Americanly Yours

I wanted to take some time and point out several of the things that I left out of yesterday’s article.

One important aspect of the model that I presented yesterday is the idea that insurance companies would likely bundle privately provided police and fire protection with homeowners insurance.  This would allow them to provide a basic level of a “public good” to the populace while charging paying customers extra for premium services.

A free market for the provision of police and fire protection could achieve many of the benefits of collectivization which exist in the current environment.  The main difference is that this collectivization would be voluntary, as opposed to the forced collectivization which is the main feature in the current model.  Furthermore, voluntary collectivization would likely occur within much smaller geographical areas than is currently the case, allowing neighborhoods and small communities to take advantage of economies of scale.

We can apply the homeowners insurance model presented yesterday to small collective units, such as neighborhoods.  Currently, there are a growing number of homeowners’ associations throughout the country which provide many of the same services which are currently provided by municipal governments.  These associations are able to provide residents with services like garbage collection, water, gyms, zoning regulations, and even fire protection and security services.  Members pay monthly or annual fees to their homeowner’s associations and are given such services in return.  In contrast to governments, homeowners’ association has every incentive to purchase services from the most cost effective provider.

Thus, it is not difficult to see that homeowners associations would be a great vehicle for expanding the number of people served by privatized police and fire departments.  In fact, forming homeowners’ associations within existing neighborhoods and apartment complexes is an excellent way for poorer people to pool resources in order to provide security and fire protection.

A great resource for those interested in the history of the provision of “public goods” by non-governmental entities is “The Voluntary City,” a book put out by the Independent Institute. This book is fascinating and leaves the reader wondering why we were never taught any of this in school (until the reader realizes that he went to a government school that had no reason to teach students that non-governmental entities can do good things).  The book deals somewhat with private law enforcement, but it also goes into great detail about the history of homeowners’ associations and the types and scopes of services that they have provided (and continue to provide).

The other major aspect that I neglected yesterday was the fact that municipally funded police and fire departments are relatively new phenomena.  The first government run municipal police force in the world was founded in London in the mid-1700′s.  This first police force was founded in a city which had managed to exist without a government police force–and without decaying into chaos for over 1500 years.

The oldest government run police force in the United States was founded in Boston in 1838–208 years after the founding of the city.  Boston has had a government police force for much less time than it went without one. Before the creation of the city run police force, Bostonians organized night watch groups, volunteer police departments, and even relied on the work of private detectives.

Surely, there are many major differences between the time before the 1830′s and today.  Thus, it would be unlikely that eliminating governmental support for and control of Boston’s (or any other city’s) police force would result in policing being undertaken in a manner similar to how is was done 200 years ago.

But, technological advances and a long and unbroken history of effective private security companies must provide us with optimism.  There are currently more private police officers than there are governmental police officers. Some of these police work as security officers, while many others work as private detectives.  The point is that they exist and they would continue to exist in a world where police provision was completely privatized.

Georgetown Law professor John Hasnas has done some interesting work on this subject.  His main point: look around at what goes on in the real world before saying that these ideas are not possible. To quote Hasnas:

“The proper response to the claim that government must provide police services is: look around. I work at a University that supplies its own campus police force. On my drive in, I pass a privately operated armored car that transports currency and other valuable items for banks and businesses. When I go downtown, I enter buildings that are serviced by private security companies that require me to sign in before entering. I shop at malls and department stores patrolled by their own private guards. While in the mall, I occasionally browse in the Security Zone store that sells personal and home protection equipment. I converse with attorneys and, once in a while with a disgruntled spouse or worried parent, who employ private detective agencies to perform investigations for them. I write books about how the United States Federal government coerces private corporations into performing criminal investigations for it.24 When I was younger, I frequented nightclubs and bars that employed “bouncers.” Although it has never happened to me personally, I know people who have been contacted by private debt collection agencies or have been visited by repo men. Once in a while, I meet people who are almost as important as rock stars and travel with their own bodyguards. At the end of the day, I return home to my community that has its own neighborhood watch. I may be missing something, but I haven’t noticed any of these agencies engaging in acts of violent aggression to eliminate their
competitors.

Ah, but that is because the government police force is in the background making sure that none of these private agencies step out of line, the supporters of government contend. Really? How does that explain London before the Bow Street Runners? The New York City police force was not created until 1845. The Boston Police Department, which describes itself as “the first paid, professional public safety department in the country”25 traces its history back only to 1838. What kept the non-political police services in line before these dates?”"

