From Scarcity to Money

An attempt to show in diagram form the progression from the observation that objects are scarce/rivalrous, to the necessity of property laws, to the development of money.

Transcript for Government Explained 2: The Special Piece of Paper

Alien: So tell me more about your ‘leaders’. Who is the current leader of your species and where are they leading you?

Human: We don’t have just one leader for the whole world. The world is divided into countries, and each country has a leader of its own, and a government of its own.

Alien: You don’t have one government that rules the whole planet?

Human: No, this planet is really big and there are billions of people on it. The world is divided up, because people in different places want different kinds of leaders and governments.

Alien: How many countries are there?

Human: A couple of hundred, I think.

Alien: So there are millions of people per country?

Human: Yes, or hundreds of millions, in some of them.

Alien: And all the people in a country live under one single government?

Human: There can be layers of government, but there’s only one government in each country. That is how it works.

Alien: But you can have multiple governments on the same planet?

Human: Yes and its better that way. If you had single government for the whole planet and it turned tyrannical, there’d be nowhere to escape to and no one to oppose it. And I wouldn’t want to be ruled by a bunch of people living thousands of miles away on the other side of the planet. It’s better having government more local, because then it’s more accountable.

Alien: How far is it from here to where the rulers of this country live?

Human: The capital of this country is hundreds of miles from here.

Alien: So you don’t want to be ruled by a bunch of people living thousands of miles away, but you don’t mind being ruled by a bunch of people living hundreds of miles away?

Human: That’s just how it is, I guess.

Alien: Why don’t you and your neighbours set up your own country here, so you can keep a close eye on what the individuals acting as your government are doing?

Human: I don’t think our government would allow us to do that.


Alien: So you have these countries, some big and some small, and the individuals living in each country separately choose which people are going to be their politicians and as act as government of that country?

Human: Yes, although not everyone is lucky enough to live in a country where we get to choose our leaders. A lot of countries have kings or dictators or warlords running their government. People in un-democratic countries don’t get to choose their leaders.

Alien: So you consider yourself lucky because you live under a democratic government, where you, along with millions of other people, get to vote, and whoever gets the highest number of votes becomes leader of the government, the gang that tells you what to do and robs you.

Human: Yes. But there’s more to it than that. Democracy isn’t the only thing that’s great about the government of this country. In fact, democracy itself is not an ideal system at all – everyone knows that. With a pure democracy, the majority rules, because the politicians do whatever the majority of people want them to do, and this can be a problem for minorities. We know this. The real reason why we’re lucky in this country is that our government is not a pure democracy, but a republic. With a republic, minority rights are protected against the tyranny of the majority.

Alien: How?

Human: Our rights are listed in our Constitution, the document that established our government. It lays out how government is supposed to work. It says what government is allowed to do, and what it isn’t allowed to do.

Alien: What does it say government is allowed to do?

Human: Government is allowed to collect taxes for things like national defense...

Alien: Hold on - the Constitution says that government is allowed to collect taxes? So it says that the individuals who are acting as government are allowed to rob everyone else using threats of violence?

Human: Yes, but only to do good things.

Alien: Where did the Constitution come from?

Human: It was written by the Founders of this country, the people who first set up the government.

Alien: The first politicians of the country?

Human: Yes.

Alien: So a bunch of regular people just got together and wrote on a piece of paper that they’re allowed to rob everyone else, as long as they call themselves “government” and call their robbery “taxation”. Then because they have this special piece of paper, everyone just sits back and lets these guys rob them?


Human: You’re missing the point. The Founders wrote the Constitution to restrain government. They made sure there was a separation of powers, so there were checks and balances in the system. They did this to strictly limit the power, size and scope of government. They made a list of things the government can do and must do, and everything else the government can’t do. They even wrote about specific things that the government can’t do, like violating the inalienable rights of the people to life, liberty and the pursuit of happiness.

Alien: OK. But I don’t see why the piece of paper is so important. I mean, hypothetically, what if the majority of the people want government to do something that the Constitution says government shouldn’t do? Couldn’t the people vote in politicians who promise to do it for them, regardless of what the Constitution says? How does having your rights listed on an old document help protect your rights today?

Human: Well if the politicians who get voted in want to pass unconstitutional legislation, then the third branch of government, the judicial, will step in and not let the legislation pass. The Founders recognised the problem of democracy, so they gave us a Supreme Court, and their role is check whether legislation is constitutional or not.

Alien: But the Supreme Court is itself part of the government?

Human: Yes. Politicians get voted into positions in the Executive and Legislative branches, but the Judicial branch is made up of judges. So if a majority supports the government violating the rights of a minority, the judges of the Supreme Court simply won’t let it happen.


Alien: Are these Supreme Court judges just regular humans?

Human: Yes.

Alien: So how does a regular human become a Supreme Court judge?

