Radio Free Market

The creators of the Constitution did not intend to bind their posterity to it nor did they have the power to do so if it in fact were their intention. So, if the creators did not bind their posterity to the Constitution, the only other way that anyone could incur obligation to the Constitution is if they bound themselves. Has that in fact happened? In only two ways could an individual bind himself to the Constitution, by voting or paying taxes.

Spooner presents the argument that none of the voting that has ever taken place under the Constitution has bound the society or even any one of its individual members to that document. Logically, a contract can bind no one but its actual signers. During the first 20 to 30 years the Constitution was in existence Spooner points out, only a small portion of the population was even allowed to vote, somewhere between 1/10^th and 1/20^th of the population.

So how could 1/20^th or even 1/10^th of a society’s members be rightfully said to have bound the other 9/10^th or 19/20^th of the population to a contract to which only they were individually obligated? The answer is that, of course, they could not. Furthermore, of the small portion that actually was able and chose to actually vote, none of those assenting members can be bound for any longer period than that for which he votes. For example, if I vote to elect an officer to hold a certain position for 2 years, I cannot be said to support the government beyond that term.

Can anyone legitimately be said to support the Constitution when the decision is not wholly voluntary? In support of this point, Spooner reiterates a moving and powerful argument taken from No Treason, No. 2: “…a man finds himself environed by a government that he cannot resist; a government that forces him to pay money, render service, and forego the exercise of many of his natural rights, under peril of weighty punishments. He sees…that other men practice this tyranny over him by use of the ballot. He sees…that, if he will but use the ballot himself, he has some chance of relieving himself from this tyranny of others, by subjecting them to his own.

In short, he finds himself…so situated that, if he use the ballot, he may become a master; if he does not use it, he must become a slave. And he has no other alternative than these two. In self-defence, he attempts the former. His case is analogous to that of a man who has been forced into battle, where he must kill…or be killed himself.

Because, to save his own life in battle, a man attempts to take the lives of his opponents, it is not to be inferred that the battle is one of his own choosing. Neither in contest with the ballot-which is a mere substitute for a bullet-because, as his only chance of self-preservation, a man uses a ballot, is it to be inferred that the contest is one into which he voluntarily entered; that he voluntarily set up all his own natural rights, as a stake against those of others, to be lost or won by the mere power of number…

Doubtless the most miserable of men, under the most oppressive government in the world, if allowed the ballot, would use it, if they could see any chance of thereby meliorating their condition. But it would not…be a legitimate inference that the government itself, that crushes them, was one which they had voluntarily set up, or even consented to.

Therefore, a man’s voting under the Constitution…is not to be taken as evidence that he ever freely assented to the Constitution…Nor can we ever have such proof until every man is left perfectly free to consent, or not, without thereby subjecting himself or his property to be disturbed or injured by others [emphasis added]” (p. 15).

I’m sorry to have put in such a long quote, but in the event that you are using this live blog as a substitute for reading the book, I wanted to share with you this beautiful passage with which Spooner advances his argument contra the Constitution (and government in general), of his philosophy of voluntary choice, and of individual rights. In brief, there is no way to find out who by voting actually voluntarily assents to and supports the Constitution, since voting is a necessity forced on to every man if he wishes to relieve himself of the tyranny of others by subjecting others to his own tyranny. If a man’s property is to be taken from him by the tyranny of the ballot and then this property used by others to his injury, well no wonder a man might vote so that he might prevent his own property from being used against him!

But this by no means is proof that, by voting, a man supports the Constitution voluntarily. Many people in fact do not support the Constitution and hope to, by voting, obstruct the execution of the Constitution by voting for a candidate who they know has no chance of success- more proof that the act of voting is no proof at all that any individual voluntarily supports the Constitution. Until the government is completely voluntary, then, “on general principles of law and reason, it cannot be said that the government has any voluntary supporters at all, until it can be distinctly shown who its voluntary supporters are” (p. 16).

Is it possible to show even who the supports are of any particular officeholder? No, since all votes are by secret ballot and thus no legal proof of any man’s intentions. Even if you could prove that Joe Smith voted for X candidate, that is no proof at all that he supports the Constitution. It is at least as likely, if not more so, that Joe votes for X candidate to prevent the tyranny that candidate Y will inflict upon them under color of the Constitution. It makes me wish that under the list of potential candidates on the ballot, there was a choice of 2 boxes that must be filled out to complete the voting process:

• I am voting to support the execution of the Constitution

• I am voting to obstruct the execution of the Constitution

Well, it would make me laugh at least, since I am fairly certain that precious few would check box A, especially since the people in government who are professedly stewards of the Constitution use it to whatever ends they choose and backwards rationalize their actions to the public.

