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Thursday, September 13, 2007

Agorist Philosophy Overview

I've been reading a bit about the philosophy of agorism, and it seems attractive to me.

The philosophy can be summarized in one sentence: "I want to do useful work, get paid, and not have to report it for taxation, confiscation, and regulation."

Let's start with a specific example. Suppose you don't like the US government's policy of aggressive wars in Iraq and other countries. You can vote, but voting is ineffective due to various corruptions in the system. The income tax means that the government confiscates 50%-95% or more of everything I produce. Productive work supports the government, even if I disapprove of its activities. I am unable to do any useful economic activity without supporting things I find objectionable.

The government's policy is completely ridiculous. Citizens may not perform work without reporting it for taxation, confiscation, and regulation. I object to that requirement.

The fundamental goal of an agorist revolution is the creation of wealth that the red market can't confiscate. This is the only type of revolution that has a legitimate chance of succeeding, because the participants would be profiting and undermining the government at the same time. The red market derives its power by leeching wealth. Creating unconfiscatable wealth undermines the red market's power.

Currently, the only type of grey market work available is low-paid unskilled labor. The agorist wants to create a grey market for highly-skilled, high-paid labor.

The agorist says that all governments are inherently illegitimate. A government is merely a group of people conspiring to take away my property and my rights. Government employees benefit handsomely from this arrangement, because the salaries and pensions they receive are higher than they would get in the private sector. The people who control large corporations benefit from this arrangement, because their market position is frequently endorsed by the government and its regulations. Wealthy campaign donors love the government-granted perks they get. The Federal Reserve's policy of inflation benefits the financial industry at the expense of everyone else. Government is merely a group of people conspiring to confiscate the wealth of the productive part of society.

The agorist says that all the functions of government could be more effectively performed by the free market. You can have a private justice system. You can have a private police force. Everyone knows that government is up for sale, manipulated by the wealthy. Why not do away with the pretense completely? Let's privatize everything.

Why should the government have a monopoly on violence and justice?

For example, instead of paying a 50% income tax, maybe I can pay 2%, or even a fixed fee, to a private police force who will insure my property is protected. The police force would utilize a private justice system, to make sure that they don't use force needlessly. If two people have a conflict and are subscribing to different police forces, then the incentive is for the businesses to resolve the dispute peacefully rather than violently. If a private police force was misbehaving, then it would be perfectly acceptable for people to start seeking alternate vendors. Some people might pay for protection by several police forces simultaneously, to prevent monopolies from forming.

Suppose there's no intrinsic legitimacy given to the government. It's perfectly legitimate to use force to defend yourself, if someone attempts to confiscate your property. Imagine what would happen if tax collectors were met with armed resistance from everyone? What would happen if everyone ceased voluntary compliance with the taxation system?

Right now, the vast majority of people are compliant with the taxation system. That means that red market workers can afford to expend vast resources tracking down violators. It needs to make sure that violators are caught so that the penalty for tax avoidance makes the risk unattractive. However, with taxation rates of 50%-95% or more, tax avoidance starts to be attractive, if it can be done with relatively low risk. I'm not just counting direct noticeable taxes. There are hidden taxes and regulations, which also cost money.

What's the real risk of getting caught? It's hard to say. You only hear about the people who got caught. The people who get away with it don't come forward and admit it, do they? There's no source of reliable statistics, so you can't quantify the risk.

How would you make the transition to an agorist economy? There is a problem, because people aren't going to want to give up their government-granted perks. They are going to resist change as much as they can. People are reluctant to avoid paying taxes and following government rules. However, if there's a profit to be made, people might be convinced.

The key is to develop a system that allows people to perform productive economic activity without reporting it for taxation and confiscation. The Internet is a useful tool for this, because it would allow people to share information efficiently. It wouldn't be too hard to write software that would facilitate an agorist economy.

The standard financial system is designed to frustrate attempts to perform economic activity without reporting it for confiscation. Transactions larger than $10,000 must be reported to the government. Repeated small transactions are also reportable. Besides, who wants to trade with worthless paper money? An alternate financial system would need to be developed. This way, transactions can be performed without reporting them to the government. People could still settle transactions with paper money or silver or gold, if they really wanted to. I think the Social Credit Monetary System is the best solution.

Whatever system is developed would need to be as decentralized as possible. As much as possible, information should NOT be stored on a centralized server. A centralized server represents an attack point. As much as possible, communications should be encrypted.

