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The War On Cash: Officially Sanctioned Theft

How banks & the government are diminishing your savings
Friday, June 12, 2015, 12:07 PM

You’ve probably read that there is a “war on cash” being waged on various fronts around the world. What exactly does a “war on cash” mean?

It means governments are limiting the use of cash and a variety of official-mouthpiece economists are calling for the outright abolition of cash. Authorities are both restricting the amount of cash that can be withdrawn from banks, and limiting what can be purchased with cash.

These limits are broadly called capital controls.

The War On Cash: Why Now?

Why are governments suddenly acting as if cash money is a bad thing that must be severely limited or eliminated?

Before we get to that, let’s distinguish between physical cash—currency and coins in your possession—and digital cash in the bank. The difference is self-evident: cash in hand cannot be confiscated by a “bail-in” (i.e. officially sanctioned theft) in which the government or bank expropriates a percentage of cash deposited in the bank.  Cash in hand cannot be chipped away by negative interest rates or fees like cash held in a bank.

Cash in the bank cannot be withdrawn in a financial emergency that shutters the banks, i.e. a bank holiday.

When pundits suggest cash is “obsolete,” they mean physical paper money and coins, not cash in a bank. Cash in the bank is perfectly fine with the government and its well-paid yes-men (paging Mr. Rogoff and Mr. Buiter) because this cash can be expropriated by either “bail-ins” or by negative interest rates. 

Mr. Buiter, for example, recently opined that the spot of bother in 2008-09 (the Global Financial Meltdown) could have been avoided if banks had only charged a 6% negative interest rate on cash: in effect, taking 6% of the depositor’s cash to force everyone to spend what cash they might have.

Both cash in hand and cash in the bank are subject to one favored method of expropriation, inflation. Inflation—the single most cherished goal of every central bank—steals purchasing power from physical cash and digital cash alike. Inflation punishes holders of cash and benefits those with debt, as debt becomes cheaper to service.

The beneficial effect of inflation on debt has been in play for decades, so it can’t be the cause of governments’ recent interest in eliminating physical cash.

So now we return to the question: Why are governments suddenly declaring war on physical cash, the oldest officially issued form of money?

The first reason: physical cash has the potential to evade both taxes as well as officially sanctioned theft via bail-ins and negative interest rates. In short, physical cash is extremely difficult for governments to steal.

Some of you may find the word theft harsh or even offensive. But we must differentiate between taxes—which are levied to pay for the state’s programs that in principle benefit all citizens—and bail-ins, i.e. the taking of depositors’ cash to bail out banks that became insolvent through the actions of the banks’ management, not the actions of depositors.

Bail-ins are theft, pure and simple.  Since the government enforces the taking, it is officially sanctioned theft, but theft nonetheless.

Negative interest rates are another form of officially sanctioned theft.  In a world without the financial repression of zero-interest rates (ZIRP—central banks’ most beloved policy), lenders would charge borrowers enough interest to pay depositors for the use of their cash and earn the lender a profit.

If borrowers are paying interest, negative interest rates are theft, pure and simple.

Why are governments suddenly so keen to ban physical cash? The answer appears to be that the banks and government authorities are anticipating bail-ins, steeply negative interest rates and hefty fees on cash, and they want to close any opening regular depositors might have to escape these forms of officially sanctioned theft.  The escape from bail-ins and fees on cash deposits is physical cash, and hence the sudden flurry of calls to eliminate cash as a relic of a bygone age—that is, an age when commoners had some way to safeguard their money from bail-ins and bankers’ control.

Forcing Those With Cash To Spend Or Gamble Their Cash

Negative interest rates (and fees on cash, which are equivalently punitive to savers) raise another question: why are governments suddenly obsessed with forcing owners of cash to either spend it or gamble it in the financial-market casinos?

The conventional answer voiced by Mr. Buiter is that recession and credit contraction result from households and enterprises hoarding cash instead of spending it.  The solution to recession is thus to force all those stingy cash hoarders to spend their money.

There are three enormous flaws in this thinking.

One is that households and businesses have cash to hoard.  The reality is the bottom 90% of households have less income now than they did 15 years ago, which means their spending has declined not from hoarding but from declining income.

While Corporate America has basked in the glory of sharply rising profits, small business has not prospered in the same fashion. Indeed, but some measures, small business has been in a 6-year recession.

The bottom 90% has less income and faces higher living expenses, so only the top slice of households has any substantial cash.  This top slice may see few safe opportunities to invest their savings, so they choose to keep their savings in cash rather than gamble it in a rigged casino (i.e. the stock market).

The second flaw is that hoarding cash is the only rational, prudent response in an era of financial repression and economic insecurity. What central banks are demanding--that we spend every penny of our earnings rather than save some for investments we control or emergencies—is counter to our best interests.

This leads to the third flaw: capital -- which begins its life as savings -- is the foundation of capitalism. If you attack savings as a scourge, you are attacking capitalism and upward mobility, for only those who save capital can invest it to build wealth. By attacking cash, the central banks and governments are attacking capital and upward mobility.

Those who already own the majority of productive assets are able to borrow essentially unlimited sums at near-zero interest rates, which they can use to buy more productive assets, while everyone else--the bottom 99.5%--is reduced to consumer-serfdom: you are not supposed to accumulate productive capital, you are supposed to spend every penny you earn on interest payments, goods and services.

This inversion of capitalism dooms an economy to all the ills we are experiencing in abundance: rising income inequality, reduced opportunities for entrepreneurship, rising debt burdens and a short-term perspective that voids the longer-term planning required to build sustainable productivity and wealth.

Physical Cash: Only $1.36 Trillion

According to the Federal Reserve, total outstanding physical cash amounts to $1.36 trillion. 

Given that a substantial amount of this cash is held overseas, physical cash is a tiny part of the domestic economy and the nation’s total assets. For context: the U.S. economy is $17.5 trillion, total financial assets of households and nonprofit organizations total $68 trillion, base money is around $4 trillion, and total money (currency in circulation and demand deposits) is over $10 trillion (source).

Given the relatively modest quantity of physical cash, claims that eliminating it will boost the economy ring hollow.

Following the principle of cui bono—to whose benefit?--let’s ask: What are the benefits of eliminating physical cash to banks and the government?

Benefits To Banks And The Government Of Eliminating Physical Cash

The benefits to banks and governments by eliminating cash are self-evident:

  1. Every financial transaction can be taxed
  2. Every financial transaction can be charged a fee
  3. Bank runs are eliminated

In fractional reserve systems such as ours, banks are only required to hold a fraction of their assets in cash.  Thus a bank might only have 1% of its assets in cash. If customers fear the bank might be insolvent, they crowd the bank and demand their deposits in physical cash. The bank quickly runs out of physical cash and closes its doors, further fueling a panic.

The federal government began insuring deposits after the Great Depression triggered the collapse of hundreds of banks, and that guarantee limited bank runs, as depositors no longer needed to fear a bank closing would mean their money on deposit was lost.

But since people could conceivably sense a disturbance in the Financial Force and decide to turn digital cash into physical cash as a precaution, eliminating physical cash also eliminates the possibility of bank runs, as there will be no form of cash that isn’t controlled by banks.

While the benefits to banks and governments of banning physical cash are self-evident, there are downsides to the real economy and to household resilience.

In Part 2: What To Do With Your Cash Savings, we’ll look at the most influential forces in play in this war, and consider strategies for preserving purchasing power, avoiding bail-ins, fees and other threats to cash savings.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

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47 Comments

Danny P's picture
Danny P
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Great article! However,

I would say it's more ethically consistent to consider taxation theft as well (it's just velvet glove stealing). It doesn't matter if it's taken for the "social good," the fact is the money is taken whether you agree or not. I like to think of the principle of taxation in the school yard: a high minded student believes many other students need bigger lunches, so he bribes and manipulates a bunch of bullies to threaten other more "privileged" students to distribute some of their lunch (and convinces the students it's their duty to have their lunches taken). That's obviously simplified, but illustrative of the principle of taxation. Essentially, it's OK to threaten and coerce all people in a geographic area if we say it's for the greater good. With the greater good argument (violence now, supposed benefit later) you can rationalize just about anything. The problem isn't the desire for "social programs" it's the initiation of force.

charleshughsmith's picture
charleshughsmith
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many will agree with you

Danny, many will agree with you, and while I see the potential for a Tyranny of the majority abuse of democracy to impose the will of the many on the wealth of the few, I discern a qualitative difference between "taxation with representation" and bail-ins engineered by unelected central banks. 

Danny P's picture
Danny P
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Yes, there's a difference, but only in insidiousness

Taxation is just a sophisticated form of theft. A sophists theft. It's not direct and it's backed by pomp, history, and tradition; but behind all that is still a threat to obey or be punished by a nonconsensual entity. As for legitimate "representation" I don't see how that can be maintained when the taxation principle relies on initiating force (it's not taxation if you can choose to pay). Theoretically, it's possible to get everyone in a geographic area (surely not the size of most countries) to agree to an institution providing XY and Z at a yearly fee, but when said institution is a government, and their laws are continually changing, they are granted the right to initiate force, and you can't opt out, then you're not really dealing with representation. To legitimately represent an individual, an institution/individual needs documented consent, and that certainly can't be true for the state. We're all simply born into a state and then told repeatedly it represents us.   

davefairtex's picture
davefairtex
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taxation, force, theft: born into it

Danny-

To legitimately represent an individual, an institution/individual needs documented consent, and that certainly can't be true for the state.

I've never found this argument compelling, because its not only individuals that have an interest in how things go, society at large has an interest too.  One might argue, society's interest is larger and more pressing.  The needs of the many, etc.

I've heard from people who espouse the uber-individualistic view - they assume that lawsuits after-the-fact can provide society with redress in cases of misconduct.  Of course, if you know anyone who is lawsuit-proof (and I certainly do), you will realize that this technique just doesn't work when it meets a truly sociopathic individual.

Some people just need force to coerce them not to be selfish jerks.

As for what defines a "selfish jerk" - well that's all about society's norms, which as you correctly point out, we are all born into.  We didn't have a vote to be born wherever we are, we just appeared, and we are dealing with it the best we know how.  You didn't choose your country, your religion, your parents, your economic level, or your race.  (Well, some people believe you did choose...but that's up one meta-level and we'll ignore that for a moment).  You got dealt a hand, dropped into a pre-existing society with the rules it has developed over time, and now you get to play it out for this lifetime.

Whatever philosophy you come up with to replace what already exists in society, it needs to be able to deal effectively with both sociopaths and psychopaths.  If you've ever dealt with either one, they really don't pay attention to much other than force.

