Dr. Gary North: Why the Internet Reformation Must Win
By Staff News & Analysis - May 15, 2013

Mises' Answer to Would-Be Conspirators: You Will Lose … Over half a century ago, Ludwig von Mises made a crucial observation. The capitalistic social order, therefore, is an economic democracy in the strictest sense of the word. In the last analysis, all decisions are dependent on the will of the people as consumers. Thus, whenever there is a conflict between the consumers' views and those of the business managers, market pressures assure that the views of the consumers win out eventually. – Gary North's Specific Answers

Dominant Social Theme: This Internet is good, but it is already in the service of government.

Free-Market Analysis: A leading hard-money economist of the modern era has just written an eloquent analysis about why what we call the Internet Reformation must inevitably have its day.

We've never had any doubt that the Internet would mimic the Gutenberg press in tearing down the accepted wisdom of the time and building up something else.

Today the Western world is in chaos. France has slipped into recession, England is in recession again, the Southern PIGS are in flames and Brussels is trying to move Europe to a federal system against the will of the majority of Europeans.

Physical gold and paper gold have diverged in terms of price and everyone who follows these things knows it is likely a deliberate divergence. Economic stresses are effecting the world's major empire, as well, the United States, where President Obama's reign has come under a sudden, powerful attack.

The scandals in which the IRS has already admitted to attacking constitutionist organizations like the Tea Party, Fedgov spying on press institutions like the AP and, of course, the ongoing Benghazi investigation that left US ambassadors dead under murky circumstances have all pushed the Obama administration off course.

Whatever Obama had hoped to do in his second term will likely suffer from this trio of scandals. He will be lucky if he is not impeached.

The BRICs – and China especially – are propping up the world's economy but China is struggling with inflation and a flattening demand curve for the consumer trinkets it produces in such large quantities. Like Japan before it, China is suffering the aftereffects of a great fiat-money binge.

Never in the history of mankind has a civilization used central bank supermoney to such great effect, building up what passes for modern civilization in about three decades. Of course, awed observers miss the point that much of this building-up is government mandated and government planned.

At least some of it as about as valid as the empty cities that China keeps building. Any civilization that bases its growth on monopoly printing presses has been built on a shoddy, shifting foundation. Japan has discovered that, as well, though its current government has decided that the cure to monopoly printing is more of it.

Unheralded among all of this is what we have been pointing out one way or another for at least a decade, and that is what Gary North has just pointed out as well: There is a revolution occurring among the consumer class, the beleaguered and tattered middle classes of the world.

They are indeed using the Internet to educate themselves about the world and their aggregate position in it. The reality of the Misesian point of view that North represents continues to grow, thanks in large part to Lew Rockwell et al. and affiliated facilities.

But in a larger sense, the Internet Reformation is not confined to any one point of view or party. It is part of what we've called in the past the hive mind. It is being driven by the same mysterious cultural give-and-take that produces fashion and disseminates new ideas around the world.

Gary North explains this via economics. Here's some more:

Like Mises' disciple Murray Rothbard, I am a student of conspiracies. They all have this in common: the seek leverage through the state. They instinctively know that Mises was correct, that they are the servants of customers in a free market order. So, they seek to rig the markets by means of the state.

Once a person comes to grips with Mises' observation, conspiracies appear less formidable. The state is a weak reed when compared to the long-run effects of liberty. The free market prospers under liberty. It expands its control over production and distribution.

This leads me to the topic at hand.

Alex Jones and Paul Watson wrote a really interesting report on the CEO of Google, Eric Scmidt. He is a big supporter of Obama. They say that he is behind a new organization, Zeitgeist. It is a supplement to the Bilderberg organization. It may be about to absorb Bilderberg.

I have been fascinated for almost half a century with the attempts of various conspiratorial groups to influence the affairs of men. This has been the goal of power-brokers for as long as we have records of human societies. The quest for power, by way of specialized knowledge and behind-the-scenes influence, goes back to the story of the Garden of Eden. Men are always trying to get shortcuts to power. They want to have inside information. They want to be the powers behind the throne, at least in those cases in which they are not convinced that they sit on the throne.

One of the basic themes of writers who specialize in conspiracy historiography is at the people on the thrones are really not the true source of their own power. It becomes difficult to maintain this when you are dealing with somebody like Josef Stalin or Adolf Hitler. When you get a true megalomaniac on the throne of power, and he personally tells everyone what to do, on pain of death, it is difficult to maintain that there are any powers behind the throne. These rulers seem to have a kind of built-in sniffer that enables them to locate people who think they are the powers behind the throne, and those people tend to disappear.

Nevertheless, when it comes to the exercise of power, every person on a throne is dependent on information. The better the information he has access to, the more effectively he can wield power. The difficulty is this: people do not want to tell strongmen on the throne that what they had been told before is a pack of lies, or worse, utter nonsense. That can get you killed. So, the quality of the information that flows upward to the person on the throne is always suspect. So, the man on the throne attempts to have multiple pipelines of information. But the more pipelines of information there are, the more confusing events get.

