by Paine's Torch
Copyright 1993 ZENO Press, All Rights Reserved
Box 170, Sedalia, CO 80135
"Markets work -- because consumers can choose not to buy."
"Governments don't work -- because citizens are denied this choice."
The concepts of property and markets are fundamental sources of social harmony and abundance among humans. Simply stated, when people respect each other, they practice market principles. When people harm each other, they practice the principles of government. Markets produce wealth; governments destroy it. This is true of all governments today, even those structured as democracies or republics.
Unfortunately, uninformed people educated by government schools often portray property and markets as dangerous and destructive things, which must be kept under control by government for the good of society. This essay presents a case for the ideas that markets produce harmony and abundance, while governments create chaos, war, depression, social disorder and tyranny. This follows directly from the fact that all governments (in their present form) are coercive monopolies, ultimately based on violence -- none of which is necessary for the legitimate and productive parts of society to function. Only when government in its present form is replaced with a variety of free market alternatives will humankind advance beyond these coercive and destructive social institutions -- the obsolete remnants of a violent and primitive past.
Today, governments are increasingly unable to deal with serious problems, many of which were created by government in the first place. The same old tired, ineffective "solutions" are offered: more laws, more taxes, more government. While most Americans seem to sense that something is wrong, they persist in dealing with government in traditional ways: legislation, political action and trying to influence public policy. Some even try to use the power of government to solve the problem of government! However, none of these avenues for change deals with the fundamental nature of government itself, and why it doesn't work. A better understanding of markets and governments may be necessary before real solutions can be seriously considered.
Most popular "defenders" of free markets have a limited trust in markets' ability to solve human problems. They often accept the benefits of markets in trade and business, but fail to see the same benefits in the areas of morality, justice, natural resources, welfare, defense, or law. This results in confused, weak and contradictory support for markets in the popular media, based on a gross misunderstanding of what markets are and how they work. Markets are so much more than economics and business -- they are literally the basis of all productive and cooperative human action.
Most popular debates about markets focus on how much government should interfere with them. Liberals say "a little" in people's personal lives, and "a lot" in economic matters. Conservatives say "a little" in economic matters, and "a lot" in people's personal lives. But a careful review of the nature and history of markets suggests that the best answer to the question, "How much?" is: "Not at all!"
This essay contains five main parts: Nature, Ideas, Government, Markets and Resolution. In the part on Nature, a description of man's natural conversion from subsistence-level living to social cooperation and increased production (through markets) is presented. Under Ideas, the principles of self-ownership, private property, free markets and government by consent are discussed in more detail. Under Government, the inherently destructive nature of today's governments and their history of plunder and coercion are presented. Under Markets, the principle of voluntary exchange as the basis for market processes is discussed, and why this process is superior to the coercion of government in all legitimate human endeavors. Under Resolution, proposals are made for replacing government institutions with market institutions. Each of the first four essay sections presents a different building block from which final conclusions are constructed.
In this essay, some male pronouns (he, his, him) are used to represent all humans, male and female. Unfortunately, the English language does not currently contain non-gender-specific pronouns for these words.
Property and markets are often thought of as artificial, unnatural things, developed within the last few hundred years by some greedy people to exploit others. This belief forms the basis of many false ideas promoted in government schools, especially the justification for interference with property and government intervention into otherwise free markets. According to this belief, a selfish focus on property and markets interrupts and contradicts a long history of cooperative human social development based on subordination of the individual to social groups. Markets are seen by some as representing the vicious competition between predators and their prey, rather than a mechanism for social cooperation and protection. "Market failure" is a common term in American schools, often used to justify government intervention in markets.
Government teachers compare markets to the "survival of the fittest" theory of evolution and the inherent violence of some animals who kill and eat others. They sometimes use this comparison to claim that private property and free markets are dangerous things, which should be limited and controlled. Government teachers and their former students often promote social structures which place "society" above each individual, as similar structures may appear to occur in nature. Defenders of government often claim that only a social structure that subordinates the individual to society is likely to produce peace and social order. Rather than the vicious competition of the wolf pack (a metaphor for markets), people would supposedly be better off by unselfishly subordinating themselves to the good of society, following the example of the bee colony. Unfortunately, these too-often-believed views are accepted without regard to the nature of real free markets and their development and operation among humans. The history of property, contract and free markets contradicts this biased, self-serving view, largely held by those who directly benefit from government power and violence for their jobs, businesses or other positions of authority and respect. Unfortunately, these anti-market views are held by most teachers, journalists and a large number of business people who simply don't understand the nature of markets and governments.
From the poverty and primitive nature of early man, private property and free markets naturally developed to create a higher standard of living beyond simple subsistence. First came the division of labor, then the concept of property, and finally contracts between people. The progression from the competitive violence of some animals to non-violent cooperation in humans resulted in a cornucopia of production that allowed humans to pursue other things besides bare survival. As part of this natural, historical process, money developed as a means to facilitate exchange, long before any government existed.
The superior intelligence and communication skills of early humans (compared to other animals) allowed them to do something that no other species had previously done: produce more useful things than just those necessary to survive. This production began with the division of labor. One human realized that he was better than anyone else at making tools, for example. Others chose to give him part of their food and other items gained from their hunting skills, in exchange for having him make their tools and weapons. The best hunters remained hunters, because they could do that particular thing better than others. Some others began to make clothing, and, like the toolmaker, exchanged their products for other goods. Thus, a barter system developed, based on a division of labor in which those with superior skills in one area could concentrate on producing those things which they produced best. Since an efficient, productive specialist could produce more items than the average person could produce of that item, the specialist was able to survive (and prosper) by only producing the one item. This was a considerable improvement in the life of the toolmaker, for example, who may not have been the best hunter. By concentrating on what he did best, he improved his standard of living, and reduced the risk of starvation or injury by not depending upon his (less adequate) hunting skills.
This division of labor developed because all people were naturally not equal. Some were better suited for hunting, some for tool-making, and some for making clothes, for example. This inequality of talent (created by nature, not man) was the original cultural diversity, and it first led to markets, not government.
The best hunters concentrated on their hunting, and traded food and furs to the toolmaker, rather than take time from hunting to make their own tools. The hunters were better off, since they could produce more food and furs than the toolmaker. The toolmaker was better off, since he could produce more tools than the equivalent amount of food and furs. This division of labor developed naturally, because it made sense to all concerned. It was in each person's self interest to concentrate on producing those things which that person could produce most efficiently which were needed by others. This division of labor led to the idea of property.
With the division of labor, some individual producers began to save and store extra items that they could not use themselves or easily carry with them. For example, the toolmaker would store the extra tools that he made, in anticipation of trading them to others for food and other items. Since his continued production of tools was based on his ability to keep the products of his labor for himself, the need arose for protecting his extra tools from others. He may have hid his extra tools, or built safe structures to house them, but the overall goal was to not let others have his tools without compensating him, their producer, for his useful labor. Keeping the products of one's labor to oneself (until exchanged for something else) was the beginning of material private property (non-material property will be discussed later in this essay). While some criticize this activity as selfish, notice that this increased living standard of the toolmaker did not harm anyone else. On the contrary, it helped others by providing them with useful things for less effort than if they produced those things themselves.
By building tooIs and not letting others have them for free, the toolmaker did not hurt anyone. He did not take anyone else's food, furs or tools by force, or demand that he be fed without producing tools. Only by doing these things (stealing or demanding to be fed) would he have hurt others. So, property resulted from the idea that each individual could decide what to do with the things produced from his labor. The division of labor meant that the best toolmakers made tools. The idea of property encouraged them to make more tools.
It soon became apparent to hunters and skilled fighters that if they stole the tools from the toolmaker without paying for them with food or furs, the toolmaker would not make tools anymore. They could threaten him with bodily harm if he did not produce, but this would not result in nearly as many tools made. Some fighters chose to coerce others into making tools for them, despite the adverse impact on production. This was the beginning of slavery, a very inefficient form of production, since workers (slaves) could not keep what they produced. Consequently, slaves produced only the minimum expected of them. They had no incentive whatsoever to innovate, or to match the output of other producers.
Some hunters, with better fighting skills than hunting skills, became security guards. This wasn't needed, of course, until an act of theft made it necessary. An act of theft was an individual's choice to ignore the idea of property, and adopt instead the idea of simply taking what you want, without giving anything in return. This idea of taking things by force later became the basis of government. The security guards, whose purpose was to protect people and their property, performed a useful service. This legitimate function of protection, developed before government, was eventually claimed by government as an excuse for its theft and violence against citizens. Most people today mistakenly believe that coercive government, despite its faults, does provide such protection. The reason why this is not true will be discussed later in this essay.
With property came the idea of contracts. Once the individual production of each person was properly recognized as his own, and means were developed for protecting that property from theft or other loss, the need for contracts arose. The first contracts were verbal. They consisted of a promise from one person to do something for another. Rather than hand over one tangible item for another (like food for tools), one person handed over an item in exchange for another's promise to do something for him in the future. If the promise was fulfilled, the contract was successfully executed.
At some point, one person accepted another's payment without fulfilling his promise to do something in return. This was a violation of the contract. Someone who developed a reputation for not doing what he promised soon became known as not being trustworthy. This resulted in a loss of credit, or the refusal of producers to trade with the untrustworthy person. Over a long period of time, through the middle ages, a detailed, voluntary system of rules was developed by merchants to encourage the fulfilling of contracts. Merchants took the risk and merchants made the rules, but no one was compelled to trade with them. This was an example of free market justice. This system, spontaneously developed by merchants completely outside the influence of government, was largely based on the voluntary boycott of contract violators.
Commercial law, developed privately by merchants, worked very well until a coercive government came along and promised to insure the fulfillment of contracts by force. Government also promised that someone else would pay for the enforcement besides those who were party to the contract. This was intoxicating to merchants and others, who were used to paying for their own contract compliance. By offering this service in an area in which it had not previously been involved, government became a "drug pusher," and merchants became "junkies." This supposed benefit to merchants marked the decline and discouragement of efficient, fair justice in commerce. This occurred simply because government intervention in commercial markets removed the connection between actions and consequences. No longer were thieves required to pay back their victims, or do without essential services provided by their victims. No longer were disputes paid for by those choosing to dispute something. No longer was it necessary to work for what you get.
