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Indian Libertarians

Life, Liberty and Property

Misconception about wealth inequality

smehra Saturday May 3, 2014

Apparently Bitcoin is going to create a hell on earth, just as libertarians want. Or at least that’s what the author of this article (Jim Edward) seems to think. The article has perhaps many misconceptions about violence, crime and state’s role in it; but perhaps the most ignorant of all conclusions is the one about “inequality” in Bitcoin.

This line of argument is not something that is new to libertarians, most people confuse the evils of money monopoly to be evils of money itself. This is not surprising that such confusion comes from state supporters, because if people accept money as evil then they will call for a power (the government) to control it.

There are a lot of people who cry about wealth inequality as it exists but only a few understand what it is and why it exists. Why is it that the holders of state’s printed bills are able to exploit others who don’t? Or a better question, what gives the value to state’s printed money, why is it in such a demand in the market?

Perhaps the most summarising answer I have found, although in statist speak, is: “You can’t pay your taxes in any currency you want”. What taxes? Well there are a lot of direct and indirect taxes that you pay for buying bread that you need to eat and survive. The first “taxation” that you have to pay is buying from a monopolized vendor. This taxation comes from what I like to call “lost or hidden opportunities”. In a monopolized market, there are barriers to entry; Businesses hate competition and love monopolies, but monopolies are most hurtful for customers or consumers. Monopolies restrict choices for consumers, more businesses providing goods and services more choices for the consumer. The reason I call them “hidden” opportunities is because they cannot be measured in any way. Regulations are not only direct violence, they are also discouraging for investors. No investor is likely to invest in an industry that is susceptible to unpredictable regulations. For instance, rarely does one invest in unowned and unoccupied land because the land title must first be attained from the state or the state may sometime in the future commit violence against you because it does not recognize that land as yours. There is no limit to how much human action, that does not harm anyone else, has been curbed directly or psychologically through threats of violence from the state.

Next type of taxes are the indirect taxes that people pay in terms of inflation, sales tax, corporate tax etc. These taxes are ultimately paid for by the consumer or in a lesser extent its employees. No monopolized institution is going to lower their profits to suit their customers, so they don’t pay taxes - it comes from the consumers. And finally there is the income tax or direct taxes.

Now imagine that you are not allowed to cultivate food without a license and land title, even foraging is restricted by forest laws and the only place you can get food is through a state approved food vendor who you must pay in “dollars” (state currency). This is the very essence of wage slavery. Now you start looking for jobs that pay in “dollars” or you start demanding “dollars” for services that you can provide.

Of course the food situation is not that bad, although still restricted. But there are other goods and services with licences and protection given to them as long as those businesses demand state’s currency. Extend this logic to all the services that man uses which are regulated by the state and then the usury becomes apparent. This is why “wealth inequality” has become a topic of importance. It is not the “wealth inequality” itself that is the problem (value being subjective), it is the artificially inflated rights at the expense of others. Monopolized money has become a tool for theft. Intrinsically worthless paper is given to labourers in exchange for their time and energy. (I have touched this topic before while commenting on a debate between MMT and Austrian schools, where I discussed how state turns trash into treasure.)

Coming back to Bitcoins. It is easy to see that the value of Bitcoins is not backed by violence as state’s currency is. Its value will not get inflated, usury will not be done through Bitcoin unless unnatural state monopolies start to demand Bitcoins for their products (which has started to happen slowly). Which begs the question - is it really inequality in credit value that is the problem here? Or is it businesses that are protected by the state, the inequality of liberty that is the root cause?

Bitcoins is run on the bitcoin protocol, anyone can actually start their own block-chain and start using it. But of course it needs to be accepted by others. This credit “inequality” has already created a response in the market in the form of alternative currencies like Litecoin, Dogecoin etc. Bitcoin itself is not a monopoly in the crypto-currency market. What gives Bitcoin its value, if not violence, is a matter of debate. Some consider it a bubble, but I like to think that its value exists because there is a demand for a currency that provides some privacy (because of state’s insistence to intrude in other people’s private matters). Not all libertarians support Bitcoins fully, some even advise against investing in it, but all are interested in seeing how this develops as it can threaten state’s money monopoly. (For more read IL’s analysis of Bitcoins).

As for those who point out its use in violent crimes, I quote the following from crypto-anarchist manifesto written back in mid-1988!:

 

“The State will of course try to slow or halt the spread of this technology, citing national security concerns, use of the technology by drug dealers and tax evaders, and fears of societal disintegration. Many of these concerns will be valid; crypto anarchy will allow national secrets to be trade freely and will allow illicit and stolen materials to be traded. An anonymous computerized market will even make possible abhorrent markets for assassinations and extortion. Various criminal and foreign elements will be active users of CryptoNet. But this will not halt the spread of crypto anarchy.

So do us a favour, ban bitcoins rather than grappling to unsuccessfully regulate it and demanding your cut. At least this way it won’t become a tool for usury.

PS: Since when did the “monopoly man” cartoon become the symbol for monopoly hating libertarians?

 

Anatomy of Voting

iljaimine Friday April 25, 2014
A certain line of thinking is all too prevalent among voters or ignorant. It runs as follows: "Candidate X may not be perfect, but s/he is better on domestic economic policy than candidate Y, and that is obviously what matters the most." This way of thinking implicitly throws the entire liberty into dustbin. This enlists my liberty too, and the voters vociferously infringe upon my life, liberty and private property through the means of social contract or hobbesianic constitution. I have not signed any contract as such, but there is such a common/absurd belief that is dooming humanitarian libertarianism. Nonetheless, I am a libertarian brutalist as well as an ethical misanthropist. And, when I make the voters to think I feel like I am administering medicine to a dead person. The political system is filled with many strident lies. The banking system is easily manipulated. The social system is highly hallucinated. And, you, dearest voter, confidently believe that the election system cannot be esoterically plotted by any concocter at all? Strange. To think skeptically is a punishment, because I have to deal with the zombies around me who do not know to reason.

 

Being Rational

They say, “Voting makes a difference”, “vote for a change”, etc but I have not understood hitherto that “if voting could change the things then why politicians have not made it illegal?” What majoritarians simply do not understand is that 80% taking away the rights of 20% through the means of voting is highly unethical and unjust. Voting is a form of splendid insanity, and to vote for change is like repeating insanity in order to expect different results. No amount of voting will discard dangerous ideas like eminent domain, social contract, legal robbery (taxation), sociopolitical intimidation, etc. Now, do not tell me that anarchism is a dangerous idea because I am highly pissed at you for not doing the anatomy of the state. This state is not at all putrescent and you think I am an extremist?

In wrestling, out in front of the people, we make it look like we all hate each other and want to beat the crap out of each other, and that's how we get your money, and get you to come down and buy tickets. They're the same thing. Out in front of the public and the cameras, they hate each other, are going to beat the crap out of each other, but behind the scenes they're all going to dinner, cutting deals. And they're doing what we did, too — laughing all the way to the bank. And that to me is what you have today, in today's political world. What you fail to realize with your real eyes is that all the political parties are two different sides of a same coin.

 

“With the subsequent rise of democracy, it is common to hear sentiments expressed which violate virtually every tenet of reason and common sense: such as "we are the government." The useful collective term "we" has enabled an ideological camouflage to be thrown over the reality of political life. If "we are the government," then anything a government does to an individual is not only just and tyrannical; it is also "voluntary" on the part of the individual concerned. If the government has incurred a huge public debt which must he paid by taxing one group for the benefit of another, this reality of burden is obscured by saying that "we owe it to ourselves"; if the government conscripts a man, or throws him into jail for dissident opinion, then he is "doing it to himself" and therefore nothing untoward has occurred.” – Murray Rothbard

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Skepticism

As Election Day nears, India’s get-out-the-vote frenzy is entering high gear, trying to browbeat voters into exercising their franchise with various arguments. Unfortunately, those arguments reflect seriously flawed logic.

“If you don’t vote, you don’t have a voice in government.” This is one of many arguments based on the false premise that your vote will affect what passes and who wins. But your vote will not change the outcome. You will prosper or suffer under the same laws and representatives whether you voted for the winner or the loser, or didn't vote.

“If you don’t vote, you have no right to complain about government.” This reflects the same false assumption. But even if your vote would determine the result, binary choices between “electable” candidates and yes or no votes on initiatives written by special interests hardly gives you the power to invoke your preferences.

“If you don’t vote, you don’t care about India.” No amount of care justifies voting if that vote doesn't alter the outcome.

“It is your duty to vote.” Voting is a citizen’s right, implying the right to abstain, not a duty. I have a right to become drunk, divorced and destitute, but that does not give me the duty to do any of them. And if one is not highly informed on an issue, as is true of most, casting an uninformed vote is more a dereliction of duty than a fulfillment of it, contributing nothing valuable to electoral results.“You must vote, because the electoral process would collapse if everyone chose not to vote. Beyond the insignificant probability of everyone abstaining, this is just the common “if everyone” fallacy. Unless your voting choice alters many others’ choices about whether and/or how to vote, which is unlikely, this is irrelevant to whether you should vote (though politicians must, to be taken seriously, as witnessed by the harassment given to any candidate who ever failed to vote in previous elections).

