Government and law

We indoctrinate even children into the belief that selective breaking of laws is beneficial for society as a whole. But it is a lie. For example, counterfeiting is illegal. If it is widespread, the value of money decreases, which is incredibly damaging to everyone except early recipients of the counterfeit funds. But government counterfeiting happens on a massive scale, through the Federal Reserve. Whole schools of economics exist in government-funded graduate schools to teach supposed mechanisms by which this is beneficial, but the truth is it is just as destructive when government does it as it is when private individuals do it. The result is a dollar that has lost 95% of its value since 1913, after previously holding its value for several centuries (since even before the establishment of the U.S.).

Government as we know it is essentially just an institution that holds a monopoly on breaking laws. They routinely violate the rights to life, liberty, and property. They even claim the power to make law, determining that some crimes are permissible (perhaps only by certain people or under certain circumstances) and declaring other wholly permissible acts to be crimes.

In the English common law tradition which continued to influence this country even as late as the mid 1800's, law was something immutable to be discovered and reasoned about by man, but not created or changed.

I am for constraining the government to obey the laws, the real laws, the immutable laws which hold sway in every time and place: let's outlaw the infringement of the rights to life, liberty, and property!

Government-certified money

Once upon a time, people had to barter in order to trade. If you raised chickens and needed butter, you had to take a chicken to a dairy farmer and hope he needed chickens, and hope he'd give you enough butter that you wouldn't be shortchanged for your chicken, and hope you could find a use for all the extra butter, because it's hard to make change for a live chicken.

Then the free market discovered money, and if you haven't read the book I just linked to on the words "discovered money," I encourage you to leave my site immediately and go read it before finishing here, because the information there is more important than just about anything I have to say. The free market selected gold and silver as its two forms of money for several natural reasons, and soon anybody could make a better living by exchanging what they produced for money and then exchanging money for what they wanted or needed.

Of course, when you accepted a gold or silver coin as payment for something valuable you produced, you wanted to make sure you didn't get shortchanged, and you therefore wanted to make sure that you really got the amount of gold or silver you were promised. If you'll go bankrupt producing chickens for a half an ounce of gold each, then you want to make sure the one ounce gold coin you've been given really does contain an ounce of gold.

So the minting business arose and created spectacular innovations to protect its customers: gold and silver ("money") was turned into coins for portable convenience. A coin would be a uniform shape and size and contain a uniform amount of precious metal. The precious metal would be alloyed with a uniform amount of base metal in order to make the coin more durable so that the precious metal wouldn't wear away. (I have made the incredibly expensive and stupid mistake of dropping a United States gold bullion coin on my ceramic tile floor. Gold bullion coins are way too pure to be used in general circulation; there is very little base metal in them. The coin in question suffered ugly dents and little flecks of gold were seen flaking off from those dents.) The edges of the coin would be reeded so that if anyone tried to clip precious metal off the edges (do this often enough and you can make a new coin!) it would be obvious that the coin no longer contained its stated quantity of gold or silver ("money"). And the mints stamped the coins with their own seals or other indicator, giving them the chance to build a reputation for reliable coins. In Joachimsthal, now in the Czech Republic, one particular mint did such a good job that the name of its world-renowned silver coin, the Joachimsthaler, became the standard for other coins and eventually became the generic name for coins of the same weight and composition. The Joachimsthaler became the Thaler, which became the Dollar. (And then the United States government appeared and assassinated the dollar, but I'm getting ahead of myself.)

The free market therefore managed to provide the best possible protection against being cheated in money. If you didn't provide just weights and a just balance, people would actually find out, word would get around, and people would be visiting your competitors.

But liberty dies on a lie, and this is the lie: government persuaded everyone that the risk of adulterated or counterfeit money (gold and silver, remember) on the free market was too great. Despite the fact that the very best in money protection had been innovated by the free market, the government told people that this was not enough, that their money was at risk, and that they could magically help. You see after liberty is mortally wounded by the first lie, and that is that government is somehow a magic organization of people that can do what people organized in other ways cannot: protect you from the unacceptable risk of adulterated money.

