Agreeing With Statists For The Wrong Reasons: Cryptocurrency Bans

Since shortly after its invention, cryptocurrency has had the attention of central bankers and government regulators all over the world. Without the slightest hint of self-reflection, they have repeatedly warned that Bitcoin, Litecoin, Ethereum, Ripple, and all the rest may be scams or tools to be used by terrorists, drug dealers, money launderers, and other ne’er-do-wells. Several countries have either considered cracking down on crypto exchanges or have already done so. Sometimes satire just writes itself; the fiat currencies that they create and inflate are far more commonly used in the criminal underworld, not to mention the criminal overworld that they run. Speaking of scams, currencies that lose 95 percent of their value over a century have proven quite effective at snatching the wealth out of people’s pockets without them even knowing it.

But perhaps the politicians and legacy financiers are on to something with their desire to ban cryptocurrency. Let us see how government efforts to ban crypto could actually strengthen crypto and do themselves in, and thus why one might agree with statists for the wrong reasons.

If cryptocurrencies are banned, they will not magically disappear, nor will many of the people who use them stop doing so. After all, did bans on drugs or guns ever eliminate those? Of course not; both are more common where they are banned than where they are legal but heavily regulated. Cryptocurrencies perform valuable services for people, and that which has a demand will have a supply. If this cannot happen legally, then it will happen illegally, as with any other commodity. States are good at destroying other centralized entities, but disrupting a decentralized system with no clear point of attack has never been their strong suit. Just look at how much copyrighted material is illegally available online. States cannot stop it because every time they arrest someone, seize a server, or shut down a website, dozens more pop up to replace them. So it would be with cryptocurrencies and sites that accept them. Showing such bans to be ineffective will be an important propaganda victory for crypto users, as will the very fact that it was tried. For why would the state and its central bank have to ban competitors unless their money was too inferior to compete?

To be fair, the blockchains and websites that do come under government attack may have some difficulties. Government hackers may be able to compromise a blockchain with weak cryptography or a website with weak security measures. But adversity breeds innovation, and most people who hack computers for the state have those jobs either because they lack the skill to make more money in the private sector or because the state has some criminal evidence hanging over them. The former are incompetent, while the latter have an incentive to do the minimum to stay out of trouble instead of their best work. Just as website owners appreciate script kiddies who think they can hack for the free security testing they provide, so will cryptocurrency developers come to appreciate attempts by government intelligence agencies to rewrite the blockchain. Customers, meanwhile, can thank the state for providing the electronic equivalent of a eugenics program, killing off the weak currencies and websites to make room for the strong.

On the subject of customer benefits, a ban could make cryptocurrency trading very profitable. Shutdowns and rumors of shutdowns of these venues have already caused exchange rate volatility, presenting excellent buying opportunities. Should a more concerted effort occur, cashouts by people who want to be law-abiding could provide a better opportunity for scofflaws than anything thus far. This process would get the financial establishment out of the crypto world, and much of their financial trickery with them. A more honest marketplace is a better marketplace. Meanwhile, the culture of crypto would return to its anarcho-captialist roots, as those would be the people still using it.

Again, banning something does not get rid of it; it simply goes underground into the black market, which has several important side effects. First, the amount of violence involved in a trade increases, as official means of dispute arbitration are no longer available. But the nature of blockchain technology counters this effect. That is why Silk Road was so popular; it reduced violence in the drug trade by using technology to provide peaceful means of resolving disputes over drug deals while giving users higher quality products. Second, the risk of arrest and the security measures to mitigate that risk drive up prices. This stands to make a tidy profit for those who buy crypto during the cashout before the ban and sell it on the black market afterward. Third, while the state can easily gain information concerning taxable income from legal, regulated exchanges and go after customers who do not give the taxman his cut, they will have a much harder time tracking all of the black market trades that would occur on a peer-to-peer basis in the absence of an exchange. In the words of Napoleon Bonaparte, “Never interrupt your enemy when he is making a mistake.” If Leviathan wants to cut off one of its own food sources, then by all means let it.

Another effect to consider is the migration of legal businesses. If the exchanges and merchants are banned in one country and do not want to keep operating illegally, then they will move to other countries that either want to host or lack the means to ban them. In practice, this means that the cryptocurrency economy will shift toward third-world countries without stable governments. To the extent that this has already happened, it has given people who lacked basic modern economic functionality the financial tools they need to begin improving their lives. Banning crypto in the most developed countries will help the poorest countries by sending jobs there. The resulting localization of usage would lead to cryptocurrencies being used more as money and less as technological curiosities or speculative vehicles, leading to exchange rate stabilization and greater economic security in such places. This would do more than any foreign aid program to lift third-worlders out of poverty, without any of the bribery that enriches despots and provides operational funding to war criminals.

Finally, banning crypto will motivate agorism more generally. With the official link between the fiat economy and the crypto economy severed, some people on the crypto side will end up staying there, especially if they had no success in the legacy system. Necessity is the mother of invention, and these people will have to innovate in order to survive. This has the potential to create the sort of dedicated counter-economics that can support an effective and hostile challenge to the globalist establishment. Friedrich Nietzsche once wrote, “That which is falling should also be pushed.” How much better it is when that which is falling manages to push itself. This, more than anything else, is why one should agree with statists for the wrong reasons when they seek to ban cryptocurrencies.

Book Review: Reactionary Liberty

Reactionary Liberty is a book about libertarian philosophy by Robert Taylor that approaches this and related subjects from a reactionary perspective. The book is divided into fifteen chapters, with a short introduction preceding.

Taylor begins with a four-page introduction in which he explains his motivations for writing the book. Mostly, this involves the decisive leftward shift in American libertarianism since the Ron Paul presidential campaigns of 2008 and 2012, including a notorious open letter to Paul read at the 2015 International Students for Liberty conference and Gary Johnson’s disastrous presentation in 2016. He briefly explains what is wrong with left-libertarianism and gives an outline of the structure of the book.

In the first chapter, Taylor begins with the non-aggression principle (NAP), self-ownership, and private property rights. Although Taylor notes the important distinction between just property and currently-held property, he fails to properly account for the role of conquest in determining property rights over the long term. Taylor goes on to explain the social and economic difficulties that arise without secure property rights. The failures of central planning are discussed, as are the differences between negative and positive rights. He lays out the history of natural law in Western philosophy, beginning with early Christian thinkers, continuing through Enlightenment philosophers, and culminating in Hans-Hermann Hoppe’s argumentation ethics. Taylor contrasts this with the state, which routinely violates natural law and rights. He details the many crimes of nation-states, war and debt slavery being chief among them. Taylor concludes by proposing an alternative to Marxist class theory which vilifies the state rather than the capitalist, and elevates the producer rather than the parasite.

The second chapter deals with the Austrian School perspective on the subject. Taylor takes the reader through praxeology, the action axiom, marginal utility, and the role of prices in efficiently allocating resources. Next, he explains why government and central bank interference with prices is so destructive. The section on money deals with the history of money according to the regression theorem, beginning with barter and commodity money, then progressing to precious metals and receipts for those metals. Taylor shows the reader that modern fiat currencies are a corruption of these receipts into instruments of inflation and debt slavery that facilitate unduly risky financial behavior, state largesse, and wars. In the Austrian view, these behaviors fuel the business cycle of booms and busts by distorting interest rates, which leads investors astray.

Spontaneous order and free markets are the subjects of the third chapter. Taylor begins with the economic calculation problem, the knowledge problem, and public choice theory, showing that central planning cannot succeed because it cannot calculate prices without the market and is further hampered by cynical concerns. He then covers the concept of spontaneous order, making the important and oft-overlooked observation that “there is no such thing as an unregulated market; the issue is, rather, who is doing the regulating.” These regulations take the form of trust, reputation, and freedom to dissociate, unless the state interferes by imposing its coercive regulations. Taylor frames the difference between state and market in terms of who gets profits and who suffers losses. The state privatizes profits and socializes losses, while the market does the opposite. Next, Taylor proposes the term marketization to describe the proper procedures for converting state monopolies into free-market entities, as privatization has acquired the meaning of turning over state monopolies to politically-connected oligarchs, as happened in Russia when the Soviet Union collapsed. He concludes the chapter by providing an outline of how businesses may function in a purely libertarian market while noting that the particulars can only be observed in the future, not precisely predicted in the present.

