Rights Are Reciprocal In Nature

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The conclusion that can be drawn from Lysander Spooner’s expositions on slavery and the injustice of the Civil War is that the rights are reciprocal.  Compulsory associate in the form of statehood is nothing more than slavery supported through the force of the U.S. Military. Kidnapping, false imprisonment, slavery, and other forms of coerced association violate the same underlying principle. All these forms of forced association restrict autonomous individuals. Who possess the implied right of unrestricted mobility. Suggesting they can travel or reside where they please as long they are not transgressing against the property rights of others. The right to self-ownership. Some may claim that this right inalienable and cannot be voluntarily transferred to another individual.  However, ownership implies that the owner can dispose of, consume, preserve, or transfer whatever they own. Even if that were to be the title to their own life. This could be feasibly transferred to another person via voluntary contracts.  The same can be said for individual rights being sold off or transferred even for temporary durations of time. When at work we are expected to abstain from making off-color or politically incorrect jokes while on the clock. In exchange for briefly and voluntarily suspending our right to free speech, we receive a conditional paycheck and continued employment.

Compulsory statehood not only violates the right to self-ownership by having the federal government assume control over the dissent citizens. It also transgresses a natural corollary of self-ownership, the right to free association.  If an individual owns themselves, they can choose who they associate with. Some may argue that you don’t choose your neighbors. Directly this observation is true. Indirectly it is false. Through purchasing a home in a specific neighborhood to consent to live near the people in the adjacent and parallel domiciles. This is quite qualitatively different then be forced to reside in a specific neighborhood by law or threat of military force. If the individuals residing in a certain geographic area all share similar sentiments and opt to become an autonomous region that is their prerogative. Yes, the Confederate South was guilty of the sin of slavery. Even considering this moral misstep, why should their right to free association be viewed as any less valid. Giving credence to the colloquialism “Two wrongs don’t make a right”. If were to examine the example of Catalonia, many Americans would be much more sympathetic to their separatist cause. In 2017, the Catalonian successionist movement presents a similar scenario.  A group of individuals self-identifying as Catalonian wanting to separate from Spain. Paralleling the Confederacy’s sense of southern identity driving them to want to become a sovereign governing body. Catalonia’s movement is easier to empathize with because it hasn’t been sullied and stained by any association with atrocities of the same magnitude as slavery.

The are other instances of the right of the free association being obscure by another issue. One of the most salient enemies of free association is political correctness. It is a lens that serves to only distort the general principle of having the right to choose whom you keep company with. Often, if you defend the right of state succession or the right not to associate with minority groups, you will be accused of bigotry. People believing that an unwavering defense of free association being tantamount to tacitly being racist demonstrates a lack of nuanced understanding. Not to mention this is nothing more than a superficial inference. It is possible to disagree with Jim Crow laws but also oppose the Civil Rights Act of 1964.  Both sets of laws infer our right to free association. Jim Crow laws are an example of forced exclusion. The state restricting who you can dine with, socialize with, and trade with through compulsory law. The Civil Rights Act of 1964 operates as a form of forced integration.  This phrase generally is utilized in the context of immigration it also applies within the context of the Civil Rights Act. Business owners are being forced by statutory law to ignore certain characteristics of job applicants in the hiring process. Even though the proprietor of the business does have legal title and liability for the enterprise he established and manages. There is even some debate as to whether private business owners have a right to discriminate against customers for nonessential goods and services. The Masterpiece Cakeshop LTD V. Colorado Civil Rights Commission case did appear to be a victory in the arena of free association. Many have erroneously labeled this situation as gay rights case.  This is incorrect. The larger principle behind this case is not whether a business is inclusive and accepts the transactions from everyone. Rather does the proprietor have the right to decline? The fact that the case involves a gay couple is unfortunate because it muddies the waters. Instead of commentators being focused on the principle of private property and individual liberty, they are all too fixated on the sexuality of the patrons who were denied service. If this had been a Neo-Nazi that had been denied service, who there has been any controversy? No. Making it reasonable to surmise that the social justice stance on discrimination is not only antithetical to our natural rights but is also hypocritical.  If we are truly committed to the principle of equality, then shouldn’t all businesses be forced to transact with every customer? Regardless if they are intoxicated and belligerent or white supremacy?  This frequently ignored question could lead someone to believe that the equality principle is one-sided.

It is utterly perplexing that most people fail to see the equivalence between various rights. For example, the right to gun ownership implies that an individual can abstain from owning a gun. The Second Amendment of the Constitution is predicated on the natural law principle of the right to defend one’s self and property.  The reciprocal nature of this right is somewhat self-evident.  This concept could easily be extrapolated to and to any of our other natural rights.  The ability to discriminate is at the very core of the principle of free association. Anytime we choose to patronize one restaurant over another we are actively engaging in a form of discrimination. The gay couple who were denied service by the Masterpiece Cakeshop could have easily utilized this principle to convey their dissatisfaction with the owners. Word of mouth can be the death knell for a small business, the couple could have easily told all their friends, family, co-workers, etc. about the incident. Urging of their close acquaintances to avoid this shop like the plague. Opting to discriminate against the shop. Is this an invalid form of protest? Not. It is equally as valid as a private company choosing to not do business with the couple.

This principle of voluntary discrimination makes state succession valid and any attempts to thwart these actions aggression. The south actively chose to discriminate between tolerating the overreach of the federal government or form their voluntary block of associated states. Through self-ownership and mutual consent among the citizens residing south of the Mason-Dixon line, this movement was valid. President Lincoln’s nationalistic initiative to force the south back into the Union was conspicuously transgressive.  


Spooner: Slavery and The Civil War= Morally Equal

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The concept of state secession has been viewed as being connected to support for slavery since the American Civil War. It seemed even in the modern era that if you advocate for the right of state secession you tacitly support slavery. Opportunistic pundits will not shay away from inferring that among many other contrived racists or Neo-Confederate proclivities. If we oppose slavery due to it being forced into involuntary servitude. A natural rights argument against slavery was first posited by John Locke in his work Second Treatise of Government. Suggesting that by a human being owning themselves due to their unalienable god-given rights slavery is illegitimate. Even though voluntary relinquishment, a man cannot transfer his title to self-ownership to another.