Now we’ve discussed the dilemma in which every man finds himself that he must use the ballot to the detriment of others that these others will not be able to practice tyranny over him. If a man succeeds let us say, in getting his man into office who will protect his particular interests, that man might voluntarily support the Constitution, since in this case it is working to his favor. But if he does not get his man into office, he might oppose the Constitution on the grounds that, in this case, it is working to his detriment. Let us say that an election was very close then, 51%-49% for sake of example. In this case, 51% might for that period voluntarily support the Constitution, and 49% oppose the Cons
titution…?

First of all, does this seem like a good system, where at any one point it is possible that 51% practice their special brand of tyranny over the almost equally large 49%? Second, to say that a man consents to the Constitution when it is doubtless that his support is contingent on whether he can be in power is ludicrous. “Such contingent consent as that is, in law and reason, no consent at all” (p. 17).

On a practical issue, how did it get to the point where men secretly cast a ballot for an agent and then never take personal responsibility for the acts of his agent? “No man can reasonably or legally be said to do such a thing as to assent to, or support, the Constitution, unless he openly, and in a way to make himself personally responsible for the acts of his agents, so long as they act within the limits of the power he delegates to them” (p. 17).

As all voting is secret, the only thing that voting proves is that there lives among us a secret band of robbers and tyrants, elected by a faceless number of individuals, that, to accomplish their ends, will rob and murder the rest of the people. “The simple fact of the existence of such a band does nothing towards proving that ‘the people of the United States,’ or any one of them, voluntarily supports the Constitution.

I would actually be very interested to completely “voluntarize” (I’m making up a word for “to make voluntary”) the government and then see how many people actually voluntarily support the Constitution. I agree with Spooner- I think it would be a very small number indeed.

I’ll leave you with this, as Spooner at the end of the chapter lists three classes as ostensible supporters of the Constitution. I think that this particular class applies to the vast majority of Americans: “Dupes – a large class, no doubt – each of whom, because he is allowed one voice out of millions in deciding what he may do with his own person and his own property, and because he is permitted to have the same voice in enslaving, robbing, and murdering others, that others have in enslaving, robbing, and murdering himself, is stupid enough to imagine that he is a ‘free man,’ a ‘sovereign’; that this is ‘a free government,’ ‘a government of equal rights,’ ‘the best government on earth,’ and such like absurdities” (p. 18).

Up next? Taxes! Specifically, that taxes do not provide any evidence that any one voluntarily supports or has assented to the Constitution.

You cannot be at once entirely free and entirely enslaved, much as you cannot be pregnant and not pregnant at the same time. Either you are free, or you are a slave. Once you have become a slave, no matter how much better or worse it gets, you are no less a slave until that time you become truly free and independent.

Similarly, the economic system is either socialist or it is free market. If it is not free market it might be socialism in the form of interventionism, but it is still socialism and will only lead to further “installments” towards its full realization. As Ludwig von Mises observed of Germany, Britain, and to a lesser extent the United States, one control led to one hundred others, all to correct the problems created by the previous measure until the system is completely overrun by the bureaucratic rent-seeking portion of society. Mises said it best; “The middle-of-the-road policy is not an economic system that can last. It is a method for the realization of socialism by installments.”^[1]

Every government action, by definition, takes place outside of the realm of peaceful trade and in the realm of domination by force, thus it is simply not possible that the State perform an act that will make proper use of the scarce resources of society. This is not just a moral consideration to hold that Government not be used to solve any sort of problem, because it involves aggressive violence, but an economic one. Government is simply incapable of solving said problems.

Initially, there must be an understanding that the State is the organized, legally legitimized means of aggressive violence. Acceptance of aggressive, coercive violence is morally repugnant. This principle does not change in a situation of one versus one, five versus five, one hundred versus one hundred million, etc. Clamoring for economic utilitarianism does not solve the matter, since it is a fortunate coincidence that taking the high ground on property rights and philosophy also leads society to the high ground in terms of economic prosperity.

The utilitarian strategy leaves the door open to du jour economic theories that might persuade the people to clamor once again for the indomitable will or government over their lives. The happy fact is that the benefits of infusing our economic theories with a robust defense of the philosophy of property rights will serve as a bulwark against whatever economic illusions could persuade the people to act against their own principles, since it is these very principles upon which their freedom is based.

