Against Equality

From “Remarks on the Stoics” by Allen Thornton (link):

Suppose that you were the only person in the universe. You could exist in the most perfect paradise without reflecting on your good fortune. You could suffer hunger, thirst, and pain and not complain about the “unfairness” of existence. Notions of good and evil, just and unjust, cannot exist unless there are other people and other lives. When we judge these matters, we usually look no further than our neighbors. Americans call people poor whose standard of living would be considered quite high in China. They take for granted luxuries that were unimaginable 200 years ago. A time may come when our descendants will consider our lives horribly brutal and short, but we do not complain so long as we live about as well as those we see frequently or know about.

It would be simple to understand the Stoics’ view of reality if we didn’t have to deal with other people. But people can steal from us, make demands on us, depend on us, and interact with us in thousands of ways. The question of our relations with other people is the most complicated one in any religion or philosophy. Epictetus explains how a Stoic can maintain his serenity in the face of obviously predatory people. He cites the case of a thief who steals your clothes. “Do not admire your clothes and then you will not be angry with the thief. Do not admire the beauty of your wife, and you will not be angry with the adulterer.” He reasons that the thief “does not know wherein man’s good consists, but he thinks that it consists in having fine clothes, the very thing which you also think.” The Stoic knows that a man’s good is in his will and character and not in anything external to him.

His logic is an example of a greater truth: Inequality leads to harmony; equality leads to conflict. We are constantly told that the opposite is true, but we should consider the relations between people. Trade and commerce depend on the fact that individuals place a different value on money. If the grocer didn’t value the bag of flour less than the customer, he wouldn’t sell it. Suppose the bag were worth a dollar to the grocer and a dollar to the customer; then the grocer would have no incentive to sell it. But the grocer values the bag at less than a dollar and so both the grocer and the customer can increase their wealth by the trade of one dollar for one bag of flour. Or suppose a rich man wants to hire a person for a job and two qualified applicants apply. The applicants are not in conflict with the rich man but with each other. Or suppose a man is in love with a beautiful woman. He is in harmony with other women and with homosexuals because they do not value the woman the way he does. Their feelings toward her are completely different from his. He feels the most hatred and ill-will toward another man who also loves the woman. Conflict is in direct proportion to equality. Of course, politics turns everything on its head. Groups of similar people with similar values combine to exert pressure to achieve political ends. But even in this case, the group is simply trying to obtain something from the government at the expense of other groups who want the same thing.

On Stirner: The False Principle Of Our Education

Max Stirner (1806-1856) was a proponent of philosophical egoism, which states that there is no “right and wrong” in a moral sense but only “right and wrong” in the sense of a given means being appropriate to a stated end. In this way, he sought to create a value-free philosophy, just as Ludwig von Mises claimed that economics was a value-free social science in that economics did not say whether a given economic end was “good or bad”, only whether the economic means chosen for obtaining it was appropriate or not.

Stirner was also a contemporary of the Young Hegelians, and a student and fierce critic of Hegel himself. Whereas he could foresee that the intellectual project of the Hegelian “moderns” was nothing but a new religion and a reformation of the thinking of the “ancients” of Greece and Rome which would ultimately end in a total state and an orgiastic ruination of the individual, Stirner instead tried to create something entirely different by reclaiming the idea of individual as owner of his own life. This he set out to accomplish in The Ego and His Own.

A few years before he published his primary work on the subject, however, Stirner wrote a pamphlet on the nature of the modern European debate over educational systems, entitled “The False Principle of Our Education“, in which he declared “The school-question is a life-question.”

Why is the school-question a life-question? Because, Stirner says, we are in school in “the time of our plasticity.” The various factions in society fight over the schools because they understand this is the moment when individuals are most malleable, moldable, shapeable– control the fate of an individual in his schooling of youth and you can potentially control him for his entire life.

Historically,

Until the Enlightenment… higher education lay without protest in the hands of the humanists… based almost solely on the understanding of the old classics… they selected the best education of the world of antiquity… the people were supposed to remain in the laity opposite of the learned gentlemen, were only supposed to gaze in astonishment at the strange splendor and venerate it

This is so because people have a tendency to respect and admire the past just as they respect and admire their parents and ancestors. By setting the educational model in the past, a period which is so far from recent human experience that its iniquities can be forgotten while its triumphs can be lauded and envied, the humanists created an educational system that played to people’s traditionalist bias, making it ripe for automatic respect and veneration. Then, by restricting such education to the elite of society, they managed to transfer this veneration to the elites who held such educations. They came to represent the old, respectable past and so were respected and granted authority themselves.