Naturally self-interest is a powerful motivator which can be harnessed to society's benefit, so individual rights need representation to provide a nice balance.  But requiring everyone to provide documented consent for everything?  Not gonna work.  Fails on the human factor: corruption, and sociopathy.  Just like communism, actually - two sides of the same coin.

DurangoKid's picture
DurangoKid
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OMG!

I had an idea for a fanfic script for Joss Whedon's Firefly series.  Mal lands the ship at a spaceport.  Kaylee is sent out to get supplies and refuel the ship, but she doesn't return after several hours.  Suspecting trouble, Mal and Jayne go looking for her.  Can you guess where they find her?  Waiting in a long line to exchange cash for Alliance credit!  Yes, the Alliance is phasing out cash.

Back in the real world, I think we can all agree the reason for the elimination of cash is the empire is in serious trouble.  The 0.01% has been asset stripping and the bill has come due.  Guess who pays?  We need to resist this.  A few things come to mind.

1.  Hoard physical Federal Reserve Notes.  As long as they're accepted, they'll be the easiest way around bail ins and other confiscation.  Until things get really nasty, that is.

2. Gold and silver coin.  Obvious.  The downside might be that this form of transaction could be outlawed.  This would put holders of bullion in a de facto black market.  Expect sting operations, warrantless searches, etc.  On the upside, after the complete demise of the current monetary system, bullion might again be legal and thus serve as a bridge over oppressive times.

3. Local currencies.  These too could be outlawed, but until then they could work locally to keep commodities moving.

4. Ledgers.  Way back when people used to keep records of exchanges and then at the end of the year there would be a reckoning where all debts are settled.  The idea was to balance everything out on paper and make up the differences with as few exchanges as possible.  Coin money or some other high value commodity was used to fill in the gaps, not as the main medium of exchange.

5. I'm sure people smarter than me could think of other things like crypto currencies provided the network and blockchain wouldn't be hacked by the banksters.  Or US marshals could show up and confiscate the whole thing.  In the interim a local network of secure servers could operate over the net provided there are no backdoors in the OS.  I'm thinking Debian or some open source software.

All of these solutions would be vulnerable to confiscation, fines, and imprisonment.  I guess at some point the 99.99% is going to have to establish something outside of the law to protect our wealth.  As long as we play by the rules, we risk having our wealth confiscated.  When the time comes to try to function outside the sanctioned monetary system, there will be no looking back.  We will all be de facto criminals under the old rules.  I would suggest making a move sooner than later while it's still somewhat possible to transact without surveillance.

Back to Firefly.  Mal is all sorts of perplexed about how to run his ship and make payroll.  What to do?  Maybe Badger can help.  He must be feeling the pinch.  Sure enough he does.  And this is where it gets interesting.  Badger sees the writing on the wall and decides it's time to become a Browncoat.  Mal chides him for coming late to the fight.  Badger retorts that it is now in his interest to rebel.  In a cash economy it didn't matter who ran the government.  Badger's connections and Mal's leadership combine to organize a guerilla style revolt against the Alliance.  I can imagine River Tam as some sort of ninja operative for the Browncoats.  Jayne would get off on shooting things.  Mal and Zoe would be soldiers again. Wash would have to choose between staying with Zoe or leaving the revolt. Inara would quit Serenity, but regret it.  Kaylee would develop as a harder, edgier sort of character.  Booke would continue on as mentor/sage and Jayne would still wonder how he knows so much about how to conduct a rebellion.  Badger would become president of Persephone.  Of course, if the series hadn't already been canceled, it then would be.  

KugsCheese's picture
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Another benefit

Banning physical cash allows the state to inspect EVERY transaction with computer analysis. What could be bad with that???

charleshughsmith's picture
charleshughsmith
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state and force

It's a fine balance between a state that limits the predation of sociopaths (its proper role) and a state that uses force to impose a system that benefits the few at the expense of the many.  Unfortunately, banning cash and bail-ins are examples of the latter.

sand_puppy's picture
sand_puppy
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The Gandhi Defense and Psychopaths

I really appreciate the incisive analysis by CHS and the additions of DaveF and DurangoKid especially.

I'd like to piggy back onto the comments of Dave above.

Some people just need force to coerce them not to be selfish jerks.

and

Whatever philosophy you come up with to replace what already exists in society, it needs to be able to deal effectively with both sociopaths and psychopaths.  If you've ever dealt with either one, they really don't pay attention to much other than force.

I believe that to most here at PP this will be clear.  But there is one group where this is not clear.  This is the GREEN Meme (Spiral Dynamics).   Unfortunately my own family is heavily represented in the group where this is not clear.  They are deeply spiritual, and talk about Gandhi, Martin Luther King, Jr., prayer, raising one's vibrational state, spiritual protection and staying close to God at all times.  None would ever consider shooting a gun (a litmus test for GREEN).

GREEN is the level were a person becomes sensitive to others.  Empathy is strongly awakened and honest warmth, kindness, deep mutual respect and caring for others comes to life. Instead of looking for victory, a win-win outcome is sought. You care about the other person and you do not want them to be defeated so you look for an outcome that is kind and good for everyone. A GREEN Meme approach is very helpful in eliciting cooperation from others.  A team is formed where members honestly care about each other.  Many stories of winning enemies over into friendship exist.

The newly discovered power of love is intoxicating.  It seems all powerful.

Love conquers all.

I have always been able to get myself out of a bad situation by looking the other in the eye and talking respectfully.  They feel my good will and won over into friendship.

With all of the Memes, we grow out of them as we find the limits of their effectiveness and are forced to seek to find a more effective way of thinking.  The sociopath/psychopath requires GREEN to evolve.

My understanding here is that the pillars of the GREEN Meme (love, mutual respect and kindness) function through the capacity for empathy, to awakens trust and belonging-ness

The psychopath has does not have this capacity.

Love, mutual respect and kindness are just not effective in dealing with sociopaths/psychopaths.

A psychopath has NO PROBLEM AT ALL HURTING any person.

The Gandhi Defense (appealing non-violently to the other persons compassion) only works when the other has the capacity for empathy.   In the case of India, the press carried the inhumanity of the occupation to the people of England who were horrified at what their military was doing.  The sociopathic elements of the military were reined in by the populous who DID have the capacity to empathize.

However, when the press is not present, and the sociopath/psychopath feels that acts are unseen or hidden, expect unrestrained violence.

Danny P's picture
Danny P
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The needs of the many

davefairtex wrote:

I've never found this argument compelling, because its not only individuals that have an interest in how things go, society at large has an interest too.  One might argue, society's interest is larger and more pressing.  The needs of the many, etc.

I agree with you to a degree, but I don't see how a state solves the problem. The state inherently grants some individuals much greater power than others. Why accept power to do "righteously" immoral things in the hands of few regular (often more megalomaniacal) people in the name of society. People are people, and power corrupts. Also, in a government there's no real competition, and the policing is done internally, so any expectation of effective "checks and balances" is folly.

Also, "the needs of them many" is such a sophistic concept. Any smooth talking pragmatic person can come up with any excuse to benefit the "needs of the many." If you don't follow a principle, say the non-initiation of force (which is rational and we already follow, largely), then you can't say any government (From the USSR to the USA) is doing wrong. They are simply trying to initiate force on people, for "our" benefit, to the best of their ability.

davefairtex wrote:

Some people just need force to coerce them not to be selfish jerks.

Yes, but why do you need a central, inherently coercive institution to prevent people from being selfish jerks. Again, this is like saying you need a bully in the schoolyard to threaten and steal from everyone to stop a few sociopaths nobody likes anyway. Are there no other ways to stop or discourage selfish jerks? What about social ostracism, guns/pepper spray, or private security systems? 

davefairtex wrote:

As for what defines a "selfish jerk" - well that's all about society's norms, which as you correctly point out, we are all born into.  We didn't have a vote to be born wherever we are, we just appeared, and we are dealing with it the best we know how.  You didn't choose your country, your religion, your parents, your economic level, or your race.  (Well, some people believe you did choose...but that's up one meta-level and we'll ignore that for a moment).  You got dealt a hand, dropped into a pre-existing society with the rules it has developed over time, and now you get to play it out for this lifetime.

Absolutely true. But how does that legitimize intuitions that act immorally? For instance, if one is born into North Korea (extreme example, I know) and has to figure out how to live, does that mean all that is imposed on him is OK?

davefairtex wrote:

Whatever philosophy you come up with to replace what already exists in society, it needs to be able to deal effectively with both sociopaths and psychopaths.  If you've ever dealt with either one, they really don't pay attention to much other than force.

It's interesting that you say "philosophy" here, because recognizing the initiation of force as immoral does deal effectively with sociopaths. The problem is that nearly everyone recognizes that in their personal, day-to-day life and then makes a giant exception to a powerful, centralized institution. THAT does not deal effectively with sociopaths, in fact, it gives the smooth talking or rich ones a shield to gain power.

 

Time2help's picture
Time2help
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Moar False Flag Ops?

For the conspiracy minded amongst you...first the Bandidos vs Cossask shoot'em up in Waco, now up to four gunmen attack the Dallas Police Headquarters building (update - lone whackjob patsy has been identified, move along)...all smack in the middle of the Jade Helm theater of operations (East Texas). Coincidence? You decide.

Assailant Attacks Dallas Police Headquarters With Automatic Guns, Pipe Bombs (ZH)

davefairtex's picture
davefairtex
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cycles, real life, fatal flaws

Danny-

Life goes in cycles.  At the beginning of the democratic cycle, people are involved and they act as a check  on the acts of government.  Cycle goes on, people grow complacent, and government gets to do things more on its own.  Power corrupts, and it gets repressive.  People then suddenly become more interested - either that, or they turn into slaves.  A tipping point is reached, and people either act as a check on government once again, or they get a dictatorship.

Ultimately, society itself is the check on government.  It just has to care enough to fulfill its function.  And that level of caring changes over time.  Our collective behavior and desires oscillate like any other natural phenomenon.  Some generations want revolution, others want to just get along, etc.  TIde goes in, then it goes back out again.

Given the changeable nature of man himself, to imagine that there is some steady-state architecture where all will be well, forever, just because everything is privatized - or conversely, because everything is under the control of the state - is to run straight up against history that counsels otherwise.  No architecture really outlives the founding fathers.  The grandchildren of the revolution don't feel that same burning desire to water the tree of liberty.  At least not until the cycle turns once again.

The architecture that society has evolved is a mix of different approaches; some private, some public.  This compromise seems best to me, so that the system itself doesn't become a mono-culture.  As society changes in composition and behavior from one generation to the next, it can either emphasize a public approach or a private approach, as it sees fit.  It can try stuff out to see what works best.

