When you choose to engage with another person, it is because you are pursuing your self-interest by virtue of it being your choice. This is not to say that making choices is always for personal material gain. We often seek the emotional gratification of helping others. When we bring violence, force, or the threat of force into relationships, our potential for harmony is reduced. Cooperation is replaced with conflict, resources are diverted from optimal usage, and squandering of resources is encouraged. In every transaction determined by force, there is a measurable amount of effort wasted. Every relationship tainted by coercion keeps us from realizing our potential in the free trade ideal.
If you buy something from your neighbor, it means you are choosing to give up money because you think your life is better with the thing than with the money. Your neighbor is giving up something for the money, because they think their life is better with the money than with the thing. This fundamental exchange concept of economics is at the very heart of why trade produces wealth. It allows for mutually-beneficial cooperative exchanges. This principle extends to all relations, not just the ones we think of as economic. When two friends share a conversation, they are freely exchanging time, energy, and attention because they each think it benefits them. If either one of them thinks they will be happier alone or speaking to someone else, they are free to end the conversation by peacefully disengaging.
The alternative to the example of a peaceful exchange between neighbors is not as simple as direct theft. What if the government says you can buy that thing from your neighbor, but only if you pay a percentage of the price as tribute? Maybe you were going to buy ten things, but now you can only buy seven. People all over the world accept various sneaky forms of government theft, but no system hides the fact that if you don’t pay the tax or tribute, your transaction is illegal and the government could lock you in a cage or “fine” you (steal from you) for “black market activity.”
In simple examples, it is easy to see the devastating effects of coercion on free trade. Even with these examples, we cannot possibly envision all the implications and ripple effects. Did the trade that didn’t happen mean buying one less bag of groceries? Creation of one less job? One less person who could afford vital medical care?
If governments only stole from us and left us alone, the impact would not be nearly as bad. Governments can steal more when they use our money against us through enforcement and suppression of economic activity. The amount of human effort diverted by wars and police states is painfully obvious. The less obvious tragedy is that governments pervert the minds of so many eager, capable people, and divert them from serving people in the free market to pointing guns at people, enforcing the will of special interests, protecting politicians, and killing each other.
The resources devoted to bureaucracies and their disastrous diversions of energy away from productive ends are staggering. If someone about to do something productive has to stop to ask a bureaucrat for permission, both they and the bureaucrat are kept from producing something of value, while even more energy is diverted to support them while doing nothing productive. This is made possible by the threat behind every regulation: if you don’t do what we say, we will come and take you away. The effect of governments misdirecting resources is enormous. How much happier we will be without violence is incalculable.
A voluntary society represents a free trade ideal in which all interactions are free of force and coercion. In that environment, all relations are voluntary and we choose to engage because we think we will personally benefit. In a voluntary society, the individual person is considered the ultimate means of production. We are happier and more prosperous because all of our interactions with others enrich our lives. Violence, coercion, and conflict are unproductive. Peace, self-ownership, and free trade are essential for any society to reach its potential.
Most of us never bother to properly answer that nagging question, “Where does money come from?” Governments and banks like it that way. Money is simply a medium of exchange. Many things other than official paper bills function as money. Without a medium of exchange, a person who wants one thing has to find someone who has exactly what they want, and wants exactly what they have to trade. Something becomes “money” when it is widely accepted enough that people will take it in trade, knowing they can take it to someone else to get exactly what they want.
Historically, different things have served as money at the same time at the same place. Before centrally-imposed currencies, no economy was dependent on a single medium of exchange. This meant different ways of accounting for value or storing value could meet the needs of the market as they developed. One disadvantage was that whatever was being used as currency could not be employed or consumed. Without a single unit of accounting, the widespread reach of industry might have been hampered, but in the absence of a centrally-imposed currency, the market would have quickly established a universal standard as needed. Even now, at the height of centrally-imposed currencies, many transactions happen as barter, in some way off the record, or based on an alternative means of accounting for value.
Sometimes governments operate central banks themselves, sometimes they use “public-private” partnerships, but either way, coercion is what makes a currency the official medium of exchange. If you use a currency they don’t like, people with guns come and lock you in a cage. They need us to use the official money or else the modern banking racket doesn’t work. In a free market, banks provide very important money management services. While money is a medium of exchange, it is still subject to the fundamental forces of supply and demand. When the banks create more money, they are inflating the money supply, increasing the amount of currency in circulation, and devaluing all the money currently being held.
