Capitalism and War: Capitalism Means Peace

F.A. Hayek said “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”2 As Mises points out, the State lacks the needed information to make accurate calculated economic decisions therefore, the State, if it won’t go away, must leave the Market alone.

All the wealth and prosperity that we enjoy today is thanks to capitalism. One of the key components of capitalism is private property. You cannot have true capitalism without the private ownership of the means of production. The unfortunate thing about private property is that it has never played nice with the State (or rather, the State has never voluntarily elected to play nice with private property).

“All those in positions of political power, all governments, all kings,and all republican authorities have always looked askance at private property. There is an inherent tendency in all governmental power to recognize no restraints on its operation and to extend the sphere of its dominion as much as possible. To control everything, to leave no room for anything to happen of its own accord without the interference of the authorities. This is the goal for which every ruler secretly strives. If only private property did not stand in the way! Private property creates for the individual a sphere in which heis free of the state. It sets limits to the operation of the authoritarian will. It allows other forces to arise side by side with and in opposition to political power. It thus becomes the basis of all those activities that are free from violent interference on the part of the state. It is the soil in which the seeds of freedom are nurtured and in which the autonomy of the individual and ultimately all intellectual and material progress are rooted. In this sense, it has even been called the fundamental prerequisite for the development of the individual. But it is only with many reservations that the latter formulation can be considered acceptable, because the customary opposition between individual and collectivity, between individualistic and collective ideas and aims, or even between individualistic and universalistic science, is an empty shibboleth.

Thus, there has never been a political power that voluntarily desisted from impeding the free development and operation of the institution of private ownership of the means of production.Governments tolerate private property when they are compelled to do so, but they do not acknowledge it voluntarily in recognition of its necessity.”3

So long as governments exist, your private property is never truly safe. This flies in the face of what government is supposed to do. Protect the property of you and me. On a positive note, private property is a space where government cannot intervene. It’s a place where ideas that keep government in check are formulated. Perhaps this is why government always looks with suspicion at private property.

Another key component of capitalism is the division of labor. “What distinguishes man from animals is the insight into the advantages that can be derived from cooperation under the division of labor.”4 The division of labor is the assigning of different tasks of the manufacturing process to different individuals in order to improve efficiency. Instead of the farmstead that produced everything it needed to subsist on its own, it later developed to a larger scale where they farmed specific things and were dependent on other producers. The division of labor creates an interdependent existence but allows efficiency to be focused on one particular task in production. This increases wealth and saves time. “Originally confined to the narrowest circles of people, to immediate neighbors,the division of labor gradually becomes more general until eventually it includes all mankind.”5 It eventually encompasses countries, this is why the way to peace is not to disrupt the division of labor with war, but enforce it through trade.That is why tariffs are actually harmful to the economy. Sure they give the immediate appearance of helping local economies, but it also promotes inefficiencies in production since it props up failing industries that would otherwise fail (looking at secondary consequences like Hazlitt1). Essentially, it causes resources, wealth,and labor to flow into inefficient manufacturing processes. Like all other government policies, it decreases the potential wealth for everyone rather than enhances it like it promises. The Division of Labor leads to the next point. War.

There are moral reasons of course, but mine are more from an economic perspective. As I stated above, the division of labor has grown to an international level. Countries are now dependent on other countries since production has become specialized under the division of labor. War interrupts the division of labor thus making production and efficiency slam to a halt. War also diverts precious resources to destructive ends. The same goes for labor. We are left with all the economic “could-have-beens”. If resources were not diverted to make weapons which have a singular and specific use, what other things could they have been produced that the free market could have dictated?

