Tuesday, July 28, 2015

Selgin and Salerno on Free Banking

When it comes to issues of either libertarian philosophy or Austrian economics, I have a very simple approach to each of these two topics – certainly not very doctorial. 

Regarding libertarian philosophy, I develop my views based on a strict interpretation of the non-aggression principle, grounded in an absolute view of property rights.  This makes theory relatively easy for me, and helps resolve many – but not all – questions of application.  It also helps keep me disciplined regarding topics that are or aren’t within the confines of libertarianism.

Regarding Austrian economics, perhaps it is more appropriate to say that my views are grounded in free markets; Austrian economics happens to be the closest thing to free market economics that exists.  Free markets means, to me, any transaction between two or more willing participants. 

I put these two together and conclude: a legal or valid free market transaction is one that does not violate the non-aggression principle.  Even this may be compatible with Austrian economics, I don’t know.

In neither case have I read every work of the great masters; in fact, I have read only a little work of any of these – Mises, Rothbard, Hayek, etc.  I build my views from the very simple foundations as identified above – nothing more complicated than this.  I sometimes find after the fact that what I have concluded does…or does not…coincide with the views of one of these masters.  I can live with either, although I always test my conclusions if I feel there is something presented that I have missed.

So on the subject of banking (and money and credit and currency), I approach the topic from a free-market viewpoint; as long as two or more people are gathered in whatever name – and they do not initiate aggression against a third party – they are free to contract in any manner they choose. 

Regarding money and banking: I don’t care about inflation, I don’t care about gold, I don’t care about shadow banks, I don’t care about fractional reserves, I don’t care about business cycles; these are all issues for entrepreneurs in the free market to deal with.  It’s called life.  Competition, pricing, and profit and loss will send the necessary signals and separate the profitable wheat from the loss-making chaff.

In other words, leave money and credit and banking and currency to the market; thereafter, whatever will be, will be.  Unless someone has a convincing argument as to why introducing force is both appropriate and not a violation of the NAP…well, there you have it.  Initiating force and the NAP are not compatible; initiating force and free markets are not compatible.

With that as background, I would like to consider two posts on the topic of free banking.  The first is by George Selgin, entitled Hayek and Free Banking; the second is by Joe Salerno – in response to Selgin – entitled Selgin on Hayek on Free Banking.

I guess I could have titled this post “Bionic on Salerno on Selgin on Hayek Free Banking.”  But that would have been a bit much, I think.  In any case, I do not fall on one side or the other in these dueling posts; I find much to agree with both, and some items where I disagree.  It will be on the disagreements where I focus (otherwise it would make for a pretty boring post to write…and read, I believe).

Selgin begins by pointing to Hayek as his inspiration to look into and develop his (Selgin’s) free banking views.  After introducing two pamphlets by Hayek that got Selgin to thinking about this topic, he offers:

Yet Hayek himself was no free banker.  For starters, his own vision of "choice in currency" had little if anything in common with historical free banking arrangements.  In those arrangements, banks dealt in established, precious-metal monetary units,  like the British pound and the American dollar, receiving deposits of metallic money, or claims to such, and offering in place their own readily-redeemable liabilities, including circulating banknotes.  In Hayek's scheme, in contrast, competing firms issue irredeemable paper notes, with each brand representing a distinct monetary unit. 

Competition, Hayek claimed, would force private issuers of irredeemable currencies to maintain those currencies' purchasing power, or else go out of business.  An overexpanding free bank, in contrast, is disciplined, not by an eventual loss of reputation, but by the more immediate prospect of running out of cash reserves.

But isn’t this the benefit of competition in a free market?  The market may very well settle on free banking in a redeemable environment.  As long as the possibility for any arrangement remains open, the market will sort this out.  I do not understand why this suggests that Hayek was no free banker.  Just because he outlined a scheme different than anything Selgin is aware of in history does not mean that Hayek’s proposal is not “free.” 

I guess I will suggest that no one is a free banker unless they actually support fully free banking – this may result in redeemable, not redeemable, whatever; but free banking in only redeemable currencies or free banking only in non-redeemable currencies isn’t free banking.  For those certain that the result will be currency redeemable in gold…we have no beef, as long as we agree that the market be left free to sort it out.

