L: Doug, you keep saying you're an anarchist. I
suspect most of our readers know that doesn't mean you like to wear black
army boots and throw Molotov cocktails at McDonald's restaurants during WTO
protests, but I'm not sure how many really know what it is you do mean. And
since this is central to your world-view and hence touches on all your
thinking as an investor and speculator, it seems useful to clear the air. Few
may agree with us on this topic, but let's talk about anarchy.
Doug: Sure. If people aren't
open-minded enough to even consider an alternative view, they're their own
worst problem, not my ideas. In point of fact, anarchism is the gentlest of
all political systems. It contemplates no institutionalized coercion. It's
the watercourse way, where everything is allowed to rise or fall naturally to
its own level. An anarchic system is necessarily one of free-market
capitalism. Any services that are needed and wanted by people – like
the police or the courts – would be provided by entrepreneurs, who'd do
it for a profit.
Look, I'd be happy enough if the state – which is an instrument
of pure coercion, even after you tart it up with the trappings of democracy,
a constitution, and what-not – were limited to protecting you from
coercion and absolutely nothing more. That would imply a police force to
protect you from coercion within its bailiwick. A court system to allow you
to adjudicate disputes without resorting to force. And some type of military
to protect you from outside predators.
Unfortunately, the government today does everything but these
functions – and when it does deign to protect, it does so very poorly.
The police are increasingly ineffective at protecting you; they seem to
specialize in enforcing arbitrary laws. The courts? They apply arbitrary
laws, and you need to be wealthy to use them – although you're likely
to be impoverished by the time you get out of them. And the military hardly
defends the country anymore – it's all over the world creating enemies,
generally, of the most backward foreigners.
In a free-market anarchy, the police would likely be subsidiaries of
insurance companies, and courts would have to compete with each other based
on the speed, fairness, and low cost of their decisions. The military
presents a more complex problem, beyond our range here, although we've gone
into a lot of aspects in our discussion on terror last week and the military a couple months back.
L: That's a lot for most mainstream folks to swallow
at once, Boss. On the other hand, the way I see it, it would be inconsistent
with my libertarian principles to demand that anyone agree with me –
but I don't need to be helping those who would enslave me to make money
anyway. That said, let's try to ease into this…
Doug: So, let's start with a
definition. Many people think of anarchy as being chaos. They see riots and
chaos on TV from some place in conflict and think, "What anarchy!"
L: That's if the talking heads don't tell them that
what they are seeing is anarchy to begin with.
Doug: Right. But chaos and bomb
throwing are not anarchy. Chaos is the actual opposite of anarchy. Anarchy is
simply a form of political organization that does not put one ruler, or
ruling body, over everyone in a society. Whether that's actually possible is
a separate matter. This is what it means. And I see it as an ideal to strive
for.
L: I'm looking at Webster's, and it says that anarchy
is: A: Absence of government. B: A state of lawlessness or
political disorder due to the absence of governmental authority. C: A
utopian society of individuals who enjoy complete freedom without government.
People might say you're focusing only on C.
Doug: Look at the etymology. It
comes from the Greek anarchos, meaning "having no ruler," an-,
not, and archos, ruler. Definition B has come into popular use,
but that doesn't make it right.
"Anarchy" is a word that's been stolen and corrupted by the
collectivists – like "liberal," It used to be that a liberal
was someone who believed in both social and economic freedom. Now a liberal
is no better than a muddle-headed thief – someone who's liberal only with
other people's money.
I refuse to let the bad guys control the intellectual battlefield by
expropriating and ruining good words.
In any event, there's no conflict whatsoever between anarchy and the
rule of law, since there are private forms of law and governance. That's what
Common Law is all about. So the correct definition is a combination of A
and C.
But I never said a truly free, anarchic society would be a utopia; it
would simply be a society that emphasizes personal responsibility and doesn't
have any organized institutions of coercion. Perfect harmony is not an option
for imperfect human beings. Social order, however, is possible without the
state. In fact, the state is so dangerous because it necessarily draws the
sociopaths – who like coercion – to itself.
What holds society together is not a bunch of strict laws and a brutal
police force – it's basically peer pressure, moral suasion, and social
opprobrium. Look at a restaurant. The bills get paid not because anybody is
afraid of the police, but for the three reasons I just mentioned.