The extent to which this right to self-ownership is inalienable has come under question over the centuries. If we truly own ourselves, shouldn’t we be able to sell our freedom to pay a debt effectively transferring our title to self-ownership? In the past contractual arrangements have been made in the form of indentured servitude. Where the contracted party consents to work for no monetary compensation in exchange for other terms of payment. Operating as a form of barter. Generally, the terms of indentured servitude were temporary distinguishing it from slavery. Some economists even assert that voluntary slave arrangements are valid on the grounds of contractual consent. If compulsory slavery is invalid on grounds of self-ownership would not compulsory statehood also be illegitimate? The association of the original colonies was composed of an aggregate collective of individuals tired of being under the thumb of a distant mother country. In other words, this revolutionary coalition was formed under the conditions of voluntary association. If rights are reciprocal, for example, freedom of religion implies the right to abstain from religious observance, then various states have the right to withdraw consent and leave the union. Making Lincoln’s use of military force to thwart attempts of the south to secede be an abuse of power.

One unlikely defender of the right to state secession was the abolitionist and anarcho-political theorist Lysander Spooner. Spooner departed from his peers in the abolitionist movement by arguing that preventing the southern states from leaving the union was on par with the institution of slavery. Spooner in his essay No Treason #1 thoroughly expresses the illegitimate manner the Constitution was utilized to defend slavery:

“On the part of the North, the war was carried on, not to liberate the slaves, but by a government that had always perverted and violated the Constitution, to keep the slaves in bondage; and was still willing to do so, if the slaveholders could be thereby induced to stay in the Union.” (P.3).

Needless to say, Spooner was not a supporter of slavery. However, does this justify the aggressive actions on the part of the United States government? After all, is it not our duty to eradicate any form of injustice such as the vile institution of slavery by any means necessary? Even if that requires bloodshed? Even if it forces a large minority of people into a central government they do not desire to be a part of? Beyond the arguments of coercive force being used against the south, Lincoln’s motives were suspect. Per Thomas DiLorenzo’s book, The Real Lincoln, it is mentioned that Lincoln showed open disdain for the abolition movement. That he was even personally prejudiced against African-Americans. Lincoln enthusiastically advocating for sending all blacks out of the country to form a colony in Liberia.  As much as this development sounds like a conspiracy theory or the fabrication of a bored pulp fiction writer, it has been validated by several sources. Leading the inquisitive observe to wonder if the Civil War was more about consolidating power than anything else.

Spooner is quick to point out how it is perplexing that men who simply wish to no longer associate with the federal government soon become traitors:

“That men may rightfully be compelled to submit to, and support, a government that they do not want; and that resistance, on their part, makes them traitors and criminals.”

This brings into question how does not desire to be a part of the constitute treason? Spooner reasons that if the Constitution was founded on the principle of freedom, then statehood would be rested solely on consent. Invalidating any attempts to use military might to keep the loose confederation of states together. The implications of preserving the union for the sake of freedom exposes deeper hypocrisy than merely a disingenuous effort to free all those subjected to involuntary servitude in the tobacco plantations of the south.

“…. power of the government, is (as she thinks) forever expunged from the minds of the people. In short, the North exults beyond measure in the proof she has given, that a government, professedly resting on consent, will expend more life and treasure in crushing dissent, than any government, openly founded on force, has ever done. And she claims that she has done all this on behalf of liberty! On behalf of the free government! On behalf of the principle that government should rest on consent!..” (P.5-6).

Essentially the northeastern establishment undermined the principles of the founding to keep the south under the egis of the federal government. If the country was founded on the principle of voluntary association, such efforts directly violate this principle. The rhetoric of fighting the south to preserve a unified and free America is a falsehood. Nothing more than the empty and halfhearted lips service that we have grown to expect in modern politics. It does not matter if the actions of the state reflect an honest reverence towards the right of volunteer association. Some scholars surmise that this right is implicit in the First Amendment, others argue that this interpretation is a little murky. From a purely natural rights standpoint, it is a clear violation to force people to join clubs and other varieties of political and social affiliation.  To blithely not only violate this right but to claim that it was done so to preserve liberty is a grotesque fallacy. Parallels the empty sentiment behind the modern phenomenon of national building. The falsehoods behind and bloviating are used to justify a nearly two-decade war(s?) in the Middle East. The United States has become the exalted missionary of liberal democracy. Nearly two centuries prior the United States adorned the false mask of the exalted liberator of slaves. Even though most of the Europeans had already abolished slavery peacefully. Like our contrived moral imperatives for engaging in our middle eastern campaigns, the Civil War was commerce under similar fallacies. To suggest the Civil War was executed the preserving the freedom of the average citizen is a slap in the face. One only needs to look at his overextension of power during the conflict to truly understand his mentality. For example, his suspension of the Writ of Habeas Corpusalone demonstrates he was a far cry from a civil libertarian.

Spooner also presents several arguments that the majority ruling over the minority was outside of the original context of the constitution.  Forcing the southern states to remain part of the United States fully exemplifies the concept of the tyranny of the majority. The Constitution stating “… we the people..” does not only include the majority, but also the minority (p.7). He also claims that if the founders intended for the majority to rule over the minority Americans would have never become an independent nation (p.8). The American revolutionaries were the minority during the revolution. When compared to the size and scope of the British Empire. Spooner also mentions that the intentions of majorities are no better or worse than those of minority groups. Both having similar wants, needs, and being predisposed to the same faults as humans make demonizing the opposition illogical (p.8). Certainly, this wisdom of not demonizing the opposition has been lost in the contemporary political climate. The majority opinion in society isn’t necessarily wise. Conventional wisdom is rife with ignorance, superstitions, and prejudice  (p. 8). It is irrational to claim a policy position, or another idea is valid due to it being popular. Such a justification can be reduced to nothing more than an example of the  Argumentum ad populum fallacy. Popularity does not automatically make an idea or an action correct.

Spooner goes on to mention how the tyranny of the majority creates a cost struggle between slave and master. Who the slave is and who the slave is varied depending upon which party is in power. Generating a competition for usurping control away from the opposing party.

The principle that the majority have a right to rule the minority, practically resolves all government into a mere contest between two bodies of men, as to which of them shall be masters, and which of them slaves; a contest, that-however bloody – can, as things, never be finally closed, so long as man refuses to be a slave …” (p.9).

The Civil War perfectly encapsulates the power struggle between various political factions. Echoing the concerns voiced by James Madison around the time of America’s founding. Vying political factions striving to achieve their objectives. The north’s desire to keep centralize and expand the power of the federal government. Leading to the use of military force. Preventing the south from separating from the United States. Effectively forcing the south to remain part of the country for political reasons. Parallels slavery. Slavery, kidnapping, false imprisonment, and forced association all violate our natural rights. The fact that the commonalities between forcing the south to remain part of the Union and slavery are awe-inspiring.

Spooner- Argument #25 Against The U.S. Post Office

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In his seminal pamphlet, The Unconstitutionality of the Laws of Congress, prohibiting Private Mails, Lysander Spooner provides twenty-seven brief arguments countering the veracity of the government-held monopoly on mail services. More specifically arguing from the perspective of Constitutional law. Utilizing the precepts of the U.S. Constitution, Spooner derives numerous thought-provoking arguments that challenged the government prohibition on private mail carriers. One of Spooner’s more novel arguments is presented in argument # 25 (p.12) of his pamphlet.

