Ingo Bischoff on Why Land Cannot Be Owned, Why the Federal Reserve Was "Good" Once and What Needs to Be Done to 'Take Back' America
The Daily Bell is pleased to present an exclusive interview with Ingo Bischoff (left).
Introduction: Ingo Bischoff is the president of the San Francisco School of Economics, a California non-profit corporation. He did his undergraduate work in Physics, Chemistry and Business Science and his graduate work in Economics. In his professional life, he was the CEO of a commercial printing and publishing company for 28 years. After his retirement from commercial business, he formed the San Francisco School of Economics in 2006. A previous interview with Mr. Bischoff can be seen here: Ingo Bischoff on Real Bills and Why They Are Not Inflationary.
Daily Bell: Thanks for sitting down with us again. We're going to ask you questions based on a quantity of recent feedbacks you've posted here regarding the economic philosophy of your School and financial history generally. So if we bounce around a bit it is only because we're trying to cover areas that you've focused on recently.
Ingo Bischoff: Thank you for the invitation. I am always pleased to answer your questions.
Daily Bell: Let's jump right in. Can land ever be owned? If not, why not?
Ingo Bischoff: Let me first define what is meant by land. "Land" is all the natural universe except Man and wealth. "Land" is not only the earth, it is the oil and minerals in the ground, the air and the sea. Just as you cannot claim to "own" the air or the sea, so you cannot claim to own the earth. All you can do with them is to "use" them. I subscribe to John Locke's view of the origin of ownership rights. Locke believed that ownership of property is created by the application of labor. The application of labor on or to "land," resulting in something which has exchange value, is termed "wealth." It is human exertion, or the "labor" applied in the production of wealth, which determines ownership rights to wealth. Since "land" was not produced by labor there are no ownership rights in land which can vest.
Daily Bell: Why is a Georgist land tax a good idea?
Ingo Bischoff: By Georgist land tax, I believe you mean the "land value tax" advocated by Henry George. There is a difference. If "Land" is not "owned," on what basis could you tax it? Land can only be used and therefore it only has a "use value" aka "land value." It is this "land value" which Henry George advocates to tax. Why is it a good idea to tax land values?
The "use value" or "land value" of a particular piece of land is determined by the use to which surrounding lands are put. Anyone with right to use a certain piece of land cannot increase its value by adding improvements. The value of a piece of land only increases if improvements are added to the surrounding lands. "Land use" or "land value" must be distinguished between residential and business use. Residential use of land is for domiciliary purposes. The improvements upon residential land are "wealth" with ownership rights. The exclusive use of land upon which the improvements rest is guaranteed by a "fee simple."
The improvements on "commercially used" land are "capital" to which ownership rights attach. Exclusive use of land for commercial purposes is also guaranteed by a "fee simple" title. The value of residentially used land increases rarely. Only the addition of commonly used improvements or services can increase the location value of residential lands. On the other hand, the value of commercially used land fluctuates by the importance a particular piece of land or mineral resource takes on as being a factor of production in the creation of wealth. The payment for the exclusive use of "land" based on the "location value" Henry George called a "land value tax." The word "tax" indicates that the revenue is used to pay for the cost of government.
Daily Bell: Why are you confident that communities can wield taxes "for the greater good"?
Ingo Bischoff: "I don't know that I would use the word "wield" to describe the collection of a "land value tax" by local taxing jurisdictionsbecause it leaves the impression that something is unjustly taken. Nothing could be further from the truth. The "land value tax" is based on the location value of a particular piece of land, which derived the value from community action. It is not based on the value of the improvements upon the "land." Any improvements upon the land are "wealth" or "capital." The "land value tax" for residential use of "land" is part of the living cost for which an individual pays with his "wages." One can call it "rent." On the other hand, the "land value tax" for commercial use of "land" is compensation for the use of "land" as a factor in the production of wealth. It is also called a "rent." However, this rent is an expense and it must figure in the overall cost of production of "wealth" or in the provision of a service. What is so good about the "land value tax"?
The "land value tax" is the only tax which when applied does not diminish that which is being taxed. When I make this statement it is met often with utter incredulity. However, if you replace the word "tax" with the word "rent" the statement becomes clear. There exists a "value" in the use of a particular piece of land for which one is willing to pay a "rent" or such value does not exist. The "land value tax" itself cannot destroy or diminish the value of a location. When the word "rent" is used to make the point there is great objection because the word "rent" implies that one does not "own" the "land." With this implication, we are back to your earlier question as to whether land can be owned.
The real question is not "ownership" of land. The question is whether "use" of land in perpetuity, to include inheritance rights, can be guaranteed. A "fee simple" title acquired with the registration of a piece of land gives that guarantee. The valuation of fee simple titled land by an elected county assessor is done for the purpose of calculating a "use tax" or "land value tax."
I maintain that the founding fathers wanted a "land value tax" for the states, to be collected at the local community level, and wanted it to be the only tax to pay for the costs of government at all levels. Article IV, Section 4 of the U.S. Constitution guarantees every state a like form of government as the governments created by the constitutions of the original thirteen states. These governments were modeled on the Anglo-Saxon shire system. The Anglo-Saxon shires, headed by a sheriff, administered the use of land in pre-Norman England. Our counties can be compared to the old Anglo-Saxon shires. They are an administrative sub-division of the state. Each state in the Union is a sovereign entity, and it possesses "allodial" title over lands within clearly defined borders, except those lands held by the federal government. Allodial lands cannot be taxed by any other sovereign.
The state, being an allodial title holder, does NOT "own" the land. "Allodial" means that the state is obligated to protect the lands and the population within the defined borders, and that the state must insure the equitable use of allodial lands. The counties under states' constitutions are the administrative agencies which register the use of land and issue "fee simple" titles. An elected county assessor values the lands under "fee simple" title based on rules of valuation established by the Association of County Assessors, as well as by other guidelines. The county assessor publishes the valuations subject to appeal. Some counties accept self-valuation for publication. The valuation list, as an official document, is furnished to towns and municipalities. The counties use valuations to calculate tax bills only for lands situated in unincorporated areas of a county. Before tax bills can be prepared to cover the costs of government the elected town or city councils must conduct public hearings to allow input to the budget.
Once a budget has been voted, it is divided by the total of the valuations within the taxing jurisdiction. The fraction obtained is called the mil rate. The mil rate, when multiplied by the individual valuation, results in the individual tax bill. If the land user does not want to pay this tax, he can sell his "fee simple" title. To arrive at the exact worth of a "fee simple" title, the annual tax is capitalized using the prevailing interest rate. The "land value tax" recognizes that improvements made and services provided with tax money benefit some locations more than others. The "land value tax" establishes the equitable use of land. Failure to collect the full land value tax for all "fee simple" titled lands leads to inequities and distortions in the economy. Through political influence, land speculators try to shift the "land value tax" away from commercially used lands to residential users. The efforts of the land speculators have been particularly successful in California with passage of Proposition 13.
Daily Bell: What is it about anarchy that rubs you the wrong way? How do you define anarchy and anarcho-capitalism?
