Wednesday, July 27, 2011

The Constitution versus the Dollar/Debt Crisis

The extent to which the federally licensed media and tax-funded school system has come to control the minds of the public is staggering. The term "government" has become synonymous with politics - even in libertarian circles. The majority of the American public of 300 million has come to trust the politicians so much that they do not even bother to read the Constitution to verify that the federal government is in compliance.

It clearly isn't. Not by a long shot.

For one, had the federal and state politicians been required to observe the gold standard - which is still enshrined in the U.S. Constitution - there would be no debt or dollar crisis. Among the few powers granted to Washington, Article I Section 8 gives Congress the power "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures." It doesn't grant Washington the authority to print money, grant a monopoly to any bank or superbank, or to regulate banking or the economy in any form other than the value of its own coins and the standards of weights and measures. This implies that banking is to be free and competitive, and that coins may be produced freely by anyone who wishes to do so. Washington may endorse coins that are in keeping with its standards, but may not prohibit the use of those which are not. Further, according to Section 10, "No state shall ... coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts ..."

The paleomedia has the public worked up into a frenzy about the Armageddon that will occur if Congress DOESN'T raise the debt limit. Stop and think about this. Is the public so gullible? In a word, "yes." But it's not that they are stupid, most of them aren't. The intellectual campaign has been well orchestrated and well funded. And the art of intellectual and financial monopolization has been developed over thousands of years. Not too long ago, the average person believed that Caesar was god. They were no less intelligent than us. But the politicians had the reigns on the flow of information. It was to be expected. Of course, the extent to which information is still bottlenecked is less than it was, but the monopolists make up for this in their ability to print paper money, and distribute it to whatever voices they wish.

When the dollar crashes - which it will - it will be nice for the public to have at its disposal some safe haven currencies into which it my weather the storm - particularly commodity-backed currencies. Were the politicians truly concerned about the welfare of their constituency, they would see to it that no ill would come to them. But we do not live in such a fairy tail land. To entrust the politicians with one's wealth is indeed suicidal. One must learn from history.

In the real world, to the extent of free competition, there is market discipline. To the extent of monopoly (which can only survive in an atmosphere of politics), there is inevitably corruption (to the extent of monopolization). In banking, as in any other industry, politics is not merely an evil, it is an unnecessary one.

12 comments:

  1. "had the federal and state politicians been required to observe the gold standard - which is still enshrined in the U.S. Constitution"

    It's not enshrined in the Constitution.

    "It doesn't grant Washington the authority to print money"

    It grants Congress the authority to borrow money and to issue securities.

    Federal Reserve notes are US government obligations, i.e. government securities, or debts. They can be redeemed on demand for Treasury coin, which is a form of government equity. Treasury coins can be made of precious metal or base metal.

    "It doesn't grant Washington the authority to regulate banking or the economy"

    It specifically gives Congress the power to: "regulate Commerce with foreign Nations, and among the several States"

    And to: "make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."

    And to: "lay and collect Taxes, Duties, Imposts and Excises"

    "This implies that banking is to be free and competitive, and that coins may be produced freely by anyone who wishes to do so"

    You may think it implies that but it doesn't say that anywhere.

    "politics is not merely an evil, it is an unnecessary one."

    Politics is necessary according to the Constitution, and thus presumably not evil:

    "All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.”

    “The House of Representatives shall be composed of Members chosen every second Year by the People of the several States”

    “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States"

    “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."

    “The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution... which shall be valid as part of this Constitution, when ratified by the Legislatures of three fourths of the several States”

    “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; shall be the supreme Law of the Land”

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  2. The tenth amendment assures the states that every power which is not specifically granted to the federal "government" is reserved for the states and the people. Even the federalists tried to argue that this limited power was implied - so the "Bill of Rights" was unnecessary. How wrong they have been proven to be.

    Now under the guise of "interstate commerce" and "welfare" they believe themselves to be omnipotent. This attempt to chain the tyrants has utterly failed. Who needs a constitutional amendment when the Supreme Court can legislate from the bench and the Imperial president can write his own laws with "executive orders."

    It is no wonder why the "economy" is in shambles.

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  3. Politics exist because people disagree.

    For example I disagree with you.

    What you're essentially saying is that if everyone agreed with your particular philosophy - i.e. that the 'free market' should organise everything, then there would be no need for politics.

    But the obvious flaw with this argument is that people don't agree. For example, I don't agree with your philosophy, with your idea that the 'free market' should organise everything.

    So how can we resolve our differences? We can engage in politics.

    In fact, by writing this blog and your book you are engaging in a form of politics: you are expressing your political philosophy and trying to convince others with your arguments, no doubt in the hope that some day the world will change and your ideas will come into being.

    Your arguments and ideas are not necessarily correct however. This is why, for example, I disagree with many of them.

