25
Sep
08

Wealth: What is it?

I am wealthier than most of the human beings ever born on this planet. So are you, at least if you are reading this at a computer in your own home. Having said that… wealth is fairly poorly defined and its meaning changes easily.

A good example of this is diamonds. If you have a lot of diamonds you are probably considered wealthy. This is due purely to scarcity, and if the international diamond consortium released all the diamonds in their possession onto the market at once, the price of diamonds would rapidly approach the price of gravel. So, obviously diamonds aren’t wealth in and of themselves, they have very limited intrinsic worth (although they are somewhat useful). How about gold then? I mean, people keep talking about going to a gold standard to give money backing with something of intrinsic value. Again though, it fails several mental tests. What is gold good for? It is a decent material for electrical and electronic components, it has decent conductivity and doesn’t corrode. Still, that hardly justifies the price of gold. Gold has value purely due to scarcity, and that is why people use it as jewelry, because it allows them to let others know they are wealthy.

What, in the end,  is wealth used for? Food is a good starting point. When food gets scarce, the wealthy tend to get the best of it. So does food have intrinsic value? Try going without for a week or two and you will quickly decide that it does. Access to food is without question wealth.

Given that criteria,  what else is wealth? Shelter is pretty high up there. In fact, it tends to be one of the things that the wealthy have an excess of. Big, big, big houses. If you don’t have shelter, you are poor. There is no-one who lacks shelter who is not poor, period.

Water is another one… if you don’t have it you are poor, very, very poor. If your access to it is limited, you are poor, very, very poor.

There is actually nothing else I can think of that guarantees someone who lacks it is poor. There are rich people who are nudists, who choose to wear nothing much of the time. There are rich people who don’t drive (although that is rare, take a look at Howard Hughes near the end). Food, Shelter, Water. That is wealth and it is the whole of wealth. Everything else is just trappings, dross to distract the eye, stand ins that allow us to ignore that our relative poverty in real terms means that if  food gets short, Bill Gates gets to have it and we may not.

The problem with wealth, as all animals know, is that you need to be able to defend it. If you can’t keep bears out of the cave, they will take it from you. If you can’t chase the lions off, they eat the zebra. When food gets short, our current wealthy should keep that in mind, or else the hungry masses will take their shelter, their food, and if it is short, their water.

I wrote this piece in order to deal with what the Austrian school of economics calls natural law. This is natural law, and the social contract is all that prevents it most of the time. When food starts to run out, the social contract loses force and those who got the short end of the stick find alternate means of wealth redistribution.

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18 Responses to “Wealth: What is it?”


  1. 1 Pankaj
    September 25, 2008 at 10:40 pm

    “Gold has value purely due to scarcity, and that is why people use it as jewelry, because it allows them to let others know they are wealthy.”
    Wrong.. gold has value because it can be shaped into intricate ornaments. And therefore used for jewellery. Now that modern jewellery making techniques have changed, platinum, a rarer material is often used in jewellery, so is titanium and cobalt. The later are decisively harder than gold to shape into delicate patterns and still make them light enough to wear.
    Yes, gold does not have intrinsic value – nothing does – except one thing – a good life. There is a tenet of philosophy that goes – the most valuable of things are the most useless. This is because whatever is of value is so because it can do something else that is more useful. Eg. A machine has value because it can produce something that can be sold on the market, so infact, the sellable product is of more use than the valuable machine. You can take that to any particular object of value and trace down the usefulness – in the end it ends up – providing the owner with a better life.

    If tomorrow people decided that gold was worthless (or maybe downgrade its value to something like steel), the austrians will stop insisting on gold being true money. This is because they have a few criteria that a good medium of exchange has to satisfy.
    1. has to be of significant value with respect to most other things of trade.
    2. should be easily divisible
    3. should be easy to transport (small size, less weight, nonvolatile)
    4. holds value over significant period of time and is not subject to rapid fluctuations in supply and demand for use (i.e. consumption).

    BUT, you can have any sort of commodity based money – and people will have the right to accept or reject the money. For example, you can have gold backed money, if you want, you can always cash it out for the physical gold. You can have oil backed money, and you can cash it out for physical oil or you can trade it for corn or for currency backed by corn (which in the future you can cash out and consume). The way it exists right now, you can be robbed of purchasing power without even physically touching you. Simply by inflating the money supply. This has been done over and over in the history for more than the last 3000 years, yet people are yet to learn a lesson (well at least those raised in socialist environments are conditioned not to see it like it is). What is wrong with trading in food either? Just back currency by food if you feel that is what has true intrinsic value. Austrians have no problems with that either.

