Commerce Versus State
Sunday, July 6th, 2008I wrote this piece for Digital Gold Currency Magazine. A comment to one of our blog entries inspires me to repost it here. This article was adapted from material I am assembling into a new book, entitled The 21st Century: What Will Happen And Why Hopefully I’ll have it ready some time in 2009.
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Government never furthered any enterprise but by the alacrity with which it got out of its way.
– Henry David Thoreau
The battle between government and commerce has been raging since the beginning of the agricultural revolution. It is a marathon struggle of Politics versus Market. Some happy day the market will win, but that day, alas, may be a long way off.
It in is the crossfire of this battle that the digital gold business finds itself. If we succeed, the market gains important territory from the state.
No, most of us didn’t particularly choose to be in this battle, we were merely trying to improve our lives. But, by reason of being at the forefront of commerce, we find ourselves at the forefront of this battle. God help us.
UNDERSTANDING THE
The most basic reason for commerce-state animosity, of course, is that Politics and Market have completely different operating principles. Markets operate on the principle of choice: People are convinced to trade. States operate by coercion: People are forced to pay and to obey.
Of course, there are traders who bring coercion into the marketplace, and there are politicians who wish to minimize it. It is quite possible to have an individual market player who loves coercion or a politician who hates it. Nonetheless, there is no real argument to be made regarding the basic operating principles – they are what they are. And they are most definitely at odds.
The more interesting question is this: What goes on in the minds of individuals, to make them sanctify either market or state?
Politicians are programmed by both psychology and experience to believe in the need for control. Even when they privatize and deregulate, politicians want to be sure that the ability to “reign it back in” remains.
Small business people are just the opposite. They have learned to believe in spontaneous order. It works. It has always worked… and it always scares the hell out of control-biased people.
But try, for a moment, to see it the politician’s way: Statist types see commerce as an essentially amoral activity, and they see politics as a Heaven-ordained forge of morality. To them, markets are purely a trading center for quasi-thieves; necessary, perhaps, but morally inferior. Politics is, to them, the temple of higher morality; where Chosen Ones make decisions based upon the principles of righteousness: Equality, Sacrifice, and Unity.
Realize that we in the digital gold arena are the few who believe in the morality of the marketplace. For reasons too long to explain in this article, the virtuous image of commerce died in the popular mind a hundred years ago, and was replaced by statist images.
Never forget that the popular mind – currently committed to finding “the good” in politics – is a powerful enforcer. You’ve doubtless noticed this when discussing the digital gold business. The price of agreement – leaving the majority – is too high for people who seek comfort in normalcy. This precludes them from considering your arguments. They may nod their head and ask questions, but they’ve already decided that they will not agree with you.
COMMERCE VERSUS WAR
War is the health of the State.
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The quote above is widely known, but is commonly taken to mean that evil government bosses purposefully stir up wars in order to have more power. This is true far less often than people suppose.
Most political leaders are no less confused than other people. They struggle to attain a place at the forefront of the masses, but once there, they soon realize that the office does not come with any magic wisdom. They look out upon a supremely complicated world and know that it is beyond their understanding. Why do you think so many of them act aloof? It’s a defense mechanism. And why else would so many of them run to fortune-tellers of various sorts? They know they are out of their depth. Politicians are overrun by great events far more often than willing them into existence.
So, what should Bourne’s statement mean? It means this: War is the health of the state because it makes the state necessary.
(I know that the above statement is not absolutely true: mankind could defend itself effectively without states. But, until men develop the courage to take responsibility for their own safety, the statement more or less stands.)
In times of peace, the state is commonly resented; after all, they do forcibly remove money from the people in their control, and that does engender bad feelings. In time of war, however, people are willing to forget about such matters: It is better to be a serf than to be a corpse.
In times of war, or of serious threat, the state will gain on commerce, often dramatically. But, even here, things have improved somewhat. Modern states have learned not to intrude too deeply upon commerce, since war materiel must be produced in abundance, and the state alone fails miserably in such attempts.
War economies are strange, mixed-up things, with twisted moralities. Commerce is challenged and abused at such times, but it is never extinguished.
RECENT MARKET SUCCESSES
As I’ve noted previously, the past few decades have been a wonderful time for economic education. Even ex-commies are buying in to the free-market philosophy! Keynes is dead and Hayek rules the roost… at least for now. Here are a few good signs (and this will be US-centric):
It used to be that offshore drugs were strictly forbidden by US law. I’m not sure if jail time was ever imposed, but it could easily have been. With the Internet as a catalyst, however, Americans began to see that the same drugs were available in
A critical feature in this was that
People without an understanding of markets can certainly understand cheaper prices, but they are also easy to intimidate. This time, contrary to what would have happened twenty or thirty years earlier, those who understood economics gave a boost of confidence to the others, and the market trumped the FDA.
A second good sign has been the lack of regulation for new utilities. The older utilities, such as electricity and gas, are all government-protected and government-regulated monopolies. Regulatory bodies are the size of small armies and require similar budgets.
The next utility to come along was cable TV, which is partly regulated. Cable TV monopolies are small, and are being broken by satellite television and Internet delivery anyway.
The newest utility, Internet access, is definitely not monopolistic and is lightly regulated, and as an after-thought at that.
WHERE TO NOW?
War and threats are now on the march and the gains of commerce are under threat. GW Bush and other Western leaders are endeavoring to build a Protector-State in response. “We’ll see everything and protect you from everything.” This may not long endure, but how much damage will be done along the way is anyone’s guess.
The next major battle between commerce and state could be currency. It’s still a bit early to tell, but with many fiat currencies headed toward what may be a terminus, it is a distinct possibility.
It seems that the digital gold market has absorbed the most serious blows of the Bush Protector-State. There has been pain aplenty and serious damage, but the market yet stands. Now that the G7’s currency and debt schemes are unraveling, it is likely that control types will have better things to do than harass us. That may give our industry some space to mature and grow in something that resembles a natural, healthy manner.
And, frighteningly enough, it is at times like these that the proud predators of the world see opportunities to grab territory here and there. The other nations being busy with internal troubles much reduces the chance of violent response to a quick, contained aggression.
The next few years look scary, but the more legitimate threats appear, the less attention is likely to be directed at us. (At our small size, however, we do remain vulnerable.)
So, the worst may be over for the digital gold marketplace. However, it will never really be over until we win the memetic war: We must make the case that honest money is both morally and practically superior to fiat, and we must make it widely and benevolently.
© Copyright 2008 by Paul A. Rosenberg