We can take Hasnas’ advice and “look around” to see the same thing with regards to private fire departments.  There are many volunteer fire departments in the United States.  New York City did not have a government run and funded municipal fire department until 1865–again, they have survived longer without a government run and funded than they have with one.  The volunteer fire department in Pasadena, Texas serves a population of 150,000 residents (a number that swells to over 1 million in the daytime).  In fact, this volunteer fire department is so well run that the Federal government even trusts them to provide fire protection to NASA’s Johnson Space Center.

While we may be years away from a political atmosphere that will allow serious discussion of privatizing police and fire departments, this is a very realistic idea with centuries of history to back it up.  Furthermore, given the dismal performance of our current police forces, this idea is certainly worth taking into account.

To quote Professor Hasnas once more:

“If a visitor from Mars were asked to identify the least effective method for securing individuals’ persons and property, he might well respond that it would be to select one group of people, give them guns, require all members of society to pay them regardless of the quality of service they render, and invest them with the discretion to employ resources and determine law enforcement priorities however they see fit subject only to the whims of their political paymasters. If asked why he thought that, he might simply point to the Los Angeles or New Orleans or any other big city police department. Are government police really necessary for a peaceful, secure society? Look around. Could a non-political, non-monopolistic system of supplying police services really do worse than its government-supplied counterpart?”

Americanly Yours,

Phred Barnet

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One of the main arguments that statists use to justify the existence of centralized government is the need for the provision of protective services.  These services tend to include national defense, judicial services, and police and fire departmental services.

Cities and states are facing large budget crises which are forcing these governments to make difficult decisions.  Many people are adamantly opposed to cutting any money from the budgets of police and fire departments.  Few people stop to think that completely eliminating governmental funding for police and fire departments could result in a large increase in public welfare and safety, while at the same time achieving massive reductions in the size of (or even the eliminations of) local governments.

The argument for government provision of these services takes the name of the “free-rider” effect and is repeated in economics and public administration and policy programs throughout the country.  The idea behind this argument is that if I were to purchase services from a fire department, but my neighbors choose not to, the fire department would likely put out a fire at one of their houses to prevent it from spreading to mine.  Thus, my neighbors have paid nothing and have received fire protection for free.  The supporters of this theory argue that over time, the numbers of “free-riders” would grow until the fire protection company could no longer make a profit and this would leave everyone in the neighborhood without protection from fires.  Therefore, to counter the effects of the free-rider problem and to ensure that the neighborhood receives adequate fire protection, a central government must provide this services.

But, it is apparent that this is not a realistic scenario.  Businesses are profit seeking enterprises and their owners are extremely unlikely to sit by and allow a free-rider problem to destroy their hard work.

Economists long assumed that there were certain goods which must be provided by the government in order to guarantee their provision in the face of the free-rider problem.  One such good is the lighthouse.  Economists and public administration professors love using the lighthouse as an example of good that cannot be provided by the free market, and therefore must be provided by the government.  After all, lighthouse operators seemingly have no way of capturing revenue for the service that they provide.  However, Roland Coase (a future Nobel Prize winning economist) demonstrated in 1974 that most lighthouses have historically been built by private groups and run for profit (and successfully so).  While this might seem impossible at first glance, deeper thought on the subject revels how this profit is made.  While it is obvious that the lighthouses cannot be profitable on their own, placing a lighthouse near a port and charging an additional port fee for the use of the lighthouse allows the owner of the port to provide the additional service and earn a profit for doing so.  This process works in the same manner that McDonald’s is able to give away ketchup and other condiments free of charge by pricing these free products into the costs of their menu items. In short, bundling a necessary but unprofitable service with a profitable service is a great deal for both the customer and the consumer.

If we apply these same principles to the provision of police and fire protection, it becomes clear that these services could be adequately provided in a voluntary manner on the free market.

I must begin by reminding readers that in a free market where individuals are free to enter into voluntary agreements with other individuals as they see fit, there is no way to predict what the actual arrangements will look like.  All we can say for sure is that the results of the process of voluntary exchange will accurately reflect the demands of the individuals that make up society.  If a good or service is “under-produced” in such a society it is because the people have chosen to use their resources to purchase goods and services which they deem more important than the “under-produced” good or service.  Thus if a community in a free society had minimal diets, but had an abundance of technologically advanced electronic products, we can only assume that the individuals in the society seem to prefer (ie, value) advanced electronic products over food.