    As for those who got the short end of the stick – look at what happened in Soviet Russia.. People are not all that perceptive with hungry stomachs. They are easily gulled into following an even more unfair system than they were in before. And once they sign the so-called social contract, they can be shot for trying to nullify it. This is precisely why no country has a procedure to give up its citizenship. The only way to do that is accept citizenship of another country (try immigrating, lets see which of these hundreds of fair minded govts in this world – lets you in without capital investment). Citizenship is ownership of a person by a entity called the govt. Immigration is the trade of these owned entities, and unless there is a profit in the trade to the new country, the new customer/country refuses to purchase the ownership to the citizen.

    If this so-called social contract is the height of human morality, then human morality has been responsible for every single death in WW1, WW2, Vietnam and now the War on Terror. A special mention of Hiroshima and Nagasaki has to be made. Those thousands of Japanese civilians signed their contract to get incinerated alive, for what? Had they not been Japanese they would still be alive. I don’t want any part of your “Human morality”. Thank you very much, but no thanks..

  2. September 25, 2008 at 10:49 pm

    I don’t think you can hang all war on the social contract. The flaws in the whole theory are gaping wide… but none of you see them. You haven’t addressed (in any meaningful way) the legal systems. You haven’t addressed the pollution issue (and yes, I have read the stock answers on mises.org… they are hot air because without enforcement they aren’t what happens, and we know this because there have been companies that have operated without being answerable to a government… and in every case they created untold suffering before they were finally reigned in by the populace).
    Look at what happened in Soviet Russia: a system based on a flawed theory of genetics and natural selection failed to provide food. Since it failed to provide food, the whole system broke down.
    The whole idea of enlightened self interest is an entertaining fiction. The truth is that human self interest is almost always short sighted. The less regulation money markets have, the more you see a cycle of boom and bust. Now, you are looking at the world that has been entirely settled and saying that everyone has always been beholden to government, but there have in fact been many, many attempts to start groups with no government. It works while the number of people stays small, the area produces extra for everyone and the money flows. After that, it collapses, and then government forms. There is a reason government always forms, in every single situation that has ever existed in the world.
    My answer to the Austrians is actually about Natural Law. I assume you know the term? It comes from the Austrian school of economics and refers to property rights. I was actually trying to explain that what is referred to as natural law is actually not natural in any way. In fact, the whole concept of property rights is a cultural artifact that arose in many different cultures but is by no means universal.

  3. September 26, 2008 at 3:49 am

    You should check out Buckminster Fuller’s ideas about wealth in Operating Manual for Spaceship Earth. After demolishing the idea of valuables similar to the way you’ve done it, he proposes that the true value of wealth is the ability to keep yourself alive for as long as possible. Anything that can’t help you or other humans live a longer (and I would assume more fulfilling) life has no value.

  4. 4 Pankaj
    September 26, 2008 at 7:45 am

    “I don’t think you can hang all war on the social contract. ”
    And why not?

    “The less regulation money markets have, the more you see a cycle of boom and bust. ”
    Really? Ok.. show me a depression where the money is commodity backed. Its getting so pointless to argue with you, that I am just one more comment away from giving up and letting you enjoy your socialism. Where are the facts? Where are the figures? Just stating something does not make it true… wake up from this ideological dream land!

    “The whole idea of enlightened self interest is an entertaining fiction.”
    Basis please.. What do you base this on? As usual, these are simple and baseless assertions

    “The truth is that human self interest is almost always short sighted”
    And we should be thankful that govt (which interestingly is comprised OF HUMANS) is there to save the day. Do you think politicians are not human? And if they are human, who is going to stop them from pursuing their short sighted self interest? Maybe we should let stones or computers rule us.

    “It works while the number of people stays small, the area produces extra for everyone and the money flows. After that, it collapses, and then government forms.”
    So acknowledge that anarchy is actually produces more for everyone.. yet it collapses (how?)

    “There is a reason government always forms, in every single situation that has ever existed in the world”
    And that reason has nothing to do with short sighted self-interests of those that seize power? It has to do with the goodness of govt.. right?

