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Great Quotes: Malo periculosam…

I’m currently reading “For Good and Evil: The Impact of Taxes on the Course of Civilization” by Charles Adams and I happened to come across this quote, which seems rather appropriate for the times.

Thomas Jefferson, an Anti-federalist, believed that (tax) rebellions every twenty years or so were “good medicine” for government. He further believed that rebels ought not be punished too harshly. To this end he referred to a Latin maxim which might come in handy when you need to dazzle naive fools.

Malo periculosam libertatem quam quietam servitutem
(“Rather a dangerious liberty than a peaceful servitude”)

Be sure always to repeat it in Latin. Fools won’t understand it anyway. Those who are simply ignorant will look it up.

Yes, Rachel, Global Warming is Politics!

I love this one from Infowars:

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She makes a great point, actually…. buuuuut… science by definition must be falsifiable – i.e., you have to be able to disprove it.

So what exactly WOULD disprove “Global Warming”?

Well… NOTHING WOULD!

And that’s why, Rachel, “Global Warming” is NOT science!

Why Rights are Inalienable

The concepts of rights is confusing to a lot of people. You can’t see them, you can’t feel them, and they are very often violated. As far as most people are concerned they simply don’t exist. Or, if they do, they are only something that the government “grants” and as such they can be “taken away” whenever that same government sees fit. But the writers of the Declaration of Independence thought that rights were “endowed by [Man's] Creator” and “inalienable”. What did they mean? Who is this Creator? And what does “inalienable” mean?

Now, when it comes to the laws of physics, there is no debate that they are “God-given” or “Nature-given”. It is clear to everyone that something much more powerful than Man determined what those laws would be. Those laws are the work of whatever it is that created the universe, whether you want to call that thing God, or Nature, or Truth, or whatever other name you might apply. And they are beyond the power of Man to change. Man can certainly disregard them. But what he can’t do is avoid the consequences of disregarding them. Nature, to be commanded, must be obeyed.

Rights are Creator-given in just the same way. Yes, a man can disregard them, just as he can disregard the laws of physics. But, just as with the laws of physics, he cannot avoid the consequences of doing so. But what are the consequences of doing so? We’ll get to that in a minute.

Now, what does it mean that rights are “inalienable”? Inalienable (or unalienable as it is also written, both words have precisely the same meaning) means simply something which you cannot give away. It does not mean that the senators have legislated that they will not allow you to transfer them to someone else, like a non-transferable coupon. It means that it is a priori impossible to do so, i.e., to talk of transferring them would be to contradict yourself.

In order to understand why this is true let’s consider the nature of consciousness. Consciousness certainly is “inalienable” isn’t it? It is beyond your power to give it away to someone else. And this has nothing to do with any man made law. It’s simply a given. You could say it is “God-given” or “nature-given” or you could say that you’re “endowed by your Creator”, however you state it, the fact remains, try as you might, you simply cannot give it away.

This certainly does not mean that you can’t kill yourself. What it means is that as long as the particular consciousness that is you exists, it is you and not someone else. It is inalienable.

Looking at this from a slightly different perspective brings us to the concept of responsibility. The word responsibility is used here to mean that you are the one who suffers whatever consequences come with your actions. It has nothing to do with blame which is an entirely different concept. For example, if the plane you are traveling in crashes, you are responsible in that the consequences of having gotten on the plane are suffered by you, but you are not necessarily to blame for the crash. When responsibility is defined in this manner, it’s easy to see that it’s inalienable, right? It is inalienable because consciousness is. Wherever you go, that’s where you are, so to speak.

Now, when we talk of rights being inalienable, we are discussing a political ideal. That means that we have a particular goal in mind. If we are to achieve that goal, then we have no choice but to follow the laws laid down by nature (or God), hence you may have heard that the concept of rights comes from an ideal called Natural Law. Natural Law is no less natural and no less law then are the laws of physics. Again, you can disregard the laws of physics if you like, but in no way can you avoid the consequences of doing so. The responsibility for doing so is yours, i.e., the consequences are suffered by you.

The purpose of the political ideal which the Founders espoused was to create a civilized society, i.e., one in which each man had the maximum potential to further his own life. They recognized that each man was ultimately responsible for his own life that this responsibility was inalienable. Hence, rights, which are simply those responsibilities restated from the perspective of a third party, a government, must be inalienable, too. For example, you are responsible for your life in that it is you who experiences it, so any society that you are a part of, if it is to be a civilized society, must recognize this fact. This recognition is the right to life.

