no third solution

Blogging about liberty, anarchy, economics and politics

Comments on Comments # 24

September 9th, 2008

I’ve had some problems lately with WordPress. The WYSIWYG editor disappeared. Some people on forums say it has to do with a problem with the TinyMCE or wp_includes file, and may be related to a version update. I never messed with any of these. I’m not sure how my version of WP updates, but I don’t do it manually.

I don’t care enough about the WYSIWYG editor to bother fixing the problem. I can use the HTML editor. Yes John, that does make us nerds.

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Black Bloke left an unrelated comment to The Demand for Money

I thought this might be of some interest to you. I just came upon some footage of the gassing of the protesters last night outside of the RNC. I’m trying to give this footage more exposure.

Protestors Tear Gassed! Raw footage – gnooze tear gassed in St. Paul!

Thanks Black Bloke. I took that Gnooze.com video and spliced it with some other footage and pictures from the RNC “riots.” It is a little rough around the edges, but you can view it: It’s Not Fascism When We Do It.

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Gilligan left some comments on The Demand for Money. I intend to reply to these in a stand-alone post.

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Smallylerned left a comment on if you can think for yourself, you can’t serve on a jury. He says that if the charge is something minor like drug possession, you should try to get on the jury just to nullify. Whatever. I’m OK with that, but I’m not going to advocate it. Most people are only capable of a tiny bit of independent thought.

They might be capable of surmising that “it’s wrong to send this man to jail,” or “i disagree with this law,” but they’re probably not capable of really wanting to do anything to change it, especially not anything subversive, like lying to a judge or a deputy, even though these sorts will lie to you whenever it serves them.

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Ryan Anderson left a comment on all your property are belong to uncle sam, in which he advocates that I ask my congressperson for permission to be more free. I’m not convinced that Ryan is an idiot, so I will respond to these uncritical observations in a subsequent post.

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Rad Geek left a comment on the August Carnival of Market Anarchy, in response to one submission that was critical of labor unions.

[T]here might be viable business models for putting capital to use other than corporate capitalism as we know it, there might also be viable organizing models for unionizing workers other than conservative, pro-state unionism as we know it.

The topics of productive organization and labor as they relate to free markets, etc., are of great interest to me. I’ve got two or three posts that I think would be relevant, in the draft stage right now. I’ve certainly been guilty of my fair share of “vulgar” capitalist apologies, so I’d like to think that maybe I have a decent frame of reference for such discussions.

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In response to All of our productivity is wasted, Harvey Orion asks,

Good point. But, if I made 20% of what I made now, I’d still have to give up 90% of the 20%, and I’d be even worse off. Isn’t it a better solution to just figure out how to make more money and succeed in spite of the bastards?

Is there really any other solution that can actually be implemented?

Well, I never suggested that you should just go out and earn 20% of what you’re earning. What I said, is that you already earn only 20% of whatever it is that you’re earning. If you can figure out a way to earn 20 or 30% of your nominal income, in a manner which can’t be stolen by taxes you should be better off.

For most people, 90% of their life is cannibalized by government. We can’t imagine living on just 10% or 20% of what we currently earn.

The irony is that we’re already doing it.

Is there any other solution? Well, that’s the point of the David Gross’ argument at The Picket Line. Primarily, we dine in restaurants and buy produce from a mass-merchandiser, because our opportunity cost is too high to be even marginally self-reliant.

Our opportunity costs are so high, because government is a thief.

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Kip left a comment (tangentially) on Who enforces the decisions of a private court? in response to my proposition that contracts should be written in as clear and unambiguous a manner as is humanly possible.

But that is of course not costless. We can either spend all our time drafting contracts, or we can actually go out and do stuff.

Agreed. Food for thought: why are contracts so costly to write, in unambiguous terms? Doesn’t have anything to do with a monopoly on the license to practice law, would it?

He also brings up some other points, marriage and adhesion contracts:

This is exactly what I try, with woefully little success, to explain to harder-core libertarians and an-caps about “government in the marriage business.” It’s very cute to say “just replicate it through contracts,” but contracts are expensive, and time-consuming. A uniform, easy and cheap system that gets 95% of couples 95% of what they want seems like a pretty good idea to me, and to dismiss it outright, regardless of the economic implications, merely because the government is involved is, quite frankly, silly.