Another negative aspect of war is the debasement of currency. Inflation is another form of taxation and what makes it insidious is that it is a hidden tax. You don’t really notice it right away. “You can line up 100 professional war historians and political scientists to talk about the 20th century, and not one is likely to mention the role of the Fed in funding US militarism. And yet it is true: the Fed is the institution that has created the money to fund the wars. In this role, it has solved a major problem that the state has confronted for all of human history. A state without money or a state that must tax its citizens to raise money for its wars is necessarily limited in its imperial ambitions. Keep in mind that this is only a problem for the state. It is not a problem for the people. The inability of the state to fund its unlimited ambitions is worth more for the people than every kind of legal check and balance. It is more valuable than all the constitutions every devised.”6 Technically, the State has no wealth to really call its own. The State does not produce anything like a private individual does. This means that it is usually limited to what it can spend and what it can spend money on. I cannot overly tax it citizens because that angers them and can even lead to revolution. This is why sound money is so important (gold or silver standard), it acts as a check against government overreach by hitting the government in its wallet.

But what happens when there is a central bank that can “create” as much money as it wants. Now the States ambitions are “unlimited”.Of course this is not true. There is always limit to resources. What occurs is that when a government wishes to use fiat currency in order to fund its imperialism, it has the central bank “create” money in order to pay for it, or it starts buying government bonds with the inflated currency. “To be sure, it doesn’t require a central bank for a state to choose inflation over taxes as a means of funding itself. All it really requires is a monopoly on the production of money. Once acquired, the monopoly on money production leads to a systematic process of depreciating the currency, whether by coin clipping or debasement or the introduction of paper money, which can then be printed without limit. The central bank assists in this process in a critical sense: it cartelizes the banking system, the essential conduit by which money is lent to the public and to the government itself. The banking system thereby becomes a primary funding agency to the state, and, in exchange for its services, the banking system is guaranteed against insolvency and business failure as it profits from inflation. If the goal of the state is the complete monopolization of money under an infinitely flexible paper-money system, there is no better path for the state than the creation of a central bank. This is the greatest achievement for the victory of power over liberty.”6 Therefore inflated currency is used to pay for unjust wars at the expense of you and me.

This expansion of credit is what has lead to the various “booms” and“busts” that have occurred through our history ever since the FED was founded in 1913.7 People are reaching for resources but they soon learn, to their dismay, that the resources were not real nor were the savings.

Therefore wars make us all poorer, so the interventionist policies that we have today make us poorer. You see “The more knowing inflationists recognize that any substantial increase in the quantity of money will reduce the purchasing power of each individual monetary unit—in other words, that it will lead to an increase in commodity prices.But this does not disturb them.”1 This harms us, those that have savings or those that are retired or on fixed incomes. Our dollars go, progressively, less farther than before. This is why we libertarians get so frustrated with Presidential Executive orders for military intervention, it is firstly unconstitutional and it is secondly expensive. We as tax payers are the ones that end up picking up the tab, not the ones making the decisions. Not only that, but war is often used as an argument to increase aggregation, unfortunately this is what is known as the broken window fallacy.8 Destruction does not equate to economic prosperity.

1) Hazlitt, Henry. Economics in One Lesson. New York: Arlington House, 1979. Print.

2) Hayek, Friedrich A. Von, and William Warren Bartley. The Fatal Conceit: The Errors of Socialism. Chicago: U of Chicago, 1989. Print.

3) Mises, Ludwig Von, and Bettina Bien. Greaves. Liberalism: The Classical Tradition. Indianapolis: Liberty Fund, 2005. Print.

4) Mises, Ludwig Von. Human Action: A Treatise on Economics. New Haven: Yale UP, 1949. Print.

5) Mises, Ludwig Von. Middle-of-the-road Policy Leads to Socialism. South Holland, IL: Consumers-Producers Economic Service, 1951. Print.

6) Rockwell, Llewellyn H. “War and Inflation.” – Llewellyn H. Rockwell Jr. N.p., n.d. Web. 14 Aug. 2014. <http://mises.org/daily/3010>.

7) “”Fear the Boom and Bust” a Hayek vs. Keynes Rap Anthem.” YouTube. YouTube, n.d. Web. 14 Aug. 2014. <https://www.youtube.com/watch?v=d0nERTFo-Sk>.