L: I saw some of this in Argentina over the last few
days. Here we are at your Harvest Celebration. Two hundred people, most of
whom have never met before, a hundred miles from nowhere – I don't know
if the nearby town of Cafayate even has a cop, but if it does, he's well
hidden. For all anyone can see, it's us, the grape vines, and the mountains.
And yet, there was order. The Estancia is private property. Your
people organized things, and the guests went along with it and had a great
time. Why? I don't think many of them calculated the odds of getting killed
if they tried to use violence to get everything they wanted, though a
rational person making such a calculation would decide it wasn't worth it.
Most people are brought up to be decent, and the people you tend to
attract have a certain moral fiber. In other words, the event was governed by
a culture of voluntary and honorable cooperation.
Doug: Just so. It's like when
people form lines at movie theaters or ski lifts. There doesn't have to be a
cop with a gun there to make everyone take turns. Everyone knows that if they
take turns, it all works out better for everyone – and they are brought
up to act that way, so they usually don't even have to make that calculation.
A more obviously government-like example is Disneyworld, which is
nothing less than a private city, complete with numerous rules that would be
called laws if it were run by politicians instead of a corporation.
Why would anyone go along with rules that aren't laws? Because they
want to go to Disneyworld. They agree, and for the most part, they go along,
and if they cause too much trouble, Disney kicks 'em out – which they
have every right to do as owners of their private property.
As Pareto's Law indicates, there's inevitably a bad element in most
places. 80% of folks are truly decent, and 20% are perhaps problematical. And
20% of that 20% are bad apples. You have to have a culture that keeps them
hiding under rocks, rather than rising to the top – as they wind up
doing quite often in government.
The reaction of a person to the idea of a truly free society is an
excellent moral litmus test. The more negative the reaction, the more likely
you're dealing with a sociopath.
L: What would you say to people who point out that
when the government collapsed in Somalia a few years ago, bloodshed ensued,
or that when the government disappeared from New Orleans in the wake of
Hurricane Katrina, ugly chaos did erupt?
Doug: It's as you said: a
cultural matter. If you have people who've been brought up to believe that
the only limits on what you can or should do is the force exerted by the
authorities, it's no surprise that when the greater power disappears, they
reach out to take whatever they want, by force.
That's clearly the case in Somalia, but it's also true of the people
stranded in New Orleans, who were primarily those with no money to flee
– in other words, the inhabitants of government housing projects. It's
not politically correct to point this out, but those people had, on average,
a distinctly different culture from that of the average American.
Actually, ex-police states are the most dangerous places – like
Russia in the early '90s, the Congo in the early '60s, or Haiti today, because they have a culture of repression that's
like a pressure cooker. When the lid comes off, it's a mess.
L: I seem to recall a flood in West Virginia in
recent years that wiped out half of a small town. Instead of raping and
robbing each other, those not hurt helped the victims. They housed them, fed
them, and even helped them build new houses. And no one made them do it. It
wasn't a case of better government – it was just their culture to do
so.
Doug: And culture is a matter of education, which means that societies that function on voluntary cooperation,
as in Cafayate, Disneyland, or the town you're talking about in West
Virginia, are possible.
There is nothing in human nature that makes it impossible to create a
society of people who respect each other's rights and follow accepted systems
for working out differences, like getting in lines at movie theaters. There
would still be criminals and sociopaths to deal with, as these occur in a
standard distribution in every population – but the point is that the
society doesn't have to be built around an essentially criminal organization,
the state.
L: And those sociopaths would be limited to whatever
mischief they could wreak personally, instead of having access to the
machinery of the state to multiply the harm they can do. But I think most
people would balk at your characterization of the state as essentially
criminal.
I know that's a big topic people have written whole books about, but
can you give us something brief to substantiate your view?
Doug: Well, it's really not that
complicated. We can probably agree that it's wrong for me to point a gun at
you and take all your money. Some people might feel sorry for me if I did
that to buy medicine for my dying mother, but it's still a crime, because it violates
your human rights. And it's still a crime if I ask someone else to do the
same thing for me – and still a crime if a whole bunch of people vote
to ask someone with a spiffy uniform and a badge to do the same thing.