Bundled Services

A key component to free market provision of police and fire services is insurance companies.  Homeowner’s insurance companies are a great vehicle for the bundling of many municipal services, including police and fire protection.  Instead of paying the municipal government for the provision of these services, people would likely pay an additional premium to State Farm, Allstate, or whatever other company they use to insure their homes.

It is further likely that rather than every insurance company operating their own fire department, numerous fire departments would emerge throughout the country and in any given geographical region.

Bundling fire protection with homeowners insurance allows fire departments to continue to put out fires at my neighbor’s house (even though he has not purchased fire protection from his insurance company), while still granting me an additional level of services not given to my free-riding neighbor, and thus eliminating (or drastically reducing) the effects of the free-rider problem; one of the most profound effects of a truly free market which recognizes an absolute right to justly acquired private property is that it has the effect of internatlzing externaltites.

One possible model for the private provision of fire protection through homeowners insurance companies is the bundle model which I presented above.  Under this model, a fire department would put out any fire in a neighborhood free of charge, regardless of whether or not the homeowner purchased fire protection insurance.  At first glance, this may seem to increase, rather than decrease the problems of the free-rider effect, however, bundling fire protection with insurance actually serves to eliminate these problems.

This is true because the insurance company would pay to replace the damages to the home and other property of its customers, but would not do so for those who had failed to pay.  Therefore, free-market fire protective services would offer everyone some level of support, but would charge customers extra fees for the service of being “made whole” following the fire.  This service is likely to be highly profitable for both the insurance company and potential customers, as the cost of rebuilding a $200,000 home, filled with furniture, computers, televisions, and many other valuable goods is likely to justify spending a little extra money on fire insurance.

Because the insurance company would like to minimize its own risk, it is likely to take steps to prevent the devastating effects of fires.  For example, insurance companies could save quite a bit of money by providing homes with complimentary fire extinguishers.  Furthermore, just as car insurance companies offer discounts to teen drivers who enroll in higher rated driver’s ed courses, homeowners insurance companies would likely offer discounts to customers who passed fire safety courses.

Private provision of police services could easily work in a very similar manner.  In this case, the homeowners’ insurance company would provide police paroling services to a paid customers.  Again, the neighbors who did not pay for this service would reap the benefits of this service when the private police squad drove by their home during a patrol.  Additionally, if an officer were to see someone breaking into the home of a non-customer, he would do whatever was in his power to stop the crime.  There would likely still continue to be a 911 like number for people to call for police assistance, whether or not they were customers.

The bundling mechanism plays an important role in the provision of police services as well.  For even though all residents of an area would be provided with a basic level of security regardless of whether or not they paid for the service, paying customers would receive additional premium benefits.  It is likely that insurance companies who offered customers policing services as part of an insurance package would bundle these services with other services like a high-tech burglar alarms which instantly alerted the police about intruders.  Similarly to the proposed fire protection bundle, insurance companies would offer their customers restitution for the damages caused by criminals.  This restitution take place relatively quickly, as insurance companies would need to do so in order to preserve their reputations.  Furthermore, this restitution would take place regardless of whether or not the police were able to apprehend and convict the perpetrator of the crimes.

But what of the areas inhabited by the poor which may not be able to afford to purchase any private police protection services?  Well, this is certainly an important issue, but there is every reason to believe that the market will provide some level of security to these people. Just as volunteer fire departments are common in this country, there is no reason to believe that in a free market, volunteer police agencies would not spring up to meet the demands of impoverished people.  We already see this somewhat, in the form of neighborhood watch programs.  It is not hard to imagine that there would be coalitions of off-duty or retired police officers who would volunteer their services for impoverished areas.  After all, doctors, lawyers, and other professionals currently do quite a bit of work for the impoverished on a pro-bono basis, and there is no reason to believe that police officers are any different.

Furthermore, homeowners insurance companies themselves might find it in their best interests to offer patrol services in these areas.  What better form of advertising could there be for a firm which offered police services than proof that their most basic level of services drastically reduced crime in an impoverished and crime-ridden area?  Providing potential and affluent customers with such a demonstration would be an excellent way to generate new business (as well as provide good will).  Furthermore, providing such services would have the necessary result of increasing the property values in the affected neighborhoods, giving some of these residents the ability to sell their properties and use those funds to move to a safer area and purchase additional security for their property.

