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“Anarchy” really is a viable system of social order

January 8, 2010 Leave a comment

Nearly everyone I talk to has no idea (or more precisely doesn’t care) what anarchy means, what an “anarchist” supports.  Most associate anarchism with the Sex Pistols song.  Bad move.

Anarchy simply means the absence of monopoly government. 

Government is defined (even by Statists) as a monopoly provider of law and order services in a given geographic region.  There is no appeal process beyond the State.  It is defined as the “last appeal entity” in any jurisdiction when a dispute arises.

Anarchists believe in the power of voluntarism, spontaneous order and competition. 

Societies can order themselves through co-operation, not coercion.  Religions, social groups, charities – they all organise themselves cooperatively.  The govt organises society through compulsorily acquired property (theft through taxes) and through the use of monopoly force (via the police).

Spontaneous (not consciously designed) order can occur through the price mechanism.  Governments do not use the price mechanism to allocate resources; they use the political process and their own decision-making criteria, divorced from the price mechanism.  If a service is already being delivered by the private sector (such as coin production) the govt has to crush that industry in order to control that market.

Competition simply means a number of entities competing to provide the consumer the same product or service.  Govts should “compete” to provide law and order.  If a citizen doesn’t like a particular brand of “law and order” he should be able to sell up and move freely to a neighbouring state providing better law and order.  Hence, states should be as numerous and as small as possible.

My first introduction to anarcho-libertarian ideas was through this book by Robert Ellickson entitled Order Without Law: How Neighbours Settle Disputes.  After reading this brilliant book, I (naturally) asked myself “If neighbours can settle disputes efficiently themselves, why can’t all of us – society at large – do the same thing?  We are all essentially neighbours, and when we get into disputes all conflicts are essentially analogous to neighbourly disputes.  So why are there monopoly providers of so-called ‘law and order’ when we could probably (in the vast majority of disputes) do a much better job ourselves through voluntary arbitration/mediation services, appointed by disputants themselves (and through private insurance and security service providers in the case of protection of property and person)?”

I then went on to read Murray Rothbard, and found that he had posed the same questions.  Then I read Hans Hermann Hoppe and the Sun came out, shining brightly.  Hulsmann and de Soto simply added to the brilliant sunshine.

I now divide up the world into those ignorant fools who haven’t read these works and those Chosen Few who have.

Murray Rothbard begged for anarchists to be given a country, a region, to try out these ideas, to see whether they would work.

Well, as it happens, an area of the world is trying out these ideas, by default.  A “lawless” region of Africa has “fallen” into a state of true anarchy.  That region is a  secessionist area within the Ivory Coast.

And you know what’s happening? 

It is flourishing!  Check out what’s happening here.

And, ironically, when the central bank of Zimbabwe completely abandoned its attempts to control the monetary system and allowed “anarchy” to reign, with any currency (foreign or domestic) lawfully being permitted to be used for trade, guess what happened?  Trade flourished!  See what happened in 2009 here.

If we know for a fact that these ideas work, why don’t governments break up, why don’t they shrink, why don’t they abandon their “plans” for the benefit of the people?

Because they don’t exist for the benefit of the people.  They exist for themselves, to suck the lifeblood out of an economy.  They exist to expropriate property on behalf of their benefactors.

Remove the thief and the people flourish, just like you’d expect in any safe, civilized area of the city. 

Allow the rapists of the State to flourish and what you get is not anarchy, but chaos.

Who can deny that the biggest, most expensive State operations today are occurring in Iraq and Afghanistan?  Have you visited these “strong state” regions?  Do you know the “benefits” the internationalized State is providing the people in these regions?  Note: the Taliban are long gone from govt in Afghanistan and Saddam Hussein was hanged years ago now.  These “enterprises” are now run exclusively by Western govts and by the UN.