Human: They are appointed.

Alien: By who?

Human: The politicians.

Alien: But then what is to stop the democratically-elected politicians just appointing judges who will allow their popular but unconstitutional legislation to pass?

Human: Well, they just aren’t allowed to do that.

Alien: By who?

Human: By the constitution.

Alien: The piece of paper?

Human: Yes. I admit it’s not a perfect system. I suppose what you’re saying could happen.

Alien: Does the government of this country, which you consider yourself lucky to live under, ever do things its own Constitution explicitly forbids?

Human: Yeah, a lot of things actually. The government is a lot bigger now than it was when the Constitution was written. The politicians pay lip service to the Constitution, but they trample over our rights anyway.

Alien: What about the Supreme Court?!

Human: I guess that system hasn’t worked very well lately. Government does pass unconstitutional laws all the time. The separation of powers worked for a while though, it’s not a bad system!

Alien: Powers were separate? I thought you said that the powers were all in branches of the same government?

Human: Well yes. The branches of government are totally independent and separate from each other, except that they are all part of the same organisation and all funded by taxation. Alien: So when you said the system had checks and balances in it, you meant that the government would check itself, and balance itself?

Human: That was the idea.


Alien: So, let me get this straight, a long time ago a small bunch of regular humans had a meeting and created a document called a Constitution that said that they can rob everyone else – millions of people – using threats of violence to make everyone obey their rules and commands. But so that the masses of the people would let them get away with this robbery and slavery, that small bunch also promised in the same document that there were some things the government would never do, and they described a way to structure government so as to restrain it. But, over time, the promises have proven to be worthless, the restraints have proven to be useless, and government has grown significantly in size, power and scope, violating more and more of the rights of the people. It sounds to me that if the Constitution was written to constrain government, then it has been a complete failure.

Human: Well, the real problem is that people just don’t believe in the Constitution any more. The Constitution only works when people know what it says and why it’s important. If people just knew that, then they wouldn’t vote for politicians who violate it. An informed populace: that’s the only way to really restrain government.

Alien: Wait, you said you feel lucky because this country is a republic not a democracy, and a republic has these supposed “checks and balances” that prevent government from violating people’s rights, even when a majority wants to violate the rights of others. But now you’re telling me a republic can only work if people refrain from electing politicians who will violate the rights of others in the first place. That’s the same as a democracy. We’re back to where we started.

Human: I see your point.

Alien: Is there anywhere on the planet where government is, despite the imaginative labels, anything other than a gang of thieves and bullies?

Human: But there’d be chaos without government!

Alien: I’m sure that’s what they tell you…

Government Explained 2: The Special Piece of Paper

Continuing from where the original video ended, the human now tries to explain to the alien the concept of "countries", the difference between a democracy and a republic, and the purpose of a Constitution.

Message to the Voting Cattle (Larken Rose video)

The Complete and Undeniable Truth - Larken Rose

"Message to the Voting Cattle".  Simply incredible...

Critique of Patri Friedman on Folk Activism

Patri Friedman, founder and chairman of the Seasteading Institute, has an article at Cato Unbound called Beyond Folk Activism, in which he criticises the advocacy approach taken by many libertarians, which he refers to as “folk activism”.

Libertarians tend to spend a lot of time debating with non-libertarians, and amongst themselves, in an attempt to promote liberty to the masses, and bring about a large-scale change in public opinion, one person at a time. Friedman says this tendency to debate stems from “an instinct to seek political change through personal interaction, born in our hunter-gatherer days when all politics was personal.”

He continues:

“In the modern world, however, bad policies are the result of human action, not human design. To change them we must understand how they emerge from human interaction, and then alter the web of incentives that drives behavior. Attempts to directly influence people or ideas without changing incentives, such as the U.S. Libertarian Party, the Ron Paul campaign, and academic research, are thus useless for achieving real-world liberty.” 

This seems to overlook completely the insights of Mises and many other thinkers who have pointed out that the opinions of the masses are the ultimate determinant of what kinds of institutions exist and how they operate. Mises wrote:

“The masses, the hosts of common men, do not conceive any ideas, sound or unsound. They only choose between the ideologies developed by the intellectual leaders of mankind. But their choice is final and determines the course of events. If they prefer bad doctrines, nothing can prevent disaster.” 

“The supremacy of public opinion determines not only the singular role that economics occupies in the complex of thought and knowledge. It determines the whole process of human history.” 

Murray Rothbard was also very clear on this:

“The world, at least in the long run, is governed by ideas.” 

And so is Ron Paul:

“Fighting for liberty with ideas makes much more sense to me than fighting with guns or politics or political power. With ideas, we make real change that lasts.” 

Etienne de la Boetie understood the implications of this when he wrote:

“Resolve to serve no more, and you are at once freed. I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces.” 

