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The Keynesian Conversion Of The Responsibility Of The State

Think of how much easier the job of government is, when instead of seeking competitive increases in production, it seeks redistribution and reduced unemployment. The first requires that you have some comprehension of your economy. The second requires that you have little to none.

[callout title=The Net Effect Of Keynes]The net effect of the Keynesian revolution was to change the purpose of the government from one of concentrating capital such that the population would derive benefits from increases in competitiveness and production, to one of consumerism, whereby the citizenry is discouraged from saving in order to create consumer velocity.[/callout]

The net effect of the Keynesian revolution was to change the purpose of the government from one of concentrating capital such that the population would derive benefits from increases in competitiveness and production, to one of consumerism, whereby the citizenry is discouraged from saving in order to create consumer velocity.

We have accomplished that objective. We have converted to the consumer society and shipped the productivity of our lower classes offshore, and made the upper classes dependent upon the lower classes consumption. We have destroyed the cultural habit of saving. And with it, the culture of individual responsibility. Our whole country lives under the myth of prosperity without applying a discount to the increased risk we are exposed to by our hubris.

The responsibility of the state is capitalization which reduces risk. Not consumption which increases it.

[callout title=Callout Title]Think of how much easier the job of government is, when instead of seeking competitive increases in production, it seeks redistribution and reduced unemployment. The first requires that you have some comprehension of your economy. The second requires that you have little to none.[/callout]

I am not against redistribution or the insurance-state. I am against the destructive state. And our state has become destructive. It has become destructive because it has become consumptive. And it justifies that consumption by leaving competitive increases to the private sector, despite the market’s incapacity for extraordinary investments.

We need 200 nuclear power plants. We need a new power grid. We need to convert to electric cars. We need to rebuild the voting system and reform the houses of government. We need to increase research funding for hard sciences and decrease it for humanities and social so called sciences. We need to change the structure of the tax code. We need to change accounting procedures that allow causal laundering of money. We need to restructure corporate law so that we can de-corporialize the corporation so that it must serve customers or fail. We need to reform the banking industry. We need to privatize the administration of social insurance. We need to do a hundred other things that will create institutional improvements for the population to compete against other nations who have cheaper labor costs.

Yet we consistently fall under the Keynesian spell, and distract ourselves from the meaningful work of building a competitive society.

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Jefferson’s Virtue Of Violence

Today, on United Liberty, the daily Jefferson quote was:

“I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man.” – Thomas Jefferson to Benjamin Rush (1800)

Freedom is created by, and maintained by, the use of violence, and a man’s capacity for violence is his political wealth. The promise he will use his violence to create freedom, is met with the lack of his need to use it for any purpose whatsoever. It is a wealth sparely spent with high returns.

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Conservative Complaints About The Social Security Scheme

The conservative complaints with social security are that it is not a fund, but a state-expanding tax. Nothing was paid into it, and therefore it is simply a current tax to redistribute from young producers to old consumers who failed to save. And secondly, that this tax also funds an intrusive and abusive government. These are structural complaints, not complaints about ambitions or outcomes.

The original creators’ ambition for this tax was to create an insurance scheme for the minority of people who lived past 65. Except, people vastly live beyond 65 today. In other words, the tax went from low to high risk because of unforeseen consequences. The conservative objection to liberal hubris is that they are asked to absorb risk because of the STRUCTURE of this system, which is now a form of intergenerational welfare, rather than the form of insurance that it was designed to be.

The solution to this structural problem is as follows: 1) to convert from an inter-temporal redistributive and high risk tax to a low risk insured savings program. 2) To change from income tax to balance sheet tax. 3) To have the government participate in, and redistribute, profits from the use of credit money – credit money which is borrowed from and secured by the promise of labor by the average person. This set of changes would eliminate benefits at a specified multiple of the mean. It would unfund government bureaucracy. It would insert more money into the economy as investment capital, and decrease the negative effect of inflating the monetary supply on savers.

[callout title=It’s A Tax]social security … not a fund, but a state-expanding tax. Nothing was paid into it, and therefore it is simply a current tax to redistribute from young producers to old consumers. [/callout]

The general argument against the correction of the social security system, is that if we increase the tax by 2% and change the age slightly, that the system as it stands would be fully funded. To which I’d counter, only if that 2% comes from balance sheet weight, not income. Because for a vast number of companies that are not subsidized by the financial markets, 2% would be half of their annual profits, and this failure would have to be built into the system.

I see no reason to rely upon assumption that the 20th century, which consists largely of the greatest external advantage that a nation has ever experienced, can be used to project the future. It is not logical to ask decreasingly populous generations facing increasing worldwide competition to support a longer living and increasingly expensive class of retirees, when instead, retirees should have saved to lend money to the generations that follow. These advantage are not sustainable, and even if they are, the system currently asks all to risk in order to fund current government, rather than all to save, to insure their mutual success. The belief that we will continue our economic advantage is the myth of american exceptionalism. Savings is sustainable – in any culture. But not the assurance of worldwide competitive advantage which can be redistributed.