So, to come back to our question previously asked, what are the consequences of disregarding rights? As we have seen, rights are the foundation of a civilized society, that is, one in which each man’s potential is maximized. The consequence, then, of violating rights – Natural (or Creator-given) Law – is the loss of a civilized society. This loss is suffered by everyone. It is suffered by you. Hence, the responsibility for ensuring that rights, your neighbor’s as well as your own, are not violated, rests firmly with you. And that responsibility is, of course, inalienable.

And, it is with this article that I attempt, with what little power I have, to convince my fellow man not to give up his rights, the consequences of which I find devastating. May God, Nature, and the Universe, help me to do that!

Why “Anarcho-capitalism” is an Oxymoron

There are quite a few so-called “libertarian” groups touting so-called “anarcho-capitalism”. To my mind this term is nothing but an oxymoron that serves to confuse people who have otherwise correct instincts. This might be because one of the apparent proponents of the idea was none other than Murray Rothbard. It’s possible, then, that this is just a case of guru-worship. At any rate, these are my views on the subject.

Before getting into a debate about complex philosophical topics like this, it is always a good idea to carefully define terms, so here are my definitions. Keep in mind that, as I will be discussing an ideal, I am using terms in the normative sense, that is, for example, law as it should be not law as it currently legislated. In other words, we are discussing theory and not practice.

  • Politics – the study of the proper structure of a collective such that each individual within that collective has the maximum freedom to act ethically[1]
  • Law – the body of ideas which delimit the manner in which individuals may act within society such that the political goal is achieved
  • Government – the organized enforcement of law. A proper government is, in essence, a collective form of self-defense (and self-defense is the only lawful use of force.[2])
  • Anarchy – the absence of organized law enforcement
  • Capitalism – the economic ideal under which anyone may aspire to ownership of the means of production. Capitalism is the natural development of a proper political system.

Now, it should be clear from the above definitions that anarchy and capitalism are incompatible. Capitalism is the result of a proper system of government – i.e., it develops from a political (collective) system under which the individual’s rights to property are respected and the recognition of those rights is enforced. Without such enforcement, there is no means of dealing with criminals other than for each individual to engage in war each time he encounters one.

Now the so-called “agency-theorist” will argue that through freedom of association individuals are “free” to band together to protect themselves. This is true, however, the moment they do, organized law enforcement is born, at least within the collective, and there is no longer a state of anarchy. Everything external to that collective, however, is still potentially in a state of war – only now it is war between tribes.

Now, the same anarchist may argue that these “small” governments are preferable to the large centralized one. Again, this depends upon the state of the “small” government. If it is a criminal government, the same problem exists – the potential for tribal warfare. If they are not criminal then of course there is a consistency of law and so which “tribe” you belong to is largely irrelevant. It is for precisely this reason that there will always be a natural tendency towards centralization. Any proper government which encounters a criminal one is justified in removing the criminal government if it is within its power to do so. In fact, if it were possible to ensure that criminals could never gain control of the machinery of government, a world government would be ideal. Yet of course, this is impossible – the very thing that makes a proper government necessary is the very thing that threatens it – the existence of criminals.

It is because of this fact that government can only ever approach the ideal, it can never reach it. This is not a defect specific to Man – it is a defect of life itself. All living things are subject to ignorance and uncertainty and it is ignorance and uncertainty which breed crime, on the parts of both the perpetrator and the victim. Only a state of perfect knowledge would allow for a perfect government – but of course in a state of perfect knowledge no government would be needed.

That life is subject to ignorance is a priori true and from this it follows that there is no such thing as Utopia. The “agency theorists” make the same error that the socialists and globalists make. They assume that a “fool proof” government is possible. But fools make excellent criminals and even better victims. For this reason, neither world government nor anarchy will ever prevent tyranny, injustice or war. As many wise men have pointed out, liberty requires constant vigilance. This is not idle talk. There is no short cut.