When barter was the means of exchange, money developed as simply a variety of useful commodities: generally useful items that others would willingly trade for. Tools were exchanged for food, food was exchanged for furs, and furs were exchanged for tools. Each of these (and other) commodities was a form of money, since each could be used to trade for other things. This led to the idea of free markets, which involved exchange without coercion. Early humans found that by recognizing the principles of property and voluntary exchange, they could acquire more useful things and improve their standards of living beyond that created by forceful means. They also found that cooperation with others and respect for their property was a prerequisite for maximizing their own prosperity and happiness. Two reasons for this were the increased production from the division of labor, and the positive incentives of market (voluntary) exchange.
Of course, some theft was successful, contrary to the general principles of property, contract and free trade. However, property owners were constantly developing better methods of property protection to minimize the effects of theft. This included the storage of one person's valuable commodities in a safe place, guarded by another, which was the beginning of banking. Banking developed as a system of commodity storage, for which receipts were issued. Banks' customers could discriminate between reliable bankers and those who did not keep their promises. As unreliable banks would cheat customers or lose their assets through risky ventures, customers would begin to deal with other, more reliable, banks. In the same way that merchants had been dealing with bad faith dealings among themselves for centuries, so did banks have to suffer from the loss of customers when they did not perform to their customers' standards. This market discrimination (choice) between good and bad banks was a necessary and beneficial process to encourage good banks to continue to be good banks. Through failure (loss of customers), bad bankers either got out of the business or improved their service to become good bankers. The same principles applied to other human endeavors as well, especially in business.
At some point, paper receipts for commodities stored became widely recognizable as a form of indirect money (direct money was the useful commodity itself). In this way, paper money and banking developed from a market, not a government, environment. Several competing private currencies developed in some cases, although governments later monopolized the banking process in most countries by force of law. This turned out to be good for bankers and governments, but bad for customers. It was good for bankers because it allowed them to cheat their customers legally. It was bad for customers, of course, simply because they were being cheated. Along with government control came the idea that bankers no longer had to keep the same amount of goods in storage as the paper receipts they issued. Of course, this kind of fraud already existed by some unscrupulous bankers before government intervention, but its damaging effects were limited to those customers who were not too careful in choosing their bank. In a market setting, this was resolved by consumers withdrawing their accounts from banks that defrauded them. Those who lost money in this manner were not likely to repeat the mistake in the future, having learned a valuable (but costly) lesson about consumer choice and personal responsibility.
The Federal Reserve system in the U.S. is a classic example of this institutionalized fraud. Created as a subsidized private (for profit) banking monopoly to allow bankers to defraud their customers, it was sold to naive citizens in 1913 as a "lender of last resort" which would prevent the banking panics that had been experienced for decades before. However, its creation led directly to the biggest banking panic in history: the beginning of the Great Depression.
The concepts of property and markets developed as a natural progression from unproductive, primitive man to a more productive man for the purpose of improving standards of living. They are explicitly based on respect for individual human rights, voluntary exchange, social cooperation and peace. Any disruption of this process, such as one person's theft of another's property, has the general effect of damaging the overall production and standard of living. This theft and coercion were the beginning of government, although governments always claim to provide the useful services of security guards and other protectors as an excuse for their aggression. Every thief or aggressor then, is a primitive form of government. In fact, government is nothing more than an organized form of aggression and violence. That some people benefit from this aggression doesn't change this simple fact.
It is easy for critics of markets to claim that governments have been used in the past to protect markets from destroying themselves through abusive monopolies and predatory business practices. However, when one considers the true nature of markets and government, this claim does not hold up. Markets are based on voluntary exchange, whereas governments are based on force. Indeed, it is government, not markets, that produces abusive monopolies. Free market monopolies are always subject to competition, whereas government monopolies are not. It is government that abolishes market controls that would otherwise keep abusive businesses in check. It is government that prevents markets from solving problems in voluntary, productive ways. Government laws, more than any other single factor, limit or prohibit the ability of markets to work. The reason for this, of course, is that governments cannot afford to have their citizens realize that all governments do far more harm than good. It would not be wise for governments to permit markets to solve problems efficiently, inexpensively, and responsively, based on the real needs of their citizens. If this were to happen, then citizens might choose to stop supporting government altogether.
In this section, the fundamental ideas upon which relatively free and prosperous societies are based are examined in more detail. These ideas consist of four major principles: self-ownership, private property, free markets, and government by consent. Each of these important principles derives from the nature of humans, and each idea follows the others in a rational, logical manner.
The idea of self-ownership is the foundation of all market processes. It is the simple recognition that all humans legitimately own their own bodies, thoughts, lives and labor. This means, for example, that people should not be restricted from doing anything with their own lives and bodies so long as they respect the equal rights of others. It was this principle, most commonly known from the introduction to the Declaration of Independence, which evolved to produce the most free and prosperous society on the face of the earth. Another phrase sometimes used to describe the idea of self-ownership is "individual sovereignty."
In his book, For a New Liberty, Murray Rothbard pointed out that the alternatives to self-ownership are ownership by another (slavery), or that everyone has a claim on your labor, life and resources (socialism). While one could argue that no one owns his own or anyone else's life, this idea (non-ownership) fails to recognize the natural ability of a person to control his own thoughts, actions and behavior. This personal control, or ownership, is a creation of nature, not man.
Most people agree that slavery (whereby one person forcefully dominates another) is wrong. The most obvious and complete examples of this are often used to distinguish between different kinds of human associations, including "good" and "bad" governments. Unfortunately, condemning only the clearest and most blatant examples of slavery allows the same idea to flourish in other, more socially-acceptable forms. To the extent that you do not control your own life, you are a slave. If someone else can control half of your life, then you are half a slave. The same principle is true for other degrees of control by those other than yourself.
Like slavery, socialism is widely unrecognized when it occurs in a more subtle form than the most obvious and complete examples. Most people think of the former Soviet Union as a socialist state, primarily because it proudly proclaimed to be one and was widely recognized as such; not because they understand the principles of socialism. One who understands the ideas behind socialism will have no trouble recognizing that these ideas dominate American society today, despite the fact that they are not called socialism.
The "public interest" is the most common phrase by which socialism is promoted today. This literally means that anyone who can convince a politician to pass a law can control your life and property legally. To the extent that others can pass a law justified by the "public interest," they are capable of controlling your life and property in accordance with the principles of socialism. The fact that no one ever precisely defines the phrase "public interest," in a rational, cohesive way, allows it to be used by virtually anyone to enforce their standards on others. The "public" and its "interest" are among the world's greatest frauds, and their worship is a primary reason why all democracies and republics are nothing more than (arguably) less-destructive versions of dictatorships.
Obviously, socialism is nothing more than a subtle kind of slavery; one in which a majority, or more often a minority of people, can justify controlling your life because of their confused ideas that individuals should be subordinated to the groups to which they belong, without regard to individual consent or choice. The idea of self-ownership is the basis of all productive and legitimate relationships between humans. Its recognition is literally a choice of freedom instead of slavery.
In the previous section of this essay, (NATURE), property was shown in its early historical setting, limited to material possessions. However, this word (property) is far more important than a description of tools and trinkets. A wider view of this concept is presented here, using the phrase, "private property." Because the common use of the word, "property" often includes coercion (especially "public property"), the phrase "private property" is used here to distinguish the market idea of property from the government idea of property. The fundamental difference is coercion (or the lack of it).
Private property is the inevitable consequence of self-ownership. It includes not only material possessions, but self, labor and ideas. If each individual owns himself, then it logically follows that the products of his thoughts and labor are his also. For this principle to be universal however, one person's property cannot depend upon the violation of another person's property. If one person's legitimate property could be easily gained by taking it from another without consent, then no property (not even oneself) would be secure from aggression. So, the recognition of the principles of self-ownership and private property lead directly to the principle of non-coercion. Legitimate property is that obtained without coercing others, which means not taking their property without consent. (See ZENO Press essay #Z-01, Property, $7 postpaid.)
To fully achieve the idea of property without coercion, the owner of property must have complete control over it. Like slavery with respect to self-ownership, partial control of property means partial ownership. The complete ownership of private property (possessions obtained without coercion) requires complete control over it by the owner. Again, in order to be universal, this principle must also apply to others who own property. This requires mutual respect and individual responsibility to be consistent with the principles presented here.
Private property is a recognition that each person has the right to complete ownership and control of those things which are legitimately his. This includes intangible things such as ideas (like songs, plays and inventions), as well as tangible things such as tools, furniture, vehicles and buildings. Property does not have to be created in order to be legitimately obtained, however. It can also be obtained by voluntary exchange. This suggests a free market, which is the only economic system that does not have to be imposed by force. It is the system of resource allocation that occurs naturally in the absence of coercion. It is, literally, nature applied to humans. There are no political laws, bureaucrats or agencies in nature. There is no single code of ethics, morality, or political law by which some animals impose their desires on others. There is only individual, purposeful, self-interested action. This natural, spontaneous order is the genesis of free markets in humans.
The violent aggression of animals in nature is more a function of their limited skills and intellect, rather than a model of how humans would likely live without authoritarian control. The natural, animal-like aggression in humans is a fundamental characteristic of government, not markets. While there is aggression in so-called "market" societies, it is not widely institutionalized as it is with government. It is not made part of societies' structure, as it is with government. And it is certainly not an example of how humans, left alone together without governments, would abuse each other. Indeed, without the institutionalized coercion of government, humans tend to develop effective defense mechanisms to protect themselves from aggression. It is a naive belief in government as protector which currently inhibits this important process. As long as people think the government will protect them from aggression (which it fails to do), they have little incentive to protect themselves.
From the ideas of self-ownership and private property, free markets represent the only kind of economic system that is compatible with them.
