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Source link: http://archive.mises.org/14332/the-killing-and-reviving-of-the-american-dream/

The Killing and Reviving of the American Dream

October 22, 2010 by

We are witnessing the fall of the American dream, which has always been about having hope in the future. This is a striking fact of our times, one made even more devastating as we look at the economic fundamentals. FULL ARTICLE by Lew Rockwell

{ 101 comments }

Christopher October 22, 2010 at 8:27 am

Great article!

Barry Loberfeld October 22, 2010 at 8:31 am

Indeed — excellent work, Lew!

david janello October 22, 2010 at 8:58 am

marriage rates are falling because of the horrific ‘family court’ system. in an uncertain economy it makes sense to get married. unless of course, your children can be taken from you, you can be imprisoned without trial, and all of your current and future wealth confiscated.
fortunately the younger generation of men is learning from what happened to guys in their 40s and 50s and are avoiding marriage altogether.

check out any of stephen baskerville’s articles, or talk to a couple dozen guys who have been put through the system.

guard October 22, 2010 at 12:17 pm

I agree. Simply changing the venue from criminal to civil automatically removes all your constitutional rights. Amazing to those experiencing this for the first time.

Rick October 22, 2010 at 4:03 pm

I’m 35 and already most of my friends have been divorced. It makes me wonder if marriage is worth it, particularly when you see what happens to someone as they go through the family law system. It’s a shame, because I have a lot of respect for people in good marriages and would like to do it someday myself. However, the only happy couples I know are baby boomers. Couples I know that are my own age, well, they’re trying. As my sister – a professional, mother, and wife – often says, “it’s getting harder to be traditional in a non-traditional world.”

Dave Albin October 22, 2010 at 6:32 pm

This underlies the problem of marriage being tied up in state affairs…. Marriage is between people, not the state.

Andy October 25, 2010 at 2:08 am

If you are skilled in compromise, family court is unnecessary. Put the well being of your children above petty issues with your ex, you will find a much more amicable solution.

Andy October 25, 2010 at 3:26 am

Still doesn’t mean that you are no longer responsible for your children, legally, morally or financially even if you never married in the first place.

What should be done with men (or women) that do not take responsibility for their children? Unfortunately, the majority of mothers and fathers that do care pay the price for those that don’t care.

jcard21 October 22, 2010 at 9:28 am

I always thought the American Dream was an Independent Livelihood… running your own business … not taking orders from others.

Dimitri October 22, 2010 at 9:59 am

“I do not consent, I will not comply” until I’m blue in the face.
Great article. Thanks.

Rob Mandel October 22, 2010 at 10:22 am

I believe you said it all with this sentence:

“What was once the American dream is turning into the American stasis.”

For stasis was the word in ancient Greece for civil strife, civil war. Most notably was Thucydides’ detailing of the stasis in Corcyra. Is there any doubt that we are far more fractured, polarized, and nearer to strife than ever? Our current president and his henchmen throw out enemy after enemy after enemy: talk radio hosts, banks, foreign money, members of opposition political parties, citizens who protest his policies, et al. The anger of the American people is becoming palpable, and I fear that it won’t be ameliorated with any result at the polls next month.

Maybe there’s good news, that finally as the means to spread ideas of liberty are at hand, maybe it will happen peacefully. Maybe. But that word stasis just seems ever more prescient.

Ohhh Henry October 22, 2010 at 10:34 am

What with lending chaos (liar’s loans), MBS chaos (the same mortgage being sold several times to different investors), foreclosure chaos (banks and law firms skipping all the usual procedures, presumably to insure that they can deny knowledge of the fraudulent or missing chain of title), and tax farming (selling property tax liens to highest bidder) … I can see that in this area the USA is racing towards one of two possible outcomes – (1) a communist-style takeover of much of the housing market similar to the British “council flats” of the mid-20th century, or (2) a fascist-style takeover by 2 or 3 extremely large banks, but under tight control of the government (or rather vice-versa) with rent and interest-rate controls that amount to legislated profits.

Turning large segments of the population into tenants of the regime is a large step toward serfdom. Add to that an increasing number of people who are dependent for a living on government jobs, government subsidized jobs, or welfare checks. A lot of the remaining non-serfs, mostly young people can be neutralized by provoking a military crisis and re-instituting the draft – if it isn’t reintroduced as a civilian make-work program (but under military justice to be sure). The choices will be – get a government job, join the military, report to a work/education camp, emigrate, or head for the hills as an outlaw. There will be continued (or accelerated) depreciation of the currency and increasing trade restrictions and controls on capital.

I’m not trying to discourage anyone, but it helps if you understand the current trends, their motivations and their historical precedents.

Terri K October 22, 2010 at 8:55 pm

Ohhh Henry…sadly, I made the “mistake” of searching for more information behind the robo-signing and I have come to much the same conclusion as you, especially wrt a takeover of housing and thus, the elimination of private property. I’ve mentioned this possible end-game to a couple of friends; they think I’m certifiably insane.

Gil October 22, 2010 at 10:42 am

Some points:

“There is a general tendency to marry in secure economic times, and to put this decision off during periods of economic uncertainty.”

Really? Most people in the early 20th century were married when young and those weren’t particular secure times. Marriage is primarily linked to religious, cultural and social customs. Most eople were expected to get married at an early age and for life back then so they did. “Living in sin” and getting divorced would bring unpleasant social stigma for most people back then so most avoided both. Not to mention women nowadays don’t want the life of their great-grandmothers – get married by age eighteen and popping out one baby after another and be stuck in the family home for most of her life. Shock and horror, some women actually want to have jobs.

“We’ve also seen a jump in the number of people working from home, which also makes sense given the tighter labor markets and growing resistance to hiring.”

In the ’90s when the Web was becoming more popular, working from home was thought to be a way of the future and could go a long way for parents to juggle work and home life.

A. Viirlaid October 22, 2010 at 4:00 pm

Gil, the comparison in Lew Rockwell’s essay was not with the end of the 19th century or the beginning of the 20th century.

Go back and read and you will notice that the observation was that this was a massive trend between 2000 and 2009:

Another trend is the delay in marriage. For the first time since the data have been tracked, the share of women 18 and older who are married fell below 50 percent. The share of the population age 25 to 34 that is unmarried jumped from 34.5 percent in 2000 to 46.3 percent nine years later. This is a massive social trend, dictated by economic realities.

Gil, you also pointed out that some people were working from home because of opportunity and not because of the recession.

That may have been true in the 1990-s and perhaps even from 2002 to 2007.

But today, I suspect that many of the new-to-the-web “workers” are being hired (and victimized) to “make links” and “post blogs” by opportunists who are out there, preying on the newly unemployed and the desperate.

Please see BBB Warns Against Twitter Money-Making Schemes

Gil October 22, 2010 at 9:55 pm

I disagree as dalaying marriage for young people has been ongoing throughout the 20th century. So much that such this statistic would have happened regardless of the economic situation. Getting married doesn’t have to be expensive. Rather it’s about Gen Yers becoming adults and few have no intentions of settling down until middle age. It’s not as if I’m disagreeing with the whole article.

A. Viirlaid October 23, 2010 at 10:17 am

Yeah, sorry if I made it sound like that.

Thanks for your reply.

Cass October 22, 2010 at 11:21 am

Great article besides the degradation of the liberation of American females to equal opportunity. Because females don’t have business-esque goals and aspirations, right?

guard October 22, 2010 at 12:22 pm

The point is that going from a society where one wage earner can support a family to a society where two wage earners are required to support a family is not more freedom, it is more slavery.