The belief that a short cut exists and talk of the means to achieve it serve only to facilitate the eventual decline of a proper government. The populace becomes complacent, believing they cannot be victimized, and greater and greater ignorance of political matters becomes the norm. It is this ignorance that eventually leads to the criminal takeover of the machinery of government and so governments, like the population, have a life cycle with a difference only in the relative length of time they persist.

Does this mean that Man should not strive for ideals? After all, they are only approachable, and never fully realizable. This is a little like saying that one should not attempt to prolong his life because he must inevitably die. As with the question of life and death, recognizing these truths can only help us to better approach the ideals.

Some means of preserving a proper government do exist and are generally attempted. Democracy, for example, minimizes the ignorance of any one man, federation, i.e., the maintenance of local governments, checks the power of the central government, separation of powers limits the effects of any one arm of government, representation sets up a system of local responsibility, etc. Even so, these ideas can only maintain a proper government when the people are vigilant. None of them is “fool-proof” and none of them ever can be.

It should now be clear that our personal values are inextricably linked with and dependent upon the knowledge and vigilance of our fellow man. It is of this fact that criminals are least aware. They imagine that slaves can approach the productivity of free men. They confuse relative wealth with absolute wealth and imagine that there will always be a supply of able men to plunder, even as they murder all the able men. All man can hope for is to stamp out such ignorance whenever he encounters it. No one wants to hear this. But burying one’s head in the sand is exactly what needs to be avoided. Anarchy, which is essentially the return to a primitive existence, is certainly not the answer.

Notes:

[1] a discussion of this is a bit outside the scope of my article, but I will try to make this a little clearer for those who are new to the subject. Because knowledge remains unalterably dispersed among individuals, no man or group of men will ever be in a position to determine what action is for another man the ethical action. This determination must always be made by the acting individual alone and therefore he must always be as free as possible to make that determination – even if he may ultimately err. It is to ensure this freedom that laws are instituted which prohibit to men those acts which interfere with his neighbor’s identical freedoms. This is the basis for the ideal known as Natural Law.

[2] Please note that government is NOT defined as a “monopoly on the use of force”. This idea contains within it the notion that government rightfully exercises some power that is forbidden to the people. Under a proper government the citizens retain the individual right to self-defense and the only purpose of government is the defense of the collective. A proper government might under certain conditions err and imprison an individual who has exercised this right because it is often difficult determine that an act was performed in defense. It is for this reason that citizen are generally expected to leave law enforcement to the government. Nevertheless, I think it’s important not to confuse this with a “monopoly” on force.

More on the FDA

Recently I wrote a quick post about the FDA in relation to a TV show on Animal Planet called I’m Alive. I received a couple of comments, but one of them requires a little more explanation so I’ve decided to answer it as a post.

First, the title of that article is “Yet another example of why the FDA ought to be abolished” and it is really yet another. It is certainly not the most compelling. Government agencies like the FDA violate ethical and political theory and as a consequence they result in negative outcomes. Understanding theory requires time and effort so it is generally these consequences that get people’s attention. Nevertheless, it is important to realize that they are consequences, i.e., concretes, where the argument requires abstraction.

A thorough discussion of the ideal in government is really a subject for a book. It requires strictly defining terms and discussing why central planning in general is unethical. In this post, though, I might be able to elucidate a bit for those who are new to the subject by revealing the true purpose of an agency like the FDA.

Any government agency has two purposes, an ostensible purpose, the one that the people buy into, and the real purpose, the one that those in control want to achieve. (See my post A Spoonful of Sugar for more on this). Let’s just take the FDA, DEA and USDA as examples (you can do this with pretty much any government agency and rather than repeat myself, I’ll let you do some of that. Go ahead and post some in the comments section if you like.)

Agency Ostensible Purpose Real Purpose
FDA To protect individuals from “snake oil salesman” To protect businesses from competition (i.e., to ensure a monopoly)
DEA To protect individuals from becoming drug addicts
  • To protect businesses from competition
  • To provide a source of monopolistic income to governments
USDA To protect individuals from food borne illness
  • To protect businesses from competition
  • To centrally control the population by controlling the food supply

As you can see, government is particularly useful for preventing business competition. If you doubt this is the real purpose of these agencies, below is a list of books which will teach you a little about the history of government interference with the market economy.

I will elaborate a bit on the arguments the people generally believe (it is these beliefs that a discussion of ideal government would dispel). For those who worry about “snake oil salesman” it is important to note that there already exists within a proper system of justice protection from them – it is the law against fraud.