The flow of accurate information is the crucial resource. The person without accurate information is flying blind. I think that this, more than anything else, is what brought down the Soviet Union in 1991. The more complex that a society gets, the more difficult it is to gain access to reliable information.

… The Internet was the product of DARPA. DARPA is a military research organization. The reason the Internet was invented in the late 1960s was because of the threat of nuclear war. The military wanted a communication system that would withstand multiple nuclear attacks. It had to be decentralized. So, they invented the Internet to provide this decentralized communication system. But what grew out of that project is vastly beyond anything that anybody could have conceived in the late 1960s. The whole world is being restructured by that project …

The same is true of the bright fellows who think that this massive decentralized flow of information can in any way be controlled by a group of technicians at the top of the system. There is no top of the system. That is the whole point. That was why the Internet was invented. It was specifically designed so that there would be no top to the system. In this respect, it is clearly the most ingenious technological invention of all time. It was centrally planned to be totally decentralized.

… We are back to the dilemma that was posed centuries ago by a Scottish philosopher named Adam Ferguson. He discussed society as the product of human action, but not of design. Anyway, it is not of human design. In our day, the premier exponent of that position was F. A. Hayek. Hayek made it clear that the decentralized knowledge that the free market can draw upon is vastly greater than the knowledge possessed by any committee. Centralized knowledge cannot compete effectively with decentralized knowledge, when people who possess this decentralized knowledge seek out ways of profiting from it. The more intensely capitalized the free market is, the better the knowledge available to entrepreneurs.

… We have here an exponential growth of knowledge. It is not simply that this knowledge exists; it is that this knowledge can be shared so inexpensively. It also can be sold. The algorithms that are used by market traders are beyond the ability of the traders to shape pricing. They are price predictors, not price shapers. Nobody is fast enough to beat an algorithm to the punch.

… We know the Federal Reserve System is eventually going to fail. Why? Because the Federal Reserve System is premised on the assumption that a relatively small committee of people that Ph.D's in economics are capable of making decisions based on the flow of information that is provided by a lot of other people with Ph.D's in economics. The information that is collected by government agencies is sent up the pipeline, and a small committee at the top is supposed to be able to analyze this information, and then set monetary policy to shape the general outcome of the economy.

… This is why I really do not pay a lot of attention to the Bilderberg, the Council on Foreign Relations, and the Trilateral Commission. Ultimately, they are going to lose, just as their British equivalents and predecessors lost, 1914-1945. The digital genie is out of the bottle. His great gift to mankind is that he keeps selling his services at ever-lower prices. He serves ever-more people by cutting prices. Nobody can get him back in the bottle.

We are excited by this analysis, which includes three main points on which we've based The Daily Bell and our vision of the Internet Reformation. First, the Internet was indeed built by DARPA, but as we've often pointed out, two Steve's in a garage basically invented the personal computer that allowed people unexpectedly to gain access to the DARPA-built Internet. The rest is history, and has been driving government-types mad ever since.

Second, North points out with great eloquence that what has occurred is Hayekian in a most profound sense. While we have our troubles with Hayek, there is no doubt that his vision of spontaneous order has proven out once again if one takes the time to analyze the development of the Internet.

North doesn't mention it but the Internet is, in fact, a living example of the best pattern of human existence, which is a form of anarchy – which merely means the absence of the guiding hand of government. What the Internet has achieved and will continue to achieve is a testimony to the free flow of ideas and the untrammeled human spirit.

Finally, North makes the point that the information that beats at the heart of the Internet will eventually sweep away the conspiracies and devious plans of those who wish to harness the Internet for their own controlling purposes.

In fact, this is just what happened during the era of the Gutenberg Press when those who sought to control the printing press with various false flag operations including perhaps the Reformation itself found out that their plots simply contributed to the same creative destruction that they were trying to counteract.

Look around. Whether the West's growing chaos is deliberate or not, the absence of an ability to start a world war and the impossibility, currently, of controlling the Internet is eroding the modern order. Global warming, the war on terror, the European Union and a half-dozen other fundamental globalist memes are under severe attack. The methodology of control has been fully exposed in the 21st century and there is no turning back.

We are not predicting a clear or easy victory for freedom and free-market thinking, by the way. We have never predicted anything but that the elites of our day may eventually conclude it is in their best interest to take a step back. They apparently did so during the Gutenberg era when the democratic state was invented to take the place of the divinity of kings.

After Thoughts

We want to thank Dr. North for his eloquent article. From our perspective, what he says is both logical and true … and more than that it is inspiring. The logic of economics throws its weight behind the Internet Reformation and we believe, in the shorter term anyway, it will tip the balance. In the longer term, the human struggle continues, but that is a story for another day.