Economics reform

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2009-04-28T21:38:00.001-07:00

This blog is now closed, it (the economy) is beyond reforming... although one blogpost is preserved for posterity: click here

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2009-04-28T21:37:00.001-07:00

glossary

Don't bother using this page...

Main page

2009-04-25T20:07:00.001-07:00

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Blogposts (more recent listed first)
Inflation is caused when debts are made that will not be paid back
Not all States are aggressive to their citizens
The State can be legitimate if it uses (enforces) only negative rights
Positive rights rely on fear (and cowards) to be effective
Price fixing (and taxation) causes scarcity and starvation
It's not right that people are able to hoard an excess of land
Should each person have a minimum quantity of land?
The State should only intervene if there is a problem
Is the money created by the banking system real money or not?
Do we really have self-ownership?
The company excludes people from having access to itself
Internal trades within a company are not subject to income tax
My contract... is not that I will do good, only that I will do no harm
Positive rights are a mistake on the part of the person who complies
Positive rights are repayment for the protection provided by the State
Banks cause inflation because people think that credit is money
Courts should be concerned with freedom, not punishment
The State exploits the judicial process by imposing fiat currency debt
What is an appropriate punishment for a one-off crime?
What attributes make up a crime?
The State should have the right to restrict our freedoms, nothing more
Forced payment of fiat currency goes against self-ownership
Punishment can only be justified if safety is improved
Non-violent criminals should be able to pay to get out of prison
Self-ownership does not deny the ability of groups to act collectively
No group or person should (have the authority to) violate the NAP
What is land slavery and how can it be mitigated against?
According to the State, credit is money but is it?
Anarchy is safety, the State is a security risk
Why deficit spending causes inflation (of prices)
Landowners are subordinate to the State
The price of fiat is set by the State (and the people) using taxation
The poor (and lower-middle class) should be exempt from Income Tax
Does a Land Value Ceiling make things more fair?
Inflation is a consequence of the State guarantee of bank deposits
Treasuries are more reliable than bank deposits
The State need not (necessarily) contradict the NAP
It would be better for the banking system to collapse
The State will be reluctant to Monetise the debt
The State takes credit for the altruism of others
Don't expect loaned money to be returned
If the debts cannot be repaid the banking system will fail
Will the banking system be tested?
Violence does not help the victim
Politicians don't know what the problem is
The Government aren't able to support themselves
The Government recognises bank credit and Treasuries
Taxing trade creates less redistribution than taxing wealth
Credit is inflationary because people don't prefer cash
Understanding the financial crisis
The State prevents people from helping each other
We achieve more when acting separately
Prices go up because banks lend deposits
The State will leave you alone if you pay fiat
The Government solution is always force
The Government is preemptive
Why must I pay taxes?
The public don't want quantitative easing
Issuing personal credit
Vigilantes are more efficient than State police
The criminal prefers the State
The State is a good way to kill ourselves
Get paid for doing nothing and work for free
Gilts are cash (with a time delay)
By holding fiat what do you own, your freedom?
Fiat as a proxy for property rights
Common harvest, then why not common distribution?
Local people would help the infirm spontaneously
Why allow banks to increase the money supply?
We should tax that which can be harmful
Change States but don't move
Inflation is the result of Socialist policies
Let the rich keep their money
Deficit spending is printing banknotes
How the State is destructive
A free market of States
Involuntary debt is invalid
Collaboration does not harm those not involved
People can refuse the State
Companies shield their employees from the State
The concept of ownership is invalid
The implications of a silent bank run
Try to make yourself useful
How to privatise the banking system

For less recent content: click here

Articles

2009-04-25T20:04:00.000-07:00

Sorry, nothing has been produced yet...

Main page

2009-04-25T15:52:00.008-07:00

To see this full-screen: click here Also, for comments: click here

Blogposts (more recent listed first)
The State can be legitimate if it uses (enforces) only negative rights
Positive rights rely on fear (and cowards) to be effective
Price fixing (and taxation) causes scarcity and starvation
It's not right that people are able to hoard an excess of land
Should each person have a minimum quantity of land?
The State should only intervene if there is a problem
Is the money created by the banking system real money or not?
Do we really have self-ownership?
The company excludes people from having access to itself
Internal trades within a company are not subject to income tax

For less recent content: click here
Articles for publication: click here

2009-04-25T15:52:00.007-07:00

ninetythree

2009-04-25T15:52:00.006-07:00

ninetytwo

Does selfishness exist?

2009-04-25T15:52:00.005-07:00

Why should we force (other) people to pay taxes?

The fact that we ourselves must pay taxes (or face the consequences) is not a sufficient reason to force other people to do so... What argument can there be to force other people to pay taxation? There can be no argument that to do so is in their self-interest, because how can we know this any better than they do? Even if it is in our self-interest (to make them pay taxes), which is debatable, it is not valid to force people to pay taxes for this reason (even if we are in the majority) because they have a right to govern themselves, as a consequence of self-ownership...

So, is it in the collective good to force someone to act against their wishes? Is it better for everyone if each of us is forced, for some period of time, to "work" for someone else? Does it make sense for us not to control our own time, but to have it owned (to some degree) by the collective and in return to receive a portion (our share) of forced labour to our benefit?

If this arrangement were (found to be) mutually beneficial there is no reason why people could not engage in this practice on a smaller scale, for example two people could arrange that for one day a week, half of the day would be spent with one acting as a master to the other's slave, the other half of the day (being) in reverse. If this arrangement is mutually beneficial for them then it is natural to think that such an arrangement would arise spontaneously in the free market. Yet, we do not see such arrangements.

It is not more efficient to force someone else to do something that we want (to be) done if we can do it ourselves... since we can assume that we will be similarly inconvenienced at some later time.

People can be trusted to (eventually) do what is right and look after each other without being forced to do so... it is for this reason that the species survives. If we leave people alone and do not force them to pay taxes they will find people to look after, if not, at least they will look after themselves and do no harm. It is legitimate for the State to react against people who are doing harm...

If people have other people that they want to help (perhaps they are motivated by a particular charity) then paying taxes for them is a serious inconvenience since they believe the money would be better spent elsewhere, according to their preferences. But how can we isolate the virtuous people from those who would not spend their money wisely? It is a false dichotomy to think that we can make such a distinction since any money spent is spent by the spender for what they consider (to be) virtuous reasons.

If we only want to spend "our" money on ourselves, who is the State (or anyone else) to object?

Tuesday 5th May 2009

We cannot know the value of bank credit until there is a bank run

2009-04-25T15:52:00.004-07:00

When people try to understand Fractional-reserve banking they generally spend considerable effort speculating on what actions the central bank (and the Government) would take in the event of a bank run. The reason they do this is that they need to know if the banks themselves will have sufficient "money" to pay out the exiting depositors. Without extra cash being created, the banks clearly will not have enough money to satisfy everyone. So if we think that credit is valuable today, it suggests an expectation that the cash required will be created when there is a run on the banks.

But this is only speculation, since we cannot ever know what will happen in that occurrence and comments by central bankers and Government officials make no difference (to the fact that we don't know) beyond offering an insight into what their actual actions might be. Even if they promise to print the money this is not (sufficient) evidence that they will (actually do so).

If they do actually print the money ahead-of-time then the banks will have enough cash in their vaults to pay everyone and this is no longer Fractional-reserve banking, but instead Full-reserve banking. If the central bank does this, they will also need to make it available to the banks as a loan, not an outright gift. It would still be necessary for the banks to repay the central bank when their loans are repaid... Or are we to assume that the loans made by the banks will never be (can never be) repaid?

There is no way to find out if the value of bank credit should be equivalent to cash, or if it is zero. Just as there is no way to find out if a bet on a horse race is worth something or nothing. The price of bank credit in the market suggests that the consensus opinion is that the required cash will be printed... If you disagree with this view there are plenty of people who will purchase your bank credit for cash.

It is a contradiction to think that, in the event of a bank run the Authorities will refuse to print the quantities of cash required (to compensate depositors) and yet also value bank credit... If you value bank credit you must also expect that the cash will be printed, unless it is only valuable to you because you expect to be able to sell it... to someone who either expects printing, or who values credit for some other (irrational) reason.

Unless we only value bank credit for its resale value, then to value bank credit and not expect that the Authorities will (be required to) print significant sums of cash in the event of a (systematic) bank run is a contradiction, because you will get no "money" for it.

If we imagine that bank credit cannot be sold until after the (inevitable) bank run, and also that we do not expect that the Authorities will print huge amounts of extra cash in response to a bank run, then why would bank credit have value? Some might claim that (in spite of these caveats) it still retains value because of the value inherent in the loans made by the bank and that holding credit presents the ability to receive the proceeds of these loans when they are repaid... But this is not a valid position because in that case you would not be owning credit but the loans themselves... Which won't ever be repaid because if the person borrowing the money was concerned with the need to repay the loan, it would not cause higher prices in the market, because the person would (rather than (feeling that they are in a position to be) spending the cash) pay down the loan.

So the pertinent question for someone who thinks that bank credit is (genuinely, not merely to sell to ignorant people) valuable not because of the chance that extra money will be printed, but instead because of the value derived from the loans made by the bank, is this: "Why does bank lending result in higher prices?" and more specifically, why does it cause higher prices when loans made outside the banking system do not result in higher prices... If they claim that loans made outside the banking system do result in higher prices, this must be demonstrated by them because there is no evidence to say that it does, why would it?

Bank lending causes higher prices because the depositor retains use of the money that has been loaned out...

If you think that bank credit is (genuinely, not due to the ignorance of other people resulting in a resale value) valuable for reasons not derived from the likelihood of extra money being printed, why then does bank lending result in higher prices (when lending made outside the banking system does not result in higher prices)?

Monday 4th May 2009

Fines (and taxes) replace the denial of rights, to the advantage of the State

2009-04-25T15:52:00.003-07:00

Do we have a right to live among others, or must it be earned?

If a criminal is punished with the imposition of a fine, which must be paid to the State, this does not restrict their access to "civilised" Society instead it provides wealth to the State in the form of the effort required to acquire the money to pay the fine. When a fine is paid, it is no different from ordering the offender to do some work (of a fixed quantity) for the State. This does not prevent the criminal from having access to the freedoms that others share, it only makes them waste some time working for the State.

It does not serve the interests of the injured party (or the rest of Society) if the criminal is not restricted from doing further harm, if they remain a risk. So, in that sense it is a useless punishment.

The interests of the victim (and the rest of Society) are served by being protected from the dangerous behaviour of criminals. We are not protected when a criminal is (only) made to pay a fine...

The rights of Society are not being met when a fine is imposed by the State... the criminal still has access to the infrastructure and environment that others share and nothing has been done to restrict their behaviour.

What good does it do to impose a fine when the criminal is free to continue their behaviour?

Our right to live among others should be taken from us if we are criminal... Or rather, the rights of the remainder of Society should be recognised when they seek to remove a criminal from their company. We should not have to (be required to) earn the right to live among others (innocence should be presumed) but we should (as a Society) have the right to remove a criminal if we are fearful that they are likely to commit further crimes...

Wednesday 29 April 2009

To impose a Land Value Ceiling is reactive, not proactive

2009-04-25T15:52:00.002-07:00

It might be argued that to remove land (or other property) from a person, by force, is an aggressive act and falls within the category of aggressive behavior. But to think this way indicates a lack of appreciation for the nature of the relationship between property rights and the State. Property rights are contingent on the consent of the rest of the community...

If a person owns property, it means that they hold a certificate which indicates that the State will agree to protect their property from trespassers who are not the owner. It means the State will support the negative right of the owner to remove others from the property. If the quantity of land held by this person is reduced it means that the State is now willing to protect a smaller area of land...

Whilst the (physical) certificate held by the landowner may not have changed, the State is no longer willing to prevent other people from entering (at least a part of) the property. The State will agree that you own only a reduced quantity of land, from what you thought you had previously... The landowner is informed that they now no longer own the land they thought they did.

The landowner is still free to claim, or even insist that the land remains in their possession but if the State does not agree it is a moot point. It is not "stealing" the land because it is only owned at the discretion of the State... It is not true that the land is owned by the landowner, only that the State has agreed to prevent other people from having (unwanted) access to the land.

Ownership is only in the opinion of the State. It means the State won't remove you, the State allows you to reside unmolested on that part of the land... A claim to ownership is a statement that, where ownership might be contested, the State is on the side of the landowner. The State (or Society) agrees with the landowner that the land belongs to them (the person claiming the land).

So a more accurate form of language when describing land ownership would be to replace a statement of the form "I own that land" with something like "Everyone agrees that I own that land".

If we claim to own the land, how can we be sure that everyone agrees with that view?

Then, to alter the arrangement of property rights held among the population, is a decision of the State or the controlling bodies. Since a decision of this kind cannot be considered aggressive (no physical action has yet been taken) then it does not violate the Non-Aggression Principle. But even if the decision can be thought of as potentially violent (that it is in some sense physical, rather than just in the mind) then to withdraw property rights can still be considered retaliatory if the landowner being deprived has committed a crime. It can (perhaps) be argued that the crime that has been committed is nothing more than to have been in posseion of an excess of land rights, the ownership (regardless of how it may have come about) is then a crime.

Wednesday 29 April 2009

What I mean by certain words and phrases

2009-04-25T15:52:00.001-07:00

For clarity, here is what I generally mean when using particular words and phrases...

Crime: Contrary to the more widely-used meaning (derived from laws set down by Government), I mean an action which combines both an object which has been harmed and a lack of consent.
Guilty: A person who has committed a "crime".
Inflation: This I generally use to mean an increase in the level of prices, rather than to mean an increase in the money supply. It would be better if we had a replacement word to mean an increase in prices so then "inflation" could be used to mean strictly an increase in the money supply.
Innocent: A person who has not committed a "crime".
Land: The natural resources of the earth.
Land slave: Someone who has become a "slave" due to their lack of access to the natural resources of the earth.
Land Value Ceiling: This is a State-imposed upper limit on the amount of "land" that can be owned by an individual, note that property rights are upheld by the State so they get the final say on who owns what...
Land Value Tax: This is a tax levied on the ownership of the natural resources of the earth at a rate according to the market value of the land.
Non-aggression principle: The preference that we desist from the initial use of violence, or the threat of violence.
Patronage: This means not only charity, in the traditional sense but also the agreement to engage in free trade.
Self-ownership: The concept that a person has a right to control their own bodies and the actions of their bodies.
Slave: This is a person who is not able to survive independently of the "patronage" of another person, or group.
State: A State is a body that punishes people for failing to comply with their wishes, a failure to act, even though they have done nothing wrong. Unlike locking up a criminal who has done something wrong.
Wage slave: Someone who has become a "slave" due to their lack of access to employment; I generally reject this claim...

Not all States are aggressive to their citizens

2009-04-22T20:13:00.000-07:00

Most Libertarians realise that the State generally uses force in an aggressive way to achieve its aims, it interferes in our lives and compels us to do things. It does not need to be this way, it is perfectly possible to have a State which protects property rights and security and yet does not act in a threatening manner. To understand how this is possible and to see the arguments behind this claim we need to consider the differing aspects of both negative and positive rights.

If I am prevented from doing something harmful, this is an expression of negative rights on the part of those affected because they are seeking to prevent me from engaging in an action. If I am compelled to do something, such as pay income tax, this is an expression of the positive rights of the State to make me do something which I would not otherwise do.

Positive rights are always aggressive in nature because the person subject to the imposition has done nothing wrong, they have not previously used force in a harmful way. They are being compelled to do something against their wishes for some reason other than to protect the security of others.

Negative rights are not strictly aggressive since the party concerned may be acting in self-defence. If a person transgresses on your property and you use force to eject them, this is not an aggressive act because it is retaliatory.

If a State uses only negative rights and uses them only against people who have done a crime, then the State is not being aggressive and it is able to protect property rights and the safety of individuals.

26 April 2009

Inflation is caused when debts are made that will not be paid back

2009-04-22T20:12:00.005-07:00

...providing we expect that the lender will be compensated for non-repayment of debt, which can only be with new money

Why don't taxpayers (usually) act in a more frugal manner in response to Government borrowing? It is because they do not think the debts will be repaid with money taken from them. They think the money will come from somewhere else, and since it is known that currency is no longer backed by a fixed commodity there is no reason (other than distaste) that the money should not be printed...

When the Government borrows money, the person lending has less money to spend but the Government feels free to spend the money even thought they have this new (debt) obligation... This is true also for personal debts outside the banking system: Unless we expect that the debt will not be paid back (and it is not true that they prefer being in debt to one person over the other, in which case this is not like-for-like debt and a gift has been given in the form of less vengeful creditors) there is no reason for the borrower to consider themselves to be in a better position to spend the money.

Lending outside the banking system does not cause inflation because, whereas the debts might not be paid back this will result in (permanently) less purchasing power for the lender since they will not be compensated.

If money is loaned that is unlikely to be paid back, this causes inflation when the lender does not feel troubled that the person being loaned money is not credit-worthy. If you aren't concerned that your money has been loaned to a person not able to pay you back this means that you expect to be compensated by another source.

Government borrowing causes inflation because the lender (the bond-holders) still think that they are going to get their money back (which, if it is monetised, they will do so) even though the borrower is shoddy, fickle and indolent*. When the lender realises that they are not going to get their money back, in the event of a failure to print the required money... this is when we see a deflation of prices as Government securities lose their value.

Government borrowing causes inflation because the lenders think they are going to get their money back and (even though) the Government is not a reliable borrower, without (unless they are able to) resorting to the printing presses.

The same is true of the banking sector; deposit-holders still think that their money is reliable even though it has been loaned out to someone else... Regardless of whether they trust the borrower, (even if they do trust them) they still do not suffer the (temporary) lack of purchasing power which would typically result from money being loaned out. This may be because either they are ignorant of the process or they trust the Government guarantee (of bank deposits). Because deposit-holders (and everyone else) treat bank deposits as though they have value, lending of this kind causes inflation.

It will be deflationary when people with money think that the Government will take their cash from them to repay the Government debt... should they ever have cause to think that.

*But then, are they really all of these things, or instead acting out of (perceived) self-interest within the environment... At least they know that the lender will not be out of pocket, except for inflation of prices.

Monday 27 April 2009

The State can be legitimate if it uses (enforces) only negative rights

2009-04-22T20:12:00.004-07:00

Unless you have done a crime you should be left alone...

It is perfectly legitimate for any Society to apprehend a violent criminal if it is agreed among them that to do so is beneficial... This would be an expression of negative rights because it restricts the freedom of the offender, thereby protecting the innocent.

It does not make sense for a Society to agree that positive rights are legitimate because, by definition people are being forced to act against their will... Some of them (who are innocent) must not agree.

If we are innocent until proven guilty then negative rights such as the Income Tax are illegitimate... we should not need to pay taxes to stay out of prison.

Negative rights are valid because they allow people to "go about their business" without being hindered by unwarranted violence... It also has utility (coincidental?*) in that together we are more efficient if we do not need to protect our belongings from disruption.

It is (or might be) better for everyone if the State protects property rights by implementing negative rights... It cannot be said to be better for everyone if people are made to act against their wishes... We do not know that a monarch (or similar) has a better idea of what to do than anyone else... but we do know that there is no reason why a person should not be able to protect themselves from aggression.

A State which uses negative rights is a peaceful State, one that uses positive rights is inharmonious because people are constantly being disrupted from doing what they would otherwise do.

It is not legitimate to presume that we (all) owe a debt to the State, for what is the State but an extension of ourselves?

Why do we owe the State anything, certainly if we are innocent?

*Why is it better (for those involved) if we do not enslave one-another, does Nature have a preference for (individual) freedom... and hence equality?

We are each an element of the species as a whole and so if we individually suffer, then we must do so collectively... If one individual intimidates the other to their own advantage (and the other retaliates) this is not good for the species, to a great extent. At some point we must be left alone... it cannot always be a fight to the death, it is (often) better for the individual to fight another day, rather than committing to conflict. Property rights are always a negotiation... what is best for the group, (in the context of conflict with other tribes)? And in the context of conflict among the groups within the tribe?

Saturday 25 April 2009

Positive rights rely on fear (and cowards) to be effective

2009-04-22T20:12:00.003-07:00

People only respond to claims for positive rights out of fear, not because they consider them to be valid... or for any other reason. A tax rebel is a person who refuses to pay taxes...

A claim to possess positive rights is the claim that you have the right to make someone else do what they would rather not do... So once we understand that the person would rather not perform the action (such as paying taxes) we know that the person is acting under duress. They are afraid (fearful) of the consequences of failing to perform the action.

The threatened consequences for non-compliance have not yet been enacted, no force has yet been used; so far it is entirely psychological. Once force is actually introduced then it becomes a question of the negative rights of each party... who has the right (or might) to force the other to do as they wish. Non-payment of taxes results in a custodial sentence, at which point the negative rights (the right to roam, to freedom) of the individual are actually threatened... of course this (to use force) is illegitimate (in this case) because no crime has been committed...

Those who pay taxes (to the State, or similar) can be said to be "Tax Cowards" because they act in a way that they would otherwise not do, out of fear for the consequences.

http://www.yourdictionary.com/coward
coward –noun
a person who lacks courage, esp. one who is shamefully unable to control fear and so shrinks from danger or trouble.

http://dictionary.reference.com/browse/coward
coward –noun
a person who lacks courage in facing danger, difficulty, opposition, pain, etc.; a timid or easily intimidated person.

Every positive right is a threat (to use force, or violence)... but it is not a threat not to do a crime because that would fall under negative rights. It is a threat that, even though you are innocent, you are obliged to perform some action (which you would rather not do) for a reason that has not been (legitimately) established.

The Government uses psychology to make people tax cowards...

Saturday 25 April 2009

Price fixing (and taxation) causes scarcity and starvation

2009-04-22T20:12:00.002-07:00

What happens when the Government fixes the price of a commodity is that the person seeking to sell it (at the market price) will desist from doing so. In effect, transactions in that commodity have been made illegal.

Anyone producing a commodity which is subject to price fixing will cease to do so... For those seeking to purchase the commodity, it becomes very expensive.

Taxation (and price fixing) of employment destroys (the availability of) jobs. Taxing transactions destroys trade and commerce.

A transaction between consenting adults should not be subject to interference from the State... who are they to say I am being exploited? What has it got to do with them?

Where is the crime? If I am innocent until proven guilty then why do I owe a debt?

Saturday 25 April 2009

Update: Further, why should a person who earns more be forced to pay more, as in progressive taxation? (Sat 25th April'09)

Update: The value of having a skill is diminished by income tax... If we know that the income derived from any hard (or skilled) work is to be extracted from us by means of threats of violence we are less inclined to work and develop the necessary skills. By reducing the incentive for people to develop skills, we must understand that we reduce their ability to assist other people, and themselves. It is to my advantage that other people are skilled (even if the skilled person is acting entirely within their own self-interest) and the Government gets in the way.

If other people are more talented than me, this should be regarded as a virtue because they will be able to do more to help me... I should not regard this as a bad thing due to increased competition.

Their skill gives you the opportunity to focus on other needs, to provide an even more luxurious product. If I make watches and suddenly watches fall free from the sky I should be pleased, not disappointed because it allows me to concentrate on serving people in another way. (27th April'09)

It's not right that people are able to hoard an excess of land

2009-04-22T20:12:00.001-07:00

People should not be able to own too much land

It's not right that some people (are able to) own an excess of land, according to value...

People who have generally been regarded as being "worthy" rich, (such as celebrities) derive most of the their wealth through Government force with the enforcement of copyright laws... They are "copyright millionaires". They derive their wealth from the claim that information can be owned...

The act of discovery does not confer ownership. What is the harm of copyright infringement? Where is the crime?*

Aside from the copyright millionaires, there are very few people who have amassed a great fortune as a result of other efforts, many are landowners who gain wealth with the assistance of the State.

So then, it is legitimate to argue (but not for this reason...) that a person should not be allowed (by the State) to occupy an excess of land, according to value. It's not right that some people are allowed to own so much land, according to value. It is being hoarded by the wealthy... partly for rental income. Landowners and landlords create problems because they stifle economic activity by making those without land dependent on cheap rents.

Is it right that a person "should" be able to make an income from being a landlord (of land, not buildings and property)? All employment is an exploitation of the circumstances of the person seeking (to perform) labour... it is wrong, not because of nature of the transaction (which is voluntary) but because of the events which lead up to the disparity in wealth. Income tax is not a good solution to this problem, better would be land reallocation.

If the tenant has done no crime, then being a landlord is "wrong" not because of the actions of the landlord, but because of the actions of the State in recognising (and upholding) the land ownership disparity... We have a right, not to an income, but to work if we are deprived. In response to unemployment, the Government "should" introduce a Land Value Ceiling...

The State enables a large section of Society to be nothing more than rent-seekers... The State encourages rent-seeking (behaviour) by protecting the rights of those who have an excess of property.

*What is the utility in assigning an "owner" to intellectual property? It results in the creator being rewarded but at a cost to everyone else... Does the first person to have suggested the concept of intellectual property "own" that concept, and if so are they entitled to a fee every time that another person is paid royalties?

Friday 24 April 2009

Should each person have a minimum quantity of land?

2009-04-22T20:12:00.000-07:00

What happens (if) when we have no (fiat) money?

How to best allocate property rights?