Do the many invalid “get-out-the-vote” arguments imply that you shouldn't vote? No. But it implies that you shouldn't vote for invalid reasons. For instance, since your one electorally insignificant vote will not change the result, voting to transfer others’ wealth to you is simply a morally offensive but ineffective attempt at theft. Similarly, choosing to vote despite massive ignorance produces no benefit to you or society.

The basic reason is that I see no reason to engage in a morally dubious practice when it doesn't even yield any pragmatic benefits. For example, if I take the wheel of a runaway bus, and I can swerve to kill 3 people instead of the 30 in the path of the bus, then maybe I go ahead and do it. Sure, I feel bad about killing 3 people who otherwise would have lived, but I understandably could “pick the lesser of the evils.” Yet that’s not what happens if you vote for someone you think will violate property rights and order the deaths of innocent foreigners. Here, your vote is not reducing the number of people killed (unlike in the bus story). Whether or not you vote for the “lesser evil,” the same person will become president and will go about doing a whole bunch of evil. So there is no practical reason for you to join in, and thus you might as well save yourself the inconvenience of waiting in line at the polling booth.

 

Voting and Socialism

Businesspeople, if they are successfully "greedy," become rich by providing their fellow citizens (i.e., consumers) with things that make them better off. In other words, they have to earn it. But many who espouse that people don't need more than a basic level of existence, in their own greed, constantly vote for politicians who will take money from others and give it to them. They, just like the businessman, want more than they currently have. But instead of earning it as the businessman or capitalist does, the socialists steal it from those who have more. The businesspeople's actions are moral (unless they earned their money by theft or by being given privileges by government), while theirs are not.

The sad fact is that this is exactly what our political system — democracy — is all about. It is a system where the masses, those with less money than the minority group that has great wealth, vote for politicians who offer to take money from the wealthy minority and redistribute it to them in return for giving the politician their votes. Voting wealth out of the pockets of those who have it is socialism, because it is done for the "common good," for the benefit of helping that part of society that earns less. This is why democracy has been likened to two wolves and a sheep voting on what to have for dinner. This is also what is known as "social justice." Politicians are simply people who learn to be good actors in order to win your vote. They ultimately care little about real progress for the country or the lives of individuals; they care about their political careers.

Wealth redistribution, therefore, is theft. It is the taking by force from one group in order to give to another. Force is involved because anyone who fails to pay assessed taxes — confiscatory taxes that mostly go directly into someone else's pockets — will be put in prison. People from whom money is taken have not usually voted for this action, but those who wanted to receive others' money usually have voted to take it from them. Many socialists will dispute this and argue that most people want to pay the amount of taxes they pay. Wealth redistribution does not involve only social programs such as welfare, Medicaid, and Medicare. It involves any occurrence of one party receiving money, physical goods, or services, that they did not pay the full cost of, but that another party did, on their behalf. For example, public transportation involves wealth redistribution because most that use it did not pay for the bulk of the cost. Even though they contribute by purchasing their tickets, the ticket is highly subsidized because wealthier taxpayers fund most of the cost.

We can see from these statistics how absurd is the phrase "tax breaks for the rich." The rich do indeed benefit most from tax breaks because of the fact that they pay most taxes. Tax breaks are the giving back to the rich some of the money that was previously taken from them. Yet socialists call this redistribution from the poor to the wealthy! In other words, if the poor aren't allowed to receive as much of others' incomes as before, and the rich are allowed to keep more of their income, then, in the eyes of socialists, the rich are taking from the poor. This is like saying that a thief who must return a woman's purse after getting caught stealing it is redistributing money from himself to her.

When the government imposes taxes on the rich or less rich for the purposes of giving the money to another it is no different from taking his car, house, farm, or individual possessions. It is often the cases that people who inherit property from deceased family members, even property that has been in their family for generations, have to sell the property just to pay the taxes. They really do lose their physical property. Even when taxes are taken straight out of people's salary, the monetary income taken could instead have been spent to buy physical goods or assets. It is family property that will never exist but would have otherwise. What is the morality of forcing wealth from those who have it to those who have less? How is it that people are outraged when a CEO steals from his company, or a street thug steals a car, but they are not upset with themselves and their poorer neighbors for stealing from those who rightfully earned more money than they? Indeed they actively support such theft and vote for more of it!

I conclude that society does not really care about morals. They care about what's best for them, defining terms in different ways in different situations, to fit their own personal or ideological agenda. Socialists condemn the businessman who becomes rich by pleasing others and providing jobs for workers and who harmed no one else in the process. But socialists claim that workers (and nonworkers) who were paid the full value of their work by the businessman but still choose government force to make him pay more, are innocent, righteous, and deserve "social justice." As a reminder of why businesspeople take nothing from others but simply benefit from creating wealth for them, consider the fishing net example from chapter 1 of The Case for Legalizing Capitalism: If an island businessman creates a fishing net, he is able to reap the reward of more fish (more wealth). If he sells the net to others, he becomes wealthy by exchanging fishing nets for money (which exchanges for wealth). With others having a net, too, they can have more fish at lower prices (fewer hours of labor). Plus, those who help the fisherman make nets get paid wages in the process. The businessman creates wealth for everyone without taking from anyone in the process. Everyone benefits!

When people elect politicians who make campaign promises to interfere with the marketplace, they implicitly instruct government to take control of private companies. Businesses of all sizes, whose owners voluntarily went into business to bring us goods and services in order to make a profit then become slaves to society because the government, representing the people, dictates to companies how much to produce, what it must produce, what is not allowed to do, what prices it must sell above or below, what materials it is allowed or forced to use in production, and how much of its income must be sent to other people or companies.

Suppose your family decided to start a business. You invest time, sweat, money, and opportunity costs in creating a new product or service. Your company's product did not previously exist, but you made it available for others, without harming or forcing anyone to exchange their income for the product. After some years, your product becomes so popular that your family has now become wealthy through voluntary exchange. Others, who engage in forceful, not voluntary, exchange, in their jealousy, use the government to regulate you. They force you to sell part of your company to your competitors (antitrust legislation) who are not able to compete as efficiently and effectively; they force you to pay your workers more than you can afford (union legislation); they force you to sell your product for a lower price than the market demands and for a lower price than you would like (price controls); they force you to produce in a way that pollutes less but raises your costs and reduces your output; they then impose a "windfall-profits tax" because they think you're earning too much money this year. Your company started out being your private property that benefited society, but then society — through government regulation — took control of it and sucked it dry. Now your family earns less, your workers earn less, and less of your product is available to consumers, and at a higher price. The consumers got what they voted for. Voting for the government to improve one's life almost always results in the opposite.

 

Conclusion

Principled promotion of ideological change is the way forward. Once libertarian ideas take hold and sweep through the ranks of the thoughtful set, there will be no need for access to the halls of power. The parasitic state will slough off of society like so much dead skin. The most effective way to promote liberty today would be to choose to abstain from voting and to tell everybody about that choice. Let me tell you, the work of is crucial. This is important. This is more important than all political action. We have to change people's hearts and minds, and their understanding of free markets and individual liberty. That's how we can change the world. Join Indian Libertarians now. 

 

A loyal slut and a disloyal wife

iljaimine Tuesday April 22, 2014
“Are there any anarchists among ‘anarchists’?” Actually speaking, there are, but the ones drawing attention are not building goodwill of anarchism. This is what I contemporarily think.

Clearly, some definition is necessary. The self-proclaimed anarchists who proceeded to "direct action at the point of consumption" (translation: smash windows and loot) were left anarchists. They were attacking an abstraction — the free market — by destroying the specific property of individual shop owners. The owners were guilty of wrongdoing because, well, they were "owners." I think this is not Anarchism. Individualist anarchism, the indigenous form of the political philosophy, stands in rigorous opposition to attacking the person or property of individuals. The philosophy revolves around the "Sovereignty of the Individual" — as an early champion, Josiah Warren, phrased it: Whether you prefer the term 'self-ownership' or 'the non-invasion principle,' the core of the philosophy remains the same.

The idea is that every peaceful individual must be at liberty to dispose of his person, time, and property as he sees fit. Force is permissible only in self-defense and only when directed at the offending individual(s), not at the representatives of a class. Individualist anarchism rejects the State because it is the institutionalization of force against peaceful individuals.

The populace of #0000ff:AnarchoCommunists that is, the use of violence as a political weapon and a form of political expression. They also divided society into economic classes that were at war with each other. Those who made a profit from buying or selling were class criminals and their customers or employees were class victims. It did not matter if the exchanges were voluntary ones. Thus, left anarchists hated the free market as deeply as they hated the State.

By contrast, individualist anarchists (loyal slut) demanded that all voluntary exchanges be tolerated, if not respected. For better or worse, the two schools of anarchism had enough in common to shake hands when they first met. To some degree, they spoke a mutual language. For example, they both reviled the State. But, by the latter, individualist anarchists meant "state-capitalism" the alliance of government and business. As a solution to such "capitalism," they called for measures such as free banking. In other words, they wanted to set up voluntary and more effective alternatives. And if such a voluntary society still harbored such evils as exorbitant interest rates, so be it. No one had the right to intervene in a non-coerced exchange. Not even a well-intentioned anarchist.

