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Source link: http://archive.mises.org/14299/the-progressive-conversion-of-social-power-into-state-power/

The Progressive Conversion of Social Power into State Power

October 19, 2010 by

Just as the State has no money of its own, so it has no power of its own. All the power it has is what society gives it, plus what it confiscates from time to time on one pretext or another; there is no other source from which State power can be drawn. FULL ARTICLE by Albert Jay Nock

{ 48 comments }

Wildberry October 19, 2010 at 10:50 am

I enjoyed this article and the book.

Let me grant that over the past 200 years or so, “All the State’s institutional voices unite in confirming this tendency; they unite in exhibiting the progressive conversion of social power into State power as something not only quite in order, but even as wholesome and necessary for the public good.”

Now let me run the clock backward. At the passing of each “un-hour”, the process of accumulation of State power is reversed and Social power increases. But in my magic world, only this changes, that is only the unwinding of the State occurs, but the rest of society is left to fend for itself. Since we are running the clock backwards, we know exactly the sequence in which this dismantling will occur. But there is no stopping it. Once begun, the “un-clock” continues to run until there is precisely no State in existence.

Ultimately, we would have arrived at the Ancap ideal, where social power is absolute, and each subtraction from the State has resulted in a free-market response that leaves individual freedoms intact while producing superior methods of doing things that need to be done, and all within a context of the non-aggression principle.

Is that the plan?

F. Beard October 19, 2010 at 3:32 pm

Unwinding the State sounds great but let’s not forget that it was State supported banking that led to so much need for government. And I am not just taking about the Fed. One way or another, the US government has privileged private banks, private moneys and private classes of money (such as gold or silver) from the beginning by accepting them for taxes.

The only way the State can be free from manipulation by the private money class is to issue its own debt and interest free money that is legal tender only for government debt. And to favor no scarce commodity, it should be made of the cheapest material that get’s the job done.

Conversely, the private sector should be free to issue money that is only good for private not government debt.

BTW, here’s a passage from Gary North that makes me doubt the sincerity of the libertarians:

“The government does have the right to establish the form of money that citizens must use to pay their taxes. The government should limit itself to a statement regarding the weight and fineness of the tax coins. If private enterprise produces coins that meet these standards, the government must accept such coins as valid for the payment of taxes. The government lawfully controls the form of taxation; but it should not have any power to monopolize the production of coins. Governments have always asserted this authority, and they have always done so to the detriment of liberty.” Gary North from http://www.lewrockwell.com/north/north895.html

In other words, those who used non-precious (and non usury) forms of private money such as common stock would be forced to buy gold to pay their taxes. Does that sound libertarian?

So yea, let’s shrink the state but I suggest we start with government privileges for bankers. And any form of government privilege for gold or silver as money is not a step in that direction.

Jordan Viray October 19, 2010 at 7:07 pm

“The government does have the right to establish the form of money that citizens must use to pay their taxes.”

The government does not have the right to collect taxes let alone establish the form of money under which taxes must be paid. Gary North is inconsistent but that does not mean the whole enterprise of libertarianism is to be discarded. Instead, take what is good and leave out what is bad. Some people come to the free-market through the Chicago School and some people come to smaller government through Ayn Rand. Neither of those two are perfect but they have a lot more truth in them than many other schools of thought. We just need to root out the mistakes.

“The only way the State can be free from manipulation by the private money class is to issue its own debt and interest free money that is legal tender only for government debt.”

How would this even work? Think it through and you will find it doesn’t. We can try to eliminate the pernicious effects of manipulation of the State by special interests through transparency, audits, checks and balances etc. but the only way to truly eliminate this manipulation is to eliminate the State.

F. Beard October 19, 2010 at 7:49 pm

Gary North is inconsistent but that does not mean the whole enterprise of libertarianism is to be discarded. Jordan Viray

I am very happy you noticed that. I am afraid that the Austrian and libertarian movement is riddled with quite a few goldbugs and usurers. In fact, private money requires neither gold or usury. Common stock is one example. Mike Rozoff’s “Wal-Mart Money” is another.

No, I won’t discard libertarianism. It is the way to proceed but hypocrites who seek government privilege for a particular private money or class of monies should be called out.

“The only way the State can be free from manipulation by the private money class is to issue its own debt and interest free money that is legal tender only for government debt.” FB

How would this even work? Think it through and you will find it doesn’t Jordan Viray

I have thought it through and it would work. Also, it has historical precedent. When the BOE was founded, its notes were accepted for taxes but were not legal tender for private debts. That was changed in the 1800′s, over a hundred years later.

A simple example: The Federal fuel tax creates a demand for government money. It is a per gallon tax. In order to drive, we would have to purchase government money on the free market from those who had it (government workers, the military, Social Security recipients, etc.) but not from the government since the government should never under any circumstances accept private money. If the government over-issued its money it would lose value without effecting the private sector. The government would either have to cut spending or raise taxes (unpopular). If it cut spending, it would encourage folks to move into the private sector, which is good.

Friend, taxes and the government are not going away soon and they shouldn’t either. There are living victims of the government backed counterfeiting cartel. They are entitled (yes, you heard me) to aid from that same government who enabled them to be looted. However, a truly free market (including in money creation) would create no more new victims and would quickly enable the government to shrink to a minimum.

Jordan Viray October 20, 2010 at 2:03 am

“I am very happy you noticed that. I am afraid that the Austrian and libertarian movement is riddled with quite a few goldbugs and usurers. In fact, private money requires neither gold or usury. Common stock is one example. Mike Rozoff’s “Wal-Mart Money” is another.”

Well there’s nothing wrong with wanting a gold standard particularly as it has some compelling advantages over fiat money e.g. the supply of gold cannot arbitrarily increase. I’m not sure what you mean by usury but the charging of interest is an inherent consequence of Austrian theory. Certainly I would love to abolish the notion of legal tender whether gold-backed or not though and let people decide what will be good money and what will not.

“No, I won’t discard libertarianism. It is the way to proceed but hypocrites who seek government privilege for a particular private money or class of monies should be called out.”

Absolutely – I know the impression of the Austrian school from some other people is that we’re “fellow travelers” and “useful idiots” for corporate interests. It’s certainly not true but I see how people could get that impression. It would be nice if there were a whole section on Mises.org devoted to naming the companies that get favorable subsidies, regulations, contracts and whatnot along with an examination of the effects of this government intervention on the taxpayer, competing companies and others. It’s not that this isn’t mentioned but rather it gets buried along with all the other information here.

