The Libertarian Standard » Anti-Statism http://libertarianstandard.com Property - Prosperity - Peace Tue, 09 Sep 2014 12:55:58 +0000 en-US hourly 1 http://wordpress.org/?v=4.0 A new website and group blog of radical Austro-libertarians, shining the light of reason on truth and justice. The Libertarian Standard clean The Libertarian Standard thelibertarianstandard@gmail.com thelibertarianstandard@gmail.com (The Libertarian Standard) CC-BY Property - Prosperity - Peace libertarianism, anarchism, capitalism, free markets, liberty, private property, rights, Mises, Rothbard, Rand, antiwar, freedom The Libertarian Standard » Anti-Statism http://libertarianstandard.com/wp-content/plugins/powerpress/rss_default.jpg http://libertarianstandard.com/category/antistatism/ TV-G Of Morality and Failed Business Strategies… http://libertarianstandard.com/2014/08/15/of-morality-and-failed-business-strategies/ http://libertarianstandard.com/2014/08/15/of-morality-and-failed-business-strategies/#comments Fri, 15 Aug 2014 21:13:35 +0000 http://libertarianstandard.com/?p=13528 Some time ago, back in 2013 in fact, Richard Branson published a piece on LinkedIn, under the heading of “Big Idea 2013: This Year the Drug War Ends” wherein he positied, among other things, that if the War on (Some) Drugs was a business strategy, it would long ago have been scrapped.  He’s absolutely correct. And he’s also absolutely incorrect.

The War on (Some) Drugs is not a failed business strategy, and it is dangerous to even suggest that it is. Instead, it is a failed moral strategy. If it seems counter-intuitive to you that the government should be in the business of applying moral strategies, you win a prize. The control of what enters one’s body is, at root, the very basis of self-ownership. (Admittedly, the phrase “self-ownership” is not quite the correct nuance. I don’t “own” me, I “am” me, but anyway…)

The apparent failure of the War on (Some) Drugs speaks just as much to its actual goals as to its legitimate chances for success. In other words, if the goal was to criminalize large portions of an entire generation, then it has been a raging success. However, if the goal was to prevent people from freely consuming that which they know is their right anyway, it had no hope of success in the first place, and that lesson was obvious from alcohol prohibition.

On the more general issue of business strategies, why is it is dangerous to draw such a parallel to the War on (Some) Drugs? Such a suggestion–that just because the War on (Some) Drugs is failing that we should stop it–is a trap. It is a great example of the argument from effect, a veritable fat, shiny, Red Herring waiting for the obvious, “well, people still murder each other…” retort. Let us be clear, murdering someone is an attack on them, which is morally prohibited, dare I say malum in se anyway. Me putting a substance that you don’t like into my body has nothing to do with you.

Drug prohibition is unarguably malum prohibitum and therefore simply the attempt–misguided and puritanical–to impose the choices of some on the behavior of all. Ergo, it was destined for failure. By the way, this in no way suggests that drugs are good, but then again, neither are Twinkies. Now, if one wants to argue about the possible negative results of drug usage–crime, sickness, whatever–those ostensibly resultant actions, at least those that actually infringe on others, are ALREADY against the law. They are, in fact, malum in se regardless.

If you’re in your own home getting baked or shooting up, and don’t bother anyone else, it should be no one else’s business. I might also argue that most, if not all, of the crime supposedly endemic to illegal drugs occurs commensurate with the distribution of said substances despite their illegality. Make it legal on one day and that crime stops the next day. And, if the lessons of places like Portugal are any indication, with very little, if any, increase in widespread drug usage.
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Against the Libertarian Cold War http://libertarianstandard.com/2014/03/26/against-the-libertarian-cold-war/ http://libertarianstandard.com/2014/03/26/against-the-libertarian-cold-war/#comments Wed, 26 Mar 2014 16:54:17 +0000 http://libertarianstandard.com/?p=13428 A controversy has arisen in the libertarian movement over the proper approach to the events concerning Russia, Ukraine, and Crimea. Like many such controversies, it has quickly polarized almost everyone, and has served as a proxy for long-standing factionalism within the movement. People quickly accuse each other of supporting Putin’s aggression or backing violent U.S. intervention. I myself have been accused of both kissing up to the Russian regime and dishing out State Department propaganda. This doesn’t itself show I have the right balance in my position, only that this feud has galvanized libertarians and hardened their rhetorical loyalties.

We might learn something from looking back at the 20th century. During the Cold War, most western critics of state power erred too far in one direction or the other. There were some whose opposition to U.S. wars led them to soften their assessment of communist aggression. Free-market and leftist lovers of peace both made this mistake. At the same time, many who favored economic and political liberty often let their anti-communism translate into support for American militarism and the security state. This confusion pervaded Americans across the spectrum.

We can all see this now: Yes, some antiwar Americans were obscenely soft on the communists. Well-meaning but foolish westerners said nice things about Lenin, Stalin, and Mao—and many of a more moderate tinge had no perspective of just how much worse international communism was than the U.S. system, at least as it concerned domestic affairs. Meanwhile, many libertarians and almost all conservatives ditched their supposed attachment to skepticism of government power and signed onto the U.S. Cold War effort. This American project included dozens of coups and interventions, the instruction of foreign secret police in unspeakable torture techniques, murderous carpet bombings that killed hundreds of thousands of peasants, and wars that indirectly brought about the Khmer Rouge and the rise of Islamist fundamentalism, both of which also became directly funded in the name of anti-communism.

It is easy to look back and see how westerners were wrong on both the Cold War and communist states—each of which killed millions of people and nearly brought the world to the brink of nuclear holocaust.

The stakes were so much higher then than in anything going on with Russia now. Imprecision in one’s moral assessment—either in defense of Nixon or Tito—was far more condemnable than criticizing Putin or Obama too harshly. The errors of almost all the great 20th century libertarians, free marketers, and peaceniks far exceeded any errors some might have today in their appraisal of NATO or Russia and Ukraine. And yet we forgive many people on both sides of that Cold War division. No one today actually thinks Hayek was a neocon or Rothbard a pinko.

Today’s polarization is all the more frustrating given that the bulk of American libertarians seem to agree on two major points: (1) the U.S. should not intervene in Eastern Europe and (2) Putin’s various power grabs are indefensible. Thus, most libertarians are not truly as divided as well-meaning Americans were in the Cold War.

Now, one’s emphasis is important. Not all acts of aggression are equal. But before addressing that, it’s useful to try to actually understand the splits in the movement right now.

I easily identify four factions, not two: (A) There are people who outright defend Putin’s aggression in Ukraine and Crimea, and who otherwise downplay his autocratic tendencies; (B) There are those who agree that Putin is worth condemning, but who think it’s more important to emphasize the evils of U.S. interventionism; (C) There are those who agree that U.S. intervention is unwise and maybe even unethical, but who think it’s most important right now to emphasize Putin’s despotism; (D) There are those who outright favor U.S. and western intervention to stop Putin.

The polarization of discussion has led to A and B teaming up against C and D. It has also led to people in the B camp pretending like “no one” on their side is actually defending Putin, while people in the C camp are pretending “no one” on their side is actually calling for war or major U.S. interventions.