The "everything should be privatized" gang makes one key assumption: there must be an incorruptible instrumentality that oversees the laws of the country protecting the rights of individuals alongside companies.  In other words, they assume no corruption exists.  (No doubt you'll find some hair to split with this, but without such an instrumentality, the "everything should be private" scheme falls apart because by far the best private ROI comes from corrupting that instrumentality, and we end up with crony capitalists complete with company stores, all armed with "private security" that reports to each CEO.  Is that worse than a dictator backed by an army?  Nope.  But its certainly no better.)

Likewise, the communists assume that everyone can be motivated to work hard for some amorphous concept of "collective good" rather than for personal gain - and that the leadership of said collective effort is also not subject to corruption.

There.  Now I've gored everyones ox.

We are the problem and the solution, not architecture.  We have to care.  Once that happens, a bunch of things get fixed really quickly.  Until that happens, nothing will change.

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davefairtex wrote: The

davefairtex wrote:

The architecture that society has evolved is a mix of different approaches; some private, some public.  This compromise seems best to me, so that the system itself doesn't become a mono-culture. 

Agreed, I've found that the promoters of various political and economic ideologies try to force a simplistic single narrative on everyone else in the world. Further analysis of these simplistic narratives always reveals some incorrect understanding about how the underlying processes supporting society actually work or how human nature works. Even the arch freedom-loving capitalists do the same in assuming that we should all be content going out and starting up our own companies, or working for some other company, to "produce" wealth so that we can fairly earn our own share of the pie and in doing so bring the overall wealth of society up through the free trade of our produced wealth -- all of course mediated by some one-dimensional measuring stick they call "real money". Not that this approach doesn't have a place in society since that is generally how ecological wealth is transformed into economic wealth that allows us to live and enjoy toys, but I like to take things back to ecological roots and compare our societies, and ideologies about how societies should operate, to what our ancestors experienced in tribes in the African savannah. I mean, genetically we are identical to those historical people. Doing this usually reveals great insight.

The problem is, there are few absolute laws governing our societies and economies at the higher level political organization scale. About the only scientific ones that still govern are the laws of physics and ecological thermodynamics. The rest is pretty much up to us.

Looking through the lens of thermodynamic ecology, I've always thought of the one-dimensional political left-right sliding scale (communism vs. capitalism) to be the modern manifestation of the conflicting motives (enticements?) that hunter / gatherers would have experienced 10's of thousand of years ago. Imagine a hunting party consisting of a group of men who go out and spear down a couple large game. Their incentive would be to eat one of the killings while away from the rest of the tribe, and not tell anyone, leaving only a few carcasses to bring back to feed the rest of the village -- ("oh sorry, the hunt wasn't very good today"). Similarly, a group of women (sorry to be sexist here but I think that is generally how the workload was historically divvied up) out picking berries or working the fields would have an incentive to gorge themselves out in the field and bring back a lesser amount to feed the rest of the village. Of course if game and berries are plentiful then the hunters and gatherers can not only gorge themselves but still have enough left to provide plenty to everyone in the village (interestingly this may be an explanation of why Canada has generally been seen to be a caring society -- it has one of the lowest population to natural resource ratios in the world, next to Russia, which of course fell into communism so that screws everything up). Being nice and generous is always easy when you have access to all the resources you need.

In this case, the hunting and gathering parties are the "capitalists" of today: they go out and invest the effort and time to harvest living things to consume -- they supposedly "produce" wealth, even though all they're doing is harvesting ecological production. They operate with a very positive EROEI; the energy they expend on their hunting parties is much less than the energy they bring back to power the village. This is exactly analogous to modern economics since 97% of all economic activity is powered by burning dead things no different than the deer carcasses and blueberries or firewood the capitalists of eons ago "produced" (an undeniable and uncomfortable fact that every economist, from left to right, will try to weasel out of acknowledging). The rest of the tribe back in camp constituting the children, elderly, the sick, the bureaucrats running day to day affairs, the maintenance men working on huts and making ovens, the babysitters, or just the plain lazy, represent the rest of society that needs to be supported by the hunting and gathering parties' very positive EROEI's.

The villagers do of course do valuable work in organizing the village and they deserve to be kept alive due to their contributions and the fact that they are people deserving dignity. Furthermore, the hunting parties need to have a home base, and a bunch of men roaming around hunting isn't going to be able to procreate for future generations by themselves, so they do have obligations to provide for the rest of their village. This is what taxation is all about. While some of the villagers can be expected to "pull their own weight" privately, not supported by taxation, by trading their plumbing or construction or babysitting or medical services for some meat, berries or firewood collected by the roaming parties, many of them cannot -- the sick, elderly, orphaned, or lazy. These people are analogous to whom the government is supposed to help via taxation of the "producers". It's always been the case that the villagers were able to be supported by the hunter gatherers. I see no reason why that should no longer be the case. How our societies radically differ today is that technology has greatly reduced the amount of people needed to do the hunting and gathering, and relegated most of the rest of us to village activities, doing things that really aren't totally necessary for the survival of the village (well, actually, now these activities ARE necessary for village survival, due to our sheer overpopulation and the need to organize the village very efficiently otherwise disease and anarchy would run rampant)

Is my analogy a simplistic one, just like the others? To some extent yes. But it is a valid one since it describes how energy and resources move through society from ecosystem production through harvesters, through secondary "producers" in the village, to waste out the other end, back into the ecosystem. That hasn't fundamentally changed in 10,000 years.

What's also happening today that is generally new to humanity is that as world resources run out, the villagers are blaming the hunter gatherers, and vice versa. But that problem is coupled with 0.01% of the villagers (the bankers and corporate oligarchs) having gained control and ownership of all village and hunting affairs. The 99% is relegated to virtual slavery due to lack of direct access to resources, and a forced participation in a thieving monetary system that constantly steals their wealth and maintains them in near poverty. Since the economy cannot grow due to ecological constraints (if demand picked up then prices for the resources would increase and send demand back down), the whole economy just stutters along on its downward trajectory with everyone blaming everyone else in pointless inane political diatribe, and few understanding where the real problems lie: 1) diminishing resources, and 2) thieving bankers.

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Topic seems overwhelming/Gandhi's letter to Hitler

I am appreciative of your insights and warnings and guidance Charles and Chris and others.  I am having a complete deer in the headlights reaction because I am terrified of moving cash anywhere out of the bank. Oh to change olds ways of thinking is hard, this has been the safe haven for me since the crash....it will take me time too much time to accept having to move any of it elsewhere. Simple phobic avoidance. I am terrified.

Sand Puppy you are spot on. I wanted to share this link to a letter written to Hitler by Gandhi around WWII which expressed then Green thinking clearly. M. Gandhi signs it "I remain your friend...". I am a big fan of M. Gandhi. He was no fool and at least he took some action instead of standing by and watching things unfold. Nonetheless it may not have been the right approach.  Normal people project their goodness onto others...just as psychopaths project their darkness. 

http://www.theguardian.com/culture/interactive/2013/oct/12/mohandas-gand...

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Communism vs. Capitalism

Several years ago I was fortunate to interact with a Hutterite colony in Manitoba.  For those who are unfamiliar with Hutterites, they are closely related to the Amish and Mennonites religiously, but they believe in forming collective "colonies" that practice communism.  They also openly embrace new technology.

In a Hutterite colony there is provided housing, food, clothing, and medical attention for no cost.  All this is provided by the efforts of the collective.  There is no individual money.  It is under the control of the elders of the colony. In the foreground is always the religious aspect of good behaviour, hard work, honest dealings, respect for elders, etc. It is a very patriarchal society with men completely in charge.

Interestingly, approximately 50% of the young people leave this system and 50% stay. It is a classic argument between collective and individual effort.

One thing that really stood out for me was the fact that, although everyone is supposedly equal, that is simply impossible.  Among the young, the better looking, more athletic, more outgoing were covertly being groomed as the next "leaders" as well as naturally assuming leadership roles in many small ways.

My takeaway from this experience is that life is not fair.  The challenge humans face is to try to set up systems that reduce that unfairness as much as possible.  It is a never ending struggle.

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Fundamentally, mine is a moral argument.

davefairtex wrote:

Danny-

Life goes in cycles.  At the beginning of the democratic cycle, people are involved and they act as a check  on the acts of government.  Cycle goes on, people grow complacent, and government gets to do things more on its own.  Power corrupts, and it gets repressive.  People then suddenly become more interested - either that, or they turn into slaves.  A tipping point is reached, and people either act as a check on government once again, or they get a dictatorship.

The cycles you describe are the best we can hope for under nation-states. However, I think even this process is not what happens in reality. Even if we assume that "people are involved" at the beginning (and you have to remember, many individuals have an interest in government growth, and they get to vote too), so what? What's the best they can hope for? They may follow the news and debate the best way to use political power, but in the end people are simply hoping the individuals they want in power make the best decisions (or protect and benefit their particular sector). And then, if they don't like what's going on, they pay no matter what. It's the antithesis of effective human action, counting on unaccountable middle men to supposedly protect and serve us. What is a realistic mechanism to keep such an institution at check; and if you can agree the initiation of force is wrong, why ever set up such an institution in the first place?

davefairtex wrote:

Ultimately, society itself is the check on government.  It just has to care enough to fulfill its function.  And that level of caring changes over time.  Our collective behavior and desires oscillate like any other natural phenomenon.  Some generations want revolution, others want to just get along, etc.  TIde goes in, then it goes back out again.

I think this is an interesting ideal, but again, I don't think it's practically true. Government does respond to society to a degree, as they've learned it's advantageous to themselves to keep the public somewhat satisfied and the violence hidden as much as possible. But that doesn't mean we really have much of a say. So long as enough people are employed by the state to carry out orders, and they can concoct an excuse, they can always flip a switch and turn on certain segments of the public. Also, what does "check" really mean, when no matter what you pay for their deeds? By the entire setup, it's obey or be punished. So, if I am absolutely horrified by state wars, or don't want to pay for another government program, (or, gasp, I morally object to state action) the best I can do is cast a vote for a mere self-interested person that won't listen anyway? Not much of an influence, really.

davefairtex wrote:

Given the changeable nature of man himself, to imagine that there is some steady-state architecture where all will be well, forever, just because everything is privatized - or conversely, because everything is under the control of the state - is to run straight up against history that counsels otherwise. 

