my friends problem with voluntarism

[Phillip Brix]

http://www.youtube.com/watch?feature=player_embedded&v=T6fg5IV6KD8

my friends jeff's responces:

on fiat curreny.

the government is granted the leagal right to coin money. it was agreed to by the original founders. if you don't like it, move!

the money is backed by the economic production of the us. its not backed "by nothing".

the fedral reserve is a private institution. so the government doesn't set the interest rates. a privately owned monoply coroporation does.

on insurace:

insurance is not a hedge against risk. are insurace companies required to pay out every claim that's filed? no.

if they refuse to honor their agreement with you, do you really have a recurse? no. maybe you boycott. well the insurance company as hundreds of thousands of customers, are you really going to convice all of them to give them up?

maybe you sue. the insurance company has a team of lawyers to dispute any such action for years on end. do you have the ecomomic resourses to spend on such a case?

if the insurance company goes backrupt, what happens to all the people who had coverage under them? tough luck? i mean you can't squeeze blood from a lemon. are you going to buy insurance against your insurance company going out of business?

on chemical/ bank insurance:

do you know how many chemical companies are in your county where you live? do you have insurance against them poisining your water supply? do you know of anyone who does? can you name one person in the entire country who does?

do you know how many banks are in your area? do you have insurace agianst your bank going under? do you know of anyone who does?

voluntarism:

if your claim is that volunatry action can solve these problems, then prove it. show me how voluntary action is currently solving these problems.

the u.s. has the lowest taxes and the least amount of govenment regulation of any industrialized nation. we are 20th place or worse based on any measure for quality of life.

the regulations the government has, most of them came about becuase the free market wasn't solving the problem.

so i obviously need some help guys. how do i respond to this.

 

 

 

 

[TheRobin]

first of all let him give you a methodology which he would accept.Else all solvings can be discarded at whim, by just making up stuff (as usually happens), so before he doesn't give a clear-cut answer as to what he accepts as proof I don't see any point in even trying to argue.

[PatrickC]

Wow, that was like a flashback to the past for me, which is why I choose my conversations as wisely as possible these days. Those exchanges can feel like the proverbial fish slaps I think they're meant to be.

I agree with TheRobin's suggestion, if you're gonna have any hope in getting your friend to look at things differently then you need to try and step him away from consequentialism. You have to understand, in that place the average statist believes he has all the rebuttals they require to take your arguments down.

[Magnus]

 

on fiat curreny.

the government is granted the leagal right to coin money. it was agreed to by the original founders. if you don't like it, move!

 

This statement is so impacted with error, it's hard to know where to start.

First, I would say that the question posed by market anarchists is whether the "government" (by which we mean the "State" organized in a corporate form, with an executive we call "president" and a board of directors we call "Congress" and shareholders we call "voters") can ethically exist in the first place. 

I realize that your friend's position is that, yes, it does, and that the writings of men who are dead these 200 or so years is somehow the definitive answer to that question, but this is not really an argument at all.  Even before we get to the question of why he is wrong, he has not yet advanced an argument as to why he is right. "Because they said so" is not really an ethical argument.

Spooner outlined a very rebuttal a while ago, which said that the "founders" had no authority to bind anyone but themselves (and maybe also the people who agreed at the time to empower these "founders" to act on their behalf).  But that certainly did not include me, and now everyone involved in that pseudo-contract is long dead.

Second, the "power to coin money and regulate the value thereof" is found in a part of the Constitution concerning the authority to set the standards for weights and measures.  In other words, it is located alongside the power to define what an "ounce" means, what a "pound" is, and inch, a yard, a gallon, etc. 

Why is money found in the same sentence as weights and measures?  I wondered why that part was written that way, so I looked into it. 

Money, of course, used to be real.  It was made of things, not just ideas and words.  One of the most important objects used for money was gold, but there were all sorts of other fungible objects that have been used as money in America, like silver, copper, whiskey, cotton, corn, wheat, horses, cattle, tobacco leaves, beaver pelts, etc.  They could all be traded for each other.

The key to understanding what "the power to coin money" means in practice (as an expression of "weights and measures") is in the meaning of the word "value."  Nowadays, we use the word "value" to refer to a very broad, abstract, subjective concept.  It refers to the desire a person has for something.  Everyone has different values -- the relative importance of things, people or ideas, compared to every other "competing value."  This is ordinary parlance today. 

