Wednesday, August 17, 2011

If You Want Rules You Can Have Rules

Many people have a hard time imagining the idea of a voluntary society because they worry that it means there would be a lack of rules which would lead to a lack of order, or chaos. They think that rules would not exist if coercive governments did not exist.

Yet we already constantly live by rules in our daily voluntary interactions. These rules work because people who do not want to abide by those rules are free to opt out.

In Issue 24 this point is made is an article by Joseph Dejan titled “Open Systems vs. Closed Systems,” discussing the differences between voluntary and coercive entities. Open systems are voluntary in nature and closes systems are coercive.

The author divides open systems into three categories:

“Three natural open systems exist that derive from man's nature, not requiring coercion or force. They are based on biological, economical and aesthetic necessities. They are: the family, business and voluntary associations (clubs, fraternities, etc.). Man by nature needs a mate to reproduce. The result of this system is a family relationship. Laws need not to be passed to compel people to organize business, anymore than for the creation of families. Voluntary associations are also open systems to organize human energy based on sharing human values. They depend on voluntary choice to join and freedom to withdraw.”

He then makes the point that within each of these categories you can find various types and degrees of rules whose purpose is to create order. Different groups will have different rules generally guided by the people in the group and if someone decides they no longer want to accept the rules, they can opt out.

Then he takes it one step further:

“It is interesting to underscore that any open system is not only characterized by its voluntary nature, but by the limitation to the application of the rules. A family does not pass rules for other families in their neighborhood. One business does not seek to force another business to follow the rules established for itself. The charter and by-laws of the Science-Fiction Club are not binding on the members of the Chess Club. The rules in all open systems follow the lines of property-ownership and control.”

So if you want rules you can have them. Just don’t push them on to those in other groups.

Tuesday, August 9, 2011

Individuals Pay Taxes, Not Corporations

I have one more item I want to mention from Issue 23. It’s called “Voluntary Musings: A Column of Iconoclasms” written by Charles Curley. One reason I wanted to mention this piece is that I just really got a kick out of the tone of the article. Curley writes in a sarcastic manner and inserts cutting humor which I found to be entertaining.

This column reports on a mix of items of interest to Charles in 1986 such as not showing “proper” respect to the flag, The Meese Report, The Challenge Disaster and what he refers to as Bonzonomics, a reference to President Reagan’s tax policies.

As Curley explains Reagan’s manipulation of the income tax, and a corresponding increase in the corporation tax, he notes that the lowering of individual tax rates will certainly get people all excited because they can “see” their tax bill go down.

But Curley points out that a tax on corporations is merely a way to hide the taxes individuals pay. Corporations are not some entity separated by individuals. Corporations are made up of individuals and he explains how this will only shift the tax in ways not easily seen:

“The taxes won't be paid in the form of money shelled out directly by the individual. Instead, the shareholder will see smaller dividends than otherwise, or a lower capital value on his or her assets. The employees may see a lower pay, but this is not likely.
Far more likely is that the employee won't see profits invested in new products to sell later on, profits invested in new capital equipment to make the employee more productive or profits invested in new company infrastructure to make the venture as a whole more productive.

No, the employee and shareholder won't see any of this. And what one doesn’t see taken away one doesn’t miss. Just as the purpose of income tax withholding was to make the payment of income taxes less painful, so also the real "reform" of this tax bill is to shift the tax burden of the federal government to make it less apparent, and so less painful. And once again the American people are engaged in an anatomical feat as they swallow this nonsense hook, line and form 1040.

But you'll be happy to know that Parliament has recently repealed the tea tax on the North American colonies.”

What I hate most about manipulation of tax policy is how politicians use it to put people into groups and classes which creates and “us” and “them” and enemy imagery among neighbors. There are “evil” corporations who don’t pay enough, there are “evil rich” people (anyone who makes more money than you do) who don’t pay their “fair share,” etc.