Now some may argue that the law against fraud is not enough because it doesn’t protect people before the crime. But no legitimate law can punish crime before it happens. The law serves to protect people by making an example of those who commit crime. In fact, protecting people from making mistakes leads over time to a population that is particularly vulnerable to such mistakes and this of course plays right into the hands of the real snake-oil salesman – the one who wrests control of the apparatus of government. An analogous situation might be the infant whose immune system remains unchallenged. He never builds up an immunity to disease while he is young and so remains particularly vulnerable.

Now, do these agencies sometimes do what people think they are supposed to do? Yes, sometimes they are successful in preventing a dangerous drug from making it to the market – after all, not everyone working as a cog in the wheel is aware of the real reason the agency exists – some people actually believe they are working for the benefit of individuals. But it’s important to realize that this function can be served in better ways – ways that do not impact the freedom of individuals to behave ethically and therefore do not have the negative consequences associated with these agencies.

I hope this clarifies somewhat my position on the FDA. For those who wish to do some studying on their own I highly recommend the following books.

The Myth of the Robber Barons by Burton Folsom (good for beginner)
The Case Against the Fed by Murray Rothbard
The Law by Frederick Bastiat
The Road to Serfdom by F. A. Hayek
The Virtue of Selfishness by Ayn Rand (ethical theory)

Atlas Society Values

I have not read the article depicted on the cover of the latest issue of The New Individualist. However, I did think that the image chosen for the cover and the title were interesting when compared with an earlier issue.

atlassocietyvalues

Those Speech-writers are Comedians

This is such a positively priceless blunder, one has to wonder… can it really be a coincidence?

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For those of you who might not get it, here is the relevant scene from the Matrix. It’s true, you have to see it for yourself.

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A Scary Chart

USA Today is featuring this nice Presidential Approval Tracker that lets  you compare the approval ratings of various presidents during their time in office. I’m not much for polls and approval ratings. I tend to think there is way too much leeway there for propaganda. Nevertheless, it’s sometimes worthwhile to check out just what they want you to think – and I think they want you to be scared.

Check out this comparison between Obama and Bush:

Kind of makes you wonder what the plan is...

Kind of makes you wonder what the plan is...

Hmmm…. I wonder what the plan is for boosting Obama’s ratings in the fall….

Why the Ideal Money Supply is of a FIXED and Arbitrary Quantity and Why Fractional Reserve Banking is Always and Forever Fraud

This post is again inspired by an article from The Freeman, the magazine for the Foundation for Economic Education. In thinking about it now, I imagine that today I would disagree on some level with a great many of the articles published in the Freeman over the years. Some ideas are more distressing than others, though. For example, in a recent letter to the editor, Stephen C. Apolito corrects Howard Baetjer on the definition of inflation. Baetjer responds saying he agrees “with Murray Rothbard’s aversion to government-issued fiat money, largely because I believe that governments and their central bankers cannot possibly know how large the money supply should be” and he thinks that “when people wish to hold more money, banks should create more money. When they wish to hold less, banks should extinguish some.”

Banks should be creating and extinguishing money? In the words of the Freeman itself “It Just Ain’t So!” Whether “free banking” or no, banks shouldn’t be messing with the supply at all. Here’s why.

Why the Ideal Money Supply is of a FIXED and Arbitrary Quantity

First, let’s think about what money actually is. Money is NOT the “most sought after good”, although it usually develops from that. Yes, money is a “medium of exchange”, but defining money so generally doesn’t tell you anything about what serves as the ideal. In addition to its function facilitating exchange (or as part of it) money serves also as a “data storage” device and it facilitates calculation by keeping track of who owes what in terms of goods. In that sense, it is essentially an IOU.