However, in the Constitution, the word "value" refers to something very simple and concrete, but its meaning has been obscured through the passage of time and changing language.  The "value" of a gold coin is the quantity of gold in it.  It is, literally, the number of gold molecules present.  But counting molecules is difficult, so we use other means instead.  To count the molecules of gold in a gold coin, we need to objectively determine two things -- its weight, and its purity.  In other words, measuring the quantity of gold in a bar or coin is a binary measurement.  It might weight 1 ounce, and be 99.9% pure.  Or, it could be only 90% pure, and weigh 1.3 ounces (or whatever). When these two objective factors are combined, it is possible to determine how much gold is there.

This determination of how much gold is present in a coin or bar is called "assaying."  It is a chemical, metallurgical analysis. It's objective and scientific. 

Incidentally, the word "dollar" refers to a similarly objective quantity of silver.  It comes from German word "thaler," which was the word given to silver coins that were minted there (lit. "from the valley").  They became popular in the 16th and 17th centuries for their consistency and reliability.  A dollar of silver literally means a coin made of 1 ounce of silver of 0.937 fineness (although both the weight and purity standards fluctuated over time, by government dictates).  What we call a "dollar" today is just an abstraction, denoted by either a ledger entry in a government-approved bank, or a piece of government-approved paper.

Now, this process of assaying the value (i.e., the actual, physical metallic content) of a coin has NOTHING to do with the exchange rate of that coin in the market place.  The value of a coin is its metal content, nothing more.

The power to "coin money and regulate the value thereof" is, literally, the power of the government to operate a mint -- a melting and stamping operation where they make ore into coins.  The government may (according to its charter) declare what the terms of weight and measure to be stamped on coins mean -- they can declare that a Filbert of gold shall mean 21.144987 grams of gold at 0.903 fineness, or whatever. 

It is not the power to shut down all private mints.  Anyone can run one, and many did in the 18th century.

The point of this Constitutional clause was to authorize the government to operate a reliable (government run) minting operation -- a place where anyone could take his foreign or privately minted coins, bars, ore or any relevant metallic substance, where they would "assay its value" (tell you how much of it was there), and either melt and stamp that substance into officially-designated coins (filberts, quatloons, guilders, kroner, or whatever), and give it all back to you, for a nominal fee, or they could give you the equivalent official coinage in exchange.

The idea was that having a governmental mint available would help keep the private mints honest -- there was always a non-profit place to go where anyone could verify (by exchange) any form of coinage.  The government mint would thereby set the standard for weight and measurement of coins.

The scope and purpose of this Constitutional power was NOT the power to declare what the exchange rate of all coins shall be in the market place.  It was not the power to declare the "value" of a gold coin IN THE MARKET for houses, horses, tobacco leaves, bread, etc. It is not the power to declare what money will buy.

What happened throughout history, of course, is that States can't resist tinkering with the official value of money.  They always want to dilute it.  It's like selling watered-down whiskey, and pass it off as though it's full-strength.  They have, historically, taken full-value coins, and in return issued debased (watered-down) coins in exchange, but they want to continue to declare that the watered-down coins they issue have the same "value" as the old ones. 

It's like the government demanding that it be paid (in taxes) in gallons of whole milk, but when it comes time for the government to pay people, it declares that henceforth a gallon shall mean 3 quarts instead of 4. 

Governments always want to declare that their diluted dollars, filberts, quatloons, guilders or kroners of silver (or gold, or copper, etc.) are, officially, now to be called full-strength coins.  That way, when the governments repay their debts (which are denominated in those currencies), they only have to repay a portion of it.  They can wave their magic wands over their shrinking treasury, and declare that the 1000 dollars (or filberts, quatloons, etc.) in their possession are now to be demarcated as 1400 dollars (or filberts, quatloons, etc.).  Ta-da!  The State's treasury is instantly 40% richer! 

The "power to coin money and regulate the value thereof" does NOT mean the power to monopolize the entire process of money-creation, to eliminate private coinage from circulation, to eliminate coinage altogether, to hand all banking operations over to a sponsored cartel, to designate this cartel's paper as the only valid form of money, and to fix the prices of money in the marketplace for every good and service of every kind whatsoever.  No, that's just not historically accurate. 

If you are going to rely on the writings and declarations of men who have been dead for over 200 years as though they are all-powerful and authoritative, and imbue those writings with the power to bind us all, then you at least ought to understand what they wrote. Otherwise, I could just as easily take a piece of paper, claim that it was written 300 years ago, but (unfortunately  for you) it was written in an alien language that no one but me can now interpret, but trust me when I tell you that it says that "Magnus of FDR shall be considered the infallible god-king of the universe."