This was the educational system of the humanists of the European Middle Ages. The system of the “moderns” post-Enlightenment, the realists, would not replace but reform it:

To eliminate the priesthood of the scholars and the laity of the people is the endeavor of realism and therefore it must surpass humanism… the essential advantage of scholars, universal education, should be beneficial to everyone… “to be able to talk about everything”… therefore familiarity with the things and situations of the present… because it satisfied the common need of everyone to find themselves in their world and time

But the aims of the humanists and the realists were short-sighted:

to grasp the past as humanism teaches and to seize the present, which is the aim of realism, leads both only to power over the transitory

Humanists offered a materialist education– to know of things. Realists offered a formal education– to know of categories, classes, and shapes, but not the value of them to anybody. Stirner himself offers an entirely different alternative, which he calls personalism— to know the self. In this failing, Stirner sees that,

knowledge is not brought to completion and perspicuity, that it remains a material and formal, a positive thing, without rising to the absolute, that it loads us down like a burden

The false principle of education, to Stirner, is that education has never been given to others or taken philosophically to its total end, the enabling of the creation of the self, or ego. It was stopped short by both the humanists and the realists in order to serve other needs, other egos. Instead, a foundation on true principle would imply,

the final goal of education… is: the personal or free man. Truth itself consists in nothing other than man’s revelation of himself… such thoroughly true men are not supplied by school; if they are nevertheless there, they are there in spite of school… No knowledge, however thorough and extensive, no brilliance and perspicuity, no dialectic sophistication, will preserve us from the commonness of thought and will

The true purpose of education should not be to fill people’s minds with stuff (facts, figures, events, people, places) or with implications (what to think of the stuff); the purpose of education should be to enable individuals to find themselves. Everything short of this does not serve the individual, but someone else:

Only a formal and material training is being aimed at and only scholars come out of the menageries of the humanists, only “useful citizens” out of those of the realists, both of whom are indeed nothing but subservient people… If one awakens in men the idea of freedom then the free men will incessantly go on to free themselves; if, on the contrary, one only educates them, then they will at all times accommodate themselves to circumstances in the most highly educated and elegant manner and degenerate into subservient cringing souls

Educational philosophy, then, can be boiled down into three primary alternatives: to educate and create masters, to educate and create slaves, or to educate and create individuals (who are neither slave nor master).

The present state of education, based off humanist and realist principles, is one of disarray and pathetic. College students,

trained in the most excellent manner, they go on training; drilled, they continue drilling… it is not knowledge that should be taught, rather, the individual should come to self-development… we do not hinder man’s quest for knowledge; why should we intimidate his free will?

Why, but only to control him.

Stirner crushes mercilessly the lie that we educate within the current paradigm so as to civilize people, and thereby make them safe co-habitants of our society, that without education these “free egos” would turn to chaos and “anarchy” and tear society apart in violent blunder:

I oppose him with the strength of my own freedom; thus the spite of the child will break up by itself. Whoever is a complete person does not need to be an authority.

“Free egos” are only threats to those who seek control over others (for they pose a form of opposition to their own ego) or those who are in a position of subservience, control and dependence upon an authority and are thereby not free to resist the aggressions of another themselves.

Instead,

school is to be life and there, as outside of it, the self-revelation of the individual is to be the task… only freedom is equality… we need from now on a personal education (not the impressing of convictions)… knowledge must die and rise again as will and create itself anew each day as a free person.

Beware those who would argue otherwise; aware of it or not, they’re attempting to set up a trap by which to control you.

Quotes – With Freedom Comes Responsibility

Liberty means responsibility. That is why most men dread it.

~George Bernard Shaw

Politicians Open The Oil Supply Floodgates Post-Sandy; Lessons Learned Or Lost?

In “Flared Tempers Over Gasoline Lines Prompt Supply Waivers” at Bloomberg.com, we learn that politicians at the state and federal levels of government are temporarily suspending existing rules, regulations and taxes to increase the supply of gasoline  available in storm-stricken areas while simultaneously lowering the price:

The Obama administration said today that it waived the Jones Act, which requires ships moving goods between U.S. ports to use U.S.-flag vessels. The action, which applies only to refined products, will increase the number of tankers available to transport fuel from Gulf Coast refineries to the East Coast.

