A very interesting, if long, article.
Norway is also full of entrepreneurs like Wiggo Dalmo. Rates of start-up creation here are among the highest in the developed world, and Norway has more entrepreneurs per capita than the United States, according to the latest report by the Global Entrepreneurship Monitor, a Boston-based research consortium. A 2010 study released by the U.S. Small Business Administration reported a similar result: Although America remains near the top of the world in terms of entrepreneurial aspirations — that is, the percentage of people who want to start new things—in terms of actual start-up activity, our country has fallen behind not just Norway but also Canada, Denmark, and Switzerland.
Here’s an interesting point. The government is simply another supplier of services just like private/public companies. And if it can do it better and cheaper than a company…
Whereas most entrepreneurs in Dalmo’s position develop a retching distaste for paying taxes, Dalmo doesn’t mind them much. “The tax system is good—it’s fair,” he tells me. “What we’re doing when we are paying taxes is buying a product. So the question isn’t how you pay for the product; it’s the quality of the product.” Dalmo likes the government’s services, and he believes that he is paying a fair price.
This is particularly surprising, because the prices Dalmo pays for government services are among the highest in the world. He lives and works in the small city of Mo i Rana, which is about 17 miles south of the Arctic Circle in Norway. As a Norwegian, he pays nearly 50 percent of his income to the federal government, along with a substantial additional tax that works out to roughly 1 percent of his total net worth. And that’s just what he pays directly. Payroll taxes in Norway are double those in the U.S. Sales taxes, at 25 percent, are roughly triple.
Admittedly, this wouldn’t work in the US. Corruption and greed are too ingrained to create a fair system. Our religion is Capitalism, damn it, and we’re sticking with it no matter how fast our economy sinks!
#75
There are literally thousands of private issued currencies around the world and have been for centuries. How many of them are trusted to pay your bills? Zero. What about other countries? Also zero.
Private organizations are not obligated to accept currencies beyond the currency of the country in which they are doing business even if that currency is backed by commodity. Thus, even if we bring back the glory days of Free Banking, it still does not mean anyone will trust your currency. Furthermore, the big reason that the government did away with any Tom, Dick and Harry currency is that many people, including the government itself, lost enormous amounts of value when the given currency du jour (like say Confederate notes), went belly up. The process of dickering around with exchange rates is another cost and is one of the reasons why the EU and the Euro exist today (for now at least).
Technically, States are allowed to still issue currency backed by a commodity such as gold, but I doubt you are keen on because that is still a government. You might even still be allowed to issue your own currency backed by whatever. Think anyone will use them? Probably not.
#77 Thomas – You’ve reminded me of when I lived in the UK. The British pound is readily accepted throughout the British Isles. But Scotland prints it’s own money through the Bank of Scotland. That pound is valued exactly the same as the pound issued by the Bank of England and is, theoretically, a valid currency throughout the Isles. But journey outside the Borderlands into England and your Scottish notes become worthless. You have to go into a bank to exchange them.
Same goes for the Northern Irish Pound issued by Irish banks. It is valued as 1 pound sterling and, while your British notes are happily accepted in Ireland, don’t try to spend your Irish money in England. However, when I lived in Scotland, it was not unusual for people to spend their Irish money in Aberdeen.
What really makes it interesting is – they all use the same coins!
Of course, none of these are private currencies. Thank you for pointing out the problems of local currencies to our teenager.
#77 Thomas
That is pure bullcrap. People use federal reserve notes because a. they are ignorant of what money and currency are and b. they are forced to pay taxes with those federal reserve notes.
You don’t need government for two people to exchange goods and services. You also don’t need government to issue currency. FRN’s have been inflated by so much it is pretty much worthless crap. The only reason it looks like it has any worth at all is because compared to other government issued currency it still looks strong. But compare it to gold or silver, and you can see a truer valuation.
So, I guess according to Animby, we should have one world currency huh? And get rid of all these local government issued currencies! That’ll fix things!
#78 Animby
I never said there wouldn’t be any rules. I just don’t put politicians and rulers up on a pedestal like you do. You worship your leaders. I see all as equals. I don’t think it’s right that us serfs be stolen from to pay the salaries of elitist thugs.