(A related issue is the adhesion contract and the EULA/TOS. It’s totally myopic to damn such terms of sale — voluntary sale, incidentally — without acknowledging that they make the product vastly cheaper to produce. How much would a cruise ticket or piece of complex software cost if each contract with each customer had to be separately negotiated?

Well, you know my position with regards to marriage is that everyone should be allowed to do so. And my position on the current state of affairs is not merely “government is involved, and should not be,” (although, they should not be).

If a marriage contract is so complicated and expensive (and I believe that it probably is), then that’s all the more reason to get the government out of the business. One could probably argue that the only reason the “marriage” as we know it is so complicated and expensive is because the burden of maintaining the institution is shouldered by the public at-large. Unfortunately, this means that the costs of bad decision-making, bad policy, and gross negligence are also distributed.

How much would a piece of complex software, like SPSS or SAS, cost, if it were free? Software is probably a bad analogy, what with being on the bleeding edge of the open source movement, but I’ll forgive you.

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John Petrie left a lengthy comment, the crux of which is:

[T]he very nightmarish scenarios Statists ascribe to their imagined, hypothetical, straw-man libertarian world already plague the Statist world. In our society, if you have a dispute with the State, you have to take your case to a State court and you have to accept its ruling! There is no possibility of 3rd-party arbitration, which would be beneficial in that case (a scenario only permitted by anarcho-capitalism).

Right now, there is one party which can unilaterally perform, with impunity, the very actions that many people fear would overtake a free market. There is essentially nothing you can do to avoid interacting with them. And they have almost all of the guns.

Are there going to be thieves and murderers and scofflaws in a free society? Yes, but they won’t have all the resources, nor will anyone be forced to interact with them…

Some people think that anarchism can’t work because it’s too Utopian. The only thing more Utopian, more divorced from the facts of reality, is the unwavering belief that the current system actually is Utopia.

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John Petrie left a comment on You Can’t Fight City Hall

Maybe the libertarian side of homesteading is on Mrs. Pettine’s side, or maybe I just want her to win because I sympathize with her more than with the city or the construction company.

The soccer arena clearly diminishes her enjoyment of her property, which she never expected to sit right next to a gigantic soccer arena. If an airport or an oil derrick or some other loud/dirty/polluting thing went up next to her already owned and used property, I would say her right as prior homesteader negated the right of others to build next-door to her and destroy the use and enjoyment of the property that existed when she settled on it and that she expected to continue. Maybe the same argument can be made for an obtrusive and ugly eyesore. I’m torn.

Yeah, a bunch of friendly old people are probably a more sympathetic cause than a real estate developer. This is doubtless true. And although I sympathize with you, I’m not convinced (by the facts as presented) that she would have a valid homestead claim to the adjacent land. That land was previously owned and used by another party, which party would probably have the most valid homestead claim. That party decided to sell the property to another.

Even if the property had been unowned, I think that you’re misapplying the homesteading principle, or at the very least that there is significant grey area. If the property was unowned, then by HP, any person can acquire ownership in the property by mixing his labor with it. Someone did that, and now, the people who didn’t are crying foul. The grey area is, that wherever you have real property, there is an imaginary line beyond which the land is no longer yours. At the edge of your property, unless the land is unowned, is always someone else’s property. You can’t exercise ownership of their land simply because it’s adjacent to yours, any more than they can tell you how to live simply because you’re adjacent to them.

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Responding to All Your Property Are Belong to Uncle Sam, Woody says,

13 Southern states attempted to leave the country in the middle 60’s but the government wouldn’t let them.

Now the government is building fences to “keep out the aliens” Any farmer/rancher can tell you, a fence doesn’t keep out the predators. It merely contains the livestock. Makes it easier to have fried chicken or a steak when you want one. We are being told that we will need passports to visit Mexico or Canada. Not true! We will need passports to get back into the country after visiting Mexico or Canada.