8) “What Is the Broken Window Fallacy?” Investopedia. N.p., n.d. Web. 14 Aug. 2014. <http://www.investopedia.com/ask/answers/08/broken-window-fallacy.asp>.


The Myth of Limited Government: Anarchy Vs. Minarchy

“Statism is the utopian ideal that just the right amount of violence used by just the right people in just the right way can perfect society.” -Keith Hamburger

Essentially minarchy is the above quote personified. It’s the idea that if we just have the right amount of coercion and the the right amount of violence, we can reach our maximum potential in society. In what way does that sound like a good idea? Furthermore, how does that sound less fanciful than a completely voluntary society like what the anarchist advocates for? Lets explore all the various arguments minarchists use to argue their case.

Government is a Necessary Evil
The idea that government is a necessary evil is the argument that evil is necessary. There is no hiding this once you reduce the logic of limited government down to its most basic form. As stated above, minarchy or limited government, is the fanciful idea that you can give an individual or a group of people a monopoly on the ability to initiate violence and force on others, and at the same time, expect them to limit themselves. That is a fantasy if there ever was one.

I used to believe in this. It was purely utilitarian even though I knew for a long time that anarchy was the logical end of the non-aggression principle and capitalism. I knew that the experiment of limited government had been tried and failed miserably, yet I felt that government was never going to go away so I would be better off if I learned to work within it. This is a compromise of morals and principle though. I realized that one cannot say they value freedom and liberty, and at the same time, tolerate the state with it’s tendency towards trampling freedoms. I realized that you are either an anarchist or a slave, there is no middle ground.

The “freedom” lovers that are afraid to take their philosophy of freedom to its logical end, namely anarchy, are under such delusions. They cannot separate government from society nor can they grasp the idea that governments do not truly exist. The idea that governments are not separate from individuals is an axiom they would rather not contemplate simply because, if they did, they would come to the conclusion that government is simply a group of individuals exercising their will over others by violence and force. This is a direct contradiction to their fantasy of having liberty, freedom and personal choice along with a the safety net of a central government. It’s pure fantasy. It’s also logically inconsistent. Statists, including advocates for minarchy (or limited government), advocate that it’s for the greater good. It’s the pragmatic argument that the ends justify the means. This is another reason why minarchists never bother to take their philosophy of freedom to it’s logical end, they like having government in a moral vacuum. F.A. Hayek said “The principle that the end justifies the means is in individualists ethics regarded as the denial of all morals. In collectivist ethics it becomes necessarily the supreme rule.”1 The statist argument for any amount of government falls flat once one makes their morals consistent. The same morals that apply to the individual must also apply to government since government is really only composed of individuals acting towards common ends.

Anarchists Make “Perfect” the Enemy of “Good”
It is often argued by supposed advocates for “free markets” and “freedom” that anarchists are unreasonable because they are unwilling to accept realistic freedom due to their fanciful ideas of what perfect freedom should be. If only the anarchist could understand the utilitarian perspective of the minarchist; that government has a role in the protection of private property and freedoms! Unfortunately, the state and private property (which is the basis for all freedoms) do not mix. Ludwig Von Mises, who was himself an advocate of limited government, conceded that the state and private property do not voluntarily coexist with each other.

“All those in positions of political power, all governments, all kings, and all republican authorities have always looked askance at private property. There is an inherent tendency in all governmental power to recognize no restraints on its operation and to extend the sphere of its dominion as much as possible. To control everything, to leave no room for anything to happen of its own accord without the interference of the authorities. This is the goal for which every ruler secretly strives. If only private property did not stand in the way! Private property creates for the individual a sphere in which he is free of the state. It sets limits to the operation of the authoritarian will. It allows other forces to arise side by side with and in opposition to political power. It thus becomes the basis of all those activities that are free from violent interference on the part of the state. It is the soil in which the seeds of freedom are nurtured and in which the autonomy of the individual and ultimately all intellectual and material progress are rooted. In this sense, it has even been called the fundamental prerequisite for the development of the individual. But it is only with many reservations that the latter formulation can be considered acceptable, because the customary opposition between individual and collectivity, between individualistic and collective ideas and aims, or even between individualistic and universalistic science, is an empty shibboleth.