Actually, some information needs to be public. A database listing who trusted whom would need to be public and shared to be useful. On the other hand, maybe a trust database should be private, because it would represent a list of people for red market agents to harass. All transaction records should be private. Ideally, transaction records should be destroyed when completed, so red market agents can't confiscate them.

There would be an important check that ensures people follow the rules. Just like in the BitTorrent economy, any user who misbehaves would be banned and denied a valuable resource. New users would be admitted only if another user vouched for their trustworthiness. The distributed nature would make it hard to shut it down, even if spies did infiltrate it.

Suppose there was an effective system for facilitating productive work without reporting it for taxation. With such high confiscatory taxation rates, there would be a huge incentive for people to work under such a system. The goal would be to avoid government detection as much as possible. As more productive people started working in this grey market economy, the power of government would decrease.

If the system was sufficiently distributed, there would be low risk even if you got caught. Red market agents might find out about some of your transactions, but not all of them. You could pay back taxes and fines on some of the transactions, and still come out ahead overall.

An agorist grey-market economy would also benefit because it could avoid compliance with all government regulations. It would not need to spend productive effort on regulation compliance. Its only wasted effort would be that spent avoiding detection by red market enforcers.

Ideally, an agorist economy could offer lower prices and higher wages, compared to the white market or pink market. The ability to avoid taxation and regulation should cut expenses by 50% to 95% or more.

Some pink market practitioners have their salaries artificially raised by the red market. For example, doctors need to waste a lot of money on education and spend years training. The supply of doctors is restricted by the red market. A license is required to practice medicine. A grey market doctor would not need the licensing requirement. He would only need to spend a year or two learning what is really needed to help his patients. An agorist doctor would not earn as much as a pink market doctor, but he would save the hassle of years of medical school and a residency. An agorist doctor would not have to deal with HMOs, Medicare, and insurance companies. The free market would help people decide which doctors are good and which are no good; people will share information about their experiences. Currently, the supply of doctors is artificially restricted, so there's no mechanism for incompetent doctors to be removed from the market. The agorist doctor won't get busted for "practicing medicine without a license" if his customers don't turn him in to the red market. Besides, patients can always go to a pink market hospital if they have a problem their agorist doctor can't handle. Eventually, the agorist hospitals would be better than the pink market hospitals.

Switching to a grey market agorist economy might be necessary for survival. A hyperinflationary crash of the dollar could happen at any time. A substantial amount of untaxed economic activity would facilitate such a collapse.

It probably is not possible for a person to satisfy all their needs in the grey market. However, the larger percentage of their economic activity that they can hide, the more they will benefit. If someone operated both a white-market business and a grey-market business, that would facilitate concealing their grey-market activities. On the other hand, you might be better off not having any official business at all. The IRS frequently cracks down on small business owners; registering yourself as a business owner might just be making yourself a target.

The red market derives its power solely by leeching off the productive members of society. Without them to push around, its power would rapidly collapse.

An agorist revolution has a legitimate chance of succeeding. The agorist market participants would be profiting from their activity. They would be undermining the government and making a profit at the same time. They would profit more than white market participants, because they would be unencumbered by taxes, inflation, and regulations. In that sense, once an agorist movement gets started, it would be self-sustaining. With a leaderless organization structure, it could not be easily shut down by infiltration or force. The agorist needs tools for effective operation, plus a certain number of participants.

An agorist revolution would probably be a peaceful one. Agorist market participants can hide their activity. They would appear to be normal, productive, nonviolent citizens. Agorist market participants would tend to resolve their differences peacefully, both to avoid the attention of red market enforcers, and because non-initiation of violence is part of the philosophy. By the time the agorist economy is large enough to be noticed by red market enforcers, it would have viable systems for competing and replacing government institutions. The agorist market would step in smoothly as the government loses power. The violence would come from red market participants, trying to crack down to preserve their position. However, a large number of red market workers might simultaneously be employed by agorist protection agencies. Typically, corporations infiltrate government by subverting Congress and the President. An agorist movement would infiltrate government by subverting the low-level line workers.

An agorist revolution, once started, would be self-sustaining. The participants would be profiting from their actions.

A lot of websites I read are philosophizing and speculating. I am ready to start writing tools and start using them. I would like to be a participant in an agorist economy, if only I knew other people to trade with! My primary skill is writing software. That's the skill I'd be offering in trade. Initially, I'll just write the code I think is needed and release it into the public domain.

Summarizing, I want to do productive work, get paid for it, and not have to report it for taxation and confiscation.

20 comments:

Darrell said...

