Archive for December 2008
In a recent BBC News article, I noted a very peculiar insight from the author. He described Somalia as
…a country torn to shreds after nearly two decades without a functioning central government.
That means no proper hospitals, no schools and no safety. The gun means everything in Somalia.
BBC News appears to explain the abscence of services by the abscence of government, not by two decades of war.
Secondly, the BBC imply that schools, hospitals and the rule of law can only be provided by governmental action. In reality, all of these services, and more, have been provided by the private sector.
The final and most bizzare insight is the final sentence – “the gun means everything in Somalia”. The implication is that the gun does not mean everything in Ireland, the UK and the rest of the developed world. All governments rule by the gun. They obtain their money via coercive methods, much like the pirates off the Somalian coast.
The first step in spreading the message of freedom, is convincing others that they are not actually free. It is just an illusion.
The gun rules in Somalia just like it does here. The difference between pirates and emperors is negligible…
I finally got around to reading Jorg Guido Hulsmann’s Deflation and Liberty (pdf) today, which put the news that Ireland and the UK’s M2 money supply had contracted in a different light. Ireland is but a small fraction of the entire Eurozone, but the inflation/deflation debate (not just in terms of prices, but also of the money supply) is front and centre now, so surely worth finding some clarity on. From page 26:
There is only one fundamental change that deflation brings about. It radically modifies the structure of ownership. Firms financed per credits go bankrupt because at the lower level of prices they can no longer pay back the credits they had incurred without anticipating the deflation. Private households with mortgages and other considerable debts to pay back go bankrupt, because with the decline of money prices their monetary income declines too whereas their debts remain at the nominal level. The very attempt to liquidate assets to pay back debt entails a further reduction of the value of those assets, thus making it even more difficult for them to come even with their creditors…
The point is that other people will run the firms and own the houses—people who at the time the deflation set in were out of debt and had cash in their hands to buy firms and real estate. These new owners can run the firms profitably at the much lower level of selling prices because they bought the stock, and will buy other factors of production, at lower prices too.
Therefore, deflation by the collapse of a fiat money regime is really a kind of spontaneous economic revolution. As Jim Rogers put it, the credit crunch is like a brush fire – it eliminates the rot which developed over time, allowing the forest to start all over again. Given that most political incentives are to do with maintaining the comforts associated with the status quo, then, it is clear why authorities would be absolutely determined to prevent it. Where is the great Henry Ford when you need him?
Failure is simply the opportunity to begin again, this time more intelligently.
Of course, Ford also said (of the US):
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
Unfortunately the meeting scheduled for this Saturday has to be canceled. The original room we booked is no longer available and we are having difficulty securing an alternative location and I’ve also contracted a highly contagious virus [that I thought I was immunised against!] that I don’t want to spread.
Hopefully we can organise something again in the new year sometime!
We’ve decided to hold an introductory seminar this Christmas to meet anybody interested in discussing the many areas of libertarian philosophy and Austrian economics that we love discussing on our blog.
Dr. Gerard Casey, past department head and lecturer in the department of philosophy in UCD, has agreed to give a talk on a subject yet to be decided. Any suggestions or requests for a particular topic are very welcome. As some of you may already know, Dr. Casey is a libertarian philosopher in who’s office we hold our weekly libertarian discussion and book-reading group.
It will be held in the “Blue Room”, upstairs in the UCD Student Centre between 10am till 2pm on Saturday 20th December.
Whether you are a newbie or advanced, a libertarian or a statist, or even if you are just curious as to what its all about, you are more than welcome to come along. It will not be a particularly formal affair but will definitely be good conversation!