A principled opponent of state power is tempted to say that in fact B and C are on one side, despite differences in emphasis, and A and D are two extremes flirting with nationalist statism. This is my position, although I will say that I have friends—good friends—who flirt with being in camp A as well as in camp D. It happens. And to make the point again, during the Cold War, any libertarian activist would have probably had some friends who advocated nuclear strikes against the USSR, and others who supported Soviet control of the Eastern Bloc. Both of these positions would have been completely immoral and disgusting—far worse than anything said by anyone in Camp A or Camp D today. Yet today’s Cold War replay is leading people to defriend each other in the name of Manichean struggle. The tendency of people to break ties with others over this will only increase the polarization and erode mutual understanding.

On the other hand, camps A and D are at least being outright in their positions, while B and C are letting themselves get dragged into a flame war against each other when they both agree on both Putin’s and America’s actions. Both B and C are being disingenuous about some of their allies in the attempt to seem reasonable and principled and to say the other side is the only one that’s unbalanced.

In both cases, the problem appears to be nationalism—a desire to defend Putin’s actions as consistent with Russian, rather than individualist, concerns; or a desire to see American intervention as being more defensible than Russian aggression because, well, at least it’s American, and we have better, more liberal values at home. Both tendencies are in fact very illiberal, as are the attempts to collectively attack people on the “other side” of this debate when for all you know some of them agree with you on all the fundamentals more than some of the people “on your side” do.

The arguments over Russia have brought the Cold War back to the movement. They have fractured those primarily committed to anti-interventionism and those primarily concerned with liberty for all worldwide, when in fact these values are two sides of the same coin. The primary libertarian reason to oppose U.S. wars, of course, is that they kill foreigners, that they divide people into tribes based on nationality, that they are acts of nationalist aggression.

Discursively, refighting the Cold War within libertarianism will only harden people’s hearts, polarize their loyalties, and ultimately compromise their principles and clarity of thought. I plead young libertarians to refuse to be a proxy belligerent in this Cold War when for the most part it’s probably not really about Russia or Crimea at all; it’s about major factions within the movement with more fundamental disagreements using this as an opportunity to fight. If you actually seek to understand everyone’s positions, you’ll be surprised how heterogeneous attitudes are, despite the attempt to turn this current affairs disagreement into a grander sectarian dispute.

So what should we think? We should probably take a middle ground between B and C. Putin isn’t just an aggressor; he’s one of the worst on the planet. He killed tens of thousands of Chechens. He oversees one of the most vast prison populations on earth. He is essentially a late-communist holdover of the party variety in everything but name, and his violations of civil liberties, free speech, and the dignity of homosexuals and others are not minor matters for any libertarian who cares about the rights of all people on earth. His invasion of Ukraine was unjustified. His annexation of Crimea cannot be defended and although some critics have exaggerated the evils of this territorial power grabs by comparing them to Stalin’s or Hitler’s expansionism, it is true that Putin’s defenders’ arguments based on ethnic nationalism could indeed be used to justify the most infamous European land grabs that occurred that same decade.

As for the United States, its foreign policy is a lot worse than Putin’s biggest detractors wish to acknowledge. While Putin has killed more people than Obama, he does not appear to have killed more people as Bush—and yes, it is a moral failure and deviation from libertarianism to downplay the Iraq war as anything less than one of the very worst international atrocities of our new century, and one that dramatically taints the moral character of U.S. diplomacy. What the last few U.S. administrations have done will haunt much of the world for decades. And the aggression has hardly ceased. Obama’s drone killings are one of the most infamous human rights violations on the planet, the drug war imposed on Mexico has taken tens of thousands of lives, and America’s own civil liberties record is far worse than some on Team America wish to confront. There are tens of millions of people much worse off throughout the world because of recent U.S. diplomacy and wars, and only a cold utilitarian would even attempt to justify this record.

I understand why some libertarians are inclined to emphasize one point or the other. Those Americans focusing on U.S. criminality are right that we have more influence, albeit marginally so, on the government that lords over us, that if we don’t stand up to the U.S. war machine and its covert ops, no one will, and that criticism of foreign aggression often fuels war propaganda at home. But others are frustrated that just because the U.S. government condemns Russian aggression, they’re supposed to keep quiet. “My country is the world,” as Tom Paine said, and libertarians around the world should condemn aggression anywhere it happens. Pretending the U.S. government is the world’s only major problem is naïve at best. The first group is often right that liberal states are more belligerent in foreign affairs, and the second group is often right that it’s easy for people here to forget about victims of foreign oppression. Such dynamics played themselves out in the Cold War, too, and both sides had a point. It would have been demoralizing to be berated for attacking either U.S. or Soviet aggression in those times.

It is hard to maintain the right level of nuance and principle. I think John Glaser and the Jesse Walker blog entry he links to are good models of principled libertarian commentary. And I agree with plenty of points being made on multiple sides of the various controversies. Those who wish to purge either Ron Paul’s followers or the Student for Liberty internationalists over this are ignoring the points of agreement as well as the odious errors on their own side, and maybe even their own errors, and are blowing things out of proportion.

Did I myself get the balance perfectly right? Perhaps not. The right balance would have been even harder during the Cold War, and yet it would have mattered much more then. So please, everyone, take a step back. It’s fun as hell to get in faction fights. Sectarian squabbles are the force that gives us meaning. But you’ll find yourself drained and with fewer friends in the end. Don’t pretend your fellow libertarians are themselves worse than Russian nationalists or the Pentagon. It’s not true in either case. Our unifying enemy should be the same: aggression, whether it is ordered from Moscow or Washington DC.

Whenever anyone strays from this balance, it’s good to bring up what they’re missing. Then you’ll see who your true allies are, who the trolls are, and who is simply using this as a battle to refight old clashes in the movement. You’ll also find out what people’s actual position is, and that might help inform your own.

 

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The Anarchism of Milk and Cereal http://libertarianstandard.com/2014/03/24/the-anarchism-of-milk-and-cereal/ http://libertarianstandard.com/2014/03/24/the-anarchism-of-milk-and-cereal/#comments Mon, 24 Mar 2014 16:14:35 +0000 http://libertarianstandard.com/?p=13407 capncrunch-12p.blocks_desktop_large

Julie Eva Borowski has done it again with a solid video on the issue of libertarian in-flighting. The caricature has me saying something wonderful about the decision to pour milk in my cereal. “Beautiful anarchy!”

Well, it’s not entirely absurd. The decision to pour milk or not to pour milk is an illustration of human volition that is embodied in all our decisions. There is no police present at the moment of choice. There is no plan in place that makes us pour or not to pour. Even if there were a plan, it is likely to be ignored. It would be destined to fail.

Actually, as I think about it, there is something of a plan. According to the government, cereal is only part of a “nutritious breakfast.” You know, the pictures on the ads. There is a big glass of orange juice, a piece of toast with butter, probably another glass of milk, and probably a half slice of grapefruit. It’s absurd. I’ve never seen anyone eat all that on a regular basis with cereal. On the contrary, we shake the box in the bowl and eat. We are defying the plan, even that urged on us by manufacturers.

So yes, there is a core of anarchism in the decision to pour and eat.

And it doesn’t just stop with the pouring and eating. The anarchist dimension of production is illustrated in the very existence of milk and cereal.

