Alternative monetary systems i.e. Starbucks Points and MasterCash

[moda0306]

Pointed,

I'm thinking functionally, if I want to get somewhere, I am almost guaranteed to have to enter on to some government path to get there, even if for a bit.  I don't know how I'd get to my airport w/o the government's road.

A grocery store is privately owned, so only holding one kind of peanut butter is their free choice... they don't have a monopoly (well, they may, but not for purposes of your example, I'd presume).

I agree that the main confiscation is the land & resources involved with running the roads... in a sense... but back to my oft-mentioned quandry about resources as private property, who are they stolen from?  Who "owns" land & natural resources?  How does one stake their claim on these over others?  The government issuing and defending ownership rights to certain individuals for non-private resources, to me, is no less coercion than the government, as a social tool of a democratic society, building infrastructure themselves to accomodate productive activity and hopefully enhance prosperity.  In a sense, making non-private wealth private is simply a social tool societies use to prevent the Tragedy of Commons.

[Pointedstick]

In the "best case" scenario, the government pays private contractors using printed money to build roads along unowned land. There's no coercion in that example. Once they start taking money or land already owned by people against their will or without their prior consent, coercion is involved. This is the government breaking its own promise to respect private property, essentially. I get that you feel like private property (especially of land) is a social construct that government grants to individuals, but if the government is going to go back on its promise to safeguard private property it arbitrates over by confiscating it anytime it wishes, then it's not doing a very good job of safeguarding private property, is it? 

[hoost]

Moda,

There are things that I have a hard time envisioning the government not doing.  Providing roads is one of those things, especially local roads.  I could see having a private highway; especially one that traverses rural land.  Having a private road through your neighborhood I could see as more difficult.  Although I do think that the closer those services are provided to the local level the better.  Perhaps the local homeowner's association should pay for its roads.  Maybe they would contract with a private road maintenance organization, sort of like some associations do for garbage service.  But yes, I struggle with how this scales up to the city level, and how it relates to pedestrians, etc.

Having said all of that, I'm not opposed to government roads in general, but I don't think that people who aren't using the roads should have to pay for them.  Of course, they may not use the roads personally, but their food might be delivered on the road; that is fine.  The road use fee would be priced into the food.  I would prefer that all roads were subject to some sort of toll or use tax, and that the taxes that were collected went straight to the road-building authority.  The Harris County Toll Road Authority here in the Houston area functions sort of like this, and I think it works pretty well; although, I don't like paying for roads twice (via gas tax and tolls).  Eminent domain is another big issue that I really haven't developed an opinion on, but obviously fits into the road-building discussion.

Regarding inflation, I see it as an inherent flaw/feature of a fiat monetary system.  The Austrian argument is that fiat currency makes the whole system much more unstable.  Their argument is that inflation manifests itself in certain areas, giving false price signals to businesses that result in malinvestment (boom), which eventually must be liquidated (bust).  This was actually the initial topic of the Bernanke thread I started, from which this thread was born.  I don't know who's right and we've obviously been having lots of discussion about it.  The reason I started that thread was because the author is predicting it's about to happen again, so I thought I'd share his prediction so that we can see if the argument has any merit as events play out.

Regarding private property, this is something that interests me as well.  It's on my list of things to develop a better understanding of; it's a very philosophical question.  I anticipate a few headaches as I learn more about the topic.

[moda0306]

Pointed,

Ok I see how gov't utilizing resources has an opportunity cost to it, but let's forget about gov't use of resources for a second.

You talk about land "already owned by the people."  What natural right do people have to claim land as their own?  I'm not saying the gov't has that natural right, but simply denying that there is any natural right to "own" something that you've simply happened upon and planted a flag into.  If one writes a symphony or designs a better widget, it's very easy imagining that those, as purely a result of intellect and creativity, are "owned" by someone in a purely natural sense, but 80 acres of prairie land?  How about a coal mine?  What about an oil deposit in the ground, or a beautiful beach-front property in Southern California?  How is any of that private in nature?

Simply put, ownership of natural resources is NOT natural or fundamental to the individual involved.  We take it for granted today as a completely natural part of a 100% free market (if there were to be one), but it's very much a result of coercion-backed, organized arbitrary allocation of the natural wealth of our earth.  It's a social construct.  Keep in mind, I believe that a system of recognizing private property is probably the most important government function there is... but it is, at its core, social engineering... just very, very important social engineering used to help prevent the Tragedy of Commons.