If we envisage a State which acts not proactively, but in reaction to crimes then there will be no reason to have fiat money; we would not need it for taxes. Punishments would be apposite to the crime that has been committed, for example a speeding fine will result in prison or being restricted from use of the road for a period of time... So too for other crimes such as owning too much land, or having been violent.

Money would no longer be a store of value (it would be difficult to store value)... We would have wealth derived only from our knowledge and the environment surrounding us. Whatever we produce (if we produce anything for trading) we would likely exchange fairly soon after it is produced. It would be a more hand-to-mouth existence... Whatever we wanted we would acquire in the short term.

If we had a Citizen's Basic Rental Income you wouldn't be able to sell your property once it is below the State-mandated minimum... if you could not survive without doing so, charities and other organisations will step in (as they do in similar circumstances now...). The State would not recognise (without checking) that the purchaser now "owns" the property... they would need to verify that the seller has other, minimum (rental income) property... It would not be possible to purchase land (property) from someone who has no other property...

So each citizen would have a minimum of Land Value; even if they are incapable of farming the land (due to physical decrepitude) the citizen is able to rent the land (out, to others) for an income of some basic level...

An innocent person should have a minimum level of property, even if they have been "lazy"... if you have done no harm you have a right to a minimum of property. You should not be required to use violence (or force) to acquire a basic quantity of land. If they (the citizen) do not want the land then (perhaps) the State can "use" the land by allowing someone else to grow crops on the land (and the State is to give the rental income to charity?), but it still belongs to the citizen.

This prevents any individual from being fully "exploited" by the market (or other, more coercive forces).

If the citizen goes missing the land falls into the hands of the State, until the person shows up again. After a reasonable period of time (after which we can assume the person has died), the land can be "sold" (reallocated) by the State.

Any person can then claim a certain, minimum quantity of Land Value. If the State can show that they already control their (minimum) fair share of land, they will not be given (any) more land for free.

If the citizen claims the land is worth less than the minimum, the State could offer to buy it at the minimum price and re-allocate the individual in land purchased by selling the original plot. The citizen would not be given the option to move anywhere of their choosing, they would be given something purchased at the minimum price. Given that the land minimum price is at the discretion of the State, the individual would have not much bargaining power. The State would reward those people who it (the State) considers to be at the bottom of the list in terms of land value. They would identify those individuals independently, only rarely would they respond to individual complaints, since it would be clear (especially in reference to neighbours) who has the least Land Value.

So each citizen "should" have a Citizen's Basic Rental Income (or a Land Value Floor) by way of owning a minimum quantity of Land Value, the "rental income" would be accrued to them in the normal practice of occupying the land (synthetically paid to the landowner by the tenant which are both the same person).

Thursday 23 April 2009

Update: I have received a detailed comment in response to this blogpost, which for some unknown reason did not show up in the actual comments, only in my email. [please note: this has since been resolved] I have copied the comment below (in black) and my responses to it in beige, or fawn.

1. I think you should structure the blog with basic arguments first. That is, you should first explain why you want to eliminate money, before considering the implications regarding land ownership. If no argument is basic, (e.g. all arguments make a package), you should start with a summary of all the ideas and how they fit together. Most people like to understand things a bit from the start, rather than collecting a lot before starting to understand. There are other possible structures, for instance start with the problems, then explain your aims, then explain how to get there.

I accept these criticisms... since I accept them, I am not going to say too much about their content. This principle also applies to the remainder of my response: if I haven't given you much feedback on a particular point it is because I do not see too much wrong with it.

2. What use is it to envisage a state with no (fiat) money? For the last few thousand years all states of any size have operated with money. This "meme" has shown extraordinary fitness. Even if a good case could be made against it, things would hardly change. The main argument for money is that it simplifies trade. People only revert to barter when they can thus avoid taxes. It makes things easier to understand and calculate if there is one standard for measuring value. At least there should not be too many standards. The € was a jump in the right direction. It is important that the standard should be stable. In fact it seems to be useful to have about 2% inflation. This encourages people to invest money, rather than keeping it in a safe. It is hard to measure the inflation exactly. The same number of pounds now buys much more computer power than 50 years ago, but much less land in London. Theatres and concerts have remained expensive, but technology has brought us TV etc. as good cheap alternatives. Extreme inflation is caused by states that "print" too much money (e.g. Hitler Germany and Zimbabwe now). Except for the €, every significant currency is stabilised by a single state.
2% inflation is also good because it introduces a disguised wealth tax. 2% of the wealth gets taxed as if it were real income.

I should have been more explicit in that I mean the absence of fiat money in particular, not money of all types. Without fiat money people will adopt another type of money just as cigarettes become currency within prisons. I don't see a reason to object to many types of money, what's wrong with too many standards?

3. Similarly, all states are proactive, especially the more successful ones. For instance they organise education for children of the poor (or stupid), which is good for all. The alternative is a ruthless selection process, where the uneducated live by violence until destroyed by the others. Such eugenic methods are inefficient. We can do things more pleasantly.

I would agree that all States currently in existence are proactive, but I do not agree with a person who holds the position that they must necessarily be. I have written a blogpost on this topic, it is one of my better posts, in my opinion because it is well structured and concise. If you are interested it is here: http://economicsreform.blogspot.com/2009/04/eightysix.html

I disagree that State-imposed education is good for all. I think the standard of education offered by the State is woefully poor and does not seek to enlighten the children, rather make them complicit to the status quo.

4. Prison for every speeding offence would be rather draconian. Road use restrictions would be hard to organise and to make just. Here too the advantage of money is seen. It is similar to the barter problem.

What happens, though when the offender refuses to pay the fine? If a crime has been committed (and perhaps speeding is not actually a crime, without the crash?) what difference does it make if the person must then pay a fine, the crime is done, it has now happened? Is to engage in "civilised" Society a privilege, if it is then this has not been denied to the person who has only been punished with a fine...

5. "Hand-to-mouth" might work for a few people. Without investment, the world is capable of supporting only a small fraction of the current population. The rest would starve. That would have advantages for most other species. Is that what you are aiming for?

Without a fiat currency, it becomes difficult to store genuine wealth. Money can only have value if it desired by other humans and so if money is not imposed by Government fiat people will be free to choose whatever they like as money. However, if they are living a plentiful lifestyle (as I envisage) they will not be prepared to do much work to acquire more money because they already have most of their wants satisfied...

6. How can you have a "Citizen's Basic Rental Income" when there is no money? Why here the word "Rental" and the association with property? It would be simpler just to pay everybody a minimum income.

It is clear to me, reading this passage of the blogpost back to myself, that I was far from sufficiently explicit in explaining this part... In my mind, I associate property rights and rental income very closely. As far as I am concerned, if you own land then there is a rental income associated with it, even if it is not fully exploited by the landowner... All life is derived from the land and so if you own your own land you derive a rental income from that land even if you consume that income yourself.

So, for instance, if you have more land than you need, you can rent the land out for someone else to grow crops and sell the proceeds at market. If you farm your own land and consume the goods yourself you still have rental income derived from the ownership of the land.

Even if someone does not receive any payments from the State, they would still have a rental income (according to what I am trying to say here) if they have property granted to them by the State.

7. If everybody had this basic income, why would some be unable to survive with it?

I had in my mind someone who is not capable of farming the land granted to them by the State, a drug addict perhaps. As mentioned above, the Citizen's Basic Rental Income should be clarified in meaning to be nothing more than property rights, not a payment in itself.

8. Where will the charities get their money from?

The charity can help out by offering to farm the land, or simply by providing food.

9. How will the land value be decided? Some acres are worth more than others.

Yes, and this is difficult (to get prices) without a universal type of money. Essentially, the value would be based on the market price, remember that whilst the Government will make sure that you have a minimum of land, trade in land still goes on... It will be clear which people have land which is worth less than that surrounding them, these people will be offered more land as it becomes available.

10. If the population rises, where does the extra land come from?

If the population becomes larger than that which can be sustained by the natural resources of the Planet, or Country (if other Countries won't let us in) then there is no argument to live peacefully and no rules apply, we descend into a competition of brute force.

11. Land, as a basis for the currency is special, in that there is only a fixed quantity of it. For instance more gold can be dug up when the effort is worth it.

Yes.

12. I see no point in each person having a minimum piece of land, unless all other personal property is similarly restricted.

The argument for having a minimum piece of land is that a person, who is otherwise innocent, relies on the patronage of others to survive even if there is plentiful land available. When I say "patronage" here I don't mean only by direct charity, I also include free trade. So if you have insufficient land, you cannot live without the co-operative actions of another person and cannot live independently. This seems unfair although I do agree with the thought that to receive land only for the achievement of being born might be less than ideal...

The distinction between land and other types of personal property is that, as you say earlier, there is only a fixed quantity of it... If someone buys your non-land property, more of it (whatever the property is) can be constructed and so a paucity of this type of property is not so threatening for an individual. In practicality of course, there is a blurring of the two types of property especially when we observe that one can be freely traded for the other.

If no one will cooperate with them, a person is helpless without land, they are not so helpless if they have land and (must) rely on their own ingenuity to construct non-land property such as a Tractor to farm the land. At least in the latter case they have a chance...

13. Strangely, your proposal is very proactive. Do we really want the state to control where people live? How do you want the world's people to live, or are you only concerned with one country`?

When talking about property rights and specifically land rights, I am generally referring to the rights as they are recognised by the State. If someone else thinks that they own land... that (their opinion) is usually pretty irrelevant if the State disagrees with them. So, as far as property rights are concerned, the State will be acting reactively even if they are protecting a minimum of land: Someone will be ejected from the land if the land does not belong to them and it is claimed by someone else. This is why I mentioned that "The State would not recognise (without checking) that the purchaser now "owns" the property... they would need to verify that the seller has other, minimum (rental income) property... It would not be possible to purchase land (property) from someone who has no other property..." it means that if someone has insufficient property, other people will be excluded from their land (reactively, I would argue...) to make way for the rights of the landless person.

This can also be viewed as the State withdrawing the commitment to protect the (land) property rights of those from whom the land is being taken, so in that sense it (can be argued that, perhaps it) is not proactive but reactive...

The same rules can apply in other countries and I generally think (in this context) Globally without too much regard for national borders... If different countries choose to defend themselves against each other many of the same principles apply between them that are (similarly) established between people within a State.

There was a time when land was the main determinant of wealth. Mohammedans consider it a sin to sell land to unbelievers. Even as late as Hitler, he thought it worth starting World-War 2, in order to get more land for Germans. Currently, there is enough land to feed the world, population, so it is not seen as so valuable. Manhattan is not valuable for the land, but for the buildings and people there. People drift more and more into cities. but really fertile land is in rather short supply. The world population looks like stabilising in the next 50 years, but agriculture is very dependent on (cheap) oil for fertilisers and fuel. To avoid humans starving as oil runs out, we need various measures, such as renewable energy, new crops such as algae, and people eating less meat. Of course people are starving right now, but this is due to wealth inequalities and distribution "problems", rather than a world shortage of food. For centuries technology has been advancing fast enough to keep pace with population growth. I include economics (money and capitalism) and politics (representational democracy) as part of this advance. (Of course nothing is perfect. Evolution is needed and even reform, but nothing drastic unless there is a drastic problem). For instance crops could support more people than hunting. This advance has got faster and faster, but there is a limit to what speed is possible. We need to fix the energy problem before another jump in population.

Of course different countries have different situations:
- The developed countries have no population growth except through immigration. They make use of global cheap labour and an unfair share of natural resources, but could manage without these after a period of readjustment. They can organise a slow improvement in life, (except that it is not quite clear what is an improvement).
- China has no population growth. It is moving towards the situation of the developed countries, but is encountering problems.
- India is in a situation like China, except that it has a fast growing population. This means that the majority of its people are not improving their lives. It has more democracy, but this hardly affects the bulk of the population.
- South America seems to be becoming more socialist and better, but is rather unstable.
- Africa is in a mess, with various corrupt dictators. Countries that seem OK go down the drain (Zimbabwe, Kenya).

This is a normal evolutionary situation, where only the fittest systems will survive, but there may be different fitness niches. New systems may spring up.

True Christians and socialists should deplore how little is done for poor countries. Cynics will say that they should look after themselves. It would be nice if the poor countries could catch up so that their population growth would stop. But it is more likely that the current mess will continue.

Thanks for your comments.

Tuesday 28th April 2009 (comment received on Monday 27th)

The State should only intervene if there is a problem

2009-04-15T19:52:00.004-07:00

The State (using force) cannot perform an objective good

The State should do nothing unless there is a need to do something.

The reactionary State...

It might be possible to envisage a State which acts only in reaction to the behaviours of individuals, so it would not be proactive... If a person does not execute a behaviour which is against the wishes of the State, the person (in that case) would not be hindered by the State.

So for example, Income Tax (unless it is decided that to trade voluntarily is a bad thing) would not attract any fines or punishments... The State would not be proactive, in seeking to do good by acquiring taxes only reactive in seeking to prevent harm. This would be on the assumption that, if left alone, most people will not cause harm.

We cannot say for certain that any action perpetrated by the State (or anyone) is a good action, and so we should do little that disturbs others unless we are doing it for the cause of someone else. We can do very little to help other people, other than to protect them.

The State should not seek to help people solve their problems, instead it should clear away restrictions which stand in their way. For example it should not help a person find work by passing laws encouraging labour, it should instead get rid of the restrictions which prevent the person from supporting themselves such as removing someone who is violent (or violently defends land which is not theirs) from their neighbourhood.

The State can do more good by being aggressive toward people who are harmful (and preventing further injury) than it can by being aggressive toward people who (even the State agree...) have done no wrong.

The State is aggressive towards innocent people... not the guilty. People who "earn" a lot of money are not the problem... Income tax would be a good idea if people earning money are the problem in the Society, but they are not. Perhaps rent-seeking and landlords (and landowners) are the problem?

What is wrong with money changing hands?

The State should leave people alone unless there is a problem... and they have been invited (by someone) to solve it.

If you haven't done anything wrong why should the State attack you? Shouldn't the State attack only harmful people? We know that to trade your labour is not wrong and we also know that it cannot be (has not been) shown that money is better (spent) in the hands of the State...

So, "should" the State be able to (have the right to) attack you (violently) for no reason? And if not, why then do we have the Income Tax?

Thursday 23 April 2009

Is the money created by the banking system real money or not?

2009-04-15T19:52:00.003-07:00

Most people think that the money created by the banking system is real: If you ask them how much money they have, they will include the money in their bank account, even if their bank is operating under a fractional-reserve regime... meaning that not everyone can get their money back if they all ask for it at the same time.

If they don't why would they leave their money on deposit? Laziness? Indifference to their circumstances in a post-crash world?

Because of this, when the bank creates extra money it results in higher prices because when a greater number of people think that they have money, they will pay more for goods. People will accept "bank account money" as though it is real (not only the purchaser, but also the seller of the goods values bank credit).

But is it real? Can the bank be relied upon to give us our money back? The bank relies upon the Government to refund our deposits, so we must ask whether the Government will provide sufficient funds in the event of a bank run... it is likely that, although they have promised to do so, the Government will not return all the promised deposits. It might be expedient for them (the Government) to explain that to return the money to the affluent depositors is a luxury that cannot be afforded in difficult times. Instead the money will go to worthy Government officials who will spend it wisely on the needy... this results in hyperinflation (of the (narrow) money supply) but results in prices lower than they were before the bank(ing) crisis.

In the sense that everyone thinks that bank credit "is real" then it is so, but when the value is truly tested in a banking failure then we will (may very well) find that it is not so real...

The money created by the banking system is not real, even though most people (apparently, according to their preferences as expressed in the market of prices) think that it is.

Thursday 23 April 2009

Do we really have self-ownership?

2009-04-15T19:52:00.002-07:00

Do we really have self-ownership, or only the right to exclude others from our person?

The right to self-ownership means that we have the right to do anything we want with, and control our own bodies. It means that we do not have the right to tell someone else what they should do with their person...

http://en.wikipedia.org/wiki/Self-ownership
Self-ownership (or sovereignty of the individual, individual sovereignty or individual autonomy) is the concept of property in one's own person, expressed as the moral or natural right of a person to be the exclusive controller of his or her own body and life. According to G. Cohen, the concept of self-ownership "says that each person enjoys, over herself and her powers, full and exclusive rights of control and use, and therefore owes no service or product to anyone else that she has not contracted to supply." (as at 18th April'09)

http://en.wikipedia.org/wiki/Self-ownership#Origin_of_the_concept
Some have traced the concept of self-ownership to certain individuals such as John Locke, who said, the individual "has a right to decide what would become of himself and what he would do, and as having a right to reap the benefits of what he did." Or, as stated more succinctly by Locke, "every man has a Property in his own Person." (as at 18th April'09)

If we have self-ownership (we have the right to control our own person) this denies positive rights (which rely on the ability to be able to tell other people what to do...) and we have only negative rights. Positive rights defined in this way are denied by self-ownership when it is defined to mean the right to control ourselves, but it is also denied when self-ownership is defined to mean the ability to prevent anyone from controlling ourselves and our bodies...

Just because we may have the right to prevent others from controlling our bodies does not strictly imply that we ourselves have the right to control our (own) bodies.

But what are the implications, from a "rights" perspective of this distinction? The semantic difference lends itself to the consideration of issues concerning (elected) self-harm and suicide... We certainly have the right to control ourselves in what might be described as a constructive act, but do we have the right to be (self) destructive?

If we disagree that our actions are harmful, then it is a matter of opinion that we are causing harm to ourselves... But if we agree (with other people) that our actions are (or will) cause harm to our own person (our own body), do we have the right to engage in that act?

Do we only have the right to self-ownership to the extent that our actions are (considered by ourselves to be) helpful? Do we not have the right to hurt our own person, just as we do not have the right to hurt others? So we might then not have the right to (deliberately) hurt ourselves?

Do we only have the right to do that which promotes life, which means to live according to our (positive) evolutionary instinct?

Saturday 18 April 2009

The company excludes people from having access to itself

2009-04-15T19:52:00.001-07:00

A company is able to make a profit (for the management) by excluding other people from having access to its own infrastructure...

A person (initially outside the company) could make a living by working within the company, but in a sense being self-employed, not answerable to the boss. But of course they would not be "allowed" to do this because the company has the right to restrict their access to its internal structure and no suitable internal market exists... We do not have a "right" to work... It is more valuable to do a particular form of work within the company than outside of it...

What is it that the company has which makes tasks within it more valuable (to achieve) than similar tasks outside of it?

Clearly, if a company excludes people too much from having access to its infrastructure (at the right price), the company will lose out because other companies will take advantage... But generally they are able to keep other people out and retain the profits for themselves.

They might have advantages which are derived from the coercion of the State, or they might have advantages of being well established in the market, such as customer recognition and brand awareness... a trusted name. Or they might have a well-oiled and efficient machine. The only thing of value (other than State favours), that a company might have (which can be sold, and is more than its component parts) is recognition and trust... they have a high status.

Friday 17 April 2009

Internal trades within a company are not subject to income tax

2009-04-15T19:52:00.000-07:00

A company (or Corporation) acts as a tax haven to its employees because internal collaboration is not subject to Income Tax... Whether it be direct instructions from a boss (to an employee) or competing favours (between employees), each company has an internal market of transactions which enables the organisation to be more productive. Income Tax is only paid only on the transaction between the employer and employee...

A self-employed individual must pay tax on each of his (or her) transactions with other businesses... For example if two self-employed individuals collaborate in selling a product by each specialising (exclusively) in a particular aspect of the construction (production), then each would be required to pay income tax (to the State) on the payment made to the other so that they are able to accomplish their particular task. When the product is completed, each person is able to sell the product on the open market (at a profit) and they must pay tax on this income as well.

If those two people joined together to form a company, they would not need to pay income tax on the transactions which occur between themselves, they would only pay tax on income generated by the company as a whole... They would only pay income tax on the profit, whereas before (as separate individuals) they would need to pay tax on the internal "turnover" transactions.

A corporation pays tax only on the income after expenses, which is "profit" but this does not take account of all the internal transactions that have taken place. If a self-employed person spends money on transactions with another small business, that expenditure is not tax deductible, unlike the (internal) expenses of the Corporation... only business expenses are tax-deductible (not personal spending) and it is presumed that all internal transactions within a large company are of (or similar to) this type. Even if a self-employed person is able to claim the tax back as "expenses" (a rebate, after keeping the receipt) the recipient must record the payment (at least, even if the expenses can be deducted from it) as income...

Normally, income tax is paid by those who have extracted money from the economy, not by those who have made no profit. Within a company, even though there is significant collaboration, because there is no "winner" (no internal prices, all by consent and approval) there is no tax to be paid.

In the same way, voluntary favours which do not attract a fee or payment, are not subject to taxation. We are able to "write off" charitable contributions as a tax-deductible expense and we are not expected to pay tax on something which has been given to us as a gift (except in certain situations when a person is close to death). But individuals outside of a large organisation do not collaborate in the same way (to the same extent) that those within an organisation do... because we are not being paid.

A person is more productive within a company than outside of it: they can (and do) earn more for their employer than their salary and their salary is more than they could otherwise earn outside of the company... Being a part of a company gives the employee access to a market of transactions which enables them to trade more efficiently (even after paying the price of having an employer; entering into a hierarchy). Because the employee will not pay an outsider to assist the company (unless they want them to help them out, in a situation which is not known to the boss, for example to pay to replace a damaged machine which the boss does not know about and the employee is responsible for...) only the boss will pay an outsider to help the firm. All transactions within the firm are to help the boss, even transactions between subordinates are to assist each-other in helping the boss. The Corporation offers efficiencies because teamwork is rewarded due to (the) economies of scale.

Two people within a company will (instinctively?) help each other (as part of a team, or only because they have been asked to do so by their boss, not by an equivalent employee?) whereas they might not do so in the "outside" world... They are being paid for their on-going loyalty and obedience, not for (the accomplishment of) a specific task.

An employee is not being paid to run the company (to be a proxy "boss"), because if they could do that they would do it alone. An employee is being paid because they can be exploited... Work for a company is different to (less agreeable than) private-sector contracts between equals, because a salary pays for an on-going commitment, it does not pay for a specific task. The employee is a "wage slave" from whom the employer can extract even greater value than that is given by the employee (by exploiting their disadvantages). The employer has the advantage (resulting from Government favours perhaps?) that they are able to make more money from the employee than they are (otherwise, on their own) able to make for themselves...

Friday 17 April 2009

Update regarding "wage slavery"... I reject this term, unless to the extent that a corporation has received favours from the State or similar coercive monopoly... Unless it can be shown that a person has been unfairly restricted from providing for themselves, no corporation owes a living to anyone else. To accuse someone else of creating "wage slavery" we must identify the crime: what is it? If it is only that the corporation has been able to establish a dominant monopoly (outside of (beyond) State assistance) because of otherwise reasonable business practices then (in rare cases) action may be justifiable, but we cannot make the case that a crime has been perpetrated by the Capitalistic system as a whole.

Instead, it is more reasonable to talk about "land slavery" which describes the monopolisation of natural resources, either by fair means (unlikely) or foul... (Sat 18th April'09)

My contract (with the State) is not that I will do good, only that I will do no harm

2009-04-08T21:23:00.007-07:00

I do not recognise any positive rights belonging to the State, only negative rights and the Social Contract should reflect this...

http://en.wikipedia.org/wiki/Social_contract
Social contract describes a broad class of theories that try to explain the ways in which people form states and/or maintain social order. The notion of the social contract implies that the people give up some rights to a government or other authority in order to receive or maintain social order. (as at 16th April'09)

If we have any (implicit) contract with the State, it can only be a contract which promises that we desist from doing harm... It can be argued that by living in the jurisdiction of the State we benefit from the advantages of State protection of property rights and that as a consequence we have an obligation to the State, to repay this favour. But it should not be the innocent person who suffers when property rights are (unfairly) violated, it "should" be the criminal. Therefore, the person who takes more than belongs to them, should pay the fine (by giving up the property) and this would be so that the State (representing "the people") can defend the (negative) property rights of the innocent...

Eventually a person could be expelled from the jurisdiction of the State, or be imprisoned. The costs of enacting the law do not fall on the innocent, instead they fall on the guilty party and if they cannot pay, the State (acting to defend property rights) must be funded by charitable donations or volunteerism. The State does not have a right to make the innocent pay for its action against their will... They do not have a right to force people to support them; although they do have the right to use force (in self-defence) against people who have opposed the (reasonable) wishes of the State. If property rights have been violated, the State may act to assist the victim, but they have no right to later demand a payment from the victim (unless they entered into an explicit contract). The Police (who uphold property rights) should be funded voluntarily, they should be like a charity or an organisation of vigilantes. It is wrong not to give a choice to the "taxpayer" if they are innocent, only the guilty should be forced to pay (by losing property rights). It is legitimate (by this measure) for the State to remove property rights from citizens for no other reason than that they hold (an excess of) property, even if they have done (no other) crime. It is wrong to force people to do things...

If no one chooses to "protect" the property rights of the citizens, then so be it...

If we force payment of taxes in exchange for the promise to protect a person's property, even if the threat (of violation) is legitimate, this is no different from any other protection racket. If they claim that our safety is a consequence of their actions (and that we must then pay...) this is a fallacy because if the payment is withdrawn, what are the consequences? If the protection is then withheld (and we are free to do so) then the Government are nothing more than a private (voluntary) security firm... and this is a lie because we are not free to withhold payment. The Government are perfectly entitled to withdraw their protection from those whom prefer not to (be forced to) pay taxes.

