Big Head Press


L. Neil Smith's
THE LIBERTARIAN ENTERPRISE
Number 775, June 15, 2014

The very sort of evil that our fathers and
grandfathers fought and bled and died to stop is
fully in control of the United States Government.


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Leviathan Revisited
by Tyrone Johnson
tyrone@silentvault.com

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Special to L. Neil Smith's The Libertarian Enterprise

Brett Scott has written an excellent review of the Bitcoin phenomenon as it relates to government regulation and international affairs. His essay appears here. (external link)

First, a few quick points on the author and the publisher. Scott is the author of The Heretic's Guide to Global Finance: Hacking the Future of Money (Pluto Press: 2013). He has written for publications like The Guardian, New Scientist, and Wired magazine, and he blogs on alternative finance here. (external link) He evidently has looked closely into developments in the crypto-currency world.

The web site, e-ir.info describes itself as "the world's leading website for students and scholars of international politics." It is operated by a non-profit and the editorial board apparently donates their time in order to provide a major resource to scholars. The site was founded by Adam Groves who works on monitoring and promoting improvements to the effectiveness of non-governmental organisations (NGOs) at Bond UK. So one should expect a certain perspective about ideologies, politics, and governments without necessarily setting too much store in technical analysis found in these pages. Given these limitations, the article is very, very impressive.

Scott makes a large number of really important points:

"The vision of a free-floating digital cryptocurrency economy, divorced from the politics of colossal banks and aggressive governments, is under threat."

"The core innovation of Bitcoin is not going away, and it is deeper than currency. What has been introduced to the world is a method to create decentralised peer-validated time-stamped ledgers."

"Banks are information intermediaries."

"Thus, commercial banks collectively act as a cartel controlling the recording of transaction data, and it is via this process that they keep score of 'how much money' we have."

"To create a secure electronic currency system that does not rely on these banks thus requires three interacting elements. Firstly, one needs to replace the private databases that are controlled by them. Secondly, one needs to provide a way for people to change the information on that database ('move money around'). Thirdly, one needs to convince people that the units being moved around are worth something."

With regard to Bitcoin, "A scattered collective of mercenary clerks essentially hire their computers out to collectively maintain the ledger, baking (or weaving) transaction records into it."

"I have a public Bitcoin address (somewhat akin to my account number at a bank) and I then control that public address with a private key (a bit like I use my private pin number to associate myself with my bank account). This is what provides anonymity."

Here, the geek in me wants to chime in, well, it doesn't really provide anonymity. Since you are associated with that public address, and since you are likely publishing that address to a web site if you want lots of bitcoin, or distributing it to your contacts through unencrypted e-mail messages if you want your personal contacts to send you bitcoin, your control over that public address is probably known to some of the people in government, and may be known to others who are determined to find out. You can protect your privacy a bit better if you keep your connection with that public address very quiet, using open source encryption such as Open PGP to safeguard your e-mail messages. But you shouldn't set much store in the anonymity of bitcoin. The blockchain by its very nature records transfers of value among users so you would be wise to be careful about how you use it.

As we go further into his essay in this review of it, I'll feel more and more inclined to chime in with a few words. But there really is a rich trove of ideas in Scott's article, so I'll quote what I think is best.

Scott writes, "The result of these two elements, when put together, is the ability for anonymous individuals to record transactions between their bitcoin accounts on a database that is held and secured by a decentralised network of techno-clerks."

"Within the Bitcoin system, a set of powerful central intermediaries (the cartel of commercial banks, connected together via the central bank, underwritten by government), gets replaced with a more diffuse network intermediary, apparently controlled by no-one in particular."

Here, I think Scott has a very important point. He doesn't quite say that the commercial banks are a cartel operating in restraint of trade (to borrow terminology from the anti-trust laws of some countries) but it seems evident that they are a cartel and that they do operate in restraint of trade, and of freedom.

More good points from Scott:

"The corresponding political reaction from policy-makers and establishment types takes three immediate forms. Firstly, there are concerns about it being used for money laundering and crime. Secondly, there are concerns about consumer protection. Thirdly, there are concerns about tax." (For my own part, I'm not really sure that these were listed in priority order.)