I ask you: Would you prefer to live as an ordinary person in the secessionist area of the Ivory Coast mentioned above or in Kabul?  Both are extreme cases at either ends of the spectrum: one with the complete absence of govt, and one with the greatest concentration of govt agencies (both “domestic” and international) on the planet.

Please think about it.  And please never associate anarchy with the Sex Pistols song ever again.

Categories: Anarchy, Austrian School

What the Hell happened to “Swine Flu”?

January 7, 2010 Leave a comment

Remember the ads?  The govt’s warnings about this being potentially catastrophic “pandemic” (the formal UN classification)?  The millions wasted on contingency plans?

What the Hell happened?

Should we just ignore similar UN-issued warnings in the future if this one was such a joke, such a non-event, such a complete waste of time?

I suspect it’s a dry run, but who knows what the world’s governments are up to?

The motivating madness of government fascism

January 5, 2010 Leave a comment

People don’t see crises coming because they believe in the rationality of government.  They don’t see the dynamic inherent in a coercive rent seeking entity that necessarily compels governments worldwide towards madness again and again and again.

WWI was madness.  The Great Depression was madness.  WWII was madness.  Hiroshima was madness.  The Cold War was madness.  Chernobyl was madness.  The deliberate death of the Aral Sea was madness.  The destruction of arable land worldwide to convert this precious fertile land into low-density residential development is complete madness.  Deliberate and govt-supported over-fishing worldwide is unsustainable madness.  The GFC was predictable madness.  The continued presence of the West in Afghanistan is madness.

Why do governments the world over act with such apparent suicidal, manic-depressive blind stupidity, such venal short-termism, such environmental destruction, such barbarity?

Because very simple incentive structures built up over time around the coercive activities of government compel it towards destructive barbaric madness.  Simple.

Those contractors supplying government make money out of what government does.  Government (originally) was developed to provide a limited range of essential services – law and order and defence.  Suppliers to government have a natural incentive to try to convince government to spend more, to make government bigger.  It’s an easy gig because governments can print to finance their own spending habits (unlike the private sector).

Governments then get bigger doing things they shouldn’t do.  And because there is no appeal process beyond government (all you can do is appeal to another agent of government), government has a natural tendency to get bigger because nothing can stop it short of complete anarchy.  So it keeps growing until chaos really does ensue.

This happens again and again throughout history and every time people are “shocked” by the chaos, by the suddenness of the social breakdown.  The Soviet Union, Iran, the US in the ’60s, Cambodia, the former Yugoslavia, Europe after WWI… all these regions experienced government-induced chaos, government supported madness.

The US will experience exactly the same social breakdown, the same insane bankruptcy, the same comic-tragic stupidity.  Why?  Because the dynamics of government compel the country towards this inevitable denouement.

Let me explain by providing a quote from Bill Bonner of Daily Reckoning:

Bethesda is one of America’s wealthiest suburbs. Money from all over the nation rolls this way. The playing field is tilted in Bethesda’s direction.

“I was sitting in the Starbucks, having a cup of coffee,” Elizabeth reported. “One man next to me was on the phone. He was talking about some deal he had done with the US Army in Afghanistan. It sounded as though he was very happy with it. The man next to me on the other side was on the phone too. He was a jollier fellow, talking loudly about how much money he had made. I thought he was a stockbroker or something like that. Then, I realized he was talking about a contract with the government.”

While the rest of the nation has suffered a setback over the last ten years…the Washington metropolitan area has boomed more than ever. Real estate prices are down…but less than other areas.

And when we looked for a house to rent, we expected to be able to name our price. We thought it would be a buyer’s market. Not so. Nice houses in Bethesda are still being sought after. How so?

Wars…bailouts…boondoggles – this area loves them. Federal employees’ earnings keep going up…and a higher portion of the US national income goes to Washington.

People make money out of the government’s fascist madness.  So the fascist madness increases.

Simple.

What’s hard to understand about rent-seeking?

Who should take a bullet over the GFC?