Ingo Bischoff: Anarchy as a form of government means government without laws. Human beings must then survive in an environment for which they were not created by genetic evolution. I agree with the late Edward Keating, Professor of Law at Santa Clara University, that the instincts of humans, which are suitable for a nonviolent, herbivorous existence in an arboreal environment, are detrimental and stressful to the cultural adaptation required for existence in a terrestrial environment. Unless it is recognized and accepted that human instincts can get in the way of peaceful existence, and therefore humans act accordingly, laws are needed to curb the free exercise of human instinct. Anarchy in society will quickly stop production and commerce. Lines of communication will cease and private property cannot be protected. It is the advocacy of anarchy as a form of government which rubs me the wrong way.
By anarcho-capitalism I understand that personal and economic activities would be regulated by privately run law rather than through politics, and that victimless crimes would not be punished. I can easily sign up not to punish victimless crime. The 4,700 federal crimes on the books now should be reduced to the 20 federal crimes initially set out. Otherwise, laws should be established by political consensus and enforced at the community level. Laws should be passed only to curb the detrimental effects of the free exercise of human instincts. Except to follow the obligation to ensure the equitable administration of lands use, states should not involve themselves in the regulation of any economic activity, whatsoever.
Daily Bell: Why don't you follow the Austrians? What do you hold against this kind of free-market thinking?
Ingo Bischoff: To the contrary, I agree with Carl Menger's marginal utility analysis as described in his 1871 published book Grundsaetze der Wirtschaftslehre. I accept Eugen von Boehm-Bawerk's contention that the natural difference in value between present and future goods is the basis from which all interest takes its origin, as he describes it in his book Kapital und Kapitalzins, published in 1884. On the other hand, I agree with the time preference theory of Professor Antal Fekete's which maintains that a time premium also exists, and that it is incorporated in the price of a present good. Eugen von Boehm-Bawerk's productivity theory claims that it is only the marginal productivity of capital which determines the rate of interest. As it regards the use of Real Bills, I take issue with the thinking of Ludwig von Mises who fails to recognize in his Human Action the difference between the rate of interest and the discount rate. While there is much with which I agree in "Austrian Economics" there are some things with which I disagree.
"Free-market" thinking, termed by Murray Rothbard as "Anarcho-capitalism," argues for a society based on the voluntary trade of private property and services (including money, consumer goods, land and capital goods) in order to maximize individual liberty and prosperity.
To maximize individual liberty and prosperity, the "Free Market" distributes "wealth" by a system of arbitrage where the discovery of prices is based on marginal utility analysis, and in which "Money," the commodity with constant or nearly constant marginal utility, is the standard of value against which the value of any other commodity or service is measured. To have a "Free Market" in "Money," therefore, is a contradiction. Furthermore, a "Free Market" in "Land" is not possible, because only "wealth" can be distributed through a "Free Market" system. "Land" is not wealth, as I discussed earlier.
Daily Bell: OK, you have Austrian sympathies. What other economists do you admire?
Ingo Bischoff: While I was served up the writings of John Hicks, Franco Modigliani and Paul Samuelson in college, I did not agree with any of them. Neither do I agree with the monetarist theories of Milton Friedman. I believe in the Adam Smith ideals of "free markets" which are free of arbitrary and discriminatory intervention by government, and which use the "gold standard" as a hedge against depreciation and devaluation of the currency created under the Real Bills Doctrine. The Adam Smith type of "free market" provides "mobility" beyond national borders. Under its "gold standard" the public purse has to be held tight. The economic order which employs a currency created under the Real Bills Doctrine and the "gold standard" is the vision of the founding fathers for the system of public law, social customs and institutions that is known as "capitalism."
The economists I admire most are Adam Smith of Scotland (1723 – 1790), Heinrich Rittershausen of Germany (1898 – 1984) and Antal Fekete of Budapest, Hungary.
Daily Bell: If every law is a price fix, transferring wealth from one group to another, then how can one pass "good" law or regulation? What makes them so?
Ingo Bischoff: I do not accept your premise that every law is a "price fix." Wealth distributed by law or mandate is "Socialism." I believe in the "free market" which distributes wealth through voluntary transactions. "Good" laws or regulations are those which curb the detrimental effects of unfettered exercise of basic human instincts which interfere with individual liberty and the economic activity of families or groups to survive and to procreate.
Daily Bell: Explain to us how Real Bills dominated the US economy before the 20th century and when they lost their applicability.
Ingo Bischoff: Real Bills or Bills of Exchange to finance the production of consumer items were first used by the Bank of Pennsylvania in the creation of the Pennsylvania Pound in the 1750s. Under the Real Bills "Doctrine," a supplier delivers goods to a producer or merchant and draws a "Real Bill" payable in 90 days. If the producer or merchant accepts the goods, he signs the Real Bill obligating himself to pay the face amount within 90 days. Once the Real Bill is signed there is no recourse, not to the signer (producer or merchant) nor to the drawer (supplier). With the signature attached, a Real Bill then becomes a financial instrument which is immediately negotiable.
It is seldom understood that a Real Bill is not a "credit" instrument and that the connection between the drawee and the drawer of a Real Bill is not the same as that between a lender and a borrower. The drawer of a Real Bill is not a lender. He discounts the Real Bill. Discounting is not lending. It is the drawee who reacts to the changes in the discount rate. These changes are governed by the demand of the consumer for the product of the producer or merchant. A drawee has the unconditional privilege of prepaying his bill. A lender, on the other hand, wants interest for lending money, not a discount from the borrower.
Beginning with the 1750s, Real Bills with various face amounts and maturity dates were discounted by banks in North America. Banks created uniform, denominated bank notes against the value of Real Bills and put them into circulation. Under the Real Bills "Doctrine," the value of the un-matured Real Bills in vaults must match the value of the bank notes in circulation. If Real Bills that have been paid upon maturity are not replaced with like value of newly discounted Real Bills, then the excess value of bank notes must be taken out of circulation.
It was failure by bankers to adhere to requirements under the Real Bills "Doctrine" and the provisions of their bank charters that repeatedly led banks into trouble. Bankers used "idle" bank notes to speculate in "real estate." The lack of full "land value taxation" encouraged such speculation. While rogue acts by bankers were not immediately apparent in their detrimental effect, the distortions they created in markets and prices caused economies to retard or collapse in cycles of 18 to 20 years in length. The worst of such economic busts was the panic of 1907. Finally, the public put pressure on the US Congress to do something to change the behavior of the banks. The result was the Federal Reserve Act of 1913.
Daily Bell: You have praised Ben Franklin's Philadelphia bank. Was its currency backed by gold? Is it true that this bank used only Real Bills against which to create its currency, the Pennsylvania Pound?
Ingo Bischoff: The Bank of Philadelphia discounted Real Bills against the payment of coin which circulated in North America. They were of British, French, Dutch and Spanish origin. The bank collected the discount to the face value upon maturity. The Pennsylvania Pound bank note did not promise redemption in monetary coin to support confidence in its value. Because of the lack of gold or silver mines in colonial America, there were no "colonial" coins. The coins in circulation were those of Britain or other sovereigns. The value of the Pennsylvania Pound was derived entirely from the reputation of the principals of the bank, of which Benjamin Franklin was one and George Clymer, as president of the bank, was another. Despite the lack of redemption promise, the impeccable and honest way in which the Bank of Philadelphia was run caused the value of the Pennsylvania Pound never to drop below the value of monetary coin. This remarkable fact was cited by Adam Smith in his book The Wealth of Nations, published in 1776.