One of the most important aspects of a free market economy is the idea that consumers do not have to buy any particular product, or subscribe to any particular service. This means that consumers are in complete control of a free market economy. With widespread acceptance of the non-coercive principles previously stated, such control is exercised in a way that maximizes production, consumer choice and happiness. Producers have to continuously improve their products or services, or at least continue to maintain a given level. If they do not do this, consumers are free to buy elsewhere. This is the most powerful (but underrated and misunderstood) benefit of free markets. So long as consumers are not forced to buy goods or services, providers of those goods and services have to respect consumers' desires (and by implication, consumers' property and sovereignty).
MARKETS WORK, BECAUSE CONSUMERS CAN CHOOSE NOT TO BUY.
Failure is an important aspect of market economies. Although this might seem to support the idea of "market failure" promoted in government schools, actually it does not. "Market failure" as promoted by opponents of free markets includes the assumption that people are not sovereign over their lives. It assumes that a coercive government can do a better job of allocating resources than peoples' own private, interpersonal choices.
If a market "fails" to provide something that someone wants, it is because no one was willing to do what is necessary to provide it. This supposed "failure" by markets is simply a recognition that everyone can't have everything he wants. It is this so-called "failure" that is cited by those who think that the government, as if by magic, should give everything to everybody for "free". Markets allocate resources to those who want them the most. Businesses prosper or not, based on their ability to meet consumers' demands. The failure of a business in a free market is a simple case of that business not filling customers' desires. This is a corrective process, in which mistakes are rectified fairly quickly, by more productive businesses replacing less productive ones. This is good for consumers, although employees of the failed businesses might resent having to look for other jobs. If their (unneeded) jobs are artificially maintained by government however, they become a drag on the economy, like building billion dollar bombers when their original "need" no longer exists.
While at first glance governments' protection of businesses from failure might appear to be good, this is a short-term benefit which ultimately results in a loss of respect for customers by the business. Like government, if customers have no choice but to buy from a subsidized business monopoly, then that business may stop respecting customers. This brings up the fear by some that free market monopolies will flourish without government control, and that such businesses may lose the respect upon which market principles are based, exploiting their customers. This is a completely preposterous fallacy, which unfortunately many people were taught to believe in government schools. A brief discussion of market and government monopolies will reveal the absurdity of this fear.
Free market monopolies occur when a single person or company has complete control over a particular good or service. Since the market principles just described emphasize complete control over each person's property by himself, this idea (monopoly) could easily apply to a popular product or useful service in a free market. However, there is an important reason why free market monopolies are usually not destructive: the owners of the property in question have a monopoly for only their own property. So long as one monopolist cannot legislate against his competition, market monopolies are extremely limited in their ability to abuse customers. They also have to satisfy customers' demands to survive, because everyone realizes that customers don't have to buy a particular product or service.
Government monopolies, on the other hand, are made so by the coercive power of the State. They are inherently coercive, which may mean several things. First, they are often subsidized by unwilling taxpayers, who have no choice whether to support a particular company or service. Second, they are protected by political laws which outlaw or regulate their competition. Third, government often enjoys a popular sanction, in which terms like the "public interest" are used to defraud people into believing that the government is acting in their interest rather than its own. These are important reasons why government-subsidized monopolies are inherently destructive.
If a private monopoly were to use coercion in an attempt to gain advantages such as those enjoyed by government monopolies, it would still lack the popular sanction that governments often have, especially democracies and republics. When someone points out the coercion of democratic government, it is often "justified" as being "necessary" to protect the "public interest," the "common good," "national security," "protecting the environment" or some other such popular phrase. No large, profit-making company can exploit monopoly to the extent that government (or government-subsidized) monopolies can, since the private company cannot seriously pretend to be unselfish, or promote itself as representing everybody. The myths that government is unselfish, and truly represents everyone, are among the most dangerous ideas in any society. This is especially true for modern democracies and republics.
The principles of self-ownership, private property and free markets mean that coercion cannot be the basis of any legitimate relationship between humans. Government by consent therefore follows from these ideas, if government is to be legitimate. In the Declaration of Independence the phrase, "Consent of the Governed" was used to establish the principle that the only legitimate government is one whose power is limited by the consent of the people so governed. Unfortunately, this idea was only partially implemented, since people who have not given their consent are routinely considered to be subject to the authority of governments who control them by force (even in the early American republic). This suggests that government, to be consistent with the principles of self-ownership, private property and free markets, must be subject to individual consent, just as any business is. This means that, to be legitimate, governments must be something other than what they are today. Today, all governments are coercive monopolies, funded by taxation (a form of legalized theft) and based on the idea that an organization can rule over people who have not given their consent to be governed. This widely-accepted (but false) idea supports the widespread and dangerous tyranny of popular governments today.
There are two different concepts of government discussed in this essay. The first, which is the form of government known all over the world today, is coercive government. Even democracies and republics are based on coercion, since some people who don't believe in a particular government are forced to support it and obey its rules nevertheless. While this is apparently "justified" in most peoples' minds by myths such as the legitimacy of coercive majority rule, this brute force cannot be denied. All governments in their present form are based on coercion, whether they are elected by a small minority who call themselves a majority, or whether they are established by the forceful overthrow of a previous government.
The second kind of government is non-coercive, or voluntary government. Unfortunately, many of today's coercive governments (like the United States of America) are mistakenly viewed as legitimate, voluntary, governments. However, only when government is based on individual consent, like any association or business, will it be legitimate. In this particular context, the word "government" is used in a theoretical, non-coercive way, to illustrate what it was intended to be by some, rather than what it actually has become. This non-coercive kind of government might be a prototype for future governments and other social organizations; not based on coercion, but market processes.
While there are many examples of market services that are provided today in direct competition with coercive government (private schools, police, etc.), the predominant view seems to be that coercive government is "necessary". Widespread growth of the idea of voluntary association to replace existing governments will be necessary before present governments stop hurting people.
Market ideas are often criticized because they supposedly promote the idea that each person should be a "rugged individualist," like a hermit, avoiding all contact with society. While this option is not prevented by markets, it would apply only to those who choose to return to a primitive existence, giving up a modern standard of living. For most people, the relevance of free markets is that they offer more productive, fair and rewarding associations with other humans, especially in a modern, technological, information-based society. No single person or group can possibly have enough information to control an economy. Only the dynamics of free markets, in which each person can decide how to allocate his resources, can a modern society be most productive and cooperative.
Individuals often choose to band together to form groups, to accomplish things they can't do alone. Market ideas do not prevent or discourage this; they simply suggest that for such groups to be legitimate, participation must be voluntary. This means that people who choose to join or form groups may later choose to leave those groups, when they believe the group has stopped fulfilling the reason that the person had for joining the group in the first place. This simple idea of voluntary association is the proper basis for all human association, including government. The Declaration of Independence suggested this when it said:
"...governments are instituted among men, deriving their just powers from the consent of the governed, that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it..."
Unfortunately, this noble idea was soon corrupted to mean that if a few of your fellow citizens voted for a few politicians, then they have the right to pass laws to control your life in any way that pleases them. As we have seen, this is nothing more than a subtle form of slavery which is described by nice-sounding words like "democracy" or "republic." Legitimate, voluntary associations of humans have several common characteristics, each of which derive from the principles presented in this essay:
Limited Purpose and Authority. Rather than pretend to be all things to all people (a contradiction, since people want contradictory things), legitimate associations are established for only those purposes that their creators decide are needed. If you join a service club whose purpose is to clean up streets, it would obviously be illegitimate for the officers of that club to regulate other parts of your life.
Voluntary Funding. By limiting itself to the resources that are willingly donated or exchanged by members and others who pay for its services, a voluntary association has real economic limits. It cannot expand public debt, finance stupid, non-defensive wars, or build uneconomic public works projects which benefit some by coercing others. In a real sense this limitation is, in the long run, a strength of voluntary associations.
Choice of Association. Members can choose to withdraw their support, membership or other participation. Any organization which denies this choice is inherently illegitimate, no matter how popular, well-established, or necessary it appears to be to some.
Collective action can be a popular way to avoid personal responsibility. Whether this occurs in a voluntary service organization or in coercive government, the principle is the same: group action allows bad decisions to occur without individual accountability. This results in stagnation and ineffectiveness in the operation of traditional collectives. This also works to inhibit innovation and production, since each person's contribution is neither recognized nor rewarded. While this may occur in most collective associations, it is particularly bad in coercive ones, like all of today's governments. At least in voluntary organizations, members can stop being members without violent, coercive repercussions.
Most people seem to believe the preposterous idea that one group of people with guns, laws and police have a right to regulate everyone's lives simply because a few of us voted for a few of them. In the first place, coercive majority rule is not legitimate. Majority rule is legitimate only in organizations whose individual members have unanimously agreed to subject themselves to such a rule. Second, there never has been an American election (at the national level) in which a majority of the people actually elected a politician. "Majorities" reported in the press are actually minorities which are expressed as a majority of those who voted. Third, only a small number of people in government are actually elected. The president is one, and congress consists of 535 others. Mostly though, government workers and officials are appointed or hired by politicians and other bureaucrats; and all enjoy a level of limited legal liability that you and I do not have. Fourth, no organization can legitimately represent people who have not given their consent for that representation. Fifth, whatever "agreements" might have been established between about three dozen men two hundred years ago are insufficient to justify forcing people today to conform to those "agreements." Sixth, the U.S. Constitution was never a properly executed agreement between any humans, then or now (see the book, A Personal Declaration of Independence, published by ZENO Press -- $10 postpaid). Seventh, the Constitution (including the Bill of Rights) has been modified, interpreted and otherwise changed by modern courts to mean things that were never intended when it was adopted. It has become an instrument of destruction, rather than protection; a hammer rather than a shield.
The genesis of coercive government is people who cannot convince others to agree with them, or cannot produce a useful product, idea or service that other people are willing to pay for. When the general market "fails" to support them, they resort to force. Unfortunately, they can usually bribe citizens with the citizens' own money to support their corrupt and destructive activities. This is possible because of most citizens' ignorance of the fundamental nature of government.
