"The Federal Reserve System virtually controls the nation's monetary system, yet it is accountable to no one. It has no budget; it is subject to no audit; and no Congressional Committee knows of, or can truly supervise, its operations." ~ Murray Rothbard
Every once in a while, I peek over the parapet of my smart, sentient, reasoning friends to see what the rest of the world is talking about. Usually, I get hit in the eyes and ears with bewildering, invincible stupidity.
In the words of Murray Rothbard: “It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”
1) “The Boom Bust period of 1797 to 1933.” It’s very important to understand that booms and busts are caused by artificial increases in the monetary supply (Austrian Business Cycle Theory). She doesn’t seem to have a grasp on this. http://mises.org/daily/672 Business cycles are not caused by a lack of regulation.
3) Pre-1914 booms and busts. If you don’t criminalize fractional reserve banking, then bank-runs should be regarded as a GOOD thing. Bad banks went bankrupt. Good ones remained. Customers were careful. Responsible people succeeded. Irresponsible people found other work. The 1914 creation of the Federal Reserve was a government take-over of the money-printing process.
4) If you want to get rid of booms and busts, you must firstly understand understand ABCT, and secondly you must get rid of fractional reserve banking which is inherently fraudulent. We don’t even need more laws to accomplish this. They just need to stop putting people in jail who trade in silver or gold (http://www.nytimes.com/2012/10/25/us/liberty-dollar-creator-awaits-his-fate-behind-bars.html) and the market will, all by itself, move from fractional reserve money to sound money.
4) FDIC insurance. Banks used to advertise their liquidity to customers because it matters. Now that everyone is insured by the US taxpayers, it no longer makes any difference where you bank. Since the government has put all the RISK on the taxpayers, let’s not be surprised that the bankers act more recklessly.
5) “We had to bail them out” WHY?????? Why isn’t letting irresponsible banks go bankrupt ever on the table? I had an internet business that didn’t do so well. Why didn’t I get bailed out?
6) The S&L crisis was caused by deregulation. No it wasn’t. It was caused by government removing risk from the banks and them (very predictably) acting irresponsibly. Instead of letting them go bankrupt, the taxpayer was forced to bail them out further promoting risky behaviour.
7) The crisis with the hedge fund Longterm Capital Management was caused by deregulation. No it wasn’t. It was caused by government removing resk from the banks and them (very predictably) acting irresponsibly. Instead of letting them go bankrupt, the taxpayer for forced to bail them out further promoting risky behaviour.
8) There is even more centralization in the banking industry since 2008-2013. If you stop fucking bailing out the Big 4, then smaller, more responsible banks would have taken over their assets long ago.
9) Regulation works. No it doesn’t. The Bernie Madoff Ponzi scheme was handed to the SEC on a silver platter by a PRIVATE investor looking out for his investment. They SEC ignored it while the Ponzi scheme grew from 4 billion to 50 billion. Bernie Madoff bragged about his close relationship with the SEC. The only regulation that works is letting irresponsible people go bankrupt.
I was once at a small Tea Party rally in Iowa. A guy came up to me and commented on my 82nd Airborne Division baseball cap. He’d been in the military too, he said. Then he made it absolutely clear to me that he was “ready to start blowing up gas stations.” I’m pretty sure he was an agent trying to create a terrorist insident to the Bureau could heroically prevent it at the last minute.
I’m confident that they’re playing a fool’s game. We have the truth of culture and economics on our side, not to mention the Consitution. They’ll ruin a few lives here and there, but in the end, the government will still bankrupt itself. They can’t resort to the type of oppression they need to stay in power without fully revealing their true malevolent selves. That would be the end of their power, at least in first world countries.
People want to trade with one another. They want to communicate. In the end, they will.
I’m actually responding to a friend who cited the article and says that he’s visited “libertarian” countries in Africa and SW Asia. I think it may be beyond the ability of these people to understand, but I wrote back anyway:
Afghanistan and Congo are not libertarian. Look for private justice and private security. Medieval Iceland is an oft cited example, albeit an imperfect one – people voluntarily chose clans for their protection.
Another is the Not-so-wild West which had a lower murder rate than most modern American cities. Wagon trains had private constitution. The original meaning of the term “outlaw” was someone declared to be outside the protection of private law. Meaning, private security would not protect him. This seems like a much more sensible means of punishment then *Forcing* victims to pay for the food, lodging and entertainment of their aggressors.
In the not-so-wild west civilization grew faster than the state, but unfortunately, the state and its many psychopaths caught up. So if you want honest example looks there, or to Medieval Iceland, the clan structure of Ireland, the thousands of kingdoms of Germany prior to Bismark and unification.
If you just want to call libertarians childish, as the article does, I would say: fuck you. What’s childish is thinking that a man with a gun can solve all the world’s problems. Health? The government will do it. Education? The government will do it. Consumer protection? Government. Raising children? Restricting commerce? Delivering little pieces of paper back and forth? Deciding whether I can put raw milk in my own body? Government. Government. Government. Government. That’s a very mature and nuanced perspective.