It wouldn't matter any more if a group of people calling themselves
Congress went through some rituals that involved a leader putting some ink on
some paper and said a violation of your rights was now "legal" than
if a witch-doctor told a tribe's warriors that it was okay to take slaves and
sacrifice them to the gods. Laws are just a "civilized" man's
taboos.
L: Obamacare is a case of exactly this. Socialized
medicine puts you and me in the position of the tribe's sacrifice, because
the mass of voters want free goodies at the expense of those who produce more
than they do.
But to get back to the word "criminal" – you're saying
that the state is inherently criminal because it violates human rights. But
does it have to be that way? Didn't Ayn Rand have an idea for a kind of
government that would not violate anyone's rights?
Doug: I don't think she ever came
up with a detailed plan. I find it interesting that her "Galt's
Gulch" in Atlas Shrugged was clearly a private city. It was built
on land owned by Midas Mulligan, and people who bought in agreed to his
terms. There was no mention of police or elected officials. What Rand said
was that a moral government could not violate anyone's rights, and that meant
raising revenues through user fees and other voluntary means – no
taxes. That's a great step in the right direction, but leaves a lot of
unanswered questions as to how to do this.
Here's the rub; imagine that the Quebecois decided unanimously that
they really didn't want to be part of Canada anymore but wanted to be an
independent, French-speaking country. So they peacefully vote and take their
marbles to play their own game. In doing so, they don't violate anyone's
rights, so there is no moral way the government of Canada can stop them. They
could use force, but that would violate the rights of the Quebecois, who
would not be hurting anyone. And if the Quebecois could do this, so could
Disneyworld, or your neighborhood – or you individually.
There's no moral way to prevent peaceful secession – but if a
state doesn't prevent secession, it soon disintegrates. People always want to
do things differently, and they would if the threat of force from the state
didn't stop them. Brute force – although gussied up with myth,
propaganda, and red, white, and blue bunting – is what holds the state
together. That force is ugly and corrupting.
No matter how benign a state might be, even one that found a way to
fund all of its activities without resorting to force, it must still violate
the fundamental human right of self-determination in order to preserve its
own existence. That's why the state is inherently a criminal organization
– it must rely on force. Even the best of them are never based entirely
on consent of the governed; there is coercion of the non-consenting minority.
And there are always some who do not consent.
Democracy is no solution – it's just 51% bossing the other 49%
around. For God's sake, Hitler was democratically elected. Democracy is just
mob rule dressed up in a coat and tie.
You and I do not consent to Obamacare, but we're forced to accept it.
Of course socialized medicine is totally counterproductive, as we discussed
in our conversation on health.
I suppose I can live with the idea of a state, as long as there were
about seven billion of them in the world – and everybody had one. That
would show that the whole idea of the state is just a scam, where everyone
tries to live at the expense of everyone else. But the only people who really
benefit are the guys on top.
L: The state's requirements for self-preservation are
why people so often say that the state is a "necessary evil." It
must violate some rights to exist, but people think that the state's
protection and support of civil society, which is a great value, is worth the
violation.
Doug: I find the concept of a
necessary evil rather repugnant. It's largely sophistry, usually trotted out
to justify some type of criminality. Can anything that's evil really be
necessary? And can anything that's necessary really be evil?
Entirely apart from that, people say the state is necessary because
that's all they've ever known. But it's not, in fact, part of the cosmic
firmament. There have been times and places in history when central authority
was so distant, or negligent, that the people did function – and
prosper – in what was essentially a functioning anarchy.
David Friedman draws attention to medieval Iceland as one example of
this. I recommend his book The Machinery of Freedom for lots
of great discussion on how society would work without the dead hand of the
state suppressing it.
L: And the reality is that there are all sorts of
private institutions that provide regulatory and governance systems, from
private cities like Disneyworld, to Underwriter's Laboratories that puts
"UL" seals on electronics they deem safe, to churches, some of
which govern their members' most intimate life functions – all through
voluntary subscription.
The Mormon Church, for example, exerts a very significant amount of
regulation of the private behavior of its members. I'm not a Mormon, of
course, but I've lived in predominantly Mormon communities, and I have to say
they tended to be cleaner, nicer, safer, etc. I'd say the Mormon religion
exerts more control over its adherents than any state's laws have ever
exerted over citizens – but those regulated like it. They
believe they benefit from it, and most important of all, they are physically
free to leave any time they want.