Thus, there has never been a political power that voluntarily desisted from impeding the free development and operation of the institution of private ownership of the means of production. Governments tolerate private property when they are compelled to do so, but they do not acknowledge it voluntarily in recognition of its necessity.”2

Mises, like many advocates for limited government, simply accept the “fact” that government is a necessary evil. They call it “good”, and in the process compromise a critical component of freedom, namely, the freedom to be free from violence and coercion and the ability to truly own one’s self. This brings us the to next point. The minarchist calls limited government “good” where as the anarchist cannot call such an institution anything but unnecessary and evil. Lysander Spooner said “But whether the Constitution really be one thing, or another, this much is certain — that it has either authorized such a government as we have had, or has been powerless to prevent it. In either case, it is unfit to exist.”3 Any amount of government is an encroachment on liberty therefore the anarchist cannot call any amount of government “good”. Even the United States government with its holy document known as the Constitution, falls far short of what was idealized originally. If one is truly honest with one’s self, how can one call anarchy an “idealist” position and at the same time, expect an all powerful institution to be limited by a piece of paper? One would have to be heavily propagandized and delusional to truly believe such a position as solid and moral. Anarchists are not making “perfect” the enemy of “good”, they are making freedom the enemy of slavery. The minarchist position is that of “a little cancer is better than a lot of cancer” when no matter what, you still have cancer. Government is a cancer if it can be likened to any modern disease and the only cure is a stateless society. The minarchist essentially advocates for a little bit of slavery rather than a whole lot of it. In the end, you are still a slave.

Conclusion: Minarchy is the True Fantasy
Minarchism, not anarchism, is the true fantasy and pipe dream. The minarchist is unwilling to take their beliefs to their logical end simply because (like other statists) they refuse to apply the same morals individuals follow to that of a collection of individuals (government). In one breath they say “government is efficient and too large to function in a proper way!” Us anarchists clap our hands and nod in agreement. Unfortunately, the minarchist isn’t done talking. They continue by saying “that is why government, an inefficient and incompetent entity, should be responsible for on the most important and crucial tasks!” At this point, we anarchists cannot help but shake our heads, especially when we are the ones accused of attempting to attain the unattainable!

1. Hayek, Friedrich A. Von. The Road to Serfdom. Chicago, IL: U of Chicago, 1944. Print.
2. Mises, Ludwig Von, and Bettina Bien. Greaves. Liberalism: The Classical Tradition. Indianapolis: Liberty Fund, 2005. Print.
3. Spooner, Lysander. No Treason: The Constitution of No Authority. Whitefish, MT: Kessinger, 2004. Print.


American Involvement in Iraq Ramps up

CNN reported that American forces have bombed IS (ISIS) convoys and weapon stashes. There has been many people crying out for further U.S. involvement in the region. It’s nice to have your heart in the right place but the U.S. Government really needs to ask “What are we doing?” and “Isn’t this our fault too?”

Obama said “I don’t think we’re going to solve this problem in weeks. I think this is going to take some time.” One has to wonder if destabilizing Iraq back in 2003 under false pretenses and then later, indirectly supporting ISIS in Syria  so that they could become strong enough to invade Iraq was all part of the plan. This is either pure evil on behalf of U.S. leadership or they are completely incompetent. More than likely it’s both.

The U.S. had no business in Iraq in 2003 and they have no more of a right to be there now. They say the definition of insanity is doing the same thing over and over again and expecting different results. It’s safe to say the U.S. government is insane along with it’s supporters and those advocating for further intervention in Iraq. It’s just sad that we are even contemplating a third Iraq war.


Know Your Rights: Talking to Police

There is no doubt that we are seeing the beginning of the Police State here in the United States. Local law enforcement agencies are acquiring tanks, MRAPs, drones and other military hardware. It can be argued that these weapons are used to fight enemies over seas, so who is the enemy when they are used domestically? That’s right, you and me. If you don’t believe me, just consider the fact that you are now 8 times more likely to be killed by a cop than a terrorist. An encounter with police can be a deadly encounter if you don’t know your rights.