Marie October 22, 2010 at 2:04 pm

Agree with guard. Individuals should be free to pursue business life, home life or no life however they see fit, regardless of their gender. The need for a 2 income family just to maintain a standard of living that was sustainable previously on 1 is a direct result of the Fed and our goverment debasing our money and destroying free enterprise as we once knew it.

Matt October 22, 2010 at 7:05 pm

“Great article besides the degradation of the liberation of American females to equal opportunity. Because females don’t have business-esque goals and aspirations, right?”

Yes, because that’s exactly what he’s trying to say.

Terri K October 22, 2010 at 9:05 pm

I agree with guard as well. I’m living in said slavery.

Patrick Barron October 22, 2010 at 11:27 am

Great article! I attended my county’s Republican Party reception this week. The deputy head of the party, a very nice and dedicated lady, told me that she regretted that the Tea Party people were unhappy with the party. She wanted to bring them back into the fold and asked me what it would take. In other words, she just wanted to offer them some sop to get them to work for the party regulars, which–believe me–are not interested in reducing the role of government in our lives. They see government, number one, as a job for them and, number two, as a way to “help” people. Lew may be right that the Tea Partiers will be corrupted by power like all the rest, but I do not see them that way right now.

Liz October 22, 2010 at 11:41 am

I enjoyed the article, I have one problem with your analysis: We have to have a strong military. While there is a lot of waste that needs to be fixed, we can not dismantle the military and not have devastating results. Look at the economic impact of the attacks on September 11, if we do not have a standing army we open ourselves up to this kind of attack on a daily basis.

Daniel Hewitt October 22, 2010 at 12:01 pm

Liz, you may want to give this a read.

The Private Production Of Defense by Hans-Hermann Hoppe
http://mises.org/journals/scholar/Hoppe.pdf

Martin OB October 22, 2010 at 1:17 pm

Daniel, In other words, inded an army (or many) is necessary. Private armies are preferable to one state-owned army, but the latter is preferable to no army at all. That’s why military spending is different from social security spending, because there’s no legal obstacle to private social security substitutes in Western democracies.

I’m sure Ron Paul never intended to make the army any smaller than it needs to be, but sometimes I think he is too optimistic about the effects of non-intervention. I mean, there are countries without an army, but it doesn’t follow that we can have a world with no armies. In the same way, most Western countries have a very low-profile foreign policy, but it doesn’t follow that world peace if achievable if only America also does. I think there’s a bit of hypocrisy by European governments, a “good cop, bad cop” strategy, where America often fights their battles and takes all the blame and the rage like a lightning rod.

Don’t get me wrong, I’m a big fan of Ron Paul. It’s just I think he needs to distance himself more clearly from daydreaming leftists who think world peace depends on America (and the West in general) kneeling, retreating and apologizing forever.

Jordan Viray October 23, 2010 at 2:49 pm

“I’m sure Ron Paul never intended to make the army any smaller than it needs to be, but sometimes I think he is too optimistic about the effects of non-intervention.”

Dr. Paul’s argument that military intervention in other countries (whether by setting up foreign bases or helping certain factions directly or indirectly) is the primary motivator of terrorist activity against us has some fairly good evidence to support it.

http://andrewsullivan.theatlantic.com/the_daily_dish/2010/10/ron-paul-was-right.html

Don’t get me wrong, there are times when I think that intervention is justified but I do not trust the ability of the State to provide that justification honestly.

Jim October 22, 2010 at 1:30 pm

Daniel Hewitt,

i read the treatise whose link you provided us with. the author, shamelessly, argues that defense, like all other utility-generating goods and services must be provided by private firms, especially insurance companies. i cannot help but laugh…are you going to fight the war in Iraq, Afganistan, or formerly in Bosnia, through insurance campanies? in a border conflict between Mexico and the US, are you seriously suggesting that an American Insurance Company would insure customers on both sides of the border, just based on profit-motive, without any “nationalistic” or “patriotic” sentiment attached to it? if security and justice are to be bought by money like all other goods, then what is justice to the poor who cannot afford to hire his own lawyer???

Ken Zahringer October 22, 2010 at 1:40 pm

You missed a critical point, Jim. Wars are horrendously EXPENSIVE. A private defense agency, unable to print or steal money to fund their activities, couldn’t afford to start wars at will, or to commit the types of atrocities that led to intervention in Bosnia. Only governments, funded by taxation and inflation, can visit that level of destruction upon their fellow man. The private defense agencies would be forced, economically, to restrict their activities to genuine defense.

ABR October 22, 2010 at 4:06 pm

Thus, if even one large, aggressive State exists, the insurance companies won’t be able to offer protection. Which is why I don’t think insurance companies are the ultimate answer under anarchy or panarchy.

Rick October 22, 2010 at 4:22 pm

ABR,

But who would a state attack and why?

To increase their territorial monopoly? Possibly. But how do you conquer an entire land that is decentralized and a mosaic of city-states, free cities, and smaller states? Who do you pick a fight with?

Is it to grab natural resources? Maybe. But with free trade it wouldn’t be necessary.

I’m not sure about Hoppe’s insurance company idea either. But one point he does make is no less true… what is the record of a centralized government providing “security”? Both at home and abroad? Or in terms of protecting individual liberty and property?

The record centralized government has for these things is not a good one and it’s the idea of “war socialism”, i.e. “total war”, or socializing protection in general during the democratic age that has led to dangerous statist ideologies and statist aggression in the first place.

Matthew Swaringen October 22, 2010 at 4:55 pm

Have a few nukes around between different insurance companies for such a time as that. I think mutually assured destruction works.

I know many are entirely against nuclear weapons, and I’m no fan of them either, but I wouldn’t be for seeing them all gone until there was no state that could pose a threat.

I also know that people may have pride in nation states but if people take pride in ideology at all (which people certainly do) you will find some people willing to fight to maintain voluntarism against a statist opponent. I think there would be a pretty sophisticated insurgency should any state attack.

Russ the Apostate October 22, 2010 at 5:15 pm

Rick wrote:
“But who would a state attack and why?

To increase their territorial monopoly? Possibly. But how do you conquer an entire land that is decentralized and a mosaic of city-states, free cities, and smaller states?”

Simple. You kill all the people who currently inhabit it.

Rick October 22, 2010 at 8:05 pm

Russ,

You answered the simple question. The other question would be why? And I don’t think killing everyone who inhabits that territory would nearly be as easy as you make it out to be because people would still defend themselves.

And who says the firm providing security – an insurer or private defense firm – wouldn’t be capable of defending a free city or territory?

Marie October 22, 2010 at 1:55 pm

I believe the point was not to be fighting wars in Iraq, Afghanistan and Bosnia in the first place. Without American imperialistic misadventures, perpetrated by our CIA and other clandestine organizations, Blowback, (or terrorism like 9/11) would not occur.
http://www.amazon.com/Blowback-Second-Consequences-American-Empire/dp/0805075593

newson October 23, 2010 at 6:26 pm

on us foreign entanglements and shady power networks, see “the transparent cabal”. recommended by beefcake and seconded by me:
http://bit.ly/cCIC2z

Rick October 22, 2010 at 4:38 pm

Jim,… what is justice to the poor who cannot afford to hire his own lawyer?

There would be “lawyers” who would work for less (but maybe have firms that represent a high volume of cases) or who work for a portion of a settlement. Not much different than some do now. Lawyers would make market-based decisions.