The “middle 60’s”? Is that the 1860s? Or was there another movement with which I’m not familiar. Pedantry aside, tax laws see to it that we’re bound by invisible chains, while border fences cages us all, literally. The Berlin Wall was designed to imprison Germans. Ask Peter Fechter.

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Dan Z left a comment on my most recent post about Kwame Kilpatrick, Thug Mayor of Detroit. It wasn’t really about Kwame, it was about privilege.

Lets be honest if a normal joe six pack were to try and assault an officer serving a warrant wed probably be cut down in a hail of gunfire before we finished, forget the baton.

Kwame allegedly assaulted a deputy serving a warrant. If I did that, I’d be beaten severely, likely in jail facing a dozen or more trumped up charges, or dead. If I sell drugs, it’s illegal. If a police officer sells drugs, he’s “undercover” and performing a “service” to his community. If I take money from people against their will, it’s called theft. If the mayor and city hall do it, it’s called a “tax.” Government plays by a completely different set of rules, which are procedurally biased in favor of government, and government agents are routinely held to a lower standard of accountability than the rest of us normals.

Kwame Kilpatrick is still (kind of) the Mayor of Detroit. After he publicly cost the city and its taxpaying base, millions and millions of dollars, in a highly-publicized scandal involving one of his aides, perjury, an (allegedly) murdered stripper, wild parties at the mayoral mansion, a $25,000, one year lease on a Carlita’s Escalade, and questionable appointments like Kandia Milton.

Ahhh, Detroit style. Very nice.

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These comments aren’t getting any younger, so I might as well throw them at you now, before they become even more irrelevant.

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Robert Evans left a comment on Of Money, Bad and Good: Gresham’s Law is Wrong:

In short, Gresham’s Law is only correct in the presence of legal tender laws.

Succinctly, that’s what I’m getting at. Legal tender laws are a necessary assumption to the problem posed by Gresham’s law. If you don’t want bad money to drive out the good money, stop forcing people to use bad money.

Eventually, when the money is really bad, serious hyperinflation bad, people stop pretending that the money is anything but worthless, at which point some other media of exchange emerge to facilitate trade. So,  in the long-run, Gresham’s law is really not applicable even when the necessary assumption is made.

Kip, Esquire disagrees with my take on Gresham’s law. I said that:

Turning simple cloth into greenbacks does not and cannot create wealth. This argument cannot be made about gold, since so long as people continue to desire it (for whatever purposes), the production of gold does constitute the production of real wealth.

Kip accuses this argument of being circular:

Fiat currency has no “real” worth, because people MIGHT stop valuing it, but gold has “real” worth, because people MIGHT keep valuing it?

Like all subjective tastes and preferences, may certainly change, although 5,000 years of recorded history are a pretty strong testament to gold’s stamina. Of course, past performance is no guarantor of future results; should tastes and preferences change with time, the value of gold will reflect those changing preferences.

So long as media of exchange are chosen freely, it makes no difference why people value the commodity, only that they do.

On the other hand, the only reason anyone, anywhere, ever, desires paper currency is because he or she is obliged by law to use it, or else. For Christ’s sake, the U.S. Government had to effectively issue a prohibition on the individual ownership of gold, in order to drive it out of common use.

Stated differently: the government forces everyone to accept paper currency, quite literally at the point of a gun. If you’d like to address this point, I’m all ears.

Otherwise, I call bullshit on the “gold is fiat money, too!” argument.

Further, Kip says that:

The gold standard’s only claim to validity is that of dilution: the government can debase the currency. But the anti-gold argument is still valid: the government need not debase the currency. And as long as it doesn’t, then the gold standard is a canard.

I hardly think that this is gold’s only claim to validity. Free men should be able to buy and sell whatever they want, with whatever they can agree upon. The Utopian condition, that “if government didn’t debase the currency, everything would be OK” is sophistry. Again, the historical record and the proclivities of politics and politicians indicate that the government does debase the currency, and will continue to debase the currency.

Even if the government chose not to debase the currency, what amount of money is sufficient to facilitate trade?