Not so for the state. This is why I've said in the past that the state
is not a necessary evil but merely necessarily evil.
Doug: Good example. The Amish and
Mennonites provide other examples, although religious communities are
entirely too uptight to suit my taste. And UL is a good one too, because
people worry that businesses would all turn rapacious if the state weren't
there to regulate them. But electronics producers are not required to
get UL seals on their products. They go to the extra expense of meeting UL
standards because they know they'll make more money if their products have
the UL seal of approval on them.
L: Best Western hotels are the same way. Best Western
doesn't own the hotels; it's largely a private regulatory agency that
inspects hotels and gives those that make the grade the right to put a Best
Western sign out front, which is worth a lot to a small mom-and-pop joint.
Doug: There are lots of private
regulatory services. Insurance companies also exert a lot of influence on the
insured, who have to go by certain rules to stay insured. And, of course,
there's a huge private security industry used by those who want to protect
their assets, rather than call 911 after they've been robbed, etc. All by
subscription.
You don't need government for anything; if something is needed and
wanted, an entrepreneur will provide it for a profit. And do so far better
and cheaper than anything a government could possibly hope to.
The economic arguments for a free-market anarchy are overwhelming. I'm
of the opinion we'd already be living with the technology of Star Trek if it
wasn't for the state slowing things down. But that isn't the reason I'm an
anarchist. The real argument is moral and ethical.
L: You know, I keep sending "unsubscribe
USA.gov" messages to Washington, but I never get a response.
Doug: Good luck. To them, you're
cattle. They care only so much as you and all the others don't stampede.
Other than that, you exist for their benefit and have as much say in the
matter as a steer.
L. Maybe that's true for most
people, but I can still vote with my feet. I've done it before, and I'll do
it again. And so have you. Which is why I was looking at property in your
neck of the woods in Argentina.
Doug: It makes a lot of sense to
be in a place where they have to treat you as a guest, to be courted, rather
than an asset to be exploited. Of course, all governments are dangerous,
destructive, and annoying. But the ones that are incompetent and disrespected
are easiest to deal with…
Anyway, love to have you as a neighbor.
This brings up another problem with the nation-state – it forces
obligations upon you. I'm a big believer in being neighborly, but when the
state tries to force you into a relationship with other people, it only
breeds resentment. I like communities that are self-selecting, where you can
assume neighbors share some basic premises about the way the world works.
L: I loved the Estancia. Those mountains would
probably convince me if you and your friends didn't. But anyway, there are a
million directions we could take this conversation, a million objections I
could raise for you to answer, but I'd like to move from theory to practice.
Even to those who agree with you, at least in spirit, this all sounds very
theoretical – of no practical consequence since the whole planet, as
you've observed, is covered with nation-states.
I've been your friend for the better part of 20 years, and I've worked
with you closely for most of the last six of those. I know this is not all
theory for you. You live your philosophy. I've seen you get up in
front of a large lecture hall with hundreds of people and tell them that the
whole of the law should be: "Do what thou wilt – but be prepared
to accept the consequences." They laugh or roll their eyes, depending on
their beliefs, but I doubt many realize that you are not only completely
serious, but that that is exactly how you live your life.
You're not shy, but you're not a braggart either, so I'll go ahead and
say that I have watched you match deeds to words. You routinely go in
"Out" doors, you light up under "No Smoking" signs, you
walk through metal detectors with your belt on, you get back on polo ponies
regardless of what your doctors tell you, you leave your electronics on when
all the other sheep on the airplane turn theirs off… I could go on and
on.
The beauty of it is that most of the time, nothing happens. You
did exactly as you pleased, hurt no one, and enjoyed life on your own terms.
On the occasions when some busybody does confront you, you usually respond
calmly and say, "Oh. Well, what should we do about it?" The worst
that happens when you are confronted is usually that you end up where all the
submissive people put themselves to start with. Sometimes you even fight
back. I've watched you make fools of airport security guards or take your
business to another hotel.
The important thing is that you start out doing what you want,
not what the busybodies want. You may end up penned in with the sheep
sometimes, but not as often as most people would think. And you start out
doing things your own way. I admire the heck out of that.
