I liked this post on Marginal Revolution about a fake Indian government.
In a remote part of India, someone set up a phony local branch of the government. They were collecting taxes, performing civic services, and writing birth and death certificates.
The guy who set up the scam kept it going because he found it to be incredibly profitable.
The "real" government found out when someone complained about a salary dispute. Allegedly, some members of the "real" government knew about the scam but kept quiet because they were receiving bribes.
I liked this quote, in this linked story:
"It would've been difficult for me to believe that a racket like this could exist, had we not actually stumbled upon this."
That's how I feel about *ALL* governments.
I liked this article in Marginal Revolution. The question was "If you're an amateur tennis player, how many balls should you play with?" If you have only 1 ball, you spend all your time retrieving that ball. If you have lots of balls, you have to pick them up and carry them home at the end. Plus, there's the risk of tripping over a loose ball.
A reader comment said "At the beginner level, tennis is actually not good exercise. The problem is that you spend more time retrieving balls than playing tennis."
I read that Russia is cracking down on bloggers. According to Google Analytics, my regular reader from Novosibirsk, Russia hasn't visited my blog in awhile. I wonder if he's still alive? (Or, he got smart and is using some sort of IP anonymizing service.)
I liked this post on Scholars and Rogues. The author is a teacher. Students are handing in term papers that cite Iraq's attack on the World Trade Center.
I liked this post on Social Memory Complex.
In a very poor region of the Appalachian mountains, there is extensive marijuana farming. It's a very profitable cash crop! The Federal government is cracking down on these marijuana farmers.
One interesting part is that these marijuana farmers are competing NONVIOLENTLY with each other. This makes it harder for the government to track them down! The only thing worse than a violent marijuana farmer is a nonviolent marijuana farmer!
The really interesting part is that members of local businesses are not cooperating with the Federal Government. The community is so poor that the people in the area welcome the infusion of cash from the marijuana trade! The usual "rat out your neighbors" approach isn't working. This makes it very hard to stop the marijuana industry.
All the government accomplishes with the "War on Drugs" is that it raises prices. This just raises profits for the people who bribe or evade the red market.
I think that using drugs that alter your brain chemistry is a bad idea. However, in a true stateless society, there's no way to prevent people from making and selling drugs on their private property.
I liked this post on the View from Below. He says that it's supreme irony for Bill Clinton to be writing a book on giving to charity, because Bill Clinton spent most of his life profiting off money taken from others via force/taxation.
Suppose a robber steals $10 billion, gives $9 billion to charity, and then he acts like he's a saint.
When wealthy people give to charity, they usually give to a charity where they specify the trustees who earn huge salaries, and they give to causes that suit their personal interests.
I liked this image from Existentialist Cowboy:
I liked this post on Classically Liberal.
Global warming is an excuse for a vast increase in government power. Government regulation of global warming will be equivalent to massive government subsidies for certain corporations.
In other words, "global warming" is gaining acceptance because people figured out they can use it as an excuse to loot and pillage. The "War on Global Warming" will likely be as effective as the "War on Drugs" and most other wars. It will be effective in making some wealthy people wealthier, but it won't really accomplish anything.
Some people say "If the US goes to war with Iran, I'm going to stop paying income taxes." In other words, there ALREADY haven't been enough abuses to make you disgusted with the government? Are you paying any attention at all?
If your idea of an "accomplishment" is preventing a war with Iran, you're a bit hopeless. The US army is TOTALLY UNPREPARED to invade Iran at this time. Iraq is smaller than Iran, and the presence in Iraq is breaking the army.
One interesting bit about Ron Paul is that he's encouraging like-minded candidates to run for Congress in other districts. Hopefully, some of them will win. This means that there should be a Ron Paul-like candidate running for President again in 2012.
On Social Memory Complex, I liked this post:
The Jews who participated in the Warsaw ghetto uprising had a much higher rate of survival than those who went along.
In other words, resisting oppression is still in your rational self-interest, even when the odds are apparently stacked hopelessly against you.
On the Ron Paul Forum, someone asks:
How does moving toward a gold standard prevent the ills that you claim the economy has without throwing us into Great Depressions? What mechanism do you propose deals with inflationary pressures on gold?
I already addressed this point in my blog.
There are two ways to return to a gold standard.
1. Repeal all the transactions and regulations that prevent people from using gold as money. Allow gold and Federal Reserve Notes to trade side-by-side, with the conversion rate determined by the market. Allow people to open gold-denominated bank accounts.