Spooner writes:

“25. If the exclusive right of carrying letters, has been granted to Congress, then it is unconstitutional for a person even to carry a single letter for a friend. And Congress is bound to punish such an act as an offense against the constitution.”

At first glance, this argument may seem thin or even frivolous. However, the implications of this refutation are much deeper than loose extrapolation. If we were to replace “letter” with any other legal commodity, such sanctions would be absurd. For example, the United States government has the exclusive right to sell, produce, and distribute bread. Making the production, sale, or transfer of bread by any private company Constitutionally barred. Any commentator with a market-oriented position on economic would be quick to decry this as “socialism”. The government attempting to monopolize and control the market for bread. If such a notion of government control of bread production seems inordinate, couldn’t the same be said of letter carrier services? The transaction costs of private companies delivering letters domestically are low. The government’s fixation with keeping private carriers out of the market back in the 1840s was puzzling.

Spooner carries the argument to its logical conclusion by extending it to the potential of congressional restrictions on gifts.  He states that “… then it is unconstitutional for a person even to carry a single letter for a friend. And Congress is bound to punish such an act as an offense against the constitution. “Hand delivering a letter to a friend is only a step away from giving a gift to a friend. The only difference is the intent. Hand delivering a message is intended to disseminate information. Giving a tangible item to a friend with no expectation of direct reciprocity is a gift. As soon as you are trading tangible goods it becomes a form of barter. Does transporting a letter somehow become crass or require the need for state intervention upon exchanging money for this service? Even if we are paying someone to deliver a letter to someone else, this is a form of volunteer exchange. Just as much as giving someone a gift or opting to cut the middleman out and hand-deliver a letter to a friend. If I am not stealing the envelope, ink, and paper to compose a letter.  No laws are being violated while transporting the letter, there shouldn’t be an issue. If a private company (subject to taxation) wants to provide the service of transporting that same letter for a fair price, congress should not obscure this free exchange. Especially if the company is being taxed. However, the legitimacy of taxation is a whole other stand-alone argument. If an organization pays to play and the transaction costs of such a business are low. Any functional counterargument is at best flimsy.

Outside of the Constitutional concerns of congress veering into unjustly regulating trade. Something that happens frequently in modern society as the Commerce Clause has been stretched beyond its original intent. Generating several perverse interpretations of this clause.  There is a strong natural rights perspective implied in Spooner’s twenty-fifth argument. If a person composes a letter, it is their letter. As in the own the physical paper it was written on and the envelope it is sealed in. While the letter is in their possession they can do as they like with the letter. They could burn it in their fireplace. The author of the letter could elect to frame the letter. They could throw it into the recycling bin. Even better yet they could choose to give it to another person. To convey a message to the letter’s intended recipient. Instead of wasting time, energy, and resource on driving across the country to deliver the letter, they can decide to transfer this duty to a third-party. In effect, temporarily consigning possessing of the letter to the third-party carrier. In any developed market system, it would be fair to say that the consumer shouldn’t be restricted to using one carrier. By owning the letter, the consumer should not be restricted by legal barriers when choosing a vendor. It would be one thing if there was a natural monopoly (if such a thing exists) then the only other choice the customer has is to transport the letter by their efforts. When the government skews the interpretation of the Constitution to carrier barriers to entry into the market.  Spooner highlights this point in his earlier arguments.  For instance, argument #1:

“1. The Constitution of the United States (Art. 1. Sec. 8.) declares that II the Congress shall have the power to establish post-offices and post roads.” These words contain the whole grant, and therefore express the extent of the authority granted to Congress. They define the power, and the power is limited by the definition, the power of Congress, then, is simply” to establish post-offices and post roads,” of their own not to interfere with those established by others.” (p.5).

Spooner fully asserts that has written, Congress has the power to establish a postal service along with the parallel infrastructure to support mail delivery. Nothing more. The power is not extended to ensure that no other entrants pursue the same line of work. Nor does it explicitly state that congress is required to distribute sanctions for market entry. Not only does congress acting against private mail carriers inhibit natural property rights, but it is an overextension of the intended duty of creating a postal service. Meaning that any action taken against Spooner’s business The American Letter Mail Company was illegitimate.  Did nothing more than preserve the jobs of bureaucrats and place artificial barriers on the natural cadence of market processes. The antithesis of preserving our natural rights and liberties.   

Privatizing Mail: Lysander Spooner V. U.S. Postal Service

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What was that power? It was, as has been shown, merely a power concurrent with that of the states and people, .. to establish post offices and post roads.” Only a concurrent power, then, having been delegated, and a like power not having been prohibited to the states or people, it necessarily follows, from the terms of the amendment itself, that a concurrent power to establish them is .. reserved” to the states respectively, or to the people-or to both.

Lysander Spooner (P.21 The Unconstitutionality of the Laws of Congress, prohibiting Private Mails. 1844)

Before the founding of private parcel carriers, such as UPS or FedEx, the United States Postal Service had a monopoly on the delivery of small packages. Until one man, Lysander Spooner decided to openly challenge the government’s industry dominance. Ultimately, the U.S. government won the battle. Spooner arguably won the war. His victory immortalized in the fact that he forced the hand of the U.S. Mail service to lower the costs of stamps through his valiant entrepreneurial efforts. Effectively driving the cost of stamps down to actual market rates. Earning the bold political philosopher the moniker “Father of the Three Cent Stamp”. Spooner observing the illegitimate manner in which the government monopolized this service, braving the risk of legal action, decided to create his private mail service. Servicing parcel and letter delivery from Boston through the mid-Atlantic. All the while undercutting the grossly inflated shipping rates set by the government.

Lysander Spooner was born on a rural farmhouse in Athol, Massachusetts on January 19th, 1809. He was one of nine children. It was speculated that Spooner’s fervently religious upbring influenced his later turn towards deism. Along with a commitment to religion, his family also were staunch supporters of the abolition movement. At the age of sixteen, he entered an agreement with his father to work on the farm until he was twenty-five. In exchange, Spooner was provided with food, room and board, and “educational advantages”. After fulfilling his obligation to his father, Spooner worked as a clerk for the Register of Deeds in Worcester, Massachusetts. In 1833, studied law under John Davis while working in his office. Spooner eventually went on to start his legal practice. Acting in defiance of the Massachusetts mandate that lawyers either have a college degree or study five years under a practicing lawyer. Spooner perceived this law as being discriminatory towards the “well-educated poor”. Drawing parallels to the artificial barriers to entry created through state occupational licensing requirements. Spooner even petitioned the Massachusetts General Court to challenge the veracity of this requirement in 1835.