I think some confusion over this concept stems from the fact that money usually develops spontaneously from a commodity, usually the most “sought after good”. But, money does not have to be a commodity. It can be sticks with carved notches (the tally sticks of Medieval England for example), numbers in a ledger, or blips in a computer.*

Now in real life, it’s nearly impossible to separate any legitimate money from a commodity. (You’ll see why I use the term legitimate in a minute). The reason is that any attempt to do so leaves open the ability to rig the tally. For this reason, the commodity chosen to be money is usually something rare and difficult to obtain more of. A good money generally has to have other properties, too, like being easily divisible, and every divided piece must be identical to the others. (This property is known as fungibility.) This is the reason that elements like gold and silver make such terrific money. The quantity of gold or silver in circulation at any given time is pretty much fixed because it is so difficult to mine and because it is a commodity which is used up to some degree (although gold and silver, as elements can always be reclaimed from waste, it is often expensive to do so.) Now of course, gold and silver are actual commodities and so the amount in circulation at any given time can and should shrink and grow. But it is for this reason that the concept money gets confused with the concept commodity in people’s minds. Money as a concept (Aristotle might have said money qua money) ought to be fixed in quantity. The quantity itself is irrelevant because money as a concept can be infinitely divided. It doesn’t matter how many goods there are, the money can be divided to accommodate any price. (Aren’t numbers beautiful?)

Just to make this really clear, let’s take a look at how it would work. Let’s say there are only 5 “blips” to go around and there are, at the start of our make believe society, exactly 5 baskets of goods. (In real life you could never divide all the goods and services in the world this way. No matter. Your brain just needs to simplify it in order to understand it. We can apply it to the real world later.)

money_01500

Now we can see that each basket is worth 1 blip. What happens if the amount of goods increases to 10 baskets?

money_02500

Now each basket is worth 1/2 a blip.

But what happens if our society is really productive. Suppose we end up with 10,000 baskets of goods! (Now that IS productive.)

money_05500

How much is each basket worth now? We just divide 5 by 10,000 (can you DO that? Yes!) and we get each basket is worth 0.0005 blips!

Obviously with real commodity money this could get difficult. But conceptually, it’s doable and money is a concept. Even with a physical commodity money, chances are we would never need to adjust the amount of money in circulation because the arbitrary figure would be large enough to start with.

Now, why don’t I take into account the number of people in the society? The number of people in a society is not relevant to the money supply because money represents goods, not people. As long as any particular person is productive and produces goods, he ought to end up with some money, but it’s his goods (or services) which are traded for it.

Why is the ideal money supply fixed in quantity? Because modern money, unlike commodity money, is essentially a tally system. Money represents the portion of the supply of goods and services in an economy that you have a claim to. There is never any guarantee that you will get any particular amount of goods and services; the money represents a percentage of the goods and services available. If there is a hurricane that wipes out a portion of the supply of goods and services, you will suffer just like everyone else. When the supply of money changes, however, your proportion of the supply of goods and services changes.

Again, the truth is more complicated, but let’s looks at it simplified.

Suppose you have 2 electronic blips. The supply of money is 10 electronic blips. The amount of goods and services in our little world is 10 baskets. You therefore have a claim to 2 of them. That gives you 20% of the supply.

money_03a500

But, what happens if the money supply increases? You still have 2 electronic blips, but now the supply of money is 20 electronic blips. The amount of goods and services in our little world is 10 baskets. You now have a claim to 1 of them or only 10% of the supply.

money_03b500

Where did your other 10% go? It went into the pockets of the holders of the new money. And what did they do to earn it? Nothing.

It gets worse, however. In the above example, the pie remained the same. In a healthy economy, though, the pie does not remain the same. It grows. This allows those who keep the tally to skim quite nicely. If you only look at the “price” you are getting, you will never realize what is happening to you. Let’s look at it.

money_04500

As you can see, although the “price” you pay and the number of baskets you get has remained the same, you still lost out. This is the effect of a growing money supply. And it gets worse still, because a growing (or shrinking) money supply means that calculating a profit or loss from a business becomes impossible. As this continues or worsens, business activity falls and the pie shrinks!

Why “Fractional Reserve Banking” is Always and Forever Fraud.

Now before we go on, it is necessary to understand how banks work. This is a complicated subject and I am going to take some liberties again in order to simplify it for you. First, why do we need banks?

Banks, as a concept (again Aristotle, and some other writers you may encounter might say banks qua banks), facilitate the use of money for productive enterprise. They do this by borrowing one individual’s money and lending it to another individual. For the service, banks (qua banks) take a portion of the interest the borrower pays (and sometimes some other fees). Interest, despite what you might have heard elsewhere is the necessary cost of borrowing. When you lend someone else your money you don’t have it anymore. You cannot spend it until the other person pays you back. That time is worth something and you should be compensated for it. That’s what interest does. Also included in interest payments are other factors, like what the risk is that the other person won’t be able to pay you back and in situations where the money supply is not fixed, how much inflation you can expect before the person pays you back.

