Current Events

Gold and Money

Warren Gibson Current Events, Economics, Liberty , , , , , , ,

Nothing seems to arouse passions—pro and con—quite like suggestions that gold should once again play a role in our money. “Only gold is money,” says one side. “It’s a barbarous relic,” says the other. Let’s turn down the heat a bit and look into some propositions about gold. That should lead us to some reasonable ideas about whether or how gold might return.

Propositions About Gold

Gold has intrinsic value. Actually, nothing has intrinsic value. The value of any good or service resides in the minds of individuals contemplating the benefits they might derive from it. What gold does have is some rather remarkable physical properties that make it very likely that people will continue to value it highly: luster, corrosion resistance, divisibility, malleability, high thermal and electrical conductivity, and a high degree of scarcity. All the gold ever mined would only fill one large swimming pool, and most of that gold is still recoverable.

Only gold is money. Although gold was once used as money, that is no longer the case. Money is whatever is generally accepted as a medium of exchange in a particular historical setting. Right now, government-issued fiat money, unbacked by any commodity, is the only kind of money we find anywhere in the world, with some possible obscure exceptions.

Perhaps people who say this mean that gold is the only form of money that can ensure stability. That’s what future Federal Reserve Chairman Alan Greenspan thought in 1967, when he wrote “Gold and Economic Freedom” for Ayn Rand’s newsletter. “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation,” he said. When later asked by U.S. Rep. Ron Paul whether he stood by that article, Greenspan said he did. But he weaseled out by saying a return to gold was unnecessary because central banks had learned to produce the same results gold would produce. Continue reading →

“How China Became Capitalist”

Brandon Christensen Current Events, Economics, History, Liberty , ,

That’s the title to this short piece by Nobel laureate Ronald Coase and his co-author Ning Wang published by the Cato Institute. Among the gems:

The presence of two reforms was a defining feature of China’s economic transition. The failure to separate the two is a main source of confusion in understanding China’s reform. The Chinese government has understandably promulgated a state-centered account of reform, projecting itself as an omniscient designer and instigator of reform. The fact that the Chinese Communist Party has survived market reform, still monopolizes political power, and remains active in the economy has helped to sell the statist account of reform. But it was marginal revolutions that brought entrepreneurship and market forces back to China during the first decade of reform when the Chinese government was busy saving the state sector.

Do read the whole thing. The Cato Institute ranks third on my list list of trustworthy think tanks. Hoover and Brookings are two that I think produce university-caliber research. Cato ranks far below Hoover and Brookings in my estimation, but it occupies a lonely third place, as none of the other think tanks out there are even close to Cato’s stature, either.

You can check out Cato’s website here.

The Civilization Bubble

Fred Foldvary Current Events, History , ,

There have been many financial and real estate bubbles during the past few hundred years, and there have been empire bubbles, but never before has there been the global civilization bubble in which we are now in. The bubble will collapse within a few decades. It will be the end of civilization, and will result in world-wide violence, deaths, and chaos.

Empire bubbles can last several hundred years, as for example the Mayan civilization or the Roman Empire. What brings down empires is invasion, bad economic policy, environmental exhaustion, or weakened tyranny. The Soviet Union, for example, was a statist bubble that was brought down by economic decay and weakened tyranny.

Most of the world is now in a global civilization. There are two enemies of this global order. One enemy is terrorist pseudo-religious supremacists. They could bring down the global civilization with electromagnetic bombs that would wipe out the storage and transmission of data that the world’s economy depends on. Very little is being done to protect the global electronic infrastructure from attack, thus the bubble.

The other threat to global civilization is internal, or as scientists say, endogenous. Global civilization is rushing towards an environmental collapse. There are hints of this in the plastic contamination of the oceans, the depletion of fresh water, the destruction of fish and corals, the eradication of forests, and possibly accelerated climate change. What will most likely bring down global civilization is the plundering and poisoning of the natural infrastructure of the earth. Continue reading →

The Future of Liberty: Reason or Superstition, Abortion Edition

Brandon Christensen Current Events, Liberty

I have been having an ongoing back-and-forth with co-blogger Hank on abortion. You can find the latest volley here.