As an entrepreneur, I do not fear the market. I fear that the government will extort enough from the entrepreneurial class that they will abandon their belief that they can outpace the predatory state. Tax individuals not by income but by balance sheet. Progressively tax companies for market participation. Eliminate the double tax system on dividends. Increase the tax on speculative returns.

[callout title=Fears]I fear that western advantage, which was demographic, technical and military, will be neither demographic, technical, or military. And that the very institutions that were limited enough to guarantee us our freedom will be the institutions by which we are permanently enslaved and impoverished.[/callout]

I fear that the bureaucracy, as in the UK, will become a predatory class living on a virtually enslaved population. I fear that western advantage, which was demographic, technical and military, will be neither demographic, technical, or military. And that the very institutions that were limited enough to guarantee us our freedom will be the institutions by which we are permanently enslaved and impoverished.

It is easy to rate the success of any government by the direct redistribution divided by the cost of government employees, and seek to constantly improve the ratio, just as we do for non-profits.

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Don Boudreaux Swings And Misses The Entire Point: Sovereignty

Over on Cafe Hayek, Don Boudreaux attacks Arizona’s policy, and in doing so, falls into the abyss of economic tyranny: the justification of economic outcome over freedom and sovereignty.

By demonizing immigrants, these politicians exploit voters’ misinformation about the economic consequences of the alleged devils.

My response was:

Don, 

You’re confusing the priority of people’s perceptions of their economic consequences with the priority of people’s perception of their political and cultural sovereignty, as well as their perception of their associated status. These people [Arizonians] have been wronged. They have been wronged by a loss of sovereignty, and a reduction in cultural dominance, and wronged by an ongoing diminution of their status. And people will act far more passionately to defend their social position than they will to an abstract economic benefit. That was, and is, the entire reason behind nationalism. Or did you forget?

When the use of economic outcomes becomes the primary criteria that one uses to determine all policy, then the economist makes a fundamental error because he ignores the most important of ‘animal spirits’: status and sovereignty. And then the methods of economics become either a religion, or the error of intellectual myopia, or of intellectual vanity.

Otherwise, economic policies are the tools of tyranny, and the justification of tyranny.

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The Virtue Of Violence

The Virtue Of Violence:

“We do not forego violence in exchange for democracy, we forgo violence in exchange for creating and accessing the market. Democracy is simply a means of hiring and firing the administrators of our markets.

We do not exist to serve democracy. Democracy exists to serve the market. And should it cease to do so, it ceases the only reason for its legitimacy or use, and is simply a means of whereby the masses destroy the accumulated prosperity of the market in the greatest act of theft and ruin that a humans can perpetuate.

If we are no longer cooperating in order to maintain our market. Then we no longer need to cooperate to maintain our government. And as such, we no longer need to restrain our violence, so that we may recreate a market and a means of administrating it.

The principles of non violence and non aggression are a means of stealing from us whenever the market is circumvented by those we hire to administrate it. It is an act of deception and fraud. It is an infinite discount on our contribution of forgone opportunity for the purpose of creating the market.

That is the true meaning of the word ‘freedom’: to spend the currency of our violence in creation of the market, our respect for property such that we may cooperate in a division of labor, our time and efforts in the creation of products and services to participate in the market, and our rewards for having done all of the above.

Violence is the source of the market, and the market the source of our prosperity, cooperation, and happiness.

Violence and it’s use in creating and maintaining the market, is man’s greatest achievement.

Violence is a virtue because it is the amount of violence possessed by men, and their creativity in and capacity for using it, and the use of it to create the market, that is the prerequisite for prosperity, and division of labor.”

And there is no other argument for the source of the market, our actions in maintaining it, other than we are slaves or children instead of free men, capable of any creative or destructive act we choose. And I will not surrender my violence, and pay the cost of forgone opportunity to create a market from which I, my family, my friends, my tribe, my culture, may prosper, so that someone may enslave me.”

– Curt Doolittle

Curt Doolittle’s writes on libertarian economics and conservative politics at Capitalism v3.0, and hosts the Libertarian And Conservative Roundtable news feed – a set of syndicated articles opinions and news in the english language from across the web.

(From Our Facebook Page)

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Violence Is A Beautiful Word

Violence is a beautiful word.

But its beauty is absent from our discourse.

I’m going to put violence into libertarianism.

I’m going to put violence back into politics and economics.

Violence, violence, violence, violence violence.   There. I said it again.  Get used to it.

I’m going to fix our civilization and its political system by revealing the elephant in the room.

I’m going to talk about violence as a virtue.  Something to be cherished, and loved, and appreciated.

Because the source of our prosperity is in our violence.

Markets, Freedom, Property, the product of the organized use of violence.

And no use of violence has ever been so peaceful, so fruitful or so enjoyable.

Roman Warriors

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Another Round On Paparazzi

Peter Surda April 21, 2010 at 2:35 am

However, it is still a person’s asset, regardless of price, because people ACT as if it is an asset, and that asset has material value to individuals, which we can determine by surveying the ACTIONS that people take, businesses take, regarding their reputation

But this is valid with regard to anything, not only reputation. This does not help define property, it confuses. Any change has a negative effect on someone. Does that mean that any action whatsoever is a property right violation?

