Why Robert Pittenger is essentially correct about discrimination

On Sept. 8, Rep. Robert Pittenger (R-NC) was asked by ThinkProgress’ Alice Ollstein after a town hall meeting in Ballantyne about whether he supported laws to protect gays in the workplace. He responded, “You need to respect the autonomy of somebody running their business. It’s like smoking bans. Do you ban smoking or do people have the right to private property? I think people have the right to private property. In public spaces, absolutely, we can have smoking bans. But we don’t want to micromanage people’s lives and businesses. If you have a business, do you want the government to come in and tell you you need to hire somebody? Why should government be there to impose on the freedoms we enjoy?”

This statement led to predictable outrage from leftist activists, bloggers, and newspaper editorial boards. “Rep. Pittenger’s ill-informed opinion is also not consistent with the fair-minded opinion of most Americans,” said David Stacy, government affairs director for the Human Rights Campaign, a gay rights organization. “The vast majority of Americans back commonsense workplace protections for LGBT Americans.”

Below, I will make the case that such an opinion is not ill-informed (even if ill-stated and ill-defended by Rep. Pittenger) and is consistent with libertarian philosophy.

The first order of business is to define what is meant by discrimination. The dictionary definition of discrimination is “the practice of unfairly treating a person or group of people differently from other people or groups of people.” The only problematic part of this definition is the word “unfairly,” which could be (and has been) used to twist the meaning of discrimination in an arbitrary fashion. After all, who decides what is fair or unfair? Those involved in an interaction, or someone outside the interaction? If the latter, then what gives them legitimacy to say what is fair or unfair? Ultimately, fairness is subjective because values and opinions are subjective. The only objective consideration concerning fairness in libertarian philosophy is whether an action is consistent with the non-aggression principle. Therefore, discrimination for the purpose of this essay will be defined as “the practice of treating a person or group of people differently from other people or groups of people without violating the non-aggression principle.”

The second task is to construct a logical framework for the right to discriminate. This is a rather straightforward task. The right to discriminate against any person for any reason is part and parcel of the right of freedom of association. In order to argue against freedom of association, one must exercise freedom of association toward the recipient(s) of one’s argument. Therefore, any argument against freedom of association contains a performative contradiction which falsifies the argument. As an idea which cannot have a valid argument against it must be true, freedom of association is a valid right which should not be violated.

The other right which comes into play when discussing discrimination is the right to private property. Private property is rightfully established by mixing one’s labor with unowned natural resources. This comes from being responsible for the consequences of one’s actions, which in turn comes from ownership of one’s physical body. In order to argue against ownership of one’s physical body, one must exercise exclusive control of one’s physical body (to write, speak, type, etc.), which only a rightful owner legitimately may do. Therefore, any argument against ownership of one’s physical body contains a performative contradiction which falsifies the argument. Thus, ownership of one’s physical body is a valid right which should not be violated, as are the corollaries thereof, such as private property rights.

So far, we have a logical case that no one, including an agent of the state, should interfere with private property or freedom of association. Effectively, this means that no one should initiate the use of force to prevent discrimination. (This, of course, does not equate to a case for why people should exercise their right to discriminate on the basis of sexual orientation, race, gender, age, or any other basis; it is only a case for why they should be allowed to do so.) But although discrimination is allowed under libertarian philosophy, it will be discouraged by market forces. In a free market, bigots are punished because they relinquish customers and employees who have the traits against which the bigot is prejudiced as well as customers and employees who are sufficiently offended by said prejudice to ostracize the bigot. This is more than a linear relationship, as those who cannot or will not obtain goods, services, and employment from the bigot will be likely to do so from other providers who are not bigoted rather than do without. This will not only impoverish the bigot, but enrich his competitors. The eventual result is that bigots cannot compete with those who are not bigoted, and must either renounce their bigotry or go out of business.

At this point, statists may protest that the above free market scenario has not played out, and that government intervention is therefore necessary to stop discrimination. Of course, this violates logically proven rights, but statists tend not to understand or care about this; otherwise, they would not be statists. The Charlotte Observer Editorial Board asked whether Rep. Pittenger would find it acceptable to fire an employee for being black, so let us consider the history of that case. Prior to the Civil Rights Movement, Jim Crow laws forced many business owners not to serve customers or hire employees whom they would have served or hired otherwise. Since that time, anti-discrimination laws have forced many business owners to serve customers and hire employees whom they would not have served or hired otherwise. In both cases, force has been used to interfere with the market to keep voluntary methods of dealing with bigotry from being tested. To claim that voluntary methods cannot work while supporting laws that prevent voluntary methods from having a chance to work is logically inconsistent.

One must also remember the role that government has played in indoctrinating children with racist beliefs. The racists who held political and business positions in the 1950s and 1960s would have been schoolchildren in the 1920s. Let us consider an example of what they were taught. This excerpt comes from Civic Biology (1914). (If the book sounds familiar, it is because it was used by John Scopes to teach evolution in Tennessee in 1925, leading to the Scopes “Monkey” Trial.)

“The Races of Man. — At the present time there exist upon the earth five races or varieties of man, each very different from the other in instincts, social customs, and, to an extent, in structure. These are the Ethiopian or negro type, originating in Africa; the Malay or brown race, from the islands of the Pacific; The American Indian; the Mongolian or yellow race, including the natives of China, Japan, and the Eskimos; and finally, the highest type of all, the Caucasians, represented by the civilized white inhabitants of Europe and America.”

With this sort of racism being taught to children in public schools, it is no wonder that a large number of them would grow up to be racists.

Another important aspect of government laws is that they frequently have unintended consequences that harm the people they are intended to help. For example, when an anti-discrimination law prohibits firing an employee for having a certain characteristic, an employer is less likely to hire people with that characteristic because it is too difficult and troublesome to fire such people if they are incompetent, as they can claim that they were fired for a legally prohibited reason and make trouble for an employer.

More generally, the belief that an action cannot be performed solely because it has yet to be performed constitutes a logical fallacy. The assertion that the free market cannot effectively deal with bigotry simply because there is not yet an empirical example of the exact outcome described above is such a fallacy (as well as an ipse dixit fallacy.)

The other criticism typically levied against libertarianism in this regard is that it is just a cover for bigotry. This criticism is easily dismissed. Libertarianism is a philosophical position on what constitutes the legitimate use of force. It says that initiatory force is never justifiable and defensive force is always justifiable. Libertarianism says nothing about bigotry one way or the other, as long as that bigotry does not involve initiatory force. To claim that a philosophy defends a certain position simply because it does not attack that position is a false dilemma fallacy. That being said, even if it were true that libertarianism is a cover for bigotry, this would actually produce good results. If bigots would become libertarians, then they would have to abide by the non-aggression principle. This means that they would stop initiating the use of force and advocating for politicians to do so on their behalf in order to advance pro-bigotry agendas. Therefore, bigots will do less damage to other people if they become libertarians.

It is thus clear that while Rep. Pittenger’s defense of his position was rather inept and his comparison between discrimination against LGBT people and discrimination against smokers is problematic, the opinion that discrimination should not be legally prohibited by the state is not ill-informed or illogical.