There is zero chance of the above reform occurring.
2. Trade off the books and use sound money. Don't report your transactions to the IRS. This solution is called "agorism". If you adopt this approach, you are saying "The current economic and political system isn't working. It's time to move on to the next model for organizing society."
The Great Depression was 100% caused by the Federal Reserve. (I need to write a full post on that.) You're arguing backwards. You can't say "If we go back to sound money, there will be a depression or recession." *UNSOUND* money is the cause of boom/bust cycles.
Under a pure gold standard, with no government regulation of money and banking, there is no deflation or inflation. Don't look to history as a guide, because government has always been tampering with money and banking.
I liked this article on Overcoming Bias:
"...then our people on that time-line went to work with corrective action. Here."
He wiped the screen and then began punching combinations. Page after page appeared, bearing accounts of people who had claimed to have seen the mysterious disks, and each report was more fantastic than the last.
"The standard smother-out technique," Verkan Vall grinned. "I only heard a little talk about the 'flying saucers,' and all of that was in joke. In that order of culture, you can always discredit one true story by setting up ten others, palpably false, parallel to it."
-- H. Beam Piper, Police Operation
In other words, if there REALLY ARE accounts of flying saucers that the bad guys want suppressed, all they have to do is create hundreds of FAKE reports for each genuine report. Anyone investigating a report is, most likely, interviewing a fake. This makes it hard to sort out the truth.
The existence of UFO cults is COMPLETELY UNCORRELATED with whether UFOs are actually real or not.
If you knew someone who was wrong 99.99% of the time on yes-or-no questions, you could obtain 99.99% accuracy just by reversing their answers. They would need to do all the work of obtaining good evidence entangled with reality, and processing that evidence coherently, just to anticorrelate that reliably. They would have to be superintelligent to be that stupid.
A car with a broken engine cannot drive backward at 200 mph, even if the engine is really really broken.
Stalin also believed that 2 + 2 = 4. Yet if you defend any statement made by Stalin, even "2 + 2 = 4", people will see only that you are "agreeing with Stalin", you must be on his side.
This is a variation of the Strawman Fallacy.
I was disappointed by this article on the Picket Line.
My bank has finally gotten around to writing me a letter explaining what happened to my old checking account. The upshot is that the IRS seized $5.16 in a levy (which was all I had in the account at the time), and Wells Fargo charged me $75 to reimburse them for the trouble. This put my account into negative territory, so they’ve since charged me another $31.50 in overdraft fees.
The problem is that it's only a matter of time before the IRS locates and seizes your other bank accounts. If the author is paid on a W-2 or 1099, it's only a matter of time before the IRS seizes your paycheck at the source.
The bank probably won't try to collect its overdraft fees. However, this will trash your credit rating, which is OK if you already own a house fully paid-off. It would suck if you needed to get a mortgage or new credit card sometime in the future.
It would be nice if there was some sort of underground banking system the author could use to store his savings.
My proposed tax resistance strategy is to focus on generating income that IS NOT REPORTED TO THE IRS. That eliminates all the negative drawbacks of what "the Picket Line" author is doing.
On Friday, I was watching Jim Cramer's "Mad Money" show on the Communism Channel. He was interviewing Ron Paul. Jim Cramer said (paraphrasing) "I'd like to explain to everyone what I really think about the Federal Reserve, but it's too complicated and people wouldn't be interested." That's a very interesting fnord. He's telling people that they aren't interested in how the Federal Reserve is a corrupt monetary system that's screwing over the average American. He's telling people they're too stupid to understand what actually is a very simple explanation.
I think the explanation is very simple. You say that a group of people shouldn't fix prices for the rest of the country. Interest rates should be determined by the free market. Anything else is Communism, not a free market.
Lots of people have called Jim Cramer all sorts of insults. I bet I'm the first person to call him a Communist.
I've received more hate mail and troll comments from my post on the Labor Theory of Value than on any other post so far. The Labor Theory of Value must be a REALLY IMPORTANT idea.
Once again, I must compliment the Supreme Leader of Humanity on his brainwashing skills. His ability to make the average person unable to think properly about economics is quite impressive.
On FSK Asks - Should I Change My Blogger Template?, gilliganscorner voted for "FSK doesn't need to change his Blogger template". The score is now 2-0 in favor of "My current template is fine."
On Interesting Quote, gillianscorner says:
Thought you might find this quote interesting:
1. Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.
