On the Supply Objection to the Gold Standard

Since the gold standard was abandoned in 1971, many people have sought to return to such a standard in order to combat inflation and rein in central banks. Keynesians and others who support fiat currency and central banking present several criticisms of this approach. One of these criticisms is particularly nonsensical, but occurs with increasing frequency: that there is not enough gold in the world to back the quantity of currency in existence, and thus returning to gold would set off a deflationary spiral while destroying several industries that depend on gold. Let us address this question from a scientific standpoint, return to economic matters, and address the claimed effects.

Physical Limits

Let us begin by finding the absolute limit of what gold can do for a monetary system. As the United States dollar is the world reserve currency at the time of this writing, it makes sense to use it as the currency to peg to gold. The smallest unit of gold is the atom, and the smallest unit of dollars is the penny. The most extreme possible case would be to set one penny equal to one atom of gold. What would this look like in practice? Any basic text on chemistry can lead us to the answer. The only stable isotope of gold is Au-197, and its molar mass is 196.967. This means that in about 197 grams of gold, or 6⅓ troy ounce coins of the type minted by many governments and private mints, there will be Avogadro’s constant of atoms, which is 6.022140857×10^23. Setting one penny equal to one atom of gold, this is $6.022×10^21 or $6.022 sextillion easily fitting in one’s hand.

This amount of money is so large that people cannot truly understand it due to the lack of a frame of reference for it. Few people will handle anything beyond millions of dollars at any point in their lives. Large businesses may deal with billions of dollars. The most powerful governments have budgets in the trillions of dollars. According to a History Channel documentary, the dollar value of the entire planet is in the quadrillions of dollars, checking in at $6,873,951,620,979,800, and subtracting Earth’s gold content leaves $6,862,465,304,321,880. As the limit of one penny per atom allows one to hold the current market value of a million Earths in one’s hand, it is clear that science imposes no physical limit to make a gold standard infeasible.

Another useful exercise is to try setting the value of all available gold equal to the value of the rest of the planet. The total available gold content at present amounts to 186,700 metric tons. Defining this amount of gold to be worth the above figure of $6,862,465,304,321,880 gives a gold price of $36,756.64 per gram or $1,143,259.40 per troy ounce. This is very expensive by current standards, but current standards do not come close to economizing the entire planet. The actual price would therefore be far lower than this, but this exercise is useful for setting an upper bound.

Current Prices

Perhaps critics of restoring sound money mean to say that the gold standard could not be reintroduced at current gold prices. In this, they are correct; at the time of this writing, gold trades at $1,284 per troy ounce. Multiplied by the 186,700 metric tons of gold available, this gives $7.707 trillion of gold-backed currency, which is not enough for the United States economy, let alone the entire world. The solution, then, is to devalue fiat currencies to fit the available gold supply. According to the CIA World Factbook, the gross world product in 2015 was $75.73 trillion. Covering this with the available gold gives a gold price of $12,616.75 per troy ounce, which is an order of magnitude above current prices, but not outlandish.

Possible Effects

Gold has gained several practical applications in recent times, particularly in medicine and technology. Critics claim that returning gold to monetary use would devastate these industries, along with the jewelry industry. In each case, critics are overreacting. Research toward creating substitutes which work nearly as well in electronics is promising. Gold salts in medicine have numerous side effects, monitoring requirements, limited efficacy, and very slow onset of action. Finally, there is no particular reason why we should care about an industry that produces impractical novelties to the extent of protecting it through fiat currency. It would be better to free up jewelers to do something more productive and helpful to others.

The other major criticism is that returning to a gold standard will cause a harmful episode of deflation. Paul Krugman writes,

“[W]hen people expect falling prices, they become less willing to spend, and in particular less willing to borrow. After all, when prices are falling, just sitting on cash becomes an investment with a positive real yield – Japanese bank deposits are a really good deal compared with those in America — and anyone considering borrowing, even for a productive investment, has to take account of the fact that the loan will have to repaid in dollars that are worth more than the dollars you borrowed.”

But those who are less willing to spend or borrow are necessarily more willing to save, which will allow them to spend more later or fund new businesses and investments. There is also the matter that one cannot hold out forever; one must eventually purchase goods and services. That the technology industry thrives despite producing the most deflationary goods shows that there is nothing harmful about this. It turns out that the value of using a current computer over the next year is worth more than holding out for a more powerful computer next year. It is also true that holding out for more food next month does not work if one cannot survive until then without food now. One may object that this would concentrate wealth in the hands of those who can hold out, but this is a feature rather than a bug because it redistributes resources to those who have been good stewards of resources.

Those who have already borrowed face a larger debt burden in a deflationary environment, and though creditors experience an equal gain, creditors are unlikely to increase their spending to offset the reduced spending of debtors. But again, this is a feature rather than a bug because it incentivizes saving over borrowing while pushing some debtors into default, thus punishing unwise lenders with loss of principal and unwise borrowers with bad credit ratings.

With falling prices, profits and wages usually have to fall as well. But profits are a function of prices and costs, which are also prices. This leaves profits largely unaffected on a percentage basis. Wages are prices as well, and the need to cut nominal wages in a deflationary environment could both incentivize firms to release their worst employees and provide pushback against minimum wage laws.

Finally, there is the belief that the sort of deflation that may be caused by returning to gold would cause a recession. But the above rebuttals deprive this problem of any mechanism by which it might occur. In fact, the empirical evidence suggests that deflation is linked to economic expansion, as occurred in the United States during the 19th century. The only period in which a correlation between deflation and depression does appear is the Great Depression (1929-34), and this may be linked to the central bank policies of the 1920s, which fraudulently inflated the money supply beyond the set gold exchange rates of the time.

Conclusion

While a free market in money would be the most desirable condition from a libertarian perspective, returning to a gold standard is a superior option to that of allowing fiat currency and central banking to continue as they are. The concerns about a lack of gold supply for returning to a gold standard are without merit, and the fears of deflation and devastation to industry are unfounded.

20 Reasons Why Gary Johnson Will Not Be Inaugurated

On January 20, barring any extraordinary circumstances, 2016 Republican candidate Donald Trump will be inaugurated as the 45th President of the United States. Needless to say, this means that Libertarian candidate Gary Johnson will not be inaugurated. There are a multitude of reasons for this, some of which are common to all third-party candidates, some of which affect the Libertarian Party in particular, and some of which are specific to the Johnson himself. Let us examine all of them in that order and see why Johnson not only lost, but failed to earn 5 percent of the vote against two of the least popular major-party candidates ever to seek the Presidency.

I. All Third Parties

a. Duverger’s Law

Duverger’s Law holds that plurality-rule elections (such as first past the post) structured within single-member districts tend to favor a two-party system. Duverger suggests two reasons for this; some smaller parties ally together to make a stronger party, and other smaller parties fail because voters abandon them. A purely statistical restrictive feature is that because the system rewards only the winner in each district with political power, a party which consistently loses will never gain political power, even if it receives a sizable minority of votes. There is also the matter of polarization; if a large group of voters support a candidate who is strongly opposed by another large group of voters, defeating that candidate is easier if they do not split their votes among multiple candidates. Furthermore, evolutionary psychology suggests a possible genetic basis for a left-right two-party political system.

b. Electoral College

The American system for electing presidents contains an additional barrier to third parties: the Electoral College. Rather than a direct popular vote, the winner of the popular vote in each state gains a number of electors which depends on the population of that state. This amplifies the effect of Duverger’s Law by making all losing votes in each state worthless for gaining the Presidency. This effect was seen in the 1992 election, when Ross Perot earned 18.9 percent of the national popular vote but failed to earn any electoral votes, as he did not come in first place in any state. This result has made people in recent elections more likely to view third-party campaigns as a wasted effort. Another historical example is the 1912 election, in which Theodore Roosevelt’s candidacy caused Woodrow Wilson to win far more electoral votes than his popular vote percentage would suggest.

c. Media Coverage

If a candidate is unlikely to achieve political power, then it makes little sense for the media to devote significant airtime to covering that candidate’s campaign, activities, and policy positions. Diverting media to a third-party campaign might also incur the wrath of the major parties, who could view such a move as a conspiracy between the media and the third party to upset the established order and respond with censorship measures. With the advent of the Internet and social media, this barrier is breaking down, but it is not yet gone.

d. Funding

Part of the purpose of funding a political campaign is quid pro quo; in other words, wealthy donors expect something in return for their patronage. In fact, studies show that there is no better return on investment for a corporation’s capital resources than to bribe politicians, which can generally only be done legally by funding their campaigns or their SuperPACs. If a candidate and/or party is unlikely to achieve political power, then funding them is a waste of capital. Furthermore, funding them may invite a backlash from one’s fellow oligarchs, who do not wish to see the system that benefits them be upended by a new political force.

e. Ballot Access

Like most groups which manage to consolidate power, the Republicans and Democrats abuse it. Regardless of whatever disagreements they have, they routinely agree that no other party should gain a foothold in the institutions of power and act in concert accordingly. The most common way of doing this is to pass ballot access laws which greatly favor the two major parties. This is done to burden third parties with expensive and time-consuming efforts to gain thousands of petition signatures in order to gain or keep ballot access. The third parties which cannot succeed in this are eliminated from the ballot and thus eliminated from political contention. Those which do succeed are greatly weakened by the loss of effort, money, and time which could have been spent campaigning for office if there were not such onerous requirements for ballot access.

f. Debate Access

Just as the establishment media is loathe to devote coverage to alternative parties for the reasons discussed above, they also collude with the major parties to deny access to televised general election debates. Since the 1988 election, the Republicans and Democrats have used the Commission on Presidential Debates that they created to effectively silence third-party candidates in general election debates (with the exception of Perot in 1992, but this was only because both major-party candidates believed that Perot’s presence was in their self-interest). This creates the appearance in the minds of voters that the two major-party candidates are the only legitimate choices.

II. The Libertarian Party

a. Inherent Contradiction

Libertarianism is a philosophical position on what constitutes the acceptable use of force. It says that initiating the use of force is never acceptable but using force to defend against an initiator of force is always acceptable. Taken to its logical conclusion, libertarianism requires anarchy and views the state as an institution of violent criminality. This is because the state is a group of people who claim and exercise a monopoly on initiatory force within a geographical area.

With this in mind, the Libertarian Party contains an inherent contradiction, in that it is a political party devoted to anti-politics, an attempt to use the current system in order to destroy it. In the words of Christopher Cantwell,

“Any libertarian who tells you he is trying to win an election is either lying to you about trying to win the election, lying to us about being a libertarian, or terribly misinformed. As far as we’re concerned, elections are a bad thing. We’re trying to end them, not win them.

