Article: Europe's pain is coming America's way

[Gumby]

You're making it sound too neat and easy... get a loan and pay it back one day.

Maybe it's not as complicated as we think it is?

No, it really is complicated.

I graduated with $25,000 in debt, paid it off in a couple years, and now live debt free...does that mean I'm part of the 1%  :o...wait a second, I guess it does!  ;D  Although I still have a job.  :(

All that means is that the money you earned came from someone else's credit. That's what M2 is... it's mostly bank credit. And then there are countless layers of credit on top of that (commercial paper, MBS, agency debt, etc). All the smileys in the world won't change that. And if you aren't willing to grasp that concept, then there's little point in continuing the conversation about credit-based money.

So it seems that either the government OR the private sector can create "money" by creating debt.  But this debt will not be created unless a person or business is willing to take on that debt.  So isn't it a self regulating system?

Huh? If you don't continue to create new credit, the system dies. How is that self-regulating? Remember in 2008 when the credit markets essentially froze up? We were on the verge of the entire monetary system collapsing. There's no choice for the private sector to live without credit the way the system is set up. The entire monetary system would literally come to a grinding halt — and default upon itself — if new credit wasn't constantly created. There is no choice in that matter, so there is no self-regulation. That's like saying that we can stop breathing air anytime we want to. It doesn't work that way.

The only way the monetary base grows forever is if the economy and population continue to grow forever, which I think we can agree is impossible, unless we colonize other planets...

No. For the private sector to keep paying off it's credit, it mostly needs to take out more credit. It's an infinite loop. You can stop the infinite loop, but it would require monetary reforms — as listed above.

Gumby, I have got say that I have learned a lot with this discussion and you have accelerated my learning 100 fold, I really do appreciate your responses...even though they appear to be going over my head...you are a patient person!  :)

I'm trying my best here . But, you're going to have to learn more about the fractional reserve to fully appreciate the amount of credit there is in the system. We've all been lead to believe that the money in our bank account is ours. It's really not. Most of it is really just credit. Harry Browne understood this, and created the PP to allow people to opt-out of the most flawed parts of the credit-based monetary system system. If a major credit-event were to happen, and there was a run on the banks, the banks wouldn't be able to stay solvent because most of M2 is just lines of credit on a bank statement.

In a strange way don't we already have a debt-free money?  All we gotta do is stop paying interest on the "debt" (ie drop interest rates to 0%), which would then just make it "money".  But if we stop paying interest then the money will erode from inflation, which means no one would want to hold on to it.

We've been over this. We do not have debt-free money right now. This is a fiat debt-based monetary system. To get the government to stop issuing debt would require major changes in the way the Treasury and Fed run things. It would require someone like Warren Mosler being elected President, and the chances of that happening are practically zero — particularly since Wall Street actually wants government debt issued. Wall Street wants people to be in debt to banks. It's the American way. You need to look at the private credit markets to see the real problem.

For instance... take a look at housing:

It's time to concede that "homeownership" is a fraud.

When there is $16 trillion in mortgage and consumer debt outstanding and an estimated $16 trillion in residential unreal estate value, with the risk of another 20% decline in prices, there is no "ownership".

Rather, virtually everyone with a mortgage is renting debt-money from a lender and leasing the land from a local taxing authority. The mortgagees have a "dead pledge" in the value of the debt owed, not an "asset". The lenders and taxing authorities are the "owners" of a lien (a bond or constraint on the real property), which entitles them to income in the form of compounding interest and tax receipts in perpetuity.

Unreal estate is the best investment for lenders and taxing authorities, not dead-pledgers...

...It is appalling and obscene that we assume as a normative condition spending 5-6 times the perceived market value (debt-based value) of a house over a lifetime when costs of principal, interest, taxes, and maintenance/improvements are included, whereas the rentiers have little or no accompanying social obligations to support public infrastructure required for productive enterprise.

Worse yet, in the process of favoring and enabling the rentier domination, we punitively tax labor, production, productive capital investment, savings, and productive capital accumulation while encouraging rentier speculation, waste, ecological degradation, and resource depletion.