I do not see a contradiction in my logic when I praise the Bank of Philadelphia for adhering to the Real Bills "Doctrine" without promising redemption in monetary coin. The Real Bills "Doctrine" only requires that the value of bank notes in circulation always match the value of un-matured Real Bills held by the bank. I am sure that in the case of the Bank of Pennsylvania this was the case at all times.
Only after the ratification of the US Constitution were states required to issue bank charters which qualified bank notes, if redeemable in gold and silver, to be used as legal tender in payment of debt.
Daily Bell: Explain to us why the Federal Reserve was "good" until its 1930s' reinvention.
Ingo Bischoff: The Federal Reserve Act of 1913 (FRA) was legislation passed by the US Congress to put a hold to the repeated boom and bust cycles caused by improper bank behavior. While the big money center banks saw the legislation coming and did everything possible to gain control over the planned franchise of a national currency, the individual states were extremely protective of the rights and independence of their state chartered banks. Over the objection of the money center banks, the US Senate, comprised of US Senators selected by state legislators, insisted that the "Federal Reserve" as a national system be divided into 12 independent, regional Reserve Banks each with its own authority to create a uniform national currency for their region based on the value of "Bills of Exchange" and gold held by the region's member banks. The issue of Federal Reserve Notes by a regional Reserve Bank differed from any other issue of Federal Reserve Notes only by the regional bank seal. The creation of the Federal Reserve Notes by regional banks was overseen by a Board of Directors selected by the US Congress.
The New York regional Reserve Bank, under the governorship of Benjamin Strong, started to violate the Federal Reserve Act in the 1920s by conducting Open Market Operations amounting to monetizing government debt. This was strictly prohibited by the original FRA. The violation by the FRBNY continued throughout the 1920s. It caused the Florida real estate bubble which burst in 1925 and the collapse of the stock market in 1929. By the early 1930s, banks were no longer able or willing to redeem Federal Reserve Notes for gold as promised.
Daily Bell: You have claimed that until the past few years and the advent of TARP that the Fed could NOT print unlimited dollars but had to get permission from the Treasury to print every dollar that it made. Where is the operative language that backs your assertion? Please quote it. (You stand athwart considerable free-market opinion that says otherwise – and that the Fed has been unconstrained for decades and has ALWAYS – virtually – printed as much money as it wanted.)
Ingo Bischoff: The expansion of the money supply under the "Federal Reserve" can be separated into three broad categories. The expansion of the money supply from 1914 until 1933 rested on the creation of redeemable Federal Reserve Notes against the value of discounted Real Bills. The amount of currency was directly related to Real Bills initiated as a result of consumer demand. This way, the money supply matched the demand for currency in the economy. The FRBNY illegally increased the money supply when it monetized government debt throughout the 1920s, causing the collapse of the redeemable Federal Reserve Note monetary system, which operated under the Real Bills Doctrine and which was established with the original Federal Reserve Act of 1913.
Executive Order #6102 issued in March of 1933, in which the US Congress concurred, nationalized domestic gold holdings. This act by President F. D. Roosevelt destroyed the Real Bills market and thereby banking under the Real Bills Doctrine. The Banking Act of 1935 abolished the independence of the regional Reserve Banks and their authority to create their own Federal Reserve Notes. The independent Reserve Banks became Federal Reserve District Banks under the direction and control of the newly created "Board of Governors of the Federal Reserve System," an "independent" government agency known generally as the "Fed" [See Federal Reserve Act, Section 10].
By inserting Paragraph (b) into Section 14 of the Federal Reserve Act through legislation in 1934 the US Congress authorized the conduct of Federal Open Market Operations, something which the FRBNY had been doing illegally throughout the 1920s. With the Banking Act of 1935, the Congress established a hybrid gold-and-managed-money standard which was known as an international bullion standard. The government fixed the price of gold at $35 of Federal Reserve Note currency per ounce at which it would buy all the gold offered, and it stood ready to sell gold at this price to the central banks of friendly countries. The brakes for currency creation were transferred from the hands of US citizens to those of foreign central banks. The money supply was determined by the Federal Open Market Committee and the expansion effected by the purchase of government bonds. Depending on reserve requirements, the system could expand the money supply; however, not nearly as much as appears on the surface when one considers that few borrowers would pay interest on money without intending to use the loan for some specific purpose.
Foreign central banks finally exercised the brakes on USD creation in 1971 when President Nixon was forced to suspend gold redemption for Federal Reserve Note currency presented by foreign banks. With the decision by Richard Nixon to suspend redemption, the last vestiges of the gold standard were gone. The value of the USD/FRN was underwritten by an agreement with the Saudis to quote crude oil in USD/FRN only. This elevated the irredeemable USD/FRN to the world reserve currency, a status which the USD/FRN still enjoys today and may do so for a while. As long as the United States can guarantee the unimpeded flow of oil from the Persian Gulf countries will trust the USD/FRN as reserve currency to pay for their oil purchases.
The expansion of the money supply after 1971 has relied heavily on the sale of US government securities. The "ear marks" entered into the annual budget by US Representatives to pay for projects in their districts result in budget deficits which then are monetized. The proceeds of the sale of government bonds are funneled by the Treasury into local economies where they create economic activity, bank deposits and demand for loans. Banks have initial credit authorization from the Federal Reserve against which they can extend loans. Subsequent authorization can only be obtained by submitting T-Bills as evidence that payment has been collected on outstanding loans. Until 2008, the predominant method of expanding the money supply was through insertion of Federal Reserve Notes received from selling US government debt, primarily to foreigners. The compound interest factor operating on the government debt for several decades took its toll on the value of the USD/FRN evidenced by the financial crisis which befell the US and the rest of the world in 2008. This created difficulties for the future sale of government securities, and the Federal Reserve had to resort to all out money creation by buying up worthless banks' assets under TARP and by repurchasing government bonds with QE, which caused an uproar among foreign government holders of US Treasuries. That is where we are today in the way the money supply is expanded.
Daily Bell: How is it that the Fed has inflated the price of the dollar down to four or five cents if the Fed has not been steadily introducing price inflation into the economy?
Ingo Bischoff: The Fed has done exactly what you allege over a long period of time. However, if it had been doing so all along by merely printing "money out of thin air," as it did with TARP or QEs, the USD/FRN would have "flamed out" long ago.
Daily Bell: Explain to those who might not understand it what constitutional amendments ought to be repealed and why.
Ingo Bischoff: The central banking system, installed with the Banking Act of 1935, could never have been foosted upon the American people without the existence of the 16th and 17th Amendments. These two amendments are 180 degrees opposed to the intent of the original US Constitution.
The violation of the original FRA by the FRBNY in the 1920s consisted of conducting Open Market Operations. It was made possible only by the existence of the 16th Amendment. The national income tax was the guaranteed revenue needed to service Treasury bonds. The national income tax alone made possible the illegal monetization of US debt in the 1920s. The US Senate, by then elected under the 17th Amendment, said nothing.
If you take the income tax away from the federal government and you send Senators to the US Senate who again are the representatives of the state governments, and who can be recalled by the state legislatures, power is going to shift from the federal government back to the states.