Just because I favor a system of voluntary interaction it doesn’t mean I’m looking for a utopian society. I’m just looking for a society that is better than the one we are in now. One that has its people struggling for control of the weapon called government, so they can coerce everyone else to do things the way they think it should be done. But to you, it’s either the way it is, or the dark ages. News flash, the government isn’t responsible for any human advancement. Human advancement has occurred despite government intervention. Government officials are just leeches.
Hmm, Alex Jones is good for pointing out how we are living in a police state. I don’t really go for the whole conspiracy theory thing because why waste your time chasing down shadows when you can see the government oppressing the people it’s supposed to be serving in plain sight. Those other guys you mentioned I’ve never heard of. Why don’t you try accusing me of listening to Free Talk Live, reading the books I’ve linked to in the past at freekeene.com and listening to Common Sense by Dan Carlin every once in a while when I have the patience. So there’s no mystery as to my influences, besides opening my eyes to the obvious tyranny. You are suffering from Stockholm syndrome. You defend the very people who steal from you on a regular basis. It’s quite sad really.
#81 – El Polo Black Loco Sheep – What are you reading? I never, not once, advocated a one world currency. Didn’t even hint at such a thing. As for using gold? I doubt there is enough gold in the world to back our needs.
Oh, screw it. You’re just like all teenagers. You can talk to them until you’re blue in the face and they’ll still think you’re red. You want a better society? You can’t do it without politics so you better start paying attention and get involved.
I’m done with this, you microcephalic. (I didn’t want to use a word you associate with O’Reilly.)
#81
TBS,
There are many transactions that do not involve the government. How many of those do you suppose use a private currency? None. How many involve barter? Comparatively few. A single currency is simply more efficient than 80 gazillion currencies that are only good in one area. What you are discussing is the value of those currencies compared to commodities or other currencies. There are simple solutions to that: buy options in other currencies or commodities which many people have done.
#83 Thomas
There are NO transactions that do not involve the US gubment (within the US, that is), unless you are dealing in the BLACK market, created by government intervention.
I’m not saying we should abandon the use of currency and depend on barter. That would be very inconvenient. I’m saying currencies should be privately issued and compete with each other in the private market. No taxes when purchasing and selling. That would boost the economy. And you would find the true values of goods without gubment picking winners and losers, bailing companies out and subsidizing corporations. And exchanging currencies would be simpler using the internet and real time information, and without government hoops to jump through, would make things even simpler.
The US government uses its fiat currency to get loans based on the fact that it can pay it off because others have confidence in its ability to steal from its “citizens” in the future. As long as the masses continue to use it and there is some sort of stability for the current government they will continue to get loans and sink further into debt.
I can’t remember the name of the currency that was created and backed by gold here in the US, but as soon as they got popular enough, the US gubment thugs raided their gold stores and shut down their operation. I don’t think the US gubment would put up with any real threat to their fiat currency.
#85
There are NO transactions that do not involve the US gubment (within the US, that is), unless you are dealing in the BLACK market, created by government intervention.
It depends on what you mean by “involve the government.” The vast majority of transactions do not directly involve the government. Two private organizations can exchange goods and services using whatever currency or barter they wish. However, they will have to determine a value, in USD in the case of the US, of that transaction for purposes of taxes but that does not mean the transaction itself cannot be in whatever currency they want. This is true of any government on the planet. Yet, you see another cost in doing business in currencies other than those of the local government: additional cost to value transactions for the purposes of tax.
I’m saying currencies should be privately issued and compete with each other in the private market.
Again, with respect to private currencies, this has happened numerous times throughout history and has proven itself to be inefficient and risky for consumers.
There are sites even now that let you conduct business purely in gold and other commodities. The site acts as an exchange for transactions. However, as I said above, you still will likely have to place a value on those transactions for the purposes of tax. In fact, even if you use barter, you may have to place a value on the transaction for the purposes of tax.
I can’t remember the name of the currency that was created and backed by gold here in the US
Actually, at least a dozen states have proposed legislation to accept gold and silver in order to pay taxes in those States.
Constitutional Tender Act
#86 Thomas
Ok, so businesses, who have enough government hoops to jump through on any busniess day, on top of trying to compete in the marketplace, have to go through the additional hassle of converting back to the FRN for tax purposes. This is what I mean when I say there are NO transactions that do not involve the US gubment.