In New Jersey, Governor Chris Christie suspended requirements that restrict filling stations from buying gasoline from out-of-state suppliers, while New York Governor Andrew Cuomo waived taxes and regulations to accommodate more fuel tankers and process them more quickly.

To the average observer, it may seem that these powerful political leaders are able to work economic miracles. Merely by suspending laws, a vast new supply of much-needed gasoline appears out of thin-air to come gushing forth to the masses, alleviating them of their post-hurricane energy stress.

But did these poles really create these refined oil products themselves? Did they create them and summon them into existence through sheer force-of-will and a few expert penstrokes?

No, of course not! This supply of energy existed the whole time, but it wasn’t able to service the people of the affected East Coast regions because rules, regulations and taxes, imposed and enforced by these very politicians, had forcibly prevented and impeded its efficient and cost-effective arrival!

This is an excellent example of Bastiat’s emphasis on the unseen. When the storm arrived and devastated the normal supply-demand equation, it became transparently obvious to everyone that these interventions impose real, dangerous costs to everyone in society and it became politically necessary to suspend them for the benefit of all. But the costs of these programs and policies do not come and go with the storms– they are with us all of the time, imposing unseen costs because the “margin” of economic activity that is thus proscribed is further and further away from the central attention of the average person.

Because these policies impose costs and undue social burdens all of the time, not just in the aftermath of natural disasters, it follows that if and when — though “temporary” increases in government power almost always prove to be anything but, temporary decreases in government power rarely become permanent — these rules and regulations are reimposed, their costs will return as well. And this means everyone will be the poorer for it.

Who will remember this hands-on lesson with the real economic and social costs of government regulations which senselessly restrain trade and commerce? Who will cry out in anger that the politicians deem it necessary to hurt them once again, having tasted this bit of freedom? How many will stand up and ask, “Why? Why are you doing this to us?”

My guess is almost no one, and the few voices which may sound will quickly be muffled, condemned and ultimately ignored.

Attack Of The Self-Control Snatchers!

Here is the abstract from a neuropsychology research paper entitled “A gradient of childhood self-control predicts health, wealth and public safety“:

Policy-makers are considering large-scale programs aimed at self-control to improve citizens’ health and wealth and reduce crime. Experimental and economic studies suggest such programs could reap benefits. Yet, is self-control important for the health, wealth, and public safety of the population? Following a cohort of 1,000 children from birth to the age of 32 y, we show that childhood self-control predicts physical health, substance dependence, personal finances, and criminal offending outcomes, following a gradient of self-control. Effects of children’s self-control could be disentangled from their intelligence and social class as well as from mistakes they made as adolescents. In another cohort of 500 sibling-pairs, the sibling with lower self-control had poorer outcomes, despite shared family background. Interventions addressing self-control might reduce a panoply of societal costs, save tax-payers money, and promote prosperity.

The progressives are out to improve society once more! And as per usual, it’s to “save tax-payers money”. Of course, first they’re going to SPEND a little tax-payer money, first. But all is well, these kinds of “investments” will more than pay for themselves in time. That’s why the cost of government keeps shrinking and our economy keeps growing and growing!

I guess the case for free will just gets weaker by the day? And since our actions and decisions are so deterministic and imperfect, of course it logically implies that an extra-social institution with a coercive monopoly could improve each and every one of us. The State truly is inevitable. I’m so glad we have government-funded neuropsychology researchers to help us figure this out.

Does Bernanke Read Blogs?

I learned in a recent Mish blogpost that Ben Bernanke denied that people were taking advantage of the carry trade with record low US government debt yields in a recent letter to the US Congress:

To the charge reduced interest income to savers from quantitative easing is a “tax” on savers, Bernanke responded that it’s in everyone’s interest, both savers and borrowers, to have an economy performing at highest level of capacity.

He also said financial institutions aren’t executing carry trades on U.S. Treasurys, when they use short-term repo transactions to fund investments in longer-dated Treasury notes and bonds. Bernanke says this activity reflects the funding of inventories by securities dealers as part of their market-making activities and not an attempt to exploit differences between short- and long-term rates.