In 1844, Spooner founded the American Letter Mail company. Audaciously announcing the incorporation of his enterprise to the U.S. Postmaster General. Reacting to the skyrocketing costs of postage in the 1840s. The cost of sending a letter from Maryland to Massachusetts was 18.75 cents. Approximately twenty-five percent of workers’ daily wages at the time. Two weeks after his grand announcement Spooner was delivering letters between Boston, New York, and Baltimore. Offering patrons this service for a mere 5 cents per stamp rate. A drastically more economical option than the exorbitantly priced stamps required to be delivered by the USPS. Doing something the Postal Service of the nineteenth century could not accomplish. Deliver mail quickly, efficiently, and all at a fair price. All benefits could not be achieved by the U.S. Mail due to the organization be rife with corruption and bureaucratic red tape. The U.S. Postal Service possessing a monopoly position in the market afforded the organization the ability to set prices.

Naturally, Spooner soon came under fire from the U.S. Post Office. Less than a week of being in business “… Congress introduced a resolution to investigate the establishment of private post offices..”. After only being in business for several months Spooner and a few of his employees were detained for transporting letters by train to Baltimore. After being incarcerated for nearly three months and grappling with other legal troubles Spooner was released from prison. The American public became accustomed to lower postage rates, meaning the U.S. post office had to lower the cost of their stamps. This resulted in many of the customers using private carriers returning to using USPS. This combined with the legal fees incurred through Spooner’s legal battles with the U.S. Government contributed to the bankruptcy of his business. After the failure of his business venture, Spooner went on to be an influential figure in the abolitionist movement.

Spooner was able to give the inefficient appendage of the federal government dedicated to delivering mail a run for its money. Through this market distribution despite the failure of Spooner’s business, he succeeded in lowering the price of postage in the United States. He did so through market forces. Directing the U.S Post Office to follow suit with providing comparable pricing to the public. This was achieved in the absence of legislation or other typical forms of political action. Truly living up to his reputation as an anarchist. Regulation suffers from the lethargy of political processes. Changes made to adjust to market conditions are much more instantaneous. Demonstrated how quickly postage rates dropped after Spooner started delivering letters.

In the spirit of Spooner and his contributions to anarchist political theory, it is interesting how there is a discrepancy between when the government engages in questionable conduct and when a private citizen does. Few questioned the government monopoly on mail delivery, but when a private citizen attempts to bring competition into the market he is ligated out of business. However, when private companies start to dominate specific industries at the end of the 19th century, there was then a moral imperative to break up this concentration of market power. The christening of this crusade was punctuated by the passage of the Sherman Antitrust Act in 1890. It would be fair to respond to this charge of hypocrisy, by stating that when Spooner waged war on the monopoly in letter carrier services there wasn’t any precedence for antitrust law in American jurisprudence at the time. Good point, but even in the light of the fully developed and sophisticated antitrust law we have today there are still state-dominated monopolies on the production of goods and services. The most salient example being defense. Some cling to the Samuelsonian public goods argument for keeping the government monopoly on defense. Keen scholars of political economy may even invoke Coase’s Theorem to justify state provision of defense services. For those who are skeptical of the legitimacy of state intervention, there still appears to be a double standard.

Lysander Spooner Week

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I officially declare the week of January 19th Lysander Spooner week. To commemorate the birthday of this legendary contributor to anarcho-political theory. I am proud to say I happen to share a birthday with this renowned theorist. Not to mention one that was heavily influential on the development of anarcho-capitalism (although arguably Spooner had some socialistic tendencies).  Next week, I will attempt to dedicate two essays to the life and work of Spooner. I will not allow this influential figure in Libertarian political theory to become a minuscule footnote!

Arjuna’s Dilemma

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Arjuna the protagonist of the Indian epic, the Mahabharata, encounters a significant moral quandary during the story. During a civil insurrection, Arjuna the prince of Pandavas was valiantly leading his army to victory when he is faced with a tough decision. In the middle of battle, he recognizes some of the faces of the soldiers in the opposing army. Former teachers, friends, and even family members. Naturally, Arjuna was conflicted about having to fight his loved ones and friends in battle. How could anyone of us turn the sword on one of a member of our own family? Choosing between defending one’s honor and family is an impossible decision to make. The tug-of-war is an existential struggle between duty and the desire for his family to be safe. Does duty weigh heavier on the obligations of an aspiring young ruler than blood? This scenario of conflicting interests leaving Arjuna in an ethical stalemate has become known as Arjuna’s Dilemma.  

How does our hero break out of his moral conundrum? The young prince receives sage advice from an unlikely source. Little does Arjuna know that his charioteer is the Hindu deity Krishna and had been observing his struggling with having to kill his friends in family in combat. The wise god explains to the prince that duty supersedes everything else even familial ties. Arjuna’s duty is to his subjects. To passively allow a violent civil-war to transpire without properly defending his people, his title to rule; would be an abandonment of duty. It is important to note, that we should not be consumed by duty. The moment duty crosses the line to desire we are drifting away from wisdom and enlightenment. It could easily be surmised that duty isn’t converted into desire until duty is combined with ambition. At that point, our “pursuit” of duty is more of self-serving objective than fulfilling a moral obligation. Whether we are being motivated by material gain, vanity, or another self-centered purpose. The excessive drive to fulfill duty generally indicates our endeavor is beyond the scope of our societal obligations.

Aspects of this allegory may not apply to every time in history or every culture, it still conveys a universal message that applies to humanity. We shouldn’t allow ourselves to be consumed by work. Yes, we have a duty to ourselves and our families to be self-supporting. However, when we allow our work-life balance to become skewed towards work, we are starting to allow ourselves to be consumed by duty.  It may be the prestige of being an employee of the quarter or the dangling carrot that is the empty promise of promotion. Often these goals are beyond the reach of our immediate duty. Typically, these aspirations are outside of the realm of moral duty. Sure, we all want nice things. To own a nice house, the white picket fence, the American Dream.

There is nothing wrong with desiring to have a comfortable life from a material standpoint. However, what everyone needs to assess is what are we sacrificing to make this happen? In a circuitous manner, this what Krishna articulated to Arjuna. Adhering to your duty is a natural safeguard that prevents you from being commandeered by your desires. A normative limitation that keeps us in check. Focusing on duty, rather than wealth or esteem, keeps us grounded. Like all things in life, there is a balance. If you are working so many hours that you barely see your family. You are potentially abdicating your duty to your family. While you do need to provide financial support to them, they also require your intangible support as well. Including emotional support. Having a worldview that considers duty keeps us grounded and focused on what is important versus being led astray by distractions. When our ambitions become our focal point, we end up levitating towards the end of the duty fulfillment bell curve. Just as much as having a lack of motivation and succumbing to sloth is a failure to fulfill our duty. It is a vice that happens to be on the opposite of the distribution as excessive ambition. Nevertheless, two sides of the same coin.