The fourth chapter offers a much-needed treatment of Cultural Marxism, a concept often (and incorrectly) dismissed by leftists as a conspiracy theory. Taylor traces its roots to the failure of political and economic Marxism in Europe after World War I, at which time Antonio Gramsci and Georg Lukacs resolved to apply Marxism to culture and use it to destroy traditional Western culture, which they faulted for the failure of communism to take root in most of the West. Taylor traces the ‘long march through the institutions’ from its beginnings in the 1930s all the way to its modern manifestations of identity politics and campus craziness. He calls on libertarians to refute Marxism’s cultural application, just as they defeated its economic application. The next section begins to do this by making the case against egalitarianism, showing it to be both impossible and self-defeating in practice. The second half of the chapter traverses more dubious ground in the form of r/K selection theory. This is an interesting analogy for attempting to understand political dynamics, but it places too much emphasis on nature instead of nurture and encourages dichotomous thinking in complex problems. That being said, it correctly suggests that some authoritarian leftists are beyond reason. The chapter ends with an explanation of the necessity of traditional social and sexual norms, as well as how and why Cultural Marxists have attacked them.

Decentralization is the focus of the fifth chapter. Taylor gives the reader a history lesson in the creation of Western traditions and common law through decentralized institutions after the fall of the Roman Empire. He blames centralization elsewhere in the world for preventing those peoples from enjoying the liberty and prosperity of Europeans. Turning to America, these two descriptions show the difference between what the United States was supposed to be and what it has become. As a remedy, Taylor proposes breaking up the US into at least 100 smaller territories. He concludes the chapter by praising those who have taken a strong stand for decentralization in the face of oppressive state power.

The sixth chapter attacks state power as a concept. Taylor explains how people are ruled indirectly through propaganda and mythology rather than directly by force, as the masses are sufficiently numerous and armed to defeat such an effort. He discusses the role of government schooling in indoctrinating the masses to accept such an arrangement, as well as the insufficient efforts to resist the imposition of compulsory indoctrination in the 19th century. The concept of situational Leninism comes next, followed by an overview of famous psychological experiments that demonstrate the willingness of people to obey authority toward reprehensible ends. After this, the role of language control and thought policing in maintaining authoritarian leftist control is examined. Taylor finishes the chapter with Ludwig von Mises’ concept of statolatry, in which statism becomes a sort of secular religion.

The attack continues in the next chapter, as Taylor turns to the flawed ideas of minarchism. He returns to the American example to show how limited government does not stay limited. He explains that the Constitution was not actually written to limit government, contrary to popular belief. It gave the federal government more power than it had under the Articles of Confederation, which Taylor praises in relative terms. He shows how Americans of the time were deceived, taking the reader through the tax rebellions of the 1780s-90s and the Alien and Sedition Acts. In the next section, he contrasts traditional monarchies with modern democracies, finding the former to be far less limited and more destructive due to inherent incentive structures. The chapter concludes with a strong explanation of why democracy grows the state and harms the cause of liberty.

In the eighth chapter, Taylor addresses police statism and what Samuel Francis termed ‘anarcho-tyranny’, a situation in which real crime goes unpunished while those who try to defend themselves are attacked by the state. He begins by noting the difference between a peace officer and an agent of the state. His description of several US Supreme Court cases is accurate, but misses the larger point that a coercive monopoly has no enforceable obligations because no one can enforce obligations against them, regardless of any court rulings. Taylor reviews Cultural Marxism through the lens of anarcho-tyranny, then explains some of the more obnoxious leftist behaviors in terms of Saul Alinsky’s Rules for Radicals. The successes of the alt-right are explained in terms of their willingness to use the left’s tactics against them, unlike conventional conservatives. Next, he covers the origin of modern policing in the UK and the US, then proposes a private alternative to state police forces. The last section contemplates violent resistance against the state, though not with nearly the length and depth that the topic deserves.

While the eighth chapter considers the enforcers, Chapter 9 is concerned with what they enforce. Taylor begins by illustrating just how much poorer everyone is today as a result of lost economic growth due to regulations. Next, he refutes the progressive narrative about the antebellum South and the industrial captains of the 19th century, showing the negative aspects of both to be the result of government intervention rather than its absence. He then profiles James J. Hill, a largely forgotten hero of free-market capitalism in the late 19th century. Hill’s good deeds are contrasted with those who used the state to get undue favors and suppress competition. Taylor also corrects the record on John D. Rockefeller. The following section covers the history of expanding regulations after the Civil War, through the Progressive Era, and on to the present. He accuses those who point to regulations as the cause of improvements in safety and reductions in pollution of committing the broken window fallacy and ignoring the fact that some regulations have made people less healthy. The chapter concludes with many examples of faulty regulations that do more harm than good.

The transition from voluntary mutual aid to coercive welfare statism is the subject of the tenth chapter. Taylor introduces the subject with the age-old statist question, “Without government, who would take care of the poor?” Of course, one must begin by pointing out that government does no such thing, as Taylor does. He spends the first part of the chapter educating the reader about mutual aid societies, which were common before the Progressive Era but were destroyed by government intervention into the healthcare and insurance industries. Taylor shows how the state has reduced the supply of medical care, thus increasing its cost and decreasing its availability. Unfortunately, Taylor’s approach ignores the Social Darwinist perspective that natural selection should be allowed to remove the least successful humans from the gene pool. The second half of the chapter debunks at length the myth of Scandinavian socialism.

The eleventh chapter deals with civil disobedience. Here, Taylor stumbles in the way that most libertarians do, in that he fails to understand raw power, celebrates small victories that will not occur on a large scale, and confuses the downfall of a particular regime with ending the state itself. He does this even while reciting the history of preparedness for the use of force among civil rights leaders and noting what the state has done to leaders of nonviolent resistance efforts. Taylor also manages to celebrate the effects of Western degeneracy among Middle Eastern youth. His encouragement of government agents to refuse unjust orders, leak information detailing abuses to the public, and otherwise engage in whistleblowing is more on point, though he notes the powerful incentive structure against doing so. The second half of the chapter details a plethora of private alternatives to services which have long been monopolized and/or heavily regulated by the state.

The growth of cryptocurrency and other peer-to-peer technologies is the focus of Chapter 12. Taylor provides a decent layperson’s overview of Bitcoin, then moves on to practical applications of cryptocurrency, such as funding dissidents suppressed by legacy financial networks, evading capital controls, and engaging in commercial activities forbidden by the state. Next, he covers the P2P revolution, which has greatly expanded liberty and privacy online and in the physical world. The remainder of the chapter runs through various examples of how P2P and blockchain technologies have solved problems and exposed corruption.

In the thirteenth chapter, Taylor addresses the open-borders dogma held by many libertarians. He demonstrates that open borders and forced integration are a form of the aforementioned anarcho-tyranny, with closed state borders being sub-optimal but less evil. The role of forced diversity in creating internal conflicts that lead to less liberty is considered, as is the biological phenomenon of kin selection in creating cohesive groups. Taylor makes the case that open borders are contrary to private property rights because in order to have open borders, the state must override the wishes of property owners who do not want migrants to enter. He then examines the history of US immigration policy from 1790 to the present, noting the shift in demographics admitted after 1965. The contention that the real problem is the welfare state rather than demographic shifts is rebutted both on the practical grounds of American politics and with the counterexample of European nations surviving socialism but falling into turmoil due to migrants.

The fourteenth chapter furthers the themes from Chapter 11 by discussing secession, nullification, and political migration. Taylor notes the myriad benefits of secession, but only briefly mentions the history of larger states violently suppressing such movements. Next, he covers the history of both legislative and jury nullification in opposing unjust laws. Taylor’s exploration of political migration is rather America-centric, but it can be adapted to other situations. His praise for the Free State Project comes off as overzealous, given the thoroughly leftist nature of that organization. He finishes the chapter with a concept called the Benedict Option, in which those who wish to preserve a tradition and begin a restoration retreat from the public and urban life of a degenerate culture.

The final chapter of the book is an argument against democratic government. This reads much like Hoppe’s Democracy: The God That Failed, quoting and borrowing from it extensively as Taylor explains the perverse incentive structures inherent in democracy and makes the case that monarchy has a superior incentive structure. But unlike Hoppe, Taylor contemplates physical removal as a means of achieving a libertarian social order in addition to a means of maintenance. As Taylor writes on page 283, “Economics teaches us that there is no such thing as a free lunch. But in order to achieve and maintain a libertarian social order, there will be free helicopter rides.” His defense of Augusto Pinochet’s actions in Chile and Lee Kuan Yew’s rule in Singapore as better than the alternatives is common in right-libertarian circles, but his defense of Francisco Franco goes a bit too far. Taylor ends with an exhortation to and description of a libertarian revolution, but this is, as before, too brief.

