Florida: Threat of Force to Stop Attackers PASSES

House Bill 89 by Representative Neil Combee and Senator Greg Evers is on its way to the Governor. On April 3rd, 2014, HB-89 passed the Florida Senate by a vote of 32-7. In the Senate, 6 Democrats and 1 Republican voted against the bill:

Republicans voting against the bill were:   John Legg (R-Lutz)

Democrats voting against the bill were:  Oscar Braynon (D-Miami Gardens), Dwight Bullard (D-Cutler Bay), Arthenia Joyner (D)-Tampa), Gwen Margolis (D_Miami), Jeremy Ring (D-Margate), Chris Smith (D-Fort Lauderdale)

Having previously passed the Florida House by a vote of 93-24, the bill  is now making its way to the Governor’s desk.

According to Marion P. Hammer, USF Executive Director and NRA Past President, “HB-89 is a bill to stop abusive prosecutors from using 10-20-LIFE to prosecute people who, in self-defense, threaten to use deadly force against an attacker as a means to stop an attack. Some anti-gun, anti-self-defense prosecutors have been abusing the 10-20-LIFE law to prosecute average citizens who displayed a weapon or gun in self-defense to make an attacker back off. Average citizens who never would have been in the system if they had not been attacked and in fear for their own safety, are being persecuted and prosecuted for defending themselves.”

“Because citizens took responsibility for their own safety, some prosecutors treat them like criminals and make them victims of a judicial system. 10-20-Life was passed to stop prosecutors and judges from slapping gun-wielding criminals on the wrist so they could quickly clear cases. The 10-20-Life law was never intended to be used against citizens who, in an act of self-defense, threatened the use of force to stop an attacker, including the unwise use of a warning shot. Yet, that’s what some prosecutors are doing. They are willfully and knowingly violating the intent of the law,” notes Hammer

RELATED STORY:

It’s Not About Warning Shots — The 10-20-Life law is being misused By Marion P. Hammer December 7, 2013

Nothing in SB-448 and HB-89, the House Companion, allows warning shots nor do they promote or encourage warning shots.

Warning shots are not safe. Nonetheless, when people are in fear for their lives or the lives of loved ones, they might fire a warning shot rather than shoot someone. People make mistakes and do irrational things when in fear of death or injury. That doesn’t mean they should go to prison for 20 years when there was no injury or harm done.

Warning shots are an unsafe result of the glorification of such conduct in movies and on TV. No one is recommending warning shots.

Nonetheless, a father should not be prosecuted under 10-20-Life for firing a warning shot. No harm was done yet a father was sent to prison for 20 years for firing a warning shot to stop an attacker from harming his daughter.

A mother should not be charged under 10-20-Life for firing a warning shot to stop an attack by an abusive ex-husband. It caused no injury and no harm yet she was prosecuted and sent to prison for 20 years. These are not isolated cases.

The simple truth is the intent of the 10-20-Life law is being violated. The law was intended to be used to lock up criminals who use guns during the commission or attempted commission of crimes.

It was intended to stop prosecutors and judges from slapping gun-toting criminals on the wrist so they could quickly clear cases.

The 10-20-Life law was never intended to be used against citizens who, in an act of self-defense, threatened the use of force to stop an attacker, including the unwise use of a warning shot. Yet, that’s what some prosecutors are doing. They are willfully and knowingly violating the intent of the law.

The cold hard reality is that some prosecutors are treating law-abiding people like criminals. People who never would have been in the system had they not been attacked and in fear for their own safety are being prosecuted. Self-defense is not a crime, it is a right and prosecutors are trampling those rights.

The threat of force in self-defense should have the same protection as actually shooting someone in self-defense. You should not be required to shoot an attacker to have the protection of the law.

The issue is not warning shots, it’s about protecting people from the abuse of prosecutorial discretion.

Marion P. Hammer is a past president of the National Rifle Association and executive director of Unified Sportsmen of Florida.

The 10-20-LIFE Law is a Minimum Mandatory law that mandates specific penalties for criminals who use guns to commit crimes:

10 years in prison for pulling a gunduring the commission of a crime.

20 years in prison for shooting a gun during the commission of a crime.

25 years to Life in prison if you shoot someone during the commission of a crime.

For more information on Florida’s 10-20-Life go here:  10-20-Life – Wikipedia, the free encyclopedia

Recent cases highlight terror threat from Muslim soldiers

It is simple common sense that soldiers who are Muslim might be hearing from other Muslims that no non-Sharia government has any legitimacy, and that the U.S. is the enemy of Muslims for waging war in Afghanistan and Iraq, etc. It is simple common sense to try to determine the allegiances and loyalties of Muslim soldiers. But to attempt such a thing would be “Islamophobic,” and the need to avoid “Islamophobia” trumps everything.

“Jihadist 5th Column Targets The Military,” from Investor’s Business Daily, April 3:

Infiltration: Though the Fort Hood copycat shooter wasn’t motivated by jihad, the FBI is hunting for another member of the Army, a Muslim convert allegedly planning a terrorist attack on U.S. bases.

After a Muslim Army major in 2009 massacred 13 fellow soldiers at Fort Hood, Texas, the FBI and Pentagon opened more than 100 investigations into suspected Islamic extremists inside the military. At least a dozen showed a strong intent to attack military targets.

These ongoing threats come on top of the 30 plots or attacks against military targets within the U.S. that law enforcement has disrupted or prosecuted since 2001, and don’t include the three military-related terror busts from this year alone, which are:

• Nicholas Teausant, aka Assad, a California National Guardsman and convert to Islam, who was arrested last month trying to join al-Qaida fighters in Syria. (An FBI affidavit quotes Assad as saying “I despise America” and threatening to kill his “kaffir” mother if she tried to stop him from joining “Allah’s army.”)

• Craig Benedict Baxam, a Maryland Army vet and recent convert who was imprisoned in January for trying to join al-Qaida in Somalia. (Court records show he told FBI agents he planned to fight the U.S. in jihad.)

• Mozaffar Khazaee, a U.S. defense contractor arrested in January for shipping secret documents detailing the F35 Joint Strike Fighter program to Iran. (He was taken into custody while catching a flight to Tehran.)

Despite continued evidence Muslims and Muslim converts pose a threat to military and national security, the Pentagon continues to make special accommodations for Muslim soldiers. Earlier this year, it relaxed uniform rules to allow Islamic beards and turbans.

Such accommodations only attract more Muslims at a time when recent terror cases highlight the ongoing danger of them in uniform. What’s needed, instead, is special screening and monitoring of such recruits.

RELATED STORIES:

Robert Spencer at Breitbart: How Many Fort Hood-Style Jihad Attacks Must There Be?

Canada’s former ambassador to Afghanistan says Pakistan is a state sponsor of terrorism

EDITORS NOTE: The featured photo courtesy of the Department of Defense is of US Army Muslim Soldiers bow down in prayer during the celebration of Eid-Al-Fitr Sunday at the Joe E. Mann Center. Eid-Al-Fitr marks the end of Ramadan, the holy month for Muslims worldwide.

The Common Core License: Open to Alteration by “Inner Circle” of Owners!

The so-called Common Core State Standards (CCSS) are being billed as “Preparing America’s Students for Success“; as “important for your child”; indeed, as The American Education Solution:

The Common Core is a set of high-quality academic standards in mathematics and English language arts/literacy (ELA). These learning goals outline what a student should know and be able to do at the end of each grade. The standards were created to ensure that all students graduate from high school with the skills and knowledge necessary to succeed in college, career, and life, regardless of where they live. [Emphasis added.]

What if CCSS doesn’t work?

Who is responsible?

Not the copyright holders, the National Governors Association (NGA) and the Council of Chief State School Officers (CCSSO).

Yes, these two groups formally get the credit for owning CCSS. Indeed, they insist upon it:

NGA Center/CCSSO shall be acknowledged as the sole owners and developers of the Common Core State Standards, and no claims to the contrary shall be made. 

NGA and CCSSO insist that CCSS is theirs.

Funny how states across the nation are fighting over “keeping” or not “keeping” a CCSS that states are bound to but do not even really own.

It’s also funny how the NGA and CCSSO organizations “own” CCSS but the American public does not get to know the exact individuals behind such “ownership.”

Cloudy at the inner circle– just like CCSS development.

Despite the exact individuals running this CCSS copyright show, both NGA and CCSSO  insist that if CCSS doesn’t deliver, they cannot be held accountable. According to the license:

THE COMMON CORE STATE STANDARDS ARE PROVIDED AS-IS AND WITH ALL FAULTS, AND NGA CENTER/CCSSO MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF TITLE, MERCHANTABILITY,FITNESS FOR A PARTICULAR PURPOSE, NON INFRINGEMENT, ACCURACY, OR THE PRESENCE OR ABSENCE OF ERRORS, WHETHER OR NOT DISCOVERABLE.

UNDER NO CIRCUMSTANCES SHALL NGA CENTER OR CCSSO, INDIVIDUALLY OR JOINTLY, BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, CONSEQUENTIAL, OR PUNITIVE DAMAGES HOWEVER CAUSED AND ON ANY LEGAL THEORY OF LIABILITY, WHETHER FOR CONTRACT, TORT, STRICT LIABILITY, OR A COMBINATION THEREOF (INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF THE USE OF THE COMMON CORE STATE STANDARDS, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH RISK AND POTENTIAL DAMAGE. WITHOUT LIMITING THE FOREGOING, LICENSEE WAIVES THE RIGHT TO SEEK LEGAL REDRESS AGAINST, AND RELEASES FROM ALL LIABILITY AND COVENANTS NOT TO SUE, NGA CENTER AND CCSSO.

Got that? NGA and CCSSO get to overtly, directly, and intentionally bill CCSS as “ensuring” “what a student should know”– yet in doublespeak, NGA and CCSSO also maintain that they “make no representations or warranties of any kind.

There’s more.

CCSS and NGA “reserve the right” to alter the terms of the license as they wish:

NGA Center and CCSSO reserve the right to release the Common Core State Standards under different license terms…

Who is bound to any capricious change that NGA and CCSSO might make in the future to CCSS? According to the license:

ANY PERSON WHO EXERCISES ANY RIGHTS TO THE COMMON CORE STATE STANDARDS THEREBY ACCEPTS AND AGREES TO BE BOUND BY THE TERMS OF THIS LICENSE.