Humankind lived 6,000 without a reliable source for milk. Milk spoils. It must be transported before that happens. Before trains and refrigeration, you were pretty much out of luck, unless you owned a goat or cow, or someone close by did. We underestimate what a seminal moment it was in the history of civilization for milk to be delivered to your doorstep back in the 1930s and 1940s. It was wonderful practice and culturally significant commercial institution, displaced only with the mass spread of electric refrigeration in the 1950s. If you think about it, we are only a few generations into a period in which people could reliably keep things cold in all months of the year. Milk was and is a luxury good.

There was no plan. There was no government push. It happened because of private enterprise operating in the spirit of freedom: “people need stuff so let’s get it to them.”

Now to the source of milk itself. It comes from cows. Modern socialists hate cows because they seem implausibly inefficient. They eat vast amounts of grain and grass, take up huge swaths of land that could be used for farming, and otherwise consume an enormous amount of resources. To keep one alive just to milk is a big expense, one requiring the accumulation of capital and long-term planning.

Think of this: no central planner, a person who assumes that he or she knows better than the market, would ever approve of a cow. On the face of it, there would be no way to know for sure, in absence of market prices and a profit-and-loss system, that a cow should be allowed to live.

Now to the cereal question. The variety and brands have delighted generations. No one person can make a box of cereal. It takes thousands, with ingredients that can come from all over the world. But there is an additional point here worth considering. Many brands have been around for decades and generations. They persist and persist. It is point of unity between us: we’ve all had Cheerios, Shredded Wheat, Sugar/Honey Smacks, Cap’n Crunch.

I was in the car the other day with some people I had not met and we were all fishing around for topics. Finally I brought up cereal, and the whole scene came to life. We talked and talked about the changes in Crunchberries, the shifts over the years in Lucky Charms, the yuckiness of puffed wheat, and much more. It was pure delight.

So within the cereal industry, we have authentic tradition at work. That’s an interesting observation about a market institution. Markets are said to be in constant upheaval and thereby always in a war against tradition. This is not actually the case. Cereal is a persistent tradition, even down to the original brand names. It has been done without any plans from government, any preservation boards and bureaus, or even hectoring traditionalists warning us against abandoning the permanent things.

We can therefore see how anarchism isn’t really about unrelenting unpredictability. Within cereal markets, we can see that anarchist-like production can preserve valuable traditions insofar as consumers — the real power behind the market — want it to be this way.

What the milk and cereal market needs is more anarchism, not less. Raw milk should be completely legal here as most everywhere else in the world. People should be allowed more choice. It is the same with the regulations and taxes that make entry into the cereal market more expensive than it ought to be. Let there be more brands, more producers, ever more choice.

And yet, let’s return to Julie’s original example of the decision to pour milk. In the end, it is ours and ours alone. There is no force of the state that can successfully enforce a single choice in this area. States aren’t that powerful and they never will be.

So, yes, let us eat cereal, pour milk, and consider the great lessons of this event. It really does illustrate a beautiful anarchy.

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FreeSpeechMe: The Anti-Censorship Anti-Hijacking Free Software Dot-Bit Plug-in http://libertarianstandard.com/2014/02/18/freespeechme-the-anti-censorship-anti-hijacking-free-software-dot-bit-plug-in/ http://libertarianstandard.com/2014/02/18/freespeechme-the-anti-censorship-anti-hijacking-free-software-dot-bit-plug-in/#comments Tue, 18 Feb 2014 18:20:00 +0000 http://libertarianstandard.com/?p=13333 Lots of interesting developments in the liberty space of late, such as Bitcoin, and other projects like General GovernanceBlueseed, the Honduran Free Cities project, and Jeff Tucker’s imminent Liberty.me (I’m involved in GG and the latter).

An exciting new project I learned about recently is FreeSpeechMe (mirror), a project by libertarian Michael Dean and others.

This is a project to spread and improve Dot-Bit (.bit), “a new top-level domain that, unlike Dot-Com, Dot-Net, Dot-UK, etc., is NOT controlled by any government or corporation.” It only costs about 7 cents to register, using Namecoin (a derivative of BitCoin). To access a .bit domain, a browser plug-in can be used. This was discussed in detail in an discussion by Dean on the Ed and Ethan show the other day

Check out their IndieGoGo campaign; video is below. I just donated half a bitcoin to it.

More information including press release, video, program, and source code: http://www.freespeechme.org/ (mirror).

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Libertarian Fiction Authors Association and Short Story Contest http://libertarianstandard.com/2014/02/07/libertarian-fiction-authors-association-and-short-story-contest/ http://libertarianstandard.com/2014/02/07/libertarian-fiction-authors-association-and-short-story-contest/#comments Fri, 07 Feb 2014 17:55:11 +0000 http://libertarianstandard.com/?p=12879 Libertarian Fiction Authors Association

It’s been a long time since I blogged on The Libertarian Standard. I’ve been busy with other projects, one of which is the subject of this post. I recently launched, in November 2013, the Libertarian Fiction Authors Association.

If you’re like me, you enjoy reading fiction but have a difficult time finding stories that truly reflect your values and interests. This discovery problem affects everyone, but is particularly acute for niche markets like ours. There are individuals and organizations (including Amazon) attempting to solve the problem for authors and readers in general, but no one was really catering to libertarians specifically.

How many libertarians out there have published fiction? How many more are aspiring authors, who are either writing their first novel or are thinking about it but need some encouragement and guidance? I had no idea, but I was sure there were far more than I knew about personally.

As an activist, I also think that dramatizing our values through fiction is an important way to spread the message of liberty.

As an aspiring fiction author myself, I wanted to form a group made up of fellow libertarian writers who could learn from, encourage, and push each other to accomplish their goals and continually reach for new heights — and, eventually, to get my stories into the hands of new readers.

So I started first an email list, then a full-blown association complete with a professional website, in order to provide

  1. a writing group and mastermind that will both nurture new talent and hone the skills of more seasoned pros,
  2. a platform for libertarian fiction authors to promote their work, and
  3. a central location for readers to find fiction written by libertarian authors.

And already, thanks to the association, in a mere few months, I have discovered many more libertarian authors than I had heard of before.

Basic membership in the association is and always will be free. At a minimum, members get a public member directory listing; their books listed and displayed on the site; a link and image-rich profile page; free promotion; and access to a private email list and social network groups.

As our first major promotional endeavor, the association has teamed up with Students for Liberty to hold a libertarian short story contest. The contest is open to everyone, except the judges and SFL staff, and the deadline to submit a story is March 4, 2014. Entrants stand to win up to $300, supporting membership in the association free for a year, and publication. Check out our announcement and the official contest page for more information.

If you’re an avid reader, check out our work and follow us to be updated about new releases and special promotions. If you’re a writer too, join us and enter the short story contest.

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The martyrdom of Aaron Swartz http://libertarianstandard.com/2014/01/16/the-martyrdom-of-aaron-swartz/ http://libertarianstandard.com/2014/01/16/the-martyrdom-of-aaron-swartz/#comments Thu, 16 Jan 2014 11:00:52 +0000 http://libertarianstandard.com/?p=12794 A little over a year ago, a 26-year-old programmer and activist was murdered. His name was Aaron Swartz, and although he was found hanged in his Brooklyn apartment, and his death ruled a suicide, there is little question whose hands are stained with his blood. He was pursued mercilessly by a bullying prosecutor with a long track record of ruining the lives of brilliant (and perhaps naive) young men who didn’t play by the state’s rules. And he was betrayed by an educational institution that once prided itself on not playing by the rules, either.