Increasing non-productive rentier gains to the top 0.1-0.4% of US households have resulted in deindustrialization, militarization, financialization, hopeless indebtedness, obscene wealth and income concentration, and the gutting of the productive capacity of the US economy.

Banks should not be permitted to take a $1 deposit, set aside $0.03 in reserve, and then lend $1 at a 7-10%/yr. growth rate and then go broke and have to be recapitalized by the central bank and government borrowing every 9-11 years when compounding interest burden exceeds labor product growth.

Banks should be required to collateralize all loans at 100%; that is, only be allowed to lend their own money, not depositors' money. However, banks should be allowed to charge whatever they like for custodial services.

Banking should not be permitted to make money from making money and thus encourage wider use of increasing leverage to capture eventually all net after-tax real labor product for a generation, leaving labor incapable of sustaining itself after taxes and debt service.

Of course, all of this would mean effectively returning to something like a Victorian-era banking standard, which no rentier, politician, or most of the public will accept.
Source: http://globaleconomicanalysis.blogspot. ... fraud.html

There's no real ownership in the system. In reality, even those without mortgages, and live their lives "debt-free," own their house with someone else's credit (or the government's debt). And you keep overlooking the fact that the private credit market is a giant ponzi scheme that is designed to become larger and larger over time.

[moda0306]

To help with the micro/macro effect of private credit imagine someone deciding that the right lane is too slow, so they move into the left lane to go 7 mph faster and get to their destination in less time.

Now try to imagine all cars in the right lane deciding its too slow, and all of them deciding that they should get into the left lane to get to their destination faster.

[Gumby]

To help with the micro/macro effect of private credit imagine someone deciding that the right lane is too slow, so they move into the left lane to go 7 mph faster and get to their destination in less time.

Now try to imagine all cars in the right lane deciding its too slow, and all of them deciding that they should get into the left lane to get to their destination faster.

Exactly. And to further that analogy... imagine that the police will only give you a speeding ticket if try to go fast in the right lane...but they allow you to go as fast as you want to in the left lane.

Then you turn on the radio and hear pundits talking about how the speed limit is still too fast in the right lane and we need to slow down the speed limit even more in the right lane and bring it down to zero. "If only we could have people going in reverse in the right lane!"

So, everyone decides to move over to the left lane to get to their destination — even though it's a more risky lane.

[moda0306]

I was thinking of the left lane is paying down debt, Gumby... I think I need to pull onto the shoulder because I'm hopelessly lost on your freeway system.

[Gumby]

I was thinking of the left lane is paying down debt, Gumby... I think I need to pull onto the shoulder because I'm hopelessly lost on your freeway system.

No, no. I thought you were saying that the left lane is using private credit to get to their destination. The right lane is using base money from debt-based dollars to get where they are going. Since people can't do all their business with base money — it's too scarce — they have to use lots of left-lane private credit.

Without lots of base money coming into existence, the private sector doesn't really pay down its private debt very much. It just gets larger and larger over time without lots more base money to help deleverage. For instance...

[align=center][/align]

Let's be honest... If the government gave social credit ("Stone" style), there would be less need for private credit. The private credit market would be smaller. People wouldn't owe as much debt to banks.

By the way... what happened to Stone anyhow? I'd love to hear his opinion on all this.

[Gosso]

I was thinking of the left lane is paying down debt, Gumby... I think I need to pull onto the shoulder because I'm hopelessly lost on your freeway system.

No, no. I thought you were saying that the left lane is using private credit to get to their destination. The right lane is using base money from debt-based dollars to get where they are going. Since people can't do all their business with base money — it's too scarce — they have to use lots of left-lane private credit.

I was thinking the same thing as Gumby.  

I like that Mish article.  But the most important point he raised was the government bailing-out the banks that made bad loans.  Really what the banks should do is charge a higher interest rate to compensate for all the defaults on their loans OR simply don't lend money to people who cannot pay it back, but of course this means no one will borrow from them anymore.  So the banks keep the rates low on their mortgage loans, and when SHTF (ie 2008) then they just ask for a bailout from the government and carry on as usual.  What should happen is the banks should go bankrupt (at least the ones with most damage) because they lent money to people that couldn't pay back the loan, OR charge enough interest to the people that can pay back the loans, to make-up for the deadbeats.