Let us consider some of the former drafts of the CCSS license. Here is an excerpt from the November 24, 2010 version:

Impermissible Uses:

The following are prohibited uses of the Common Core State Standards: (a)revising, including editing; (b) recasting, such as in the form of abridged or condensed versions, in a manner that, in the view of NGA Center and CCSSO,changes the meaning or intent of the Common Core State Standards or any part thereof; (c) sublicensing; (d) sale; (e) claiming of ownership, including copyright; (f) any use that may be prejudicial to the Common Core State Standards, NGA Center, or CCSSO; and (g) any use contrary to the express terms of this License. Notwithstanding the foregoing, the Common Core State Standards may be included in larger works published by the Licensee, even if such larger works are sold or copyrighted by the Licensee.

(The same restriction is also part of the December 21, 2010January 23, 2011, and February 24, 2011 CCSS license versions. My thanks to Suzette Lopez for sending these links my way.)

That restriction would certainly dampen the current push to “rebrand” CCSS or to cosmetically alter CCSS (like Indiana is doing).

However, there is nothing stopping the CCSS copyright holders from mandating 100% CCSS adherence once, say, all current legislative sessions are ended.

That’s right: Laws passed regarding “modifying” CCSS can be made null by a change in CCSS copyright that requires 100% CCSS adherence.

Tricky, but NGA and CCSSO “own” CCSS. Never forget that.

Let’s consider another sinister possibility due to this copyright.

On March 31, 2o14, I wrote a post in which I discussed the issue of CCSS curriculum regulation (including the possibility of a CCSS regulatory agency) on the horizon. It seems that on March 6, 2014, members of the Brookings Institute suggested the following:

The Common Core (meaning NGA and CCSSO) should vigorously enforce their licensing agreement. In the past textbook writers and others have inappropriately claimed that they aligned course content. Supporters of standards based reform should recognize that low quality content could sink the standards and enforce their copyright accordingly.

Let us not forget that proponents of CCSS have repeatedly noted that CCSS is “not a curriculum.” Technically, they would still be able to say as much even if NGA and CCSSO expand their dictatorial reach and require that curriculum be submitted for their review prior to earning some CCSS “seal of approval.”

NGA and CCSSO could alter *their* CCSS copyright to require their approval of curricular materials used in school districts across the nation.

CCSS is all about sameness, for sameness can be mass produced and rake in phenomenal dolares for contemporary education profiteers.

Sameness is important for making money.

Some CCSS proponents, like Springfield, Missouri, school board member Annie Busch, call this sameness “consistency.”

Here is how “consistency” works:

Keep CCSS the same. (If CCSS veers, then enforce sameness via copyright duress.)

Keep the curriculum the same. (This way, the market is not state-specific; instead, the market is nationwide.)

Keep the tests the same. (NGA and CCSSO curriculum “oversight” is only one step away from CCSS test “oversight.)

While we’re at it, have NGA and CCSSO include data collection requirements as part of the CCSS “agreement” with the CCSS “owners.”

Does this sound far fetched?

States that “choose to retain” CCSS (loosely defined since stakeholders have never been in the driver’s seat of this car) will continue to fight off such standardization pressures.

Keep your eyes open for it.

And do not be fooled by articles like this State Impact piece in which Achieve, “a nonprofit that helped develop the standards” (uh huh) tries to tell the public that states with CCSS can make unlimited changes and that the CCSS copyright is to “protect the rights of the states that developed them.”

The “owners” of CCSS (whoever the inner circle “owners” might be) meant for this venture to indefinitely yield fat fiscal returns.

RELATED VIDEO: This video courtesy of Utahns Against Common Core shows a series of ELA books by Zaner-Bloser with a core theme that is not literature and writing. It is social justice activism for ages 6 and up.

[youtube]http://youtu.be/FSHoxWaVeto[/youtube]

 

EDITORS NOTE: The featured photo is of President Barack Obama seen through a door to the pantry near the State Dining Room of the White House as he waits to meet with the National Governors Association on 25 February 2013.

Hard Times that Need Hard Answers

I am paying more for everything these days and this is brought home to me every time I go to the supermarket and contemplate buying anything from an avocado to a London broil. I can’t imagine what it must be like to feed a family with two or three children.

I never imagined living in a nation where an 18-year-old girl would move out of her parent’s home and then sue them to pay for her college tuition and other support. A judge put an end to that nonsense.

I often feel like I am drowning in nonsense. I delete upwards of eighty emails I receive every day because they tell me that I am going to receive millions of dollars from people I do not know, offer dubious business propositions, loans, or they are from companies in foreign countries whose language I neither read, nor speak.

The news media deluged me with constant speculation and rumor about a missing Malaysian jet liner that is likely at the bottom of the Indian ocean and not likely to be found for years, if ever. I feel sorry for the passengers, but this occurred while Russia’s Putin was breaking a whole bunch of treaties to reclaim Crimea.

What the media has not told you is that the Ukraine has been run by a seriously corrupt group of people who routinely plundered it and that, in taking over the Crimea, Putin has taken on a new financial burden and a region that receives its power from the Ukraine. So, while he has secured control of the Russian naval ports and some military installations, he has also added to Russia’s cost of operation when its economy is not that strong to begin with. The likelihood that he would invade Lithuania, Estonia, and Moldova is small and, in fact, he has spurred a sleepy NATO and European Union to gear up militarily.

The same media has managed to largely ignore the lies the President and his former Secretary of State, Hillary Clinton, told about the killing of a U.S. ambassador and three security personnel in Benghazi, Libya. It has largely ignored the corruption of the Internal Revenue Service by politicizing it into an instrument to deter Tea Party and patriot groups from being granted the same non-profit status that liberal groups routinely receive. There were other scandals such as Fast and Furious in which guns were provided to Mexican drug cartels that then were used to kill a U.S. Border Patrol agent and countless Mexicans.

When he lifted the sanctions against Iran in order to negotiate their cessation of efforts to build their own nuclear weapons, Obama ignored their decades of declared hatred of America and Israel, and the fact that Iran is the world’s leading sponsor of terrorism that is keeping the Middle East in turmoil. Syria is just one example. Why would anyone want to negotiate with Iran? Decades of negotiations with the nuclear armed North Korea achieved nothing.

The strength of the United States since the end of World War Two allowed nations to move toward greater democratization. It resisted the Soviet Union during the Cold War for some four decades and saw its collapse in 1991. Our record is not perfect. The decision to go to war in Vietnam was wrong. The decision to go to war with Saddam Hussein’s Iraq after he invaded Kuwait was right, but the later war to remove him from power achieved that goal while ending in total withdrawal from a nation with no experience of self-governance. The “red line” asserted for Syria when its dictator used poison gas was withdrawn within a day.

Hard times call for hard answers and hard decisions. America’s hard times, economically, are the direct result, not only of Obama’s failure to put right the financial ills of the 2008 banking crisis, but of piling on trillions in more debt with government “stimulus” programs that had never worked in the past.

Not only did the President deliberately lie repeatedly about Obamacare, its passage has played havoc, generating unemployment as companies large and small responded to the rescinding of existing health insurance programs and new rules of how many can be employed, full and part time. It literally forced the cancellation of health insurance that people liked in order to force them to purchase more expensive insurance they could barely afford and didn’t like.

Hard times have been made much harder for millions who are unemployed and have ceased looking for work because of the scarcity of jobs. Instead, the government expanded welfare programs from unemployment compensation to food stamps. It destroyed the self-reliance that Americans have believed in from its founding.

At home and abroad, the hard times have gotten harder and the President, protected by a compliant news media, has found plenty of time to play golf and vacation continually, while displaying an indifference to the welfare of Americans and others around the world that is breathtaking. As Putin was annexing the Crimea, the President was shown working on the “brackets” predicting the outcome of the NCAA men’s basketball season.

The only hope for the future now rests with the outcome of the November midterm elections. If disaffected Democrats and independents join with Republicans, returning power in the Senate and expanding it in the House holds some hope of responding to our economic malaise.

I have paid my taxes and my only thought while doing so was the realization that most of the nation’s budget is now devoted to “entitlement” programs that are predicted to be insolvent in the near future.

© Alan Caruba, 2014

RELATED STORY: The Real Inflation Fear – US Food Prices Are Up 19% In 2014 | Zero Hedge

Saving Civilization Means Killing Equality

If a famine befell us and you couldn’t save everyone, would you withhold the food you had and let every citizen starve rather than endure the inequality of just saving some? If recent history is any guide, certain leftists just might say yes.

A good example of this phenomenon involved a multiple sclerosis patient in Gothenburg, Sweden, who was denied a more effective and expensive medication — even though he was willing to pay for it — because, wrote columnist Walter Williams in 2009, “bureaucrats said it would set a bad precedent and lead to unequal access to medicine.” No wonder Winston Churchill said that socialism’s “inherent virtue is the equal sharing of misery.”

And another example just reared its ugly head in Plymouth, Michigan, where the locality’s high school is tearing down newly constructed bleachers in deference to the equality police. MyFoxDetroit.com reports on the issue, writing:

A new set of seating is being torn down outside the Plymouth Wildcats varsity boys’ baseball field, not long before the season begins, because the fields for boys’ and girls’ athletics must be equal.

A group of parents raised money for a raised seating deck by the field, as it was hard to see the games through a chain-link fence. The parents even did the installation themselves, and also paid for a new scoreboard.

So what happened? Some unnamed malcontent lodged a complaint with the feral government, at which point U.S Education Department Office for Civil Rights overlords decreed that the seating must go. Ain’t equality grand?

Except that equality is simply a ruse. And think about it with respect to this issue:  the principle is that facilities “for boys’ and girls’ athletics must be equal,” but are boys’ and girls’ athletics equal? The striking contradiction in these male/female sports equality controversies is that calls for “equality” are deferred to within the context of the acceptance and promotion of an inherently unequal system. That is to say, if equality is the guiding principle here, why have separate leagues, teams and tours — protected from the best competition — for girls and women?

The solution, whether it’s the Plymouth situation or calls for equal prize money in tennis, is simple. If a lightweight boxer wants the purses the heavyweights get, he needs to fight and succeed in the heavyweight class; likewise, if feminists want what the boys/men have, they should try to compete in their arena. And I do advocate this: eliminate separate categories for women, and let the sexes compete together on a level playing field. After all, to echo what Lincoln said about laws, the best way to eliminate bad social policy is to enforce it strictly. If you believe in equality, practice it.

