(GOOD STUFF BELOW I THINK FOR THE SMART FOLKS ON THE LIST)
RE: “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.” – Thomas Jefferson, 1802
Yes, chris, thats a gem of wisdom. It should be in the New Bible Of The West.
Of course, he may mean something other than you think he does. He assumed that the people in government wouldn’t do exactly the same thing. And that’s the problem. Starting in 1913, they did. They created the income tax scheme, and fiat money, and the central bank, and they soon made the senate popularly elected instead of appointed by the states. This made government into a a bank with bankers (politicians) who had the very same interests as did selfish bankers: self promotion.
The problem of any human cooperative endeavor is to extend the time preference of the individuals involved. This is Hoppe’s basic insight into government: that we must have kings because only kings who are thinking about the long term future consider the state as property, and treat it as something to be handed over to next generations. Everyone else is incentivized to be opportunistic traders, without protecting the institutions of cooperation that make their opportunism possible.
I have said, and continue to say, that while we have a division of labor, we also have a division of knowledge in order to perform that division of labor, and while we have a division of knowledge, the division of knowledge is inter-temporal. In that when we work together in alliances and groups we also divide up the time frame into divisions of outcomes. SOme of us are short term, some medium, and some long. And this fact exposes a limitation of the human mind: that outcomes are incommensurable. In the sense that multiple competing inter-temporal strategies (plans people have to produce opportunity, profit or gain) are highly complex, and incomparable, and that we HAVE to break this process into responsibilities. This is the process of the inter-temporal division of knowledge because of the requisite incommensurability of outcomes in complex production networks. (I don’t think anyone other than me is working on this problem.) But back to banking. So, the inter-temporal problem means that we cannot think like we do, in that we are all supposed to create institutions that think in a similar fashion. ie: our politicians have to be incentivized toward different inter-temporal ends, if indeed we are going to have politicians, and I think the answer is no. But if we are, then they need to be inter-temporally incentivized. This means that kings think about ‘forever’, senators think about ‘the mid term’ and the house is ‘fashionable’. I think our founders assumed this in the structure that they put in place, but did not codify it enough to protect it, possibly (like the right to bear arms) because they thought it was so obvious. But those who came after, made democracy rather than judgement the first priority, (a scheme to transfer power really, and nothing else) and democracy acted over time to equalize the temporal preferences of the division of our government. The senate was supposed to “compensate for the fashionability of the house”, which s what the founders said. But by making it democratically elected this stopped. This forced the president as well to be more temporal as well in order to work with them. The we got the federal reserve which again was more temporal, and then we used these competing forces to MAKE THE ENTIRE COUNTRY AND IT’S CULTURE TEMPORAL. When in fact, THE ENTIRE PURPOSE OF THE ENLIGHTENMENT AND PURITANISM WAS TO MAKE PEOPLE AND THEIR CULTURE INTER-TEMPORAL. Thus destroying the national intertemporal division of knowledge and labor. I believe people naievely did this because they see people who are more future oriented as poeple in power over them and costing them opportunities for self benefit, rather than as necessary guardians of the boundaries of the polis’ temporal productivity for the common good, effectively making people pay controlled opportunity costs for the purpose of maintaining their civilization rather than experience accidental suffering. This process by the way, tends to preserve knowledge capital, and does so for a variety of reasons, and tends best to preserve intertemporal konweldge capital, becasue in any group, in any population, the primary problem for decreasing prices, increasing production, and building a competitive population, is extending people’s time preference faster than externally percieveable pressures (things that the people can see easily) inform them.
(wow, I didn’t plan to write that but if you understand it then you’ve graduated from my academy)
Rothbard maintained that the only way to make sure banks didn’t do what jefferson warned us against (and realize, government is a bank. Period. That’s what it is) is to require any bank to adhere to the gold standard, and to have multiple competing banks with multiple competing currencies.
Rothbard’s book “The Mystery Of Banking” is something I would recommend highly. It is simply written, easy to understand, and complete is scope.
Remember that money is calculation. We cannot cooperate without it, because we cannot make calculation without it. If you interfere with it, then you interfere with the tool we have developed to compensate for the fact that our memories are more temporal than is our civilization, and because our senses and memories are so limited, we will gladly, over time, sell away the very land we live on, just as jefferson stated.
In practical reality, the force that holds the land controls the land by violence. That means, we must default on our loans and hold the land by force. IN most cases this is bad. In this case, where we have, by our consumption and debt converted the rest of the world to productive capitalism, and raised most of humanity out of despotism and poverty. If we default on the loans, that accomplishment will not have changed, and we stilll will have created a moral advance like no other civilization in history.
So, as I recommended before, and will recommend now, that is actually what we should do.
It is actually what we are going to HAVE to do.
Because as you can see, those people who said that we were going to be able to tax people sufficiently to pay for the ponzi schemes we have put in place over the years (medicaire/medicade/social security/unemployment) cannot be funded. It is a demographic problem. There are no free lunches in economics.
This is not to say that we cannot have such social services, it is to say that we must save and invest to fund them, rather than borrow to fund them. In that sense we must have private social security funds, and insurance companies that run the social services, rather than government, all of which are insured by the government and banks, if we wish to have a fiat currency and the insurance facility that government actually supplies.
Just like I have been writing about.
Because these things are NOT a difference in method, a difference in opinion, a difference in strategy, a difference in political preference. They are A NECESSARY by product of the problem of human computation. Money transporting in time is the human accounting system. Accounting as an art is simply the checkbook we use. Government is a construct of humans that can only interfere with this process by trying to better it. Government’s job is to PROTECT those institutions so that people CAN cooperate. It is not to administer that cooperation, because government is, frankly, simply individual human beings, and the weakness of individual human beings is the very reason we developed the calculative technologies of cooperation: property->trade->contract->Promise->Truth->counting numbers->money->contracts->courts->banking->accounting->insurance. Notice I did not put laws in there, because there is only one law, property, and all conflict resolution derives from that one law.
I’d also add that:
“The tree of liberty must be refreshed from time to time, with the blood of patriots”.
The word patriot, comes from Pater, “father”. It means treating the polis (country) as if it is your parent, and as your child. It is not a collective concept. It is an individual one. It is not military, but individual.
In other words, we must work to restore the calculative order, in all it’s dimensions.
Current economic philosophy contains an error, or multiple errors in reasoning, along the lines I brought up above. Primarily because they are not looking at the intertemporal division of knowledge as a problem, and I believe that this is because the constancy of time (near-invariabilty of time) in the physical world, (economists are looking to the philosophy of science for leadership) but the purpose of thought, which is simply memory and theorizing, is to compress time. To make time plastic. And in truth, each of us does percieve time differently. We invented time, the concept of time, as a metronome in order to cooperate, and to make time calculable, but in truth time for minds is a plastic thing, and it’s constancy an illusion. Economic thought has embraced this illusion. Political economy, or the philosophy of human cooperation in groups, is particularly vulnerable to this problem. Hoppe and rothbard, mises and hayek all helped me understand, although i think the mises hayek difference is largely due to this unstated disconnect. If I live long enough I hope to fix this problem in philosophical thought.
From: Christopher Bates
Sent: Friday, November 14, 2008
To: Debate This
Subject: The Prophet
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.” – Thomas Jefferson, 1802
Christopher M. Bates