Those are some of the heartbreaking and infuriating insights from a story in this month’s edition of Boston magazine about Aaron Swartz’ arrest and indictment, his father Bob’s attempts to extricate his son from the legal mess, and the relentless pressure by federal prosecutors to make an example of him. The punishment they sought for Aaron was draconian even by the feds’ standards: 13 felony counts under the Computer Fraud and Abuse Act (CFAA), with a possible prison term of 35 years, and a $1 million fine. Bank robbers and terrorists have received more lenient sentences. But U. S. Attorney Carmen Ortiz declared that Swartz’ prosecution would serve as a warning to other “hackers” about “stealing” from computers.

Aaron SwartzWhat did Swartz “steal”, exactly? Nothing. He downloaded files from JSTOR, an online archive for academic journals. Swartz used the network at MIT, where his father served as an adviser, under its “open access” policy, which included its subscription to JSTOR. Swartz had long held the view that scientific research should be freely available and not locked away behind a paywall. This wasn’t even the first time Swartz had performed such a download; in 2008 he grabbed 2.7 million documents from PACER, a federal court document system that usually charged for such access, even though they were public records. That attracted the FBI’s attention, but they found Swartz had committed no crime.

Swartz in fact had devoted much of his young life to finding ways to liberate information. Some of his earliest work included coauthoring the RSS 1.0 specification, a syndication format for Web-based content; founding a company to create wiki-based technology, which eventually merged with Reddit; and co-founding Demand Progress, an online advocacy group known mainly for its opposition to the Stop Online Piracy Act (SOPA). Swartz had also worked with Lawrence Lessig, a law professor and an advocate for intellectual property reform, studying under him at Stanford and later as a research fellow at Harvard. Swartz aided Lessig in developing the Creative Commons alternative copyright framework.

Given Swartz’ professional credentials and his history of “hacktivism”, what made his bulk downloads from JSTOR any more egregious than his previous exploits? The fact that Secret Service agents responded to the report of a “security breach” in the MIT network provides a possible clue:

When the Secret Service arrived, Bob [Swartz] says, the first thing they asked was whether any of the university’s classified research was threatened.

It wasn’t, but the nature of Swartz’ download, from a laptop hidden in a utility closet, made it look more suspicious to the feds. And it’s not surprising that a university receiving nearly a billion dollars in federal grants might toe the line with regards to any demand from the government, its hacker ethic be damned.

Intellectual property enforcement also played a role in Swartz’ prosecution. JSTOR subscriptions are not cheap, costing schools up to $50,000 per year. But MIT had a policy that not only allowed anyone on campus to use their network, but did not require authentication to access JSTOR. It was only after Swartz’ bulk download that suddenly “unauthorized network access” became an issue, allowing him to be charged under the CFAA. At worst, Swartz cost JSTOR some bandwidth during his download (to its credit, JSTOR settled with Swartz out of court and pursued no further legal action), but he didn’t steal anything. The concept of intellectual property, and the framework used by the state to enforce copyright, rests on the logically bankrupt notion that downloading a copy of something without permission constitutes “theft”. Never mind that Swartz did have permission in this case — once he broke some imaginary and unwritten rule (“too many documents”, apparently), his action rose to the level of a felony in the federal government’s view. This preposterous reasoning was all prosecutors needed to go after Swartz.

It was Aaron’s misfortune that he did his deed in a district with one of the country’s most notorious cyber-crime prosecutors. Stephen Heymann, the lead prosecutor in Swartz’ case, is no stranger to ruining young men’s lives. In 1994 Heymann prosecuted a student, also at MIT, for creating a bulletin board system which allowed users to trade copyrighted software (a precursor to the file-sharing networks common today). His case was dismissed on grounds that he didn’t intend to profit from the downloads, which prompted Congress to strengthen the CFAA to allow prosecution even if profit wasn’t a motive.

Heymann later won the conviction of 16-year-old Jonathan James, who had gained access to NASA and Department of Defense systems, and became the first juvenile to be incarcerated (via house arrest) for hacking. Heymann again targeted James in 2008, in an investigation of an identity theft ring tied to break-ins of department store networks. Although the Secret Service never found any evidence James was involved in the hacks, he killed himself in 2008, saying he had “no faith in the ‘justice’ system.”

Nor should anyone else, really. The system has never been about “justice,” and it seemed even less so in the circumstances surrounding Aaron Swartz’ case. This case was about projecting government power and crushing anyone who dared to upset the status quo, as Swartz often did. And anyone wishing to remain in the elites’ good graces — like MIT, and most other public research universities — had best do whatever is necessary to please their masters. And despite their pleas of “neutrality” in this case, MIT administrators did exactly that. They provided Heymann with every scrap of information they had about Swartz’ activities, usually with just a phone call. Bob Swartz pleaded with them to negotiate a settlement, asking: “Why are you destroying my son?” The school never gave him a satisfactory answer.

With the arrogance characteristic of state prosecutors, Heymann seemed shocked at Swartz’ temerity to fight the charges. Most outrageously, he likened Swartz to a rapist:

Negotiations continued, but in the end Aaron told Heymann no. He would fight the felony charges and go to trial.

Later, Heymann would tell MIT that he was “dumbfounded” by Aaron’s decision, and claimed that Aaron was “systematically re-victimizing” the university by choosing to go through proceedings. Publicly criticizing MIT at a trial, Heymann said, was akin to “attacking a rape victim based on sleeping with other men.”

If anyone was “raped” in this scenario, it was Aaron. Humiliated, cut off from many of his friends — his relationship with his girlfriend, Quinn Norton, ended after Norton tried to talk to Heymann and wound up giving the prosecutor a key piece of evidence against him — and seeing no end to the persecution, Aaron Swartz decided to end it himself.

In the end, there were no winners. No one was ever hurt by Swartz’ actions, no vital national interest served, no copyrights protected, no damage to repair. Instead the world lost a brilliant young mind who understood better than most the power knowledge has to liberate the world. Perhaps the state understands that too, which is why it tries so desperately to crush those who attempt to set it free.

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The Freedom of Rose Wilder Lane http://libertarianstandard.com/2014/01/14/the-freedom-of-rose-wilder-lane/ http://libertarianstandard.com/2014/01/14/the-freedom-of-rose-wilder-lane/#comments Tue, 14 Jan 2014 23:07:20 +0000 http://libertarianstandard.com/?p=12821 rose2

People schooled in the libertarian idea are prepared for the thesis that freedom is productive and protective of human rights, whereas despotism is neither. Many years ago, I first glanced through Rose Wilder Lane’s The Discovery of Freedom and assumed that it was an eloquent statement of known truths, so surely there was nothing much to learn here. Maybe it was right for beginners.

In my second reading, some ten years later, I was struck by the depth and sweep of her argument and how it goes far beyond conventions. The problem, as she sees it, is not just the state, but rather, the universal penchant for repressing the human spirit. The state is only the most egregious form of authority.