“A simple example: The Federal fuel tax creates a demand for government money. It is a per gallon tax. In order to drive, we would have to purchase government money on the free market from those who had it (government workers, the military, Social Security recipients, etc.) but not from the government since the government should never under any circumstances accept private money.”

If the government over-issued its money it would lose value without effecting the private sector.”

Intriguing. I’ll have to defer to the experts on this one but if that were the result, that would be an improvement!

“The government would either have to cut spending or raise taxes (unpopular).”
Considering that within approximately one century taxes have gone from around 3% to 35% GDP, I’m not sure the mere unpopularity of taxes would be enough to stop the government from raising them.

“If it cut spending, it would encourage folks to move into the private sector, which is good.”
True.

“Friend, taxes and the government are not going away soon and they shouldn’t either. There are living victims of the government backed counterfeiting cartel. They are entitled (yes, you heard me) to aid from that same government who enabled them to be looted.”

I think we had this discussion in another forum where you recommended that all the victims of Fed-financed housing bubble be bailed out. They are victims, for sure, since Austrian theory proves that the low interest rates essentially forced miscalculation about the true availability of savings for investment. Mass deception to be sure with millions of victims. But we can’t rob Peter to pay Paul. Besides, I think I calculated the cost of such a bailout as too high – maybe you’ve backed down from the suggestion of “bailout” to “aid”.

Certainly I could not abide any new taxes to pay for that aid but if we were to say, shift government spending overseas military bases and war and use it to pay for something like Social Security and Medicare obligations for the retired (especially because the Social Security trust fund is bankrupt) – I’d be okay with that.

“However, a truly free market (including in money creation) would create no more new victims and would quickly enable the government to shrink to a minimum.”

Agree.

F. Beard October 20, 2010 at 7:47 am

Considering that within approximately one century taxes have gone from around 3% to 35% GDP, I’m not sure the mere unpopularity of taxes would be enough to stop the government from raising them. Jordan Viray

Which is approximately how long ago the Fed was founded. I contend that our fascist money system, government backed fractional reserve lending in the government enforced monopoly money supply is the root cause for socialism in the US. Until the Fed wrecked the economy in the 1920s and 30s, socialism could not gain much traction in the US.

But we can’t rob Peter to pay Paul. Besides, I think I calculated the cost of such a bailout as too high – maybe you’ve backed down from the suggestion of “bailout” to “aid”. Jordan Viray

No new taxes are needed. Consider that the bankers blew a bubble with leverage of 20-30 to 1. That virtual money is going back to where it came, thin-air, as “debt” is repaid. I put “debt” in quotes because I don’t consider debt to a counterfeiter, government backed or not, to be morally valid. But for the sake of appearances and accounting and following the letter of the law while also following the spirit of it, let’s assume the banks should be paid back. Fine. While the banks have a government given privilege to create virtual money (credit), the US government has a sovereign right to create real money, debt and interest free legal tender fiat (United States Notes).

So, I suggest we:

1) Abolish the banks’ ability to create any more virtual money.
2) Have the US Treasury send every American adult a large (and equal) check of new debt and interest free legal tender fiat that is sufficient on average to pay every underwater mortgage down to current price levels TIMES from 2-7 since that is the Biblical remedy for theft and also because if the banks are to practice 100% reserve lending without deflation then a large amount of real money must be created to replace the virtual money that would disappear.
3) After the debt has been cleared, then restrict legal tender laws to government debt only and allow private currencies good only for private debt to be created.

So, in summary, we should bailout the victims of the current system and then implement genuine reform.

Jordan Viray October 20, 2010 at 4:50 pm

“Which is approximately how long ago the Fed was founded. I contend that our fascist money system, government backed fractional reserve lending in the government enforced monopoly money supply is the root cause for socialism in the US. Until the Fed wrecked the economy in the 1920s and 30s, socialism could not gain much traction in the US.”

The Fed induced Great Depression was certainly fertile ground for socialism. But you have to give Marxism, Lenin and his seemingly successful Soviets their due as well since they were big at the time. Planted the seed, as it were.

“1) Abolish the banks’ ability to create any more virtual money.”

Agree.

“2) Have the US Treasury send every American adult a large (and equal) check of new debt and interest free legal tender fiat that is sufficient on average to pay every underwater mortgage down to current price levels TIMES from 2-7 since that is the Biblical remedy for theft”

Disagree. That would cause massive inflation and destroy the value of savings in this country. That’s theft and I’m pretty sure the Bible does not condone such.

” and also because if the banks are to practice 100% reserve lending without deflation then a large amount of real money must be created to replace the virtual money that would disappear.”

100% reserves would be great but of course that is an intrinsic part of getting rid of fractional banking.

F. Beard October 20, 2010 at 8:00 am

Certainly I could not abide any new taxes to pay for that aid but if we were to say, shift government spending overseas military bases and war and use it to pay for something like Social Security and Medicare obligations for the retired (especially because the Social Security trust fund is bankrupt) – I’d be okay with that. Jordan Viray

Some have called our bogus wars and overseas bases “Military Keynesianism”. I agree. We should bring home the troops. We will need them to practice genuine capitalism, once we implement it.

Also, murder of innocents is a sin.

Wildberry October 19, 2010 at 8:49 pm

Jordan,

You said: “Some people come to the free-market through the Chicago School and some people come to smaller government through Ayn Rand. Neither of those two are perfect but they have a lot more truth in them than many other schools of thought. We just need to root out the mistakes.”

I hate to tell you this, but I can actually agree with you on this statement. Absolute truth is not required to make progress.

Then I lose you on this:
“…but the only way to truly eliminate this manipulation is to eliminate the State.”

To come full circle, here is another quote from Mises’s Bureaucracy, page 20.

“Nobody ever asserted that the conduct of a war and preparing a nation’s armed forces for the emergency of a war are a task that could or should be left to the activities of individual citizens. The defense of a nation’s security and civilization against aggression on the part of both foreign foes and of domestic gangsters is the first duty of any government. If all men were pleasant and virtuous, if no one coveted what belongs to another, there would be no need for government, for armies and navies, for policemen, for courts and for prisons.”