Daily Bell: Explain why you find Alexander Hamilton – the scourge of Jeffersonian agrarian freedoms – to be an honorable and patriotic individual.
Ingo Bischoff: Alexander Hamilton, though an Anglophile, nevertheless was an honorable and patriotic individual. Unlike Jefferson, who was suspicious of bank credits, Alexander Hamilton figured out that the might of the British military was largely based on British credit around the world. He explained to George Washington how the colonists could fight the British by ruining their credit and by establishing good credit around the world for the new North American States. It was Alexander Hamilton who insisted on honoring all promises of payment given during the fight for independence. Though many promises were sold by original holders for pennies of face value, particularly by soldiers, Hamilton insisted that they be honored at full face value even though political pressure was against him. He prevailed, and he thereby established a remarkably good credit record for the United States. It helped greatly in fighting the British in the War of 1812.
Daily Bell: Explain why you do not believe either Hamilton or JP Morgan were agents of European banking elites.
Ingo Bischoff: While Hamilton admired English institutions and had relationships with London bankers, he first and foremost looked out for the welfare of the United States. J. P. Morgan was sent by his father to study banking in Austria, Germany and England. As such, he considered himself of the banking profession, and he was mindful to cultivate relationships. However, as a banker in the United States, he was considered the undisputed leader in banking circles. He did much to keep the bickering banking interests in line for the good of the country.
Daily Bell: Explain, please, why you believe, along with J. P. Morgan, that only gold is money and silver is not.
Ingo Bischoff: Gold has been money for 3,000 years. Gold as currency became inefficient in the Middle Ages when financing for production had to compete with the need for gold in transacting commerce. That is when Real Bills started to emerge as the basis for the creation of currency. Only small amounts of gold were needed to clear Real Bills. However, paper currency was not readily accepted, and since the supply of silver to gold was fairly constant at the ratio of 1:15 for many decades, silver became the currency with which to transact commerce. In the end, gold won out to be the standard of value. Silver today is mostly an industrial commodity which derives its value from use as a commodity and not from use as money.
Daily Bell: Explain why you believe that historically most private money standards did not include both gold AND silver. We believe they did.
Ingo Bischoff: When you speak of "private money standards," I assume you mean deposit receipts for gold and silver used as currency. I have no doubt that they circulated.
Daily Bell: Explain, please, why the 1920s Fed inflated so aggressively. You believe it was not a criminal act? Why wasn't it? And what was the MOTIVE?
Ingo Bischoff: It wasn't the "Fed" that inflated so aggressively in the 1920s. Remember, the "Fed" refers to the "Board of Governors of the Federal Reserve System." It only came into existence with the Banking Act of 1935. Governor Benjamin Strong of the regional Reserve Bank of New York must be held responsible for the violation of the Federal Reserve Act of 1913. Of course, he died in 1928, before the collapse of the stock market. His motivation was to monetize US government debt to help out the British Pound, which had lost value due to the drainage of gold reserves to pay for the costs of WW I. President Coolidge adamantly refused to agree to cancel payment due the United States from Britain for war materials supplied. When the US economy entered a slump in the early 1920s, Benjamin Strong seized the opportunity to monetize US debt, at the same time helping out his friend, Montegue Norman, the Exchequer of Great Britain. The monetization of US debt in the 1920s was clearly a criminal act, since the original legislation quite clearly prohibited the monetization of "Anticipation Bills."
Daily Bell: What is a reasonable level of taxation? Is the IRS necessary?
Ingo Bischoff: There is no reasonable level of taxation. There is only a reasonable level of expenditure for government services. The US Constitution clearly prohibits the taxation of wages and wealth. This only leaves the taxation of land on an equitable basis which can only be done by collecting the full "land value tax," which I described earlier. Strange as it may seem, the land value tax collected at the local community level can pay for the cost of government at all levels, to include the federal government. There is absolutely no need for an agency such as the IRS to exist.
Daily Bell: Why were the Fed enabling act and progressive taxation passed almost simultaneously?
Ingo Bischoff: The ratifications of the 16th Amendment and the 17th Amendment were supported by the money center banks in retaliation for the states' opposition to hand them control over the Federal Reserve with the pending Federal Reserve Act. After the two amendments were ratified, the money center banks relented on holding up passage of the Federal Reserve Act. A similar situation occurs with the Occupy Wall Street movement calling for a "Robin Hood Tax" to help establish a "New World Order."
Daily Bell: How did America and the world get into the fix that it is in?
Ingo Bischoff: America got into the fix entirely due to the excesses of central banking. Because of the compound interest function, the monetization of debt will always sooner or later lead to the destruction of a currency.
Daily Bell: Should America be interfering militarily all over the world?
Ingo Bischoff: America isn't interfering all over the world. America interferes where it needs to insure that the flow of crude oil is controlled or otherwise not impeded. It is the value of OPEC oil, set by the Saudis and the American Oil Majors, which gives value to the USD/FRN. In other words, the US military guarantees the value of the USD/FRN.
Daily Bell: Is the Internet making a difference by introducing more freedom into the world?
Ingo Bischoff: Without a question, the Internet exposes the propaganda emanating from the Main Stream Media owned and operated by the monetary elite. The average individual can find out through the Internet about the dangers which are about to take him down. He does not have to depend on a compromised education establishment or a biased media to be informed about the dangers. Freedom depends on knowledge.
Daily Bell: Did the Gutenberg Press do the same thing?
Ingo Bischoff: It certainly did. It spread information to an extent not possible before the printed word was mass produced by use of the Gutenberg Press. It put a stop to the overreach and the tyranny of the Church in Rome, and it ushered in a brand new world order with the Protestant Reformation led by Martin Luther.
Daily Bell: Will the Internet fail ultimately and be controlled by the powers-that-be?
Ingo Bischoff: It's too late for that. The genie is out of the bottle. Any attempt to muzzle the Internet now will cause those who attempt it to go down in flames.
Daily Bell: Explain, please, what you would do as President of the United States to fix the economy and the lamentable state of freedom that now exists.
Ingo Bischoff: First, I would urge the Congress to remove the "legal tender" protection given the Federal Reserve Note in the Coinage Act of 1982. This would allow banking again under the Real Bills "Doctrine" and enable a competing currency to appear. The credit unions could easily be the conduit for such currency creation. Real Bills and redeemable currency would create immediate employment opportunities in the private productive sector. Government employees would be encouraged to seek jobs which pay in redeemable currency, not irredeemable Federal Reserve Notes. Next, I would urge the Congress to propose an amendment to repeal the 17th Amendment. In case the Congress refuses, I would urge the states to request the Congress to call for an Article V convention. I believe that with the return of the states to the seat of power in the federal government, the repeal of the 16th Amendment is a given. As I mentioned earlier, with the 16th and 17th Amendments removed from the US Constitution, power will revert to the states. However, repeal of the amendments is difficult to realize, because there is formidable opposition by all sorts of special interests regardless of political party affiliation arrayed against it.
Daily Bell: Thanks for sitting down with us and answering the "tough" questions!
Ingo Bischoff: Thank you. It was a pleasure.
We've been the recipient of Ingo Bischoff's posts for several years now and have interviewed him several times as well. We think this interview may clarify some previous issues and we thank him for providing his thoughts so generously.