Live it.

And live with it.

And since the boys’ American high-school mile record is considerably faster than the women’s world record — and since this gap appears, with some variation, across sports — my proposal would provide some necessary “policy clarification.”

The education department’s decree is also an attack on charity. The message is that pursuing good works just might be a waste of time because, inevitably, they’ll conflict with some government regulation or mandate. It’s in addition a quasi-Marxist assault on the market. After all, the Plymouth community’s interest in building new baseball bleachers was no doubt driven by there being greater fan turnout for the boys’ games. And the market renders such verdicts all the time. It’s said that female fashion models earn three times what their male counterparts do, bars may offer women free drinks or entry without a cover charge, and no one troubles over women-only health clubs. It’s only when market determinations seem to benefit boys or men that the equality ruse is trotted out.

The truth is that equality dogma is a fiction of modern times. As for the timeless, the word “equality” appears in only 21 biblical verses, mostly referring to matters such as weights and measures. There’s good reason for this, and don’t blame it on the supposed “backwardness” of religion because a devout evolutionist would have to be the staunchest believer in hierarchies born of natural inequality. As G.K. Chesterton pointed out, “[I]f they [people] were not created equal, they were certainly evolved unequal.” Look around you at the world of nature and man, which, if the evolutionists are correct, are certainly one and the same. How much equality do you see? Rams butt heads, and one ram wins and the other loses; wolves have alphas and one male lion dominates and leads a pride. Then, there are 3.1 billion possible combinations when a couple has a child. And, oh, what combinations they can be. How many of us can play golf like Tiger Woods, defy gravity and shoot baskets like Michael Jordan or compose music at four years of age as did Mozart? People have greatly varying IQs, physical capabilities, personalities, inclinations toward virtue and gifts. Equality is a pipe dream.

This variation exists among groups, too. Ashkenazi Jews have the world’s highest average IQ, while Asians enjoy that status insofar as major groups go. And disease and conditions have no regard for equality, either: the Pima Indians have the highest rate of diabetes on Earth, breast cancer afflicts mainly women, the incidence of Tay-Sachs disease is highest among Jews, black men suffer from prostate cancer at twice the rate whites do, while sickle-cell anemia is found almost exclusively among blacks. I guess reality is “racist.”

Reality is actually this: it’s completely illogical and contradictory for a person to claim on one hand that he believes in classical, cosmic-accident evolution, but on the other that all groups somehow, quite accidentally, wound up the same in capacity, inclination and worldly abilities. After all, since evolution holds that groups lived and developed separately for millions of years — subject to different environments, stresses, adaptive requirements and to the luck of the draw — their winding up “equal” was, for all intents and purposes, a mathematical impossibility.

Earlier evolutionists recognized and accepted this reality, mind you, and in fact became eugenicists. Note here that the term “eugenics” was coined by Charles Darwin’s cousin Sir Francis Galton. Also note that the concept greatly predates the term: Greek philosopher Plato advocated murdering weak children, and the Spartans had actually done it.

This doesn’t mean I embrace eugenics or classical evolution (my views on the latter are found here). The point is that whether you believe we’re accidentally different or that, as St. Therese learned, there are even divinely ordained hierarchies in Heaven, equality is certainly not a thing of this world.

This helps explain why entities prescribing “equality” — such as the early French republic and all the Marxist killing-field regimes — become the worst tyrannies. Since equality is wholly unnatural, its mullahs must violate man’s nature, must trump it and twist it, in an effort to pound their sinister square peg into the round hole of reality. And woe betide he who defies their self-deified will.

Cries for equality are today the second-to-last refuge of a scoundrel (shouts of “racism” are the absolute last). Contrary to what Churchill said, however, they don’t actually visit upon us an equal sharing of misery. Rather, the pigs more equal than others will dispense the ever-diminishing pork to the peons, as they feed at the trough of modern man’s sloth, envy and error.

Contact Selwyn Duke, follow him on Twitter or log on to SelwynDuke.com

EDITORS NOTE: The featured photo is by Josephou. This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

Rothbard’s Remedy: Less government means faster healing, says new study by DOUGLAS FRENCH

Economic theories don’t lend themselves to laboratory testing, so the work of a national appraisal firm is especially enlightening. A new study lends support to the Austrian business cycle theory, which says that the less government is involved, the faster a market will recover.

Pro Teck Valuation Services has posted a report comparing housing-market rebounds in cities with “non-judicial” foreclosure processes with those with “judicial” ones. In other words, they compare states in which the government meddles less in foreclosure with states that meddle more.

Pro Teck found that of 30 metropolitan housing markets in non-judicial states, housing markets corrected sooner and prices have rebounded more quickly than in states with more government involvement. Could Murray Rothbard have been correct that markets clean up clusters of malinvestment?

Pro Teck chief executive Tom O’Grady told The Los Angeles Times, “When we looked closer” at rebound performances state by state, “we observed that nonjudicial states bottomed out sooner”—typically between 2009 and 2011—”versus 2011 to 2012 for judicial states, and have seen greater appreciation since the bottom,” typically 50 percent to 80 percent compared with just 10 percent to 45 percent for judicial states.

“Our hypothesis,” he added, “is that nonjudicial states have been able to work through the foreclosure [glut] faster, allowing them to get back into a non-distressed housing market sooner, and are therefore seeing greater appreciation.”

In October, the top 10 metro areas Pro Teck studies were in non-judicial California. At the bottom were cities in Illinois and Florida, both judicial states. “Unlike California, which tore off the foreclosure Band-Aid quickly, Florida and Illinois have been slowly peeling it away,” the Pro Teck authors explain. “In these states there are still high ratios of foreclosure sales and hefty foreclosure discounts, which in turn are limiting any real recovery. Because of this, all of our bottom ten metros are in Florida or Illinois.”

The top 10 metro areas had less than four months of inventory for sale and averaged more than 20 percent year-over-year appreciation. A key statistic in Pro Teck’s analysis is the ratio of foreclosure sales to total sales. In all of these markets it was under 10 percent. In the view of Pro Teck’s experts, “Supply-demand market fundamentals have returned, which should lead to a sustainable recovery.”

In slow-moving judicial states, foreclosures are still 25 to 50 percent of sales, and unsold inventory remains high, at a five- to 10-month supply.

In the same vein that judges believe they facilitate orderly housing markets in judicial states, Ph.D.s and bureaucrats believe problems with the economy (inadequate aggregate demand) can be fixed with the proper committee-determined interest rate and the use of government force to keep businesses alive or keep certain prices in place.

The Austrian school is unique in recognizing that the real problem is the unsustainable boom. The eventual bust is really the economy’s required healing. Central bank interest-rate manipulation directs capital into high-order capital goods. These low interest rates make these projects appear economically sound, when in fact these projects are malinvestments.

The “cluster of entrepreneurial errors,” as Rothbard termed these malinvestments, is the result of central bank credit expansion driving rates below the natural rate of interest that would be set by individual time preferences.

As bad as what central banks and government policies do to incite the boom that creates the malinvestments, they compound the problem by not allowing the market to heal after the bust.

The financial press appears confounded by the continued lackluster recovery. Five years have passed and trillions of government dollars have been spent since the financial crash. Unemployment is still high, as is the use of food stamps. However, keeping assets in the hands of failed managers with a boom-time cost basis is a sure way to prolong the stagnation.

In non-judicial states, home foreclosures proceed without the involvement of the court and the properties are transferred within months. In judicial foreclosure jurisdictions (22 states), post-default proceedings involve court intervention with specific courted-ordered steps that can take up to two and three years to complete.

In non-judicial states requirements to foreclose are established by state statute. When the borrower defaults, the lender sends a default letter and in many states a notice of default is recorded in public records at the same time. There is a prescribed period for the borrower to cure the default. If the default is not paid, a notice of sale is mailed to the borrower, posted in public places, and recorded at the county recorder’s office. After the notice period has expired, a public auction takes place and the property is sold to the highest bidder.

A judicial foreclosure starts with the lender filing a complaint with the court asking for approval to foreclose its lien and take possession of the property as a remedy for non-payment. The borrower is provided notice of the compliant and is permitted to dispute the facts by answering the complaint.

In most cases there is no dispute, but the court must still issue a judgment in favor of the lender or servicer. The court then authorizes a sheriff’s sale and property is sold to the highest bidder. Lenders’ credit bids (usually the amount owed) are typically the highest and the lenders become owners of the property.

timeline provided by the Mortgage Bankers Association indicates that the average judicial foreclosure process lasts 480 to 700 days, with the homeowner/borrower remaining in the home as many as 400 days.

New York, a judicial state, has the longest foreclosure timeline at 1,049 days. Texas, a non-judicial state, has the shortest timeline of 159 days.

Rothbard pointed out in Man, Economy and State that if the government interferes at all in the cleansing process of the depression, it will only prolong it. “The more these readjustments are delayed,” Rothbard explained, “the longer the depression will have to last, and the longer complete recovery is postponed.”

James Grant pointed out recently in The Wall Street Journal the result of government tinkering with the economy versus letting it be. “The laissez-faire depression of 1920–21 was over and done within 18 months. The federally doctored depression of 1929–33 spanned 43 months.” He went on to write, “America’s economy is too complex to predict, much less to direct from on high.”

On a micro level Pro Teck’s comparison lends support to Austrian theory. Increased government intervention simply prolongs the agony. Less government means a quicker recovery.

ABOUT DOUGLAS FRENCH

Douglas E. French is senior editor of the Laissez Faire Club and the author of Early Speculative Bubbles and Increases in the Supply of Money, written under the direction of Murray Rothbard at UNLV, and The Failure of Common Knowledge, which takes on many common economic fallacies.

EDITORS NOTE: The featured image is courtesy of FEE and Shutterstock.

The UAW Against the Volunteer State: Labor politics is desperate, thanks to capital mobility by Wendy McElroy

The United Automobile Workers (UAW) recently failed to unionize the Volkswagen assembly plant in Chattanooga, Tennessee. The campaign—and failure—revealed the desperation and changing dynamics of modern labor unions.