The nature of the State is to make false promises to bait support from the people it victimizes. They promise to protect you from boogeymen; they promise to solve your economic problems; they promise to carry out the will of your deity. We see this as completely ridiculous; we know it will fail, and we know that most people are stupid enough to swallow it hook, line, and sinker, so we cannot compete with it in a popular vote.

Libertarians are anarchists, whether they realize it or not. Even the ones who are delusional enough to think that they are going to get elected and restore the bloody republic are little more than useful idiots who are repeating anarchist propaganda for us through channels normally reserved for government. The goal is not to win your elections; the goal is to turn a large enough minority against the legitimacy of the State as to make its continued function impossible.”

Though the Libertarian Party has other purposes, such as social networking and educating people about libertarian philosophy, it is hampered in a way that other, non-libertarian third parties are not by its contradictory nature.

b. Principles Over Party

The Libertarian Party brands itself as the Party of Principle, though this is questionable when one considers the candidates who run under its banner. To the extent that this is true, however, it can harm the party’s election results. A principled libertarian will reject the political quid pro quo bribery that allows the major parties to fund their campaigns and maintain their power, and this puts one at a structural disadvantage to the political establishment. As Nick Land explains,

“Since winning elections is overwhelmingly a matter of vote buying, and society’s informational organs (education and media) are no more resistant to bribery than the electorate, a thrifty politician is simply an incompetent politician, and the democratic variant of Darwinism quickly eliminates such misfits from the gene pool. …It is a structural inevitability that the libertarian voice is drowned out in democracy.”

c. Lack of Unity

If an insufficiently libertarian candidate wins the party’s nomination, LP voters are more likely than voters of other party affiliations to support another party’s candidate. In 2016, this manifested in the defection of many libertarians to the Trump campaign (and a small handful to the other campaigns), as well as the quixotic write-in campaign of failed Libertarian candidate Darryl Perry. This results in the LP having less of an impact than it would if its voters came home after a bitter primary to the same extent that voters for the two major parties do. A lack of unity in an already small party is a death sentence for its political influence.

d. Bad Presentation

From the standpoint of a philosophical libertarian, the 2016 Libertarian National Convention was a raging dumpster fire. Candidates voiced support for all sorts of anti-libertarian ideas, the least libertarian candidates for President and Vice President were nominated, a candidate for party chair performed a striptease at the convention podium, and failed presidential candidate John McAfee thought it wise to attack the core demographic of libertarianism. At a time when the Libertarian Party most needed itself to be taken seriously by the American people, the convention did nothing to help the image of libertarianism while doing much to pollute its message and tarnish its image in the minds of voters.

After the convention, the LP spread misinformation concerning what a vote for Johnson could actually accomplish. It turns out that contrary to LP propaganda, 5 percent of the national popular vote does next to nothing for ballot access because ballot access is a state-level issue. The only such law is found in Georgia, but it requires 20 percent of the national popular vote for automatic ballot access in the next election. Lying to potential voters about the impact that they will have for one’s cause is not a recipe for success.

III. Johnson/Weld 2016

a. Lack of Libertarianism

As mentioned above, Gary Johnson was the least libertarian of the five candidates featured in the debate at the convention. Johnson repeated the tired falsehood that libertarianism is social liberalism combined with economic conservatism, supported fixing Social Security rather than phasing it out, claimed that market forces had bankrupted coal companies rather than government regulations, supported for a consumption tax (which drew a round of boos from the audience), advocated regional banks rather than a free market in currency, declined to condemn the atomic bombing of Hiroshima, had no answer as to whether American involvement in the World Wars was justified, supported government involvement in marriage, favored the Civil Rights Act of 1964 (which drew a round of boos from the audience due to parts which violate private property rights and freedom of association), and supported government-issued driver’s licenses (which drew several rounds of boos from the audience). Johnson also has a history of supporting military intervention against Joseph Kony, saying that Jews should be forced to do business with Nazis, wanting to ban Muslim women from wearing burqas, and growing state government spending as governor. William Weld, Johnson’s running mate, was even worse; he was the least libertarian of the four vice presidential contenders by a mile. Weld has a history of supporting affirmative action, eminent domain, environmental regulations, gun control, the Iraq War, the Patriot Act, the presidential candidacy of Barack Obama, and the presidential candidacy of John Kasich. There was nothing to attract anyone who was looking for a principled libertarian message, and much to repel them.

b. Lack of Knowledge

In a September 8 interview on MSNBC’s Morning Joe, Mike Barnicle asked Johnson about Aleppo. Johnson completely blanked out on the issue. At the time, he was hovering around 9 percent in the polls and needed to reach 15 percent to gain access to the debates. This gaffe marked the beginning of his gradual decline from 8.8 percent on September 7 to the 3.3 percent of the vote he received on November 8. Attempts were made to defend his gaffe by claiming that Johnson could not bomb other countries like major-party presidents do if he did not know about them, but these rightly rang hollow. A few weeks later, Johnson was asked to name a foreign leader that he admires and was unable to name anyone. While a philosophical libertarian could say that all heads of state are presiding over criminal organizations and are thus unworthy of admiration, Johnson did not do this and attempts by his supporters to spin his gaffe in that fashion were risible at best. It is one thing to withdraw from foreign entanglements, but quite another to have no idea what is happening in the world.

c. Lack of Personal Growth

Johnson first ran for President in 2012 as a Republican, then switched parties to gain the Libertarian nomination. As the 2012 campaign season wore on, Johnson improved in his ability to speak publicly and articulate libertarian ideas, though he still made some significant errors. Unfortunately, this trajectory did not continue. Four years is a long time in which to gain knowledge and grow as a person, but Johnson did not noticeably do either during this time. If anything, his mental faculties appear to have regressed between his 2012 campaign and his 2016 campaign.

d. Bad Presentation

Not only did Johnson gaffe badly on multiple occasions, but his presentation was downright weird at times. In an interview with NBC’s Kasie Hunt, Johnson stuck out his tongue and spoke almost incoherently. His intention was to make a point about debate access and how bad the major-party candidates were, but it looked desperate, forced, and strange. He appeared to be stoned in other media appearances, despite claiming that he had stopped using marijuana for the campaign.

e. Lack of Preparation and Study

A lack of knowledge and personal growth can only be properly addressed by preparation and study. Johnson and those around him needed to make sure that he was learning everything that he would need to know in order to be an effective presidential candidate on par with the major-party candidates. Clearly, this did not happen.

f. Inactivity Between Elections

A person who intends to run as a third-party candidate in multiple election cycles needs to be involved with the party’s activities in the intervening years. As the most public face of the organization, no one else has more power to bring in donors, encourage activists, and invite new people to the party than the party’s presidential candidate. But Johnson was nowhere to be found between the end of his 2012 campaign and the beginning of his 2016 campaign, having retreated into the private sector to run a marijuana company (which may help to explain the previous points in more ways than one). Johnson has similarly fallen off the face of the political landscape now that the 2016 campaign is over, which may harm the party’s outreach efforts leading up to the 2020 campaign.

g. Lack of Charisma

Johnson seems to lack the ability to take over a room in the way that successful presidential candidates do. Instead, he is usually soft-spoken and nervous, which causes his statements to lose some of their gravitas and his barbs to lose some of their sting. When he does raise his voice, it comes across not as righteous indignation but as a simple loss of temperament. While this might be good for countering the imperial Presidency after taking office, it is counterproductive for getting there.

h. Lack of Political Awareness

Much like Rand Paul during his campaign, Johnson seemed completely oblivious to what was happening in middle America. Whether by the statism indoctrinated into the voting public or by the political autism and cuckoldry that commonly manifest in mainstream libertarians, the libertarian moment passed and the right-wing populist moment came. The Libertarian Party found itself just as unprepared for this as did the Democrats and the establishment Republicans. For this reason (and the previous reason), Johnson was incapable of effectively countering Trump.

i. Unscrupulous Spending/Ron Neilson

The Libertarian Party and its candidates never have the resources of a major-party campaign. It is therefore of the utmost importance to wisely use the limited amount of funds available. The Johnson campaign failed to do this, spending an inordinate amount on campaign consulting services while still owing nearly $2 million from his 2012 campaign. If the campaign had received a good return on its investment into Ron Neilson’s consulting firm, then this might not be so bad. But given all of the above issues which a consulting firm might be expected to notice, bring to a candidate’s attention, and attempt to resolve, this was clearly not the case.

j. Lack of Loyalty

Even if all of the above issues did not exist, it is difficult to mount a successful presidential campaign when it is being torpedoed by no less than the bottom half of the ticket. Bill Weld proved that he is not only anti-libertarian on the issues, but a traitor to the Libertarian Party. In an interview with MSNBC’s Rachel Maddow on November 1, Weld said,

“Well I’m here vouching for Mrs. Clinton and I think it’s high time somebody did, and I’m doing it based on my personal experience with her and I think she deserves to have people vouch for her other than members of the Democratic National Committee, so I’m here to do that.”

At a press conference on November 7, the following exchange occurred:

Press: Between Clinton and Trump would you say ‘vote for Hillary Clinton?’

Weld: “Absolutely! I’ve sort of said that from day 1… But I’m saying, you know, if you can see your way clear to vote the party in the middle, that would be the Libertarians, that’s our first choice.”

Weld then said,

“We want people to vote Libertarian, but I understand in very close swing states there may be different dynamics at play, but in places like Massachusetts, where Mrs. Clinton is way, way, ahead, I would encourage everybody to vote Libertarian.”

Given the history of third-party candidacies, this is exactly the wrong approach. Third parties advance their causes by playing spoiler, thus forcing the major parties to either adopt their platforms or face the threat of being replaced in the way that the Republicans replaced the Whigs.

Conclusion

Gary Johnson is not going to be President, and the 20 reasons discussed above show that there was never any doubt of this by any competent observer. In future elections, this should be a thorough guide for the Libertarian Party concerning what not to do. But because Johnson gained a record vote total and vote percentage for the LP and libertarians tend to be no better than other people at recognizing the need to contemplate counterfactuals rather than to look only at what happened in this timeline, these lessons will likely remain unlearned and the LP will continue to wander in the wilderness.

25 More Statist Propaganda Phrases

In the discourse of statists, there is a group of phrases of which one or more tend to be present in nearly every argument. The previous listing of twenty-five such phrases was a major hit, so here are twenty-five more of the most common phrases that statists use in their arguments. As propaganda has a tendency to be repetitive, some of these phrases contain the same logical fallacies, and will therefore have similar refutations. As such, the phrases are ordered so that earlier rebuttals also apply to some later phrases.