Sometimes It Is Easier to Be Ignorant

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Arguably one of the most famous quotes attributed to Socrates is “The unexamined life is not worth living”. It is the type of quote we have grown to expect from such as deep and contemplative thinker. Is this truly the best advice for the average person? Not that I would ever veer into the territory of philistinism, but is every aspect of life worth examining? Better yet, are such intellectual endeavors even productive for the average person?  I would argue no. Not because I seek to celebrate ignorance, nor do I lack faith in the intellectual capacity of my friends and neighbors. Sometimes knowledge is more trouble than it is worth. Everyone is familiar with the colloquialism “curiosity killed the cat”. As simplistic and folksy as that old saying might be. It does contain a grain of truth. In the pursuit of knowledge, we risk becoming jaded and overwhelmed by some of the more unpleasant aspects of reality.

Do you remember the disappointment you felt we discovered Santa Clause wasn’t real? Even worse, your parents’ marriage was nothing more than a sham? These examples may seem trivial but applied to grander questions they can make someone very skeptical. Skeptical to such an extent it brings them to the brink of an existential crisis. If you have devoted your life to political activism and you come across a few Public Choice articles regarding voting, you will grapple with your sense of identity. Being told that your vote carrying any weight is nothing more than an illusion is difficult to pill to swallow. Especially much of your sense of self and principles are derived from believing you have sway over political issues. Therefore, it isn’t necessarily prudent to want to dissect all of the mysteries of the universe. Even if it is a lie, sometimes that one lie is what helps people cope with the difficulties of life.

Looking too deeply into an issue is generally counterproductive at most jobs. The ability to extrapolated basic logic is generally rewarded. To overthink an issue, will cost your employer and customer time and money. Utilizing reason to more efficiently perform a task is conducive to being a “good employee”. Pondering the large philosophical questions at work eats into productivity. Also, getting so philosophical that you question the entire veracity of the enterprise of your employer’s goals or metrics will not win you any friends. Overtly questioning your superior’s decisions in Socratic prose will award you with some unfortunate adversaries. Speaking of friends, you will not be making very many. Most of your co-workers will think you are weird for not accepting the prima facie assumptions of our world. In most cases, avoid you like the plague. For all the philosophy majors currently working retail, at call centers, offices, etc. I feel for you. Your love of wisdom and truth can effectively alienates you from your peers.

Outside of the pursuit of knowledge destroying your coveted illusions and making you something of a misfit, is another issue, you can never put the genie back in the bottle. Once you have seen the truth, it might be enlightening, but you never look at the world the same way again. I do not personally subscribe to the new-age movement, but many who do talking about opening their third-eye. In most instances, these individuals will tell you don’t open your third-eye if you like your life the way it is. Why?  Once you have become enlightened, it is a point of no return. You can’t unlearn the secrets of the universe. You will never enjoy the pleasures of binge-watching reality television after a bad day at work if you have learned it is nothing more than a farce. Speaking of your job, the stable nine to five, you might want to quit your job because you figure out it is pointless. Decided to take on the risk of becoming an entrepreneur in an attempt to find a meaningful vocation. This is a lot of disruption for one person, especially if they are more than content with keeping the status quo intact.

I have never attempted to open my third-eye. However, I love to study philosophy and political economy. Once you have opened Pandora’s box of uncommon knowledge you will begin to crave it. Much like tapping into a deeper sense of consciousness, you can never see the world the same way again. Leading to some conflicts. I find it more and more difficult to care about my day job. I am a proponent of capitalism and all, however, I know there are better ways to make a living. I will never have the same work ethic I had before my independent study of the large questions. It was much easier to keep my nose down and get my job done back when I was ignorant. Demonstrating that it can be maladaptive for some people to reflect upon vast questions such as the quiddity of existence.

The process of seeking wisdom is never easy. Whether the actual pursuit is what makes a man weary or it’s the consequence of not being able to cherry-pick the pleasant truths from the unpleasant ones. This is why it can sometimes be a lonely path. For those who are inclined to take up the challenge, it is the only path. Despite the downsides of pursuing truth, knowledge, and wisdom in an imprudent world, for some, this is their only true calling. They are the ones who seek daylight when everyone else opts to remain in the cave. It is important to remember that pursuing truth does have its pitfall beyond misconstruing it. One excerpt from Plato’s Republic that encapsulates this point beautifully. It was about Socrates’ telling of the Allegory of the Cave in the book:  

            Therefore, even if a person should compel him to look to the light

            Itself, would he not have the pain in his eyes and shun it, and then,

            turning what he really could behold, reckon these as really more clear

            than what had been previously pointed out? (p.235).

That is it. The truth can be inconvenient. The truth could even unravel the very fabric of our being. Especially if it is predicated upon a false sense of identity or a flimsy house of cards built upon numerous lies. Much like almost all of the other cave dwellers in Socratic allegory chose to ignore the truth. Most of society elects to do the same. Similar to the discomfort experienced when our eyes adjust to direct sunlight, it can also be uncomfortable to be confronted with the unadulterated truth.

Romeo and Juliet – A Story About Wanting What We Can’t Have

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After watching the documentary I Love You, Now Die: The Commonwealth V. Michelle Carter I came to a fairly superficial conclusion. I initially chose to watch this HBO mini-series for potential legal analysis. I plan to address those concerns in a later blog entry. Oddly, from a legal standpoint, this case is quite interesting. There wasn’t any previous case precedence in Massachusetts state history. Making this case one that explores uncharted waters.  However, my observations are not about the legal facts of the case.

Conrad Roy III and Michelle Carter were two Massachusetts teens who had a highly toxic and co-dependent relationship. Both suffering from various forms of mental illness. Carter lived in a quasi-fantasyland. Blurring the line between romantic comedies and dramas with her relationship with Roy. Drawing parallels between their relationship and the ebbs-and-flows of numerous works of fiction. Even drifting down the perverse road of suicidal ideation. Hence, here aggressive attempts to coax Roy into killing himself. Carter almost took glee in the concept of the attention she would receive in the climatic event that Roy or Roy and herself had committed suicide. Her vision of being showered in attention was almost like a linear plot twist in play. The act of Roy killing himself was the divine Deus ex Machina to free him from the deepest depth of depression. Having the potential to satisfy the psychological pathology of both teens.