If you can explain to me how on earth public resources are inherantly private, and who they should belong to, I'd love to hear it.  I haven't heard one solid defense yet.  Somebody used an example of a baby who's pacifier has been taken away, understanding at his/her core what private property truly is before they even have the ability to really think, and expressing that through displeasure and loud crying.  This is an interesting, and very appropriate example, but probably not for the intended reasons... for the pacifier was NOT the baby's.  It was someone else's. The baby simply got used to the comfort of it, and threw a fuss when it was no longer acknowledged as theirs.  This is evidence not that people have an inherant understanding of private property, but that people have an inherant will to claim as much as their own as they possibly can, whether they have a natural right to it or not.  The mere existence of a resource, and the fact that it appears nobody else has claimed it as their own, seems like a pretty weak natural defense for recognizing that resource as Abraham's, John's, or Peter's.  

[hoost]

In the "best case" scenario, the government pays private contractors using printed money to build roads along unowned land. There's no coercion in that example. Once they start taking money or land already owned by people against their will or without their prior consent, coercion is involved. This is the government breaking its own promise to respect private property, essentially. I get that you feel like private property (especially of land) is a social construct that government grants to individuals, but if the government is going to go back on its promise to safeguard private property it arbitrates over by confiscating it anytime it wishes, then it's not doing a very good job of safeguarding private property, is it? 

I would argue that in the best case, the government would use borrowed money to pay the private contractors to build roads along unowned land.  It would then repay the loans with the proceeds of usage fees paid by those who choose to utilize the road.  There is no coercion in that scenario.  When the government prints money, it is transfering purchasing power from everyone else with money to themselves, and I see that as a hidden form of coercion, which is why I'm generally opposed to printing money.

[Pointedstick]

Moda, what I was saying was that even in a society in which government deeds land and establishes property ownership, collecting taxes and using eminent domain to build a freeway represent breaking the rules of its (unspoken, unwritten) contract to protect property. I was just trying to illustrate how the concept of a property-protector doesn't make a whole lot of logical sense to me.

I agree that the problem of how land becomes deeded and how original property ownership is established is a tricky problem, and I admit I don't yet have a good libertarian answer for you.  I believe Hans-Herman Hoppe has a lot to say on the subject, but I'm not nearly as well read in his works as I ought to be.

Also, the pacifier example was mine, and it seems you're right about it not quite illustrating what I thought it was illustrating. 

[hoost]

I believe Hans-Herman Hoppe has a lot to say on the subject, but I'm not nearly as well read in his works as I ought to be.

I tried to listen to a lecture by him once and it blew my mind.    He is really deep.  I plan to try again someday soon.

[Pointedstick]

I believe Hans-Herman Hoppe has a lot to say on the subject, but I'm not nearly as well read in his works as I ought to be.

I tried to listen to a lecture by him once and it blew my mind.    He is really deep.  I plan to try again someday soon.

Did you know that nearly all his books are available for free online at the Mises institute? I've read a few, and mind-blowing is really the right word, especially for Democracy: the God that Failed. I suspect The Ecnomics and Ethics of Private Property is going to turn my brain upside down too, once I get around to reading it. Hopefully that's where I can find a good answer to Moda's very difficult question.

[hoost]

I didn't know all of his were available, but I did know they have a large number of books available.  I think I have the link bookmarked.  Here.  They have a book that HB recommended reading calledEconomics in One Lesson by Henry Hazlitt.  I read that one a few months back and thought it was pretty good.

Okay, I found Hoppes' book and I just read chapter 13: On the Ultimate Justification of the Ethics of Private Property.  It's 9 or 10 pages.  I think I understand what he's saying, but not well enough to summarize or paraphrase it.  Looks like it starts on page 350; there is also a link to it on the left side in the pdf.  Maybe someone else can give it a read and try to come up with either a refutation or a summary.  I think both will be welcome.  I'm going to take an alieve now.    I'll take another stab at it tomorrow.

[MachineGhost]

My contribution is for everyone to read Private Enterprise Money:

http://www.newapproachtofreedom.info/pem/index.html

and then this article/blog:

http://beyondmoney.net/resource-links/e ... oney-plan/

I believe we'll have money like the Valun once technology makes it feasible.  BitCoin is sort of an early forerunner, but money issuance needs to be related to productivity/demand to be really useful to mainstream society, otherwise it will just be hoarded.