It’s curious that Bernanke covered this particular topic because it was only recently that David Stockman complained about it explicitly in an interview with Doug Casey:

This market isn’t real. The two percent on the ten-year, the ninety basis points on the five-year, thirty basis points on a one-year – those are medicated, pegged rates created by the Fed and which fast-money traders trade against as long as they are confident the Fed can keep the whole market rigged. Nobody in their right mind wants to own the ten-year bond at a two percent interest rate. But they’re doing it because they can borrow overnight money for free, ten basis points, put it on repo, collect 190 basis points a spread, and laugh all the way to the bank. And they will keep laughing all the way to the bank on Wall Street until they lose confidence in the Fed’s ability to keep the yield curve pegged where it is today. If the bond ever starts falling in price, they unwind the carry trade. They unwind the repo, because then you can’t collect 190 basis points.

Does this mean Bernanke reads blogs and follows Doug Casey?

I got excited at first when I noticed this apparent connection. But then I realized it’s more likely he was responding to particular inquiries from Congresscritters, not necessarily the vox populi itself. Congresscritters and their staff do have their ear to the ground and occasionally turn annoying phone calls, emails and fax inquiries at their office into cases for Congressional investigation. I hear some staffers also read ZeroHedge and I’m sure the interview came up there.

This is probably a good example of the charge that politicians are nothing more than social weathervanes– they aren’t intellectuals and they don’t lead the debate in society, they merely follow it and, when they think it’ll earn them some goodwill, they stick their finger into people’s eyes according to which eyes and how deeply they believe “the people” want them to gouge.

That’s not to say they govern according to the people’s will. Standing on your soapbox and shouting is a bit different from actively trying to manage the economy according to your perception of a mass of other people’s wishes. To the extent that what the politicians do to society overlaps with what certain interest groups actually desire and “vote for”, the coincidence is explained by nothing more than the fact that this is how politicians pay people off to remain in power. The rest of the time, they’re firmly entrenched in the elitist conspiracy and power politics of rulership which has its own agenda, set of rules and schedule of procedures.

In conclusion, Bernanke probably doesn’t read blogs. He probably doesn’t have much time in between manipulating interest rates and having his dome waxed and beard trimmed. After all, the central planner of the free world’s got to look illustrious.

Review – The King Of Oil

The King of Oil: The Secret Lives of Marc Rich

by Daniel Ammann, published 2010

The Story of Marc Rich

The popular telling of the myth of the crimes of Marc Rich almost perfectly captures the modern American zeitgeist– a businessman, the most evil and exploitative kind of villain that can plague a nation of honest and earnest people, sought to earn a profit via oil trades with the enemy (post-Revolution Iran) during a time of national crisis and embargo (the embarrassingly stupid hostage situation in Tehran circa 1979), evaded his tax obligations and then had the sheer nerve (or perhaps deep well of pure, black hatred within his heart) to refuse to stand trial for his crimes by fleeing to neutral Switzerland, using his enormous, illegally-acquired and not to mention positively unsightly personal wealth to buy himself immunity — and eventually a full pardon — from a criminal justice system to which lesser mortals must pay heed.

But if we peer a little closer (and trust the retelling of Rich’s story in Daniel Ammann’s biographic to be honest and accurate), we begin to see Marc Rich in an entirely different light– if not immediately heroic, then certainly victimized by a benighted American public and tormented by a vengeful “limited” government with ulterior motives. Yes, in this new light, Marc Rich casts long shadows, and standing hunched over in the shadows we see the plotting, manipulative forms of then-US Attorney Rudy Giuliani and then-US Federal prosecutor Sandy Weinberg, as representatives of themselves but also as representatives of the disaster of unbridled ego, political pragmatism and the twisted logic of the State that has nowadays become so popular.

The man’s accomplishments are legend and long-form: single-handedly creating the world market for spot-price oil; circumventing blockades, trade barriers and hare-brained foreign policy situations to move commodities from the conflict-ridden pieces of earth where they lay, wasted, into the hands of producers all over the world who value them most; organizing a billion-dollar-a-year commodity trading company with his partner Pincus Green, whose reach spanned the globe; and evading the vagabonds and plunderers calling themselves the US federal government and the US Marshal Service for over a decade.