Eight Negatives Of Economic Sanctions

In the course of international affairs, economic sanctions are a common tool of politicians who seek to achieve foreign policy objectives without resorting to open warfare. Just as economic ostracism can be a nonviolent means of successfully dealing with personal conflicts, statists would have us believe that economic sanctions are a nonviolent means of successfully dealing with international conflicts. Below are eight reasons why nothing could be further from the truth.

  1. Sanctions require initiatory force. Like all other policies that are legally binding in a statist society, economic sanctions are maintained by the threat of force being used against those who disagree with them and act upon that disagreement. In other words, if trade occurs between a citizen of the sanctioning state and a citizen of the sanctioned state and agents of the sanctioning state learn of it, they will initiate the use of force against these people. As states are the organizations which currently have the capacity to engage in the most violent behavior, and have repeatedly shown a willingness (and eagerness) to use this capacity, economic sanctions are far from a nonviolent means of achieving foreign policy objectives.
  2. Sanctions do not resolve conflicts. Diplomacy is the intergovernmental counterpart of interpersonal negotiation, and it is the proper method for dispute resolution. Just as escalating to ostracism of a person is an admission that negotiation has failed to resolve a dispute, escalating to an embargo of trade goods coming from a nation is an admission that diplomacy has failed to resolve a dispute. Sanctions generally do not involve measures of restorative justice, so tensions are likely to continue, as forgiveness and reconciliation tend to be possible only when restitution is possible.
  3. Sanctions can dishonestly do economic damage to a nation. Sometimes the political leaders of a nation decide to punish another nation on factually inaccurate and/or morally unjust grounds. When this happens, economic damage will be done to people who do not deserve it (or at least, do not deserve it for the specified reasons.)
  4. Sanctions can escalate conflicts. When sanctions are levied for factually inaccurate and/or morally unjust reasons, the people of the sanctioned nation can become angry at the sanctioning nation and demand that their government take decisive action, leading to a war that might not have happened otherwise. There is also the fact that open trade serves as a deterrent to war, as neither nation wishes to sacrifice the economic benefits of trade and neither state wishes to destroy a source of tax revenue. This is why Frederic Bastiat once said, “When goods cannot cross borders, armies will.”
  5. Sanctions cannot stop determined violent sociopaths. Just as an individual person cannot ostracize murderers, thieves, rapists, kidnappers, and other such violent criminals and expect this to stop their aggressions, a government cannot sanction another government and expect it to stop waging war against its own people or other people. If the benefits of invading another territory to take natural resources, gain a new tax base, or gain living space for an overcrowded domestic population are judged by rulers to be worth the drawbacks of economic sanctions, then violent sociopathic rulers will commit acts of aggression. The same goes for exploiting or exterminating people within a ruler’s territory. Stopping them requires the use of violence in self-defense by the inhabitants of the invaded territory or deterrents such as nuclear counter-strike capability; nothing short of this will work against a determined state aggressor.
  6. Sanctions are a double-edged sword. Free trade is by definition beneficial to all parties involved. Economic sanctions interfere with free trade, and thereby hurt not only people and businesses in the sanctioned nation, but also hurt people and businesses in the sanctioning nation by depriving them of markets in which to sell their goods and services. If enough sanctions are levied, and especially if a government sanctions other nations whose governments continue to allow business with the sanctioned nation, it is possible for organized alliances to form against the sanctioning nation, which can ultimately make the sanctioning nation more economically isolated than the sanctioned nation.
  7. Sanctions hurt commoners, not rulers. The economic deprivations caused by sanctions tend to disproportionately affect the poor, while leaving rulers all but untouched. Rulers can typically find ways to evade economic sanctions, and failing that, they can simply tax their subjects at a higher rate, all while blaming the sanctioned nation for the suffering of their subjects.
  8. Sanctions provide effective propaganda for rulers. The rulers may say, “Look at these outsiders! They have cut off your trade opportunities! They are the reason your goods and services are not being bought! They are the reason why you are poor! Support us and our cause, and we will rid you of this nuisance!” Regardless of how realistic such an outcome may be, it is not difficult for the rulers of a sanctioned nation to convince their impoverished citizens that uniting behind their rulers is their best hope. Historically, this has a terrible track record for the advancement of human liberty and has frequently led to wars.

To conclude, nothing that I have said above is outside the realm of common knowledge. An educated statist is as aware of these shortfalls as I am. This means that the reasons for the prevalence of economic sanctions in foreign policy must be viewed with a degree of cynicism. Politicians like to use sanctions not because they work, but because they are effective for political posturing, for giving the appearance of acting tough while doing nothing of substance. Sanctions are also used simply because there are no other options between diplomacy and military action to compel change in a geographical area outside of a government’s direct control.

Special thanks to Christopher Cantwell, whose article “Top 6 Shortfalls of Ostracism” was very helpful in the writing of this article.

Real libertarians say: immigration is a government program

On July 8, Libertarian Party Chair Nicholas Sarwark released a statement called “Libertarians say: Let the immigrant children in,” which says that the Central American children currently crossing the Mexican border into the United States should be allowed into the United States. While the statement makes several valid points, let us examine what is wrong with it from a philosophically consistent libertarian perspective.

“Should the U.S. government forbid foreign children from entering the United States? The Libertarian Party says no.

It would be unjust and inhumane for the U.S. government to prohibit these children from entering the United States.”

The U.S. government cannot forbid anything, because it does not exist. Likewise, the Libertarian Party does not say anything, nor can it, because it does not exist. Each individual person exists, and it follows that only an individual person has the ability to say something or forbid something. But putting this strange collectivist utterance aside, the answer to the question of whether agents of the state should use force to deny freedom of movement into a particular geographical area is no. However, this is not to say that because agents of the state should not do it, that it should not be done at all. A case for restricted immigration on the basis of private property rights is consistent with libertarian theory.

“A great irony is that U.S. government policies have caused the conditions that some of these Central American children are fleeing. The War on Drugs has created a huge black market in Latin America, causing increases in gang activity and violent crime. Some of the affected children naturally try to flee this violence. It is wrong to jeer at them, call them ‘illegals,’ and tell them to get out.”

The culpability of those who set U.S. government policy is quite clear, with the predictable repetition of the history of 1920s Chicago. But the solution is to reverse those policies, not to admit people to the United States against the wishes of private property owners therein.

“Many of these children are hoping to reach friends and relatives in the United States. A freer, simpler legal immigration process might result in a safer journey with more adult supervision along the way. In any case, Libertarians support maximizing freedom knowing that risks, including risks to children, are always involved. In some cases, children may be better off migrating, even without adult supervision, than staying trapped in dangerous environments — just ask the Jewish children who escaped from Hitler, or Tutsi children who escaped genocide in Rwanda.”

This is true.

“Libertarians do not support forcing people to pay for other children’s welfare, and there are obviously costs associated with helping children who arrive in the United States. However, there are many charitable organizations that have already mobilized to provide that help. A nation of 320 million people can provide sufficient charitable help to the number of children involved (around 50,000 over the last nine months).”

The problem is that people will be forced to pay for other children’s welfare, to the tune of $1,000 per day per child. Charitable deeds which are funded with stolen money (in the form of taxation and currency debasement) are not virtuous.