2. A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated.
3. We have, not one or two, but many, fields of endeavor into which it is difficult, if not impossible, for the independent man to enter. We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world — no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.
- Woodrow Wilson, "The New Freedom : A Call For the Emancipation of the Generous Energies of a People", 1913
I've seen the first two before and variations of the third. Some sources say those quotes are misattributed to Woodrow Wilson.
I like the first quote. Woodrow Wilson is referring to the Supreme Leader of Humanity!
The two biggest crimes in US history occurred while Woodrow Wilson was President. The 16th amendment was fraudulently declared ratified. The Federal Reserve was created.
On The Labor Theory of Theft, an Anonymous reader says:
Lawyers create no value because the law is made so complicated by the State with its own specialist language that you need a parasite lawyer to interpret and apply the law.
I already addressed this point in Reader Mail #20. Someone suggested that lawyers provide a service of tangible economic value. Only a troll or a fool would suggest to me that lawyers provide an economically useful service.
In addition, the law is made unnecessarily complicated so that lawyers themselves are justified spending many hours on each case and billing their victims a fortune per hour.
The only reason someone would purchase a lawyer's services is to protect themselves from government violence.
By E-Mail, a troll says in relation to the Labor Theory of Value:
> My definition was "Labor is paid an amount proportional to theYour definition of LTV is structurally defective, because it is
> actual real value of their work. More difficult jobs get paid more."
recursive. You can't use the word/concept of "value" in the
definition of the word/concept of "value".
-----The implied general case of insuring or hedging all surprises out of
> I didn't say anything about land prices. In the case of a sinkhole,
> whoever bought the land should have bought insurance or surveyed it
> first. In the case of a gold mine, whoever sold the land should
> have prospected for gold first.
life cannot be achieved. Whenever there's a surprise, the LTV
mispredicts the human response.
-----This statement depends on a bunch of simplifying assumptions about the
> If you were using land for farming, the price of the crop should
> equal the price of the labor spent farming, plus a suitable return
> on invested capital for the farm owner.
lack of surprises, which are not true in practice.
My definition of the Labor Theory of Value says that, in a FREE MARKET, "wages" and "real economic value" are pretty tightly correlated. "Wages" are defined in terms of "sound money". "Real economic value" means the actual genuine value of the work performed.
In the present, "wages" and "real economic value" are uncorrelated due to government interference in the market.
In a free market, for any realistic negative risk, you can purchase insurance.
The fact that people occasionally might receive windfalls DOES NOT DISCREDIT the Labor Theory of Value. Take the blue pill and don't waste my time with your false arguments. Your arguments resemble that of someone grasping at straws so they don't have to realize that they've been brainwashed.
I can make a more precise formulation. A person's average expected salary is proportional to the real economic value of their work. In a mature free market, large deviations are the exception rather than the rule.
In a free market, there will be no laws outlawing gambling. Suppose someone wins a large sum of money while playing a slot machine. Does that discredit the Labor Theory of Value? I say no. You say yes? The person's expected loss when playing the slot machine was the fair value of that work.
Let us consider another example. An experienced businessman invests 1000 ounces of gold into a business. It fails and all the capital is lost. Does that mean the businessman was a fool? No. If he calculated his expected gain properly, it was a good investment. Suppose he calculated an expected gain of 5000 ounces of gold 50% of the time and a full loss 50% of the time. It was a good investment. If he was a credible experienced businessman, maybe he could have found other investors willing to share the risk with him.
Let us consider another example. An experienced businessman invests in storing grain, to be sold at a profit if there is a drought. There is a good harvest and there was no profit. Does that mean he was a fool? If there was a drought and he sold his grain at a huge premium, does that mean he didn't deserve the profit?
Random chance does NOT discredit the Labor Theory of Value. Your argument sounds like the gibberish of someone who prefers to be brainwashed.
That same troll still trolls:
Name calling is what people do when they don't have a substantive
argument, and it weakens your presentation. You might enjoy this:
http://www.infidels.org/library/modern/mathew/logic .html
-----That's begging the question, where the premises are at least as
> "Real economic value" means the actual genuine value of the work
> performed.
questionable as the conclusion reached. If you want to define
"value", you must do so without using the concept of "value".
"Sound money" doesn't help in defining value, because sound money is
just another physical commodity. When you state the price of labor in
money, you also state the price of money in labor. What is the value
of the commodity used for money, and what unit do you state it in?