The ideological honeymoon was soon shattered. A major conflict was over the left's use of violence as a political strategy. For example, in March 1886, Benjamin Tucker - editor of Liberty, the voice of 19th century individualist anarchism - caused a national scandal. He published an article entitled "The Beast of Communism." There, he disclosed that "a large number" of communist anarchists in New York City were setting fire to their own property to collect on capitalist insurance policies, even though some properties were tenements with hundreds of occupants. In one fire, a mother and her newborn had burned to death. Tucker labeled these so-called radicals as "a gang of criminals." Individual and left anarchists were fellow travelers no more. Liberty became a foremost critic of left magazines.

The schism between the two forms of anarchism has deepened with time, largely due to the path breaking work of Murray Rothbard. But as individualist anarchism draws increasingly upon the work of Austrian economists such as Ludwig von Mises, it draws increasingly farther away from left anarchism.

Now, let me tell you…

Occasionally, there are issues upon which the left and right can unite in protest. Opposition to the World Trade Organization (WTO) could have been one of them. But not because the organization is an expression of "free trade." The WTO has nothing to do with free trade. Some nation members want tariff preferences for developing countries. Japan wants to protect its fishing and forestry. Switzerland intends to maintain subsidies for farmers. The EU wants to restrict certain imports (e.g. beef) until the technology (e.g. genetic modification) can be 'proven' safe.

True free trade means the same thing as it did to Legendre, the businessman reputed to have provided a famous answer to the 17th century French politician Colbert, who wanted to know how to assist him. Legendre is said to have replied, "Laissez nous faire" — leave us alone. The historian Ralph Raico explains, "Today the term laissez faire has come to mean: leave the people alone, let them be, in their economic activities, in their religious affairs, in thought and culture, in the pursuit of fulfillment in their own lives." This is what the free market means to individualist anarchism.

Left and right anarchists could have united in non-violent protest against the WTO as a vehicle of government oppression. But instead of smashing the State, left anarchists smashed the windows of shopkeepers.

 

Central Banker’s Monstrous Policy: An unseen phenomenon

iljaimine Saturday April 19, 2014
The framers of monetary policy are the sellers of your monetary freedom.

This article is a sidequel of Monstrous Policy.

To believe that the central bank creates monetary freedom is like observing fire creates the woods. Central bank is an institution that manages a state's currency, money supply, and interest rates. Central bank possesses a monopoly on increasing the amount of money in the nation, and usually also prints the national currencywhich usually serves as the nation's legal tender. Praxeologically speaking, I am asserting that the central banks do not only enjoy the monopoly over money-supply but also inflate the economy to facilitate the principles of imposed order. This process of facilitation begets a society of statism and impudently abhors the potency of methodological individualism. Methodological individualism (MI) is the view that social phenomena can only be understood by examining how they result from the motivations and actions of individual agents, whereas statism is the belief that the state should control either economic or social policy, or both, to some degree. Statism is effectively the opposite of free marketism. As a methodological individualist, I am confident to diagnose that the central banks vociferously suffer from apoplithorismosphobia (fear of deflation) and they are highly responsible for lynching the beauty of catallaxy. Catallaxy is an alternative expression for the word "economy". Whereas the word economy suggests that people in a community possess a common and congruent set of values and goals, catallaxy suggests that the emergent properties of a market (prices, division of labor, growth, etc.) are the outgrowths of the diverse and disparate goals of the individuals in a community.These central bankers masquerade disinflationism, through their so-called contractionary monetary policy, but are legally infringing upon the subjective theory of monetary value. Many people are unable to realize this real lie with their real eyes, because they have been inured to uncritically accept the monetary measures.

Monetary policy is a very twisting and sweetening economical term, in the pragmatism of banking. Bankers may have succeeded to masquerade wisely, but the honeymoon is costliest in the long-term. Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as increasing the interest rate, or changing the amount of money banks need to keep in the vault (bank reserves), whereas mondustrial policy (a fusion of "monetary policy" and "industrial policy) describes the Fed's creation of new money during the 2008-2009 financial crisis in order to rescue certain firms, such as Bear Stearns and AIG, and certain markets, such as commercial paper and money-market mutual funds, at the expense of others, by purchasing securities and making loans. It is a recent term contemporarily coined by John Taylor, a Stanford economics professor, former Bush administration treasury undersecretary and developer of the Taylor Rule to guide interest-rate policy. The term describes the Fed's management under Ben Bernanke's leadership of the 2008-2009 financial crises, which Taylor views as excessively interventionist. Taylor was also concerned about the future effects of this policy.

This term can also be applied into other economies than USA, irrespective of the status of the economic system. As long as the central banks continue to pagan over the monopolization of money-supply, the financial society of any nation-state will drift away from the beauty of market-based financing. Moreover, Tony James has rightly pointed out the intelligence of market based financing in an article, published by Wall Street Journal, dated March 3, 2014:

And, generally speaking, Keynesian economists and Monetary economists (Chicago school of economics) are “deliberately unconscious” (rational ignorance) of the Austrian school of economics. To elaborate “monetary policy + mondustrial policy = monstrous policy”, I believe that it would be a serious blunder to neglect the fact that monetary inflation birthed by the monetary policy also generates forces which tend toward capital consumption. One of its consequences mainly through mondustrial policy is that it falsifies economic calculation, banking and accounting, thus, producing the phenomenon of illusory and high interest rates. These all beget a monstrous society driven by the animal spirit of the government and central bank(s). To my knowledge, I am ultimately certain that this antagonist of crypto-currency (monstrous policy) is also a form of taxation (legal robbery) without legislation.

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In the above chart, I ratiocinate that it does not matter which political party is in power. The rapid expansion of total money supply will continue, due to the existence of central banking and fractional reserve system in India. Therefore, in the long-term, “we are all dead”. The given below chart elaborates that the praxi-interventionism of rational ignorance through political voting and RBI’s monstrous policy have impudently debased the Indian rupee.  It is advisable to all the aurophobic central bankers to go back home and read Theory of Money and Credit by Ludwig von Mises. Banking economics is not something to master in college, so think otherwise in the pretense of knowledge.

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Conclusively speaking, I strongly feel that banking economics recommends neither inflationary nor deflationary policy. It does not urge the governments to tamper with the market’s choice of a medium of exchange. It establishes only the following truths:

1) By committing itself to an inflationary or deflationary policy, the monstrous policy does not promote the public welfare, the commonweal, or the interests of the whole nation. It merely favors one or several groups of the population at the expense of other groups. Example: Bailing out Air India, United Bank of India, etc.

2) It is impossible to know in advance which group will be favored by a definite inflationary or deflationary measure and to what extent. These effects depend on the whole complex of the market data involved. They also depend largely on the speed of the inflationary or deflationary movements and may be completely reversed with the progress of these movements,

3) At any rate, a monstrous expansion results in malinvestment of capital and overconsumption. It leaves the nation as a whole poorer, not richer. Example: Real estate sector.

4) Continued inflation must finally end in the crack-up boom, the complete breakdown of the currency system. Example: Currency wars.

5) Deflationary policy is costly for the treasury and unpopular with the masses. But inflationary policy is a boon for the treasury and very popular with the ignorant. Practically, the danger of deflation is but slight and the danger of inflation tremendous.

 

The Ukraine and Crimea, caught between the Old and New world order

Smeaglebeagle Friday April 18, 2014

The Ukraine and Crimea, caught between the Old and New world order A short history and introduction of geopolitics

The situation on the ground, some estimated 80.000 Russian troops with all military hardware within striking distance of the Ukrainian border. All bases on Crimea under de-facto Russian control, a majority of its populace seemingly in favour and supportive of the reorienting towards Moscow versus Kiev. Occupations and (pro-) demonstrations in Eastern-Ukraine. Some have called this a takeover and an infringement of international law. And linked it to the move of Hitler taking over the then Czechoslovakian territory, Sudeten land. Many comparisons and questions can be raised if one studies this history further as one could with the actions of Stalin, but this is often what happens with history, analogies can easily be found but they are not the present nor is the Russian Federation the same as the Nazi Germany of 1938.