Finally, on my third reading, I got it. This is a supremely radical and challenging work, one that essentially turns the world upside down. Nearly every expert on the topic of the history of civilization will tell you that the regime is what makes the difference between whether a nation rises or falls.

Lane takes another view entirely. She says it is not the regime but the absence of the regime that sets the human spirit in flight and permits it to create and make beautiful things out of the uncivilized world of the state of nature. She pictures the whole history of humanity as a struggle to be free of authority — not just this or that authority but all authority.

The problem as she sees it is that men have a penchant to want to rule others. This expresses itself in every area of life in which we allow it to happen. In the voluntary sector of society, we are at least free to flee the impositions, and flee we must if we hope to create and build and prosper. But when authority grabs hold of the law, matters change, and we are no longer free to get away. That’s when the human spirit is most threatened with death.

Lane tracks the struggle from the ancient world through modern times. The first attempt she identifies with begins with the prophet Abraham, who asserts a law independent of civil authorities and yet serves as a basis for judging all authority. This culminates with the arrival of the Christian faith, which heralded the individual and recognized his rights, not by virtue of membership in a tribe or political unit, but universally by virtue of one’s very humanity. This attempt was subverted, however, with the union of church and state.

The second attempt that she chronicles will astound most every reader without exception. She marks it with the life of Muhammad, founder of Islam. Here was another attempt to free humanity from the chains of earthly authority, and the results (as she sees them) were the flowering of civilization in arts, commerce, science, and scholarship. It is through Islam that Christendom discovered the writings of the ancients, derived its number system, found its technology, and cast off its forming bias against commercial dealings.

It goes without saying that this section, probably more than any in the book, will come as a revelation to readers raised in the current epoch, in which we Americans are constantly told about the inherent dangers of Islam. Why don’t we know about this side of history? Lane’s explanation is rather plausible: Our official history is Christocentric in the extreme, and we are thus denied much information about the period between the 7th and 12th centuries — a gigantic swath of time in which most of the action took place outside the parameters of Christendom.

But of course, we know what happened to Islam. Its free spirit didn’t last; it became consumed in war and war preparations — and finally relented to authoritarian institutions. Its promise died.

What is the third great epoch? It began in the New World with the American colonies. In this section, Lane’s prose soars to all-new heights. Her love of America has nothing to do with the jingoism we know all too well. It is a love of individualism, experimentation, risk, entrepreneurship, creativity, reward, and the inspiration that comes with building a new civilization itself. What a hymn to our history she writes!

And note the date. This was written in wartime. There were censorship rules at the time, things you could and couldn’t say. What might she have written about war authoritarianism that she did not dare to write? I think we can imagine. In fact, you can read between the lines. She saw America betraying its history, principles, and destiny. And what would she write today?

There is so much wisdom in this work, so much to challenge and surprise us. Lane was learned, passionate, and remarkably creative, and her prose is that of a well-honed professional writer and researcher. This book is a gift. Its lessons are for our time and all time.

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Ted Cruz mad at Obama for not throwing more pot users in cages http://libertarianstandard.com/2014/01/11/ted-cruz-mad-at-obama-for-not-throwing-more-pot-users-in-cages/ http://libertarianstandard.com/2014/01/11/ted-cruz-mad-at-obama-for-not-throwing-more-pot-users-in-cages/#comments Sat, 11 Jan 2014 08:30:36 +0000 http://libertarianstandard.com/?p=12799 Senator Ted Cruz (R-Alberta Texas), a “Tea Party” Republican and ostensibly a champion of states’ rights, is unhappy with President Obama’s decision to not round up marijuana users in Washington and Colorado:

“A whole lot of folks now are talking about legalizing pot. The brownies you had this morning, provided by the state of Colorado,” he jokingly said during his keynote speech at Texas Public Policy Foundation’s Policy Orientation.

Oh Ted, what a knee-slapper!

“And you can make arguments on that issue,” Cruz continued. “You can make reasonable arguments on that issue. The president earlier this past year announced the Department of Justice is going to stop prosecuting certain drug crimes. Didn’t change the law.”

The problem, as Cruz sees it, isn’t just limited to Obama’s decision to not interfere with Washington’s and Colorado’s legalization of marijuana. The president is running the government like a “corrupt dictator” and only enforcing the laws that suit him. And perhaps Cruz has a point. But let’s look at a list of Cruz’ complaints:

Cruz is on solid ground when criticizing Obama’s unilateral delay of the ACA employer mandate. He simply doesn’t have the executive authority to make such a decision, as a lawsuit filed in October to block the delay argued. But it all falls apart when Cruz goes after Obama on immigration and drug policy.

For one, discretion in law enforcement is not the same thing as suspending a law. Prosecutors have always had substantial leeway in choosing which cases to pursue and what evidence to present, so Obama’s directives to immigration and Justice officials on relaxing deportation rules and drug offense indictments is not flouting the law but simply changing the enforcement strategy. This is not uncommon.

But more to the point, Cruz is attacking Obama for not strictly enforcing immoral laws. No government has moral authority to use violence against people, especially so when those people have violated no one’s rights. Smoking a plant and crossing imaginary political borders are crimes only because the state has declared them so. It’s blindingly clear that the federal government has no compelling interest in criminalizing drugs nor does it have a constitutional mandate to do so. And arguably it need not have jurisdiction over immigration enforcement — the constitution provides for federal authority over naturalization, or the laws and process by which one becomes a citizen. A states’ rights advocate, as Tea Party Republicans purport to be, might argue that border enforcement is the domain of border states.

Cruz seems to be repudiating both a cornerstone of the new Republican grassroots platform, and arguing for more federal infrastructure to maintain policies any true conservative should oppose. This is the sort of cognitive dissonance, not to mention rank hypocrisy, that keeps Republicans so woefully out of step with much of the nation.

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Power Has Failed Us http://libertarianstandard.com/2014/01/02/power-has-failed-us/ http://libertarianstandard.com/2014/01/02/power-has-failed-us/#comments Thu, 02 Jan 2014 22:34:58 +0000 http://libertarianstandard.com/?p=12765 The morning after I saw “Catching Fire,” part two of the film series based on the Hunger Games novels, I was scheduled to give a lecture on the nature and functioning of the state. I had vast notes I had prepared over the previous six months for it.

After seeing the movie, I was tempted just to toss them out; in fact, I nearly suggested that we all just leave the lecture hall and go to the movies. That’s because this one movie reveals more about the state than practically any book I could suggest.

It’s a great thing when popular culture becomes a teacher of truth, and I believe this is precisely what is happening in our time. Not every movie and not every show, but the biggest grossing of them are all centered on a theme. That theme is this: powerful people are not our friends but our enemies – so if we want to have a free and flourishing life, we are going to have to get busy and figure out how to make it happen.

The fictional government in the Hunger Games wants a static and unthinking population that is dedicated to compliance as a first principle. Everyone must stay in his or her assigned district (there are 12 remaining “districts” in Panem, the country that was once the United States); there is no social mobility; and the citizens are told to be grateful for this because, after all, there is no revolutionary threat anymore. To keep that possible, the people must be constantly punished for the last time anyone challenged the central authority. That punishment consists of an annual lottery that sends children to their death in fights that pit district against district in a highly televised gladiator event know as the Hunger Games.