Also, wasn't repealing Glass-Steagall a huge event, that allowed investment firms and commercial banks to co-mingle their clients money.  This essentially opened Pandora's Box for the investment firms, which gave them access to all this "base-money" that they could then leverage up into more risky assets.  This I agree is wrong, unless we allow the banks to go bankrupt when they F&$# up.

[Gumby]

Here's another good chart to put the private credit market into perspective.

[align=center][/align]

Anyone have $54,134,000,000,000 handy? ...No? No problem, let's just create some more private credit to pay it off, shall we?

[Gosso]

Anyone have $54,134,000,000,000 handy? ...No? No problem, let's just create some more private credit, shall we?

Right.  But without that private credit wouldn't we have had massive deflation?  Or, our current economy would have remained the same size as it was back in the 1950's?

Isn't that what MMR/MMT stresses, that it is not the size of the debt, but whether the economy can absorb it while keeping inflation in check?

[Gumby]

Anyone have $54,134,000,000,000 handy? ...No? No problem, let's just create some more private credit, shall we?

Right.  But without that private credit wouldn't we have had massive deflation?  Or, our current economy would have remained the same size as it was back in the 1950's?

Guess you haven't been reading very closely. The solution is to reduce private credit by having the government make up some of the difference. For instance, the government could spend debt-free money on public infrastructure and issue a social credit where the government gives people debt-free money directly to the people to invest in their futures and pay down their debts — so the entire private sector doesn't get deeper and deeper into debt over time.

Would you rather have the private sector have $54 Trillion in total private debt — which becomes riskier over time? Or have the government provide more debt-free base money to let everyone climb out from under that mountain of debt?

[Gosso]

Anyone have $54,134,000,000,000 handy? ...No? No problem, let's just create some more private credit, shall we?

Right.  But without that private credit wouldn't we have had massive deflation?  Or, our current economy would have remained the same size as it was back in the 1950's?

Guess you haven't been reading very closely. The solution is to have the government make up the difference. For instance, the government could issue a social credit where the government gives people debt-free money to invest in their futures and pay down their debts — so the entire private sector doesn't get deeper and deeper into debt over time.

Would you rather have the private sector have $54 Trillion in total private debt — which becomes riskier over time? Or have the government provide more debt-free base money to let everyone climb out from under that mountain of debt?

I think we're going around in circles.  I'm starting to really like the fiat system we have set-up, minus the bank bail-outs.  I think we should also reinstate Glass-Steagull, since that will help reduce the excessive highly-leveraged speculation.

As I continue researching this topic it is possible I will change my mind. 

[moda0306]

There's a lot to be desired from a mixed fiat & private credit system that's allowed to freely float with other currencies and juxtaposed to a population that has savings options to give them freedom.

Ours, however, has put banks at the forefront and confused everyone about both horizontal and vertical money.

[Gumby]

Right.  But without that private credit wouldn't we have had massive deflation?  Or, our current economy would have remained the same size as it was back in the 1950's?

Guess you haven't been reading very closely. The solution is to have the government make up the difference. For instance, the government could issue a social credit where the government gives people debt-free money to invest in their futures and pay down their debts — so the entire private sector doesn't get deeper and deeper into debt over time.

Would you rather have the private sector have $54 Trillion in total private debt — which becomes riskier over time? Or have the government provide more debt-free base money to let everyone climb out from under that mountain of debt?

I think we're going around in circles.  I'm starting to really like the fiat system we have set-up, minus the bank bail-outs.  I think we should also reinstate Glass-Steagull, since that will help reduce the excessive highly-leveraged speculation.

As I continue researching this topic it is possible I will change my mind.  

Right.. I get it. I was where you were a few months ago. But, the more I thought about it, the more I realized that the system is really a plutocracy. I get the sense that you don't see the damaging effects of private credit amongst the private sector in your daily life? A $1 Trillion student loan bubble... people going into debt to pay healthcare costs, etc.