Given how many poor people are in jail or prison for non-violent offenses, socialized legal defense can only be called a miserable failure.

if security and justice are to be bought by money like all other goods

I know it’s hard to fathom at first. But think about it. The reason you believe these ought to be socialized is because that’s just the way it’s done. But there is relatively little discussion about the merits of such a system, and whether or not it has been a success or failure.

Put another way, if the government for the last one hundred years had been in the business of making jeans and shoes – and that’s just the way it’s done – you would no doubt find it radical now if someone like Hoppe said, “privatize shoes.”

Security is a product and service like anything else, socialized or not. Certainly far more important than jeans, but a product and service no less.

Inquisitor October 23, 2010 at 6:17 am

“i read the treatise whose link you provided us with. the author, shamelessly, argues that defense, like all other utility-generating goods and services must be provided by private firms, especially insurance companies”.

Do you shamelessly argue a monopoly should provide it?

“i cannot help but laugh…”

Mutual.

“are you going to fight the war in Iraq, Afganistan, or formerly in Bosnia, through insurance campanies?”

Why should those wars be fought to begin with?

” in a border conflict between Mexico and the US, are you seriously suggesting that an American Insurance Company would insure customers on both sides of the border, just based on profit-motive, without any “nationalistic” or “patriotic” sentiment attached to it?”

People have devotion to their firms often. Why, though, should there be “nationalistic” or “patriotic” sentiments attached?

” if security and justice are to be bought by money like all other goods, then what is justice to the poor who cannot afford to hire his own lawyer???”

An available good.

King George October 22, 2010 at 12:49 pm

I’ll side with the anarchists (partially) on this. The US spends more than the rest of the world combined. The military-industrial complex could be trimmed back BIG TIME and still provide an adequate defence.

scineram October 22, 2010 at 1:15 pm

Then dismantle 60% for start.

Scott D October 22, 2010 at 1:32 pm

Liz,

43% of all military expenditures worldwide are made by the United States. The next closest is China with 6.6%, and China’s expenditures as a percentage of GDP is less than half that of the US. We are also the highest per capita, at $2155 spent per person, again, about twice as much as the next closest.

Do you really think that we need to be spending over six times as much as anyone other nation in the world on defense? Did all of that massive expenditure do anything at all to prevent 9/11?

Beefcake the Mighty October 22, 2010 at 1:38 pm

I knew this article would bring out the neocons (see also Jim’s contribution here).

Ken Zahringer October 22, 2010 at 1:56 pm

LIz, the sad fact is that the current US military structure has almost nothing to do with national defense and everything to do with projecting US power abroad. At least, that’s what I was taught (sort of) in Squadron Officers’ School. Like it or not, America has an empire, and we are beginning to have the same problems that every empire in history has had, all born of the fact that people don’t like foreigners trying to run their lives. If lack of a global standing army would leave us open to endless terrorist attacks, then why haven’t countries like Switzerland or Canada seen far more attacks than we? Answer: They don’t have armies out causing more problems than they solve. Our best hope for a peaceful future is to maintain the level of military we need for genuine defense, and stop roaming about the world with Teddy Roosevelt’s big stick, looking for hornets’ nests to whack.

Phinn October 22, 2010 at 8:05 pm

Liz,

How is spending trillions of dollars on aircraft carriers and battle groups and infantry divisions and drones and missiles supposed to stop half a dozen guys with explosives that you can make with ordinary household chemicals?

Please think about this question logically. A massive statist imperial global army is really not going to prevent the next backpack bomb from being left in a crowded a movie theater. It couldn’t do so even if they turned the whole planet into a giant prison, not even close.

The fact that you would reflexively assume that a massive, far-flung military even has the capacity to prevent terrorism, or that it was even created or maintained for that purpose, is a testament to the success of statist propaganda. Snap out of it. Look around you. The world needs you to see the truth through their lies.

Gil October 22, 2010 at 10:01 pm

I believe most people agree this is what should’ve happened on Sept. 11:

http://www.gunslot.com/pictures/911-cartoon

newson October 23, 2010 at 6:32 pm

agreed. private defense in action.

Tom October 22, 2010 at 11:48 am

Great article. A couple of points.
U.S. Banks were taken over by Investment Banker mentality. Prudence and wisdom were replaced with self gratification and short term gain.
Debt became crack cocaine.

Jim October 22, 2010 at 12:09 pm

“social security and medical benefits to the old are a waste…” very funny…isnt it?imagine the US being ruled by the Mises Institute! Imagine how the Mises guys would tackle lawlessness and terrorist attacks in the complete disolution of the state appartatus! Imagine the fate of old, senior, and disabled citizens under the rugged-individualist-libetarian Misesian world! these guys are really funny….I would be grateful if any of the Mises guys enlighten us with examples of stateless, prosperous, stable and secure states…..

Matt R. October 22, 2010 at 12:15 pm

Got news for you, Jim. America is broke beyond imagination.

Scott D October 22, 2010 at 1:37 pm

Yeah, the old would all die without Social Security. That’s what happened to them before 1937. I mean, how many people do you know today that were old back then? NONE. The lack of social security killed them all, that’s why.

A. Viirlaid October 22, 2010 at 5:28 pm

Scott D — thanks for that!

I laughed out loud!

As to Jim’s point about:

Imagine the fate of old, senior, and disabled citizens under the rugged-individualist-libe[r]tarian Misesian world!

The fact is that you have to be a bit paranoid and delusional, or antisocial and ignorant of how social an animal we human beings are, to actually believe that people do not take care of other people as a matter of course.

This of course is exactly your point. I wonder if Jim got it though?!

That is, how did anyone survive before Nanny Government came to save us? How did we survive UNTIL that day, that Big Government came to be?

Did we have to steal from other people to look after our own families or to look after our own villagers before huge national governments were established (especially as under F.D.R.)?

Before huge state governments came to save us, did we have to confiscate all the private landholdings of peasants as in Russia, to ensure that the ‘State’ could then farm that land, and provide Free Bread for All?

Before huge Daddy-Governments, did we have to enslave huge armies of randomly selected citizens to dig gold out of the slave mines of Kolyma to run those governments?

“Kolyma znaczit smert” = “Kolyma means death”

Before Big Government, with its shameless self-promotion and self-congratulating and self-serving ways came to be, how in the world did humans survive?

As hermits?

No. The concept is silly. Humans have always survived with the help of other humans.

“No man is an island” is not just an elegant turn of phrase. It’s a reality.

Even the existence of people who delude themselves into thinking that they are ‘independent’ of the assistance of others don’t cause that supposition to be true.

I think Jim simply does not understand the point of about freedom that this site is trying to convey.

Yes, humans can be coerced into being ‘helpful’.

But the slave laborers of Kolyma were far less productive and helpful to Stalin then an army of well-paid and well-fed motivated volunteers would have been.

But then Stalin was not really interested in being productive.

If his human offerings to Kolyma dropped dead it was ‘productive’ to him in another way.

That was because it generated FEAR as a side ‘benefit’ through which Stalin exercised total control. By ensuring that all the folks ‘back home’ knew about KOLYMA he could ensure their loyalty through intimidation.

Our love of life in the face of a determined and ruthless government sometimes can cause us to choose Life over Liberty.

The phrase “Better Red than Dead” rationalizes a lot of human behavior in the face of danger to us and to our loved ones.

The question is do we want to live in such circumstances?

Or is it better to be “Dead than Red”?

That is, do anyone of us today still subscribe to the famous American cry: “Give me Liberty, or give me Death!”?

What we are fighting for sometimes is not clear, but in the case of creeping Big Government, we had better wake up, because sooner or later, the choice will become exactly that crystal clear.