There is also the fact that compassion (which is normally a virtue) can be taken too far and turned into a tragic flaw worthy of the finest works of Euripides. To an external enemy wishing to bankrupt Americans, sending helpless children to the border to drain resources and divert the attention of border patrols is an excellent diversionary tactic for inserting terrorists. To the state (the internal enemy), allowing a large number of children to enter is beneficial because unproductive people give politicians an excuse to expand state power to give benefits to them, and there are few types of people who are less productive on average than children. The gang members who are also entering serve the interests of politicians as well, as they provide justification for expanding the police state.

“And if we’d just end the War on Drugs, the number of refugee children would be much lower.”

This is necessary, but not sufficient. Military interventionism, protectionist trade policies, economic sanctions, and foreign aid also create more refugee children in the countries targeted by them.

“Ultimately, the fact that many of these children are fleeing dangerous situations isn’t the issue. Even if they were coming to the United States for fun, we should still allow them to enter. All foreigners should be allowed entry into the United States unless the government can produce positive evidence that they pose a threat to security, health, or property.”

This statement is quite anti-libertarian, as it implies that the state should have authority over who gets to enter which geographical areas and what constitutes a threat to security, health, or property rather than private property owners. Only individuals are legitimately capable of owning land, as only individuals are capable of mixing labor with unowned natural resources, which is the correct way to create property based upon self-ownership and the resulting responsibility for one’s actions. Therefore, individuals should have the right to admit to or exclude from their private property any person for any reason.

“Our bad immigration laws affect a lot more people than just these children. Many foreigners want to come work in the United States, which benefits them as well as Americans. However, our government makes it impossible for almost all of them to work here legally.”

This is not necessarily true. It should be clear to a student of Austrian School economics that benefit is subjective. A person may value a lower population density more than the rise in real incomes that results from immigration, in which case foreign workers are not a welcome sight.

“The Libertarian Party believes that the U.S. government should not prohibit Americans from hiring foreign workers. There are about 60 million legal foreign entries into the United States each year (mostly tourists). Those foreigners should be free to work in the United States as well. There’s no question of border security — it’s just a question of the government’s unjust and foolish protectionist labor laws.

(By comparison, there are only about 500,000 “illegal” entries into the United States each year. Most of those are foreigners who want to work in the United States, and who would be denied visas because of that intention.)”

Again, the Libertarian Party cannot believe anything; only an individual person can do that. That being said, the belief is true as long as private property owners who control the area in which foreigners will be working have no problems with it. There is also the matter of child labor laws and compulsory schooling laws, which would prevent the children currently crossing the border from being free to work even if foreign worker restrictions were lifted.

“Some observers have noted that generous benefit and subsidy programs in the United States, including free education and health care, may be attracting lazy foreigners. …It’s worth pointing out that foreigners use these programs at a lower rate than natives, according to a recent report by the Cato Institute.”

This is true.

“The Libertarian Party supports the abolition of government benefits and subsidies, for both natives and foreigners.”

This is good, but the moral order in which to do this is to end the government benefits and subsidies, then open the borders because this subjects people living in America to less taxation and currency debasement.

“It’s a shame that many in the media are trying to make Americans feel fear and suspicion toward immigrants. It’s particularly disgusting that protesters would yell at children to make their political point.”

This is true.

“Immigration is good for foreigners and good for Americans, and we need to change our laws to make immigration much easier.

The Libertarian Party Platform says the following about the freedom of trade and migration:

3.4 Free Trade and Migration

We support the removal of governmental impediments to free trade. Political freedom and escape from tyranny demand that individuals not be unreasonably constrained by government in the crossing of political boundaries. Economic freedom demands the unrestricted movement of human as well as financial capital across national borders. However, we support control over the entry into our country of foreign nationals who pose a credible threat to security, health or property.”

These points have been addressed above.

To summarize, real libertarians say: immigration is a government program. The correct solution to the current border crisis is to respect private property rights, eliminate the various government programs which have made so many refugees, otherwise let people move where they wish and either associate with or dissociate from whom they wish, and do all of this without involving the state.

Book Review: Freedom!

Freedom! is a book about libertarian theory written by activist Adam Kokesh. The book discusses the philosophy of libertarianism, applies it to various socioeconomic issues, and discusses its potential.

Mr. Kokesh begins by discussing the nature of freedom from a self-ownership perspective, and shows how government is philosophically incompatible with this perspective. He then shows how the non-aggression principle and the right to claim property derives from self-ownership. The validity of the self-ownership perspective has been argued with more robustness elsewhere, but we can assume that Kokesh omits a deeper discussion of argumentation ethics for the sake of brevity. Strangely, Kokesh does not include the precise definition of government that he has used repeatedly elsewhere (a group of individuals who exercise a monopoly on the initiation of force within a geographical area). He finishes the first chapter by proposing a society in which people only engage in voluntary relationships.

The second chapter is about the history of the state and how we might evolve past it, with an emphasis on the role of technology in helping people see through the lies of government propaganda and become productive enough to oppose the state in meaningful ways. The overall tone is rather Pollyanna-ish, as governments have become far more dangerous with recent advances in technology, and technology alone is not guaranteed to lead to the end of the state. There is also an alternative interpretation of the available data which is not directly discussed; namely, that the evolution from more crude forms of government to democracy did not occur because common people wanted more influence in government, but because rulers found that human livestock are more productive when given the illusion of freedom.

The third and fourth chapters briefly discuss the nature of self-defense and justice in a free society, with much more space devoted to the ways in which governments have corrupted these concepts with their monopolies on legal systems and military defense. Such corruptions include military interventionism, foreign aid, conscription, the military-industrial complex, wars against abstract ideas and tactics rather than physical foes who may be defeated, laws that criminalize victimless behaviors, laws that restrict access to weapons, courts that give agents of the state cover to assault peaceful people, the prison-industrial complex, and a legal system of punishment rather than a justice system of restitution.

The fifth chapter discusses taxation and explains why it is immoral, in both direct forms and indirect forms such as central banking. Kokesh shows that attempting to use the state to rein in the excesses of the rich will fail because the rich control the state by funding politicians. He then demonstrates that taxes discourage production because removing incentive to work in the form of income taxation will lead to less work being done (at least officially). After explaining how fiat currencies are imposed and how they are used to make it easier to tax a population, he argues that eminent domain and property taxes violate private property rights and are yet another form of theft. Kokesh finishes the chapter with a glimmer of hope; that a generation of people will come who will disown national debts because such debts legitimately have nothing to do with them. There are two problematic arguments in this chapter. First, there is the idea that taxation can be voluntary if one believes that governments serve people, one’s tax money is used properly, and one willingly pays taxes. This is false on two counts. Truth is independent of belief and morality is objective, so taxation is immoral even if one does not believe that it is. Also, consent under duress is not valid consent. As it is impossible to distinguish consent given only because of duress from consent given despite duress, it is impossible to consent when duress is present. Second, Kokesh claims that the only options for fighting taxation are to fight tax collectors in court and to conduct economic activities out of the view of tax collectors. This is false because the use of defensive force against agents of the state is also an option, even if there are not yet enough potential practitioners to make it likely to succeed.