Furthermore, consumers are not likely to subscribe to a police service which forcefully restricts their lifestyles.  For example, a marijuana user is unlikely to sign up with a police service which promised to arrest marijuana smokers who were using the drug on their own property.  Thus, such a system would necessarily focus on real crimes–crimes against life, liberty, and property.  Like all free market reforms, the privatization of policing will have the result of leading to a more prosperous society.

Unfortunately, this idea is not currently politically feasible.  Yet, I am confident that as our local, state, and federal budgets continue to spiral out of control and the government faces a populace increasingly hostile to taxes, ideas like this will be brought to the forefront of the public discourse.  It is important to lay the theoretical groundwork and describe how the market could provide for basic services like police and fire protection in the absence of governmental provision of such services.  An idea must be first be born and then developed before it can be considered feasible.  Following that, it must be discussed publicly as a viable alternative.  Thus, the purpose of this article was not to suggest a change which I expect will be enacted or even debated in the near future, but rather to demonstrate the feasibility and workability of such a proposal in the hopes that some day soon the citizenry will take the necessary steps to move towards a truly free and voluntary society.

Americanly Yours,

Phred Barnet

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I have often used the Constitution as one way of justifying my opposition to “laws” passed or proposed by Congress and the President. After all, the US Constitution is touted by many people as the “supreme law of the land.”

But, very few people ever ask why it is the supreme law of the land, or why it even has any power at all, and almost no one asks if it is the supreme law of the land, or if it has any power at all.

In fact, it is the Constitution that calls itself the “supreme Law of the Land.”  So if you ask someone why the Constitution is the supreme law of the land, they are likely to respond by telling you that it says so right there in the Constitution.  If you were to then respond to that by asking what gives the Constitution the right to declare that it is the supreme law of the land, they are likely to respond by saying that it is the supreme law of the land (or something to that same effect). This is what philosophers call a tautological argument, and what everyone else calls a circular argument.

Is the Constitution the supreme law of the land?

Well, the Constitution was a contract.  It was signed by 39 men at the Constitutional Convention (out of the 55 delatates).  Following this, the States held their own votes on ratification in which 1071 men voted in favor of adopting the new Constitution. But, all this tells us is that 1,100 men agreed to the Constitutional Contract.  What of the 16 delegates who refused to sign the Constitution?  What of the hundreds of men who voted against the ratification of the Constitution in their State legislatures.  And most importantly, what of the people who were not given the opportunity to vote for or against the Constitution?

Would it be right to assume that the people who explicitly refused to sign a contract should be forced to abide by it?

But, the vast majority of Americans were not allowed to vote at the time of the Constitution.  This included children, slaves, women, indentured servants, and (in many States) those who did not own property.  They had no say in their local or State governments, and thus no representation in the Constitutional Convention (which—by the way—was authorized by the Congress to amend the Articles of Confederation, not to replace it). The Revolutionary War, which ended less than 5 years before the Constitutional Convention, was fought over the issue of “taxation without representation.”   We must ask ourselves if being governed without one’s consent is substantively different than being taxed without one’s consent/representation.  And no, these arent just the musings of a lone libertarian.  According to recent polling, only 23% of America voters believe that the United States government has the “consent of the governed,” while 62% say that it does not.

Imagine if Verizon offered to provide you with wireless service in exchange for a fee, but for whatever reason, you EXPLICITLY DECLINED to sign the contract (even though most of your neighbors agreed).  Could anyone rightfully assume that Verizon would have the right to declare itself your provider? Of course not.

Lysander Spooner brilliantly pointed out that those who support the Constitution often use the right to vote as a method of justifying the legitimacy of the government. A simple examination of these arguments reveals that this argument falls into a severe tautological trap as well. For eaxmple:

• If I vote for the winning candidate, I have given my consent to his actions because I have sanctioned his platform. Furthermore, I have given sanction to the Constitution by participating in its institutions.
• If I vote against the winning candidate, I have still given my consent to the Constitution because the act of voting implies that I agree to the process outlined in the Constitution and that I would expect the losers of the vote to abide by the results of the vote had my candidate of choice won.
• If I choose not to vote, then I have no right to complain about the government because I have declined to participate in a “valid” process which could have yielded different results had I participated.

