When it comes to the proper role of government, most people seem to agree on a few basic issues; murder, rape, fraud, theft and vandalism (acts of aggression against individuals and their property) are almost universally accepted as violations that government should prevent or punish. Conflicts tend to arise only after we step beyond that common theme.
Two legal terms illustrate that fundamental split: malum in se and malum prohibitum.
Friday, March 30, 2012
Thursday, March 29, 2012
Not Worth a Continental
In The Perils of Paper Money, I introduced David Wolman's article A Short History of American Money, From Fur to Fiat, which appeared in The Atlantic in early February.
In that essay, I explained briefly how money, once disconnected from any objective standard of value, has historically devalued over time. This is starkly illustrated by the story of the Continental Currency issued during the American Revolution. This tale, relegated to two brief paragraphs in The Atlantic article, is central to our understanding of the concept of money. It provides an important cautionary tale concerning our existing Federal Reserve System and the peril of money grounded in nothing but the full faith and credit of any government.
In that essay, I explained briefly how money, once disconnected from any objective standard of value, has historically devalued over time. This is starkly illustrated by the story of the Continental Currency issued during the American Revolution. This tale, relegated to two brief paragraphs in The Atlantic article, is central to our understanding of the concept of money. It provides an important cautionary tale concerning our existing Federal Reserve System and the peril of money grounded in nothing but the full faith and credit of any government.
Tuesday, March 27, 2012
Open-Source Freedom
Robert A. Heinlein
Northwestern Localist asked an interesting question in response to the column Homebrew Production is Coming.
How many years are we from designing and building our own farm equipment, transportation, etc. etc.? This kind of technology makes massive centralized government control less viable.I happened to know the answer is zero, which sent me searching for something I vaguely remembered, and that led me to the today's column. While Northwestern Localist won't be printing up a tractor on a RepRap machine any time soon, his question goes far beyond that, to the concept of shared knowledge.
Monday, March 26, 2012
The Higher Education Bubble
With almost a trillion dollars in loans outstanding and an estimated 27% of those loans more than 30 days in arrears, it's getting easier every day to predict the next segment of the economy to collapse.
Those who understand how the bubble-blowing combination of the Federal Reserve and government policy destroyed the housing market, fueled the dot-com bubble of the early 2000s, and shares some level of responsibility for every nationwide recession since 1913 watched in trepidation when "college for all" replaced "home ownership for all" as the entitlement mantra. It's starting to look suspiciously like they were right once again.
Fitch Ratings notes that the "The Federal Reserve Bank of New York recently reported that as many as 27% of all student loan borrowers are more than 30 days past due. Recent estimates mark outstanding student loans at $900 billion- $1 trillion."
Those who understand how the bubble-blowing combination of the Federal Reserve and government policy destroyed the housing market, fueled the dot-com bubble of the early 2000s, and shares some level of responsibility for every nationwide recession since 1913 watched in trepidation when "college for all" replaced "home ownership for all" as the entitlement mantra. It's starting to look suspiciously like they were right once again.
Fitch Ratings notes that the "The Federal Reserve Bank of New York recently reported that as many as 27% of all student loan borrowers are more than 30 days past due. Recent estimates mark outstanding student loans at $900 billion- $1 trillion."
Sunday, March 25, 2012
Homebrew Production is Coming
Author's Note: The Homebrew Industrial Revolution, by Kevin Carson, goes into great detail about many of the concepts underlying this series of posts. A number of columns will focus on information gleaned from there. Well worth the time to read. Highly recommended.
In the first column in this series, The Apolitical Economic Superpower, we discussed the rapid growth of the untaxed, unregulated economy that currently provides 50% of the world's jobs, and is expected to provide two-thirds of the world's jobs by 2020, according to the Organisation for Economic Co-operation and Development (OECD).
In The Rising Phoenix Society, we learned of David Obi, who brought electricity to the masses in Nigeria by working an underground distribution deal with a Chinese manufacturer. We looked at local and urban farming as an example of the growth of apolitical employment in the US, and touched on regulation and infrastructure costs as two reasons that smaller-scale production may prove increasingly more competitive with factory farming in the future.
We also noted the great changes in the creation and marketing of literature, music, photography and other arts over the last few years, thanks to the largely unregulated and tax-free internet. We mentioned the grassroots effort that arose in opposition to the corporate-driven attempt by government to squash that great blossoming of creativity. We also observed that education (as opposed to government managed and financed "schooling") is on the cusp of a similar great transformation.
However, there's one major element of society that has and always probably will remain within the Domain of the Dinosaurs; the holy trinity of mass production, mass marketing, and mass distribution. Like it or not, that model is a keystone of the modern economy. The current assumption is that centralized mass production, with its requirements for massive capital investments, high energy and transportation costs, reliance on nation-wide infrastructure, considerable administrative overhead, and reliance on a production-driven throwaway consumption model is the only viable model for production.
Can that model be challenged by one without all those drawbacks? By the process of negation, that model would include low capital requirements, low overhead, local distribution, and build-to-demand production of durable, repairable goods. Unless goods can be economically produced in much smaller batches on much less expensive equipment, that model is a non-starter. But innovations on the horizon suggest a strong possibility that those conditions will be met in the not-too-distant future.