And the Federal Reserve Note is not risky to consumers? Was not the Deutsche Mark not risky to consumers? Of course there is risk involved. There is always risk involved in any transaction. But if you allow people to freely and voluntarily choose which currency they want to use, people will gravitate to the one that proves itself to be the most stable. And if one currency fails, the whole economy doesn’t sink with it. Since there has never been a “successful” society without government (as the douche-bag above likes to keep reminding us) then how can a free market currency compete with a gubment-mandated and enforced currency?
Having to pay taxes in FRN’s is a burdern that restricts the amount of people who choose to deal in alternate currencies. This burden is IMPOSED by the coercive fed gubment. This is exactly my point.
I didn’t mean gold and silver. I meant a currency backed by gold and silver. I wish I could remember the name and the people who were arrested for creating it. But, I’m sure I don’t have to remind you that people’s gold was confiscated from them by federdal decree at one point in this country. Better believe it can happen again.
Sorry for the late response. It snowed today and therefore was quite disruptive to my normal day at work and such. Good convo though.
#87
Ok, so businesses, who have enough government hoops to jump through on any busniess day, on top of trying to compete in the marketplace, have to go through the additional hassle of converting back to the FRN for tax purposes.
There simply is no reasonable alternative to that situation. Even if we allowed every person to have their own currency, it would cost the government, and therefore the citizens, enormous sums to deal with multiple currencies. I happen to have built multiple systems that deal with multiple currencies and they are a headache and a half. Every transaction to the government would require a conversion of the given amount to USD so that internally the Federal government could track budgetary information. Every currency would have to be evaluated by the government to determine whether the source was sufficiently stable as to accept payments. In short, it would be extraordinary expensive.
And the Federal Reserve Note is not risky to consumers?
ALL currencies of any form represent a risk. Using your own currency is a risk. Using barter is a risk. The question isn’t whether there is risk. The question is whether the relative risk makes USD safer that Jimbo Bob’s Fancy Pants Currency Note. The answer is absolutely and resoundingly yes. If you are worried about inflation, then don’t put your money in USD. Whenever you get money, put it in commodities or other currencies.
But if you allow people to freely and voluntarily choose which currency they want to use, people will gravitate to the one that proves itself to be the most stable.
Again, people *can* use whatever currency they want, just not when interacting with the Federal government (or all State, County and City governments for the moment). It would be ridiculously expensive for the US government to process payments in 80 gazillion currencies. I.e., it would cost *you* significantly more in taxes. One of the reasons that various States have not issued their own currency, even though they can, is that it would be incredibly expensive to process payments in multiple currencies and at the end of the day they would *still* have to deal with USD. The benefit simply does not outweigh the cost.
Having to pay taxes in FRN’s is a burdern that restricts the amount of people who choose to deal in alternate currencies. This burden is IMPOSED by the coercive fed gubment. This is exactly my point.
Perhaps so, but that burden is orders of magnitude less than the burden of requiring the Federal government to deal in alternate currencies. If you want to deal in alternate currencies you can; its just that YOU have to do all the exchanges to USD instead of the US government and that is absolutely the way it ought to be. I shouldn’t have to pay for you entertaining the idea of alternate currencies. What you are suggesting is analogous to allowing each citizen to write up their own tax form and submit it to the government instead of being required to use the official form.
As I mentioned in an earlier post, it is already the case that the States can issue their own currency backed by gold or silver. The reason they do not is that it would be expensive to handle the processing of payments in multiple currencies and thus, at the moment, not worth the trouble.
#88 Thomas
Woah, woah. Ok, we’ve got to back up here. Let’s assume there is no government. Just so I can make my point. (And I’m not an expert, so bear with me here).
With no government, there are no taxes to be paid. That means when 2 people make a transaction, one gets a service or product, and the other gets money. Obviously, the 2nd person will not accept the money unless he has reason to believe that money is stable enough to retain it’s worth. There are many ways to do this, from using things like gold and silver, which is a bit clumsy, to using a note backed by a bank which may back it with some commodity it has in its stores. Now, it would be up to that bank to build confidence in its customers that its notes are stable. Different banks competing for customers would figure out the best way to do that. That’s how the free market works.