This is really where I need to clarify. I'm not suggesting any "steady-state architecture." I'm simply arguing that what separates the state from all other institutions is the initiation of force, in which a few men are granted the power to force others to do their will. This is just foolish to me, and I would also consider it immoral. I realize morality is a sticky issue, but the non-aggression principle is nearly universal already (when not padded by state terminology). We teach our kids not to take other children's candy. I'm sure we'd be equally horrified if we found our child had forced his daycare playmates to give him some of their candy or be beat up by a couple of his big friends (even if he explained that he gave some back to everyone).  This is a direct analogy to state principles, only they have a load of excuses and lies for their actions, from "defense" to the "greater good" (also, as we've established, most people are born into governments so hardly think to question the water they swim in). My argument is from principle, not effect, although I think the long-term effect of accepting consistent ethical principles would be hugely positive.

davefairtex wrote:

The architecture that society has evolved is a mix of different approaches; some private, some public.  This compromise seems best to me, so that the system itself doesn't become a mono-culture.  As society changes in composition and behavior from one generation to the next, it can either emphasize a public approach or a private approach, as it sees fit.  It can try stuff out to see what works best.

I think you're conflating society and governments here. Collections of individuals could "try stuff out to see what works best," but so long as there are states all action in a geographic region is under their watch (they write the laws, after all). Just take the imposition of central banks and fiat currency. That alone puts a HUGE constraint on people's ability try things out. If you include all the taxes, regulations, and laws imposed on people, it's not really a case of individuals figuring stuff together... it's mostly people trying to figure out how the hell to live in a far-reaching system. Hell, this entire site is basically trying to figure out how to be soften the impact of government (or government exacerbated) failures. And if you're argument is that the government should simply be smaller, well I say why set up your future generations for inevitable, potentially devastating collapse?

davefairtex wrote:

The "everything should be privatized" gang makes one key assumption: there must be an incorruptible instrumentality that oversees the laws of the country protecting the rights of individuals alongside companies.  In other words, they assume no corruption exists.  (No doubt you'll find some hair to split with this, but without such an instrumentality, the "everything should be private" scheme falls apart because by far the best private ROI comes from corrupting that instrumentality, and we end up with crony capitalists complete with company stores, all armed with "private security" that reports to each CEO.  Is that worse than a dictator backed by an army?  Nope.  But its certainly no better.)

Nope. :) . First, I don't think "everything should be privatized." This assumes I believe a central mandate would be effective for positive social change. This assumes I think rules should be negotiated in as large of areas as what we know as countries today (cities or neighborhoods could make more sense, to me). I do believe privatization and voluntary trade is the most effective way for individuals to interact, but I'm not going to say people can't try other ways of organization (that's a statist approach). The only place I draw a line in the sand is the initiation of force (hopefully you're seeing a trend by now). So if one is interested in starting a community or organization where everyone voluntarily joins (no matter what their form of organization/economics looks like) I don't think anyone has the right to stop them. However, if the manager decides to start taxing the adjacent community or threaten to attack, that would clearly be unacceptable.



As for corruption, I think that's quite an assumption to say I don't believe it "exists." I'm just arguing that CLEARLY governments are a prime location for corruption. What other place can you initiate force without people blinking? The potential for widespread corruption begins in the average man's acceptance or recognition of the corrupt action. If the average man doesn't accept the initiation of force (and thus, won't become a hired gun for coercion), then it will be much more difficult for an institution to become corrupt in a way that is as immeasurably damaging as a state. When governments get corrupt, it is everyone's downfall because the state fosters, delays, and then disperses negative consequences. If a business or community becomes corrupt, the consequences largely fall on them because it's unacceptable for them to order others to pay for it.

In short:

 
Free trade = voluntary organization = voluntary payment = potentially limited corruption
(if a business tries to coerce you, clearly people find this unacceptable and can stop supporting them)
 
States = compulsory organization = coerced payment = inevitably widespread corruption
(when a state coerces you, one either doesn't recognize it or shrugs his shoulders and says, "what you gonna do?" You pay or get fined/go to jail/get shot)



So, again, to make clear: I'm not arguing for a specific set of circumstances or "architecture" in the future. I'm arguing that the initiation of force is wrong and counterproductive. The state is one of the last places on earth people accept coercion (along with some religious and parenting practices, neither to be overlooked). If a growing number of people can accept that it's wrong to initiate force (and put it into practice in their own life), then half humanity's battles are won. Then humanity can even begin looking at it's own sustainability without overt cynicism. As of now, we are simply repeating rhyming versions of history over and over again, feeling powerless and unsure what could even be done. Well, I don't think there's any answer that can "fix" a state, but we can certainly fix our minds and our actions in our own lives, and then pass along those principles to our children.

davefairtex wrote:

We are the problem and the solution, not architecture.  We have to care.  Once that happens, a bunch of things get fixed really quickly.  Until that happens, nothing will change.

I agree! But probably not in the way you mean. I think being morally opposed to the state is caring. It takes a lot of energy and is as effective as beating your head against a wall to care about what the government does. I mean, care, in the sense that you want to be aware of how to react to regime change; but as I mentioned before I don't think people have as much sway in state actions as you suggest (let alone agree on how to theoretically use the state machine).

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Decisions, decisions.

Funny how a conversation about money can evolve Naturally into a conversation about Love. Did anyone else notice the drift?

Tom Campbell (Physicist, My Big TOE) has a lot to say about that. I am not hijacking the thread. The older I get the more I realize it is all about love or fear. (Scary psychopath versus caring and sharing).

Money itself is a Left Brain model of reality. It represents the products of Civilization. The products of nature are free and self renewing. 

If we choose to remain Civilized, we are going to have to do it in space. The surface of a planet is not an appropriate place for industrial civilization.

Choose.

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a moral argument
Danny-
Fundamentally, mine is a moral argument.

I'm arguing that the initiation of force is wrong and counterproductive.

Yes, I know the Communists also feel that theirs is a moral argument - a very intensely moral argument.  Equality just sounds so reasonable.  We all are for that, aren't we?  I know I am.  Of course their system worked no better - it failed on the human element, just as I believe your morally-based system would as well.

I'm sure you don't see it that way, or you wouldn't believe the way you believe, but its really clear to me.

To use trader jargon - and acknowledging the irony of the phrase in advance - with a gun to my head, I believe the initiation of force is valid under the appropriate circumstances.  Sometimes you have to pick the least-worst option.  And yes of course that can be a slippery slope, but you just do the best you can.

And that's the key.  Doing the best you can.  I do not believe in your absolute moral statement about "initiation of force is wrong" - sometimes, initiating force is entirely appropriate, both from a personal level, and from a societal level too.  It shouldn't be the first choice, but it needs to be there.  That's just how stuff works on planet Earth.

I recognize this position, taken literally, can be used as justification to do all sorts of horrible things.  My approach is to use "the reasonable man" defense - would a reasonable man initiate force in that same circumstance.  Thats the same thing as using the metric "would society in general be ok with this conduct" as a limit or restraint to my own conduct.

And that is my recognition that society itself provides the basis for government.

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Trippy

Lots of people waking up.

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show me good violent aggression

davefairtex wrote:

I do not believe in your absolute moral statement about "initiation of force is wrong" - sometimes, initiating force is entirely appropriate, both from a personal level, and from a societal level too.  It shouldn't be the first choice, but it needs to be there.  That's just how stuff works on planet Earth.

Give me some examples of initiating force being "appropriate." Also, you do realize that it IS the first choice for governments (in that it is the fundamental basis of their power and means of acquiring resources). 

davefairtex wrote:

I recognize this position, taken literally, can be used as justification to do all sorts of horrible things.  My approach is to use "the reasonable man" defense - would a reasonable man initiate force in that same circumstance.  Thats the same thing as using the metric "would society in general be ok with this conduct" as a limit or restraint to my own conduct.

I don't think "society" is a good place to base your principles. Slavery was once widely accepted, and so was the divine right of kings and priests. The good old saying goes, "the road to hell is paved with good intentions," so it doesn't matter if those in power think they are doing good and being reasonable; or if the general person (not that I think they actually think about it) accepts their fundamental power. People accept such things as a fact of life because they are born into it, and then are raised by state acceptors/praisers/apologists, not due to a reasoned acceptance. Again, what are some ways a "reasonable man" would initiate force?

(don't forget that self defense is not initiating force)

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societal self defense & the reasonable man

Danny-

show me good violent aggression

One man's violent aggression is another man's "societal self-defense."  To you, taxes are probably violent aggression, and to another, they are just societal self defense.

So what defines violent aggression is that "reasonable man" once again, which drags societal norms right back into the mix.

I don't think "society" is a good place to base your principles. Slavery was once widely accepted, and so was the divine right of kings and priests.

I chose my words carefully in my last post.  Let me try again, this time with bold:

My approach is to use "the reasonable man" defense - would a reasonable man initiate force in that same circumstance.  Thats the same thing as using the metric "would society in general be ok with this conduct" as a limit or restraint to my own conduct.

Everyone should feel free to exceed society's norms in terms of moral behavior.  There's no requirement to own slaves.

What's more, I believe that a lot of what happens in our own crony-capitalist / surveillence-state country vastly exceeds what a reasonable man in the society would approve of.  We should not conflate where we find ourselves now with what most people in society believe should be true - if they were all in full possession of the facts.

And that last little gem brings me to my final conclusion.

Ultimately, the morality or immorality of force initiation isn't the important issue of the day.  Transparency is the issue.  SP said it best when he talked about Ghandi and why nonviolence worked - once the conduct of the army was exposed, all the reasonable people in England with empathy said "no more" and it came to an end.

Once transparency happens, the whole reasonable man/societal pressure force starts to work.  With transparency, the 96% of the population that has empathy can have a material effect.

We'll never be able to get rid of the requirement to initiate force, any more than we can unilaterally disarm and just "hope for the best."  But we can require that all uses of force be transparent.  Cops with cameras is one example.  Allowing pictures and movies of chickens with their beaks cut off fed antibiotics while living in tiny cages is another.

So if you actually want to fix something important in today's world, so that the actual conduct of affairs on the ground matches up with what reasonable people really do feel is right, don't focus on force, focus on transparency.

Of course if your true motivation is that evil force-using society is impinging on your desire to keep every dollar you earn, then by all means continue with your "moral crusade against initiating force..."  :-)

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Jubilee

In 1933, the banking system cleaned its slate by severing the link between the IOUs it had emitted and the little amount of gold that backed them. It now wants to severe the link between a debt mountain worth many times the world GDP and a residual pool of paper money that backs it, still officially under public control. By cutting this last tether, the banking system cleans its slate once again and gains unlimited powers of money creation. Humanity is to surrender the whole planet to the banks and remain utterly enslaved to repay its debt. Now what if we decide not to pay an unpayable debt?

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Gentlemen

Dave and Danny,

thank you for a very interesting exchange.  I find myself thinking things like, "ah, the force is strong in this one", and  "when the student is ready, the teacher will appear". 

Danny, I can well imagine a group of men sitting around a fire some were listening to your words.  The older men, who say little and listen a lot, may exchange quiet glances.  "This one has a fire in his belly, with a little care and cultivation he may grow into an interesting and useful man".