It might be possible to establish a Social Contract with the State which recognises only negative rights, not positive rights: such a contract would be similar to a promise known as a restrictive covenant...

http://www.gillhams.com/dictionary/228.cfm
Term: restrictive covenant
A promise which is negative in nature. For instance, as a condition of being offered an position, an employee may be required to enter into a restrictive covenant not to work with a competitor of the employer for a specified period after the termination of the employment contract.

In this way, the citizen would be entitled to no protection from the State other than that which would be voluntarily given (they can take out private protection) but they would otherwise be free to do as they wish provided they do no harm. Their (the citizen's) restrictive covenant would be to refrain from aggression against either the State or any of its citizens... The State would similarly promise to do no harm to the citizen, unless and until the citizen performs a crime.

We have no reason to be obligated to the State for services which we have not (got) the ability to refuse... We would only have an obligation if we had previously agreed (explicitly) to perform a task in consideration of a contract. We have, none of us, agreed to such a contract... The State should seek the permission of the citizen before it acts in such a way so as to incur (create) a liability to the citizen... we should pay (Income Tax) once we have agreed to the method by which the money will be put into use. We should be able to refuse if the Government doesn't adequately explain how the money will be spent, to our satisfaction.

We should only be forced to pay if we are satisfied with their service... We keep paying but the service doesn't improve.

Thursday 16 April 2009

Positive rights are a mistake on the part of the person who complies

2009-04-08T21:23:00.005-07:00

To threaten violence isn't really a crime... and so therefore to oblige another person's claim to positive rights is a choice made by the "victim".

It is a mistake to comply with someone who claims that they have a right to instruct your actions (that they have positive rights)... They don't have positive rights unless you have agreed (signed?) a contract...

It is not a crime for the State to request Income Tax because they are making a claim to positive rights which can only be substantiated with the threat of violence or by your complicity in the "Social Contract"... If you abide by the Social Contract then it makes sense for you to agree to pay Income Tax. If you reject the Social Contract, but continue to pay Income Tax, that is not the fault of the State since to threaten violence is not a crime (it is freedom of speech).

So, in neither case does Income Tax violate the Non-Aggression Principle (since we now exclude the threat of violence from the definition, only actual violence).

So for that reason positive rights ("Give me your money or I will kill you") are not supported, but neither are they a crime... They are a mistake on the part of the person who complies. If someone threatens violence, the response should be to ignore their requests but to make their statement known to as many other people as you think is required to offer you protection... so that there is no possibility that they might commit the crime threatened.

Governments use fear to extract value from their populace... we pay because we are scared.

Thursday 16 April 2009

Positive rights are repayment for the protection provided by the State (they are part of the "Social Contract")

2009-04-08T21:23:00.003-07:00

Positive rights entail a threat, but do not address the problem of the original crime...

The only way to uphold a positive right is to threaten the "victim" with consequences should they fail to comply with the instruction. This is different from negative rights which are upheld immediately by using force to prevent the transgressor from continuing.

If we imagine a "squatter" who has decided to inhabit a property considered to belong to another person... The negative right of the owner to exclude people from squatting might be upheld by a threat (of violence) which results in the person choosing to leave.

The response to a squatter from someone who claims positive rights might be, that to compensate for the hardship of having their property violated, the squatter must pay a fee to the victim. Of course, this must be accompanied with the threat that further action will be taken if the fee is not paid. But the fee does not remedy the problem. It would be absurd if the request for a fee is not accompanied with a request to leave as well, unless the squatter has now become a tenant and the crime has been forgiven...

Assuming a fine is requested and still the squatter has no "right" to stay (they have not become a tenant) then what purpose does the fine serve, surely it is a distraction? Only the repulsive part of the punishment addresses the problem.

We might feel that, in this situation a payment might be reasonable to compensate the victim... But what if the fee (representing positive rights) replaced the instruction to leave (negative rights) entirely? Effectively, the squatter would have forced themselves into a position of being a tenant, against the will of the landowner. And without the fee being paid, the instruction to leave remains... The fee delays the punishment.

So then, a positive right must be a compensating "payment" (of any form) which delays the eventual punishment... Asking for a fee in excess of the the property being returned does not serve justice because if the property is returned, then that is as it should be. If the State considers that the perpetrator "should" be punished beyond merely returning the original property (perhaps to help pay for the cost of law-enforcement... but this would be a negative right (confiscation, not making someone do something)), then perhaps (further) property can be removed from the criminal but there is no strong reason that it should be given to the victim (again, no positive rights are necessary).

Assuming no crime has been committed, and we are no longer talking about the squatter, then a positive right would be something like a claim to the right for free health care, provided by the State, or for the State to demand Income Tax. Given that the individual has little ability to threaten the Government if services are poor, the claim to a "right" to good State health care is an empty claim (the Government are not forced to provide it). It is a suggestion (not a right) that we should receive good "free" health care...

To collect Income Tax, the State must threaten the individual with dire consequences for not paying... a removal of property rights (but not aggression since only the State upholds the property rights... (landowners are subordinate)). But is this (a threat of) violence if it only means that the State chooses to recognise different property rights? If we (agree to) receive protection from the State (for our property) do we then agree that Income Tax (and the other duties of being a citizen) is part of that exchange and not a violation of the Non-Aggression Principle? What happens if we don't agree to the "contract", is it right that the State then take all of the land? Or does your land become an "island" (a Nation-State) independent of the land surrounding you? In which case (if you reject the protection of the State) there would be no reason that "their" laws would (legitimately) apply to you...

Unless we (have) agree(d) to the Social Contract (but then, if we have, we would be talking about a contract, not positive rights), positive rights are a violation of the NAP since they entail the threat of violence.

If two "freemen" (who are detached from the State; have not agreed to the "social contract") encounter one-another, one would have no "right" to demand an action or behaviour of the other person... this would be aggressive. Our response to a claim to a positive right must always be: What are you going to do if I don't perform as you wish?

Thursday 16 April 2009

Banks cause inflation because people think that credit is money

2009-04-08T21:23:00.001-07:00

Credit affects cash in the same way that a 50p coin affects £5 notes...

Existing £5 notes are able to purchase less when extra 50p coins are added to the circulation of a currency because ten 50p coins compete at parity with the £5 note... According to the State who ultimately provide the demand for fiat currency, ten 50p coins are worth the same as one £5 note so that relationship extends into the market.

If the State have decided that one unit of bank credit is equal to one unit of cash (of whatever denomination) then extra credit will affect the price of cash. It does not matter that someone might object (to the statement that) credit is "as good" as cash, or that a £5 note is better than ten 50p coins... If most people do think that they are equivalent that is what sets the market price.

A person might have a preference for one type of coin over another, let's say they appreciate the appearance of a 10p coin... because other coins are (also) legal tender, that person is "forced", obliged to accept other coins in payment for goods and services. The purchaser can force the recipient to receive the coins (and notes) of their choice (provided they are legal tender) because otherwise the debt might not (still) be recognised by the courts; the courts will no longer assist in chasing the debts...

A debt may be established in a particular currency (such as payment in only 10p coins) but if the purchaser has offered sufficient coinage which is deemed legal tender, the debts will not be chased by the courts, even though the purchaser has changed his (or her) mind in what type of currency to pay. If the consideration is offered in legal tender, even if it was previously promised in another "currency" then, as far as the courts are concerned, there is no debt to repay.

Because the quantity of legal tender must be of equivalent (market) value to the initial promise, it obliges the recipient to accept what is the aggregate estimation of legal tender (value) and therefore does not allow (it removes) the expression of individual preferences...

If we imagine a scenario in which a person is promised a sack of potatoes in exchange for their labour, but then the debtor responds by offering only cash then the vendor must then accept the legal tender at the market price of the potatoes. So the fact that cash is legal tender drives out the individual expression of preferences for commodities and forces people to intermediate their purchases with legal tender (at the market price)... The law makes legal tender the forced medium of exchange.

Because bank credit is not "legal tender", it has value not because it is a forced currency (in the way that cash has value) but instead because the market value of credit is similar to cash. And if a person pays in credit, this can be seen as a promise (of a bank) to pay cash, so it is in fact very similar, and may be regarded as "cash" by some courts(?). If not, then the value of credit is derived only from the preferences of the (aggregate) market. Because credit cannot discharge debts in the same way that legal tender is able to do, it cannot be said to "be money" in the fullest sense. Only notes and coins are good at discharging debts...

The State creates demand for fiat currency via taxation and it is forced upon the population (into contracts which do not otherwise involve the State) as a medium of exchange through the legal tender laws (to make (with the outcome that) people generally write contracts in fiat money...). This also increases the extent to which prices stabilise out across a country, since they are all priced according to a common measure.

If credit is valued by the State (and the rest of the market) then it is able to affect the price of cash, even though it is not legal tender. Credit affects the price of legal tender because it (legal tender) competes with credit. Whatever the value of £1 is derived from, a unit of credit is worth the same (the value of the credit is derived from the value of the cash). Most people don't prefer cash because they all use bank accounts, which convert their "money" into credit... Bad money does not drive out good, because people do not hoard "good" money (cash), they instead convert it into credit by placing it in a bank account because it is financially advantageous for them to do so, they may not make a "profit" by doing this (interest) but they do at least receive free current-account banking services. The State (by guaranteeing bank deposits) incentivizes people to prefer credit over cash. The Government guarantee of bank deposits is sufficient to remove the risk premium that would otherwise be paid for holding credit (over cash). We don't prefer cash because our doubts and fears are compensated for by the State. We are paid (by the State) to treat credit as cash.

So long as people think credit is valuable it is costly to think (and behave) otherwise... When enough people start to think that cash might be preferable (beyond what the Government would be willing (and able) to issue new bank notes to support...) then the costs of preferring cash become less than the risk of holding credit which means that people will withdraw their money from the banking system.

We get paid for the risk of holding our money in the form of bank credit... (loaning it to the banking system). Credit is a risky form of money which may become worthless at any moment... extra credit affects the price of cash because cash (whilst the financial system is intact) can only be purchased for one unit of credit. More credit does not mean that a unit of cash will purchase more (credit) because credit can be exchanged for cash at any moment and so why would you sell (credit) for less than one unit (of cash). Credit is the possibility of cash... we take the risk for the convenience of banking and perhaps a fee received (compensation) for keeping our money on deposit. Credit can be exchanged for (one unit of) cash (can get one from the Government) at any time (the Government makes a market at parity...) which is the reason that the total quantity of both credit and cash is what affects prices.

Imagine two farmers, one with a crop of potatoes, another with apples. If they have roughly equivalent yields, it may be that one potato will purchase one apple (and the Government will make a market at this price). So then, what happens if the potato farmer grows a greater (more abundant) crop? Typically this would result in apples costing more than the potatoes (potatoes would get cheaper) but because the Government continues to make a market at the old price, the two crops continue to trade at parity.

Credit trades at parity with cash due to price-fixing.

The risk premium for holding credit cannot be expressed (as a price) in the market because credit can (usually) be exchanged at parity... We cannot know what the market considers the likelihood of bank run (is) until it happens.

If we fear that the market will obtain comprehensive knowledge of the banking system, we must fear that credit will eventually become worthless due to a (systematic) bank run. Because people don't know about the nature of the banking system, they will not exchange credit for anything less than parity (neither do they (yet) have to). Stupid people think that credit is worth the same as cash and people who are not stupid are willing to risk holding credit (due to convenience and possible material rewards...) up to (or just prior to) the point that the remainder evaluate the truth... They think credit is money which is why extra credit inflates prices... For as long as the banking system is intact, cash won't have increased purchasing power over credit because people do not prefer it; people will not think your cash is worth more than their credit. The amount of credit they would be willing to exchange for your cash would be only parity. Your cash buys less and less... because everyone thinks that credit is cash.

Most people think that credit is cash which is why cash will lose value when extra credit is issued...

Wednesday 15 April 2009

Courts should be concerned with freedom, not punishment

2009-04-08T21:22:00.007-07:00

Courts should not be preoccupied with serving "punishment" to the criminal, but rather concerned with extending (and improving) the rights of the innocent (not necessarily the victim) to freedom from oppression...

It makes sense, often to put a person who has committed a crime into prison... But we must (should) ask what purpose does this serve? Is it to punish the criminal for their actions or is it to provide a greater degree of freedom to those who have been or might become affected by that individual? If we are satisfied (seek) to do no more than punish the criminal this might not lead to a peaceful outcome, clearly corporal punishment does not improve the safety of the environment unless the behaviour of the criminal is altered as a result...

Previously: (click link) "A debt to Society is not a debt to the State, and even a debt to Society does not alleviate or resolve any of the problems presented by crime. It is not enough that a person has been punished, we need to take preventative measures... Making people pay fiat doesn't do any good, or serve a useful purpose."

So then we must ask what "punishment", (to mean sentence) actually improves the freedom of (the remainder of) Society? Prison obviously improves freedom if dangerous criminals are kept away from the law-abiding population... Imposing fines and taxes does not do so.

An example of a State-imposed punishment might be Income Tax, so then; by what mechanism does the payment of income tax improve the freedom of the remainder of the population? It doesn't...

Tuesday 14 April 2009

Update: Taxes and fines are "wrong" unless a crime has been committed, and even if there has been a crime, it is still not an appropriate sentence... to deny self-ownership (by making them pay a fine) does not respect the criminal, it makes them subordinate to you. Why should the State be paid cash simply for being the victim of a crime? Why should we be forced to pay money to the State (by way of taxation), even if we have done a criminal act? A crime should result in the deprivation of liberties, nothing more... not as a punishment, but instead as a means of preventing further harm (but it is still (usually) preferable to keep the criminal alive). We do not (should not) want to make the criminal suffer... only to keep them away from the wider population. It is understandable for people to want to remove a criminal from their midst, but we cannot allow them to torture the criminal.

Making the criminal pay a fine does not achieve any of the outcomes which are desirable (unless the payment is being made to you directly (compensation?), or you want nothing more than to see people suffer).

Income tax: Is it a crime to earn money? (14th April'09)

The State exploits the judicial process by imposing fiat currency debt

2009-04-08T21:22:00.005-07:00

It is to the advantage of the State to make the punishment of a crime the payment of fiat currency. This creates an artificial demand for the paper currency which would otherwise not exist, it makes fiat currency valuable. If people need currency to discharge debts to the court system then paper money will have a market value due to this...

This procedure is highly advantageous to the State since, if fiat has value, it allows the State to issue paper notes which can be exchanged for other goods and services.

There is no reason the State should have this ability above other individuals or groups... If other people could "charge" criminals with the payment of their paper money, it would create a demand for that currency also. This would be to the direct advantage of the person issuing the currency (and of no advantage to anyone else) and a disadvantage to the criminal who must acquire the fiat. Also, the payment is made to the State but the State is not necessarily the injured party... (and how does (would) rewarding the victim serve justice anyway?).

Why must money be paid (does this best improve the "social environment" for the future (does it even satisfy the victim?), or is there something more appropriate?), what (type of money) must be paid and to whom must it be paid?

Questions regarding the nature of (fair) punishments:

i) Does paying money (paper or otherwise...) address the problem facing "Society" now that the crime has come to light (is it a good solution)?
ii) If it is (to be) paper money, what type of paper money should be paid (issued by whom)?
iii) To whom should the payment be made?

On the second point... (what type of money "should" be paid?) Assuming the price to obtain the money is roughly consistent, it can make little or no difference to the victim or criminal which currency is chosen... The only difference it makes is that it allows the courts to give legitimacy (value) to a particular currency. But this is an arbitrary choice because the courts should be there only to serve justice, not to advantage a particular body by creating demand for their (paper) currency, even if that body is itself.

For a court to (choose to) pass as punishment a payment or fine in its own currency (that of the State) is a conflict of interests because it has an incentive to do so. The courts will always choose to make the payments in their own currency if they can (it is in their self-interests to do so, and an abuse of power).

It would be preferable if the courts were separate from the State (or any money-issuing authority)... Issuing money should preclude you (the body) from acting as (or within) a court system, or even as an agent of the court... Or rather, a court should not be entitled to pass a sentence which involves the payment of a currency issued by the court, or body aligned with the court. Since this is the only way a paper currency ever takes on value, no virtuous paper currency will ever exist because, if a court itself cannot make demand for their currency (or for that of a "body aligned with the court"), for another currency to have been chosen by the court is indicative of collusion... Then to choose another currency suggests that the body chosen might be aligned in some way... So then the courts would never have a good reason to ask for payment in paper currency.

Unless it can be argued that for the criminal to pay money (even asset-backed money) alleviates the suffering of the crime, then fines and payments (including taxes) are a worthless approach in punishment. How does a payment help anything?

Making someone pay money into a court denies the self-ownership of the criminal (it makes them act, rather than preventing them from doing so)... It is better to deny them rights that they might otherwise have. A person dos not become a slave (someone who has lost the "right" to self-ownership) having committed a crime... we do not take control of their decision-making process, even if we would like to. We "should" not make a person (even a criminal) act against their will, only (allow ourselves to) act according to our own will which may be to seek to reduce the freedoms of a criminal person.

Even if a person has done something wrong, we should respect their "right" to self-ownership. Even criminals should be respected... To make someone hand over money requires the issuing of a threat, unless the sum is paid worse consequences will follow. The threat can be said to have been made in self-defence (since it has been issued to the criminal) but it does not expand the property rights of the victim(s) because it is resolved by payment of fiat (which does not represent property? (safety from the State...)). We can assume a restriction of property rights is done against the will of the person concerned, so a threat in this case is worthless (property rights are in the opinion of the State).

The court has made a bargain with the guilty criminal that if they pay, no further action (actual, physical action) will be taken. Given that payment of fiat is equivalent to working for the State, the crime is forgiven if the defendant serves the State with goods and services... But the State is not "the people". This punishment doesn't even reward the victim (it rewards the State) and it does not reduce the property rights of the criminal (except to the extent that it increases the debt of the individual (criminal) to the State). It increases the implicit debt (of that person in particular) that each of us (apparently) have to the State... which perhaps alleviates the debt of everyone else, if the State consequently demands less.

A debt to Society is not a debt to the State, and even a debt to Society does not alleviate or resolve any of the problems presented by crime. It is not enough that a person has been punished, we need to take preventative measures... Making people pay fiat doesn't do any good, or serve a useful purpose.

Tuesday 14 April 2009

What is an appropriate punishment for a one-off crime?

2009-04-08T21:22:00.003-07:00

What is the best way to treat a criminal which will result in the best outcomes for the future of those people affected and concerned?

A one-off crime is distinct from an on-going crime in that is doesn't happen persistently, an on-going crime is similar to a territorial dispute because both parties uphold their "right" to prevent the other from trespassing on what is (they claim) their land. Usually, in an on-going dispute, neither party will deny that they are engaging in the violence (force) and neither party will think that they have done anything wrong. For these reasons participants in a territorial dispute will not seek to prevent their behaviour from becoming known to the public, in fact they might encourage that since it might help the situation get resolved...

If we assume a one-off crime (such as violent attack, or rape) has been committed and also that we are entirely convinced of the guilt of the defendant (it is redundant to argue against a form of justice on the grounds that a defendant might have been found falsely guilty since all methods will have that possibility, we can ask whether the system allows for flexibility in remedying a miscarriage of justice but that is not the same as continually making the point that the person whom is accused of guilt might not be so... are we to let everybody go free in that case?) then what action should be taken?

At the present time the sentencing is decided by the judge (after the jury has decided on the guilt). The judge must choose a sentence appropriate to the circumstances of the case and also according to the recommendations prescribed by the law-making authorities... The only body available to the judge to provide the sentencing is the State (we can only "hand over" the criminal to representatives of the State...).

Imagine the sentencing of a drug addict who has perpetrated many burglaries, the only option for the judge is to hand that person over to the State. Might it be better if a charity (who are expert in treating, and dealing with, drug addicts) offered sentencing to the judge, provided they give assurances that the criminal will be kept away from Society during the period of the sentence? It would remove the burden of "in loco parentis" (over the criminal) from the State...

Might it be better then, for the judge (and whomever else must decide on sentencing) to have a suite of possible sentences to chose from? It would be a form of free-market sentencing whereby the judge would have a choice of "punishments" offered by various groups, including charities, groups representing the interests of the victim, possibly a traditional State punishment, and all other groups. The judge could then choose the most apposite punishment among those offered.

We can assume that in most cases of serious crime, there will be a group that offers to put the defendant to death... We can also presume that there will be groups that oppose this practice and that will offer to provide an alternative course of treatment. There will be many groups who are motivated, at least in part, to rehabilitate and nurture the criminal out of sympathy for their position... just as there will be groups who seek less tolerant solutions.

A free-market choice of sentences will allow the courts to choose a punishment that is more appropriate to the crime... which best improves the social environment for everyone else. It is the one which best improves the circumstances for Society in the future.

We can assume that the option to do nothing, and let the defendant go free always exists, if only to avoid the situation of having only a very severe punishment such as the death penalty for relatively minor crimes.

Another innovation (beyond extending the tolerated bodies to provide sentencing to those not part of the State, and making a choice available...) might be to extend the decision-making responsibilities to more than only the judge (presently, often under guidance from the law-makers), the jury could be involved, perhaps making a democratic decision. Or even a poll of a wider selection of people from the community.

Tuesday 14 April 2009

What attributes make up a crime?

2009-04-08T21:22:00.001-07:00

http://en.wikipedia.org/wiki/Crime
Societies define crime as the breach of one or more rules or laws for which some governing authority or force may ultimately prescribe a punishment. (as at 13th April'09)

The general description of crime is that it is something that attracts a punishment from an authority such as the State... we are then left to presume (or deduce) that the type of activities that will be punished are unhelpful and harmful to the population, or an individual. But we are not told the precise nature of what might be considered harmful, perhaps because we cannot be sure of what will come in the future, so we make laws by precedent. In any case, it is an action which is not approved of by an authority of some kind...

If we accept the doctrine of self-ownership and consequently reject positive rights (making people do something) in favour of negative rights (making people stop doing something), an authentic definition of "crime" emerges which allies well with the theories of Natural Law. If a person has only negative rights, they have only the ability to reject the actions of another person: they do not have the "right" to instruct them on how to behave (to make them do something)... Aggression is then only valid in self-defence and should not be instigated without prior cause. We accept (recognise) that to do nothing is not a crime and that we ultimately are entitled to life unless practicality or circumstance (such as over-population) prevent it.

If a person is to have self-ownership it would mean that whatever they chose to do to themselves, cannot be considered a crime... Even if the activity is dangerous such as rock climbing, or taking drugs, because the "harm" is being done to themselves, it is not a crime. We are allowed to abuse our bodies, since they "belong" to us...

If our bodies belong to us, then we are also able to engage in (mutually) voluntary activities with other people.

The "problem" arises when a person does not consent to our actions... By what criteria do we then decide if there has been a crime? If I am transgressing on their personal property or person, (and they do not agree) then I might have done something wrong. So how far does their personal property extend? If I have not harmed their property, but only harmed my own then (since it has been done to myself) there is no crime (even if there is harm). It can only be a crime if harm is done to the property or body of another person, which may extend to "shared" properties such as the natural environment, oceans and atmosphere... and they object to (disagree with) the stated actions and behaviours.

So for an action to be considered criminal we need not one, but both of the following conditions to be satisfied:

i) The complainant must not have been involved (knowingly and) willingly; it must have been involuntary, to mean without consent... a lack of consent.
ii) We must establish that harm has been committed, we can't have a victimless (harmless, the victim must have been harmed) crime.

So we must have a victim (someone (or thing, such as the environment?) who has been harmed) and secondly, they must not have given consent...

If we start with a definition of "crime" such as that given above, we can then move on to the practice of assigning punishments to activities which fit these two criteria... This is contrary to the practice of defining crimes by the punishments they receive, which tells us only about the consequences of the behaviour and not anything about their nature.

Monday 13 April 2009

The State should have the right to restrict our freedoms, nothing more

2009-04-08T21:21:00.006-07:00

...they should not be able to make us do something.

The State should not have the right to make us do something, or to make us pay a fine... If the State represents the sentiments of the majority of the population, then they have the right to deny the access of a criminal to the territory. They do not have the right to make the criminal do work for the State. Unless we are criminal, we have a natural right to the land but if we are criminal, that right can be restored after period of incarceration and continued good behaviour...

There are two types of crime... an on-going crime (of the type where a person persistently prevents (other) persons from gaining access to property which does not belong to them, such as a land dispute) and the second type, a non on-going crime, a one-off crime such as violent attack or rape.

The first type of crime can be said to be a public crime because the person perpetrates it (repeatedly) in plain sight and they would not deny that they are engaging in this action; they would argue that they are in the "right". The second type is a private crime and the criminal would be highly unlikely to argue that the right to engage in the action was a legitimate right (few argue in favour of rape as a natural right...).

So the first type of crime (on-going) can legitimately be solved with the application of violence, since property rights can only be established by force. The way to solve this problem is to restrict the rights of the transgressor from having access to the disputed territory... if this continues it ends up with the person eventually being incarcerated.

