 | | The Daily Reckoning | Saturday, June 9, 2012 |
- The Market for Liberty: Revisiting the classic voluntarist text,
- Readers weigh in on Apple vs. Gold,
- Plus, all this week’s reckonings archived for your free and uncoerced reading...
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|  | | | | | | Joel Bowman, checking in today from Buenos Aires... | |  | | Joel Bowman | A couple of years ago, after debating the idea of voluntarism with many a friend and foe alike, somebody sent your editor a copy of Morris and Linda Tannehill’s The Market for Liberty: Is Government Really Necessary?
“This will not solve everything,” the friend who sent it wrote, “but it will get people thinking about what is possible...what is probably, even, without the force of the state.”
And right they were. Although the case for freedom always rests on its firmest foundation when debated from first principles, it nevertheless helps when one can discuss how these propositions might play out in the practical world, the “real” world. The Tannehill’s timeless work inspires in the reader the kind of “ah ha” moment that leads to exactly this kind of deeper thinking.
Yesterday, Laissez Faire Books released the 2012 publication of Morris and Linda Tannehill’s classic. We were honored to have been able to contribute the forward to the newest edition of a work we hold in such high regard. That essay, Freedom, Naturally, serves as this week’s feature article.
Please enjoy...
| | | | | The Daily Reckoning Presents | Freedom, Naturally
By Joel Bowman | | | It is at times useful to imagine how a truly laissez-faire society, one entirely emancipated from the shackles of state coercion, might exist and operate. Morris and Linda Tannehill examine this very idea in The Market for Liberty: Is Government Really Necessary?
The Market for Liberty imagines a totally free society — one with no government intrusion whatsoever — in which the free market is left to respond to the demands of individuals without recourse to institutionalized coercion, implied or actual. Is such a stateless existence even possible, much less preferable? Or, as so many contend, is it merely an academically contrived utopia?
Morris and Linda Tannehill address all the usual fears and protestations that a truly nongovernmental — i.e. anarchist — society conjures up.
Whenever there arises in conversation the mere suggestion of a totally free, laissez-faire market — the possibility that human beings might even be able to survive (much less thrive) without the safety net of state control — apologists for “benevolent government” invariably step atop their soapboxes and ask, “Yes, but who will provide education for the masses, if not the public schools?” or “Who will care for the sick and weak, if not the public hospitals?”
Indeed, these are questions that deserve thoughtful, honest answers. But these questions assume realities that are not in evidence.
They suppose that “the public” (i.e., the state) actually has money to “provide” these services, rather than, as is actually the case, first having to expropriate (steal) it from private, productive individuals. Furthermore, the fallacy of benign governmental control relies on the idea that governments can provide essential services more reliably and cost-effectively than the private sector.
In other words, the government’s obligation to provide essential services is more reliable and effective than the private sector’s opportunity to provide essential services. Admittedly, this debate does not lend itself to easy, black-and-white conclusions.
But as the Tannehills argue persuasively, the free market provides solutions that governments would never dream of. “The big advantage of any action of the free market,” contend the Tannehills, is that errors and injustices are self-correcting. Because competition creates a need for excellence on the part of each business, a free- market institution must correct its errors in order to survive. Government, on the other hand, survives not by excellence, but by coercion; so an error or flaw in a governmental institution can (and usually will) perpetuate itself almost indefinitely, with its errors being “corrected” by further errors. Private enterprise must, therefore, always be superior to government in any field.
(It is worth mentioning here that corporations acting in collusion with the state are not private enterprises as the Tannehills define them. They are simply entities that have co-opted the government’s “gun-for-hire” to do their dirty work for them. Think Wall Street “bailout” recipients and their army of DC lobbyists. Indeed, think any institution at all that seeks unfair protection or promotion from the state.)
The lines on the battlefield between the comfort of state control and the liberty of anarchy are familiar to all. The state is a protector, one side argues. The state is a prison guard, the other side argues.
- How, the statist is heard to question, might common disputes find resolution without the currently preferred monopoly of the state’s courts?
- What about private monopolies that would ruthlessly jack up prices and bleed us working-class proletarians to death?
- By what means might a laissez-faire society offer protection from foreign aggressors?
- How might the personal liberties underpinning the whole system be protected if it were not for the tireless work of the state’s police and its myriad other law-enforcement agencies?
Indeed, the statist continues, how would “the law” itself even come into being, and in what shape would it find application in the absence of the all-knowing, all-powerful state? The Tannehills address these anxieties thoroughly and logically. “Freedom is not only as moral as governmental slavery is immoral,” they write, “it is as practical as government is impractical.”
Discussions criticizing the state’s myriad shortcomings and follies are many. The Tannehills’ Market for Liberty takes the extra step in providing viable, concrete solutions to state-sponsored dilemmas. The free market, they argue, can correct the state’s tendency toward costly excesses, and can do so peacefully and voluntarily, simply by following price signals from the market itself.