[MachineGhost]

Furthermore, I think it's pretty naive to think that any unregulated monetary system wouldn't be abused by those who profit from it the most. What happens when someone abuses Starbucks points or MasterCash? Does the government get involved? Or do Starbucks baristas come in a Starbucks-mobile and throw those people into a private Starbucks prison?

But what happens when the government itself abuses the monetary system?  Don't we find ourselves in that situation today?  There would be no demand for alternative monetary systems if it was not happening.

Way too many people believe the govenrment has omniscient powers to do what cannot be done by ordinary human beings (which is clearly an oxymoron), but when it comes to the realism of issuing fiat money, I think it's actually true!

[MachineGhost]

Back then we were a country of poor immigrants. Now, with our dollar in the toilet, we are one of the wealthiest countries on earth in terms of living standards. You might feel warm and fuzzy inside if your dollar bought a bicycle, or an ice cream cost a nickel, but your wages and your savings would likely be 1% of what they are now. Even Harry Browne has pointed out that if you put all your cash into Short Term Treasuries 30 years ago you would have done just fine. The whole "our dollar is now worthless" argument is mostly meaningless political misdirection used to rile up constituents.

Come now!  The Greatest Generation that stuffed their currency under the mattress because they didn't trust the banks or government would disagree with you.  I suspect the Greeks soon will also (especially given the increase in direct home invasions by Russian gangs).  It's far too easy to conflate currency with CD's or Treasuries when thinking of "dollars".

[MachineGhost]

Notice the word written on the sword in the banker's hands. If the banker didn't have that sword, they would simply find another weapon to complete their goals. Handing currency creation over to those guys would be a disaster. They would just manipulate their own currencies to attain more wealth.

I think history has amply demonstrated that.  Nonetheless, we need to come up with a better solution than relying on a bunch of pandering blowhards known as Congress.

[MachineGhost]

I can see a lot of your points.  The thing that gets me though is that it seems to me that the inflation we experience in US dollars is a transfer of wealth facilitated by the government.  At the end of the day, if the government is going to be in the business of transferring wealth, I'd rather they do it honestly with guns and taxation.   ;D  It seems like the ability to inflate removes a lot of accountability from politicians, because people don't see the connection between the free things they get and the loss of purchasing power of their money.  They blame businesses for rising prices instead of government.  The same thing goes for the reduction of our freedom over time; it is all facilitated by the government's ability to inflate.

I think inflation is a lot like a lottery.  If you play a ticket when the odds are below the jackpot, its a tax on the stupid just as if you hoarded currency under the mattress instead of lending it out.  But when interest rates are negative, inflation is a tax on savers just as when the lottery jackpot is above the odds of winning, but you lose the ticket.

[MachineGhost]

I agree that the main confiscation is the land & resources involved with running the roads... in a sense... but back to my oft-mentioned quandry about resources as private property, who are they stolen from?  Who "owns" land & natural resources?  How does one stake their claim on these over others?  The government issuing and defending ownership rights to certain individuals for non-private resources, to me, is no less coercion than the government, as a social tool of a democratic society, building infrastructure themselves to accomodate productive activity and hopefully enhance prosperity.  In a sense, making non-private wealth private is simply a social tool societies use to prevent the Tragedy of Commons.

How do you feel about "government" claiming the land and roads for itself but leasing it out to the private sector to operate, maintain and profit from?  This has been successful in a number of countries and their road conditions makes ours look like a sick joke.

[MachineGhost]

I would argue that in the best case, the government would use borrowed money to pay the private contractors to build roads along unowned land.  It would then repay the loans with the proceeds of usage fees paid by those who choose to utilize the road.  There is no coercion in that scenario.  When the government prints money, it is transfering purchasing power from everyone else with money to themselves, and I see that as a hidden form of coercion, which is why I'm generally opposed to printing money.

When the government prints money, nothng happens.  Only when it gives the money to the public, will the influence be felt.  And whether that influence is negative or positive depends on population growth, productivity levels and demand for the money (velocity).

Gumby would say that inflation doesn't even manifest until there is consumer demand.  We debated over this awhile back, but now I think he may be correct as far as demand-side inflation goes.  Money does not cause inflation if its hoarded.  It has to join the velocity stream and demand of any kind is a reflection of that.