At least it will so become, in my humble opinion.

And at least to me, it is better to fight against that trend NOW, than when we actually ARE faced with that horrible choice, between freedom and actual personal and familial extermination.

A. Viirlaid October 22, 2010 at 5:44 pm

I think you got my meaning, Scott D in that last sentence, where I made a mistake.

That final sentence should have been:

And, at least to me, it is better to fight against that trend NOW, than when we actually ARE faced with that horrible choice, that is, to live unfree or to face actual personal and familial extermination.

Erik B October 22, 2010 at 1:42 pm

Jim, The Mises Institute would not rule anything…. individuals would be free to associate in whatever means they choose to. ( :

I think the point of the article is that we’re so far down the road to serfdom we’re no longer at a point where tweaking a few public policies can prevent a major disaster and the thing we need to do more than anything else is continue to educate people as much as possible on the concepts of freedom and liberty… correct me if I’ve somehow missed the point.

Rick October 22, 2010 at 4:09 pm

Agreed Erik. The whole idea of centralized “ruling” is something Americans need to get away from.

Jordan Viray October 23, 2010 at 3:24 pm

“social security and medical benefits to the old are a waste…”

Mr. Rockwell does not actually say that. What he does say is that Social Security and Medicare/Medicaid for older Americans are both socialist and unsustainable. They are wasteful, to be sure, but that is completely different from suggesting that the benefits they provide are a waste.

The Social Security “Trust Fund” is empty. There is no money to pay for these programs and projected demographic changes suggest things will only get worse as time passes. For a look at the numbers, check out the movie “IOUSA”.

Now while Social Security must be ended at some point, I do recognize that some of its recipients who are no longer be able to work would not be able to support themselves in its absence. I’d support a plan to maintain benefits [as long as those tax dollars came from other programs and not from new taxes] for those whom Social Security is the primary source of income. I think it would be fair to those who have been planning on having Social Security to gradually reduce those benefits (say by 4%) for every year someone was from the Social Security retirement age. So those

65+ will get 100%
64 will get 96%

55 will get 60%
35 will get 20%

31 will get 4%
30 and under get nothing

Does this seem reasonable? What suggestions would you all have to better address the need to reduce Socialist programs while providing for the fact that people nearing the age of retirement don’t exactly have much time to prepare a new nest?

Joe October 23, 2010 at 4:18 pm

Jim,
When did Mises say he was a AnCap?

King George October 22, 2010 at 12:50 pm

Awesome article. Outstanding to see something of this quality from Lew, and without the usual tinfoil hats. I am truly impressed.

Evan Foreman October 22, 2010 at 1:22 pm

Bravo!

Ohhh Henry October 22, 2010 at 1:34 pm

I would be grateful if any of the Mises guys enlighten us with examples of stateless, prosperous, stable and secure states…

Here are a couple to get you started:

The Not So Wild, Wild West

Stateless in Somalia – and loving it

Pennsylvania’s Anarchist Experiment

The gist of the anarcho-libertarian argument is – in the absence of a state with its overwhelming (and corrupting) power, the ability to rob and murder is severely curtailed. Although anyone in theory could be a brigand, in practice everyone else is also armed and therefore brigands have no advantage of strength. Robbing and murdering is a lot more risky when you don’t have a uniform, a badge and an army behind you. That is why anarchic societies are more peaceful.

When you do find examples of widespread robbery and murder in a stateless society then you will probably find that the brigands are actually a would-be government, which they use as a moral justification and as a recruiting tool (promising loot and official patronage).

Martin OB October 22, 2010 at 1:52 pm

I think the point about social benefits for old people is a bit unfair. I see there’s no reason to steal other people’s money and give it to them, but they do have a right to get their money back. If they payed more than what they are getting back, they have nothing to be ashamed of. If it was a scam, those responsible should go to jail.

Since no government will admit it really was a scam, I think a more sensible (and fairer) approach would be to let the welfare state phase out naturally, by ending first those subsidies to people who can compensate through lower taxes (such as unemployment and education subsidies) or by changing jobs (such as agriculture subsidies), allowing people to opt out of social security and stop paying for their future retirement and allowing old people to retire as late as they want.

The idea is, start the reforms in those areas where the market solution is NOT private charity. Like it or not, an increased need for private charity is awfully bad press for any government.

Anthony October 23, 2010 at 4:21 pm

You’s right, Martin… it IS unfair that people who paid into SS would not get their money back. Unfortunately, their money has already been taken and given to currently retired people. Their money is gone, and the only way to “give it back” is to take it from other people.

Martin OB October 24, 2010 at 11:39 am

How about this: Bankrupcy procedure. Take the social security trust fund and share it out among the beneficiaries. They will get less than what was promised to them, but still a substantial payment, and it seems reasonably fair for everyone. After this, of course, end the social security program.

greg October 22, 2010 at 2:30 pm

When a market is hot, people make stupid choices just to get into the frenzy. I saw it with Rottweillers and I saw it with real estate. In the US, we saw people make stupid real estate choices and bought homes in Stockton, Michigan, upstate NY just because they were inexpensive and allowed the buyer to get into the craze. Now these buyers are stuck because their investment has fallen and real estate is not liquid.

Same applies to education. People were going to college without researching the best university for the field they want to enter. It makes a difference where you graduate!

And the third factor that makes this recession worse is personal debt. We had people buying homes with less than 20% down. We have kids taking on “good debt” to get a college education.

This does not have to happen! I started 20 years ago, paid off my mortgage, put my two kids through top private schools, I have no debt, both of my kids have no debt and they both have great jobs. I currently work out of home and spend at least 4 weeks a year traveling the world.

The point I trying to make is that you all can sit around complaining about the world around you or you can take control of your own life and profit from the present.

A. Viirlaid October 22, 2010 at 4:42 pm

greg you have some good points… but…

Sure we all make mistakes and people who take unreasonable financial risks may have to take their lumps and their medicine.

But what if the situation is manipulated by wizards behind closed curtains so as to entice us to take what we think are entirely reasonable risks?

What if someone can make us believe that there is no point hanging on to cash, and what if those people can make ‘Cash seem like it is Trash’?

You wrote: “When a market is hot…”

Ask yourself what caused the market to heat up? — The FED!

The FED moved the goalposts; The FED changed The Financial Frames of Reference.

Please see If Einstein Were an Economist

Sure we all owe it to ourselves to look at education offerings and their relative values and costs. I think Americans are starting to do this.

We are starting to see that we may have not only been sold a bill of goods by The FED, and by Big Pharma, and by Big Government, and by Big Armed Forces, but also by Big Education.

As to your positive attitude, I commend it.

And we have a shortage of your type of attitude to life.

The problem is, that a lot of the damage has already been done (and done by humans, and done completely unnecessarily).

Those people, who have been damaged by the actions of The FED and by similar agencies and actors, will not become undamaged overnight.

In fact, Ben Bernanke continues to pile damage upon damage, by trying to entice the very same damaged Americans into doing even more damage to their financial, economic, mental, and physical welfare, by making us raid our limited pocketbooks just one more time. Why? Why, to ‘save’ the Economy ofcourse!!!

Some doctor, that Doctor Ben Bernanke!? Some medical practice he runs.

His motto?

Not the reasonable doctor’s motto of “first, do not harm”.

No, his is “do harm the first time, and do harm every single subsequent chance I get.”

For the ‘logic’ in Ben’s medicine please see What’s Hiding In The Currency War?

Seems like every central bank out there is “giving us” the same treatment, the same medicine.