Overall, the book is good, but not great. For a book called Reactionary Liberty, it could have used more reaction in the form of lengthy explanations of traditional norms and power dynamics. Taylor seemed to lack an editor and proofreader, as some typos survived in very unfortunate places that render a few sentences absurd. A few chapters can become tedious when Taylor features a laundry list of examples. That being said, it is a strong presentation of right-libertarianism that is impeccably sourced.

Rating: 4/5

The Not-So-Current Year: 2017 In Review

Though the specific demarcation of the passage from one year into another is a rather arbitrary social construct, it does provide a useful annual period for self-examination and remembrance. Now that 2017 has entered the history books, let us take a look back at a year’s worth of essays and review the not-so-current year.

We begin, of course, with last year’s article of the same kind. Some articles in this list are sequels to articles in that list. Aside from that, we may move on.

I began 2017 by addressing a recurring story throughout the 2016 election campaign; that of Russia hacking the DNC and phishing Hillary Clinton campaign chairman John Podesta’s email system. I argued that Russia would have been justified in doing not only this, but in actually altering the election to cause Donald Trump to win. I would later use this piece as an example in a guide on how to argue more sharply in order to throw opponents out of their comfort zones. The story lingered on, so I published a sequel detailing the benefits of a Trump-Russia conspiracy. The left’s activities after the election became ridiculous, so I decided to give them some free advice.

My first list of 25 statist propaganda phrases and some concise rebuttals was a major hit, so I started planning a sequel. I had no intention of taking almost two years to compile 25 more statist propaganda phrases to refute, but better late than never, I suppose.

Donald Trump became the 45th President of the United States, which of course meant that Gary Johnson did not. I explored in detail what was wrong with Johnson’s campaign that made him not only lose, but fail to earn 5 percent of the vote against two of the least popular major-party candidates ever to seek the Presidency. Once Trump was in office, the responses to his trade policies among mainstream analysts led me to explain why many of them are politically autistic.

Book reviews have long been a part of my intellectual output, but I decided to start doing more of them in late 2016. This trend continued throughout 2017, as I read and reviewed The Invention of Russia, The Age of Jihad, In Our Own Image, Come And Take It, Against Empathy, Level Up Your Life, Islamic Exceptionalism, The Science of Selling, Closing The Courthouse Door, Open To Debate, Calculating the Cosmos, The Art of Invisibility, Libertarian Reaction, and The Euro.

Antifa grew from a nuisance that rarely affected anyone other than neo-Nazis into a serious threat to anyone who is politically right of center and/or libertarian who wishes to speak in a public venue. A comprehensive strategy to defeat them was necessary, and I was happy to provide one. Kyle Chapman grew weary of Antifa’s antics and led the effort to take up arms against them, becoming known as Based Stickman. I praised him in song. After the events of February, April, and May Day, I revised the strategy.

The Walking Dead comic series and the television show based on it contain many themes which are of interest to the student of libertarian philosophy. I explored the many ways in which Negan’s group resembles a state apparatus. The first part covers the sixth season of the show, and the second part covers the first half of the seventh season. At least three more parts will come next year.

‘No Particular Order-ism’, or the belief that libertarians should take whatever reduction in the size and scope of government they can get, has become common among the more radical members of the Libertarian Party. I explained why this approach is misguided.

White nationalist and alt-right leader Richard Spencer was present in the bar of the Marriott hotel that hosted the International Students For Liberty conference. This did not go over well with Jeffrey Tucker, who loudly denounced Spencer, after which security removed everyone from the bar. I wrote about the incident and the philosophical underpinnings of it.

Sometimes, the lens of examination is best turned inward to correct one’s own missteps. Such was the case for an article I wrote in 2014 about the nature of fake libertarianism, so I published a revision.

Theories concerning the creation, acquisition, trade, inheritance, and defense of private property form much of libertarian philosophy. The role of conquest in the determination of property rights had gone largely unexplored, so I decided to remedy the situation.

Terrorism struck in London on the anniversary of the Brussels attacks. I wrote a list of observations on the event.

I argued against more amendments to the United States Constitution, namely the Second and the Eleventh.

A chemical weapon attack occurred in Syria, which led to US intervention via a cruise missile strike. I wrote a list of observations on the event.

Keynesians and others who support fiat currency and central banking frequently claim 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. I debunked that claim.

On the anniversary of the Oklahoma City bombing, I applied ethical theories to the event to gain a deeper perspective of what happened and the aftermath of the event.

The primary aim of politically active libertarians is to limit and reduce the size and scope of government, as well as to eliminate as much state power as possible. I made the case that in order to do this, it may be necessary to temporarily do the opposite.

On May 8, Fritz Pendleton published an article at Social Matter in which he argued that liberty is best preserved by authority rather than anarchy. He then proceeded to launch a misguided attack against libertarianism, all while misunderstanding authority, anarchy, liberty, and the nature of a libertarian social order. I rebutted Pendleton’s case on a point-by-point basis.

Fashion trends can be a useful barometer of the health of a society. I explained how the trend of clothing that is designed to mimic the appearance of wear and work for those who think themselves above the sorts of activities that would produce these effects naturally indicates that a revolution may come soon.

Memorial Day provides an opportunity to promote statist propaganda concerning the nature of service and the provision of defense. I decided to do the opposite.

The immediate danger standard says that using force against someone who is not presenting a physical threat at the exact moment that force is used constitutes aggression, and it has become far too commonly advocated in libertarian circles. I explained why it is wrong and why it has gained prevalence.

On June 14, James Hodgkinson opened fire on several Republican members of Congress and their staffers while they were practicing for the annual Congressional Baseball Game for Charity. I wrote a list of observations on the event.

The Supreme Court ruled against the stays on Trump’s travel ban, but he missed a greater opportunity by letting them decide rather than ignoring the courts. I explained how and why.

Political rhetoric has grown increasingly heated, with violence erupting as a result. I showed how democracy is the root of this problem and how abolishing democracy is the solution.

The meme of throwing one’s political rivals out of helicopters has become popular among certain right-wing and libertarian groups in recent years. Unfortunately, people from all over the political spectrum tend to misunderstand the historical context of the meme, and thus interpret it incorrectly. I wrote an overview of this context and explained why helicopter rides may not be the best option.

I welcomed Insula Qui, the first additional writer for Zeroth Position, in July. He provided two articles to keep the site going while I was preparing for, participating in, and recovering from the Corax conference in Malta. A piece describing the problems that led to the call for net neutrality and recommending against more state inteference in the Internet came first, followed by a critique of common libertarian strategies to date. Speaking of the Corax conference, a revised version of my talk may be found here, as they own the rights to the original. A topic that came up in the talk that needed further comment is that in the discussion of proper behavior beyond the basics of libertarian theory, right-libertarians in general and libertarian reactionaries in particular will use the term ‘degeneracy,’ but they do not always properly define the term. I attempted to do so.

In the August 2 episode of the Tom Woods Show, he asserted that libertarians and fascists are completely contradictory political perspectives and could never be combined, and that when one embraces fascism, one must have relinquished one’s libertarianism, as there is no other solution that would make sense. Qui countered these assertions and delved deeper into the relationship between libertarianism and fascism than I had previously, which is not as inimical as one might think.

An alt-right rally in Charlottesville, Va. on August 11-12 turned violent, with three deaths and about 20 injuries. I wrote a list of observations on the events. In response, the large technology companies of Silicon Valley, which have become increasingly hostile to right-wing and libertarian content creators over the past decade, ramped up their censorship efforts. I proposed a novel and radical plan to deal with this problem so as to avoid public utility regulation.

I welcomed Benjamin Welton, our second additional writer, in September. I had meant to write an article about using the historical concept of outlawry to deal with violent illegal aliens myself, but time constraints led me to outsource the project. He then explored several historical examples of private military defense, finding that something novel must be created in order to defeat the state and maintain a libertarian social order.

In the wake of two major hurricanes, the usual complaints about price gouging were made yet again. I explained why price gouging is actually beneficial.

Qui wrote a piece about the limits of the applicability of libertarian philosophy, explaining that humans can fall into the categories of personhood or savagery, and that it is important to deal with each accordingly.

Catalonia held a referendum to secede from Spain and become an independent nation on October 1. This was met with force, and much hostility ensued. I wrote a list of observations on the events.

Qui examined the role of the modern concept of citizenship in advancing a particularly insidious form of totalitarianism.

On October 5, the New York Times published an opinion column by Michael Shermer in which he argued that the rule of law is a bulwark against tyranny, but guns are not. I thoroughly rebutted his arguments.

Welton explored the history of judicial corporal punishment, then made a case for restoring its use as a replacement for imprisoning lesser criminals.

The debt ceiling became a political issue again. As it incites financial panic for no good reason and hides important truths from common view, I advocated for its elimination on formalist grounds.