And the man’s crime? Libertarians, steady yourselves– doing business in certain places and in a certain fashion without the express permission of the United States federal government to do so. In other words, Marc Rich was guilty of minding his own business.

Enemy of the State

That’s the reality of Marc Rich’s crimes, but that was not the story fed to journalists by U.S. attorney Rudy Giuliani on September 19th, 1983. On that day, the public learned of Rich’s “fifty-one counts of fraud, racketeering” and “tax evasion” (pg. 116). “It was ‘the largest tax evasion indictment ever,’ Giuliani said.”

The defendants engaged in this scheme as a part of a pattern of racketeering activity in which they concealed in excess of $100 million in taxable income of the defendant Marc Rich International, most of which income was illegally generated through the defendants’ violations of federal energy laws and regulations. This scheme, and pattern of racketeering activity, enabled the defendant Marc Rich International to evade taxes in excess of $48 million in United States taxes for the 1980 and 1981 tax years.

Giuliani, however, held back the most serious charge until the end of the press conference.

The most serious charge:

Marc Rich + Co. AG [Rich’s Swiss trading corporation and mother-company to MRI] ‘entered into contracts with the National Iranian Oil Company (NIOC) to purchase Iranian crude and fuel oil.’ ….Trading with the enemy– the gravest of accusations” (pg. 117)

This is how Marc Rich’s crimes became famous, and Marc Rich himself infamous. Prior to these allegations, Rich had been a quiet genius, an unknown billionaire. For a man who would later become the detested scoundrel of a nation who had, until that time, been quite familiar with its many antiheroes (Billy the Kid, Al Capone, Charles Manson), the initial reaction of Sandy Weinberg to allegations against Marc Rich was telling.

“Marc who?” Weinberg asked. “I’ve never heard of a Marc Rich.” (105)

Yet, this “accidental discovery” (117) of Weinberg and Giuliani’s (trading with the enemy) would provide the political impetus to eventually charge Rich and partner Pincus Green with the nation’s toughest “RICO” (Racketeer Influenced and Corrupt Organizations Act) laws, the “prosecutor’s equivalent of nuclear weaponry” (122). For a man whose entire indictment contained not one crime of actual fraud or extortion, the traditional definition of racketeering, it’s hard to imagine how racketeering charges could be justified. Actually, it’s hard to imagine how any charges could be justified because, remember, Rich’s crimes were not against actual, existing individuals but rather against the positive corporate mandates of the United States federal government and its immense regulatory and tax bureaucracies.

True crimes

The real racket being run was that of the US tax authorities, the real crime Rich — a literal world citizen with passports issued by Spain, Switzerland and Israel and whose main business was incorporated in Switzerland — was guilty of was not paying his protection money and furthermore being so bold as to trade with a rival gang in Iran.

And this is really the most instructive moral of the many morals of the Marc Rich saga. Forget the struggle of fleeing Europe’s Holocaust and losing everything in the process. Forget the hard work and determination of an immigrant family that allowed them to overcome language barriers and their immediate poverty to ultimately realize an ‘American Dream’ of their own. Forget the sheer talent and raw force of will necessary to forge a world commodities empire and create an entirely new way to trade oil, a new market that directly challenged the oligopoly of the Seven Sisters oil cartel.

No, Marc Rich’s story is significant and telling because it reveals the true nature of government in practice, and especially government as practiced in America, where it is nothing but politics and egos that decides men’s fates, and not some phony, childish striving for the “common good.” It shows us that government is fundamentally anti-competitive, anti-business and anti-individual.

Political vendetta embodied

The crusade against Marc Rich was over the top and beyond any reasonable idea of the pursuit of justice in a free country. With rampant politicization of the process and the prosecution and defense alike, its use of the most formidable federal charges possible (RICO) and the wanton collateral damage caused to Rich’s company, employees, trading partners and even world markets, it was akin to an all-out totalitarian war.

“It was phenomenal,” Sandy Weinberg told me with glee. “We tied up all U.S. assets, including 20th Century Fox. We shut ’em down completely. We shut the company down for a year. They couldn’t operate in the U.S. It cost them dearly. I assume it cost them probably a billion dollars.” (123)

Ask yourself, what is this prosecutor gloating over? What is he gloating over besides his own pride in his personal power to destroy a man’s business, business partners and reputation? What is he thrilling over but the loss of value, to many millions of people the world over, that the “billion dollars” in lost revenue represents? Rich was never charged with a crime that represented stealing from others or extorting his trading partners… all money he made, he made on the basis of voluntary, wealth-producing transactions from the viewpoint of his trading partners.