When the demonstrations in the Ukraine started some months ago, the frenzy surrounding the popular mantra called freedom was belted out by the media. The independence declaration of the protestors in the ‘Western’ Ukrainian city of Lviv saluted by the EU and USA, cheered on by its populace. Seemingly ignorant about the complexities, possibly willing to elude their daily realities of a lack of jobs and their seemingly impotent governments in solving the crisis. Facts on the ground have changed, the hangover has rattled our rest, the lullabies are stuck and the rocking of the cradle cramped. Surprized or even appalled is the last thing we, of course meaning the ‘citizens’ of the EU and USA, and our electives should be about developments in the Ukraine or Crimea. Let me illustrate the point by a snapshot of history and geopolitics and linking them up with current events. Point one, international law like any law does not exist without any facts on the ground. It exists by means of 'international' consensus meaning an informal acceptance amongst equals defined as recognized legal bodies and its willingness and capacity to follow words up by actions. Like stated point one, because this is where it already becomes murky. States as legal bodies arise and disappear, get surpassed by history or form history. The United States of America formed out of the colonies but seceded from the British Commonwealth. After the British Empire first had invaded the territories of the Sioux, the Cherokee nation, the Navajo, the Lakota, the Seminole and many others. Wars waged by scorched earth tactics, the destruction of the major source of protein, the bison and the deployment of biological weapons, infested blankets with smallpox. A North American war between French and British forces - rewarding American 'Indians' for scalps of any member of the opposing side - still leaving its trace in a bilingual Canada split between a British and French commonwealth. Track fast forward, empires, nations, rise disappear and its members get reshuffled. South-Sudan, North- and South-Korea, East- and West-Germany, Bolivia, New-Mexico, The Confederate American States, The Orange Free State, Rhodesia, Israel, the USSR, Yugoslavia, the Ottoman Empire, the Lithuanian-Polish Federation, the Hapsburg empire. Some have gone, but all illustrate that states appear and disappear, there are no givens. Rulers, rules and borders change that is the only given. Memories, sentiments, books and as far as we know the newest innovation, digital bites we hope remain. Point two, all centres and members are constantly in flux, exchange. Bottom-up, top-down, in this new era of enlightened citizenship and civic society contributions, we hope more bottom-up than top-down but borders rely on membership and a creation or maintaining of a status quo. And when members count their cards they should be free to align accordingly, without such rights one could not legitimize the establishment of for instance the state of Israel or Pakistan. Nor could one understand the method of consent granted by many centrist states to regions and communities pushing for independence and a resolving by mutual consensual limited autonomy such as Papua in Indonesia, the Kurdish region in Iraq or Catalonia in Spain. Then there are the states which have recently re-established autonomy or were newly formed such as Somaliland, South-Sudan, Czech and Slovakia and the majority of territories formerly aligned to Moscow or for that matter the former colonies of those Western European colonies. While the USSR colonized much of Eastern Europe, Western-European Empires were crumbling or started to crumble by the military aid given by Moscow or its allies such as Cuba. It is claimed that in the new era of civic democracy members make states not states members. Membership is one of mutuality. Point three, reality is blurry never clean cut. Point four Clausewitz: "War is diplomacy by other means". We might conclude that when negotiations, discussions, compromise, possibly the ballot box and when arguments become void or non-satisfactory to the parties involved the means of resolution become revolution or war. Point five, diplomacy during war is etiquette, to be taken at face value. Point six, amongst world powers diplomacy is part of war, a part of strategy, a tool, not the ‘preferred tool’ or the final goal. Also possibly only amongst world powers with the realistic ability to destroy each other and all means of their elite and its members can diplomacy be taken as preferential to a Mexican stand-off.

Let's return to the 'facts' and look at the paradigms involved. A part of its citizens, not the whole of Ukraine was on that Maidan square, neither was there a popular referendum ousting the elected president, the question not being if that ever would have been respected. He fled/left Kiev and his seat of government, after his countermeasures to street protests triggered 'state-wide' reactions. And groups lay siege to the government buildings. At the end many deaths were to be mourned, the majority civilian and some state enlistees. The chain of events many claim were triggered by the choice of the president to not sign a treaty with the EU but engage further with Russia. Who was behind what, unfortunately is neither a topic of civic rights nor parliamentarian knowledge. What we can ask and must ask is what is the current scenario we are looking at. A cessation or annulment of a territorial unit from the Ukrainian map and legal sphere and a extending of the Russian legal sphere and expansion of its map or domain.

This is what we might call the meta-legal aspect. How was this established according to the media; offering alternative legal membership (Russian passports) to the majority of its inhabitants in case they didn’t have it yet, a referendum established and worked out during a de-facto temporal lapse of Ukrainian territorial legal and military influence. Seeing that a strong minority rejected and even blocked the referendum we can infer that the outcome even if it was a referendum within an autonomous community (existing previously as a national minority) it represents a democratic majority but in no way a legitimizer. The now local opposition (Crimean Tartars and Ukrainians) had previously never seen itself or organized it's self furthermore as such. On a conceptual level the move might illustrate the possible failure of civic democracy where the majority seizes power versus negotiating with the minority, suppressing versus agreeing. Secondly if this becomes a precedent we might see it as the end of the multi-ethnic state and a victory of nationalism and ethnic politics; a renewal of nationalism in public discourse. States with sizeable regionally centred minorities might claim the same. Bulgaria, Greece, France, Switzerland within the EU and many territories beyond fall under such scenarios. Possibly causing tensions along the old borders of many unstable states. But was this all the consequence of handing out of passports, we might for that matter point towards Turkey and Morocco of which citizenship is hardly often relinquished and many members reside within the EU. However the way the Russian Federation handed them out on request based on linguistic, cultural alignment protested against by the members of state was however not unique, two former USSR countries, Moldova and Rumania had tense relations in 2009 when Rumania handed out Rumanian passports to Moldovan citizens of which many have some 'Rumanian' lineage, also Rumanian being the majority language of Moldova, and its shared history and symbols makes it a problematic relation. Moldova’s situation some have linked to the Ukraine due to the Transnistria discussion, where Russian troops guard the border with this – strongly Russian versus Rumanian oriented – ‘Moldovan’ territory which broke away shortly after Moldova established itself as state in the early 1990’s. Where Crimea might stand for the Russian Federation’s only naval base not frozen shut in any period of the year, to maintain Russian ‘standard’ naval might its links with Transnistria are its industrial and military complexes. Both represent financial and military capacity and limited independence. Not only the legal and territorial integrity is on the table but it's financial viability. A recent reaction by the Moldovan Prime Minister Lurie Leanca shows a pre-empting and a reaction to the Ukrainian situation, where neither party was chosen but a form of neutrality still looking at EU membership but trying not to endanger its trade with the Russian Federation, which in the past already used a blockade of Moldovan wine, one its main export products. Transnistria seems according to media not recognized yet by the Russian Federation as opposed to Crimea and the territories previously approximately four years ago called Georgia but now South Ossetia and Abkhazia. Disputed territories in their alignment and independence, such as Tibet and Taiwan for that matter, or closer to the EU treaty ‘territory’, Kosovo, still not recognized by the Russian Federation by ‘the West’ recognized as independent from 2008. The fourth of March it was reported that the EU would set up court to research war crimes during the Balkan war – or the Yugoslavia civil war – by the EU supported ethnic Albanians of Kosovo on other inhabitants such as Serbs. At the time of the independence referendum opposition had been voiced by the Russian Federation but was neglected or ignored by the EU.

The Crimea situation or incident also is worrisome for NATO and the EU, because the Ukraine formerly is not a member of neither therefore the Russian Federation is not attacking, nor invading NATO or EU territory. However this can be problematic for any future relations where any territory looking to expand or align would be left to fend against any possible aggressor in the intermediate period between initial talks and full membership. Worst case scenario, any future member ceases to exist prior to signing. Being not a reliable partner is exactly what the Russian Federation calls the EU, NATO and the USA. That they do not honour their agreements and do all that they accuse their opponents including the Russian Federation of. Examples enough one might say. Gaddafi and Hussein both were given big salutes and used to be guests of honour for both the EU and the USA while their practices were known just as the support for different disputable regimes are now. The acts in Chechnya of Russian Federation supported units is probably appalling and according to some has created the feared 'black widow' movement, wives of killed Chechen men with nothing left but their lives, taken to be responsible for a siege of amongst others on a primary school in the city of Beslan. And further a Moscow theatre bungled by the Russian Federation, due to hostage deaths linked to the use of an unreliable Russian designed nerve agent in gas form. But is this so different to the abuses of Abu Ghraib and Guantanamo. And what about the anti-insurgency tactics taught by the CIA to the military and governments of the states of the Americas in the eighties, including horrendous forms of torture. And some years before while the government of the USSR was cracking down on dissent and correcting other soviet states by invading them, the then USA was beating up its dark coloured members because of their call for human and equal treatment while they were dying in their wars against the influence of the USSR. In this period the same can be said about the French in Algiers in their dirty war against anti-colonial insurgency, the British in Northern-Ireland, or the Spanish in the Basque country. Finally more recently should the USA and ‘the West’ be surprized if its support of Israel which in January was holding 183 children (of which 20 between 12-15 years old) in its prison system and maintains a de-facto state of segregation that states around the world question the integrity of justice it talks about. When those supposed to be protected by the states of the 'democratic' world do not stand up for those it has vowed to protect as we saw in Sbrenica, possibly the biggest genocide on the European mainland since the second world war where the Dutch military as part of a UN peacekeeping mission had the obligation to protect a civilian population and a ‘secure’ civilian safety zone but due to a lack of the high command and its non-ability or non-desire to commit air support watched on as dozens of men and boys were marched of, never to return to their loved ones. Years later the Dutch government tried to spin responsibility on to the UN under the guise of it having been a UN operation of which member states cannot be held sole responsible. In the last couple of days the Dutch government after years has recognized to next of kin that it should have protected the three men working for Dutchbat in Sbrenica and have agreed to pay 20.000 euro’s in compensation per person. A court case against the Dutch state on behalf of the other 6000 killed is on-going.