Capitalism and consumerism are distinct phenomena, with the latter caused by high time preference, which in turn is caused by the flaws inherent in modernity. Qui explained this at length.

I welcomed Nathan Dempsey, our third additional writer, in November. He runs a project called Liberty Minecraft, and wrote an introduction to the project.

The relationship between libertarianism and racial politics has become a controversial issue in recent years. Views on the issue run the gamut from complete opposition to imperative alliance, with nearly every conceivable position between being advocated by someone noteworthy. Many libertarians either provide the wrong answer or are afraid to address the question, so I decided to address libertarianism and support for ethnic nationalism.

Black Friday is revered by most libertarians as a celebration of free-market capitalism. I updated my explanation of why this reverence is misplaced. I weighed in on holiday shopping again due to some misguided criticism of computer programs designed to scalp popular gifts. Finally, I detailed the problems with Santa Claus.

Qui offered a message of hope in dark times by demonstrating how the socialists and anti-capitalists of today are not usually as fanatical as those that the early libertarians opposed, then offered advice on how to argue against them. He quickly followed this with an explanation of his concept of autostatism, which closely echoed one of the other presentations from the Corax conference. He then dealt with traditional views on degenerate behavior, and how a compassionate, non-enabling approach is necessary.

Due to surging exchange rates, the opening of Bitcoin futures, and the likelihood of Bitcoin exchange-traded funds in the near future, there is renewed mainstream interest in Bitcoin and other cryptocurrencies. There are benefits of cryptocurrencies which will be cheered by political outsiders to the chagrin of the establishment, and I listed eight of them.

Qui finished out the year by explaining why individualism and nationalism are not as incompatible as many people believe.

All in all, it was an interesting year full of occasions to make sharp libertarian and reactionary arguments. May 2018 bring more and better. Happy New Year!

Book Review: The Euro

The Euro is a book about the shortcomings of the eurozone currency project by American economist Joseph Stiglitz. The book makes a case against many of the policies pursued by European leaders thus far and recommends several alternatives, including further integration, a flexible euro, and the exit of one or more members. The book is divided into twelve chapters which explore different aspects of the problem and possible solutions.

A short preface details Stiglitz’s view of the economic problems of Europe as being largely attributable to the creation of a single currency zone without the creation of other institutions that are found in other such places elsewhere in the world. He compares the euro to the gold standard, repeating the flawed mainstream view that deflation is bad. His Keynesian approach to economics and thoroughly statist worldview is apparent from the beginning. That being said, Stiglitz appears to want to solve problems and correctly identifies some people and institutions as being uninterested in doing so.

The opening section begins with a chapter that expands upon the preface and outlines the rest of the book. There is little here that is not covered in greater detail later, so let us move on. In Chapter 2, Stiglitz argues that the poor results of the euro should have been expected because economic integration of this sort cannot come before political integration. Here, he contends that military might no longer shapes outcomes as it once did, but this is dubious because nothing short of a nuclear exchange that no one wants could have stopped the United States from conquering and colonizing Iraq if that had been the intention and American leadership had used its full power. So too for Russia in Ukraine and Crimea. His responses to other arguments for a single currency make more sense. He states the fallacious mainstream position on public goods, claiming without logic or evidence that it is impossible for markets to provide basic research and common utilities. This amounts to a confusion of collective action with state action. Even so, Stiglitz does recognize that localization is better than central planning from afar, though his disdain for German policies makes him inconsistent on this point. He then turns to economic integration, discussing the importance of German history with hyperinflation and its prominent role in modern Europe for understanding the European Central Bank. Next, Stiglitz writes about effect that a shared currency has on economic integration, which is mixed. Like many Keynesians, he accuses the market of failure when this is actually impossible; such events are actually failures of government, resources, or individual people. He also regards economics as scientific, even though the scientific method cannot be applied to subjects in which counterfactuals are so important but also unobservable. As usual, the word ‘neoliberal’ says more about the person using it than anything else. He concludes by arguing that there is a democratic deficit in Europe, even though he argues elsewhere in the book against incentive structures which are necessarily part of any democracy.

Europe’s lackluster economic performance since the 2008 crisis is the subject of the third chapter. Stiglitz begins by claiming that Keynesianism is a success because it has lengthened business cycles and shortened downturns, but it has also made the downturns that do occur so much worse that markets were better off before such interventionism. Much of the chapter consists of empirical data for Europe since 2007. When discussing unemployment, he seems not to recognize that unemployment benefits subsidize a negative behavior and will thus produce more of that behavior. Stiglitz relies upon the Gini coefficient when discussing inequality, which is a faulty metric because it measures pre-tax income rather than after-tax consumption. This causes it to exaggerate the amount of income inequality. His detailing of the long-term adverse effects of recession in terms of destroyed human capital is largely correct, but he again recommends interventionism that tends to worsen such problems. He also takes the position that the state should protect those at the economic bottom, though almost every economist would avoid social Darwinism on this front. Stiglitz then commits a fixed pie fallacy by arguing that trade surpluses necessarily cause trade deficits elsewhere, when the reality is quite different. He concludes by correctly noting that the counterfactuals help critics of the euro, and that there is no better explanation for many of Europe’s troubles than sharing a common currency across uncommon societies and economies.

The second section argues that the euro suffers from a flawed initial design. In Chapter 4, the requirements for a single currency region to be successful are considered. Here, Stiglitz uplifts full employment and market stability as goals while denouncing those who favor economic freedom as a “lunatic fringe.” This leads him to contemplate a false dilemma between national control of money and supranational control. He blames market fundamentalism (which he calls neoliberalism) for the crisis of 2008, despite the fact that markets were altered by central bankers in such a way as to cause the crash, which he all but says elsewhere. In explaining the differences between the United States and the eurozone, Stiglitz highlights the freer movement of Americans, the identity of Americans at the national level rather than the state level (at least in modern times), and the federal nature of monetary and fiscal stimulus. He is correct to say that there must either be “more Europe” or “less Europe,” but sides with the former. He describes the Keynesian theory of business cycles, but makes no mention of the Austrian theory. Stiglitz then repeats the tired fallacy that austerity caused the Great Depression and the current malaise, rather than central bank shenanigans and tariff policies. His blame for the gold standard is similarly misguided. He somewhat fixes an error from the previous chapter by clarifying that trade imbalances are not a problem if currency exchange rates can change to compensate for them. He straw-mans the laissez-faire position on unemployment by saying that it views unemployment due to market adjustments as good rather than as simply necessary. Stiglitz then gets a few points correct: low wages undermine worker morale and productivity, falling wages may not amount to falling prices if firms are worried about their solvency, and monetary stimulus has a breaking point at which interest rates cannot be lowered further. But he again blames the private sector for being excessive when it is only reacting to perverse incentives created by governments and central banks. There is little to fault in Stiglitz’s explanation of why currency areas are prone to crisis except for the preceding error, but it never occurs to him to simply not have such an area. The chapter ends by repeating many of the fallacious arguments from the previous chapter concerning trade surpluses and deficits.

The fifth chapter considers the economic divergence of the eurozone countries. Stiglitz argues in favor of institutional frameworks to prevent the need for bailouts, as well as funds to make depositors whole and provide bailouts. This ignores the moral hazard created by such a regime that causes bankers to take excessive risks, as well as the powerful incentives that an absence of protection would have on depositors to act responsibly and hold bankers accountable. His view of regulation is starry-eyed, missing the entire concept of regulatory capture. This is especially striking, given his focus on institutional capture in the following chapter. Stiglitz rightly complains of capitalized gains and socialized losses among bankers. In his consideration of other sources of divergence, he again fails to consider the possibility of turning over infrastructure to private development, instead proposing expansion of the European Investment Bank, which is certain to become another statist boondoggle. His view of knowledge markets is flawed in the same manner as his view of economies; it fails to account for the distortions that statism necessarily causes which lead to various types of failure. He concludes the chapter by showing how policies in the eurozone have caused greater instability, but cannot seem to avoid blaming the private sector for responding to the incentives imposed upon it.

In Chapter 6, Stiglitz examines the European Central Bank. He begins by saying that open markets and free competition can efficiently allocate resources only in the presence of adequate government regulation. This is a contradiction because an absence of government regulation defines an open market with free competition. His arguments concerning the inflation-only mandate of the ECB and the problems it causes would be much stronger if the Austrian business cycle theory were anywhere to be found in the book. His description of events in Chile under Pinochet does not agree with the long-term result of economic prosperity relative to the rest of South America and neglects how much worse conditions would have been under Salvador Allende. His claim that markets are supposed to be efficient and stable are a straw man; instability in the form of creative destruction and inefficiency by some metrics rather than others are inherent in a market economy. Stiglitz correctly writes that monetary policy is always a political question, pitting creditors against debtors for control of the central bank. But he leaves unclear how democracy is supposed to hold central bankers accountable. He also must not know any libertarians, or he would know that some people have proposed taking away spending power from governments to ensure that they do not misbehave. The chapter ends with a history of fashionable central bank policies over time and what was wrong with them from a Keynesian perspective.