  5. 5 Pankaj
    September 26, 2008 at 7:51 am

    If you think natural law is unnatural, obviously, you are in opposition to almost every single founding fathers of the USA.. except Hamilton. The series of humanitarian philosophers who came up with the idea of natural laws are all wrong, while you my friend are smarter than them. Yep! Must be true. Can I have a inferiority list of all the scholars that were wrong in the opinion of Traverse Davis? And is this an argument of opinions? Cause if it is – I am sorry to bother you I thought we were debating facts.

  6. September 26, 2008 at 1:38 pm

    Mike:
    Bucky!!! Bucky is awesome… truly one of the great minds of all time. I agree with his concept of wealth, but was trying to narrow it down for this debate.
    Pankaj:
    On another thread I am trying to get a concise list of costs for diesel generation in place vs. costs of large scale power generation like we use now. It should be noted that this cost list isn’t easy (one has to take into account the subsidies used in oil exploration and refinement, roadway maintenance by government vs. private roads as proposed by Austrian economics, the actual costs of the generators which are not simple things and aren’t purchased as a single unit, generator maintenance due to ongoing running vs. the maintenance costs of generators that are used purely as backup, the discount to fuel prices due to not having to pay taxes on them… not a simple number to come up with. Once I have my spreadsheet done I will give you the actual tally).
    As to a depression in a society using an asset backed currency: There were numerous depression throughout the US during the 18th and 19th centuries. What year did the US drop the gold standard and go with fiat currency? Hint… it’s in the twentieth century.
    Now, I prefer the concept of labour backed currency with a deflationary marker personally… I actually agree that fiat currency is a bad idea. I have always been a little curious about how exactly it got to be as widely accepted as it is, but an asset backed currency has not shown itself to be recession or depression proof. It is less prone to hyper inflation, but not proof against regular inflation.
    Also: Really? Gold was useful because it could be shaped into intricate jewelry and not because of its scarcity? Why is copper not the defacto show of wealth? I have worked with both (I used to make jewelry) and let me tell you, gold is actually harder to work. It is a major pain… it is far too soft for easy working into intricate shapes. Once you fire it you really have to be careful or you simply get yellow coloured expensive liquid.
    As to natural law… property laws were held in fairly high regard in the US by the founders, but there has been a great deal of debate amongst philosophers as to what is natural law… what is the role of the individual and what is the role of the state. You picked a set of people you agree with on this subject, but to claim that I am stating I am smarter than the founding fathers of the US and completely arrogant is a lie. I am picking different great men to stand on the shoulders of than you are… that is all.
    Now, natural law is a misleading term to me. Natural law is that mass attracts mass, that the rate of entropy cannot decrease within a closed system, that the amount of energy needed to propel a given mass increases exponentially as speed increases. Those are natural laws. Property is the result of society and society determines the limits on property. The method that Austrian economics proposes for the protection of property is simple force, with no need for any form of reciprocation, the lone wolf strategy in other words. The problem is, wolves die without the pack.

  7. September 26, 2008 at 1:44 pm

    Oh, and Pankj:
    As to all war being the result of the social contract… you made the claim, it is your responsibility to back it up. I have seen no evidence that all war is the result of the social contract and you have presented none.

  8. 8 Pankaj
    September 26, 2008 at 4:06 pm

    Tell me one war that was started without a flag, a nation-state being involved. When people are living in a stateless environment, like pre-christianity Ireland, or modern day somalia, the conflicts between individuals lead to fights, brawls etc. But never the wars that lead to the killing of hundreds, thousands even millions of people.

    “I am picking different great men to stand on the shoulders of than you are”
    That maybe true, only that these people are obscure statists. OR “intellectuals” paid for by the govt. Note that I see a bias of such “intellectuals” towards statist ideology. Their job is to never let anyone think about the real role and responsibility of the state.

    “The method that Austrian economics proposes for the protection of property is simple force, with no need for any form of reciprocation, the lone wolf strategy in other words”
    Would you for once, go read their ideology and not make things up on your own?
    The whole opposition to state comes from opposition to the MONOPOLY of FORCE of the state. Not Force itself, but monopolies of force. Thats enough on that topic – but you got to know a little bit about the philosophy you are talking about, cant just keep making stuff up! And no, wolves do live without packs as well, what Austrians want people to be is an elephant, not a wolf. Its strong and big enough to fight its way through anyone, and although a pride of lions may succeed in able to kill it – because there is no alpha leader, killing one elephant does not end the source of strength of the elephants nearby.