In Catching Fire, we see a population beginning to discover that the real enemy is not the other districts; but the people at the top of the heap in the Capital – the capital city of Panem that belongs to no district, is disproportionately wealthy compared to the districts despite not producing anything themselves, is excluded from the Hunger Games lottery, and is where opulence prevails and whose people live without a care for the well-being of the rest of the population. The Capital sounds a lot like our non-fiction capital.

Here’s the thing: the command-and-control apparatus that was given life in the 20th century is in the process of falling apart. It can’t do anything right. As David Wiegel has pointed out in his blog on Slate.com, “Americans are rarely in love with our government, but rarely have we despised it like we do right now. A December 5-8 Gallup poll found that 72 percent of us consider ‘big government’ the greatest threat, the highest in 48 years.”

This is completely rational: the last several wars have yielded horrible body counts, but not improved lives; public services are nearly universally shabby compared with private ones; and people are starting to look at their taxes and scratch their heads, wondering what they are paying for.

The NSA spying scandal was a PR disaster for government. Did they really expect that the people would discover that all our phone calls, and emails, and even our browsing habits are being monitored and say in a collective voice “Oh thank you, big brother, for protecting us from bad things”? The nearly universal response was outrage, so much so that even the Obama administration has had to back away from responsibility.

Then there’s Obamacare. It was just last year that the now-president was bragging about having his name attached to it; after all, this was the “progressive” dream dating back many decades. The idea is that if we just let government run the system, we’ll get fabulous healthcare for next to nothing. The experts worked diligently to think through every contingency.

Finally the great day arrived where the dream could finally be translated into reality. What followed is routinely described as disaster. Fewer people are insured today than before the program was implemented. This was a mess made in D.C., but D.C. cannot and will not fix it. That’s the essence of the issue. Our problems have mostly been made by a bad idea that wasn’t ours to begin with, and now it is up to us to make the difference in our own lives and get out from under Panem’s – I mean Washington’s – control.

This is an idea that is indeed catching fire. The world of markets and the information they disseminate are breaking down the structures of power, and the great dream of Liberty.me is to push this trend further and provide a crowdsourced clearing house for chronicling and encouraging this great trend. We need this space and we are making it happen.

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Ponzi Argumentation: Gary North’s Rhetorical Mania http://libertarianstandard.com/2013/12/04/ponzi-argumentation-gary-norths-rhetorical-mania/ http://libertarianstandard.com/2013/12/04/ponzi-argumentation-gary-norths-rhetorical-mania/#comments Wed, 04 Dec 2013 16:09:25 +0000 http://libertarianstandard.com/?p=12724 Ponzi Argumentation:  Gary North’s Rhetorical Mania

by John Mather

Gary North has responded to my article critiquing his assertion that Bitcoin is the largest private Ponzi scheme in history.  North’s response is instructive as a lesson in rhetorical tactics.  It doesn’t, however, redeem North’s faulty arguments against Bitcoin.

To summarize, North frames my article as a personal attack on him rather than a critique of his Bitcoin arguments.  Then, despite saying he doesn’t know me, he condescendingly calls me a “kid” (untrue), a programmer (untrue), ignorant of the basics of debate (untrue), and a “space cadet” (I will let readers judge).  He also uses the rhetorical device of repeatedly saying I’m digging a hole for myself.  Repetition is an old technique employed by advertisers and politicians.  Repeat a claim over and over in hopes that people will come to believe it’s true.  All this rhetorical arm waving amounts to playground bullying rather than a substantive response to my critique.

A Bit of Progress

To North’s credit, he starts off by making a large concession to my critique.  He drops the Ponzi scheme claim and titles his response, “Digital Tulips: The Bitcoin Mania.” He devotes the introduction to reframing the debate by giving historical context about tulip mania.  He expresses discontent that I’ve held him to the actual definition of a Ponzi scheme, but “to keep Mr. Mather happy,” he agrees to abandon the Ponzi scheme framework.  I doubt North is concerned about humoring me, but I’m delighted he has let go of the Ponzi scheme canard.  This allows the discussion to move past Bitcoin being a scheme based on lies and deceit to a discussion about whether Bitcoin’s price volatility will drive it to what North claims is its value: zero.  We are making progress.

Unfortunately progress halts after this concession, as North unfurls a raft of of rhetorical gambits which serve to distract rather than inform the reader about the substance of the debate.  I will call them out one by one.

A Personal Attack!

North from the outset attempts to frame this debate about Bitcoin as a personal attack on him.  He advertises his article on his home page by writing, “A young man decided to take me apart in full public view.  This affords me an opportunity to have a little fun. . . ”  I issued no personal attacks against North, and I have no need to do so.  North of course has no idea what my age is, but by calling me “a young man” he can set up a “watch the old pro whip a young buck” rhetoric.  North continues the personal attack frame-up in the body of the response: “His article is published on a site run by Jeffrey Tucker.  Mr. Tucker was wise enough to get a stand-in for this hatchet job.”  After characterizing my article as a “hatchet job,” North continues:  “He dismisses me as if I am an economic ignoramus.”  If I thought North an economic ignoramus, I would not have written the critique in the first place.  In fact I explicitly stated, “North is widely recognized as an expert on Austrian economics, and I make no claim to the contrary.”  The issue is that North does not understand Bitcoin, not that he does not understand Austrian economics.  His ignorance about Bitcoin and misapplication of Austrian analysis to Bitcoin are the sources of my criticisms.  His rhetorical maneuvers fail to refute them.

If North can reframe a substantive debate as a personal attack, then he can appear justified in taking a posture which is personal and aggressive.  This is his strategy.  By saying I’m a “stand-in” for a “hatchet job,” he is making a personal attack on me and Mr. Tucker.  The fact is that I submitted this article, unsolicited by anyone, to multiple publishers.  I did not know where it would be published, though Tucker’s role as former editor at the Mises Institute and publisher at Laissez Faire Books seemed like an appropriate choice given this issue is about Bitcoin and Austrian Economics.  North’s discontent that the article was published publicly – “in full public view” – is odd.  When people disagree with North’s public statements, are they obligated to respond only to him personally?

Argument from Age Fallacy

In addition to the personal attack framing, North several times commits the “argument from age” fallacy.  Namely, because he’s older, he is therefore wiser and correct.  For this trick to work, though, he must first frame me as being young.  Hence he refers to me as “a young man” and a “kid” despite saying he’s never heard of me.  I have far more gray hair than not, but that of course has nothing to do with the substance of the debate.  I could be a teenager and be correct, or I could be older than North and wrong in all my arguments.  North goes back repeatedly to the argument from age fallacy, ending his article with “Old timers can see what’s coming.”  Old timers…. So that must settle it then?  It would be equally silly to say old timers didn’t see the car replacing the horse and buggy, or word processors replacing typewriters.  None of this is valid argumentation.

To recap thus far, he’s framed my article as a personal attack by a naïve youth who doesn’t know better.  He pairs the argument from age fallacy with another effective rhetorical device: repetition.  He continually issues “rules” as if to patronizingly share some tips with the young buck who dared challenge him.  Saying over and over that I’m digging a hole for myself is not a valid rebuttal of my arguments.  It’s up to readers to decide who is in a hole.  Constant repetition by North that my arguments are weak, without actually demonstrating that they are weak, is not a refutation.  It’s just a repetition gambit, and it distracts from the truth seeking process.