There's a lot to be desired from a mixed fiat & private credit system that's allowed to freely float with other currencies and juxtaposed to a population that has savings options to give them freedom.

Ours, however, has put banks at the forefront and confused everyone about both horizontal and vertical money.

Exactly. It's about having a better mix for the future — as debt begins to take over everything.

[MachineGhost]

At least, that's just how I've come to understand it. If you know of any specific illegal activity, please share it with us.

When the Fed creates bookeeping entries out of thin air specifically to buy anti-charter debt like subprime non-governmental MBS securities, etc. its engaging in fiscal policy and hence, unconstitutional.  Congress did not give the Fed the power to buy non-Treasuries and the power to increase the money supply belongs only to the Treasury.  Bernanke should be tried for treason.

Scribbles on paper may not matter when it comes to political expediency, but we're supposed to operate under the rule of law and a strict Constitution.  Either we find a way to get back to that, or the country will continue to decay.

MG

[MachineGhost]

If I think that the U.S. government does a poor job of maintaining the currency, I cannot set up my own competing currency.

There is nothing in the Constitution or the unconstitutional Legal Tender Acts that prohibits anyone but the States from "emitting bills of credit", as long as such is not counterfeit.  The Secret Service merely acts under color of law in suppressing and imprisoning non-counterfeit competition.

MG

[MachineGhost]

Sorry MG, but that is what's bs.  If government is illegitimate than so is private property In any recognizable form, and then we're left basically with anarchy.  People actually value the societal organization governments can accomplish.  Otherwise the most high demand areas to live for our best and brightest wouldn't mainly be metropolitan areas.

Question: But are there certain things that must be done by government, things that only the government can do?

Answer: Government consists of individual human beings, who can only do what humans can do. The fact that they call themselves "government" (or organize themselves into an organization called "government") does not imbue them with magical powers to do what others can't do. Human beings can only do what humans beings can do.

Question: But if we don't have government there will be chaos, disorder, crime, poverty, illiteracy, homelessness, drug abuse, pollution, etc, etc..

Answer 1: How do you know?

Answer 2: Such a list almost always consists of problems we already suffer from -- in other words, if we have government there will be chaos, disorder, crime, poverty, illiteracy, homelessness, drug abuse, pollution, etc, etc..

MG

[moda0306]

MG,

Would you call yourself an anarchist? do you believe in any government?

I don't ascribe Individuals in government with powers others don't have.  An individual or company could build and manage roads, contract out a military, or a number of other things we tend to leave to government.  However, when one analyzes social systems, one would look to the arrangement between gov't and the private sector in one instance, and a 100% private system in the other, and realize that government delivers services in a different way than the private sector would, and the vast majority of people prefer some gov't management of those services because of the different way they're delivered.  Not because it's IMPOSSIBLE for the private sector to do things a certain way, but that it's entirely against it's nature to do so.  Does that mean its not tyranny of the majority?  Maybe it is, but that would apply to any popular gov't establishment, starting with the first court or road.

[Gumby]

At least, that's just how I've come to understand it. If you know of any specific illegal activity, please share it with us.

When the Fed creates bookeeping entries out of thin air specifically to buy anti-charter debt like subprime non-governmental MBS securities, etc. its engaging in fiscal policy and hence, unconstitutional.  Congress did not give the Fed the power to buy non-Treasuries and the power to increase the money supply belongs only to the Treasury.  Bernanke should be tried for treason.

Scribbles on paper may not matter when it comes to political expediency, but we're supposed to operate under the rule of law and a strict Constitution.  Either we find a way to get back to that, or the country will continue to decay.

MG

MG,

In principal, you're correct.

But, in reality, the line between monetary and fiscal policy is rather blurry. Bernanke even called on policymakers to "further clarify the dividing line between monetary and fiscal responsibilities" in the following speech...

http://www.federalreserve.gov/newsevent ... 00525a.htm

[MachineGhost]

MG,

Would you call yourself an anarchist? do you believe in any government?