In one text message string, Carter details the romanticized depiction of the climatic end of Shakespeare’s Rome and Juliet. As we all, know both of the star-crossed teens end up dying in the end. Lying dead, right next to one another in the ultimate display of catharsis. Demonstrating to the quarreling families how petty their disputes truly were. It would be quite likely Carter saw some highly embellished similarities between the protagonists of the play and her relationship. Upon the documentary reviewing this string of text messages, my mind began to wander. I started to realize that the story of Romeo and Juliet if we strip all the emotional entrapment of romance is nothing more than an extended narrative detailing the Forbidden Fruit Effect. This phenomenon is also known as the Paradox of Temptation. Essentially, we desire what we cannot have.

This has economized instances of prohibited commodities. This principle is not confined merely to the illicit drug trade. During the cigar boom of the late-1990s and early 2000s, the U.S. demand for Cuban cigars skyrocket. To the extent that there was a major slump in quality. The one centralized tobacco producer for Cuba had to resort to using green tobacco and inferior quality control procedures to keep up with demand. It should be noted that the United States has had a trade embargo with Cuban since 1962. It’s hard to believe that much of the mystique of Cuban cigars to Americans isn’t influenced by them is a restricted product. We have seen a similar phenomenon with the legalization of recreational marijuana. What has been referred to as the “Green Rush”. A surge of sales for a product that has been legal and demonized in America for decades, that is now finally legal. To the naïve Cannabis user, the mystery behind its pharmacologic effects is enough of a draw to purchase Marijuana-related products. Would this romanticized image exist to the same capacity if Marijuana use was as ubiquitous as drinking beer? Most likely not. Most of the buzz and hype is levitating around pot because we have treated it as an unholy and deplorable vice for so long. Has only recently become fashionable (in the mainstream sense).

The story of Romeo and Juliet is if reduced to its most base level, a story about wanting what you can’t have. Due to the fact we steeped the narrative in a cloak of riveting romanticism, we forget that this isn’t purely a love store. Would Juliet be as appealing to Romeo if she was a member of a rival family? Couldn’t the same be said for Romeo? Granted, most of these pointed questions are a mix of a priori reasoning and loose conjecture. However, considering the flaws of human nature and the unfortunate fact we are attracted to what we can’t have. Analogous to a moth witlessly fly towards a flame. This seems to be an enduring characteristic of the human condition. Doesn’t matter whether it is two lustful teenagers in the Shakespearean-era or a 1920s Flapper enjoying an illicit gin-and-tonic. We want what we can’t have. Getting beyond the compelling drama of the vibrant and rebellious love affair between two teens, what are we left with? An engaging allegory fixated on desire. The drawbacks of pursuing everything we desire to possess.

The Paradox of Coupons

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Do coupons help us save money? This very question may seem counterintuitive, but it is one worth entertaining. Coupons certainly help us save money if they are for purchases that were planned expenses. Such as regularly purchased necessities, for example, a coupon for broccoli at the local grocery store. A nutritious food item that is frequently purchased by Mr. Jones. In this instance, it would be awfully difficult to argue against the fact that Mr. Jones is saving money through using a coupon. The same could also be applicable for luxury items that are planned expenses. Let’s say Mr. Jones takes his wife out to dinner every third Thursday of the month. Mr. Jones and his wife dine regularly at the same chain-restaurant every month. Mr. Jones finds a coupon in the local paper for 25% off his next meal for this very same eatery. Even though dining in a restaurant is not a necessity Jones is still saving money because this luxury was a planned expense. He is not going out of his way to obtain a product or service he hasn’t budgeted for.

So when does use a coupon or taking advantage of a sale not result in the patron saving money? It should be stated that there is a lot of subtlety and nuance in addressing this question. From a prima facie standpoint, using a coupon always results in savings. Why? Because the customer is receiving a discounted price on the specified product or service. This superficial assumption only analyzes one single transaction. If we are assessing Mr. Jones’s total finances on the hyper-microlevel, then yes, he has saved money by using a coupon. However,  the thin line distinguishing between a budgeted purchase and an impulsive one is where the difference truly lies. The discount provided by a coupon saves money on a single purchase. If the customer goes out of their way to purchase an impulse item that was not planned for they are not genuinely saving any money. Perhaps they are on a single transaction. The allure of saving money with no consideration given to whether they want or need the product or service is not conducive to the overall conservation of money. The individual who is a spendthrift is still spending money recklessly even if they are saving a few dollars on a single transaction. The real metric that measures true savings is the comparison of typical spending to average income. If an individual can retain more of their income and curtail their previous consumption habits, they are truly saving money. The intentions behind clipping coupons are thwarted if it leads to an increase in overall consumption.

How we are seduced by the opportunity to save money even on frivolous purchases has deeper psychological implications than being the victim of an illusion or flawed logic. For some people, they get a dopamine hit when they are hunting down a deal. Mirroring the same neurochemical reaction that a gambler experience when they allow their ex-ante perceptions to override their better judgment. As they dispense with probability as they continue to feed quarters into the slot machine. Making these deal hunters as much of a slave to the reward centers of the human brain as a junkie or gambling addict.

There is another explanation providing some insights into why we are often overvaluing the benefit of coupons. That would be the theory of Time Preference. Per the Austrian School of Economics,  Time Preference is the immutable fact that people value present consumption over future consumption. The  Austrian economist Eugen von Böhm-Bawerk applied this concept of valuing present consumption over future consumption to interest rates. Bohm-Barwerk postulated that people are willing to pay interest to obtain access to present goods for two reasons. For one, they anticipate having more income in the future.  Also, the perceived value of a good tends to diminish over time. Through considering these two variables Bohm-Barwerk added a temporal element to the economic theory of interest.  When time plays a factor in how people assess the value of goods and services it is fair to assume if you need to pay your mortgage tomorrow and happen to be $500.00 short you would be willing to pay more than the sum borrowed to have the money today. Meaning receiving that $500.00 today is worth more than the total sum loaned. It could be speculated that this is due to two factors. The fact that the individual receives the value of the money loaned plus the value of receiving itexpediently. The other factor isthat the individual receiving the loan enjoys the value of the $500.00 and the benefit of avoiding the penalties for making a late mortgage payment.

If the theory of time preference provides us with the precepts for understanding interest rates, how does this pertain to coupons? Time preference relates to coupons in the sense that sales, discounts, promotional codes, and coupons all influence our evaluation of goods. A coupon operates as a purported signal of a price reduction to the customer. If the customer perceives the value of the good or service to be higher than the discounted price, they will purchase it. Lowering the price of a commodity below market value makes the prospect of purchasing it more appealing to the customer. It could be argued that coupons can subjectively serve as a means of increasing an individual’s time preference. In other words, making them less apt to delay consumption and purchase the item that is on sale. Through lowering the price of a good it realigns the incentives of purchasing the item by providing a quantified value below the customer’s perception of expected value. Signaling to the customer that maybe that 12-pack of Guinness is worth pick-up from the grocery store. While $7.99 is an absolute steal. It is still $7.99 more than you had originally intended to spend. 