The next two chapters delve into the Greek situation in particular, as Greece has suffered a more severe economic crisis than any other eurozone country. The seventh chapter explores the effect that the Troika’s policies had on countries in crisis. Stiglitz accuses some European leaders of acting in bad faith by purposefully attempting to punish governments with different political views from their own, which may be accurate. He continues his misguided attack on austerity, though it has more merit against what Europeans have actually done than against real austerity. He correctly explains the problem with primary surpluses, but then commits the broken window fallacy by embracing Keynesian multipliers. Stiglitz accurately diagnoses the problems of increasing taxes, but seeks to aid governments in collecting them rather than encourage economic freedom and stronger property rights. He describes his ideal system of property taxation in the same tone that a proud and unrepentant thief might use to boast of his crimes. Although he is correct to say that particular moves toward privatization and economic freedom may produce adverse results in particular contexts, this is a justification not for state intervention, but for undoing even more statism so as to remove the problematic context. Stiglitz notes that the hegemony of American military power has put Europe into a Pax Romana problem in which it cannot fend for itself against a real threat, but advises that this problem be worsened in the name of fiscal restraint. He compares reductions in pensions to wage theft when the two are clearly different. It is the responsibility of workers to figure out that they are being offered terms which may be impossible for the employer to meet in the future and practice caveat emptor. As for bank bailouts and debt restructuring, Stiglitz describes the situation well except for his faulty view of austerity.

Chapter 8 delves into structural reforms in Greece that made matters worse. Again, Stiglitz’s views of austerity and democracy corrupt an otherwise sound analysis of trivial and counterproductive actions taken by the Troika. He claims without proof that industrial policies are required to advance countries that are lagging behind in technological development, neglecting that markets are not doing this because they are either disallowed from doing so or are assuming that the state will do this for them. He criticizes intergenerational transmission of advantage and seeks to use the state against it, when it should be championed as both eugenic and important for maintaining a natural aristocracy. Stiglitz argues for a price on carbon emissions and claims that the private sector will not address climate change, when again the state has kept this from happening. He finishes by discussing counterfactuals, which is interesting given his empiricist thinking on economics.

The final four chapters deal with various proposals going forward. In the ninth chapter, Stiglitz offers his advice for fixing the eurozone. As before, he embraces what Henry Hazlitt called “the fetish of full employment” as the goal of his policy proposals. Much of the content of the chapter rehashes proposals from previous chapters. He seeks to create common deposit insurance and common resolution while abolishing place-based debt within the EU. This will create moral hazards and work against people who wish to escape debt slavery inflicted upon them by their ancestors. He calls for wages to be raised in countries with surpluses, which will lead to unemployment in those countries as workers whose labor is not worth higher wages are laid off. He fundamentally misunderstands precious metals, failing to understand their role as a store of value and medium of exchange, even if no longer officially used in such capacities. Stiglitz seeks to make the financial sector and other corporations serve society, but fails to recognize that the organs of a statist social order inherently and irrevocably serve themselves at the expense of the society. The shortsightedness of markets of which he complains is actually caused by the institutions that he seeks to use to solve the problem. One of the few sound recommendations made in this chapter is the creation of a super-Chapter 11 bankruptcy procedure to quickly restructure debt. He goes on to propose that EU taxes be based on citizenship, and that some of the proceeds be used for foreign aid or resettlement of migrants, further impoverishing and culturally endangering Europeans.

Chapter 10 examines the possibility of what Stiglitz calls “an amicable divorce,” in which countries exit the eurozone. He considers the example of Grexit, or Greece returning to its own currency that he calls the Greek-euro but would probably be called the drachma, as it was before the euro. He proposes that Greece create a new electronic currency to ease concerns over producing coins and banknotes, stop tax avoidance, bring everyone into the financial system, and facilitate the ability of central banks to create credit. Stiglitz fails to consider that people are likely to reject such a system in favor of cryptocurrencies, which have all of the benefits of such a system without most of the drawbacks, and that such a system could offer states tyrannical control over their citizens. His view of credit indicates magical thinking, although this is quite common in modern financial circles. He again blames the private sector for problems caused by politicians and central bankers, while ignoring peer-to-peer lending as a substitute for modern credit systems. Stiglitz describes a potential system of credit auctions which could be abused with much the same ease as the current system. He admits and supports what should be abhorrent to any decent person: that fiat currencies are ultimately given value by extortion in the form of taxation. Stiglitz correctly says that a new Greek currency would enable them to devalue it to correct trade imbalances, but his proposed system of trade tokens for the same purpose would be redundant. He equates deflation with a deficiency of aggregate demand, neglecting the possibilities of an abundance of supply or improvements in efficiency and/or quality. His description of currency change as a debt restructuring is insightful. To end the chapter, Stiglitz considers the alternative of Germany leaving the eurozone, though it is unlikely that they would give up their current position of power so willingly. This segues into the topic of the next chapter, which is a flexible euro consisting of several subdivisions.

Stiglitz uses Finland as a counterexample against those who claim that profligacy in southern Europe is to blame, rather than the structure of the eurozone. Most of his argument here is correct, except for his view of austerity. His proposal in this chapter is to have several eurozones with fluctuating exchange rates, which could be brought closer together over time as political integration occurs, eventually resulting in economic integration. The details are borrowed from the previous two chapters. Though more likely to succeed than the proposals in those chapters, it is also the least likely to be adopted. Stiglitz correctly recognizes that having a single currency area is an interference in the market in and of itself, monopolizing exchange and interest rates in the area, but cannot seem to fathom that his flexible euro proposal also does this on a smaller scale. He claims that it can be better not to simply rely on prices for the allocation of resources, but does not explain how to solve the local knowledge problem or the economic calculation problem in a superior manner. He also says that history shows free banking to be a disaster, when the truth is quite the opposite.

The final chapter sees Stiglitz review many themes from previous chapters, but he also covers topics which are barely mentioned elsewhere. He denounces anti-immigrant groups in Europe, which are only trying to resist demographic replacement by a ruling class that they did not ask to replace them. So much for the “democratic accountability” that Stiglitz extols in the same breath. He blames right-wing economic ideology for rising inequality in the United States beginning with the Reagan administration, but incomes really began to diverge ten years earlier, when Nixon ended the gold standard. Stiglitz expresses a desire to preserve the Enlightenment values of Europe, but cannot comprehend how letting in migrants with distinctly anti-Enlightenment values will jeopardize that mission. On the issue of trade policy, he understands that free trade is not always best for all parties involved, as it can destroy important societal arrangements that prevent conflict. But then Stiglitz incredulously asks how one could have expected that Europe’s leaders would create such economic dysfunction, with massive unemployment and lack of economic security. The answer is that a proper amount of cynicism would require such an expectation.

Overall, the best thing that can be said for the book is that it is not an effort made in bad faith. Stiglitz correctly identifies many of the problems with the current state of affairs in Europe and seems to want to help, but his proposed solutions are thoroughly misguided. Despite his palpable disdain for Milton Friedman and other Chicago School monetarists, he suffers from one of the worst of their faults: a desire to solve the immediate problems set before him combined with a lack of broader perspective. This leads him to propose a banking system which could be used to terrible effect against political dissidents, tax collection schemes that would indicate criminal intent in any non-statist context, and forced political integration by means of stealth and subterfuge. He also seems to believe that everything would be fine if only state power were used by the right people to implement the right policies. It never occurs to him that the power itself might be the problem. The Euro is an interesting case study in leftist economic thought, but those looking for real solutions to Europe’s economic woes should keep looking.

Rating: 2.5/5

On Consumerism, Corporatism, Time Preference, and Modernity

Consumerism

Capitalism is often blamed for consumerism. It is almost a certainty that whenever leftists run out of other arguments, they will make an argument related to consumerism. Consumerism is almost universally despised by people who have higher ideals, so it is easy to point out consumerism and then act as if it is an argument against capitalism. One reason for this is that socialism, the other major economic system in the modern world, eventually leaves people with nothing to consume, so capitalism is an easier target. But socialists make multiple critical errors in blaming capitalism for consumerism. While it is certainly true that capitalists benefit from a consumer culture, and that the capitalist system will not be toppled when people are attracted to consumer culture, this does not mean that capitalism as a system of free enterprise and private property is by necessity a cause of consumerism or oriented around consumerism. Furthermore, the capitalist class itself will be subject to consumerism and themselves be as hurt by it as anyone else.