Thus, whether or not I vote, and whether or not I vote for the winner, I am giving sanction to the Constitution and to the actions of the government. We can easily see how this is a circular argument, akin to the expression “damned if you dont, damned if you do.” You dont have to be a trained philosopher to realize that this argument isnt a sound one.

Lysander Spooner argued that the Constitution actually bound no one. I agree with his logic, but have reached different conclusions.  I will argue that the Constitution does not bind very many people, but it does bind those (and only those) who have expliticly agreed to the Contract.

The President, Vice President, and members of Congress all take an oath upon entering office.  In doing so, they are explicitly giving their consent to the Constitution and agree to act in accordance to this Constitution.

Thus, the President, Vice President, and Congress are required by law to uphold the Constitution and its provisions, whether or not they like what it says. Failure to do so is a violation of their oath and a violation of the laws of the government that they have explicitly agreed to serve. The President’s oath reads

“I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.”

Notice the final clause which demands that the President “preserve, protect and defend the Constitution of the United States.” Thus, the President must use his veto power whenever Congress passes a law that violates the terms of the Constitutional Contract. Failure to do so would be an explicit violation of the President’s oath and grounds for removal from office.

Similarly, the oath of Congressmen reads:

“I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.”

This oath differs in that it requires members of Congress to ” support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same. [Emphasis added]” This is an important difference, as it not requires Congressmen to defend the Constitution against domestic enemies as well. Thus, every member of Congress has a duty to defend the Constitutional Contract from those who wish to undermine it. This must not only include other members of Congress who are bent on undermining the Constitution, but also must include protecting the Constitution against Presidents who rountiely violate the Constitution and their oath to the Constitution.

But if most members of Congress, as well as the President, Vice President, Cabinet, and most of the executive bureaucracy—the people who have taken an oath to the Constitution and who are thus bound by it—refuse to adhere to the Constitution or to their oath, then why should we, the American people have to abide by the Constitution?

Generations of Congresses and Presidents have routinely violated the Constitution and have trampled on the protections afforded in the 1^st, 2^nd, 4^th, 5^th, 8^th, 9^th, 10^th, 14^th, 15^th, and 21^st amendments. Their actions have rendered many of the above amendments nothing more than “dead letters.” The trampling of the Constitution by the very people who have sworn to protect it is not limited to the Constitutional amendments themselves, but also includes the routine violation of many of the protections contained in the body of the Constitution itself.

I have pointed out that members of Congress and the President have taken oaths requiring adherence to the Constitution. We The People, on the other hand have not. This fact alone leads to the logical conclusion that the Constitution does not apply to those of us who have not declared allegiance to it. And yet, many of those who ahve taken official oaths to the Constitution routinely violate it. Thus, the question must again be asked: if most members of Congress, as well as the President, Vice President, Cabinet, and most of the executive bureaucracy—the people who have taken an oath to the Constitution and who are thus bound by it—refuse to adhere to the Constitution or to their oath, then why should we, the American people have to abide by the Constitution?

In addition to Presidents and the Congress, members of the military take oaths of loyalty to protect and defend the Constitution as well:

“I, [name], do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic [emphasis added]; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.”

The military oath not only requires that members of the armed services protect America against foreign invasion, but also requires that these members protect the Constitution from domestic enemies (those who have sworn allegiance to the Constitution but violate it) as well.

But, instead of taking their oaths seriously and defending the Constitution which they have sowrn to protect, Presidents, members of Congress, and members of the military have been much more willing to use their authority to force the American people to live under an unconstitutional (and nonconsensual) government.

I ask again: If the government refuses to abide by the Constitution, why should we?

The answer is that we shouldnt.

How long will we continue to allow Congress to rule over us using a “do as we say, not as we do” logic? The truth is that this has gone on long enough.

But, even if Congress, the President, and everyone else within the goverment followed their oaths perfectly, this would not be reason enough to follow their laws. The above statement stems fromt he simple fact that the vast majority of the American people have never sworn an oath of allegiance to the Constitution. A simple example can be used to understand why we are not bound to the Constitution—even if it is perfectly followed. Imagine that someone declares himself to be the new owner of your car without your permission. This man has no legal or rightful claim to your car, but that doesnt stop him from claiming ownership. However, this man is “nice enough” to allow you to use the car whenever you want. Thus, his “ownership” of your car doesnt interefere with your right to use the car in any way. But, does this mean that you should allow him to get away with the crime of claiming false ownership over your car? Of course not. It is true that while he still “allowed” you to drive your car whenever and wherever you wanted you probably wouldnt rebel against him, but that surely wouldnt meant hat you have accepted his claim of ownership over your car.

