort. This not hyperbole but rather simple fact.

The problem, which has plagued all fascist and socialist economies throughout history, is that nationalization destroys the ability of the economy to rationally allocate capital goods and invest in the future. It is this incapability that is behind the phenomenon where communist countries seem to become mired in the past with stagnant technology, bare shelves in shops and factories that routinely fail to meet production quotas. » Read more

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

A Letter to Senator Kerry

Dear Senator Kerry,

I was aghast to read your response to my email on the subject of requiring people to get Federal government approval to work.  It is the sort of totalitarian policy I would expect from some right wing fascist dictatorship. I am especially stunned see a former nominee of the Democrat party send out a letter under his name defending such illiberal policies.

Let us ignore the obvious peril of permitting someone like a Bush appointee telling employers whom they may or may not hire.  Let us pretend that people will never be victimized by enemies withing the government.  Instead, let us pretend that this law will not be abused.

First, let us examine what you call an ‘illegal worker’.  I assume that you are not implying that people are somehow illegal.  That notion hopefully died with the victory of the civil rights movement in the 1960’s.  I am sure that what you meant was that rather some people are working illegally, i.e. without your permission.

So let us examine what workers do.

Workers produce things.  When they work for pay, selling their labor services to some customer who needs help getting something done, both the workers and the customer benefit.  The worker of course gets the wage that he values more than his time.  The customer gets the wealth created by the labor which they value more than the money they expend in paying for it.

In effect, two people (or one person and a company, or two companies) decide to engage in trade.  You have declared that some of these relationships are illegal.  I assume that you believe that these transactions should be illegal because someone was harmed (the alternative is too depraved to consider).  Obviously, the people engaged in the practice you want to make illegal are not harmed;  they wouldn’t enter into these arrangements if they didn’t feel that the trade was better than not trading at all.  Obviously the person who is harmed is someone else – someone not involved in the trade.

It is clear that you want the customer to be forced to deal only with a subset of labor sellers.  Much like the segregationists in Virginia who sought to prevent black people from marrying whomever they wished and limit them to only marrying other black people, you want to force employers only to employ people you approve of.  Of course this is ridiculous.  Am I harmed because your wife decided to marry you and not me?  Is Sacks 5th Avenue harmed because Target makes me a better offer?  The very notion is absurd.  Like the segregationists in the old south, you are taking your emotional disapproval of how other people interact each other and are threatening them with violence.  Of course, you don’t want to dirty your hands; the clubs that beat lawbreakers will be wielded by the police, allowing you to sleep comfortably in bed with no inconvenient memories threatening your delusion that you are somehow a moral person.

Much like the Mr and Mrs Loving who decided to ignore the racists in the Virginia legislature who declared their love ‘illegal’, people are deciding to do business despite your attempts to stop them.  You call it an ‘underground’ economy in an attempt to discredit it.  What I see are people heroically asserting their right to choose whom they do business with.  Of course they hide it from you!  If my wife and I had lived in the 60’s in Alabama, we’d hide our marriage from the Ku Klux Klan.  The fact that people are hiding from you does not discredit them – rather it discredits you.  Think about it!  People are hiding from you.  They are scared of you. Are you proud of this?  Do you consider this an accomplishment?  If your son came home from school proudly announcing that he’d bullied someone, would you tell him how proud your were of him?

I am told you are a religious man: when you face your creator on judgement day, I don’t think you will earn many brownie points by  telling your maker that your big accomplishment was threatening people who wished to peacefully do business with each other.

In these difficult times it is shameful that an influential senator like yourself is throwing rocks at your countrymen’s efforts to earn a living and improve their lives.  I hope you will come to your senses and stop threatening us and let us go about rebuilding our lives.

The letter that triggered my ire below the fold » Read more

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.

The Un-American Pledge of Allegiance

One aspect common to totalitarian regimes is the forced loyalty oath. Nazi Germany, for example, forced all pastors, civil servants and soldiers to take an oath of loyalty to Adolf Hitler. In the Soviet Union, in Communist China, and numerous other nations, the state demanded that people swear loyalty to the government as a condition for a jobs, for education, or to receive any service that the state had arrogated for itself. Typically regimes demand routine public displays of loyalty before everyday events such as sporting events, theater performances, or the beginning of the school or work day.

Why do totalitarian regimes demand that people publicly announce their loyalty and subservience? The answer is simple – the totalitarian regime typically does not have the people’s willing loyalty. Rather, they must compel the people’s loyalty. And, if they can’t have the real thing, a fake version is just fine. The forced loyalty oath is a sign of a unpopular regime, that fears the people because it acts in a manner that not in the people’s interest.

Is the forced loyalty oath ineffective? Are totalitarian regimes fooling themselves, making people say empty words that the people don’t believe? To the contrary, the forced loyalty oath is common because it is very effective, being one of the cruelest attacks on freedom.

