Jesus Huerta de Soto said in his essay ‘Classical Liberalism versus Anarchocapitalism’
http://mises.org/story/3791

. . . once we accept the existence of the state, it is impossible to limit the expansion of its power . . . the "law-based state" is an unattainable ideal and a contradiction in terms as flagrant as that of "hot snow, wanton virgin, fat skeleton, round square," . . .

I think he’s correct, but we still need everyone to follow the Maybury precepts. My hope for that happy situation even in the distant future is rather dim.

Originally posted by Augustine2004

Jesus Huerta de Soto said in his essay ‘Classical Liberalism versus Anarchocapitalism’
http://mises.org/story/3791

. . . once we accept the existence of the state, it is impossible to limit the expansion of its power . . . the "law-based state" is an unattainable ideal and a contradiction in terms as flagrant as that of "hot snow, wanton virgin, fat skeleton, round square," . . .

I think he’s correct, but we still need everyone to follow the Maybury precepts. My hope for that happy situation even in the distant future is rather dim.

No, that's about when I stopped reading his article. There is no a contradiction in terms. He thinks its a contradiction because it, by definition, wields force (coercion). But the minarchist state would wield force (only) against the infringement of rights. Presumably private protectors of rights would do the same and thus equally be a "contradiction." Or else he is assuming that there would be no defensive or retributive force at all, and thus no protection of rights?

Originally posted by joel

No, that's about when I stopped reading his article. There is no a contradiction in terms. He thinks its a contradiction because it, by definition, wields force (coercion). But the minarchist state would wield force (only) against the infringement of rights. Presumably private protectors of rights would do the same and thus equally be a "contradiction." Or else he is assuming that there would be no defensive or retributive force at all, and thus no protection of rights?

I don't think that is what de Soto had in mind. He probably is thinking that any institution given a monopoly of 'legitimate' force will seek to increase its power and scope of powers. What would initially be reagarded as immoral eventually becomes seen as moral and right. The state has demonstrated it can twist people's thinking a great many times. Actually, Jonestown is hardly an aberration. Stuff like it has been happening for centuries and doubtless will happen again.

Joel, I didn’t see your ‘deflationary spiral’ thread http://www.theologyweb.com/campus/sh...tionary+spiral

Hulsmann used the same term as follows in his essay ‘Deflation: The Biggest Myths’
http://mises.org/story/1254 (Joel already gave a link)

When people no longer wish to own a paper money and start selling it at any price, the result will be an ever declining purchasing power of this money, which in turn might convince even those who had bought that they better get rid of it, and the sooner the better. The result is a deflationary spiral: less willing owners – less purchasing power – less willing owners – less purchasing power and so on, until the paper money has completely vanished from circulation.

I think Joel and I have already discussed that passage. I think this is better described as a crackup boom. People would call it hyperinflation instead of Hulsman’s ‘deflationary spiral,’ because as each dollar loses purchasing power, more dollars are needed to purchase any given good or service, in the main. In other words, extreme price inflation.

Now that any possible confusion is, I hope, cleared up, let’s look at what Hulsmann had next to say:

Notice that this does not mean that the economy will necessarily be thrown back into a state of barter. What usually happens in such cases is that people start using other monies such as gold and silver coins, or foreign paper monies. The deflationary spiral therefore has the healthy effect of replacing an inferior sort of money – inferior from the point of view of the money users – with superior money. Again, there is no reason why this process should not be completed in a few days. And there is therefore no reason to expect that production will not resume very quickly under new ownership.

I tried to figure out what the government would do–how would the Parasite Class react to the crackup boom? Naturally it will seek ways to retain its power and privilege in the face of the boom. If the Class allows the boom to take its natural course–people will switch to ‘good’ monies–then the Class will lose a great deal of power and privilege. That’s so because the Fed and its money are the most potent sources of power and privilege. It seems to me that the Class has no ‘good’ alternative. Any attempt to retain power and privilege based on maintaining a fiat money system probably would be political suicide. How can the government have any credibility left after its money blows up so spectacularly? Also, if the people have lost confidence in the money, why should we expect the people to have any confidence left in the government itself?

So, I’m tentatively changing my view to one of watchful and wary optimism: provided I see clearly what is going on, hyperinflation is nothing to fear–indeed it’s something to rejoice at.

(I have only begun to study Joel’s deflationary spiral thread.)

Originally posted by Augustine2004

How can the government have any credibility left after its money blows up so spectacularly?

By misdirection. The government will do what it has always done: blame the market. During the greenback inflation of the Civil War when the value of the greenback was falling drastically (against gold), the government blamed it on anonymous "gold speculators". That is, they claimed that the price inflation was due to speculators bidding up prices, thus misdirecting attention away from the government's printing presses.