In the sixth chapter, Kokesh begins by explaining the ideal of trade without force, fraud, or coercion, then examines how destructive government interference in trade is to the economy. He then goes into more detail about how central banks and fiat currencies distort the economy, and suggests cryptocurrencies as a possible way to solve this problem. Next, there is the problem of corporations, which led to the formation of unions. Kokesh explains that corporations are legal fictions created by the state to protect the wealthy who bribe politicians, and that this led to strong unions as a reaction by workers to the formation of powerful corporate interests. After this, he discusses the effect of government monopolization on infrastructure and utilities, which has hampered advancement beyond current technology and raised the cost of all goods and services by eliminating the increased efficiency that results from competition among service providers. The fifth section of the chapter is devoted to the method of ostracism and boycotting to bring about change in a peaceful manner. Unfortunately, the shortfalls of ostracism are not fully explored. Kokesh ends the sixth chapter by making the case that everything should be viewed through the lens of economics.

In the seventh chapter, Kokesh demonstrates how government interference in schooling, medicine, assistance for the poor, drug use, environmental protection, and the free flow of ideas has harmed everyone. Free market solutions to these problems are discussed perhaps too briefly, but discussing them at full length would make the book several times longer, and this has been done elsewhere by other authors.

The eighth chapter discusses government involvement in personal and family relationships. Here, Kokesh makes the case against laws forbidding consensual relationships as well as the case for peaceful parenting and treating children more like people and less like property vis-à-vis their current standing in society. This perspective is then applied to the problem of bullying in government schools. The chapter ends with a discussion of racism that examines its nature, its uses from a libertarian perspective, and how it is used by power elites to divide and conquer.

The last two chapters present Kokesh’s advice for living free in an unfree world, as well as his prediction for where the human species is going. His advice includes learning to master one’s emotions, becoming knowledgeable about taking care of one’s body and using that knowledge, living as debt-free as possible, doing work that one can be proud of, and choosing to have a positive state of mind. The last chapter returns to the theme of the second chapter; namely, that of technological advancement reaching an asymptote beyond which the state cannot function. Fortunately, the Pollyanna-ish tone does not return here, as Kokesh warns about the destructive potential of states with technology at a nearly asymptotic level. The next three sections discuss the methods by which people may transition to a voluntary society, which include education, civil disobedience, conducting business out of view of the state, and abolishing states gradually from the top level down rather than all at once. The use of force to topple governments is perhaps unfairly downplayed, however. Kokesh ends the book by explaining that the transition to a free society is not a revolution in the historical sense, but an evolution to something entirely new.

Overall, the book could explain some concepts in more detail and could avoid a few specious arguments, but it is what it was meant to be: a strong but concise treatise on the philosophy and potential of libertarianism.

Rating: 4/5

How To Stop Government Bitcoin Sales

On June 27, the US Marshals Service conducted the auction of 29,656.51306529 Bitcoins. They have been in the possession of the federal government since they were stolen through civil asset forfeiture from Ross Ulbricht upon his arrest in October 2013 on charges of narcotics trafficking conspiracy, computer hacking conspiracy, and money laundering conspiracy for allegedly running the anonymous Internet marketplace Silk Road.

From a philosophical libertarian perspective, this is a travesty. Agents of the state seized Ulbricht’s Bitcoins and sold them under civil asset forfeiture laws, which allow agents of the state to take any person’s property and sell it at auction by accusing that person of a crime and confiscating the property as evidence. It matters not whether the person is later exonerated of all charges; neither the property nor its value may be recovered. If a group of private citizens were to act in the same manner, it would be possible to bring federal charges against them of robbery, receipt of stolen monies, transportation of stolen monies, and conspiracy to commit the aforementioned crimes. These crimes carry a maximum combined sentence of 52.5 years in prison and a fine of $750,000. But because the agents of the US Marshals Service are agents of the state, and the state has a monopoly on the enactment and enforcement of laws, they will face no punishment for this conduct.

Of course, the best way to combat injustice is through direct action. While it is too late to stop the theft and auction of Ulbricht’s Bitcoins, cryptocurrencies such as Bitcoin provide several mechanisms for preventing other such events from happening in the future. Let us examine some of them.

1. Use strong encryption methods when engaging in state-disapproved activities. Ulbricht failed to do this, even revealing his real name on an Internet forum using an unencrypted connection, which allowed agents of the state to link him to Silk Road and make an arrest. It is possible to encrypt a wallet so strongly that even the most powerful computers cannot crack it by the laws of thermodynamics. One can also use the Tor network and mixing pools to make it more difficult for agents of the state to spy on one’s activities.

2. Use cold storage outside of one’s computer. Ulbricht kept the Bitcoins being auctioned, as well as another 144,342 Bitcoins linked to Silk Road, on his personal computer. If he had stored them in a cloud-based wallet service, a cryptocurrency exchange, an encrypted USB drive, a silver ring, or some other medium, they would have been much more difficult to seize and auction.

3. Give access to one’s Bitcoin wallet to a confidant. This is somewhat risky, as the confidant could betray the Bitcoin user and steal the Bitcoins out of a wallet. But if Ulbricht had done this, then the operating funds of Silk Road along with Ulbricht’s personal Bitcoins could have been kept out of state hands and given to another person who could continue running the operation without losing assets.

4. Use assassination markets to discourage agents of the state. An assassination market is a prediction market in which people can anonymously place bounties on people and receive payment for correctly guessing the date of unnatural death of an individual in advance. Several of these already exist. Such a market could be used to increase the hazard level of being a politician who passes legislation against non-aggressive behavior (such as that of Ulbricht in operating Silk Road), or of being an enforcement agent for such legislation, to the point that few would want to take the risk of doing such things.

5. Implement a method of tarnishing stolen Bitcoins. Such a method is not currently part of any cryptocurrency, but a framework for such a method has been created. The idea is to add a function, either to the Bitcoin protocol or as an external supplement, that informs users that a particular amount of cryptocurrency is stolen money or otherwise ill-gotten. This would disincentivize dealing with people who steal cryptocurrencies or use them in the commission of aggressive acts, as well as dealing with people who deal with such people.

6. Convince enough Bitcoin miners to use a majority of the hash rate to stop transfer of seized Bitcoins. This method goes one step further than tarnishing Bitcoins; it effectively freezes them. The blockchain is a public ledger that is a fundamental part of Bitcoin. The process of mining includes maintaining and updating the blockchain. If miners who control a majority of the hashing rate do not wish to see a particular transaction performed, they have the power to stop it by denying it any confirmations. While this is normally a bad thing in the form of a 51% attack on the network, it could be used to prevent governments from selling seized cryptocurrency.

It is thus clear that Bitcoin users have many tools at their disposal to thwart agents of the state who would do to others what has been done to Ross Ulbricht. It is now up to each member of the Bitcoin community to use them as one sees fit.

The five Ws of fake libertarianism

So far, this year has been a time of debate and infighting amongst libertarians. Aside from the original disagreement within libertarianism, that of minarchism versus anarchism, we also now have newer divisions of thick versus thin, also known as brutalist versus postmodernist, and complete non-violence versus the limits of non-aggression. In a significant number of cases, supporters of one side or another within a division have accused each other of not truly being libertarians at all. In other words, accusations of fake libertarianism abound. In this piece, I will attempt to resolve the issue of precisely what constitutes fake libertarianism.

