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Tuesday, November 13, 2007

How Much is 2+2?

This post is in the style of Freedomain, and his parables comparing Ron Paul to a member of the Ku Klux Klan who is opposed to racism and lynchings.

I frequently write about topics such as agorism, the evils of the Federal Reserve, the evils of the income tax, the evils of government regulations, or the merits of a gold standard. A lot of times, clueless people or trolls have responses such as:

- We need a monopolistic state in order to have a stable society! This is false. The monopolistic state itself prevents stable free-market alternatives from emerging.

- We need the Federal Reserve to "manage the economy"! This is false. The Federal Reserve must "manage monetary policy" only because of the structural flaws in debt-based money and the Compound Interest Paradox. Interest rates should be set by the free market. With debt-based money instead of credit-based money, you need negative real interest rates to ensure that there's any money in circulation at all.

- We need income taxes to fund the government! This is false. Who needs a monopolistic government? I'd rather purchase government-provided services on the free market. Everyone knows that monopolies are incredibly inefficient. Why should government get an exemption?

- We need extensive government regulations to protect people! Without government, look at all the bad things people would do! This is false. Government regulations exist to squeeze out small businesses. Government *PROTECTS* the people who do bad things. If you are the victim of a corporate crime, your only recourse is government-provided courts, which are expensive and inefficient. Even for egregious crimes, you may not get a fair trial in a government sponsored court. You can wind up spending a lot of time and money and losing, whereas the corporation can easily afford $200k in legal fees. Frequently, it isn't practical to sue when you're screwed over, and your best option is to write the experience off as a loss and move on.

In the past, when people did bad things and got away with it, it was due to preexisting state interference in the marketplace. This was used as a pretext for more government interference. Regulations are typically written by the large corporations being regulated; the Federal Reserve is the most noteworthy example. The people who control large corporation love more government interference in the market, because it benefits them. This keeps snowballing until you arrive at the current situation.

- History has discredited the gold standard! It didn't work! It failed in 1933! This is false. The USA abandoned the gold standard in 1913 when it created the Federal Reserve. People didn't realize how badly they were cheated until 1933, when the default on the dollar occurred. The Federal Reserve, the banking industry, and the media colluded to discredit the gold standard. Keynesian economics falsely teaches that a gold standard didn't work. The gold standard worked perfectly well before 1913. Large banks colluded to create financial crises so they could get the Federal Reserve Act passed. The average person doesn't know that the Federal Reserve Act, which regulates banks, was written by the people who control large banks! The media falsely reports that a gold standard never worked.

Bankers wanted to be able to subsidize the banking industry and large corporations with negative real interest rates. They wanted to be able to steal people's savings and wages via inflation. You can give people an annual raise of 5% while inflation is 15%, and they'll feel like they're getting paid more. The gold standard was the best protector of individual savings. Under a gold standard, real interest rates can't go below 0%. Under a gold standard, it was very easy for individuals to save their wages and start their own businesses, because they didn't have the problem of inflation eroding their savings. A gold standard places small businesses on equal footing with large corporations; actually more favorable, because large corporations have humongous inefficiencies. Under a gold standard, the best way to grow a business is reinvested earnings, which supports the small business. Fiat debt-based money provides a humongous subsidy to the financial industry and large corporations, paid by everyone else as inflation.

It is government force that caused the gold standard to fail. Gold and silver are what the free market selected as money, before the red market was strong enough to force people to use unbacked paper as money. It took decades of scheming and violence to discredit the gold standard.

- But under a gold standard people hoard gold! There isn't enough gold to go around to support trade! This is false. People start hoarding gold when they realize their government is going to default on its paper money, as happened in 1933. The media falsely decried gold hoarders as being dishonest, when they were just acting in their economic self-interest. Honest unregulated fractional reserve banking legitimately expands the money supply to match the needs of trade. The old "bills of exchange" system worked very well. Even under a gold standard, you don't need to trade physical gold if you have a balance of trade. The gold standard is just a benchmark to set prices. In a truly free market, with sound unregulated banking, interest payments are a disincentive against gold hoarding.

I find myself making these arguments over and over again.

Sometimes, being an agorist is like being the only person anywhere who knows that 2+2=4.

I say "Did you notice that 2+2=4?" Other people answer "No, fool, it's 6! That's what we were taught in school!" Others answer "No, fool, it's 3! Every good liberal knows that 2+2=3." Others answer "No, fool, it's 5! Every good conservative knows that 2+2=5!"

Political debate shows feature people sitting around debating topics such as "2+2, does it equal 3 or 5?"

I go on a job interview. The interviewer asks me "How much is 2+2?" I answer "4". They say "We're sorry. We're looking for team players who know that 2+2=5."

I see Ben Bernanke testifying before Congress. A democratic Congressman says "Under the Bush Administration, the value of 2+2 has increased from 7 to 19! This is the largest increase of any administration in recent history!" Ben Bernanke responds "The Federal Reserve considers many economic factors when setting the value of 2+2. Sometimes, the best value is 3. At other times, 5 is the best value. The Federal Reserve will do whatever it takes to manage the economy. If 2+2=1587 is needed to stabilize the economy, that is what the Federal Reserve will do."

I watch the Daily Show. They play a clip of President Bush saying "2+2=purple". Jon Stewart and everyone else laughs.

I post on the Ron Paul Forum: "2+2=4". People respond: "Ron Paul's official position is that 2+2=3.9. He's closer to the truth than anyone else, and that's why we urgently need to support him." I say "But really, 2+2=4, not 3.9", and the response is: "I'm sorry, but 2+2=4 isn't politically viable at this time. If Ron Paul went around saying 2+2=4, he'd be lynched. Enough people are dismissing Ron Paul as a crackpot for saying 2+2=3.9. Be happy that someone is finally acknowledging that 2+2 is approximately 3.9. If people on the Ron Paul Forum start posting that 2+2=4, then that will completely discredit his campaign."

There are many interesting discussions on the Ron Paul Forum. I see thread topics like "2+2=3.8" and "2+2=4.17". Every once in awhile, some brave soul posts "2+2=3.95", and he is roundly shouted down. There are trolls who go around posting "2+2=3" and "2+2=5". They are loud and convincing. People say "This troll is loudly insisting that 2+2=3. Perhaps I should adjust my option from 2+2=3.8 to 2+2=3.7."

How could a simple fact like "2+2=4" be so completely and thoroughly covered up?

How much is 2+2? Does anybody besides me know the answer?

Coming up in a later post: the deeper intricacies of 3+6=9.

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