What do you mean “even if we allowed every person to have their own currency”? Why should anyone be able to restrict someone from having their own currency? If that currency is worth anything, others will want it and want to use it. There is a need for currency, and when there is a need, someone will supply. He who supplies it best will succeed in business. He who doesn’t goes out of business (like Jimbo Bob). Besides, thinking every person would have their own currency is like saying every person would have their own pizza business and car repair shop. In a free market, different people would offer different products and services according to where they see a need or want exists. Just like in our real world apart from gubment. It’s only the gubment that can offer a service few people want and fund it with theft even if when fails. Well, gubment, and corporations who get corporate welfare from the gubment.
Of course it would be silly for states to print their own currency. States are just a smaller form of the federal government, and hence have the same faults. Instead of one massive government going into irrevocable debt, you’d have 50 smaller ones doing the same.
In this digital age, though, currency conversion can be done with the click of a mouse button. So would it really be that difficult to have to convert your currency? I feel much safer not having the power to print money in the hands of a select few (The Fed) and it would be worth the hassle to me. Besides, banks would want to get your business, and they would be incentivized to make the process as painless as possible while making your life as seamless as possible. Just like you can go anywhere in the world and use your Visa card. The only difference is in a free market world it would be done by providing the best service for the lowest price instead of by government mandate. I prefer voluntary action over force.
Now, I understand that we don’t live in that free market world right now. I’m just saying things don’t have to be this way. People will eventually wake up and realize that government is an institution funded by theft and is populated by self-serving individuals who have no right to impose arbitrary laws on peaceful people who are just trying to live their lives. As long as there is a gubment, than yes, it is easier to use the gubment issued currency, and that’s why most people use it. Bucking the trend is a huge hassle. It’s easier to go along to get along than to stand up to a huge, violent gang that is backed by the disillusioned masses. Once the masses withdraw that support, the gang will fade away.
#89
TBS,
Let’s assume there is no government. Just so I can make my point.
“Let’s assume that a group of pink unicorns can manage a country of 300 million people just so I can make my point…”
It’s a premise that never has nor can exist. There must be an authoritative source to provide the common defense and general welfare. Without government, there is no force of law and thus effectively no law.
With no government, there are no taxes to be paid. That means when 2 people make a transaction, one gets a service or product, and the other gets money
Firstly, with no government, person A, pulls out a Smith & Wesson, puts it to person B’s head and says, “You will give me what I want or I’ll put a bullet in your head and you family’s heads”. Then person A drives away on what? Certainly not a road since there is no central agency to build and maintain roads or is it that any local thug can build their own roads from wherever to wherever and charge whatever they wish?
Now, it would be up to that bank to build confidence in its customers that its notes are stable
Fast forward a couple of years where person A is holding a large quantity of notes issued from said bank and that bank suddenly goes out of business because in reality it was a Ponzi scheme (since there is no regulation) that finally fell apart. With no government, anyone holding notes from that bank are now holding worthless paper. Better still, you have a large number of the businesses in the area holding notes and they also go out of business.
What do you mean “even if we allowed every person to have their own currency”? Why should anyone be able to restrict someone from having their own currency?
Actually, that’s my point. With no government, anyone could print their own currency. In fact, without government, anyone could counterfeit anyone’s currency and wouldn’t that inspire confidence?
Besides, thinking every person would have their own currency is like saying every person would have their own pizza business and car repair shop
Since we are still in the Fantasyland of no government, crime syndicates would effectively take over and force people to use their currency exclusively even to the point of preventing people to put money in competing currencies.
In this digital age, though, currency conversion can be done with the click of a mouse button
A. Not for free. Every time you convert one currency to another, the clearing house charges a fee.
B. It isn’t even as simple as that as each clearing house (banks, exchanges etc) have rates that fluctuate based on the amount and time of day which is itself affected by currency conversions.
In short, there are no free lunches; there is a direct and indirect cost to currency conversion. Another problem is the issue of fraud when converting currencies, which without government, would widespread.
I feel much safer not having the power to print money in the hands of a select few (The Fed) and it would be worth the hassle to me.