What is a fake libertarian?

In order to consider this question, we must first have proper definitions for “libertarian” and “fake.” Fortunately, this is not hard to do. Firstly, libertarianism is a philosophical position on what constitutes a proper use of force. It says that initiating the use of force is never justifiable and using force in a defensive manner is always justifiable, even if it is not always preferred. Secondly, we must consider what makes a fake adherent of any position a fake adherent. A fake adherent of a position is a person who claims to believe in that position while explicitly rejecting the premises of that position or their logical conclusions, or a person who adds to or subtracts from the premises of that position. Note that one may believe in additional premises beyond a certain position without being a fake adherent of that position, but to falsely represent such premises as being contained within that position does make one a fake adherent. Thus, a fake libertarian is a person who claims to be a libertarian but does one or more of the following:

  1. Supports initiating the use of force for any reason;
  2. Rejects a logical conclusion of the non-aggression principle;
  3. Claims that another principle can trump the non-aggression principle;
  4. Claims that libertarianism contains something that it does not contain, or vice versa.

When and where are there fake libertarians?

There are fake libertarians to be found in many places, within many organizations, and throughout the history of libertarian thought. But this much should be obvious, otherwise the subject would not attract the attention of my penmanship.

Who is a fake libertarian?

There are two ways of addressing this question. One approach is to call out individual people who espouse false versions of libertarianism. But the point of this piece is not to accuse (relatively) famous people of heresy and treat them to excommunication, but rather to provide rebuttal to falsehoods and inconsistencies, as these are truly the root of all evil. There is also a danger in naming a person as a fake libertarian who later becomes a true libertarian, as this would date a piece that would otherwise stand the test of time. As such, I will take the other approach of calling out certain ideologies within the libertarian “movement” and showing how they amount to fake libertarianism.

First, let us consider minarchism and anarchism. Libertarianism demands that no one initiate the use of force, regardless of who is initiating force, whom force is initiated against, why force is being initiated, or what the consequences of intiating force may be. As this is a universal principle, no exception may be made for agents of the state. This leaves the state with no means of operating, as all of its funding comes from taxation, currency debasement, and borrowing, and all of its laws are backed by the threat of force being used against those who disagree and act upon their disagreement. The collection of taxes, like all actions carried out by agents of the state, is done under the threat of kidnapping and caging for non-compliance, with the threat of murder should one resist being kidnapped and caged. This violates the non-aggression principle and is therefore forbidden under libertarianism. Currency debasement is merely taxation without legislation, a hidden tax that steals the wealth out of everyone’s money by devaluing it and giving it to government-favored bankers. Borrowing is simply taxation deferred to the unborn, who cannot possibly have a say in the matter. As invalid conclusions necessarily follow from false premises, the operation of a state is incompatible with libertarianism.

But surely not every advocate of limiting the size and scope of government is a fake libertarian. If this were true, then most people (those who were not always anarchists) would necessarily have to become fake libertarians before they could become true libertarians, an absurdity. It is for this reason that a distinction must be made between those who either have doubts about the practicality of anarchism (such as how certain services will be provided in the absence of government) or have never seriously considered anarchism and those who explicitly reject anarchism. There is nothing wrong with having curiosities about the operation of a stateless civilization, and there are many ideas for how these services may be provided which will need to be tested as and after the state is eliminated. There is, however, something wrong with letting such concerns lead one to rule out the possibility of anarchism. Ruling out the possibility of anarchism means accepting some degree of statism. As this involves rejecting a logical conclusion of the non-aggression principle, those who call themselves libertarians but explicitly reject anarchism are fake libertarians.

Second, let us consider thin libertarianism versus thick libertarianism, or as Jeffrey Tucker and an author with the pen name Bulbasaur have renamed it, libertarian brutalism versus libertarian postmodernism. Libertarian brutalism is the non-aggression principle, nothing more and nothing less. Libertarian postmodernism, on the other hand, suggests that libertarianism tells us more about what ideals we should have and how we should interact with other people beyond the restrictions of the non-aggression principle. While there are other positions on issues which logic demands that one take beyond the non-aggression principle, these are distinct and separate from libertarianism, as one can assert various individual preferences without initiatory force, and these may be incongruous from person to person. But there are those who try to blur the lines and say that libertarianism includes additional tenets and requires additional commitments on other issues, such as racism, sexism, environmentalism, wealth disparity, and so forth. These people claim that libertarianism contains something that it does not contain. As such, libertarian postmodernists are fake libertarians.

Third, let us consider pacifism versus a belief in the legitimacy of violence used in self-defense. Libertarians are free to choose not to exercise the right to use violence in self-defense. It may be a stupid thing to do, and it will likely cause them to wind up dead when matters take a turn for the worst, but one does not truly have a right if one is not free to choose not to exercise it. But a problem arises when pacifists insert total nonviolence into libertarianism as an additional tenet. These people claim that libertarianism contains something that it does not contain; namely, a prohibition on all uses of force, not just initiatory uses of force. Thus, libertarians who include pacifism inside their definitions of libertarianism are fake libertarians.

Why are there fake libertarians?

There are several motivational factors for fake libertarians. Let us examine the two most common ones.

There are some pundits who wish to espouse either conservative or progressive ideas, but find that their lack of talent prevents them from finding an audience among conservatives or progressives, as their relatively larger talent pool is already dominated by more persuasive propagandists. But in a smaller community with a relatively smaller talent pool, like the libertarian “movement,” they are capable of being the big fish in a small pond. And since we are talking about conservative and progressive pundits, twisting the truth is just part of the gig, so they find nothing wrong with taking on the libertarian mantle, adding a few buzzwords to their vocabularies, and using their talents to corrupt the message of liberty.

There is another motivation similar to the first, but it has a more nefarious purpose than dishonestly gained self-advancement. Some fake libertarians are leftist entryists who are attempting to take over and destroy libertarianism so that it can no longer pose a threat to statism in general and their political ideologies in particular. Lest this sound like a conspiracy theory, one must remember that it has happened at least twice before. “Liberal” used to mean civil liberties, limited government, private property rights, and laissez-faire, but leftists entered liberalism and changed that. “Conservative” used to mean tradition, limited government, anti-colonialism, and anti-federalism, but leftists entered conservatism and changed that. Now it is libertarianism’s turn, unless true libertarians successfully combat this effort.

In closing, there is something important to remember about why there are fake libertarians. Just as counterfeiters do not make copies of worthless banknotes and forgers do not falsify meaningless signatures, political charlatans do not pretend to hold a position if doing so has no potential benefit. Thus, true libertarians should take heart. The very fact that there are fake libertarians means that true libertarianism is worth something, and that defending it against those who would falsely assume it and attempt to destroy it is worth doing.

Free Markets Require No Regulation

This article is a rebuttal to an article titled “Free markets need more regulation than you think” by John Aziz, taking the form of a point-by-point commentary.

The article is subtitled “After all, they can’t just magically appear out of nothing.” No one is claiming that free markets magically appear or that they arise out of nothingness, so this is a straw man fallacy. Now let us delve into the article proper.

“I have always found it unfathomable that people think a “free market” means little to no regulation.”