For the purpose of this section, government is defined as a coercive monopoly which has assumed ultimate authority over all humans in a particular geographical area. This definition is similar to one developed by Morris and Linda Tannehill in their book, The Market For Liberty. This defines the traditional view of (coercive) government, regardless of its form. There has always been considerable debate about how much force, under what conditions, and by what authority, can be legitimately exercised by government. By this definition however, government is distinctly different from other organizations, because of its ultimate reliance on coercion and violence. The most democratic or republican government coerces those who do not agree with it, thereby operating on the exact opposite principles than those upon which markets are based. Popular rhetoric and some historical documents to the contrary, all present governments reject the idea of self-ownership. For any government to accept the idea of self-ownership is to admit that its citizens may withdraw their support without penalty. This is obviously not the non-coercive (voluntary) government described in the previous section.
Government has been the primary means by which some humans have enslaved others. This enslavement continues today in America, despite a history of documents and law which explicitly defined the proper role of government as a protector, based on the consent of those governed. This section describes the origin of government, its foundation of coercion and the reasons why it can never be legitimate until it literally becomes something other than what it is.
The first time a human intentionally hurt another was when government began. Obviously, there is no recorded evidence of this particular event. Perhaps similar events occurred simultaneously in different parts of the world, but the important thing is that a particular principle was established. That principle is common to all governments today, and the reason why they are inherently illegitimate.
The primary principle of government is COERCION. Coercion is defined here as the initiation or threat of aggressive force, fraud or theft. It occurs when one human aggresses against another without consent. This is the exact opposite principle of markets. Whereas markets are based on voluntary exchange, government is based on aggressive force. This force is often justified by a variety of excuses, but the simple fact remains that all government in its present form is based on force. This is not the legitimate, defensive force that someone might choose to protect person or property. It is the raw, aggressive force of thieves, barbarians and tyrants.
The origin of government as we currently know it was conquest. This is described by Albert Jay Nock in Our Enemy The State, Spencer Heath in Citadel, Market and Altar, Rose Wilder Lane in The Discovery of Freedom and by Murray Rothbard in For a New Liberty. During primitive times, stronger people found that they could often exploit weak people, and take the fruits of their labor by force. This conquest was undertaken without much understanding about production, human rights or the incentives that people have to produce useful things. It was a throwback to animal instincts, in which the simplest and most obvious way to get something you wanted was simply to take it. For people with primitive technology, limited intelligence and little understanding of future consequences, this initiation of force appeared to be an effective way to organize human societies.
After the conquest of some groups by others, there was often a period of slavery, in which the conquered continued to be dominated by the conquerors. This was simply an extension of the conquest, in which two societies merged. This was sometimes followed by a sense of common heritage. For example, when the Normans invaded the Saxons in England in 1066, there was a period of rebellion (remember the legend of Robin Hood?), followed by a gradual mixing of the two societies. Today's England is thus a mixture of two previous societies; one a conqueror, and one the conquered. As Thomas Paine wrote in Common Sense, the history of the English government is a history of this kind of conquest, and today's English government is simply a more sophisticated version of an earlier tyranny. Even its constitution is biased by this unfortunate history of the domination of some by others.
As the conquerors and the people they conquered intermarried and shared their cultures, a new, single culture was established. In some cases, there was a ruling class; often the remnants of the original conquerors. In any event, subsequent laws, constitutions, rules and regulations were based on the same original idea of conquest: that some men are entitled to rule over others without their consent. Modern democracies and republics continue this tradition, but fraudulently disguised as legitimate representatives of the people over which they rule. Political elections, in which a few people vote for a few politicians, are publicized and used to reinforce this fantasy in modern democracies and republics. Remarkably, most people seem to believe this gross distortion.
Now, some will object to this simplistic characterization of popular modern governments. They will argue that the U.S. Constitution, for example, was established by and for the people, and therefore this government operates with the consent of those governed. Any force this government uses is sanctioned by "the people" to maintain order and to protect the weak against the aggression of the strong. However, this is completely untrue, as illustrated by an analysis of the idea of coercive majority rule.
Majority rule is a popular excuse for the force that is used by democratic government. This idea, promoted in government schools as a legitimate way of making collective decisions, is completely contrary to the idea of self-ownership. It is based on coercion, not cooperation. A few simple examples will illustrate this.
If two people use force to take the property of another, this is commonly called theft. The fact that the two thieves are a majority of the three people concerned does not condone the simple act of theft. By the same token, if one million people agree to steal one person's property, it is still theft, although it would obviously be a very popular form of theft. Notice that as the group of thieves gets larger, the apparent responsibility of each thief is reduced. If ten people steal one person's property, then each group member can say "the group did it." If the group is based on majority rule rather than unanimous consent, the responsibility of each member is further reduced. If there is a secret ballot, then the responsibility is reduced even further. Is it any wonder then, that all modern democratic governments (relying on "pseudo-majority" rule and secret ballots) represent nothing more than a popular way to steal without going to jail?
This idea of coercive majority rule is part of the "justification" for today's democratic government tyranny. However, just because something is popular doesn't mean it is right. This suggests some boundaries on legitimate and illegitimate majority rule.
For majority rule to be legitimate, it must be based on unanimous consent (this doesn't condone unanimous theft, however). In other words, in an organization in which majority rule is exercised as a legitimate means of making collective decisions, each of the members must have previously agreed to abide by a majority decision. Without this original, unanimous, individual consent, majority rule is not legitimate. While the elected leadership in any voluntary organization might be able to extend its authority beyond what the members originally intended, such organizations are subject to a very powerful idea which tends to limit this potential tyranny. That idea is member support. Without the voluntary support of its members, such an organization would soon dissolve. This recognition of the need for member support is why most voluntary organizations and businesses strive to please their members or customers. If they do something that their patrons don't like, and refuse to listen to complaints, they find themselves without members or customers. When this happens, the organization doesn't last long. If coercive majority rule were legitimate, then lynch mobs and slavery would be acceptable forms of human behavior.
In an 1850 pamphlet called The Law, French economist and statesman Frederic Bastiat pointed out the difference between two stated purposes of the law: one for protection, and one for giving positive benefits to people who have not earned them. He presented a dilemma between these two purposes which I have expanded here to include government in general. The following is based on this expansion of Bastiat's original work.
There are fundamentally two purposes of government that are popular today: 1) to protect people and property, and 2) to transfer wealth. Unfortunately, the second purpose cannot be achieved without violating the first. This is widely misunderstood by most people, who have been taught in government schools that the government can and will treat everyone "equally," because each of us has "equal rights." This really means that those who produce wealth are punished, so that those who don't produce wealth can be rewarded. There is a variety of gradual states between these two extremes (like some producers subsidizing other producers), but you get the general idea. The effect of this "equality" is to make everyone equally poor, a lofty goal almost achieved in some explicitly socialist societies, just before their economies collapse.
If government's purpose is to protect people or their property, it cannot forcefully transfer wealth from one person to another without violating this original purpose. If government is supposed to protect your property, then it violates that purpose when it taxes, confiscates or otherwise appropriates your property without your permission. Regardless of people's needs or other noble purposes, this simple fact cannot be denied: you have to violate the first purpose to fulfill the second. Most people justify this aggression as being necessary in order to achieve some "public" purpose, or to help those who cannot help themselves. The tragedy of this particular bankrupt idea is that by confiscating wealth from producers, the government literally destroys wealth (see examples below) which is the economic basis of charity and compassion in the first place. The more wealth the government transfers, the more it destroys, and the less there is for all concerned. While this coercive wealth transfer process can create short-term benefits for some, it eventually harms the very people it was intended to help. Essentially, the welfare state destroys jobs and prosperity; no matter how modern and no matter how much rhetoric about "working with business," or "providing aid to the poor" it uses.
The following examples are presented to support the case that government destroys virtually everything it touches. Each of these simple descriptions of a particular government activity explains little-known aspects of it. Each suggests a reason why government does far more harm than good, contrary to what most people were taught in government schools. A list of references at the end of this essay provides further documentation, argument and evidence.
Public property is like dropping a pizza into a group of kids. Everyone grabs a piece and devours it as quickly as possible, because if he doesn't, someone else will get it first. The quicker and more aggressive you are, the more you get! This is the inevitable consequence of making the pizza "public," without defining who gets how much. By placing a pizza in front of the kids, each with an "equal right" to it, it is immediately consumed.
With adults, government and public property, the principle is the same, but the procedure is slightly more orderly than the kids and their pizza. "Public Land" is set aside for some particular purpose, such as a national forest. Then, it is declared to be managed by the government for "multipurpose use." This means that mining companies, logging companies, hunters, backpackers, fisherman, kayakers and environmentalists can pay lawyers millions of dollars to argue how it should be used. Whoever wins gets to force everyone else to conform to his ideas. Biologist Garrett Hardin calls this the "tragedy of the commons." I call it socialism.
Although it is claimed that everyone "owns" public property, no one really owns it. Some government officials may have temporary control of it. But no one owns it. And this is why it is so poorly used, managed and protected. Private forests tend to be well-managed in order to preserve the owner's future assets. Public forests tend to be overused and fought over like the pizza and the kids who collectively "owned" it (without defining individual property rights).
Public property is one of the stupidest ideas ever conceived by the human mind. If you think you own public property, as the government says, then try to sell it. Or rent it. Or decide how it is used. Or try to use it without the government's permission. Does this feel like ownership? Does this look like ownership? Does this smell like ownership? Of course not! The property is controlled by the government; not owned by the citizens in whose name it was acquired. It is absurd that so many people naively think they own public property, just because the government tells them so. The magic phrase, "public property" appears to transform the chaos of kids and pizza into something more proper; more legitimate. But this is an illusion -- smoke and mirrors. It's still kids and pizza.
People take care of things they own. They are not so careful about things owned by others, or the "public." This is the essence of the dichotomy between private and public property.