This is the stark reality of government, that it destroys wealth. That it tears society down. That it hobbles trade. And all for what? For the egos of ambitious politicians. Who benefited from Marc Rich’s downfall? Not the people of the United States, and not the people of the rest of the world. But for Giuliani, it was “another feather in his cap” (123).

“U.S. Attorney Giuliani knew that the case would serve as a springboard for his political career– a career that would lead him to become the mayor of New York and later to make an unsuccessful bid for the U.S. presidency. One could go so far as to say that Giuliani’s political and very public career actually began with this case. As history has shown, the fact that the case escalated rapidly before virtually exploding as a media event was not exactly to Giuliani’s disadvantage. In all likelihood, this escalation was even desired.” (142)

Ultimately, Marc Rich ran afoul of the political process. He sought to trade around arbitrary regulations and restrictions on oil exchange established by the political Department of Energy. He maintained multiple passports and was not beholden to the ever-changing nationalistic political winds of any land or time period. He exploited tax loopholes to avoid paying as much protection money as he could, protection fees which are, again, established arbitrarily and politically by the respective governments involved on he basis of what is expedient, not what is right or necessary. And finally, he traded with unpopular foreign regimes without respect for outstanding bans and embargoes and did so without the nauseating moral hypocrisy of the politician who makes claim that he is transacting with rights-violators for the Greater Good.

The moral: the individual stands alone

No, Marc Rich only traded for profit, nothing more, nothing less, and a value that is truly non-partial and non-political.

What Is The True Significance Of Obama’s Gaffe?

Obama’s recent gaffe about how people with businesses didn’t do anything to build them themselves (attacking the “every man an island”, strict-individualism philosophy-caricature) has been in the news and trending through the blogosphere as of late. It won’t be important for long– some other outrage or trivial incident will soon replace it, as always happens — so I’ve got to get my commentary in now and strike while the iron is still hot.

The common response to this is predictable in that it follows the dialog of the false dichotomy perfectly. If you like Obama and what he represents, you get an opportunity to get pissed off at the naive idiocy of conservatives who “really believe that everyone does everything on their own” and who ignore that we live in a society of other people! Your view that we really are interconnected on a fundamental level is reinforced and you can then make any logical jumps to policy recommendations based off this premise that you desire.

If you don’t like Obama and what he represents, you get an opportunity to get pissed off at the naive idiocy of liberals who “really believe that no one is capable of excellence and achievement on their own” and who ignore that some people like Steve Jobs, or even a lonely small business owner, largely stand alone in society as they quest after accomplishment! Your view that entrepreneurial decisions which create wealth and opportunity for all are never made collectively is reinforced and you can then make any logical jumps to policy recommendations based off this premise that you desire.

Thesis, antithesis… synthesis? The false dichotomy reigns supreme and serves its ultimate purpose, which is to “divide” society so that it may be “conquered” by the elites straddling atop it. Everyone is so busy fighting one another about formalistic issues, “Is every man an island or does it take a village?”, that no one notices the masked-villain with his hand in the cookie jar and his grip on the whip.

The question is not individualism versus collectivism? It may surprise you to hear it, but it doesn’t matter. The important question is, whether members of society largely organize as individuals or collectives, should their interactions be constructed on the basis of coercion or voluntaryism?

Should you be free to choose, or guided by the invisible, omnipotent and omniscient hand?

The other important observation to make here is this: Obama is a politician, and as a politician, he is a puppet of perceived public interest. Everything he says, he says to cater to a part of society that agrees with him and is willing to support him politically.

If you watch the clips of Obama’s gaffe, you can tell from the hoots of “YEAH!” and the clapping that for many in his audience, it wasn’t a gaffe. It was “truth.” It was something they identify with and connect with.

Again, a false dichotomy. We can all fight about Obama versus Romney, Republican versus Democrat, etc. But meanwhile, our friends and neighbors are captured by this philosophy of coercion.