I could print up one billion FRN's all by my lonesome in secret, but nothing will happen until it hits that velocity stream.

[moda0306]

I agree that the main confiscation is the land & resources involved with running the roads... in a sense... but back to my oft-mentioned quandry about resources as private property, who are they stolen from?  Who "owns" land & natural resources?  How does one stake their claim on these over others?  The government issuing and defending ownership rights to certain individuals for non-private resources, to me, is no less coercion than the government, as a social tool of a democratic society, building infrastructure themselves to accomodate productive activity and hopefully enhance prosperity.  In a sense, making non-private wealth private is simply a social tool societies use to prevent the Tragedy of Commons.

How do you feel about "government" claiming the land and roads for itself but leasing it out to the private sector to operate, maintain and profit from?  This has been successful in a number of countries and their road conditions makes ours look like a sick joke.

MG,

Could you cite an example of this?  I'm quite curious of the mechanics of this type of system.

[MediumTex]

I agree that the main confiscation is the land & resources involved with running the roads... in a sense... but back to my oft-mentioned quandry about resources as private property, who are they stolen from?  Who "owns" land & natural resources?  How does one stake their claim on these over others?  The government issuing and defending ownership rights to certain individuals for non-private resources, to me, is no less coercion than the government, as a social tool of a democratic society, building infrastructure themselves to accomodate productive activity and hopefully enhance prosperity.  In a sense, making non-private wealth private is simply a social tool societies use to prevent the Tragedy of Commons.

How do you feel about "government" claiming the land and roads for itself but leasing it out to the private sector to operate, maintain and profit from?  This has been successful in a number of countries and their road conditions makes ours look like a sick joke.

A while back I heard the humorous observation that the reason we have traffic is that the private sector makes the cars but the public sector makes the roads, which guarantees that there will never be enough roads in the right places for the number of cars trying to travel on them.

[MachineGhost]

Could you cite an example of this?  I'm quite curious of the mechanics of this type of system.

This is a good start: https://en.wikipedia.org/wiki/Private_highway

Note the number of arguments against free-market roads are dramatically less than those in favor.  It is very, very odd that the U.S. should be heralded as a beacon of capitalism worldwide, yet suffers from decaying public roads and public infrastructure.

[hoost]

The Mises Institute had a good articlethis morning on the "Austrian" point of view of gold as money.

Opening lines:

"I noticed a contradiction," writes an anonymous blogger:

The Austrian School advocates against price fixing and economic planning, and the Austrian School advocates a gold standard, which can be seen as a way of fixing the rate of change of the size of the money supply through economic planning.

I think their approach makes sense.  The idea is not that we should have a government mandated gold standard, but that we should remove all legal barriers to alternative currencies and let people use what they want to use, whether it be gold, Starbucks Points, or MasterCash.

[moda0306]

Could you cite an example of this?  I'm quite curious of the mechanics of this type of system.

This is a good start: https://en.wikipedia.org/wiki/Private_highway

Note the number of arguments against free-market roads are dramatically less than those in favor.  It is very, very odd that the U.S. should be heralded as a beacon of capitalism worldwide, yet suffers from decaying public roads and public infrastructure.

The decaying infrastructure has a lot less to do with government not knowing what it's doing than Congress not knowing how to engineer an economic recovery.  Our roads suck because we are afraid to adequately fund them, not because government just doesn't know what its doing.

I agree that the main confiscation is the land & resources involved with running the roads... in a sense... but back to my oft-mentioned quandry about resources as private property, who are they stolen from?  Who "owns" land & natural resources?  How does one stake their claim on these over others?  The government issuing and defending ownership rights to certain individuals for non-private resources, to me, is no less coercion than the government, as a social tool of a democratic society, building infrastructure themselves to accomodate productive activity and hopefully enhance prosperity.  In a sense, making non-private wealth private is simply a social tool societies use to prevent the Tragedy of Commons.

How do you feel about "government" claiming the land and roads for itself but leasing it out to the private sector to operate, maintain and profit from?  This has been successful in a number of countries and their road conditions makes ours look like a sick joke.

A while back I heard the humorous observation that the reason we have traffic is that the private sector makes the cars but the public sector makes the roads, which guarantees that there will never be enough roads in the right places for the number of cars trying to travel on them.