And so the government had "proved" that it naturally must have a monopoly on the money supply. The government became the sole supplier of coins. Now money was government certified, and finally everybody could trust it. They could trust it so well the government hoped they didn't even find it necessary to check it. And it wasn't long until every time the government got its hands on a coin that the coin was clipped, or melted down and mixed with more base metal than it was supposed to have, in order to give the government more coins and trick people, for a while at least, into accepting less payment for the product of their hard work which government desired. So the government lied about protecting people and then perpetrated the same harm on those people. Sadly, one definition of government is a group of people with a monopoly on breaking the law. Note that in this case, the law already existed before the government even regulated the issue: private sellers have an incentive to keep just weights and a just balance; the government does not, especially when it comes to the money supply.

The big lie isn't just about money. Everywhere government tells the same story in order to kill liberty and expand its own power: there is a danger, and the risk of this danger is unacceptably great, and even though the government is just a bunch of people with fancy hats and titles they are somehow magically able to protect against this danger in a way that people organized in other fashions cannot.

Parents can't select who will teach their children; only somebody certified by the government should be allowed to do that! (And if parents want to teach their children by themselves, heaven forbid, we simply must regulate the situation and insist that the parents are certified.) It's too dangerous for people to simply select their own health care providers; the state must certify certain people as "doctors" and only they should be allowed to practice medicine. Food could contain dangerous additives and the government must look it over. Noone would preserve great natural wonders or historic monuments if the government didn't take care of them, with your money. The roads would be a warzone if we didn't license drivers. If government doesn't step in to regulate cheese, somebody might sell a lesser-quality cheese under the same name, or an identical-quality cheese from a different location which people would buy instead of the real thing, or people might even begin to think that quality is subjective. Chances are, you felt a gut feeling of agreement with some of these sentences.

Of course one of the biggest dangers to the state is the idea that anybody should be allowed to read the law and have their own opinion on it, and so practicing law without a license is of course completely forbidden.

Are there real dangers if the state isn't allowed to regulate and certify things? Yes, there are. As I showed above, in the realm of money the the free market protected against these dangers better than the government, though. Lord willing, I will later blog on two ways in which the free market protects against such dangers in general.

Counterfeiting

What do you think about counterfeiting? Is there anything wrong with it? Counterfeiting is illegal, but should it be? Does it hurt anybody?

When a person counterfeits a dollar bill, he can immediately spend it (assuming he did a good enough job), so the faux bill has some value. It is worth roughly a dollar. Where did this value come from?

With a new dollar in circulation, everybody else's dollars are worth slightly less. If there were only one thousand dollars in existence before the counterfeit, then every one of those bills lost value equal to one-tenth of a cent, in order to make up the value that the new bill received.

This effect is trivial for one single one dollar bill. Nobody counterfeits "one spots," anyway. But if an operation cranks out hundreds and hundreds of twenties, suddenly the effect is not so insignificant. If a person or group were allowed to keep manufacturing money in this way, they would eventually steal a large portion of the value of the rest of the money supply. So counterfeiting hurts everybody.

Here's the lesson: your government can do the exact same thing. I'm not just talking about the ability to print money: through the sale of treasury instruments, through banking mechanisms, and through good old fashioned printing, the United States government has the power to manufacture new money. When this happens, it hurts people, just the same as if it were done by somebody else. It doesn't magically become helpful just because the government does it instead of a common criminal. It doesn't magically become safe just because we took a vote on it. And it doesn't magically become a good idea because some economists (paid by the government -- go figure) claim that the money supply needs to "expand." I already showed you above what happens when the money supply is expanded like this, and it is not a good thing.

Creation of money is stealing. It changes the value of everybody else's money. It violates the command of Leviticus 19:36 -- it makes the measure of our dollar unjust and changing. Originally a dollar was equal to about one ounce of silver, or about one-twentieth of an ounce of gold. If people wanted more dollars, they had to work for them, either by selling goods or services that they labored to produce, or by digging them out of the ground.

Should Christians support the government producing more money out of nothing? Because this is one area where both of the major political parties have the same stance. They are squarely in favor of government continuing to have this power.

Pizza for pesos, part two

Pizza Patrón has announced their intention to continue accepting the Mexican Peso at their stores. Good for them! I'm sure they are making a lot of money off of this service. Good for them! Unless somebody was using force to affect the transaction (for example, by pointing a gun at someone, or passing a law requiring authorities to point a gun at someone), such voluntary transactions mean that people were served, and society, on balance, advances. In general, they will prosper in proportion to the value of the service they provide.

