Big Head Press

L. Neil Smith's
Number 564, April 4, 2010

"This is the lie of democracies and republics.
Your opinion doesn't matter."

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How it goes
by Jim Davidson

Special to The Libertarian Enterprise

This is how it goes, everybody knows.

If governments can do any good, it is because individuals acting from within the government do some good. It follows logically that if they can do good in that situation, they can do good in other situations.

The fallacies of classical liberalism are mainly that governments derive their powers from the consent of the governed. Those in power really don't care whether you consent or not. And, the other main fallacy, governments protect life, liberty, and property. They do not. Governments separate the unwary from their property for the benefit of those who run the state, and impose surplus order on any who oppose this situation.

These things happen not because the people involved are especially evil, but many are evil in a banal way. Rather, these things happen because those in power are motivated by self-interest to keep power, at considerable cost to others. The imperative of the politician is to get re-elected, no matter who gets hurt by the laws they pass for those who fund their campaigns. The imperative of the bureau-rat is to control a larger budget, no matter how much harm they do with their regulations and enforcement actions.

These incentives lead to perverse results, which is why so much of the world has government which is completely corrupt, to the point that it is a minor inconvenience very much of the time—too lazy to do much enforcement, too greedy to stop any major development, easily controlled through bribery and vices. The worst of both worlds is the Puritanical insistence on strong government and the liberal insanity that any government can be just. All government makes war on liberty, as Mencken noted some decades ago.

It is this set of incentives and the short-term gains that can be realised by politicians and bureau-rats that made it evident to Laozi about 2,600 years ago that there was no real prospect for a society without coercion and brutality. Though he clearly wanted to "govern" only with the lightest touch, judging by his many sayings—"I take no action yet the people transform themselves, I favor quiescence and the people right themselves, I take no action and the people enrich themselves...." he became convinced that such a society would not survive in the face of the overwhelming desire of a few to have power through politics and bureaucracy.

I find it particularly interesting that at roughly the same time Laozi had come to prominence in ancient China with these bold ideas of limited interference in other people's lives, that a man named Anacharsis from a place called Scythia journeyed to Athens. Anacharsis was a contemporary of Solon, and criticised Solon's proposal for a web of laws to govern Greeks. Anacharsis said of these laws that they would be much like a spider's web, capable of ensnaring the poor and the weak, but completely ignored by the rich and the powerful. Solon ignored him and issued his decrees.

There is no doubt that Laozi and Anacharsis were correct, as the following 26 centuries have shown. Even where people voluntarily withdraw from society, such as in Shaolin temples, they were often pursued by the state with demands. We have entire traditions of martial arts which derive from the fact that emperors first disarmed and then attacked those who sought the peace of the monastery.

Faced with this understanding, Laozi counselled a strategy of withdrawal and asceticism, of making do with much less. After all, if you accumulate wealth, the state is going to seize it. If you generate income, the state is going to seize your income in taxes, demand that you withhold pay from those who work for you, demand that you do things their way rather than the way you wish, and ultimately confiscate your business if you won't comply. So why bother? Why even get started down that path?

I believe that today there are a set of technologies that make it possible to advance the cause of agorism without giving up on prosperity. What do I mean? I mean that there are now, today, techniques and technologies that make it possible for two persons to have an economic exchange and have no one else detect that it took place.

Unfortunately, it also seems clear that very, very few people are going to involve themselves in these technologies. I'm not really sure why not, but complexity seems to be part of the reason.

The technologies include: virtual privacy networks such as those provided by Cryptohippie and Rayservers (both dot com), encrypted e-mail such as provided by Gnu Privacy Guard and the Enigmail plug-in for Thunderbird e-mail client (see tutorials at Vertoro dot com and elsewhere) and value exchange technologies such as Trubanc, Loom, and Pecunix (dot com dot cc and dot com, respectively).

With similar technologies, people can, with nearly complete impunity, download essentially any information from bitTorrent. You can see any film that is available in digital format, you can read any book that is available that way, you can access software—though not all software installs from pirated materials are a source of happiness, since contemporary software often communicates with other servers on the web. I do not say that this capacity is good or evil, but that it is here. That particular genie won't go back in the bottle, and if you are relying on a business plan that denies the existence of these capabilities, you are living in a dream world.

It is very probable that technologies for private economic exchanges are going to be developed in ways that actually create the private stock exchanges, the private bond markets, the private economy that is so desperately needed. But these technologies have not been developed, and have not been marketed, in ways that are popular and successful. I don't know how to solve this puzzle.

So, I bring it to your attention. That's how it goes.

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Jim Davidson is an author, entrepreneur, and anti-war activist. His 1990 venture to offer a sweepstakes trip into space was destroyed by government action as was his free port and prospective space port in Somalia in 2001. His 2002-2007 venture in free market money and private stock exchange was destroyed by government action in 2007. He's going to Mars if he has to walk. His second book, Being Sovereign is now availble from Lulu and Amazon. His third book Sovereign Self-Defence will be released for Kindle very soon. His fourth book Being Libertarian will be available for free download as a .pdf, being a compilation of all his essays and letters in "The Libertarian Enterprise" since 1995. Contact him at or


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