The UAW is the richest union in North America, with assets of reportedly more than $1 billion at the end of 2012. It is arguably also the most politically influential, because it donates large amounts of money to Democrats. Like most unions, however, its membership and dues are in decline while its costs, such as pension benefits, are climbing. According to the Bureau of Labor Statistics’ Union Members Summary (Jan. 24, 2014), there were 14.5 million members in 2013, compared with 17.7 million in 1983, and 11.3 percent of workers belonged to a union in 2013, compared to 20.1 percent in 1983.

For the UAW and, perhaps, labor unions in general, the Chattanooga vote was a pivotal event: Foreign manufacturers employ a huge—and non unionized—workforce.

The stumbling block: Foreign auto manufacturers such as Nissan, Volkswagen, Toyota, and Mercedes-Benz have set up plants in
Southern “right-to-work” states. These states defend a worker’s right not to join a labor union; other states allow closed shops in specific industries, meaning that they exclude non-union workers. A February 15 Forbes article explained, “In more than 30 years, none of the free-standing assembly plants owned by foreign manufacturers in the United States have ever been organized. (This doesn’t include factories that originally began as joint ventures.)”

According to CBC News, the UAW isn’t alone in its concern: “Detroit’s three automakers—Ford, Chrysler and General Motors—are increasingly anxious about the 78-year old union’s future.”

Why would the UAW’s future worry Detroit’s big three? Unions and corporate executives, though they’re usually cast as enemies, share a vested interest in keeping the union strong.

“For them, it’s a ‘devil you know’ situation. They worry that the 382,000-member UAW could be absorbed by a more hostile union. Such a merger could disrupt a decade of labour-management peace that has helped America’s auto industry survive the financial crisis and emerge much stronger, according to a person with knowledge of executive discussions,” CBC News reported.

A standard method by which to unionize an American workplace is to have at least 30 percent of employees request a union, usually in the form of signing a card or a petition. After the National Labor Relations Board (NLRB) approves the request, a secret-ballot election is held. If more than 50 percent of the employees vote for unionization, then a union is usually formed unless there are circumstances such as an appeal. A second procedure called a “card check” offers a different route; that’s when over 50 percent of workers request unionization. National Review explained what happens next: “The employer can choose to recognize the union, and it’s formed without a secret ballot. If the employer declines . . . a secret ballot election is held that requires majority support.”

The secret ballot has become a flashpoint, with surprising advocates and opponents. In decades past, unions pushed for secret ballots because they perceived a need to protect pro-union workers from threats or retaliation by employers. In short, secret ballots were a consciously pro-union measure to ensure workers could vote freely. Now, depending upon the politics of particular states and industries, unions want to make obsolete the secret ballot, which can function as an anti-union measure. That is, employees who vote secretly do not experience peer pressure or blowback from coworkers and union organizers. In some situations, this makes employees less likely to vote for unionization.

In recent years, Democrats have repeatedly introduced legislation into Congress that would automatically create a union without the step of a secret ballot or the need for employer consent. The only requirement would be for 50 percent of workers to request unionization. The legislative attempts have been unsuccessful so far. If the unionization in Chattanooga had succeeded, however, it would have established precedent, bypassing legislation altogether. It would have also made a crack in the barrier that has prevented the unionization of foreign manufacturers in the South. Unfolding the Chattanooga event reveals modern labor-union strategy.

The Pivotal Event

In February, the UAW seemed poised for victory in Chattanooga. A month earlier, it had publicly declared a victory by claiming that card check had demonstrated that a majority of workers wanted the union. It asked Volkswagen’s management for official recognition. But eight workers complained to the NLRB, reporting that the UAW had used thug tactics and misrepresentation in the ballot-casting. They also accused the management in Germany of threatening to cut the flow of work to the Chattanooga plant unless unionization occurred.

That might be the most interesting aspect of the story. As the Washington Post asked, “The German company is campaigning for the UAW, not against it, in a kind of employer-union partnership America has seldom seen. What gives?” Most foreign manufacturers oppose unionization of their American plants because it would usher in expensive benefits packages and weaken their control of workplace practices, such as hiring and firing. But labor practices in Germany are union-friendly. Volkswagen was undoubtedly targeted because the company is open to establishing a German-style works council, which would have been the first of its kind in America. A works council consists of blue- and white-collar employees who are partners in management decisions on issues such as productivity and workplace conditions. American labor laws, though, make this arrangement illegal without unionization. Specifically, federal NLRA statute section 8(a)(2) prohibits so-called “company unions,” which the VW works council would be categorized as.

The most powerful pushback against the UAW came from state officials who believed unionization would harm Tennessee’s economy and make the state far less attractive to business. One of the obstacles officials erected was a 2011 state law on secret ballots and the “selection of exclusive bargaining representative(s).” The law states,

Should employees and employers seek to designate an exclusive bargaining representative through an election, they have the right to a secret ballot election; if a secret ballot election is chosen, no alternative means of designation shall be used.

The state law has been called unconstitutional because it may contradict federal rules on unionization. Nevertheless, the state law clearly indicates Tennessee’s opposition. State Sen. Mark Green, the vice chairman of the Senate Commerce Committee, also called for Volkswagen to facilitate a secret ballot to protect workers’ privacy and shield them from intimidation. The likelihood of intimidation increases because most petition signatures are generated employee to employee, face to face. Green argued, “You’ve got seven guys standing around you who work with you every day and they’re saying, ‘hey, sign this card.’” Green concluded, “We don’t elect the governor that way, we don’t elect our representatives that way, the ballot is secret. That’s democracy.” The senator also claimed to know of four large manufacturers that were monitoring the Chattanooga situation before committing to expansion within Tennessee.

Gary Casteel, the UAW’s regional director, denied the charges of union intimidation and threw the accusation back at the state government. A secret ballot, he argued, would give “outside interests” a 40-day window in which to take out ads and otherwise communicate anti-union messages to VW workers. By contrast, Casteel claimed the cards in the card check would carry a simple, self-explanatory message and not be confusing.

On February 14, the Chattanooga Volkswagen workers cast a secret ballot. They defeated unionization by a vote of 712 to 626. The defeat occurred even though Volkswagen had signed a neutrality agreement, pledging not to interfere with the UAW’s efforts; such agreements are considered to be endorsements of unionization. Volkswagen workers also defeated unionization despite a strong drive by the UAW that included public support voiced by President Obama. They defeated it even though the NLRB facilitated the election by fast-tracking it.  An anti-union campaign headed by Sen. Robert Corker, Jr., and Tennesseans’ concern about unemployment, prevailed.

Conclusion

Predictably, the UAW has appealed the February 14 results and seeks a revote. The union accuses state officials of “dirty politics.” For example, it argues that officials threatened to withdraw state-financed incentives if Volkswagen workers unionized. As of this writing (March 27), the NLRB has set a hearing for April 21, but delays are probable. Rejecting the vote would mean rejecting the solid precedent of siding with the voice of workers. Accepting the vote would mean undercutting labor unions on a matter that may be key to their future. Whatever the decision, union politics in America is changing.

ABOUT WENDY MCELROY

Contributing editor Wendy McElroy is an author and the editor of iFeminists.com.

EDITORS NOTE: The featured photo is courtesy of FEE and Shutterstock.

Common Core the Movie: “Building the Machine”

In the documentary, both proponents and opponents will present their perspectives so that you can draw your own conclusions on this important educational issue. To learn more visit: http://www.commoncoremovie.com.

[youtube]http://youtu.be/zjxBClx01jc[/youtube]

 

EDITORS NOTE: A leaked email from the deputy executive director of the Council of Chief State School Officers (CCSSO), one of the nonprofits that developed and owns the copyrights to the Common Core standards, indicates the group is mobilizing Common Core supporters in the face of the release of a documentary film from the Home School Legal Defense Association (HSLDA) on Monday….

Missouri Education Watchdog provided the text of the email from Carissa Moffat Miller of CCSSO, the subject of which is “Anti Common Core Movie, embargoed materials.”

Many of you are likely aware of an anti-common core movie slated to be released in a few days. The Home School Legal Defense Association, a Virginia-based organization opposed to the Common Core, has produced a film called “Building the Machine.” The film’s anticipated online release date (which has changed several times), is currently set for March 31, 2014. The film implies that the Common Core was created through politics, misinformation and corruption. Using stark graphics and ominous music, the film features interviews with Common Core opponents arguing against the standards’ development and implementation—interspersed with misleading snippets of interviews from Common Core supporters…

The U.S. Chamber of Commerce and Fordham have put together the attached two documents that can be used to clarify the vast amount of misinformation that will be circulated as a result of the movie. Please note – these are EMBARGOED until Monday, March 31st. Please do not distribute.

A Push Back – Billboard Asks, “Air Force Cadets, Are You Free to Say So Help Me God?”

In response to recent attacks on the religious freedom of Christian cadets at the Air Force Academy, the Restore Military Religious Freedom Coalition, of which the Thomas More Law Center is a member, has posted a billboard near the Academy supporting the religious freedom of Christian cadets.

The billboard asks, Air Force cadets, “Are you free to say so help me God? They did” against a background of the four presidents carved on Mount Rushmore.

The sign’s message relates to the removal of the phrase “so help me God” from the official cadet handbook as well as the recent removal of a Bible verse from a cadet’s personal whiteboard.

Concerning the recent affronts to religious freedom, Lt. Gen. (Ret.) Jerry Boykin, Executive Vice President of the Family Research Council (FRC), stated: “Christian cadets at the Air Force Academy have the constitutional right to express their individual faith. If such faith scares faculty at the Academy, then it is unlikely they will be very effective when confronted by a committed enemy who is willing to die for his or her beliefs.”

Richard Thompson, President and Chief Counsel of The Thomas More Law Center added, “We’ve all heard the adage, ‘There are no atheists in foxholes.’  That’s because the history of our nation evidences the fact that in the end victory depends on the spirit of our soldiers, not on the sophistication of our war machines.  As General George S. Patton, one of America’s greatest battlefield generals once declared, ‘Wars might be fought with weapons, but they are won by men.  It is the spirit of the men who leads that gains the victory.’”

Other events at the Air Force Academy have also indicated a hostile attitude toward Christians in the Air Force Academy including preferred treatment of an event sponsored by an Academy Atheists club, which led conservative commentator Todd Starnes to wonder, “if those in charge of the Air Force Academy believe the only good cadets are godless cadets.”