A lot of people talk about the government's annual budget deficits and total debt, but few seem to understand them. Suppose you had a credit card and unlimited credit. You could charge just about anything (temporarily increasing your standard of living), while paying only the minimum amount each month. This could possibly go on until you couldn't afford the minimum payment. It would then be obvious that you will never pay back the debt. If you can't afford to make the minimum payments, then you certainly can't afford to make the larger payments needed to pay it back. The credit card company would lose money, having already reimbursed the people from which you bought goods and services with the credit card. You would have become a thief, although that may not have been your intention.
The federal government operates like this simple example. Instead of using a credit card, it issues IOU's (government bonds). So long as tax receipts exceed the interest on the national debt, government can borrow the rest by issuing more bonds (like charging more on your credit card). But when total tax receipts fail to cover the interest on the debt (a situation currently projected for about 1995 in the U.S.), it will become more obvious to all that this debt will never be paid. Who will lose from this debt not being paid back? Not credit card companies, as in the personal example. Most government bonds are held by banks, pension funds and private individuals. They will all lose if the government cannot pay them back (except possibly bankers -- see the next example). So, to avoid admitting the truth (that it is bankrupt), the government will pretend to pay them back, and it's victims will love it! At first.
Inflating the currency is one very popular way that governments deal with this kind of problem. This allows the government to "pay back" debts, but in lower-value dollars. Since banks are part of this inflation process, and profit greatly from it, they are not likely to call the government's loans in when payments are difficult. To better understand this, the banking and money system must be explored in more detail.
If I walked down the street and gave a $100 bill to every person I met, I would soon be known as a benefactor, a hero, a philanthropist -- a great man. Yet, if it were discovered that my $100 bills were counterfeit, printed in my basement, I would be denounced as a crook.
Well, folks, guess what? Your government is both the hero and the crook! When it provides you with "free" benefits (jobs, pensions, health care, roads, food stamps, business subsidies, etc.) it appears to be a hero. But when it issues IOU's (bonds) to the Federal Reserve so the Fed will print more money, it is a crook. Guess who gets to pay back the IOU's? Certainly not the politicians who look like heroes for giving you the benefits!
Trouble is, most of us don't see or understand the "crook" part. Thousands of government teachers, economists, bankers, politicians, bureaucrats and most journalists have taught us that printing money without commodity backing or market production is legitimate when the government does it. It's not!
Bankers, of course, love this process, since they can create valuable assets for themselves out of essentially nothing! For the cost of some paper, ink and labor, they can create as much money as their printing presses will produce. Bless their little hearts, they work night and day so your benefits can be paid in nice fresh, crisp bills. In fact, even if the government doesn't pay them back, the bankers still make a lot of money from the interest on these "loans." This is not interest on something valuable of theirs loaned out at risk, like you would loan a neighbor your new lawnmower. No sir, it's interest on money that was created out of thin air! It's as if your neighbor paid you $20 a week for the imaginary use of your lawnmower, and you didn't even have to loan it to him. If you could get 50 people to pay you for such an illusion, you could make an extra $1,000 a week, without producing anything. And you would only need one lawnmower -- just in case one of the fools asked to see it!
How would you like to legally write a "hot" check for a million dollars, invest it and live off the interest? Even if you never saw the million dollars, the interest would provide you with a comfortable living. Since you didn't have to put up any real money in the first place, the interest would be "free" income to you. That is, until whomever you cheated refused to play the game anymore. If you or I did this to a bank, we might go to jail. However, when the government and the bankers do it to us, politicians get to buy votes, bankers get rich loaning them the "money," and both look like heroes!
In 1920, economist John Maynard Keynes said:
"By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
So, you've been saving and investing your money, and now it's time to retire. But wait -- someone has stolen it! There's nothing left, and no one is accountable. The thief was "everyone," since your money was used for a noble "public purpose." So what are you going to do, put "everyone" in jail? Will that get your money back? No.
This hypothetical tragedy will eventually happen to millions of people who depend on the Social Security system in America. It will happen because there are no savings, no investments, no individual assets assigned to each person who participates in the system. There is only a vague promise by politicians that the system is sound. It is not.
Let's say you have saved and invested for many years, building up a retirement account. It has your name on it -- there's no question that it's yours. The amount of money in the account grows by the amounts you add, plus any dividends and interest that accrue to the account.
Now, suppose the government passed a law requiring all private retirement accounts to be combined into one account, without anyone's name on it (sounds like public property, doesn't it?). When anyone reached the age of 65, they could take money out of the account. What do you suppose would happen? Well, the first thing that would happen is that few people, if any, would add any more money to the account. The reason you probably wouldn't do this is that it would no longer be allocated to your retirement. By placing all the money in a common pool and allowing anyone over 65 access to it, it will get overused -- a common aspect of public property. In other words, it will no longer be your account. You will have been robbed.
The second thing that will happen is that all who are eligible to take money out of the account will do so, whether or not they need it at the time. Since anything they leave will simply be taken by others, there is no incentive for anyone to leave anything in an account that does not have his name on it (remember the kids and pizza?).
Social Security works just like this imaginary example, except that the account wasn't funded by money you and others saved. If fact, it wasn't fully funded at all. Today's recipients are paid directly by today's workers. Who will pay their benefits when they retire? The official answer is future workers. But, because there will be more future retirees and fewer workers (remember the "baby boom?"), Social Security taxes alone would have to be astronomical to make this work. This does not even consider the additional problems the government will face in light of its debt bomb and funny money. The real answer to the question, "Who will pay for the benefits?" is, "NO ONE!"
The U.S. Supreme Court has ruled that no citizen has a property interest in the Social Security system (Fleming vs. Nestor, 1960). When have you heard this fact mentioned in the popular media? When push comes to shove, and the Social Security system has more old people requiring benefits than the amount young workers will provide, it will collapse. This is inevitable. And then, perhaps only then, will a lot of people realize that the system never did save or invest their money. It always played financial paper games to make it look right. But it was never right. It was doomed almost from the start.
Social Security was the crown jewel of the socialist program called the New Deal, but the jewel is really cheap glass -- a massive fraud. There is no private account in which your contributions are saved and accrue interest -- most of your money has already been spent! The only way the promises in this program can appear to be kept is for the government to inflate the currency. But such inflation will destroy the economy and cannot last indefinitely. The system will break down, as will the banking system and the currency system. We are almost to the point where these secrets can no longer be hidden.
Many people seem to believe that the money the government takes from them by force is still theirs ("This public works project is owned by the people of the U.S."). Incredible! At least a thief takes your money and then leaves you alone; he doesn't follow after you and try to convince you it was for your own good. And he doesn't claim that you still own the money or property he just stole from you. But this is what government does. And most people seem to believe this outrageous, clearly contradictory, illogical claim!
If the government could effectively tax everyone for 100 percent of his income (including barter income), what would happen to production? Assuming this could be done, why would anyone make shoes, build cars or fix appliances? Perhaps some would continue to work for nothing, but then how could they survive if everything they received had to go to the government? Obviously, this is an extreme, ridiculous example. Most people simply would not give the government their last bit of food (some fools would, because "it's the law"). This simple, extreme example illustrates the ultimate impact that taxation has on the production of useful goods and services. Taxation destroys production -- period! Total taxation virtually eliminates production. Half taxation eliminates some production. Ten percent taxation eliminates less, but it still eliminates part of it. Involuntary exchanges result in an overall decline in value (because individual choice is denied). All taxation is theft. The fact that one government's taxes are less than another doesn't change this simple fact.
Total taxation could never be achieved, primarily because individual self-interested people can be considerably more effective at protecting their wealth than any bureaucratic government can be at confiscating it (if the people know how to protect themselves). People will find ways to illegally produce things, to exchange, and to survive (like in the Soviet Union before it collapsed). This is true even at low levels of taxation, but even more true at high levels. Today, taxes on American citizens are higher than they were for Roman slaves, feudal serfs in the middle ages, or the colonists who started a little tax rebellion that became the American Revolution.
One of the planks of the Communist Manifesto was free public education. Karl Marx realized in 1848 that control of young minds was a prerequisite for implementing sweeping social goals by government force. The mass education movement during the late 1800's in the U.S. was implemented at a time when Marx's socialist ideas were gaining popularity in Europe and parts of the U.S. Like any "free" service, mass education was sold to a gullible public that it would provide the basics of education to those too poor to afford it, and thereby greatly improve the quality of American society. Unfortunately, like any idea imposed by force rather than developed through natural market action, mass education became the worst possible thing that could have happened to American children. It literally programmed them to be obedient servants, instead of free, sovereign individuals. This programming continues to this day, despite emotional and irrational arguments that this is not happening.
I don't think anyone can more eloquently state the case against government schools than 26-year veteran teacher John Gatto, New York City teacher of the year in 1990, and New York State teacher of the year in 1991:
"The lesson of my teaching life is that both the theory and structure of mass-education are fatally flawed; ...Mass education cannot work to produce a fair society because its daily practice is practice in rigged competition, suppression, and intimidation. ...The massive rethinking the schools require would cost so much less than we are spending now that powerful interests cannot afford to let it happen."
Mr. Gatto's book, Dumbing Us Down (New Society Publishers, Philadelphia, 1991), is one of the most revealing, authoritative and penetrating critiques of government mass education that has ever been written. From his practical, day-to-day experience, Mr. Gatto has revealed the actual effects of mandatory, coercively-funded, politically-decided, mass production "education," rather than the false, idealistic accounts of government teachers and other apologists for the status quo who don't want to look at the damage these schools do to young people's minds.
Government schools literally destroy creativity, enforce blind obedience to authority, and remove most of students' natural desire to be independent, critically-thinking human beings. This coercive system teaches them that morality comes from coercive law, that prosperity comes from government regulation, and that justice is getting something for free when you're not willing to work for it.
Most humans are so used to following rules set by others that they rarely stop to think about what makes those rules valid. Is it majority rule? Is it democracy? Is it because the rules were established a long time ago? Those who question the validity of existing rules are often treated as outcasts by those who conform to the rules. Some people prefer the apparent security of political coercion to the liberating concepts of individual freedom and responsibility. In short, many (perhaps most) people want to be taken care of, rather than to be free.