  1. Give back to the community”

This phrase is used by people who want business owners to support local charities or help the needy directly. There is nothing wrong with this sentiment. In fact, it is more likely to be efficient and effective than a government welfare program, and it is certainly morally superior. Private charity operations must compete for donations, which incentivizes them to be more efficient and effective in their efforts. They also have a better sense of who can be helped out of poverty versus who will only exist parasitically upon the good will of others. But the phrase ‘giving back to the community’ is misguided and dangerous.

That one is giving back something to people implies that one has taken away something from those people. This can lead to a perception of legitimate business owners as thieves who do not rightfully own what they have, when the truth is quite the opposite. To the extent that businesses in a free market thrive, they do so by voluntary trade. They give customers what they want at prices they deem reasonable. The customer wants the business owner’s products more than he wants his money, while the business owner wants the customer’s money more than he wants his products. They trade assets and both are improved from their subjective points of view. As such, a business is always giving to the community, and its profits are evidence of the value that its customers have received from the business.

If the charitable nature of business ended there, it would be good enough, but there is more. A successful business will be able to employ people. This allows people to accept a constant rate of payment for work done without having to take on the capital risks of starting and running a business oneself. Additionally, this gives the poor and the mentally deficient, who cannot start their own businesses, a path to prosperity and a sense of dignity.

The idea that such benevolent activity to improve one’s community is somehow exploitative of that community is nothing short of communist propaganda and should be rejected as such. Businesses that donate to charities are not ‘giving back to the community’; they are giving the community even more.

  1. Pay your fair share”

Phrases 2-7 are used by progressives who want to intervene in the market economy and make the wealthy pay more taxes. This is wrong on two counts. First, taxation would be considered robbery, slavery, trespassing, communicating threats, receipt of stolen money, transport of stolen money, extortion, racketeering, and conspiracy if anyone other than government agents behaved identically. An objective moral theory must be consistent, so it can be no respecter of badges, costumes, or affiliations. What is immoral for you and I to do must also be immoral for government revenuers to do. Second, the rich already pay the vast majority of the tax revenue collected, while many poor people pay nothing. If “pay your fair share” is to be logically consistent, then all of the poor should be taxed at least to some extent.

  1. Income inequality”

The income inequality generated by a free market is a feature, not a bug. People have different degrees of expertise, intelligence, and motivation, which results in different ability to earn income. This results in the people with the most resources being the people who are best at acquiring, defending, and properly investing those resources. This ultimately benefits everyone because it allows innovations to move past the initial stage, at which only the rich can afford them, and become inexpensive enough for mass adoption. To the extent that income inequality is a problem, it is due to state interference in the form of currency debasement and regulatory capture.

  1. Society’s lottery winners”

This is an open insult to the hard work that business owners have put into their firms to make them successful. A lottery winner invests money in a manner which one may expect to be wasteful and happens to get unearned wealth. A business owner invests both money and labor in a manner which one may expect to be productive, and some earn wealth.

  1. You didn’t build that”

The idea behind this phrase is that someone else built the infrastructure upon which a business relies in order to interact with its customers and make profits. But those who use this phrase make an unjustifiable logical leap from there to assert that a business owner should pay taxes to the state in return for that infrastructure. The problem is that the state monopolizes the infrastructure and forces people to pay for it, in many cases without regard for how much they use it, if at all. People should pay for what they use, but it is immoral to force people to pay for what they are forced to use. In a free society, the infrastructure would be privately owned and voluntarily funded. Those who say that the state must provide infrastructure, and in turn that people must pay taxes for it, have an unfulfilled burden of proof that they frequently shift, committing a logical fallacy.

  1. Gender pay gap”

Those who obsess over this issue point to an overall disparity in pay between men and women and conclude that some kind of unjustifiable gender discrimination must be occurring. But to some extent, a gender pay gap results from the natural differences between the genders. Intelligence testing shows that while the average intelligence level is almost the same for both genders, the standard deviation is much higher for males. This means that geniuses and dunces are both disproportionately male, which females are more likely to be of average intelligence. This makes sense from an historical perspective; in traditional societies, some men were planners and inventors, other men were manual laborers, and women were the support staff for both groups. (There were occasional deviations from this, but they were the exception and not the rule. The NAXALT objection is a sign of political autism and should be denounced as such.) As the highest-paying jobs tend to require great intelligence, and people with great intelligence tend to be male, it follows that a gender pay gap would result. Males tend to have more strength and toughness than females, and the nature of human procreation makes males more disposable. This grants males an advantage in taking high-risk jobs which have hazard pay bonuses, resulting in a gender pay gap. Behavioral differences between the genders, which are also partly genetic in origin, produce a difference in the ability to negotiate for higher salaries.

Another problem with the progressive narrative on gender and pay is that they look only at the aggregate and do not compare like cases. When two workers in the same profession who are equal in every measurable way except for their genders are compared, such disparities do not appear. In some cases, women even earn a few percent more than men when this is taken into account. Part of the reason for the aggregate pay gap is that women choose to work in different fields from men, and these fields do not pay as much.

Although baseless misogyny (and misandry) do occur, its elimination would only reduce the gender pay gap; it would not result in equal pay.

  1. Social justice”

The idea of social justice is that the state should ensure fair distribution of wealth and social privileges, equal opportunity, and equality of outcome. The implication is always that the current conditions are socially unjust. This idea has several major problems. Who defines what is fair, and why should they be allowed to define it? If opportunities and outcomes should be equal, who must make them equal? If an injustice is present, who is the subject of the injustice?

Fairness is a subjective concern, and should therefore be determined by those who are closest to an interaction, i.e. those who are directly involved or affected. As long as all parties to a interaction participate voluntarily and no external party is aggressed against, all involved may deem the interaction fair and the matter of its fairness should be considered resolved. But in social justice rhetoric, the idea of fairness is an excuse to stick one’s nose in where it does not belong and interfere in matters which are none of one’s business. Because doing this successfully involves initiating the use of force against peaceful people and all wealth and privilege can be traced back to a series of interactions, social justice perverts the idea of fairness into something intrusive and unfair.

Equal opportunity and equal outcome are advocated by right-wing and left-wing ideologues, respectively, but both of these are erroneous. Neither can exist without not only a redistribution of wealth, but a leveling of cultural norms and a medical erasure of genetic differences between people, for all of these give some people advantages over others. The resulting inequality of opportunity will necessarily cause an inequality of outcome. All of these measures require initiating the use of force against people who do not wish to be made equal in these senses. Thus, social justice twists the idea of equality into something which must be imposed by unequal means, as the state and its agents are legally allowed to do that which is disallowed for other people and organizations to do.

Ultimately, social justice is not a form of justice at all because there is no subject by which an injustice can be committed. Proponents of social justice will say that a collective is the victim, but this is impossible because collectives do not exist. To exist is to have a concrete, particular form in physical reality. To say that collectives exist is beg the question of what physical form they take, as all available physical forms are occupied by the individuals which are said to comprise the collective. Thus there is no collective existence apart from the existence of each individual said to comprise the collective. Those who advocate social justice cannot point to an individual victim of social injustice, but they seek to create a multitude of victims of real injustice.

  1. Level playing field”

This phrase is used by regulatory busybodies who see an innovation and decide to stand athwart history yelling “Stop!” In any sort of activity, some people will always have an advantage over others, whether it is a first mover advantage, a better idea, better marketing, greater intelligence, etc. The truth is that there can be no such thing as a level playing field, and that which cannot be done should not be attempted.

  1. Our Constitution”

Phrases 9-14 are used to foster a sense of collective identity. The idea that a constitution is “ours” assumes that a collective exists and has ownership of the constitution. As explained earlier, collectives do not exist apart from the existence of each individual said to comprise the collective. Additionally, to own something is to have a right of exclusive control over it. Part and parcel of this right is the right to physically destroy that which one owns. As governments would use force to stop anyone from attempting to destroy the constitution either literally or figuratively, the citizens are not the de facto owners of a constitution.

  1. Our shared values”

Although any recognizable social group will come together to further a certain set of shared values, this phrase is frequently abused by statist propagandists to create a sense of nationalism. In modern nation-states, there tend to be few (if any) shared values across the entire population. To the contrary, it is usually the case that large subcultures within the nation hold values which are diametrically opposed to each other, as well as to the values which are espoused by the ruling classes. To make matters worse, whatever constitution or other founding documents may be in use are frequently cited by all sides in the cultural conflict as a means to justify their own views and attack their opponents.

  1. Our fellow (insert national identity)”

Much like the previous phrase, this is used to lump together people who may or may not fit together by constructing a common identity around them which may or may not have any basis in reality. The implication is that even if people within a nation have disagreements, they are still part of the same collective. This is not necessarily the case because disagreements between subcultures within a nation can grow to a point at which they are no longer able to peacefully share a system of governance. This necessitates a peaceful parting of ways, and the unwillingness of political leaders to allow this to happen results in political violence and civil wars.

  1. That is un-(insert national identity)”

As sociologists are so fond of telling us, an in-group will attempt to clarify its boundaries by othering some people, i.e. defining them as part of the out-group. This is done for purposes of ideological purity as much as for any other reason. Politicians and pundits use this phrase in an attempt to define certain ideas as being out of bounds of the allowable range of opinions. But just as a nation has no existence apart from the individuals comprising the nation, a nation has no ideals apart from the ideals of the individuals comprising the nation. Thus, to tell a person of national identity X that they hold un-X ideas is a contradiction of terms.

  1. National interest”

There is no such thing as a national interest apart from each individual person’s interests because there is no such thing as a nation apart from each individual person. Because a nation will invariably contain individuals whose interests contradict each other, the idea of a national interest is false by contradiction unless everyone in a nation can agree upon a certain set of core interests.

  1. Shared sacrifice”

When government and central bankers interfere with the economy and cause a recession, both typically intervene with fiscal and monetary stimulus programs. As Keynesians, they do not understand that they are only sowing the seeds for another boom and bust cycle. When this happens, politicians and their minions will call for “shared sacrifice.” This phrase really means that they wish to pass off the costs for the mistakes of the ruling classes and the politically-connected wealthy onto the entire population rather than let natural selection eliminate the incompetent from the ranks of politicians, central bankers, and speculators. Of course, the people never get a proper return on their forced investment; rather, it is heads they win, tails you lose.

  1. Rights come from the government”

This phrase is used by progressives who wish to justify their view of the role of government, but it is contradictory. If rights are given by the state, then they can also be taken away by the state. But a right is not something which can be taken away by someone else; it can only be forfeited by the right-holder by violating the equivalent right of another person. This contradiction necessitates a different source for rights, such as argumentation ethics.