    “Why is copper not the defacto show of wealth? I have worked with both (I used to make jewelry) and let me tell you, gold is actually harder to work. It is a major pain… it is far too soft for easy working into intricate shapes. Once you fire it you really have to be careful or you simply get yellow coloured expensive liquid.”

    Who said anything about defacto show of wealth? that was you. The visibility of wealth can or cannot be avoided. The value for gold has nothing to do with show, but rather the acceptibility of gold on the market as a high value commodity. Note that the price of oil has been steady with respect to gold, after the technology has matured. Which tells me if you go to Saudi Arabia, hand them some gold in exchange of oil, your oil price would be constant. Copper was money at one point of time, when pure copper was hard to come by and people valued it highly as well. But the Austrians are not saying ONLY GOLD. They are saying any commodities will do, just make sure you specify what commodities you are backing the money up with. The value of the commodity to the receiver of the money will determine the exchange rate. For that matter gold has been stable in prices with respect to most other commodities, but if you like you can have corn backed money or water backed money.. really, there is no restriction, but you would know that if you ACTUALLY go and read the Austrian theory.

  9. 9 Pankaj
    September 26, 2008 at 4:11 pm

    “There were numerous depression throughout the US during the 18th and 19th centuries. ”

    Figures, numbers and sources please.

  10. 10 Pankaj
    September 26, 2008 at 4:19 pm

    “Really? Gold was useful because it could be shaped into intricate jewelry and not because of its scarcity?”

    I explained the use of gold, not the value of gold in jewellery. Women also use flowers, and garments, these days make-up.. are they indication of show of wealth as well?

    The value of gold is what it is because the wide spread acceptance of it as a high value commodity. It is a much better type of commodity to back up currency or as a medium of exchange because it holds high value in even in small quantities, is easy to transport, can easily be divided for distribution or put back together. It is virtually indestructible. And it is easy to identify. It is also not possible to simply create it out of cheaper entities like paper.

    Labor backed currency is another idea. In fact it kinda already exists. It is called work contract. All you need to do is give the people who are going to perform the labor (uniform people please, no short, tall, strong, weak, skilled and unskilled) just a single file grade of laborers behind each type of labor backed currencies.. when you do that AND you allow the cashing of this resource at the will of the bearer (as with commodities), you can have labor backed currencies.

  11. 11 Pankaj
    September 26, 2008 at 4:22 pm

    So the main point of disagreement is
    “Property is the result of society”

    I vehemently disagree – Property is the result of a individual’s labor. And no society cannot set limits on my property, not without my explicit and voluntary consent.

  12. 12 Pankaj
    September 26, 2008 at 4:31 pm

    “one has to take into account the subsidies used in oil exploration and refinement, roadway maintenance by government vs. private roads as proposed by Austrian economics, the actual costs of the generators which are not simple things and aren’t purchased as a single unit, generator maintenance due to ongoing running vs. the maintenance costs of generators that are used purely as backup, the discount to fuel prices due to not having to pay taxes on them… not a simple number to come up with. Once I have my spreadsheet done I will give you the actual tally”

    Isn’t it funny that inspite of subsidizing oil exploration, refinement, roads – all govt creations – the govt ITSELF is unwilling to utilize them to its benefit, and YET it is the fault of the free market? Somehow the exploitative entrepreneur can be the only entreprenuer benefiting from govt, but yet again we need the SAME govt to keep those exact SAME exploitative entrepreneur in check. Do you see the self contradiction there? In absence of a govt, there would be no oil exploration subsidies, so oil tycoons like Rockafeller would have to drill, purify and distribute on their own dime (which the first Rockafeller did). In absence of govt, there would be roads that are responsibility of the private owners. So those who don’t use roads, don’t have to pay for them – why does a one city man need interstate roads? Why should he be forced to pay for them? Why should a man in Florida or Kansas, where the land is flat and so roads are cheap, have to pay for the expensive roads in the hilly areas of California and Utah?