I don't ascribe Individuals in government with powers others don't have.  An individual or company could build and manage roads, contract out a military, or a number of other things we tend to leave to government.  However, when one analyzes social systems, one would look to the arrangement between gov't and the private sector in one instance, and a 100% private system in the other, and realize that government delivers services in a different way than the private sector would, and the vast majority of people prefer some gov't management of those services because of the different way they're delivered.  Not because it's IMPOSSIBLE for the private sector to do things a certain way, but that it's entirely against it's nature to do so.  Does that mean its not tyranny of the majority?  Maybe it is, but that would apply to any popular gov't establishment, starting with the first court or road.

In principle I am.  I believe in a legitimate authority that actually derives its lawful consent given voluntarily by contractees, not forced upon society by decree and proscriptions of so-called rulers.  Why is accident of birth supposed to equate to grateful slavery within imaginary borders when such is repugnant to hunderds of years of evolving democratic and freedom principles?  I don't consider lawful authority and "government" to be the same thing, however, but I understand society confuses the two (as well as itself with "government") due to the overwhelming threat of force if one doesn't kowtow.  As Don Corleone said in The Godfather, "I'm going to make him an offer he can't refuse."  Respect and fear [of duress, coercion] are not the same thing and the economic outcome is radically different.

In practical reality, there are three things going on:

A) There's the continual usurpation of rights, claims and powers that inherently belongs to individuals by the 1% ruling elite using scribbles on paper for purposes of control and profit.  I call this the perversion of the metaphysical and sacrosanct rule of law.  Example: the board of the city of Los Angeles recently deciding to carve the city into 12 or so zones, granting a monopoly to a waste management company in each zone, putting 50-60 independent waste managmeent companies and their employees out of business, instantly.  Those few waste management companies that are granted the monoplies just happen to be all unionized, not by coincidence.  By what any stretch of the imagination did all the individual customers grant such a power to the board to be econimcally raped in the name of cryonism and protectionism?  It is well recognized under centuries of common law that one cannot intentionally agree to enter into a contract to do harm to themselves, or the contract is null and void as if never have existed.

B) People have a general low level of reason and thinking skills and in combination with A above, they are completely ignorant, brainwashed and bamboozled to think there is something magical about the private sector or "government" that either one or the other can do certain actions for what the other can not.  The only claim to fame the "government" can make is that it doesn't adhere to the restrictions and repressions of the profit motive, i.e. lawfully giving the customer value.  Example: if there's no profit in providing telephone service to rural areas, then use a non-profit organization to provide such instead of economically raping millions of non-customers via taxes with all the waste, fraud and cryonism such generates.  Or use a lawful mechanism, such as liturgy, to do same.  The fact that A above has setup such mechanisms like ticks on a dog, is not proof that society "wants" such; it is proof that society is lazy, takes the path of least resistance, doesn't feel it has the bravado or doesn't have the time and resources to fight and burn the ticks off.  If you haven't noticed by now, the ruling class (ticks) in general rarely takes a stand on principle and fights other members of the ruling class for the benefit of the 99% because it will cause their reputations to suffer, loss of income/business, social ostracism, etc..

C) I've always wondered why people were so consistently irrational that A and B, etc. is perpetuated endlessly over and over throughout the centuries.  At last, I believe I have finally found the answer.  It is due to immortality and the fear of death!

The use of logic and reason taken far enough will bring anyone to the anarchist position sooner or later, because human weakness corrupts absolutely.  The 99% are not at a deep enough level of critical thinking skills about the nature of reality, society and "government", whether because they're struggling with starvation or poverty, are the common criminal or white collar thug, enarmored with breeding/raising children or other addictions, or are politically connected and benefiting from high level of cryonism.  Currently, the ruling class has an enormous influence over shaping the propaganda they want the rest of society to hear, believe and support with a Preatorian class (police, military, SS, FBI, CIA, DIA, NSA!!!) to protect them.  If you'e too busy struggling to survive life and the enemy has outposts in your head, you have zero chance of effectively figuring out how to actually reform or build a better society.

Bottom line: if we want respect for the rule of law so that a society endures instead of inevitably collapsing through corruption, we cannot first base a society on the very fundamental principle of ignoring it.  Compromise may be the root of all evil, but an oxymoron is truly the seed.

