August 25, 2001

I predict that one day mankind will be free of government, so long as the Internet remains free of intervention... and I am not even bullish on tech stocks, go figure - Ed Bugos

When wealthy people become influential and are one day faced with the prospect of economic loss they are apt to betray the free market regardless that it may have helped to make them. It takes strong character to avoid the temptation to tilt the playing field in one's own favor, if it is at all possible, and as someone important once said, the truest test of any person's character is to award them power.

Maybe money really does buy a whole new set of problems.

But on to something else here. Consider these thoughts a brief interlude, or even prelude if you will, to the next issue of the goldenbar report, In Gold We Trust.

When discussing the gold market it is difficult to avoid politics because Gold's 8000 year old history is itself scarred by the conflict between the State and Individual, over its importance to society. The former claims that it is the instrument of greed and capitalism, and wholly unnecessary in a civilized Fiat world, while the latter claims that it is the instrument of freedom and capitalism, and necessary to keep mankind honest.

Still, to attach the word greed and all its meaning to capitalism rather than to the behavior of some human(s) is like blaming the gun for a murder... like saying that guns do in fact kill people... send the murderer on a State paid vacation for one, for all his (or her) trouble, thank you.

In fact, the latter, or those that serve mankind's (the Individual) libertarian interests, hold that it is the world of Fiat, which produces kind of a dishonest greed, if you will... the kind of greed where it is tempting to tell on your neighbor for that promotion, rather than the kind that is better to be called motivation... the kind that gives all the others a bad name... and the kind that will give capitalism a bad name some day if the current establishment has its way (how can you tell which side I am on).

Nonetheless, in order to grasp the scope of the potential bull market in gold prices, it is perhaps worthy to understand the nature of the unending conflict between the State and the Individual, and to assess where we are today in that progressive battle. It is in this context that the investor will be able to understand the nature of the Gold business and prices - I didn't say predict them - over the long term.

What has the government done for America's freedom, with all of its Gold? Are American's more free than they were, prior to say, 1913? Aren't you tired of doing for your country, and not getting anything in return from its custodian, except for more bills and promises about the future?

Here's a good door opener: why do people fear anarchy? To understand that, we need to discuss why people think that they need government.

Some believe that the government protects them from something, anarchists perhaps; some believe that the government helps them attain something; and yet others believe that government is a fact of life, as if it were the natural order of things. Still others think that anarchy means to live in a constant state of revolution. Though I suppose that without a government, the (unemployed) 'revolutionaries' would have to fight capitalists, or banks, as did Shay's Rebellion - an armed insurrection of debt-ridden farmers in Massachusetts whose brief rise and fall in 1786 set the constitution into motion.

Yet still, the key is that there has to be a reason for the revolution, and it is usually the result of the discovery that the playing field is not level, has no hope of becoming level, ever, and that someone else continues to keep it unleveled for their own benefit, whence the silent animosity grows into despair, anger, and then perhaps revolt.

Today, we have a developed legal system with nearly too much precedent for anyone to want to exploit anyone else in the first place. I'm sarcastic here, but there is some truth to it. Enforcement is another issue, but one that perhaps a smaller government could handle. Perhaps a legal system administered by a small government is preferable to one that is "decided" by a big one anyway.

Besides, Shay's Rebellion epitomized a time of widespread civil strife, which had more to do with the state of the union (before it became a union) than it did with angry debt ridden farmers (consumers today?). The unsuccessful rebellion was only the final straw, but it was enough to fan the fires of James Madison's Federalists.

The existence of a stealth "anarchy is better than no government at all, I suppose" (quip from author's father at dinner one evening). And so, the anti-Federalists gave in to a restricted government, one that was responsible to the Bill of Rights, which were designed to ensure citizens of the United States freedom of speech, freedom of the press, freedom of religion and freedom of assembly, among other things.

I cannot say whether I am an anarchist or not. I don't think I am, purely, however, I certainly stand for minimal government, particularly the interventionist kind.