This is an argument from personal incredulity. That one person finds an idea unfathomable has no bearing upon its truth value.

“Yet since the days of Reaganomics, an increasingly large number of economic thinkers have made exactly that case, to the extent that deregulated markets have become Republican orthodoxy. What is so mind-boggling is that the policies they champion have little to do with the intellectual heritage they invoke.”

This is a fair point. Many Republicans claim to support government deregulation of markets while in practice, they tend to merely reduce regulations rather than eliminate them. They also tend to favor regulations that help large corporations at the expense of smaller competitors, as well as protect certain industries, such as the military-industrial complex and the petroleum industry.

“Proponents of deregulated markets say their cause was born from the idea that millions of people acting freely in the marketplace make more efficient decisions consistently than any group of Wise Men appointed by government can. In this world, humans are rational actors pursuing rational ends and the competition between them is a better regulator than any government official. The market simply rejects the businesses who do not offer a good service, while rewarding those who do.”

This is not entirely correct, as we need not assume rational actors pursuing rational ends. If people are irrational actors, then the government which is composed of people will contain irrational actors, who will therefore do nothing to solve problems by imposing irrational government regulations.

“These laissez-faire attitudes are encapsulated in a quote from Reagan himself: “The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.'” The implication is clear — government regulators and bureaucrats come in, misunderstand the market, and just get in the way of entrepreneurs. At best, it is argued, this hurts efficiency. At worst, it is a road to totalitarianism, where the government completely squashes economic and political freedom.

Friedrich Hayek’s The Road to Serfdom is a book frequently cited by many who see government regulation as a slippery slope toward totalitarianism.”

All of this is true.

“Yet Hayek himself was more pragmatic about regulation than the title of his book implies, condemning a “wooden insistence” on “laissez-faire” as harmful to the cause of economic freedom.”

Pragmatism is a rejection of the very idea of having principles. It says that there is no a priori knowledge, which is a performative contradiction because the act of asserting that there is no a priori knowledge requires the use of logic, which is an example of a priori knowledge. It also says that truth is either not a property which can be attributed to a statement (deflationary), or that truth simply means “useful to believe” (pragmatic). This rejection of objective truth is another performative contradiction, as to reject objective truth is to make an objective statement, which cannot be true by the premises of the argument. That the falsehood of pragmatism is proven has helped to grow the Rothbardian school of thought to eclipse the Hayekian school. Rothbard, it should be noted, was equally (if not more) condemning of Hayek’s defenses of limited statism and deviations from laissez-faire.

“Advocates of laissez-faire and deregulation generally argue that government’s regulatory role is the prevention of violent coercion, fraud, and theft, as well as the enforcement of property rights and contracts, and little more. In other words, it should act as the night-watchman state. Some — such as the anarcho-capitalist followers of Murray Rothbard — go further and argue that it is beneficial for even these functions to be taken over by the market.”

The reason that anarcho-capitalists advocate for the market to take over night-watchman state functions is that it is contradictory for governments to perform them. Governments cannot prevent violent coercion because they are institutions of violent coercion. Governments cannot prevent fraud because their supposed legitimacy comes from contracts that no one living has ever signed or been given an option not to sign, which is a fraudulent basis for legitimacy. Governments cannot prevent theft because they are funded by taxation, which is theft. Governments cannot protect property rights because their powers of taxation and eminent domain are violations of property rights. While governments can enforce contracts, they use violence to monopolize this service within their geographical areas, meaning that they can charge almost any price and provide as poor a quality of service as they wish.

“Yet Hayek pointed to a number of areas where he considered regulation beneficial — and the list may shock advocates of laissez-faire economics. Hayek cited the restriction of excessive working hours, the maintenance of sanitary conditions, and the control of poisonous substances.”

These are all necessary protections, but the idea that government regulation is the only way to create such protections is a positive claim which carries a burden of proof. As that burden has not been fulfilled, there is no obligation to accept the claim. There is also an appeal to authority here; just because Hayek considered regulation to be beneficial does not mean that it is.

“He argued that regulation by the market became ineffective when property owners weren’t charged for the damages they caused, and thus saw a need to regulate deforestation, farming, and the smoke and noise produced by factories.”

Such results were caused by government intervention. Through the legal fiction known as a corporation and the government monopoly on the enforcement of law, business owners and investors have been shielded from civil and criminal liability for their acts of property damage. A better alternative to the statist system for dealing with pollution has been laid out by Stefan Molyneux here.

“So what “road to serfdom” was Hayek talking about if he favored government regulation in many areas? He was actually describing central economic planning, where the government takes over the process of allocating resources, setting prices, and directing economic activity entirely. In other words, Hayek warned of states like Soviet Russia, Cuba, and North Korea. And if we look at the lack of political and economic freedoms in a country like North Korea, it is clear that Hayek was at least partially right.

But the key thing that Hayek grasped that many modern advocates of laissez faire don’t is that government regulation of markets is not the same thing and not even close to being the same thing as full-on central economic planning.”

Regulation and central planning differ only in degree, not in kind. Both are coercive interventions by the state into the economy. Government regulation always has some economic impact, and will in some way alter the process of allocating resources and setting prices through the effects of compliance costs. There is also the overwhelming tendency for state power to expand, meaning that today’s regulation can easily turn into tomorrow’s full-on central economic planning.

“In fact, I’d go even further and argue that the existence of a free market where individuals can freely pursue their economic desires and enjoy the fruits of their labor is a product of freedoms secured through government regulation.”

This is an ipse dixit fallacy, as to argue a point, one must actually provide logical deduction and/or empirical evidence to support the point. The author does not do this.

“A free market isn’t something that just magically appears out of nothing.”

This straw man fallacy has already been dealt with above.

“It is a complex system born out of the context of a whole framework of legal, social, and political conventions that allow for the development of individuals who are capable of making the discerning economic and social decisions required for the functioning of a free market.”

This is true, but the claim that a government is required for this is a positive claim with an unfulfilled burden of proof. The claim should therefore not be accepted.

“Beyond the basic freedoms of the night-watchman state — secure property rights, freedom from coercive violence, freedom of movement, freedom of association — a genuinely free market requires regulation to secure other freedoms as well, like the freedom from being tricked by misleading advertising or from being poisoned by dangerous chemicals. I would also suggest that the following are equally important to the creation of a free and healthy marketplace: freedom from starvation; freedom from dying from easily curable diseases; freedom from environmental degradation caused by pollution; and the freedom to develop yourself as a person through education.”

We have dealt with the security of property rights and freedom from coercive violence above. From there, the contradictions of government continue. Governments have not defended freedom of movement; in fact, they have done the opposite through immigration laws, passports, vehicle operation licenses, and economic and travel sanctions. Governments cannot protect freedom of association because they violate freedom of association by forcing people to associate with them. Governments cannot protect people from misleading advertising because they engage in misleading advertising in the form of propaganda. Governments have infringed upon the freedom to develop oneself through education by forcibly indoctrinating children in public schools and by denying children the ability to learn a trade through child labor laws.