  13. September 26, 2008 at 5:09 pm

    Where do I start?
    Monopoly of force seems as good a place as any. There is always a monopoly of force. That is the truth of natural law. I suspect that I am physically more capable in a fight than you are (although we have never met so I don’t actually know… I am basing it off of one comment on another site and my knowledge of my own capabilities). In the absence of law I obey whatever internal moral code I posses. If I posses a moral code that says I don’t respect your right to own stuff, I can take it (providing I am physically stronger). You might have a gun, which means that I am likely to shoot you instead of beating you up, it is safer for me. A gun is an equalizer, but that equality is undone by the fact that I have no morals (in reality I have morals, this is a hypothetical situation) and am willing to kill you to get what you have. Maybe instead of shooting you, I have a friend and we have agreed to co-operate to take what you have. Now there are two of us and if you are not in a defensible position we are probably going to convince you to relinquish your gun, then we take your stuff. Now we have your stuff plus an extra gun… and you have nothing.
    A private police force is simply not a remedy for this. The reason is that a private police force is only answerable to the person who pays them. If I have a great deal more money than you I can hire a private police force that can beat up your private police force. You might decide to band together with a bunch of friends and pay a private police force to help you out, and then all of you might agree to go in on the costs… but anyone not in on the deal doesn’t get the protection and I take their stuff and hire an even bigger private police force. Oh wait, I probably need people to farm all that land I have taken, people to do the manufacturing jobs I don’t want to do, etc. I know, I have a shitload of land I just stole. I’ll take some people who don’t have land (and there are people who don’t have land… I made sure of that by taking it from them) and let them live there, under the protection of my private police, in exchange for their labour. Hell, I will even let them keep enough food to feed themselves. To guarantee that they won’t rebel I will make sure that their farms only grow a limited number of crops, and other farms in other places grow other crops… then I will make sure that some of the crops from here go there and vice versa.
    So, this is a simple scenario that has played out a million times around the world. The war starts because the people I have on my land keep having kids… food is starting to get tight. You have hired (along with your friends) a large private police force, and you all know how to fight as well, or, more likely, you went the militia route. My private police force doesn’t have to farm. They are all excellent marksmen and professional soldiers. If you went the militia route it takes them a day and a half to destroy your army. Now, there are still a bunch of you hiding in the forest and making guerrilla strikes, but we own your farms. We take what we want, we settle people there.
    This is what has happened every time there has been a place without government. Someone forms a government by force… the ones who form governments to resist that government stand a chance, the others are wiped out. Only in our new, more civilized age has that changed. Iraq and Vietnam would not have been a problem for Atilla, even if history had granted his horde and his enemies modern weapons.
    For a stateless war, look to the highlands of Papua New Guinea. There are wars there all the time, however there is no stateless area (nor has there ever been a stateless area) that has the resources to wage war on the scale you are talking about… in order for a society to reach the point where it has the manufacturing capability to make weapons that will kill on that scale, it has historically always had some form of government.
    As to depressions in the 18th and 19th century, this is easily obtainable public data. It isn’t even controversial.
    One article that points out issues specifically with employment and monetary supply under the gold standard is here:
    http://www.econlib.org/library/Enc/GoldStandard.html
    This chart shows actual economic trends over the period in question… note that there is an upward trend, but that there are massive down dips as well:

    There is this article, and a number of supporting ones on this website:
    http://thearchdruidreport.blogspot.com/2008/08/idols-of-marketplace.html
    Gold Standard:
    You were the one who claimed that the value of gold was its ability to be worked into intricate jewelry. I was the one who pointed out this was asinine. Commodity backed currency is something that we don’t totally disagree with, but I do see flaws with it. It is a simple tool, but a simple tool is only applicable to simple situations.
    I dealt with property is the result of society in the first paragraph. Every argument I have heard against that is specious at best. Tell me how, with your great capabilities, you are going to keep your property, hell, tell me how you are going to keep me from living on and farming your back 40.
    As to the last paragraph… I am attempting to give you a fair assessment of your argument. I am not cherry picking data that support my case (even though the numbers for it are far easier to obtain). To argue with that practice strikes me as rather short sighted. Perhaps I will simply take current oil prices, drop the subsidies, and not count the government added costs? No, that would be a dishonest practice. I am trying to come up with a fair metric. I am even throwing in a hefty (but arguable) discount on the actual generators and the cost of maintenance on the basis that in theory the greatly increased number of such generators should increase the number of people who have the expertise to maintain them and the greater production runs should decrease the cost per unit.
    As to the price of road maintenance… you are aware that most of it is handled on a state or municipal level right? You pay the most towards the roads in your municipality, then you pay a bit to the state highways, and a smaller bit towards the national roads. Now, those roads (the national ones) only exist because there is a body big enough to build them. without those roads, you don’t have access to the same foods that you enjoy in the supermarket, the fuel that you want to use to run your generator, the clothing that you buy so cheap at wal-mart. Even if you never leave your neighborhood, don’t own a car, never got your drivers license, if you drink coffee you are using the road interstate road system, if you buy clothing manufactured more than a few miles away (and in America you do, because there is no other choice) you use the interstate road system.