YIKES!!! — it’s a race to the bottom.

Jim October 22, 2010 at 2:40 pm

Moreover, under a stateless society, how do we formulate and exercise our foreign, trade, and commercial policies? If we have rich rare earth elements’ deposits at Mountain Pass in California, who will own and run the mining operation? Where will the royalties go? How do we allocate or award the exploration and extraction rights? Who has the right to make such decisions? Does Mountain Pass belong to California? Or to the US? Or to North America?

Inquisitor October 23, 2010 at 6:21 am

“We” own nothing. Individuals do. Courts can decide the legitimacy of property rights to a particular resource. I know it’s “hard” to imagine this, but the private sector has ways of settling disputes and coordinating production without the need for the state. That goes all the way down to property title recognition. You do not need a state for it, itself making declarations of ownership over property with NO objective link to show it homesteaded it.

Russ the Apostate October 22, 2010 at 3:18 pm

“If we have rich rare earth elements’ deposits at Mountain Pass in California, who will own and run the mining operation?”

Ummmm, whoever owns the land.

Raimondas October 22, 2010 at 4:45 pm

Si vis pacem, para bellum

Ohhh Henry October 22, 2010 at 6:23 pm

Moreover, under a stateless society, how do we formulate and exercise our foreign, trade, and commercial policies? If we have rich rare earth elements’ deposits at Mountain Pass in California, who will own and run the mining operation? Where will the royalties go? How do we allocate or award the exploration and extraction rights? Who has the right to make such decisions? Does Mountain Pass belong to California? Or to the US? Or to North America?

In the article “The Not So Wild Wild West” (linked above) this exact situation occurred in California, in which miners peacefully cooperated with each other to make claims, secure mining rights and then extract minerals – without any coercive government interference. I believe this was in the time between the Mexicans relinquishing California and the US government establishing effective control. It was mostly small-scale placer mining, but there is no reason why larger organizations (corporations and cooperatives) can’t relate to each in the same way as individual miners. All of these things are surprisingly easy to work out when nobody has the advantage of possessing overwhelming force.

In the presence of government interference you will probably see the blocking of small miners’ claims in favor of large organizations who have bribed government officials (one way or another), and the use of all kinds of ridiculous tort law, intellectual property law and environmental law. Ostensibly the purpose of all this legal action would be to make things fair and preserve the environment, but the practical purpose would be to favor people with government connections over those without. You might even find that no minerals are mined at all in the presence of heavy government involvement, no matter how lucrative it would be.

newson October 23, 2010 at 6:45 pm

benson has a great article touching on the stateless mining code and its enforcement:
http://mises.org/journals/jls/10_1/10_1_4.pdf

Steven B October 22, 2010 at 9:33 pm

What especially makes me perk up, reading this article, is the idea of reducing government to its proper place by the withdrawal of consent. I have always felt or intuited this to be the key, but a truly effective way to facilitate the widespread withdrawal of consent has never surfaced that I have seen. It also seems that most libertarian writers don’t even address the question. Yet the identification of some small but key form of passive resistance, which millions of citizens could unobtrusively take — IF they knew about it — could, it would seem, fundamentally transform America’s political dynamic and the consciousness of the country….

A. Viirlaid October 23, 2010 at 10:31 am

Steven B we had a discussion on this site that touched on what you refer to as “Withdrawal of Consent”.

Please see http://blog.mises.org/11359/gold-and-guns/

I suppose if you (or all of us) could identify how to begin such a movement — as opposed to just establishing another political party — then our political ‘masters’ (or is it supposed to be ‘servants’?) might be inclined to consider actually reducing the size of government before we hit the proverbial ‘wall’ — which some say we crashed through some years ago.

Perhaps instead of voting (which seems to reproduce the same sad results, time after time) if we would just write on our ballot, every opportunity that we had, the letters “M.I.S”.

This would denote Make It Smaller!

Or maybe M.I.S.P. = Make It Smaller Please!

John Voigt October 23, 2010 at 5:24 am

The falling marriage rates are, in part, the result of the breakdown of traditional family and gender roles. There are, of course, economic factors at play here (staggering real wages caused by perpetual inflationism, continuous capital consumption, etc), but the question is why do such inefficient economic conditions persist? Why are individual’s replacing their parents with the State? Why are divorce rates continuously rising? Why is welfare socially tolerated, and in fact encouraged? Why have abortions lowered crime rates? Why does every advanced civilization, across the world, shun homosexuality and polygamy? You could say, “because of religion,” but that begs another question, namely why do most of the world’s religious structures agree that such conditions should be unlawful?

The answer is, in my opinion, that these traditions have emerged naturally over countless centuries, in fact millennia, from a continuous process of trial and error. In other words, they are efficient social conditions, and are not arbitrary social conventions that were the result of class/gender warfare, or previous “modes of production,” as many sociologists claim.

The traditional family unit yields individuals with strong moral values that have restraint, and are too proud to beg or demand welfare. Too be more specific, I believe that the “feminist” movement is a major cause of our current state of socioeconomic deterioration (there is a strong correlation that supports this assertion). In other words, unlike Marx, I don’t believe that economic conditions solely determine the entire social structure.

A. Viirlaid October 23, 2010 at 11:14 am

John Voigt I think you are right about social evolution being based on a process that has been occurring as you point out for millennia.

The problem is that the process can go backwards on occasion (or suffer stasis) especially when we humans (with our sometimes ruinous human nature) run the institutions that set social policy and social norms.

As one example, while the Holy Roman Catholic Church today has oversight from within, but more importantly from without, and like many powerful institutions does better service for humans with such oversight (especially as provided by the free press and free journalism) — that institution did not always have such oversight. So then there was little room or incentive for evolution and self-improvement.

Our governments in the Western world seem to have also in a very creeping manner retrograded to something that is harmful to humans, whether we all recognize the results of that process or not. Since it has been so slow, it has been virtually imperceptible.

That is, these governments, by their very size, and the responsibilities and roles that they have assumed, have become INCONGRUENT to a large measure with HUMANS and our needs and natural motivations. It has happened so slowly in most decades, that even most of the people inside our governments do not know this process is still happening. Most times we just look up and see that boy, this government is really getting in my face — what happened? (Like with the bank takeovers —- first the central banks ensure that the financial system collapses, and then their governments ride in to ‘save us’ —- see what I mean?)

Governments do sometimes replace parents in our societies. That this is helpful in a few cases is probably the correct observation. But that this is harmful in many other cases, is also true. That is because no government can really be a parent.

Where governments destroy incentive this process is harmful. That they do this is beyond doubt. And in so doing these governments are destroying their own long-term viability. When you have eaten the golden goose, who exactly is going to lay those golden eggs in the future?

As for the Feminist Movement, I don’t quite see it the way you do. That movement has pretty much run its course, at least in its first incarnation, in the West — that is, it still needs to happen in the East (IMHO).

That movement was a historical necessity. Woman have been the chattels of men for centuries. Of course during that time, most men were the chattels of some other person as well (most people do not even know this). So an overreaction to centuries of oppression was natural.

What I find more interesting about your comments is that you have tied the rise of government and of the welfare state to some of the evils in our societies. This would be worthy of more development in a separate essay.

As for the Moral Relativism that has arisen with the rise of welfare states and their enablers, their central banks (with fiat money), please refer to a link that I got here at this site from someone else. It was fascinating IMO.

http://blog.mises.org/14186/reason-tv-on-cantor/

http://mises.org/journals/rae/pdf/RAE7_1_1.pdf

I don’t believe that economic conditions solely determine the entire social structure.