Freeways often suck due to capacity issues at different times of day.  I'm spoiled in the (liberal) state of MN by having a pretty adequate freewway system to handle the traffic, but I'm quite sure it's the public sector equivalent to mind-numbingly long lines at Disney World on a nice Saturday afternoon.  

[hoost]

Freeways often suck due to capacity issues at different times of day.  I'm spoiled in the (liberal) state of MN by having a pretty adequate freewway system to handle the traffic, but I'm quite sure it's the public sector equivalent to mind-numbingly long lines at Disney World on a nice Saturday afternoon.  

Moda,

Are you from the Twin Cities?  I went to the U of M and lived there for almost five years.  It seemed to me like the freeways there were hit or miss.  I remember 35W was always very nasty going into/out of downtown as was 94, 394 always looked bad during rush hour (I was going the opposite way), 494 on the west side was always a pain, 36 was bad...I'm trying to think of areas that were decent during rush hour but I can't really think of any.  Most of the time I was going the opposite way that traffic was since I lived on campus.  It seems like the Houston traffic is not quite as bad as Minneapolis-St. Paul, although there are definitely routes I avoid during rush hour.

There are a lot of things I miss about the cities, but traffic and mid-October through mid-April weather are not included in that. 

[moda0306]

hoost,

Yes I am... I am comparing traffic to what I assume to be true stories from MN newcomers that lament on how much less gridlock traffic we have.  That said, I agree with almost all your examples on some level... 35W has been improved, and to be honest it's great coming NE out of the cities until I get off onto 36, which is a bit stubborn but really not that bad.

Road construction from our brutal winters makes it worse than it would otherwise be as well.

PS, you forgot 169... perhaps one of the worst at certain times of day. 

[MachineGhost]

The decaying infrastructure has a lot less to do with government not knowing what it's doing than Congress not knowing how to engineer an economic recovery.  Our roads suck because we are afraid to adequately fund them, not because government just doesn't know what its doing.

That's possible considering other countries like Japan (bridges/roads to nowhere galore), but I think you're holding onto a very small probability occurence.  "Government" is incompetent in both funding and knowing what it should be doing at various times just by the nature of an institution which is not predicated upon voluntarily satisfying clients to achieve a gain.  The lack of the pricing signals leaves brute force, political favors and backdoor cryonyism as poor alternatives for determining whether any good is being done to society (I'm presupposing that is the theoretical function of "government", reality nonwithstanding).  I don't think history has shown the latter to be very efficient, useful or just.  As a prime example, Congress responds only to short-term voting considerations and short-term profit at expense of long-term societal harm; if anything, that is the real Tragedy the Commons!

"Big Vision" government projects like the FDR's industry cartelization, Eisenhowers's federal highway system or Kennedy's NASA moon shot may succeed initially, but over time the accumulated externalities and inefficiencies come home to roost.  It seems to me the worker bees/ants are not capable of maintaining said vision once the queen bee/ant is gone.  The workers need a stake in the game to actually care about outcomes, i.e. to become private property owners.  With government bueraucracies and big businesses the breeding grounds of socialism, as they take up more and more of the GDP, the workers become more and more dysfunctional from that standpoint.

[hoost]

hoost,

Yes I am... I am comparing traffic to what I assume to be true stories from MN newcomers that lament on how much less gridlock traffic we have.  That said, I agree with almost all your examples on some level... 35W has been improved, and to be honest it's great coming NE out of the cities until I get off onto 36, which is a bit stubborn but really not that bad.

Road construction from our brutal winters makes it worse than it would otherwise be as well.

PS, you forgot 169... perhaps one of the worst at certain times of day. 

Ah, yes, 169.  I didn't go over there very often, but when I did I regretted it.    The winter does make it worse, because you have the winter storms causing backed up traffic during those months, and the summer construction coupled with lake season backing up traffic during the summer months.

All told I'd say that traffic there is about average for what I've experienced, which admittedly isn't a whole lot.  Los Angeles and San Diego are much worse.  Lafayette, LA is horrible; I'd say on par with LA, but it's a much smaller town.  Luanda in Angola has by far the worst traffic I've experienced.  Houston is a bit better than MSP depending on which route you take.  ...I guess we're getting a bit off track for this thread.  Although I must say, I'm looking forward to heading back up to MN later this summer; it will be a nice relief from the Texas heat.