What is the value of a treasure chest of gold coins if you're marooned
on a desert island?
-----Counterexample: in a free market, you couldn't buy insurance against
> In a free market, for any realistic negative risk, you can purchase
> insurance.
the business losses caused by disruptive technologies yet to be
invented. We know that disruptive technologies will appear, but we
can't predict the size of their effect. It is not reasonable to
insure against a loss of unknown size.
-----Are you describing an idea where the union slogan was that workers
> I can make a more precise formulation. A person's average expected
> salary is proportional to the real economic value of their work.
should be paid "enough to buy back the product"? In order for cash
flow to be high enough to pay that much, all expenses other than that
factory's labor must be zero: raw materials must be free.
If someone's acting like a troll or brainwashed fool, I'm going to say they're acting like a troll or brainwashed fool. If you don't like it, why are you reading my blog or E-Mailing me?
You aren't my "opponent". You're a clueless brainwashed fool that I'm trying to help. At some point, I will decide you're too clueless to be saved and stop wasting my time on you. You did raise some false arguments that haven't been mentioned before, so I'll address them.
You really shouldn't be saying "I can't think logically". Your disagreement with me is based on axioms and definitions. If you disagree with my axioms or disagree with my definitions, then we are speaking different languages and there's no point trying to communicate. If you can't see that our disagreement is entirely over axioms and definitions, you are the one who can't think logically.
In a really free market, money and value are tightly correlated. Price signals are the way people communicate about what work needs to be done. Government violence distorts the market. The government prevents people from communicating via price signals.
You can't buy insurance against losses due to disruptive technologies. Outlier events do not discredit the Labor Theory of Value. If you are a savvy businessman, you will notice the disruptive technology as it is introduced, and change/sell your business. More skilled workers adapt better to disruptive technologies.
The free market itself is insurance against job loss due to disruptive technology. In a truly free market, there would be no artificial barriers preventing people from switching careers. A worker who loses a job in one career should quickly find a comparable-paying job in another field. In the current economy, most careers have substantial barriers to entry, placed there by the government. (This is what Woodrow Wilson was referring to in his quote above.) This means that most workers would take a substantial pay cut when they are forced to switched careers, due to offshoring or new technology.
Government violence distorts the market. The bad guys WANT workers to think "If I lose my job, I'm screwed." The important point is that the slaves must be continually afraid of displeasing their masters.
The reason that workers don't have enough purchasing power to buy manufactured goods is the Compound Interest Paradox. During the boom phase of the economic cycle, negative real interest rates encourage an expansion of industrial capacity. The price signal of "projected investment returns" is distorted. During the bust phase of the economic cycle, there isn't enough money in circulation to buy all that industrial capacity.
In the most recent boom cycle, a lot of people bought houses. During the current bust, those people discovered there wasn't enough money in circulation for them to pay off their mortgages. This phenomenon is unrelated to the Labor Theory of Value. However, massive government distortions in the market, including the Compound Interest Paradox, cause the Labor Theory of Value to not hold.
Why is there so much hate for the Labor Theory of Value? Based on your E-Mail address, you work at a university. Unfortunately, a university is not the place for free thinking. You are free to think that I am being a stubborn fool, because the actual truth would blow your mind.
Regarding Reader Mail #20, redpillguy says by E-Mail:
This guy tries to debunk the "Debt Virus" using false logic - I believe he was being clueless, not evil:
He didn't make any false counter-arguments that we haven't discussed already. Did he succeed in convincing you that the Compound Interest Paradox isn't real?
No. You may have missed my reply in his comments section:
----------------
There's a very important piece of the puzzle you are missing.
Every time a bank loans money, they create it out of nothing. And every time they create money, they loan it. The 2 go hand in hand; you don't get one without the other. The Federal Reserve creates money out of nothing, and banks do the same via the magic of fractional reserve banking.
So every time new money is created and loaned, the interest payment for this loan needs to come from money already in existence. Therefore each time there is a loan repaid, it shrinks the money supply in circulation. The system needs constant money creation (new loans) at a faster rate than old loans are being repaid (thus the spiralling debt).
The Nobel prize winning economist, Milton Friedman, has shown that every recession has been accompanied by a contraction of the money supply, and vice versa.
If the Federal Reserve raises interest rates (prices of loans) and thus greatly reduces new loan activity, servicing all the existing debt requires that the money is shrunk. Voila, engineered recession.