Sunday, July 26, 2015

Antonio Gramsci Libertarians

I continue on my exploratory journey of various hyphenated libertarians.  Working through all that was required to write my most recent post on this topic was most helpful to me in this regard.

I offer again my summary thoughts from this post, regarding self-identified “left-libertarians”:

This social agenda need not be embraced by all who carry the name “libertarian.”  It is perfectly “libertarian” to peacefully picket for either the gay couple or for the baker.  Libertarian theory and the NAP does not offer guidance beyond the respect for property.

When push comes to shove, however, I contend that all libertarians must fall on the side of property rights.  Absent property rights, there is no NAP; absent the NAP and you can remove the word “libertarian” from “left-libertarian.”  Recalling the history of the movement, you end up with the Marxist strain.

Keep that in mind when you are told by a so-called libertarian about the social causes you must support.

I know that there are libertarians who hold what would be described as conservative or traditional cultural views – to include what would be described as traditional Christian views.  On many topics of culture, I am one of these; needless to say, I come to these outside of and apart from anything derived via libertarian theory.

The individual of who I am most aware within the libertarian community who writes rather strongly about such cultural aspects is Hans Herman Hoppe.  To my knowledge, he does not mandate or suggest that individuals must or should adopt these views as libertarians.  I have read and heard him speak of such things via practical / logical arguments.  In any case, if he conflates his cultural views with libertarian theory, I would disagree with the connection.

To be fair, I haven’t read much of Hoppe’s work on this subject, however.  So I went poking around, and look what I found:

What’s with the socially conservative strain of anarcho-capitalism coming out of the Mises Institute and Hans-Hermann Hoppe?

It is a brief post at the Center for a Stateless Society site – the same site that I visited for my above-mentioned post regarding left-libertarian thinking!

If you’re an outsider to the libertarian tradition you might be baffled by some of the positions of some of the libertarian anarchists like Hans-Hermann Hoppe at the Ludwig von Mises Institute.

I would only be baffled by this if I thought that libertarian theory had anything to say regarding such cultural questions.  Libertarian theory does not; it merely addresses the proper use of force.

Liberty is about the emancipation of humans from oppressive forms of organization, so what is the deal with someone who claims to support liberty but thinks queer influence is a net negative for society?

I will avoid for today digging into whatever might be meant here by the phrase “oppressive forms of organization.”  As to the rest – imagine any of the following:

…what is the deal with someone who claims to support liberty but thinks a high rate of divorce is a net negative for society?

…what is the deal with someone who claims to support liberty but thinks children born out of wedlock is a net negative for society?

…what is the deal with someone who claims to support liberty but thinks use of recreational drugs is a net negative for society?

…what is the deal with someone who claims to support liberty but thinks alcoholism is a net negative for society?

There is no “deal.”  As a libertarian, any of the four could be reasonable concerns, and to hold any of these as concerns does not violate libertarian theory.  Of course, the same is true regarding “queer influence.”

Don’t believe me?  Ask C4SS…from the same post:

Friday, July 24, 2015

The Vintage of History is Forever Repeating

-        E.A. Bucchianeri, Faust: My Soul Be Damned for the World Vol. 2

With the benefit of hindsight and the evidence of subsequent events, it is easy to identify moments in history that were (rightly or wrongly) meaningful, regardless of how the event was viewed at the time.  This will be a story about one such event.

It is also a story of a repeating history…or maybe just a continuing history – after all, a few centuries from now the last 100 years will be remembered as one long event; a newer “100 Years War,” perhaps.

I am currently reading “A Peace to End All Peace: The Fall of the Ottoman Empire and the Creation of the Modern Middle East,” by David Fromkin.  From the Amazon introduction:

David Fromkin reveals how and why the Allies drew lines on an empty map that remade the geography and politics of the Middle East. Focusing on the formative years of 1914 to 1922, when all seemed possible, he delivers in this sweeping and magisterial book the definitive account of this defining time, showing how the choices narrowed and the Middle East began along a road that led to the conflicts and confusion that continue to this day.