Film/Document Your Encounter:
Always try to remember to document your police encounter. Filming it is of course the best option. There are many ways to do this. Of course your smart phone has a camera on it but what if the police smash your phone or take it away? That is why I use Bambuser on my phone. It streams video to your bambuser account so they can’t just delete the footage from your phone. I also lock my phone so that they can’t access it to begin with.

If you don’t have the ability to film or you cannot film at the moment, always try to remember the details. Remember what the officer(s) looked like. Try to get their badge numbers or their names. Remember all of those little details and record them down as soon as you can after your encounter. This will help you later should you need these details.

TIP: You have a first amendment right to film a public servant operating in public and performing their public duties; but don’t ever point your camera or phone like a gun. Don’t give them a reason to be overly aggressive with you. The best way to hold your camera, if it is a phone, is low and angled slightly upward. It’s awkward, but it can’t be construed as threatening. If you have a video camera, the best way is to again have it low and angle the viewfinder up so you can make sure you are getting a good shot.

You Don’t Have to Identify Yourself (Know the Law Wherever you Are):
Carrying an ID is really only required when you are driving a vehicle or a passenger on a commercial airline. However, there are states that have stop and identify statutes. You will be in violation of the law and potentially be detained if you don’t identify yourself when prompted (I know, they are bogus laws, but don’t risk getting arrested). Where I live, California, it is not required to show ID to an officer unless they have reasonable suspicion that you are committing a crime. How do you know if they have reasonable suspicion? Ask “Am I being detained?” and “Am I free to go?” If they say you are not being detained, just walk away. If they say yes, ask under what suspicion.

Regardless of where your encounter has gone from here, do not answer any questions. You don’t have to. The 5th Amendment states:

“No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” 

If they ask you were you are heading, politely ask “Am I legally obligated to answer that question officer?” Or simply and respectfully decline to answer.

Final Tips:
First of all, be prepared to get arrested if you film police. Yes you have a constitutional right to film police. Yes you have a constitutional right to not answer questions or identify yourself. The problem is that maybe you encountered officer cranky who just doesn’t give a crap about your rights. You know, because “Obama has decimated the friggin’ constitution, so I don’t give a damn”.

Prepare to have your stuff broken. Again this is why I use Bambuser. They can smash my phone all they want, but the evidence of their over stepping on my rights is already out there.

Always be respectful and never push the officers. They have guns and you don’t. Yeah it’s unfair, but showing their disrespect for the rights of the people they supposedly serve, to any degree, is useful in keeping them accountable.

Examples:
Adam Kokesh at a DUI Checkpoint.

Another Example of a checkpoint.

A man is stopped by police and drives away.

I don’t answer questions.

A great video by Flex Your Rights.

Police searches.

Police at your door.


Fallacy Friday #6: Austrian Economics is not Scientific

I have heard progressives who are aware of Austrian economics say this. I have heard people from the Chicago school say this. It’s quite clearly a fallacy. “Austrian Economics falls short because it rejects the scientific method!” This is completely untrue. The Austrian School has the deepest respect for the scientific process, this is why it has the appearance of rejecting the scientific method in the first place. It sounds contradictory so I’ll explain.

Austrian economics is a a school of economics that is descriptive. This means that Austrian economics never prescribes what those in authority aught to do as far as economic policy is concerned.* This is why, when asked about what the government should do about economic problem “X”, they usually say “nothing”. This is because Austrian economists view the world as complex and uncertain. Why is the world complex and uncertain? Because the world and the economy is made up of individuals who all have different value scales that are all subjective

What is a Value Scale?
Commodities and other such economic goods do not really have intrinsic value that can be objectively figured out. All valuations come from the subjective valuations of individuals and economic actors.1 I will use myself as an example. Say I have 2 hours of free time (time is a means in this case since I have a limited supply of it and it cannot be used towards two things at the same time). Say I have the option to paint a picture, take a nap, watch TV, read a book, or go for a walk. Now I have two hours to spend on any one, or all, of these activities. Say I value the activities as follows:

1. Paint a picture
2. Go for a walk
3. Read a book
4. Take a nap
5. Watch TV

Now this would just be my own personal value scale. Someone else may have a completely different scale of preferences they would like to do. If I was to ask a scientist to use the scientific method in order to quantify my value scale, they would probably tell me that it is impossible. This same sort of value scale is how individuals value economic goods as well, with the means being money and other media of exchange, and the activities being goods. Since there is a limited supply of an individuals media of exchange, persons engaged in economic activity must choose  which ends they will satisfy. They then create their own value scales. Mises said the same thing when he said “Value-judgments on this principle would have to be expressed as follows: ‘The satisfaction that I could get from the consumption of a certain quantity of commodities is a thousand times as great as that which I get from the consumption of an apple a day.’ or ‘For this quantity of goods I would give at most a thousand times this apple.’ Is there really anybody on earth who is capable of adumbrating such mental images or pronouncing such judgments? Is there really any sort of economic activity that is actually dependent on the making of such decisions? Obviously not.”2

So you can see that Austrian Economists do not renounce the scientific method simply to fulfill a bias or fit their own perspective. They know the proper place for science and the scientific process. The subjective valuations of economic actors, which are not measurable, is not the appropriate place to use methods dealing in objective matter. This is why Austrian economists rely on logic and deduction rather than the traditional scientific method. Human action, or praxeology, is something science will have to live without measuring and quantifying.

Who Is Really Rejecting Science?
The Austrian economist is not rejecting science because if science was used, it would prove their bias wrong. The Austrian uses deductive reasoning and logic in order to describe economic activity because it is the only way to describe it. As we have seen above, economic valuations and exchanges are a far outside of the realm of scientific theory and measurement. How does one measure the quantity of satisfaction of an individual? You cannot. The only people rejecting science are the ones misusing it. They are the economists that, despite what has been shown above, still try to quantify subjective values. “Praxeology, according to Mises, is not concerned with why individuals pursue the specific purposes they do, but only with what can be deduced from the axiom that they do act purposively.”3

Science never prescribes anything (meaning recommends something as beneficial). Science only describes our environment and you can do with that information as you please. It did not invent the law of gravity, it only describes the law of gravity. It does not prescribe how your body works, it only describes how it does. In the same fashion, Austrian economics is probably closer to this idea of science because it does not prescribe how economics works, it only describes it. If anyone is using economics to prove their biases, it’s the economists using mathematics in order to quantify value. Sure they can create these great artificial constructions, but that is all they are, artificial. They never, like science intends to do, describe reality or how economics and acting individuals operate.The Austrian can link their deductions to reality because “The ‘logical structure of action’ is ‘linked to the logic of our thought,’ because we act on the basis of rational thought.” Austrian economists, as can be seen, have the utmost respect for science. This is in contrast to every other economic school out there that seems to exist simply to dictate public policy. The Austrian economist shows you the facts and leaves you to draw your own conclusions.

*note: Austrian economist generally advocate for free markets simply because subjective value is so incalculable, government policy and regulation becomes pointless. Thus, a free market composed by the aggregate demand of a community due to each individuals value scale is the only recourse. It’s the policy of no policy.

1. Taylor, Thomas C. “The Ludwig Von Mises Institute.” An Introduction to Austrian Economics. Mises Institute, n.d. Web. 07 Aug. 2014. <http://mises.org/austecon/chap4.asp>
2. Von Mises, Ludwig. The Theory of Money and Credit. New York: Skyhorse, 2013. Print.
3. 
White, Lawrence H. “The Ludwig Von Mises Institute.” Methodology of the Austrian Economists, Ludwig Von Mises. Mises Institute, n.d. Web. 07 Aug. 2014. <http://mises.org/mofase/ch4.asp>