North’s first patronizing “tip” is to save the “rhetoric of condemnation for your conclusions.”  Mr. North has not followed his own advice.  He’s already framed this debate as a personal attack launched by a kid who has stupidly poked his stick in a hornet’s nest of truth.  Now I must be schooled in a “let the old pro show you how it’s done” way.  It’s clever posturing, and he closes his piece with a cute Youtube of an Alka-Selzer commercial to reinforce it.  It all makes for good entertainment.  The problem is, it’s just rhetorical arm waving.

Fiat Money ≠ Bitcoin

North says the heart of his article is that “fiat money is ‘spoken’ into existence.  It is not money developed over centuries in market transactions.”  He then equates Bitcoin to fiat money, calling it “wanna-be fiat money digits” that were “spoken into existence.”

This is blurry language that results in blurry thinking.  Fiat money’s key distinguishing characteristic is that it is mandated for use by fiat.  By state decree it must be accepted as money.  Bitcoin is not issued by fiat, and it is not used by fiat.  North seems bent on ignoring this distinction, but it doesn’t change the reality that people are using Bitcoin by choice and as an alternative to fiat money.  Further, some fiat money in the past has been commodity backed and fully redeemable (alas no more), not “spoken into existence.”  The fact that fiat money in the digital age can be instantly created at zero cost in any quantity (witness Japan’s quadrillion yen public debt) contrasts starkly with Bitcoin, which cannot be created instantly, is mined at the cost of enormous computing power, and is limited in total supply to 21 million bitcoins.

The fact that Bitcoin hasn’t “developed over centuries in market transactions” is simply not the crux of what determines whether or not it is a currency.  People’s demand to use it as a currency is the crux of whether or not it’s a currency.  It’s bizarre that North readily says that the US dollar is money, as if the fact that it used to have a commodity backing is the reason it is valued now.  Most people today don’t know any monetary history at all, and they give no thought whatsoever about whether dollars (or any other fiat money) is commodity backed or not.  North raises no objections to the other fiat currencies I mentioned as being money either, some of which have short histories and no commodity roots.   How about the Euro, a total fiat creation hatched in 1999 with no history whatsoever of commodity backing?

“Out of Nothing”

North does not refute my point that Bitcoin is not made “out of nothing.”  Instead he makes a pun about “specie” backing to avoid the fact that he’s made a specious argument.  North wants to play word games by simultaneously defending fiat currencies as money while saying that any private alternative cannot serve as currency unless it has had centuries of market transactions.  It’s simply not true, and North has not demonstrated otherwise.  But to confuse matters more, he says, “I reject fiat currencies that are not the product of long years of use in the free market.”  So he rejects them how?  By refusing to use Euros in Europe?  He wouldn’t get very far, but he at least could survive over there by using Bitcoin.

He continues to dodge the “out of nothing” argument by repeating that “Bitcoins were created out of nothing to perform a service.”  At some point I hope he will recognize that the utility he derives from his website and his ability to write his articles and earn a living from his subscribers are all a function of software, none of which is made out of nothing, and all of which perform a service.  Further, his computer’s processing power and the electricity it consumes is not “nothing” any more than the processing power and electricity that is used to mine bitcoins is nothing.

Fiat Currencies:  Stable and Easily Used?

North makes the surprising claim that fiat currencies are stable:  “My point is this: the volatility of Bitcoins’ price is an indication of why they will not replace central bank fiat currencies, which are easily used in trade, and which are — so far — stable in purchasing power.”  North categorically ignores the numerous fiat currencies around the world which have imploded in his lifetime.  Countless people have been financially wiped out by assuming the mindset of fiat stability.  Here is a long list of examples.

Despite North’s US-centric frame of reference, he still ignores the 96+% devaluation my grandmother has suffered, and the 50+% devaluation since the 1980s.  And we’re only a few years into the age of quantitative easing, so we can reasonably expect things to get much worse.  Bitcoin has been more volatile than US dollars, as I’ve noted, but it doesn’t mean that fiat currencies are stable.  It also doesn’t mean Bitcoin has to be more stable than the US dollar to serve as a currency.

North is also not giving a fair account about ease of use in trade compared to Bitcoin.  I bank internationally, and it is very difficult to do so.  Americans are barred from opening bank accounts in several countries due to FATCA and other reasons beyond the scope of this discussion.  And even when Americans find an international bank who will do business with them, it can take months to open an account.  Then once an account is open, you are charged fees for transferring money to the new account, and then fees again for exchanging your money to the local currency.  With Bitcoin, this is all completely avoided.  I can do business directly with any individual at any time, instantly.  Furthermore, if you walk into a bank and ask for, say, $10,000 out of your account, there’s a good chance you will be denied, questioned as to why you want the funds, and have a suspicious activity report filed.  This is not what I would characterize as “easily used in trade” when compared with Bitcoin.

False Dilemma:  Bitcoin or US Dollar

North continues, “The market has determined that the dollar is money. It has not determined that Bitcoins are money.”  Governments determine what is money by fiat, and the dollar is no exception.  There are a mountain of different fiat currencies in small geographic regions with transaction volumes that are a minute fraction of the US dollar.  I refer readers to this up-to-date list of 182 fiat currencies.

Yet North wants to make it seem like the choice is between the US dollar or Bitcoin, period.  North ignores the fact that Bitcoin is international, and its use is not by fiat.  Bitcoin may be in the same realm of the transaction volume of some of the small countries on that list of 182 currencies.  As time goes on, it’s possible Bitcoin will achieve a transaction volume that exceeds several countries on that list.  I don’t know, and neither does North.  It’s a false dilemma to say Bitcoin can’t be a currency unless it’s more used than the US dollar.  North does it anyway:  “Which is money: dollars or Bitcoins? The answer is obvious: dollars.”

Rule: Value is Subjective

North then goes on to issue a “rule” to me – another rhetorical device which is an argument from authority fallacy – I’m an expert, therefore I’m correct – which has nothing to do with the issue at hand.  He wrote in his original article, “Something that was valuable for its own sake, most likely gold or silver….”  This statement implies gold and silver have intrinsic value, but he takes offense that I call him on it.  He may have written a dozen books in the past on the subjective theory of value, but that is irrelevant to what he wrote in his article.  It would have been constructive to simply say his choice of words is not what he meant and move on.  Yet he says my criticism of him saying gold and silver are valuable for their own sake is an “attack on him” and “rhetoric” with “no supporting logic.”  Here is another of North’s diversionary tricks: when you can’t refute an argument, dismiss the argument as rhetoric.

Network Effect: Programmer Jargon?

North seems to enjoy making assumptions about me.  He appears to believe I’ve invented the term “network effect,” and that I am using it as a programmer.  Neither is true.  Network effect is a term used in economics.  I refer North to the externality Wikipedia entry in which network effects are discussed.  The entry also mentions Mises and Hayek, so I can assure North that no programming knowledge is necessary to understand it, despite him characterizing a network effect good as “programmers’ professional jargon.”  I also refer North again to the network effect entry which begins,  “In economics and business, a network effect (also called network externality or demand-side economies of scale) is the effect that one user of a good or service has on the value of that product to other people.”