The Market for Liberty is, for all intents and purposes, a very real, practical solution set to those most commonly presented excuses for acquiescing to governmental authority. The government is not merely a “necessary evil,” the Tannehills argue. “It is necessarily evil.”
Of course, The Market for Liberty does not project a utopia in which acts of violence simply disappear and where every individual immediately sets off on a long road to perfection. Rather, the authors illustrate how individuals acting in their own self- interest, coming together to engage in mutually beneficial exchanges, are thus incentivized to act with honesty and integrity.
“The history of governments always has been, and always will be, written in blood, fire and tears,” the Tannehills assert. In The Market for Liberty, they show how freedom is not only an alternative to the state, but a far superior one worth, at the very least, our immediate and undivided attention.
Regards,
Joel Bowman,
for The Daily Reckoning
P.S. Did you receive your copy of Morris and Linda Tannehill’s Market for Liberty yesterday, Fellow Reckoner? It should have arrived sometime in the morning, from the desk of Jeffrey Tucker and the team at Laissez-Faire Books. Members of the Laissez-Faire Club, which costs about ten bucks to join, receive no less than four books per month, one every Friday. So far we’ve covered such titles as Rose Wilder Lane’s The Discovery of Freedom, Bill Bonner and Pierre Lemieux’s Idea of America, John T. Flynn’s As We Go Marching and plenty more. They’re all in the archives...ready and waiting for you to download.
What Jeffrey and the Laissez Faire Team are creating here is truly something special. The Club is a fully digitalized experience dedicated to the promotion of liberty. It is the kind of place where freedom lovers can come to learn, exchange ideas, discuss market opportunities and plenty more besides. If you’re not yet a member...and not yet receiving these books, we kindly invite you to join us, here.
| | | | Addison Wiggin’s brand new book, The Little Book of the Shrinking Dollar, is turning a few heads...
“I strongly recommend this book,” wrote Chuck Butler, President of EverBank World Markets, in his Daily Pfennig newsletter. “And at [254] small pages,” he added, “it’s a quick read. It’s all spelled out for you. Things I’ve talked about for years, and now it’s right here in a great book! Kudos to Addison Wiggin!”
The Gloom, Boom and Doom Report’s Dr. Marc Faber had this to say: “The Little Book of the Shrinking Dollar is not an academic paper published by some ignorant economists. Not only does Addison convincingly and disturbingly argue that ‘every paper currency in the history of civilization has eventually lost its entire value,’ but he also offers ways to protect our wealth.”
Long story short, this book is making waves. You owe it to yourself to read it. In fact, we think it’s so important, we’ll actually give you a copy... Free! Click here now to grab yours before it’s too late.
| | | ALSO THIS WEEK in The Daily Reckoning...
| The Subprime Student Loan Bubble
By Bill Bonner
Baltimore, Maryland
The feds paid for one heckuva a lot of education...subsidizing students and colleges...with trillions of dollars. They pay for GIs to go to school. They give grants to the schools themselves. And they hand out hundreds of billions in loans, at low teaser rates (just like subprime!) to students...often to students who are unqualified and unlikely to get much out of it.
Christmas in Killarney...80% Off!
By Ronan McMahon
Waterford, Ireland
In Ireland these days, your real estate dollar goes a long way. Today’s fire sale auctions have exposed true market values that can be 80% lower — and sometimes more than 80% lower — than the peak prices of 2007. Today, real estate agents and sellers know that to even have a chance of finding a buyer they have to sell at deeply distressed rates. You know things are bad when real estate agents don’t even bother with photos on listing websites. That’s the case in Ireland today. And it’s particularly the case in rural areas away from the big cities.
On Jelly Donuts and Gold
By Eric Fry
Laguna Beach, California
Gold is “forever unproductive,” says Warren Buffett, CEO of Berkshire Hathaway. “Civilized people don’t buy gold,” says Buffett’s sidekick, Charlie Munger. Civilized people, says Munger, “invest in productive businesses.” So let’s see... Where does that lead us?
Three Investment Ideas to Avoid...or Sell Short
By Chris Mayer
Gaithersburg, Maryland
Jim Chanos is a man who sells his stocks first and then buys them later — hopefully, in his case, at much lower prices. He profits when stocks go down. Chanos is perhaps most famous as the man who sniffed out the fraud that was Enron. In Wall Street parlance, he is a short seller. At the recent Grant’s Investment Conference in New York, this great short-seller gave the audience a half-dozen short sale ideas. He called them “value traps” because they look cheap on the surface but have serious problems underneath. You don’t want to own any of these ideas. I’d like to highlight three of them.
“¡Qué Quilombo!”
By Joel Bowman
Buenos Aires, Argentina
According to the Sermon on the Mount, “lusting after another woman” is a sin, even if you never act on that lust. But now comes Argentina’s Minister of the Interior to assert that lusting after another currency is a crime, even if you never actually trade your pesos for that other, temptress currency.
| | | | Only 62 People Know Exactly Why These Four Companies Could Change the World
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This could go down in history as the story of our era.