Mr. Aziz advocates for some positive liberties, which are invalid because their provision violates negative liberties. Freedom from starvation implies that a farmer or hunter/gatherer should be forced to provide food to someone, a violation of the freedom of association of the food provider. Freedom from dying of easily curable diseases implies that a doctor should be forced to treat a person, and/or that a personal trainer should be forced to help a person stay physically fit enough to repel disease. These are violations of the freedom of association of the doctor and/or personal trainer.

Pollution, as explained above, is a problem that free markets can solve, but governments have used their violence to prevent such solutions.

“After all, it is no coincidence that the market economy only really began to develop when the modern democratic state did too.”

We end with both an ipse dixit fallacy and a cum hoc ergo propter hoc fallacy. No rational or empirical evidence is given to support the idea that the market economy developed because of the modern democratic state. Numerous economists and historians have argued that this has occurred in the opposite order. There is also the possibility that it is just a coincidence, as well as the possibility that some other factor is responsible for the development of both.

To conclude, a free market is an economic system in which no fraud, coercion, or initiatory force is present. Government is an organization that initiates force. Therefore, free markets do not need more regulation than one might think. They require, by definition, no regulation at all.

Six observations on the secession of Crimea

On March 16, Crimeans voted overwhelmingly to secede from Ukraine and rejoin Russia. Crimea had been part of Russia until it was given to Ukraine in 1954, and has been an autonomous republic since. Recently, Russian soldiers occupied Crimea and surrounded Ukrainian military bases in the region.

As with most events in world history, this is a teachable moment with several important observations to make and lessons to learn. Here follow six such observations and lessons:

1. There is no comparable event involving United States history.

Some writers insist upon trying to understand the events in Crimea by comparing them to United States history involving Texas. This is not a valid comparison for several reasons. First, there is no group in Texas that is comparable to the Crimean Tatars, an ethnic group that used to have a khanate in the region and is descended from the Mongols. Second, there is no pipeline running through Texas that is comparable to the Druzhba pipeline system that runs through Ukraine. Third, Texas was once an independent country which became part of the United States, seceded as part of the Confederacy, and was reconquered by the United States. Fourth, never was part of another state given to Texas and then taken away again. Thus, any comparison must involve hypotheticals which simply cannot comport with historical facts.

2. If voting changed anything, it would be illegal.

It is clear that the vote in Crimea was carried out under duress, and the vote result is suggestive of the votes carried out in authoritarian regimes like North Korea or those of the Arab world, where voting against what is desired by the ruling class is extremely hazardous to one’s well-being. If, however, the vote had gone in the opposite direction, it is unlikely that it would have made any difference. After all, ballots perform rather poorly at stopping bullets, and Putin is the sort of leader who has no reservations about using force to achieve his goals, as evidenced by the Russian occupation of Crimea.

3. A condition of anarchy exists between states.

The word anarchy comes from Greek αναρχος (anarkhos), meaning “without rulers.” The world system has no overruling authority, unlike the system inside a single state. There is no hierarchically superior power that can resolve disputes between nations. The United Nations is a weak attempt to do such a thing, but this instance shows its ineptness: Russia has veto power over UN Security Council Resolutions, and will simply veto any resolution condemning its activities in Crimea and/or prescribing punishments for such activities.

While this sort of anarchy is not the sort that anti-statists wish to create, it does demonstrate that a situation without rulers need not degenerate into a Hobbesian war of all against all. However, a stateless society would need to have better dispute resolution options than those which are available to states today, such as contract/reputation ratings and insurance policies against aggressive acts.

4. Putting trust in an agreement for which there is no viable recourse when the agreement is breached is unwise.

This should go without saying, but this error appears to be a systematic error at all levels of human interaction, from voters trusting the promises of politicians to negotiators of agreements between governments trusting the word of negotiators who represent far more powerful governments.

When the Soviet Union collapsed in December 1991, Ukraine had in its territory the world’s third largest strategic nuclear weapons arsenal. In 1994, Ukraine, Russia, the United States, and the United Kingdom signed the Budapest Memorandum on Security Assurances, in which Ukraine gave up its nuclear weapons in exchange for pledges to respect the territorial integrity of Ukraine. The problem with the agreement is that Ukraine was left with no recourse if the agreement were breached, as it has been by Russia’s invasion of Crimea, its own military could not repel the threat, as Ukraine’s current forces cannot, and no other signatory provided military aid, as none have.

5. The supposed legitimacy of the actions of states is based solely upon the ability and willingness to use violence.

To quote Mao Zedong, political power grows out of the barrel of a gun. Other standards of the establishment of state legitimacy do not work; going by length of time a government has operated, the presence of a military, legal opinions written by lawyers, or an edict by a body with authority over states does not allow a state to get established in the first place, while going by a constitution or a vote would prevent the continuing operation of states by allowing for individual secession. And if the vote for Crimean secession is illegitimate because it has been carried out under occupation by a foreign military, then the governments of Iraq, Afghanistan, Japan, Germany, and even the United States within the states which were part of the Confederacy are likewise rooted in illegitimacy.

6. If one has nuclear weapons, giving them up is unwise. If one does not have nuclear weapons, seeking them is wise.

Since the Cold War paradigm was established in 1949, no nation that has had a nuclear deterrent has been invaded. There has been no more effective deterrent against threats to a nation’s sovereignty and territory in human history than having a strategic nuclear weapons stockpile. Ukraine surrendered its nuclear weapons after the 1994 memorandum, and has now been invaded. Muammar Gaddafi and Saddam Hussein abandoned their quests for nuclear weapons, and now they are dead. This sends a strong message to those who are worried about their security and the potential for foreign invasion, and makes the likelihood of a nuclear exchange occurring somewhere in the world much higher.

Book Review: Selected Salvos from the Loose Cannon Libertarian

Selected Salvos from the Loose Cannon Libertarian is a collection of political, social and cultural articles written by fellow Libertarian Examiner Garry Reed.

Mr. Reed begins with an article about a lesson taught by a comic strip about Scrooge McDuck which shows how free markets reward productivity and punish corruption, as well as offers an explanation for why currency debasement is not helping to fix the economy. In the next article, Reed presents a solid case for how government is the cause of most of the chaos present in daily life, rather than the barrier keeping disorder at bay, as is the common delusion.

Next, Mr. Reed explores some hypothetical future news stories which have yet to happen. While the stories are plausible, they lower the credibility level of the book and feel out of place.

The following article considers the faith-based initiative during the Bush administration and the media’s reaction to it. Predictably, they focused on the matter of separation of church and state but ignored the replacement of charity with the distribution of stolen goods through government welfare programs, an injustice perpetrated by Democrats and Republicans alike.

Next, there is a foray into the subject of jury nullification. While a good article, it is somewhat incomplete from a historical perspective, failing to mention the Supreme Court decision Sparf v. U.S. (1895), which led to the current lack of information given to juries about the option, as well as Bushell’s Case (1670), in which the practice of jury nullification was firmly established in English (and hence American) law.

Another article concerns the failure of government-run public transportation, as well as how a free market in such services is more efficient, but it reads more like a petition than a logical case against government services.

The next article purports to explain libertarianism to the uninitiated, but really only succeeds at explaining what libertarianism is not. A philosophical approach to libertarianism must be found elsewhere, and Mr. Reed even admits as much, begging the question of why it is included in the book.