The moral argument and the claim that the Russian Federation is an unreliable international partner and the stand of between the Russian Federation and 'the West' has not been so high as since the cold war, emulated by the Cuban missile crisis, where a possible deployment of USSR nuclear warheads on Cuban soil let to a USA threat of all-out war. The ships eventually were called back to Moscow in exchange for a concession from NATO to not deploy any new missiles in Turkey, aimed at countering any missile threats from Moscow. Seen as betrayal by Che Guevara, leading to a fall-out with Fidel Castro and his withdrawal from Cuban politics and initiating his missions abroad eventually leading to his death at the hands of USA trained ‘Bolivian’ anti-insurgency units. What happened eventually, the missiles in Turkey were deployed, the agreement not fulfilled. So when some years ago, NATO wanted to deploy installations in amongst others Poland as part of an anti-missile shield, claimed against 'unpredictable' states in for instance the Middle-East, it was a strong 'no' from Moscow. In the last couple of days Lavrov has compared the language of 'the West' to that of the Cold War, formally ended with the collapse of the USSR federation in 1991. Is this rhetorical strategy or an emboldened statement of an equal partner of the international community of state members. Is it the language of containment or a frantic response to an unpredictable partner playing a wild card, and is the statement by Lavrov an attempt to give its opponents the idea that the 'muscle' flexing has worked, that the ships will be returned to harbour. We now can wonder whose game is being played. The main contributor of the NATO forces and probably the owner of the highest sophisticated hardware including drones and military satellites is the USA which has stated in the last couple of years and in the last couple of days that it cannot and will not keep on footing the bill for NATO deployment, although as independent state has many operations 'specific' and ‘military’ on-going. The overall response to the Crimean crisis by ‘the West’ was first sanctioning 11 and then another 12 'involved' individuals of the echelons of power of the Russian Federation. Interestingly enough neither including Putin nor Lavrov, of course any future negotiations would be difficult with a travel ban so that might explain it. In response to the first sanctions Putin has ordered a pay-back of 11 billion dollars of (gas-) aid by Ukraine. What did Obama do further well what has been brought in the media is first a half hour phone call and then later an hour phone call. One must assume this was more than a private talk but amongst two diplomatic teams.

Furthermore NATO has expanded its presence in the air with its AWACS surveillance system flying, one must assume more flights on the borders with the Russian Federation and allies, and an extra deployment of fighter jets to Poland. In response the Russian Federation has deployed on its ‘request’ a unit of fighter jets in Belorussia. Countries on the borders which now are a member of the EU and NATO such as Estonia, Latvia and Poland are weary of the sounds and troops on its borders. Past experience with the brutal oppression experienced under Soviet regime and recent incidents such as the Polish plane crash killing many of the military and political top of Poland while on its way to a signing of a treaty with the Russian Federation has made the Polish public and elite edgy about Moscow's intend, besides this Poland still contains the Russian enclave of Kaliningrad, bordering the Baltic sea. The state of Estonia, one of the most advanced in government services via the internet, has its own reasons to be weary. When some years ago public anger about the abuses in the Soviet era called for a removal of a war memorial for the Russian liberators following proposed changes in the law, led to an almost paralyzing of the state and internet due to the work of 'infuriated' Russian hackers. Salient fact is that for instance memorial war marches in Riga also contain veterans of the SS, some teenagers at the time. One interviewee said Hitler was bad but Stalin at the time was worse. In the last couple of days the former secretary -general of NATO, De Hoop Scheffer has stated that NATO will not go to war over non-NATO territory what should infer from this, is it aimed at the Ukraine or the Russian Federation, or merely explaining what might be expected, what is important is that he was the former top-diplomat of the alliance with probably many informal ties.

How far can 'the West' or international community go with its dependence on Russian Federation gas and large investments of Shell-BP in the development of its gas/oil infrastructure. The alternative some would say are the gas fields from further places like Kazakhstan, just invited by Moscow for talks. A pipeline then maybe running through Turkey, with Erdogan it is said recently having requested talks with Moscow on becoming a partner in the Shanghai treaty and in 2013 it ordered a Chinese military missile system versus a ‘Western’ NATO system. Complex due to its recent stance on Syria and it is claimed its military support for the Syrian opposition. With Obama recently visiting Saudi Arabia on talks and the regime in Syria supported by Teheran this seems a long stretch, but to be taken into account anyhow. The recent shooting down of a Syrian jet fighter by the Turkish military seems then not helpful in this. Ethnic affiliations and the image of Turkey and Erdogan as protector of members of Islam and the Turkish ‘tribe’ seems not to sit easy due to the position of the Crimean Islamic Tartars a legacy of the Crimean Islamic/Turkic state. A group which showed its worries of renewed alignments between Crimea and Moscow due to the memories of oppression experienced under Soviet rule. Similarities and conceptual links with the exiling or some – amongst them the UN – might say the genocide of Armenian Turks in early 20th century Turkey might be made. Any dealings of Ankara with Moscow will eventually then border on its playing the international Turkishness card in the case of racial violence against Crimean 'Turks', although that Islamic credentials due to recent purges in the state apparatus and military via the AKP network might override nationalistic-ethnic motives. Again this might be countered by the split and reaction by the Gulun movement to which many Islamic Turks look for guidance.

The Crimean Tartars might not fear the lash of Moscow the most but the undercurrent of ethnic white supremacist Russian movements, as we've seen with the rise in race murders in Russia, and the possible rise of nationalistic parties in the duma. Possibly extended and multiplied by the recent announcement of Putin that in two weeks a rapport named "Foundations of State Cultural Politics" it’s summary in the view of state advisor Vladimir Tolstoi "Russia is not Europe", and rotating around the Russian language. A state homogenization of culture one could say ironic, seeing that the largest state in the world contains a multitude of ethnicities of which many are not blue eyed and fair skinned. This violence and ideology perfected in military like organized camps might be a response to the incidents in Beslan and Moscow blamed on the Chechen and Dagestan Muslims and supported by the sense of meaning and belonging as an alternative to jobs and any hopeful future for disenfranchised youths and remnants of the once social welfare guarantees for the elderly. Any reaction against this oppression and violence in Crimea would however play in the hands of Moscow as Muslim violence, and its images of reaction and resistance possibly used for propaganda and measures against all 'Muslim' looking individuals and any general public dissent. In all this stands the Ukraine and its political elite as the wild card. The economic hardships eased by cheap Russian Federation gas and promised aid, this taken away it has little hope to keep a population satisfied, so the anger against the 'old' elite could turn easily into anger against the 'new' elite by leaders of the revolution including nationalistic Ukrainian street fighters of which one of its leaders recently was found shot. The recent aid package granted by the IMF in return for 'reforms' must have felt somewhat as a support from the EU, the USA and NATO however it must also be seen as a victory of the free market forces due to the interest to be paid on any help or bail-out and forced opening up of its public companies and assets open to the highest bidder, which ironically might end up being USA or Russian Federation companies. In regards to elections and the political elite the previous prime minister Yulia Tymoshenko which came to power after the Orange Revolution in 2004-2005 (Nov-Jan) and which until her recent release by protestors was jailed on charges of corruption, some say due to her political position which led to a long running dispute between the former Prime Minister Viktor Yanukovych and the EU. She has become one of the candidates for the newly declared elections, one up from former boxer Vitaliy Klitschko who has thrown the towel in the ring in exchange for a promise of the Kiev post of Mayor by the new candidate Petro Poroshenko the biggest chocolate producer of Eastern Europe, interestingly enough one of the major export products of the Ukraine towards the Russian Federation. And finally the West least likeliest poster boy Mykhaylo Dobkin, who supports the ousted prime minister and Ukrainian federalism. The Ukraine seems to be wild card in this game in which EU and democracy are tossed about as rhetoric’s, with the bilateral ties between many EU members and the Russian Federation on the one hand and that other BRIC member China on the other – with which Netherland signed in the last weeks a military cooperation treaty – and the internal division and tensions within the EU and then specifically on its Southern borders Greece, Italy and Spain, the EU membership might start becoming less a thing of the future but more a thing of the past. Of course military like organizations like the EGF ( the European Gendarmerie Force) – possibly already deployed in the Southern hotbeds of economic austerity instability – together with the EU border force FRONTEX might counter any ‘internal’ and civic border destabilization although this would mean a return to the Spanish Franco and the Greek generals period.