When we look at why people engage in consumerism, we can see several major trends that cause consumerism. The first is having a corporate structure when it comes to enterprise. This means that for there to be consumerism there must be people who advance consumerism. There would be no consumerism if there were no beneficiaries of consumerism, and honest businesses do not need consumerism. Corporations are not honest businesses, as they hide behind a legal fiction created by the state. Without corporate structures, which are entirely constructed by the state, there is no party who would advance consumerism. Second, there must be people who are willing to engage in consumerism. Whereas people who have their lives figured out and have purpose beyond themselves do not turn to consumerism, these must be people who have nothing better to do than to consume. Such people see their lives as a series of capital transactions in which they seek immediate gratification. Consumerism cannot develop within healthy societies where people have cares beyond their own immediate interests. Third, consumerism requires that these people have money, as they cannot consume without first gaining access to a sufficient amount of capital. Thus, consumerism requires an abundance of consumer goods and services. Fourth, there must be a high social time preference within the society because people need to seek immediate gratification to value consumerism instead of being personally disgusted by engaging in consumerism. Finally, it is not only necessary that people have personal abundance, but that the capital structures that produce consumer goods are well-maintained. These capital structures will be maintained when people consume, but high time preferences will necessarily cause a form of stagnation, as there is insufficient investment to facilitate growth.

Corporatism

It is undeniable that the modern economy is largely driven by giant corporate structures, and it is similarly undeniable that these corporate structures are based on making as much money as possible in the shortest amount of time. Making profit is not inherently bad, but it is necessary to account for time preferences. The strategy used by megacorporations once they have attained their status is not to build up a honest reputation and a good name as valuable providers of quality services, but rather to profit in the moment and then leverage this profit for future gain. This is why many corporations operate in debt; they hope that they can be propelled by their profit and obtain investors by providing the potential for returns. This has much to do with the nature of corporations. Corporations are entities partially separate from the people and property legally represented by them. They shield people from personal responsibility, which creates a wide range of perverse incentives. If businesses were fully accountable, then there could not be such a large amount of corruption within them or such a high time preference by them. Without the ability to sustain debt through lack of responsibility, businesses would have to lower their time preferences.

Not only does the state indirectly advance predatory business practices in allowing corporate structures to take shape, the state also directly allies with corporations. Whereas attempting to create a corporation without involving the state will have no effect, incorporation is a government program and a corporation is a public-private partnership. Furthermore, politicians are funded by corporations, and corporations get special benefits from the state as a return on their investment in political connections. The result is that the state has been overtaken by corporate power, and the two work symbiotically in order to enhance their parasitism upon the rest of society. The largest corporations need their licenses, privileges, regulations, and other such competition-stifling measures to maintain their position, while the state needs to have control over the economy to maintain its position. Corporations are the only entities that can truly ensure that the economy is not outside the state. The entire modern political system is based on a mutual reassurance between corporations and the state, and separating the two at this point will cause an economic collapse.

At the highest level of business, the image of the humble CEO or board manager who does what needs to be done is a misconception; the people who run megacorporations are not the most virtuous people. Big business is not oppressed, and is not some heroic figure from an Ayn Rand novel who is fighting against the state for the freedom to compete in the free market. Rather, through regulatory capture, big business uses state power to oppress small businesses and individuals who seek to compete with them. For these reasons, the corporation is a fundamentally anti-capitalist institution.

Time Preference

There are the situations in which the state directly incentivizes high time preferences. People who are struggling financially are far easier to control than those who are financially secure. By contrast, when people save money and accumulate wealth, they are less influenced by the state. The state can make use of this to artificially create and expand a consumer culture by inflating away savings. This is done by printing fiat currency that loses its value over time, then watching people impoverish themselves by using that currency. People may have an abundance of consumer goods, but they are constantly struggling financially and feel as if they are much poorer than they are. These reckless spending habits that are bound to impoverish the spenders are extremely beneficial to the state and the politically connected corporate elites. Furthermore, the state can tax people more on their purchases if they spend beyond their means. It will also create more possibilities for taxing artificially successful businesses when they inevitably expand due to the calculation with inflationary currency being favorable towards them. However, this is unsustainable and always results in an economic contraction. Unfortunately, the state can also exploit this by picking winners and losers, bailing out favored megacorporations, creating new social welfare programs, and expanding the grip of central banking over the economy.

Having high time preferences also leads to an economy based on debt, in which people spend more than they have, and both governmental and private institutions support this spending. Banks earn most of their income from this overspending and from people who are unable to pay them back in full. Due to this over-reliance on debt, the population as a whole is saddled with debt that can feel impossible to ever pay off, which can cause them to lose their motivation in life. The population will be easier to control by both the state and the banks that run this debt-based economy, as the agencies who provide the debt for the economy are the agencies who make the reliance on debt possible. Easy debt also leads to price inflation, as there is more market demand without a corresponding increase in market supply.

People get addicted to debt when they need to spend more than they have. However, this results in a problem when a person’s available collateral shrinks in comparison to their debt. They will eventually hit a wall where they can take no more debt unless and until they pay off their old debt. This is a debt trap in which people must repeatedly take on new debt to pay off old debt, all while interest accumulates and clearing their debt is impossible. This keeps people from being able to prosper, and the number of people trapped under such a burden is increasing. This, in turn, causes much greater class divides, as lower-class individuals who do not keep a store of capital that they can use for various ventures will be unable to make profitable investments. They will always be subject to one boss or another and will never experience true independence.

None of this is the fault of a capitalistic economy, but rather the high time preferences exhibited by the consumerists. On the contrary, capitalism is the most benevolent aspect of this situation, as it punishes the destructive habits of consumerism. These people are stuck in poverty not because of capitalism, but because of their own consumption habits amplified by state interference. Their lack of advancement is not an unfair punishment, but rather a sign that they should change their ways. This requires a particular mindset of growth and improvement that is most often stunted by public education and the degenerate culture which most people inhabit. This mindset requires that people actually trust the market signals they receive instead of seeing capitalism as a repressive entity. Escaping poverty requires a willingness to do what must be done instead of waiting for someone else to provide a handout. People who blame capitalism for holding them down while engaging in mindless consumerism are as children who eat too much candy, become ill, and also complain that they have too little candy.

Modernity

The modern society allows people to live a life without meaning. It removes church as a higher spiritual goal, community as a higher social goal, family as a higher personal goal, and even denies the importance of individual goals that a normal person might have. Through the lens of modernity, it is better to remain free and untethered rather than have a family. Looking out for one’s own interests at an individual or group level is derided as selfishness that ignores the greater good of society or hateful racism. By society, modernists do not refer to the disaffected small villages or the impoverished sections in urban communities that are in the greatest need of strong and healthy communities. Instead, they almost exclusively refer to a central state and imply that people are only worthwhile when they work for the state or when they work for nothing of value. They only see the state as a representative of society, with the only acceptable substitute to focusing on the state being pure hedonistic nihilism. Ironically enough, this mindset is most often heard coming from people who oppose capitalism on the basis of it being anti-social.

People are thus left without a greater meaning to work towards. They are left not providing for themselves, their family, or something else they hold dear. People are left as freely floating agents who are reduced to nothing other than consumers, and material pleasures are the only things that allow these people to tolerate the otherwise meaningless lives that they lead. They are not some great paragons of modernity, but rather embody the lowest state of rot and decay.

Conclusion

Consumerism is caused by progressivism, corporatism, and impatience. Capitalism is nowhere near the root cause of consumerism. Free enterprise and private property do not create such a propensity to consume over doing more meaningful things. The reason why consumerism is such a prevalent phenomenon is not because there is too much capitalism, but because people lack self-restraint or purpose and are encouraged by the state to live in such a manner.

Twelve Observations On The Catalonia Independence Vote

On September 6, the government in Catalonia announced that it was going to hold a vote on October 1 to decide whether the region should secede from Spain and become a nation-state unto itself in the form of a republic. It also announced that should the people choose independence, the government would declare secession within 48 hours. Spain’s constitutional court declared the vote unconstitutional, and the central government in Madrid said that it would attempt to stop the vote. Neither side backed down. The Spanish government seized ballots and tried to shut down polling places, resulting in violence that left over 840 people injured. The vote still took place, with nearly 90 percent voting for independence. In response, pro-secession protests occurred throughout Spain and a general strike was called across Catalonia. Spain and the European Union have rejected Catalonia’s requests for mediation, and King Felipe VI has denounced the secession movement. Twelve observations on these events follow.