That’s a false warm-fuzzy. You would be required to hedge your bets with respect to currency by splitting your savings into many different currencies. Furthermore, stock exchanges (which are private) would not be required to accept every form of currency so you would have to balance the currencies you might use day-to-day with currencies you have invested. Some do that now, but instead of a handful of currencies, you would have to hedge your bets over dozens of currencies in order to truly mitigate risk and each time you convert your currency to something else, you lose value.
Besides, banks would want to get your business, and they would be incentivized to make the process as painless as possible while making your life as seamless as possible.
You mean like how banks were incentivized during the Free Banking era? Without government, the best solution is convince people that a given currency is stable, convert their investments in your currency into something else and get out before it implodes.
Just like you can go anywhere in the world and use your Visa card
Big difference between what you are suggesting and Visa: Visa is backed by a currency which is backed by a government. That is far more stable than a commercial enterprise.
#90 Thomas,
What laws do you really need in order for a society to function? In my eyes, just two. 1. Do not aggress against those who haven’t aggressed against you and 2. Honor your agreements aka contracts. You don’t need a government to enforce two laws. When you have a bunch of inane laws such as seat belt and helmet laws and possession of a plant laws is when you get the overbearing government we have now.
So, with no gubment, would you be person A? Would anyone you know or anyone whom you transact with on a daily basis be person A? Who exactly would be person A? I believe person A would either be an ex government official or mafia or gang member. Those make up a small portion of the population. If the majority of people (the peaceful people who would fit the person B definition) understood what Liberty and Freedom are, they would allow very little incentive for the person A’s of the world to pull out Smith & Wessons because they would have their Glock 9’s in response to defend themselves. Since the majority of people, peaceful people, don’t know what Freedom and Liberty are, they allow the biggest crime syndicate of all to steal from them on a daily basis: the gubment.
Of course roads would exist without gubment. This is one of the biggest arguments for gubment that is completely unfounded. All people want to travel from their property to another’s property, right? So, since there is a need for roads, someone will supply. One way could be a company would lease portions of people’s land and build roads on them, and those who use it would pay for it as they use them, perhaps using an electronic system such as EZPass. That’s just one idea. The marketplace would find the most efficient way, of course. Central planning is inferior because you only get ideas from the few and those are enforced on the many. The marketplace gets ideas from everyone and the best rise to the top.
Not to mention, stores would want their customers to be able to reach them. How would that happen without roads? The stores would be incentivized to subsidize roads in order for their customers to reach them. Maybe the stores would join to form a consortium of sorts to pay for the building and maintenance of roads. Of course, I’m not some supreme central planner. Only the free marktet could determine how best roads would be built and how it would be paid for.
You want to talk about Ponzi Schemes? What do you think Social Security is? Of course, buyer beware. But at least in a free market, you can pick and choose. With gubment, you’re forced to pay taxes. Gubment paper can become worthless just as you described. Of course, in your example, only the businesses in that area go out of business. In the example of Weimar Germany, the whole country went out of business.
It would be up to those who are printing the currency to figure out how to best protect it from being counterfeited. As if this problem doesn’t exist today. People counterfeit the FRN, no matter what safeguards are installed.
I ask you this: how much money has the Fed printed (aka created out of thin air via policy)? Doesn’t inflating the money supply not devalue the currency?
About the so called “Free Banking Era” (I lifted this from Wikipedia, which, of course, isn’t the end all be all repository of knowledge, it is a quick and easy way to look things up. There are references to this snippet located on the page it came from):
Although the period from 1837 to 1864 in the U.S. is often referred to as the Free Banking Era, the term is something of a misnomer, for it refers not to a general system of “free” banking in the literal sense described previously, but rather to various state banking systems based on so-called “free banking” laws, which, though they made it unnecessary for new entrants to secure charters (each of which was subject to a vote by the state legislature), nonetheless restricted their undertakings in important ways. Most importantly, U.S. “free” banks were denied the right to establish branch networks, and had to “secure” their notes by purchasing and surrendering to state banking authorities certain securities those authorities deemed eligible for the purpose…etc etc…
So, no, the free market did not exist in banking during that era because it was impeded by state gubment.