[1] Von, Mises Ludwig. “Middlie-of-the-Road Policy Leads to Socialism.” Two Essays by Ludwig Von Mises: Liberty and Property ; Middle-of-the-road Policy Leads to Socialism. Auburn, Ala.: Ludwig Von Mises Institute, Auburn University, 1991. Print.

The first sentence of the first section of the book reads, “The Constitution has no inherent authority or obligation.”

Talk about making an entrance.

Lysander Spooner looks at the Constitution as a contract, and as such could only have been binding on those who actually signed it. What a novel idea, that contracts are only applicable to the parties involved. Fine, if everyone signs it good for them, they are a party to the agreement. But as Spooner points out, only a (very) small portion of the people then existing were, “permitted to express either their consent or dissent in any formal manner.”

Even if the Constitution were binding on the people living at the time who actually formally consented to it, all of those people are dead now. Spooner wrote that they had all been dead from 40-80 years. In 2011, we can say that the (incredibly small number of) people who actually formally consented to the Constitution have been dead for well over 200 years.

What’s the problem here? The problem in Spooner’s opinion, and I agree, is that even if the parties who created and assented to the Constitution had intended to bind their posterity to the Constitution (which they did not), who in their right mind could say that these persons had the authority or power to do so? Spooner says it as such: “That is to say, the instrument does not purport to be an agreement between any body but ’the people’ then existing; nor does it…assert any…right…to bind anybody but themselves.”

In illustration of this point, Spooner breaks down the language of the Preamble to the Constitution. Now this is much more important than it seems. As Wikipedia says, and of course Wikipedia is always right,

“The Preamble to the United States Constitution is a brief introductory statement of the Constitution’s fundamental purposes and guiding principles. It states in general terms, and courts have referred to it as reliable evidence of, the Founding Fathers’ intentions regarding the Constitution’s meaning and what they hoped the Constitution would achieve.”

So the rest of the Constitution is based entirely on the preamble and the creators’ actual intentions, and it probably would be a good idea to look at the actual language. So let’s look: “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

Spooner writes of this, “It is plain…that this language, as an agreement, purports to be only what it at most really was, viz., a contract between the people then existing…and, of necessity, binding, as a contract, only upon those then existing.”

The Constitution is a legal document, so looking at it from the point of contract law proves very fruitful. Of course, we’re taught not to look at it in this manner, but rather as some sort of mystical Ten Commandments like piece of parchment paper sent down to us by the Almighty.

One of the most important points that Spooner makes in the first section is this- the Preamble, which states the intentions of the creators in writing the document, does not in any way, shape, or form state any desire on their part to coercively bind their “posterity” to the Constitution. No where does it say that their “posterity” must or shall live under it; only that the hopes of the creators in adopting it were that, “it might prove useful to their posterity, as well as to themselves, by promoting their union, safety…etc.”

The ethical argument that Spooner makes cannot be overlooked or under weighted. The idea that a group of people intended to and/or had the power to coercively bind all future generations to abide by the Constitution is not only untenable, but immoral. No individual has the right to bind their children and their children’s children to a contract to which only he formally consented.

I wish I could write better than Spooner does about this point, but alas, he hit the nail on the head: “If they had intended to bind their posterity to live under it, they should have said that their object was, not ‘to secure to them blessings of liberty,’ but to makes laves of them; for if their ‘posterity’ are bound to live under it, they are nothing less than the salves of their foolish, tyrannical, and dead grandfathers.”

Spooner gives two examples of which I will retell only one to illustrate the point that the creators had neither intention nor authority to bind their posterity to the Constitution. What is true for Robinson Crusoe on a desert island is true for the society as a whole in an economic sense. So too it is true that what holds for the individual who plants a tree for himself “and his posterity” is the true for a group of people signing a document such as the Constitution. Spooner writes, “…when a man says he is planting a tree for himself and his posterity, he does not mean to be understood as saying that he has any thought of compelling them, nor is he such a simpleton as to imagine that he has any right or power to compel them, to eat the fruit. So far as they are concerned, he only means to say that his hopes and motive, in planting the tree, are that its fruit may be agreeable to them.”

To conclude, the language of the Preamble, which states the intentions of the creators of the Constitution and sets the motive and tone for the entire document does not assert or imply, “any right, power, or disposition, on the part of the original parties to the agreement, to compel their ‘posterity’ to live under it.”