1. One cannot understand the present without knowing the past. The formation of the current Spanish state can be dated to 1469, when the Christian kingdoms of Castile and Aragon were united by the marriage of Isabella I of Castile and Ferdinand II of Aragon. Under their leadership, the last Muslim rulers were expelled from Spain, Christopher Columbus was sent to the New World, and royal power was centralized at the expense of local nobility. Even so, Spain has always been a multi-ethnic state, composed of Basques, Catalans, Galicians, and others. In the 19th century, nationalist feelings among these groups grew. These aspirations took a back seat during the Cuban War of Independence, Phillipine Revolution, and Spanish-American War. Regions of Spain were granted greater autonomy in the Second Spanish Republic (1931-39), but this was brutally repressed during Francisco Franco’s dictatorship (1939-75), such that people were not even allowed to give their children Basque, Catalan, Galician names. After Franco’s death, Spain was turned into a semi-federal state with 17 autonomous communities, some of which have their own languages and cultures, as Catalonia does.

2. The Catalan independence movement cuts across ordinary political lines. Some people in Catalonia believe that independence would bring order to the region’s finances, or make taxes paid by Catalonians provide more benefit to Catalonians. Others are migrants who became involved with the Catalan movement and have no loyalty to the government in Madrid. Still others have particular political objectives that they believe to be easier to achieve on a smaller scale, such as an independent Catalonia rather than the entirety of Spain. In American terms, the parties which are in a temporary alliance to achieve independence run the gamut from the Constitution Party to the Green Party.

3. The harder one clenches one’s fist, the more sand slips through one’s fingers. For the Madrid government, responding with peaceful dismissal of the independence vote would have been more effective. Instead, they met peaceful efforts by Catalans with violence. In the words of a Spanish politician, “We have given them the pictures they want.” By forcefully opposing the self-determination of Catalans, the Spanish government is pushing swing voters toward the independence movement, as such actions raise the specter of Franco that is still remembered, particularly among older people. Furthermore, the creation of a new state is much easier if existing states recognize it, and images for foreign consumption of people trying to vote and being hit with truncheons and shot with rubber bullets for it will create pressure on other governments from their people to recognize Catalonian independence.

4. The voting results are questionable. The Catalan government rushed through the legislation for the referendum and passed it in a late-night session without the opposition being present. They vowed to secede even if turnout was low, and engaged in smear tactics against those who opposed independence. Turnout was only 42.3 percent, and the anti-independence side did not campaign because the government in Madrid declared the vote to be illegal.

5. This will provoke greater nationalist sentiment in the rest of Spain. Whenever separatist sentiment grows in one part of a nation, a unionist sentiment tends to grow elsewhere in reaction to it. In some cases, this occurs because the separatists threaten to remove an economically important area from the nation, such as a mine or a seaport. In others, such as the American Civil War, the separatists are engaged in activities that the unionists find morally reprehensible. Sometimes, a central government simply wishes to keep separatists subjugated so as to discourage other separatist movements elsewhere in the nation, such as in the Basque country. Whatever the case may be, nationalism in Madrid is likely to grow alongside secessionism in Catalonia. This will be bolstered by the fact that Catalonia is more leftist than the rest of Spain, as nationalism tends to be more common on the right.

6. Nationalism is not an ally of liberty; merely an enemy of some of liberty’s enemies. The nationalist sentiments of Catalans or anyone else in Spain will not lead to liberty in and of themselves. Only by coupling such sentiments with the principles of self-ownership, non-aggression, and respect for private property can a libertarian social order emerge. Nationalism is also hostile to any decentralizations of power below the national level. That being said, nationalism is certainly a lesser evil than globalism, and may serve as a temporary makeshift on the path to a better political arrangement.

7. The EU will be weakened regardless of the end result. If Catalonia becomes independent, it will be outside the EU, having to either apply to rejoin or have its move toward independence also serve as a Catexit, so to speak. Given Catalonia’s population of 7,522,596 and GDP of $255.204 billion, this would remove 1.47 percent of the population and 1.23 percent of the GDP from the EU. By contrast, Brexit will remove 12.83 percent of the population and 13.45 percent of the GDP from the EU. Even though Brexit is a much larger issue, the impact of a Catexit would still be noticeable. Catalonians are unlikely to want to exit the EU, but doing so may be unavoidable if they cannot gain admission once they are independent.

As per the previous point, it is also necessary to contemplate a Spexit, with or without Catalonia included. Growing nationalism in Spain as a reaction to growing separatism in Catalonia may lead to euroskepticism there. This, combined with longstanding economic issues in Spain such as high unemployment, may lead conservatives to contemplate the possibility of a brighter future outside of the European single market. A complete Spexit would remove 9.08 percent of the population and 5.94 percent of the GDP from the EU, while only Catalonia remaining in the EU would remove 7.61 percent of the population and 4.71 percent of the GDP from the EU. Though not as impactful as Brexit, a second member state leaving the EU could signal the beginning of the end.

Finally, regardless of whether any exits occur, the EU will almost certainly appear to be weak and ineffectual as a result of recent events. Calls for it to mediate the dispute have gone unanswered, and the EU seems intent on ignoring repression of a democratic vote. Given the EU commission’s threats of sanctions against Hungary and Poland for their anti-democratic policies, this seems rather hypocritical. One must also consider that the EU has no mechanism for dealing with such an issue. Article 3a of the Treaty of Lisbon calls for the EU to “respect their essential State functions, including ensuring the territorial integrity of the State, maintaining law and order, and safeguarding national security,” so it is unlikely to help the separatists. Nor is it in the rational self-interest of anyone who wields power in the EU to intervene, as doing so would encourage separatists in other EU nation-states.

8. Secessionist movements are fueled by economic hardship and government mismanagement. The role of the Catalan people in Spain is both privileged and marginalized. Even though Catalans have maintained a distinct identity, they contribute more to Spain than they receive in return, especially in terms of institutional influence, which remains dominated by Madrid. Since the 2008 financial crisis, this has exacerbated tensions, and the continued economic problems in Spain lead some Catalonians to believe that they could do better for themselves with more local governance.

9. The state is legitimized only by force. The simple truth is that any other basis for legitimacy is subject to reason and defeated thereby. A deity fails because no such being is proven to exist. A constitution fails because any person or group can write one, leaving the state’s legitimacy constantly imperiled. An appeal to tradition fails because all traditions and states must begin somewhere, leaving them unable to be formed in the first place. A supranational body fails because it begs the question of how it gets its legitimacy. A social contract fails because a valid contract must be entered into willfully by all parties. Democracy fails because it is a logical impossibility, which could not even appear to function without the state already in place, thus resulting in circular reasoning.

Mao Zedong spoke truly on the nature of state legitimacy; “Political power grows out of the barrel of a gun.” A state continues to operate because it violently subjugates anyone who would attempt to end its operation, and it maintains territorial integrity by violently suppressing any efforts by its people to secede from the state. The only factor preventing individuals or sub-national groups from gaining sovereignty is the fact that they lack the force of arms and/or the willingness to use them for that purpose.

10. Self-determination must be taken and defended by force. Given the previous point, the path to true independence is clear. A separatist movement must first declare independence, but this will never be sufficient. The larger state will seek to retain any breakaway provinces by force, and if the separatists wish to form a new nation rather than be imprisoned or executed on charges of sedition or treason, they must respond with defensive force to the aggressions of the larger state. This has been the norm at least since the American Revolution, and the Catalonian situation is shaping up to be no different.

In a more general theoretical sense, self-determination must be taken and defended by force because the failure to do so will result in some group of aggressors infringing upon one’s self-determination. As Vegetius said, “He, therefore, who desires peace, should prepare for war.” Only by doing this can one present an effective deterrent against those who would return a free people to a state of bondage.

11. Repression by the Spanish government may provoke terrorism. Should the violence escalate, as appears likely, some Catalonians may end up following the Basque model. In the Basque Country, there is a moderate nationalist and separatist movement, much like the Catalonian independence movement. But there is also the ETA, a paramilitary group that has engaged in terrorist acts for decades. The group was founded in 1959 during Franco’s regime, but continued carrying out attacks for decades after the restoration of regional autonomy. Other examples of this throughout the world include the Irish Republican Army and the PKK in Kurdish regions of Iran, Iraq, Syria, and Turkey. Notably, the Kurds are also attempting to create a new state for themselves at the time of this writing.

12. The international community functions as a cartel. Catalonia and Iraqi Kurdistan are currently attempting to become independent nation-states, and both are being met with a mixture of indifference and contempt from existing nation-states. That such movements provoke hostility from the remainder of their current states is understandable and has been addressed above, as has the uneasiness of foreign governments to recognize the independence of separatist movements. But there is more at work here, which may be explained by considering the role of cartels in a marketplace and the effects that decentralization would have if taken to its logical conclusion.