This service performed by banks might not seem like much, but it is really the cornerstone of a modern economy. Think of it this way. If you decided to simply save your money in a mattress, the entrepreneur down the block who is planning to introduce an entirely new technology that will enhance your life experience 10 fold may never get the chance to introduce that technology. By lending to others we ourselves are ultimately rewarded. For this reason, banks (qua banks) are essential.

Because money and lending are so essential to a proper economy, bankers, if they are not ethical, are in a position to attain extreme power over others. They do this by obfuscating and confusing people into believing that the supply of money needs to “expand” and “contract” according to demand. This would be the case if the money were commodity based, like gold and silver. In that case the supply would expand and contract naturally based on the cost of mining and bankers would have no hand in it. Today, there is no commodity money. Today we are using a tally system with the quantity of the blips, or pieces of paper, expanding and contracting according to the whim of the banker. (It is important to note that your neighborhood banker is likely completely unaware of this. He is simply doing a job. In the US the “banker” would be the Federal Reserve, but there is likely a world system with bankers who control the Federal Reserve, too. For this reason, I don’t recommend confronting your neighborhood banker with what you learn here unless of course your goal is to help him understand.)

So, how does an ideal banking system work?

In an ideal banking system, if you lend someone your money, you cannot spend it until they pay it back. If you did, that would be kind of like having your cake and eating it, too, wouldn’t it? The modern CD or Certificate of Deposit account is closest to the ideal banking system. When you open a CD you are agreeing to lend your money to the bank for a specified length of time. For the use of your money the bank pays you a fee – the interest rate. During that specified length of time you do not have the use of your money. The bank might let you take it anyway if you need it sooner, but only after a delay and a penalty. The reason they do this is because they have promised that money to someone else as a loan and now they will have to ask that person to pay back the loan sooner. If you were the borrower in this case, you wouldn’t like that very much. (The reality is of course more complex than this – the bank might not need to ask for the money back, but they might have to turn down another loan to someone else because of it.)

Today, savings accounts, checking accounts, and other types of deposits can be “loaned out” even though technically you haven’t loaned the bank any money and you can supposedly claim it at will.

Now, how does “fractional reserve” banking work?

In the old days of the gold standard, paper money represented gold stored in a vault. It was simply easier to carry around a paper claim check than it was to carry around gold, which is heavy and hard to secure. For this reason people usually traded the claim checks and only rarely presented them to the banker to get their gold back. Nevertheless, the amount of claim checks in circulation was directly related to the amount of gold in a banker’s vault, therefore the supply of claim tickets would shrink and grow as people deposited more or redeemed claims. This wasn’t a problem because the gold was still the money and the paper just a substitute. As time went on, however, the claim checks became more and more standard and the people’s trust in them grew. At some point a banker realized that he could make a profit by “loaning out” the gold in his vault. He didn’t really have to remove any of the gold from the vault though; he could just print more claim tickets. In this case, each ticket is supposed to represent the same weight in gold, but in fact, it does not.

money_07500

This is fraud.**

This is also the beginning of “fractional reserve banking.” The phrase “fractional reserve” is a banker’s euphemism. There is no reserve. The “fraction” is simply the amount of gold that the banker doesn’t print double tickets for. For example suppose the banker wants to keep a 10% “fractional reserve.” This just means that 10% of his claim tickets can be redeemed for gold before he goes bust. It also means that 90% of his claim tickets are fakes.

Now in modern times there is no gold at all. The “reserve” today is simply a percentage of the wealth that is deposited with the banks. I say “wealth” because that is the only way I can describe money which represents a real portion of the supply of goods and services as compared to money which represents nothing. In fact it is not so easy to divide like this. Unlike the gold claim tickets where the lucky few who managed to redeem their claim tickets before the banker went bust actually got the amount printed on the ticket, today there is no “amount” of anything on the ticket and it is the luck of the draw whether or not a person manages to get the full claim – in fact this may not even be calculable.