The idea that societal institutions reflect the attitudes, opinions and values of the people at large seems irrefutable. Consider first a society where everybody believed in the necessity and benevolence of government. Then there would be government. Now consider a second society where everybody identifies the notion of government as a scam and considers anyone who proposes setting one up as immoral. In this society, no government could exist. 50 years ago, pretty much everyone did believe government was necessary and benevolent. Since that time however, and particularly in the last decade, there has been a seismic shift and now a sizeable minority of the population are anti-statist, or very close to it. If the trend continues, eventually anti-statism will be the majority view, bringing us closer to a situation where we know no government could exist.

So this raises the obvious question: when will we start to see visible changes that reflect this change in public opinion? De la Boetie is certainly poetic, but what does he mean the Colossus will "fall of his own weight"? What will that look like? What events will take place to make that happen?

This is a widely debated question. One idea is that when a sufficient number of people are anti-state, they will elect representatives who will put an end to state activities “from the inside”. This strategy is the one taken by organisations like Cato and Reason, and recently the Libertarian Party. It is a widely rejected strategy, and in his article Friedman points out some of the problems with it: he describes it as libertarians “bashing their heads against the incentives of democracy”.

Secession and nullification is another strategy, and one that is far more likely to be successful. Hans Hoppe outlines the strategy in theory in this lecture. The Free State Project and The Seasteading Institute are both attempts at putting this theory into practice. While these projects are very important for bringing about liberty, it must not be forgotten that these projects are only possible after sufficient numbers of the masses are in favor of liberty. It seems that Friedman forgets this when he writes that:

“This plan [Seasteading] is one of immediate action, not hope or debate. It makes use of the people we have now rather than trying to convert the masses” 

He goes on to say:

“Seasteading is far from certain to succeed, but this is a hard problem, and there will be no easy answer. Two of the greatest risks are the expense and danger of the marine environment, and the chance that states will interfere. The latter is a systemic risk for any reform (if they'll interfere with a new city in the ocean, then no place is safe[7]), but the former is an idiosyncratic risk that could be diversified away if seasteading was part of a portfolio of freedom projects.” 

The risk that states will interfere is the key risk and it is worth spending some time thinking about how this risk can be mitigated. What will determine whether or not the state will interfere and how might they interfere? If a Seastead or a town in New Hampshire declares independence, the state has a very strong incentive to ignore the declaration, and send in an army of police, regulators and tax collectors, if they have to. It is not just the immediate lost tax revenue, but the risk of further secessions, until the state becomes obsolete, that will make the state extremely keen to prevent any secession.

Will they be able to send an army of police to prevent secession? That depends on how the situation will be perceived by the masses. If it is obvious to the masses that the secessionists are peaceful people who want to try out living in an independent state, then they may have no objection to the secession, and may be strongly opposed to the state moving in on them. The public may simply wish the secessionists good luck. If, on the other hand, the state can convince the public that the secessionists are "bad guys" in some way, they will be far more likely to accept the government moving in to put an end to the secession.

The state will do everything it can to turn public opinion against the secessionists. They will call them terrorists. They will say the seceding region will be a drugs haven and tax haven. They will call the secessions free riders, exploitative and unpatriotic. The state will do whatever it takes.

Will the state be able to convince the public that the secessionists are "bad guys", so they can go Waco on them? This is the big unknown, but the chances of this are surely directly related to the extent the masses favor liberty and the concept of secession. The charge of “tax evaders!” will fall on deaf ears if taxation is considered illegitimate. The charge that the seceded region will be a drug haven will fall on deaf ears if people are opposed to anti-drug laws in their own nation. If the public recognise secession as legitimate, it will be very difficult for the state to act against the secessionists.

Friedman presents Seasteading as though it is a path to liberty that sidesteps the difficult task of “converting the masses”. But, on the contrary, the success of the Seasteading project depends on how the masses feel about secession. This is why “folk activism”, aka promoting liberty and the idea of secession to open-minded people through debates and discussion, is not “useless for achieving real-world liberty”.

I applaud the efforts of everyone involved on a practical level with the Free State Project and the Seasteading Institute, but I reject Patri Friedman’s claim that trying to change minds is a useless endeavour.   Public opinion determines the whole process of human history.

To use de la Boetie’s analogy, when a town, country or Seastead comes to secede, it will be like starting to pull the pedestal out from under the Colossus. Certainly somebody needs to do this if the Colossus is to come down. But whether the pedestal can be removed, and whether the Colossus falls and breaks into pieces after this happens, or is able to remain standing strong and repair itself, depends on the reaction of the masses. We need people working on removing the pedestal, but we also need people working to make sure that when the pedestal starts to move, it will be moved easily, and that the collapse will then ensue, in the form of a torrent or snowball of secessions, until the state is obsolete.