That’s the real problem to face and solve. Save your anger and disgust toward the puppets for the people who nominally control the strings. Ask not, “How will we get rid of Obama?” but instead, “Why do some of my fellow members of society believe this, and how can I change their mind?”

Ask yourself, “If I can’t change their mind, what then?”

Progress Requires Innovation, Innovation Requires Freedom; No Freedom, No Progress, That’s Government

Joe Quirk on seasteading:

Benjamin Franklin participated in several major innovations in his day. He helped discover and control electricity, and he helped design the US Constitution. The control of electricity set off a cascade of innovations, driving almost every modern technology we can name. Yet the instrument of government he helped invent has not progressed.

Consider that Franklin’s many inventions have advanced beyond his wildest imagination: the Franklin stove, bifocal glasses, refrigeration, the flexible urinary catheter (my favorite). Yet, the methods of government he helped invent have not evolved. And why?

Because inventors and entrepreneurs had the freedom to experiment with Franklin’s technological ideas, but not his political ideas. More importantly, as Patri [Friedman] says, customers had power to choose amongst gadgets competing to please them, while citizens are captive to the political system they inherit.

One day, people will laugh at the idea of government (legitimized, institutional theft and murder) just as today people laugh at the idea of monarchy as a system of government.

Government is a technology– it is a means for achieving particular ends. What people don’t understand right now is that

1. government is a means, not an end and
2. government is an inappropriate and contradictory means for the end of “living in a harmonious, civilized and prosperous human society”

Government reduces human relationships to the Laws of the Jungle, the very thing we all claim to be striving so mightily to avoid.

As Allen Thornton wrote in the early 1980s,

And just what is this government? It’s a man-made invention. It’s not some natural phenomenon or a special creation of God. Government’s an invention, just like the light bulb or the radio.

The state was invented for me, to make me happier, but a funny thing has happened: If I don’t want this invention, people are outraged. No one calls me unpatriotic for refusing to buy a light bulb. If I don’t choose to spend my money on a radio, no one says that I’m immoral. Why should anarchy upset everyone?

Anarchists are ahead of their time, even though the truth they speak is itself timeless– conservatively, probably 200-300 years ahead of their time. The gradual evolution of the “human collective social consciousness” over time has been away from absolutism and toward individualism, with various depressing but ultimately temporary and regional setbacks along the way. Most visionaries DO look like kooks to their neighbors and countrymen before their vision is realized.

But it is the “market purists” who will have the last laugh, and ultimately deliver every one into the closest thing to a perfect society that one can get while still remaining firmly in the grips of reality in this universe.

They’ll be naysayed and boohooed and shouted at quite a bit along the way, though. Good thing most of us are of stout heart and strong mind.

Kleptocracy Via Inflation Is The Global Model, Not Just Chinese

Australian hedge fund manager John Hempton is out with a new piece on his blog about “The Macroeconomics of Chinese kleptocracy“, the main takeaway of which is:

But ultimately the Chinese establishment like inflation – it is what enables their thievery to be financed.

The more serious threat is deflation – or even inflation at rates of 1-3 percent. If inflation is too low then the SOEs – the center of the Chinese kleptocratic establishment will not generate enough real profit to sustain the level of looting. These businesses can be looted at a negative real funding rate of 5 percent. A positive real funding rate – well that is a completely different story.

[…]

The Chinese establishment has a vested interest in getting the inflation rate up in China. Because if they don’t all hell will break loose.

Unless the Chinese can get the inflation rate up expect a revolution.

I know John (who appears to be a well-intentioned but generally naive political conservative) would likely strongly disagree with the following characterization but…

This is the kleptocratic model prevalent in all major developed and developing world economies– inflation is the keystone piece of these systems and it is why CB presidents from Bernanke to Draghi to Shirakawa are all intent on creating and maintaining it.

If the inflationary engine fails to turn over, the loot-truck stops making its rounds. If the loot-truck stops making its rounds, the elite and their scumbag offspring don’t get paid and all the world’s peasants (you don’t have to work a farm to be an economic peasant) suddenly wake up to just how desperately poor they are after being continually ripped off for decade upon decade.

But, I’m a cynic, so of course I’d see the world that way. More reasonable men, like Mr. Hempton, are more prevalent in the world than I, so everyone is spared my dark view of things and can instead bask in the glory of knowing that, while our systems may not be perfect, at least they’re not as bad and out in the open as China’s.