Unfortunately, the anti-Christian hostilities at the Air Force Academy are part of what Rev. Franklin Graham called a move “to completely secularize our military.” The Family Research Council listed a series of affronts to Christian Religious Freedom in the Military in their report “A Clear and Present Danger.”

EDITORS NOTE: An earlier version of this news story incorrectly ascribed the report A Clear and Present Danger to the Restoring Military Religious Freedom Coalition.

A History of the Disastrous Global Warming Hoax

“It is the greatest deception in history and the extent of the damage has yet to be exposed and measured,” says Dr. Tim Ball in his new book, “The Deliberate Corruption of Climate Science”.

Dr. Ball has been a climatologist for more than forty years and was one of the earliest critics of the global warming hoax that was initiated by the United Nations environmental program that was established in 1972 and the Intergovernmental Panel on Climate Change (IPCC) established in 1988.

Several UN conferences set in motion the hoax that is based on the assertion that carbon dioxide (CO2) was causing a dramatic surge in heating the Earth. IPCC reports have continued to spread this lie through their summaries for policy makers that influenced policies that have caused nations worldwide to spend billions to reduce and restrict CO2 emissions. Manmade climate change—called anthropogenic global warming—continues to be the message though mankind plays no role whatever

There is no scientific support for the UN theory.

CO2, despite being a minor element of the Earth’s atmosphere, is essential for all life on Earth because it is the food that nourishes all vegetation. The Earth has passed through many periods of high levels of CO2 and many cycles of warming and cooling that are part of the life of the planet.

“Science works by creating theories based on assumptions,” Dr. Ball notes, “then other scientists—performing their skeptical role—test them. The structure and mandate of the IPCC was in direct contradiction of this scientific method. They set out to prove the theory rather than disprove it.”

Cover - Deliberate Corruption“The atmosphere,” Dr. Ball notes, “is three-dimensional and dynamic, so building a computer model that even approximates reality requires far more data than exists and much greater understanding of an extremely turbulent and complex system.” No computer model put forth by the IPCC in support of global warming has been accurate, nor ever could be.

Most of the reports were created by a small group of men working within the Climate Research Unit (CRU) of the University of East Anglia and all were members of the IPCC. The result was “a totally false picture supposedly based on science.”

The revelations of emails between the members of the CRU were made available in 2009 by an unknown source. Dr. Ball quotes Phil Jones, the Director of the CRU at the time of the leaks, and Tom Wigley, a former director addressing other CRU members admiting that “Many of the uncertainties surrounding the cause of climate change will never be resolved because the necessary data are lacking.”

The IPCC depended upon the public’s lack of knowledge regarding the science involved and the global warming hoax was greatly aided because the “mainstream media bought into and promoted the unproven theory. Scientists who challenged were denied funding and marginalized. National environmental policies were introduced based on the misleading information” of the IPCC summaries of their reports.

“By the time of the 2001 IPCC Third Assessment Report, the politics and hysteria about climate change had risen to a level that demanded clear evidence of a human signal,” notes Dr. Ball. “An entire industry had developed around massive funding from government. A large number of academic, political, and bureaucratic careers had evolved and depended on expansion of the evidence. Environmentalists were increasing pressure on the public and thereby politicians.”

The growing problem for the CRU and the entire global warming hoax was that no clear evidence existed to blame mankind for changes in the climate and still largely unknown to the public was the fact that the Earth has passed through many natural cycles of warmth and cooling. If humans were responsible, how could the CRU explain a succession of ice ages over millions of years?

The CRU emails revealed their growing concerns regarding a cooling cycle that had begun in the late 1990s and now, some seventeen years later, the Earth is in a widely recognized cooling cycle.

Moreover, the hoax was aimed at vast reductions in the use of coal, oil, and natural gas, as well as nuclear power to produce the electricity on which all modern life depends. There was advocacy of solar and wind power to replace them and nations undertook costly programs to bring about the reduction of the CO2 “fossil fuels” produced and spent billions on the “green” energy. That program is being abandoned.

At the heart of the hoax is a contempt for mankind and a belief that population worldwide should be reduced. The science advisor to President Obama, John Holdren, has advocated forced abortions, sterilization by introducing infertility drugs into the nation’s drinking water and food, and other totalitarian measures. “Overpopulation is still central to the use of climate change as a political vehicle,” warns Dr. Ball.

Given that the environmental movement has been around since the 1960s, it has taken decades for the public to grasp its intent and the torrents of lies that have been used to advance it. “More people,” notes Dr. Ball, “are starting to understand that what they’re told about climate change by academia, the mass media, and the government is wrong, especially the propaganda coming from the UN and the Intergovernmental Panel on Climate Change.”

“Ridiculous claims—like the science is settled or the debate is over—triggered a growing realization that something was wrong.” When the global warming advocates began to tell people that cooling is caused by warming, the public has realized how absurd the entire UN climate change argument has been.

Worse, however, has been “the deliberate deceptions, misinformation, manipulation of records and misapplying scientific method and research” to pursue a political objective. Much of this is clearly unlawful, but it is unlikely that any of those who perpetrated the hoax will ever be punished and, in the case of Al Gore and the IPCC, they shared a Nobel Peace Prize!

We are all in debt to Dr. Ball and a score of his fellow scientists who exposed the lies and debunked the hoax; their numbers are growing with thousands of scientists signing petitions and participating in international conferences to expose this massive global deception.

© Alan Caruba, 2014

How Obama Is Drowning the Economy in Red Tape

Kelsey Harris and Amy Payne from The Foundry write, “Regulation: It’s a mostly hidden drain on the economy—and a favorite of the Obama administration. It affects all of our lives—and wallets—yet rarely makes headlines. Why? It’s complex; it’s constant; and the sheer volume of regulations is stunning.”

Heritage experts James Gattuso and Diane Katz have just updated their one-of-a-kind report on the Obama administration’s unrelenting use of regulation to push its policy agenda. Check out our new infographic to see how this presidency compares to the previous one, and what it’s costing us.

Gattuso and Katz note, “In his January 2014 State of the Union address, President Barack Obama vowed to wield his executive powers when faced with congressional resistance to his legislative agenda, stating: ‘America does not stand still—and neither will I. So wherever and whenever I can take steps without legislation … that’s what I am going to do.’” And he is doing it daily with red tape.

redtape2014_FINAL

Wildlife is Thriving Because of Guns and Hunting

Since the late 1930s, hunters, target shooters and the firearms industry have been the nation’s largest contributors to conservation, paying for programs that benefit America’s wildlife and all who love the outdoors.

In fact, the U.S. Department of Interior just announced that firearms and ammunition manufacturers contributed a record $760.9 million in excise taxes in 2013 through the Pittman-Robertson Wildlife Restoration Program.

National Shooting Sports Foundation (NSSF) has created the below infographic, “How Wildlife is Thriving Because of Guns and Hunting,” to illustrate how “we as an industry and as sportsmen are the greatest contributors to wildlife conservation in America, providing nearly $9 billion over the past 76 years.”

HowWildlifeisThrivingBecauseofGuns_533323d3aa357_w1500

Effectively Irrational: 30 common fallacies used against libertarians by Max Borders

By now you have probably heard of Bryan Caplan’s “rational irrationality.” The idea is that if the cost of holding irrational beliefs is low enough, there may be more irrationality demanded. Indeed, if holding an irrational view makes someone feel better about himself or keep membership in some in-group—but holding the view doesn’t directly harm the holder—she may very well stick with that view.

Caplan contrasts this with the idea of “rational ignorance,” which is more familiar to our readers. That simply means the cost of acquiring enough information to have a truly informed opinion about some issue is generally high, so people remain ignorant.

Both of these behaviors certainly play a role in the preponderance of dumb policies and dumb views. But are there corollaries in debate tactics?

Most libertarians find they’re arguing in social media these days. So they’re not only finding new people on whom to test their ideas, they’re finding new fallacies in response. And sometimes these fallacies work, despite being fallacious, which is probably why they’re so commonplace. This is especially true on social media, where one can quickly learn that the real point of these exchanges is to play to the audience, to provide them with an excuse to withdraw into whatever biases they already hold. Still, maybe it’s possible to raise the costs of employing these fallacies—at least a little.

We’ve decided to offer you a fun list of them, which you can use as a handy guide in the process of engaging in well-mannered, reasoned discourse online.

  1. Argument ad KochBrotherium: This fallacy is a cousin to the genetic fallacy and guilt by association. The twist, of course, is that anything that the Koch Brothers ever say, said, fund, funded, might fund, came close to funding, could have funded, will fund, walked by, looked at, support, think about, or mention is invalid by virtue of, well, “Koch Brothers! Boo!”
  2. The Unicorn: You’ll recognize this fallacy from the question, “Why does no libertarian country exist anywhere in the world?” Embedded in the question is the assumption that libertarian countries don’t exist because they are fantastic creatures, like unicorns. Of course, just because something doesn’t exist yet does not mean it can’t exist. Indeed, the Internet in 1990 and the American Republic in 1775 beg to differ. And the unicorn fallacy fundamentally confuses the libertarian worldview with some “L”ibertarian platform that might be the product of some electoral processes—processes most libertarians reject. Michael Lind and E. J. Dionne have brandished this fallacy rather shamelessly, and have had it parried rather effectively by better minds.
  3. Nut-Picking: This fallacy has nothing to do with Jimmy Carter. In this style of argument, the arguer finds the kookiest or most insane person who self-identifies as libertarian and then ascribes all of that person’s beliefs or claims to all libertarians. (This one could also be called the Alex Jones fallacy.) This is a tough one to counter simply because there are plenty of nuts to pick from, and plenty of them use the L-word.
  4. Must Be Scared/Have No Answer: This one’s pretty simple really, and a unique creature of “debate” via social media. The libertarian leaves his computer or signs off for a while and the opponent accuses the libertarian of not being able to answer his or her Facebook claims, which the libertarian simply never saw or had no time to answer.
  5. The Tin Man: This fallacy was identified and named by Cole James Gentles (here), who inspired this article. With the tin man the arguer either concludes or falsely assumes that the libertarian “has no heart” because she argues against some favored policy. This cousin of the straw man (scarecrow) fallacy assumes a direct line between sympathies and outcomes. Any failure to support some means amounts to a failure to support the wished-for end.
    The tin man fallacy is rooted in the assumption that one’s opponent, often a libertarian, has no heart. Unlike the straw man fallacy, in which the debater needs to mischaracterize their opponent’s position, the tin man fallacy allows the debater to build a sturdy-looking, if hollow, general facsimile of their opponent’s position (“You are against state mandated universal health care?”), but not give him a heart (“Then you don’t care about poor people who don’t have access to affordable, quality insurance, or people with pre-existing conditions!! You heartless monster! WHY DO YOU HATE THE POOR?!” Heard that one before?)