Well yes, but when you consider that governments interfere SO DARN MUCH with the free operation of our Economies, then IMO there is a clear link between those governments, our economic well-being, and the “entire social structure”.

In other words, governments have taken it upon themselves, after basically destroying our freely-functioning, and wealth-creating economies, to ride up on their white horses and ‘save us’ from those terrible ‘failing’ free-enterprise Economies.

That is, the governments take it upon themselves to modify and create new institutions that make up a large part of what you refer to as the “entire social structure”.

What a joke — what a scam — what an ingenious way (even if is done in a partially unconscious manner) — what an evil “social evolutionary process” — with which to take over every aspect of our lives.

Don’t you agree that this is insidious and evil?

Nicodemus October 23, 2010 at 8:34 am

Very inspiring and encouraging piece. Thank you.

I am reminded of part of the Cross of Gold Speech by William Jennings Brown that I also find inspiring.

“We beg no longer; we entreat no more; we petition no more. We defy them! Ah, my friends, we say not one word against those who live upon the Atlantic Coast, but the hardy pioneers who have braved all the dangers of the wilderness, who have made the desert to blossom as the rose – the pioneers away out there [pointing to the West], who rear their children near to Nature’s heart, where they can mingle their voices with the voices of the birds – out there where they have erected schoolhouses for the education of their young, churches where they praise their creator, and cemeteries where rest the ashes of their dead – these people, we say, are as deserving of the consideration of our party as any people in this country. It is for these that we speak. We do not come as aggressors. Our war is not a war of conquest; we are fighting in the defence of our homes, our families, and posterity. We have petitioned, and our petitions have been scorned; we have entreated, and our entreaties have been disregarded; we have begged, and they have mocked when our calamity came. We beg no longer; we entreat no more; we petition no more. We defy them!”

A. Viirlaid October 23, 2010 at 11:18 am

I agree with every syllable that you have written and quoted, my friend, Nicodemus.

Thank you and thanks to Lew too.

“We defy them” indeed!

David K. Meller October 23, 2010 at 1:11 pm

Message from Abe Lincoln (who certainly understood statism and militarism) to today’s political class–and its shills and stooges in the media and academia:

“You can fool SOME of the people ALL of the time, you can fool ALL of the people SOME of the time; but you can’t fool ALL of the people ALL of the time!”

When he said that, even Lincoln–and his followers–didn’t have to cope with the internet, with the Mises Institute, antiwar.com, or the 9-11 truth websites…

PEACE AND FREEDOM!!
David K. Meller

F. Beard October 23, 2010 at 1:58 pm

However, if we take a longer-term look, we can see that these trends date back decades, with the turning point being the severing of the dollar’s last link to gold in 1971. This is the event that set up the explosion of government growth, of credit addiction across the population, of massive malinvestment in housing and many other sectors, of the gutting of American savings, and, most seriously, of the loss of freedom to the national-security state. Lew Rockwell

Et tu, Lew?

Government money is backed by its taxing authority. Must it also be backed by a shiny, scarce metal whose mining is destructive to the environment?

The problems in American society can be traced backed to government backed fractional reserve lending in the government enforced monopoly supply and the fact that government money is legal tender for private debts.

Gold is a tool of the usury class. It should have ABSOLUTELY NO government sanction.

Let government money ONLY be legal tender for government debts (taxes and fees) not private ones and let private monies ONLY be good for private debts not government ones.

Since government money is based on its taxing power (force) it need not and should not be backed BY ANYTHING ELSE. Else it grants grants government privilege to private interests (fascism).

As for private monies, let them consist of or be backed by whatever (including gold) subject to the usual laws against fraud and insolvency.

So what is it Austrians? Are you libertarians or are you seekers of a government enforced/favored gold standard? You can’t be both.

Gold is gold and liberty is liberty. They are not synonymous.

John Voigt October 23, 2010 at 3:58 pm

@F. Beard,

“Gold is a tool of the usury class. It should have ABSOLUTELY NO government sanction.”

You don’t understand the gold standard and the price specie flow mechanism (look it up). Libertarians don’t support the gold standard because they like glittering pieces of metal. They support the gold standard because it’s self-regulating (prevents nations from arbitrarily creating illusory comparative advantages through inflation), its supply is not arbitrarily determined by decree, and because it emerged naturally (through voluntary exchange) as the common medium of exchange.

F. Beard October 23, 2010 at 4:22 pm

You don’t understand the gold standard and the price specie flow mechanism (look it up). John Voigt

Actually, I do understand it. I used to believe in Austrian Economics myself. But if gold is so wonderful, then it needs no government privilege, eh?

So my question remains: Are Austrians libertarians or in favour of government privilege for gold?

The truth is that gold has traditionally been a tool of the usury class. It is not gold that gives value to government money; it is government privilege (accepting it for taxes, etc.) that gives value to gold (beyond its commodity value).

But there is no need for disagreement between libertarians about the virtue of gold as money since it would be allowed as a PRIVATE money.

However,imo, even in the PRIVATE sector gold would quickly be eclipsed as a money form because it depends on usury to survive and historically has depended on fractional reserves as well.

As a libertarian, I don’t intend to trade one form of slavery for another that has been tried and rejected.

John Voigt October 23, 2010 at 5:00 pm

“Actually, I do understand it. I used to believe in Austrian Economics myself. But if gold is so wonderful, then it needs no government privilege, eh?”

Gold isn’t used as money today in regular transactions precisely because of government legal tender laws. In fact, gold is still used as money at the international level, and it is demanded as an inflation hedge. In other words, without arbitrary government restrictions, gold and silver would freely circulate as money (as it did for thousands of years). The libertarian argument in favor of the gold standard is simple: it emerged naturally through voluntary free-market activity. It is considered “honest money,” and not “tools of the usury class” (what does this even mean anyways?).

The economic argument in favor of the gold standard is somewhat complicated, but it has to do with the fact that it has natural self-correcting mechanisms (again, look up the “price-species-flow-mechanism”), that prevent international distortions and perpetual disequilibria in money and capital markets.

“It is not gold that gives value to government money; it is government privilege (accepting it for taxes, etc.) that gives value to gold (beyond its commodity value).”

First, gold was used as money before taxes even exited. Next, fiat paper currencies have always been seen as a tool of oppression, and rightly so. Kings would overthrow the gold and silver standard whenever they needed to finance their wars but dared not levy additional taxes. Fiat paper money = theft, and it has value solely because it was once tied to sound money (where its supply cannot be arbitrarily altered by decree), i.e., gold.

F. Beard October 24, 2010 at 2:04 pm

Gold isn’t used as money today in regular transactions precisely because of government legal tender laws. John Voigt

Which should be abolished except for government debts (taxes and fees). By the same token, private monies should ONLY be good for private debt.

Any objections??

The libertarian argument in favor of the gold standard is simple: it emerged naturally through voluntary free-market activity. It is considered “honest money,” and not “tools of the usury class” (what does this even mean anyways?).

Let the goldlovers get gold accepted for government debts and you will find out.

The economic argument in favor of the gold standard is somewhat complicated, but it has to do with the fact that it has natural self-correcting mechanisms (again, look up the “price-species-flow-mechanism”), that prevent international distortions and perpetual disequilibria in money and capital markets.

Again, I do understand (well enough) the international gold standard. Banks in a country that imported more than it exported risked the loss of gold as its paper money was redeemed. That loss of gold would force the banks in that country to contract credit. That would normally cause price deflation which would make the countries exports cheaper. Conversely, a country that exported more than it imported would gain gold and be able to expand its money supply thus driving up its prices and making imports cheaper. Note that the system is based on fractional reserves which the Austrians claim to hate.

