We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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Samizdata quote of the day “What I find fascinating is how many intelligent people are willing, even feel urged, to provide intellectual support for a system that is not the result of intellectual discourse but came about – rather non-intellectually – through sheer power politics, opportunism and hubris, and that is evidently failing. Our financial system (or non-system) offers a great example of Nietzsche’s dictum that investigating the true origin and the true motivation behind things most often leads to surprising results. The purpose and the clever design that most people later believe to be behind various institutions are often only projected onto them with hindsight.”
– Detlev Schlichter.
As regular commenter “Laird” said the other day, compared to the chicanery that is modern central banking, the row about the LIBOR business is small beer indeed.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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OT–
I have update material on my experiences with the 3d printing. If you’ll drop me an email address to use, I can drop you information on either a short-sweet basis, or a full-up blog-post with images/links/etc.
Over the years, various audits of US government agencies have found any number of major violations of financial and accounting rules that would have led to criminal charges and heavy fines if found in a private entity.
Everyone is familiar with the problems associated with the Pentagon, but there are similar, if not worse, abuses in numerous other state organs like the IRS audit a few years ago that found multiple major instances of improper accounting techniques, both internally regarding their own budget and externally toward taxpayers, or the billions of dollars that the Interior Dept recently lost in a case over its mismanagement of various royalties owed to native tribes, etc.
The malfeasance at the welfare and social security agencies is so widespread that no one can figure out how to find out where all the money is going, or to whom.
One of the significant negative consequences of any state which accumulates excessive power and resources to itself is that it becomes the means of theft and corruption rather than its preventer.
The reason Acton was right is that the opportunity for corruption emits an ethical odor in the same way decomposition emits the odor of rotting flesh.
The latter attracts buzzards, vultures, flies, and other scavengers.
The former attracts politicians.
Wrong thread Russ.
For once someone, other than me, has hit the wrong key (or whatever).
As for the financial sytem.
One point to remember is that no one designed in this way – or in any way.
It was not designed – it was a series of interventions over a very long period of time, and each intervention seemed SENSIBLE, although the end result is demented and doomed.
To take the American example….
The stuggle over the government created National Banks (First, Second – see such works as Rothbard’s “The Panic of 1819″and over President Jackson’s alternative of “pet” State level banks . Left the United States with basically State level banking which worked (after a fashion) in the 1840s and 1850s.
The pre Civil War banking boom-busts were understood by some (perhaps by President Martin Van Buren who, although a professional banker, insisted on payment of taxes in hard currency and refused to allow tax money to go into banks – neither a “national bank” or “pet” State level bank [because both built inverted pyramids of debt on the base of the money – i.e. debt far greater than the amount of money put into them], perhaps this should read BECAUSE he was a professional banker….), Senator “Bullion” Benton certainly understood banking – and they kept out of his way. After all Benton was not exactly a peace and love type – “President Jackson? Oh yes I remember him – I shot him once, a fine man”.
But most people just knew there was something dodgy about banking – they could not have told you what, specifically.
People understood that bankers lent out the savings that were entrusted to them (hopeing that most people they lent the savings out to paid back the loans, with interest, at the due time). However, they were also aware that bankers did other things to – things that caused boom-busts, but they could not tell you what.
So when political action was taken it was hopeless – such as the State of Iowa’s ban on banks. The farmers in Iowa knew something bad was going on, but they did not understand what (and the experts were no help – they insisted on talking in technical jargan which was, at best, meaningless and, more normally, activelly deceptive). So they just banned banking – thus throwing the baby out with the bathwater.
The baby – because the main buiness of bankers (back then) was indeed lending out real savings – they did lots of other …. also, but the core business was constuctive.
So things carried on till the Civil War – which (unsurpriseingly) messed up finances.
The National Banking Acts seemed a good way to restore order – certainly the experts said so and the main New York baners agreed.
Oddly this next stage in social evolution seemed to produce worse boom-busts there had been before the Civil War (although these boom-busts were not the product of human design – although they were certianly the product of human action), so the Federal Reserve was created to deal with this.
And then there were lots of other moves (going down to out own day) each one a pragmatic response to problems,but…..
It all gets too depressing.
Anyway… (as I have been in a coffin sized glass box in the sun for 11 hours and am in a even worse mood than normal….).
All this social evolution stuff does not work when it is govenrment intervention that is doing the “evolving” – even with (indeed especially with) the advise of the leading expert and the advice of the leading practical people in the field (in the case bankers).
The Common Law is another example – left to lawyers it becomes unusable as a way of settleing commercial disputes, so only when PRINCIPLES (ouch that terrible word) are imported into the system (by such people as Judge Mansfield in England and Professor George Bell in Scotland) is it really useable – as other than a job creation scheme for lawyers.
Although even then things soon “evolve” back to the slime – for example I heard of an early 1900s case only today when the highest court in Scotland ruled against a will (where a man left money to build a great monument to himself and his family) because it was not for the “public benefit”.
What has that got to do with a contract or a will?
Bugger all.
The judges should have been flogged till their backbones became visible. Then they would have learned not to consider the “public benefit” or whether someone had “benefitted the community” – well at least other judges having observed these ones having been flogged to death, would have learned.
Just kidding, I am nice cat really.
And in banking?
How about if you are lending out money you must actually have the money you are lending out. And you then (after you have lent it out) do not have the money any more till when (and IF) it is paid back.
Just as if you are lending out water, you must actually have the water you are lending out – and if you lend out the water you do not have the money any more till when (and IF) it is paid back.
Laws from principle – rather than random laws.
Of course it may not work – just as the Peel’s Banking Act of 1844 did not work.
Instead of banks issuing “bank notes” for which they did not have the gold they said they had. They just issued other forms of debt paper (drafts, loans – whatever) without having the money they said they had.
But that is acceptable – one has a credit boom, then a bust (but not of vast size) for banks just go bankrupt if they make the bubble very big.
And if anyone (such as Walter”concede whatever Bagehot – third editor of the Economist magazine) suggests bailing out a “good” bank that has got into difficulties by no fault of its own……, then one should.
Well perhaps best not to publically write out some of my sadistic fantasies.
I will just say that those who give the banks the American version of the scan “suspension of cash payments” shoud be treated the same way.
“But that is a good practical way of dealing with the problem”.
Which is exactly why it should NOT be done – and why doing it leads to worse and worse things.
But only those who think in terms of PRINCIPLES (again that terrible word) will understand that.
For example, what is money?
Is money the legal tender of the state? Which they demand for their taxes.
Then it is a matter of notes and coins issued by the state – and naught else.
Or is money a valuable commodity that buyers and sellers have freely chosen.
Then money is this commodity (gold or silver or ….) and naught else.
Nowhere does a credit bubble, legitimately, appear.
Anymore than a book-keeping trick “water bottle” that DOES NOT REALLY EXIST can save your life in a desert.
But scams and frauds can not really destroy civilisation.
Not unless, each step of the way, “pramatic solutions” are followed to “save the situation”.
For they only “solve the problem” at the expense of making it bigger (and bigger and bigger….) later on.