No matter what else Ingo Bischoff is, he's surely one of the nation's (perhaps the world's) most tenacious proponents of Real Bills. They remain a controversial topic, but he has steadily made his case for them and for a number of other views which some might consider idiosyncratic – not within either the Austrian free-market or Keynesian socialist paradigms.
Of course, we don't agree with all Mr. Bischoff's formulations; we'd place him in the ambit of a classical liberal, someone who sees a reasonable if limited role for government. We've become more philosophically attuned to anarcho-capitalism over time. Thus, we've discovered increasing areas of disagreement over the years.
Additionally, Mr. Bischoff either doesn't know or doesn't care to acknowledge that anarchy is merely the absence of government not a condition of social disorder or chaos. Ironically, as we can see today, government is just as likely at times to be the instigator of chaos as its remover.
In no particular order, we disagree with his opinions regarding the Federal Reserve (it was never any good, nor could it have been), J.P. Morgan and Alexander Hamilton (they were seemingly agents of European banking families in our view), Ben Franklin's Philadelphia bank (it was ultimately an inflation machine) and even his theory of land (we think land can and ought to be "owned" if people wish to do so, and we don't agree with the concept of forced-renting of land from the cooperative).
Those are just some of our areas of disagreement. Bottom line, we don't much believe in "reasonable" government these days. We don't think there's likely any such thing. Government is made up of people who will pass laws over time that advantage themselves and their allies and paymasters. The only defense against government is the dissemination of REAL information about what's going on at the top.
What's real information? It starts with the idea that every law is a price fix and every price fix distorts the "real" economy by transferring wealth from those who made it those who didn't and don't really know how to apply it. The result is that that equity between individuals is INCREASED as wealth is dissipated.
The only trouble is that this sort of redistribution results in a "race to the bottom." In the end (and we seem to verging on end times now) fewer and fewer people accumulate more wealth (those at the very top) while everyone else has been equalized into poverty. The net result is poverty and paralysis of the body politic.
And yet ... there is hope, as well. We're fortunate to live in a time when the Internet can provide us real insight into the way the world works. This sort of illumination has happened before, most recently with the Gutenberg Press, which spawned the Renaissance, the Reformation and ultimately the discovery and population of the "New World."
Real history, so it seems to us today, is a struggle between elites who want to impose the maximum amount of authoritarianism that is possible and middle classes that resist to a greater or less extent, depending on the efficacy of the communication technology that is doing the informing.
Technology, in the modern era, is overtaken and co-opted by elites that promote their dominant social themes of authoritarian control. Then some new technology comes along to make people aware of their manipulation and they fight to be free-er again. It's a cycle. We're in the free-er part of the cycle now.
This paradigm does not seem to leave much room for "reasonable government." In fact, we hope the middle classes, informed by the Internet, roll back the current Western Leviathan as broadly as possible. Why? Because then the elites will have more ground to make up once they begin to exercise significant control over the Internet. They're not there yet – not by a long-shot – in our view, no matter what "doomsters and gloomsters" say.
Just to repeat ... every law and every regulation fixes a price of some sort and redistributes wealth from those who earn to those who do not. Thus, the marketplace is a much more effective mechanism for regulating people's behavior than "regulatory democracy" – which inevitably ends in totalitarianism.
We believe in the maximum amount of privatization for every part of the society, from private law to business, to money, to culture and religion. The state, we think, enforces its will via force and cannot do otherwise. Mr. Bischoff posits a much gentler approach to these issues than we do. Perhaps he is correct, though we think modern history is unfortunately showing us otherwise.
Posted by Adam on 11/07/11 11:28 AM
"To count on other people to do onto you no more than you would do onto them, is to be hopelessly naive."
Then the same must be said of your feather-fingered friends calling themselves "the government" and so your faith in the restraints of your "constitution" (a piece of paper no-one living has signed and so binding upon no one) is hopelessly naive.
"I want to see you tell someone who is about to do you harm all about your "non-agression principle", before he slits your throat."
YOU, Ingo, are making an argument, you are NOT slitting someone's throat. You are engaged in peaceful persuasion, you are NOT initiating an act of aggression.
You CANNOT argue against the non-aggression principle whilst USING the non-aggression principle.
To do so would be a performative contradiction. Estoppel by deed would (and does) apply:
'To say a person is estopped from making certain claims means that ... he will not be heard to make a statement which is flatly inconsistent with his earlier behaviour... '
Estoppel: A New Justification for Individual Rights by Stephan Kinsella (PDF)
Click to view link
'Kinsella's "estoppel" theory draws on Hoppe. Kinsella argues that an aggressor cannot coherently object to being punished for the act of aggression, by the victim or the victim's agents or heirs, i.e. he is "estopped" from withholding consent, because by committing aggression he commits himself to the proposition that the use of force is legitimate, and therefore, his withholding consent based on his right not to be physically harmed contradicts his aggressive legitimation of force.'
Click to view link
Click to view link
Posted by AnarchoLibertine on 11/07/11 11:09 AM
And, Bischoff undermines his own argument re: non-land ownership.
If no one can own land... how can anyone collect tax/rent on said land (per your support of the "Georgist land tax")?
In the strange world of statists, someone who improves a previously unused piece of land w/his or her own labor doesn't own it... but someone who did nothing to this piece of land and who may never see it is somehow entitled to extort money from the one who DID?
Posted by Wiseman on 11/07/11 11:04 AM
My point is that Georgian land value tax would be a huge mistake. Private ownership of land is crucial to the efficient use of land. If the goal is to reduce rent seeking, property tax should be reduced, and use restrictions should be reduced so that more landlords would be free to compete and provide additional units for rent.
Just in food distribution and health-care, the way to provide more service (in this case the use of land, and habitable/usable space on it) is not government centralization but encouragement of more competition. Government collecting the entire land use value (if it is even calculable at all) would destroy that competitive market process.
Posted by AnarchoLibertine on 11/07/11 11:03 AM
Mr. Bischoff, understanding anarchy isn't that difficult:
1. Theft is wrong--under any label ("Georgist land tax") and even if its an individual w/a fancy-sounding govt. title doing it... even if 51% of the populace agrees w/the theft.
2. Murdering others in order to enforce a right to theft is wrong.
Statists like yourself make exceptions for the fictional entity called "govt"... an organization run by... individual humans. This discredits your ENTIRE position and pretense of wanting to promote peace and commerce. You don't promote social harmony and economic advancement by legalizing theft and murder.
If you say people are 'bad' and need govt... you're ignoring the fact that govt will be run and/or elected/appointed by these same 'bad' people.
If you think a piece of paper (written constitutions) can prevent 'bad' people in govt. from abusing political power you've learned nothing from history.
Statism is just another irrational religion w/govt. taking the place of god.
Posted by Adam on 11/07/11 10:57 AM
Posted by Wiseman on 11/07/11 10:53 AM
There is some merit in the Real Bill Doctrine. However, many advocates of it fail to realize that what kept RBD operative was the lower probability of human errors when projection/speculation is limited to 90-days. There are classes of capital, including land as well as many types of major machinery and buildings, that have service value far beyond 90-days!