I have come to believe that you cannot distinguish between the illegitimate and harmful intervention of government into free markets, and the other, arguably legitimate purposes described there. Because your ideology insists that the State must be entirely eliminated from any purpose in common with the individual desires of the citizen, you must subscribe to convoluted theories of how such a function as defense can be provided by the “free market”.

That is why your over-reaching conclusions are strained and unrealistic in my view.

And as I have said before, this ideological rigidity serves to hijack any potential for a deeper discussion that departs from this singular point of view that “the State must be completely eliminated”. Maybe we could even come to some common understanding about what we mean by the difference between “State” and “Government” based on the scope of activities to which coercive powers can be limited.

That is why, after several days of debating with you, not only do you not retreat from your fundamental premise, even to in some limited sense just long enough to advance the discussion, but nearly every post you write ends with “…and that’s why the State must be eliminated.”

Wildberry October 19, 2010 at 8:54 pm

Sorry, I forgot to copy this part:

OK. I get that you think that. Any way to move beyond that “end state” discussion to how to apply all of the things that we agree are true (and I sense there are many)?

Jordan Viray October 20, 2010 at 1:23 am

You think they are my conclusions are over-reaching, strained and unrealistic just because of Mises? I kind of look at Mises, Hayek and Rothbard in a similar way to Socrates, Plato and Aristotle. They all made major contributions to their respective fields of inquiry even though there were some major differences in their thought. Hayek built on Mises and Rothbard built on Mises and Hayek the same way Plato built on Socrates and Aristotle built on both.

In my view, Human Action is certainly a great work and its presence in Rothbard’s Man Economy and State is clear. But Rothbard also came to different conclusions. It’s not that I take away from Mises but rather recognize the advancements made by Rothbard on Mises.

You think it’s ideological rigidity but it isn’t. If Rothbard and the various other anarcho-capitalist scholars work were not actually out there, you’d have a point. But it is and the force of its arguments cannot be ignored. You may not agree that the State needs to be eliminated and that’s fine – but know that the reasoning comes from a Rothbardian understanding which is just as much an heir to the Austrian school as a purely Misesian or Hayekian understanding.

There has hardly been a debate between us since you are fairly ignorant of basic Austrian scholarship and there is no retreat from the premise that the State must be eliminated no matter how much you would like that to be the case.

But now that you mention it …

Rectio delenda est.

Wildberry October 20, 2010 at 12:50 pm

Jordan,
“You think they are my conclusions are over-reaching, strained and unrealistic just because of Mises?”

If you think all that I’m about is appealing to something Mises wrote as the final authority of anything, you are not paying attention.

Rothbard (and Mises) wrote on many subjects and supported their view from many diverse points of entry. I’m trying to establish another point of entry in our discussions.

But your strained insistence that I cannot venture beyond the barriers you construct destroys that opportunity, because we can never get past this issue. You are stuck in a feedback loop. That makes your view rigid and inflexible because you cannot seem to incorporate your views with the diverse knowledge, experience and understanding of others. Instead, these views set you apart from anyone that disagrees with you on this single detail. For you it is not a detail, but everything. That isolates you from me and me from you. That’s why we keep running around the same track.

Not everything Rothbard wrote supports the conclusion that the state, in all forms and manifestations, must cease to exist. Not everything Huerta De Soto wrote necessarily supports this ultimate conclusion. It is, to be generous, an open issue. Yet both made great contributions to my understanding of the things they wrote about. The history and workings of banking throughout history is very useful to discussions concerning potential futures for America, which I am interested in. It is not necessary for me to subscribe to what you consider their ultimate conclusion to find their work useful, but useful for what? On that question, you and I probably share much common ground.

“If Rothbard and the various other anarcho-capitalist scholars work were not actually out there, you’d have a point. But it is and the force of its arguments cannot be ignored.”

Who’s ignoring them? Not me. I’ve spend many hours over the last week responding to those who share your view, so I have both direct and indirect evidence that this work is “out there”, perhaps in more than one meaning.

Let me give you another point of entry. You have been throwing around praxeology as the measure of why anarchy is “superior” to other conclusions. But I think you misuse this term. Here’s why:
If praxeology is the study of human action, and is used to advance our understanding of economics, its utility is that it frees us from logical or mathematical rigidity, and allows for the construction of a set of hypothetical conditions. The purpose of this method is to further our understanding of reality.
In other words, we set up some conditions and try to explain how it works and why it works the way it does, and then we look at reality and see if it matches up. That is one reason why Austrian economics, including the business cycle theory, are so compelling. When you take the Austrian model and compare it’s predictions to reality, they line up. Therefore, they “make sense”.

It is impossible to do this with anarchism, because there is no “real world” that can be used to verify ones hypothetical conclusions. This has been pointed out to you and others in a number of ways. Now does this mean it is a “false idea”? Of course not. It is an idea that can be articulated in a cohesive way, and it can create a vision of something in our minds. But it cannot be verified by praxeology, because as far as I can tell, human actions do not lead to a state of anarchism. The most I can say is that apparently at some distant past in human history something more akin to anarchism probably existed. So what? The truth or falsity of that is really pretty immaterial in the grand scheme of things.

“There has hardly been a debate between us since you are fairly ignorant of basic Austrian scholarship and there is no retreat from the premise that the State must be eliminated no matter how much you would like
that to [not to] be the case.”

If this is not the statement of a fanatic, I don’t know what is.

Here is something for you to consider. Some pretty smart people grappled with this question over 200 years ago. They were not Austrian scholars. They proceeded from the premise that “men are not angles”, and therefore government, in some form was not only inevitable, but desirable. They formulated a system of government as a “second attempt” to the Articles of Confederation, and created the Constitution. They argued for that course of action most notably in the Federalist Papers. It was ratified by the existing states at that time, and Americans legitimately consented to be governed by these principles, for as long as they remained free from tyranny. That system has been functioning essentially intact for over 200 years. In addition, many important Austrian scholars, some of which we have both probably read, support that fundamental idea.

Praxeologically, this appears to me to be superior to anarchy, because the predictions of how and why it operates hold up when you compare their predictions to reality. This is supported down to the level of individual human action, and not just some aggregated representation of what the “State” actually is.
Now it may be true that you are much more of an Austrian scholar than I. But that’s ok, because I am here to learn. By the same token, I would bet that I have more scholarship credentials than you in other areas. But really none of that matters, because I am not speaking to your resume. All I know about you is what you write here, and all you know about me is what I write here. Two guys searching for their version of the Truth.