    The frightening part of this fallacy is that its wielder usually thinks exitus acta probat.

  6. Availability Cascade: Something big and bloody happens on the news (or goes viral), so the arguer implies or concludes that it’s a widespread occurrence. Example: A mass shooting has occurred, which points to an epidemic of gun violence. It’s not clear that if gun violence is at a multidecadal low point, the incident reflects an “epidemic.” The ready availability of some story leads one to conclude that a problem is widespread and demands a drastic response. Cass Sunstein, known for his work on “nudging,” gets credit along with Timur Kuran for identifying this phenomenon. (An availability cascade doesn’t always have to involve specious reasoning, but it very often does.)
  7. Man on the Moon: Remember Rachel Maddow standing in front of the Hoover Dam? She’s trying to convince her viewers that the government (which she calls “the country”) must tax and build some major make-work project in order to revive the economy (or whatever). Maddow is employing a form of the man on the moon fallacy, which takes the form, “If we can put a man on the moon, we can do X.” But it misconstrues any reservations about big, awe-inspiring State projects as doubts about “America’s” ability to do big things. It’s just assumed that anything requiring extensive collaboration must be done via State power for it to count. Questions of the value, cost, or feasibility (or some combination thereof) of any particular project are sealed off from the word “if.” And of course “we” is never carefully unpacked.
  8. The Gap: I wrote a whole book about why the following involves fallacious thinking. The fallacy goes something like this: “The free market widens the gap between rich and poor.” Now, strictly speaking that claim might be correct. But so what? I’ll pass over the problem that the “free market” has probably already been attacked with the unicorn fallacy at some prior point in the same hypothetical conversation. In any case, because economies are dynamic, the “rich” and “poor” change from day to day, and measured in quintiles, we don’t know whether the “gap” will be greater or smaller from one day to the next, even assuming a free market. The real problem with such reasoning is the built-in assumption that a gap itself is a bad thing. Suppose a really tall man moves into my neighborhood. Apart from my suddenly wishing I were taller, does the presence of the tall man make me worse off somehow? Of course not. The existence of the rich person doesn’t make me worse off, either, unless he got rich by using political means to transfer money from my pocket to his. This happens all the time. But such transfers have nothing whatsoever to do with free markets.Measuring an asset gap in and of itself tells us little. Indeed, without the functional story of how any gap came to be—stories, not snapshots matter here—we can’t make any judgments about it whatsoever. “Gap” talk is just a fetish that ignores how much better off the poor are thanks to the existence of innovators and entrepreneurs who got rich by creating value. And the unstated assumption is that if any group of people has more wealth at any particular point, the people with less are somehow being wronged simply because the other group has more. The gap fallacy is also meant to preempt debate, usually in the service of another agenda (which is rarely more than reinforcing the opponent’s opinion of himself as a good guy).
  9. The Two-Step: Some opponents will simply change the subject in the middle of a discussion, leaving the original claim by the wayside. Usually neither party notices the two-step. For example, the opponent may refuse to answer the libertarian’s direct question and instead respond with another question. Or the debater may slide into one or another irrelevant point that has no bearing on the original point at issue. This process can go on for a while unless the libertarian rigorously brings the opponent back to the original point. The red herring, ad hoc, and non sequitur are similar enough fallacies, so the two-step may also be classified as an evasive tactic.
  10. Panglossian Fallacy: Because the military-industrial complex was somehow involved in developing aspects of what later became the commercialized Internet, it follows that government funding is indispensable for such wonderful things to appear—and that all the things that go along with the funding (and revenue-collection) apparatus are therefore also acceptable. This variation of the post hoc fallacy is seductive particularly because we can never know what would have happened in the counterfactual private sector. Form: If it happened, it must be the best of all possible worlds. (See also the “The Government R&D Canard.”)
  11. Your Side: Also known as tarring with the same brush, this fallacy has a couple of related forms (see No. 1 and No. 3). An opponent may accuse the libertarian of being a Republican or Tea Party conservative because he or she happens to agree with a majority of Republicans on some particular issue. One hears: “Your side thinks . . . ” when in actuality the libertarian doesn’t have a “side” per se. It works even better as a tactic if there is really no connection at all apart from being something the opponent’s “side” would never say. The “your side” fallacy allows the opponent to appeal directly to tribal biases, which are more immediate and powerful than any argument. When it’s intentional, this rhetorical maneuver is meant to appeal to others who may be watching—the hope being that they’ll swerve into the ditch that is their own biases.
  12. The We/Society Fallacy: This common form of hypostatization occurs when the user ascribes rational individual agency to “society” and conflates or confuses society with the State. Both usually happen immediately, or somewhere hidden, before the opponent even speaks. The opponent wants his moral position or emotional state to be reflected somehow in the organization of society. Although “we” or “society” is a useful ersatz word that appears to confer legitimacy on some aspect of the opponent’s claim, it is almost always an intellectual sleight-of-hand. Only individuals can act. Groups must work through processes of either collaboration or coercion. (Note: “The market” is often misused this way by both supporters and detractors.)
  13. Deus ex Machina/Market Failure: People is people. And yet opponents sometimes think that it’s enough to argue that governments, by dint of largess and force, have the power to fix certain kinds of problems, which they label “market failures” because they happened outside the purview of State action. Note that this only works in one direction: Problems in any area covered by the State are usually chalked up to being problems merely of execution, whereas “market failures” allegedly reflect an inherent deficiency. Even if one agrees that one set of people working in voluntary cooperation cannot solve some problem (or at least haven’t yet), it does not follow that another group of people—“the government”—can. Indeed, greats like James Buchanan and Gordon Tullock have given us very good reasons why government is not likely to solve problems and will likely make matters worse.
  14. The Organic Fallacy: Such arguments take the form, “It’s organic, therefore it’s good or good for you.” Or similarly, “It’s not organic, therefore it’s bad or bad for you.” One hears this rationale to demand regulations and food labeling. And while there may be independent reasons to justify such regulations or labeling, these are not justified by the organic fallacy. It’s not clear that Socrates would argue for the health benefits of natural hemlock, nor would people with thyroidectomies argue they should go without Synthroid. I would add that, until there is more evidence to the contrary, there are plenty of GMOs that are good for me. (Note: Plenty of libertarians commit this fallacy too. Just because Monsanto is a rent-seeker doesn’t mean all its products are bad.)
  15. Nobel Fallacy: You may recognize the form “X has a Nobel Prize in economics, who are you to argue against his claims?” I don’t care whether Krugman or Stiglitz has a Nobel Prize, they’re wrong about just about everything. And the truth or falsity of one’s claim doesn’t depend on his credentials. (Meanwhile Nobel Laureates James Buchanan, Vernon Smith, Elinor Ostrom, Douglass North, Milton Friedman, and Friedrich Hayek are mostly always right. I mean, that’s like 6–2 for the good guys. [*rimshot*])
  16. No Parks for You: Snarkier opponents of libertarianism rhetorically ask why libertarians avail themselves of all the goods and services government happens to provide. “If you’re going to live by your principles, you can’t use X or Y” (insert: state universities or public roads). Of course, it does not follow that one should not avail himself of some good or service he thinks should be provided by other means. Indeed, one could argue that he is more than justified in consuming some good or service he has been forced to pay for against his will.
  17. The Self-Exile Fallacy: Snarkier still is the opponent who argues that “If you don’t like it, why don’t you just leave?” Implicit in this question is the suggestion that there is some positive duty for one to leave a condition he doesn’t like and/or that by one’s staying, he his implicitly consenting to whatever the system is. By this “logic,” if you have just bought a house with an ‘80s bathroom, instead of improving, changing, or upgrading it, you should just take a bath in the kitchen sink.
  18. Somalia: Opponents love to tell you that Somalia must be a “libertarian paradise.” Everyone laughs. If you respond with a phrase like “comparative institutional analysis,” everyone’s eyes glaze over and you lose, despite being correct. Somalia has been better off on most dimensions without a central government than it was under a brutal, centralized regime—warlordism notwithstanding.
  19. Social Contract: Rousseau left a terrible intellectual legacy. And progressives use his “social contract” to justify anything under the statist’s sun. Of course, there could be a real social contract, but libertarian opponents prefer the one that allows them to justify anything under . . .
  20. Start Somewhere: You’ve slogged through the data. You’ve offered a completely rational response. You’ve explained the ins and outs of why your opponent’s policy X won’t work and why it may even make things worse. The response? “We’ve got to start somewhere.” The idea here is that it’s better to do, well, anything—even if it might result in calamity. And, of course, the State must do that potentially calamitous thing. (See also No. 23.)
  21. Social Darwinism: “The free market is just social Darwinism!” This is actually a pretty old meme. It was used by progressive academics in the 1940s to smear the work of Herbert Spencer. Spencer was a biological Darwinist to be sure. And he also thought the market and social phenomena like institutions and ideas would be subjected to analogous evolutionary forces. But the unit of survival in markets is the business, not the individual. In other words, businesses that fail to create value for customers die. But advocating for free people to engage in voluntary exchange is not advocating that people leave the weak, poor, or vulnerable to suffer. Quite the contrary. Most advocates of the free market believe a robust philanthropy sector is part and parcel to a system of voluntary exchange. Herbert Spencer thought so too. He writes: “Of course, in so far as the severity of this process is mitigated by the spontaneous sympathy of men for each other, it is proper that it should be mitigated.”
  22. Argumentum Ad Googlum: This fallacy proceeds when the libertarian makes a good point or builds a stellar case, or asks a question the opponent can’t answer. The opponent disappears for a while, frantically Googling away. The opponent comes back with a series of links that stand in for argument. To be fair, this isn’t always a fallacy, as some will use links to support their claims. But often the tactic is used to thrust the burden of debate back onto the libertarian who is expected to read through the links and infer some point. At best, it’s bad form.
  23. We’ve Got to Do Something!: Related to the “start somewhere” fallacy, “We’ve got to do something!” is an argument that really means (a) the State has to do something, and (b) State action is preferable to both no action or private action. Numerous examples of this fallacy appear when opponents think any action riding on good intentions is good enough, consequences be damned. Often, however, it can be demonstrated that it is better for government to do nothing and to stop doing what it’s already doing. (Examples include stimulus spending, regulation, and other forms of intervention.) For government to do nothing is rarely presented as premise subject to debate and evaluation. Someone genuinely open to ideas would ask, “What should be done about this?” and “Who should do it?” Someone genuinely interested in answers would have the courtesy to make explicit what they already believe: “The government has to do something, which is beyond debate. Here’s what I think that something should be.”
  24. Empirical Fallacy: A familiar opponents’ refrain of late is: How do we know X isn’t going to work until we try it? We have to wait and see the empirical evidence before calling X a failure. With such reasoning we should let monkeys go to Washington and type randomly into a big machine that spits out statutes at random. Well, we already do this in a manner of speaking, but it might be a good idea to look at some well-established economic theory and economic thinking before sallying forth into legislative adventures that could have both predictably perverse and unintended consequences. More importantly, the opponent presumes it is the prerogative of the State—and, by extension, any governmental group within the State apparatus—to experiment on those under its auspices, and that it is the duty of the subjects in that jurisdiction to submit to the experimentation. (Also called the Pelosi Fallacy.)
  25. No True Libertarian: Ever heard of the no true Scotsman fallacy? Usually it’s applied by someone in a group to question another’s membership in that same group in terms of their ideological purity. Libertarians are famous for saying to each other, “If you think X, you’re no libertarian.” But libertarians’ opponents use a variation of this too. They’ll say something like, “Libertarians believe in X. If you don’t, you’re no libertarian.” (X might be natural rights, collective non-State action, a social safety net, etc.) The no true Libertarian fallacy is a way of trying to force the libertarian to choose between a subtle variation in his argument and his own doctrine. It implies the libertarian lacks credibility: “This clown doesn’t know what he thinks!” Of course, such a tack has no bearing on the truth or falsity of either party’s claims, or the validity of their arguments. Libertarianism is a diverse school of thought. It is not a monolith. One need only demonstrate the consistency of his argument.
  26. Fascist Ignorance: This one should be familiar: Libertarian opponents were outraged—OUTRAGED—when John Mackey pointed out quite correctly on NPR that Obamacare is a fascist policy. Fascism is, of course, a doctrine that calls for significant State control over private industries, to be carried out in the service of State ends. So the fallacy of fascist ignorance is a form of ad hominem in which a libertarian opponent refers to the libertarian or his views as “fascist” despite, strictly speaking, holding fascist views herself. (One might also refer to this as the “chicken calling the cow ‘poultry’” fallacy.) In the interests of good discourse, however, it’s probably not wise for anyone to evoke the power of the “F” word at all, given how much baggage it carries.
  27. Just One Life: The emotional appeal, grounded in nothing substantive, is meant to be a moralistic shutdown card. It goes “I’m sorry, but if we can save just one life with this policy, it’s worth it.” What does that even mean? Does it mean that every life has infinite value? Does it mean that saving lives at the expense of others and all other considerations is the purpose of government? Or does it mean that “worth it” is completely vague, but you just care a lot? It’s a heroic-sounding sentiment, but it demonstrates only the speaker’s commitment and earnestness—not any analysis of the policy itself.
  28. Consensus: This hybrid of the bandwagon and appeal to authority fallacies infects lots of discourse. It takes the form, “Lots of really smart and educated people believe X, therefore it’s true.” From the USDA food pyramid dieticians to macroeconomists, authorities are not always right. There are limits to any individual’s ability to understand all the nuances of a given issue. Prediction and forecast are even more difficult. Political decision-makers must confront the same cognitive limitations as mere mortals, which is why they, like libertarian debate opponents, rely far too heavily on expert “consensus.”
  29. Logo-phallo-euro-centric: Opponents accuse libertarianism of being hostile to women, minorities, homosexuals, and other marginalized groups. The fallacy lies in the idea that if your doctrine doesn’t acknowledge that groups deserve special, State-sanctioned treatment at the expense of other groups or individuals, it’s tantamount to some ism. Some even go as far as to say that if you use certain language some construe as racist, sexist, or homophobic, it invalidates libertarian doctrine. While many libertarians act like idiots and should probably not overreact to collectivist PC victim narratives with foul language, libertarian doctrine is at root a doctrine of anything peaceful—voluntary cooperation, decentralized power, and radical community formation. The heroes of libertarianism (of all races, sexes, and ethnic backgrounds) know that collectivism and Statism are interdependent world views: It takes evoking collectivism and inventing group rights (or wrongs) to justify most State actions, and the State has historically had the power systematically to prop up or tear down people by group.
  30. Who Will Build the Roads?: This familiar duck has a thousand variations, but the idea is that because the opponent has never seen it nor can imagine it being done without the State, it follows that it can’t. But of course, it (roadsaideducation, and the rest of it) can. (See also No. 13.)