One of the most pervasive myths of modern society is that a variety of constitutions, statutory laws, administrative rules and other coercive rules are necessary, legitimate and useful. Largely as a result of public school indoctrination and watching television, most people don't question things that they are systematically taught not to question. However, few have considered the tyrannical nature of all statutory and constitutional law, the ineffectiveness of such law to solve legitimate problems, and the vast destructive power that even well-intended political laws have.
Many people seem to believe the fantasy that coercive statutory laws, created by popularly-elected legislatures, are legitimate rules for each of us to follow. If only more of us would follow these laws, then there would be less crime, less social strife, and less poverty and despair! If you believe this, then you were effectively "educated" by your indoctrinators. People who continue to place their trust in coercive government for protection and justice are like perpetual children, asking the super-parent State for permission to do almost everything. This is not the action of a conscious, freedom-loving person.
Suppose I had competent scientific data to show that most crimes were committed by left-handed people (I don't, so please humor me here). Now, doesn't it make perfect sense to pass a law that puts all left-handed people in jail? It doesn't? Why not? Wouldn't this statistically reduce crime? This is exactly the basis for much of our legislation today, because of the "law's" duty to protect the "public." If anyone can demonstrate the slightest statistical link between a problem and a particular group of people or a product, then that group of people or product can be assumed to be guilty until proven innocent. This is the fundamental basis of most "public interest" legislation. It is literally the imposition of collective slavery over individual freedom.
What if I could demonstrate that by forcing everyone out of bed at 6:00 AM every morning and making them exercise for 30 minutes that the overall health of the nation would improve dramatically? So what? Is this overall statistic worth giving up your freedom? Some people think so.
Statutory laws are primarily created by special interests who convince politicians to give them special favors. These favors may include the imposition of one group's morality on everyone else. But laws don't work because they inspire rebellion, they usually originate from a special favor for some specific group, and rarely get applied in a fair, even-handed manner. Bad laws just create more outlaws. And today, government has just about priced itself out of the "protection" business. More people are simply refusing to obey stupid, counterproductive laws. Laws to "solve" some small problems often end up causing larger problems, such as the minimum wage causing unemployment. Political laws are fundamentally the initiation of force by some over others. They are more often used to hurt innocent people rather than to restrain violent criminals.
GOVERNMENTS DON'T WORK BECAUSE CITIZENS ARE DENIED A CHOICE.
The most fundamental and important concept to understand about markets is the fact that they depend on the voluntary exchange of goods, services, ideas, products, goodwill and all other things that human beings find desirable or necessary. In fact, a market is nothing more than a network of voluntary exchanges. In their excellent book, The Market For Liberty (Libertarian Press, 1984, originally published in 1970), Morris and Linda Tannehill provided this definition of a market, with a slight difference. They referred to voluntary economic exchanges. I have deleted the word "economic," because market principles apply to all human action; not just economics.
Voluntary exchanges result in a net gain for both sides of a transaction (a classic "win-win" situation). On the contrary, an involuntary exchange (upon which government is based) usually results in one person gaining at another's expense. It is a "win-lose" situation. The following discussion of these two kinds of exchanges illustrate the reasons for this, followed by brief discussions of market prices and economic choice.
A voluntary exchange, as the name implies, is an exchange of property without coercion. As we have seen, this property may include not only tangible items, but ideas, thoughts, services and labor. An interesting aspect of voluntary exchange is that both parties perceive a benefit from such an exchange. For example, suppose I want to buy a used television set, and you have one that you want to sell for $100. If I agree to your price, we have a deal. Here's how we both benefit from this transaction:
I would rather have the television set than my $100. Otherwise, I would not give up my hard-earned money. This means that I come out ahead on the deal. In other words, I win. BUT WAIT! If I win, then that means you lose, doesn't it? No, my friend; and this is the fundamental reason why opponents of markets fail to understand their power and utility: WE BOTH WIN! You would rather have my $100 than your television set. Therefore, you win, too! This double benefit occurs not only with tangible items such as television sets, but also with services, ideas and all other aspects of interpersonal relationships.
Naturally, I would prefer to have a new television set for my $100, but I can't find anyone to sell me a new one at such a low price. You would prefer to have more than the $100 I am willing to pay, but you can't find anyone to pay more than this. If either one of us sets a condition that is unsatisfactory to the other, no exchange takes place. So, although a market transaction might not be viewed as perfect by the participants, it always results in a gain for both parties. Keep in mind that minimizing loss or pain can also be a gain in this context.
Notice that what made this transaction work was the unequal value we each placed on the two assets. I valued the television set more than the $100, while you valued the $100 more than the television set. It was this inequality that created the conditions for the transaction, and made it work for both of us. Now let's look at the other kind of transaction.
An involuntary transaction is one in which one party benefits at the expense of another; usually by coercion. For example, if a thief takes your television set without your permission, then he gains without having to pay you for it. However, you lose your property, which was stolen from you. This is obviously a "win-lose" situation. The thief's friend might also win, if the thief gives him the television. Then the thief's friend perceives the thief as a hero. Even if the thief sells it to his friend for $50 (rather than its obvious value of $100), then the thief still looks like a hero. The friend's perception of the thief as a hero may or may not include the knowledge that he is a thief.
Involuntary transactions are often justified based on their ability to produce "television sets" for free or at half price to the thief's friends. The biggest thief is government, whose friends are voters, government employees and contractors, some businesses and various special interests who ask to share its plunder. Rather than television sets at half price, the benefits are often "free" public education (indoctrination!), business subsidies, jobs, health care and countless other benefits paid for by money taken by force from the unwilling taxpayer (or borrowed in his name). All this is done in the name of the "public;" a convenient excuse to make the stealing seem legitimate. However, nothing can thoroughly disguise the fact that some people lose (taxpayers), while others gain. And the thief is an apparent hero because of it.
With an involuntary transaction, not only does one party lose, but the overall result is a net decline in value. Using the television set example, this occurs because the television set was transferred from someone who valued it more to someone who valued it less (the opposite of a voluntary market transaction). Since the rightful owner was originally willing to pay the full market price for the television set, he obviously valued it more than the thief or his friend. If the thief or his friend were willing to pay as much as the rightful owner, the television set wouldn't have been stolen in the first place. This means that involuntary transactions (like taxation) reduce overall value.
Government isn't exempt from this principle; it just disguises the process so that even intelligent, educated people will not recognize it. This is why all government based on taxation must be replaced rather than reformed. It is evil, destructive, illegitimate and fraudulent. The less government, the better! Just like cancer.
In the IDEAS section of this essay, the principle was established that each property owner is the only one who can legitimately control his own property. If only the property owner can legitimately control his property, then only he can set a price or other terms by which his property may be taken from him. This means that the owner of the property has all legitimate regulatory authority over his own property, but none over the property of others.
If you asked $200 for the used television set described in the previous example, and if I were not willing to pay that much, then we would not have entered into the voluntary transaction. You do not have to sell the television for a "fair" price, because it is yours. You (and you alone) have the right to decide how much should be paid to remove it from your possession. Of course, I and other potential customers have the right to refuse to pay your asking price. If this occurs, then you will not sell it.
There is no "fair" price. You can ask twice the price for a used set as I could buy a new one for. I can offer one dollar. Neither proposal is an aggression upon the other person, or improper in any other way; they are just subjective, individual opinions of the conditions under which each of us is willing to part with our own property (your television; my money). However, it is often the big thief (government) that convinces us to accept stolen property, and makes us feel good about it because the theft is covered up to look like our civic duty, or patriotism, or that wonderful catch-all phrase, "the public interest."
All resource allocation decisions involve choices. The essence of free market dynamics is that priorities have to be set by each individual in order to allocate limited resources among unlimited desires. When a resource is plentiful (like air in most places), it may not require allocation by economic choice. However, when it is scarce, its user or owner must decide how it is allocated (see ZENO Press essay #Z-01, Property). For example, when a family budgets its income, it has to consider how much money is available, and then decide what to buy with it. Living expenses usually come first, and then the members of the family can decide which additional things they want to buy. The limited amount of money available dictates how much they can spend, unless they have a credit card.
A credit card allows a family to spend beyond its means, but only for a while. Eventually, the credit card company demands payment, and if it is not made, then the card (and its credit privilege) is lost. This discipline tends to keep most families from spending beyond their means for too long, although some never learn the lesson. Ordinary people and families must begin with the amount of money they have, and curtail their spending desires to conform to that amount. While it is possible for a person or family to keep getting new credit cards, not paying for the old ones, it is the responsibility of the credit card companies to be more careful who they extend credit to. If they fail to do this, then one of their enterprising competitors will eventually replace them when their costs get too high to stay in business.
Individuals, and even large companies, are extremely limited in the extent to which they can exploit their debt. Eventually, their debt has to be paid, forgiven or liquidated. Somewhere, sometime, somehow, the debt gets resolved. Without the ability to artificially expand debt based on patriotism, the "public interest" or some other nationalistic excuse for hysterical collective action, private individuals and companies are severely limited in their ability to exploit debt, customers, or involuntary transactions. Private, market-based debt payments or liquidations occur relatively quickly. Unfortunately, government debt is put off much further into the future than private debt, because the institution is widely (but falsely) believed not to be subject to the same economic laws that ordinary humans and other organizations are subject to. It is, however -- it's reckoning day is just later, and the correction will be much more severe when it occurs. Whereas the individual or company might go bankrupt in a legitimate market correction (telling them that they did not satisfy consumers' desires), government seems to be able to push the eventual correction much further into the future, when today's politicians and bureaucrats will not be around to take the blame. This cannot go on forever, anymore than a market-based business can lose money forever. The piper must eventually be paid. And the resolution of government debt will be much more traumatic for society than the resolution of any person's or company's debt.
The principles of free markets and voluntary exchange apply to all interpersonal relationships between humans. Friendships, marriages, service organizations and families can also benefit from these principles. The key is that for such interpersonal relationships to be productive, valuable and cooperative, they must be based on the same kind of respect between individuals that businesses show their customers. This is not easily understood by most people, who were taught just the opposite.