This post is not about the Middle East or the fall of the Ottoman Empire.  It is about Europe’s Great Game, offered as chapter 2 in Fromkin’s book.

"The Great Game" was the strategic rivalry and conflict between the British Empire and the Russian Empire for supremacy in Central Asia.  The classic Great Game period is generally regarded as running approximately from the Russo-Persian Treaty of 1813 to the Anglo-Russian Convention of 1907. A less intensive phase followed the Bolshevik Revolution of 1917. In the post-Second World War post-colonial period, the term has continued in use to describe the geopolitical machinations of the Great Powers and regional powers as they vie for geopolitical power and influence in the area.

It is easy enough to accept that the United States has taken Britain’s place in this so-called game.  It is my view that this switch was by design, on behalf of all relevant and meaningful parties. 

Fromkin traces the roots of the game to Napoleon’s advances against Egypt and Syria, key points in Britain’s access to its outposts and colonies in the sub-continent and Far East.  Though Napoleon was checked in his plans, Britain’s global vulnerabilities were exposed.

…Napoleon afterwards persuaded the mad Czar Paul to launch the Russian army on the same path.

This was Czar Paul’s Indian March:

The secret plan of the expedition, as preserved in the Russian archives, envisaged the joint operations of two infantry corps, one French (with artillery support) and one Russian. Each infantry corps had 35,000 men, the total force thus containing 70,000 men, plus artillery and a large contingent of Cossack cavalry.

The march was stopped:

When Orlov's modest Cossack contingent advanced as far south as the Aral Sea, they received intelligence of the Emperor's assassination. The Indian March was brought to a halt, and before long the Cossacks were commanded to retreat.

And perhaps in this event was the so-called Great Game between Britain and Russia born:

The British public learned about the incident years later, but it firmly imprinted on the popular consciousness, contributing to feelings of mutual suspicion and distrust associated with the Great Game.

For a nice little twist:

It is tempting to speculate that the Pahlen plot was triggered by the Indian adventure, given that the high-placed Russian officials did not approve of it and their conspiracy was financed by British diplomacy. There is no evidence to confirm this conjecture.

Returning to Fromkin, Britain’s response to this threat was to support the native regimes of the Middle East against European expansion:

Throughout the nineteenth century, successive British governments therefore pursued a policy of propping up the tottering Islamic realms in Asia against European interference, subversion, and invasion.

George Curzon outlined the stakes:

“Turkestan, Afghanistan, Transcaspia, Persia – to many these names breathe only a sense of utter remoteness…To me, I confess, they are the pieces on a chessboard upon which is being played out a game for the dominion of the world.”

I guess that makes the rest of us “Mongo.”

Tuesday, July 21, 2015


I offer “What is Left-Libertarianism?” written by Kevin Carson and published at the Center for a Stateless Society, A Left Market Anarchist Think Tank & Media Center.  It is a well written summary of the background and historical basis for the “left market anarchist” political philosophy.

I will comment little until the end; I choose to leave Carson’s work (and explanatory comments from others) to do the heavy lifting.

We call ourselves left-libertarians, first, because we want to recuperate the left-wing roots of free market libertarianism, and second because we want to demonstrate the relevance and usefulness of free market thought for addressing the concerns of today’s Left.

The following paragraph came before the paragraph cited above, yet it offers historical background and context:

[…“left libertarian”…] was originally used as a synonym for “libertarian socialist” or “anarchist,” and also commonly included syndicalists, council communists, followers of Rosa Luxemburg and Daniel DeLeon, etc. Many of us at C4SS would consider ourselves part of this broader left-libertarian community, although what we mean when we call our position “left-libertarian” is more specific.

…is a type of proposed economic system, a form of socialism, considered a replacement for capitalism. It suggests that industries be organized into confederations or syndicates. It is "a system of economic organization in which industries are owned and managed by the workers."

Syndicalism…holds, on an ethical basis, that all participants in an organised trade internally share ownership of its production.