I am not completely in agreement with the agorist philosophy, to some extent, there must be decisions made by the greater whole, and I do not think I would be comforted by the idea of private police force funded directly by our contributions.. nor having some people covered by it and not others... though I am aware that in fact, it is the case now anyway...some are protected by the police, others, hunted.

I believe though, that I have the first step in addressing these issues, and publicizing these issues in a way that would have people reaching the same sorts of conclusions on their own.

It will require programmers, lots, and lots of programmers, to create a system that emphasizes a community mind set and encourages a true free market by allowing people to more easily reach out to those with what they need, and even more so, begin to understand themselves and what they truly need. Most of the technology already exists.... it will be a massive integration project.. I'd love to talk to you about it.

Anonymous said...

Some research where grey economy works (easter europe) maight shed some light at what and how can be done.
Here is an example from a country in eastern europe. Grey economy.. about 60%.If you check the fake statistics about this is far away from any country including US. Reality.. u can get a catscan, rmn whatever in the same day you need or you want it and if you work in grey economy u can easily afford it.
As for money, there are still things which are not income but are income. How about if the company will loans with some intrest payable after 100 years?

Anonymous said...

I have done a good ammount of high skill work that I didn't claim on my taxes. This is done outside of my payroll work that has automatic deductions. The way I see it the governemnt is already taking 40% of what I make a month. The small ammount of outside work lets me take back 10-15% of that. Even with the extra I am still not breaking even or getting close to my paper gross income. My extra cash is to offset the allowances the super rich get to deduct from thier taxes.

The problem is that companies must pay me in the form of a check sent by accounting. There is always a paper trail.

I charge less than I should but that is done to keep the payment small enough that they will be reported by the company to the IRS as part of a total expense rather than a single expense that would throw up a red flag.

I can not do this for my total income because deposits over $10k would be flagged by my bank. It prevents me from ever making a living off this work alone but it does give me a few extra thousand dollars a year.

The chances of getting caught are very low. To get caught the company needs to report the direct income paid and the IRS computer must flag me. To that end I did get caught for 2004 because one company that paid me was audited. The payment to me was flagged. I owe the IRS some money but far less than 35% of the total ammount I recieved that would have been taxed had I reported the income.

Even being caught and forced to pay the penalty is preferable to paying the full ammount of taxes with that money added to my income on a 1040. Adding the money would raise me up a tax bracket taking even more money out of my pockets.

It would be preferable to be paid in cash but a cash payment by accounting would need to have a paper trail for tax purposes.

Essentially the grey market is limited to a level less than $10k a year.You can try to go for more but you risk being flagged by your bank. You can open multiple accounts but that can be hard to manage.

You also must not put any money into a savings account to try and gain a small ammount of interest because the interest will be reported to the IRS increasing your risk of being flagged.

The Agorist revolution can not happen because there are not enough outlets to spend credit. Big box retail dominates the landscape. There are not enough small retailers to accomodate any realistic lifestyle.

Some barter can be done. It is possible to trade sporting even tickets for food at local restaurants. Barter only works for individual owned business. Also barter only works if the trade is for something the person would have paid real money for anyway.

Anonymous said...

I'd like to continue on my point.

The problem with Agorism is getting paid with something that will not leave a trail that can then be used to purchase other things. That is why most agorist workers are unskilled laborers. Paying someone $20 to mow yourlawn isn't exactly rewarding high skilled labor.

Getting paid in cash for high skill work is preferable but there are not enough outlets for high skill work that will pay enough in untraceable currency to make a living. Most individuals do not have enough cash laying around to pay skilled laborers. Most people pay a plumber or contractor with a check, ansking to be paid in cash may cost you the job. It would be great if I could get paid in gold and silver but how many companies have a stockpile of gold lying around. The situation is even worse for individuals.

As a computer programmer you may be able to find enough local small business to program a few customer databases and get paid in cash. Could you make a living on that money? Would the total ammount of time invested be worth more than just working at a large corporation?

One of my first jobs was teaching elderly people how to use a computer. I charged $20 an hour and usually took home $60 in cash from each lesson. I made around $800 a month cash which was good for a 16 year old kid. Far preferable to working at McDonalds.

I have always kept a line of work outside of my core job to generate extra cash. However I could not use my core profession to make $50k a year in cash due to the lack of outlets to sell my services. I have close to 10 individuals that run businesses that pay me in cash or barter for my services. The total worth of the service is maybe $3000-5000 depending on the year. For me to make a real living I would have to expand my circle of trust to a few hundred individuals. At that point can the circle still be trusted? At what point is the circle comprimised by a tax deduction and paper trail.