All the money in circulation has already been replaced by debt-based money. Therefore, all the money in circulation cannot repay all the debt. Meaning, the banks own all the money.
The last paragraph is explained well using statistics (the Fed's M2 and M3) by this blogger (you need to reconstruct it):
http://fskrealityguide.blogspot.com/2007/11/ron-paul-federal-reserve-and-gold.html
Your hobo example doesn't invalidate the Debt Virus, because the hobos don't have the power to create money out of nothing.
Bank expenses cancel it out partially, but do you believe that their sum total administrative cost is equal to 5 to 10% of GDP of the entire economy? (5 to 10% is the range of loan interest rates). Is 5 - 10% of the population employed by banks? If the sum total of all bank's expenses are less than the sum total of all interest payments made, then the "debt virus" aka "Compound Interest Paradox", exists, and the banks have us all by the balls.
When you post a blogger comment, you can use the 'a' HTML tag so that links actually appear as links.
There were no comments after your response. Your comment appears to have been totally ignored.
In my experience, posting comments on other people's blogs is usually a waste of time. I only do it if the blogger makes a good post. If the blogger is a fool, I stop reading their blog. Most bloggers ignore reader comments. I make sure I ridicule the stupid comments and answer the serious questions. So far, my best traffic spikes have resulted from someone else writing an article about my blog. When lewrockwell.com mentioned my post on Real GDP Growth Has Been Negligible Since 1990, that directed a lot of traffic to my blog.
There is one slight error in your response. Banks create money by (1) loaning out customer deposits and (2) borrowing from the Federal Reserve at the Fed Funds Rate. When a bank creates money by issuing fractional reserve loans against money on deposit, they recycle all the money via interest payments to depositors, bank expenses, and shareholder dividends.
Under a gold standard (1) was the only mechanism available for banks to create money. In that case, the large banks colluded. They stopped issuing loans to crash the money supply. Knowing in advance there would be a crash, the banks profited immensely.
It is at item (2) where the Compound Interest Paradox operates with the full force of law. When the Federal Reserve creates new money by "monetizing the debt", it creates the principal but not the interest payments. The Federal Reserve creates the principal out of thin air, and that principal PLUS INTEREST is permanently destroyed when that loan is repaid. There is a permanent money supply shortfall equal to the interest.
So when the Fed receives the principal payment in full, they destroy that money?
I already addressed this point in "Federal Reserve Thoughts - How it Works". I was planning a separate post on "Monetizing the Debt", but I haven't finished it yet. I'll review for you how this scam works.
Money is continually destroyed due to the Compound Interest Paradox. Almost every day, the Federal Reserve needs to create new bank reserves so that the Fed Funds Rate equals the target rate.
The Fed Funds Rate is the rate that banks charge each other when they lend each other surplus reserves. Banks with surplus reserves loan them out to other banks. Banks with a shortage of reserves borrow reserves from other banks. Only the Federal Reserve has the power to create new reserves, via its "Monetizing the Debt" trick.
Suppose the Federal Reserve decides that it needs to increase bank reserves by $1B so that the Fed Funds Rate is at its target value. The Federal Reserve buys Treasury Notes that are nearly expired. Suppose these Treasury Notes have a market value of $999M. The Federal Reserve creates $999M of new money in the account of the bank that sold the Federal Reserve the Treasury Notes. The Federal Reserve's account looks like:
debit: -$999 million (money just created)
asset: $999 million (Treasury Notes with a market value of $999M)
A few days later, those Treasury Notes expire. The Federal Reserve redeems them with the government for $1B, the face amount. Now, the Federal Reserve's account looks like:
debit: -$999 million (money just created)
credit: $1B (redeemed Treasury Notes)
In other words, the Federal Reserve has a profit of $1M. The Federal Reserve makes a guaranteed riskless profit as long as interest rates are positive. The scam is that the Federal Reserve has no cost of capital. It was able to create the $999M out of thin air.
There is now a PERMANENT money supply shortfall of $1M. Every time the Federal Reserve "monetizes the debt", it puts society in a deeper and deeper debt hole. The $1M required to pay the interest was NEVER CREATED or put into circulation.
Instead of an outright purchase of Treasury Notes, the Federal Reserve sometimes does a "repurchase agreement". The Federal Reserve agrees to buy Treasury Notes for a few days, creating reserves, and then sell them back in a few days, destroying reserves. The interest accrued in those few days is subject to the Compound Interest Paradox, just like when the Federal Reserve makes an outright Treasury Note purchase.
