Zeppflyer on February 24, 2007, 09:06:32 am
I am currently (10:00 am 2/24/07) sitting at the Ludwig von Mises Conference at Grove City College.  In the room right now are Lew Rockwell, Hans Sennholz, Tom Woods, Tom DiLorenzo, Joe Salerno, Jeffery Herbener, and Guido Hullsman among others. 

It's probably too late, but I will be eating lunch and dinner with these guys and if anyone has a question about free market economics or theory, I'd be happy to pass it on and try to get an answer. 

In any event, this is bloody cool.


Rocketman on February 24, 2007, 10:22:33 am
I have a question that I think needs to be asked.  "With the declineing purchasing power of the U.S. dollar it is clear to me that at some point in the future that an American currency (not neccessarily the American dollar) is going to have to be backed by either gold, silver or some other physical substitute."  "What in their opinion is the best way to go about getting into the hands of citizens who are used to dealing with fiat currency and who are largely ignorant of basic monitary theory this new currency with a minimum of disruption?" ???

Zeppflyer on February 26, 2007, 05:45:48 pm
I have a question that I think needs to be asked.  "With the declineing purchasing power of the U.S. dollar it is clear to me that at some point in the future that an American currency (not neccessarily the American dollar) is going to have to be backed by either gold, silver or some other physical substitute."  "What in their opinion is the best way to go about getting into the hands of citizens who are used to dealing with fiat currency and who are largely ignorant of basic monitary theory this new currency with a minimum of disruption?" ???

Short Answer:  There's no real consensus.

Long Answer:  There are two primary options out there with variations on each.  These are, the government method and the private method.

The government method was first proposed by Von Mises to solve Austria's interwar economic problems.  Basically, the government will immediately stop issuing new bank notes.  (Here some allow issuance to replace worn out notes while others say that there should be none at all.)  The dollars in circulations would then be matched to the amount of gold in the government's hands and the dollar would have its solid value. 

Variations on this mostly focus around the non paper money stock.  It would either no longer be backed and rest solely on the faith that people have in their banks, or would all be fractionally backed and slowly decreased by making it illegal for banks to issue more unbacked loans. 

The private method consists of suspending legal tender laws.  This would make it legal for private concerns to issue their own currencies.  The theory is that competing currencies would weed out the more inflationary ones since people will prefer currencies that retain their value.  Some even think that currencies unbacked by gold or other products are immoral even when the customer knows this and has a choice.  They favor not allowing the issuance of unbacked currencies.

I like the second option.  Both because it gets government out of money entirely and because I think it more practical.

As to whether either can happen, Let's just say that we'll work towards it after the revolution.


Rocketman on February 26, 2007, 06:25:36 pm
I agree with you Zeppflyer.  I seriously doubt that the government method would work.  Two problems that I see (probably more if I look close).  One is that if you took all of the gold in the world and divided all the printed US currency alone that would mean that each ounce of gold would be worth about $85,000.  Needless to say that would be kind of difficult to split if you were just getting a cup of coffee.  Probably have to go along with a silver and copper currency to go with that.  The second is that government would still have it's fingers in the pie so to speak.  Meaning down the road we would be right back where we started from and in the same mess that we're in now.

Leviathan on April 24, 2007, 07:38:54 am
I *was* going to post this in a new topic, but the forum seems to have been locked.  It's a distantly related topic, though.

In page 116, Forsyth says that the security companies don't fight each other, what exactly "settled" that one?  This is a relevant question, because one of the biggest arguments (even to me) why private security companies wouldn't work in practice is the history that private firefighter companies had.  The example I'm referring to is long ago, there were private firefighting companies.  When one company signed a given building to their firefighting contract the competitors had a tendency to set fire to it and then try and kill the fire company when it came to put out the fire.  Meanwhile many on both sides ended up dead and the building and possibly neighborhood burned to the ground.  The concern is that without at least a central police authority, firefighters and security companies would get involved in these kinds of conflicts.

What exactly would prove to people in the companies themselves (since they'd be the ones who would have to be prevented from fighting this way) that it's not worth any contract to take on that kind of work?  And what was supposed to have done so in the TPB universe?

Frank Bieser on April 24, 2007, 09:21:34 am
I *was* going to post this in a new topic, but the forum seems to have been locked.  It's a distantly related topic, though.

Which forum was that?  If you were wanting to do this in a General forum, "Talk Amongst Y'selves" is the place to do it.