The forced loyalty oath attacks the freedom of speech. With it, the regime seizes control of a person’s mouth, and compels that mouth to say words that its rightful owner wishes not to say. The monstrosity of the crime arises from the fact that it is through our words that we construct society. It is with our words that we build our bonds with our fellow men. We are social animals, we need to talk to our fellows for our basic sanity. That is why one of the cruelest punishments that men visit upon each other is solitary confinement. Seize control of a man’s words, and you have effectively imprisoned him in his skull. That is why I feel that the right to speech is second to the right to life.

While most people recognize that that the freedom of speech is the right of every person to say whatever he or she wants to say, they often forget that it also includes the right of every person to not say things that he or she does not want to say. Forcing a person to say what he does not want to say is as bad as gagging him and silencing him.

We can decry pictures of children standing at attention wearing the red scarf of the Young Pioneers uniforms or the shorts of the Hitler Jugend as adults order them to pledge their undying loyalty to a state that plunders them and enslaves them. However, the sad fact is that while many Americans who would condemn other nations in a heartbeat for demanding such false displays of loyalty are supporters to a systematic version of it being practiced here at home.

Every day, millions of children living in the U.S. are compelled to utter the following words:

“I pledge allegiance to the flag of the United States of America, and to the Republic for which it stands: one Nation under God, indivisible, With Liberty and Justice for all.”

Allegiance is a state of loyalty or devotion. A declaration of allegiance is not something to be taken lightly. It is a modern form of a declaration of fealty, the oath that a person took under feudalism that bound him to obey his lord’s commands, even unto death. The oath these children are ordered to make is loyalty not to any idea or set of principles, but to a flag, a symbol of the state. Change three words, and a Cuban child could utter it in devotion to Castro, a North Korean to the government of Kim Il Sung, a Scottish child to the British Queen or a French child to the Republic. This emptiness did not go unnoticed to the public who demanded that politicians correct the matter. They did not want to give it any principle that would challenge the legitimacy of the state, so they decided to add a loyalty oath to God to distinguish it. Of course, God is conveniently very lax in enforcing such oaths and so no practical impediment to the power of the state. Furthermore, I am told that the champions of adding a religious component to the oath carried the day by arguing that no “godless communist” could take the oath, marking them for ostracism.

It is not surprising that public schools make this demand of children. From their inception in 1642 in the Massachusetts Bay Colony, U.S. government schools have had on main purpose: to indoctrinate children in the religion or mores that the state feels most useful. Useful skills like reading and writing, critical thinking, knowledge of the arts and sciences are all secondary to the goal of indoctrination. In the case of Massachusetts, the schools were originally intended to induct the children into the state’s official version of Protestant Christianity rather than the heresies of their parents. In modern times, the religion is not some strain of Christianity, but rather the worship of the state. One can see this in the original version of the pledge, which is short and to the point:

Text Meaning
I pledge allegiance to the flag of the United States of America, and to the Republic for which it stands: I will be loyal to the state and obey it’s commands.
one Nation The state is the people
indivisible People are not allowed to secede or withdraw from the state.
With Liberty and Justice for all.
Standard boilerplate conditions that all states, from Iceland to the People’s Republic of North Korea, claim to establish for the people under their control.

The details of the pledge are damning. The person who makes it is claiming not only loyalty to the state, but a loyalty that is devoid of any principles and irrevocable under any conditions.

The change to add “under God” does nothing to lessen the totalitarian nature of the pledge other than to make the laughable claim that the state is subservient to God.

The United States was originally founded as a nation of conscience. We can see this in an odd passage early in the Treaty of Amity, Commerce and Navigation, signed in 1794. This was the treaty which reestablished diplomatic relations between Britain and the United States of America. In it the U.S. government made the following pledge towards British subjects remaining in the former colonies after the British Army evacuated it:

“All settlers and traders, within the precincts or jurisdiction of the said posts, shall continue to enjoy, unmolested, all their property of every kind, and shall be protected therein. They shall be at full liberty to remain there, or to remove with all or any part of their effects; and it shall also be free to them to sell their lands, houses or effects, or to retain the property thereof, at their discretion; such of them as shall continue to reside within the said boundary lines, shall not be compelled to become citizens of the United States, or to take any oath of allegiance to the Government thereof; but they shall be at full liberty so to do if they think proper.”

Every few years, some organization sues a school district because it compels children to state the pledge with the clause “under God”. These suits invariably claim that it violates the clause in the U.S. Constitution forbidding the establishment of a state religion. Unfortunately, these lawsuits miss the main point. The human rights violation is not that children are forced to pledge their loyalty to God – t is the fact that the children are forced to make any loyalty oath at all!

The pledge of allegiance is not compatible with a free country. Written by a socialist who sought to indoctrinate children with the idea that they should be servants of the state, it opposes the very principles underlying the Declaration of Independence. It is the duty of every patriotic American, whose loyalties are to those principles rather than some flag or body of men, to oppose it. Let the enemies of freedom distinguish themselves by compelling people to take oaths against their will. Let us once again embrace freedom and expel the rotten pledge of allegiance from our schools.

I am an anarcho-capitalist living just west of Boston Massachussetts. I am married, have two children, and am trying to start my own computer consulting company.
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