To err is to be human. People do make mistakes. That's why decision making has to be relegated to individuals, so that people can take their own risks instead of being shackled to the mistakes by "leaders" in a collective. Individual experimentation is how society make progress, just like evolution. Central planning doesn't work, because the central planners themselves are not omniscient or omnipotent. Central planners in China in recent years, in Japan 20 years ago, and Soviet Union and Germany in the 1920-30's before them, seemed to be achieving impressive results for a short time only because they were copying western discoveries! so in someways, the central planners in those backward places had information advantage over their countrymen, even then only for a short time.
It would be silly to think the government is able to calculate all land use value ahead of time. The rent market exists precisely because nobody knows the precise land use value or even the use of value of the land+improvement at any given time. The market is there to discover price. As new ways of land use is discovered every day. In places of high rent, there are even sub-landlords that sublet their leases that arbitrage the price difference between long term vs short term! So why shouldn't the government (or even the owner landlord himself) cut out the middle-man? Because prices fluctuate over time, and prices are different for different package size! It's just like selling muffins. There are entire businesses built around buying muffins by the dozens from Costco and selling them individually in the corridors of office buildings! Likewise, you can get muffins for a fraction of the original price if you show up at Starbucks at closing time (or even free on the curb side). How would the government bureaucrats be able to decide the price of muffins at every conceivable location at every conceivable time of the day? Not to mention the public's changing preferences for the type of muffins?
The whole thing is impossible to manage from a centralized government. Government trying to play the landlord and cutting out all the "middlemen" in the rental market is not going to be any more successful than all the 20th century experiment to have the government play the food production and distribution monopoly, cutting out all the middle men. The result was invariable mass famine and deaths!
Perhaps mass famine and population reduction is the goal. Even that Malthusian-inspired goal is a huge mistake: look at everything you have touched since waking up yesterday morning, over the past 24+ hours, almost everything you have ingested or used is the result of someone else' labor output! Trust me, you won't be happy with eating wild grass seeds as "natural resource"; almost all "resources" we use today are someone else' output! Division of labor through mutually willing exchanges ensures that every one puts out more "resources" than they consume!
Chew on that again, Division of labor through mutually willing exchanges ensures that individuals puts out more "resources" for other human beings than they themselves consume! In fact, it is the coercive transfers by the government that consume more "resources" than they produce. Companies that consumes more "resources" than they produce would long be bankrupt if not for government bailouts. The fundamental problem with the FED is the fact that it was designed to be the bailouter-of-last-resort from the very beginning! There is nothing wrong with speculations on long term assets so long as the speculators take their own chances (people make mistakes; if not for the Americas getting in his way, the entire Columbian expedition would have been a mistake resulting in the deaths of the entire crews somewhere in the oceanic crossing to the Far East); as risk management requirement imposed by other free market participants would limit the scale of speculation. It is the "buyer-of-last-resort" provided by the "Central Bank" that transfers the risk to the public at large and incentivize reckless risk taking.
Posted by Wiseman on 11/07/11 10:15 AM
Air and Sea are un-owned under most circumstances because they are supra-abundant; i.e. they have no economic value (despite obvious value to human survival, as air for breathing): the diminishing marginal utility of each unit of additional air approaches zero because we have so much of it all around us. Water likewise is almost un-owned in most places due to supra-abundance, but in deserts, you can be bet that water and water rights are very much owned! Land is not supra-abundant, especially land in built-up commercial centers. To pretend that land were supra-abundant, i.e. making land un-owned, or "owned by government," would only lead to mis-allocation of the limited resource.
The advantage of private ownership over "public ownership"/un-ownership is the competition and efficiency resulting from private/diverse ownership. When a single person owns all the land in a geographical area, he is the tyrannical government; conversely, a tyrannical government is an individual (or small group of colluding individuals) owning all the land in a geographical area. Competition among land rent service providers is what allow for relatively low tax/rent for new businesses looking for space and for people looking for place to live (and to work at the new businesses). Government monopoly on the supply of land (on the rental market) would be just like government monopoly on the supply of food: the result would not be cheap rent or readily available space, but shortage and extremely tight supply due to resource mis-allocation.
It's silly to think there is a fixed "land value" as separate from human improvement. Should much of the most valuable water-front land in the major coastal cities be taxed as mud flats or sea bottoms? as they were found hundreds of years ago before human improvement? Even on a daily basis, land value can be changed dramatically by human action: see what happens to the value of your land and that of your neighbor if you start piling up trash in your yard, or even just stop maintaining your house for a few years. OTOH, new use of land (as in for new types of profitable business) is discovered every day, and that is what enables rent payment or get vacant commercial space rented. An empty warehouse in Detroit today (or in lower Manhattan 30 years ago after the sweatshops moved out) has/had nearly zero value, but new residents and start-up's moved in and built up the community, the same old building can be worth thousands of dollars per square feet in lower Manhattan! e.g. SOHO.
Land value is indeed highly dependent on community context. However, the government does not at all embody the community! SOHO example above was a clear case. On the other coast, Stanford University made all the land surrounding it in the Silicon Valley extremely valuable. Your own effort at maintaining your house and like effort on the part of your neighbors make your community's land value high as people want to live in the neighborhood.
None of that has anything to do with the government. In fact, if the government were to be allowed to take away all the resources that you and your neighbor have for improving your own houses and your neighborhood beyond that of a Detroit combat zone, the land value of your town would collapse just like the Detroit combat zone as people flee. Just do a simple survey of property tax rate vs. land value and quality of life in all the towns in the US. At 1% or lower you will find decent towns; at 3% or higher you will invariably find man-made disaster areas full of human misery.
The voluntary exchanges between neighbors make a community prosper; the coercive resource mis-allocation (aka "tax") by government (to enrich a small group of well connected government contractors) condemn humanity to misery. Collecting tax is only half the story, the less important half; the more important half is where the money ends up going. Once you follow the full flow on how and where it is spent, it's obvious that taxation is only an excuse to coerce the public to overpay a small group of well-connected service providers that would not be able to live high on the hog if the people retained their freedom to choose.
Reply from The Daily Bell
So what the heck is you conclusion! You think no one should be able to "own" land? What?
Posted by Hoss on 11/07/11 09:43 AM
The reason a group of rational, free people might voluntarily form a 'government' is not to be governed but to pool their resources and loan to it the exclusive right to the use of retaliatory force, for the purpose of protecting their individual rights (including their right to their own life and property), presumably according to 'just' rules.
Obviously there are problems in the implementation. Anarcho-capitalists point out some fundamental contradictions, such as the problem that granting a monopoly on force leaves the population vulnerable, and so on. Attempts to address these problems in the U.S. constitution have failed for a long list of reasons. Ultimately, the founders recognized this, at least Jefferson did, as evidenced by some of his more famous quotes.
I can understand the case for minarchism, and I see the flaws pointed out by opponents of state power. I don't see a solution to the Gang Problem, nor a solution to the usurpation of government power problem either. It looks likely that Darwinism applies to societies, and freedom will not persist unless the most intelligent have the upper hand in defensive capability.
Anyway, thanks for that incisive defense of property rights.
Posted by Hoss on 11/07/11 09:23 AM
A 'right' is a moral principle defining and sanctioning a man's freedom of action in a social context. The concept of a 'right' pertains only to action-specifically, to freedom of action. It means freedom from physical compulsion, coercion or interference by other men.
Ownership is the right to exclusive use and disposal of some thing.