"One non-monetary function for a Bitcoin-style blockchain could thus be to replace the privately controlled ledger of the notary with a public ledger that people can record claims on."

"One can, however, use a blockchain to create a decentralised registry of domain name ownership, which is what Namecoin is doing."

"Theoretically, this process could be used to record share ownership, land ownership, or ownership in general."

"Unlike the original internet, which was largely used for transmission of static content, we experience sites like Facebook as interactive playgrounds where we can use programmes installed in some far away computer. In the process of such interactivity, we give groups like Facebook huge amounts of information. Indeed, they set themselves up as information honeytraps in order to create a profit-making platform where advertisers can sell you things based on the information. This simultaneously creates a large information repository for authorities like the NSA to browse. This interaction of corporate power and state power is inextricably tied to the profitable nature of centrally held data."

"But what if you could create interactive web services that did not revolve around single information intermediaries like Facebook? That is precisely what groups like Ethereum are working towards."

(It seems worth noting that Diaspora* has been a distributed social networking system since November 2010.)

"I send information to this entity, triggering the code and setting in motion further actions."

"Humans can overtly manipulate, or bow in to pressure to censor. A decentralised currency or a decentralised version of Twitter seems immune from such manipulation."

"When asked about why Bitcoin is superior to other currencies, proponents often point to its 'trustless' nature. No trust needs be placed in fallible 'governments and corporations'."

"The vision thus is not one of bands of people getting together into mutualistic self-help groups."

(As someone who has gotten together in mutual aid groups, and has organised several, I don't agree that the vision of crypto-currencies is devoid of any role for mutual assistance groups. How technical tools are used depends on the users.)

"Rather, it is one of individuals acting as autonomous agents, operating via the hardcoded rules with other autonomous agents, thereby avoiding those who seek to harm their interests."

"Note the underlying dim view of human nature."

(Here there seems to be some confusion, since a dim view of human nature is indicated as underlying or implied when it seems much more overt. There is ample evidence to support such a dim view, and it ought to inform every activity of humans. People do lie, cheat, steal, deceive, abuse power, murder, rape, and torture. The people with more power always seem more willing to do these things, and vice versa. It isn't sane to assume that other human beings have your best interests at heart. Indeed, it is not a safe assumption that other people have a better nature; it is, however, generally safe to assume that each human being has self-interest, to paraphrase Robert Heinlein.)

"If only we can lift currency away from manipulation from the Federal Reserve."

(After a hundred years of Federal Reserve currency manipulation, one would think that if the Federal Reserve were good for anything but making rich bankers more wealthy and more powerful, someone would have come across that thing, by now.)

"Activists traditionally revel in hot-blooded asymmetric battles of interest (such as that between StrikeDebt! and the banks), implicitly holding an underlying faith in the redeemability of human-run institutions."

(So, how's that been going? All measurements seem to indicate ever-greater-concentrations of power, with widening gaps between the wealthy and the poor, despite endless activism and faith in institutions.)

"The Bitcoin community, on the other hand, often seems attracted to a detached anti-politics, one in which action is reduced to the binary options of Buy In or Buy Out of the coded alternative."

(Giving people more choices is apparently viewed as a bad thing, though I'm not really sure why. For my own part, I don't think the entire Bitcoin community is being fairly described here. Many people who use Bitcoin are also involved in various types of politics, including activism. It might be more fair to say that Bitcoin technology creates very limited political implications, and is mostly about choice-taking behaviour, or economics.)

At one point, for his own reasons, Scott writes of Cody Wilson: "But where exactly is this perfect system Wilson is disappearing to?" I found this statement very odd, probably because I missed where Cody Wilson said his system was perfect. And, indeed, Scott goes on to note, later, "... Wilson is a subtle and interesting thinker, and it is undoubtedly unfair to suggest that he really believes that one can escape the power dynamics of the messy real world by finding salvation in a kind of internet Matrix. What he is really trying to do is to invoke one side of the crypto-anarchist mantra of 'privacy for the weak, but transparency for the powerful.'"