This is one of the reasons why I reject the notion of immaterial trespass. Instead, I humbly propose that only those immaterial negative effects that are defined in contracts are to be prosecuted (i.e. contract violations).

Furthermore…

Property is a claim on an opportunity to make use of any object, material or abstract, upon which men can act.

It is not necessary to own immaterial goods to make use of them, therefore from the existence of an opportunity you cannot imply ownership. As I said before, with immaterial goods, anything causally related is “making use of”.

We can create representations of abstracts, can’t we? We’ve created plenty of them. I can stake a claim on land. I can form an abstract entity called a joint stock corporation, and then sell shares. I can marry someone and get a marriage certificate. I can get a receipt for a deposit. I can sign a contract. I can buy an option. I can wager a bet.

Why can’t I stake a claim on a formulae? Or a brand or trademark? Or a design or patent? Simply because they require uniqueness against a broader pool of people, because are treated as first-come first-serve exclusivity, rather than an auction model, and because the market cannot expand to provide better and more accurate service than does the state.

These registries try to prevent copying and bypassing investment (theft) rather than parallel innovation, which is in the market interest.

Under the Hoppian property scheme land registries are maintained and protected by insurance companies and private firms instead of the state. But to limit the scope of property is to limit the competitive ability of groups to compete against other groups. The problem is that the government owns the registry and terms by which abstracts are registered, while denying the purpose for which we enact the registry: to encourage capital investment so that goods and services can be rapidly brought to market at lower risk rather than through direct subsidy. But in turn these devices can be used to prevent products and services from entering the market, and in particular, products and services that do not require capitalization, and that they too often endure long enough to create artificial monopolies. Book protections that persist beyond one generation of offspring of the author.

Banks regulate their own ‘market’ of loans. Each stock market has regulations. Why can’t we have markets for other claims? Why can’t we auction off uses of a design, rather than simply deny competitors to the market. it’s the state monopoly that’s the problem.

Material trespass and immaterial trespass are simply conventions driven by the ease of registry. In a man’s mind he can know his physical property, and know that any other object is not his physical property. If we could catalog ideas just as easily, would we not treat them as such? We do. We create ‘pointers’ to externally reference memories. They’re real world representations of abstractions.

Is the purpose of the libertarian program to create a platform for cooperation and trade, to minimize the potential for government corruption, interference, theft, bureaucracy, waste, violence, class warfare, and exploitation using the evidence of how men actually act? Or is to create another silly religion that is contrary to the behavior of human beings, or is it just another absurd metaphysics like Marxism?

A libertarian society must be one by consent – or we need to abandon the principle of non violence and implement it by force. And if it’s to be a society of consent, then it must reflect human behavior in order to gain consent. Human behavior, and the evolution of our knowledge, dictates that we leave the system for definition of property and the registry thereof open to innovation. Not closed, and limited to material constructs.

The general body of arguments on this topic are reductio and illusory because of it. The real issue at hand is that in the division of labor, specialized knowledge is required to in order to innovate, and innovation in all but the black swan areas requires capital concentration, and markets are best served by their own division of labor in the act of policing fraud and theft, or even of registrations of claims against property. Government is not an innovative organ, and it is a corrupt and slow moving one.

The issue instead, is to adopt a Hoppian division of labor and competition rather than a Rothbardian Luddite program, or a government-run monopoly program that by it’s very nature is expressly counter to the innovation, division of labor and specialization of knowledge needed to keep pace with our innovations, almost all of which, are currently ABSTRACTIONS. In this EXPANDING WORLD, the Hoppian model of privatization and risk management using insurance schemes rather than the monopoly of government is a superior answer than that of the Rothbardian Luddite model, which artificially Harrison-Bergeron’s” the civilization – to a man.

If we can protect several property so that it can be invested in. We can protect abstract property so that it can be invested in. The institutional problem is registration and regulation. Not Rothbardian abstinence. And not to get a population to adhere to an absurd metaphysics. But to create institutions wherein real human beings can interact using real human innovations, almost all of which are abstractions, and most of which are now beyond individual comprehension. ( Property requires memory. Institutions are a form of social memory. Institutions educate indirectly. Memory becomes behavior. Behavior becomes normative.) Our problem is institutions, not beliefs. Actions not words.

And any libertarian, and anarchic program that would simply force people to prefer to resort to violence to resolve differences, or which would impoverish the greater body of people by making them less competitive against other groups (which Rothbardian property would do) is simply to exchange the prosperity of the market for abstract registry of opportunities for the poverty of the bazaar society. It is regression. It is to limit man to the industrial age. It’s a Luddite philosophy.

The anarchic research program’s undermining of the historic legitimacy of the state is separate from the use of non-state (insurance) institutions to maintain both real and abstract property.

Focus on the right problem. Private, competitive, market institutions that divide knowledge and labor and provide service over government monopoly institutions that provide corruption, theft and incompetence.