I think your reaction to this claim would be that (a) you didn't agree to that arrangement, and (b) my interpretation of this document is awfully self-serving.

 

 

the money is backed by the economic production of the us. its not backed "by nothing".

 

Government money is backed by the power of the government to extract a portion of the wealth created by people's productivity via taxation.  Statists always want to skip over that part.

 

 

voluntarism:

if your claim is that volunatry action can solve these problems, then prove it. show me how voluntary action is currently solving these problems.

the u.s. has the lowest taxes and the least amount of govenment regulation of any industrialized nation. we are 20th place or worse based on any measure for quality of life.

the regulations the government has, most of them came about becuase the free market wasn't solving the problem.

 

 

The government's actions caused the "problems" in the first place.  Every time. 

Pollution?  It was once solved by respect for clear property rights.  It was the government that re-wrote the ancient rules against pollution, which went back to pre-Roman times, by declaring in the mid-19th century that a polluter's actions would be allowed to persist if shutting the polluter down was "unreasonable."  Before that, anyone could shut any land use down, merely by showing that the polluter was trespassing.  It was simple and automatic.  A single homeowner's land use right were just as inviolate as any industrial manufacturer's.

The government courts unilaterally changed the law to add a meaningless standard of "reasonableness."  In practice, what this meant was that if a local industrial operation was politically powerful, and economically well-connected, it would be allowed to continue polluting, because shutting it down was considered so "unreasonable."  The entire field of "law and economics" (i.e., legal voodoo) was created as an effort to pretend to define which property rights would be enforced and which would not. 

Money?  The problems with inflation and price volatility was caused by governments giving banks a free pass.  Everyone in the sane world is required to deal honestly with customers.  But banks were allowed to issue promises to repay multiple customers with the same money, over and over again.  Clearly, it's impossible for a fractional reserve bank to legitimately make these promises, since such a bank is insolvent, by definition (its liabilities exceed its assets).  But governments allowed banks to operate, although they were bankrupt, and even allowed them to stay in business and legally default on their contractual obligations.  They called this process "suspending specie," which is euphemism for governments granting banks the special privilege of not repaying their debts, and yet still staying open for business. 

Government lies and aggression are the root cause of every problem that it has ever purported to solve.  I have yet to see an example to the contrary.

[Existing Alternatives]

What kind of relationship you have with this person? (Most importantly why?) Is your relationship of the kind that you can yell random stuff at each other? He seems to be doing just that! I don’t know if there is a room for a rational discussion here. But if you want a yelling match, you could come up with some interesting answers:

 

the government is granted the leagal right to coin money. it was agreed to by the original founders. if you don't like it, move!

 

Granted by who, exactly? So, you should only “move” if you disagree with the “original founders”, everything else is ok to dismantle?

 

the money is backed by the economic production of the us. its not backed "by nothing".

 

How exactly is it “backed” by my production? How do they know how much I produce?

 

the fedral reserve is a private institution. so the government doesn't set the interest rates. a privately owned monoply coroporation does.

 

So, “private monopoly corporation” is a good thing?

 

insurance is not a hedge against risk. are insurace companies required to pay out every claim that's filed? no.

 

Insurance companies enter a contract to pay in the case of the underlying event. And yes, this makes them a risk management tool. And no, there is no such thing as “risk-free”

 

if they refuse to honor their agreement with you, do you really have a recurse? no. maybe you boycott. well the insurance company as hundreds of thousands of customers, are you really going to convice all of them to give them up?

 

If a bully steals your lunch money, do you have any recourse? Boycott?

 

do you know how many chemical companies are in your county where you live? do you have insurance against them poisining your water supply? do you know of anyone who does? can you name one person in the entire country who does?

You can buy insurance for pretty much any event, including poisoning your water.

 

do you know how many banks are in your area? do you have insurace agianst your bank going under? do you know of anyone who does?

 

Yes, there is such thing as bank insurance, despite being forced on people by government

 

the u.s. has the lowest taxes and the least amount of govenment regulation of any industrialized nation. we are 20th place or worse based on any measure for quality of life.

 

US does not have the lowest taxes nor the least amount of regulation. Technically 20^th place out of 165 isn’t that bad. I doubt that is true for “every single measure of quality of life”.

 

the regulations the government has, most of them came about becuase the free market wasn't solving the problem. 

 

Name one!

Was it too much? Sorry, but I enjoy yelling at idiots on occasion! Btw, your friend sounds very angry, he might have some deeper issues. Are you in a position to help him resolve those?