I am finding, as I'm sure many have before me, that one of the regrets of getting older is that I will not live to see how many promising young people turn out.

With love and respect, 

John G.

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1933 Jubilee?

Ozfig-

In 1933, the banking system cleaned its slate by severing the link between the IOUs it had emitted and the little amount of gold that backed them.

Lots of people say stuff without checking facts.  Here's a chart.  Notice how monetary gold - once revalued at $35/ounce - was well in excess of the base money supply.  You can see that M0 (currency) which is actually a component of base money, lags well behind total monetary gold.

Why the massive ramp in monetary gold after 1933?  Was it all just Crazy Franklin "Reflationary" Roosevelt?  I think, some of it was.  But also, if I recall correctly, they had an election in Germany that same year - the last real one for a while.  My guess: ramp in US gold reflects international capital flows fleeing Europe in advance of WW2.  That, and cheaper dollars had the US selling things at a big discount, which resulted in gold flowing into the country.

So - no.  The big decoupling didn't happen in 1933.  That came much later.  And also, there was a great deal of gold backing the FRNs back then - more gold than total monetary base, actually.  After the reflation, of course.

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bank credit/gold ratio

Here's another chart.  It is "total bank credit outstanding" divided by total US monetary gold: more clearly, the number of dollars in outstanding bank credit for every $1 in gold on reseve.

See that "0.79" ratio in tiny letters down there in 1945?  There was more gold than bank credit back then.  Its hard to believe, isn't it?  But those are the numbers I got from old Fed statements.  The depression really eviscerated private debt in the US: about 58% (31B down to 15B) of private bank just went away from 1929-1935.

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Thanks Dave

I do appreciate your analysis. 

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Wealth extraction pump

davefairtex wrote:

The depression really eviscerated private debt transferred wealth in the US: about 58% (31B down to 15B) (from 15B to 31B, or roughly 16B) of private bank wealth just went away to the banksters from 1929-1935.

Meh, minor tweak (no dig at you Dave, just "Fed Up").

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You missed the worst aspect

With no cash your entire economic life can be terminated at will by the State.

If you think the "Do not Fly" list is bad, wait until you are on  the "Do not Buy" list.

Perfect tool for the totalitarian state.

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davefairtex wrote: Ozfig- In

davefairtex wrote:

Ozfig-

In 1933, the banking system cleaned its slate by severing the link between the IOUs it had emitted and the little amount of gold that backed them.

Lots of people say stuff without checking facts.  Here's a chart.  Notice how monetary gold - once revalued at $35/ounce - was well in excess of the base money supply.

Base money supply is one thing, total debt under any form expressed in dollars is another, and leverage during the Great Depression was massive. So forget about base money supply, debt is the problem.

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total debt during the depression

So Ozfig.  I detect hand-waving.  Your original claim was:

In 1933, the banking system cleaned its slate by severing the link between the IOUs it had emitted and the little amount of gold that backed them.

I showed you via my two charts that the amount of monetary gold ("the little amount gold that backed them") actually increased during the period you mentioned - 1933 all the way through the mid-1940s.   What's more, total bank credit actually declined from 1929-1935.  Then you said:

Base money supply is one thing, total debt under any form expressed in dollars is another, and leverage during the Great Depression was massive. So forget about base money supply, debt is the problem.

Perhaps you didn't notice that I provided two charts, one with base money, and the other with total bank credit.  Base money + total bank credit = "the banking system", which you say had its slate cleaned and had "little gold to back it."  This statement, according to my evidence, is not correct.

So at the time you talk about, 1933, the backing of bank credit by gold was massive.  There was no issue with insufficient gold backing at that time.  That issue came much, much later, during the 1960s, when the bank credit/gold ratio totally blew out and ended ultimately with Nixon slamming the gold window in 1971.

At least, that's what the evidence shows.

Now if what you meant to say was that people couldn't pay their debts during the depression, well sure.  That's because debts remained while income plummeted.  But that had nothing to do with insufficient gold backing.

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Yes!

Bilejones:  I agree.  I often thought that the old Soviet Union government and secret police would have loved having the technology of the international credit card companies.  Being able to track every purchase and financial transaction may be more powerful than having a GPS implanted in every citizen.  The GPS only reveals a person's location.  Being able to track every purchase lets them see what you are up to as well as where you are.

JT

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Cashless Society Needed for Negative Rates-Gordon Long

Gordon T. Long has an interview related to this topic, for those interested, at: http://usawatchdog.com/cashless-society-needed-for-negative-rates-gordon-long/

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Ditto Here

The concept of a do-not-buy list would be intriguing from a central planning perspective and could be specifically customized for those deemed problematic or the particularly annoying "poster children" for anti-establishment-whatever.  Want to purchase that special "something"?  Sorry, you're not on the authorized list for that item. Or, "sorry, you've already purchased your allocation of TP this month".  No more TP for you!  Time to pull up the nearest log (or raised bed) and grab a few leaves.

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No Buy Lists: Aaron Russo talked about the same thing

The film producer, Aaron Russo, reports Nick Rockefeller attempted to recruit him to "his group."  Russo was unhappy with the plan because of the way that the common people were going to be treated in this vision and declined to accept.  Shortly before his death from cancer, he gave this interview with Alex Jones articulating the vision the Rockefellers were pursuing.

Watch from the 50 seconds mark to the 1:50 where he explains the "No Buy List" idea.

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Let's be accurate here...

Hi! I'm back. cheekyPerhaps not to y'alls pleasure.

davefairtex wrote:

show me good violent aggression

One man's violent aggression is another man's "societal self-defense."  To you, taxes are probably violent aggression, and to another, they are just societal self defense.

Sorry, I think this is logically inconsistent (and open to abuse). Taxation is inherently violent aggression, this is not just my opinion. By definition, if you don't obey you are punished, through violent force if deemed necessary by rulers. Self defense requires imminent threat to self or property, so I'm not seeing how violating both leads to some abstract "self defense." That sounds like doublespeak, to me. It's like saying your supposedly hired body guard needs to regularly punch you in order to punch a mugger in front of you. I think self defense is a concept that certainly can be refined and debated, but it's really distorting reason to include taxation. Also, are there no other ways to pursue collective defense? How much do states really protect us when they can start wars, enforce liberty destroying laws, and become totalitarian?    

davefairtex wrote:

My approach is to use "the reasonable man" defense - would a reasonable man initiate force in that same circumstance.  Thats the same thing as using the metric "would society in general be ok with this conduct" as a limit or restraint to my own conduct.

Everyone should feel free to exceed society's norms in terms of moral behavior.  There's no requirement to own slaves.

Sorry, I did misread that last part. But I still don't see that as a valid metric for ethical behavior. It leaves way too much room for irrationality and inconsistency. So what if one can exceed society's norms? The point of ethics is to have a few explicit societal expectations (enforced through ostracism or disapproval) to promote human cooperation and peace, and then for principled individuals to defend them even if it's not popular. If a "common" ethic of your society is irrational and evil (like one that supports slavery or murder of blasphemers), and popular ethics is your limit for explicitly saying "this is right/wrong", then you simply can't consistently argue even against slavery or the stoning of a blasphemer. Right/wrong human behavior is completely relative to society's baseline, according to your approach. I mean, in a way this is correct in that ethics are a human creation (a fiction) and not dictated by nature; however, that doesn't mean all ethical systems are equal in value, jf the goal of ethics is to facilitate peaceful human interactions (which I think it is implicitly).

Now, I'm not saying taxation is as "in your face" evil as those actions, but it is a violation of a principle that I think most already find valid and clearly promotes peaceful interaction (don't take things from others, especially by threat of violence). Taxation is also one of the building blocks of pretty much the most dangerous fictional entity mankind still supports: the state. Mankind accepting states puts most of the power in a relatively few hands, and then those hands can do "acceptable," initiatory violence towards mankind. 

davefairtex wrote:

Ultimately, the morality or immorality of force initiation isn't the important issue of the day.  Transparency is the issue.  

I don't completely disagree. Of course increased transparency would be helpful. However, who holds the cards in disclosing information? It certainly isn't "the people." It certainly isn't the lap-dog media. One can ask, beg, and protest for transparency, but again, those in power ultimately decide what and how to disclose information.Transparency is an uphill battle (K2 without oxygen tanks, if you will), and then you have the trouble of sorting what information is true, false, or exaggerated. You also have to fight misinformation and constant distraction of your average person. On top of all that, we have a population who is largely apathetic and zombified, or just outraged at symptoms and then patting themselves on the back for "taking a stand." I'm not trying to be overly pessimistic, I just think that "transparency" comes in spite of governments, not because they suddenly have a change of heart or we "make" them. People who dig for and communicate accurate facts are obviously invaluable, but they are all the more necessary because governments aren't transparent and, honestly, I don't think ever will be.

That's why I focus on the ethics. We have a principle (don't initiate force) that most people understand and accept in their personal lives (we freely and confidently call out thieves, rapists, assaulters, etc), but don't usually see in the state due to history, propaganda, and verbal deception. I accept the principle (the non-aggression principle) as consistently as possible, and individuals within states (some consciously, many unconsciously) violate the principle like it's their job (actually, it is). It's not just an occasional slip-up (oops, I'm sorry, I didn't mean to send you a bill for a thousand inefficient/dangerous things you never asked for), it's the defining characteristic. Obey or be punished, that's the mantra, regardless of how worthwhile their laws/regulations/defense are; or if they have "legitimate representation" (which I don't believe there's ever been). Promoting consistent and peaceful ethics DOES promote positive change, because if we can look at murderous thieves (in action, not necessary intention) and call them murderous thieves, then we don't support them and don't get wrapped up in playing their game (just vote for Bob! Serve your country! God bless America!). You don't (in fact, you can't) negotiate with people who ultimately have guns to your head. I make changes in my own life, pay off the thugs, and then focus on supporting voluntary and rational ideas and practices. We know it's possible to change and accept widespread principles and ideas, because that's what defines humanity; so I choose to focus on the consistent and non-violent ones and steadfastly support them, in spite of widespread delusion.

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davefairtex
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being reductive

Danny-

I'm clear at this point where you are coming from, and I suspect you are clear with where I'm coming from too.

I've achieved my objective, which was to understand your worldview.  I'll be reductive and summarize what I've learned.

Taxes = Evil, aggressive violence - on a par with murder, theft, slavery, etc.

An ethical, nonviolent society = A society that doesn't force me (or anyone else) to pay taxes

I realize this is not the sum total of your worldview, but it happened to be the subset that was most interesting to me.  Please feel free to correct me if I've made any errors in understanding.