As far as the second type of crime is concerned, the State restricts the freedoms of the criminal for different reasons than for the first. Here, the wrong-doing of the criminal cannot be reversed and the initial conditions cannot be restored (unless we have the unusual situation of continued actual aggression). The victim has been hurt and the damage cannot be undone... The only worthwhile approach now is to reduce the likelihood of a reoccurence ... Incarceration certainly prevents the criminal from being violent again (for a period of time), it also punishes the criminal which may lead to a change in philosophy, we cannot legitimately punish the criminal by any other means (than incarceration) since to do so would deny the target the right to life; property external to the actual person is shared property and may be revoked by the State. The rights of the State do not extend to the person itself...

If our (the State's) only legitimate sanction is to deny access to the (shared) natural resources of the world (incarceration) then we cannot force people (with the threat of prison) to pay taxes and fines... Since the State can (then) only use imprisonment to control behaviour (without violating the (part of the) "self", which does not extend to external property...) it cannot charge taxes and fines. Taxes and fines aren't invalid for the reason that they damage the "self" (they don't) but instead because charging fiat is auxiliary to the problem at hand.

A solution to the "problem" of minor crimes, that we do not (might not) want to result in a prison term would be the three-strikes and you're out rule... For example, continued speeding charges or parking misdemeanors (where the victim has been established) would result in an actual prison term.

Taxes and fines are not an effective approach to the problem (of any particular crime) because they do not address the initial cause of the disturbance... They are orthogonal to the problem, and irrelevant (not pertinent). Not only does this create confusion, it also fails to address the underlying cause... It is imprecise, an injudicious punishment; inappropriate.

So then: Income tax (by charging fiat currency) is an inappropriate sanction against the crime of employment (if employment is a crime... (it isn't)) because it does not (effectively) address the underlying problem...

Taxes and fines of fiat currency (even if well-meaning) are not perspicacious... Which is damaging because it results in (unintended) consequences... People will act to protect themselves against the (inappropriate) punishments rather than adjust their behaviour in (perhaps) more advantageous ways. It is not a crime not to have sufficient (fiat) money... but if the consequences of a crime can be undone with the payment of money, it makes being "rich" (in fiat) a "license" to commit crimes. Rich people can do bad things such as "own" an inappropriate quantity of natural resources...

It is OK to have a job (employment) if you are rich... The "crime" (according to the tax laws; if it is punished (by tax) there must have been a crime(?)) of having a job is less costly to the rich, should (as we seem to be saying...) cash be used as a get-out-of-gaol card? Would the wealthy need to pay more?

Payment of cash does not resolve the problem (whatever it is defined to be, or have been), which ultimately can only be resolved with a sanction such as (or similar to) imprisonment. The payment of taxes or fines (to the State) is not what the victim wants...

When the punishment (for a crime, we must have a crime before any punishment can be legitimate) is clumsy, misdirected, off-target then we have bad outcomes... People will adjust to the nature of the off-target attacks and change their behavior in ways which are not optimal... The punishment should be appropriate to the crime, not only in severity but also in type, like-for-like... This mistake is why fiat currency has value.

If the punishment is tangential to the crime, it sends the wrong price signals into the market... For example if we fine someone (fiat currency, not property claims on natural resources) for bodily assault (instead of reducing, or threatening to reduce) their freedom, this is not a like-for-like punishment. We do not create a (price) demand for better behaviour, only fiat currency. It doesn't really "hurt" the criminal in the same way... But, better than any punishment is prevention (of one-off crimes, on-going crimes being closer in character to a public dispute...). And prevention is best achieved with surveillance... by making our actions public (for example having everything around us recorded...), not known only to the State.

Sunday 12 April 2009

Forced payment of fiat currency goes against self-ownership

2009-04-08T21:21:00.005-07:00

Self-ownership suggests (allows for, permits) only negative rights

A negative right is the ability to restrict the behaviour of someone else, not force them to do something... So we can prevent someone from trespassing on our land, but not force them to work on our land or hand over their produce. In the same way, taxes are an exploitation of a positive right (which denies self-ownership) on the part of the State... So whereas it might be valid (if we accept self-ownership) to remove land from a person, it is not valid to fine them for owning an excess of land (Land Value Tax)... We can prevent someone from trespassing on our land but not fine them (fiat money) for doing so.

Punishments which reflect (are an expression of) the negative rights of the State might include: Curfews, seizing property or land, restricting access to the road (driving ban), incarceration...

The ownership of fiat currency is not a violence (in and of itself), although it may have been a result of violence... to claim land rights is to threaten violence, if someone transgresses on the land. To own fiat currency is not a threat of violence... So the payment of a fine (or taxes) is not because (due to the fact that) the person has too much (fiat), it can only be for the punishment of another crime. Owning fiat is not a crime of itself.

If you have a large quantity of fiat, if this hurts me it does so only because of the actions of the State... so the State cannot be justified in punishing the person with an excess of fiat because this is harmful (to others) only because of (the actions of) the State. You (the State) would be (or are...) punishing them, the "rich" for no other reason than the harm caused by your (arbitrary) actions... Since there is no reason to justify the taxation of the State, the harm caused by having an excess of fiat is the fault of the State. If the State is provoked to attack (otherwise innocent) individuals as a consequence of the (otherwise innocent) actions of a third party, the blame cannot be said to lie with the actions of the third party.

Unlike land, no one else can have a legitimate claim to fiat which is not in their possession... it is not (cannot be said to be) a birthright, it is (a right) granted only by the State. Forced payment of fiat suggests that it is owned by the State, or at least that your ownership denies the legitimate right of another person to have use of it (to own it)... Is protection from the State a birthright? No, since the State is arbitrary... The State has no obligation to protect individuals, and similarly we have no obligation to protect each other.

If the punishment is to fit the crime, then an excess of property ownership should result in access to property (granted by the State) being denied... not a fine of fiat money. By demanding fiat, rather than addressing the objectionable behaviour is the mechanism by which fiat becomes valuable...

Sunday 12 April 2009

Punishment can only be justified if safety is improved

2009-04-08T21:21:00.003-07:00

Punishment (including that delivered by the State) "should" be used only if it is to protect the person (people) from violence... It can only be justified if the actions prevent (or at least hinder) the perpetrator from repeating the harmful action.

If the "perpetrator" has not been violent (including the threat of violence*), then to take action against them denies self-ownership because it contradicts the NAP (which can be derived from self-ownership).

Can we consider punishment to be more than a safety issue and in fact a device to help instruct the transgressor that their behaviour is "wrong"... So the outcome not only has (intended) consequences for the people whom are protected (from the criminal) but also improving consequences for the criminal him/herself? Is arbitrary punishment alone (without restricting their freedoms) likely to improve outcomes? Would it be a deterrent? And if it is only a deterrent then why execute the punishment if only to deter others and make an example of the criminal? This is a terrorist tactic designed to control behaviour using fear...

How does taxation mitigate against continuing danger?

Taxation (meaning the payment of fiat money) does not mitigate against further danger because it does not address the issue... It serves the State but does not improve the safety of citizens... A reward is not "compensation" when a crime has been suffered and further, a reward to the State is not compensation for the victim, who is not the State. A reward does not solve the problem because it is a "positive" act, it does not alter the factors which precipitated the crime in the first place...

The ownership of (even excess quantities of) fiat currency is not a crime because to deny access to fiat currency does not deny life... Even though fiat may be limited in supply no one must have it to survive, unless the State introduces punishments for not paying fiat currency (taxes) but then the misdeed has been performed by the State (who demand taxes) and not the person who has an excess of fiat... If someone has an excess of land it might be valid to treat that as a crime, or if someone has been violent (to extend their own property rights or reduce those of another person) but fiat cannot reasonably be said to belong to someone if the State deny it (that they do own it) because fiat has no meaning beyond the State... Landowners are not subordinate to the State (contradiction of... see earlier)? Do the population have a right to object to the State-decreed allocation of property (land) rights, this would be a revolution, or local rebellion?

Property rights are upheld by violence (and self-defence) and violence is an expression (according to their personal self-assessment) of property rights... But when did the violence begin? The only way for property rights to change hands willingly (land claim disputes) is through the State. If everything must be free-trade then how are property rights established? Perhaps by individual, local (without the State) arrangement...

The only way to train people not to transgress property rights (including violating self-ownership) is to punish them for doing so. This creates a disincentive which makes the costs (risks) to the action greater than the rewards... But once the crime has been committed what use is the punishment, unless the crime is on-going as is the case with property disputes over land... In the case of land disputes, violence (in retaliation) solves the problem since property rights are established by using violence. As for crimes which are not on-going, such as violent attack, or rape... only prevention is a satisfactory solution since (retaliatory) violence is not capable of restoring the initial situation...

So punishment can only be justified if (equitable) property rights are restored...

*If we allow for the definition of violence to extend beyond merely physical violence, and to include psychological violence then the threat of violence can (should) be included in the meaning of "aggression", within the NAP. If it is an aggressive act to verbally (or through body language?) threaten violence, then is it violent (aggressive) to convey the threat of another person (to someone else)? Unless the message is conveyed under duress (the threat of violence, or similar), the intermediary can be said to have caused harm because the aggressor might not (otherwise) have delivered the threat to the person directly and would have been merely making idle "boasts"... Perhaps the threat of violence falls under free speech and "should" be disregarded from all consideration of the NAP (always presume any threats are "empty words"...)?

Sunday 12 April 2009

Non-violent criminals should be able to pay to get out of prison

2009-04-08T21:21:00.001-07:00

It is valid to regard fines as a legitimate form of taxation...

Criminals which are not a danger to the general public (not a safety risk) "should" be able to pay to get out of prison... It is very expensive to house prisoners for an extended period of time and if the primary reason for incarceration is that it helps to keep the public safe then what purpose is served by detaining a "safe" prisoner?

In allowing a "rich" prisoner to repay their "debt" with an exchange of property, the taxpayer suffers much less. The taxpayer, most often times would prefer to be paid than have an extra (safe) person in prison.

Saturday 11 April 2009

Self-ownership does not deny the ability of groups to act collectively

2009-04-08T21:18:00.000-07:00

Self-ownership does not deny the ability of groups to act collectively (in self-defence)... although it is unlikely in the absence of a tribal identity that group associations would be very strong

For their own protection, an individual may choose to associate with a larger group that will act in self-defence if any member has been violated. This does not violate the principle of self-ownership (which establishes the Non-Aggression Principle) since all members of the group are acting voluntarily...

Such an individual would feel an obligation to assist in the efforts at retaliation if any member has been "attacked". They may even want to act of their own volition and not out of a sense of (established) duty.

Trust... Until the loyalty of each member has been tested no individual can be sure of the commitment (which is) expected of them and that which can be expected from others. Without a sense of (tribal) identity the group structure doesn't work very well...

Unless we see aggression against a neighbour as (in some sense) an attack against us personally, then it is unlikely we will take strong (retaliatory) preventative action... But do some people want to pursue criminals for their own satisfaction, and for no other reason? This would be to help other people in the most selfless way.

To get rid of criminals it makes sense to collaborate with other people if the costs of doing so are less than the advantage of living in a "safe" community. If we are well known to our neighbours then to act in this way will improve our standing and (perhaps) make other aspects of live less expensive to us (we are repaid with favours from neighbours). The significant difference here, as compared to typical (bid-offer) "bargains" in the market place is that our compensation is retrograde: our payment comes later...

So, provided people are prepared to work for (and reliably expect) rewards after the execution of a (retaliatory, protective) task, then Societies will prosper and not descend (if it is a bad thing) into individualism.

Friday 10 April 2009

No group or person should (have the authority to) violate the NAP

2009-03-28T07:29:00.004-07:00

Since it is not a crime to be alive (except during over-population), only our actions can be considered criminal... it is a matter of choice... do we have a choice not to steal? Unless we suffer from over-population, then yes we do...

If we (as individuals) have sufficient access to natural resources, then a crime (to be defined soon here, below) cannot be justified. If there are not sufficient natural resources for everyone then chaos (to mean the antonym of peace) and violence will be inevitable. But since there are sufficient natural resources for everyone, there is no legitimate reason not to have peace.

So then, it can be said that given that we do have a sufficiency of natural resources to commit a crime is an avoidable act and it is natural (and not objectionable) for you to face consequences for doing so.

It is not a crime to be alive (except perhaps if the environment is over-populated) so then we can commit a "crime" only by doing something, in contrast to not doing anything (being inactive). The law concerns actions...

A crime is when we impose ourselves on another person (or property, in this context they can be seen an synonymous) in a way that has not given them a chance to (reasonably? see "ambiguous violence" below; some circumstances might be argued either way) refuse.

So we can consider (compare) some behaviours (actions) against this definition (of crime) to see what is a crime and what is not... Firstly violating someone's personal property (bodily harm if we allow self-ownership) is a crime because (presumably) the victim did not consent to the action. Consenting sex is not a crime, rape is a crime. Freedom of association is not a crime unless one or more of those involved is present against their will... Equally free trade (to mean voluntary co-operation) is not a crime...

So if the State chooses to observe the NAP and to "punish" only crimes under this definition, what type of activities will constitute crime? We could argue that to occupy an unfair share of the natural resources is a crime since it relies on prior aggression. Even if land has been acquired in the past with State approval, the argument is still valid if we allow that the State (in the past) acted in contravention of the NAP. Other crimes could include damage to the (shared) environment such as air or land pollution... A more contentious crime might be anti-social behavior if we have suffered "ambiguous violence" such as noise pollution.

Given that we don't have the "right" to object to freedom of association we cannot object to a party going on at our neighbour's house unless we suffer in some way, perhaps from noise pollution. Our only right is not to be transgressed against (we then have only negative rights).

Violence and the threat of violence...

If we have freedom of speech, is it criminal to threaten violence towards another person or property? Do we have the right to prevent someone from speaking in this way? We might have the right to prevent someone from creating noise pollution (whatever the content) but should we be able to prevent consenting people from threatening one-another? Do we have the right to prevent someone from reporting (perhaps to the potential victim) that someone else has stated an intention to perform violence?

We must presume (in the absence of a claim of noise pollution) that the threatened person does not object, so then if no one is harmed there can be no crime. Equally consenting harm is not a crime as in the case of ill-advised plastic surgery. But has a crime been committed if a person is told something they would not want to hear? Yes, it could be argued that this is anti-social behavior causing distress and is a type of "ambiguous violence"... So the threat of violence is also a contravention of the NAP.

The criteria for determining if an action constitutes a crime is not whether other people will object, but rather if they do object (and if (potentially) affected parties are unaware, would they object if they were knowledgeable of your actions...), are those objections reasonable?

If we want to live in a peaceful Society we should ask what actions if they are performed by everyone lead to harmony? If everyone violates the NAP then clearly we end up with a disordered and violent Society. If everyone observes the NAP, the opposite is true. But do we have the right to harm ourselves? If the NAP is "valid" because it is good (for everyone) if everyone follows it, then do I have the right to prevent you from harming yourself for the same reasons? Which would deny self-ownership... Self-harm is not disruptive to others.

Crimes are defined by punishments... If someone has done a crime it is acceptable for them to be punished (eg repatriation of stolen goods, proportionate).

We seek to determine what is (and isn't) a crime in order that we may allocate (and justify) punishments, so that we can live in a more harmonious Society. What logic is it then for anyone to punish what is not a crime, punishment for its own sake... We cannot think that punishment is good for everyone to do. It is certainly a violation of the NAP but does punishment (by everyone) lead to more peace? No, it is the opposite of peace... If we want a peaceful Society we should punish only in retaliation. Since to collaborate co-operatively (by their (our) own "free will") does not violate the NAP then Income Tax is a crime. For violence (or the threat of violence) not to be a crime it needs to be a justifiable retaliation (to some prior crime).

If a crime is defined to be that which is punishable under the law of the State then voluntary co-operation (employment) is a crime (according to the State) since it is punished by Income Tax. Anything that is punished is illegal (even if the punishment is minor) and by this definition, employment is illegal.

So if we have the right to prevent people from (certain) actions, but not insist that they do certain things (we have negative rights) what things is it reasonable for us to have the right to prevent them from doing? Clearly it is not reasonable for me to object to a pair of consenting adults having sex, but if I am sleeping in the next hotel room (and they are loud) perhaps I have a stronger case because I have been affected. It is not reasonable for me to complain that I don't like people having sex (without giving a justifiable reason) since I cannot hear the activity. People are free to have sex because it is a free country and it has not been shown that to have sex is bad for people as a whole to do and until it is, we presume that no one has the right to prevent it...

Privacy is peace...

Privacy means that we have the right to refuse others access to our person and property... They do not have the right to control our actions (self-ownership) unless it is harmful to them personally (or a bad thing for everyone to do? But who gets to decide what is healthy? Self-ownership is more important than the "public good", if only because we can't know for certain what is good for Society (should the Messiah be allowed to kill himself (or herself)? If no then being "virtuous" becomes a disadvantage, if we don't want that outcome (for Society) then we must allow (for) self-ownership and assess harm only among those who have not given consent, or who weren't aware of the action in question and might not have given consent)... Self-harm (such as taking drugs, if it is harmful to do so...) should not be illegal? But does a healthy person lose property rights when a drug addict needs a fix? If no, then self-harm punishes itself... and we must allow the "right" for (consenting) self-harm). Harm to one's self is different from harm to a non-consenting other person. Can there be harm if the action is known to the affected parties and no one objects? Is it legitimate to violate the NAP out of love and affection? No, unless it can be established that self-ownership has ceased to be valid due to mental illness or insanity (but this is a weak position since who can say for certain?)...

So we are "allowed" to kill ourselves but not to violate the NAP (because both are consistent with (derived from?) from self-ownership)... we can do harm if consent is given (but is it still harm?). No harm (is done) if all involved agree.

...and if we have the right to refuse others access to our person and property this means that we have privacy (if we want it). To have peace means that we cannot retaliate against someone who has denied us access to their person or property. The NAP means that we do not have the right to force other people to do what we want, unless it can be established that they have performed a crime.

To deny self-ownership (either by contravening the NAP or by seeking to prevent (consenting) self-harm) leads to bad outcomes... It is better that we each make our own decisions (according to our preferences). Why should people be prevented from doing what they want to do, unless a crime has been proven? We have the right to intervene in other's actions only if they are negatively affecting other people...

(Unless we reject self-ownership) Our only right is the right to prevent other people from acting a certain (harmful) way (which denies the self-ownership that other people have over their property, including their person). We can only, if we accept self-ownership, act (to mean the use of force) in self-defence (be it that of a group or individual)... To think the opposite is a "survival of the fittest" approach.

Friday 10 April 2009

What is land slavery and how can it be mitigated against?

2009-03-28T07:29:00.003-07:00

A person with insufficient access to natural resources (such as land) has no way to survive. In order to survive by independent means a person must have access to sufficient land. If we do not have enough land then we can only survive if someone with land (ultimately) is willing to either support us charitably or if they are willing to trade... We can only survive if someone else (in the market) has given permission for us to do so. And from this we can deduce that someone in such a position (unable to survive independently) is a slave to those who control the natural resources, such as land...

With insufficient land we are at the mercy of other market participants trading with us, so that we can survive. If we have no land we can only offer our labour... If the landed population have a sufficiency of cheap labour we cannot survive without charity (forced or otherwise).

The way to mitigate against "land slavery" is to introduce measures which act against the accumulation of land (and perhaps other resources) into the hands of a small number of people. This could be achieved by introducing a (State-imposed) Land Value Ceiling. This would prevent any one single person from owning more than a prescribed quantity (measured by market value) of land... The State would withdraw their protection from land which is deemed (to be of a quantity) in excess of what is reasonable. The "discarded" land would then fall into the hands of the State (since otherwise it would belong to whomever claimed it first, which is mob-rule). The State would then dispose of the land as appropriate (perhaps selling it to raise funds, reducing taxation).

It can be argued that the State is not violating the NAP (non aggression principle) in this process. We can say that ownership of "an excess" of land is aggressive since it has occurred as a consequence of prior aggression, either by seizing the land privately or by seizing it with the assistance of the State (spoils of war).

If someone has acquired an excess of land privately without coercion, such as a businessperson then they have not acted aggressively and it is regrettable that they would have to "lose" land in this way... However, there are not many circumstances where wealth has been acquired this way, usually monopolies (or copyright) are involved in some way.

The Land Value Ceiling (by removing State protection of land deemed to be in excess of that which a person can reasonably claim to "own") would mean that, because land would be easier to acquire, land slavery is diminished since people would have easier access to land.

Someone with an excess of land is able to rent land to the unlanded (for a profit) and yet lose none of their wealth (their land remains in place). They can then survive by doing nothing from one year to the next... And yet the unlanded farm the land but still most of the proceeds "belong" (according to the State) to the landowner. The slave is owned not because they are restricted from escaping, but instead because they do not have access to that which gives life. A person needs to "work" (in this situation) only because they do not have sufficient land of their own...

If a person chooses to farm their own land to provide for themselves, can this be said to be "work"? Surely only those who are a slave to someone else do work... the rest is not work, but something else (another word), "survival" perhaps, farming, grazing, gardening, harvesting (harvesting still involves a degree of effort, but it is different from "work" if the land is your own), tending (to the land)?

The landowner harvests their own crop (on their own land) but the unlanded must harvest the land of the landowner. The payment to the "land slave" (for doing the harvesting) is as little as the landowner can afford (according to the market) to give. Unless the landowner wants to acquire more land, they can easily survive by harvesting their own land without assistance from the unlanded and by doing so the "land slave" would have no means of survival. So we end up with a situation where the landed have no need to "work" (as distinct from harvesting, or a more suitable word) and the unlanded do nothing but the "harvesting" for the landowners (receiving no land in return). And if there is no harvesting left to do, they will be forced to rely on (either forced or unforced) charity.

Land (natural resources) sustains life but it is at the whim of the landowner... since access to the land can be denied, so too can life.

Thursday 9 April 2009

Update: To clarify the true meaning of the word "harvest" in this context, we need to understand that it is characterised as being distinct from other types of action because it does not require the permission of another person to engage in the activity... The landowner can live and feed themselves according to their own whims and they do not rely on the say-so of another person. The "Land Slave" can only survive if another person (or group) behaves in a way which enables them to survive... No one can legitimately deny your "right" to harvest the crop, to do so is considered part of your rights as landowner. However, they (the authority) do deny the "right" of another person to farm and cultivate your land (or to live on it) without your permission (which may be given in exchange for something in return such as a share of the harvested crop, or a cash payment for renting the land). Hence the unlanded need the permission of the landed to grow crops to survive, even if to deny that permission would be financially detrimental for the landowner (since they would no longer be receiving rent...) it (permission) would still be required.

To harvest your own land you don't need the permission of someone else. And if a person must pay rent to have fundamental access to a reasonable quantity of the natural resources (such as land) required to sustain life, they can only be described as a slave (if they are innocent), or if they are a criminal, a prisoner... (13 April'09)

According to the State, credit is money (to mean valuable) as a consequence of their guarantee of bank deposits, but is it?

2009-03-28T07:29:00.002-07:00

Credit isn't money because the State guarantee is a bluff... Credit is (regarded as) money because bank deposits are guaranteed by the State but would the State print the necessary banknotes in the event of a banking "crisis"?

And since the deposit is a demand deposit, it must be a guarantee for cash instead of Treasuries...

Previously: Treasuries are more reliable than bank deposits
It is a contradiction to think that bank deposits are reliable and yet think that Government debt is worthless, it is not possible for a logical person to think that the bond market "should" collapse and yet still keep "money" on deposit in a banking institution.

Bank credit has value in that either the Govt will borrow on the debt markets or it will issue newly printed money to banks. So far, (in the circumstances of Northern Rock) the Government has chosen to lend to the banks and fund this with Treasuries... so if it cannot (continue to) raise funding from the Treasury market then bank credit will only be reliable if the Government prints the extra money.

Are there any circumstances where the Government will recognise bank deposits (with printed cash) and yet not refund Treasuries? If the Government is both i) Forced to either repay the (Treasury) debt with cash or to default (not allowed to keep borrowing) ii) Decides not to monetise the debt by printing money... then the Treasury market has then collapsed and the Government is not credit-worthy. Will it then (in those circumstances) print money (it cannot borrow) to allow for bank deposits to be redeemed?

It is unlikely that it will do so in those circumstances... although it could if it is felt that the guarantee of bank deposits is worth more than the credit-worthiness of State debt.

Credit is money only if you think that the State guarantee is reliable and since Treasuries aren't money, it can only be reliable if the money is (going to be) physically printed which is unlikely. If the Government do intend on printing the required cash then why not print it up now, in readiness? When the bank makes a loan the borrower would receive fresh cash from the central bank and be required to repay the debt to the commercial bank which would owe the original sum (in cash, without interest) to the central bank at maturity. The commercial bank would need to establish that the loan is genuine (to an outside party) otherwise it would be an interest-free loan (to itself) which would not be supported by the central bank since it would allow arbitrage (they could purchase Treasuries and make a risk-free profit).

The State could (might) argue that the reason they do not issue the required banknotes is only a matter of convenience and that the guarantee of bank deposits is genuine, that they are prepared to print the fresh cash needed. However, this is disingenuous because if they felt that this type of full-reserve banking should prevail they would not have issued the State guarantee of bank deposits in the first place; they would have allowed the banks to go bust and compensate the depositors according to their loss.