  14. September 26, 2008 at 5:22 pm

    Oh, one other thing Pankaj:
    Have you ever actually studied wolf packs? I find it unlikely. Lone wolves typically follow the pack they were cast out of, attempting to harvest whatever meager food they can from the packs leavings because they are a pack animal and are poor solo hunters. Most lone wolves die within one year of being cast out. Very, very rarely a lone wolf will find other lone wolves. Usually they fight each other because they already lack food and unless there are enough of them to hunt effectively the two of them are only reducing the food supply each has available. Again, that is natural law. We are a pack animal.
    Elephants are actually a poor example. While a single elephant is hard for predators to kill, elephants are one of the most herd based animals in existence and tend to die very swiftly when they are alone. They are simply unequipped to survive solo.

  15. 15 Pankaj
    September 26, 2008 at 6:22 pm

    “Now there are two of us and if you are not in a defensible position we are probably going to convince you to relinquish your gun, then we take your stuff. Now we have your stuff plus an extra gun… and you have nothing”

    Isn’t this EXACTLY what the state does? And no, there is no need to have a monopoly of force. There will be imbalance of force, not a monopoly. Look at what happened with the US in Iraq. The mighty US war machine has weakened by annexing the oil rich Iraq, not gotten any richer. Note that the US govt is trying hard to declaw the Iraqi population (as opposed to iraqi insurgents), but has not succeeded yet. Yes you and your friend can try to attack me – but there is a risk that you will be shot. Now the question for you becomes, is it worth it to get shot in an attempt to steal my gun and some stuff? Like I said before a good life is the most useful thing. And even a dumbest of idiots knows its no amount of stuff is worth loosing your life over, especially when there are other easier ways to earn what I have, without starting up hostilities with everyone that was benefiting from me. UNLESS, you can conscript people, or even draft them into a “volunteer force”, then this idiotic venture is a no-loss situation. Hail the STATE!

    “Have you ever actually studied wolf packs? I find it unlikely”
    Wrong again.. but what does it matter. You wont even stick to a single point. It would be better if you respond to my power generation questions first, rather than dragging the conversation all over the place. First power then fuedalism, fed vs no fed, gold vs copper vs labor, now wolves..
    Quite frankly you have no facts to back anything up, simply assertions and you expect me to take it? – BECAUSE YOU SAID SO, does NOT make it SO.

    “elephants are one of the most herd based animals in existence and tend to die very swiftly when they are alone” Only females herd, not males, that too is a voluntary and cooperative coalition. As for die very swiftly, have you seen an elephant? Do you know what an elephant is? These are the exact animals were used in the armies that defeated Alexander’s mighty legions. And yes, they were used against those armies by Alexander’s genius as well, which caused a turn around in the battle of thousands of men on both sides. If you are going to make any assertions at least try to make them believable, baseless as they are – they don’t have to be ridiculous.

  16. September 26, 2008 at 7:20 pm

    Pankaj:
    Actually, what I am doing is taking apart each of your arguments, none of which are fact based in any way. You ask for facts but provide none, 0, zilch.
    My example of the two people… that is the way a state is formed, and it is the situation every time you have an extended period of time without a state.
    Your argument that my friend and I would not take your stuff actually completely disregards the totality of human history, hence it is not a valid argument. It is a pie in the sky ivory tower theoretical perfect world where everyone has skills they want to trade for labour, there is no inequality of ability and people work everything on enlightened self interest instead of the many people who work on short sighted, brutish self interest.
    The power generation thing has become a serious thing with you, and I am trying to do your research for you. You asserted that it was more efficient to generate power with a series of medium sized generators than it is with centralized power generation… you failed to back up that assertion. I am currently attempting to find decent numbers to determine one way or another the truth of that. Again, it is a complex equation that I could easily give short shrift to… much the way most economic issues are dealt with in Austrian economics (what was the average unemployment rate while the US used the gold standard in the nineteenth century?)
    Every time I do give you facts and figures you jump away from them… you question until facts are produced and then ignore the issue. If, at the end of my power generation research I discover that I was wrong (even using the very generous method I have devised to determine prices under a free market system) I will freely admit that. You do no such thing when you are called on a point.
    The wolf pack thing was a metaphor that you called into a discussion on biology and naturalism… and you were still wrong.
    The elephant is another such example. You stated that Austrian economics wanted us to be Elephants. Elephants are great fighters, one elephant can kill almost any single opponent that attacks it, and are usually even able to kill small packs of predators. Large packs kill the young and the old, unless the herd protects them. Elephants also have specific issues going downhill to water. This is due to the balance of their bodies. The herd makes sure that not all the elephants are in this vulnerable position at once. Life is complex, the ability to beat things up doesn’t make you safe… you have to think, you have to co-operate. You espouse a philosophy where that co-operation is optional, despite all of history as contrarian evidence (after all, if laissez-faire capitalism works, how come there is not a single society based on it on the entire planet… the closest you get is some primitive tribes in the middle of the jungle)