It is only at this step in the money creation process, when the Federal Reserve "monetizes the debt", that the Compound Interest Paradox operates with the full force of law. When a bank loans out customer deposits, all the loan revenue is recycled as interest payments and bank expenses and profits. However, banks in aggregate need to borrow from the Federal Reserve every day. The Federal Reserve keeps creating new money to subsidize negative real interest rates.
On Reader Mail #20, Zhwazi says:
I pissed off Francois a few months ago and he's still holding a grudge against me. He's a bit of an ass to me and anyone that he thinks I'd consider an ally or friend or who calls themselves an agorist. Just ignore him. David Z is, as you might have guessed, a friend of Francois.
It sounds like I'm entering a conversation in the middle. I'm unaware of any history between Zhwazi, David Z, and Francois Tremblay. Both Zhwazi's blog and Francois Tremblay's blog are on my "read regularly" list. My only interaction with David Z was where he said lawyers produce a service of tangible economic value and that the Labor Theory of Value was false. I classify that response as trolling.
I can't believe that Francois Tremblay believes "lawyers provide a service of tangible economic value".
On Reader Mail #20, Francois Tremblay says:
Fine then, I am open to refutation. Link me up to an entry you like about LTV that explains why it is right, and I will read it (preferably not by zhwazi, but if I must, I'll read his stuff too).
I already wrote a post on the Labor Theory of Value.
I've received more troll mail and hate mail for the Labor Theory of Value than on any other post. I am forced to conclude:
- The Labor Theory of Value is TRUE in a FREE MARKET. In a free market, a natural arbitrage process ensures that workers' salaries approximately equals the true economic value of their work. There may be temporary anomalies as new technologies are developed, but that does not discredit the Labor Theory of Value. People may receive windfall profits or losses, but that does not discredit the Labor Theory of Value.
- The Labor Theory of Value fails to hold in the USA, because the USA is not a free market.
- The Labor Theory of Value is a REALLY IMPORTANT ECONOMIC IDEA.
- "The Labor Theory of Value is false" is a pro-State argument.
- "The Labor Theory of Value is false" is a pro-Communist argument!
- People need to believe that the Labor Theory of Value is false, because otherwise they would realize how messed up the current economic system is!
- The Supreme Leader of Humanity has spent a lot of effort brainwashing people to believe "The Labor Theory of Value is false".
I am NOT speaking to you, I am speaking to FSK. He will decide whether he wants to reply or not, not you.
This is starting to get silly and amusing. My personal policy is "respond to everyone who isn't spamming or trolling". I don't understand how whatever history you two have is spilling over into my blog's comments.
This highlights why I like to have my own blog. I get to decide who is trolling and who isn't trolling here. I try to give people the benefit of the doubt, like that clueless fool E-Mailing me above. It's hard to tell the difference between a troll and a brainwashed fool.
On Reader Mail #20, David_Z says:
FSK - I've no idea why you jumped to the conclusion that I'm trolling your site. I apologize if I've in any way offended you, because it was truly not my intention.I judge each comment separately and individually. If redpillguy started posting stupid comments, I would accuse him of trolling as well.
I understand that you've a definition for LTV which is not consistent with the established definition. That's all I meant to say in my comment. As for the adversarial nature of your reply, I'm disappointed. I read your blog regularly, have probably commented here several times, and have hosted you twice in a Market Anarchist Blog Carnival (e.g., #7). I would not have thought a modicum of respect would be too much to ask of you.
My primary objection is when David_Z said, in the Labor Theory of Theft:
I strongly disagree with the assertion that the lawyer produces nothing of actual value. Lawyers produce a service.
This places David_Z firmly in troll country. From an anarchist, market anarchist, or agorist perspective, this is pure trolling. Lawyers provide a useful service ONLY in the context of an unaccountable monopolistic exploitative legal system. Lawyers are profiting from a complicated extortion and protection racket.
If you're thinking like a fool, I'm going to say "You're thinking like a fool." Do you still think lawyers provide a service of TANGIBLE ECONOMIC VALUE? Do lawyers increase the total wealth of the world? Are they unproductive leeches?
This is why I try to respond seriously to trolls. It's hard to tell the difference between someone who's actively trolling and someone who's merely confused.
It's helpful to say "You're thinking like a fool." when someone actually is thinking like a fool. David_Z really should seriously think about the statement "Lawyers provide a service of tangible economic value."