Recently I made a trade to design brochures for a hair salon if they would cut and color my wife's hair for free. My normal fee would be $500. She has had her hair dyed and cut 3 times for free so far. The salon would have charged a price of $175 for each service. The total value of work is close to even. I sacrificed $500 in income in order to save myself over $500 paying for my wife to get her hair done. I would prefer to have $500 in my pocket and tell my wife she can't get her hair done but that would cost me in other ways. At least I know that I can keep my wife happy by trading a few hours of work every few months.

I understand the agorist philosophy. I have essentially been working towards it my whole adult life. The taxation system is just too far reaching at this point.

I do not see trading in gold to be preferable. Essentially gold holds no value other than the value the market puts on it. Handing someone a few pieces of gold after they complete a job with you would most likely result in a "what am I supposed to do with that" response. Handing the same person a gold necklace that can be given to his wife, even with less total value than the gold pieces, would go over better.

To purchase anything the gold will have to be transferred into currency at some point. For that reason federal reserve currency holds more value than gold or other metals. Which is why the central bank holds so much power. The true value of gold is as a market tool used by the very rich to increase or decrease the face value of cntral bank issued currency.

Without a gold standard any stockpile of gold is essentially worthless as form of currency. At one time your gold could be worth $900 an ounce. Six months later it could be worth $300. If you traded your feredal reserve currency for gold at $900 an ounce and the value dropped to $300 you lost a lot of money.

Because gold and other precious metals are linked so closely to the manipulated market agorism needs a different type of currency to be succesfull.

fritz said...

All I can post today Is an Idea. Reader mail was great,And the ideals of Fsk are great.

But some day if we all want this form of society, we are going to have to act. And act with one accord.

We have great ideas,A philosophy we can stand by,and tenants to fallow.

All I ask is "how the hell can we get this movement started????"

The remnant can begin the work,and that's us, and the rest will someday assist us and become willing players in the new movement.

For right now I think it best to get this understanding out there,in the world,like a seed planted.

And when the time to act is certain, Than we will all know what to do. keep the ball rolling,and when we hit critical mass. Than the movement can take its place among the ideas of free people.

Hold tight,when we feel the desire to take affect.There will be nothing to stop us,,,Peace!!!

wraft said...

Trade for doorknobs (dk)

Leelex

Anonymous said...

Unless the whole transaction is done anonymously through e-gold or a similar method, physical identity could always be compromised. The state can perform sting operations by their own moles or turning existing members through coercion. Anonymous transactions do away with that risk, but reduce the scope of agorist economy only to work which doesn't involve physical property transfer. That could be works which can be digitalized or, say, assasinations.

Even if the transaction is done anonymously, the state can use compare individuals' wealth to their declared taxes and build a tax evasion case on that, despite the lack of less circumstantial evidence. That's an existing practice in USA, for instance.

As for the cryptography part, transactions could be performed using Diffie-Hellman key exchange. Compromising the secret key would only allow the statist reactionary forces to impersonate an individual, but not access his transactions, given that they wouldn't be able to wiretap him or backdoor his OS.

Alexander said...

I think that there is great merit in reducing the size and waste of government, but anarchy is not the solution.

The foundation of the free-market is property rights. To buy and sell, we must be first be able to own. We must have faith that a contract will be carried through. The only body capable of setting universal standards and of enforcing said standards is a government.

You use private police as an example. Who would prevent the leaders of these private police forces from becoming despotic tyrants? Do you think that a "misbehaving" police force would stop if people stopped paying it? It would then surely rob and extort people.

If you want to see a world where everything is privatized, go to a third-world country. Money buys police. The result is not peace, but chaos.

paul said...

I agree with the anarchy statement. It seems like the agorist philosophy describes the type of government that we have seen for the last eight years and not the one that our new leader is finally on a path towards. Money, credit, gold . . . none of these things are really worth anything except that we trust our trading partners to place the same value to them as we do. This is the main point that is missed by this philosophy because the only way that an economy can thrive is if there is a strong underlying trust among all trading partners. How can we place a value on gold once the smartest and most powerful have siphoned it all to the top? It would begin to hold less and less value as the minority of individuals holding gold monopolize the supply! The Chinese have struggled with a lack of trust for decades but are now the strongest growing economy in the world because they have begun adopting the strong American form of checks and balances combined with a growing freedom in the marketplace for individual decisions. If they did not have such a Bush like government now they would be more like our Clinton economy and really be kicking our asses!

Fivemileshigh said...