The vast majority of the readers of this article have taken no oath of allegiance to the Constitution or the the US Government (which itself is guilty of repeatedly violating the Constitution).  I have never read the words of the oath aloud, I have never signed an oath of loyalty to the United States or to the Constitution.  How then can anyone argue that this document binds those of us who have not taken a loyalty oath?

The Constitution itself was nothing more than a well orchastrated coup, designed to centralize the powers of the government into the hands of an elite few. The vast majority of citizens (and all of the slaves held) never had a proper say in the approval of the Constitution. And, as Lysander Spooner pointed out, one cannot sign a contract that binds future generations (wouldnt that be the greatest form of taxation without representation that is possible?). Thus, even if the Constitution somehow did bind all those living under it upon its ratification, it binds no one today but those who have explicitly agreed to it.

The Constitution does not bind those of us who have made no such explicit agreement. Thus, we have no legal or moral obligation to follow the “laws” put forth by Congress, the regulations created by Congress or executive agencies, or the executive orders and decrees made by the president.

I am not advising you to break the law—just because the law doesnt bind us does not mean that the government will not employ the use of men with guns to force you to comply with its laws and regultations. Just as an unarmed person would probably be better off (ie, would have a much better chance of survival) turning his wallet over to an armed robber who demanded the wallet, most people will find it easier to comply with the “laws” of the United States government rather than risk their own death or imprisonment.

But, even as we continue to hand the robber our wallet, this does not mean that we should recognize the legitimacy of the robber who demands tribute and restricts the liberty of so many millions of people.  It certainly does not mean that we should be happy to hand the robber our hard earned wealth.

Recognizing the illegitimacy of the Constitution and the United States government is a very important step. The more that people recognize this fact and speak about it, the more obvious it will become to the populace.

A critical mass of Americans is needed to recognize that we do not owe our allegiance to the Constitution.  Furthermore, this critical mass needs to realize that the United States government is illegitimate and that it has no moral right to tax, rule, or restrict the liberty of anyone who has not consented to be ruled.  Only when the people wake up and realize these facts will we be able to restore our lost liberties.

Americanly Yours,

Phred Barnet

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I recently read Peter and Andrew Schiff’s new book, “How an Economy Grows and Why It Crashes.”  I am a big fan of Peter Schiff and was excited about reading this book.  Peter Schiff is an economist who is famous for predicting the financial meltdown in advance.  Here is a great video of him making predictions in advance of the meltdown.  He is even laughed at by the other commentators on CNBC and FOX for implying that there was a housing bubble only months before the market crashed.  Well known economists including Ben Stein and Arthur Laffer were among those mocking Schiff.  Interestingly enough, the people laughing at him selected Washington Mutual, Bear Stearns, and Merrill Lynch as great stock picks (all of those companies are now out of business).

This book is a simply written, illustrated allegory which details how economies grow and what can cause economic collapse.  The book begins with three men who are stranded on an isolated island.  The men spend all day fishing just to catch enough fish to barely survive.  After a time, one of the men underconsumes and is able to use his savings to increase the number of fish that he catches.  From this action, an island economy is born.

The story continues for generations and generations (immigrants eventually come to the island) as the island’s economy continues to develop.  I will refrain from giving specific details about the economic expansion so as not to ruin this book.

The chapters contain “Reality Checks” which simply relate the material in the chapter to real life by defining the concepts which are outlined.  In these short sections, the Schiffs explain things like underconsumption, productivity, savings, risk, and so on.  The “Reality Checks” help readers who may have little or no understanding of economics understand basic economics principles.

At the end of each section is a much more detailed (but still simple and easy to understand) section called “Takeaway.”  These sections elaborate on the lessons from the chapter and give further explanation of the underlying economic principles.  They greatly enhance the book by providing the reader with a nice overview as well as a great segue to the next chapter.  The “Reality Check” and “Takeaway” sections both help move the story along and are features which would be great in other books on economics.

The first 5 chapters of this book are absolutely amazing.  The Schiffs do an excellent job of using humor to make reading about economics fun and easy to follow.  They explain the causes of a growing economy (and the effects of a growing economy on society) in a manner that is easy for anyone to understand, regardless of their economic background.