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Danny P
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About right

That's my position. Although, I wouldn't say taxes are "on a par" with murder, theft, slavery. Well, maybe theft. That reduction makes it sound like it should be obvious (and makes the position sound absurd), when the whole point is it's deceptive. The consequences of taxation are also very different, as the aggression is felt much less by each individual in the moment (especially when states are going full debt/inflation mode) but can be very destructive down the road and spread to many more people.

So I suppose I didn't convince you, huh? Well, thanks for debating, anyway.

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davefairtex
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convince me

Danny-

I don't think taxes are the most serious problem we face right now.  Nor do I feel they are on a par with robbery - stealing with the threat of violence if you don't comply.  I get the argument, I just don't buy it.  I know it makes sense to you, and you're a smart guy, but I just don't agree.

Right now, here's my sense about where our serious problems lie: peak resources, crony capitalism, a complete lack of transparency, a system of debt slavery, a political system focusing on "flag burning/war on christmas" level issues, an education system that both indebts and instills compliance, a cartel-controlled and poisoned food supply, a sickcare system that reaps large profits addressing (and sometimes fabricating) symptoms while ignoring causes, a perpetual war on terror that can never have any end and justifies any amount of surveillence and mechanisms of control, and a media that serves to reinforce all of the foregoing as "normal."

So yeah.  Taxes = violence: not top of my list.  I'd be fine with taxes if I felt there wasn't this overarching - let's call it conspiracy - to floor it right as we're approaching the cliff.

Perhaps that's the subtlety of the trap.  If only the dictatorship seemed more intelligent about it all, I'd be less disgruntled...

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jgritter
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Cellophane Packages

Danny,

I'm surprised that you would feel unwelcome, you seem to be an intelligent guy with interesting things to say.  I think the rub is that you sound, and maybe are, very naive.  

I have an image in my mind of you standing in the meat section of a grocery store in front of a huge display of neatly packaged protein, expounding on the nature of the world, and believing that that refrigerator case in front of you represents all that is reality.  You sound like a young man who is unaware of the long preceding chain of events. Insemination, gestation, hot amniotic fluid spilling in the dirt.  A cute little knock kneed creature struggling to it's feet to follow it's mother out into a world of heat and cold and shit and piss and burps and farts and flies and predation only to arrive at the day when it will be unceremoniously killed, gutted, skinned, and dismembered by people working in a cold, wet, stinking environment with sharp knives and saws, before finally ending up in a clean and orderly display case were you stand, filled with moral indignation that anyone would ask you to part with 10 minutes worth of the hard earned pay you struggled so valiantly force in some brightly light, climate controlled cubical some were.

A sloppy sentence and a bit of a rant, but have you any idea how lucky you are to live in a time and place were the likelihood of some big, mean, ugly looking dude walking into your house, beating the shit out of you, f**cking violently in the ass and dragging you off by a chain around your neck to die in agony is relatively low?

So now we find ourselves at the brink of what could be among the greatest catastrophes to ever hit the human race, brought about by appalling greed, stupidity, ignorance and malice, and you're worried that someone has their hand in your pocket.

Get your head in the game, boy!

John G.

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Danny P
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legitimate ownership

davefairtex wrote:

Nor do I feel they [taxes] are on a par with robbery - stealing with the threat of violence if you don't comply.  I get the argument, I just don't buy it. 

I'm not sure you really get the argument, as you clearly just described taxation ("stealing with the threat of violence if you don't comply") but apparently want to believe it's something else (look up steal in the dictionary). Like I said, it is different in some ways (immediate impact, popular acceptance, consequences) but it logically falls into the category of stealing. I'm sorry I keep coming back to this, but it baffles my mind it's difficult to comprehend. All I can guess is that you either 1) don't like the argument 2) believe the state has a legitimate claim to a portion of each individual's property (and, in fact, is the ultimate decider in all appropriate behavior as well). If it's 2, then that's a huge claim that needs justification.

I'll "quickly" explain why I don't believe states have a justified claim:

First, I think that a respect for private property is an essential element in reducing human conflict (thus: if you want to reduce human conflict, respect private property). This is because resources are scarce, and if a society has no (or inconsistent) standards for the ownership of resources, conflict will inevitably arise. The first principle of private property is that each individual "owns" himself/herself, thus no one can justly lay claim to another's body (via murder, rape, assault, etc). This is self evident, as if one tries to claim they are "right" to control (harm or otherwise) another's body, they are simply delusional. The principle that follows self-ownership is that an individual owns the consequences of his/her actions (both good and bad). Thus, if an individual is an original appropriator and mixes labor with a substance/place, then they "own" that substance/place. Some examples would be: building a fence around some unoccupied land, cutting down a tree for firewood, catching a fish. The only way one can justly attain currently owned property is for it to be gifted or exchanged for (both, by definition, are voluntary). Violent means of attainment are considered theft.

Now the entire driving force of states, throughout history, is violating private property. A state doesn't attain property through trade or by building something of use; they come and take and control a population, through violent force if they deem necessary. A state claims to be the sole (monopoly) source of law in a geographic region, and the laws are forced upon individuals without consent. Furthermore, individuals within a region are forced into paying for the state under threat of violence. In other words, a small group of individuals lay claim to being the only legitimate arbiter of what rules to make for themselves and everyone else in a geographic region, and claims the sole right to interpret and enforce the law. This claim violates private property as a state enforces and attains resources for laws without prior consent (exchange) from legitimate owners. They also never gained legitimate ownership of a geographic region (thus, we can't be said to be paying "rent" or "restaurant bill" to the state). States (for the most part) didn't trade with original appropriators, nor did they mix labor with vast swaths of land (let alone the land a legitimate owner built his/her house/business on). Most nations gained control over regions through explicit force, and have even blatantly stolen from or murdered prior inhabitants, and all states are maintained through a continuation of violating private property.  

In short, the essence of the state is to violate private property.   

davefairtex wrote:

Right now, here's my sense about where our serious problems lie: peak resources, crony capitalism, a complete lack of transparency, a system of debt slavery, a political system focusing on "flag burning/war on christmas" level issues, an education system that both indebts and instills compliance, a cartel-controlled and poisoned food supply, a sickcare system that reaps large profits addressing (and sometimes fabricating) symptoms while ignoring causes, a perpetual war on terror that can never have any end and justifies any amount of surveillence and mechanisms of control, and a media that serves to reinforce all of the foregoing as "normal.".

Much of this I would attribute to the common acceptance of the state, the consequences of which are continually growing. If not directly, at least in our ability to deal with these problems. The root is general irrationality, but states are a huge manifestation (and positive feedback) of people's irrationality. It's similar to the medieval church: it worked because people were so irrational, but they also worked to sustain that irrationality. States are what allow people to delay natural consequences of over consumption and bad choices. Sometimes they even actively destroy resources (esp. war). Who controls and regulates education? Who controls the money supply? Who regulates and feeds the media easy stories? Who distracts the public with symptomatic (at best) issues and politics? Rejecting states and state answers plays a huge role in slowly fighting these issues. The problem is, of course, much of society is in sad shape and can't handle responsibility. If a crash happens soon, it's going to be ugly.

I'll admit, you're quite right when you say arguments against taxation shouldn't be on the top of the list for daily action. I mean, I think on a message board like this it should be heard, and I think it is an important argument to consider amongst thinkers and shakers; but in my daily life where it truly counts it's not my focus. I think you can only talk to those who will listen and know how to reason, so I don't believe in anti-tax protests or proposing the "abolition" of the state. I engage in conversation at an individual level, and treat people sincerely and as empathetically as possible. I value voluntary exchange, and there are more ways than ever to do this nowadays. The state is a huge roadblock, sure, and I think our acceptance of states (and thus their less noticed abuse) will likely lead to a scary crossroads in the future (and have clearly been terrifying in the past). However, if people are to change it's through interacting with them in a caring, sincere way; not by being some web-forum debate ninja.

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davefairtex
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individual property & philosophy

Danny-

Your whole philosophy is that individual rights should always trump the rights of society.  I get that.  I don't agree, but I really do understand it.

To me its a matter of degree rather than a matter of absolutes.  Yes, when the Feds shut down a raw milk producer with a swat team, that's clearly wrong.  But if someone doesn't pay their taxes for years yet is perfectly happy to make use of services provided by the state, that's wrong too.  Its a matter of where the balance should be, society vs individual.

Where is the balance today?  My opinion: the state has way too much power right now, and it has become decoupled from the society.  But that's just a matter of society/state balance and that sort of thing tends to happen in cycles.  My solution is to get the state back in balance with society, as opposed to either virtually eliminating the state, or saying society's rights are always trumped by the individual.

I'm not sure you really get the argument, as you clearly just described taxation ... but apparently want to believe it's something else. Like I said, it is different in some ways but it logically falls into the category of stealing. I'm sorry I keep coming back to this, but it baffles my mind it's difficult to comprehend. All I can guess is that you either 1) don't like the argument 2) believe the state has a legitimate claim to a portion of each individual's property (and, in fact, is the ultimate decider in all appropriate behavior as well). If it's 2, then that's a huge claim that needs justification.

So, I find myself getting frustrated.  I'm sorry you are baffled, but I guarantee that the problem is not a comprehension issue - at least, not on my side anyway.  I'll make my central point once more, at the risk of being seen as obnoxious:

  • Society has rights.
  • Individuals have rights.
  • The nexus of these two circles in the venn diagram is where the struggles occur.

In my belief system, in some cases taxation is robbery.  In other cases, it isn't.  In my opinion, the discussion should be about where the balance should lie, rather than about one side always winning while the other one always loses.  I'm happy to talk about individual cases, but when you trot out your theories of the absolute supremacy of individual rights and as a result you declare that society has no rights, you just lose me.

So, as you can see, there are no comprehension issues, there is just disagreement.

Disagreement is permitted, yes?

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gillbilly
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Individual vs. Society

I just had a chance to read the debate between Dave and Danny. Danny, I'm curious where you draw the line between your beliefs and reality? Taxes are collected to plow and maintain roads, protect ecosystems, provide public assistance and care such as fire departments and police, create laws to protect individuals. Do you own your property outright and never leave the premises?

Farmers used to be responsible for clearing the roads in front of their properties. They discovered they would be more productive (individually) if they hired one person to do it full time so they could concentrate on farming. So they all chipped in (taxes) and hired one person, with one set of machinery to do the work (instead of all farmers having their own resources). They all enjoyed more productivity, more trade with their neighbors, and it reduced the cost and price of their crops.