The wild card in this game is the Ukraine. The big players the Russian Federation due to its home game, stopping any future loss of territory and collapse of the multi-ethnic federation and projecting strength for a home audience. Also its real objectives, military assets and the richest commodities of the former soviet states seem on the table. As is it for the USA, always a player and since the recent Snowden revelations if it had already been a reliable partner one it illustrated with its own agenda. That the French socialists were portrayed as the new friend and started operations in Africa which probably explained a part of their socialist loss in recent elections is illustrative of the new move away from a common EU agenda and a return to unilateral actions and bilateral agreements. NATO and the OSCE (Organization of Cooperation and Stability in Europe, which includes the Russian Federation and Israel) – recently claiming that it’s monitors on the ground are preventing worse destabilization – are the only institutes of meaning it seems although that NATO on its flanks in the form of Turkey, its reliance might be in doubt. Although it has stationed NATO patriot units against, it is claimed possible Syrian actions against Turkey. The USA also is playing for a home audience although that might be more the senate and the two party top brass elections than the watchful citizen. New elections are around the corner and one of the democratic (Obama’s party) candidates and previous (anti-war) Vietnam veteran Kerry has been send on an impossible mission to broker peace between the Palestinian and Israeli parties and now on top of this, the new mission impossible brokering a diplomatic solution between Ukraine and Russia. Another democratic contender has appealed to that good American dream of an all-powerful USA, former Secretary of State and senator Hillary Rodham Clinton stating she would never allow the Russian Federation to push its agenda that far, the same rhetoric heard from the mouth of the recently freed Timoshenko who stated that if she would be president of the Ukraine after the upcoming May elections she would not hand over any territory without a fight.

Coming back to the USA economy, since the rise of the Euro currency and the start of the global economic crisis the Euro has risen to 1.4-1.5 Dollars meaning that any printed USA money cannot be taken to be easily absorbed by the market, of course the rise of Russian gas in Rubbles is another factor and although such economical boosters as Iraqi and South-Sudanese oil is a nice impulse but to state that its investment in new military technology such as drones can be seen as a guarantee to its position as the governor of the ‘New World Order’ is challenged. Statements by USA politicians done in the past stating that it would never allow any of its soldiers to be tried in the international criminal court in The Hague and would even take military action to extract them or claiming the UN as a defunct body as stated in the past by Bolton later a USA ambassador to the UN is all but value for money. The Russian Federation, The EU, The USA, NATO and the single states and their members which lay at the basis of all these alignments and the current world order and narratives are on the table, in turmoil once again since the last Olympics in Beijing when Moscow went to war with Georgia. We are only waiting to see if the price of Norwegian oil will hike, the fracking of gas and nuclear energy (due to Tsjernobyl and the handling of the aftermath leading to massive casualties of radiation poisoning, a painful reminder of the legacy of Soviet era decisions in the Ukraine) by large industry will be lobbied for. And an EU uniform and honest foreign and sustainable energy policy will emerge. Possibly prior to exploitation of the Crimean oil/gas fields. According to Russia Today, the current stalled deal of ExxonMobil (USA) and Shell (Dutch-UK) could represent 7 million tons in annual produce. So Crimea also might have represented Ukrainian economic strength and independence of Russian Federation gas. In April as a possible reaction to Western moves the Russian Federation started negotiations with China on gas exports.

The slow game might show almost all parties a winner, by a non-expansion of the Russian Federation and no European multiborder and multi state war. Except for the Ukraine, the Crimean Tartars and its Ukrainian inhabitants. The USA can state it did something by financial boycotts. NATO members that they did something by planning and plane deployment to Poland. The Russian Federation gained and maintained its southern port and boosted the popularity of its political elite including Putin. The alignment with China’s military established and rationalized. Bilateral ties with Russian Federation economy by different EU members maintained. NATO’s alliance with its biggest contributors not rattled. However for Eastern EU (would-be) members with sizeable ‘Russian ethnic’ territorially concentrated communities, the complex relations with Moscow deepened, as with a distrust of EU and NATO commitment. The rise of violence and the ideology of ethnic one state nationalism and tensions amongst ‘differing’ communities within them another. The sense of belonging and the multi-ethnic democratic state model is at stake.

The wild card in this game is the home viewer and the Ukrainian public and elite. What is at stake on a rhetorical and diplomatic level is the logic that governs daily politics and the framing of actions and camps, once blown of course this ship will not as easily find its bearings as the hypermodern military battleships named Sebastopol and the other Vladivostok, the two internationally known harbours representing the extreme Western and Eastern harbours of the Russian federation just like the two headed eagle on the rubble. The boats were ordered in 2011 in France and jointly build of which the Vladivostok was ready for delivery in the last couple of weeks and the Sebastopol expected in 2016 – although that might be halted due to sanctions. Ironic that November 2013 the British Council announced 2014 as the year of extensive cultural bilateral projects with the Russian Federation as the Dutch possibly celebrated its relations with Russia with 2013 as Russia-Netherland year. Rumours on the internet are now starting to circulate that USA based military contractors are also operating in the Ukraine. The Ukrainian interim government has some hours ago called on ‘Russian’ citizens and occupants to stop their occupation in exchange for no future legal actions against them. The temporary government in Kiev stated approximately forty eight hours ago that it would end the occupations in Eastern Ukrainian cities by diplomacy or by force.

While the Russian speaking population of the Ukraine in recent years did not see its language recognized as formal state language their support taken for granted or their existence as provocative maybe now those in the Ukraine and the former soviet states will have to understand that minorities cannot be governed without representative and civic rights. The recent developments in the last couple of days in Ukraine are indicators and also dealers of the new game. Demonstrations and occupations of government buildings in the East and reactions to any perceived ‘ethnic Russian’ actions can be a slow and fast game. The Russian Federation proclaimed it retains the right to intercede to protect ‘ethnic Russians’ or legal citizens. Any wrong handling and framing by politicians on the ‘Ukrainian’ side might trigger a genuine response by its Russian inhabitants. Then the question is not where did the occupants come from or who trained or instructed them but how they and their treatment is perceived. And then the USA’s recent statement by Secretary of State Kerry that 19th century actions by the Russian Federation might trigger a 21st century response by the USA. NATO has stated that within two weeks plans for troop redeployment will be an option. Kiev has stated that the occupations of the Eastern cities will be resolved within forty eight hours by diplomacy or force. Since the announcement on the 9th of April new cities have seen upheavels in Eastern-Ukraine, action by the Ukrainian police and military. And within the EU we’ve seen a visit by Merkel to Greece to announce the positive developments in the Greek economy looking like recovery. What game the EU will play will strongly influence its future and possibly upcoming elections.

 

Thin libertarianism and Thick libertarians

smehra Tuesday April 8, 2014

What is Thin Libertarianism?

For the benefit of newcomers to this debate I am going to define what thin libertarianism is. Thin Libertarianism or Non-aggression Principle(NAP) or just ‘libertarianism’ is best described as:

 

Initiatory violence or its threat (coercion) is wrong (immoral, evil, bad, supremely impractical, etc) and is forbidden; nothing else is. (Taken from the New Libertarian Manifesto)

To better understand watch this: https://www.youtube.com/watch?v=muHg86Mys7I Now this is an interesting definition. Firstly, because such a framework of ethics permits a wide variety of acts that one may commit and still be within libertarian ethical code. Secondly, because it makes a lot of people uncomfortable.

The reason for this discomfort lies in the fact that this minimalist definition allows for a lot of acts that one may consider immoral (for various reasons like religion, scientific proof etc) to be committed despite such reasons. Such acts can be condemned as immoral subjectively but the fact is that “thin libertarianism” has absolutely no opinion on those subjects. It leaves the decision of committing such otherwise considered ‘immoral’ acts on the individual.

 

What is a Thick libertarian?

Since the philosophy of thin libertarianism asks you to make a very small commitment, personal preferences are bound to creep in. A thick libertarian is someone who makes those extra commitments based on those extra preferences. There are a lot of topics on which such a distinction has been used.

For instance, racism - thin libertarianism makes no statement about racism. One can be a racist and still be a libertarian in the thin sense (as long as they follow the NAP). One can also oppose racism, start a social campaign against it and still be a libertarian. All libertarianism demands from you is that you do not stake claim on life, liberty and products of someone else’s labour (property).

Of course, not all types of commitments are part of being a Thick Libertarian. For instance, if you are a libertarian and believe that apples are better than oranges, it is not a valid thick strain. For it to be a part of the thick strain you must believe (and show) that eating apples helps in the cause of liberty. (This might be obvious, but I had to mention it for reasons that will become apparent)

But why stick to such a simple example that initiated such a distinction? Let us take a look at some other examples that have not been discussed before:

What does thin libertarianism have to say about religion? Nothing! But there are personal preferences of people. There are Christian Anarchists and there are Atheist Anarchists. The former derives liberty from Christianity and the latter considers religion to be another form of authority tied to the state. Both believe that spreading their ideology helps spreading liberty.

What does thin libertarianism has to say about money? Nothing! There are those who promote the usage of gold, there are those who promote mutual credit system and there are those who support Bitcoin. All the them think they advocate what helps protect your liberty best (especially against the state). Are any of them less of a libertarian?

Consider free market socialism (socialism being defined as a system where means of production are owned by the labour) or Libertarian Socialism. Thin libertarianism has no opinion on that matter. It does not say how an organization must be organized. This is again a form of personal preference on how you wish to organize society around you.

Similarly, libertarian individualism is a thickness on top of the core libertarian principles and so are those forms of collectivism which are consistent with NAP.

The fact of the matter is that there are no thin libertarians (hence the title of this article). It is impossible to be one. By being a thinking and acting libertarian you are bound to show your personal preference in your thoughts and actions, that you believe are better suited to protect your liberty. Hence we conclude that every libertarian is a thick libertarian.

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Why it matters?