Is Fractional Reserve Banking Ethical Part V: Conclusion and Compromise

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The debate over whether Fractional Reserve Banking is ethical to proceed over approximately a decade (the late 1980s/ early 1990s to the early 2000s). Resulting from subsequent papers repudiating the previous claims over the researchers on the other side of the issue. It should be noted that in these series of retaliatory papers that technical arguments were presented in tandem with ethical justifications for or against this practice. For the sake of brevity, I chose to focus on the ethical considerations of the topic. However, this does not exclude a potential technical comparison of Fractional Reserve Banking in the future. 

To any reader who has never thoroughly examined nor given a second thought to Fractional Reserve Banking, I hope reading this series of essays was illuminating. Fractional Reserve Banking is arguably the most prevalent banking system globally. Yet, something that impacts our lives daily we never think to question its inner mechanics let alone whether it is ethical. The ethics of banking extend beyond whether the patrons are benefiting at the expense of someone else, either through easy access to loans or interest payment on savings. There are potential ramifications to the economy. 

Distortions in the credit market are precisely the impetus for business cycle calamities such as the cataclysmic burst of the Housing Bubble in 2007. Providing loans backed up by fiduciary media is nothing more than a house of cards waiting to fall done. Artificially manipulating factors such as prices, interests, and money supply can only facilitate the misallocation of resources. Such indicators operate as unspoken signals to consumers and entrepreneurs. Due to this fact, these distortions create an illusory image of the loan market and naturally economic agents respond accordingly (p.108). A fact that both George Selgin and Lawrence White are too quick to refute and dismiss (p.102). This carries the implications of defrauding the economy as a whole versus being isolated to the bank’s customers. Even if you are the type to limit all your transactions to precious metals or cryptocurrency, it is worthwhile to read up on this topic.

Summary of Compelling Arguments From the Austrian School:

It is difficult to say whether the Free-Bankers or the Austrians are on the right side of the debate. Both camps provided some truly convincing arguments. The Austrian opposition notes how ownership can only legitimately be taken on by one person and Fractional Reserve Bank obfuscates this immutable law of property ownership. From a contractual standpoint, that the agreements between banks and clients in such an argument are illegitimate. Since the terms are not only unclear to the typical layman but are a categorical misrepresentation. Presenting fiduciary media as actual money. The disingenuous nature of this faulty contract is only compounded by the fact that these claims for money are based upon the banknotes that are not back by currency or specie. Attempting to redeem them for actual currency is analogous to using a deed for a boat and attempt to claim ownership of a house. Also that it is a false analogy to argue that any devaluation of present money caused by the issue of fiduciary media is no different than an increase in the supply of a good due to protection or harvesting. 

This is because the increase in the supply of lumber from harvesting more oak trees is derived from legitimate market processes and in-turn does not seek to directly devalue anyone else’s property. Also, that in no way can Fractional Reserve Banking represent the Demonstrated preference of bank clients. Demonstrated preference can only be expressed with one’s property. Fractional Reserve Banking by its very nature disrupts this relationship.

Summary of Compelling Free-Banking Arguments:

The Free-Bankers also bring up some compelling moral defenses in favor of Fractional Reserve Banking. They are even bold enough to directly claim the practice is not fraudulent. Through a banking client electing to accept the terms of service regardless of their understanding, the contract is still valid. It would be one thing if these banks purported to practice 100 percent reserve banking, but function as a Fractional Reserve institution. These contracts are formulated between consenting adults, it would be antithetical to the principle of individual freedom to prohibit such arrangements. The real trouble comes from government interference. One only needs to look at the large array of protections awarded to backs through the FDCI to see the true culprit in shielding unsavory banking practices from insolvency or litigation. Also, the ignorance or the naiveté of the consumer is not a reasonable justification for banning a product or service. Even though the risk of a bank run is present, it is a relatively rare occurrence from a historical standpoint. If faced with a potential bank run the bank can issue an option clause suspending redemption, solving the issue through valid contractual recourse. Speaking of redeeming bank deposits. A customer assumes the risk of not being able to redeem money when they agree to open an FRB account. They assume the risk. In turn, for the opportunity cost of having their liquid money held and the potential risk of a bank run/ insolvency, they receive an interest payment. Overall, patrons must prefer Fractional Reserve systems to 100 percent reserve banking. There have never been any governmental decrees in modern history that all banking must be done via a Fractional Reserve System. Despite its flaws, ultimately, the people prefer being paid interest payments versus having to pay warehousing fees.

Can There Be a Compromise?

There are certain aspects of both arguments that appear to be flawed. The Free-Bankers are too lackadaisical when it comes to distortions in the credit structure enabled by Fractional Reserve Banking. The Austrians to some extent seem too rigid in their interpretation of property ownership. Under many of their arguments likening the practice to a Ponzi scheme. Yet, to be conceptually consistent would not these same economists also take issue with multi-level-marketing? Then again it could also be counter-argued that MLM schemes and Fractional Reserve Banking while present similar confusions, property rights have much greater degree clarity in MLM arraignments.

Back in 2000, the economist Jorg Guido Hulsmann wrote an article in the Independent Review refuting the Fractional Reserve practice of creating “money”. Hulsmann (see page 108) much like his anarcho-capitalist counterparts Hoppe and Block are opposed to government intervention. If FRB is morally and technically flawed how can we address the issue of it short-comings without introducing state involvement? In this twenty-year-old article, Hulsmann presents a summary of points previously made by Hoppe and Block that would alleviate some of the issues relating to the categorical confusion. It should be noted that Hulsmann in that these suggestions for informal rules and norms of banking presume no state involvement in banking. Also, the author details the intimate relationship between the FRB and the government. Going so far as to refer to it as a “handmaiden” of government (p.108). Making it easy to infer that Hulsmann believes that the intertangled marriage between Fractional Reserve Banking and government is an unbreakable bond. However, let’s take these suggested conditions as theoretical and contingent upon a banking system free of regulation. See his suggestions below:

“…Fractional reserve banks would have to use a different language than they commonly use because words such as “deposit” are deceptive. They would have to make it clear that money “deposited” with them is, in fact, a credit of unspecified duration. And the “banknotes” they issue would have to be presented not as money titles but as some sort of very liquid IOUs..”