A generation later, along comes the farmer who wasn't a part of this original arrangement, and he doesn't feel like he should have to pay for the guy who clears the roads...but of course he is happy to travel on the roads that have been cleared. He was born well into the continuum of this arrangement and benefits from it, but feels like he should have the right to say no to it. His refusal is seen as "theft" by the rest, and they decide to enact a law to force him to pay. Why? Because once he starts the idea rolling that it's okay to not pay, and there are no repercussions, the agreement begins to unravel and all suffer.

So, do you travel to work on public roads? Do you use public bathrooms? Do enjoy a walk through a public park? Do you expect the police to show up when your house is broken into, or the fire department to show when it's on fire? Are all these things forced on you?

One reasonable person can go to the town hall, make a case as to why the majority of the town shouldn't pay for something, and if it makes sense, the town will vote for the change...one individual person! It starts locally and then moves to the state level and then on to the federal level. In the Northeast, there was talk that a nuke plant would never close. It closed this past January 1st. 

It can be messy, it can be inefficient, it can be frustrating, it can be unfair, but we have to continue to strive to do the best we can. We can do things to protect ourselves from the negative aspects, i.e. being more resilient, but we can not separate ourselves completely from it, nor should we try.

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Sterling Cornaby
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Dave and Danny Debate

Yes, I also do agree with Danny that taxation is very much abused and federal government takes much more then there 'fair' share. I would much rather see city/county governments provide all most the 'benefits' we equate to government (roads, court houses, police, welfare).  Taxation at the Federal level (and many states as well) is abused for power and does not really go to the common man.  I don't want a bloated Federal military, I don't want Trillion dollar banks bailed out on the promise of my future earnings (taxes). 

I believe much in the same vain as Danny is explaining; though it is changing at least for me as I get a little older.  'Property rights' only really work in a world where there are is a bathroom in the house for every person... 

Moyers: What happens to the idea of the dignity of the human species if population growth continues at its present rate?

Asimov: It will be completely destroyed. I will use what I call my bathroom metaphor. Two people live in an apartment and there are two bathrooms, then both have the freedom of the bathroom. You can go to the bathroom anytime you want, and stay as long as you want, for whatever you need. Everyone believes in the freedom of the bathroom. It should be right there in the Constitution. But if you have 20 people in the apartment and two bathrooms, no matter how much every person believes in the freedom of the bathroom, there is no such thing. You have to set up times for each person, you have to bang at the door, "Aren't you through yet?" and so on.

The same way democracy cannot survive overpopulation. Human dignity cannot survive it. Convenience and decency cannot survive it. As you put more and more people into the world, the value of life not only declines, it disappears. It doesn't matter if someone dies. The more people there are the less one individual matters.

Issac Asimov, quoted in A World of Ideas by Bill Moyers (May 26, 1989)

Right now, we have a world of ever increasing population and diminishing resources (scarcity). Just that by itself is going to make the world less free and create a world of haves and have nots.  The idea of property rights gets stretched very thin in places where needs such as water is getting scarce.  In this case you have a old Mormon ranch getting eaten by the water needs of Las Vegas; this is an exact case where the needs of more people doing dumb things crushes an individuals property rights.  I would have to say property rights work really well in a world with a moderate level of scarcity, but too much scarcity and this idea really breaks down.  

In the extreme, I believe people will not even own themselves in a world where energy per-capita is very low.  I believe the main reason for slavery in the past had much more to do with energy per-capita then any moral ideals such as a 'A person has the right to own himself'. Greek philosophers, American Christian's, etc all had slaves when the energy per-capita was low.  

Well you can do two things to eliminate slavery and have property rights; have more energy or have less people.  Get this ratio off two far and the nature of bathrooms takes over.  In my mind that's the crux of it. 

Thank you both for the debate, it is helpful.

Sterling

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Mark_BC
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Posts: 373
The idea that taxes are evil

The idea that taxes are evil and should be abolished is absurd on so many levels and reveals an illogical line of thinking. Firstly, there's the practical aspect: since there will always be some form of a government, how will it get funded? Will it just print up its own money to fund its expenditures? Well that is inflationary and that created money must be removed from the economy somehow, and taxation of some sort is how. 

Secondly, there is always this underlying assumption with anti-taxation advocates that the simple act of private individuals "producing" goods and services and offering them into the market, in and if itself, is sufficient to provide wealth to society and that taxation is nothing more than a parasitic burden to this "production". However, I've never seen anyone who promotes these views actually try to explain how that production actually happens. The Mises institute is amongst the worst in this respect and it's taken to an extreme in the writings if Ayn Rand. I've never seen someone use the word "produce" so often yet not seem to have the foggiest idea of what underlying processes actually enable that production. Personally I get tired of the ideological debates. Ideology is good because it provides a framework for understanding, but if it isn't tied to real-world processes then ideology is merely an intellectual diversion not worthy of much. The human mind functions by creating abstractions and this allows imaginative people to create and take the stories created by such extractions to levels beyond what is consistent with the real world. 

In reality, wealth is transformed, not produced, and stemming from this fundamental shift in understanding comes a different model of how wealth moves through societies and how taxation and government fits into that. Of course, the absurd system we are all enslaved to now is nothing to legitimately gauge taxation since everything in today's financial system is highly abberant and not sustainable. 

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Mark_BC
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Digital money will never work

While the government may try to implement a cashless system as a last ditch effort to retain control and steal the remnants of wealth from the masses, I don't envision this lasting or even working at all. 

We we can be sure that the US dollar and trade deficit are going to end soon. The implications of this to the US economy which is so consumption driven will be tragic. The result socially will be mass unrest and collapse, I see no way around this. 

Now, in that scenario, imagine how they are going to be able to maintain a functioning and responsive internet in all corners of the country!!! Add to this the fact that  the US no longer manufactures electronics and the cessation of trade of most electronic gadgets from china due to the trade deficit ending, well I just can't imagine how every till in the Us is going to be able to afford  all the newly expensive foreign card reading machines. It would be like imposing a cashless society on africa, isn't going to work. 

Not it going up happen, and if they try I will take that as confirmation that they don't have a clue what they are doing and are losing control.  The best way to create skyrocketing demand for pm's is to ban cash. 

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Michael_Rudmin
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Posts: 531
A generation later...

Let's edit that, shall we? A generation later, along comes the farmer who sees that whereas he used to own and run his own toll road, now the "builder" tolls the roads far in excess of the work he does.

He sees that the taxes are used to pay worthless lazy louts to sit on his land and criticise. He sees that the percentage of his income that is taken, without his consent, went up from 10%, to 15%, to 25%, to 70%, and now for many of his friends is pushing 105% IF he wants to use those roads or healthcare he has paid for.

No, maybe taxes aren't inherently theft -- I can be agnostic about that one, though I disagree.

But at some point, they have become theft.

Whatever happened to "a laborer is worth his wage"? What ever happened to "you shall eat by the sweat of your brow"? Or "you shall eat the fruit of your labor"?

Theft happened.

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Danny P
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Posts: 9
Positive rights, Negeative rights, Trade VS Taxation
Hello, all. Here's an extended reply to a few of your comments. I'm commenting slowly as to not take up too much of my time. My suspicion is that this is not the most effective way to debate, but hopefully it's of some use or interest to you guys.

davefairtex wrote:

Your whole philosophy is that individual rights should always trump the rights of society.  I get that.  I don't agree, but I really do understand it.

davefairtex wrote:
  • Society has rights.
  • Individuals have rights.
  • The nexus of these two circles in the venn diagram is where the struggles occur.

 
Rights are a tricky issue. Rights are another fiction, some useful, some dangerous. I think the best way to look at rights are "positive," and "negative." Positive rights is the concept that one inherently deserves to get something and that someone/group MUST provide it to him/her. This is a bastardization of the original idea, I think. People think they need states to provide (by force) these positive rights. Healthcare, education, defense, roads etc. are some typical things people think the state must provide to all individuals. When I hear one say they have a "right" to these things, all I hear is "I want these things, and I want it for free." Negative rights, on the other hand, are simply principles that exclude individuals from acting upon you. The right to life and liberty are negative rights. One doesn't need to take action to provide something for you, but they don't have a right to act upon you. The main problem with positive rights is that they require violating the much more rational negative, "liberty" rights. The state cannot provide "positive rights" for free, as someone must pay for the provisions. Positive rights are also illogical, as one cannot claim something is owed (inherently by someone else) to them simply for living. In layman's terms we call these people entitled, and it's just not a healthy or sustainable notion to pander.



As for individual vs societal rights, negative rights cover both. Society is simply a large group of (somewhat) culturally similar individuals interacting together, so any conception of rights must apply to both individuals and society at the same time. For example, it is irrational to say that one person can't initiate force, but if "society" votes to do so it is suddenly acceptable. The notion of societal rights is madness when considering positive rights, as society is put at odds against each other. Suddenly, people believe if they're not getting something for free, somebody else is oppressing them. The truth is, nobody has a responsibility (logically and in reality), enforced at gun point, to provide things to others. Not only is this immoral, but it's highly impractical: if there are positive rights (a universal concept) then everyone owes everyone else something. That's just nonsense. That doesn't mean certain things aren't desirable to many: defense, healthcare, and education; but we can't say these things MUST be provided or your rights are being violated.  The only right that can be applied universally and consistently to society is the right to life and liberty (to not be coerced, murdered, raped ,etc). Everyone is capable of universally respecting this proposition and "acting" it out because all that is required is that you respect (don't initiate force upon) individuals and their property.
 
I think trying to come up with the right alchemy for a state to enforce whatever "rights" they ultimately see fit is a fools quest. When rights can only be rationally sustained in the very basic negative rights, what's the use of a far reaching, violating, centralized entity to supposedly defend those rights? Once again, I just can't bring myself to accept the proposition, "to protect your inalienable rights, one institution must violate those rights."
 
 

gillbilly wrote:

Danny, I'm curious where you draw the line between your beliefs and reality? Taxes are collected to plow and maintain roads, protect ecosystems, provide public assistance and care such as fire departments and police, create laws to protect individuals. Do you own your property outright and never leave the premises?