You have to obfuscate the concept of what a 'right' is in order to dispute the concept of ownership. Yeah, we went there too. Or, you have to declare that the 'thing' is somehow different. It isn't. It is still a 'thing'. Regardless of what its properties are.
In the absence of rights, it's King Of The Hill. Whoever asserts and maintains exclusive use and disposal is the de facto owner. As it has ever been. As it is now. Even your dog understands the concept of 'mine, as long as I can keep it'. Especially when he marks his territory until a bigger, meaner dog comes along.
You 'own' what you own as a privilege granted by the State, and your 'rights' are exercised at the pleasure of the State. The biggest gang with the most guns 'owns' the land, and 'owns' your output. It is human farming, and you are supposed to keep your assigned place and do your duty.
Arguments to the contrary of individual ownership are calculated to get those who are denied ownership to submit quietly and keep the flow of wealth going to their owners.
If I have a right to my own life, then I am a sovereign. I declare it to be so. Those who disagree must ultimately advocate force, up to and including killing me. And they have argued in favor of it, as they must in order to avoid contradiction. The truth is that the State actually owns me by exercising dominion over every inch of land that I might occupy at any time, and some believe this is as it should be.
But, that's just me. I must be different somehow. My soul does not consist of positive and negative electrical charges traveling between brain and heart. I evolved as a meat-eater with the adapted ability to subsist on some vegetable matter if necessary. So I guess it should be obvious why I don't fit in. I don't believe historical precedent nor present law constitute a moral argument for or against anything. They might be instructive on which method of human farming produces the most output, but they do not inform on the underlying question: SHOULD you own yourself?
Posted by Jeanna on 11/07/11 08:35 AM
No, I do not wish to take a promise from the federal government. I understand the history, and I guess I need to rephrase my question. My mental block here with Real Bills is based upon the need for gold and silver to circulate in order to maintain a gold or silver standard. When the Philadelphia pound note was issued based upon Real Bills presented to the bank, a paper system evolved that was easily attacked.
Since the colonists were not able to keep the gold and silver circulating within the colonies because the British merchants were taking them back to England, the paper system of Real Bills and bank notes were their only "money". They did not have a way to replenish hard currency, and therefore lost their measuring stick.
The only viable reason for continued faith in the bank notes or Real Bills was the added value (labor) for the product sold. So, the gold standard disappeared, and a "work" standard took its place. How can you maintain a value without the measuring stick?
My concern is that without freely circulating gold and silver, you cannot maintain a gold standard. I am also having trouble with the logistics of Real Bills in today's global exchange.
Posted by taxesbyanyothername on 11/07/11 08:03 AM
Evil people do operate in markets. If, in the abscense of coercion, in other words without either the failure or collusion of government, unless they serve their customers well they are overtaken by competition. Government on the other hand is by definition coercive and never ever tolerates competition.
Posted by taxesbyanyothername on 11/07/11 07:58 AM
There has been a system where obligation was entirely based on land. It was called feudalism. It certainly did not have anything like 100% moral buy-in, no system ever has or will have, and yet it persisted.
Posted by ronavery on 11/07/11 02:41 AM
I find it interesting that Bischoff refers to Locke and still believes that the state should own property and the people rent it from the state as is done presently. A land value tax regardless of how one calculates it is a perversion of the sole purpose of lawful government, namely, the protection of the property of the people consisting of their life, liberty and possessions, one being land.
People own property and they create lawful government to protect their property not confiscate it and charge them a rent for it eternally. The obvious effect of state rent on land is that if one does according to their own will with their land and not the will of the masses or the state or the appetites created by the main stream media they are boycotted and lose their land to those who are more disposed to follow the herd.
Next Bischoff also refers to Adam Smith who also stated that a land value tax or ad valorem tax was not practiced even under the European monarchs in 1776 except for Belgium where it was a total disaster. A land tax then was certainly not practiced in the new Colonies under the English Crown.
From the works of Locke who did not address land tax as they did not exist at the time we base the principle of lawful taxation for the support of lawful government. A lawful tax cannot threaten the property of the individual as government is created to protect the same and cannot be paid for by a means that undermines its purpose or else its end is designed into it method of support.
Adam Smith in his Wealth of Nations said there was a tax called the "land tax" under the European monarchs but that it was really an income tax based upon the income from leasing it to others, the produce from it. But if the land was not used it was not taxed.
The problem with Bischoff is that he starts his analysis of government and economics from that which makes government work instead of what government is to do for the people. If a government does not do what it should for the people there is no reason for it to continue. Land is just another property for the means of protecting other properties belonging to individuals. If land is threatened even by threatening to take it and sell it to others if a tax is not paid is to first cease the property and then threaten your removal from it making you a slave to the will of others to retain it.
However, I also do not agree with the position of the Daily Bell that all government is not a good thing and that anarchy is merely a lack of government. I and Locke would agree that anarchy is the want of lawful government not the absence of unlawful government or tyranny. What most anarchist think is anarchy is what Locke called the peaceful state of nature and while that can exist it is not enforced without lawful government.
Therefore, lawful government is the enforcement of the peaceful state of nature also a view of Locke's. While anarchy by definition is the want of government it cannot sustain the peaceful state of nature. Anarchists also make the error of thinking that the market is a self-sustaining machine that, if left alone, will govern mankind morally and honestly.
But what makes them think that the market is immune to the evil devises of mankind any more than government. Lawful governments eventually become corrupt but so do markets. And it is easier to resist unlawful governments with new lawful ones than with nothing. The proper use of the word anarchy includes the condition of what is left in the wake of a destroyed lawful government leaving unlawful government and/or tyranny in its place.
Posted by Wrusssr on 11/07/11 02:16 AM
I've labored under the belief that most people who migrated to American came hoping to own property because the share cropper thing just wasn't working out for them in England and Europe; though it worked out great for squires with money, land, serfs, weapons, and defensive castles. Clearly I was wrong! The colonists were supposed to claim the new land for King George or the current potentate at the time and. . . .rent it?
See, there's this one land thing I can't seem to resolve. Are you aware there's a global race on by the mega-elites to gobble up the finest farm land on the planet along with all 'land rights' that go with it by (a) bribing government officials to allow them to purchase millions of these acres for, literally, pennies on thee dollar, then (b) having those same government officials use their militaries to kick local farmers off lands they've lived on, farmed, and fed local populations from for centuries using natural seed and farming methods; local claims to land be damned?
Millions of acres of prime global land, as we speak, is being quietly reverted to what the Europeans left when they started arriving in America; back to baron-serf-share-cropper land.
And my question is: Who tells these mega elites they're now going to have to start paying rent on the lands they've stolen? Again. This time with money. Robin Hood? The City? BIS?
You really focused me on your minimum government thing you wove into your paper bill argument, though. Well, hey, I got some good news for you. How about no government? As in Washington, D.C. The bankers have purchased that, too. Price of laws also is coming down now that they've bought so many to turn back onto America. Take the Patriot Act, for example. It's a buyer's market out there now if you got the dough. Constitutions and laws, I've deduced, can be pesky and troublesome for the elite. But, maybe it's good we avoided putting every Wall Street criminal who claimed moral hazard as a per se defense for the theft of trillions of taxpayer dollars using a system they crafted and created. No sir, no need for cumbersome laws. Wouldn't want to try to discourage anyone from trying to make a buck, even when they got their marks handcuffed. You farmers there. . .you get on outa here! We own this land now, ya heah?