Their intention was only to create a document that their posterity might find useful in promoting their union, safety, tranquility, and that it might tend to secure to them the blessings of liberty.

The next section discusses this idea: if the founders did not and could not bind their posterity, have their posterity bound themselves?

Today I want to talk a bit about a topic that should be discussed in every household, especially those interested in the economic well-being of their families and of the nation. This newsletter is a primer on some initial facts you should be aware of when contemplating what type of monetary system should prevail if we want to have a prosperous society.

Where did money come from? This is a fundamental topic to which we should all devote time to study, carefully.

The prevailing wisdom seems to be that money as such came into existence by fiat at the hands of the government or monarch. We were all running around engaging in barter (direct exchange) until this decree occurred. I as a wheat farmer would come to you with a bushel of wheat and directly exchange my wheat for something I valued in consumption, let us say bacon.

Does this example make clear the concept of direct exchange? When two commodities are exchanged, each one intended to be directly consumed by the exchanging party, a direct exchange has occurred.

Barter is messy, however. For example, if I the wheat farmer brought my wheat to the pig farmer and he did not want wheat in exchange for bacon, I would be out of luck.

So how did we move from this messy system of barter to a system in which I give you wheat, which you want directly for consumption, and in exchange, I accept something that I do not want at all, let us say steak (which in this hypothetical world I dislike)?

The conventional wisdom tells us that this problem of the double coincidence of wants, a monarch or government in all of its wisdom came up out of the blue with the idea that instead of each party getting exactly what they want in the exchange, that one party would accept something that they do not want at all for its own use.

Even under the dictate of a king or government, who in their right mind would give up something the other person wanted in exchange for something they did not want, simply because some monarch said, “Hey if everyone accepts something they don’t want, we will all be more prosperous?”

When you take into account that, by definition, engaging in direct exchange never happened before it actually happened, this theory becomes even more absurd. It is a laughable and untenable position to maintain.

We as thinking human beings can do better.

In truth, money could have come about in only one way.

Individuals in their quest to improve their life according to their own preferences would seek in exchange commodities that were the most marketable.

By most marketable, I mean a commodity that was most easily saleable in exchange.

Think about it. As individuals kept engaging in exchange, they inevitably run into the same situation over and over- they could not find someone who wanted exactly what they were selling, and was selling exactly what they wanted to buy.

Therefore, individuals in their own self-interest began to sell their wares for whatever good they had the best chance of selling in the future. As this process continued, eventually certain commodities would prove themselves uniquely marketable or saleable. The end of this process of exchange for the most saleable goods led to one or two commodities gaining widespread use as media of exchange– that is to say, they became MONEY!

What is so important about this fact? It is this- money came about organically on the free market as individuals in their own self-interest sought to exchange their goods for goods that would be the easiest to trade away at a later date.

There are certain commodities that have characteristics that are particularly useful in playing this role as a medium of exchange. By medium of exchange, I mean a commodity that serves as a bridge for direct exchange (the commodity that is accepted even though it is not intended for direct consumption). A medium of exchange should be:

• Portable. No one would want to carry around iron as a medium of exchange. You would be carrying around a ton of iron on your way to Best Buy. We want something we can carry around in our pockets. Scarcity plays into portability as well.

• Durable. If the commodity that served as a medium of exchange were destroyed before it could be traded away, that commodity would not be able to be used very long and the system not be very efficient- in fact, it would probably collapse.

• Homogenous. If this medium of exchange is going to be on one side of every transaction, it would be very hard to reckon one exchange against another if the units were not homogenous. Homogeneity allows for consistency throughout the money supply. An ounce of pure silver for example is exactly same as any other ounce of silver.

• Scarcity. Paper clips wouldn’t serve very well as money. They are very easily manufactured and thus their value of them would be unstable. Scarcity ensures that the value of money remains roughly stable.

• Divisible. A commodity able to be divided and still keep a pro rata share of its value would further enhance its desirability as a medium of exchange.

This lends some insight as to why gold and silver have universally been used as money. Remember, money is simply a commodity or commodities that have been selected above all other commodities for use as media of exchange.

This is all very interesting- but what does this mean for me as I form my opinion about what the monetary system should look like?

Well, since you now know that money came about organically on the free market without ANY government or monarchical intervention, you tell me…Should government determine what you are legally allowed to use as money, and back up their monopoly over money with the threat of violence via legal tender laws?

Or should this job be left up to free individuals who can produce money in the same way they produce cheeseburgers and laptops?