Fiat paper money = theft, and it has value solely because it was once tied to sound money (where its supply cannot be arbitrarily altered by decree), i.e., gold.

Government is force. Whoop te do. If you wish to call taxation “theft” then go ahead. But if the goldlovers force us to buy gold to pay our taxes, then there will be TWO sets of thieves to deal with, the government and the goldlovers.

Liberty is liberty and gold is gold. They are not synonymous. The bankers (the usury class) hate that government can issue money. That hatred is (partially) justified if the government money can be used for private debt. But please recognise the hypocrisy of the bankers if they wish to have their private monies (or class of monies such as gold) be accepted for government debt.

Again, to have a truly free market in private money creation we need separate government and private money supplies.

F. Beard October 24, 2010 at 2:18 pm

Correction:

“That hatred is (partially) justified if the government money can be used for private debt.”

should be changed to:

“That hatred is (partially) justified if the government money must be accepted for private debt.” {italics added]

Mike S October 26, 2010 at 10:10 am

You honestly think that “the bankers” hate the fact that the government can issue money? Let’s go ask all those TARP recipients how they feel about the government’s legal tender laws.

Rick October 23, 2010 at 4:30 pm

F. Beard,

You ask an interesting question. A lot of people here write about competitive currency.

Re: environment

Also, all of the gold used or stored, in one way or another, has already been mined. Unlike oil, it doesn’t get burned off once used. Looking at it that way, you could say it can be recycled. “Recycled” might seem like a stretch, but once mined and in circulation it can be exchanged over and over again.

Re: Gold and government

I think it’s also important to keep an eye on what the Chinese are doing with their currency. I’ve read – just opinions at this point – that some think the Chinese government really doesn’t want to be the world’s reserve currency, but instead want to lead a “basket of currencies” that is backed by some commodity. That commodity could be gold, silver, or maybe copper… nobody outside high levels of Chinese government knows. They might not even know yet.

But if that happens, the U.S. fiat dollar will be even weaker than it is now and possibly obsolete or on its way to obsolescence, and Americans will have to adjust. If the U.S. government and the Fed doesn’t adjust accordingly, then individual Americans will have to back their money personally. Hence, one reason why so many people have bought gold and silver.

Rick October 23, 2010 at 4:49 pm

This has me thinking about insurance companies versus the state.

I’m wondering if there has been anything written about the history of insurance companies, the first one, etc.? Also, did states – and do they now – see insurance companies as a threat to their territorial monopoly and protection racket?

J. Drozdz October 23, 2010 at 4:16 pm

superb, motivational article! Thank you, MR. Rockwell!! Hail to mises.org!

F. Beard October 23, 2010 at 4:52 pm

Also, all of the gold used or stored, in one way or another, has already been mined. Rick

Not so. I read not too long ago about 186 (?) Africans dying of lead in their water supply from a nearby gold mine. Also, the Amazon is being despoiled by mercury used in gold extraction.

But if that happens, the U.S. fiat dollar will be even weaker than it is now and possibly obsolete or on its way to obsolescence, and Americans will have to adjust. Rick

Internationally, the US dollar is backed by whatever it will buy in the US. We are the breadbasket of the world. As long as the world must eat then US currency should have value abroad. Domestically, the US dollar is backed by the fact that taxes are required in it.

As for adjusting, the Austrians had better adjust to the fact that they can’t be libertarians and be for government privilege for their favourite money form.

If the US will learn to practice genuine capitalism (which logically requires SEPARATE government and private money supplies) then we will attract genuine capital. But if we insist on an outmoded and fascist money model then we will just be competing with younger and more enthusiastic fascists abroad. We will lose in that case, imo.

John Voigt October 23, 2010 at 5:07 pm

@F. Beard

“Internationally, the US dollar is backed by whatever it will buy in the US. We are the breadbasket of the world. As long as the world must eat then US currency should have value abroad. Domestically, the US dollar is backed by the fact that taxes are required in it.”

This is complete garbage. Singapore lacks natural resources and yet its dollar has value. Value has nothing to do with taxes, or natural resources. Value is entirely subjective, and money is valued because it facilitates exchange (the most liquid commodity). There are African nations that have abundant resources and yet their currencies have practically no value.

“If the US will learn to practice genuine capitalism (which logically requires SEPARATE government and private money supplies) then we will attract genuine capital. But if we insist on an outmoded and fascist money model then we will just be competing with younger and more enthusiastic fascists abroad. We will lose in that case, imo.”

Again garbage. Money is money. You don’t have different money supplies, one for the private sector and one for the public sector. Money is THE COMMON MEDIUM OF EXCHANGE, by definition. You make absolutely no sense (I don’t even know what “genuine capital” is, and I don’t know what the gold standard has to do with fascism).

F. Beard October 23, 2010 at 6:29 pm

Singapore lacks natural resources and yet its dollar has value. Value has nothing to do with taxes, or natural resources. John Voigt

I don’t know what gives Singapore’s money value but what I said with regard to US money is valid. Take the Federal gasoline tax. It is a per gallon tax. It is collected in US dollars. Don’t pay the tax and you don’t get to drive. The tax thus creates demand for US dollars. No dollars = no driving.

Again garbage. Money is money. You don’t have different money supplies, one for the private sector and one for the public sector.

Why not? Because gold and usury can’t survive in a truly free market? But common stock could. It is only paper certificates but has real value based on the assets of the corporation. It requires no borrowing or lending; assets and labor would merely be purchased with new stock issue thus sharing wealth at the same time it is consolidated. Mike Rozeff’s “Wal-Mart Money” also requires no gold.

Money is THE COMMON MEDIUM OF EXCHANGE, by definition.

The government is force and the private sector is voluntary cooperation. How is it morally possible for them to share a single money supply? It isn’t.

You make absolutely no sense (I don’t even know what “genuine capital” is,

Human talent, chiefly. When the US begins to practices genuine (ethical) capitalism then it will attract the finest people in the world.

and I don’t know what the gold standard has to do with fascism).

Like I said, government money is backed by taxation. It needs and should have no other backing since that would privilege some private money form which would be fascism. Government money should be as cheap to produce as possible and still get the job done.

Rick October 23, 2010 at 7:08 pm

F. Beard,

Not so. I read not too long ago about 186 (?) Africans dying of lead in their water supply from a nearby gold mine. Also, the Amazon is being despoiled by mercury used in gold extraction.

I didn’t mean to give the impression that gold would never again be mined. But I was just making the remark that, unlike oil, once it’s mined and being used it doesn’t just disappear into the atmosphere as a gas. And I certainly didn’t mean to imply that all miners would be ethical. But the unethical practices of some people – which always seems to take place regardless – is not a legitimate reason IMO for sticking with fiat money as legal tender.

But if this story you report is true and the mine is the cause, then the mining company has no respect for the property rights of nearby people and it’s government that is sanctioning that and bailing them out of the consequences(?).

Some of the biggest buyers and sellers of gold lately have been governments and central banks. I think this is part your point about the dangers of government having a monopoly on any type of currency, if I understand you correctly.

Also, and IMO, the current gold rush wouldn’t be so dramatic if governments and central banks weren’t so busy debasing the dollar. It’s another example of interventionism leading to unintended consequences.

As for adjusting, the Austrians had better adjust to the fact that they can’t be libertarians and be for government privilege for their favourite money form.