In syndicalism, unions exist independent of a state, and do not operate under state micromanagement and central planning.

Syndicalists state that society ought to be organised bottom-up based on direct democracy, confederation, workplace democracy and decentralised socialism.

Mises on Syndicalism (Human Action, Ch. XXXIII Scholars Edition):

The second meaning of the term syndicalism refers to a program of society's economic organization.  While socialism aims at the substitution of government ownership of the means of production for private ownership, syndicalism wants to give the ownership of the plants to the workers employed in them. Such slogans as "The railroads to the railroadmen" or "The mines to the miners" best indicate the ultimate goals of syndicalism.

…the idea of syndicalism as a system of social organization is a genuine product of the "proletarian mind." It is precisely what the naive employee considers a fair and expedient means for improving his own material well being. Eliminate the idle parasites, the entrepreneurs and capitalists, and give their "unearned incomes" to the workers! Nothing could be simpler.

The root of the syndicalist idea is to be seen in the belief that entrepreneurs and capitalists are irresponsible autocrats who are free to conduct their affairs arbitrarily. Such a dictatorship must not be tolerated.

The fundamental error of this argument is obvious. The entrepreneurs and capitalists are not irresponsible autocrats. They are unconditionally subject to the sovereignty of the consumers. The market is a consumers' democracy. The syndicalists want to transform it into a producers' democracy. This idea is fallacious, for the sole end and purpose of production is consumption.

It is a characteristic fact that the syndicalists in dealing with these issues always refer to management and never mention entrepreneurial activities.

Council communism (also councilism) is a current of socialist thought that emerged in the 1920s. Inspired by the November Revolution, councilism was characterized by its opposition to state capitalism/state socialism and its advocacy of workers' councils as the basis for dismantling the class state. Strong in Germany and the Netherlands during the 1920s, council communism continues to exist today within the greater socialist and communist movement.

Chief among the tenets of Council Communism is its opposition to the party vanguardism and democratic centralism of Leninist Ideologies and its contention that democratic workers' councils arising in the factories and municipalities are the natural form of working class organization and authority. Council Communism also stands in contrast to Social Democracy through its formal rejection of both the reformism and Parliamentarism.

From libcom.org:

…council communists argue that society and the economy should be managed by coordinations of workers’ councils, made up of delegates elected at workplaces and can be recalled at any moment by those who elected them. As such, council communists oppose bureaucratic state socialism. They also oppose the idea of a revolutionary party seizing power, believing that any social upheaval led by one these ‘revolutionary’ parties will just end up in a party dictatorship.

Saturday, July 18, 2015

Something Positive

My last several posts have been…negative – for the most part critical of non-libertarian libertarians.  I enjoy doing it and will continue whenever I come across an opportunity.  There is one word that will continue to have meaning, and that word is “libertarian.”

As a libertarian and Austrian, it is tremendously easy to find things about which to be negative – whether in the world around us or regarding those who seem to desire to distort the message.

But this post will be about something positive. 

Sunday marks the beginning of Mises University:

The Mises University is the world's leading instructional program in the Austrian School of economics. Since 1986, it has been the essential training ground for economists who are looking beyond the mainstream.

The program offers courses and seminars on the whole range of the discipline. A core curriculum presents economic foundations, and more than fifty elective classes explore the entire range of economics, in all levels of advancement.

If you aren’t already attending, no worries.  Many of the courses will be streamed live.  Further, for a nominal fee, you can enroll in Virtual Mises University.  The fee offers the possibility participating in forums, submitting questions, and ultimately securing a certificate of participation.

If liberty and free markets are ever to be achieved, it will only happen through education – not through advocating “policy” and not through violent revolution.  The Mises Institute is at the forefront of consistency in these fields, and Mises University is a wonderful vehicle through which many young people can be introduced to or gain a deeper appreciation for freedom.

And while you’re at it, send a few units of fiat digits.  We can all do something to advance the cause.

An Update on a Leftist Wolf

The following comment was posted regarding “A Leftist Wolf in a Libertarian Sheep’s Clothing,” my thoughts on Sheldon Richman’s defense of the supreme court’s decision on gay marriage.  I feel the comment and my response deserves its own space.