With the theoretical argument refuted, let us turn to practical concerns. Progressives claim that government is necessary as a defender of our rights, for the most brutish person or gang may rule and violate our rights otherwise. But a government is a group of people who exercise a monopoly on initiatory force within a geographical area. A government is funded through taxation, which violates private property rights. Its laws are enforced by the threat of arrest, fines, imprisonment, and possibly execution, which violates liberty, property, and possibly life rights. A rights-protecting rights-violator is a contradiction of terms, and the state is just such a brutish person or gang that the progressives say we need safeguards against. Note that although they have a burden to prove that this territorial monopoly is required in order to protect rights, they never do so. At best, they will ask for counterexamples, but this reliance upon historical determinism only shows their lack of courage and imagination to think beyond what has been to see what can be.

  1. We get the government we deserve”

This phrase commonly appears in the media immediately following an election, particularly after a result which entrenches the current system and fails to produce the changes which are invariably promised (which is to say, nearly always). The way that this phrase is used by the media is an example of victim blaming, as the people are going to continue to be violently victimized by agents of the state and the media is saying they deserve to be.

However, one could also interpret this as a call for revolution; in the words of Frederick Douglass, “The limits of tyrants are prescribed by the endurance of those whom they oppress.” There is a case to be made that if people are unwilling to abolish the state by force even though they could, then they deserve to suffer the consequences of their inaction.

  1. Pay your debt to society”

This phrase is used by commentators on criminal justice issues as a euphemism for serving time in prison. The problem with this phrase is that society cannot be a victim because it does not really exist; each individual person exists. A crime must have a definite victim; an individual and/or their property must have been aggressed against. Any debt incurred by a criminal should be payable to that victim, not to all people living within a geographical area.

  1. Rule of law”

This phrase is used by people who try to justify the state by fear-mongering about what could happen without it. But the truth is that rule of law is fundamentally incompatible with a state apparatus. Rule of law is the idea that people should be governed by laws rather than by the arbitrary decisions of rulers. A state is a group of people who exercise a monopoly on initiatory force in a certain geographical area. People who have a monopoly on initiatory force necessarily have a monopoly on the enforcement of laws. This means that they can choose the nature of the law and the enforcement thereof. Thus, in the presence of a state, those who wield state power rule the law. The law does not rule them. Therefore, the only possibility for rule of law is to have no state.

  1. Law-abiding citizen”

This phrase is frequently uttered by the common person as a sort of virtue signal that one is a good person. But whether abiding the law makes one a good person is dependent upon the nature of the law. In a statist society, the law is a collection of opinions written down by sociopaths who have managed to either win popularity contests or murder their competitors and enforced at gunpoint by thugs in costumes. When most people commit several felonies every day because the laws criminalize a vast array of activities which do not threaten or victimize anyone and purport to legitimize the victimization of the citizen at the hands of the state, a law abiding citizen is not a goal to which people should aspire.

  1. Common sense regulations”

This phrase is used by people who wish to restrict economic and/or personal freedoms on the grounds of some public good. But their proposed regulations often defy common sense, not that common sense provides an accurate understanding of reality. The purpose of this phrase is to demonize opponents of a proposal as lacking good sense without having to make a logical case for the proposal.

  1. Corporate citizen”

This phrase is used by people who wish to hold businesses accountable to various laws and regulations. It has its roots in the idea of corporate personhood, the idea that a corporation has rights and responsibilities similar to those of a person. This is wrong because a corporation is a legal fiction created by the state to shield business executives from liability. It is not an extant being with moral agency, as a real citizen is. If the object is to hold people fully accountable for their actions, then corporations must be abolished and full liability for one’s crimes must be restored.

  1. Don’t waste your vote”

This phrase is used by supporters of major-party candidates who wish to suppress votes for minor parties. However, the definition of a wasted vote is a vote which does not help elect a candidate. In an indirect election, such as the United States presidential election, only electoral votes matter. Therefore, all popular votes in such a contest are wasted unless there is a law which prevents faithless electors. In elections in which popular votes directly determine the outcome, all votes for losing candidates are wasted, as well as all votes for winning candidates which went above the amount necessary to win. Thus, the percentage of wasted votes in a race may be given as

W = 100% − (Second highest vote percentage)% − 1 vote,

which will be at least 50 percent unless only two candidates receive votes and the winner wins by only one vote.

  1. This is the most important election of our lifetime”

This phrase is used by the establishment media in the hopes of increasing voter turnout. It is a combination of pleading, manipulation, and crying wolf that is completely nonsensical. It assumes that elections matter, requires impossible knowledge, and contradicts physics.

For the ruling class in a democratic state, elections are just tools of social control that provide the populace with meaningless participation in a process in order to convince them that criminal conduct performed under color of law is legitimate because “they voted for it.”

In order for the upcoming election to be the most important of our lifetime, it must be more important than every future election in which current voters will vote. But the future is unknown and unknowable until we arrive at it.

It is known that altering a system at an earlier time gives it more time to develop differently, resulting in greater changes. As such, at least in terms of how different a counter-factual world in which a different candidate took office might be, the most important election of any person’s lifetime should be their first one.

  1. Freedom isn’t free”

This phrase is used by supporters of government militaries and their military-industrial complexes to stir up emotional support for soldiers, defense spending, and the occasional foreign invasion. But the fact that freedom must be defended at a cost does not mean that a government monopoly military is necessary or proper for that task. There is a logical gulf between the two that most people cannot even see because governments have monopolized military defense for millennia, but it is there. To simply jump across it without attempting to explain why a private, voluntarily funded, non-monopolized form of military defense would be insufficient is philosophically invalid.

  1. We need to have an honest conversation”

This phrase is used by politicians and their propagandists when dealing with controversial political issues which tend to go unaddressed for long periods of time due to their third rail nature. But politicians have a tendency to either do nothing about such issues or to uniformly disregard the will of the people. The real purpose of this phrase is to set a trap for both the mainstream opposition and political dissidents. Either can be tricked into believing it acceptable to venture opinions which are outside of the Overton window, for which the establishment can then attack them as unreasonable extremists. In some cases, it is a way for authoritarian regimes to find out who to violently suppress. As such, it is best to rebuke those who make such a claim.

Are Libertarians A Joke? A Rebuttal to Milo Yiannopoulos

In an October 16 interview with TheNation.com, Breitbart columnist Milo Yiannopoulos was asked whether libertarians are an acceptable alternative for right-wing voters who are tired of voting for establishment Republicans who flatter them with words but act the same as always. This led to the following exchange:

What about the Libertarians?

What about them?

Are they not an acceptable alternative?

No. They’re a joke.

Why?

Libertarians are children. Libertarians are people who have given up looking for an answer. This whole “everybody do what they want” is code for “leave me to do what I want.” It’s selfish and childish. It’s an admission that you have given up trying to work out what a good society would look like, how the world should be ordered and instead just retreated back into selfishness. That’s why they’re so obsessed with weed, Bitcoin, and hacking.

I always thought those were the most attractive things about them.

Maybe so, but that’s why you can’t take them seriously. It’s all introspective and insular and selfish.

Is this true, and if so, to what extent? Let us see.

Looking for an Answer

In order to say that libertarians have given up looking for an answer, it is necessary to be either ignorant or dismissive of massive volumes of literature produced by libertarians. But Yiannopoulos has somehow managed to do one or the other, if not both. It is not the case that libertarians have given up trying to work out what a good society would look like and how the world should be ordered, but that many of us are weary of being treated like Cassandra and saying “I told you so” to the mainstream body politic in response. In other words, withdrawing in disgust is not the same as apathy.

Doing What One Wants

Libertarianism is not about doing whatever one wants. One has no right to initiate the use of force against another person or their property. This does not change when people gather together, wear certain costumes, claim certain affiliations or job titles, or hold a vote. Respect for individual liberty is the difference between civilization and barbarism, between progress and subsistence, between peace and destruction.

Selfishness and Childishness

Yiannopoulos, like many critics of libertarianism (and Objectivism) before him, uses the common meaning of selfishness rather than the meaning used by libertarians (and Objectivists), which leads to his confusion. In the interest of avoiding confusion, libertarians commonly speak of rational self-interest and the drive to do what will maximize one’s own happiness and well-being. The freedom to pursue one’s self-interests without interference as long as one does not commit acts of aggression, to the extent that it is present, has led to the innovations that make Yiannopoulos’ life as he knows it possible, so it is rank hypocrisy for him to deride this as childish. In cases in which the pursuit of self-interest by each individual results in adverse outcomes for a group or the self-interest of a person is to game the system to one’s advantage, the state offers no solution and is frequently the cause of the problem. All too often, those who accuse libertarians of selfishness are committing the opposite sin; that of conspicuous compassion. Forced philanthropy is a contradiction of terms, and the result is frequently worse than the result of doing nothing to help those in need, especially when viewed through a Darwinian lens.

To be fair, libertarianism could be considered a childish idea in the sense that “don’t hit people and don’t take what is theirs” is simple enough for a small child to understand. The nuances that arise when responsibility is obfuscated, rights come into conflict, or aggressors must be stopped can be properly deduced by an older child unless adults fill their heads with falsehoods or neglect to educate them in the proper use of logic. But this is not what people generally mean when they call an idea childish.

Weed, Bitcoin, and Hacking

There are some libertarians who promote vices as though they were virtues and believe that decentralization alone can bring down the state apparatus without ever being used for evil purposes, but a significant part of the libertarian movement is not so foolish. While marijuana use tends to result in political cuckoldry, Bitcoin and hacking are causing real inconveniences for the powers that be. Bitcoin (or a superior successor) is capable of destroying the system of central banking and fiat currency that is financially oppressing the average person in order to benefit the politically connected wealthy. With releases that have exposed illegal behaviors by the national security state as well as the Clinton campaign, Wikileaks has proven to be a headache for both sides of mainstream American politics. There is good reason for libertarians to be obsessed with these anti-political methods of action, given that political methods have generally failed them.

Introspection and Insulation

Yiannopoulos seems to believe that introspection and insulation make a philosophy unworthy of being taken seriously. But introspection and insulation are healthy, even essential at times. If adherents of a philosophy do not come together among their own and do this, they cannot refine their beliefs or make important human connections with each other. If individuals do not do this by themselves, they cannot have the necessary focus to examine their lives properly.