One other point Curley makes in his column that never occurred to me was about the economic effect of the income tax. He says at the time the income tax was being proposed, the very wealthy really just faked their resistance because an income tax isn’t really about the rich paying more because if you already have wealth, it’s not income. It’s real effect is on those less fortunate who work hard to accumulate new wealth.

I wondered if Mr. Curley was still around writing so I did a google search and found him. Gotta love the internet. He occasionally writes for a freedom-minded organization in Wyoming, The Wyoming Liberty Group.

Wednesday, August 3, 2011

Paper Is Not Gold

I hit a jackpot of sorts as I prepared this blog post for the article in Issue 23 titled “Hard Money” in the Voluntaryist Tradition because my related research led me to a couple of future issues of The Voluntaryist.

This article discusses the history of coined money as a medium of exchange in the United States. Carl explains how entrepreneurs came in to supply the market for coinage just as they do for any other product or service that is in demand.

Of course gold was the main metal used to create the coins and I learned that private gold coinage began during a gold rush in Georgia and North Carolina in 1828. (I didn’t even know there was a gold rush in those states, did you?)

Then the story moves to California after gold was discovered there in 1849. The use of coins there is quite a story. Since California wasn’t a state yet, there was no settled government which meant it was even more of an opportunity for someone to fill the market demand for a medium of exchange so people could conduct business.

California seemed to be doing just fine with this until the Civil War. The U. S. government issued paper money and California had to now figure out how to deal with this new situation. These new “greenbacks” had no gold backing so it makes sense that Californians would have little use for them. A lot of people had no interest in “greenbacks,” they liked their gold.

As a matter of fact, the tax collector of San Francisco even refused to accept them as payment!

In addition, many people did not want to be in a situation where they had contractual relationships built on payment in gold and end up receiving paper money, so the state passed the Specific Contract Law which basically said payment had to be made in the form stated in the contract.

I know I always recommend reading the articles for yourself but this one is of particular importance to Carl as he concludes the piece:

“Given the demise of both private and government gold coinage, it is difficult to imagine how commodity money will once again assert its dominance in market exchanges. Yet there is a natural law at work which assures us that paper is not gold, despite all the statist protestations to the contrary. Both voluntaryists and "hard money” advocates need to be aware of the monetary history related in this article, not only is the moral case for private coinage laid out, but its very existence just over a century ago proves that such a system was functional and practical.”

Now, to get back to what I said at the beginning about hitting the jackpot, as soon as I started reading this article, I immediately thought of the Liberty Dollar. I knew practically nothing about it specifically, only that people in libertarian circles were upset at how the government came in and shut them down and I also was aware that their offices were in Evansville Indiana, a mere two hours from where I currently live.

So as I was reading a bit on the Liberty Dollar, I discovered that Carl was never very enthused about it. He wrote about his concerns in Issue 110, one being that they used the term dollar, which Carl says is a statist term, “a government unit of accounting.”

This then led me to Issue 65 where Carl wrote about a bad experience with another private coinage firm, Gold Standard Corporation, which was accepted as payment for The Voluntaryist subscriptions up to that point.

Carl’s remarks on both the Liberty Dollar and Gold Standard Corporation reference the questionable character and actions of people inside those businesses. Carl warns us that “free market rogues can defraud you just as bad as government ones” so you should always be careful and skeptical.

This is true of course but if they were indeed fraudulent in some way, at least both of those businesses do not exist anymore. The Federal Reserve, government minting and printing however, still remains.

One last point I need to bring up on this topic is bitcoin. I have looked into bitcoin. I have watched videos on bitcoin. I have read articles on bitcoin. But I don’t get it.

Since my husband is in computers, when I saw people working with bitcoin at Porcfest, I had someone explain it to him in the hopes I can understand it better. He seemed to understand it better, but I still don’t. I am completely confused about it.

I have noticed a lot of excitement in libertarian/anarchist circles around bitcoin and I have seen several skeptical views about it as well. I don’t know what you think but I guess the smartest thing for me to do, since I don’t get it is to just stand back and see what happens.