I looked at Wikipedia's definition of "The Labor Theory of Value", and my definition is equivalent to what's there. My definition is more simply stated. For now on, when I refer to "The Labor Theory of Value", I mean my definition and not someone else's.
In a FREE MARKET, a natural arbitrage process ensures that a worker's salary equals the true economic value of his work.
On Reader Mail #20, redpillguy says:
Your statement "if mainstream economists repeatedly and unanimously bleat a statement, it must be false", reminds me of this article:It is important for the red market to brainwash everyone that gold is discredited as an investment. If the average person realized the problems of the US monetary system and rushed to convert their unbacked paper to gold, the US dollar might collapse in hyperinflation.
http://www.kitco.com/commentary/old/Turk/turk_may072007.htm
Every time The Economist disparages gold, the price goes up.
Too funny. I'm waiting for their next article that says so.
Hedge funds don't normally speculate in a long gold position. Occasionally, the dollar-denominated gold price must undergo a sharp decline. This guarantees that speculators who borrow fiat money and buy gold lose money. This allows the average person to believe that gold is not a safe investment.
I should write an article about the Hunt Brothers' attempted silver corner. The red market made an example of them. The lesson is "anyone who speculates on an increase in the silver or gold price will be bankrupted".
The problem is that taxes and regulations make it very hard for the average person to invest in gold or silver. You have the "Where can I safely store my metal?" problem. There's the taxation problem. Gold investments are taxed unfavorably compared to stock investments.
The true long-run return of a gold investment should equal the inflation rate. If you invest in physical gold, you're saying that you want an inflation-adjusted investment return of 0%. Physical gold or silver is the only investment that will hold its value after the inevitable collapse of the US economic system!
The bad news is that a physical gold investment will yield an inflation-adjusted return of 0%. The really bad news is that physical gold might be the best investment out there!
I'm not rushing to convert my savings to physical gold and silver yet. There's the storage problem. Plus, the collapse of the US government is still around 20 years away. There's no need to rush. Stock investments are a good inflation hedge in the meantime.
The good news is that central banks are close to exhausting their gold reserves. After that point, they won't be able to suppress the gold price anymore.
On The Gold and Silver Taxation Scam, LibertyLu said:
You couldn't find a coin shop in your area? I live in UT, and I buy strictly "junk" silver (pre-1964 U.S. coins) and gold eagles. In both cases, I pay no sales tax. I have never bought any other type of bullion there, so I'm not sure if it's just because of the legal tender status of the coins I buy. I always deal with them in cash, and I can go and sell my metals. In cash, and totally anonymous. Untraceable.
I have been thinking about this lately, and it seems like a good way to get an underground economy started. Participants can trade their FRN's at the coin shop, after which the [U.S. legal tender] gold & silver coins enter the underground market.
I actually did locate some gold and silver dealers in my area. Here is a service that helps you locate coin dealers.
I E-Mailed one of them. He said that there was a 10 ounce minimum for gold bullion purchases. Also, his bid/ask spread was A LOT WIDER than the bid/ask spread offered by online dealers. Do I buy in person, paying 2% more, or buy online, which is riskier but cheaper? He didn't say anything about "junk silver".
I live in a city where government regulations and rents are particularly high. I consider opening an "off the books" coin dealership to be a viable business, if I had a trustworthy customer base.
I would avoid "junk silver". The coins are usually worn from circulation. The discount for "junk silver" is insufficient to cover the "loss due to wear and tear". I'd buy 1 ounce rounds, paying the spot price plus a transaction fee.
2 comments:
So, in our Anarchotopia or Agorotopia, am I to presume that nobody will ever have a need for the arbitration, mediation, contract dispute resolution services, etc., offered by "lawyers" (or whatever one may choose to call them)? Even without a monopoly on the legal system, assuming a pure common law approach, won't people need some of these services? If they will not, I'd appreciate an explanation.
In my defense of lawyers, I certainly did not mean to imply that they earn no economic rent at the present. To be sure, their current level of compensation is in extreme excess of what their services rendered would likely be worth in the absence of government manipulation. But I don't believe that their value would fall to zero any more than I believe the value of the UAW labor would fall to zero if government stopped meddling in their marketplace. Both wages would fall, and probably substantially.
But not to zero.
Well FSK, on this particular issue we're gonna have to agree to disagree, because I just don't agree at all.
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