The Question July 17, 2015 at 8:36 AM


I linked to this post on my site in my own critique of Richman and have been in an exchange with Thomas Knapp of C4SS over what Richman meant when he wrote it. Strangely, Knapp brought up something you said here that I did not quote in my post and seemed determined to make it the center of the argument. I refused to debate the merits of it there, and even stranger is that while he was willing to discuss what you said there he has yet to comment about it here.

You wrote that "Yet nowhere have I read that Richman advocates for the property rights of bakers who refuse service to gay couples, or of bartenders who refuse service to (insert your favorite protected class here). In fact, he often writes what could easily be interpreted as the opposite – and even calls it libertarian."

On my site Knapp posted this link to one of Richman's articles, where he acknowledges the property rights of such people while advocating for ways to deal with them without using state violence, and I'm curious how you view it within the context of what you said above.

bionic mosquito July 17, 2015 at 1:39 PM

How I would view it is that Richman is either confused, or purposefully confusing. From the link you provided:

While such behavior is repugnant, the refusal to serve someone because of his or her race, ethnicity, or sexual orientation is nevertheless an exercise of self-ownership and freedom of nonassociation. It is both nonviolent and nonviolative of other people’s rights. If we are truly to embrace freedom of association, logically we must also embrace freedom of nonassociation.

I continue to have trouble believing that the libertarian philosophy is concerned only with the proper and improper uses of force. According to this view, the philosophy sets out a prohibition on the initiation of force and otherwise has nothing to say about anything else.

Let’s get specific. Are there distinctly libertarian grounds for disapproving of racist conduct that does not involve the use of force?

So I’m puzzled by the pushback whenever someone explicitly associates the libertarian philosophy with values like tolerance and inclusion. We don’t care only about force and its improper uses.

So, how are these two reconciled? How can libertarianism include the freedom of non-association and at the same time be associated with tolerance and inclusion. A philosophy cannot so directly contradict itself without being considered bankrupt.

If you want to advocate tolerance and inclusion, feel free; just don’t include it as a desire to expand the meaning of libertarian philosophy – as Richman does.

I suspect that I write as much as any libertarian about cultural and ethical topics. I try to never make these a part of my statements about libertarian theory, property, and the NAP. Richman does. He is wrong to do so, and he is helping to corrupt the message.


End of comments.  I will add: I am sorry I did not see (or recall) this other Richman post – I could have done much more with it that I have done in this brief reply to “The Question.”  For now, and absent further information, I will just leave it be.

Does Richman reconcile these contradictory positions elsewhere?  Perhaps Thomas Knapp of C4SS can post a comment at “The Question’s” blog and then “The Question” can let me know.

Friday, July 17, 2015

Libertarian Crusades?

Apparently the president of students for libertine, Alexander McCobin, wants to take the LGBT battle overseas.

The gay rights battle is far from over for libertarians. In fact, for those who strongly believe in gay rights, now may be one of the most important times to pick up the banner and march forward. While legal equality has been achieved for individuals in the United States regardless of sexual orientation, there is a long way to go for the recognition of gay rights in many other parts of the world.

An interesting choice of words: a “battle,” “pick up the banner and march forward” regarding “other parts of the world”; very militaristic, almost religious.

Onward, Christian soldiers, marching as to war,
With the cross of Jesus going on before.
Christ, the royal Master, leads against the foe;
Forward into battle see His banners go!

A renewal of the Crusades, perhaps:

The Crusades were expeditions undertaken, in fulfilment of a solemn vow, to deliver the Holy Places from Mohammedan tyranny.

I will come back to this shortly.  Meanwhile, back to young Alexander:

Homosexuality is illegal in 77 countries; it is punishable by death in 7 of them. Only 21 countries recognize same-sex marriages as legal nationwide.

He provides a link to an interactive map, identifying the legal status of same-sex relationships in every country.  Guess where you will find the concentration of countries where homosexuality is illegal.  I will give you a hint:

The Crusades were expeditions undertaken, in fulfilment of a solemn vow, to deliver the Holy Places from Mohammedan tyranny.