January 4, 2010 Leave a comment

According to Edmund Conway of the UK Telegraph, the blame should be spread around.

That’s BS.

The blame clearly and undeniably lies at the door of the Pricks of Threadneedle Street. 

Here’s Conway’s attempt to channel the bankers’ mea culpa:

Who is really to blame for the financial and economic crisis? The answer is as frustrating as it is obvious: everyone and no one. In some sense all the members of both the public and City practitioners must take some responsibility for the worst slump since the Great Depression. Whether it is the bankers, the finance ministers, the hedge fund managers, the regulators or the members of the public who borrowed too much, we are all to a greater or lesser degree culpable for the crisis. In the broadest sense of all, human nature is to blame – whether it is the irrationality that tends to cause and magnify business cycles or our inability to challenge the status quo.

But without doubt some are more guilty than others. As far as some are concerned, the fault lies most specifically with the financial system and the bankers who created the toxic debt instruments, and, furthermore, lined their own pockets with the proceeds.

However, in what may in time be judged as a seminal contribution to the debate, the Institute of Economic Affairs has now published one of the most detailed analyses on the causes of the crunch, and their powerful conclusion is the opposite: that it was governments and regulators who erred. Moreover, that the people most often berated for their part in the crisis – the hedge fund managers and those who run tax havens – are among the least guilty. Meanwhile, the regulators have secured a massive reward for failure, in the form of more funding and new responsibilities.

A letter to The Daily Telegraph, signed by some of the country’s most renowned economists, outlines precisely what went wrong and spells out the need for a radical overhaul to ensure it never happens again:

“Perhaps the most important point: central banks should have done more to ensure both prices and debt did not balloon out of control. In the early years of this millennium, following the dotcom bubble, central bankers ought to have kept interest rates higher. Likewise, those in surplus nations should have tried to encourage their public to save slightly less. Instead, the cabal of central bankers, led intellectually by Federal Reserve chief Alan Greenspan, ignored the massive imbalances that built up between nations and the asset bubbles inflating closer to home, judging that they could easily mop up after their explosion.

“The Bank of England and Financial Services Authority are to blame here: there are a whole variety of counter-cyclical policies they could have used – for instance compelling banks to keep more liquid cash or to build up more capital – but they refused to do so. Whatever they claim now about overhauling the system, the fact is that they had powers to do so before, but simply did not act.

“The IEA argument is that the shadow institutions – the hedge funds, private equity and tax havens – are becoming the scapegoats for the crisis. But in fact the real problems were to be found in the big banks and insurers, which were tightly overseen by national authorities. Much as we may disapprove of these other cogs in the financial system, it is unfair to blame them for the crisis.

“This proposal, together with the second, that banks should be allowed to fail, are among the more controversial propounded by the IEA. Their idea is to call for a more free banking system, in which customers are aware that banks are not always supported, and that in the event of a bank’s failure depositors will become creditors whose cash is not guaranteed.”

“One lesson from the crisis is that central banks must make sure they do not focus on one thing. Had the Bank of England paid more attention to the growth of money, it might have done more to prevent the debt bubble expanding. That said, the European Central Bank, which has a more explicit monetary focus than the Bank, has also been found lacking in its approach to monetary policy.”

Why do the Brits go to water when they try to point out the venality of mafioso bankers, or the idiocy of government, or the brainlessness of those who happen to be in power for no other reason other than their surname or their kindergarten education?  What is it about the “born to rule” class structure that strangles commentators when they need to identify those who were to blame for the biggest catastrophe the Brits have seen since the Great Depression?

I would prefer it if the economists would say: “One lesson from the crisis is that central banks have proven themselves to be the very definition of a moral hazard.  Central banks should be simultaneously killed off in a mass orgy of public humiliation and ridicule (preferably in the middle of a town square, like the old days). Banks should then be broken up and allowed to fail like any other business.  For depositors, the warning should be ‘caveat emptor’.  And for bankers, the warning should be ‘Jail for Fraud, like any other common crook.'”