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| | | | | The Weekly Endnote...
| | | After Eric’s fantastic “On Jelly Donuts and Gold” piece earlier in the week, in which he lambasted Buffett’s assertion that gold is an “uncivilized” investment, we observed...
“[T]he Berkshire Boys are not the only folks pooh-poohing gold these days. In fact, bashing gold is something of a daily Wall Street pastime. And even those folks who feel no need to bash gold are quite content to ignore it. They’d rather buy a “hot stock” like Facebook...ugh...or maybe a proven winner like Apple.
“We have no idea who’s right or wrong here or, more importantly, who will be right or wrong going forward. But we’d love to hear your thoughts on the subject...just for kicks. We’d like to hear from you whether gold or Apple will be the better bet over the next five years.”
We asked...and, as usual, you responded. First up, Fellow Reckoner Tex provides the following insights...
Apple has done well, but it’s observable that the “wellness” was based on the efforts of one man: Steve Jobs. Apple had to bring back Jobs just to remain solvent and avoid ultimate bankruptcy. Now that Jobs is deceased, the unknown factor is his replacement(s). Can anyone really replace an innovator?
Yahoo! recently ran an article posing the same question: Would you put your money in Apple or in Gold? My response was gold. Especially for the next 5 years, all currencies (fiat) have nowhere to go but down. Not because I say so, but because the laws of nature dictate that something-for-nothing ultimately results in nothing.
Buffet/Munger probably secretly understand this concept but can’t afford to admit to it. They’re too involved in the political-rewards process. That very political process is what saved them. The bailouts saved several of their Berkshire holdings that otherwise would have gone Chapter 7. From a rational viewpoint, they’re not going to bite the hand that saved their bacon. The question now is, “For how long will their bacon be saved?”
Bush 43 made the mistake of not letting the Clinton recession run its course. Had he done so, we would not now be having this debate. But the refusal to let the market clear-out the deadwood has now come back in-spades to bite us. Who would have thought that we’d throw productive folks under the bus in order to save the unproductive dinosaurs? Too big to fail is a contradiction in terms. Kicking the can down the road only postpones the inevitable collapse while insuring that the results of that ultimate collapse will be far worse.
Gold is not-yet in bubble stage because the man on Main Street is not yet aware of gold. When your waitress volunteers as to how she just took out a 2nd mortgage on her house and bought gold, THAT will be the time to get-out and reassess your options.
And this, From Reckoner Don D., checking in from Portland, “United Police States of America”...
Initially, I would point out that Buffett’s comparison between gold and productive businesses is a bit misleading. Productive businesses are simply vehicles for producing dollars. A locomotive is not a store of wealth — it is a means of making money. The real comparison is between gold and paper money, and we all know how that contest will end.
As for gold and Apple in the next five years, I would have to bet my FRB notes on gold. In the next few years, two critical trends will likely continue — the growth of the middle class in developing economies will slow, and the central banks of the world will print. The first is bad news for Apple, and the latter is good news for gold.
And finally this week, responding to Bill’s essay on education in America, Reckoner Hemming writes...
I graduated from a midwestern university in 1953, while, at the same time, working fulltime at a local grocery store chain.
As you can imagine, many of my fellow students were veterans of WWII who were getting a free ride via the GI Bill which included free tuition plus a stipend for living expenses.
College then was, for me, light-years apart from high school. We were not coddled, not babysitted and not supervised to see if we could do the work. As a result, my freshman class quickly deteriorated by at least 50% the first semester and went further downhill from there.
I don’t know the graduation rate of fellow students, but I would estimate that only 10% of initial freshman actually did the required work in order to achieve a degree.
I find it ludicrous to assert that everyone needs a college education. As Red Sanders, a former football coach at UCLA, was reported to say, “Everyone is not created equal — some are bigger, stronger and faster than others”.
I think we are emphasizing the wrong attributes by government fiat. Instead of emphasizing quantity, we need to focus on quality — quality of education for the folks who are willing to pay their dues by adhering to the rigorous requirements to actually achieve the end result of their efforts, i.e., a good education — which is not dumbed down for the masses as it is reportedly the case today as we are told that many, if not most, high school graduates do not have the academic background to comprehend what college education is all about without serious remedial education to make them college ready — a price they will not be able to pay.
We see the end result of government intrusion in education, just like “everyone should own their own house” — a lie that is so destructive that it causes pain to the entire country.
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Apple or Gold? Education or Miseducation? As always, we welcome your thoughts. Email them to the address below and...
..enjoy your weekend.
Cheers,
Joel Bowman
Managing Editor
The Daily Reckoning
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Here at The Daily Reckoning, we value your questions and comments. If you would like to send us a few thoughts of your own, please address them to your managing editor at joel@dailyreckoning.com
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