Later when Nixon faced large inflation he did the same thing, blamed the inflation on gold speculators.

I predict that the government (and its apologists) will try to blame "speculators." (or even more generically, "greed")

In my prior post what I should have said instead of , ‘. . . provided I see clearly what is going on,’ is this: ‘. . . provided that I plan well for whatever happens, . . .’

Originally posted by joel

By misdirection. The government will do what it has always done: blame the market. During the greenback inflation of the Civil War when the value of the greenback was falling drastically (against gold), the government blamed it on anonymous "gold speculators". That is, they claimed that the price inflation was due to speculators bidding up prices, thus misdirecting attention away from the government's printing presses.

Later when Nixon faced large inflation he did the same thing, blamed the inflation on gold speculators.

I predict that the government (and its apologists) will try to blame "speculators." (or even more generically, "greed")

Yes, but the greenbacks went out of existence. Surely you are not thinking that the dollar will NOT go out of existence sometime in the next few years? The Confederate money never was popular, if I recall correctly. The Continental wasn’t, either; recall the saying, ‘not worth a Continental.’

If the people abandon the dollar for other monies in sufficiently large masses, and they will out of desperation, what can the government do? It can’t put a gun to each of our heads, and we still have large numbers of guns ourselves. Besides what would the Parasite Class have to lord over if they kill us all? Let the government blame everyone but itself all it wants.

The question still is, what will the people do?

Quote from this blog:

It’s a problem that inheres in creating a constitution and then giving to the government the power to interpret its meaning!

That’s a problem with Joel’s preference for small states (like city-states). Handing power to an institution is dangerous, because in part the institution may interpret its mandate (list of responsibilities) in its own way that is inimical to the interest of the people. To be sure, the smaller the state, the easier it is to either do away with it (why not?) or make it less powerful. It’s still a problem, though.

Originally posted by Augustine2004

If the people abandon the dollar for other monies in sufficiently large masses, and they will out of desperation, what can the government do? It can’t put a gun to each of our heads, and we still have large numbers of guns ourselves. Besides what would the Parasite Class have to lord over if they kill us all? Let the government blame everyone but itself all it wants.

The question still is, what will the people do?

The problem can be seen from the reaction to recent events. The government used misdirection, blaming "greed" and "deregulation" for the housing and financial collapse. Thus the people accepted more of what caused the problem.

If people accept the claim that the inflation is due to "greed", then the government can get the people to accept a replacement fiat currency (like "nuevo pesos", maybe they'll just call them "new dollars") and probably more "regulation" instead of rejecting fiat money as the root cause of the problem.

Perhaps the only thing that can change things is for a major political party (Republicans or a replacement?) to loudly and consistantly point to the root problem. That would create debate and get people interested in learning more about the issue.

Originally posted by joel

The problem can be seen from the reaction to recent events. The government used misdirection, blaming "greed" and "deregulation" for the housing and financial collapse. Thus the people accepted more of what caused the problem.

If people accept the claim that the inflation is due to "greed", then the government can get the people to accept a replacement fiat currency (like "nuevo pesos", maybe they'll just call them "new dollars") and probably more "regulation" instead of rejecting fiat money as the root cause of the problem.

The USA people number just 4.53% of the world population http://en.wikipedia.org/wiki/List_of..._by_population
Our dollars are used world-wide, though. Oil is usually traded with dollars, for example. I’m sure you don’t need reminding that foreign banks use dollars as bank reserves.

By now I’ve seen several reports that China is shifting from dollars to gold and other things. Charles Goyette says that he discusses in his new book, ‘What Persian Gulf oil producers and other countries are doing to prepare for the dollar meltdown’ http://www.lewrockwell.com/orig5/goyette6.1.1.html Tom Woods’ book Meltdown was a bestseller. Ron Paul’s End The Fed is still selling well.

Despite rhetoric pumped out by Washington, about 3 of 4 Americans want the MidEast war to end. Pols are having to struggle mightily to pass health care and gun control laws that are more than limp noodles.

All in all, you’re right up to some point, though. The question is, where is it?

I’ve struggled to get a clear understanding of the economic effects of the Cash for Clunkers program. I started with postulating a program for a specific industry intended to shift its sales from the future to the present. First, assume that sales should have declined in the present rather than artificially pumped up like that. Perhaps consumers have wants or needs for products, services, and jobs offered by the rest of the economy that would be less satisfied or less available both in the present and the future. Second, assume instead that sales should have remained constant. What was said also goes here. Finally, what if sales would have gone up much anyway? Again, the same thing to say here.