Your search has led you to this:

“Rectio delenda est.” or The better it must be destroyed.

And once destroyed, we are where? You say there is a “vision” and “scholarship” on the subject which, were I up to your standards of scholarship, I would understand.

Well, is there room in your world view to allow for the possibility that I do understand?

Reality is not a simple thing. We cannot reduce this complexity simply by drawing a straight line from proposition A to proposition B. In nature, when one thing is destroyed, something else always emerges to fill the void. That is the reality of history, both natural and human-made. You seem to believe that human society can be reinvented from whole cloth. If the State, in all its various forms and applications, were utterly destroyed, something completely unlike the State would emerge. But it therefore follows that this could only occur if it’s inhabitants were ever vigilant to the reemergence of anything “State-like”; so that it could be destroyed before it gains a foothold. And such vigilance would depend upon an enlightened populace that rallied to the cause when such a threat appeared.

And thus, we return to that very problem grappled with 200 years ago; if men are not angles, then what might we do to protect the freedoms of the individual in perpetuity, yet acknowledge the necessity and desirability of the necessary functions of self-government?

To wonder with awe and respect at the results of that inquiry is no less than to wonder at the design and complexity of the natural world. The more you know the more divine it appears.

Would it be fair for me to presume that you know more about Rothbard’s work than you do about the capacities of our Constitutional Republic? If that is true, should I presume you have nothing intelligent to say on the subject of Governance? No, that would not be true or polite. You might yet surprise me.

Jordan Viray October 20, 2010 at 6:21 pm

“Rothbard (and Mises) wrote on many subjects and supported their view from many diverse points of entry. I’m trying to establish another point of entry in our discussions.”

A view that cannot be taken seriously given your willful ignorance.

“But your strained insistence that I cannot venture beyond the barriers you construct destroys that opportunity, because we can never get past this issue.”

“You are stuck in a feedback loop. That makes your view rigid and inflexible because you cannot seem to incorporate your views with the diverse knowledge, experience and understanding of others.”

Yes, the truth has a way of being rigid and inflexible and face of the diverse errors that abound in the world. I keep an open mind, but you aren’t going to convince me of some erroneous view for the sake of “understanding” and other people’s “experience”.

“Instead, these views set you apart from anyone that disagrees with you on this single detail. For you it is not a detail, but everything.”

Nope, if anarchy was my be-all end-all, I would move to Somalia.

“That isolates you from me and me from you. That’s why we keep running around the same track.”

Yes, your defense of the State does isolate your views from mine. Also, I’m at least familiar with the basics of Mises and Rothbard, unlike you.

“Not everything Rothbard wrote supports the conclusion that the state, in all forms and manifestations, must cease to exist. Not everything Huerta De Soto wrote necessarily supports this ultimate conclusion. It is, to be generous, an open issue.”

Not everything I write supports anarchy either. But when Rothbard talks about the State, don’t pretend he does so in support. Rothbard is an anarchist and it is telling that you are trying to imply otherwise.

“It is not necessary for me to subscribe to what you consider their ultimate conclusion to find their work useful,”

No one suggests otherwise.

“Who’s ignoring them? Not me. I’ve spend many hours over the last week responding to those who share your view, so I have both direct and indirect evidence that this work is “out there”, perhaps in more than one meaning.”

Yes you. Responding to anarchocapitalists when you are not familiar with basic anarchocapitalist scholarship is no virtue. You are like the critics of the Austrian school who have not even read Human Action. Those hours would have been better spent getting up to speed IMHO.

“You have been throwing around praxeology as the measure of why anarchy is “superior” to other conclusions. But I think you misuse this term.”

This, coming from someone who doesn’t even understand the term.

“Here’s why:
If praxeology is the study of human action, and is used to advance our understanding of economics, its utility is that it frees us from logical or mathematical rigidity, and allows for the construction of a set of hypothetical conditions. The purpose of this method is to further our understanding of reality.
In other words, we set up some conditions and try to explain how it works and why it works the way it does, and then we look at reality and see if it matches up. That is one reason why Austrian economics, including the business cycle theory, are so compelling. When you take the Austrian model and compare it’s predictions to reality, they line up. Therefore, they “make sense”.”

Sure enough, you demonstrate an insufficient grasp of praxeology. Austrian thinking doesn’t “make sense” because “when you take the Austrian model and compare it’s predictions to reality, they line up”. It makes sense because it proceeds logically from the apodictic axiom “Humans act”. It cannot but make sense.

“It is impossible to do this with anarchism, because there is no “real world” that can be used to verify ones hypothetical conclusions. This has been pointed out to you and others in a number of ways.”

Again, if you think it is at all necessary that we verify hypothetical conclusions, you fail to understand praxeology. And I’ve pointed out your (and Allen’s) deficiency in this regard several times.

“Now does this mean it is a “false idea”? Of course not. It is an idea that can be articulated in a cohesive way, and it can create a vision of something in our minds. But it cannot be verified by praxeology, because as far as I can tell, human actions do not lead to a state of anarchism.”

Oh wow. Praxeology does not conclude that human action “leads to a state of anarchism” any more than it tells us human action “leads to the free market.” Free-market advocates and anarchocapitalists know they are making normative statements.

“The most I can say is that apparently at some distant past in human history something more akin to anarchism probably existed. So what? The truth or falsity of that is really pretty immaterial in the grand scheme of things.”

And it is immaterial as far as a praxeological understanding of anarchy is considered as well. But to those who don’t understand that methodology, examples are helpful.

“Here is something for you to consider. Some pretty smart people grappled with this question over 200 years ago. They were not Austrian scholars. They proceeded from the premise that “men are not angles”,”

Yes, I’m acutely aware of that. I’m especially aware that those people did not proceed praxeologically. Also, that’s a bad axiom.

“Praxeologically, this appears to me to be superior to anarchy, because the predictions of how and why it operates hold up when you compare their predictions to reality.”

Considering you don’t understand praxeology and the complete unimportance of predictive ability in the method, what you’ve said is rubbish.

“This is supported down to the level of individual human action, and not just some aggregated representation of what the “State” actually is.”