Now of course the above represents a very simplified explanation of how our modern banking systems work and how they should work. But I think it serves as a good starting point for understanding why no one – not even the government – ought to be messing with the amount of money out there. This concept is going to become more and more important for people to understand as we come to rely less and less on an actual object in our daily exchanges. Cash even in the form of paper is probably on its way out. Even today, the bulk of exchange is handled by computerized blips that have no physical representation outside of cyberspace. While convenient, this modern tally system is (and has been) an extremely dangerous state of affairs – something I think a lot of average people are starting to notice these days. I hope this article (and my previous articles The Basics: Money, Inflation and Deflation and The Basics: Banking, Inflation and Deflation) will help demystify the process somewhat.

Notes:

*I’ve gotten some questions regarding my use of the term “commodity” in this article. If you are using the term “commodity” to include any item that a person might want, money would certainly be a commodity. But, I think it’s important when defining terms not only to be clear but to have the terms be useful. I do not think it is particularly useful to define “commodity” in a way that does not differentiate money from the things it is used to buy – therefore money to me is not a commodity.

**Also known as counterfeiting. I don’t like this term, however, because some people will mistake counterfeiting as printing money against the wishes of the government. The government has no business printing money, either.

The idea of ‘Consent’

This is a just pet-peeve of mine. I sometimes hear arguments regarding the ‘consent’ clause of the Declaration of Independence that seem to imply that one must consent to a just government and from that follows the idea that anything goes as long as one consents.

I have to weigh in on this.

In a truly just system there is no such thing as ‘consent’. Consent is implied by the fact that the system is just. I need no signatures, I need no approval. Justice is justice – period.

Now I understand that this might be confusing to some people. Especially those who believe in the concept of relativism, i.e., the idea that there is no independent or objective truth upon which ethics or politics is based. Proof of an objective reality is a bit outside my scope at the moment (although my recent post on Descartes’ Proof of the Existence of God might interest you if you are looking for this). I imagine, though, that the vast majority of my readers take the existence of an objective reality for granted except when normative sciences are involved. In other words, most people’s epistemologies are hopelessly split. Nevertheless, I’m going to make an attempt to show that true justice does not require consent by creating an example from a law that practically no one would find unjust – the law that requires men to abstain from murdering one another. Let’s suppose that for the sake of argument a group of individuals develop a society and all consent in writing to abide by this rule.

Shortly thereafter a stranger comes into town. He murders a citizen in town and is brought to trial for the murder. His defense? Well, he never consented to such a law!

Absurd? Of course it is. This notion follows for ALL just laws. Just is of course an important distinction. If you have a wily relativist view of things, justice will have utterly no meaning and you will not be able to create anything remotely like a just society. You will be busy trying to uphold all kinds of crazy and unjust laws. (If you’re interested in discovering just what justice is and how we know it, I recommend reading some of Ayn Rand’s work. As I mentioned in a previous post Rand is one of the very few philosophers who have a full and consistent understanding in this area.)

Some time ago a friend of mine attempted to counter the above argument with precisely the opposite approach; that anything goes as long as one consents. (This is really a very good thing to do when you are trying to understand a new concept. Take whatever it is you are trying to understand to its logical extreme.) He was imagining that there could exist a society of people who together agreed that to be a part of their society one must consent to never defend himself. Could such a society even exist without breaking it’s own rules? Of course not. The first time someone DID defend himself the society would either need to take action (i.e. defend itself thereby breaking it’s own rule) or else ignore the law, at which point, it ceases to have any meaning.

The point here is, don’t get hung up on the idea of ‘consent.’

The Declaration of Independence and the US Constitution are by no means perfect – even as originally written. Nevertheless, when you are reading something that was written at some point long in the past, I think it’s important to remember that languages change and evolve. Words that had one meaning then have a different meaning now, and if you read those works understanding only the current meaning, you are going to be confused. (This problem is compounded when a work has been translated from a foreign language written centuries ago! Remember that when you are studying ancient religious texts that weren’t even written down until centuries after they were conceived!)

Here is the original passage from the Declaration of Independence that includes the ‘consent’ portion:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

I recommend that when you read such terms as self-evident, creator, created, unalienable, just powers, and consent, you immediately try to define them and put them into a coherent whole. No small feat, admittedly, but if you are arguing about the use of the word ‘consent’ you are clearly at this level. The trick is not to get stuck there!

