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.