The printing-press proponents argue that more money is needed to facilitate more trade, to increase productivity, etc.   But productivity buys productivity, does it not? First produce, then consume.  Adding another zero to the end of my paycheck is pointless, if another zero is added to the end of the prices of everything I buy.  As long as prices (i.e., exchange ratios) are freely floating, it makes no difference how much nominal money exists;

Since fiat monetary injections either create demand where there previously was none, or increase demand over-and-above the levels that would’ve otherwise prevailed, the creation of new money must cause prices to rise.There is no basis in economics for assuming that rising prices are either the cause of, or are indicative of, macro-economic well-being. Quite the contrary, rising prices are indicative of shortages, and shortages, poverty.

In other words, TANSTAAFL.

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1955Design left a comment on Exploiting Ignorance: Money for Nothing, in response to my assertion that in the event of credit default, “Nobody has lost anything … on the contrary, whosoever he purchased goods from has already received and has likely spent the money that was created out of nothing.”

OK, this is all pretty confusing to me. Hasn’t the credit card company lost in this case? After all, they paid money to Best Buy for that flat screen HD television that you acquired by using your credit card.

The source of this confusion is that most people simply have no idea how money is lent into existence by the Federal Reserve and its member banks.  Money is essentially created out of thin air, and then borrowers are asked to repay that money plus interest over time. I feel like I have a pretty good handle on the concept, and it often still challenges me. That’s why I included the Galbraith quote,

The process by which banks create money is so simple that the mind is repelled.

This topic deserved its own response which I posted as Money From Nothing.

Recently there was a relevant article at Strike the Root which talks about money creation. The banks don’t loan your money that you have on deposit with them, rather they use your money essentially as a sort of collateral, against which they are permitted to create additional money in the form of debt instruments.

1955Design left another comment on >Fiat Credit is Not a Loan.

If the $1000.00 was effectively created out of thin air when I bought that TV, why is it that people defaulting on their credit cards and not making payments causes the credit card company to lose money over time?

I guess it still seems to me like there must have been some “money in the bank” when the CC company transferred the funds to Best Buy.

The process by which banks create money is so simple that the mind is repelled. God, I love that quote.

The banks have created a series of pyramiding obligations on their books (in the form of deposit accounts) which can only be met by further monetary expansion. As long as the money supply continues to expand, most of the “loans” will eventually be paid back. The problem is when the money supply ceases to expand, or the pace of expansion is less than anticipated. In these circumstances, there is not enough money left to pay back all of the loans. This means that there is no longer enough money in the vaults to satisfy the regular withdrawal demands of the bank’s clientele.

Banks and credit cards “lose” money when borrowers default, because on their books they claim a note receivable in the amount of the outstanding principal and interest on the “borrowed” funds.  Other people’s deposits consist largely or entirely of money that is tied to one of insolvent obligations. Many people have invested their money with these companies, if the house of cards collapses, they stand to lose it all. That’s bad. But it’s hardly worse than the alternative.

If it really was your money that was loaned out, you’d be the one losing it when someone defaults on the loan.  But it wasn’t your money; this much is evidenced by the fact that the bank, acting in conjunction with the FDIC, will guarantee the full amount of your deposits up to $100,000.  Since no individual loses money when a borrower default on a loan, we can conclude either that the money was created out of thin air, or that it will eventually be created out of thin air.

Banks get in trouble because the FDIC doesn’t want to bail them out.

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William Blum at Dissident Voice offers Some Thoughts on Patriotism:

At the end of World War II, the United States gave moral lectures to their German prisoners and to the German people on the inadmissibility of pleading that their participation in the holocaust was in obedience to their legitimate government. To prove to them how legally inadmissable this defense was, the World War II allies hanged the leading examples of such patriotic loyalty.

That’s what I mean when I talk about The Nuremburg Standard. You should not be able to get away with war crimes simply because someone with more stars on his shoulders told you so. If you abdicate your moral compass, you abdicate your right to be treated like a human being.

Reminds me of an AntiFlag song:

NOT PROUD – Of my skin
NOT PROUD – Of where I live
I’m fucking proud of who I am… I AM HUMAN!

no third solution

Blogging about liberty, anarchy, economics and politics