Milton Friedman was an idiot

December 17, 2009 3 comments

Friedman had some reasonable insights into the inefficiencies of government.

However he made a number of unforgivable errors, which ironically endeared him to the Establishment and enhanced his reputation.

First, he trashed Austrian Business Cycle Theory.

Second, he was a fiat money guy, supporting fiat money over gold (up until the end, when he started having doubts – too late in my view).

Third, he supported central banking.  How he could be a “free market guy” and support monopoly fiat and monopoly price fixing of interest rates is beyond me.

Fourth, he destroyed Chile by implementing policies which systematically removed social investment and safety nets that (arguably) govts should provide, whilst keeping monopoly fiat in place.  He should have advocated the elimination of monopoly fiat and allowed the continuation of social safety nets.  He was clearly a tool of the major US banks in Latin America.

Fifth, his policies destroyed New Zealand, partially destroyed Australia, and partially destroyed many other countries including the UK and the US. 

Antal E. Fekete does a wonderful job of destroying Friedman’s theories here, in a speech he delivered in late 2006, just after Friedman’s death.  He also wrote a brilliant piece critiquing both Keynesianism and monetarism here, entitled (tellingly) Götterdämmerung.

If you are shocked by the title of my post, please read these two pieces immediately.

I will never forget Friedman sitting on the edge of Victoria Harbour in the late 1970s openly admiring the “free market” of Hong Kong.  Hong Kong has the highest number of billionaires in Asia but 18% of the population live below the poverty line.  Pollution problems are very serious.  If you ask the average Hong Konger are they happy I guarantee they’ll say no.  Housing is hideously expensive and is a huge tax on the working people (despite the supposedly low rates of tax there).  Social services for the aged are extremely poor.  Worst of all no one can buy and sell in gold – the monopoly HK dollar is pegged to the US dollar.  So the economy is subject to the same mad monetary swings as the US.

It is not so much a “Free Market” as one “Trapped in a Monopoly Money Hell”.  If they could be allowed to trade in any currency they liked, I’d be more sanguine about HK.  Until that fundamental issue is addressed, the Hong Kong people will never be free.

ETS as “rent seeking”

December 17, 2009 Leave a comment

According to Wikipedia:

In economics, rent seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic environment, rather than by earning profits through economic transactions and the production of added wealth.

In other words, rent seeking activity occurs when businesses try to use corrupt governments to change compulsory laws in their favour and feed off government revenue rather than try to serve individuals in the market through voluntary trade.

Banks are the biggest rent-seekers in the Western world, spend the most on lobbying governments and have the closest connections with central banks and governments.  Oil companies probably come a close second.  Third, probably the military-industrial complex.  Fourth, probably aged services and medical services providers.  Fifth, probably telcos.

The ETS is a massive rent seeking exercise with billions at stake.

You create a honey pot of billions of dollars collected coercively by governments worldwide and concentrated in the form of an ETS, you set up a venue for around 15,000 people to discuss how to collect and dole out these billions, and then you invite 45,000 people into the venue…

And you are surprised by chaos?

This is government at work.

We are doomed.

“Anarchy” (decentralised local voluntary self-government and a voluntary gold standard) is way, way, better than this.

Oz govt tries to outdo Iran and China in net censorship

December 16, 2009 Leave a comment

They may well succeed given our non-existent libertarian movement.

“Sheeple, stay in line and watch what we want you to watch!  Fleecing you is good for your health!  Shut up and keep quite!  That’s not an iceberg, we’re headed for global warming, so it can’t be an iceberg.  The govt models don’t predict an iceberg, so it doesn’t exist.  Do NOT move towards the lifeboats.  Govt employees to the lifeboats first!  The Captain is also entitled to be the first to leave, because he’s the most important brain on this ship!  Die sheeple…you deserve it because you let me run your life!  Ha Ha Ha!”