There is a certain irony in this view coming from Yiannopoulos. “The unexamined life is not worth living” is a famous quote from Socrates, described by Plato as being uttered as part of his defense when he was tried on the charges of “corrupting the youth” and “not believing in the gods in whom the city [of Athens] believes, but in other daimonia that are novel.” Socrates was ultimately convicted and forced to commit suicide. If such charges still existed today, Yiannopoulos certainly would have been brought up on them by now.

Taking Libertarianism Seriously

In a sense, it is hard to fault Yiannopoulos here, given the cesspool of degeneracy that the Libertarian Party has become. This is a problem caused by leftist infiltration of the libertarian movement and the libertarians who allowed it to occur, and it is a problem with people rather than a problem with libertarian philosophy. Although Yiannopoulos is sufficiently intelligent to figure this out, he seems unwilling to do so. The works of Rothbard, Block, and Hoppe are no less valid just because people call themselves libertarians while doing their best to undermine the practice of libertarian philosophy.

Conclusion

Yiannopoulos calls himself a cultural libertarian, though this seems to be just another attempt to corrupt the message of libertarianism so that people can fake being a libertarian for their own personal gain. The joke is on him for rejecting liberty in favor of right-wing statism. He has shown his true colors, and libertarians should shun him.

On Market Failure

The idea of market failure is a widely believed misconception which has found widespread use in statist propaganda for the purpose of justifying government intervention in the private sector. Though the term itself has only been in use since 1958, the concept can be traced back to Henry Sidgwick. It is used to describe a situation in which the allocation of goods and services is Pareto inefficient. This occurs when the rational self-interest of individuals is at odds with the optimal outcome for a collective. Such a situation is frequently blamed on conflicts of interest, factor immobility, information asymmetry, monopolies, negative externalities, public goods, and/or time-inconsistent preferences. Among these, monopolies, negative externalities, and public goods receive the most attention from mainstream economists.

But let us pause to consider what a market is. A market is a structure that allows buyers and sellers to exchange goods, services, and information. The participants in the market for a particular commodity consist of everyone who influences the price of that commodity. To say that a market has failed is to say that this process of assembling the information about a commodity which is reflected in its price and its change over time has failed. But the causes listed above are either inconsistent with a free market or unresolvable by interventions which bind the market. Let us explore this in detail.

Monopolies

While monopolies are frequently blamed for market failures, a monopoly in a particular market is typically the result of government intervention which has raised barriers to entry in that market. Through a vicious cycle of regulatory capture, larger businesses can put smaller competitors out of business by bribing politicians and regulators to favor the former and harm the latter. This continues until a market is effectively monopolized. Therefore, this type of monopoly is actually a government failure rather than a market failure.

Another type of monopoly can occur when there are natural barriers to entry, such as the need to build vast amounts of infrastructure in order to provide a good or service. This can give the first entrant into a market an insurmountable advantage. Consumers may then complain that this monopolist is abusing them rather than show gratitude that they are getting a service which was formerly nonexistent. But if the monopolist were really overcharging, then it would become feasible for another provider to either challenge the monopoly directly or provide an alternative service. This type of monopoly is actually a market signal that a particular good or service would be better provided by another means, and entrepreneurs should look for those means.

Third, a monopoly can arise in a free market if one business satisfies all consumers of a good or service to such an extent that no one cares to compete against them. This kind of monopoly is not a market failure, but an astonishing market success.

This leaves only the ‘public goods’ argument, which merits its own section.

Public Goods

Public goods and services are those whose consumption cannot be limited to paying customers. It is frequently argued that this produces waste in the form of unnecessary duplication and excess costs born by those who are not free riders. There is also the matter that non-excludable and rivalrous resources in a commons may be depleted without intervention. The latter can only be fully resolved by eliminating the commons, as restoring exclusive control to the resource is the only method of eliminating the perverse incentives created by a commons. The concerns over free riding and unnecessary duplication ignore incentives, prove too much, and commit the broken window fallacy.

If we wish to have a rational discussion, it is essential to define terms. A problem is an undesirable situation which can be remedied. This is because a situation which is not undesirable presents no problem to solve, and an undesirable situation which has no remedy is just a fact which must be tolerated. The free rider “problem” is a situation of the latter type, as it is impractical to make sure that everyone pays exactly what they should pay for the amount of public goods that they consume. That government monopolies destroy competition, and thus the market price system, makes the free rider “problem” impossible to solve, as the information needed to determine how much each person should pay for the amount of public goods that they consume is destroyed beyond repair.

If taken to its logical conclusion, the idea that no one should be able to consume more than or pay for less than their fair share of a public good means that the state should be eliminated, as the very presence of a state means that some people are consuming more than and paying for less than their fair share of the total wealth in the economy, as states are funded by coercive means which violate private property rights. Those who receive government welfare payments, bailouts, grants, or any other form of government funding are free riding upon the backs of taxpayers and anyone else who uses currency printed by a government’s central bank. The latter group of people are forced riders who are required to pay for public goods from which they receive insufficient benefit. Charity would also be unjustifiable if the concept of the free rider problem is taken to its logical conclusion, as those who receive charity are not paying the full cost for what they are using.

But suppose we ignore this as well. If we accept for the sake of argument that there are public goods and that no one should be able to consume more than or pay for less than their fair share of a public good, then the result will be a massive distortion of the economy, as both the state and private charity must go. While the demise of statism is nothing to lament, the absence of any form of private charity would lead to the very sort of Hobbesian war that statists fear and think that they are preventing. It must also be noted that the money for payments for public goods which are now being made was once being put toward another purpose. Whether that purpose was spending on other goods and services or investment (which is really just another form of spending), the diversion of spending away from these purposes and toward public goods will eliminate some other economic activities that were occurring.

Nearly all competitive production involves supposedly wasteful duplication, in that each provider must have the infrastructure necessary to produce that which is being provided. But if the duplication is truly wasteful, the market signals this by rendering the wasteful duplication unprofitable. Government intervention interferes with such signals, and government control over an industry completely eliminates them, leading to far worse government failures than any failure of the market.

Externalities

A problem related to public goods is the problem of externalities, in which costs or benefits affect a party who did not choose to incur those costs or benefits. When firms do not pay the full cost of production, each unit costs less to produce than it should, resulting in overproduction.

The most frequent examples given are pollution, traffic congestion, and overuse of natural resources, but all of these contain externalities because the market has been prevented by governments from internalizing the costs. Air and water pollution are externalities because government intervention on behalf of polluters has eliminated the common law system of private property rights with regard to pollution. Before the Industrial Revolution, pollution was correctly viewed as an act of aggression against people and their property. Those victimized could sue for damages and obtain injunctions against further pollution. Polluters and victims can also bargain to reach an optimal level of both production and pollution. Additionally, the victims would be justified in using violence in self-defense against polluters, though this is an historical rarity. But government monopolization of environmental regulation has prevented these market solutions from being implemented. Therefore, pollution is a government failure rather than a market failure.

Traffic congestion is another tragedy of the commons that causes externalities in the form of pollution, wasted fuel, and lost time. But this is another case in which governments have monopolized a good and produced it out of accordance with market demand. Without competing private firms to build different traffic systems in search of more efficient ones and without private property rights determining location and control over the transportation system, we are left with a non-excludable good that is incentivized toward overuse. Attempted solutions of congestion pricing, mass transit, and tolls mitigate some effects, but not to the extent that private service providers might implement such methods. Again, we have government failure at work.

A third example of externalities occurs with overuse of natural resources, such as fish and lumber. But once more, we see government intervention against private property mechanisms creating problems. Because state personnel in modern democracies do not personally benefit from maintaining the value of state-controlled property and work almost solely with the usufruct thereof, they are incentivized to engage in bribery and corruption. When states sell only the resource rights but not the territory itself, they get a renewable source of income. But firms that harvest renewable resources can abuse this system, stripping the resource bare then vanishing when it is time to replenish. These ‘fly-by-night’ lumber companies, fishers, and other such exploiters lead to the fast demise of resources which were harvested and preserved for centuries prior to state intervention. In short, government fails yet again.

Before moving on, a quick word about positive externalities is in order. This is another way of talking about the free rider problem, so the same criticisms discussed above apply. But we should also consider the benefits of free riders. Although some people will argue that free riders are responsible for higher costs, they are actually signaling that a good or service is overpriced. While degenerate freeloaders do exist, most free riders who are aware of their free riding are willing to pay for what they are receiving but believe that said goods or services are overpriced. In the state-enforced absence of another provider, they choose to “pirate” the public goods rather than pay the cost which they believe to be too expensive. If there are rational, knowledgeable people in charge of a public good that has many free riders, then they will respond by lowering the cost to convince more people to contribute, which can actually raise the total contribution.

The above result is rare, of course, as rational, knowledgeable people tend to be productive rather than become part of the state apparatus. The more useful role of free riders is to crash government programs which cannot be ended by normal political means. Most government programs help a few people by a large magnitude while harming a much larger number of people by a much smaller amount. This means that an irate and tireless minority will work to keep their sacred cow from being gored, while the majority is not being harmed enough to take action to end the harm. Thus, there is nothing more permanent than a temporary government program, and it is politically impossible to abolish entitlement and welfare programs. While the strategy of overloading such programs was first proposed by leftists who wished to replace them with far more expansive redistributions of wealth, it could also be used by libertarian-minded people who wish to replace such programs with nothing.

Other Culprits

The less-discussed causes of market failure are conflicts of interest, factor immobility, information asymmetry, and time-inconsistent preferences. This is mostly because government intervention is more widely known to either cause these problems or fail to solve them. Conflicts of interest typically occur when an agent has a self-interest which is at odds with the principal that the agent is supposed to serve. For example, a lawyer may advise his client to enter protracted legal proceedings not because it is best for the client, but because it will generate more income for the lawyer. A politician may vote for a law not because it is in the best interest of the people in her district, but because she was bribed by lobbyists who support the law. The only solution to a conflict of interest is to recuse oneself from the conflict, and government offers no answer, especially since it inherently operates on conflict of interest.

Factor immobility occurs when factors of production, such as land, capital, and labor, cannot easily move between one area of the economy and another. This sometimes occurs due to malinvestment caused by government distortions of the economy; in other cases, it results from technological advancement that puts an industry into obsolescence. In any event, government regulations frequently make it more difficult to change occupations and maneuver capital than it would be in a free market. Interventions to help workers in a declining field typically fall victim to the knowledge problem; it cannot accurately retrain workers or educate future workers because it cannot know what the economy will need by the time the retraining or education is complete.