But, hey, it is also really, really unfair to suggest that people who want to travel to Mars and settle there are interested in doing so in a way that "escapes" from a technologically complex civilisation. Those of us who remember the history of Roanoke, for example, are likely to be extremely sceptical of settlements in distant places having utterly no contact with nor connection to the parent society from which they come. Presumably, it is necessary for Scott to take a moment to be forgiving of Cody Wilson, especially for the sin of believing he can escape the power dynamics of a messy real world since Wilson never seems to have said as much. Whether it is any more appropriate to make assumptions about what space settlement enthusiasts actually want is left as an exercise for the reader.

Scott writes: "Back in the days of roving bands of nomadic people, the political option of 'exit' was a reality. If a ruler was oppressive, you could actually pack up and take to the desert in a caravan."

"The bizarre thing about the concept of 'exit to the internet' is that the internet is a technology premised on massive state and corporate investment in physical infrastructure, fibre optic cables laid under seabeds, mass production of computers from low-wage workers in the East, and mass affluence in Western nations."

It almost sounds as though alternative technologies for communication by radio packet, by bouncing signals off meteors, by operating cell towers, were impossible. A whole series of data store-and-forward satellites built by amateur radio enthusiasts seems to have gone missing from reality.

The essential nature of the Internet is that it was designed to be so robustly decentralised that it could survive a nuclear war. That it was designed by the psychotic militarists who wanted the power to plunge the world into such a nuclear conflagration is irony, not a contradiction.

Scott: "If you are in the position to be having dreams of technological escape, you are probably not in a position to be exiting mainstream society."

Of course, exiting mainstream society is not well-tolerated by the people who control things. Scott appears determined to say that it isn't tolerated by the activists and left-anarchists who want to fight for a more human solution to the problems of human behaviour. Of course, the people who want to leave Earth and settle elsewhere don't particularly care who is willing to tolerate their migration. Space enthusiasts have known for some decades that space tourism and space colonies were not welcomed by those in power within government space agencies. Even someone as wealthy and powerful as Richard Branson seems to have had enormous difficulties getting his space tourism venture "off the ground" due substantially to difficulties with government.

Scott: "That is a healthy radical impulse, but the conservative element kicks in when the assumption is made that somehow privacy alone is what enables social empowerment."

In fact, what is meant by privacy seems to be given short shrift here. Eben Moglen, writing in the Guardian for a Columbia Law School lecture series, notes: "Our concept of 'privacy' combines three things: first is secrecy, or our ability to keep the content of our messages known only to those we intend to receive them. Second is anonymity, or secrecy about who is sending and receiving messages, where the content of the messages may not be secret at all. It is very important that anonymity is an interest we can have both in our publishing and in our reading. Third is autonomy, or our ability to make our own life decisions free from any force that has violated our secrecy or our anonymity. These three -- secrecy, anonymity and autonomy -- are the principal components of a mixture we call 'privacy.'" (external link) If you are going to focus only on privacy as a tool for the owners of private property, you are missing a great many essential aspects of what it means to the people building technologies to promote it.

Scott writes: "Despite the rugged frontier appeal of the concept, the presumption that empowerment simply means being left alone to pursue your individual interests is essentially an ideology of the already-empowered, not the vulnerable."

I often wonder how much time on actual frontiers, hundreds of miles from amenities like running water, the people who write about "rugged frontier appeal" have under their belts. But, a far more significant point, to crypto-geeks, is that the vulnerable are the ones who have the greatest need to be left alone by systems of arbitrary power. It is not the wealthy and powerful who need good systems for protecting their private property -- they already have them, and can afford to lose forty percent of their income every year with a shrug of the shoulders. Poor people need much more help protecting their income, property, and power because they have so very little of it.

It would be not only idle but also idiotic, to suppose that by taking 40% of the incomes of some of the wealthiest, the government is doing anything for those who are poorest. Judging by the inability of the government of the United States to operate Veterans Administration hospitals for millions of veterans without leaving at least 57,000 of them out in the cold without any care at all for more than 90 days, one would think the pretence of governments being good for poor people would have been penetrated by now. I can't tell whether Scott feels that governments are good for the poor, but there is a strong aroma of that view in some of his sentences.

Scott writes: "It is often pitched as a radical empowerment movement, but as Richard Boase notes, it is 'a world full of acronyms and codes, impenetrable to all but the most cynical, distrustful, and political of minds.'"