  17. 17 Pankaj
    September 27, 2008 at 3:41 pm

    “Life is complex, the ability to beat things up doesn’t make you safe… you have to think, you have to co-operate”

    Agreed 100%. But make cooperation voluntary. That means if I agree to cooperate with you within reasonable limits of the word “cooperation”, you cannot point a gun at me when I say – sorry cant kill someone for you. This is exactly what the state does.

    “how come there is not a single society based on it on the entire planet”
    Because the price of liberty is eternal vigilance. And then there are those “power hungry” that will brainwash people to think that an artificial entity which has a gun to your head is actually helping you. (Reminds me of GOD and Hell of the christian left). God is good, God is great – only till you do what HE tells YOU to do. The moment you refuse to obey – you are damned to hell. Be the obedience be in case of giving church money or threatening/killing non-christians to convert them.
    No Liberty has been a long forgotten natural state of man. Careful “education” and control of every facet of life over the centuries, has lead people to believe that the state has their best interest at heart.
    Take this example – if you ask a Canadian if his govt cares for him and hence is necessary – he would mostly agree (or else he is against his state), if you ask an American the same thing – again the same response and position. So with an Englishman, Chinese, N.Korean, Cuban people. But you can notice that none of them have the same idea of govt. None of them have the same laws or same system of delivering justice. How can they all be right?

    As for those that think the state does NOT care about them – ask them why they have not left the country or stopped being a citizen of the country they live in? Also note that the country – i.e. every bit of land within its territory and is truely OWNED by the state. A citizen is merely a renter worker (a modern equivalent of the feudal share cropper). A citizen necessarily has to either affiliate with another country – and become a “foe-reigner” in the society where he was born. Why cant he simply give up his citizenship and continue living as he likes – only forming voluntary associations that he chooses to? He may not use public roads or any other publicly funded facilities, but it is not as hard as you think it is. This is why the govt lays a wholesale claim to the property that was built out of public’s money. If taxpayer monies have paid for the construction – shouldn’t an immigrating citizen get a infrastructure investment rebate? Please note that his ancestors also contributed to the public investment from the taxes they paid – so where is his inheritance? Shouldn’t they who die in the country – having paid the taxes into public infrastructure investment be able to hand over the inheritance of their share of investment to the people?
    Only no govt allows disinvestment in GOVT! Lets say we just allow this for people who work 40 hour/week jobs, or 80- hour/week jobs – would that not be fair? Since according to you the benefits of the state are for those needing it – why not allow the poorer people the right to disinvest in govt if they choose to give up their citizenship? Lets do that – shall we?

    On the other hand, the rich can afford lawyers (ever hear of HR Block?) to avoid tax payments and I believe the length of the tax code is not an accident. It is a artificial forest to allow holes for the rich and wealthy to pass through unpaid. Then they have lobbies to fund their businesses via govt contract. The rich have nothing to loose under socialism – contrary to commonly held belief – the rich have everything to gain – and poor risk loosing everything they own – just on a one-by-one basis.

  18. October 7, 2008 at 11:14 pm

    Pankaj: Look at the real history of laissez faire… I recommend you start with The Shock Doctrine by Naomi Klein. Agree with her or not, you can’t fault her footnotes, she backs everything up pretty hardcore.
    The truth is that every time regulations are loosened and society approaches the dream of completely unregulated markets it fucking collapses.

    Do you have any good sources for pricing on diesel generators? Everything on that scale that I have found is call for quote.


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