Oh? Care to show how?

“Now it may be true that you are much more of an Austrian scholar than I. But that’s ok, because I am here to learn. By the same token, I would bet that I have more scholarship credentials than you in other areas.”

Great, I’ll defer to you in those areas then.

“Rectio delenda est.” or The better it must be destroyed.

Incorrect translation.

“Well, is there room in your world view to allow for the possibility that I do understand?”

You reduce that possibility with pretty much every misinformed post you make.

“Reality is not a simple thing. We cannot reduce this complexity simply by drawing a straight line from proposition A to proposition B. In nature, when one thing is destroyed, something else always emerges to fill the void.”

I guess vacuums are impossible then.

“That is the reality of history, both natural and human-made. You seem to believe that human society can be reinvented from whole cloth.”

I have no idea what that’s supposed to mean.

“If the State, in all its various forms and applications, were utterly destroyed, something completely unlike the State would emerge.”

Not necessarily.

“But it therefore follows that this could only occur if it’s inhabitants were ever vigilant to the reemergence of anything “State-like”; so that it could be destroyed before it gains a foothold. And such vigilance would depend upon an enlightened populace that rallied to the cause when such a threat appeared.”

Think about what “therefore follows” means. You might have some kind of argument here but your haphazard treatment of causality and logic makes it hard to follow.

“And thus, we return to that very problem grappled with 200 years ago; if men are not angles, then what might we do to protect the freedoms of the individual in perpetuity, yet acknowledge the necessity and desirability of the necessary functions of self-government?”

Well considering the obesity epidemic, I suppose most men are not angular but rather rounded.

“Would it be fair for me to presume that you know more about Rothbard’s work than you do about the capacities of our Constitutional Republic? If that is true, should I presume you have nothing intelligent to say on the subject of Governance? No, that would not be true or polite. You might yet surprise me.”

I’d consider myself more familiar with the American political system than a lot of people but by no means an expert. It’s the same with Rothbard. But I know enough to call out bluffers.

Rectio delenda est.

Donald Rowe October 20, 2010 at 10:30 pm

Wildberry,

“… searching for … the Truth.”

I realize you were probably speaking figuratively, so don’t take this personally. Only a fool searches for the Truth. Search for Beauty, Symmetry, and Balance instead. You may recognize those if you find them, and you may be graced by Truth, for your efforts.

The state cannot be destroyed as long as the force that causes the state continue to exist. The state cannot protect our freedom as long as it destroys the same freedom it purports to protect.

In order for human society to grow in numbers, without massive destruction, there must be more restraint placed on our violent nature, not less. The state is limited in the amount of such restraint it can provide because of the balance that exists within its structure. The more restraint it tries to provide, the more freedom it destroys. This is perfect symmetry and balance. We do not see its beauty but that is due only to our perspective. That the state is amoral is not the real problem, rather, it is that the state cannot successfully provide two mutually exclusive goods, restraint and freedom, to the satisfaction of all. Only anarchy can provide both, and can do so easily.

But there are problems to be worked out. Anarchy is not simply the lack of the state, nor is anarchy ever going to spring up spontaneously, out of the void. I will proclaim, for the record, that it is anarchy that causes the state. Specifically, the current paradigm of ownership, the underpinning of the current understanding of anarchy, is flawed in a manner that compels us to form a state to prevent the inevitable disaster that must result were anarchy to be implemented.

I offer no proof of these statements. I appeal to no higher authority as I make them. You are, of course, free to respond, or not, as you are compelled.

Cordially,
Don

F. Beard October 19, 2010 at 3:42 pm

Make that “doubt the sincerity of some libertarians”. I am sure there are plenty of sincere libertarians but I am beginning to suspect that there are wolves in the midst of the sheep too.

Wildberry October 19, 2010 at 5:17 pm

F. Beard,

Perhaps bigger bogeymen than wolves, but so be it.
This is a very important notion you are expressing; where to start. Obviously this was meant to be just a thought exercise, as the process of rolling back the interventionism doesn’t have to be, and certainly should not be taken in the precise order in which they were created.
But that leaves us with a design problem. I am thinking of it like a demolition engineer. I can drop a bomb and take out the building and a few surrounding city blocks, or place strategic charges in structurally critical places and drop it precisely in the intended space.
Another model is that game where you start with a stack of blocks, and you see how many you can pull out before it collapses? Turn it around and ask, what are the fewest blocks I can remove before the whole thing comes tumbling down?
I am not an anarchist. This is just an analogy. But clearly we are out of whack and we are starting at the bottom of a very large hill. What would be on the list of the most intelligent things that could be done to return America something much more akin to a “free state”?

You seem to be thinking along these lines.

F. Beard October 19, 2010 at 6:38 pm

What would be on the list of the most intelligent things that could be done to return America something much more akin to a “free state”? Wildberry

I think having separate money supplies for the government and the private sector is crucial. We don’t want the government’s monetary policy distorting the private sector and we do not want any private monies or class of monies (PMs are an example) to have any government privilege thereby distorting the free market themselves.

So for the private sector, it would be a mixed bag. On one hand, it would be free to develop its own stable currencies but on the other it would not be able to loot purchasing power via fractional reserve loans in the government enforced monopoly money supply. In the long run, that would be best. No longer able to loot wealth via government privilege, corporations would be forced to share wealth with their workers. As for the government, it would be relieved of the necessity of being concerned about the private sector since the private sector would take care of itself. As the private sector grew and prospered, the State would wither away to a minimum.

The state is force and the private sector is voluntary; how can it be morally possible for them to use just one money supply? And moral considerations cannot be excluded from sound economic policy. Those folks in France are mad and with good reason. They are having austerity forced on them so the government backed money cartel can be paid interest on money that France should have created debt and interest free itself (but only for government debt, taxes and fees).