And yes, I do realize Visa is backed by gubment currency. I’m just using the idea of how technology in today’s world can solve the issue of commerce between people who use different currencies. And you do pay to use the Federal Reserve Note, you pay taxes, which subsidize all the costs you mention as far as printing the money, making it hard to counterfeit it, so on and so forth. So, no free lunch here either.
It may be that in a free market society, there would be just a few institutions who end up printing currency. But it would happen voluntarily. As opposed to now, at the end of a barrel. Those few institutions would know that if they tried printing a trillion dollars to bail out their buddies, people would bail out of that currency and its stock would plummet, therefore those bailed out buddies would still need bailing out and would go out of business. And the reputation of those who run that institution would be marred and people wouldn’t do business with them again. Not to mention those customers could sue that institution for fraud. (Try suing the gubment for fraud. Good luck with that.) That brings up the idea of free market arbritration, but I’m not even going to go into that right now…Of course Ponzi schemes would still be possible, but without the false promise of gubment to lean on, consumers would be forced to be vigilant against those who would rip them off.
I know that’s a lot to chew on, which is why I recommend reading “A Market for Liberty”, which has a lot of interesting ideas on how a society would function without gubment and it explains things much better than I can and is a much better forum for it than this is.
#91
What laws do you really need in order for a society to function? In my eyes, just two. 1. Do not aggress against those who haven’t aggressed against you and 2. Honor your agreements aka contracts. You don’t need a government to enforce two laws.
First, you are ignoring the host of other laws that protect people from exploitation. Second, without government, who protects people from aggression? Is it purely a free-for-all “Law of the Jungle”? Who enforces contracts? You say I owe you money. I tell you to go f- yourself. How does this dispute get settled without any courts? Do we simply duke it out? Without government, the person with the biggest stick or army wins. In effect, the physically weak or people without an army have their rights trampled and become slaves.
RE: Roads
Suppose you build a road that makes it easier for you to get to town. Suppose also, that I have a road that I charge people to get town. Your road represents competition. Rather than compete, it is far more efficient to simply send a bunch of goons to blow up your road, force you pay me protection money or simply eliminate you. This is mafia 101 and it is one of the reasons we had to create organizations like the FBI to hunt down people in the mob because they became so powerful that individuals or even individual law enforcement organizations were powerless to stop them. Your view of the world becomes nothing less than a dictatorship or entirely ruled by local mafias.
Further, what stops someone from building a road straight through what are today National Parks (they obviously do not exist without a government)? There are no natural resources that will be protected unless individuals have sufficient power and motivation which never happened. At best, they become the areas controlled by the rich never to be shared by anyone.
RE: Risk
Yes, governments can become risky investments. Yes, it might happen one day that Social Security collapses. However, again, that there is risk is not at issue. Compared to the risk of a free-for-all with no laws, the risk of government backed currency is nearly zero.
It would be up to those who are printing the currency to figure out how to best protect it from being counterfeited. As if this problem doesn’t exist today. People counterfeit the FRN, no matter what safeguards are installed.
A. On the whole, governments have more resources to combat counterfeiting than individual issuers.
B. The government has law enforcement organizations to enforce fraud.
C. Having each organization do R&D to combat counterfeiting and pay and organize enforcement against counterfeiting would be ridiculously costly to society.
Of course Ponzi schemes would still be possible, but without the false promise of gubment to lean on, consumers would be forced to be vigilant against those who would rip them off.
Caveat emptor for currency would reduce trade to a infinitesimally small fraction of what it is today. Overall, it is more costly to society to require each person having to do due diligence on every currency they might encounter in addition to the general worries of trade itself since there is no law and no law enforcement. Each trading partner would have to worry about outright theft from the other partner, guarantees of payment, fraud and so. These worries exist now but there are rules and enforcement that protect trade partners which discourage illegal activity and provide an avenue for settling disputes. In your law-of-the-jungle world, disputes are settled by the barrel of a gun.
There is a reason no society has ever operated this way. It has a significantly higher economic cost and hurts specialization. In effect, every person would have become an expert at trade, currency and protection which would draw their resources away from other areas of interest that might benefit themselves and society. People that might provide tremendous benefit to society like say Stephen Hawking, have no place in your society because they cannot protect themselves. If you think your anarchistic society is so great go start one somewhere (other than the US) and let’s see if you succeed. My risky US dollars are betting that you won’t.