The State could (might) argue that the reason they do not issue the required banknotes is only a matter of convenience and that the guarantee of bank deposits is genuine, that they are prepared to print the fresh cash needed. How can we know if their guarantee (and their necessary subsequent claim (position) that credit is money) is a bluff? Can they be trusted to print enough notes and coins to allow all redemptions?

They (the State) want you to think that credit is money so that they aren't forced to print (or decline to print). They would prefer not to print, which we know since they have not yet printed up to now... But would they (print) in the event of a significant bank run? Unless you expect them to do so (and unless Treasuries are "money" and will be exchanged for bank credit) then credit isn't money...

Credit is money only if you think the State guarantee of bank deposits is reliable. If you think that money is safe in the bank (bank deposits are reliable) then you must also think that credit is money... So then, credit isn't money and your deposits are not safe in the bank. Credit "is money" only if your deposits are safe in the bank... Your money is not safe.

And since credit is inflationary (and can be exchanged at parity for cash, with no "risk premium" in the price) we can deduce that the aggregate of market sentiment is that the State guarantee of bank deposits is reliable...

Wednesday 8 April 2009

Anarchy is safety, the State is a security risk

2009-03-28T07:29:00.001-07:00

Anarchy is safety because it allows everyone to make their own provision for their security needs, they will do so to the extent that they feel necessary. The State intervenes in this activity and prevents voluntary "vigilante" groups from providing security. They are the monopoly provider of security services and as such face no competition. They make it illegal to do what people naturally do, and that is to protect themselves...

They are a security risk because they are not directly responsible (individually) for their actions. Their position allows them to claim that they are acting on behalf of the electorate, rather than acting personally. This allows (results in) people being much more reckless with security concerns, since they know they are protected from the consequences of their actions (to a degree) by the fact that they apparently act for a great many people. It is easier for them to get away with reckless behaviour.

Statism subverts the normal rules of "nature" by laying down restrictions on our impulsive (instinctive) behaviour, we are asked to pay attention to "the law" beyond what we would do instinctively. Even if it "feels" right, we are told not to do it for the fact that it is illegal...

People will solve a threat to their own security without encouragement, provided to do so is not made illegal. Since the State has the capacity only to punish and condemn, the state solution can never be the peaceful solution...

Saturday 4 April 2009

Why deficit spending causes inflation (of prices)

2009-03-28T07:29:00.000-07:00

NB: this section is long, you may prefer to read only the summary at the end of the article.

Issuing Treasuries makes people sell cash (because the yield is favourable) and so the price of cash falls (less demand for (liquid) cash)... Cash trades at a premium (to treasuries) because it is more liquid (not locked-up). It is more expensive (but not much more...)

Treasuries are cash with a time delay... people assume that they are reliable and will be as good as cash, when the time comes to redeem them... for that reason cash is worth less as a result even before they come to be redeemed. If the price of cash is affected by new treasuries (each individual assumes that cash will be available at maturity) it can only be because they are inflationary

Treasuries are inflationary because (as they mature) they will soon be equivalent to cash... the Government will use tax receipts to pay off maturing Treasuries, as they fall due which means (because there are more Treasuries) the tax bill must be higher, which results in inflation. Treasuries mean the tax bill will soon be higher...

If the Government issues new debt (repayable in the future, unlike bank deposits which are repayable now) this causes a rise in prices (inflation) just as is the case with new bank deposits... Government debt is inflationary for the same reason that new bank deposits are inflationary, because (the store of) wealth has been transferred from elsewhere today. We do not "borrow from the future" just as we cannot lend to the past...

Just like bank deposits, the Government will accept Treasuries in the payment of taxes.

If people expect that Government debt can be exchanged for cash (notes and coins), if not now then certainly at maturity this will establish the value of Treasuries. If a person has no reason to doubt the credit-worthiness of the State, then a one-year treasury will be worth exactly what we would accept for the certain promise of actual cash a year from now.

So, unless we have a reason to very much value money in the present over "future" money then Treasuries will have value. Since the Government can continue to issue new Treasuries when it needs to, there is never a reason to find out whether the Government has the ability to pay... If we assume that after a year, rather than receiving cash, the Government replaces your Treasury with a new (longer-dated) Treasury, plus some cash compensation (interest) then we see that the Government never needs to find the actual money.

We know that the Government has the ability to create extra cash out of thin air so we have no reason to question their credit-worthiness.

So why do people continue to accept the treasuries, rather than reject them in the knowledge that the Government does not have sufficient money? Why would someone hand over cash in this scenario? Because to not do so would be to lose out on the interest payments that come with "investing" in Treasuries... You get paid the annual interest rate for taking the (small) risk that the Government will default on its debt, each year.

Since they can print the money this risk (of default) must surely be pretty small... If people expect a great deal of deflation in the money supply then they will be willing to accept a lower level of interest payment. If people expect inflation the Government will need to pay a higher level of interest so that people do not sell out of cash and "money" all together and purchase hard assets such as land.

So why is Government debt inflationary... if we imagine a market with a person with cash. They are able to either spend it on property (such as land) or to put it into the bank. Now they have a third option which is to buy a promise of money from the Government (a Treasury)... So the choice has widened from "do nothing" or buy house, to "do nothing", buy Treasury or buy house. If they "trust" the Government they expect, a year (say) from now that the market will contain double the quantity of cash plus the house. So immediately the cash held in the present has become worth less than before. The Government will pay whatever rate that means a person such as this will always buy the Treasury...

The Government in this way is similar to a bank in that if you asked for your money back prematurely, they would not be able to pay... It borrows from the market to pay you back. All of the people that the State borrows from expect that they will be repaid which increases the money supply because if we all think we are due a large payment of cash soon, we value liquid cash less highly.

Cash is worth less (than before Government lending) because people think they can wait for the Treasury to pay out in the future. Each person would accept (for example) £120 a year from now in exchange for £100 liquid cash (they would buy the Treasury). And if a person selling a hard asset would also accept treasuries then we see that prices will increase. If the Government is competing to buy the house, the Government will pay sufficient interest to the seller that the trade goes to the State (and houses get more "expensive"). When the Government sells a Treasury the "original" money stays in the market... which drives up the price (of the house). The cash-holder will need to pay more since they are now competing against the State...

Because the value of fiat money is derived from taxation, if Treasuries are acceptable in payment then they will have similar value to cash. For example if you have an obligation to pay a sum of taxation a year from now then the State will (it has been established) accept Government debt in payment, so then if you need to pay tax and expect the Government to continue to recognise its own debt in payment then Treasuries are an OK store of value. The value of fiat is derived from its ability to cancels a debt to the State, and treasuries provide the same function. It is similar to taxation... (pre-paid tax). Interest is the "reward" for paying taxes early... (you get a discount).

Your (liquid) money loses value because if other people pay off their future taxes there will be more for you to pay. If you hold Treasuries it means you must (consequently) pay less taxes in the future which means that (since all wealth is measured this way) those who must still pay taxes in the future (who don't have Treasuries) are relatively less wealthy.

Both cash and Treasuries offer protection from the State, if the Government issues Treasuries (supply goes up), they compete with the only other thing that performs the same function (cash) which means cash is less valuable (rising prices). If someone "feels" protected from the State (they own Treasuries) cash will be less valuable to them. Each unit now buys less protection from the State, the State asks for more (units) each year... because the market itself will exchange less for each unit because they now also have Treasuries.

Cash is nothing more than a short-dated Treasury. We would rather have the cash now (than the Treasury) but the discount is not much... In a year or so's time they will be equivalent. Treasuries will be cash soon (or at least equivalent).

More taxes will be demanded from those who do not hold Treasuries... The value of cash is the percentage of "Government safety" that can be provided by its ownership. If you own all the money you can direct the Government in whom to attack (or at least, choose whom to save). If someone else now has Treasuries, they are protected and you cannot direct aggression towards them. Cash provides less safety when more Treasuries have been issued... Assuming the violence of the State is roughly constant (it is as violent as it can be), then the value of each cash unit diminishes are more are printed because each unit avoids a smaller portion of violence.

If fifty tokens are in circulation and one token can avoid four units of violence, and the State presumes to attack eight times monthly, then to remain free costs two units per month. If more units (double, to 100 and each now buys safety from two units of violence) are in circulation (and the State is no more violent) each unit will buy less and you must pay four units per month to keep the same safety... This is inflation and it derives directly from taxation. The violence is ongoing...

Issuing a treasury protects someone in the same was as cash except that it cannot be used prior to maturity (although it has a market price)... Part of the value of cash is that it can protect from future violence as well as immediate State violence. Cash has an advantage over Treasuries only for the short time before the debt matures. Cash will buy less protection from the State (when Treasuries are issued) because someone with Treasuries now has less need for the cash, demand falls and the price drops.

But why wouldn't someone holding Treasuries still value cash just as much, after all it is a store of wealth... because they too have a price on the receipt of violence. They do not seek to avoid violence at all costs... at some point they are prepared to accept their fate. The amount of "work" they are prepared to do before they rebel (against the Government) is not infinite...

Each person has a different (level of) fear of the State... If you have Treasuries, you figure you are better off than other folks and so you worry less about acquiring cash... you only have to stay ahead of others (your place in the pecking order) you don't keep running if you have won the race, you take a rest. The State will attack the weakest in the crowd.

Because owning Treasuries makes a person feel "rich" (assuming default is unlikely), they then have less demand for cash which makes the price drop. The game is to stay ahead of the rest of the rat race... to avoid the punishment of the State. Your cash buys less if everyone has Treasuries because they are safe, your wealth has been taken from you. And it is the absolute value (not number of units of paper) which the State cares about, so your tax charge will rise. The value of (cash) fiat falls because the State has made other people safe... and so safety has been taken away from you. Other people (who have received Treasuries) stop, or slow working because the threat to them is now in the distant future... They stop competing for fiat. The smaller the number of people who want (need) the fiat, the less it is worth. If the number of people who want the money is halved then the value will fall by half also (you will need to pay twice as much in taxes, if the State is to remain the same size).

...since the "market" for the State to attack is diminished, the violence (per individual) will increase so now the state will presume to attack 16 times monthly... and each token will protect against four units as before. Now each person (who is not "rich") must pay four units per month, instead of two as before. You need to pay more (in absolute terms) because other people have been taken out of the market...

The violence of the State must now be absorbed by those who have not received new Treasuries... Each person (who still has a demand for cash) must pay more (absolute) taxes... and if the quantity of cash circulating stays the same, you must pay twice (assuming half are now "rich", and that the remainder do not rebel against the State). Effectively, the population of the State has halved (a Nation State is a population who are fearful of a singular State!)... so what happened to the value of the money? If a unit of fiat can be seen as a stake in the human capital of the population then, if the population falls (and the cash is not lost, but transferred to the remaining people), the value of each unit of fiat falls (inflation).

Deficit spending (issuing Treasuries) causes inflation because fewer people now want the money... the new debt serves the same function as cash. The Treasuries evoke the same feeling in the owner (who does not fear default) as does cash, they are a form of cash. The value of cash is tied to taxation: the state demands a fixed quantity of man-hours... if you do the labour you get given a fiat token... "work for me or give me some fiat"... Fewer men with the same number of fiat tokens means each token buys less man-hours which results in inflation.

The violence that the State is able to exert over the population remains stable even though many people have been given Treasuries... they now attack fewer people, but they aren't (yet) able to rebel... Let's say that (before issuing the Treasuries) the State does enough violence to receive 4 months' worth of labour from each person... after issuing the Treasuries, some people are free from providing the state with labour and so each other person must work for longer. Life gets more difficult for those without Treasuries, just as it does when others in the population receive extra cash. People who have received treasuries behave as they would do as if they had received cash...

Unless you have an immediate tax problem, you might as well sell your cash for Treasuries... they are just as good as cash unless you have a tax charge which must be paid before the maturity of the Treasury.

People trade not only their immediate freedom, but also their future freedom from the State. Part of the value of cash in the market is that it protects in the future, it is a "store of value"... and so when Treasuries are issued which offer the same protection, the price (to mean value) of cash falls.

The advantage of cash over Treasuries only lasts up to the maturity date of the Treasury, at that time you will be able to sell the (maturing) Treasury for the equivalent sum of cash. If you know other people will soon have "cash", then the value of your cash falls. They can wait to get the cash later... It's not so important to have cash now in this case. £100 maturing a year from now will soon be worth the same as £100 cash... you will sell your cash (at the market price) to the Govt to pay the maturing Treasury, provided you are confident that you will find a market for your Treasury (the State, to pay taxes).

Government tax receipts will be used to pay off maturing Treasuries... as they fall due. Treasuries are valuable because the market expects that they will be paid, if only though force. At least up until the point that they default... but the debts can always be paid because they retain the ability to tax people as required. The liquid cash loses value because, in the knowledge that you will have to give up your cash for taxes, you might as well have State debt... If you must pay a year from now then why not buy a one-year treasury and receive interest? They (the State) "own" your money anyway (you have it temporarily): Either give me £100 a year from now or give it to me now (buy Treasury) and receive £5 interest.

Since so many people own Treasuries, the tax bills will be much higher in the future... Let's say Govt issues 5 £100 bills with 5-year maturity. To redeem those bills, the State will need to tax £500 from the population, but if those have been sold into the market it is easy for the State to demand £500 from the holders (in taxes) by not repaying their debt. So, rather than default the State will tax other people an increased amount... The Government needs to tax more and more as time goes on which causes inflation... But people can pay it (the increased prices of taxation) because so many of them purchased Treasuries... Because taxes are going to go up so much in the future (as a result of the extra Govt debt) this causes inflation because very soon your savings are not going to be able to pay off the higher tax bills (which must be higher to redeem all the treasuries).

...issuing Treasuries causes inflation because the State will have no choice but to charge much more in taxes when the debt falls due, which means the value of each unit of fiat falls and in comparison "prices" rise.

Assuming the debt rolls over, then each year, as the debt increases, the Treasuries become just as effective as the cash in paying down taxation debts. If holding Treasuries means you are owed taxation receipts then this is just as valuable as fiat currency. If a £100 Govt bond is symbolic of the State promising to "steal" £100 from someone else, then it's almost as good as holding £100 cash. It means in a year's time the Govt will seize £100 from a taxpayer and give it to you (assuming no default risk)...

So, like a bank account it is a (delayed) multiple claim on the "same" money... eg if £1,000 of Treasuries have been issued and there is only £100 in circulation, then when the debts fall due, all parties are owed the same amount of money and there is not sufficient. Holding a treasury means that the Government have promised that quantity of money to you in the future... not "now" as is the case in banking. Someone with cash will find that they will be able to purchase a lesser amount of goods and services when people around him or her have Treasuries because they will feel that their treasuries are worth a similar sum to the cash itself. People don't need the cash because they have Treasuries... and when choosing between a treasury and cash, they will choose the Treasury if the interest rate is good enough... they are inflationary because they are valuable, and the value they give is of the same sort as that given by cash and so the currency is diluted. The value is derived from the same place the value of cash is derived from, they are both a form of protection money which is acceptable to (recognised by) the State. Even though the State does not accept treasuries (only cash) the taxpayer can sell the T-bill (for cash, at the discounted value) to pay the taxation. So people who have more than enough cash to pay the taxes can then acquire a Treasury which will mature soon. This makes money "cheaper" because the cash-holder "knows" the Treasury has a market value and so is willing to buy it which makes their position less secure than it was...

If two people owe taxes and only one of them has cash then they are in a good (bargaining) position relative to the second person, if however, the second acquires a Treasury (by whatever means) his (or her) position is now much less advantageous, they are able to get the cash by selling the Treasury and so the person with all the cash at the beginning ends up with a treasury.

There is no strong reason to hold cash (over Treasuries) providing you don't expect default... The value of T's does not come from the expectation of repayment, instead it comes from the fact that cash is not particularly preferable and so the value of treasuries is derived from the value of cash. Treasuries are valuable because cash is valuable... and they can be sold for cash because they can pay taxes in the future. Assuming no default, it is like printing cash with a "void" first year or two, cash which doesn't come into effect for a while. Is the price of cars diminished if you sell a bunch of cars that won't work for the first 6 months because they have a timer delay? Surely, yes... a special type of cash that is not recognised by the Government for the period that it is "locked up", but which then becomes the same as normal money...

Cash offers less protection (from the State) when there are more treasuries around... If we measure wealth in houses, consider a person who has cash, they can buy one house, but suddenly when someone else has Treasuries other people can afford to pay more so the house costs more cash. Rich people (who don't need to worry about taxes for a year or two) can always provide cash in exchange for Treasuries. Why wouldn't it cause inflation?

If a rich person (who don't need to worry about taxes for a year or two) is selling the house, they will be willing to accept the Treasuries and will not sell to the cash-holder unless they can provide a higher price (inflation). If the house-seller is not rich they can find someone who to make the cash less acceptable. Rich people deal in Treasuries and the quantity of Treasuries defines the price of cash since cash is always discounted in value from the treasuries... Cash is a form of short-dated Treasury. Cash can be used to buy Treasuries which are the predominant currency... Issuing new treasuries affects the price of other treasuries so then it must also affect the price of cash, if cash and treasuries maintain their previous relationship. Issuing lots of T's does not result in permanently higher yields because once a few T's have been purchased, the money is spent by the Government and it ends up back in the account of a depositor who is likely to by Treasuries (since they are cheap) and eventually the price will rise and the cash-Treasury relationship will stabilise. The person who receives the proceeds received by the person who sold the treasury will end up buying a Treasury with the proceeds. This will continue until the typical yield is again established. Each individual (and the market in aggregate) has a preference for Treasuries if they are cheap and so the cash will recycle until the "correct" price relationship is established...

This is different from a normal economy, where extra supply leads to lower prices because the demand for a particular good is not universal... The price differential (yield) is a measure of the preferences of individuals for money now vs money later, which does not change. Issuing Treasuries does not affect the yield because the market adjusts (and the price of cash falls). Issuing new Treasuries does not affect people's time preference for money. Everyone with cash will instead have some Treasuries in their portfolio (since they are cheap), issuing Treasuries makes people sell cash (it is now less valuable)... it makes cash cheaper. Future money (for a while) is at a much better price...

Cash will lose value when Treasuries are printed because other goods can easily be purchased with treasuries... People who hold Treasuries can price the cash-holders out of the market for goods and services.

Friday 3 April 2009

Update: Fiat money is a store of security... without threats (from the State, or similar) fiat currency has no use. We can do nothing with it except to pay taxes which prevent the State from damaging our property or harming our person. So the more fiat currency in our possession the greater protection we have and the longer we can survive without interference. It allows us to be left alone... Without that fear we would have need for (fiat) money. (4th April'09)

Summary: Unless the State monetises the debt (by printing money) then, at some point Treasuries will be worthless. Treasuries are valuable only if the State is credit-worthy. They cause inflation because people think they are valuable and subsequently other types of money have less value... because they either are (in the case of bank deposits), or soon will be (in the case of Treasuries) redeemable for actual cash. Because bank credit can be exchanged for cash it is as good as cash. Unless the cash-holder has a reason not to value credit, they will see extra credit as a dilution of the value of their cash.

Treasuries (and bank credit) make cash less expensive (inflation) because people think that credit is money. They think that their cash is no better than credit...

A person buying currency (by selling goods and services) is usually indifferent between cash and credit, so then as far as they are concerned (a person who thinks that credit is money) cash and credit is the same. They think that credit performs the function of cash just as well. The supply of credit or cash (together currency) has increased... Prices are determined by the supply of "credit or cash" (Treasuries are a kind of promised cash (or credit)).

Since (people think) the price of credit is pegged to that of cash (by the State), extra credit diminishes (weakens) the value of cash. Credit affects the price of cash because people think that credit is money (in the same way that fool's gold might affect the price of actual gold). If someone (the mafia?) issued IOUs (different from cash in appearance but with the same units) for cash which were generally trusted then the price of cash would fall until doubts concerning the value of the IOUs arise. Then a discrepancy between the value of cash and the IOUs (credit) would appear. If we do not trust that the IOUs will (or can) be redeemed for actual cash then they become less valuable... But the person who has been issuing the IOUs might prefer not to exchange them for actual cash (even if they have the ability to print cash) when people ask for it.

Since the IOUs (bank credit) will not be redeemed for actual cash, people have been "tricked" (better to say mislead, perhaps innocently) into thinking that they are valuable when in fact they are not...

So deficit spending (and bank lending) causes inflation (of prices) because people mistakenly think that the Government is credit-worthy (or that the State guarantee of bank deposits is reliable). And if they see no reason not to value Treasuries (or credit) they will value cash less highly in comparison... If people "think" that (behave as though) credit is money, then so long as the definition of money is derived from people's behaviours, we must say that it is.

We can understand the inflationary mechanism (of issuing bank credit) by thinking about the relationship between Scottish banknotes and "British" banknotes... when extra Scottish banknotes are issued, they have an appearance which is markedly different from English notes but with the same units. The Scottish banknotes will cause inflation among British banknotes, just as if they were the same. Similarly, a separate class of (company) shares, whilst being different in appearance will dilute the value of existing shares... Lottery tickets issued on a different colour paper will reduce the value of existing tickets (because the winnings will be shared among a greater number of people).

The difference between currency inflation and (for example) shares is that, whilst the stock clearly references ownership of a company, currency is self-referential and does not signify a share of a particular thing. If a currency can be said to represent ownership of the country then bank credit (if it is reliable) confers to the owner a similar quantity of ownership rights as cash does which is why it causes inflation (so long as the guarantee is believed). Whatever the value of cash is derived from then (so long as it is valuable) the value of credit is derived from the same place.

Wednesday 8 April 2009

Landowners are subordinate to the State

2009-03-28T07:28:00.004-07:00

It only makes sense to tax criminals or those with an "excess" of property... Taxing those with little property is equivalent to slavery

Taxation is slavery when the State takes from those who have little property... it can only be justified to take money (on behalf of the State) from an otherwise innocent person, if that person has an excess of property rights (upheld by the State).

Remembering that property rights can only be upheld (recognised) by the State, or a body with similar characteristics to a State, taxation (where no fault has been established, as for transactions...) can only be justified in redistributing resources which have come to be "unfairly" allocated. More simply, unless you have done something wrong, the State can only justify taking your stuff if they think it should belong to another person. That being the case, and assuming they are justified in thinking that, then it cannot make sense to take money (by force) from an otherwise innocent person if they themselves have very little property.

If you have done nothing wrong, then the State must be acting in a way to enhance the distribution of property... which cannot be enhanced to a more equitable system if the person being deprived of property via taxation has little or no property themselves. It doesn't make sense to tax the poor unless the State is acting only out of self-interest and for the interests of those employed or associated with the State (not a true justification).

It can only be justified to tax the wealthy (in terms of property rights), or criminals.

...it wouldn't be an aggressive (initiation, or threat of violence) act for the State to withhold protection of property rights from wealthy landowners. The land then "given up" by the landowners would then fall under the control of the (democratic?) State. The State could then allocate the land which falls into their hands in a democratic way.

The State "should" only (agree to) protect the property rights of people who do not have an excess of property... So if you want to obtain (own) extra property beyond what is considered a reasonable amount, the State would not help you to protect it, or recognise your ownership.

Wednesday 1 April 2009

The price of fiat is set by the State (and the people) using taxation

2009-03-28T07:28:00.003-07:00

Fiat money is an extension of property rights, but in a sense it (this aspect of property rights) is a negative right because the scarcity is artificial (imposed by the State). It assumes the individual not to have a right to freedom as a given, that it must be earned

The State thinks that fiat money is valuable and will exchange it for land... It is valuable because the State thinks that it is valuable. If the State decides to collect other goods, rather than fiat, when collecting taxes the value of paper money would immediately plummet.

Taxes aren't the reason that fiat is valuable because that is arbitrary.

Fiat isn't valuable.

When the State decides to stop bashing people on the head for crimes they are innocent of (or actions which they come to realise are not harmful, or (justifiably) punishable) fiat will be worthless. But they will only come to realise that when challenged not through their own thoughtful enquiry...

Fiat is valuable because the State says that it is: they force you to sell your possessions at a price set by them... Taxation is the means by which the State sets the price of fiat. Price fixing results in shortages of the commodity in question (when the price imposed is below market, as is usually the case) because it is no longer economic to sell the commodity at the false price. The State sets the price of fiat above the market price... If land (or labour) is then (as a consequence) set at a price which is too low this results in shortages (of land held in private hands).

The State likes to think that (a unit of) fiat is worth a great deal of land (land is cheap), the people will think the opposite (land is expensive). The State likes to think "they" own the land whereas the people like to think it is owned by the people.

It is a simple battle between private and public ownership... But who really cares about public ownership (of land)? Collective farming doesn't work very well because the proceeds are "shared", meaning that there is no (idiosyncratic) reward for working the land. Public ownership of land can be helpful if the land becomes "unowned" as in the case of leisure parks, in this way no one is free to farm the land (neither allotments (idiosyncratic produce, effectively the same as private ownership) nor collective farming (shared produce)) but if people are hungry this will not be tolerated. It ("unowned" land) is like having a "wilderness" which is not affected by human influence... although we can visit.

If the State acts to remove pieces of land from ownership by an individual (or private group) with the intention to make the land common land, not used for commercial purposes, then this can be beneficial. Not all land needs to be owned by someone, some of it can be left to the other species of the Earth... a wilderness which we can visit and which in time will become a resource greater to everyone than it would otherwise have been.

It can be designated (to be) land beyond (the ownership of) individuals and Nation States. A World Park?