I consider this distinction to be a very good development because it a) gives us a very large ground to work with, and b) helps us stretch the limits of our tolerance against those who we consider “immoral” on subjective grounds or simply disagree with. Regardless of your subjective morality, if you consider Non-Aggression Principle to be a part of your moral framework (and apply it consistently), you are a libertarian. It provides us with an ethical framework that truly tolerates people you disagree with. And yes this means tolerating racists.

Humanitarians and Brutalists?

Given how we have just concluded that all libertarians are thick, who are the humanitarians? It is a label adopted by those thick libertarians who consider their thickness to be “humanitarian”, which includes opposition to “racism”.‘Brutalism’ is a label given by the ‘humanitarians’ (who made such a distinction in the first place) to those libertarians who constantly stress on the core philosophy of libertarianism (or thin libertarianism). Brutalists are not thin libertarians, as we have concluded no one is, but they are tolerant in giving the label libertarian to anyone who agrees with the core principles. (Arguably being MORE tolerant than ‘humanitarians’)Now there is nothing wrong in being “humanitarian” on top of being a libertarian and also nothing wrong in spreading your ideas and acting upon them (NAP implied). So why are ‘Brutalists’ so up in arms? Because they have been called as such.The two recent articles, first by Jeffrey Tucker and second by Sheldon Richman attacks these “Brutalists” for being tolerant towards subjective morality of others. The sad part is, that they agree that “The brutalists are technically correct that liberty also protects the right to be a complete jerk and the right to hate” and then conclude that “Libertarianism Is More Than Just Rejecting Force”. Tucker’s criticism of “brutalism” has been presented quite one-sidedly. When he says that brutalists “miss the bigger point of human liberty” what is implied is that all libertarians must agree with him or they are brutalists.Imagine if I said that libertarianism implies support for gold and all those who disagree are “missing the bigger point”, that they are “brutalists” and should follow my vision of a free society. Then, throw in a couple of words like “Nazism” and “Bolshevism” (actually present in the article). Who is the real Brutalist here?
If tolerance is the highest “humanitarian” virtue, so is tolerating those who you consider to be “immoral”. As long as they do not stake claim on anyone else’s life, liberty and property those people should be tolerated - their life, liberty and property should not be interfered with. Laissez Faire.

Are you a humanitarian or brutalist?

I found this question difficult to answer, especially when i was asked to pick sides. If ‘humanitarian’ is defined as a “thickness” that comes from the “liberal” history, then I probably am one. But I certainly did not like the intolerance of the articles that sparked the debate in the first place. Which lead me to conclude that this was a false dichotomy created by the writers. Suffice to say that I will not be taking part in it.Comments and Discussions: http://indianlibertarians.org/forums/viewtopic.php?f=5&t=31
 

Kejriwal and Crony Capitalism

smehra Sunday March 30, 2014

‘Crony Capitalism’ is a slippery term, perhaps even more so than the term ‘Capitalism’. If Capitalism can be used to define a free market production of capital goods, it can also be used to define a symbiotic relation between big business and government. Similarly Crony Capitalism can imply Government’s favoritism to certain businesses (in the form of legal monopolies) or it can simply mean the state breaking its own rules to protect certain businesses (what is commonly called corruption). Anarcho-Capitalists tend to use ‘Crony Capitalism’ in the first sense, Arvind Kejriwal (and other politicians) uses it in the second.

The first meaning implies government’s interference in the free market, ie, any form of government favoritism to certain businesses, legal or otherwise, that hinders competition and creates unintended consequences. The second meaning simply implies subjective usage without any logical base. Where the first meaning incites you to question the coercive nature of the state, the second meaning spreads the wrong message - that ‘Capitalism’ works as long as everyone follows the rules laid down by the state.

While it is true that the state regularly breaks its own rules to practice ‘Crony Capitalism’ or ‘corruption’, but that said ‘corruption’ is just the tip of the iceberg. The legal plunder and real upward redistribution that goes on behind the scenes is hardly ever talked about in the mainstream. Hardly does anyone hear “honest” politicians talk about how the state steals land away from its owners, causes inflation in the money supply and legally favors businesses over individuals.

Kejriwal in his recent speech at CII has proclaimed that he is not against Capitalism, but against ‘Crony Capitalism’. What is that supposed to mean? Does he define Capitalism as a ‘competitive’ system where every man has to play by the rules of the state? In that case, such a system is by its very nature ‘Crony’. Let us not forget that many large corporate empires like Tata have set themselves up by following the rules of the state. Legally, there is no corruption in the case of Tata acquiring land to build their nano cars - and this only hit the mainstream news because it was turned into a political ruckus. However land acquisition is hardly an element of the free market. Free market would imply the right of the individual to sell his justly acquired land to whomever he likes at whatever cost he likes.

People talk about how Land acquisition has become a racket in India. To them I ask, when was it not a racket? Was it not unethical when it was imposed upon us by the Britishers in 1894? Or was it not unethical under Nehru’s regime, when he used it to construct his “state socialist” empire killing the local private enterprises? Or was it not unethical when the nobles were given titles to vast amounts of land stolen from peasants under the rule of the kings? Land Acquisition has always been a racket.

Kejriwal too has spoken against Land Acquisition, but not in the same sense. He speaks of corruption in land acquisition - that the governments have acquired land at under “market value”. But he is yet to make a firm stand against land acquisition. "Market Value" of land under Land Acquisition bill is a clever ploy to fool people into thinking that the the transaction was just. How can it be a market value when there are laws forbidding sale of land to other parties? When there are laws forcing you to give up the land no matter what? How can one even determine market value in such a situation?

The way Kejriwal appears to define ‘Capitalism’ implies that he supports all of this, as long as the state (and everyone else) followed the rules written by the state in a book of fairy tales called the constitution. His wrong headed crusade against “corruption” ignores much of what is wrong with the state - placing state’s laws on a pedestal to create a standard of honesty.

How Kejriwal defines Capitalism will probably never be clear and looking at his actions in Delhi I doubt he supports freedom. His pro-business rhetoric (not pro-market by any standard) can be attributed to the fact he was giving a speech at CII. Put him a room full of union leaders and you would probably hear him support labour paternalism.

This actually reminded me of this scene from Austin Powers

 

AnComm fallacy

iljaimine Sunday March 30, 2014
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It is thousand times more better to have common-sense without education than to have education without common-sense. In this context, I intend to highlight that anarcho-communism is a 16 letter word used by inferior magicians with the wrong alchemical formula for transforming earth into gold.

To simplify, Anarchist communism (AnComm) advocates the abolition of the state, private property and capitalism in favor of common ownership or control of the means of production. Only through such collective control, it argues, can "the individual" be free of governmental domination and economic, that is, capitalist, exploitation. Under anarchist communism, the actual tasks of governance and production would be accomplished directly through a horizontal network of voluntary associations, workers' councils and a gift economy from which everyone would partake solely to satisfy his or her real needs. Anarchist communism, also known as anarcho-communism, communist anarchism, or sometimes, libertarian communism, advocates the abolition of government, which it refers to as the state; private property, especially the means and assets of mass production; and capitalism itself. In place of those institutions and systems, it calls for—as does its ideological competitor Marxism—common ownership or at least control of the means of production. Unlike Marxism, however, which advocates a dictatorship of the proletariat, anarchist communism opposes all bosses, hierarchy, and domination.

Despots or these AnComms are drunk with power of collectivism. They must reluctantly admit that they are subject to the laws of nature. But they reject the very notion of economic law. Economic history is a long record of various communitarianism that failed because they were designed with a bold disregard for Austrianism. AnComm, through various phony calls, clamors for social just. But, according to me, social justice is purely against natural justice because social justice is the anti-concept that employs the concept of justice in order to gain moral credibility—and then obliterates that concept in people’s minds and replaces it with the idea that the forcible redistribution of wealth and compassion is moral. Moreover, AnComm abhors subjective theory of value in all ways and always. Will you give up drinking tea, when forced you with a cup of coffee in an AnComm society, if going by the logic of communism i.e. from each according to his abilityto each according to his needs? Last but not least, AnComm is holistically against self-ownership. Thence, they are unready to even learn praxeology, catallaxy and methodological individualism.

If there is one thing, for example, that anarcho-communism hates and reviles more than the State it is the rights of private property; as a matter of fact, the major reason that anarcho-communists oppose the State is because they wrongly believe that it is the creator and protector of private property, and therefore that the only route toward abolition of property is by destruction of the State apparatus. When owning any private property, according to AnComm, is conscientiously corruptible then how come collective ownership incentivizes the means of production and consumption in an ethical way? They totally fail to realize that the State has always been the great enemy and invader of the rights of private property. And, when private property is theft to the AnComm then what makes public property so sacrosanct over robbery? Furthermore, scorning and detesting the free-market, the profit-and-loss economy, private property, and material affluence — all of which are corollaries of each other — anarcho-communists wrongly identify anarchism with communal living, with tribal sharing, and with other aspects of our emerging drug-rock "youth culture."