So, it was amusing to see a very acronym-laden sentence in Scott's concluding paragraph: "That is why liberation movements always seek to break contracts set in place by old regimes, whether it be peasant movements refusing to honour debt contracts to landlords, or the DRC challenging legacy mining concessions held by multinational companies, or SMEs contesting the terms of swap contracts written by Barclays lawyers." I guess we're all supposed to know that DRC is the Democractic Republic of Congo (which, judging only by published accounts of events there in the last ten years, is neither democratic nor much of a republic) and that SMEs are small and medium-sized enterprises. Thank goodness for acronyms, huh? smile

Scott writes: "Indeed, crypto-geekery offers nothing like an escape from power dynamics. One merely escapes to a different set of rules, not one controlled by 'politicians', but one in the hands of programmers and those in control of computing power."

Many crypto-geeks would object to this concept, since it is in the nature of knowledge about computer languages and systems that anyone can learn to use those tools. It is not in the nature of political power that anyone can, by learning how it works, actually have any of it.

It is very hard for computer geeks to read documents like the constitution for the United States and then see that the clear text of that document has utterly no bearing on the nature of government as it is actually expressed in that country. No doubt it is comforting for people who don't want to bother learning mathematically intensive skills, like computer programming, to suppose that it is an arcane system that can be used as abusively as the Byzantine legal code of the federal government, but it turns out that mathematics and logic have rigour that systems of governmental authority lack. Or, put more simply, political power has no rules -- politicians lie, cheat, steal, murder, and rape, and get away with these things with impunity nearly all of the time. Programming software requires some mathematics and quite a lot of logic, and has rules that do apply all the time.

Scott: "It offers a form of protection, but guarantees nothing like 'empowerment' or 'escape.'"

It offers a set of rules. Many anarchists understand that rules, including physical laws of nature, are all around. It isn't the rules that some of us want to get away from, it is arbitrary rulers. Referring to the Greek language roots, "an-archon" or "without ruler" is a very different matter from the chaotic implications of "no rules."

Nothing offers real protection. There is no form of society that is free of risk, free of danger. All you can hope to do is manage the risks you are presented and make the best use of technologies available to you to mitigate those risks.

Scott writes, "Actually, it is highly questionable whether one can 'choose' whether to use email or not."

He makes the point that if you don't use e-mail, you may be marginalised. That's certainly true, although I have gone for weeks without using e-mail, and for over a year without cracking open Facebook or Twitter. It is actually possible to "detox" from digital systems, if you set your mind to it.

"While individual instances of blockchain technology can clearly be useful, as a class of technologies designed to mediate human affairs, they contain a latent potential for encouraging technocracy. When disassociated from the programmers who design them, trustless blockchains floating above human affairs contains the specter of rule by algorithms."

People who favour democracy, or a theoretically-limited-but-actually-unlimited republic, or another form of government may not be comfortable with anarchy, kritarchy, or technocracy. Certainly any "rule by algorithms" applies to data, and can only loosely be applied to humans, given our nature. Many anarchists seem to want to have "participatory democracy" in their mutual aid societies, rather than having those who want to aid one another simply do so. Some anarchists actually want a system without any rulers, even peer pressure, to dominate one another, but as Thoreau pointed out long ago, such people are very rare.

Kritarchy offers a very different model. Sometimes called "rule of judges" it attempts to apply certain concepts of law to find results or judgements that are suited to the interests not only of the individual participants in a dispute, but also those of the community in which those people live. Kritarchy is described in the books of judges in the Bible, and is contrasted by one of those judges, Samuel, with the extreme voracity of monarchy as an alternative. Many traditional societies live by the judgements "discovered" or found or invented by elders. Of course, not everyone is comfortable with traditions. Some traditions are more unequal than others.

Scott: "Interestingly, it is a similar abstraction to that made by Hobbes. In his Leviathan, self-regarding people realise that it is in their interests to exchange part of their freedom for security of self and property, and thereby enter into a contract with a Sovereign, a deified personage that sets out societal rules of engagement. The definition of this Sovereign has been softened over time -- along with the fiction that you actually contract to it -- but it underpins modern expectations that the government should guarantee property rights."