Wednesday 1 April 2009

Update: A "World Park" (World Parkland) would be made up of land which is left aside for nobody. No one is entitled to stake a claim on the land, so long as the International body responsible denies them that right. A country with a strong need to be allocated some of the partitioned land can lobby and negotiate with the other Nations to be given some of the land...

This would be a solution to the problem of land allocation which arises when people see no reason to restrict their own access to land... take for example a hypothetical island with two inhabitants. In order to live peacefully, once they have decided not to share the island, they draw up a border and split the island in two between them. They do not (usually) think to split the island into three and to leave the third section unpopulated. The proposal for World Parks ("International Reservations"?), is to propose exactly that... (1st Apr'09)

Update: Not all of the land must be owned by someone... Some of the land can be left to the wilderness and for nature to thrive. We can leave this land alone and not develop it or grow crops on it. We can "develop" land which is allocated to people and not (the land that is) left alone. This does not mean we are not able to enter (and enjoy) the land that is set aside, only that we do not consider it to be "ours" above the other species of the earth.

The set-aside land can be said to belong to the animals... (27th April'09)

The poor (and lower-middle class) should be exempt from Income Tax (regardless of what they earn)

2009-03-28T07:28:00.001-07:00

The exchange of property is not a crime... tax wealth not earnings. The rich (not high-earners) should pay more tax

Does a person have a (divine) right to a share of the Earth? If a person is innocent of any (violent) crime, do they have a "right" to a share of the Earth? If I have done nothing wrong and I find myself without land is it right that I "should" be given some by State force? What if I "spend" the land? Then would it be preferable for everyone to have an allocation of land (and subsequently an income?) which they are unable to sell?

The reason the person cannot sell the land is that they will then not be able to reclaim a further plot of land... it can be shown that they already possess a piece of land. If they are in difficulties as a consequence of selling the land that is a responsibility of charities and other welfare provision, it is no longer a question of land rights.

You wouldn't be able (allowed by the State) to sell your land rights... so you could only plead poverty if you were in debt to another person, or for some reason you are disabled in another way. If you sold your land that would be a private arrangement (similar to sub-letting property...) not recognised by the State. It would only be enforceable in private courts (not State courts) and so the ownership for the purchaser of the land would not extend to the State level and hence would be of reduced value.

The State won't let you sell land below a minimum level... you can't have less than a certain amount of natural resources. It's not violent to prevent someone from selling property rights recognised by the State... because they are upheld by the State in the first place... the State is a player (the third party) in the transaction and must give approval. You would need the permission of the State to sell your property.

Is aggression defined by the State?

Since property rights are defined (upheld) by the State and any transgression of those rights is viewed as initiating violence, then can it be said that the State defines the understanding of violence (in Society)?

And if violence is defined (and punished) by the State then why is Income Tax acceptable unless the State chooses to contravene the NAP?

For the State to impose an action which the individual is not able to freely refuse, surely the State must claim that he or she has done something wrong... or perhaps there is a greater (emergency) need? Or if the State seeks to provide another individual with a fair share of the Earth's resources then why would they punish trade since that does not demonstrate that you own an excess of resources (and does not alter your ownership).

It is reasonable for the State to "punish" land ownership, if not for any other reason than it is the State which upholds property rights...

Why tax people simply for earning money... why not tax them for more justifiable reasons, such as owning an excess of natural resources?

Tuesday 31 March 2009

Update: Individuals could make a dispensation appeal (an affidavit) to the State on the grounds of poverty, which would mean they no longer must pay Income Tax. The threshold for payment of taxes of this kind could be quite high meaning that many people would not pay any income tax. The "poor" (or even lower-middle class) would be given a tax-break... (31st Mar'09)

Does a Land Value Ceiling make things more fair?

2009-03-28T07:28:00.000-07:00

How can the wealth of the land be distributed fairly?

Introducing a Land Value Ceiling (or Cap) would restrict people from owning more than a "fair share" of the natural resources of the land... If we agree that there is a sufficiency of land to sustain all of the population then there can be no justification in restricting an innocent individual from having access to a suitable portion of land. We "should" only give birth to a child if we have sufficient resources to sustain it(*).

We can only be free if we have enough land to provide sufficient food. Land is freedom.

So should every child be given a plot of land? Yes, if we are not to put ourselves above them in importance... but "should" there be a disincentive against producing many babies(*)? Perhaps, but even if there is, the disincentive should not be associated with the child itself but instead the adult(s) responsible. However, it is difficult to punish the parents without also affecting the child. Of course, people would (should) be free to voluntarily pay for other people not to have children... The ultimate sanction would be forced State sterilisation of the parents(*) but it would never come to that, for one thing the natural costs of giving birth and child-rearing would provide a disincentive.

A Land Value Ceiling, by definition would not differentiate between "virtuous" people who obtained their land rightfully and those who have benefited from aggressive behavior in the past.

Someone who does much good for those people around him or her would perhaps feel justified in wanting a greater share of the natural resources... which could then be passed on to children. So excess land could perhaps be sold (to the State) for extra breeding rights and therefore access to land.

So a woman can only give birth to a (final) third (or fourth depending on the decision of the State) child without being sterilised if she has a certificate establishing land rights, effectively money(*). On your "last" child you can pay not to be sterilised... Somewhat barbaric, perhaps better for the Mother to incur a debt (to the State) on giving birth to the "excess" child(*)? How can it be levied(*)? This encourages people to be poor...

We assume that everyone who needs to give up land property rights to the State via the LVC is virtuous, if someone else is less virtuous then that crime must be dealt with separately.

With a Land Value Ceiling it would be impossible to store wealth beyond an upper limit... even storing wealth in precious metals could be restricted if they are considered part of the Earth itself and in some sense, belonging to everyone. Certainly, if every country imposed an LVC precious metals would be deprived of their monetary properties in any case... Gold would remain of little value within any country with a Land Value Ceiling because property rights would remain the dominant currency.

Regarding children... the point is not to associate the child with the actions of the parent... we "should" not even seek to punish the parent for having extra children since to do so would suggest that She has gained above those who have not had children.

Some women will have more children than others... And as much as we might resent it(*), we must give up our land rights to the children because they are the next generation. Is there any justification to restrict someone's reproductive rights other than to avoid the problems of overpopulation and can those measures be shown to be lesser than the damage of extra children? Since this can never be shown it cannot be justified to remove (or restrict) reproductive rights, we can only make accommodation for the children when they arrive by sharing land and natural resources in the most fair way possible... come what may.

A Land Value Ceiling would enable the State to allocate resources fairly to make sure everyone has a reasonable chance in life... an appropriate share of freedom. It would enable a Society to regulate the disparities in ownership that arise through cronyism and Monopolies.

Tuesday 31 March 2009

Update: (*)No restrictions should be placed on the rights of a woman to have children... If more children are produced than the Earth can sustain, then we will see what happens.

Wednesday 29 April 2009

Inflation (to mean higher prices) is a consequence of the State guarantee of bank deposits

2009-02-18T00:14:00.001-08:00

The State makes it expensive not to lend your money...

We are "forced" to lend our money to those people who borrow from the organisation which we bank with, otherwise we lose out financially.

http://www.fscs.org.uk/
The Financial Services Compensation Scheme (FSCS) is the UK's statutory fund of last resort for customers of authorised financial services firms. This means that FSCS can pay compensation if a firm is unable, or likely to be unable, to pay claims against it. FSCS is an independent body, set up under the Financial Services and Markets Act 2000 (FSMA). Our service is free to consumers.

All money on deposit in a banking institution is loaned out to customers of the bank. Because this practice is protected by the State, it becomes uneconomic to refuse this practice by keeping your money in a full-reserve bank. So then, we all bank with State-banks and our money is loaned out to others. Where normally, we would choose not to lend our money to others, the Government intervenes in the market to make it uneconomic to refuse.

We are effectively being paid by the State to lend our money... to strangers.

Sunday 29 March 2009

Update: Old title: Everyone is being paid by the State to lend to strangers ...They aren't being paid to lend to strangers, they are being paid to (or rather penalised for failing to) place their money in an institution with a banking license (which may then lend the money out). The Government subsidises placing your money on deposit with people who will lend it out. The State subsidises institutions who want to lend your money... The State indemnifies banks against lending (and losing) your money.

Banks can lend your money because the State allows them to... (31st Mar'09)

Open thread

2009-02-18T00:13:00.001-08:00

This is an open thread to discuss Voluntary Alibi Agencies, please feel free to comment below...

Treasuries are more reliable than bank deposits

2009-02-18T00:05:00.001-08:00

Assuming people trust the Government promise to convert bank deposits into Treasuries (when needed) is sound, then bank deposits are equivalently reliable to Treasuries... Of the two (bank deposits and Treasuries), Treasuries are more reliable because they do not rely on the necessary first step of converting the bank liability in a State liability

Bank deposits have value only because the State have promised to convert them into "cash" when required. In practice this means when the security of bank deposits is threatened by doubts surrounding the reliability of deposits, the Government will step in. The Government will loan a sufficiency of money to the banks for them to meet withdrawals and for the uncertainties to pass. This means the bank deposits become the liability of the State just as Treasuries are the liability of the State.

If the State does not have sufficient cash available to meet bank withdrawals it will "borrow" on the debt markets by issuing new debt. So the obligation (to the State) has transferred from the bank account holder to the person who purchased the new debt. And bank liabilities have transferred into Treasuries. The Government will also have a commitment from the bank itself to repay the debt. So the bank now owes another person (via the Government) instead of the previous customer. The Government is now an intermediary (or guarantor) of the debt to the person who purchased the bond. The debt owned by the bank is effectively transferred to the State... but the liquidity profile may have changed.

The bond purchaser effectively buys the bank loan with an added Government guarantee, which is "sold" by the bank customer (a forced sale (forced by the deposit customer) as a consequence of the Government promise).

If we imagine a bank customer, their deposit is matched with an illiquid debt to the bank itself which cannot be redeemed early. If we assume the bond purchaser and the deposit-holder have similar preferences, the deposit-holder receives a Government liability (the Treasury) in exchange for the (term, not demand) bank loan... at a fair price.

So it true to say that bank deposits are worth no more than Treasuries and may be worth less if the guarantee to convert into State debt is unreliable.

The State is guarantor for the people who have borrowed from the bank... which makes bank deposits worth more than zero. And since the State sanctifies these debts (to the bank) then all debts are in effect State debts. A loan issued through the banking sector means that a Treasury has been issued on behalf of the borrower (to make them credit-worthy). The debt can be converted into State debt of equivalent value although perhaps not of the same duration (we have yet to see (the maturities) since very little bank deposits have yet been converted).

The banking system relies on the strength of Government debt so a collapse in the Treasury market will also mean a collapse of the banking system and will likely lead to hurried bank withdrawals. It is a contradiction to think that bank deposits are reliable and yet think that Government debt is worthless, it is not possible for a logical person to think that the bond market "should" collapse and yet still keep "money" on deposit in a banking institution. Someone who doubts Government debt will first withdraw all their money from the bank in exchange for notes and coins (cash)...

It doesn't make sense to have money in a bank account if you think that Government debt is worthless.

Sunday 29 March 2009

Update: Having money on deposit in a bank is less safe than holding Treasuries because at best, bank deposits are worth only as much as Treasuries... Bank deposits do not offer a safe haven for someone who has sold Treasuries for fear of Government insolvency. (30th March'09)

The State need not (necessarily) contradict the Non-Aggression Principle

2009-02-18T00:04:00.000-08:00

Taxation can be retaliatory and doesn't need to violate the NAP... Adherence to the Non-Aggression Principle does not obviate (rule out) the State... and the State can be justified if the behaviours that it punishes can be described as unfavourable to the people as a whole (such as crime)

The State (as a form of collective behavioural entity) can still exist even without violating the Non-Aggression Principle, just as individual can exist as such.

By "State" I mean a body with the (legitimate) power to use force against a person and even to imprison them.

The Principle of Non-Aggression states that it is inappropriate to initiate violence (or the analogues of violence such as force and coercion) against another person or body... but that violence can in some circumstances be justified in self-defence. So then, we can argue for a State to act only in accordance with these rules. For example, the State may seek redress from someone who has committed a violent act against the State which may be defined in any number of ways.

A (persistent) criminal can be considered to have transgressed against not only the individuals concerned, but also the State meaning that the State would then be justified in seeking redress.

Income Tax (or any punishment for a transaction) violates the NAP whereas, it can be argued, a tax such as the Land Value Tax does not do so

So how would the crime-fighting actions of the State be funded, if not by coercive taxation? Well, for one thing, part of the punishment for any crime could be to remove assets from that (criminal) person which can then be used to pay for Police and Prison and so on... But assuming that all criminals happen to be lacking in financial wealth, how else can crime-fighting be funded (assuming those people do not "work" voluntarily and that it cannot be (sufficiently) funded by voluntary donations...)?

Taxes can be accrued from those who it can be argued, have transgressed violently against the State. For example it can perhaps be argued that a person who damages the environment has acted violently and that it is then appropriate (or excusable) for the State to use force in seeking redress (which would be a form of taxation). Similarly, it could perhaps also be argued that a person who has engaged in anti-social behaviour (such as speeding on the roads) has acted aggressively and must then pay taxes.

Another (perhaps contentious) circumstance which may be viewed as prior aggression is that a person has an inappropriate (or unfair) amount of natural resources such as land or other property. It can perhaps be argued that people with an excessive quantity of property have "benefited" from past (usually State) aggression and it is just and fair for them to suffer for this past violation of the NAP (to no greater extent than they are presently gaining from it). These arguments are along the same lines as those supporting the Land Value Tax.

So if the State cannot be funded by voluntary donations or by selling the seized assets of those who have been violent, then it cannot exist (or at least be funded) without violating the NAP...

But, if we extend the definition of "violence" in this context to mean behaviours deemed inconducive to the public good then the State is able to collect revenue in a valid way.

Friday 27 March 2009

Update: Unless voluntary exchange of goods and services is a (violent) crime then Income Tax is a violation of the NAP. It is an arbitrary punishment... should there be a reason or justification for taxing someone, beyond needing to accumulate revenue? Should it matter what it is that the State chooses to tax? Or is it nothing more than an issue of pragmatism (easiest to tax) for the State?

There are plenty of rich criminals... Why tax someone for choosing to exchange their labour? Why do the Government punish "work"... what's the point, is it a crime? Why punish people for working? Why not punish activities we (collectively) dislike... such as violent and aggressive behaviour? (31st Mar'09)

Update2: If the definition of aggression (and violence) is defined by the State (since they define property rights) then why does working (selling labour) constitute violence, assume the State chooses to follow the NAP? (31st Mar'09)

It would be better for the banking system to collapse

2009-02-18T00:03:00.001-08:00

It would be better for the banking system to collapse and for the system to reset than to continue the State guarantee of bank deposits

The State guarantee of banking deposits is intended to prevent a collapse of the banking system arising from the inability of banks to redeem the entirety of their deposits...

It is this guarantee which allows commercial banks to increase the money supply and reduce the purchasing power of money already circulating in the economy. Preventing a failure of the banking system in this way is not sufficient compensation for the damage done to Society resulting from the extra inflation.

If the banking system collapsed (without State monetisation of commercial bank liabilities) the money supply would reduce dramatically and be held by those who were first to withdraw their money. This would have the disadvantage that the distribution of money could be held in an uneven way and it is unfair for those who do not get their money back.

However, there are ways for the Government to make things fairer, perhaps by abolishing taxes for a period of time (financed by deficit spending) which would cause inflation and allow more people to get their hands on some money.

At the moment, private banking institutions are able to deprive the rest of the economy of wealth by lending existing deposits to new customers. This is a very unstable system and unfair to everyone who does not gain directly (the banks and the State).

Allowing banks to enact Fractional-reserve lending has no advantage and only privileged entities are permitted to carry it out. It is damaging to Society because wealth is transferred without the consent of the dispossessed...

Monday 23 March 2009

Update: Eventually all bank liabilities become liabilities of the State (they are replaced with Treasuries) which means the question is no longer whether or not the State guarantee is reliable, it becomes a question regarding the credit-worthiness of the State itself. Clearly, if all the debt is monetised, meaning that the State issues either new paper money or synthetic central bank money (narrow money), the previous value of State debt (and bank deposits) will be restored. If the State refuse to print new money (for whatever reason) it will be a collapse of the currency... If we assume (predict) that the State is willing (and able?) to print the money (and that the guarantee to exchange bank liabilities with Treasuries is reliable) then we can say that "credit is money". If either of these assumptions is false (more likely the former) then it is not true to say that "credit is money". 24th March'09

Update2: For as long as the market continues to price the Government guarantee (and promise to monetise the debt) as reliable... then we can consider there to be three (or four) types of money circulating in the economy: i) Narrow money; notes and coins ii) Bank liabilities iii) Government debt iv) Unfunded Government obligations (such as unfunded pension promises). The first two are on demand liabilities, meaning that they can be redeemed at any time (for cash). Government debt (Treasuries) can only be redeemed for cash at maturity but they can be exchanged for cash at the (discounted) market price. Similarly, unfunded Government obligations can be considered to have a "fair" market price. Someone who owns this promise will have more money to spend on other things, they can even promise their pension payments to someone else in exchange for valuable assets. 24th March'09

Being watched makes people safer

2009-02-18T00:03:00.000-08:00

People would do less crime if they knew they would be a suspect

Given the choice, people would prefer to associate with people who would be under suspicion should they commit a crime. For example, a person in a crowded place with their face obscured makes people nervous because it reduces the possible downside to them committing a crime... It is mutually beneficial then (assuming we all prefer not to commit crime) for all parties to be easily identified should a crime have been committed. If we can all be observed by a fair arbiter of justice then we can be reassured that crime is less likely, since we are being watched.

The only problem for any of the participants would be if the observer is not deemed to be fair or a person prefers not to be watched. If, in that case they are able to refuse such scrutiny then there can be no reasonable objection: If the watched consent to being watched then could there be a problem? Only if being watched leads to an unstable problem... if collectively we seek to do harm to each other.

So then, if we allow (or encourage) people to associate with voluntary agencies which allow for participants to be monitored in their every-day lives it would provide security and lead to a reduction in crime. In the event of a crime being committed the agency would be able to provide an alibi for the member to the prosecuting authorities.

Such agencies could be known as Voluntary Alibi Agencies, or VAAs.

Wednesday 18th March 2009

The State will be reluctant to Monetise the debt

2009-02-18T00:02:00.001-08:00

Given the choice, the State will default on its debt

In the event of Bank Nationalisation, the liabilities of the banking sector are officially transferred to the State. This means that, in effect, depositors now hold Treasuries instead of bank deposits.

http://www.nowandfutures.com/us_argentina.html

By then there will be so many Treasuries outstanding it will become obvious that not all of them can be repaid... Then people will want to know the value of their Treasuries and refuse to receive more Treasuries in return. They will become curious to know if they can, in fact be redeemed for cash.

At this point, the Government will be very reluctant to redeem the Treasuries for cash (since that would be to relinquish power to the Treasury-holders). If it is politically possible for them to do so, the State will refuse.

They might well plead that, reluctantly they are of the view that there is a greater need elsewhere than to bail out relatively well-off Treasury-holders.

At this point the banking system has unquestionably failed.

To what extent is the State willing to print money in order to restore the banking system to its previous status? It might be sensible to conclude that, as friendly as they are to one-another at this stage in the cycle, at a later date the State may desert the banking system in the hour of need.

21st February 2009

The State takes credit for the altruism of others

2009-02-18T00:02:00.000-08:00

...and punishes people for working together.

In many sectors of Society we observe people acting in the aid of others to no apparent benefit to themselves. Unless there are reasons not to, the instinct of most humans is to help others where it is possible to do so. We have many names for this; Charity, Altruism...

The Welfare State aims to provide people who are impoverished with a chance to receive a helping hand. They are assisted by people who are motivated to help, not only to earn money. And it is often the State that takes the credit for these actions although the State had little to do with providing the care.

In the absence of the State many people in the caring profession, education, healthcare etc. would still work in those fields but perhaps for a lesser fee or even for nothing.

This "unpaid" labour received by the State in provision of services to citizens may give the impression that State services are better value (for taxes paid) than in fact they are.

21st Feb'09

Don't expect loaned money to be returned

2009-02-18T00:01:00.005-08:00

There is no honest reason to loan money... where Loan is defined to mean give up for a period of time.

http://www.thefreedictionary.com/Loan
loan n.
1.
a. Something lent for temporary use.
b. A sum of money lent at interest.

To loan money can be motivated by deception if we wish to appear more wealthy than we are for whatever reason... But providing that is not our aim, there can be no reason to lend money (a store of value) to someone else... It may be that a person would like their money to be in a more "liquid" form but that is a change of type of money, not a loan of money itself.

If money is only a store of value (and) then if it must eventually be returned no value has been transferred. I am no more wealthy if I inherit a sum of money allied to an equivalent debt. It is only if the sum of money and the debt are mis-matched in price that wealth has been transferred.

If a person decides that, having received a loan they are now able to spend the money and work off the debt at a later date they have made a mistake. Our wealth can be thought of as being the present value of our future labour and any other valuable assets which we may have, perhaps relationships... By taking on debt our future earnings can only have been increased (by that action) if the extra debt means that we are likely to work harder or more efficiently in the future. It is to suggest that we are taking a vacation now and will work to pay it off later.

But we never take a vacation because we can't decide to work more effectively in the future, only less effectively at a particular time. A loan would have meaning if we could choose to be more productive but that is not a choice we can make. We can only choose to "take it easy"...

21st Feb'09

If the debts cannot be repaid the banking system will fail

2009-02-18T00:01:00.004-08:00

Inflation is caused when someone new (feels they) can spend money and so buying at the peak can be a cheap way to rent a house

Inflation is caused by being in debt, not spending alone. Someone new can spend money which they couldn't before getting into debt. It doesn't matter whether or not the loan is spent for it to create inflation, only that it could be spent. Money sitting in a box buried at the bottom of the garden still affects prices so long as we do not forget where it has been buried. So too, money loaned from a bank and not spent still affects prices just as it would have done if spent.

The key is that the person now feels as though they can afford to buy things which they might not have done before, they aren't (yet) worried about paying it back.

When we spend money to moves from our bank account into that of another person. What difference then does it make (to prices) that we have spent the money and it is no longer in our account?

It can be argued that a person with debts (which must be repaid) will be inclined to hoard the money as the repayment date approaches. We can consider this to be money taken out of the economy. So it is someone who is in the red (and unable to find the money to pay the debts) that contributes to inflation given that someone with cash to spare will tend to pay down the debts and return the "extra" money to the bank.

Being in debt means that, when it is repaid, money is to be destroyed at some point in the future. If someone new can (and is inclined to) spend money then inflation has been created. As the deadline for the repayment of the debt approaches, fewer people can spend the money.

Borrowing (often) makes people feel rich, it is when the repayment date approaches that they feel less rich.

We can assume that once a credit bubble has formed a massive default of debts will be inevitable. If we assume the money loaned by the banks will never be returned that inflation is permanent if deposits get bailed out.

To say that only 5% (or even 1%) of bank deposits are backed by cash is to assume none of the debt is repaid. If the debt is repaid (default of debts is not inevitable) then the bank credit disappears, meaning that a greater and greater proportion of the bank deposits are fully-backed. This means the people in debt do sufficient work to pay off their creditors in the economy. The people in debt would be purchasing (exchanging for labour) the bank credit of their creditors which they would use to cancel their debt to the bank.

If you sell a house after the price has risen you have locked-in the gains...

If you sell a house at the top and deposit your money in a bank you may not get all of your money back. If the State does not bail the bank out, you may only be compensated with the original house which you sold now worth a lesser amount. You do not receive the "work" owed to you by the person who purchased the house.

A default of the banking system equalises cash-holders (no one has any cash because credit is now worth nothing) and writes off the debts because no one can pay them; we all default. And once the credit has gone we are left with the narrow money supply (cash) plus whatever the Government chooses to print... The system is doomed to fail given that the "work" required to repay the debt cannot be provided which means that, unless the State prints sufficient money for the depositors, the entire (banking) system will fail. Even if the depositors are saved the debts become worthless (to the banks) because of widespread default.

If enough money is printed before widespread default, perhaps some of the debt could be restored.

A crash (when widespread default is involved) is, by definition a failure of the banking system... and without sufficient preventative measures to allow debt-repayment (adding new money to the economy) it will be inevitable.

21st Feb'09

Will the banking system be tested?

2009-02-18T00:01:00.003-08:00

Fractional-reserve banking is the elephant in the room.

When the financial crisis is discussed, the (nature of the) banking system itself is rarely mentioned as a possible root cause. Many euphemisms have been generated such as "getting the banks lending again" and "lost confidence" but people apparently feel unable to discuss the actual situation.

http://www.phrases.org.uk/meanings/elephant-in-the-room.html
An important and obvious topic, which everyone present is aware of, but which isn't discussed, as such discussion is considered to be uncomfortable.

Why don't people think that it is profitable to mention Fractional-reserve banking?

The main reason, it would seem to me is a fear that to mention it creates a larger problem of (further) reduced "trust" in the banking system. There is a fear that widespread knowledge of the way the banking system "works" will result in a devastating collective bank run.