MG

[moda0306]

MG,

Your example of Los Angeles is a great reason to be skeptical of government, but we're kind of tinkering around the edges here in terms of anarchism, are we not?  There'd be no Los Angeles without government!  It'd almost be functionally impossible given the way a private sector tends to interact with itself when there is no infrastructure or recognized property rights.  Is that a good thing or a bad thing?  I am not about to judge for people, but there seems to be far less demand to live in areas that look much more "free" (rural areas in small-gov't states) to big cities because of the social & economic environment that has developed there and is accomidated by a certain level of government.

Is there an example of a society that's developed without government that would serve as a model, or close to, for you?  Seems to me a society without government will too often start to look a lot more like Somalia than any kind of utopia.  I can see what you're saying about coercion, I really can, and I actually respect anarchism for its philisophical and intellectual consistency.  However, I think it's a bit of a stretch to attribute peoples' belief that government can do good things as some kind of lack of intelligence.  A lot of anti-gov't people I know are also some of the least educated people I know... this isn't to say I see some kind of correlation between opinions on government and intelligence, overall, but simply in my social sphere.  I think we shouldn't tinker around the edges, though, with anecdotal examples about Los Angeles sanitation.  Anarchism is rooted in principles that allow no government whatsoever.  Not just the excessive, pestering nanny state.  So using those examples only helps us realize that gov't may be too big in some areas, or at least too clumsy.  Anarchism should fully recognize that cities as they exist today probably wouldn't even be able to exist in an anarchistic USA.  Think of all the gov't coordination that makes a city function... it's simply impossible for these types of social/economic spheres to develop without government.  As anarchists, I think your core group should fully absorb and admit that, and explain to us what our new societies free of gov't would actually look like.  Don't hide from it.  Not saying you are, but I think we don't dive deep enough into this question of all gov't being coercion.  It's a valid statement, but not one we can truly visualize by simply pointing out that LA and the CIA do things that are distasteful to us.

[MachineGhost]

Is there an example of a society that's developed without government that would serve as a model, or close to, for you?  Seems to me a society without government will too often start to look a lot more like Somalia than any kind of utopia.  I can see what you're saying about coercion, I really can, and I actually respect anarchism for its philisophical and intellectual consistency.  However, I think it's a bit of a stretch to attribute peoples' belief that government can do good things as some kind of lack of intelligence.  A lot of anti-gov't people I know are also some of the least educated people I know... this isn't to say I see some kind of correlation between opinions on government and intelligence, overall, but simply in my social sphere.  I think we shouldn't tinker around the edges, though, with anecdotal examples about Los Angeles sanitation.  Anarchism is rooted in principles that allow no government whatsoever.  Not just the excessive, pestering nanny state.  So using those examples only helps us realize that gov't may be too big in some areas, or at least too clumsy.  Anarchism should fully recognize that cities as they exist today probably wouldn't even be able to exist in an anarchistic USA.  Think of all the gov't coordination that makes a city function... it's simply impossible for these types of social/economic spheres to develop without government.  As anarchists, I think your core group should fully absorb and admit that, and explain to us what our new societies free of gov't would actually look like.  Don't hide from it.  Not saying you are, but I think we don't dive deep enough into this question of all gov't being coercion.  It's a valid statement, but not one we can truly visualize by simply pointing out that LA and the CIA do things that are distasteful to us.

My points were more about the systematic thought processes, or lack thereof, that allows injustice and coercion to be institutionalized in modern society with all the negatives that it entails.  If a wolf camoflauged himself in sheep's clothing and did good deeds among the flock, it is still a wolf at the end of the day.  Its true nature cannot change and it will use its to it advantage.  I merely propose that we all stop hallucinating that the wolf is a sheep which we've been doing over and over for centuries.

Anarchy means "without rulers".  Thats quite different from the "authority" hallucinotion that most people conflate with "government".  Said another way, authority arises from voluntary respect (rationality).  Coercion/rulers arises from fear (irrationality).  So if we equate government with voluntary and mutually-consented to authority as opposed to a monopoly of coercion over a geographical domain (Mao's barrel of a gun), then you certainly can have an anarchistic government.  By what standard are we supposed to each have individually agreed to contract out to the pretended Constitutional notions of the "Founding Fathers" for their own unique version of institutionalized coercion?  There is no legitimate authority to be found in that process and I know of no legitimate government in existence on this planet at this time.  Go read the Declaration of Independence, its all better said there than I ever could.  What got FUBARed was the implementation of those grievances and ideas.