In my distinction about network effect goods (and how money is one of them), he says I’m “beating a dead horse” with no actual refutation.  I will take that as agreement.  I do commit the error of making a typo on Carl Menger’s first name, to which North says I’m confused, despite the fact that I hyperlinked the name to the correct Carl Menger.  My apologies for the typo.

Back to Ponzi-ville

Though North at first seemed content to drop the Ponzi scheme claim, he returns to it by saying that he never claimed Bitcoin was a fraud (“I said it was not a fraud”), despite calling it the largest private Ponzi scheme in history and saying the creator(s) of it have been “siphoning off” money.  He does not address my actual point, and instead pulls out the “rule” rhetoric again:  “I see. We should buy Bitcoins as money because Bitcoins’ creators imitated the State.”  He continues to refuse to acknowledge the fundamental divide between fiat money which can be created instantly in any quantity and is foisted on the public by force, versus Bitcoin which is used voluntarily, has a hard limit on its quantity, and cannot be instantly created with a keystroke.  The fact that I point this out in my original article he, amusingly, cites as proof that I’m using his argument against him.  Of course if he had drawn these distinctions between Bitcoin and fiat money in the first place, I may not have felt compelled to write my critique.

News Flash:  Bitcoins NOT Used in Market Exchanges!

North continues his argument from authority fallacy by offering up another rule, claiming I have erred by agreeing that money develops out of market exchanges.  I maintain that Bitcoin is being used in market exchanges.  He disagrees:  “Bitcoins are not being used in market exchanges.”  I of course can point to numerous market providers of products and services which accept Bitcoin.  North could do his Christmas shopping on this site alone.  I know people who exchange Bitcoin every day for various goods and services.  He, on the other hand, makes the proclamation that they aren’t being used in market exchanges without offering any evidence whatsoever.

Further, North ignores the fact that as the price of Bitcoin rises, its purchasing power for goods and services increases.  If you can acquire a desired good or service directly with Bitcoin, why exchange Bitcoin for a fiat currency to make the purchase?  The only way to ignore this is to hold fast to the delusion:  “Bitcoins are not being used in market exchanges.”  I know people who pay rent with Bitcoin, buy food with Bitcoin, buy books online with Bitcoin, et cetera.  North provides no evidence to the contrary.

“Nothing to Consume” and Circular Logic

North completely ignores my criticism of his statement that a good has to be consumed in order to serve the customer.  Neither Bitcoin nor gold are consumed.  Instead he falls back to repetition of the rule rhetoric.

Next North invokes a circular reasoning fallacy to avoid addressing the error in his statement that “the fundamental characteristic of money is its relatively stable purchasing power.”  I again refer to readers to this list and his claim that fiat currencies are stable forms of money.  Purchasing power of fiat money has and will continue to fluctuate, at times wildly and unpredictably.  So it bears repeating:  The fundamental characteristic of money is that it’s the most widely demanded good in an economy.  The rising price of Bitcoin indicates that it’s being demanded more and more.  North claims this is proof that it is destined to be worthless.

Gold and Price Volatility: Confusing Causality

North and I agree that gold is not money, but he implies that it’s because the price is volatile. My pointing out the move from $35 to $1,910 doesn’t dissuade him from recommending it as an investment.  (I agree.)  Yet he says the dollar is stable from year to year.  Could the trillions and trillions of newly created dollars over the past few decades be accountable for gold’s massive price rise?  What is stable, the ounce of gold which has forever been the same, or the US dollar as a measuring stick for that ounce of gold?

Bait ‘n’ Switch

North attempts a bait and switch regarding my explanation that because Bitcoin has no yield, we will only know in retrospect whether it’s in a bubble or in an adoption phase as a currency.  He mistakenly tries to tie Bitcoin to real estate, which is a yielding asset.  I wrote, “During the adoption phase of any good as money, the purchasing power rapidly increases from its initial value as a non-monetary good as more and more people adopt it.”  Notice how North swaps in the word “fiat” for “good”:  “He is making this up. There are no records of any such private fiat money in history. All fiat monies have been extensions of previous government money systems or a previous commodity standard.”

My point was straightforward, but I will step through it to dispel the confusion North attempts to create.  If a person in a given economy believes that a good will be adopted as money, he may act on that speculation by purchasing the good in advance of it becoming money.  If he is correct in his prediction, he will see that good rapidly increase in purchasing power as it becomes money.  Why?  Because that good is in the process of becoming the most widely demanded good in the economy, which is the definition of money.  Bitcoin’s adoption as a borderless medium of exchange by more and more people around the world would cause its purchasing power to rapidly increase.

Ignoring Arguments is Not a Refutation

My comparison of the monetary traits of Bitcoin vs gold and silver is unaddressed by North in any substantive way.  He quotes part of my comparison (and for some reason inserts “Conclusion” into my discussion of durability) without refuting any of it.  But by now it’s easy to spot the tactic:  do not address my actual arguments.  Instead he says I’ve ignored “the entire history of monetary economies” without offering any basis or citing a single example.  Rather than using this opportunity to discuss monetary history, as I did with the continual silver debasement of the Roman denarius, he avoids the entire discussion.

He then goes on to say that legal tender laws are irrelevant to the US dollar’s role as money.  “No one has to accept them,” according to North.  Here’s a dictionary definition of legal tender:  “currency in specified denominations that a creditor must by law accept in redemption of a debt.”

Conclusion

Despite the barrage of rhetorical sound and fury pointed at me, the only valid criticism North offers of Bitcoin is its price volatility.  Because it’s been volatile, he reasons, it’s not being used for market exchange, and therefore can never be currency.  And because it can never be currency, he concludes, it is worthless and destined to collapse.  (Interestingly, because of fiat price volatility, he doesn’t believe he’ll ever see gold used as money, despite serving as currency for centuries.  He does not discuss why the price of gold has been so volatile in recent decades.)  North also does not mention the long history of defunct fiat currencies which he would have designated as money before their implosion.

I maintain that we cannot know Bitcoin’s future.  Its price ascent could be because it’s in a bubble, but it could also be indicative of its increasing adoption as a borderless currency alternative.

North criticizes me for not offering proof of the number of Bitcoin exchanges which take place, yet he claims without offering any proof that none are happening.  I suggest he inspect the public ledger of Bitcoin transactions, and I suggest he Google vendors who are offering goods and services using Bitcoin.  Perhaps he will also hear from readers who are using Bitcoin for market exchanges.  To wit North, in one of his personal swings at me, says I’m a “space cadet,” perhaps without being aware that Richard Branson will be accepting Bitcoin on Virgin Galactic space flights.

My point after all this remains the same, and I repeat it as a non-programmer, non-kid, long-time investor in gold and silver:  Gary North may claim the fate of Bitcoin is already sealed, but his arguments are not compelling.  As I said in my original article, if Bitcoin becomes defunct, the cause will not be explained by North’s faulty arguments against it.  For example, states could attempt to regulate Bitcoin out of use, even outlaw it.  This a risk factor North does not mention.  I’m open to changing my views, as we all should be, if shown better reasoning.  Until then, North’s rhetorical bluster remains hollow.  Here is my question for North:

John Mather is a fan of technology, gold and silver, Bitcoin, and Austrian economics.

Email him at john.mather182 [at] gmail.com.

 

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