But it must be clear by now that those who are curious will already have a fairly good understanding of at least the general nature of the problem, if not the intricacies. They will be at least vaguely aware that Fractional-reserve banking might have something to do with the problems.

If the Authorities were to announce that a collective bank run is not a threat because they would print all the money necessary, it would allow people to discuss the system. They might be alarmed to discover that the Authorities are willing to print the money in this manner... but that would be at least moving the discussion forward. People would then (perhaps) question the wisdom of allowing commercial banks to force the hand of the Authorities by creating credit which must be replaced eventually with cash.

If the Authorities persistently refuse to confirm that they are willing to print money in this circumstance, people will come to suspect that not all bank deposits can be redeemed. This can lead to a continued stand-off whereby the public, collectively do not want to trigger a collapse of the banking system and so continue to pretend that they have no doubts.

In Argentina the general public decided to test the banking system, whereas in Japan they allowed it to go untested.

Given that the percentage of the population who have significant bank deposits is relatively minor, that would suggest a willingness for the banks to be tested is likely but it would need to be those with significant deposits (with the most to lose) who would need to make the withdrawals. So in a sense, it would be a rebellion of the middle-class and the rich (as in Argentina) for the banking system to be tested.

The public might not want to test the banking system (collectively) but if they decide (or fear) that it will be tested this will precipitate (further) withdrawals.

If people think that it will, then it will be tested... who can say?

20th February 2009

Surely the public don't have an appetite for Corralito: http://en.wikipedia.org/wiki/Corralito? (21st Feb'09)

Violence does not help the victim

2009-02-02T19:17:00.001-08:00

The State is legalised violence

According to the State violence is acceptable... Unless it acts in a way which is in contradiction to its beliefs, the State thinks that violence is an acceptable and reasonable means to resolve problems. It uses violence to solve all the problems which it is confronted with. Indeed, the State can be defined by any violent act within a Society which is seen as legitimate.

It is the most powerful gang... and is a burden on those who have chosen to lead a life outside violence, just as illegal gangs are. The legitimacy of the State rests on the use of violence only.

People only care about Politicians because they are scared of violence (be it of the State or another gang, external or internal). Peaceful co-existence allows all participants to refuse what they are offered.

Since it does not help the victim, there is no reason for the citizens of a country to be violent towards themselves... just as there is no reason for an individual to be so.

19th February 2009

Politicians don't know what the problem is

2009-02-02T19:16:00.008-08:00

The State has a "legal" monopoly on force which it uses to maintain dominance which is unethical

http://www.housepricecrash.co.uk/forum
They'll pay just enough to price you out and then make you dance for access - that's what state capitalism is all about.

As people become more enlightened they will be more inclined to let others get on with their lives unperturbed. Political parties of all types will need to have a more hands-off approach to appeal to voters. Draconian parties, be they Socially or Economically illiberal (to restrict individual preferences) will be less popular as people realise the justifications for a restrictive approach are invalid or insufficient.

Civilisation is the gradual process of realisation that coercion is not ethical, in that it does not lead to "the good life".

The back cover of issue #103 of Woodworth's Journal, The Match!, defining ethical anarchism

19th February 2009

The Government aren't able to support themselves

2009-02-02T19:16:00.007-08:00

The Government need taxpayers to support them because they aren't able to generate an income for themselves. They are unable to pay for their own expenses because they are not able to earn the money independently on the free market.

A person operating in a free market who is not able (or chooses not) to threaten others with violence if they don't hand over money must earn money for whatever they want to do themselves. For example, if the Government wanted to raise money for a new hospital it could earn the money itself to pay for it... except that it does not make a profit.

Unlike Government, Companies make a profit because they are able to provide something that people would (and do) pay for willingly.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=104221
The Four Cats

Four men were bragging about how smart their cats were.

The first man was an Engineer,
The second man was an Accountant,
The third man was a Chemist, and
The fourth man was a Government Employee.

To show off, the Engineer called his cat, "T-square, do your stuff."
T-square pranced over to the desk, took out some paper and pen and promptly drew a circle, a square, and a triangle.
Everyone agreed that was pretty smart.

But the Accountant said his cat could do better. He called his cat and said,
"Spreadsheet, do your stuff."
Spreadsheet went out to the kitchen and returned with a dozen cookies. He divided them into 4 equal piles of 3 cookies.
Everyone agreed that was good.

But the Chemist said his cat could do better. He called his cat and said, "Measure, do your stuff."
Measure got up, walked to the fridge, took out a quart of milk, got a 10 ounce glass from the cupboard and poured exactly 8 ounces without spilling a drop into the glass.
Everyone agreed that was pretty good.

Then the three men turned to the Government Employee and said, "What can your cat do?"
The Government Employee called his cat and said, "CoffeeBreak, do your stuff."
CoffeeBreak jumped to his feet.......
Ate the cookies........
Drank the milk.......
Sh*t on the paper.......
Screwed the other three cats.......
Claimed he injured his back while doing so.......
Filed a grievance report for unsafe working conditions.......
Put in for Workers Compensation...............and
Went home for the rest of the day on sick leave............

AND THAT, MY FRIEND IS WHY EVERYONE WANTS TO WORK FOR THE GOVERNMENT!!

The State will constantly explain how it is virtuous because it must justify forcing people to pay taxes under threat of violence. They claim it is for a good reason but they do not allow others to argue against them.

19th February 2009

The Government recognises bank credit and Treasuries

2009-02-02T19:16:00.006-08:00

The Government recognises bank credit and Treasuries... as forms of money. Credit is money because the Government thinks that it is.

Legal tender is valued because it is recognised by the courts as being suitable currency in the repayment of debts, particularly taxes. But so too are bank credit and Treasuries accepted in the payment of debts (by the courts) and in the payment of taxes.

Does this mean that to value either bank credit or Treasuries, an individual would need to be knowledgeable of the fact that its value is derived from such a promise? A person holding Treasuries might trust that the Government will repay the debt for irrational reasons, they might think that it will come from tax receipts or similar... but since new currency can be printed out of thin air it is always possible for the State to repay the debts (however worthless the money may eventually become).

If we are certain that the Treasury debt will be monetised the loss of purchasing power happens when the state issues more paper than it can repay through taxes, not at the point of eventual monetisation. The lottery ticket is valuable as soon as the numbers come up... you don't need to wait for it to be redeemed. In fact, a winning lottery ticket could be exchanged as currency alongside normal notes and coins. It would debase the value of other banknotes if the Government will need to print out extra currency to support it. People might not bother to redeem the note since they have no reason not to trust the Government to issue extra currency.

A person might value bank credit, not knowing the bank isn't holding a quantity of notes and coins on their behalf. Whether they are deceived in this way, or if they are aware of the realities of the situation and rely on the deposit guarantee, they will value their bank-account money. It would only be if they did not expect that the State would print the currency required in a bank run that there would be a reason to value cash more highly.

A bail-out of the banking system is not inflationary for someone who had been valuing credit (or Treasuries) equivalently to cash.

Credit and Treasuries are valuable if you trust the Government. And if enough people trust the Government, their value will never be tested because no one will redeem their deposits or sell Treasuries.

Although a sell-off in Treasuries could trigger a run on the banks? If the Government refuses to make good on customer deposits this would be deflationary in the extreme (for people who had valued credit equivalently to cash). It is unlikely any Government printing of money (for reasons other than to make good deposits) would exceed the amount that would have been required to bail-out the banking system.

Even a crack-up boom, for someone who values credit equivalently to cash wouldn't be inflationary because the Government would print less than would have been required to make good on deposits. To print more would be unjustifiable... Unless it is claimed that the needs of others are greater than those of the depositors and that the newly-printed money must go to the needy. It could be claimed that the safety net exists and so the Government could be justified in ignoring the pleas of depositors in favour of those who are in absolute (or relative) poverty.

It might be possible for the Government to argue that there are better things to spend "their" money on than helping depositors, such as social projects and similar.

19th February 2009

Taxing trade creates less redistribution than taxing wealth

2009-02-02T19:16:00.005-08:00

Taxing trade (activity) creates less redistribution than taxing wealth (assets) where "redistribution" is understood to mean acting to reduce inequalities in the distribution of wealth.

http://www.thefreedictionary.com/redistribution
re·dis·tri·bu·tion (rds-tr-byshn)
n.
1. The act or process of redistributing.
2. An economic theory or policy that advocates reducing inequalities in the distribution of wealth.

A pie chart showing the projected constituents of UK taxation receipts for the tax year 2008-2009, according to the 2008 Budget. 18th Feb'09

It is interesting to note the proportion of taxes that are raised through a levy on trade as opposed to a levy on wealth...

Fully 85% of UK taxes are sourced by taxing the trading behaviour of participants in the market-place. The remainder are (sourced from) the direct taxation of wealth, the most prominent form of which being the Council Tax which comprises not even 5% of the total (using figures for 2008/09).

Fees assigned to "taxing trade" comprising 85.5% of the Total

Income tax	28.65%
National insurance	19.33%
Value added tax	15.49%
Corporation tax	9.48%
Fuel duties	4.75%
Stamp duties	2.49%
Tobacco duties	1.40%
Beer and cider duties	0.63%
Wine duties	0.54%
Customs duties and levies	0.46%
Insurance premium tax	0.44%
Spirits duties	0.43%
Air passenger duty	0.39%
Petroleum revenue tax	0.31%
Betting and gaming duties	0.28%
Landfill tax	0.20%
Climate change levy	0.13%
Aggregates levy	0.07%

Fees assigned to "taxing wealth" comprising 10.1% of the Total

Council tax	4.60%
Business rates	4.38%
Vehicle excise duties	1.13%

Fees unassigned comprising 4.4% of the Total

Other taxes and royalties	2.90%
Capital gains tax	0.92%
Inheritance tax	0.59%

Tax on wealth (as opposed to tax on trade) tends to encourage equality because the "poor" are just as inclined to trade as the "rich". There are certain basic requirements, such as the need for food and energy which are consumed in roughly equal amounts by both groups. In fact, someone who has little money might be more inclined to trade (sell their labour) because this is a way to acquire wealth, to catch up. Someone without valuable assets such as a house would perhaps work harder than someone who has sufficient housing... the rich can afford to be more idle.

Taxing trade tends to re-enforce the status quo, whereas taxing wealth enables a more speedy redistribution of wealth.

If the Government can be seen as landlord to its citizens they you pay according to what proportion of the natural assets of the State that you occupy (an example might be the Land Value Tax). If on the other hand you pay the State according to how much "work" you do (as measured in transactions) then the Government will then be seen as a "dependent" to the people, like a parasite...

We are punished for working together and helping one-another. It would be better to tax anti-social behaviour such as pollution, or perhaps owning more than a fair shore of the natural resources such as a landlord.

18th February 2009

Credit is inflationary because people don't prefer cash

2009-02-02T19:16:00.003-08:00

Credit is inflationary if people think it is cash or if they think it is as good as cash...

If the supply of cash increases in the economy, prices will rise; we can say that the price of cash has fallen (each unit buys less)... If the supply of credit increases in the economy and people think that it is in fact cash then so too will the price of cash fall.

If people don't know the difference between credit and cash (money) then the supply of either one will affect the price of the other. If issuing extra credit means more people think they have cash then prices will rise (inflation).

Sometimes when a child opens a present it decides to play with the box rather than the gift. So then is there any reason not to describe the box itself as the gift just as much as the contents?

If they do discover a difference and conclude that credit should be worth less than cash, then this is deflationary. If they are then reassured that credit is as good as cash (for whatever reason) prices will be restored to their previous level.

Given that legal tender derives its value from taxes and its ability to discharge debts in a court of law, then if people can be convinced that bank credit (and Treasuries) will also perform the same function equivalently then they will be reassured.

We can safely assume that the courts accept those forms of currency at the present time in the payment of debts so what reason could there be for the State to rescind that judgement? The courts would need to rebel against the banks and the Debt Management Office (which issues the Treasuries). This would be a major political shift, a revolution.

So then, if they have discovered that a difference between credit and cash exists, people will discount credit to the extent that they expect a revolution of this kind...

Credit is inflationary because people don't prefer cash... or at least, if they do they don't prefer it sufficiently to compensate for the convenience (and perhaps even payment on their balance, erroneously* described as interest) of having their currency in the bank. You can either have a bank account and credit or no bank account and cash. Given that cash can't be held in a bank (with all the privileges and fees that are typical) people are satisfied with credit.

The problem with cash is that as soon as you put it in the bank it turns into credit... cash turns into credit when you put it in the bank.

The rewards for putting the money in the bank (free banking, fees and so on) for most people, outweigh the perceived risk that credit will not in the long run be redeemable for cash assuming they even are aware of a difference between the two forms of currency. People prefer to keep their money in the form of credit rather than cash because the State rewards them for doing so.

*The money has not been loaned because the customer can still get access to it on demand, so it is not interest.

18th February 2009

Update: If they (the Government) did use the freshly-printed money to pay off account-holders then the depositor would have been correct to value credit equivalently to cash... Since that isn't going to happen (it wouldn't be politically expensive to default, only a small percentage of people have significant savings) credit is currently mispriced and it would be a good idea for depositors to ready themselves to beat the rush when people come to mistrust the banking system.

Depositors are naive to think that their money will be safe if there is a collapse of the banking system. (19th Feb'09)

Understanding the financial crisis

2009-02-02T19:16:00.001-08:00

As individuals we will act according to what we think will be best for the group. For example, even if we think it might be a good idea to take our money out of the bank we will be reluctant to do so if we think it will cause system-wide failure. We might be willing to close our account if we think only our bank will fail but if we think all banks will fail we don't act, instead leaving our money in the bank.

So, assuming people do act like this, and given that all banks are in fact a single entity, we can treat "the public" as if it were a rational discrete entity.

So why then do we have a financial crisis? The financial crisis is caused by asset prices becoming too high and houses being unaffordable for people. Collectively, we have decided that this is not a good thing and that something must be amiss. We can't understand where all the money is coming from...

We can describe this feeling as "doubt" in the financial system...

As knowledge of the market becomes more complete among the participants, behaviour will change. The optimal strategy for everyone (including someone who already understands the system) will change as other people gain knowledge of the market.

So what happens now and how can this doubt be assuaged?

People aren't sure where all the money is coming from and aren't sure that the way the banking system works is a good thing... Their way to communicate that to the Powers That Be is to hesitate to take on more credit. They are effectively asking for the system to be changed, or at least examined.

The Powers That Be will respond with an attempt to reassure a sufficient number of individuals (as they think necessary) that things can't be improved, so that things return to normal. If the public disagree and think that the system can be improved the crisis will not go away.

The people suspect that Fractional-reserve banking is not a good system (partly as a response to the credit boom) and are agitating to find out if something can be done to improve it. In response, the Powers That Be will need to give assurances that at least something will be done to improve the system in the future.

18th February 2009

The State prevents people from helping each other

2009-02-02T19:15:00.001-08:00

It is the natural inclination of everyone to help people more often than not and so any interference to this behaviour will prevent people from doing that and they will help each other less.

If a person has decided, or come to the view that the human instinct is to do harm then it makes sense for them to advocate the State. If, however we realise that people, when they can, like to help one-another then we do not advocate the State.

We are at our best and achieve the most when we are working to help not just ourselves but also (perhaps) others. We don't achieve so much when we seek to do harm. As we realise and understand that other people are just like ourselves we will be less inclined to harm them and so any efforts to do so will be less productive because we won't be able to do it with such passion.

If left alone people will do good overwhelmingly... It is beneficial for them individually as much as it is collectively.

17th February 2009

We achieve more when acting separately

2009-02-02T19:14:00.006-08:00

Spending our own money achieves more than when it is spent by the State... So there is no need to worry about negative consequences in the absence of a State because more people want to live in a harmonious society than do not.

If we all try to achieve the same thing but in our separate ways we get a better result than being forced to work together. There are of course exceptions to this... at least sometimes forced labour does achieve something (an example being the Bridge on the River Kwai) but mostly we achieve more when not enslaved.

Working together through choice is better than being forced into it.

We might not agree on what is a worthwhile undertaking to pursue but there is no reason to delegate decision-making on what is a worthwhile ambition to a majority decision.Let people decide for themselves how best to spend their time.

Imagine the glorious harmonious society we could achieve without the State to mess things up constantly!

...people working together through choice on things that they care about and protecting one-another from threats, through choice. Helping those in distress out of their own volition not because they are worried about being punished for not doing so.

Why would people end up behaving like this? Because the alternative is worse: to behave counter-productively (destructively) would no longer lead to good outcomes. The State would no longer absolve you from blame when you act maliciously because there is never a justification. For example, murder committed by an Army is still murder and so on...

17th February 2009

Prices go up because banks lend deposits

2009-02-02T19:14:00.005-08:00

The practice of banks being allowed to lend a percentage of a customer's deposit leads to more people being able to spend that money which allows prices to rise. This is why Fractional-reserve banking is said to increase the money supply: The spent money remains on deposit to the original customer.

Instead of only the depositor being able to spend the money, now a second person (the borrower) can spend the same money which means that more people can afford the same goods. The difference between the depositor and the borrower is that the borrower must repay the debt at a future date.

When the borrower has repaid the debt; the situation will return to one where only the depositor has use of the money (until it is loaned again).

It becomes impossible for the lenders to pay the money back unless lots of other people keep borrowing. At which point the Government print the extra money required to secure bank deposits (perhaps) and we start again.

If they don't print the required money for the depositors but instead invest in Government projects (with fresh money) that again, would reset the system and mean that it is a good idea to take out debt.

If they allow the banking system to fail it's a good idea to borrow because the system has been reset. If the banking system is not tested by the general public this could lead to a decreasing money supply if people are wary of their deposits. In this scenario it is important to be aware of the recourse rights of the lending institution...

We are able to acquire goods without doing the work first... Preferring to delay the work to a later date. If many people take the same course of action it becomes impossible to complete sufficient work to repay the debts.

A solitary person, if the money supply was constant, would be able to borrow money and pay off the loan over a period of time. If a great number of people do the same thing there will not be sufficient work to do in the future to repay the debt because the labour market will be saturated with people looking for work.

When this happens (assuming the work can't be done*) many of them will default leading to bank failures and perhaps printing money by the authorities (if they prefer to save the depositors, which they might not).

*If the work can be done (as a result of loss of purchasing power and increased money supply)... it would mean the lenders (bank depositors) realise, or must accept, that they will be able to get much less out of their debtors in terms of work than they may have anticipated. For example, they may have loaned an equivalent of work for a year but receive in return only the work of a few months.

The losses get "written down" so to speak.

If many people have taken out a loan over a similar period of time this will result in a contraction of credit as the loans get paid back. This will mean that a unit of money increases in value and becomes impossible for the borrower to pay back.

In either scenario (default or inflation) to have taken out the loan is to the advantage of the borrower and against the interests of the "lender", the customer. If the interest on a house is less than the comparable rent (and the loan has limited recourse) then there is no risk to the borrower to dissuade them from choosing to default at the end of the loan.

Only if the money supply is roughly comparable at the end of the loan to what it was at the start can the loan be thought of as (even approaching being) equitable to both parties. A slight decrease in money supply insufficient to result in default for the borrower would be the worst outcome for the borrower.

16th February 2009

The State will leave you alone if you pay fiat

2009-02-02T19:14:00.004-08:00

Government exists to create demand for fiat...

The State is nothing more than an entity which is unprofitable yet survives through the use of force. The force (and subsequent fear) used to generate a demand for taxes is what enables the State to issue a currency that has no value. We make a peace offering to the State in the currency issued by the State.

Legal Tender Guidelines
Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation. Both parties are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes. In order to comply with the very strict rules governing an actual legal tender it is necessary, for example, actually to offer the exact amount due because no change can be demanded.

We need fiat in order to be left alone by the State... without threats of violence there would be no spontaneous demand for fiat.

We might as well agree (for everyone) to spend three days a week digging a hole and filling it up again.

The 4 Ways to Spend Money by Milton Friedman
http://www.youtube.com/watch?v=Un4-eI1T71E

1. You spend your own money on yourself.
2. You spend your own money on someone else.
3. You spend someone else's money on yourself.
4. You spend someone else's money on someone else.

"There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income." - Milton Friedman

Fox News interview (May 2004)

It is naive to believe in the State because people care about themselves before they care about other people.

15th February 2009

Fiat is only valuable if someone has less than you. (17th Feb'09)

The Government solution is always force

2009-02-02T19:14:00.003-08:00

"The best lack all conviction, while the worst are filled with passionate intensity." - William Butler Yeats

The State is an old-fashioned concept: Just as the State is prescriptive (it tells us what to do) it is filled with the passionate intensity of knowing what the right thing is to do.

Those who do not claim always to know the right thing to do are not attracted to the idea of a State because we would not claim to know what to do any better than the next person. We would not even claim that a group decision is preferable to a decision made by an individual.

If we allow for uncertainty any action must be predicated on an impulse which must be personal. There is no such thing as a group impulse, we might behave and react according what we think the group might do but that is not similar to something done by an individual.

To act as a group is to take the initiative... but against what? If there is nothing to act against why then take initiative and where is the justification for the State?

If people want to be lead they can choose a leader voluntarily and pay money to them. They don't want the Government which is why it must be forced upon them. The State controls the population.

The Government keeps trying to 'help' the population (or so they claim) but they keep making things worse.

If the Government had genuine solutions they would have been successful in the private sector. The only thing that can be offered by the Government (outside the private sector) is the use of force.

It is crazy to think that force is the best way to solve anything. Government is a crazy idea: We are forced to help those we might prefer not to help. This removes the price incentive and the feed-back of information.

14th February 2009

The Government is preemptive

2009-02-02T19:14:00.001-08:00

The Government protects against imagined problems by taking preemptive action which is almost always in excess of that which is reasonably required

Imagine a crop failure... It might be argued that it is reasonable to help the suffering parties by removing grain from surrounding (unaffected) farmers. This, it could be argued would be a reasonable thing for the State to do (a justifiable use of force). Ignoring the question of whether those farmers wouldn't give up their plentiful harvest voluntarily and the reason why they might be reluctant to do so... we assume for the moment that this is a reasonable action, to forcibly transfer the crop.

This would be a reactive action to crop failure. It is not preemptive. A preemptive action would be to collect all crops as a matter of course and only redistribute them according to who produced them (or by other means of measuring ownership or virtue) in the instance that there is no crop failure.

So to do this would be to assume the worst and then remove the State from the scenario only when the worst has been shown not to have happened.

It is analogous to the situation in War. How can it be argued that War is wrong? We can only argue that peace is better and therefore aim to de-escalate the problem.

If rather than taking preemptive action, we take only reactive action then this will lead to peace (and liberty)...

We seek to justify ourselves to others by arguing that our actions are pardonable, if only because a greater wrong has been perpetrated on us. If we weaken the strength of the argument that a previous wrong forgives a further wrong then the State is weakened.

If we allow and encourage the population to forgive and forget past slights and wounds we move closer to a peaceful world.

To forgive is to teach the perpetrator that perceived wrongs against them are not worthy of being upset over.

To forgive is a good example to set... Because the State is preemptive our only hope it that they grow tired and give up.

8th February 2009

Why must I pay taxes?

2009-01-28T06:49:00.008-08:00

If I have no obligation to another person or group why then am I in their debt?

Many reasons are given to justify the payment of taxes: It is to help make a better society, it is to help those who have not been so lucky in life... But what if we disagree that the State can improve society or that we have been unfairly fortunate in life?

Who is to arbitrate on our relative virtues? If I have been lucky in acquiring my wealth who are we to take jurisdiction over luck? Let the lucky be lucky.

We don't begrudge the lottery winner... Perhaps the belief is that the rich have achieved their material wealth unfairly... and that the State is a way to provide redress. Compensation for prior wrongs. But how have the rich coerced wealth from others? They must have been the previous State, so the argument is to use the present State to right the wrongs of previous States.

8th February 2009

The public don't want quantitative easing

2009-01-28T06:49:00.007-08:00

The public don't want bank deposits to be bailed out if that means credit is to be replaced with cash

If we make the assumption that should the banking system be tested by a widespread redemption of bank accounts, the Government will bail them out, why don't people withdraw? If they fear the Government will default on their commitment there is every reason to take the money out. So the "public"... if we can think of them as one entity, must assume that the Government will not default.

So why then as a silent bank run and deflation sets in does the public not test the banking system?

A silent bank run indicates a lack of trust in the banking system. So why then do the public not withdraw their funds? Because they do not want to be confirmed in the suspicion that to make their deposits good the Government would need to print vast quantities of money.

The public also fear the Government refusing to bail out the banks which would also lead to consequences unwanted by the general public.

So the public, not wanting either a default (leading to potential break-down of the currency system) or a bail-out of the banking system prefer to do nothing. We never find out if the State would print the necessary cash and the public prefer us all to be ignorant.

http://preview.tinyurl.com/bmjpdq

I just cant see why the government didnt pay out the savers and let the bank go bust, leaving the shareholders with nothing and the creditors who loaned them money with nothing either, as is the risk with owning shares or lending money.

I dont want to believe the PM of this country is screwing us, it looks that way to me but surely...

Why do you think he wants to be PM?

The state only exists to steal and bully. it's all it does. Why would the head of the state not be a thieiving bully?

We find a similar situation in the bond markets. Without a sell-off in the bond markets we cannot know whether the Government is prepared to buy up the debt with freshly-printed money.