Among the gems:

The answer to my question is obviously ‘no.’ It has been the answer for 100,000 years. Not 10,000 years. Not 1,000 years. Not 100 years, but 100,000 years. At least. And, of course, this will continue to be the case in the foreseeable future as well. The last thing we need is to replace a fetish of the past with a fetish of the future when it comes to reproductive rights.

Libertarians use reason and facts to guide their thoughts, not appeals to an unforeseeable future or an omnipotent being (see my original post).

The liberty movement will continue to suffer as long as we have people who appeal to superstition and ignorance to make their points. Underlying this debate is a far bigger one: do libertarians really represent a different kind of politics, or are we, as some on the Left and the Right charge, merely Republicans who think smoking weed is not a crime?

The Beltway Consensus: Iraq Edition

Brandon Christensen Current Events, History , , , , , ,

The illegal invasion and occupation of Iraq undertaken by the Bush administration is one of the American republic’s darkest moments. I rank it as the fourth-worst policy in our history, just after slavery, the extermination of the Indians, and the invasion and occupation of the Philippines and just before Jim Crow and the New Deal. Invading and occupying Iraq rejected the American notions of liberty and justice, individualism, republican government, and free trade. It also further damaged American credibility in the eyes of the world.

For the most part, populations have been okay with Washington’s antics since the end of World War 2. There are certain expectations that everybody has of a world hegemon, and the Cold War atrocities that Washington committed were largely understandable. But attacking a third world despot in the middle of the Islamic world – for no apparent reason except to “bring democracy” to the region – not only undermined the US’s claim to be defender of the peace, but it exposed the extent of the republic’s intellectual decay that has been going since the New Deal. Not only does nobody believe our claims when we attack a helpless state, but they don’t think we have the intellectual capacity to do the job, either.

My own perspective on the crimes against humanity that Bush and his cronies committed are much more superficial, of course (I live in LA, after all!): we have basically copied the British imperial model. Not only are my taxes being spent on killing innocent people abroad, but Washington is not even doing it creatively! The following article in Foreign Affairs illustrates my point perfectly. Continue reading →

Adamson’s Book Signing

Brandon Christensen Books, Current Events, History

Dr. Adamson’s new book just came out two weeks ago, and he has passed along a couple of photos from his book signing event. More below the fold. Continue reading →

What’s Up with Inflation?

Warren Gibson Current Events, Economics, History, Liberty

Inflation as measured by the Consumer Price Index (CPI) has been almost nonexistent for several years, though it started creeping higher in the first half of 2011. Yet many prices have been rising at double-digit percentage rates. Are official figures trustworthy? And what of expectations? There is a great deal of buzz right now about inflation but also talk of renewed stagnation with the Fed’s QE2 program having ended in June. Could renewed stagnation trigger enough deflation to counter inflation? Or might we get the worst of both worlds—stagflation—as in the 1970s?

We can’t get anywhere with these questions until we agree on the meaning of inflation. At one time the word referred to an increase in the money supply. Over time it came to mean a general increase in prices, an unfortunate turn of events not just because we lost the nice metaphor of an inflating balloon, but also because the shift in meaning tended to obscure the relationship between the two phenomena. Some free-market authors hold out for the old definition, but I suggest this is wasted effort. In my classes I use the phrases “price inflation” and “money inflation” to keep the distinction alive without getting too sidetracked by semantics.