Been written the two things essential for a Republic or a nation are enforced laws and the right to own property. Absent one or the other and you have neither. Both provide remedies for things like financial crimes and land confiscation
And whichever reader said for your system to work the people have to have 100% moral buy-in was dead on, Ingo. Considering mankind, in my opinion, hasn't progressed one iota emotionally since he stood up and walked out of caves is a good indication we got a ways to go yet; Mexico being the poster child.
Posted by richo270 on 11/07/11 02:08 AM
The vast majority of the land on the North American continent is neither residential, nor commercial, it is agricultural.
As a member of a third generation farming family in a traditional rural community, I can say that if any politician from any rural state ran on implementing such ridiculous notions as running all local state and national expenditures exclusively on land taxes, they would be laughed at... or worse.
Posted by Bischoff on 11/07/11 01:20 AM
You make extremely good points. I don't take issue with any of them, except to say that a sudden clampdown would not be tolerated politically. To surrepticiously choke the internet takes time and amounts to the proverbial frog being boiled slowly.
Sudden clamp down will cause tremendous political problems. Clamping down slowly allows alternatives to develop.
Nevertheless, I take your concerns as very real.
Posted by Bischoff on 11/07/11 01:06 AM
"Anarchy is not a state of lawlessness", says you.
I based my comments about anarchy on the definition given in Webster's dictionary. If there is a "School of Thought" which appropriated the word "Anarchy" to give it their own interpretation, I must tell you that I do not follow the thoughts of such School, nor do I recognize its particular semantics.
I am sorry, but in this argument you are stuck with me adhering to Webster's definition of anarchy.
The British drained the gold and silver from the colonies to cater to the mercentalist interests of British Parliament. The Pennsylvania Pound swarted their attempts. When Real Bills, or the Pennsylvania Pound currency created against them were used strictly to facilitate consumer item production and consumer purchases, no gold was needed to clear the Real Bills. That was the experience with the Pennsylvania Pound until the Currency Act of 1764 when the British Parliament prohibited the use of the Pennsylvania Pound for any official transactions involving the crown.
The Bank of Philadelphia never inflated the currency. The use of the Pennsylvania Pound was choked off by parliamentary edicts. Fewer and fewer Real Bills were drawn which could be discounted by the bank. This had a downward spiral effect on the economy in the colonies. The Currency Act by British Parliament passed in 1764 more than anything else contributed to the outbreak of the American Revolution.
The Federal Reserve Note created under the Real Bills Doctrine as prescribed by the 1913 FRA was undermined by illegal monetizing government debt by the NY regional Federal Reserve Bank. When there were too many illegally create FRNs in circulation, banks no longer could or would redeem the 1913 FRNs.
The Congress and FDR colluded to nationalize gold holdings in 1933, after the NY regional Federal Reserve Bank had destroyed the currency prescribed under the original 1913 FRA by illegally monetizing debt. The point is that the redeemable FRN didn't lose its value in 1933 with the confiscation of gold. It lost its value starting in the 1920s with the violation of the FRA by the FRBNY.
Likewise, under the hybrid gold-and-managed-money standard, the post-1935 FRN started to lose value with the unlimited financing of two wars, the Vietnam War and the War on Poverty under Lyndon Johnson. Nixon's default on of Bretton Woods Agreement and his suspension of redemption for gold was the result of too many FRNs being presented for redemption by foreign central banks toward the end of the Vietnam War.
Real Bills do not sustain the gold standard. The gold standard is a measuring stick. It measures value. The gold standard is the basis for a denominated currency used for accounting purposes. Real Bills only need a very minor amount of physical gold for clearing Real Bills. If need be, and people forgo saving, gold is not necessary at all. The Pennsylvania Pound proved it. Real Bills can stand on their own. However, gold is needed for savings, unless of course you rather have a promise from the federal government to take care of you in old age via a Social Security System.
Posted by provolone on 11/07/11 12:36 AM
"Ingo Bischoff: It's too late for that. The genie is out of the bottle. Any attempt to muzzle the Internet now will cause those who attempt it to go down in flames."
Click to view link They are laying the foundations for censorship to protect us from 'rogue' websites. Please examine this carefully. Aside from the debate about intellectual property rights and guilty until proven innocent style legislation; This legislation opens the backdoor for complete censorship. It also allows for actions against parties who are deemed complicit, such as advertisers or hosting providers.
Already my business is assaulted by false DMCA claims on a regular basis. I am lucky enough to have found a webhost who will allow me to combat these false claims. Most simply terminate me instantly upon receiving a false DMCA claim. PROTECT-IP will be the end of the Internet as we know it today. The major media companies will have complete control. The accused will have to prove their innocence to regain control of their domain names. After installing censorship systems which will effectively have a global reach, it will be easy to apply these same systems to 'protect' us from 'rogue' information. Undoubtedly, emergency justifications will be cited when expanding these powers. Perhaps a false flag Internet based terrorist attack will be the precipitating event? As a dose of moderation, similar preceding bills have not been passed.
Aside from the above disturbing realities, the Internet as we know it today is dependent on centralized search services. Sure you can always use word of mouth or other viral promotion means to get traffic to your site, but that is not the Internet we know today. Users depend on search services to provide them with relevant information. Google, Yahoo, and Microsoft currently have an interest in providing you with free information because it makes the medium of Internet more relevant. If they decide to clamp down on a given narrative, don't expect a competitor to jump in and provide an alternative anymore than you would expect a non lying cable news network to appear next week. The infrastructure to process the volume of information necessary to create relevant search results is cost prohibitive. Already there have been instances of pro-Ghaddafi videos deleted by Youtube, which is owned by Google. The state department openly admits to using Google and Facebook services in the astroturfing of the Arab Spring. A Google executive has been trotted out before the media and praised for helping foment revolutions. Somehow I doubt this tide of control will be receding anytime soon.
Respectfully, I must disagree. Sarcastically, I am still waiting for the above mentioned individuals to "go down in flames". The Daily Bell and its contributors are well informed individuals who I must thank for sharing compelling views with myself and the larger Internet community. I have learned much from this site and the avenues of research it has opened for me. However, I am skeptical of the Internet as a end all solution to the deliberate misinformation campaigns we are all suffering from. To compare the Internet to something like a printing technology is not accurate. Anyone with the resources could produce a movable type press and begin printing. Do you propose that individuals can set up an adhoc replacement Internet with a free(as in liberty) and open DNS system? The two are not analogous. Certainly mesh routing technologies are being developed and wireless links do present a possibility, but without the existing networks and systems in place; Such a replacement would be amatuer at best. Latency in such a system would be unbearable. This hypothetical scenario still would have to address rogue nodes designed to censor traffic in transit.
Posted by NAPpy on 11/07/11 12:12 AM
As described by you, land ownership is different.
Property theory, as I've seen it, is a human convention designed to solve the problem of conflict over scarce things. In this context, land is scarce, and should be treated no differently than any other property.
Posted by taxesbyanyothername on 11/07/11 12:07 AM
I have to agree, thank you Mr. Bischoff. Your time and effort at the school are greatly appreciated as well. Economic education is our only hope.