To sell bonds and then find that Monetisation happens is to lose but if they refuse it would have been wise to sell the bonds. Since the market as a whole would prefer not to know that the Government is not prepared to monetise the debt they prefer not to test the fact. They go on imagining that monetisation is a possibility or that the debt is valuable for some other reason.

It is Mexican standoff: neither party wants the situation to reach a conclusion. We would prefer to pretend to ourselves that repayment is likely. From Wikipedia: "Mexican standoff is a strategic deadlock or impasse, in which no party can act in a way that ensures victory." (as at 7th Feb'09)

We don't want either a bail-out or default so instead we continue...

7th February 2009

Issuing personal credit

2009-01-28T06:49:00.005-08:00

A way to improve the efficiency of the economy and to extend the degree of personal autonomy in people's lives would be to allow trading in personal credit. At the moment we trade only the credit of nation States... Personal credit trading enables people to enter into economic relationships with others that are different to those enabled today.

At the moment we can only be in the debt of another by borrowing the currency of the State... This introduces a third party into the arrangement because currency is the credit of Government... It is possible for the State to forgive the lender any obligations (to the State) and so the lender is no worse off than they were originally. We trade the currency (credit) of a third party, they are always involved and in fact have the final word on what any of it is worth. Depending on the relationship of an individual with the State, money in the hands of one person is worth an amount according to that relationship.

The nature of State credit is different from individual credit because the State has the ability to decide that credit held by a particular person is worthless, whereas an individual who renounces credit owned by one person would affect the price of all their credit... To put it another way, personal credit can be sold to another person if there are relationship difficulties... credit of the State is different because it is not debt of the State but a promise to exert reduced harm.

If the relationship between two creditors sours, the credit can be sold... however, we always need the credit of the State. Credit of the state means we must do less work (for the State) than otherwise. It is a "negative" credit...

Currency is how people decide who gets to do less work for the Government

Each year our debt to the State increases (taxation) so currency is a way to off-set those losses. Each year the Government assumes an issuance of personal credit to itself from each of the citizens... If you haven't agreed that anything is owed why should this issuance have been assumed?

So then personal credit is a way to enable individuals to get into debt with each other without introducing the currency of the State.

The value of personal credit would be based on nothing more than the "full faith and credit" of the issuer... the holder would trust that it is worth something because it is worth something to the issuer and they can be relied on to act in a way to preserve the value of the credit. This happens in a similar way to someone who is anxious to maintain a good reputation among colleagues.

If we imagine two friends, Alice and Bob decide that they like and trust each other they may decide to reinforce that bond by issuing to one-another their own credit. If we assume for the moment that the exchange rate is roughly parity, Alice would issue Bob with ten "Alice credits" and vice versa.

They would now be in each other's debt.

How would this work? Imagine a few days later Alice decides that she would prefer to eat out that night, rather than to cook for herself. She goes to a restaurant and offers to pay for the meal with "Bob credits". The restaurant inspects the Bob credits and confirms they are a credit they are willing to accept (more on this later...). So now Alice has a full stomach and the restaurant has Bob credits. A few days later, the restaurant might give Bob a call and see if he is willing to come in later in the week and wash a few dishes to get his credit back.

They might haggle on the price of the credit, but eventually when Bob has done sufficient work for the restaurant his credit can be redeemed. Now only the credit of Alice is in circulation.

So why then would the restaurant know to recognise Bob's credit? Every person and every business would have a suite of credits (currencies) which are recognised by them. Their bank account would consist of multiple sub-accounts for each of the currencies that they accept. If a currency becomes prevalent in the locality and they do not accept it they would consider adding it to their roster of recognised currencies.

So what happens if we want to use a currency which is not widely recognised in the locality in which we find ourselves? Very simply we would exchange it for a currency that does find favour...

Imagine we are about to plan a tourist trip to a foreign place. We know that very few of the currencies that we hold will be recognised, but we happen to know that someone whose currency we hold used to live in the region and still has many friends from there. We approach them and ask if they still have currencies from the time that they were abroad? They confirm that they do and agree to exchange them for our "local" currencies.

This enables someone who is in good standing with a person to trade on their "credit" in a foreign land... it is similar to someone saying "mention my name"... we exchange social standing or status. Previously the foreign vendor (perhaps a hotel owner) would be due a favour from the person who gave their name, now everything is above-board.

So how to issue credit? A person issuing credit would use a bank to facilitate the process. They would inform the bank whenever more credit is issued or if it is bought and sold. Your bank would perhaps allow you to issue credit to a couple of dozen people. For someone to open an account to own your credit would require their (the bank's) approval.

It would be possible for the bank to issue two types of credit: Public and Private... Whoever owns the Public credit would be known to you, your bank would allow you to see who owns this type of credit... The distribution of Private credit would not be known to the issuer of the credit. The issuer, of course would know the absolute amount and perhaps the number of accounts but nothing more.

When distributing Private credit the issuer could have an auction to existing holders, without being informed of the final purchaser.

We use Government money because there is no better alternative... And since there is no wealth behind the money (the Government isn't productive) the State must tax the population to create an artificial demand.

If we could issue our own credits the justification for State money (and hence taxes) would evaporate.

Stocks and shares can be seen as an individual currency but because the demand for fiat is universal (everyone pays taxes) State fiat becomes money (the most commonly-traded good). So shares do operate like private currencies except that they are drowned out by the State.

People could use company shares instead of fiat. They don't because everyone has to pay taxes (a universal burden) which creates the demand for fiat...

http://preview.tinyurl.com/b5lv4c
for the record the BoE doesn't so much "supply the economy with money" as use violence to force all competing forms of money out of the market place.

So in this way the Government uses violence to force competing currencies out of the marketplace.

7th February 2009

Vigilantes are more efficient than State police

2009-01-28T06:49:00.003-08:00

The Cola Wars were not violent and we are a better judge of the risks we face than the State... they have no price to act upon

Individuals have a natural instinct to prevent crime, they want to live in a safe and secure environment and instinctively detect and seek to extinguish threats against them. The State monopolises security services (makes vigilantism illegal) to the detriment of Society.

There is no monopoly on truth and certainly not of justice so the authority of the State to administer "justice" has no legitimacy.

Crime would be handled by communities but without a centralised authority. The outcome (of the action) would be the judge of (the quality of) any interventionist act. Centralised authoritarian crime-prevention doesn't work because they are removed from the problem, ignorant of the subtleties of the local situation. Failure to solve the problem efficiently does not harm the State because their revenue is not dependent on performance.

Public sector policing doesn't work because there is no price incentive, there is no way to reliably differentiate between that is genuinely important to people so they end up doing whatever is easiest for them to avoid reprimand.

Helping someone out of fear of punishment for not doing so is a destructive way to organise Society because it means we do not answer to our own instincts but instead must guess what would be valued by others. If we do nothing we must answer to a perceived authority and give an explanation of our apparent laziness... instead we should act only if the impulse to so is our own...

It is damaging to act on what we perceive the desires and wants of another person to be because we are only guessing and our wants are often not shared or common to all.

Public sector policing doesn't work because people are not acting out of their own instincts and biases, they are acting on behalf of others... Someone always acts more efficiently when they are providing for themselves and so security services run by those who would most directly benefit are more efficient. We are more adept at solving our own problems than the problems of other people and more greatly motivated to do so.

People are better at looking after themselves than being protected by someone with no price incentive. They are a better judge of what makes them feel secure than the State who mandate what they consider to be suitable protection without choice. People should be able to choose their own police protection by rewarding efficient services and removing favour (funding) from those who fail to do a good job.

It might be a good idea to have competing Police services in an area and for the locals to have the ability to reward one or the other for doing a good job with increased funding and financial rewards...

To commit violence always comes with some degree of risk and is costly: People and companies will avoid doing so if the reward is not sufficient compensation and if people are well-off (we generally attack those we fear, or if we have no better choice out of poverty) the rewards will rarely be sufficient. People wouldn't do crime if they were not already made desperate... A competing firm cannot prevent you from improving your product whereas they may be able to prevent you from harming them directly.

If people have freedom, the best way for them to improve their situation is to do something constructive. If someone is not free then it becomes efficient to be destructive. It is important for people to be able to express their disapproval in a meaningful way... to make theft damaging to the thief (if discovered).

We applaud achievement even if it harms our business because it is helpful to mankind, sabotaging another firm achieves nothing for others.

People are themselves a better judge of what makes them safe and efforts should be made to further autonomy of security by allowing people to choose their own form of protection, and removing (to the extent that it is possible) this right of discretion (to chose on their behalf) from the centralised State.

We are less motivated to look after other people than (we are) to look after ourselves. Power should be given to the individual: We can police ourselves

1st February 2009

The criminal prefers the State

2009-01-28T06:49:00.001-08:00

Aggression carries a high risk, of either concurrent retaliation or retaliation after the fact (by aggravated parties)

Clearly the motivation to perform violence is heightened due to the State since resources are wasted and people are made desperate by lack of supply in goods and services. So the risk of suffering violence (at least the motivation to do so) is greater in a State system... what about the strength of reasons not to do so? The State often prohibits the ownership of weapons such as hand guns so an individual is less protected because of the State. Concurrent retaliation is not an increased deterrent under the State system.

So is retaliatory action an increased deterrent to violence after the fact in the presence of the State? Many point to what are seen as lenient sentences for violent crime in modern societies... Would a "vigilante" force* do any better?

Assuming they would do better, how do we know that they too would not become a menace? The answer is that they also face the same threat of retaliation from elsewhere and their motivation to perpetrate violence is less than it would be in a State system.

In a free market everything is more efficient and this applies to law and order just as well. If the natural end-point of evolutionary progression is less violence then a lack of a State (and hence greater efficiency) can only accelerate the development toward peace. Alternatively, someone who fears that the natural order of things is for more and more violence will then be in favour of the State to delay this eventual outcome.

The conclusion we draw is that anarchy (the lack of a State) reduces violence, not least because the practice (aggression) is no longer sanctioned and approved of by those in charge. The State is nothing more than the means by which the dominant group exert violence. It is the orthodox Mafia...

The criminal fears anarchy because "justice" would be much more swift and more damning due to the enhanced efficiency of the free market. People would require a very high standard of behaviour among those they associate with and there would be greater incentive to behave well, to enable access to the most discerning people. If a vigilante group delivers justice which is too harsh perhaps resulting in death for the victim (deemed by them to have been a criminal) then the disincentive for that group will be the retaliation of other vigilante groups loyal to the "criminal". It is less likely that such a situation will escalate in a free market because those in a position to make decisions are directly affected by the outcome, not removed from it.

A vigilante group may also issue threats to someone considered to be a criminal... the threat would be that if certain actions are repeated a sanction will follow. This can be communicated to all other vigilante groups to reassure them against (to obviate) a heated response to a surprise lynching.

The difference would be that all associations are voluntary - a free market of States - someone who feels insufficiently protected can join what they consider to be a more "vigilant" group. Naturally they would be expected to make a more significant contribution to such a group. And you would negotiate with the local group the extent of your contribution... there would be those who are willing to do protective vigilante work for free... The State prevent people from investigating crime and has a monopoly on protection... How much more efficient would crime-reduction (and prevention) be if everyone worked together, without duress or coercion...

Most people want to reduce crime but are prevented from doing so because the State has a monopoly on crime-prevention.

There are always people who are willing to protect an area, for one thing they may have children and family in the jurisdiction. "Protection" is something that cannot be separated from our behaviour, it is the instinctive reaction to violence the only question is to whom are they (those who provide security) allied? Anarchy asks for a reduction of loyalties so that the criminal can be assimilated before things get too bad... You would have to trust that violence would be reduced in a society where we all act as individuals out of self-interest.

Mostly crime is motivated by a sense of injustice, (the desire for) revenge and societal conflict (if you are concerned for your belongings hide them in a safe or get insurance). If you are fearful of a random attack then, because the State has disarmed you, you are weakened.

If you are killed would there be an investigation and repercussions for the criminal? Would a vigilante group take any interest? Yes, because to have a murder in the neighbourhood represents a risk to those living... You would want to make sure you are safe by living in a safe neighbourhood. You would leave an area that felt unsafe...

Our most powerful need is for territory... stealing possessions is of little long-term value and can easily be prevented by free market methods, insurance or safeguarding those assets. Assuming a criminal is not inclined to senseless violence, your greatest asset and target for them is territory. But, in anarchy, territorial rights are upheld by those (locally) that recognise them. To usurp someone from their territory (and to benefit from it) necessarily requires that a new person is taking advantage of the stolen territory.

The neighbours can see very easily that something has changed and may chose to take action damaging to the criminal.

Your assets are recognised and upheld by your neighbours so unless they recognise (and approve) your legitimacy to own them (which they wouldn't if you have taken them forcibly) then they cannot be stolen. You would only be allowed to join a neighbourhood if it can be shown that your behaviour is of high standing... But the good thing would be that security is provided locally and not administered by a distant central authority.

*The vigilante force would comprise a loose association of individuals whose security is heightened by their mutual association. A "free-loader" who seeks security without putting themselves on the line (at risk) would be stigmatised and would need to satisfy those who would risk their own safety that their commitment is reciprocated. Without that element of trust neither would the "free-loader" feel protected because he/she would sense that others doubted their commitment.

31st January 2009

The State is a good way to kill ourselves

2009-01-28T06:48:00.001-08:00

Pollution and loud music justify intervention ...if consent can reasonably have been expected to be requisite or required.

Consent is a matter of opinion... to what extent do our actions require the consent of others? For example property may be disputed, a field which has not been claimed by anyone might be seen as common territory and people might object if someone claimed it for their own.

They might prefer you not to have done something but will not resist (you doing it). Perhaps the specific property rights in question have not been sufficiently well defined (yet).

When property rights have not been clearly established the concept of consent becomes nebulous. So then, how can an unfavourable action be well defined? It can't but it will have the characteristics of limiting the access of others to limited natural resources, in a similar way to pollution of the environment.

Pollution is when someone takes an unjustifiable proportion of the natural resources, for example playing loud music (to the disapproval of others, not a concert) in a crowded place.

The State is pollution... it relies on the arrogant idea that someone should have influence over you without your consent... without acting on their own, instead backed by the power of the State. There is no more reason to devote resources to the State of our jurisdiction than to any other State. We, ourselves are a resource and the State diminishes the extent of that resource. We could achieve so much more without the State. It is a pollution of the mind.

If the State is pollution who has been maligned? We can only be arrogant in the context of another: who is offended if the human race destroys itself? But then, if people starve as they did in China, Russia and anywhere else it has been tried... where is the loss?

People don't work as hard if their wealth gets stolen... they stop working. Even the ones who are willing to work don't know what to do because there is no price for anything.

We end up with nothing but at least it is shared.

31st January 2009

Get paid for doing nothing and work for free

2009-01-16T20:06:00.007-08:00

"From each according to his ability, to each according to his needs" Karl Marx

The Socialist ideal, or so they claim is that everyone lies around doing nothing whilst all the wealth is produced by people acting in the interests of others. On hearing about this scheme most people decide they would rather be in the receiving group and set about achieving that.

Socialism becomes a competition to avoid work and responsibility which is why Socialists often proclaim their personal virtues to people who have no choice but to listen. The principles of Socialism are a good idea for everyone else to follow, just not for me...

We (Socialists) imagine that our praise should be sufficient currency to motivate others to do as we would like.

The experience of history shows that when there is no reward for productivity, there is no productivity. Ants in a colony act out of self-interest not to serve the interests of a mythical group but to further their own genes... To act in the interests of the State is to act in the interests of an abstract idea. The State is not something who's wants can be known.

Communism is impossible without a centralised authority... without which to whom do the resources go before they are redistributed? It can only be totalitarianism.

Why would someone be willing or interested to advance the interests of the State, since it is nothing more than an idea, there is no reason why a person should have a bias in favour of it. If we must pay to be a member of a group, then we must pay often because we are members of may groups of different kinds. There is no non-arbitrary reason to reward the nation States that we find ourselves in... we could just as well pay money to all sorts of groups: why (do we need to) pay money to be near people?

The State does not have a right to claim jurisdiction of the land. You don't own this country and neither does the national Government.

Marxists: They think they own the place.

31st January 2009

Gilts are cash (with a time delay)

2009-01-16T20:06:00.006-08:00

Why is Government debt inflationary?

Printing (issuing) Gilts affects the value of fiat held by an individual assigned beyond the term of the Gilt. For example, someone who has sufficient money to easily last for the next year would not differentiate between a one-year Gilt and legal tender... they have no short-term need for cash.

Someone in possession of a Gilt can easily borrow money to meet a short-term need... and so Gilts act as money. The Gilt can be used as collateral for a short-term loan.

A Gilt is the same as legal tender except that you can't use it for a year... assuming no risk of Government default. It is locked-up and suffers from a temporary lack of liquidity compared to cash.

If you wait for a year the Gilt is the same as cash, or so they assume... If you are indifferent between waiting for a year and having the cash now then Gilts are "money" to you. Government debt is the promise of extra legal tender in the future so cash would have a premium over Treasuries only because it can be used in the here-and-now.

Provided you could live comfortably for the next year, why would you distinguish between the ownership of a one-year Gilt and cash? Government debt is the same as legal tender that you can't use for a period of time. If someone gave you a house but said that you can't use it for a year would you have less demand for a house?

You don't care so much about owning cash if you have Gilts and so the price falls. Demand for cash drops because the extra Gilts in circulation meet the same need (apart from in the immediate short-term) that is met by cash.

Another analogy is that the price of Oil would fall if extra Natural Gas entered the market, although they are not the same thing the price of one will affect the other since each satisfy a similar demand in the individual. Or maize and rice...

This assumes no default risk, that the debt would be monetised by the central bank... doubts surrounding their readiness to do that would of course lead to cash trading at a premium and Gilts losing value by comparison. If you're certain the debt will be repaid, Treasuries are as useful to you as cash held in trust for you (by the Government) for a period of time.

Whilst any individual has an unlimited appetite for money, it is the relative value of cash compared to Gilts or Treasuries that affects the price. Government protection (or whatever fiat money is representative of...) is limited in supply and hence the value of any unit of money is derived from the proportion of protection that it provides.

If £100 represents the freedom of one person for a week, then when the money supply goes up £100 will only buy a few days of freedom: it will be worth less. Issuing Treasuries means an expectation that in the future your £100 will buy much less freedom. Issuing one-year debt (assuming monetisation) means that £100 will buy much less freedom a year from now and (by discounting) it trades for less in the here-and-now.

Cash means that you are free today and tomorrow, Gilts mean that you are free tomorrow. (New) Government debt means that the role of cash as a store of value is compromised... because we expect that the scarcity will be reduced when the debt is monetised in the future.

If one person has more money (cash) than another they are more wealthy, but what about their relative wealth when both of them are given an amount of new Treasuries (dated to mature relatively soon)? Surely, they are now more equal in wealth.

30th January 2009

By holding fiat what do you own, your freedom?

2009-01-16T20:06:00.005-08:00

So long as the State wants fiat to be valuable, and the State has power, fiat may be converted into property rights by forced seizure of land. This would convert fiat into typical deeds to resources which could be sold into the market.

Fiat money is apparently backed by nothing more than fear of the Government... what then are property rights backed by? Just as a bond certificate entitles the holder to payment from the State at a future date, property deeds confer the right of the holder to claim ownership of an asset as recognised by the State.

Fiat money entitles the holder to a period of freedom, property deeds entitle the holder to a claim on land or other natural resources... they are similar in essence.

The way for the State to remove legal tender (fiat money) is to merge fiat with "ownership" of natural resources as recognised by deeds of the State. Why would it be preferable to exchange only deeds and to no longer have fiat, so that deeds serve the purpose of both? So long as there are property rights (recognised by the State) a "fiat" currency can be said to exist... the State could increase the money supply by issuing rights to itself, so that each previous occupant now owns a smaller percentage of their land...

An advantage of having only deeds to natural resources would be that citizens would be inclined to redeem their holdings for actual land if the banking system (or the Government) increased the supply surreptitiously... but that is no different to the fiat money system now.

Fiat money is the chosen (perhaps) abstraction of the exchange of property rights... If only barter existed, the exchange of large land rights would be problematic because it would be difficult to store value. Perhaps the best means would be antiques or art which offers a value derived from the uniqueness of each item which is part of the (source of) value within fiat currency.

Without fiat it is more difficult to store value in a form desirable to everyone, someone in a distant location wouldn't want your land unless they were prepared to relocate. Shares in property could emerge as a form of currency, for instance a percentage of a large area of farmland would yield a return and be valued by everyone equally. But against what would the relative value of each piece of land be measured, likely this would be gold or other precious metals. The requirement is that it (the money) be divisible so that relative values can be compared. Whatever commodity emerges or is chosen automatically acquires an elevated value...

Stocks in national companies could emerge as an alternate currency to fiat... they are recognised throughout a jurisdiction and have a yield which is valuable universally. Also claims on energy might be a useful means of exchange.

To get rid of fiat then, would require the seizure of land (or other natural resources protected by the State) and then reallocation according to fiat ownership... so that each unit of fiat can be redeemed (and then extinguished) for a unit of land, or similar. The amount of land seized by the State would be auctioned for all the remaining fiat in the system, after that it would not be valuable... but at what stage does the value disappear? Surely as soon as the "auction" is announced fiat is threatened? Or does the fiat become a permanent symbol (share) of ownership in State assets?

Then fiat can (already) be seen as a share in the assets of the State. So, to get rid of fiat is to get rid of the State to the extent that the State claims ownership of assets on behalf of the population: none would feel that they are owed since they no longer hold an IOU.

By giving people something of (almost) equivalent value to what they may already think they own, they will feel more independent of the State.

It should be the aim of the State to convert fiat into land rights, perhaps via Land Value Tax and buying up land. The land would then be sold to the market and the money destroyed. People are already familiar (thanks to the banking system) with the need to get rid of fiat money as soon as it is in their possession.

At what point would the fiat go suddenly to zero? At the point that the State announces all the auctions have been sold and that they are no longer aiming to convert fiat into land value... The "final auction" would set the final price on fiat, it would be rational for anyone still holding fiat to convert their holdings into land...

29th January 2009

Fiat as a proxy for property rights

2009-01-16T20:06:00.004-08:00

Fiat money is the means by which the population easily transfers property rights amongst themselves, which are upheld by the State.

But it isn't the possession of these rights which is taxed, instead it is the transfer of these rights... Fiat is a means of purchasing Government protection which enables you to survive independently without being a wage-slave* or relying on the State for handouts. Someone with a paucity of (State sanctioned) resources must pay rent even before they are able to provide for themselves...

Taxing property ownership would affect rent-seekers but it would also increase the price of rents, affecting tenants. But, overall it would be disadvantageous to rent-seekers because they would become a "tenant" of the State.

A tenant wants cheap rents but ultimately, cheap rents are associated with something (an asset) of little value. But if taxation is to be "progressive" it should fall more heavily on the rent-seekers than the tenants, rather than those who trade or rent.

To own property is to own access to life itself... someone with an excess of property can charge tenants a fee for their survival, they are selling a livelihood. Should anyone be asked to pay for (their) existence (from birth) when we clearly have sufficient resources for everyone?

Should an orphan (who otherwise would not inherit material assets) have a right to a piece of land? If yes, should giving birth to a child be restricted or even requiring of permission? Or should it be assumed that all children can be accommodated and that restrictive measures should be taken only when the limit on fairly distributed resources has been met?

So then (if the State is to recognise property), is it reasonable to tax an unfair excess of property, rather than earnings? Effectively, for people to become tenants of the State rather than employee?

*Someone who has insufficient resources to live independently, must rely on others.

28th January 2009

Common harvest, then why not common distribution?

2009-01-16T20:06:00.003-08:00

"The man who gives me employment, which I must have or suffer, that man is my master, let me call him what I will."
Henry George (1839 – 1897)

If we are not responsible for providing for ourselves then the State must provide for us and we, in return do what is necessary to appease the State. If we do feel responsible for providing for ourselves then can there be a justification for preventing us from doing so?

If someone has insufficient natural resources of their own, then they will require the permission of a rent-seeker before that person is able to provide for themselves. Their existence relies on the approval of someone else... Is it right that a person would require the permission of another to survive, given that there are easily sufficient natural resources? This situation can only arise because of an imbalance in the distribution of natural resources such as land.

Unfair distribution of "property rights" results in some of the population having no choice but to be in servitude to those who have plentiful land.

If an excess of land is taxed by the State then this will serve to redress this inequality... The (marginal) value of land would be very different for each person, someone with land already would incur extra taxes with each acre of land purchased so to them it would be very expensive, for someone with less land it would be cheap.

Then the person selling their labour could pool their resources (to farm more efficiently) and have a stake in the outcome of their production... Each person would not only be selling their labour but negotiating a claim on the labour (and resources) of others.

If we need permission to improve our circumstances then "wage slave" must be an accurate description of our position. Our ability to provide for ourselves can only be removed by the so-called "property rights" of other people.

To earn money is to take property from the State... Once property rights are established the State (to survive) must protect your assets and so has more work to do and is thus weakened. An anarchist should earn money...

26th January 2009

Work enables others to have free time

Not everyone can be idle (assuming there are some jobs no one likes to do) which means that at some point we must each pay for the time that we are idle. It is when there is no job that is not considered by someone to be leisure that we are entirely idle... (28th Jan'09)