In 1970 Milton Friedman said, “[Price] inflation is always and everywhere a monetary phenomenon.” This is not entirely true but understandable because he was writing at a time when the causal relationship had nearly been forgotten. We can have price inflation without money inflation when there is a supply shock. An overthrow of the Saudi government, for example, might well disrupt the flow of oil from that country. A surging oil price, because it is so important to our economy, would likely pull up the price level with it. In this situation the monetary authorities can help things by doing exactly nothing—letting higher energy prices do the work of encouraging marginal users to cut back. Supply shocks, as such one-time events are called, do not of themselves generate sustained price increases and are therefore not classified as inflation by some economists. Continue reading →

National-Socialist Management Practices; No Obama Derangement Syndrome

Jacques Delacroix Current Events, Law, Liberty, Politics , , , ,

[Editor’s note: this essay first appeared on Dr. Delacroix’s blog, Facts Matter, on July 18 2009]

Quick update on health care on 7/20/09:

I have said before on this blog that there is something wrong with the way we deliver health care in America. It costs us twice more per capita than it costs Europeans and we die younger. That is true in spite of the fact that liberals lie a lot on the subject of health, especially, regarding the number of “uninsured.” The Republican Party missed that boat entirely and we are paying the price for it now.

The President’s insistence that bills must be passed before the August recess has only one explanation: He wants to avoid debate like the plague. Think it through. If our health care system is as bad as he says, it has been so for a long time and we can probably stand it for an additional three months, or six months , or a year. Decisiveness is not everything. (See below.)

After all, the President wants to dispose for the long run of 1/6th of our economy. Given the considerable slowdown in economic growth his other policies guarantee, given the aging of the population, it will soon be 1/5, or 20 % of the economy. There is nothing else like it. For comparison, national defense never took more than 5% since the Korean War.

Aside from anything I may believe about the influence of government on  effectiveness in health delivery, I am interested in the political consequences of the President’s plans, of all his plans. With health, he will make sure the government controls the economy to an unprecedented level. He is turning the US into a corporatist state. That’s another word for “fascist,” without the violent overtones. Continue reading →

(The Myth of) Gun Control as a Panacea

Amar Ali Current Events, Liberty

Just because this is my first post on this consortium, don’t feel shy to comment or rip in!

In light of the horrific tragedy in Connecticut, liberals (not to be confused with leftists[i] ) have decided to take this opportunity to push a political agenda. Inevitably, this leads to dubious arguments rushed to by emotionally moved people trying to justify drastic and sometimes extreme policy positions.

What better time and opportunity to deconstruct this myth and inject a broader perspective?

The most common and tired false rationalization is that guns kills, therefore, gun control, or banning guns would lead to less deaths. Coincidentally, on the same day as the Sandy Hook tragedy, 22 children in China were attacked by a man wielding a knife[ii]. Does this mean we must ban knives or have “Knife Control”? Most would respond no. In fact, it has been shown that more people have been killed with Hammers and Clubs[iii].

Of course the common retort is that guns are different, that they can be controlled and would lead to a decrease in crime. Problem with that theory is that criminals rarely follow the law. Does a person willing to commit an illegal homicide care whether their gun is legal? And in reality, it shows as crime has increased after bans in UK[iv], [v]  and Chicago[vi],[vii] and the after strict bans. Reports show that homicides in Chicago outpace that of Afghanistan[viii] and it is the only major US city to see increases in homicides.[ix]

Here gun opponents will eagerly jump up to point to Europe to demonstrate cases of “successful” gun control. Unfortunately Continue reading →

Abortion, the Conception of Life, and Liberty

Brandon Christensen Current Events, Law, Liberty , , ,

Ridicule is the only weapon which can be used against unintelligible propositions. Ideas must be distinct before reason can act upon them; and no man ever had a distinct idea of the trinity. It is the mere Abracadabra of the mountebanks calling themselves the priests of Jesus. – Thomas Jefferson, 1816

My blog post on freedom and feminism prompted a number of short but informative dialogues in the comments section, and I thought it would be a good idea to draw some of these arguments out a little more and really delve into the implications of what it means to be free.

My original post was meant to serve as a general outline of the major rift within libertarianism (and, by implication, the American Right) today: the cultural one. I think that the rift between libertarians on cultural issues is actually much less serious than the one between libertarians and conservatives, and the comments section highlighted this important disagreement. Instead of a mutual mistrust based upon suspicion of authoritarian tendencies hiding in plain sight, libertarians actively fight conservatives when it comes to the struggle between liberty and power.