Doug: Well… You're Don
Lobo, a well-known anarchist in your own right – well known for not
cooperating with the state. But, like you, I'm very easy going, and always
try to observe others' rights to the fullest.
While it's true the most basic law is "Do as thou wilt –
but be prepared to accept the consequences," you can extrapolate that
out, as a practical matter, to two others. One, do all you say you're going
to do. And two, don't aggress against other people or their property.
Everybody understands those laws, and you don't need a corrupt, and
corrupting, government to elaborate on them any further, as far as I'm
concerned.
The people I like to hang out with, like you, observe those things.
Besides that, I find you're quite good at keeping your cool while questioning
minions of the state… maybe you do it just to see if there's actually a
real human in that uniform they wear.
L: Okay, okay, but I don't want to comment in print
on all the things I've done. The point here is not to flatter you, or myself,
but to point out to people that submission is a choice, not a foregone
conclusion. Freedom is something you never get by waiting for permission but
by exercising it as vigorously as your creativity and energy allow. By
pushing back against the barriers – like when you told the Inn at Aspen
where to shove the city's "No smoking in the bar" rule, and that
you'd accept the responsibility if the mayor walked in.
In the most general terms, I think it's a mistake to think of freedom
as a noun, rather than as a verb. And your actions show the world the
consequences of doing freedom, rather than waiting to be given freedom.
Doug: Well, that's true. And, not
to pat myself on the back, it's worth noting that there have been times when
I've had my setbacks and even a substantial negative net worth – but it
was my problem and nobody else's. So not having any money is no excuse for
not taking charge of your own life and living it the way you want to. I
wasn't given freedom by my parents or the government.
L: Hear, hear! So… Investment implications?
Doug: Attitude is everything, and
that matters. If you let yourself be treated like cattle or herded like
sheep, you won't invest so as to maximize your freedom. There's a lot we
could say about this, but we've gone on long enough. The place to start is
with diversifying your assets across political jurisdictions, making it
harder for each would-be Big Brother to corral you. This is a rule almost
everyone forgets – but it's the most important single thing in today's
world.
I would like to recommend a book here. Along with Rand's The
Virtue of Selfishness, I'd say it's the most important I've ever read,
and had the most practical effect on my thinking: The Market
for Liberty by Tannehill. It
describes, clearly and precisely, how a society without government would
likely work. Best of all, it's now a free download from the Mises Institute's web
site. If you understand the
basics, you'll feel much less obligated to support the destructive
institution of government – because you'll know it's unnecessary.
L: As we covered in our conversations on currency controls and living abroad – and Argentina, of course. What else?
Doug: Don't feel guilty
about finding the lowest-tax jurisdictions for reporting your income, owning
property, etc. Shopping with your feet is not only your human right, it's a
positive good for the whole world; the more everyone shops for the least
onerous governments, the more governments will have to compete for being less
onerous, and the better off we'll all be.
L: And the easier it will be for people to exercise
their freedom as you do. What about trends?
Doug: Just the ones we've already
covered – but now the need to take action is getting more urgent. I see
that the new employment bill Obama just signed has new currency controls buried in its guts. It
doesn't necessarily prohibit anything new. But it has new reporting
requirements and penalties. It's an overture to what's coming. As Mencken
said, nobody's life or property is safe while Congress is in session.
L: I figured you were right about this being in the
cards, but I have to admit it's started sooner than I thought it would.
Doug: Sometimes I hate it when
I'm right. And I still think things will get worse than even I think they
will. Remember my mantra: Liquidate, Consolidate, Create, Speculate.
L: No specific investments?
Doug: Nothing looks particularly
good to me right now, except gold. If you don't have a serious position in
gold, you should build one post-haste – with as much as possible
outside of the U.S.
L: Okay then. See The Casey
Report for details.
Doug: Right.
L: Very good. Talk to you next week.
Doug: Yes. Perhaps we should have
a closer look at the implications of Obamacare.
L: Looking forward to it.
Doug and the other editors of The Casey Report tell it like it
is – so you can see what's coming. The government meddling in all
sectors of the economy… systematic dollar devaluation… the state
and fate of other countries around the globe… and the investment
implications that can make or break your future wealth acquisition. Learn all
about how to take advantage of any crisis and profit while others lose; click here for more.
Doug Casey
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