Joe October 21, 2010 at 4:47 pm

@Wildberry, I think you need an inspirational respite from these Ancap antagonists. So here is one of the greatest openings to a book I have ever read: Here is a planet, whirling in sunlit space. This planet is energy. Every apparent substance composing it is energy. The envelop of gases surrounding it is energy. Energy pours from the sun upon this air and earth. On this earth are living creatures. Life is energy. Every living creature has consciousness and desires. The imperative desire is to continue to live, and living is not easy. Life struggles to exist, among not-living energies that destroy it. The energy of heat, cold, storms, floods, drought, is the deadly enemy of every human being. His second enemy is the living energy of other creatures, the animals, the plants, that kill him and that he kills for his food and other uses. Everyone must constantly be defended aganist these enemies. Farmers and sailors and doctors always know this. Lineman know it, and engineers, chemists, truck drivers and railroad men and oil drillers and sand-hogs and construction workers and airplane pilots and weather forecasters–all the fighters who protect human lifes in modern civilization, and keep this civilization in existence. These men who know the human situation on this earth and stand the brunt of it, enable others to forget it. The thinkers–scholars, teachers, writers, politicians–fed and warmed and lulled like babies, can forget their real situation. But their acts recognize it. They live in houses, they use electric lights, they use someone to stoke the furnace. This is the opening paragraphs of “The Discovery of Freedom” by Rose Wilder Lane. I find it refreshing and real. Everytime there is “background noise” I read this and get back to reality. As Madison had learned what reality is from experience. I noticed there seems to be confusion about “Authority” and where it comes from. Here is what Rose Wilder Lane had to say, “American government is not an Authority; it has no control over individuals and no responsibility for their affairs. American government is a permission which free individuals grant to certain men to use force in certain necessary and strictly ways; a permission which Americans can always withdraw from American government.” And here is the course we should take, “The true revolutionary course which must be followed toward a free world is a cautious, experimental process of further decreasing the uses of force which individuals permit to government; of prohibitions of government’s action, and thus decreasing the use of brute force in human affairs. This is the only course toward a richer world.” I agree with this vison and course of action. This is the only course of action, I see no other. There is truth and reality. Experience is a good teacher of reality and truth and we can see through history where we have going wrong. It is a million times easier to revert back to the original founding of this Constitutional Republic than to try and establish and Ancap society. As I have said before if we went back to the original document and lived as it was put forth by the founders of this nation than we would not even be talking about some Utopia idea as Ancap.

Carl October 19, 2010 at 8:32 pm

All the power it has is what society gives it, plus what it confiscates from time to time on one pretext or another; there is no other source from which State power can be drawn

No other source? There is one source. The same source that all legitimate authority comes from.

It seems so weird, but true, that free markets have nothing to do with anarchy.
* I really enjoy MISES.ORG, they introduced me to Mises, Hazlitt, etc etc etc
but for the life of me I don’t understand why they do not purge themselves of
anarchy as easily as they do republics and democracies.

Thanks for reading,
Carl

Jordan Viray October 20, 2010 at 1:34 am

And what, pray tell, is that source of legitimate authority?

If you think it is “the people”, go read Hoppe for a dismantling of democratic/republican government. http://www.lewrockwell.com/hoppe/hoppe4.html

If you think God grants the institution of government His seal of approval, think again: http://www.lewrockwell.com/orig/carson2.html

Joe October 21, 2010 at 5:11 pm

@Jordan, The source is you and me and can never be anything else. Here is a blast from the past that I think you will enjoy: “American Government is not an Old World Government; it is not the use of force in an attempt to control subjects who try to submit because they believe the ancient superstition that Authority controls them. American Government is a limited use of force, permitted by free men who are leading a world revolution.” “Responsibility-evading citizens in this Republic, if they become numerous enough, can wreck the Republic, the revolution, and the whole modern world. But not one of them can evade responsibility. Each will be responsible.” Rose Wilder Lane, The Discovery of Freedom. These words were written over 70 years ago. They were true then and they are true now. The reality has always been we are responsible for our freedoms since we are the Authority.

Jordan Viray October 21, 2010 at 10:24 pm

“American Government is not an Old World Government; it is not the use of force in an attempt to control subjects ”

That was never true. But yes, I agree that the individual is responsible for defending his own freedom.

F. Beard October 20, 2010 at 5:32 pm

Disagree. That would cause massive inflation and destroy the value of savings in this country. Jordan Viray

First of all, I propose eliminating fractional reserve lending. FRL creates about 95% of the money supply so it is of course the main driver of inflation. If that were abolished then our chief concern would be the near total elimination of our money supply as debt was repaid UNLESS that credit was replaced with real money.

That’s theft and I’m pretty sure the Bible does not condone such. Jordan Viray

It would not be theft. It would be return of stolen property combined with the elimination of the means by which it was stolen. Afterwards, we would have 100% reserve banking, a population with affordable debt, savers who had been compensated for years of suppressed interest rates, a reflated economy and business confidence because people would have money to spend.

Jordan Viray October 20, 2010 at 7:34 pm

“First of all, I propose eliminating fractional reserve lending. FRL creates about 95% of the money supply so it is of course the main driver of inflation. If that were abolished then our chief concern would be the near total elimination of our money supply as debt was repaid UNLESS that credit was replaced with real money.”

Writing out those checks to bailout underwater homeowners as you suggested, on the other hand, would be extremely inflationary – particularly so if our money supply was brought down to M0.

“It would not be theft. It would be return of stolen property combined with the elimination of the means by which it was stolen.”

Savers did not “steal” money from anyone. Causing massive inflation by your bailout plan steals from them. I’m all for eliminating this means of stealing i.e. inflation, but your plan would essentially steal from these innocent savers.

F. Beard October 21, 2010 at 4:19 am

Savers did not “steal” money from anyone. Jordan Viray

I never said they did.

I’m all for eliminating this means of stealing i.e. inflation, but your plan would essentially steal from these innocent savers. Jordan Viray

Savers would receive an equal distribution of the new money too. How could they complain?

Friend, the villains, the bankers, have set their victims, both borrowers and savers, against each other. The savers have been cheated of honest interest rates via FRL as you are probably aware. However, by that same process, the borrowers were driven into debt during the (inflationary) boom that is unserviceable (“underwater”) during the bust. A bailout of both borrowers and savers by the government is thus morally justified because it was the government that enabled the banks to loot them.

Or we can witness how our society deals with a shrinking economic pie, an outgoing tide that grounds many ships. Time Magazine said just recently that the prospect of civil war in the US “doesn’t seem that far fetched”.

Jordan Viray October 21, 2010 at 4:04 pm

“I never said they did.”