Another sensational, fake problem which called for a massive governmental solution is about to enter the dustbin of intellectual history. It’s hard to believe how intensely this idea was promoted. Hard the believe the passion with which I was berated by acquaintances for my skepticism. Hard to believe that I pretty much broke up with a great girl because I wouldn’t join the church of the dying earth. Now, the idea is ending. I’m sure its zealots will not be afflicted by memory. For them there is another crisis on the horizon — inequality, perhaps. For them, there is no time to reflect on the past. The crisis is upon us! We must throw ourselves behind this cause with all our hearts and mind!
It’s blowing my mind almost every day. Not only does it threaten the end of government money, it opens up myriad other possibilities — micro transaction to fund content, using the block chain to cryptographically verify first-creation of document, separating the holy trinity of commerce (ownership, identity, trust) into discreet entities. Bitcoin is going to be very, very big and everybody should be keeping an eye out.
Yes, there is a significant barrier to entry — difficult to use, difficult to buy Bitcoins with what I’m excitedly calling “legacy currencies”, not popularly accepted, the threat of loss or theft. Fear not, entrepreneurs are throwing themselves at all these problems — building civilization, as entrepreneurs always do.
I believe the “Propertarian” view is that most leftist policies can be considered an attempt by women to control the strongest men, and by weaker men to dethrone them. Libertarianism is an aristocratic philosophy which allows for peaceful competition and voluntary exchange to determine who is most successful. The institution of property is a gentleman’s agreement to compete according to civilized rules: you don’t steal from me, and I won’t steal from you.
These rules happen to benefit everyone else too — every single layer of society, without exception — but many people would rather watch the world burn than allow such competition, because a free market might reveal the unbearable — that no one really values the eight years you spent crafting crappy prose about the extent of feminist views of some obscure historic figure.
For Bitcoin newbies, imagine Bitcoin as a gigantic ledger. Every bitcoin wallet has a copy of this ledger. So if I was running a standard Bitcoin wallet on this computer — then this computer would have on it a copy of all Bitcoin transactions, ever. Yes, ALL of them.
Decentralization is important because there’s nothing for Bitcoin’s enemies to shut down.
When you make a bitcoin transaction, you can add a little text to it, like a memo on the check you write.
When the mysterious Satoshi Nakamoto, who invested Bitcoin, made the first entries in the ledger, he wrote that newspaper headline:
January 3, 2009, Times of London; “Chancellor on brink of second bailout for banks”.
I’m embarrassed by how little I remember from my “Intro to Crypto” class at Stanford. This video really helped: https://www.youtube.com/watch?v=wXB-V_Keiu8.
It talks a little about the history of encryption — until the 1970’s symmetric key encryption was used. Public key encryption was quite the breakthrough. And get this — when it was first discovered (invented?) the THE GOVERNMENT INSTANTLY CLASSIFIED THE RESEARCH!!! It was later re-discovered.
Anyway, for laypeople, I’d suggest watching this video to the point of understanding that it’s really, really hard to factor the product of two big prime numbers.
Trying to understand the Modular function which stands on top of this fact is difficult.
Final note: Though it isn’t in the video, my understanding is that Bitcoins don’t actually encrypt anything, but they use these crypto algorithms to verify that transactions match account numbers. Digital signatures, in other words.
So, if you post your bitcoin account number on a website to accept donations, everyone who uses bitcoins can see what transfers were made to that account. Of course, the beauty of bitcoins is that you can make as many accounts as you want and transfer bitcoins between them.
Not only are the advantages of Bitcoin over gold accentuated by the restrictions which entrench the world’s fiat systems, it is likely that Bitcoin’s emergence is a reaction to those restrictions.
It is hard to imagine their development in a completely free market where successful banking is based on service and competition instead of the political privilege which licenses select institutions to counterfeit, where regulatory burdens would be very low and tending toward increased efficiency, where, rather than restricting the flow of commerce across borders, major institutions would be dedicated to enabling it, where we could instantly transfer fractions of a commodity money to anyone in the world.
In such a free market, there would simply be no need for a crypto-currency without a commodity backing.
So what is Bitcoin’s value? It is a means of escaping the enforcement of the world’s currency monopolies, a jailbreak. It is a service, like Western Union, only cheaper, easier and faster. Bitcoin is a vehicle. Bitcoin HAS an intrinsic value as a wealth delivery service with the peculiar feature that wealth needs to transform into Bitcoin before it can be exchanged.
In an environment of extreme Bitcoin skepticism, a transaction would look as follows: wealth transforms into Bitcoin, zips instantly to anyone in the world (or beyond, so long as they have internet access), and then transforms out of Bitcoin.
People would be willing to thus transform their wealth so long as they are saving money, time or convenience over rival money transfer systems like conventional bank-wires, credit card purchases, or Western Union.