    The Constitution gives Congress the power to do certain things, but people will inevitably disagree on exactly what Congress should do, or on how to interpret the Constitution. This is why the Constitution also describes the foundations of the political process through which disagreements can be resolved.

    Given that politics is embedded in the Constitution, and that you are a 'Constitutionalist', you are apparently contradicting yourself when you describe politics as being both 'evil' and 'unnecessary'.

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  4. Politics is collective decision making. Since collectivism always tends toward conflict and the reduction in accountability, it opposes the process of civilization.

    Whether or not one agrees with the laws of the market is irrelevant. They apply regardless. Politics tends to create monopolies which increase costs and decrease quality.

    Politicians rely on the theft of taxation and the murder of war. They need immunity from civil processes. Market transactions, on the other hand, are voluntary.

    The US Constitution was meant to limit politicians. It has failed to do so. A better constitution such as that of Aquia (http://wiki.seasteading.org/index.php/Constitution_of_the_Autonomous_Freezone_of_Aquia) would prevent the state from coming into existence.

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  5. "Since collectivism always tends toward conflict and the reduction in accountability, it opposes the process of civilization."

    That is an ideological assertion, not a fact.

    "Whether or not one agrees with the laws of the market is irrelevant. They apply regardless."

    That is another ideological assertion, not a fact. There is actually much disagreement within economics regarding the supposed "laws" of "the market".

    "Politicians rely on the theft of taxation"

    Taxation is not theft, it is taxation. Though you may want to conflate two separate categories of things for ideological reasons, this does not mean that they are in fact the same.

    If taxation was theft, why would the Constitution permit Congress to "lay and collect taxes"?

    “Politicians rely on... the murder of war”

    Governments and countries wage war, but this does not mean that politicians necessarily “rely” on war.

    “They need immunity from civil processes.”

    This makes no sense. Politicians are legislators.

    “Market transactions, on the other hand, are voluntary.”

    Not necessarily.

    For example a starving person may be forced into a transaction. Saying they could choose to die instead is ridiculous. Another example might be 'externalities', where a third party suffers as the result of other people's transactions. This person may claim compensation in retrospect, but this does not mean that the original harm was voluntarily incurred.

    “The US Constitution was meant to limit politicians.”

    It places certain limitations on the government, and also gives the government certain powers. Its sole purpose is not to “limit politicians”.

    “A better constitution such as that of Aquia”

    So now you don’t really support the Constitution, because it’s not quite as you’d like it to be?

    Aquia Constitution:

    “We require that every person within the freezone hold the following fundamental tenets to be the supreme law, inalterable, eternal, and sacred.”

    This is not ‘voluntary’, it is obligatory.

    The problem is, the US is not ‘Aquia’. It has its own system of laws and government, and they are not the same as those of Aquia. If you want to change the US into something resembling Aquia, the question is, how are you going to do that? How are you going to change the law to turn the US into the sort of anarcho-capitalist society you desire?

    Are you going to impose that change unilaterally? Presumably, not.

    Unless everyone suddenly spontaneously agrees with your political philosophy and agrees to change the US into ‘Aquia’ (highly unlikely), you will either have to engage with the political process and the law as they currently stand, or else you will have to stage some sort of armed revolutionary coup.

    As I said, people disagree about these things. Just because you think that your beliefs are absolutely correct, does not mean that they necessarily are. Your belief in the infallibility of your beliefs does not give you the right to impose your ideal social system on everyone else. These things have to be negotiated between people with fundamentally different views.

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  6. Collective decision making tends to create conflict to the extent of the number of individuals involved. It is hard to find two people that agree - much less a million. Market transactions, on the other hand, are unanimous. If one does not wish to purchase a product or service, he may refuse to participate.

    Collectivization of property reduces accountability to the extent of the number of owners. War and pollution are the most notable results of this fuzzy ownership - where it is difficult to expel the intruder. Natural tort and contract law - as opposed to "criminal" law (the political version of law) - concerns those individuals who are actually involved in a given conflict. It is difficult to externalize costs to the extent that one is held accountable for one's actions. Politicians and their cronies are rarely held responsible for losses and damages that they inflict on others.

    Theft occurs when one parts with his property unwillingly. A "voluntary" tax would not be a true tax but a user fee.

    War is the health of the state. This isn't rocket science.

    You seem to have difficulty differentiating between constitutionally restricting the actions of legislators, and legislating the nonintrusive actions of sovereign individuals. So you will probably have even greater difficulty understanding the value of preventing the state from coming into existence where it does not yet have a foothold. I respect your ignorance. It's time for me to move on. I do not wish to rewrite my book here.

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    1. "Collective decision making tends to create conflict to the extent of the number of individuals involved."

      "Collective decision making", in some form or another, is an unavoidable reality. Presumably this is why it is embedded within the Constitution.