Information asymmetry occurs when some parties in a transaction has more and/or better information than others. This creates a power disparity which is sometimes called a market failure in the worst cases. Common sub-types of information asymmetry include adverse selection and moral hazard. Adverse selection occurs when one party lacks information while negotiating a contract, while moral hazard involves a lack of information about performance or an inability to obtain appropriate relief for a breach of contract. These cases are made worse by government laws, as laws can lead to both adverse selection and moral hazard. For example, an insurance firm that is legally disallowed from discriminating against high-risk customers is itself put at a higher risk through no fault or will of its own, being unable to turn away those who cost the most to insure or cancel insurance policies for reckless behavior by the insured. Fortunately, there are market methods for resolving informational asymmetries, such as rating agencies.

Time-inconsistent preferences occur when people make decisions which are inconsistent with expected utility. For example, one might choose to have ten ounces of gold today rather than eleven ounces tomorrow. Time preferences are expressed economically through interest rates, in that interest rates are the premium placed upon having something now rather than waiting for it. Governments interfere with interest rates through central bank monetary policies, leading to alterations of time preference that can be inconsistent. This is still another example of government failure rather than market failure.

Resource Failure

Another possibility for market failure which is rarely discussed is that of resource failure. If an economy becomes dependent upon a certain non-renewable resource, that resource becomes scarce, and there is no viable alternative, the result can be devastating not only to markets, but to peoples’ lives as a whole. For example, if peak oil occurs and there is no alternative energy source available to meet the energy demands fulfilled by fossil fuels, a market failure will occur due to resource failure. Another historical example is the destruction of trees on Easter Island. Resource failure is generally not amenable to government policy, and may be exacerbated by it if subsidies alter the market to keep it from finding the best solution to a resource shortage.

Complainer Failure

The last type of failure is not a market failure at all, but a failure by a critic to understand the nature of the market. Consumer demand does not drive the economy; capital investment does. The over-reliance on gross domestic product (GDP) as a measure of economic output has fooled many people into believing otherwise, but GDP neglects intermediate production at the commodity, manufacturing, and wholesale stages of production. As such, consumer demand and spending are an effect of a healthy economy and not the cause.

With this in mind, the idea that the market has somehow failed when it does not produce everything that a particular person might want and deliver it exactly where they want it for a cost that the person finds agreeable is ridiculous. A person levying this criticism should be advised to check their hubris. If a certain good or service is not produced in a free market, it is because such production is not sufficiently worthwhile for anyone to make a living through doing so. The fact that everyone gets by without that good or service indicates that no failure has taken place. Those who desire that good or service so much should make an effort to provide it so that they can have it.

Standards

The entire idea of market failures is based on Pareto efficiency. But there is no reason why we must choose Pareto efficiency as the measure of market success. One could just as well define market efficiency as the degree to which it permits its participants to achieve their individual goals. (Note that these are equivalent if the conditions of the first welfare theorem are met.) Another possible standard is that of productive efficiency, which is optimized when no additional production can occur without increasing the amount of resources, time, and/or labor involved in production. An economy with maximum productive efficiency cannot produce more of one good without producing less of another good.

Conclusion

In every case, that which appears to be a market failure is actually a failure of government policy, natural resource management, or economic understanding. We may therefore reject the very idea of market failure as yet another form of statist propaganda.

This Is (Probably) Not The Most Important Election Of Our Lifetime

In this election cycle, just like the others before it, the establishment media is telling us that this is the most important election of our lifetime. They repeat it over and over again, as if to convince themselves. But is this really the case? Let us thoroughly examine this idea.

First, it assumes that elections have importance. This is an idea that most Americans take for granted, as it is part of the civic religion that people are indoctrinated into from an early age. But this does not make it true. In fact, this should make it highly suspect, as the truth requires not indoctrination; only discovery. For the ruling class in a democratic state, elections are just tools of social control that provide the populace with meaningless participation in a process in order to convince them that criminal conduct performed under color of law is legitimate because “they voted for it.” The widely perceived differences between the two parties are just an illusion, and the heart of government policy remains the same, regardless of what the people want. Regardless of who wins in November (barring a miraculous victory by a third-party candidate), there will be more fighting against terrorists but no serious push to defeat them, military spending will stay at absurd levels, the Federal Reserve will not be abolished or even significantly reined in, a large illegal immigrant population will remain, regulatory agencies will continue to inflict great harm on small businesses, civil liberties will be further imperiled, the welfare state will be preserved, and Congressional gridlock will likely continue. With this in mind, elections do not have importance in the sense that the establishment media is describing. If elections do not have importance, then one cannot be more important than another. The idea that the upcoming election is the most important of our lifetime fails a fortiori.

Second, it requires impossible knowledge. In order for the upcoming election to be the most important of our lifetime, it must be more important than every future election in which current voters will vote. But the future is unknown and unknowable until we arrive at it. As such, the claim that the upcoming election is the most important of our lifetime cannot be proven until all current voters have died and all of the elections they will live through can be evaluated for their impact.

Third, it contradicts physics. Let us assume that it is always true that the current election cycle is the most important of our lifetime. It follows that each successive election is more important than the one before it. As the entire population is not replaced between election cycles, there are people who vote in successive elections (in fact, most voters do). Thus, we can carry this idea back through history as far as the first advent of elections in the place being considered. The conclusion of this line of reasoning is that changing an election result farther back in history would cause less change to the present day than changing a more recent election result. But it is known that altering a system at an earlier time gives it more time to develop differently, resulting in greater changes. As such, at least in terms of how different a counter-factual world in which a different candidate took office might be, the most important election of any person’s lifetime should be their first one.

Each of these logical and philosophical problems is enough to render the phrase inert. But given all of these fallacies, no rational person should be calling this election, or any other, the most important election of our lifetime. So then, why do politicos do it? The answer is that it is a way to psychologically manipulate the masses. Immediacy is an important feature in human psychology because nothing is more important in terms of what can be acted upon than the present; the past has already happened and cannot be changed by available means, and the future has not yet arrived and therefore cannot yet be acted upon. But it is not only the case that the present is unique; it also feels unique. Only in retrospect can one see that an election is really not so different from previous elections, with the amount of time necessary for this being dependent upon how many minor differences there were between the candidates.

It would be reasonable to conclude that the phrase “this is the most important election of our lifetime” is a combination of pleading, manipulation, and crying wolf. This, of course, leaves us with three important questions. When will the American people ignore the pleas of the politicos? Is a wolf really out there? And if so, who or what will be his meal?

Make America Miss Again: The 2016 Republican National Convention

On July 18-21, the Republican Party held its national presidential nominating convention in Cleveland. Over a thousand delegates from all 50 states attended the convention, along with dozens of guest speakers. Each day had a different theme, based on Republican presidential nominee Donald Trump’s campaign slogan “Make America Great Again.” These were “Make America Safe Again,” “Make America Work Again,” “Make America First Again,” and “Make America One Again.” Let us examine each of these themes, how they were presented, and what is wrong with the approach of Trump and the Republicans.

Safe Again

The theme of the first night was “Make America Safe Again.” According to the GOP convention site,

“From attacks on our own soil and overseas to the tragedy in Benghazi, the policies of Barack Obama and Hillary Clinton have left us vulnerable. Our immigration system is broken, leaving our country open to security threats and the negative consequences of illegal immigration. A Donald Trump administration will listen to and learn from our nation’s heroes who have put themselves in harm’s way and pursue a national security strategy and foreign policy that will strengthen our military and make America safe again.”

But it is the United States government that does the most to make Americans unsafe, and the Trump agenda does little to address this problem. To the extent that crime has decreased since its peak in 1991, it correlates more strongly with increased firearm ownership among the citizenry than with anything the government has done.

Under a Trump regime, there will still be a multitude of laws which criminalize behaviors that do not aggress against any person or property. The police who enforce those laws will continue to make Americans unsafe. Currently, Americans are 58 times more likely to be killed by a police officer than by a terrorist, and this statistic is unlikely to improve unless more terrorism occurs during a Trump administration.

Unfortunately, that could be the case. Trump’s plan for dealing with ISIS (whatever it might be) is likely to motivate many more people to join terrorist organizations and kill Americans. When civilians are killed in drone bombings, as over 55 were in the week leading up to the convention, their surviving family members will want revenge. However horrible ISIS is, they will view it as the lesser evil if Americans killed their family members and ISIS did not. They will probably never find the drone pilots to kill them, as would be just, so they will try to kill American civilians, and some of them will succeed.

Trump’s military policy is to “build a military that’s gonna be much stronger than it is right now. It’s gonna be so strong, nobody’s gonna mess with us.” But the American military budget is five times larger than that of its next competitor (China) and as much as the next 11 countries combined. This drives up the national debt, which many experts consider to be the most serious long-term threat to national security.

Of course, the lineup of speakers failed to recognize any of this, instead focusing on the standard Republican fare of Hillary Clinton’s failure in Benghazi, the need for border security, and the hostile climate toward police. This may lead Trump to victory, but those who fail to understand the roots of problems have no hope of solving them. Then again, solving them may not be the point.

Work Again

The theme of the second night was “Make America Work Again.” According to the GOP convention site,

“The Obama years have delivered anemic economic growth, the lowest labor-force participation rate in 38 years, and job-killing regulations and legislation like Obamacare. These policies are crushing middle-class families, and a Hillary Clinton presidency would merely be an Obama third term that would deliver the same poor results. Donald Trump is a successful businessman with a solid record of creating jobs and the experience we need to get America’s economy up and running … and get Americans working again.”

Unfortunately, the speeches that night had almost nothing to do with the theme. There was criticism of the Clintons, vague talk of Trump “supporting businesses of all sizes” (whatever that means), and base assertions that Republicans care about jobs and the economy. To quote Peter Suderman, “None of these things are plans in the sense that offer or even suggest a set of specific, plausible, debatable steps that a president might take. That’s what a plan is. A plan is not the end result you hope to achieve; it’s a description of the particulars of how you intend to produce that result.”

What we know of Trump’s economic policy is not much better. His tariff proposals would not protect American jobs, but would make goods and services more expensive for the American population, as all such measures do. The tariffs against American goods that other countries would impose in response would harm American exports and destroy American jobs. His plan to oppose H1-B visas will only raise the cost of hiring people, which will result in less jobs. His support for intellectual property will maintain artificial economic inefficiencies and continue disrespect for real property rights. Labeling China a “currency manipulator,” as Trump intends to do, will strain relations while being enormously hypocritical, given the Federal Reserve’s record of currency debasement.

First Again

The theme of the third night was “Make America First Again.” According to the GOP convention site,

“America has always been an exceptional nation. Our Founding Fathers created a system of government that has protected our liberty, allowed American ingenuity to flourish, and lifted people out of poverty by creating the conditions for opportunity and prosperity. Unfortunately, years of bad policies and poor leadership have weakened our position in the world. Under a Trump administration, America will once again be a beacon of progress and opportunity.”