In the skeptical environment, the amount of wealth people leave in the form of Bitcoin would reflect the fees associated with changing wealth into and out of Bitcoin (for example, the fees charged by btc-e.com or mtgox.com). (Read more)
Bitcoin fever!!! I was paid about 8.7 bitcoins a couple years ago for articles I wrote for dailyanarchist.com. Their total value was about $70. Today, the value of each bitcoin is $195. My 8.7 bitcoins are worth $1700.
We may be seeing the emergence of a new money. Think of the advantages — no transaction costs. Setting up an account takes a few seconds and no paperwork whatsoever. Mastercard and Visa take 3% from merchants. Imagine bitcoin merchants passing this savings onto consumers.
There were some libertarians who went into bitcoins very early and very big. If bitcoins emerge as money they will become Rothchild rich. We have yet to see major attacks from governments. Surely, they will come. But how can they possibly succeed? There’s nothing for them to effectively strike.
It is much easier for government to stop gold than to stop bitcoins. This may be why there is already a developed bitcoin market, while there’s no such dynamically growing market for gold.
Bitcoins will tear down the fiat system. Gold may replace bitcoins in the distant future after the fiat system is long dead and buried.
On one hand, the economy of a government is their “sphere of exploitation” (to use Hoppe’s term from Austrian vs. Marxist Class Analysis). So why would Putin not welcome this action, which punishes those who dare escape his sphere of exploitation, and will likely discourage others from escaping?
1) Russia wants to improve itself by attraction rich, capable entrepreneurs from the west, like the Frenchman Depardieu.
2) In the twisted, counter intuitive world of post-Soviet economies, the exploiters are often trying to escape their own prison. I suspect most politicians of post-Soviet countries had money in Cyprus.
I make the argument against Sweden as a socialist paradise quite often. It usually goes like this:
4 Arguments against Sweden as an example of socialist success
1) Sweden’s wealth can be attributed to the fact that it has been peaceful longer than any other country in Europe, including Switzerland. It used to have a radically free economy. Completely free trade. It even had competing currencies until 1903.
2) Sweden’s welfare state ballooned in the 50s and 60s. Since then, Sweden’s economy has slowed considerably. In one albeit controversial study published in the Swedish Economics Association’s journal Ekonomisk Debatt in 2009, Ratio Institute economists Bjuggren and Johansson found that there has been NO JOB CREATION AT ALL in the private sector from 1950 to 2005.
3) Sweden is still has some economic freedom. Their corporate tax rate is considerably lower than the US’s. They rate extremely well on Heritage’s scale (18th).
4) Even if you think these argument are BS (which they aren’t), you have to ask yourself why the Swedish people elect politicians who call themselves conservative and cut taxes. In 2010, they re-elected politicians who cut taxes on everybody, including the super rich.
Side note: My libertarian friends in Sweden are outraged that the reforms in Sweden which pass for free-market reforms are thinly veiled corporatism and other corruption.
Here’s a Ted talk from 2010 about paying people NOT to kill wildlife. I sympathize (somewhat) with the goal of conservation, but environmentalists know nothing about economic incentive.
Greg Stone talks about ANTI-fishing licenses:
Well, their is now evidence of what you might determine rationally. Paying people not to do something is a recipe for disaster:
A renegade band of Solomon Islanders is responsible for the slaughter this week of about 900 bottlenose dolphins, says a group that was paying for the killing to stop.
Fanalei villagers on Malaita said the American Earth Island Institute had promised last April to pay them S$2.4 million (NZ$400,000) over two years not to kill dolphins, but villagers claim they had only received 700,000.
The Solomon Star said the killing was in retaliation for the underpayment. (Read more)
Stateless in SomaliaPeter Leeson drawing on statistical data from the United Nations Development Project, World Bank, CIA, and World Health Organization. Comparing the last five years under the central government (1985–1990) with the most recent five years of anarchy (2000–2005), Leeson finds these welfare changes:
* Life expectancy increased from 46 to 48.5 years. This is a poor expectancy as compared with developed countries. But in any measurement of welfare, what is important to observe is not where a population stands at a given time, but what is the trend. Is the trend positive, or is it the reverse?
* Number of one-year-olds fully immunized against measles rose from 30 to 40 percent.
* Number of physicians per 100,000 population rose from 3.4 to 4.
* Number of infants with low birth weight fell from 16 per thousand to 0.3 — almost none.
* Infant mortality per 1,000 births fell from 152 to 114.9.
* Maternal mortality per 100,000 births fell from 1,600 to 1,100.
* Percent of population with access to sanitation rose from 18 to 26.
* Percent of population with access to at least one health facility rose from 28 to 54.8.
* Percent of population in extreme poverty (i.e., less than $1 per day) fell from 60 to 43.2.
* Radios per thousand population rose from 4 to 98.5.
* Telephones per thousand population rose from 1.9 to 14.9.
* TVs per 1,000 population rose from 1.2 to 3.7.
* Fatalities due to measles fell from 8,000 to 5,600.
Despite this, the US wreaked death and destruction upon the country in an attempt to establish a favorable state:
Blowback in Somalia in many cases they were chopping their head off and taking the head to the Americans or whoever. And telling them, ‘We killed this guy.’”