The standard libertarian view is that cartels are inherently unstable, as the incentive of each member has a profit motive to betray the cartel. This incentive is frequently countered by state interference in the economy to protect a cartel from this effect. There is no more profitable venture in the current system than the management of a state, so this profit motive is amplified alongside the protectionist motive as an equal and opposite reaction. But libertarians tend to under-appreciate the role of aggressive violence in the marketplace, which is a service for sale like any other. This keeps them from fully understanding situations like these, in which established players seek not only to out-compete upstarts or hamstring them through regulatory capture, but to engage in direct violent suppression of competitors.

Finally, the rulers of nation-states must be aware at some level that the entry of new polities into the established order has the potential to remove that order from power. In the words of Murray Rothbard,

Once one concedes that a single world government is not necessary, then where does one logically stop at the permissibility of separate states? If Canada and the United States can be separate nations without being denounced as in a state of impermissible ‘anarchy,’ why may not the South secede from the United States? New York State from the Union? New York City from the state? Why may not Manhattan secede? Each neighbourhood? Each block? Each house? Each person? But, of course, if each person may secede from government, we have virtually arrived at the purely free society, where defense is supplied along with all other services by the free market and where the invasive State has ceased to exist.”[1]

Taken to its logical conclusion, political exit may be disintegrative, but stopping somewhat short of atomized individualism would both remove the Cathedral from power and create the opportunity to build a superior form of social order. The establishment has no interest in allowing this to happen and would rather nip it in the bud at the expense of looking oppressive and/or indifferent than risk losing their global hegemony.

Taken together, these explanations help one understand why the established nation-states, despite their contrary interests, can agree that no new members should be able to join their club.

References:

1. Rothbard, Murray (2009). Man, Economy, and State with Power and Market. Ludwig von Mises Institute, Scholar’s Edition, 2nd ed. p. 1051.

Book Review: The Age of Jihad

The Age of Jihad is a book about political unrest in the Middle East by Irish journalist Patrick Cockburn. The book is a compilation of his notes and articles over a 20-year period (1996-2016) while traveling throughout the Middle East. Cockburn did direct reporting where possible, and relied upon first-hand accounts when venturing into certain places was too dangerous.

Cockburn begins with his reporting from Afghanistan in late 2001 as the United States began its intervention to remove the Taliban from power. Next, he shares his experiences of Iraq under sanctions from 1996, 1998, and 2001, followed by his experiences there during the American occupation from 2003 to 2010. This is followed by his next forays into Afghanistan from 2009 to 2012.

The next part of the book focuses on the Arab Spring and the events that followed, with particular emphasis on countries in which the rulers were not quickly deposed. Cockburn begins with the Libyan Civil War of 2011 that removed Muammar Gaddafi from power, along with the difficulties that followed. Sectarian violence in Yemen from 2009 to 2015 and the failed uprising in Bahrain in 2011 each get a chapter.

The last part of the book covers recent developments in Syria and Iraq. First, the Arab Spring in Syria and its development into the Syrian Civil War from 2011 to 2014 is discussed in two chapters. Another two chapters are devoted to the contemporaneous destabilization of Iraq. This culminates in the rise of ISIS and the establishment of the Caliphate, in and near which the final four chapters take place.

The book gives important insight into just how terrible daily life is for people in war-torn lands, including the near-absence of basic utilities, shortages of essential items, rampant unemployment, and fear of mistreatment both from rebel groups and one’s own government. The book is filled with anecdotes of behavior which have not been seen since the Renaissance in the West, and knowledge of this behavior helps to explain animosity toward migrants from that region. The reader may be familiar with some of the events described, but almost anyone would find new information somewhere in the book.

One comes away from the book with a sense that both Western and regional powers had to be trying to perform so poorly. Western powers sought to punish Saddam Hussein without regard for the Iraqi people who bore the brunt of sanctions. They ignored cultural attitudes and sectarian divisions while turning a blind eye to mass corruption that greatly weakened the nation-building projects in Afghanistan and Iraq. They removed dictators who were stabilizing forces, thus creating power vacuums which were filled by al-Qa’ida and its affiliates. It is difficult to be so maliciously incompetent without intending to do so.

Overall, Cockburn does an excellent job of conveying the reality on the ground in most of the conflicts in the War on Terrorism and the Arab Spring. The only real improvement would be to add sections on recent events in Egypt and Tunisia, which only get passing mentions as sources for jihadists in other places. The Age of Jihad belongs on the bookshelf of any serious student of recent history, the Middle East, revolutions, war, and/or the effects of foreign intervention.

Rating: 5/5

Book Review: The Invention of Russia

The Invention of Russia is a book about the history of the Soviet Union and the formation of modern Russia by Russian journalist Arkady Ostrovsky. The book focuses on the time period of the rule of Mikhail Gorbachev, Boris Yeltsin, and Vladimir Putin. Special attention is paid to the role played by the media in shaping narratives and steering the population from the Soviet era to the present.

The prologue deals with the author’s experience during and immediately after the assassination of Boris Nemtsov on February 27, 2015. He briefly overviews events over the past few decades that factored into Nemtsov’s murder, and the author’s experiences through those years are also discussed.

The book proper is divided into two parts, each with five chapters. The division between the parts is roughly set at the 1993 Russian constitutional crisis. The first chapter begins with the end of the Soviet Union, then backtracks to give the reader a sense of Soviet history up to Gorbachev’s rise to power, with emphasis on the events that foreshadowed it, such as de-Stalinization and the crushing of the Prague Spring. The second chapter covers the time from Gorbachev’s appointment to the fall of the Berlin Wall. The nature of perestroika and glasnost are discussed, as well as how the Chernobyl incident affected both. Later in the chapter, Ostrovsky details the split between the liberal reformers and the Stalinist hardliners, as well as the beginnings of the privatization of state assets which formed the class of Russian oligarchs. The third chapter explores the final two years of the Soviet Union, including the economic difficulties, the rise of Yeltsin, the worries of the KGB and other elements of the Soviet power structure, the January Events in Lithuania, and the 1991 Soviet coup attempt. The fourth chapter looks at the role played by the media in the dissolution of the Soviet Union and how the generational shift from the shestidesiatniki to their children affected the changes. The Kommersant newspaper is highlighted as an example of the new Russian media, as well as one of several examples of less than honest business practices in the early 1990s, which occurred due to the moral vacuum left by communism. The fifth chapter covers the time from the end of the Soviet Union up to the 1993 crisis, with particular attention to the role of television, radio, and print media in shaping the narrative and saving Russia from another Communist takeover.

The sixth chapter continues the discussion of the 1993 crisis, then moves on to the creation of NTV, Russia’s first Western-style television station. Of course, NTV had to compete with Channel One and other state media, which caused tensions with the state when NTV covered the first Chechnya war from the Chechen point of view. The chapter concludes with the 1996 election, in which the media played an essential role in bringing Yeltsin up from single-digit polling to a victory over Gennady Zyuganov, his Communist challenger. The seventh chapter continues with the events after the election, including a battle between oligarchs that turned into a political crisis, continued troubles with Chechnya, the search for a vision for Russia moving forward, and finally, the 1998 Russian financial crisis.The eighth chapter shows how this milieu combined with NATO airstrikes in Serbia and an overly propagandistic media was able to elevate an obscure KGB agent named Vladimir Putin to the presidency of Russia. The decision of most of NTV’s leadership to side against this was the beginning of the end for the station. The ninth chapter covers the time from the beginning of Putin’s rule to the invasion of Ukraine in 2014, including the ouster of several high-profile opponents of the regime, the bringing of NTV into the control of Gazprom and its gradual turn toward the regime, further trouble with Chechen terrorists, the Russo-Georgian War, and the activities of various media personalities. The tenth chapter looks at Putin’s rule in light of Russian popular culture, the rise of the bureaucrat-entrepreneur, the protests of 2011-13, the military operations in Crimea and eastern Ukraine, and the use of propaganda to manufacture support for foreign aggression.

The book is excellent at face value, providing a perspective that can only come from a native person who lived through many of the events described in the book. But it is even more valuable to libertarians and reactionaries for the obvious parallels between Russian history and the current state of affairs in the West, as well as for the warnings concerning the improper dismantling of government monopolies, as happened during the transition from the Soviet Union to modern Russia.

To conclude, the unique explanations of historical events and the focus on the role of the media in steering the ship of state make this book an invaluable addition to the collection of any activist, analyst, historian, strategist, or student.

Rating: 5/5