In the first column in this series, The Apolitical Economic Superpower, we discussed the rapid growth of the untaxed, unregulated economy that currently provides 50% of the world's jobs, and is expected to provide two-thirds of the world's jobs by 2020, according to the Organisation for Economic Co-operation and Development (OECD).
In The Rising Phoenix Society, we learned of David Obi, who brought electricity to the masses in Nigeria by working an underground distribution deal with a Chinese manufacturer. We looked at local and urban farming as an example of the growth of apolitical employment in the US, and touched on regulation and infrastructure costs as two reasons that smaller-scale production may prove increasingly more competitive with factory farming in the future.
We also noted the great changes in the creation and marketing of literature, music, photography and other arts over the last few years, thanks to the largely unregulated and tax-free internet. We mentioned the grassroots effort that arose in opposition to the corporate-driven attempt by government to squash that great blossoming of creativity. We also observed that education (as opposed to government managed and financed "schooling") is on the cusp of a similar great transformation.
However, there's one major element of society that has and always probably will remain within the Domain of the Dinosaurs; the holy trinity of mass production, mass marketing, and mass distribution. Like it or not, that model is a keystone of the modern economy. The current assumption is that centralized mass production, with its requirements for massive capital investments, high energy and transportation costs, reliance on nation-wide infrastructure, considerable administrative overhead, and reliance on a production-driven throwaway consumption model is the only viable model for production.
Can that model be challenged by one without all those drawbacks? By the process of negation, that model would include low capital requirements, low overhead, local distribution, and build-to-demand production of durable, repairable goods. Unless goods can be economically produced in much smaller batches on much less expensive equipment, that model is a non-starter. But innovations on the horizon suggest a strong possibility that those conditions will be met in the not-too-distant future.
Friday, March 23, 2012
Greece Surrenders to the Underground Economy
The Guardian recently published Greece on the breadline: cashless society takes off, an all-too-brief look at what's happening in the streets of Greece in response to their government's international monetary woes. This paragraph is what triggered my reaction and the title of this post.
The Greek parliament recently passed a law encouraging "alternative forms of entrepreneurship and local development", including exchange networks such as Volos's, giving them official non-profit status for tax purposes.As I read it, Greece has surrendered to the underground economy by writing off a significant chunk of future tax revenue, and it has to do primarily with "exchange networks such as Volo's." To understand, we have to go back to the top of the Guardian's story.
Around the Web 3/23/12
Here are few interesting articles that I've noticed in the last week or so that I thought might be of interest to those who enjoy The Tireless Agorist.
Thursday, March 22, 2012
Pizza Federalism, Kickstarter and the Arts
Discussion of federalism is all the rage these days among conservatives. Such conversations are generally framed by the Tenth Amendment, interpreted as an issue of "States Rights," and then dismissed by the left as a throwback to the days of the Civil War.
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.I believe a more honest appraisal of the concept requires consideration of the Ninth Amendment as well, and others are becoming at least tangentially aware of that idea.
The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.When both the Ninth and Tenth Amendments are included in the discussion, federalism expands to encompass "pushing government decisions down to the lowest democratic level possible," as Jonah Goldberg notes.
Tuesday, March 20, 2012
Government Integrity Analyzed
A consortium led by the Center for Public Integrity, a "nonpartisan" watchdog group, released a report on the integrity of state-level governments on Monday.
Not one state got an "A," the breakdown was 5 "B"s, 19 "C"s, 18 "D"s, and 8 "F"s.
I found it particularly telling that this "nonpartisan" watchgroup did not issue grades for either the District of Columbia or the federal government.
Here's how they begin their lament.
Not one state got an "A," the breakdown was 5 "B"s, 19 "C"s, 18 "D"s, and 8 "F"s.
I found it particularly telling that this "nonpartisan" watchgroup did not issue grades for either the District of Columbia or the federal government.
Here's how they begin their lament.
Monday, March 19, 2012
The Booze Cause of the Economic Crisis
Author unknown
Appearing at Real Clear Politics today, Causes of the Crisis, wherein Robert Samuelson proclaims "Four years after the onset of the financial crisis -- in March 2008 Bear Stearns was rescued from failure -- we still lack a clear understanding of the underlying causes."
He makes note of the two competing theories; that Wall Street, unregulated, took too many risks, and that mortgage-lending standards created the housing bubble. He then examines the case for a root cause of both.
Actually, both theories are correct -- and neither is... But the fact that these theories are not mutually exclusive suggests that both were consequences of some larger cause. Just so. What ultimately explains the financial crisis and Great Recession is an old-fashioned boom and bust, of which the housing collapse was merely a part.In this, Samuelson is correct. He then proceeds to give a history lesson, pointing out that the boom began with the decisive defeat of double-digit inflation in the early 1980s, (while failing to address the cause of, or cure for, that inflation, however). He points to two mild recessions in the ensuing years, and gives credit to the Federal Reserve for "defusing" those two threats. He then states "booms become busts because justifiable confidence becomes foolish optimism," and continues his history lesson by spreading the blame everywhere; on investment banks, households, lending standards, regulators, ethical standards, even criminals. But not one word of explanation as to how "justifiable confidence becomes foolish optimism."
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