I cannot see whether there’s a net economic benefit in the long run. Probably a drawback, because the timings of consumer purchases and of supplies (manufacturing, for example) are disrupted. Developing a iron mine can take years and is highly dependent on anticipating future demand with a high degree of accuracy. How would developers feel when suddenly the government springs a future-to-present shifting program on them for an economic sector that demands much iron? Plans would have to be redone and forecasting would be more problematic.

As for the suggestion that shifting sales from the future to the present would help ease or end a recession, bosh. We need the recession to clear out the malinvestments that the previous boom had accumulated. Shifting sales will not eliminate them and may in fact create yet more. Perhaps the government printed a wazillion of dollars to fund the shift program, creating yet another bubble.

Originally posted by Augustine2004

The USA people number just 4.53% of the world population http://en.wikipedia.org/wiki/List_of..._by_population
Our dollars are used world-wide, though. Oil is usually traded with dollars, for example. I’m sure you don’t need reminding that foreign banks use dollars as bank reserves.

Perhaps then the proposed replacement fiat currency will be "international". A world central bank (via the IMF or something). This thread ( http://www.theologyweb.com/campus/sh...d.php?t=130839 ) suggests there are already talks of that or going back to a Bretton-Woods style system.

They put the blame on "greed" or some such and insist (along with the global community) that we need a global central bank to "regulate" and "stabilize" things and to "prevent such a financial collapse from occurring again."

What the heck is a pandemic? If you ask WHO, you might wind up asking WHAT!? http://www.theglobeandmail.com/life/...rticle1348100/


I think my post on the future-to-present sales-shifting programs need correction, but my thinking is still chaotic. Anyway, I'm a bit surprised nobody has tried to refute the post yet.

Originally posted by joel

Perhaps then the proposed replacement fiat currency will be "international". A world central bank (via the IMF or something). This thread ( http://www.theologyweb.com/campus/sh...d.php?t=130839 ) suggests there are already talks of that or going back to a Bretton-Woods style system.

They put the blame on "greed" or some such and insist (along with the global community) that we need a global central bank to "regulate" and "stabilize" things and to "prevent such a financial collapse from occurring again."

You keep focusing on what the governments will do. I'm more interested in whether we are idiotic and amnesiac so that we continue to fall for all those excuses. I provided evidence that seems to suggest we are not quite so. I'll keep an eye out for more.

Originally posted by Augustine2004

You keep focusing on what the governments will do. I'm more interested in whether we are idiotic and amnesiac so that we continue to fall for all those excuses. I provided evidence that seems to suggest we are not quite so. I'll keep an eye out for more.

I do hope you are right that the American people are wising up.

Originally posted by Augustine2004

Quote from this blog:

It’s a problem that inheres in creating a constitution and then giving to the government the power to interpret its meaning!

That’s a problem with Joel’s preference for small states (like city-states).

Yes, that would be a problem, but not a necessary or inherent one. It is not one that was inherent in the U.S. government. A recent article quotes Thomas Jefferson in the Kentucky Resolutions,

"Resolved, That the several states composing the United States of America are not united on the principle of unlimited submission to their general government. . .

"[W]hensoever the general government assumes undelegated powers, its acts are unauthoritative, void, and of no force. . .

"[T]his government, created by this compact, was not made the exclusive or final judge of the extent of the powers delegated to itself, since that would have made its discretion, and not the Constitution, the measure of its powers; but each party has an equal right to judge for itself, as well of infractions as of the mode and measure of redress."

(my emphasis) http://www.campaignforliberty.com/article.php?view=324
The Supreme Court is not the final arbiter. The context of Jefferson's writing was that the States could ignore the Alien and Sedition Acts as having "no force or effect" in their state because that power was not delegated, regardless of the federal government's or the Supreme Court's interpretation.

Originally posted by joel

Yes, that would be a problem, but not a necessary or inherent one. It is not one that was inherent in the U.S. government. A recent article quotes Thomas Jefferson in the Kentucky Resolutions,

"Resolved, That the several states composing the United States of America are not united on the principle of unlimited submission to their general government. . .

"[W]hensoever the general government assumes undelegated powers, its acts are unauthoritative, void, and of no force. . .

"[T]his government, created by this compact, was not made the exclusive or final judge of the extent of the powers delegated to itself, since that would have made its discretion, and not the Constitution, the measure of its powers; but each party has an equal right to judge for itself, as well of infractions as of the mode and measure of redress."

(my emphasis) http://www.campaignforliberty.com/article.php?view=324
The Supreme Court is not the final arbiter. The context of Jefferson's writing was that the States could ignore the Alien and Sedition Acts as having "no force or effect" in their state because that power was not delegated, regardless of the federal government's or the Supreme Court's interpretation.

There is a guy running for governor in Georgia on exactly this premise.

http://georgiafirst.org/governor/enter.shtml