Sphynx on April 24, 2007, 08:17:21 pm
In page 116, Forsyth says that the security companies don't fight each other, what exactly "settled" that one?  This is a relevant question, because one of the biggest arguments (even to me) why private security companies wouldn't work in practice is the history that private firefighter companies had.  The example I'm referring to is long ago, there were private firefighting companies.  When one company signed a given building to their firefighting contract the competitors had a tendency to set fire to it and then try and kill the fire company when it came to put out the fire.  Meanwhile many on both sides ended up dead and the building and possibly neighborhood burned to the ground.  The concern is that without at least a central police authority, firefighters and security companies would get involved in these kinds of conflicts.

What exactly would prove to people in the companies themselves (since they'd be the ones who would have to be prevented from fighting this way) that it's not worth any contract to take on that kind of work?  And what was supposed to have done so in the TPB universe?

Based on my trade paperback copy of the original novel, Chapter 16: The Balance of Madness, the same conversation is covered in more detail on page 160.  After a longer version of Captain Forsythe's comment, Ed and Lucy chime in:

(Ed)"What the captain isn't saying," Ed added, "is that there's simply no profit in smashing one another to pieces.  That was settled, long ago."

Lucy nodded.  "Little village off the east coast -- one gang decided they'd try running things, four or five other companies objected.  Before the dust settled, they'd nearly wiped each othe out.  Manhatttan, if I recall correct.  Ever since, security outfits --
and thier insurance companies -- have been big supporters of adjucation."

(The Probabilty Broach, Del Rey Book, published by Ballantine Books, Copyright: 1980, First Edition: January 1980).
I've always assumed that one or more of the "security companies" LNS refers to were what in our world became the New York organized crime "gangs".

Hope this expands your understanding.

Leviathan on April 25, 2007, 06:25:30 am
I noticed after I posted that there's a "until you post somewhere, you can't create new topics" ruleset on the forum.  By then, I figured it was too late and I might as well let the comment stand.  The symbol means "there have been no new messages" instead of "no new messages allowed", heh.

But that answers the question, I was curious.  It's just things like that are why I'm tempted not to advocate for private security and firefighters and such.  And I can see that if it were to happen in real life that a country be run by such measures, it's likely that such a "lesson" would have to be learned in blood before people would ignore greed and realize it's their (and many others') messy deaths to try it.  Ah, well.  Such can be the pitfalls of living in freedom, people have to be free to be stupid at least once and you have to hope they learn the lessons of history.

While I'm asking such "how things might work in a free economy" questions, how about city utilities and roads?  Utilities are a pain to set up the carrier service for, such as laying pipe for water and sewage or stringing cable for electricity (not to mention that without eminent domain, which I abhor, you'd have to get permission from every property holder along the route).  Roads are even pricklier, since the only way to make a profit from them are to put tolls up.  And those would make a city nearly impassable.  You'd have to stop probably every block to drop a copper in if people resorted to tolls.  And every segment owned by a different person would potentially be built and maintained by a different road crew.  I'm not suggesting necessarily legislating the solutions, just suggestions that are realistic how people might do these things to counter others' arguments against such privatization.

About the only other situation that might be worthwhile talking about is resources that have a limited supply, such as coal and natural gas.  If any one company were to somehow gain a stranglehold on them, it results in potential supermonopolies where they have total control and thus can gouge and fail to maintain as they will.

Scott on June 04, 2007, 01:31:29 pm
How to provide city streets and water/wastewater -- to my thinking the only "natural monopolies" -- is something I've been kicking around for a while. Lately I've come to think that the solution would not be all that different from the arrangement we have now. A city or a section within a city would be set up as a corporate or cooperative entity, the landowners within having the status of shareholders. The corporation/co-op's duties would be limited to maintaining streets and basic utilities. The difference between this and what we have now is that the city's jurisdiction would include only its own property -- it can make whatever rules regarding what transpires on the streets but what transpires on the non-city property served by those streets is private business only.

I do see some pitfalls from this, but I haven't come up with a better arrangement.

Frank Bieser on June 07, 2007, 01:13:22 pm
How to provide city streets and water/wastewater -- to my thinking the only "natural monopolies" -- is something I've been kicking around for a while. Lately I've come to think that the solution would not be all that different from the arrangement we have now. A city or a section within a city would be set up as a corporate or cooperative entity, the landowners within having the status of shareholders. The corporation/co-op's duties would be limited to maintaining streets and basic utilities. The difference between this and what we have now is that the city's jurisdiction would include only its own property -- it can make whatever rules regarding what transpires on the streets but what transpires on the non-city property served by those streets is private business only.