If you want to know more about where money comes from, you can read What has Government Done to Our Money? by Murray Rothbard. Here is the link; it is FREE to read online.

http://mises.org/books/whathasgovernmentdone.pdf

I highly encourage you listen to Radio Free Market at RadioFreeMarket.com or check out our archives on iTunes. We are also LIVE at 7AM Pacific Time on RonPaulRadio.com.

Thank you for reading. Enjoy your weekend.

Aaron Brown

Note: To add friends/family to the list, have them contact me at my e-mail.

The content of this letter is for informational and entertainment purposes only and is not to be viewed as financial advice from the author. No part of this letter can be redirected, rewritten, or reused somewhere else without express permission.

Evidence abounds that the central bank concept is on its way out. The complete and obvious failure of central stabilization and monetary “stimulus” becomes more apparent every day. Stagnation, depression, and a decline in the standard of living in the industrialized nations are apparent to anyone with eyes to see. Both the Tea Party and Occupy movements contain within them anti-Federal Reserve and monetary elite sentiment. Videos describing economics have become YouTube sensations. The Keynes vs. Hayek rap battle videos, which portray these two economists arguing over whose economic theory best explains the boom-bust phenomenon, have garnered millions of views and have even been used in college classrooms. Texas Congressman Ron Paul even wrote a book specifically about the United States government’s central bank, called End the Fed, which climbed as high as six on the New York Times bestseller list.

The scholarship put forth by the Mises Institute as well as other individuals and organizations has forever changed the discussion of monetary policy and economics as it relates to the central bank. This is an indispensable step towards a private property society marked by sound money, non-aggression, and property rights.

Undoubtedly this is a positive development. Unfortunately, where one economic idea is discredited another ensnares those who have were never taught the ideas of Menger, Mises, or Rothbard. As the central bank tide continues to flow out, the Greenbacker tide threatens to rush ashore.

Greenbackism endorses a system in which the government has direct control over the money supply. The Greenbacker position is that fractional reserve banking is evil as is the private central bank. The true evil to Greenbackers is the interest charged by the central bank on the currency loaned to the government, as this immediately puts the government and thus the people in debt; since the interest is charged on money created out of nothing, the only way to pay off the interest is to continually create money to cover the outstanding debt.

Greenbackers are spot on with their analysis of fractional reserve banking as well as interest charged on loans of fiat money. Both of these practices are fraudulent and should be treated as such. In a free market this type of fraud would not be possible, unless of course certain individuals were willing to keep their deposits in a fractional reserve bank- though it is arguable that this would occur.

Incredibly however, Greenbackers come to the conclusion that if a cartel of private banks given monopoly control by the government is bad, then a direct monopoly by the government is just the thing that will cure our economic ills. The advantage of this system to a Greenbacker is that since the government can create money out of thin air interest free, then every special interest would enjoy the ability to institute their favorite pet projects. Of course, Greenbackers do not think this magic money creation would cause inflation nor would it trigger the boom-bust business cycle. The economic problems with this system are glaring, yet, Greenbackers do not see it. Why? There is a lack of economic knowledge to be sure, but more importantly a naiveté as to the nature of the State.

Greenbackers fall into the government vs. private industry trap. They are under the impression that the wise public servants in government are simply outmanned by the greed and corruption of the private central bank and its minions. As I wrote in another article on this subject^[1], this seems to be an insurmountable error in Greenbacker ideology, namely that the central bank is a completely autonomous institution that has taken over the government, and if only we could abolish the central bank and give the power of money back to “the people”, our lives could return to normal.

Of course, a normal existence to a Greenbacker is one in which every individual is controlled by the wise rulers in government. The misconception of a “private” central bank is the crux of the problem. Once a Greenbacker realizes that the central bank has naught but what power the government gives it through legal tender laws and other protectionist measures, he has no choice but to admit that the government is the great enabler in the relationship between it and the central bank.

There is much to be excited about the modern movement against centralization of monetary power in the government and banking elite. This is arguably the greatest push against the central bank concept in history, aided by the internet, recent financial crises, organizations like the Mises Institute, and of course, Texas Congressman Ron Paul.

Nevertheless, we must be aware of monetary hegemony in different forms. Greenbackism is the foremost threat to monetary freedom as it is seen as the most “practical” alternative, since, to statists, the choice is either a government granted monopoly to a central bank, or direct monetary monopoly by the central government itself. Greenbackism is monetary socialism of the worst kind. As Mises said, we cannot ignore socialism- we must confront it and destroy its ideological underpinnings.