Two key arguments will be exploited on this blog for the sake of showing Ron Paul Republicans and other, newer members of the libertarian movement just how nakedly aggressive and barbaric anti-abortion laws really are. Continue reading →

Around the Web

Brandon Christensen Current Events, Links
  1. Gun control: change we don’t believe in
  2. A photo essay of Antarctica. I’m weird (news flash!) and I’ve always had an obsession with Antarctica
  3. On the ethics of voting. Grab a cup of coffee or tea
  4. Canada’s First Nations: Time we stopped meeting like this
  5. What is driving growth in government? This weekend’s must-read

Fresh Blood!

Brandon Christensen Current Events

We’ve got a couple of new changes coming your way: younger bloggers!

Stay tuned, and enjoy the ‘comments’ thread on my recent post in the meantime (don’t forget to have your say as well).

Libertarianism and Feminism

Brandon Christensen Current Events, Liberty , , , ,

I thought I’d throw in my two cents on the recent brouhaha between the two largest camps within the libertarian movement (the “paleos” and the “bleeding hearts”). Really quickly, the differences between the two camps are few and far between on matters of economics, but on matters of culture there is a wide chasm separating the two. The paleos are cultural conservatives and the bleeding hearts are not.

For the record, I consider myself in the “bleeding heart” camp, even though I spent more than enough time in Santa Cruz doing the co-op thing and hanging out out with lazy, dishonest, stinking hippies.

The bleeding heart camp initiated the brouhaha with the following:

This morning Julie Borowski, who makes videos as “Token Libertarian Girl,” shared her answer to the question “Why aren’t there more female libertarians?” […]

Every single one of these things that she criticizes women for doing should be seen not as causes for shame, but as complex choices that smart, thoughtful women can and do make, without destroying their lives in the process.  In addition, Borowski is making arguments that conservatives hurl at women all the time. If we want to pull young women away from liberalism and toward libertarianism, repeating the very same intellectually patronizing conservative arguments that pushed women to liberalism in the first place doesn’t seem to be the way to go.

And a follow-up post had this tidbit to add: Continue reading →

Environmentalism and Property Rights

Brandon Christensen Current Events, History , , , ,

The horrible air in Beijing has been making the news again, and for good reason. Check out these pictures for reasons why. The topic of environmentalism and its compatibility with liberty has been brought up before here at the consortium, but I’d like to briefly use this opportunity to point out something on property rights.

Conservatives and, lamentably, some libertarians often attribute environmental destruction to “the tragedy of the commons,” but this is short-sighted. Anthropologists have long pointed out that land and property held in common is actually governed quite well. Political scientists and economists have recently begun to come around to this point as well, with Elinor Ostrom (a political scientist by training) winning the 2009 Nobel Prize in Economics for her work on how some societies govern the commons.

Common land and its use often requires an informal set of rules for maintaining a harmonious balance between man and land, and is also a characteristic feature of societies that we would variously label, rightly or wrongly, as stateless, pastoral, foraging, tribal, or my personal favorite: undeveloped. In other words, common land is often exploited by poor people who do not have the resources to institute a regime based largely on private property. With this in mind, just think: would you want to be the party that is found guilty for violating an agreed-upon set of rules for a specific area of land? Even if there were no formal state apparatus charged with enforcing a society’s rules? Not only would you have to face justice, but you’d also be held responsible for the possible suffering of many other people depending on the land, which could lead to other forms of punishment besides fines or violence; punishments that could affect the lives of your loved ones and your loved ones’ loved ones. Continue reading →

Don’t Forget

Brandon Christensen Books, Current Events, History

Michael Adamson’s new book, A Better Way to Build…, comes out on the 15th of this month. You can check out more of Dr. Adamson’s (bad ass) work in the ‘recommendations‘ section of the blog. He’s got stuff on Native American property rights (or lack thereof), US foreign policy, and the decline of Argentina just hanging out online waiting for curious minds to read and process.

Dr. Adamson is a historian by trade, and we’re lucky to have him on board here at the consortium. Also, check out his demolishing of the rationales used by the Bush administration to go to war in Iraq (the second time around).