In chapter 6, however, things took a slight turn for the worst.  In this chapter, the Schiffs explain the foundation of a banking system.  I have heard Peter Schiff give speeches on this in the past–his speeches are great and include detailed information on the historical evolution of banking.  It is always interesting to hear Schiff speak about this and I wish that he had included more of this information in his book.  For some reason or another, the Schiffs do not tell the full story of the evolution of the banking system.  This is somewhat perplexing, as he wrote about this quite nicely in his bestselling (and highly recommended by me) book, Crash Proof.  I have also seen him give numerous speeches on this subject, all of which were great speeches which gave this full history.  The failure to include this can certainly be excused, as the Schiffs’ book was surely intended to be a brief, simple overview of how an economy works.

The “Takeaway” section of chapter 6 was also somewhat perplexing.  There was a disconnect between the material in the chapter and the “Takeaway” section which is likely to confuse some readers.  In this section, the Schiffs launch an attack on the Federal Reserve system without explaining to the reader exactly how this ties in with the information in the early part of the chapter.  While I fully agree with the Schiffs on the Federal Reserve, an uninformed reader might have a little trouble understanding the Schiffs’ early critiques of the Federal Reserve System.  To their credit, however, the Schiffs do properly explain this later.

I do want to point out to my reader that this chapter is my only real criticism of the book and that while it is worth pointing out, it does not take much away from what is truly an excellent book.

Following this section, the Schiffs continue to brilliantly explain the evolution of a developing economy into a major economic player.  While the time line is a little off (something that the Schiffs warn the readers of in the introduction), the Schiffs paint a largely accurate picture of the history of the American economy and the growth of the American government (especially with regards to its intervention in the economy).

I wont give away the ending, but the economy in the book suffers a fate similar to that of the American economy during the current economic crisis–the title promises to explain how an economy crashes, so I dont think that Im giving anything away.  However, the Schiffs looks into the future and offers a glimpse of what the future of the American economy might look like if we do not quickly enact sound monetary policies.  Given Peter Schiff’s history of correctly predicting the course of the economy, his prediction is certainly worth taking into account.

My rating:

Strongly recommend:  9/10

Americanly Yours,

Phred Barnet

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Even most children know that taking things without permission is known as stealing.

There are three methods of acquiring property: homesteading, voluntary exchange, and theft.   The first two methods are just, while theft is inherently unjust.  Taxation involves taking things without permission and must be classified as theft.

However, before deciding on whether or not taxation should be considered theft, the term “taxation” must be defined. I will define taxation as “a government mandated extraction of resources from individuals and/or groups, paid to support the aims of the government.”

The phrase, “mandatory extraction” is the key to understanding why taxation is theft. A mandatory extraction, by nature, is taken through the use of force or coercion, and not paid voluntarily.

Theft is always theft, regardless of who does the theft, how the theft occurs, and what excuses the thief makes to “justify” the theft.  The ONLY exception to this statement is when things are taken as restitution for a prior wrong (for example, if you stole $100 from a person, a court would be justified in taking $100 from you without your permission to repay the victim).

Before I go on, I must address a question that I will surely be asked by many readers: arent taxes special because they are taken by the government in order to provide people with their basic needs?

The answer to this question is a flat NO!

People have certain inalienable rights which should never be violated. It would be wrong of me to kill you, rob you, or physically harm you. Governments are made up of people, and are often created by people to secure their rights. Because governments are made up only of people, governments cannot have any rights that people themselves do not have. It simply does not make sense for this to be untrue. Rights are rights, people are people. Any claims that the government has more rights than anyone else is arguing that some people (the populace) should be considered inferior and subordinate to others (the government).

Taxation involves taking property from people without their consent; taxation is theft.

To quote myself: “If a man with a gun were to demand that unless you pay him 1/3 of your income he would lock you in a cage, he would be guilty of initiating the use of force with the intent of committing theft. It would not matter if the man promised to use this money to pay for a school for your children, for a new highway, or for a missile defense program. Taking things from a person without their permission is, by definition, theft.  Silver-tongued rhetoric may be employed to obscure this fact, but it cannot change it.

Taking something from another person without their permission is always theft and should be condemned as theft. It does not matter what the “reason” or “justification” for this action is.  It does not matter who committed this theft, what was stolen, or how many people told the aggressor to act.”