Guns

I really am feeling these days that I am living in a matrix. Not just a system created by elites… a real cosmic joke.

The absurdity here of course is that it took a ban on FOX HUNTING for the British people to realize that they wanted their guns back. That anyone EVER accepts the idea that banning guns will reduce crime is just amazing. A little deductive reasoning will tell you that it won’t. It’s easier reasoning than most geometry problems. The politicians are not banning guns to reduce crime and then discovering that it doesn’t work. It was never their intention to REDUCE crime at all. The intention is to INCREASE the ability to commit crime – especially for a particular brand of criminals – who are somehow never noticed.

I used to love Court TV. I learned a lot about law and political philosophy from studying cases presented there. But one of the problems with all of these “crime” shows is that they are focused on a really irrelevant brand of criminal. The guy who robs a liquor store is a lightweight. If he kills a few people, he’s STILL a lightweight. Despite all the machinations of a serial killer and his seemingly perverse motives – HE’S a lightweight. The REAL criminals are much bigger and they enslave, torture and kill MILLIONS. But no one ever notices them. The focus is always on the little guy.

The real criminals are the ones who take your guns and tell you it’s for your safety that they do so. Don’t be surprised when it backfires. It was never meant to work. The purpose is to disarm you so that THEY can control you. This is not some grand conspiracy theory. It is simply how the world works. It’s not new, it’s how it has always worked.

Recently I watched a show on the History Channel about the Berlin Wall and all the people who tried to escape from East Germany. The absurdity of keeping people inside a country they simply wanted to leave never entered the heads of the border guards. Those who imagine for one moment that the 2nd Amendment in the United States is meant only for the “armed forces” are less than children – they are zombies.

This topic is not even worth a “Basics” article. If you can say 2+2=4 you have the basic reasoning skills to figure this one out for yourself.

For a good definition of the term “injustice” check out what happened to Tony Martin.

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They Live

For those of you that might have been lost by my reference to “sunglasses” in a previous post this is the movie that alludes to. Pretty funny and entertaining… but with a bit of truth???

Note: you can use the drop down box under “Google” to go directly to Google video.

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1929

At this point, it’s worth taking a look at what happened in 1929. If you’re not yet familiar with this chart, let’s just say that you probably will become familiar with it over the next few years. This chart is from Yahoo. Click the image to go to Yahoo’s Finance site and play with it for yourself. (You may need to adjust the chart yourself back to the date range shown here.) I’ve put the cursor over the week of November 11, which is right before a powerful rally. But it’s a fools rally. For the next two years the Dow continued to decline another 85%! In fact, here are the stats:

  1. a 40% decline from a high of 380.33 starting August 26, 1929 and ending the week of November 11, 1929
  2. a powerful 28.5% rally that lasted until April 1930
  3. a fall of 86% over the following 2 years until a low of 41.63 was reached on July 5, 1932

A total fall in the value of the Dow of 90%. If this were to happen today the Dow would end up at 1409.30. No the decimal is NOT in the wrong place.

If you are watching gold and the dow/gold zoom, then you have probably already considered that this could happen. Let me make this clear… THIS COULD HAPPEN. That doesn’t mean it will. What it means is that it COULD. It’s very easy to become so used to certain situations, hey, sometimes they’re all we’ve known in our entire lives, and we come to believe that things will always be as they are. The best way to save yourself in this market environment is to realize what could happen and protect yourself accordingly. Don’t fool yourself into thinking it can’t happen. That goes for the political environment, too. If you’re new to the idea that gangs of criminals run the governments of the world, I suggest you read a little history and recognize that about all that’s changed is the sophistication of the criminal. 

Educate yourself while you can still do it.

Be careful out there.

O(s)bama Bi(nla)den

This was pointed out to me by someone noting the Obama signs in the yards of neighbors. Not only do I doubt very much this is a coincidence, but even if it was, one would imagine that the distaste alone would be enough to crush Obama’s campaign. That it doesn’t is really, really, telling. No doubt this joke is meant to show those of us who can see it just what we’re up against. As the socialist fist descends upon us, some fools are dancing on the roofs celebrating it’s arrival. Hence, I’ve come to realize that an Obama sign on a lawn tells you volumes about what the occupant DOESN’T know. Goddamnit, PUT ON THOSE SUNGLASSES!!!!!!

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