I encourage readers to add more to the comments section below.

Note: huge credit to Cole James Gentles, Jeff Ellis, Sarah Skwire, and Zach Spencer for their assistance in compiling these fallacies. Thanks also to Michael Nolan for help in fleshing these out.

Max Borders

Max Borders

ABOUT MAX BORDERS

Max Borders is the editor of The Freeman and director of content for FEE. He is also cofounder of the event experience Voice & Exit and author of Superwealth: Why we should stop worrying about the gap between rich and poor.

Keystone XL: Who benefits? Who loses?

Last Thursday, 20 March, the Washington Post published an amazing article by Juliet Eilperin, their Environment reporter, claiming the Koch brothers are the major owners of Canadian “tar sands” – the source of oil to be shipped through the Keystone XL . Specifically the article said:

“The biggest leaseholder in Canada’s oil sands isn’t Exxon Mobil or Chevron. It’s the Koch brothers.”

In doing so, Eilperin and the Post relied on a recently issued report from a far-left outfit called the International Forum on Globalization (IFG).

Ms. Eilperin is a longtime advocate of action to save the earth from “catastrophic anthropogenic global warming” (CAGW), the old name before it became “climate change” or “carbon pollution.” It is not terribly surprising that Eilperin opposes the pipeline, whoever is invested in it. The surprise is that Eilperin rushed so quickly and gullibly into an obvious hoax.

The recent IFG report is a supplement to one issued in October, 2013, which became a laughingstock when John Hinderaker of Powerline blog tore it apart, noting that even IFG admits Keystone XL would provide competition for Koch oil sales in the American Midwest, costing them about $120 billion. In addition, Koch Industries has never lobbied for the Keystone XL. Also, one does not just drive up to a Keystone XL terminal – assuming one ever exists – and pour in a truckload of oil. A would-be user has to pay, in advance, for a quota of oil to be shipped, an allowance of a portion to be used (of a total 830,000 bbl/day). Koch Industries hasn’t bought a quota. Needless to say, Hinderaker had a lot of fun ripping the WaPo and Eilperin.

A wise journalist – or, at least, an honest one – would have issued a retraction and an apology to the readers. Eilperin and the Post have done neither. Nor has the Post’s Fact Checker, Glenn Kessler, the man who issues “Pinocchio” awards to liars, said anything about the article.

pinocchio_4

Pinocchios courtesy of the Washington Post.

This lie ought to get Eilperin four pinocchios.

So, what did Eilperin offer in response? She said:

The Powerline article itself, and its tone, is strong evidence that issues surrounding the Koch brothers’ political and business interests will stir and inflame public debate in this election year. That’s why we wrote the piece.

Oh. The fact that someone – not even Koch Industries – tried to rebut a complete lie is justification for printing the lie in the first place – since it “stirs and inflames public debate.”

But wait, as the TV salesmen say, there’s more.

Juliet Eilperin is married to Andrew Light, who formulates environmental policy for John Podesta’s Center for American Progress (CAP). Light is also a member of the Obama Administration, as a Senior Advisor to the Special Envoy on Climate Change in the State Department. As you remember, Climate Change is the most important issue facing the world – according to the Secretary of State, John “A Child Could Understand This” Kerry. Today President Obama is in Europe, discussing with NATO and the leaders of the European Union, what we can do to blunt the Russian control of the EU energy supply.

As you probably remember, John Podesta was recently made a “special advisor” to Obama – and specifically to advise on climate for the guy who once promised to make your electricity costs “skyrocket.” Mr. Podesta strongly and unequivocally opposes the construction of liquefied natural gas (LNG) export terminals. He wants more study – as has been done for Keystone XL pipeline, for five years.

Who benefits if the Keystone pipeline goes ahead? Millions of Americans who will see gasoline prices decrease. Millions of Canadians who will see taxes flow into their national treasury. Thousands of Americans and Canadian workers. American energy independence, a priority since the 1970’s. Certainly not Koch Industries.

Who benefits if Keystone is not approved?

Tom Steyer, hedge fund billionaire and major Democratic Party contributor. Steyer is offering $100 million to Democrats in 2014 who oppose Keystone. Prior to the Democratic Senators’ talkathon, the leaders visited Steyer’s home in New York. Does anyone believe Mr. Steyer cares for the environment and global warming $100 million worth?

The feature image is a picture of Brad Johnson, a staff writer for Podesta’s Center for American Progress, admonishing the Washington Post against telling lies – when the Post dared print a column by Charles Krauthammer that suggested climate science is not “settled science.”

The American Physical Society (APS) recently appointed a panel of members, including three prominent sceptics, to review its previous endorsement of global warming as a matter of concern. Sounds pretty unsettled. I don’t often agree with Johnson or the rest of Podesta’s gang, but I also wish the Washington Post and its environment writer, Eilperin, would stop telling lies.

RELATED STORY: Keystone XL is Proof Obama Opposes U.S. Economic Growth

The Austrian Influences on Bitcoin by Jeffrey A. Tucker

There is a bit of Menger, Mises, Hayek, Rothbard, and Kirzner in every satoshi.

