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Monday, September 10, 2007

Reader Mail #4b - Who Needs the Government?

As I predicted, my post on "Ron Paul Forums and Paid Disinformation Agents" has been quite popular.

When someone finds my blog via Google search, Google Analytics tells me what keywords they searched for. I'm still surprised by Google search results. My blog is finally the #1 result when you search for "Compound Interest Paradox". Quite a few people are finding my blog via Google and the page Taxes on Bonds' Home Run Baseball, but according to Google Analytics, they don't stick around. Searching for "Edward Flaherty" doesn't lead you to my blog at all, and if you search for "Edward Flaherty is full of crap", my blog is at the bottom of the first results page. If you search for "Federal Reserve sucks", I'm on the second results page, which has me disappointed with my PageRank. I searched for "Discounted Cashflow Paradox" and "St. Petersburg Paradox" and didn't find my blog in the first few results pages.

Someone searched for "Vanguard brokerage sucks", and they actually stayed on my blog and read a bunch of pages; the irony is that I actually think Vanguard is a decent broker! Vanguard's commissions are high, but they give a great credit interest rate on cash and their customer service is excellent. My investment strategy is long-term-buy-and-hold, so I don't mind the commission charges that much. For "Vanguard brokerage sucks", I'm the first result on the second page; maybe this post will boost that!

I got a bunch of referrals from a "zionistwatch" blog. It was a user comment and not the main article, in reference to The Communist Manifesto's Successful Implementation in the USA. I'm getting a bunch of visits from, but the I can't find the specific post that's referring people! I couldn't find it via the search function, and Google Analytics just shows it as "viewtopic.php".

I notice that other bloggers provide keyword tags for their post. I haven't been doing that. Is that worth anything?

When I say "Who needs a government at all?", people tend to very strongly disagree with me. It's amazing how incredibly brainwashed everyone is. They think they can achieve reforms by voting, but voting is a waste of time. They think political activism might help. That's just slaves petitioning their masters to be less cruel.

When I say "The original US Constitution is not a valid starting point for a system of government.", people tend to strongly disagree and get angry. The original US Constitution was a flawed system, because it led to the current situation where everyone is enslaved via the Federal Reserve and income taxes.

There isn't going to be any meaningful reform and improvement until enough people figure out that a monopolistic government is not needed at all.

I'm pretty convinced that it's possible to construct a stable society without a monopolistic government. However, the only way to be sure is to perform an experiment. Is anyone interested in experimenting?

In Reader Mail #4a, an anonymous reader says:

I know we are enslaved.

If you know that, then what are you doing about it?

However if the system was to collapse there would be chaos and social breakdown.

You were off to such a good start. Now you're thinking like a brainwashed dumbass.

In the past, when governments have collapsed, there has been chaos and social breakdown. In the past, revolutions were started by people who wanted to declare themselves to be the new government. There was a period of chaos as two groups claimed to be the government in the same location.

For example, the situation in Iraq is chaos and social breakdown. The problem is not that Iraq has no government. The problem in Iraq is that there are multiple groups of people who want to control the new government. The problem in Iraq is not too few governments; it's too many governments! Multiple groups are competing with the goal of having a monopoly on violence and justice within Iraq. None of the competing groups have a goal of "nobody should have a monopoly of violence".

However, what happens when there's a successful revolution by people who believe there should be no government at all? As their revolt progresses, they would develop replacement systems for services formerly provided by the government. The new government would look like the organizational structure of the group that successfully revolted.

That's the goal of an "agorist revolution". People can show a profit and start a new economic system at the same time! You undermine the government, and are profiting from your activity. Under a fair economic system, you can be selfish and help others at the same time. People decry laissez-faire capitalism, but there has never been a truly free market with no government intervention at all.

Unfortunately, that is one of the false axioms you have been brainwashed with. "People need a government with a monopoly of violence and justice in order to survive. Without the government, society will completely collapse."

I have been studying this subject for many years (after experiencing life and just knowing intuitively that some people are robbers and present themselves as respectable), and am firmly on your side.

Until you come to the conclusion that government is evil and needs to be completely eliminated, I don't really see how you could claim to be on my side.

Just as a side note, you know that Catholicism prohibited Usury right?

Yes, I knew that. That's the reason many of the first bankers were jewish. The rules were relaxed once it was remembered how effective banking is at enslaving people. I even have some small articles on that subject, Croesus the Banker and The Book of the Banker.

Also Islam still prohibits it though Muslims have been largely taken over by the bankers and their agents as well.

Some European converts to Islam are claiming that Islam is government without state in its pure form, and Usury, taxation, fractional reserve banking and fiat currencies are Un-Islamic. However it is inevitable that corruption will set in, in any situation. A group will form either internally or externally in a different region of the world which will create a oligopoly of power and state and they will impose their will on a Anarchic system. I feel drawn to the works of Kevin Carson and you. my experience of work at a university in the UK (Iam just a lowly IT technician trapped in a inneficient organization which makes life mundane) is well described by Carson.

I would not equate Islam and anarchy. The above paragraph seems like incoherent nonsense, except for the part where you say you like my blog and Kevin Carson's blog.

There are "Islamic banking" techniques to over come the ban. One example is "repurchase agreements". Instead of loaning you $1M at 5% interest for a year, I agree to buy your property from you for $1M and sell it back to you for $1.05M a year later. Another example is partial sales. Instead of a 30 year mortgage, I agree to sell you a house at a rate of 1/30 per year. Unfortunately, religious people who agree to such terms wind up paying even more than they would under traditional financing methods. Perversely, "Islamic banking" is used to justify an even *greater* usury charge, because very few vendors provide the service.