Money liberty is a freedom we don't often think about. The authors of the United States Constitution intended American money to be limited to gold and silver. It is impossible for the government to inflate the supply of gold and silver. Inflation is a means of stealing some value from the entire money supply and using it to create new (stolen, counterfeit) money. It is a violation of Leviticus 19:35-36. Inflation does not add value to the total money supply; it merely redistributes the value that already exists. (And unlike other government programs, it usually doesn't make any pretense of redistributing the value to the poor. This value tends to go to bankers and other credit-driven industries like real estate.) After millenia of human existence, the free market had selected gold and silver as money, the medium of human exchange. Governments used force to confiscate gold from their citizens and force their populations to use paper money instead, giving government powers over the money supply, such as inflation. (They call this power "flexibility.")

The sole reason government insists on paper money is in order to have this power over the money supply. If left to the free market, trade would probably resume again in some commodity like gold or silver. Platinum has presented itself as a modern choice that some people think could be a good medium of exchange. In older times, some societies were known to trade in butter, cartwheels, and even cigarettes. But over time, gold and silver have always tended to win out as being the most convenient for trading.

If you own your property, you have the right to do whatever you want with it, including trade it to another property owner for whatever he is willing to trade for it. But we have decided that modern societies need to have limits on freedoms like this. We tell people they may keep their property, but then we limit what they may do with it. This is a violation of God's command that we honor private property: "Thou shalt not steal." If I tell you how to use your property, I've stolen it and left you as a mere custodian. On top of this fundamental abuse of freedom that occurred in order to bring about our present money situation, the whole reason for this system's existence is so that the government can create new dollars at will: in other words, so that the government can steal from every single dollar holder at once, any time it wishes. Is this a power that Christians should vote for?

The Constitution granted Congress the power to make coins out of gold and silver, and to establish their value. In its first act pertaining to money, the Congress declared the United States dollar would be equal to the amount of silver in a one ounce silver coin that was circulating at the time. This coin had a lengthy history: in the middle ages, some of the best silver coins came from the German area of Joachimsthal. The coins came to be known as the Joachimsthaler, or later the Thaler. If it's not obvious, this is where the name "dollar" came from. Eventually there were lots of sources for Thaler-sized coins, and they were all called Thalers or Dollars. It doesn't matter where an ounce of silver comes from as long as its the same weight as every other ounce.

Long before our modern paper money, the most popular coin for trade in America was a Thaler coin called the Spanish Milled Peso, or the Spanish Dollar. America's founders couldn't care less what was stamped on their silver and gold coins, as long as the coins were of the right valuable substance, and of the right weight. Even though America eventually started minting its own coins, Spanish Pesos and American Dollars circulated side by side for over a century. Nobody thought this was strange. Benjamin Franklin, George Washington, Alexander Hamilton, Thomas Jefferson -- all of them almost certainly traded in Spanish Pesos at some point in their lives, here in America.

Government came up with the idea that it should have a monopoly on coin production within its territory. It started teaching its people the idea that they should use only their own national coins, as a matter of national pride. Almost all governments did this. Eventually governments passed laws to try to require people to use their own national currencies in most day to day transactions. This was just a step on the road to currency the government could inflate. (If everybody can switch to gold or silver coins from another country or a private mint, then they will do so the minute the government starts issuing inflated coins with less gold or silver in them. Competition, the free market, protects people's interests far better than any government.) Search your Constitution -- you'll find the power to mint coins granted to the federal government, you'll find the power to mint coins and the power to issue paper money denied to the States, you'll find an amendment that says the federal government doesn't have any powers that aren't granted to it by the Constitution (this is in an Amendment because the original writers of the Constitution thought it was obvious). If you compare with the previous Articles of Confederation, you'll find that the phrase used to grant Congress the power to mint coins originally contained permission to issue paper money -- this was intentionally taken out when the sentence was moved to the Constitution. What you won't find in the Constitution is the right for the federal government to monopolize money. You won't find any sentence granting them the right to require people to use American coins. In 1920 it took an Amendment to the Constitution to give the federal government the right to outlaw alcohol. Why did it not take an Amendment to give Congress the power to monopolize money, or issue paper bills?

If you'll check this link, you can see how much value has been stolen from American dollars. Originally, a dollar was one ounce of silver, or one twentieth of an ounce of gold. How much silver is a dollar worth now? How much gold?

Given that America's founders used coins like the Spanish silver Peso interchangeably with American Dollars, and intended us to continue doing so, I find the uproar over Pizza Patrón's private business decision to take Mexican paper Pesos to be somewhat out of place. A more appropriate uproar would be one against the criminals in government who violated the Constitution and required us to start using fake paper dollars.