 
Yes, taxes are used to provide these things. It's another question entirely whether they must be provided through coercion. I'm obviously not against such things in general, but I think it would be much better to have a society where they weren't "paid" for though violence by a monopolistic entity. I would also argue the state does either a ineffective or hypocritical job at most of these. For example, they create laws (like don't steal) but then make the forceful confiscation of property a bedrock of their practices (hypocrites). They say they want to protect the environment yet support a military industrial complex and then blow shit up way out of proportion for "defense." Do I leave my property? Of course, nobody chose the state they live in and we all must still live within it. Do I use the roads? Of course, but that doesn't mean they can only be built through taxation. Is it wrong for me to use the roads? No. To use a metaphor, if someone puts an iPad in my mailbox with a note that says, "this is for the benefit of society!", and I use it, do they have a right to demand payment at gunpoint accusing me of stealing? No, because I never agreed to purchase the iPad and they are forcing me to pay for it. It's the same with roads and other services, only many are monopolized needs we are born into (not a frivolous iPad), and all of them are provided by force in an absence of choice, therefore it isn't morally wrong to use them. 
 

gillbilly wrote:

Farmers used to be responsible for clearing the roads in front of their properties. They discovered they would be more productive (individually) if they hired one person to do it full time so they could concentrate on farming. So they all chipped in (taxes) and hired one person, with one set of machinery to do the work (instead of all farmers having their own resources). They all enjoyed more productivity, more trade with their neighbors, and it reduced the cost and price of their crops.

gillbilly wrote:

A generation later, along comes the farmer who wasn't a part of this original arrangement, and he doesn't feel like he should have to pay for the guy who clears the roads...but of course he is happy to travel on the roads that have been cleared. He was born well into the continuum of this arrangement and benefits from it, but feels like he should have the right to say no to it. His refusal is seen as "theft" by the rest, and they decide to enact a law to force him to pay. Why? Because once he starts the idea rolling that it's okay to not pay, and there are no repercussions, the agreement begins to unravel and all suffer.

What you've described are NOT taxes. People voluntarily chipping in to have an outside source provide a service is called a voluntary transaction, not taxation. If the road clearing service starts doing a bad job in your scenario, I presume the farmers can stop using that service and choose a new service. If this were a taxation situation, then the road clearing "service" would threaten the farmers if they refused to use their service: send them higher bills saying they must continue paying or they will eventually send thugs with guns. 
 
As for the young farmer who comes along and doesn't want to use a road clearing service, well there are many non-coercive options in dealing with this fellow. Chances are if the farmer is buying the property, he understands and respects the value of voluntary transaction. One could simply explain that they pay for this service and it would be great if he continued (why would he be an asshole when reputation is an important aspect of local business?). The key question is who owns those particular roads? If the road is legitimately owned by a group of farmers (they built or exchanged for them), they have the right to ban him from use if he doesn't buy in and support the cleaners. Rationally, one either has to pay for service or own the roads. So they could set up a gate and charge him a fee if he doesn't want to buy the roads. There are likely hundreds of ways to try and figure out such problems without violence, and all of this would be talked about before he bought the property. Many times, the power of social disapproval and ostracism are enough to get people to do (or not do) something. 
 

gillbilly wrote:

One reasonable person can go to the town hall, make a case as to why the majority of the town shouldn't pay for something, and if it makes sense, the town will vote for the change...one individual person! It starts locally and then moves to the state level and then on to the federal level. In the Northeast, there was talk that a nuke plant would never close. It closed this past January 1st.

 
I see what you're saying to a degree. I'm sure there's some more efficacy at a local level. However, it's still not a voluntary position to be in. For example, I cannot go and negotiate what specifically I want to support. I cannot convince them to become donation based, or to abolish property tax as they have no rightful claim to a portion of my property. I cannot tell them that I never asked for them to represent me or my neighborhood or my business, therefore I'm not paying them and I'm not following their regulations. Chances are, eventually they too would send someone to arrest me for noncompliance if I disobeyed their rules. It may be an interesting start (if the only governments were local), but the fundamental issue is still there: you obey and pay for them or they can arrest you. They have a legal right (obligation, even) to violate your property. Perhaps if there's a concept for local governance that doesn't violate property rights, I'd be a little more interested. 
 

Sterling Cornaby wrote:

Right now, we have a world of ever increasing population and diminishing resources (scarcity). Just that by itself is going to make the world less free and create a world of haves and have nots.  The idea of property rights gets stretched very thin in places where needs such as water is getting scarce.  In this case you have a old Mormon ranch getting eaten by the water needs of Las Vegas; this is an exact case where the needs of more people doing dumb things crushes an individuals property rights.  I would have to say property rights work really well in a world with a moderate level of scarcity, but too much scarcity and this idea really breaks down.

 
This is an interesting point. You may be right, that in our current approach (deficit spending, debting, distracting ourselves to oblivion) people may wake up one day and find out the Titanic is sinking and they don't have the skills/knowledge/character to cope... and then rip each other apart. But none of this has to do with the legitimacy of private property. I think there IS enough to go around (not at our current consumption levels, forever) and that people can choose to downgrade before killing and robbing each other. I think free markets are capable of adapting and revealing the real price of things, more forcefully convincing people to adapt as well. It's fundamentally thanks to big banks and governments that people live in illusion zone, where they are able to avoid the cost of spending and over consuming now. So yeah, I think it's completely possible to downgrade and accept reality without violence completely taking over (for sure, there will be pockets of society that will go crazy). A key problem is the drug of government spending and the illusion that you can get something for free with no consequences. That toxic, state lie reaches all throughout society. Just take education. Most kids go through government schools. Are they taught about economics, sustainability, and the true costs of government spending? Does the environment of schools even promote critical thinking, resilience, and responsibility in an individual? Can you really expect public schools to take an objective look at government or the state of the country? No, no and no. Yet, public school is an automatic answer to most because it's promoted as good and appears free. Take just "free" education away and shit gets a little realer. It might not be pretty at first, and people would surely throw a fit, but then people would be faced with the real decision of buying education and figuring out it's real value. Then the education could adapt and become a varied, more effective place.

Mark_BC wrote:

The idea that taxes are evil and should be abolished is absurd on so many levels and reveals an illogical line of thinking. Firstly, there's the practical aspect: since there will always be some form of a government, how will it get funded? Will it just print up its own money to fund its expenditures?

 
You're basing your rebuttal on a bald assumption: "there will always be some form of a government." You may be right, but I'm not even sure what you mean by government. Are you saying there will always be a group of individuals that claims the right and is able to act out the initiate force in a geographic region? This is not a necessity, nor is it an inevitability. Humanity is quite capable of accepting varied principles and systems (evolving), and the only way a state gets away with what it does is if at least enough people believe in their necessity/morality enough to shoot their guns to force the other end of the population into "acceptance." I think a state's capability to sustain widespread faith and acceptance is diminishing, and less and less people are willing to just blindly shoot the guns for them.



As for funding voluntary "governance" (or rules) I think there are a lot of ways of doing so voluntarily. Discerning and accepting valid property rights plays a large role. If one (or a group) legitimately owns a building, a neighborhood, a road, etc. He/she/they logically gets to set the rules for those who interact with their property, so long as they don't violate basic negative rights. The effectiveness of the rules are determined by the market, as people will not want to participate in a dangerous/ineffective environment. A group of people may also decide to submit themselves to a third party to resolve disputes or protect their property, if necessary. I realize what I'm saying needs a much more thorough breakdown to be truly convincing, so I can refer you to some books if you're interested... In any case, under states we have arbitrary rule. States are not the answer to just and effective rules. The state doesn't own anything legitimately, and can violate other's property to support their actions. Thus, they only make rules that are advantageous to themselves. Lucky for us, we live in a relatively rational and abundant society (at this moment, anyway), so they can't so easily get away with blatant violence. However, the tyranny switch is always there for them to hit, they just need the right excuse and story to sell for it to be advantageous to them.

Mark_BC wrote:

Secondly, there is always this underlying assumption with anti-taxation advocates that the simple act of private individuals "producing" goods and services and offering them into the market, in and if itself, is sufficient to provide wealth to society and that taxation is nothing more than a parasitic burden to this "production". However, I've never seen anyone who promotes these views actually try to explain how that production actually happens.

 
What's not to get? If you take away the corrupt power of crony capitalism (the ability for states and corporations to play each other, utilizing the states sole right to coercion, for personal gain) individuals (and groups) have the opportunity to own and produce something and offer it to the market freely. Then other individuals have the opportunity to choose if it's fulfills their needs and desires. Trade ensues, and both parties (in the moment of transaction) win. The market changes over time as society evolves and new information and technology enters consciousness. Some market entities fade or die, and others rise up to meet a new need or desire. These entities can be as vast or limited as the market will accept. Some may produce little, other than peace of mind and intellectual advancement (a ecological reserve, nature park, research centers), and others may produce something tangibly valuable ( from computers to crayons). More open markets have proven over and over again to provide wealth to societies (trade allows many people to utilize and fulfill self interest on a grand scale peacefully). If you take away taxation and state rule from the equation, people are free to try other systems and forms of organization. Perhaps there are better? There's certainly room (and necessity) for charities and non-profits in a free market as well.



What is taxation if not parasitic? INHERENT to taxation is the confiscation of a portion of someone else's production. If taxation didn't inherently rely upon someone else's production, we'd call it something else. Sure, many people may accept it (and thus believe they are giving), but it's not as if they truly have a choice. And yes, taxation is used to do real things (some important), but a clever parasite may also give some back to the host if it allows continued or increased access to life-blood.
Dwain Dibley's picture
Dwain Dibley
Status: Member (Offline)
Joined: May 27 2015
Posts: 3
There is no such thing as "Depost Cash"

Our monetary system is based upon Legal Tender Law. It is the law that defines the money. Nowhere in that definition, or in any law, will you find the credit generated by The Fed of the banking system listed. There is no law anywhere that grants the right to create money to the Fed or the banks. There is no law anywhere that acknowledges or designates the credit generated by the Fed or the banks or the $10-Trillion in credited deposit accounts, as money.   Every bit of it is a promise/obligation to pay legal tender.

All deposit accounts contain no money what-so-ever, they are all 'credited accounts', Bank Liabilities or, Debt Obligations, that are totally dependent upon positive asset values for their continued existence. What do the banks owe their depositors with credited accounts? As per law and contract, they owe Legal Tender Cash, of which, they only hold a tiny fraction against the trillions in credited deposits they owe, hence the term "Fractional Reserve Banking". This is the primary reason banks are deathly afraid of cash and potential bank runs, what little cash they have supports millions, billions, trillions in bank liabilities.

As stated, credited deposit accounts are totally dependent upon bank held asset values for their existence, the credit does not exist otherwise. This should indicate that an application of negative interest rates to credited deposit accounts would destroy the amount of credit affected and serve to lessen bank deposit liabilities and free up capital for new rounds of credit creation. 

The same applies to bank "bail-Ins", which is a misnomer.  A proper term would be "selective or targeted defaults".  Your account is already the bank's debt, it cannot use it's own debt to bail itself out of debt, all it can do is default.  Hopefully, targeted defaults will result in the bank gaining enough freed capital to provide backing for what remains of the deposits.

As for the war on cash, See: The Ban on Cash - Part II

Because banks need capital to back the credit/debt they create, the ban on cash will probably just be on public holding and use of cash, leaving the debt structure in place.

See the video at the end of my blog.

the Frog

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