Creating money and forcing us to accept it is worse than stealing because it attempts to hide how badly we are getting cheated. It also hides who is responsible. Is it the central banker who creates more money? Is it the politician who votes for the debt? Is it the tax enforcer? Is it the banker who gets to decide who gets massive loans? Maybe it’s the voters who were fooled by politicians who do nothing to challenge this racket because they serve as its cheerleaders.
Many people profit from centrally-imposed currencies, so their supporters are fierce and well-funded. They are the politicians who deliver “pork” to their voters and payoffs to key demographics. They are the government contractors who give kickbacks to politicians in appreciation for exorbitant profits. They are the bankers and heads of financial institutions. The beneficiaries of this system have a huge advantage over everyone else, not just by getting so much “free money” but also by getting to spend that money before its price-raising effects are felt throughout the market.
Some central banks use “price stability” as their excuse for creating money. This is one way governments work as promised. As a healthy economy develops, production techniques improve, technology improves, and efficiency improves, so prices come down. This means the average person can afford more stuff, more services, and a higher standard of living. Central banks are limited in how much money they can create by complaints about rising prices, but to the extent prices do not go down as much as they should, wealth is being robbed from us by those who are getting all the benefits of being hooked up to the central bank.
The effects of a central bank are pervasive and far reaching. Not every new unit of currency created goes directly into the hands of the beneficiaries. That would be too obvious. Much of the money goes to various government programs. This money often ends up going to purposes valued by the market, but in a way that reinforces dependency on the central racket. Much of the money goes to educational institutions or other influential groups and the conversation is polluted with bias. Some of the money finds its way into economics departments at universities, where the next generation is taught that the fraud is not only harmless, but essential. This message is then echoed in the mainstream media.
Forcing someone to use a currency that is constantly losing value discourages savings. The distortion of the saving/spending balance has even worse long-term effects like malinvestment and bubbles. The flow of money created by central banks and other major financial institutions attached to them encourages wild market swings through reckless investment. Often coupled with the effects of central banks are government edicts, tax breaks, or other incentives that channel money into certain areas, creating massive bubbles that inevitably pop with painful consequences.
Despite attempts to kill competing currencies, technology is making it impossible to stop the increasing demand from being met, as more of us realize that holding government money is an avoidable way of paying taxes. Governments have often resorted to confiscation of precious metals or other strict regulations on their trade and ownership, but because they have never been perfectly effective, people have always sought to own gold and silver as alternative stores of wealth. Due to this demand, use of gold and silver has increased dramatically in recent years.
The most important developments in money will be those that do not just repackage or accelerate old forms of it, but create entirely new systems. Digital, decentralized “cryptocurrencies” are already being tested by the market and might just be the new money that completely replaces centrally-imposed currencies. No one knows what future markets will demand from their money, or how technology might meet those demands. Existing technology already empowers us to opt out of government money systems. When enough of us decide that we don’t want to get ripped off any longer, the government money racket will be obsolete.
The money racket is central to the existence of all modern governments. It doesn’t matter if the government is controlling the money, or the people controlling the money are controlling the government. Whoever is controlling the money is controlling the government and coercion makes the entire racket possible. When we are free to pursue our needs without the threat of violence, we will always be happier. Nowhere is this more true than in our choice of money.
In the name of protecting us from corporations, most governments have created a legal framework that favors them as fictional legal entities. Some people think regulation, taxes, and laws restricting free and peaceful economic activity serve to reduce the power of corporations. In reality, large corporations support these policies, and people who control vast amounts of wealth pull the strings. Corporations love regulations because they hinder competition. They support taxes because they can afford ways around them. They love it when we turn to governments for protection from corporations, because the results usually protect them from accountability. For the super rich who might have owned slaves directly in the past, governments keep citizens on the big plantation of corporatism and tax slavery.
With the rise of corporatism, laborers (and anyone who did not benefit directly from corporatist policies) were at a great disadvantage. The formation of powerful unions was a predictable result. Everyone is entitled to freedom of association and speech. We can meet with whomever we like, when we like, and say what we like. As individuals, we have a right to choose to work or not work at any time and to communicate our reasoning with our employers. However, in the course of resisting the unjust powers corporations gained through government, unions themselves have gained unjust powers.
Unions do not have any special rights as groups that individuals do not, but governments have been happy to pander to them to build constituencies and make it appear that they’re looking out for the common people. Unions do not have a right to keep anyone from working. Unions ask governments for laws that allow corporations to buy benefits without paying taxes, but then every worker who is not in a union or working for a corporation is disadvantaged in the market for those benefits. Workers become more dependent on corporations and less able to opt-out of tax slavery.