Anarcho-communists have always been extremely vague and cloudy about the lineaments of their proposed anarchist society of the future. Many of them have been propounding the profoundly anti-libertarian doctrine that the anarcho-communist revolution will have to confiscate and abolish all private property, so as to wean everyone from their psychological attachment to the property they own. Furthermore, it is hard to forget the fact that when the Spanish Anarchists (anarcho-communists of the Bakunin-Kropotkin type) took over large sections of Spain during the Civil War of the 193Os, they confiscated and destroyed all the money in their areas and promptly decreed the death penalty for the use of money. None of this can give one confidence in the good, voluntarist intentions of anarcho-communism.

Philosophically, this creed is an all-out assault on individuality and on reason. The individual's desire for private property, his drive to better himself, to specialize, to accumulate profits and income, are reviled by all branches of communism. Instead, everyone is supposed to live in communes, sharing all his meager possessions with his fellows, and each being careful not to advance beyond his communal brothers. At the root of all forms of communism, compulsory or voluntary, lies a profound hatred of individual excellence, a denial of the natural or intellectual superiority of some men over others, and a desire to tear down every individual to the level of a communal ant-heap. In the name of a phony "humanism", an irrational and profoundly anti-human egalitarianism is to rob every individual of his specific and precious humanity. Furthermore, anarcho-communism scorns reason, and its corollaries long-range purpose, forethought, hard work, and individual achievement; instead, it exalts irrational feelings, whim, and caprice — all this in the name of "freedom". The "freedom" of the anarcho-communist has nothing to do with the genuine libertarian absence of interpersonal invasion or molestation; it is, instead, a "freedom" that means enslavement to unreason, to unexamined whim, and to childish caprice. Socially and philosophically, anarcho-communism is a misfortune.

Economically speaking, anarcho-communism is an absurdity. The anarcho-communist seeks to abolish money, prices, and employment, and proposes to conduct a modern economy purely by the automatic registry of "needs" in some central data bank. No one who has the slightest understanding of economics can trifle with this theory for a single second.

The AnComm are against taxation too but they are professional liars when it comes to georgism. The good thing with my rothbardian ideology is that we can tolerate the existence of AnComm in our stateless society, but the AnComm will never tolerate any form of Anarcho-capitalism. The prime motive of AnComm is to not set man free from men. A rose smelling better than a cabbage doesn't mean that a rose makes a better soup. At first whiff, the altruist rose (AnarchoCommunism) may smell better than the “egoist” cabbage but the  former surely makes a lousy soup.

Anyways, stay tuned for an upcoming "robotic marxism" if these cretins have their way. 

 

It is Monstrous Policy, stupid.

iljaimine Monday March 10, 2014
Policy is not a plan of actions, adopted by some so-called social groups, for the benefit of society. Policy, according to me, is exoterically an esoteric plan of annexing all the atoms into the corpuscle of thralldom.

I welcome you all to the vortex of policies. This maelstrom is so strong that many are hopelessly and inuredly dependent on the policy-makers. Policy making, on the other hand, involves policymakers imagining pain points that might come up in the future…and prescribing intrusive preventive measures. The problem with the policy-making approach is that nobody can predict the future, given the utter unpredictability of human action. So, any policy making attempt will, by design, put the cart before the horse. Moreover, there are unintended consequences of the intrusive prescriptions that end up creating their own plethora of unforeseen pain points. And these are real. The policymaking solution to these new pain points is of course, more policy. And a domino effect ensues. The domino effect also ensures that the policymakers stay employed and engaged, thus creating a vested interest which could play on the conscious as well as a sub-conscious level. The only policy that I know can benefit the mankind is ‘no policy’.

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This essay is an attempt to enlighten you with one of the most vile policy called Monetary Policy. Monetary policy happens to sweetly talk all about the interest rates, money, credit financing, etc. but many fail to realize with their real eyes that monetary policy is a real lie. In fact, monetary policy is vociferously infected with apoplithorismosphobia. It is also least concerned about tackling monetary inflation. This policy is nevertheless architected by the aurophobic hobbesians. I am not a psychologist, but using common-sense any kindie can easily come to the conclusion that the system in which s/he is living is a cornucopia of grand foolishness. Monetary policy, in my view, is designed by the chrometophobic central bankers. To be very frank, I also possess a generalized view that they have not read this Theory of Bank and Credit. They should go back home, and read Ludwig von Mises and Murray Rothbard. For now, any layman can start reading Jesús Huerta de Soto’s Money, Bank Credit and Economic Cycles to grasp the macro picture very precisely.

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Contractionary monetary policy masquerades tackling inflation, but does no good. Expansionary monetary policy begets crony capitalism through a new root called Mondustrial policy. Mondustrial policy is an element purely antithetical to the order of catallaxy and spontaneity. It is designed to distort the financial resources of many to protect the few. With the enunciation of it, the authentic scope of free market catallaxy loses its intrinsic value. Therefore, you have now all these egonomists and leftists condemning money and capitalism. Mondustrial policy is one of the contemporary example when it comes to printing money out of thin air. It does nothing great. All the central banks, of our world, including Rabble Babbler of Ignorantia, fail to function within the monetary policy framework. I expect these so-called educated creditors to read what Panama is up to, when it comes to solvency. I also want these silly voters to learn a beautiful Somalian lesson, when it comes to market cooperation in anarchy.

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Now, from the above interpretations, it is to be commonly understood that monstrous policy is an amalgamation of monetary policy and mondustrial policy. The prime tasks of this policy are:

-       to corrupt the theorem of capitalism,

-       to distort the markets,

-       to create inequality by bailing out the losers,

-       to tax eternally,

-       to print money out of thin air,

-       to abuse the regime of gold standard,

-       to reflate inflation,

-       to disinflate deflation,

-       to spur Sturm und Drang,

-       to deflate growth levels,

-       to establish stagflation,

-       to crack down on the crytocurrencies,

-       to enable currency war through artificial means,

-       to expand debtocratic balance sheets of various banks,

-       to guard the imbecility of fiatizationism at any cost.

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Last but not least, market-based financing is far far far better than credit-financing by monetary policy. There are many lessons to be learned, but the point is when are they gonna be observed?

 

Insights into Investing using Austrian Economics

mithun.dutta Sunday March 9, 2014

Investment is core for businesses. It’s a human action. An investment occurs when a capitalist decides to convert by acting in order to transform his financial instrument from being a saving instrument to investment instrument. A savings instrument differs from an investment instruments in terms of risk to expected benefits. The choice of saving instruments are goods which are speculated to maintain its Purchasing Power Parity relatively stable over other goods for a time frame (duration) for which the good will be saved.  An investment instrument is comparatively riskier than a savings instrument but it is anticipated to appreciate in its Purchasing Power Parity in the time frame for which it is invested.

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From the point of view of Austrian economics understanding some factors plays a crucial role for the investor

1>     Human Actions Axiom.

2>     A priori deduction.

3>     Capital goods, producer goods and consumer goods.

4>     Theory of subjective value.

5>     Heterogeneity of time. It is the understanding that same piece of gold yesterday and today is to be treated as two different goods as it lies at different time intervals.

6>     Difference between price and value.

7>     Catallactics/evenly rotating economy.

8>     Praxeology of government regulations and policies.

9>     Banking and Inflation.

10> Business Cycles.

11> Understanding the basic idea of the stages involved in production process.

12> Market terms like volatility, indexes, calls, puts, alpha, beta, support, resistance, moving averages, volumes, trends, dividends, splits, technical analysis, fundamental analysis, bear, bull, pigs, jobbers, arbitragers, face value, PE ratios, spreads etc.

13> What to make out of historical data and statistical data.

14> Metaphysical construct of intuition, thymological factors and nature’s concept of chance or luck.

15>  Future is unknowable and unpredictable.

16> Investment is subjected to profits and loss.

Note that above list doesn’t consist of all factors of knowledge but sufficient arm the investor to give insight to the market and market interpretation.

The soundness of Austrian theory comes from the a priori deductions. This methodological approach itself reduces the risks for the Austrian investor.  Due to praxeological analysis the Austrian investor is most likely to forecast or anticipate the future market state. Unlike non Austrian Financial analysts and investors whose forecasting is based majorly or solely up on statistical analysis and fundamental analysis; the Austrian Financial Analysis includes other factors influencing the market happening by using reasoning and logical connections. For example the Austrian Financial Analyst/Investor will figure out that “if phenomenon A has occurred then result B must be the result”. However the prediction of anticipating a “result B” is not the outcome of any statistical result or mathematical calculation only. It is predicted using philosophy as well as economic theory rather than solely based on numeric data. For instance the non-Austrian economist will never include the anticipate risks of economic bubbles which might exist in the market. Spotting of Economic Bubble requires understanding what the government is doing in contrast to the mainstream methods where only historical data of the financial instrument is worked upon using technical and fundamental analysis. Historically as well as by experience we know that mainstream financial analyst and many investors has failed to predict market crashes and lost substantial amount of money. Austrians has predicted almost all major market crashes and spotted the economic bubbles before they burst.

Further insights into Financial Analysis and investment using Austrian Economics will be covered by me and other members of Indian Libertarians.

However you may check out this book by Austrian Economist and Indian Libertarians member Saurabh Thirani here:

Spot the next Economic Bubble