Examples of taxation as theft

Some of the taxes described below are not traditionally thought of as taxes, but they are taxes—they all meet the above definition of being a government mandated extractions for the purposess of supporting the aims of the government.

A government imposed minimum wage law prevents a person (a sovereign owner of him or herself) from selling their labor to a potential buyer at a mutually agreed upon price. This is theft of a laborer’s future earnings.

A government imposed ban on the sale of alcohol on Sunday prevents a person from selling their justly acquired resources to an individual willing to purchase them. This is theft of profits.

A government imposed business regulation prevents a business from using its justly acquired resources in the manner that it sees fit.  This is theft as well.

A mandatory income tax, imposed under penalty of imprisonment, enforced by men with guns is theft of the fruits of one’s labor. Stealing one’s labor is called slavery. A mandatory income tax makes the government a middle man in all labor transactions, and allows them to claim ownership of property that they did not justly acquire.

A mandatory property tax, imposed under penalty of imprisonment, enforced by men with guns is, by definition, a violation of property rights, and therefore is theft—no explanation should be necessary to prove this. But… property taxes are fees on products that have already been paid for. They are levied on the owner of a property. A mandatory fee on residents for the continued use of their own house is no different than the government charging a person rent to stay on their own property. Remember, a person who justly acquires property becomes the owner of that property, but if a person has to pay the government rent to occupy their own property, who is the real owner of the property, the homeowner, or the government?

A mandatory sales tax, imposed under penalty of imprisonment, enforced by men with guns is theft as well. A mandatory sales tax makes the government a middle man in all retail transactions, and allows them to claim ownership of property that they did not justly acquire. Sure, they can argue that sales taxes are imposed in order to pay for police, but this does not change the fact that this money was acquired through theft, and not through voluntary means. The mafia also forces businesses to pay a protection fee.

I would love to hear your comments on this article, but please dont post a comment or send me an email that says “taxes are necessary because without them, the government could not provide services.” I have addressed this above: taking money from someone without their persmission and then using that money to buy they something that they may or may not want is still taking something without permission [theft].

Please do not send me a message or post a comment telling me that taxation is “voluntary” and not theft because if I disagree with the taxes, I can move somewhere else. When it comes to taxes, we have three choices: paying a tax, or refusing to pay the tax and being arrested by men with guns and then locked in a cage, or leaving one’s family, friends, and property behind to search for a society that does not employ mandatory taxation. This fact should make it clear that taxation is not voluntary. A person who uses coercion to force another person to give up some of their property under threat of violence is guilty of extortion. Governments can have no rights that people do not have, and are therefore just as guilty of extortion as would be a person who acted in this manner.

Furthermore, the argument that if a person does not want to pay taxes, they can renounce their citizenship and leave the US to avoid taxes is false.  The US government does levy a tax on people who give up citizenship:

“Expatriation on or after June 17, 2008, may cause an expatriate to be subject to IRC § 877A, which was enacted as part of the Heroes Earnings Assistance and Relief Tax Act (HEART) Act of 2008. Generally, IRC § 877A imposes income tax on the net unrealized gain on property held by certain U.S. citizens or green card holders who terminate their US residency as if their worldwide property had been sold for its fair market value on the day before the expatriation or residency termination (mark-to-market tax). The Treasury Department and IRS have authority to issue regulations under IRC § 877A so further guidance is expected soon, though it has not been released yet.”

Finally, please do not send me a message or post a comment asking how things like schools, roads, or even national defense could be paid for without mandatory taxation. There exists a long history of voluntary provision of all these goods and services (check out this book for more information).

Furthermore, these items could be provided for through taxation in a purely voluntary manner if people were allowed to exercise their natural right to free association and choose their own government. Under voluntary government, taxation could no longer be considered theft, as those who did not wish to pay a tax could simply drop out of one government and sign a contract with another government.

Economist Walter Block argues that under voluntary government, one would have “the right to stay put, on one’s own property, and either to shift alliance to another political entity, or to set up shop as a sovereign on one’s own account.”

Governmental services can be provided on the free market as can any other service; a government would agree to provide certain services (possibly protection, roads, health care, or whatever) in exchange for a fee from a citizen. Thus, the citizen would be paying a purely voluntary tax.

In contrast to voluntary, contractual government, our government does not allow citizens to withdraw their support from the State.  It levies taxes on people without their consent.  These non-consensual taxes must be recognized and exposed for what they are: THEFT.

Americanly Yours,

Phred Barnet

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