When you have a “job,” you do not own it. A job is an agreement with someone, a group of people, an organization, or a corporation. No one can “take your job.” If the conditions around the agreement change, the agreement may be changed or terminated. The idea of a job as a possession is at the core of many bad government policies that are excuses to use force against people exercising their rights. Just as members of a union have a right to stop working, non-union workers have the right to start working.
As free people, employees and employers have the right to set the terms of their relationships and walk away at any time if they are unsatisfied. Laws that force us out of productive relationships are especially brutal. Taxes on employment and minimum wage laws make otherwise profitable relationships unviable or illegal, and thus “destroy jobs” or prevent them from ever being created. Governments get away with so much “job-killing” because the unseen cost of jobs that were never created remains invisible, except in our imaginations and economic calculations.
While governments have created special privileges for unions, they have created far more for corporations, including various forms of “anti-strike” laws. A law prohibiting a strike says, “If you don’t work, there will be consequences!” which is the same as forced labor. If the government threatening consequences is also taking as much of our income as it can, we’ve got most of the elements of direct human ownership. But when people believe they are free, they are more productive. In a fair, healthy market for labor, we can properly value the most important assets: individual people.
Corporatism has spawned unionism and the result is a vicious cycle that feeds into statism. As people turn to government to protect them from corporations, corporations get more powerful, and then people demand more protection. Corporatism and unionism are tools of control and consolidation of power that drive up the cost of hiring people and increase unemployment. They both impede the freedoms necessary to properly value the labor of individuals.
IV. Infrastructure & Utilities
Modern living depends on many complex systems that challenge our ability to share resources. Technology has developed faster than our ability to create voluntary systems to share the bounty of new technologies. Governments have taken advantage of this to seize monopoly control over many important functions. They promote the dangerous idea that people are incapable of managing such systems without a coercive central authority. This keeps us from receiving the best services technology can provide. Governments have been operating the infrastructure racket for so long that many people assume we couldn’t have electricity, water, airports, telephones, railroads, gas, subways, waste disposal, or internet without their coercion. All these functions will be better without the threat of violence involved, as is true of all cooperative endeavors.
When someone points out that we can provide for all our needs without coercion, the typical response shows just how entrenched the idea of quick, thoughtless government “solutions” is: “But who will build the roads?!” Governments have run the roads racket for so long that we seem blind to the many consequences. As with any monopoly, the provider has little accountability to the consumers, so we generally get roads that are dangerous and full of potholes. When police are tasked with providing for the safety of the roads, they instead succumb to the temptation of using safety as an excuse for generating revenue with citations. Officials who decide when and where roads are built make their decisions based on the needs of special interests, often steering traffic and money to where it will get them kickbacks. Control of the roads has also made it very easy for governments to monopolize public transportation, limit consumer choice, and hold back the implementation of new technology.
If governments were not subsidizing the roads, not only would roads better serve us, but their costs could be assessed by the market. New technologies can’t compete with subsidized old technologies. Subsidizing roads has entrenched fossil fuel technologies, and is heavily supported by the car and gas industries. Without interference, communities might have created more sustainable systems based on walking and biking, and long distance travel would be more focused on mass transit systems. Without the roads racket, getting around would be a lot safer, more efficient, and better-suited to people’s needs, instead of the needs of government.
In many places, governments don’t operate utility monopolies themselves, but license corporations to enjoy monopoly privileges. It is just as true about electricity and water as it is about anything else: a monopoly policy that limits competition by force will lead to underserved consumers. They will pay more and services will be worse. Nowhere is corporatism stronger than in highly-regulated “free” markets for infrastructure, and this is where some of the worst corporate abuse happens. During periods of high demand, utilities run or regulated by governments often force rationing of critical services when a free market would respond to that demand with increased supply.
As we wake up to the far-reaching consequences of government, we are demanding more options and technology is delivering them. A monopoly on providing electricity is useless when everyone has sufficient access to free energy through solar panels, wind farms, or geothermal generators. When the internet becomes a mesh of independent computers, the telecommunications industry won’t benefit much from forcing out competition. Even the roads racket will be obsolete when we have flying cars or drone taxis. The effects of government control of infrastructure and utilities will eventually be rendered insignificant by technology. Until we abolish government, we will live with the consequences of allowing criminals to run essential parts of our lives!
Choosing who we associate with has far greater implications than most of us realize. We are communal by nature and depend on interaction with others. Rewarding someone’s behavior by associating or doing business with them is the most significant endorsement. A society that rewards people for violence will get more violence. A society that tolerates people who violate the non-aggression principle will be ruled by aggressive people. A society that believes aggression is necessary in order to function will institutionalize coercion and reward those who provide what it considers necessary. More importantly, the choices we make as individuals determine how we will be treated. When all of those choices are added up, the preference of a society is clear, and it will be reflected by the culture.