I read Kevin Carson and I like his blog. I have a link to his blog in my "Favorite Links" section. When I see an interesting topic on Kevin Carson's blog, I sometimes repost it here in simpler form.

I think that is possible to have government collapse and not be replaced by a new monopolistic government. It depends on the practices and values of the people who overthrow the government. For example, in the USA, after the revolutionary war and defeating Great Britian, the leaders in the colonies formed a new government. Their values were "We don't want to pay taxes to a foreign government; we want people to pay taxes to a government that we control." They didn't want to abolish government; they wanted to replace the old government with a government they controlled.

The only way to be sure is to perform an experiment. The practices of the people organizing the revolt would have to emphasize their mistrust of government and dictatorship-organizations. The current government cannot be defeated by an organization that uses a dictatorship structure. A revolt that uses a dictatorship structure will be shut down via force or infiltration. However, leaderless resistance has a chance of succeeding. This guarantees that the new economic system will not be dominated by dictatorships like the current system.

I consider myself to be an order of magnitude ahead of Kevin Carson. He doesn't seem to fully understand the corrupt nature of the monetary system and taxation system as well as I do. Plus, Kevin Carson seems to be mostly interested in writing. I'm looking for people to trade with, to get an alternate economic system started.

On The Discounted Cashflow Paradox, an anonymous reader says:

Just wanted to let you know that you have a math error in the page about the cashflow paradox...

"This is the following game: You flip a fair coin until a tails shows up, at which point the game ends. For each head, you receive a payment of $1*2^n, where n is the number of consecutive heads already seen. For an outcome of T (p=1/2), you receive $0."

2^0 = 1 -- any number to the zero power is always 1

Unless by $0 you mean the profit made from the game under the assumption that it cost the player $1 to play.

First, this is the "St. Petersburg Math Paradox", which is actually separate from the "St. Petersburg Financial Paradox", which is what I call "The Discounted Cashflow Paradox". I've heard both paradoxes referred by the same name as if they're related, even though they're completely different.

Going back to the language in that post, the game ends as soon as you receive a T.

For the following sequences:
  • T, payoff is $0
  • HT, payoff is $1
  • HHT, payoff is $1 + $2 = $3
  • HHHT, payoff is $1 + $2 + $4 = $7
  • ... and so on
You are suggesting that the payoff for "T" should be $1. I don't think that's what I wrote.

I said that the player receives a payoff for each head, and the game ends with no more payments when the player gets a tail. I think that what I wrote was logically consistent.

Of course, the payout in the case of an immediate tail doesn't really matter much. It's the small probability of a large payoff that's the interesting part.

There is a separate question: "What is the value of this game?" What is the amount you would be willing to pay if someone offered you this game? The answer depends on the bankroll of the person offering you the game. For example, if the person offering the game had a bankroll of $255, then this game would last at most 8 consecutive heads. Each round is worth $0.5, so the game would be worth $4 in that case.

If you were playing this game for real, at some point your opponent would run out of money or default on purpose.

The main point of the article is the Discounted Cashflow Financial Paradox. I only mentioned the St. Petersburg Math Paradox because other sources falsely say they are equivalent.

The St. Petersburg Math Paradox has a simple solution in the real world. Any actual opponent has a finite bankroll.

The Discounted Cashflow Paradox also has a simple solution in the real world. The money supply is diluted at a faster rate than you earn as interest, due to the massive subsidy the Federal Reserve pays to the financial industry. Real interest rates are negative. If you hold onto your dollars for long enough, invested in "safe" government bonds, they will eventually be worthless. There's a division by zero error when you run a Discounted Cashflow simulation for a sufficiently long time period.

Further, I believe the US government will collapse soon, due to an agorist-style revolution. In that case, the stock market will be worthless after the US government collapses. That makes the reality even more ridiculous. When pricing a stock, you aren't just using worthless money; you're also using worthless stock. Following that reasoning, any stock price at all can be justified.

1 comment:

Anonymous said...

I read your response to my comments about Catholicism, usury etc.

I think you were a little harsh in your response, calling me a 'dumb ass', but hey I will not hold it against you. :-) I think you misunderstood my comments, I know I was not very clear, I am usually in a rush and do not want to prolong my comments un-necessarily.

When I said there would be social breakdown, I meant if there was a collapse of the economy "wall street crash" style. Supermarkets would empty, food, water, electricity supply would stop..looters and thugs who are armed would roam the streets etc.

Sure it can happen that the state dies and people manage to develop a alternative anarchist way...but the people would have to be independent enough to do so, not dumbed down by 'The State' and its compulsory Schooling system for decades. I think many people would have no idea how to cope with the collapse of their nanny State.

The Muslims I linked, in my last comment say that Islamic Banking is a trojan horse, designed by bankers, to involve and integrate Muslims into the State. Islam is government without State. No standing armies and no taxation, except for the Zakat for Muslims and the Jizya for non Muslims which are distributed according to known and defined categories. And these are very low.

History moves in cycles, there is no progress or Hegelian dialectic, all attempts to 'fix' a static system are doomed and only undertaken by the State. Societies and individuals like all natural phenomena grow, become prosperous, decay and become corrupt. A anarchist system would not last forever, just as a State system would not, they grow, become corrupt decay, die or rejuvenate along different lines.

I think you should promote your blog on forums...I have been posting your link there with regard to indebtedness etc, some people think getting in debt, paying mortgages etc. is 'normal' and unavoidable. 'dumb asses' as you would say.

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