Many common types of human relationships are like a private kind of socialism. Married couples, for example, participate in the joint ownership of property, and a sharing of various duties. Unfortunately, this often leads to conflict, because it is never clear who is responsible for what. One spouse makes money, puts it in the joint account, and the other spouse spends it. This may lead to resentment on the part of the spouse who made the money. Another example is sharing household cleaning or repair duties. Without a clear, mutual agreement between people about what will be done, miscommunication and argument may result, rather than productive work and positive results. In short, market principles apply to virtually all voluntary human action. When people choose to manipulate, coerce, threaten or cheat each other, not to mention actual violence and physical aggression, they are acting like governments; not markets.
Joint ownership of property, like public property, is often a cause of conflict. A better way would be for each individual to have a specific ownership and responsibility clearly defined, as described by Harry Browne in How I Found Freedom in an Unfree World. This could be negotiated between the people concerned. Then it would be clear who gains or loses when a question arises. Responsibility would also be clear, rather than the fuzzy, often illogical placing of blame that results from joint or public ownership of property -- the property owner would make the decision. If you own your own body, then you should be the one to decide how it is used. Likewise, you should decide the use of your other property, but not the property of others. Markets require mutual respect; governments require only forced obedience. One is a lofty and productive human goal for human action; the other is tyranny.
The further application of market principles to personal relationships would make those relationships more productive, rewarding and fair. This requires honest and thorough communication (including "active" listening), negotiation of agreements, and the ability to change the deal if one partner becomes dissatisfied with it.
One of the objections some people have about relying on markets rather than government is that markets supposedly allow people to do anything they want, including hurt people, and they believe government is the only institution that can prevent or stop this. This assumes, of course, that government can prevent or stop it. But if government can't prevent theft, drug abuse or murder in prison, where it has complete control, then how can it prevent such aggression elsewhere? The answer, of course, is: "It can't." People often compare what governments promise to do with what they have been taught that markets "fail" to do. Not only is this an unfair comparison, but it supports the "something for nothing" promise of all governments. Such comparisons usually don't mention that government inadvertently subsidizes crime.
Prohibition created Al Capone, just as drug laws indirectly cause gang violence today (by making illegal drugs very profitable). Government welfare destroys families, gun control provides weak victims and prisons teach criminals how to commit better crimes. Public property, police with limited liability, coercive funding and ineffective statutory laws are a deadly combination for the government's "criminal justice" system. Every component of this system is based on the same inefficiencies and counterproductive incentives of other government activities.
Governments can't control crime. Governments are crime (remember public debt, taxes and social security?). Markets won't eliminate crime. But without coercive government, at least markets would be free to develop better protection services than the false promises made by government.
Forgetting for the moment that government does a lousy job of doing what it promises, let's assume that someone who is currently benefiting from the government will not be so benefited in a free market setting. In other words, that person will lose as a result of a more freedom-oriented society. I have no doubt that many cases like this would exist in a conversion from government to markets, despite my confidence in markets to deal with most such problems. However, this potential for some people to lose what they have doesn't mean that voluntary markets should be subordinated to coercive government.
Suppose you found out that your father was a hit man for the mafia -- someone who kills people for money. His blood money was used to provide you food, clothing and other things throughout your young life, because he loved you and wanted to take care of you. Would the fact that he was good to you change your horrible discovery? More importantly, could you still accept his money if he continued to kill people, and wanted to provide for you after you found out? Wouldn't you feel at least a little bit uncomfortable, and possibly refuse to accept his blood money? If you were an independent adult, you could do this with a minimum of disruption, except for the obvious emotional trauma. But if you were still a child or teenager, with no other means of support, what would you do? This is the dilemma that some individuals dependent on government will have to face when and if they accept the principles in this essay.
One of the most damaging socialist ideas is that government should protect people against losses, including those for which they are partially responsible. Like a shot of heroin, the narcotic of government "protection" infects some people with irresponsibility that would rarely occur in a free market setting. This is not understood by most people, who seem to think that government promotes personal responsibility through deterrence and punishment.
If you choose to live in a dangerous neighborhood, you are more likely to get mugged or shot. If you choose to climb mountains without safety equipment, you are more likely to fall and injure or kill yourself. If you invest money in a company without checking it out, you are more likely to lose your capital. These are voluntary, personal lifestyle choices for which some people don't like to take responsibility. The government attempts, sometimes successfully, to compensate people for losses that they were at least partially responsible for. This promotes a lack of responsibility in people. It's just another case of the thief rewarding his friend. Anyone who proposes to interrupt this process is mistakenly seen as an aggressor. But was the person who told you your father was a hit man an aggressor? What about one of his victims that refused to be killed? Remember, if your father's victims started defending themselves from his aggression, he might lose his job and you might be without financial support. While this simple, extreme example may seem unlikely to you, it does illustrate the way government works to destroy personal responsibility.
Suffering loss as a price for irresponsible action is a natural process. To interrupt this process by protecting people from their irresponsible behavior only leads to more irresponsible behavior, and a greater dependency upon their "benefactor." But in reality, the "benefactor" is a destroyer, just like heroin and other narcotics. The more you experience the benefits (highs), the more painful the later correction.
The first four sections of this essay have only scratched the surface of reasons why markets are beneficial and government is destructive. This essay has attempted to cover only the most fundamental, conceptual principles, and the simplest of examples. However, the basic contrast between government and markets is worth summarizing here.
It is important to realize that the most beneficial act of government toward one person or group comes at the expense of harming others. Whenever governments transfer wealth (creating benefits), they must necessarily abandon their more important function of protection (Thank you, Frederic Bastiat!). If you are on the receiving end of the benefits, you may not be able to objectively evaluate the aggression necessary to provide those benefits, or the violence upon which they are ultimately based. You have been taught (in government schools) that this aggression is necessary to prevent a greater potential aggression. Unfortunately, the "small" aggressions have taken on major proportions, resulting in the largest plunder of wealth in human history. Today, government aggression does far more harm than the benefits it provides for some.
With respect to markets, the most fundamental point made in this essay has been their reliance on voluntary, cooperative human action. This applies not only to economic matters, but also to interpersonal human relationships. By applying market principles to a wider-than-normal range of human action, they can be seen for the truly beneficial ideas that they are. By limiting market principles to the economic sphere, their application and benefits have been artificially limited, which is precisely the way most people view them. Those who think of markets as only applying to business and economics are missing more fundamental and beneficial applications -- ones which could literally revolutionize human societies. Such widespread recognition of market principles would tend to topple tyrants and promote more cooperative human relationships.
The first comments in this essay bear repeating, now that the foundation has been laid to understand them better:
WHEN PEOPLE RESPECT EACH OTHER, THEY PRACTICE MARKET PRINCIPLES.
WHEN PEOPLE HARM EACH OTHER, THEY PRACTICE THE PRINCIPLES OF GOVERNMENT.
You may not agree with these simple statements yet. You may need more proof than the few principles and ideas discussed in this essay, in which case I encourage you to read the references listed at the end. But please keep in mind: the difference between aggressing against people and allowing them a choice is extremely profound, whatever you call these two fundamentally opposed ideas. As discussed here, the difference between these two ideas is literally the difference between freedom and slavery. You can't build a free society on a foundation of coercion, no matter how much it appears (or promises) to help some people.
Most people who study, debate, analyze and communicate various freedom ideas do not follow them to their logical conclusion in areas where this is considered unpopular or taboo. For example, the American Republic was born amid a tax rebellion, treason to the then-existing national government and civil disobedience, but this is not often seen by most people as justification for such actions today. Because of a naive faith in the American "system," aggressions by its government today are not widely viewed as illegitimate. Quite literally, the victims of government aggression accept such aggression because of its common acceptance by others. This leads to incomplete, contradictory and counterproductive "freedom" strategies. These include participation in electoral politics, constitutional reform movements and partial privatization of a few public services. The prevailing view seems to be, "don't offend government too much, or try to move too fast, or else government will reject these ideas and we ('freedom' activists) will be worse off than when we started." This is a hopelessly defeatist, pessimistic, ineffective approach to human freedom and market implementation.
THE PROBLEM IS, MOST PEOPLE WHO SAY THEY BELIEVE IN MARKETS REALLY DON'T, BECAUSE THEY DON'T REALLY UNDERSTAND THEM.
And this means that they can't really understand the strength of markets to defeat aggressive, collectivist institutions. So they play the government's game, by the government's rules. Is it any wonder why freedom is so slow in coming?
If you have cancer, you don't reform it; you get rid of it! BUT I AM NOT recommending violence, overthrow of any existing government, or political action. On the contrary, this would simply make so-called "freedom-lovers" just another government. You can't very well get rid of something if you respect its principles enough to become it! So, we need to talk about effective, non-coercive, market ideas of implementing freedom. These basically involve education, innovation and withdrawal of support. I summarize these three approaches as "get smart," "build freedom," and "starve the beast."
"Get smart" means education about yourself, market principles, government aggression, personal power, bureaucratic weaknesses, tax laws, IRS codes and how government disobeys most of its own laws. This may include learning how other people successfully protect themselves from government aggression, both inside and outside the system. It could include methods to minimize your risk while working within the system, while you decide when and if you want or need to move outside. As you already know, this author is not particularly interested in discussing government solutions to government problems.
Learning that you have the power to control your own life may be the most important part of this freedom education. Learning that government is not all-powerful may be the second most important part. Neither of these are likely to be learned in government schools, which were designed to produce obedient, non-thinking citizens who think they owe their lives and prosperity to government. And that obeying stupid, coercive rules is a noble act of patriotism. Thomas Jefferson, John Adams, Thomas Paine and Patrick Henry would turn over in their graves!