      For example, you want to tear up the Constitution and the law and turn the US into 'Aquia'. Others don't. You want to replace "We the People" with "We the proprietors and administrators". Others don't.

      The problem for you is that the US is not going to magically transform into 'Aquia' simply because you believe it should, no matter how correct you believe your arguments to be. Others do and will continue to disagree with your arguments. The reality is that the US will only turn into 'Aquia' if enough people actually want it to. As such, you can pretend that "collective decision making" is unnecessary, but this will not change the fact that it is unavoidable.

      "Market transactions, on the other hand, are unanimous. If one does not wish to purchase a product or service, he may refuse to participate."

      You seem to be assuming individuals that are entirely self-sufficient. The reality is that most people are obliged to enter into transactions with each other simply in order to survive. For most people, this means selling their labor in "the market" in order to be able to purchase the basic necessities of life in "the market". They may have a limited choice between different ways of obtaining money, and a limited choice between different suppliers of essential goods, but the basic obligation to enter into "the market", in one form or another, is unavoidable for most. One cannot "refuse to participate" in general. One's freedom of choice within a given context is accordingly strictly limited by one's access to the means by which choices can be effectively realized within that given context.

      "Collectivization of property reduces accountability to the extent of the number of owners. War and pollution are the most notable results of this fuzzy ownership - where it is difficult to expel the intruder."

      Privatizing everything, a meaninglessly fanciful concept, would only put an end to war if one were to believe, fancifully, that human nature would somehow change over night. War occurs because people have differences which they think can only be resolved through violence. Privatizing everything would not eradicate this fundamental problem. The idea that privatizing everything is the way to eradicate pollution is equally fanciful.

      "Theft occurs when one parts with his property unwillingly."

      Money owed to the government in tax is money which belongs to the government by law. You may say that the law is unjust or illegitimate, but this is a political opinion and not a fact. You often seem to confuse the two.

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    2. Collectivism may not be avoidable but it can be reduced drastically - and hopefully eventually eliminated.

      Tear up the Constitution? If the politicians would at least abide by their oath of office (obey the Constitution), the monolithic megastate would be drastically curtailed. It could be amended in light of recent discoveries in the areas of competitive insurance, competitive arbitration, and advances in private security technology brought about by a small degree of competition allowed in these fields.

      When one discovers his slavery, he tends to seek his emancipation.

      Labor is also a market good. In a free market one sells quality labor at a proportionately increased price - his "wages."

      To argue that the "government" rightfully owns that which it takes by taxation is to recognize that might makes right - at which point philosophical arguments are irrelevant. This is a powerful argument for sovereign individuals not to surrender the powers they have - and a particularly strong argument against authorizing others to take such powers by force.

      In the context of this article, the regime confiscates property via inflation of the monopolized currency - which is another form of taxation, because those who use the "dollar" are not allowed a safety valve currency. The newly printed dollars are distributed to their cronies first - before their value diminishes due to increased supply. The common people must ride out the storm.

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  7. "War is the health of the state."

    That is a slogan not an argument.

    "You seem to have difficulty differentiating between constitutionally restricting the actions of legislators, and legislating the nonintrusive actions of sovereign individuals."

    I don't have that difficulty. Both are forms of social organisation which establish certain laws in accordance with a set of values and beliefs. The error in your reasoning lies in your assumption that one form is unquestionably superior. But this is an ideological assertion reflecting a particular political philosophy and set of beliefs - not a fact.

    "you will probably have even greater difficulty understanding the value of preventing the state from coming into existence where it does not yet have a foothold"

    You don't seem to be able to grasp the difference between "understanding" and disagreement. The fact that I disagree with your ideology does not mean that I don't understand it.

    "I respect your ignorance."

    Simply dismissing an opposing view as "ignorance" is the hallmark of an absolutist and dogmatic mentality. No wonder you hate democracy.

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  8. Politicians like immunity, but they are humans too. Once individuals begin to realize that the politicians are no closer to God than the rest of us, they will no longer let them steal, murder, or commit any act that civilized people avoid. They will once again suffer the consequences of their aggression - which will no longer be "externalized."

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  9. People don't think that politicians are closer to God.

    Taxation isn't stealing.

    I'm all for making war illegal, if that would somehow eliminate war everywhere. Highly unlikely though.

    Simplistic rhetoric won't achieve anything.

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  10. Many people believe that politicians need to be granted special privileges and immunity. They somehow feel that they are supernatural and can rewrite the laws of nature by decree. Many are reluctant to stop feeding the beast because they have become dependent on it - or think that they are.

    Again, theft occurs when one parts with his property (or time, &c.) against his will. There is no reason to force someone to defend himself, &c. Taxation - however you define it - is unnecessary and counterproductive. Read the book.

    War IS illegal in the US (see my other article, "Private Defense and the Constitution") except when explicitly declared by the Congress. An improvement would be to make it impractical (see the chapter, "Elements of Security").

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