No but that is what must happen if you cut out checks to bailout all underwater homeowners. Let’s say I bought a home for $400,000 and now that home is now assessed at $200,000. According to your plan, the Treasury would give this homeowner a $200,000 check. Over the tens of millions of underwater homes, that will easily be several trillion dollars. Not to mention the millions of people fooled into thinking house prices would go up because of the Fed financed boom and remortgaged. These people are underwater too. Bail them out? So they get to keep the nice cars for free and whatnot they bought while their neighbor who did not remortgage does not? And on top of that we should compensate savers for their losses from such extreme inflation and produce more inflation? No.

The economy is a complex thing. Fixing government intervention with more government intervention is not the answer.

F. Beard October 21, 2010 at 5:34 pm

And on top of that we should compensate savers for their losses from such extreme inflation and produce more inflation? No. Jordan Viray

The bankers play the inflation game every time they create money from nothing and lend it out. Do you think they care that they are creating inflation? No, they don’t. Why not? Because they understand that the loaners of the new money benefit at the expense of every one else. They extract a PRIVATE inflation tax on society.

But do the bankers want the government creating new money, bypassing them, and inflicting an inflation tax on them? No way. That is inflationary!

But in any event, banning FRL would cause intense DEFLATION unless the real money supply was increased. Bailing out the population at the expense of the bankers (but only in real terms) would not only be justice but POETIC justice.

Jordan Viray October 21, 2010 at 10:46 pm

Make no mistake, inflation, whether it be created by bankers or through bailout schemes is unjust.

Banning FRL would reduce our monetary base to around $2T and you are proposing several trillion dollars of bailouts after the fact. That is absolutely inflationary. Not only that, if deflation took place let’s say the prices of everything were halved. Then you give huge bailouts to underwater homeowners? So rather than houses being overpriced as they are right now, they would be extremely overpriced under your plan.

I know you have good intentions but it is best to let markets sort things out rather than the State.

J. Murray October 22, 2010 at 6:38 am

Jordan – Prior the Federal Reserve, Fannie Mae, and Freddy Mac, there was no such thing as a 15, 20, or 30 year loan. Home loans were typically 5 years long. Nominal free market price declines don’t have a negative effect on a 5 year loan becuase it’s simply not long enough a period to compound to a point the loan becomes impossible to pay off. Loans in excess of 5 years came into being because of excessive government intervention. Remove the interventions on the lending market and the long-period loan market will mostly vanish. When the long-period lending for unproductive assets vanishes, so will any fantasy problems with “deflation”.

Jordan Viray October 22, 2010 at 5:27 pm

J. Murray – so you support F. Beard’s plan of mailing out checks to every homeowner who is underwater so that they are solvent again?

As I’ve repeated mentioned to F. Beard in this thread, I have no problem with removing government intervention but I do take issue with his plan.

Just out of curiosity though, how do you know the long term loan market would virtually vanish in the absence of government intervention. I’m sure they would decrease but it seems a possible case of mere correlation and not direct causation. Surely you’d have to factor out changes in time preference as well.

J. Murray October 22, 2010 at 5:28 pm

Uh, tell me how you made that extreme leap of faith and I may deign to respond to you again in the future.

Jordan Viray October 22, 2010 at 7:44 pm

@ J. Murray

Well I wouldn’t blame you if you haven’t been following the discussion between me and F. Beard since it’s not all that interesting. The discussion at hand revolves around the statement he made earlier in the thread:

“So, I suggest we:

1) Abolish the banks’ ability to create any more virtual money.
2) Have the US Treasury send every American adult a large (and equal) check of new debt and interest free legal tender fiat that is sufficient on average to pay every underwater mortgage down to current price levels TIMES from 2-7 since that is the Biblical remedy for theft and also because if the banks are to practice 100% reserve lending without deflation then a large amount of real money must be created to replace the virtual money that would disappear.
3) After the debt has been cleared, then restrict legal tender laws to government debt only and allow private currencies good only for private debt to be created.”

I agree with 1. Disagree with 2. Unsure about 3

That’s what the discussion is about.

What did you think I was talking about in my comment immediately preceding yours?

Banning FRL would reduce our monetary base to around $2T and you are proposing several trillion dollars of bailouts after the fact. That is absolutely inflationary. Not only that, if deflation took place let’s say the prices of everything were halved. Then you give huge bailouts to underwater homeowners? So rather than houses being overpriced as they are right now, they would be extremely overpriced under your plan.

Your comment was a bit out of the blue in consideration (though still interesting). I’d still like to know the chain of reasoning that suggests that in the absence of government intervention, long term loans would dry up. I’m sure there would be fewer of them but virtually disappear? Could be true but have you factored changing time preferences into it?

Raimondas October 20, 2010 at 11:14 pm

Anarchy is mother of order.
Machno

Rand October 21, 2010 at 4:50 pm

That’s all well and fine, but how about some concrete examples on how we can counter and reverse this trend.

Joe October 21, 2010 at 5:16 pm

@Rand,
It’s obvious how to combat runaway government. Rein in the government. We have a Constitution that allows us to reverse whatever was established. You are the Authority and so am I and all the other citizens of this country. The citizens allowed the current state of affairs so we need to as citizens correct the state of affairs.

Fallon October 21, 2010 at 5:48 pm

The Constitution means whatever the persons in power say it means. Besides, constitutionalism is as contradictory and mythical as Rousseau’s social contract.

Joe October 21, 2010 at 5:34 pm

“New generations appear each temperamentally adjusted – or as I believe our American glossary now has it, “conditioned”—to new increments of State power, and they tend to take the process of continuous accumulation as quite in order. No truer words have been said. Albert J. Nock understood. Another way of saying this is the old frog in the pot situation. Never throw a frog in a steaming pot of water because he will reject it and jump out. Put the frog in the pot and slowly turn up the heat. The poor frog will die before he jumps out. As Albert Nock said that Government has no power except what we give it. The Social Power is a way of saying individual citizens. We are responsible for our Government and we are the Authority. If we are in the pot and it’s getting hot than we better reverse the process because we have the power to do it. We are the only living entity that has the power. If we lose this great Republic we have all the responsibility for that. So let’s not be temperamentally adjusted and start kicking some ass.

F. Beard October 22, 2010 at 6:20 am

Not only that, if deflation took place let’s say the prices of everything were halved. Then you give huge bailouts to underwater homeowners? So rather than houses being overpriced as they are right now, they would be extremely overpriced under your plan Jordan Viray

The problem with deflation is that the debt is not marked down correspondingly. So, either we have mortgage principle cram-downs which will only benefit the borrowers OR we bail out the general population which would compensate the savers too.