There are actually examples of anarchistic societies in the past, but thats besides the point.  We are modern human beings now, potentially with a lot more intelligence....  I say its about time we used it to create a more fair and just society that actually respects our innate rights.  But first, people have to get their heads out of their asses and start thinking clearer about reality.

Anarchy is essentially a war against the coercion-wielding ruling elites and their henchmen.  They will usually do everything in their power to squelch or shut down such "dangerous" and "subversive" ideas (to them).  We are lucky to have a First Amendment shield as Europe has/had traditionally a lot less tolerance for any kind of anarchistic thought, with regular raids, imprisonment, etc.. 

The difference between minarchism and anarchism to me is the difference between a camel having its foot in the tent and not.  I am fully supportive of gradualism to get to the end goal, but lets get real.  It's going to mandate the power of technology to continue empowering individuals against the nation-state parasites so that the required changes happen non-politically, without resistance and in the free market.  It will do no good to "overthrow" a metaphysical concept if the same exact thought processes result in the same tired ol' thugs coming back.  We have no choice but to win, otherwise the alternative seems to be a dystopia.  The NSA is already well on the way to implementing it.  Once their version of Big Brother HAL goes online, I will never discuss this stuff publically ever again, so already we can see the chilling effect on intellectual free speech Big Brother HAL is going to have.

MG

[moda0306]

MG,

If all government is coercion, what are the acceptable levels of government?  I know "less is more" to an anarchist, but every single level of government involves what could easily be considered a coercive act.

Also, since any level of government could be considered coercion, I think looking at coercion as the only consideration of the illegitimacy of government is logically flawed.  I tend to think looking at a mix of coercive nature of an act and the utilitarianism achieved is probably the best way to judge government, but even this is up for a lot of interpretation.

For instance, one could look at the fact that the government chops up our neighborhoods with roads and highways, and basically have a soft monopoly on transportation mediums in this country as being a horrible form of coercion.  However, most people see vastly more utility out of our current arrangement than trying to imagine the private sector managing an efficient transportation system.  Also, I hesitate to think that any form of recognizable "private sector" would exist without the government artificially guaranteeing real property... so that throws another kink into the system... one that anti-government folks often like to gloss over.  Many would have considered the monopolists of the 1800's to be "coercion-wielding ruling elites." 

So if it comes down to utility, a group also might see the permanence of a governmental entity to be beneficial in providing certain social safety nets.  The hard-working wealthy farmer or real estate mogul might see a social safety net as coercion, others might see the government recognizing and defending land to the farmer and mogul as coercion... I tend to think it's all part of a balanced society in which I feel very free.  I guess you could call all of this part of a "social contract," though I can see how you'd think that this is illegitimate as well.

[MediumTex]

This is a great discussion, and i would add this to the exchange:

I don't think that most politicians and bureaucrats typically understand the coercive nature of what they are doing.  They are simply suffering from a low-grade delusion that a little coercion is justified by the benefits of state action if the motives are pure.

The police officer that stops me for a minor traffic infraction and requires me to pay a tribute to the state to continue my journey without being kidnapped or beaten by him or his colleagues probably believes that there is a difference between him and the highway robbers that the police are supposedly protecting us from, when in reality (from my perspective) they are exactly the same, except the modern version of the highway robber has succeeded in putting most of his competition out of business.

One of the basic problems, I think, is that a large portion of society wants a "strong man" form of coercive rule to make them feel safe and to have someone to tell them what to do.  The fact that this sort of arrangement virtually always leads to tyranny is a lesson that many people seem incapable of learning.