Again, I feel impelled to ask, "How has that been going?" How has the expectation that governments exist to guarantee property rights been working out, in the event? My reading of Hobbes was that he favoured an absolute monarch with totalitarian authority, and that in this view he could be contrasted with others like Rousseau who also imagined a social contract that not only guaranteed property rights, but also limited governmental authority. As an individualist and as an anarchist, I cannot find any evidence that a limited government has ever remained limited. My scepticism is only based on thousands of years of evidence.

Scott: "Conservative libertarians hold tight to the belief that, if only hard property rights and clear contracting rules are put in place, optimal systems spontaneously emerge."

Actually, my direct personal experience of conservative libertarians is that they believe that by being conservative Republicans they won't get anywhere, but by being members of the much smaller Libertarian party, they play a big role in a small pond. The idea that optimal systems spontaneously emerge appears, to me, to be a distortion of the ideas of economists like Hayek and von Mises who have only said that in a free market, optimal prices emerge.

Mind you, living in places under societies where free market pricing was forbidden has proven to be extremely difficult for those of us who have had to experience such things. Ludwig von Mises noted that without the ability to find prices, all sorts of totalitarian behaviour shows up, because scarcity becomes very widespread. Of course, he also noted that the idea of turning the world into a huge bureaucracy with every individual in charge of some bureau, or desk, has caused people to shed "rivers of blood." So his writings were not welcome in Nazi Germany or Stalinist Russia, two places where his personal papers were held from public view (and withheld from him) until 1991. Go figure.

Scott: "They are not actually that far from Hobbes in this regard, but their irritation with Hobbes' vision is that it relies on politicians who, being actual people, do not act like a detached contractual Sovereign should, but rather attempt to meddle, make things better, or steal."

Thomas Jefferson made a similar point in his first inaugural address, that we have not been able to find "angels in the shape of kings" to rule us, so we must relent to the limitations of self-government. Although individuals are probably not very capable, or learned, in matters that might prove important, there is no evidence that their inability to govern themselves has any magical power to generate an ability to govern others. Hobbes' vision is really one of authoritarian power running rampant, and everyone in the world obeying total authority. It is, it turns out, a vision of a society where life is poor, nasty, brutish and short, if we are to judge by the experiences of people under Ataturk, Hitler, Mao, Stalin, and Pol Pot, to name only a few.

Scott asks, "Don't decentralised blockchains offer the ultimate prospect of protected property rights with clear rules, but without the political interference?"

I really don't think that would be true. There is no ultimate protection for property rights -- everyone has to do their best to protect what they have by available means. It is clear, though, that a fear of political interference is based on real understanding of human experiences.

Scott writes: "This is essentially the vision of the internet techno-leviathan, a deified crypto-sovereign whose rules we can contract to. The rules being contracted to are a series of algorithms, step by step procedures for calculations which can only be overridden with great difficulty. Perhaps, at the outset, this represents, à la Rousseau, the general will of those who take part in the contractual network, but the key point is that if you get locked into a contract on that system, there is no breaking out of it."

It isn't at all clear how that would be true. The assets involved in a blockchain might be forfeit, but people can always choose to build new systems, to remove assets using the existing rules, or to abandon the assets that they feel are burdensomely connected to rules they no longer like. People would remain free, even if such a techno-leviathan could arise. Of course, some of us believe that we are free in spite of political systems, too. It isn't clear that deification has ever been much good, whether one were to choose to deify governmental authority or cryptographical technology.

Scott writes, "This, of course, appeals to those who believe that powerful institutions operate primarily by breaching property rights and contracts. Who really believes that though? For much of modern history, the key issue with powerful institutions has not been their willingness to break contracts. It has been their willingness to use seemingly unbreakable contracts to exert power. Contracts, in essence, resemble algorithms, coded expressions of what outcomes should happen under different circumstances. On average, they are written by technocrats and, on average, they reflect the interests of elite classes."

Quite a few people believe that powerful institutions break their contracts. Many people in the labour movement, for example, have pointed to contracts guaranteeing wages, working conditions, or other limitations on corporate power, which have been broken, often repeatedly, by the companies that don't want to be held to their obligations. How do those companies get away with such behaviour? By having powerful governments to ratify their actions, often with the force of arms.