Think parking lots.  These are privately owned "roads" if you will, which the land owner and their tenants have a vested interest in maintaining.  Some are maintained better than others, but an unusable, or poor parking lot quickly effects the bottom line.  Thus budgeting the cost of maintenance is necessary to making money.   I see no reason why this can't scale into larger areas where there is an economic incentive to allow access to potential customers.  "Free riders" in this case are generally not a concern until it becomes a bottom line effecting problem, in which case the owner is incentivized to implement control mechanisms (the cost of which has to be balanced against the cost of allowing free riders).

I could easily see cooperatives of some sort or another (whether a cooperative of landlords, or land owners) seems a reasonable approach to handling large scale stuff, as well as formulating agreements to connect things together to encourage trade.

As far as power, sewer, and such utilities are concerned, the costs of providing centralized utilities vs decentralized ones would also play out in the market place.  Whichever balances effectiveness and economy best will be the way things go.


jrl on July 01, 2007, 11:22:13 pm
Then there is the NPR/Linux solution: Donations.

Some people receive far more benefits than they pay for, and some pay far more than the benefits they receive, but it balances out.

I would expect developers to build the water/sewer/streets infrastructure and build a certain degree of a maintenance trust fund as he sells the property. The better the trust fund, the more valuable the property 'cause the infrastructure won't go begging. . . The maintenance would be done by the developer, his heirs and/or assigns. If the developer isn't keeping things up to your standards, you can organize a fund raiser, or hire your own contractor and get it fixed. ("Too many potholes on your way home? call Potholes are UsŪ for prompt service at an amazingly moderate fee.")

The corporate solution is entirely too much like government for my liking.

Indeed, corporations share many odious properties with government: They have an unlimited lifespan, shield their employees from responsibility for their decisions, and have a growth imperative.

Frank Bieser on July 01, 2007, 11:46:53 pm
The corporate solution is entirely too much like government for my liking.

Indeed, corporations share many odious properties with government: They have an unlimited lifespan, shield their employees from responsibility for their decisions, and have a growth imperative.

In the abscence of governments, it's all contracts anyway.  Without government you can't have entities with blanket limited liability.  You might have contracts between entities where one party agrees to limit the other party's liability to a certain dollar amount, or something like that.  No limits to the kind of deals the human imagination can conjure.

Certainly what you propose is doable as well, again by contract.  Some places will get built one way, other places will get built by other means.  Depends on the requirements and the driving financial factors of the deal.


Rocketman on July 02, 2007, 04:35:46 pm
"If any one company were to somehow gain a stranglehold on them, it results in potential supermonopolies where they have total control and thus can gouge and fail to maintain as they will."  One company already now has a supermonopoly on them now.  It's called the government.   ;D

Sphynx on July 02, 2007, 08:07:13 pm
JRL:  One thing to remember is that "real world" corporations, especially since the end of the 19th and start of the 20th Century, are wholly owned entities of the state.  To create a modern corporation is to beg the government, either Federal or State/Provincial, for permission to limit the shareholder's liablities.

I've read somewhere, by L. Neil or Vin Suprynowicz or someone else, that in a Confederate style society, the formation of a "corporation" would be to streamline the bookkeeping involved in raising capital funds, and share liabilty.  Share holders would be liable for the entire losses (or, hopefully, profits) of the company proportional to thier ownership interest (% total shares owned).

The biggest difference would be that there is no state to grant exemptions, special status, or majesterial (think eminent domain) to these corporations, nor would the be any public bail-outs of failing companies.  These features alone would lead to smaller, more focused, and conservativley managed corporations.

If anyone out there has references on some of this, please help my failing memory :)

Leviathan on July 04, 2007, 08:23:16 am
I have had to nearly continually remind people that the monopolies the government "saved" us from with the anti-trust legislation (which hasn't worked terribly well, I might remind) were mostly created by the same government that "saved" us from them.  Through a program of regulation, subsidy, intellectual property laws (yes, trademark, patent, and copyright results in a lot of these oversized behemoths), and Terrifically Sweet Deals (such as the pittance sale of the vast swaths of land the railroads sat in the middle of) the US government effectively gave all resources to a single company in any given industry and stifled any hope of competition entering to challenge them.  There are a couple cases of natural monopoly, but even those it would be preferable to have to live with their largesse while the market finds alternatives than to have to deal with a government that has the power to simply split companies apart.

"Government is a disease masquerading as its own cure."  I'm not sure whether you were the original author of this line, L. Neil, but it says it best.

 

anything