But there is a dark side to American exceptionalism. Too frequently, it is taken to mean that the United States government has carte blanche to commit atrocities which would land leaders of other countries in front of a war crimes tribunal. As for the Constitution, if it has truly protected liberty and allowed for human flourishing, then why does America lead the world in prison population? Why are Americans facing stagnant earnings? It is fair to point to bad policies and poor leadership, but Trump, like so many other politicians and businesspeople, fails to understand the root of the problem. As long as there is a government monopoly on currency and law, this power will be abused by those who are most capable of abusing it for their benefit.

Most of the speakers failed to speak of making America first again in a sense that was separate from the themes of other days of the convention, and some did not even have the word “first” in their speeches. Only astronaut Eileen Collins spoke of a particular example of restoring American supremacy, but the future of space exploration belongs to the private sector, not to nation-states.

Despite all of this, America is first, and therefore cannot be made first again. But this is not the real problem. America is the prettiest horse in a glue factory of global statism, and Trump has no plan to solve this problem.

One Again

The theme of the final night was “Make America One Again.” According to the GOP convention site,

“America faces serious challenges at home and threats from abroad. In order to turn our challenges into opportunities and keep America secure, we need leadership that will focus on what unites us, not what divides us. Donald Trump will move our country beyond the divisive identity politics that have been holding us back by restoring leadership, building trust, and focusing on our shared love of country and our common goal of making America great again.”

This is exactly the wrong approach. America is more divided than it has been in over a century, and these divisions are over differences which cannot be resolved by compromise and unification. This is because there is and will be no common purpose among Americans; various groups are acting toward cross purposes. The only ways that unity can be brought about are for the United States to balkanize or for one side to violently suppress the other, whether by political means or civil war. No political figure, and especially not anyone as polarizing as Donald Trump, will unify such a divided population, and that which cannot be done should not be attempted.

Great Again

The overall theme of the Trump campaign is “Make America Great Again.” But its approach is misguided at every turn, either failing to recognize the true nature of problems or addressing them in ways which will only make them worse. As this is the latest in a long line of such campaigns by all major political parties, a more appropriate slogan would be “Make America Miss Again.”

Requiem for a Dumpster Fire: The 2016 Libertarian National Convention

On May 27-30, the Libertarian Party held its national presidential nominating convention in Orlando, Fla. Over a thousand delegates from all 50 states attended the convention, along with dozens of guest speakers. Much of this was well and good, though some leftist degeneracy has infiltrated most corners of the libertarian community, and the guest seminars and panels were no exception. But none of this matters much to those who are not libertarians and/or have no interest in the inside baseball of the Libertarian Party. Those people were paying attention to the presidential and vice presidential debates, as well as the election processes for the party’s presidential ticket and national party offices. What they saw, at least from the standpoint of this philosophical libertarian, was a raging dumpster fire.

At the vice presidential debate on Friday, the audio quality was unbecoming of an organization seeking to put people into the White House. William Weld was generally lacking in passion and boldness, supported using the United Nations as a check against corrupt governments in third-world countries, and frequently diverged from straight answers in order to attack presumptive Republican nominee Donald Trump. Larry Sharpe seemed to believe that all punishment should be abolished and misidentified several historical figures as libertarians who were not. Will Coley was a mostly consistent libertarian, but managed to confuse non-aggression with pacifism. Alicia Dearn was more on point, but otherwise unremarkable. All four candidates were soft on the topic of violent revolution.

If the vice presidential debate was bad, then the presidential debate on Saturday was worse. The audio problems continued. Gary Johnson repeated the tired falsehood that libertarianism is social liberalism combined with economic conservatism, supported fixing Social Security rather than phasing it out, claimed that market forces had bankrupted coal companies (and was promptly corrected by Austin Petersen), supported for a consumption tax (which drew a round of boos from the audience), advocated regional banks rather than a free market in currency, declined to condemn the atomic bombing of Hiroshima, had no answer as to whether American involvement in the World Wars was justified, supported government involvement in marriage, favored the Civil Rights Act of 1964 (which drew a round of boos from the audience due to parts which violate private property rights and freedom of association), and supported government-issued driver’s licenses (which drew several rounds of boos from the audience). John McAfee defended keeping entitlement programs for older people. Petersen voiced support for a flat tax to fund Social Security, claimed that roads will be unnecessary because we will have jetpacks, and voiced support for the atomic bombings of Hiroshima and Nagasaki. Darryl Perry was wrong on some historical facts, but was generally a strong libertarian. Marc Allan Feldman mistakenly asserted that one cannot fight for one right without fighting for others, claimed that the Islamic religion cannot be blamed for terrorism, failed to realize that political leaders will want to engage in warfare if they perceive it to be in their interest, and was equivocal on the Civil Rights Act concerning private sector discrimination. All five candidates engaged in various degrees of openborders cuckery and said that there is no lesser evil between Republicans and Democrats.

The nominees were chosen on Sunday, and to the surprise of few, Johnson and Weld won, though neither earned a majority of delegate support on the first ballot. In this decision, the delegates decided to choose nominees with the most name recognition in hopes of reaching out to more voters at the cost of presenting a false message of what libertarianism is. This decision says that the Libertarian Party has forgotten its purpose as an educational tool and is instead trying to play the establishment’s game, thinking that the establishment is sufficiently divided against itself to allow an upstart challenger to the duopoly to have a chance. As such, they chose the most moderate, safe, mainstream, establishment candidates they could find to run with the banner of what is supposed to be an extreme, bold, anti-establishment party. But if history has taught us anything about third parties in America, it is that the two major parties always agree that no other party should be allowed to compete.

It would be bad enough if the heresies of Johnson and Weld were limited to their debate responses listed above, but there is much more. Johnson has a history of supporting military intervention against Joseph Kony, saying that Jews should be forced to do business with Nazis, wanting to ban Muslim women from wearing burqas, and growing state government spending as governor. Weld has a history of supporting affirmative action, eminent domain, environmental regulations, gun control, the Iraq War, the Patriot Act, the presidential candidacy of Barack Obama, and most recently, the presidential candidacy of John Kasich.

It is hard to view this as anything other than a culmination of the hostile takeover of the Libertarian Party by cuckservatives and cuckertarians that has been underway for a long time. To quote myself from an earlier article,

“The cuckertarian denounces anarchist libertarians as utopian idealists, preaching instead a form of limited statism that contains obvious contradictions. Cuckertarians prefer to moderate the message of liberty to reach a wider audience, but in the process they corrupt it into something that a consistently principled libertarian would barely recognize. In the Libertarian Party, this results in moderate or even fake libertarians gaining the presidential nomination.”

Some libertarians may say that this election is a test to see whether libertarians can work within the system, but has this experiment not been run repeatedly for the past 40 years, with essentially the same result each time? This many attempts should be enough to convince even the most stalwart party operative that, in the words of Christopher Cantwell,

“Any libertarian who tells you he is trying to win an election is either lying to you about trying to win the election, lying to us about being a libertarian, or terribly misinformed. As far as we are concerned, elections are a bad thing. We are trying to end them, not win them. …Libertarians are anarchists, whether they realize it or not. Even the ones who are delusional enough to think that they are going to get elected and restore the bloody republic, are little more than useful idiots who are repeating anarchist propaganda for us through channels normally reserved for government. The goal is not to win your elections, the goal is to turn a large enough minority against the legitimacy of the State as to make its continued function impossible.”

Unfortunately, the troubles did not end with the presidential nominating process. At a time when the Libertarian Party most needs itself to be taken seriously by the American people, one candidate for party chair decided to perform a striptease on the convention stage during the process to fill that office. But perhaps worst of all, failed presidential candidate John McAfee thought it wise to attack the core demographic of libertarianism. During his concession speech, McAfee said,

“When I first joined the Libertarian Party, two things stood out very starkly. One, 75 percent of you are men. Number two, 99.8 percent of you are white. Shame on you. Shame on you, and shame on me for never having mentioned it before.”

If anything, white men deserve praise for being the demographic group that is intelligent enough to become libertarians to such a disproportionate extent. What McAfee is suggesting is that there is a white man’s burden, that it is the responsibility of white males to make sure that females and non-whites are educated and behaving properly. But rather than denouncing him as a racist and sexist, as would have been proper, the audience applauded him. Even if his intended point was that more outreach should be done to females and non-whites, there are evolutionary reasons to believe that this will be less than fruitful.

The long-term result of the 2016 Libertarian Party National Convention is hard to predict, but it did nothing to help the image of libertarianism while doing much to pollute its message. As such, the best result in the general election may be one of total failure so that libertarians can reject the approach taken by the party. As always, the path to liberty is anti-political.

Cut Puerto Rico Loose

On May 2, the Puerto Rican government missed an interest payment on bonds it has issued to an extent of $422 million. Worries of default on the territory’s general obligation bonds are continually rising, as it appears that a $2 billion payment due on July 1 will also go unpaid.

Of course, the usual suspects are calling for intervention to “save” the island from its financial woes. Some Democrats are openly clinging to Keynesian ideas of bailouts for troubled financial instruments, despite the abject failure of such measures to repair the mainland U.S. economy since 2008. Meanwhile, House Speaker Paul Ryan has made the statement that “[o]ur primary responsibility is to protect the American taxpayer and to help bring order to the chaos that will befall Puerto Rico if the status quo continues going in the direction it’s going,” which is contradictory because attempting to rescue Puerto Rico will require victimizing not only the American taxpayer, but everyone who holds U.S. dollars.

That such a bailout would be funded by money gained by the state through extortion and currency debasement is terrible enough, but rescuing Puerto Ricans from the just consequences of their actions also creates a moral hazard. If Puerto Rico, then why not Detroit? Chicago? California, even? If $72 billion in debt plus $44 billion in unfunded liabilities for a outlying territory, then why not more for the U.S. mainland? Rewarding and subsidizing bad behavior only encourages more of it, not only from some irresponsible actors, but from all of them.

It must also be noted that in the current political climate, Republicans will be demonized by Democrats and the lapdog media regardless of what happens, and the Republican rank-and-file will be given the shaft. If there is no bailout, then Democrats will accuse Republicans of being too stingy to help people in need, especially ethnic minorities. If there is a bailout and trouble continues, which it will under such circumstances, then Democrats will blame Republicans for not using enough stimulus and/or for allocating the funds poorly. If one will face accusations regardless of one’s actions, then one might as well get one’s money’s worth and do the right thing. And what is the right thing?

Do not only abstain from bailouts; cut Puerto Rico loose.