I presently live in Eastern Europe and can tell you from personal experience that the gray market is large but not significant to the big picture. You can easily buy labor (service) and locally made products in cash at lower than white market prices. The trouble is that there is a definite upper limit to what you can do. That limit is effectively all imported goods that have a pre-existing paper trail, and all goods that have to have a paper trail such as cars and real estate. Paper trails are very hard to hide. You can use gold to store wealth, by buying bullion with the proceeds of your gray market activities, the trouble comes when you try to spend a significant amount of your wealth at once, say to buy a home. At that point you can't have a pile of cash/gold come out of the woodwork because the establishment will start asking where it came from.
A very common way to people use to preserve what they earn is by using the enormously complex system to evade it. It's like your work is used to fatten up your master, but he has gotten so fat that he simply can't catch you 100% of the time. In practical terms this means buying stuff through your business for personal use and writing it off. Unfortunately, this still feeds the system. I don't have a solution yet, but generally the more corrupt and complex a state apparatus is the easier it becomes to circumvent, albeit if just for the small things.

Hakuna Matata said...

The new monetary system components are already available:
http://en.wikipedia.org/wiki/Ripple_monetary_system
http://en.wikipedia.org/wiki/ECache
http://en.wikipedia.org/wiki/Bitcoin

Ron Paul last presidential elections candidate is supposed was supporter.
However, he was ostracized by media.
(I am not Ron Paul supporter, as I am not even from US).

Kevski said...

I know this will never be posted but here is my comment: Anyone who doesn't know the difference between "insure" and "ensure" should not be allowed to write a blog.

Just as another point, in a free market your take home income will also be determined by the free market. So if you now make $10 and pay $3.50 in taxes, taking home $6.50, in your "argorist paradise" you will still end up only taking home $6.50, because there will be someone else who will be willing to do the work for that.

Get your head out of your you know what.

Fivemileshigh said...

Kevski:

A spelling error, while not something to be proud of, does not invalidate an idea.

Furthermore, there IS a difference between earning 6.50 on the books vs. under the table. The difference is that in the first case, you are generating 10 of revenue of which the state keeps 3.50 and spends that to restrict your rights. In the second case, you generate 6.50 which you alone keep and decide how to spend. In the first case you are feeding a parasite, in the second you are not.

David_Z said...

Kevski, next time open a goddman dictionary, I do not think the gaffe is nearly as terrible as you imagine:

tr.v. en·sured, en·sur·ing, en·sures
To make sure or certain; insure: Our precautions ensured our safety.

in⋅sure
  /ɪnˈʃʊər, -ˈʃɜr/ [in-shoor, -shur] -sured, -sur⋅ing.
–verb (used with object)
1. to guarantee against loss or harm.
2. to secure indemnity to or on, in case of loss, damage, or death.

Anyone who prefaces his commentary with what draconian criticism of a very minor grammatical slip, ought to be kicked in the scrotum. Repeatedly.

Anonymous said...

This agorist economy might work, especially in third world countries where the government doesn't have too much high technology to monitor all individuals transactions.

another way to set it up is to create a secret society that believes in it , grow a large enough community then when the members are numerous enough (be sure to have members that are loyal and infiltrated in police, and government).
Then cassively coordinate and begin implementing the agorist economy on a grand scale as a surprise attack to the established system. Better if the system takes a loong time to figure out what is going on.
Make sure it works and recruit new people to use agorist economy instead of being pawns of the red market. If the people feel that the agorist economy is more beneficiall to them and can survive with little risk compared to the benefits.
It might have a chance.

Anonymous said...

Let's take agorism to an extreme example, and see how it fails:

We're all happily working and getting the benefits of no taxation.

The Jihadists show up on ourshores with weapons, but we forgot to fund a military.

Oops.

FSK said...

I usually don't respond to trolls, but you don't need a State police/military monopoly to prevent invasion.

There still would be private police forces, who would prevent any invasion.

There would be no laws restricting gun ownership. The invaders would be faced with well armed opponents!

An invasion of the USA wouldn't succeed for the same reason that the US invasion of Iraq and Afghanistan is one huge cluster****.

"We need the government to protect us from the bad guys!" is entirely State propaganda.

T.B.S. said...

I have to admit, I'm completely stunned at the number of people commenting here who are completely unfamiliar with market anarchist thought; who keep bringing up the most banal and endlessly refuted objections.

Anton Sherwood said...

"A government is merely a group of people conspiring to take away my property and my rights. . . . The agorist says that all the functions of government could be more effectively performed by the free market."

I'd rephrase that.

FSK said...

This is an old post. I realized that I'm a much better writer now. I understand the philosophy of freedom better now.

I should make an updated version.

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