Because of government propaganda, many believe that threats of force are the best way to change others’ behavior: “Do what the politicians say because we the people told them to say that, and if you don’t, you deserve to get locked in a cage.” Any honest observer of society will see, however, the consequences of individual association have a far greater effect on regulating behavior. The simple obvious example is production: people make things that others want to consume. A large part of economic behavior is determined by what other people value as determined by sales.
In personal relationships, we generally choose to associate with people who make our lives better. Unfortunately, many don’t realize that this should be the only determining factor in deciding whether or not to interact with someone. When we stay in abusive relationships, we are rewarding, and thus encouraging, abusive behavior. The same principles apply to the attitude of a community. You might want to buy something because it’s a good deal and the product itself makes your life better, but if the seller uses your money to pollute the environment or support politicians, that needs to be factored in! A community that gives in to an abusive relationship with government will get more abuse.
When people decide not to support a company at the same time because of its behavior, it’s called a boycott. Sales determine corporate behavior far more than regulation. Even with the worst of corporatism, the profit motive requires efficiently serving the needs of as many people as possible. If a company fails to meet people’s needs, it goes out of business. Government regulations only serve to drive out competition, limit our choices as consumers, and stifle innovation. When our choices are limited because competing new businesses are stifled, corporations get away with bad behavior, especially when people depend on them for essential services. All of our choices as consumers have an impact.
Reputation, referrals, social status, and existing customer satisfaction can be factors in deciding whether or not to associate with someone, but when buying expensive items or medical services, we often seek formal approval or endorsement by experts. While governments will never fully monopolize this most important function, many try to with the licensing racket. Licensing sounds good because we all want reliable services and qualified people, but that’s why it’s unnecessary. There’s nothing wrong with a group saying that if you don’t meet their standards, they won’t certify you – but when the governments do that, not only is it funded by taxation, it comes with the threat of force. This means governments decide who is allowed to do business based on the desires of their sponsors. This also serves as another form of taxation, because getting licensed is often expensive. When judging whether or not to do business with someone, rarely is government approval sufficient. In fact, government licensing is often so unreliable, that even if the standards were appropriate, it couldn’t be trusted.
We don’t have the right to vote for a politician who is going to hire an enforcement officer who is going to threaten people or punish them with fines (theft) for doing things we don’t like. The only right we have in regards to someone doing something we don’t like (if they are not violating someone’s rights) is to walk away. Even in most cases when someone is violating the rights of others, walking away, fully disassociating, and encouraging others to do the same is far more effective than violence. When all the people in a community disassociate from someone, the result is ostracism. This may be geographical or not, but one does not need to be expelled from an area to be effectively cut off and isolated.
In cases of extremely violent and dangerous individuals, ostracism may be insufficient, but addressing that issue by pooling resources peacefully will be far more effective than by using this as an excuse to punish an entire society with taxes. We have an innate instinct for punishment, but justice is not served by another injustice. Choosing who to interact with carefully will achieve the stated goals of government regulation peacefully, efficiently, and morally. In our daily lives, we all have an important role to play in achieving a more free and just world. Every choice we make is an expression of our values. This powerful process of everyone expressing their preferences to determine social standards is only stifled by government.
When the principles of economics are applied only to things that can be valued in numbers, we miss out on their most important lessons. We tend to think of economics as "stuff having to do with money," but many exchanges of value occur without being counted in numbers at all. Every human interaction can be better understood as an economic exchange. We might think this cheapens interpersonal relations, but it actually elevates them.
Drawing an arbitrary line between what is and isn’t part of the economy limits our understanding of how rich we all are, and keeps us from properly understanding our most important relationships with friends, family, and loved ones. We don’t need paper or numbers in a relationship for there to be a great exchange of value. Even in a simple conversation, we are exchanging our time, energy, ideas, and attention. Every voluntary interaction happens because those involved think it benefits them. All voluntary interactions are economic transactions. Is marriage not a voluntary exchange of our most valuable assets of time, love, and affection?
When we arbitrarily separate what is and isn’t considered economics, we diminish the value of that which we exclude. Pretending these principles don’t apply in some situations encourages irrational behavior based on misunderstandings and inaccurate evaluations. This also creates openings for manipulation. The current system of measuring value that excludes relationships diminishes them and elevates the part of the economy prone to government manipulation. By expanding our concept of the economy, we can see the greater value in life that governments can never touch, and just how insignificant governments really are when it comes to the true sum of the human experience.