For good measure, Russia is thrown in there as well (convenient for Alexander).  Interesting…many of the same targets of US military aggression are targets of Alexander’s cultural crusade.  A match made in…well, I don’t want to get all religious.

Alex recognizes there may be criticism of his position:

There will certainly be critics of the idea that either the US libertarian or LGBT Rights movement should get involved in the affairs of other nations.

You think?  Especially by residents in some of the countries targeted by this US libertarian / LGBT marriage?  Many residents of these countries might wonder why US libertarians are taking the gay fight overseas instead of working at home to end the destruction caused by their American government via sanctions, bombs and drones.

After all, which “transgression” more significantly violates the rights of more people in these supposedly unenlightened countries?  A few gay people don’t have equal rights, vs. 100% of the population blanketed by death from above?

But I don’t want to divert the focus from McCobin’s call: “…now may be one of the most important times to pick up the banner and march forward.”

I say: Alexander the Great, pick up the banner and march forward.  Deliver your holy places from cultural and religious tyranny. 

I will not be a critic – in fact, I strongly encourage the effort: there are 77 countries where you can start, but 7 are in the most desperate need.  Start with these.

Thursday, July 16, 2015

The Gospel According to Francis

I think I need not provide a link or other evidence for the current Pope’s socialist (if not Marxist) leanings and his corresponding wishes for salvation of the poor by the state.  Yet, for ye of little faith in this mosquito, I offer a couple of snippets:

I ask God to give us more politicians capable of sincere and effective dialogue aimed at healing the deepest roots – and not simply the appearances – of the evils in our world!

It must be reiterated that “the more fortunate should renounce some of their rights so as to place their goods more generously at the service of others”.

We can no longer trust in the unseen forces and the invisible hand of the market.

Growth in justice requires more than economic growth, while presupposing such growth: it requires decisions, programmes, mechanisms and processes specifically geared to a better distribution of income, the creation of sources of employment and an integral promotion of the poor which goes beyond a simple welfare mentality.

With that out of the way…I have searched for sources in the Bible that might support these views.  I found passages that were close, but not quite right.  But then I stumbled across a translation I had never seen before.  You have heard of the New International Version (NIV)?  Well, I found the New Comintern-ational Version (NCV).

Following are a few selected comparative verses, with the slightly different translation noted in italics in the NCV.

NIV:  Jesus answered, “If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.”

NCV: Jesus answered, “If you want to be perfect, go, ask your politicians to take your neighbor’s possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.”

NIV: “But now as for what is inside you—be generous to the poor, and everything will be clean for you.”

NCV: “But now as for what is inside you—ask the Roman guard to force your neighbor to be generous to the poor, and everything will be clean for you.”

NIV: “Sell your possessions and give to the poor.”

NCV: “Take your neighbor’s possessions by popular vote and give to the poor.”

(Please note: the change in the following passage is very subtle – I almost missed it myself.  It should also be noted that Zacchaeus was a wealthy tax collector.)

NIV: But Zacchaeus stood up and said to the Lord, “Look, Lord! Here and now I give half of my possessions to the poor, and if I have cheated anybody out of anything, I will pay back four times the amount.”

NCV: But Zacchaeus stood up and said to the Lord, “Look, Lord! Here and now I give half of his possessions to the poor, and if I have cheated anybody out of anything, he will pay back four times the amount.”

NIV: For Macedonia and Achaia were pleased to make a contribution for the poor among the Lord’s people in Jerusalem.

NCV: For Macedonia and Achaia were pleased to tax the wealthy for the poor among the Lord’s people in Jerusalem.

NIV: As it is written: “They have freely scattered their gifts to the poor; their righteousness endures forever.”

NCV: As it is written: “You must forcefully scattered their wealth to the poor; your righteousness endures forever.”

It is recently reported that the Pope is open to discussing critiques of his criticisms of capitalism.  Given that he has a sound biblical basis for his views from the New Comintern-ational Version of the bible, I suspect these will be very short conversations.