Several articles following concern a libertarian, non-interventionist (but not isolationist) approach to foreign policy, and how failing to follow such policies has incited hatred and violence against Americans. Mr. Reed recommends a few measures that are not purely libertarian, such as maintaining a state-run military and offering rewards (presumably tax-funded) to intelligence-bearing defectors from other nations, he does deliver a mostly sound criticism of current foreign policy, and even manages to sound a bit like Harry Browne at times. He also explores the civil liberties issues of the PATRIOT Act in standard libertarian form.

Mr. Reed then turns his attention to the judicial branch, and some of the reasons why it has failed to protect Americans from the overreaches of the legislative and executive branches. Toward the end of this section, he recommends the correct solution: make the state irrelevant by disobeying and nullifying its laws.

Next up is a humorous piece with a multitude of pork references concerning multiple manners of government interference in the affairs of peaceful people. While a good read, it feels out of step with much of the rest of the book.

Mr. Reed finishes with criticisms of the War on Drugs, adeptly pointing out the logical fallacies of government anti-drug ads, as well as the truth about where drug cartels and terrorists get much of the money they need to cause havoc (spoiler alert: it is stolen from American taxpayers and handed over by the US government).

Overall, the book has high points but is lacking in details and depth, and Mr. Reed’s self-deprecating sense of humor in some places can become tiresome. This could be a possible starting point for those interested in libertarianism, but better introductions can be found elsewhere.

Rating: 3/5

Arguments for stimulus and how to counter them

It has now been five years since the passage of the American Recovery and Reinvestment Act of 2009. Several commentators are claiming that the stimulus has been successful, despite its unpopularity, or that it was at least an improvement over a laissez-faire approach. Let us examine these claims.

The Federal Reserve, the TARP program, and the auto industry bailout prevented an economic collapse. The stimulus saved or created 6 million jobs.

Such claims are an example of the broken window fallacy. While they point out the jobs that were created by the stimulus, they ignore the jobs that could have been created if the money had been left in private hands. Many supporters of Keynesian stimulus have anticipated this argument and have offered rebuttals. Let us examine some of these.

The broken window fallacy does not apply because desired savings are not automatically converted into investment spending, so that government borrowing need not come at the expense of private investment.

To some extent, this is a fair point. The broken window fallacy is necessary but not sufficient to explain why stimulus is not effective. Due to the nature of debasement and borrowing, another argument is needed to explain why exploiting the velocity of money and stealing from the future to feed the present will not be effective.

Many proponents of austerity will say that the stimulus money must come from somewhere, but this is not true. Its fiat nature in modern economies allows it to be created out of thin air. But its value must come from somewhere. In the case of currency debasement (also known as quantitative easing), the value is extracted from all existing money in the economy. But as this extraction of value takes time to occur, the original spenders get to spend the money at its current value, while those farther down the line get to spend the money at its debased value. This effect helps to make the rich richer and the poor poorer, and is thus a form of income inequality caused by governments.

In the case of government borrowing and deficit spending, the value is extracted from the future productivity of the tax base, thereby selling the unborn into debt slavery. Thus, while stimulus does increase the resources used at present, this comes at the expense of having less resources to use in the future. The effect on the economy is much like the effect on a farmer who runs out of food in the winter and decides to eat his seed crop. He will be better off for a time while his resources last, but he is consuming the resources in the present that he needs to use next spring to provide for himself in the future. (This metaphor may fly over the heads of some younger farmers, but those who were farming before seed companies were able to use the legal fiction of intellectual property to force farmers to purchase seeds from them each year will understand.)

Governments had to spend because the private sector would not.

Spending occurs in the private sector when people have money to spend and believe that they will receive a reasonable return on investment. The problem is that a large amount of private capital was lost in the housing bubble. This bubble was caused by Federal Reserve policies from 2000 to 2004, which true to Austrian business cycle theory, set off a wave of malinvestments in housing that collapsed in 2008, following a tightening of monetary policy in 2006. As the Federal Reserve is authorized by Congress to perform its manipulations of the economy, we are left with the idea that government intervention is the solution to a problem created by government intervention, which is a contradiction.

Now let us consider what happens when governments spend money because the private sector will not. First and foremost, there is cronyism. The politically connected members of the 1 percent are most likely to receive stimulus funds. There is also a lack of profit motive. Governments do not have to earn a reasonable return on investment because they obtain their funds at gunpoint rather than by voluntary means, and they have excluded all competitors from their geographical areas. Thus, they have no incentive to invest wisely with stimulus funds, and they frequently do not. These malinvestments, in the worst cases, can help to fuel the next business cycle.

Spending cuts since 2011 have destroyed jobs. A sort of reverse broken window fallacy is at work here, as one cannot see the jobs that would have been saved if higher levels of spending had continued.

There is something to this argument, even though there is no way to be sure that spending cuts destroyed jobs because we have no control group to observe. But it must be remembered that jobs which are sustained by elevated government spending are temporary jobs which will end whenever elevated government spending ends. Eventually, such spending must end in one way or another, so these jobs were destined to be lost at some point. But again, we have the broken window fallacy of ignoring what the private sector can do if money is not taken out of it to fund stimulus, as well as the seed crop consumption problem if stimulus is funded by debasement or borrowing.

Now let us consider two more arguments:

Europe tried an austerity approach that failed, and this provides a control group which shows what happens without stimulus.

Quite simply, Europe did not engage in austerity. There have been riots in protest of proposed austerity measures, as well as theft from the bank accounts of private citizens to help keep government spending going, but very little in the way of actual spending cuts. According to Eurostat, only eight countries in Europe (out of 30) cut government spending between 2008 and 2012. But even if there had been austerity and accompanying economic hardships, short term losses are to be expected as the economy adjusts to a lack of stimulus, but this will result in long term gains.

Also note that unlike the US, individual European countries cannot use central bank manipulations to attempt to solve their problems. But this is probably a good thing, as will be shown below.

The stimulus should have been larger, but doing something was better than laissez-faire.

The historical evidence does not support this assertion. By comparing the laissez-faire approach used from 1887 to 1913 with the Keynesian approach used from 1933 to present, we find that while stimulus by governments and central banks spaces out recessions to an average of every 5.7 years from every 3.9 years, the recessions which do occur are much deeper, doing 46.11 percentage-point months of industrial production lost until previous peak is regained (PPM) of damage to the economy per year versus 40.98 PPM of damage per year with an Austrian approach. Factoring the time difference and damage difference together, this means that a Keynesian-managed recession is 64 percent worse on average than an Austrian-managed recession.

By using the same methods used by Adorney, we find that the period of monetary stimulus only from 1914 to 1932 resulted in a recession every 3.2 years on average, doing 137.3 PPM of damage per year. This makes an average recession managed solely by a central bank 67 percent worse than an average Keynesian-managed recession and 175 percent worse than an average Austrian-managed recession. Clearly, central banking alone produces by far the worst results. While a period of government stimulus without monetary stimulus would be interesting to examine, no data for such a period exists.

Like the seed crop consumption analogy discussed earlier, we see a short term gain followed by a long term loss. Increasing the amount of stimulus to get over one recession will set the stage for a much worse long-term recession, one which may not be responsive to stimulus.