Some form of debt relief (which is Biblical btw, see Deuteronomy 15, Leviticus 25) is coming. Too many people have been screwed this time and the outrage is building. So the borrowers will end up with nice affordable housing and the savers will get nothing.

Well, if that is the way the savers want it.

J. Murray October 22, 2010 at 6:49 am

You don’t sound like you actually read the passage. Deuteronomy 15 states you cancel loans for tribe mates and brothers. What it means is don’t maintain long term loans with your own family. The modern nation-state didn’t exist at the time of Biblical writing, so when the term Israelite was used, it meant your individual tribe, which in those days was your extended family. The same passage states you will require payment from a foreigner, whose debts are NEVER cancelled. Foreigner in those days meant anyone outside your family. The borrower is not the bank’s family or tribe. The borrower is the foreigner and his debts are explicitly commanded to NOT be absolved after seven years.

Leviticus 25 makes no mention of debt.

F. Beard October 22, 2010 at 12:20 pm

You don’t sound like you actually read the passage. Deuteronomy 15 states you cancel loans for tribe mates and brothers. J. Murray

I read it just a few days ago. Christians are not under the Old Testament Law but we would be wise to heed it especially with regard to forgiveness, don’t you think?

The same passage states you will require payment from a foreigner, whose debts are NEVER cancelled. J. Murray

“From a foreigner you may exact it, but your hand shall release whatever of yours is with your brother. “ Deuteronomy 15:3 [bold added]

“May” does not equal “must”.

The borrower is the foreigner and his debts are explicitly commanded to NOT be absolved after seven years. J. Murray

Chapter and verse, please. So fellow Americans are “foreigners”?

Here’s something to ponder.

Jerimiah 34:8-22

My take away is that the Jews could have escaped death and destruction if they had not reneged on their pledge to free their Hebrew debt slaves.

Is government backed fractional reserve lending in a government enforced monopoly money supply just or not? And if it isn’t, what do you believing Austrians think should be done about the victims of it?

Micah 6:8-11

J. Murray October 22, 2010 at 12:55 pm

Foreigners in Biblical sense, as I’ve already explained, means anyone outside your extended family. Nation-states did not exist nor did people identify themselves as a national origin (German, French, etc) until the late 18th Century. The Bible, between the Old and New Testament, was written between the 8th Century BCE and the 3rd Century AD. During this time, people did not identify themselves nationally or regionally like we do today. You could live right next door to a foreigner your entire life. A foreigner was anyone that was not a member of the Israealite tribe. You couldn’t just walk in and become a member of the tribe, you’re a member by heredity and can’t simply pick up and shed that identity like you can a citizenship.

That’s why the term brother is used and not countryman. The Bible gives no obligation to absolve debts of any individual that does not share a hereditary lineage.

So, no, Americans aren’t my brother and, in the Biblical sense, if you’re an American and not related to me, you are a foreigner.

F. Beard October 22, 2010 at 2:22 pm

Like I said, Christians are not under the Old Testament Law but we would be very wise to heed it. And as for extended families, the entire human race has been traced to just one male about 40,000 years ago (that would be Noah) and one female (Eve) about 120,000 years ago.

But leaving aside forgiveness you have not addressed the issue of just compensation to the victims of government backed FRL. In fact, justice calls for that; no appeal to forgiveness is necessary.

Jordan Viray October 22, 2010 at 5:33 pm

“The problem with deflation is that the debt is not marked down correspondingly. So, either we have mortgage principle cram-downs which will only benefit the borrowers OR we bail out the general population which would compensate the savers too.”

False dichotomy. Let’s say we had deflation from reversing the fractional banking system e.g. raising reserve requirements 15% every year. Money supply goes down, prices go down. People who owe $300,000 on a house they initially bought for $400,000 which is would now be valued at say $100,000 would simply walk away. Once the malinvestment in housing is corrected, they could buy houses at “realistic” prices. No bailout needed.

F. Beard October 22, 2010 at 5:51 pm

Well, it’s good to see you are in favour of strategic default. Of course, it will likely wipe out many banks but c’ est le vive, eh? My plan would save the banks (nominally) while punishing them in real terms by bailing out everyone else.

Well, let’s just see how well the deflation works. Perhaps when the jobs of many Austrian savers are eliminated as the “mal-investments” are cleared they’ll find they have no money to buy assets on the cheap.

F. Beard October 22, 2010 at 6:56 pm

Oh, and since State and Federal tax revenues are declining but their costs aren’t then say hello to new taxes:

http://theeconomiccollapseblog.com/archives/75-ways-that-the-government-and-the-financial-elite-will-be-sucking-even-more-of-the-life-blood-out-of-the-american-people-in-2011

Ain’t deflation fun?

Jordan Viray October 22, 2010 at 7:53 pm

Yes, strategic default makes perfect sense in this situation. Let the banks repossess these homes – that was all part of the deal. Of course that would (normally) cause many of these banks to become insolvent but that’s also a consequence of the deal as well.

The market “demands” a correction in housing prices and the consequences are what they are. The banks that engaged in riskier lending practices will fail and the ones who evaluated the situation better will survive.

Maybe these effects will hurt a lot of Austrians too. But if we support creative destruction, then we have to accept that “destruction” can happen to us just the same.

F. Beard October 22, 2010 at 8:34 pm

But if we support creative destruction, then we have to accept that “destruction” can happen to us just the same. Jordan Viray

Ah yes, “creative destruction”. The boom-bust cycle has been with us (the West) for over 300 years. It has killed millions, at least 36 million in WWII. How was that for “creative destruction”? I imagine WWIII will be even more “creative” in its destruction.

Ask yourself how the banking systems which supposedly had little to lend during the Great Depression suddenly had unlimited amounts to lend to their governments for WWII? And if that money was available (at interest) to destroy Europe then why wasn’t it available to bailout the victims of the bankers and prevent WWII?

F. Beard October 22, 2010 at 3:59 pm

Well if you oppose a general bailout of the population then it it turns out there is another path the borrowers can take: http://market-ticker.org/akcs-www?post=170008

Of course the savers are left out in the cold …

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