Let us face facts; Puerto Rico has never really been a part of America, not in terms of economics, culture, language, or identity. In fact, it was not a part of America at all until 1898, when the United States gained control of it from Spain (along with Guam and the Philippines) under the Treaty of Paris, which ended the Spanish-American War. For four centuries prior since being claimed by Columbus in 1493, Puerto Rico had been a Spanish colony. The people there used the Spanish language, but developed their own sense of culture and national identity. (This commonly occurs upon islands, as the ocean makes for a clear barrier between in-group and out-group.) That they may call themselves U.S. citizens is only a matter of law.

The economic well-being of Puerto Rico is not on par with the rest of the United States. If it were an independent nation, it would rank between 60th and 62nd in GDP, with a similar economic output to Angola, Morocco, and Slovakia, none of which are exactly paragons of economic development. If it were a U.S. state, it would rank 37th out of 51. The difference is far more pronounced when considering other measurements. In terms of public debt to GDP, Puerto Rico has a debt of 66 percent of GDP, while no U.S. state exceeds 25 percent. The per capita public debt of Puerto Rico is $19,486.60, which exceeds that of every U.S. state but is lower than that of the District of Columbia. The per capita income in Puerto Rico is $11,241, placing it just above half of the worst U.S. state (Mississippi, $21,036) and far below the best (D.C., $45,877; Connecticut, $39,373).

While cutting Puerto Rico loose is a matter of rational self-interest for mainland Americans, it is also a way to end their victimization at the hands of central bankers and the investors who react to their pernicious policies. While a free market would have much higher interest rates and no currency debasement, central banks like the Federal Reserve have kept interest rates artificially low and have greatly expanded the monetary supply. Savers who are used to getting a reasonable rate of return in a savings account thus have to seek riskier alternatives. Those who have enough capital to access hedge funds, high-risk sovereign debt becomes an attractive option. Those who are poorer either sit on fiat currency as it loses value or venture into precious metals and cryptocurrencies, which can pose even more risk and volatility. While Puerto Rico would likely form a central bank and issue its own fiat currency if it were cut loose, this would keep the Federal Reserve from imposing an economic system which encourages booms that favor foreign investors at the cost of busts that burden Puerto Ricans. A problem of this sort has already been seen in Greece, and the mistakes made by the European Central Bank should not be repeated.

The Pragmatic Libertarian Case Against Open Borders

The attacks in Paris and Beirut have resulted in increased focus on immigration in general and the Syrian refugee situation in particular. Many libertarians have weighed in on the situation, mostly on the side of open borders, or at least on the side of admitting the refugees. Let us look at the other side of the issue and make a case against open borders and for excluding the refugees, at least under current circumstances.

The Way It Should Be

In a stateless society founded upon libertarian principles, immigration controls would be a matter of respect for private property rights, freedom of association, and non-aggression. If there were some unowned land available, then immigrants would be free to come in and mix their labor with the unowned land to establish private property for themselves. If all territory in an area is already occupied, then immigration would be on an invite-only basis in that area. Someone in the area would have to sponsor an immigrant, which would entail inviting the immigrant to one’s property and figuring out the immigrant’s living and working situation. Depending on the agreements that one has with one’s neighbors, there could also be some vicarious liability involved with inviting an immigrant who then commits crimes against people and/or property.

The only situation that requires further explanation is that of immigrants or refugees who are going to a place where they are welcome but must pass through territory where they are unwelcome in order to get there. In this case, the right to life must be weighed against the right to property. The right to life is clearly superior to the right to property, as the exercise of property rights requires one to be alive, and that which is dependent cannot overrule that upon which it is dependent. This result means that immigrants may travel through territory where they are unwelcome if it is impossible for them to get to the destination where they are welcome without traveling through territory where they are unwelcome. This right of emergency easement is subject to some restrictions which can easily be deduced from the above:

  1. While in the property of those who do not welcome them, they must not threaten in any way the ability of the property owner to stay alive, as their rights to life cannot overrule the property owner’s right to life.
  2. The immigrants must show as much respect as possible for private property by moving as fast as possible through territory where they are unwelcome and using no more resources from the property than they must in order to stay alive.

This standard allows maximum respect for private property while forbidding the use of private property rights to assist in killing innocent people, such as could happen without this standard if persecuted refugees were corralled between oppressors who seek to exterminate them and property owners who will not let them pass through their lands to reach safety on the other side.

The Way It Is

Unfortunately, the immigration policies of nation-states do not remotely resemble this standard. States overrule the desires of property owners through their monopoly on initiatory force and attempt, with varying degrees of success, to exercise exclusive control over who may enter and/or remain within a geographical area. For the state to usurp the control that private property owners should have over immigration and association is a travesty. That the state usurps control over protecting private property from invaders and then allows in inferior and/or dangerous rabble in a desperate effort to solve the economic problems that states inherently create is even worse.

Nation-states also steal from their subjects via taxation, currency debasement, and eminent domain. These ill-gotten goods are used not only to finance bureaucratic largess, but also to create massive social welfare programs and common spaces, each of which creates perverse incentives with respect to immigration. Minimum wage and child labor laws create further distortions of market signals which lead to unnatural immigration patterns.

With democratic forms of governance, voting creates even more problems. Immigrants from cultures which value theocracy over separation of church and state, socialism over capitalism, misogyny over basic rights for women, etc. will eventually use the power of the ballot box to inflict their inferior ideas upon everyone else, especially if they are allowed in at such a rate that assimilation into the prevailing culture cannot occur. Whereas voting was once limited to those who owned property and thus had skin in the game, now anyone who has reached the age of majority may vote in most Western democracies, and there are efforts to push the age limit even lower while making it easier for people to register to vote. This makes it more likely than ever that immigrants will adversely affect the prevailing culture.

The foreign policies of Western nations in general and the United States in particular have created refugee problems. Actions produce reactions, and interference in the internal affairs of other nations is no exception. When one group in a conflict is given funding, training, and supplies by an external nation-state, there is no guarantee that the effort and resources will stay on target. A group which fights for Western interests at the moment can become anti-Western later. A group can join another group with different objectives. A more powerful group can slaughter the pro-Western group and commandeer their weapons and other resources. All of these possibilities can result in enemies who have American military hardware. When Western nations conduct drone strikes and other bombings that kill civilians and destroy property owned by innocent people, it creates resentment and anger that motivate people to become terrorists in order to seek justice or vengeance in the only way they can. There is also the fact that the rational self-interest of those who wield state power is to prolong the War on Terrorism as much as possible, the body count on both sides be damned.

Nearly all developed nations currently have anti-discrimination laws which forbid discrimination on the basis of race, religion, national origin, and many other characteristics. This means that if a government fails to respect the wishes and property rights of its citizens and invites in a number of people from countries that said government is bombing, then the citizenry cannot even refuse to associate with these people.

In the politically correct environment of contemporary Western nations, the results will be more identity politics, tension and violence between different racial and cultural groups, higher taxes, less valuable currency, lower wages, higher national debt, and more criminal activity. But as all of these negative outcomes lead people to ask the state to solve these problems and few people can figure out that the state is to blame and we cannot solve our problems by using the same thinking that created them, the state has every reason to create this situation.

From Here To There (Or Not)

The very presence of the state is sufficient proof that the libertarian approach described in the first section will not be used. Initiatory force is the means of the state, and when all they have is a hammer, everything looks like a nail. In the presence of the state, the immigration problem is thus a matter of forced segregation (in the form of immigration controls and/or closed borders) or forced integration (in the form of open border and anti-discrimination policies). Those who wish to use a libertarian approach (or any other third option, for that matter) to immigration must therefore seek the abolition of the state, but very few libertarians are willing to even talk about what is necessary to bring this about within our lifetimes, let alone take action in that direction. In fact, there is almost a perfect overlap between libertarians who have come out in favor of importing Syrian refugees and libertarians who will denounce anyone who argues in favor of the use of defensive force against the state.

The Lesser Evil

Because a libertarian approach to immigration is not a choice that the state offers and libertarians are largely unwilling to do what would be necessary to make this choice available, we are left with attempting to choose the best of two bad options and making a pragmatic case for which option is the lesser of two evils. Again, the only options that states afford us are forced segregation (in the form of immigration controls and/or closed borders) or forced integration (in the form of open border and anti-discrimination policies). Let us explore the case that immigration controls are a better option than open borders within the current context.

This is really no more complicated than examining the logical conclusions of combining an open border policy with the current nature of statism. In a free market, wages in a particular region would reflect the market demand for workers in that region. Workers would respond by migrating to different areas to meet the demand for their services. In a statist society, this does not work so well. The combination of welfare programs, minimum wage laws, child labor laws, and other such distortions of market signals drive artificial waves of immigration which would not otherwise occur. Like a breaker switch stuck in the ‘on’ position, the market signals are forcibly prevented from conveying that enough migrants have come to a particular region. It is also unreasonable to assume that governments which are so incompetent at everything else would somehow be excellent arbiters for deciding which immigrants are best suited to enter the country. The overload of immigrants, some of whom we may expect to be of poor quality, means that some will not find work and thus will either turn to government welfare programs or criminal activity (but I repeat myself). This creates costs which are paid through taxation and/or currency debasement. This eventually becomes unsustainable and leads to a collapse of the system.

At first glance, this may appear desirable or even necessary. After all, it is essentially impossible to eliminate welfare programs through political means, so it stands to reason that those who wish to eliminate them must use anti-political means, such as overloading them until they collapse. The problem with this technique is that it is likely to head in an anti-libertarian direction, as its original proponents realized. People who have learned to depend on government handouts for their survival are not suddenly going to become anarcho-capitalists when the welfare state fails; rather, they will demand with the threat of massive social unrest that the state solve their problems. The state will be all too happy to pretend to do this by implementing anything from a basic income guarantee to full communism, both of which are not steps toward liberty, fake libertarians notwithstanding.

The choice at present is to allow this chain of events or to stop it. Of course, stopping this chain of events with government policy presents its own set of problems. The Cold War taught us that governments build walls not to keep people out, but to keep them in. Welfare statism is unsustainable even without immigrants overloading it, and closed borders will be used to restrain the rich and keep them paying into the system as well as to keep out the poor from other nations who would collapse the system faster. And contrary to some closed-border libertarians, the point should not be to get the state to act like a private property owner would, as this is impossible on two counts. The very presence of a state makes private property impossible, and it is impossible to know precisely how private property owners would behave toward immigrants in a counterfactual world which currently has no states. Restrictions on immigration are only a stopgap method for dealing with an imminent problem which must not go unaddressed and is not going to be solved by the correct answer anytime soon.