Contracts are written by people with power, including the power to enforce or not enforce, those terms. So it is always true that if you are contracting with someone you don't trust, you probably have an agreement that isn't worth the paper it is written upon. That doesn't mean that you cannot ever trust anyone. And if you never trust anyone, as Larry Niven noticed some years back in his novel "Destiny's Road," you can't get much done.

Scott: "That is why liberation movements always seek to break contracts set in place by old regimes, whether it be peasant movements refusing to honour debt contracts to landlords, or the DRC challenging legacy mining concessions held by multinational companies, or SMEs contesting the terms of swap contracts written by Barclays lawyers. Political liberation is as much about contesting contracts as it is about enforcing them."

That's widely regarded as a valid perspective of history. However, there is a pattern here of deception and abuse of power which makes the term "contract" inappropriate. If someone holds a gun against your head, and demands that you sign a contract, many courts of law are going to be reluctant to enforce that contract. For it to be a "contract" as such, it ought to be entered into freely, knowingly, and competently by all parties, and there should be an exchange of value involved. When peasant movements deride "debt contracts" that effectively make them slaves to the soil owned by "landlords" they do so in the realisation that the agreement was not entered into freely, and its terms may have been concealed from them.

Another way of looking at the same history would be to say that political liberation is about contesting whether a set of rules being enforced was ever actually a contract. Given the extremely coercive nature of many of these systems of rules, it seems incorrect to call them contracts. So it may still be possible to have freedom and have contracts.

It is an interesting side note, to me, that the Greek term for money, "nomisma" refers to their word for "law." And in my most recent blog on this topic, I've mentioned how silly it was for Solon to imagine he could make the people of Athens more righteous by weaving them a web of laws. If, however, his purpose was to ensnare the weak while creating artificial advantages for the powerful, then his web of laws did its job.

Scott writes: "Rather, you use technology as a tool within ongoing political battles, and you maintain an ongoing critical outlook towards it. The concept of the decentralised blockchain is powerful."

A very cogent statement, indeed. The concept of decentralisation is big. Indeed, it is that very decentralised nature that has made it possible to have an Internet that is robust enough to survive nuclear strikes on a number of cities. The power of decentralised systems has become evident since 1969 or so when the Internet was first conceived, and we are going to live in a future where decentralisation plays an enormous role in how things get done.

Scott notes, "Centralised vote-counting authorities are notorious sources of political anxiety in fragile countries. What if the ledger recording the votes cast was held by a decentralised network of citizens, with voters having a means to anonymously transmit votes to be stored on a publicly viewable database?"

That idea is very exciting. Vote fraud is one of the many reasons that anarchists are often very reluctant to trust democracy. It is, however, not the only reason.

Scott: "We do not want a future society free from people we have to trust, or one in which the most we can hope for is privacy. Rather, we want a world in which technology is used to dilute the power of those systems that cause us to doubt trust relationships."

The only way to have a future free from people who have to be trusted is to have a future without any people, in my opinion. We are better off with technologies that let us have more say in our own destiny. And in that respect, I think that Brett Scott and I are in agreement.

Many of these ideas have a lengthy history. For example, the powerful nature of centrally held data is discussed by William Irwin Thompson. In Darkness and Scattered Light from 1978, Thompson points out that in ancient Egypt the illiterate were all out in the hinterland, whereas the elite with mathematics and writing and knowledge were concentrated in the centre, around the temple. The people who knew how to read and write had a great deal of power that was not available to people who did not, and in ancient Egypt, that power was part of their central mass.

In Money and the Mechanism of Exchange (1875), William Stanley Jevons famously analyzed money in terms of four functions: a medium of exchange, a common measure of value or unit of account, a standard of value or standard of deferred payment, and a store of value. There is some really tasty history in the unit of account part, which Scott mentions as having a significant role in the blockchain technologies. For example, during several centuries there were no Byzantine gold solidi anywhere on the British Isles, but the solidus was the basis for accounting nevertheless, because of its long-term stability as a coin. Even in a future where an all-powerful state attempts to ban bitcoin technologies, it may be difficult to eliminate the underlying unit of account.