Bitcoin seemed to emerge out of the blue in early 2009 as a unified monetary and payment system, something anticipated by no one. It’s true that the people who saw its merits and viability early on were code slingers and hackers. They posted their masterworks in strange places, and they are not available at university libraries. It’s all a little much to get your mind around, and there’s no academic literature about it. But then, the beauty of bitcoin is that you can jump in, start using it, and learn from the ground up.

For my part, I was incredulous about Bitcoin for two years after I heard about it. It just seemed crazy that money could somehow be created by a computer without any external or physical foundation. In some ways, this seems contradictory to everything we know about money.

But now that the currency has taken hold, its infrastructure is being built, cash-to-Bitcoin machines are going up everywhere, and mainstream opinion is gradually coming around. Cryptocurrency is real and not going away.

It’s time for a retrospective on exactly who among economists anticipated such a radical idea that markets themselves could discover and sustain a money independent of the State. When looking for economists, we need to begin with those who regarded money as a market good, created through entrepreneurial experimentation.

That points directly to the Austrian School.

Carl Menger (1840–1921). “Money is not an invention of the state,” wrote the great founder of the Austrian School. “It is not the product of a legislative act. Even the sanction of political authority is not necessary for its existence. Certain commodities came to be money quite naturally, as the result of economic relationships that were independent of the power of the state.”

This runs against most of what we think we know. Money is produced by the State today and has been in most places in the world for the better part of one hundred years. This creates an illusion that the State is the reason for money’s existence.

This is untrue. Money was nationalized away from markets, just as the roads and schools were. None of the reasons for this development are good. Government likes to control the money because it can depreciate it and thereby have another revenue source besides taxes. It can guarantee its own debts to prevent markets from evaluating them realistically.

The banks oblige this wish. In exchange, they are protected from market competition and enjoy protection against bank runs. In essence, the government grants banks the right to counterfeit so long as government can enjoy the first fruits of the printing press.

Once you release yourself from the myth that government created money, new possibilities emerge. Menger describes the emergence of money in evolutionary terms. There is trial-and-error. There is innovation. There are fits and starts. Something can be money in one place and not in another. Its emergence is gradual and goes through many iterations. “This transition did not take place abruptly, nor did it take place in the same way among all peoples.” This is a good description of the emergence of Bitcoin.

Ludwig von Mises (1881–1973). In a book published in 1912, Mises deepened and broadened Menger’s original theory about the origin of money. He was seeking an answer to the question of money’s original price in terms of goods and services. He explained that at any one time, there are many goods competing for money status—that is, that the good would be acquired not just to consume but also to trade for other goods.

He explained that it is impossible for anything to just be labelled money and for it to obtain value. There must be more to it than that. Gold and silver, for example, obtained their money value by virtue of their prior use in barter. In this sense, money must extend from a living market experience.

How does this apply to Bitcoin? The underlying value of Bitcoin is connected to its incredibly innovative payment system. The technology combines a distributed network, a ledger updated and verified for each transaction, cryptography, and a direct peer-to-peer system of exchange to create the blockchain. Users played around with the results for fully 8 months before the attached currency (Bitcoin) obtained its first market value.

Giving value to this digital currency was not something that could be done by government or social contract. It takes real market experience with a value good—or, in the case of Bitcoin, a wonderful service that the whole world needs. Such is the origin of Bitcoin’s value. In fact, if there were no payment network bound up with the currency, the currency itself would have no value at all.

In my experience in explaining this to people, this is a real sticking point. Most people think of money and a payment system as different entities (dollars vs. Visa). With national money, this is entirely correct. But Bitcoin is different. It unites the two in one. That’s hard to think through.

Mises made two additional contributions. He said that central banking was not necessary and predicted that it would be detrimental to the soundness of money. History has proven him right. In his ideal, money would function entirely apart from the State—just as Bitcoin does. Also, Mises closely tied the cause of sound money to freedom itself. He compared sound money to constitutions that guarantee fundamental human rights.

F.A. Hayek (1899–1992). Hayek was Mises’s colleague in pushing for fundamental monetary reform for many decades. Together they warned of the dangers of central banking. They demonstrated how expansionary credit policy leads to price inflation and business cycle, and also fuels the growth of government. They begged and pleaded to reverse course. But they were doomed to be prophets of decline.

One year after Mises’s death, Hayek decided to take a different course. In 1974, he wrote “The Denationalization of Money.” He gave up on the idea of government involvement in money at any level and concluded that there had to be a complete separation, even at the level of reform. He suggested a revolution from below.

He once favored the gold standard, but with this book he said, in effect, “We certainly can do better than that, though not through government.” He explained that “we have always had bad money because private enterprise was not permitted to give us a better one.” He endorsed a system of privately created monies based on a variety of technologies, included indexes of commodity baskets. These monies would all compete for market dominance, same as with any other good.

This book seemed mind-blowing at the time. But with Bitcoin, it’s not so crazy. The technologies were not around during Hayek’s day but now we can see how much we’ve been missing in the age of nationalized money. Money has gotten worse rather than better—and this is different from other private commodities, like phones, cars, and computers. Money can indeed be a product of private enterprise. The right reform plan is to just forget about the government’s system and move onward to something more wonderful. In the competition for money and payment systems, the market system will win.

Murray Rothbard (1926–1995). The first I ever heard of the idea of private coinage, it was from Rothbard’s 1963 book, What Has Government Done to Our Money. The idea astonished me, though, again, the notion seems not entirely outlandish now. New research has emerged that has shown that private currency is a huge part of modern history, from England in the Industrial Revolution to the American nineteenth century.

This wasn’t his central contribution. Rothbard was a theorist of the idea of private property, spelling out its implications for the whole of the social order. It is private property that brings order, secures liberty, rationally allocates resources, keeps conflict at bay, allows for the adjudication of disputes, incentivizes production, and generally shores up human liberty. Rothbard firmly established that money is and must remain private property.

Why does that insight matter? It comes down to one word: banks. They first existed as warehouses, made necessary because of safety and the costs of transport. The function of banks as lenders is really something different. In either case, the rights to who owns what ought to remain clear. Alas, it was not to be the case. Banks love ambiguity over ownership. If they can warehouse your stuff and make money lending it out at the same time, that’s all the better for them. If they can get government backing for the practice, that’s even better.

Rothbard’s best idea of reform—spelled out at great length in his 1983 book The Mystery of Banking—was to re-institutionalize property rights in the realm of money. No more should there be confusion and uncertainty about the titles to money property. Just as in the rest of the world, there should be clear distinctions. You can warehouse your money or your can loan it to a lender at a risk but there should be no mixing of the two. In today’s world, no one has a clue who has a right to what.

Now consider Bitcoin. When I own it, you don’t. When you own it, I don’t. There are no intermediaries, no charge backs, no confusions about how many there are or to whom they belong. To pay is to transfer, not just on some fictional ledger that may or may not reflect. This is a Rothbardian dream come true.

To be sure, Mt. Gox muddied the situation substantially, but that is not intrinsic to Bitcoin itself. It was a result of one firm that was poorly run, and this firm was compromised by a hacking theft, a cover up, incompetence, or outright fraud (it’s still just starting to be sorted out—for instance, Mt. Gox just found 200,000 BTC it didn’t realize it had). But the beauty of the situation was that even with that institution’s obfuscation, users knew of the foul play. For years prior to bankruptcy, it was obvious that something was amiss. Bitcoin is still being traded. The newest firms are going the extra mile to make it clear that they hold all your property at all times. Plus, with paper wallets and cold storage, you don’t have to use third parties at all.

Unlike the gold that Rothbard favored as currency (he died in 1995, just as the web was privatized and began to mature), Bitcoins are both weightless and spaceless. This means that the warehousing function of Bitcoin is technically unnecessary. Every owner can be his or her own banker. This is a dream in many ways, since the the warehousing function is technologically contingent, not an eternal feature of the world.

Israel Kirzner (1930– ). Kirzner is a student of Mises’s who has dedicated his life’s work to understanding and expanding upon an insight of his teacher. Mises saw that economics resisted formal modelling for many reasons but a major factor was the presence of entrepreneurship. There is a reason that textbooks neglected this topic for decades. It contradicts the goal of perfect prediction and perfect control. Entrepreneurship introduces an element of chaos that defies every expectation. Kirzner elaborated.

This is the act of discerning unmet technologies and needs in a market setting and bringing them to life for consumption and production. Entrepreneurship means introducing something new that had previously been unknown. There is an element of surprise that is essential to entrepreneurship that drives forward the process of market development.

When we think of Bitcoin, how can we not think of entrepreneurial surprise? It was released not as a traditionally capitalist product but rather on a free forum. Anyone could download it and starting “mining” Bitcoin. But only those super-alert to the opportunity did so. One of those was the inventor himself, who is a very rich person today. This is what it means to be alert to and discover an opportunity.

Today there are many thousands of businesses that have grown up around Bitcoin. There are wallets, exchanges, retail and wholesale stores, service companies, and so much more. Each one represents a risk. Most will not make it. But some will. What determines their success or failure (leaving aside government regulations) is whether they meet the needs of the consuming public. No one can know the results in advance.

Kirzner is the master of describing this process, one that Menger said is at the heart of causing a new money to emerge. Thus have we come full circle: 120 years of scholarship that describes the very economic heart of cryptocurrency. To most people it is mystifying and amazing, and truly it seems that way. But there is a logic to it all, even if it is only obvious in retrospect.

How many years will it be before the economic science of the non-Austrian variety catches up? For now, most professionals in this field are politely ignoring the fact that Bitcoin has blown up nearly all conventional wisdom about monetary theory and monetary policy. (Konrad Graf, though, is already on the story). Indeed, Bitcoin was necessary in part because the current State-based system has utterly failed to keep up with the times. Had the market been allowed to work all along, instead of being restricted and truncated by state control, the system would likely be further along than it is.

Now is a good time to look back, dust off those neglected books, and rediscover the school of thought that anticipated all the core of what makes Bitcoin so incredible.

RELATED STORY: IRS Rules Bitcoin is ‘Property,’ Subject to Tax

20121129_JeffreyTuckeravatarABOUT JEFFREY A. TUCKER

Jeffrey Tucker is a distinguished fellow at FEE, CEO of the startup Liberty.me, and publisher at Laissez Faire Books. He will be speaking at the FEE summer seminar “Making Innovation Possible: The Role of Economics in Scientific Progress.”