I don’t think all are. I think it’s a mistake to generalize “Austrians” and group Austrian school thinkers into a collective. Once again, IMO, competitive currency is something to discuss.

As for China and the U.S. dollar, I think it’s a mistake to assume that the dollar will always be the world’s reserve currency.

F. Beard October 24, 2010 at 6:50 am

But the unethical practices of some people – which always seems to take place regardless – is not a legitimate reason IMO for sticking with fiat money as legal tender. Rick

Even if all gold mining was perfectly conducted, it would still be a waste of human effort. Why? Because government money is backed by force; it needs no other backing. However, it should only be legal tender for government debts (taxes and fees), not private ones.

As for private money supplies, let’s see if gold and usury can survive in a truly free market in money creation. Imo, it can’t, not for long. But let’s see.

Paradoxically, we need government fiat in order to have a truly free market in private money creation. Otherwise, the government would be favouring a particular money or class of monies such as PMs.

As for China and the U.S. dollar, I think it’s a mistake to assume that the dollar will always be the world’s reserve currency. Rick

I assume no such thing. However, if the US will decide to practice genuine capitalism then the demand for both its government and private money supplies should always be strong.

nate-m October 24, 2010 at 7:30 am

Very weird stuff.

From my understanding there is no special reason why everybody must use the U.S. Dollar worldwide, except for what has happened in the past. The only reason it happened this way was through international treaties and promises that a percentage of the dollar was gold back. Promises and treaties that Nixon broke. Since then it’s seems to have just trudged along just because it was convenient and we were dominate.

But it seems like to me that the dollar is not backed by force, it is simply backed by the good credit of the USA government and the Federal reserve. If that credit was to falter then can see other countries happily dropping the dollar as a international standard like a hot potato.

Gold itself is a commodity and due to it’s rather compact and it does not rot or rust and that sort of thing. I wouldn’t be surprised if the amount of gold discovered roughly offsets the amount of gold consumed for industrial, electronics, and other applications due to the way commodity trading and price influences work. So gold itself has value based on the simple fact that it’s gold. It’s going to have value no matter what because it’s always going to be desirable for purpose or another.

I can imagine in a world with privatized monetary systems then you can have bank notes backed by something other then Gold. I suppose any commodity is up for potential money-backing status, although most of them are not going to be nearly as ideal as gold is. That would be a nice way to avoid any potential problems in money supply. You could potentially use any commodity as a source for money and thus probably get just about as much liquidity as you’d ever want… and since everything would be backed by something of value you’ll have differences in exchange rates and whatnot, but generally speaking you could avoid most of the pitfalls that you get with fiat money based only on credit.

F. Beard October 24, 2010 at 7:10 am

Once again, IMO, competitive currency is something to discuss. Rick

If we are to have genuine capitalism then competitive currencies are a must. Government privilege for any money or class of monies is thus ruled out.

My favourite private money is common stock. Common stock:

1) Requires no borrowing or lending. Assets and labor are simply bought with new stock issue.
2) Any price inflation is born ONLY by the owners of the corporation who can vote on how much new stock should be issued.
3) Since no borrowing or lending is required then deflation need never occur.
4) Is decentralised.
5) Increases the number of people with a vested interest in the free market.

Rick October 25, 2010 at 11:42 am

F. Beard,

Your objections to a government backed gold standard was addressed by Murray Rothbard in “America’s Great Depression”, a book I happen to be reading at the moment.

“But a 100 percent gold reserve requirement would not be just another administrative control by government; it would be part and parcel of the general libertarian legal prohibition against fraud.”

He goes on…

“Banks that issue receipts to non-existent gold are really committing fraud, because it is then impossible for all property owners (of claims to gold) to claim their rightful property. Therefore, prohibition of such practices would not be an act of government intervention in the free market; it would be part of the general legal defense of property against attack which a free market requires.”

Ch.1, page 27. Fifth paperback edition.

Salvador October 26, 2010 at 1:37 pm

“But if this story you report is true and the mine is the cause, then the mining company has no respect for the property rights of nearby people and it’s government that is sanctioning that and bailing them out of the consequences(?).”

More like they just happen to the the little animal that got stamped upon by the big gorilla. This is what happens when government is not strong enough to protect the weak from the strong. Anarchy = rule of nature, where only the strong survive.

Jordan Viray October 26, 2010 at 4:50 pm

“This is what happens when government is not strong enough to protect the weak from the strong.”

HAHAHA, yes, because that’s what governments are known for right? I mean it’s pretty rare for governments to trample on the weak through invasion or oppression. The Roman government in the Mediterranean, the English government in India and Ireland, the Spanish government in the New World, the Soviet and Nazi government in Europe, the American government in aboriginal America and in the Middle East… all exceptions.

We need to give the government more power so it can stop further cases of miners dying.

John B October 24, 2010 at 8:42 am

Excellent article. Victory or defeat is in the realm of ideas, and is where it is currently being lost.
But, as you say, people are waking up to the deception, to a degree. There have been some significant victories for freedom.
I do think you are a bit too harsh on the Tea Partiers. Yes, there is a danger they will compromise back to state business as usual, as the Conservatives have done badly in the UK. Okay, the UK Conservatives are a statist party, but at least under Margaret Thatcher there were attempts to set us free, and in fact her policies, together with Reagan’s in the US, led to a couple of decades of prosperity.
So it was not all bad, and degrees of achievement are not to be despised.
Strategically one has to keep moving in the right direction, and the Tea Parties are such a move.

The Mises Institute has done tremendous work towards overcoming the deception and my congratulations to you.

Zach Noyes October 24, 2010 at 7:19 pm

Thank you for your article.

As a temporary member of “generation sloth”, I can assure you that it is our fault. It is due to irresponsibility, apathy, arrogance, and a lack of competitiveness. I ended up not having any college debt, but a surplus (the lucky benefactor of a subsidy and of a willingness to work over the Summer), but I realized that there wasn’t much of a future for me in the avenue of work I had assumed I would be qualified for at the outset of highschool (or at least that was the thought that dominated me in my pessimistic state while at college: now I am just uncertain). I was, probably unjustifiably, spending more of my time worrying about how the government created an uncompetitive and counterproductive state in the workplace that I was preparing myself to move into and how that would influence my own behavior rather than looking for other avenues of employment. I am currently applying for work in the resturant business as a line cook with the hope of eventually being an executive chef if I can prove myself fit for the role.

F. Beard October 25, 2010 at 12:03 pm

Your objections to a government backed gold standard was addressed by Murray Rothbard in “America’s Great Depression”, a book I happen to be reading at the moment.

“But a 100 percent gold reserve requirement would not be just another administrative control by government; it would be part and parcel of the general libertarian legal prohibition against fraud.” Rothbard Rick

What I mean by government backing of gold is accepting it for taxes purposes. That would thus be an unlibertarian privilege for a class of monies (gold).

I agree with Rothbard that FRL is theft but we are not talking about the same thing.

F. Beard October 26, 2010 at 12:43 pm

You honestly think that “the bankers” hate the fact that the government can issue money? Mike S

Not when they need a bailout as you have indicated!

Let’s go ask all those TARP recipients how they feel about the government’s legal tender laws. Mike S

Bankers absolutely LOVE legal tender laws since it enables them to counterfeit in a government enforced monopoly money supply with FRL (fractional reserve lending). However, they would hate it if the government abolished FRL and became the sole issuer of new money reducing them to loaners not creators of new (although temporary) money.

I advocate for separate government and private money supplies which should please everyone worth satisfying.

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