But at any rate, I don't think that in the absence of government altogether the odds of a not justified revolution are any more likely than the odds that you and your neighbor will have a fist fight in the morning, unless of course someone were to unjustly assume the powers and privelage of government. As for your neighbor, if there were something that was to prevent a fight, it would probably be the thought of a lawsuit before it would be the idea that you or he might get hauled off to jail.

So, what assumptions then do we have to make about human nature to believe that a free society will be subjigated to a condition of constant strife? On the contrary, it is today, in modern, socialized, and overly governed society, which requires eternal vigilance of the principles of liberty.

On protection, Benjamin Franklin said it best when he noted the exchange of liberty for safety, not just our own, but also that which belongs to our children, and neighbor. For what? Peace? Chamberlain thought it was a good idea to let Mr. Hitler have nearly twice the concessions originally demanded from Czechoslovakia, in the name of peace. He was hailed a world hero for preventing an outbreak of war just before Churchill called it a total and unmitigated loss. Churchill was right, and accordingly, there was no peace.

What is to protect us from government, which is a natural peacetime oppressor of the individual? What makes us think that government's don't exploit our desire for peace? If they do, their objective cannot be to achieve it (because then the desire would not exist).

As for what the government can help us to attain, there is an entire body of economic knowledge that is seemingly lost on America, but which truths are entirely indisputable, and which has shown that the government is less effective than the market at helping society achieve most of its goals.

Government will always be a fact of life only in so far as humans need protection from themselves, and accordingly, as long as they believe that they need protection from others. But it is far from the natural order of things.

Furthermore, there is not an insignificant difference between the idea that our greatest threat is from ourselves (meaning other humans and our own delusions), and how we choose to deal with the consequences of that facet of human society.

To embrace more government is to invite the Trojan horse through the gate, because it is the public confidence (or money), which is the instrument, as well as the object, of acquisition - Thomas Jefferson.

Government is not the natural order of things, it is a man made institution, and it is subject to all the flaws of human ignorance, but even more importantly, it is the chosen form of our (unwitting?) captors.

So what is the answer, no government? Anarchy? I don't think that is the answer.

There may be some purpose, or utility, for government, though it must be a restricted purpose. If there is one point of contention that I can pick on, out of the utilitarian hemisphere, it is the idea that mankind "needs" society in order to maximize its own happiness.

Indeed, I think that is an easily exploitable delusion, one that is perpetrated on our insecurities almost each day. The truth is that while all government is man made, society is simply a fact of life. It is unavoidable, within reason, to live on this planet without coming into contact with other people, or groups of people.

Thus I contend that society is the natural order of things, among humans at any rate, not government. And whether society came before the individual or afterwards is not quite another chicken or egg argument, however, it is clear that individuals are drawn to society as inevitably as they are drawn into having relationships with the opposite sex… and I don't think it has anything to do with maximum happiness (I'm ducking here), nor does it have anything to do with the attraction of belonging to a pecking order, unlike the canine, who appears to thrive on a pecking order.

Furthermore, It is doubtful that the answer to improving our own interpersonal relationships lies with choosing someone to govern them, anymore than the answer to getting along in society is the same. Mind you, I'm not an expert at utilitarianism, so you can take that with a grain of salt, which is all I'll have to eat if my wife reads this... she'll raise my tax rate.

Seriously, I believe that the only reason for government to exist is to do a job that the market will not do but which we all would like to benefit from. But even that is an invitation, which has to be handled with care. Thus, this job has to be restricted to protecting the instruments of our individual freedom and liberty, as opposed to being allowed to become the instrument itself, of acquiring our liberty.

And if there is one thing, which we will discuss in the August issue of The Goldenbar Report, and which is the most precious guardian of that liberty, it is in awarding the individual with the choice of what is, or what isn't good enough to be money. Alan Greenspan said it concisely in only his title, 50 years ago: Gold and Economic Freedom.

Their relationship is truly inseparable, as we will soon find out I suspect.

Sincerely,
Edmond J. Bugos


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