A comprehensive freedom education is necessary before any plan for effective action can be developed to protect yourself from the aggression of government, or for that matter, to decide that you want to protect yourself. The components of this education might include the following:
Find Out How Government Works. Most of what you learned about government in government schools is wrong. They taught you the way government is supposed to work, rather than how it actually works. It helps to understand why most coercive acts of government usually produce the exact opposite results from those intended. For example, the minimum wage creates unemployment for unskilled workers. It primarily benefits those who do not have to work for the minimum wage. Destroying the myths of government is necessary before a person will become ready to take meaningful action.
Learn Freedom Principles. This is important so you can understand the benefits of market institutions and why they can do any legitimate task better than government. If you still believe that markets are dangerous and destructive, as you were taught in government schools, you will not understand how market institutions can be used to protect people and their property, thereby promoting more cooperative human relationships. Also, this information can be used to develop new market institutions to replace government.
Discover Personal Strengths. Some individuals have a kind of power that bureaucrats, politicians, dictators and army generals can only dream about. It is the power of self-directed, responsible, conscious action, without the conflicting burdens of public policy and constantly asking others for permission. Virtually everyone in government has to ask for someone else's permission before they act, if only to check out the latest versions of statutes, administrative rules and departmental policies. You don't!
Discover Government Weakness. Learning the weaknesses of government, especially the fact that all governments depend upon popular consent, can be empowering to individuals. This is one of the least understood aspects of government. Government employees have only a few resources, which they attempt to use, like terrorists, where they will have the most effect. So, instead of tracking down the thousands of Americans who don't pay taxes, they concentrate on a rich person, like Leona Helmsley, and put her in prison for a stupid technicality -- something that most people get off for. But her case makes headlines. What most people reading those headlines don't realize is that the government simply can't come after most non-taxpayers, because it doesn't have the resources to do so. It only takes a relatively small minority of the population to say "NO!" to government for its weakness to be exposed.
Develop A Course Of Action. Depending upon what area of involvement you choose, you need to develop a plan which will allow you to achieve your goals. Of course, this includes setting goals, projecting time schedules and committing to accomplish what you set out to accomplish. This may also include networking with others who have expertise that you don't. In particular, you may want to decide at some point when, if at all, you would choose to exit the system. This is a critical decision, which some may not think necessary. However, if you think there is even a slight chance of government or its major institutions collapsing, then it would only be prudent to decide ahead of time what conditions must exist for you to make this important decision. Some have already done it. Some may chose to go down with the system. It could be the most important decision of your life, possibly saving it.
A variety of books, courses and seminars are available to freedom-oriented people which will allow them to understand themselves, various freedom principles and strategies for finding freedom. But first, those people have to be receptive. They may have already noticed a conflict between something they were taught and some new information, but may not have fully realized the consequences. One of the most difficult things for humans to learn is to discard obsolete information. Unfortunately, many people are unable to accept new information which conflicts with ideas they have been taught. This phenomenon was discussed by Thomas Kuhn in The Structure of Scientific Revolutions. They spend most of their lives proving that they are right, rather than figuring out how to have a better life. If you want to have a better life, the first thing you have to do is stop lying to yourself. The rest will follow. In other words, "Get Smart!"
Once more people understand the basic problem with government (coercion), many will want to work toward solving that problem. "Building freedom" doesn't mean working through the current political system to force your ideas on others. Rather, it means building alternative systems of protection, dispute resolution, law, ethics and yes, even morality. Morality in a free market setting isn't a single set of rules which everyone obeys or they go to jail. Rather, it is the expression of a variety of competing opinions of how people should relate to each other. A free market morality may be largely based on the principles in this essay, but it is contradictory to the principles themselves to enforce them on those who don't agree with them.
Several different kinds of non-coercive organizations could be built to replace the coercion of government. These are the institutions which will provide important and useful services when government finally destroys itself. Some such organizations exist today, such as privately owned schools and fire protection and police agencies. Contrary to popular opinion (reinforced by government schools), private police agencies are not likely to become aggressive, fighting private wars at the request of their rich employers. On the contrary, private police have a much more limited task than government police. That task is to protect clients and their property; not to enforce stupid laws regulating other people's morality. Simply stated, it is unprofitable to fight a private war. If you don't believe this, consider this fact: There are about twice as many private police than government police in the U.S. at the present time. When was the last time you heard of a private security guard beating a helpless person? Or attacking a compound of families who had not harmed anyone before the attack? Or shooting someone for refusing to send his kids to government schools? It is government police that you should fear, not private police; for the simple reason that private police lose their jobs if they abuse their client's customers. Government police have no customers; their salaries are paid regardless of who they hurt. Only the most extreme and obvious cases (like the Rodney King beating) result in any accountability at all.
There are several ways that freedom can be built. One is for individuals and groups to exit political systems. Another is to create new products and services that are better and cheaper than government products and services. Another is to develop proprietary business methods of organization to replace non-profit (and "public") organizations. Spencer Heath, in his brilliant book, Citadel, Market and Altar (Baltimore: The Science of Society Foundation, Inc., 1957) suggested that in the future, a variety of private businesses will take over most public services. This will likely result in better, cheaper and more beneficial services than those currently provided by coercive government. Remember the theme of this essay: Markets work, because consumers can choose not to buy. Governments don't work, because citizens are denied this choice.
Private banking systems, with separate and independent currencies, could be developed to replace a fraudulent Federal Reserve and its watered-down "dollars." This could begin as simply as the trading of certificates from merchants for their services. Or certificates for the storage of valuable commodities. Or clearinghouses for other goods and services. This must be carefully done at the present time, however, because the government has many laws and other rules which it uses to prohibit or restrict such activities. Unfortunately, most people just sit by and accept new rules, laws and administrative decisions without complaining. Some people don't accept these however, and they will likely be the most rewarded survivors when government institutions collapse.
Arbitration and mediation services could be created that are not tied to the existing system. By operating under the existing system, such services would be hopelessly bogged down in restrictive rules and procedure, and would probably not be much better than existing government courts. Markets for such services need to be identified and expanded. For example, construction companies have used private arbitration for years. Unfortunately, such companies are dependent on government for most of their work. Even so, they have chosen private arbitration simply because government courts don't work. The lengthy time required and the inefficiency of "free" justice isn't worth it in an industry where time is money.
Personal protection devices could be developed to allow individuals and groups to protect themselves from government aggression. So far, the most effective of such methods has been to change one's lifestyle, dropping out of the official system. However, there is much room for the development of other defensive technologies which would permit a person to shield himself, for example, from bullets. If this technology is developed within the existing system, then government police will be the first to get it, and it might even be banned for use by others. Security may have to be part of any extra-government activity (a word to the wise!).
Other innovations such as unregulated, private insurance companies, competing systems of ethics between different businesses and professions, computer networks and encryption devices need to be developed as well. An important consideration will be how to keep new technology away from government. Survival equipment and supplies may be important, depending on how bad the social disorder gets when government collapses.
Terra Libra is a new country without borders or traditional government. It is an attempt to accomplish most of the ideas presented in this essay. It is a worldwide free enterprise zone, in which people from all over the world can coordinate their activities to achieve freedom. Frederick Mann, founder of Terra Libra, has developed and used a variety of techniques which individuals can use to protect themselves from the aggression of government. He calls this Freedom Technology. Freedom Technology is defined as the knowledge, skills and methods needed to produce freedom in an unfree world. His approach is largely based on legally withdrawing from existing political systems, although it is not limited to that approach.
The most appropriate ways for free marketeers to spread these ideas is through building better organizations which accomplish what governments can't, and by withdrawing their support from the existing tyranny. This leads to the final step, a most controversial one.
"Starve the beast" means a widespread withdrawal of support. This may be done legally by using trusts and legal arguments to turn the system against itself, or it may be done illegally, by creating black markets and other alternatives. At any rate, it may not be fully effective until the first two phases are further advanced.
There are several ways in which people can withdraw their support from the existing government system. One is to place one's assets and income into the underground economy. This, however, depends upon lifestyle and a variety of other factors which may complicate the transfer. Another is removing one's consent to be controlled by the government. This may include fighting traffic tickets, or otherwise using the rules of the system against itself. This is often done by a variety of groups which use the constitution, case law, the Uniform Commercial Code (UCC) and the IRS Code to remove their voluntary consent from paying income tax. Thousands of people are doing this. Another approach is to reduce your dependence on government benefits. Most of us can't stop using public roads, simply because there is not yet a private alternative. But we can stop demanding government legislation to "protect" our jobs or businesses, or to prevent other people from doing things we disapprove of. We can take responsibility for our own property protection, and stop supporting the false idea that government police protect poor people. If this is true, then why are police so widely mistrusted in poor neighborhoods? You can't rationalize this one away with the misinformation you hear on the nightly news.
Once a critical mass of people in a society believe that the system doesn't work for them, they will withdraw from the system and build something better. If they have gained the knowledge they need to protect themselves from the aggression of the existing system before it collapses, they will be in a better position to replace it with something better. At some point, the existing system will be hopelessly ineffective, as was the Soviet Union just before its collapse. There was no longer any pretense that the government was legitimate, effective, powerful or useful. When this belief is held by a sizable minority of people in society, especially those who produce useful goods and services, the government will be powerless to stop their widespread civil disobedience. If you think you would never intentionally think of civil disobedience, just remember the tanks in Moscow. A few thousand brave citizens, fed up with government tyranny, stupidity and aggression against its citizens, simply stopped being victims. The rest is history, as is the Soviet Union. Someday, this will also happen to the United States government.
The excesses of government will eventually be corrected. Many people will not survive. Some will die, some will be financially, physically and/or emotionally destroyed; but some others will prosper. Those who prosper will probably be those who understand the nature of markets and governments. Large institutions that people have been brainwashed into depending upon will fail: government jobs, social security, business subsidies, heavily-regulated insurance companies, the Federal Reserve; and yes, even the United States government itself. This resolution of long-standing theft, violence, public debt and abuse of citizens by government will be blamed on markets. The lion will blame the lamb for not laying down quietly and consenting to be its dinner. The lamb will survive; the lion will not.
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How I Found Freedom in an Unfree World, by Harry Browne. New York: Avon Books, 1973.
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