[moda0306]

MT,

That's a pretty good example to dive into.  The very act of giving us roads is a pretty commonly accepted role of government.  Not because it's not somewhatcoercive in nature, but because it's so incredibly utilitarian.  The coercive costs of having a system that is well interconnected and designed to induce a relatively efficient flow are not enough for us to democratically reject it (not saying democracy can't be coercive, but just pointing out that it at least denotes a certain amount of popularity).  The police tend to do more to maintain a proper flow of traffic than they do to prevent highway piracy.  We'd never expect "freeway pirates" to keep us from driving wrecklessly or going 30 mph over the limit, thereby disrupting the very efficiency the freeway was supposed to give in the first place.  They'd be trying to steal our cars/belongings whether we drove at a reasonable speed or not.  We tend to accept the coercion of the police on the road because it serves to enhance the function of the road in the first place.  If you really think there's not much of a difference there, I'd ask you to describe to me what our roads would be like without any rules of conduct enforced by police, but with the same number of roaming gangs deciding to drive people off the road and empty their wallets.

So it tends to be popular for the government to do this for its utilitarianism.  While some laws surrounding driving are excessive to the goal of the utility of the highway/freeway, most work to maintain the utility that we desired in the first place.  The flow of a freeway doesn't function to nearly the same extent if some people aren't driving given the rules of the road in ways to advance their own individual position.  So while we're getting into more directly coercive acts (pulling people over for going 15 mph over a speed limit, with the threat of force as an inducement to listen to everything they say).  The policing tends to be less popular than roads themselves because they're more coercive, but they also help the roads to function for their intended purpose.  The more stringent the laws, the less utilitarianism accomplished and the more coercion imposed, so there is a balance.

[AdamA]

One of the basic problems, I think, is that a large portion of society wants a "strong man" form of coercive rule to make them feel safe and to have someone to tell them what to do.  The fact that this sort of arrangement virtually always leads to tyranny is a lesson that many people seem incapable of learning.

But isn't this necessary? 

In the book you recommended Earth Abides (which is fantastic) my favorite part is where the gruff outsider, Charlie, comes to live with Ish and his people.  He wants to do something (have 'relations' with Evie, which has been forbidden because she is mentally retarded and, in their eyes, should not have children) that, although probably harmless, is considered taboo.  Because Charlie is so rebellious and threatening to their way of life, they opt to hang him.  As things unfold, you get the impression that Charlie is actually in the right, but you also get the impression that they had no choice other than to kill him for fear that if they let him get away with it, he'd eventually wind up taking over completely.  To me, this kind of exemplified what people mean when they describe government as a "necessary evil."

[MediumTex]

One of the basic problems, I think, is that a large portion of society wants a "strong man" form of coercive rule to make them feel safe and to have someone to tell them what to do.  The fact that this sort of arrangement virtually always leads to tyranny is a lesson that many people seem incapable of learning.

But isn't this necessary? 

In the book you recommended Earth Abides (which is fantastic) my favorite part is where the gruff outsider, Charlie, comes to live with Ish and his people.  He wants to do something (have 'relations' with Evie, which has been forbidden because she is mentally retarded and, in their eyes, should not have children) that, although probably harmless, is considered taboo.  Because Charlie is so rebellious and threatening to their way of life, they opt to hang him.  As things unfold, you get the impression that Charlie is actually in the right, but you also get the impression that they had no choice other than to kill him for fear that if they let him get away with it, he'd eventually wind up taking over completely.  To me, this kind of exemplified what people mean when they describe government as a "necessary evil."

This does raise the always-interesting issue of what exactly the difference is between the state and an organized crime syndicate.

If we put aside the issue of morality, since no one can agree on what exactly morality means and in any case many modern criminal statutes have little to do with morality, the question is really just who will do the coercing--the government or the criminals.  The idea of individuals being free from coercion of any kind sort of gets lost in the swirl of these other issues and competing interests.

Do we have to have government?  In at least a majority of cases I would say no, since in at least a majority of cases I would say state functions are also performed by the private sector.  As I have said before, I'm not in favor of the private sector as solution deliverer for any reason other than I like the way private sector transactions are fundamentally based on the democratic process of doing business with who you want to do busines with, rather than being required to do business with an entity like the state under the implicit threat of violence or confiscation of your property for non-compliance.