The corrupting influence of the aggregation of state power with regard to contracts and money is identified in a letter from EC Riegel to Ludwig von Mises in 1952: "The economy functions by means of verbal and written contracts, and under a monetary system, these contracts are all expressed in terms of the monetary unit. Hence the meaning of the monetary unit is the meaning of the contract. With the state's power to change the meaning of the monetary unit, it holds complete perversive power over the economy. To admit this all pervasive intervention while objecting to collateral ones is to swallow a whale while gagging at minnows."

Riegel makes a few other points well worth considering which popped into my head as I was reading Scott's essay. In his New Approach to Freedom, Riegel writes about who should issue money. The issue power does not belong in the hands of government, Riegel pointed out in 1946, because government is not a free enterprise. It is a coercive enterprise, so it on the one hand demands money at gunpoint and, sometimes, issues money and makes it legal tender, forcing it into circulation at gunpoint. The only people morally fit to issue money are free enterprisers, individuals and groups operating in the free market. Why? Because, if a free market outfit issues money, it is also going to provide goods or services for which that money would be acceptable. Therefore, it creates a market for the money it issues. It does so non-coercively, which is the whole point of cooperating in the free market. In his book, Riegel suggests that anyone can issue currency and that there is no moral hazard so long as they are prepared to make enough things (or provide enough services) to accept that same amount of currency in return.

Of course, not everyone sees cooperation and non-coercive behaviour as preferable. Quite a few people seem very willing to have a powerful state that forces other people to do things. Some people, who also seem to take a dim view of human nature, seem to believe it is necessary to have a powerful state to force people to do things. I don't share that view.

E.C. Riegel wrote in June 1947 that, "...it has not dawned upon society that the political monetary system that prevails in every nation is fundamentally socialistic. To point the finger at conscious socialists is self-deceiving, for it implies that others are not socialists. The finger should be pointed as well at the professing individualists who accept the socialization of the monetary system and are naïve enough to believe that we can have a free enterprise system in spite of it (Escape from Inflation, published 1979)."

Riegel's writings have been helpfully collated by The Heather Foundation which maintains this site that includes all of his published writings. (external link)

Scott also seems to ignore the critical international relations aspects of the closing not only of the space frontier to human settlement (see the 1967 Outer Space Treaty), but also the closing of the frontiers of the sea surface and sea floor (1982 Law of the Sea Treaty) and Antarctica (1957 treaty as renewed). Of course, not everyone is interested in an open frontier.

Dr. Robert Zubrin, quoting extensively from the writings of Frederick Jackson Turner, has made a number of points about the difficulties associated with the closing of the American frontier. It is noteworthy that within a single generation of that event, prohibition of alcohol led to the formation of a national police agency, a "black chamber" was formed to spy on Americans, a brown-shirt style American protective league was formed, the United States was dragged into the First World War (the settlement of which seems to have led ineluctably to the Second), and a number of major industries began to be regulated and heavily cartelized, not the least of which was the banking industry. Frontiers do seem to make a difference to some people, but not, it seems, to Scott, who concludes, "Screw escaping to Mars."

If you consider the factory worker in Boston in 1835 who didn't like his job, nor his boss, nor his working conditions, nor his pay, you might have a left anarchist view of an open frontier. At that time it was possible for that factory worker to walk to the frontier, making it less essential that he go on strike to get better working conditions. The numerous injustices of European immigrants taking land from Native Americans are important aspects of human history. It is noteworthy, though, that there are neither native peoples nor blue whales on Mars, so a space frontier might have fewer inherent forms of injustice about which to worry.

It won't be an escape from technological civilisation, if a human settlement on Mars is to succeed. For that to work, one would need to get out to the asteroid belt where, to quote Freeman Dyson, "the IRS won't be able to find us." And on that amusing side note, I conclude.


Tyrone Johnson is SilentVault's key person for marketing and business development. He has experience in business operations in Europe, Africa, Asia, and North America. Johnson has a classical education in the arts and sciences and a graduate degree in business. He has worked in mainstream banking, alternative currencies, technology development, and management consulting.


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