            “..On the “FR notes,” one would have to find a promissory note of the following type:

 The FR Bank promises the holder of this note to try to redeem it out of its gold reserves. Because FR notes are not 100 percent covered by gold presently in our bank, in case we cannot redeem, the following rules apply. . . .  (p.108)”

Is Fractional Reserve Banking Ethical -Part IV: The Defense of Fractional Reserve Banking

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Part I: Click here.

Part II: Click here.

Part III: Click here.

It is quite clear at this point that followers of Austrian economics view Fractional Reserve Banking as nothing more than a Ponzi Scheme. However, proponents of the Free Banking School (arguably an outgrowth of the Austrian School) believe that this practice is legitimate providing there isn’t any government interference in banking. Even the uninitiated observer will admit that this contingency is a highly unrealistic one. In the modern era, banking continues to be a heavily regulated industry. Free Bankers may have a relatively cogent ethical argument from a theoretical standpoint. After all, it is the responsibility of a mentally competent adult to be aware of the terms of service for any product or service they choose to receive. Ignoring the fine is not an exculpatory factor. Either from a legal standpoint or from an ethical perspective. Also, to be conceptually consistent one should scrutinize multi-level marketing schemes. Such a business model mirrors similarities to Fractional Reserve Banking. Hence why opponents liken it to a Ponzi scheme or pyramid scam.

Argument #1: It Isn’t Fraud.

From the Free Banking perspective, Fractional Reserve Banking is not a fraud. If the banking establishment makes it clear that the services provided constitute Fractional Reserve Banking, then the arrangement is legitimate. This is because the terms of the contract were not violated (p. 87). It would be problematic to present your services as 100 percent reserve banking if it encompasses the practices of the Fractional Reserve System. Fraud would entail a misrepresentation of the bank’s services. 

Taking any measures to prohibit this system of banking is antithetical to the principle of individual freedom. Any such interference would  be obstructing an existing contract between consenting parties. Doing nothing more than disturbing the economic liberty of freedom of contract, which is a pillar of private property rights (p. 87). Individuals who oppose the practice find the freedom of contract argument to be farfetched as few patrons have a firm comprehension of what Fractional Reserve banking entails (p. 88). The naivete of the consumer does not sully the legitimacy of the arrangement. Even Murray Rothbard himself has stated that historically banks have rarely retained a 100 percent reserve system (p.88). Why? Most likely because the banks clients preferred a Fractional Reserve system. If customers prefer an interest payment on their savings versus a maintenance fee for warehousing, so be it (p.88). The market for banking services has responded accordingly.

Circling back to the issue of misrepresentation of services, even the hardline naysayers believe that such a banking system could be admissible under certain conditions. Most notably if there was the further elucidation of the specific details of fractional reserve services. A long-standing concern of economists such as Hans Hermann Hoppe and Walter Block being that such ambiguity makes the practice fraudulent. Creates categorical confusions between money and fiduciary media (p.20-28). Professor Block asserts that the redemption requirements need to be clarified to set aside the concerns of fraud (p. 89). Whereas Block’s counterpart Hoppe stresses that banking institutions should present a warning regarding the suspension of redemption. He analogizes this precautionary courtesy to an option clause. Unfortunately, this concern does not comport with the facts of history. As is evident by the Scottish period of Free-Banking in which specie payment was suspended for decades (p. 89-90).

Another argument that grapples with the question of whether FRB is fraudulent pertains to the ability of the banks to fulfill redemption obligations. Keeping low percentages of reserves on hand turns money redemption into a gamble. However, this concern is inconsequential. Historically even in the absence of government intervention few banks have failed to fulfill any redemption obligations to patrons (p.90). For one, solvent banks are not prone to bank runs. Even in the event, a solvent bank runs out of currency, they can issue an option clause to temporarily suspending redemption. Resolving the issue through contractual channels (p. 91).

Argument #2- The Concerns Over Third-Party Effects Are Not Substantial

The most salient third-party effect or “spill-over effect” confronting the practice of Fractional Reserve Banking is a decreased likelihood of successful redemption. Obviously, in a Fractional Reserve Banking system, the more money that is lent out the fewer reserves the bank will have on-hand. Resulting in adverse consequences for the individual demanding to withdraw money from their account. It should be noted that the depositor agrees to this argument upon opening a bank account. Therefore, by signing on the dotted line of the terms and services of the bank, they choose to assume the risk (p. 93). Despite the risks, bank patrons continue to bank with these institutions. Alone based upon the Rothbardian theory of Demonstrated Preference the individual bankers must benefit from this arrangement. After weighing the benefits concerning the costs (p.93). 

The spill-over effects of Fractional Reserve Banking are not solely confined to banking transactions. The practice has also been claimed to create other distortions throughout the economy. Through how loans are funded it compromises some say the credit structure is compromised. It should be noted that the risks are somewhat minimal. If anything it aides the economy by providing a larger stock of capital (p.94). The issue with this criticism is that much of the instability in the economy comes from the intervention of central banks and governments and not Fractional Reserve Banking. This form of banking is not prone to instability or “cylindrical over-expansion”(p.94). These claims underestimate the fact that the amount of “nominal money” issued offsets the “.. changes in the velocity of money..”. Fractional Reserve banking works to alleviate the disequilibrium and “ business cycle consequences”. Hoppe and the company also assert that any injection of fiduciary media will ultimately result in a business cycle. However, if the increase in fiduciary media is matched by demand a disequilibrium will not arise (p.101-103).

Argument #3: The Popularity of Fractional Reserve Banking.

The popularity of Fractional Reserve Banking is another factor to contend with. Banking customers have demonstrated their preference for FRB. Historically, few banks have remained a 100 percent reserve system. However, customers continued to do business with these institutions (p.95). Contributing to this popularity has been the incentive of banks paying interest on deposits versus requiring a warehousing fee (p.95). Banking patrons also held faith that their bank had sufficient funds to fulfill withdrawal demands. Bank runs were generally triggered by other factors signally insolvency to bank clients. Countries such as the United States with greater propensities towards bank insolvency tend to have many protective laws shielding the banks from market pressures (p.95-96). It should also be noted that back in the 1800s when banking legislation was being discussed in the press the banking system was openly described as a fractional reserve system (p.96). Not only fully informing the average constituent of the details of the Fractional Reserve system, even with this knowledge doing little to dampen its prevalence (p.96).

The use of Fractional Reserve Banking has never been compulsory. There has never been any laws or penalties compelling banking in the United States to levitate towards this specific banking system (p.97). Patrons voluntarily assume the risk of engaging in this variety of banking for the trade-off of being rewarded with an interest payment (p.97). The argument that clients are unwittingly tricked into patronizing an illusory form of banking is dismantled by the fact that banks compete for business. Nothing is stopping an enterprising individual from persuasively selling 100 percent reserve services (p.97).

Is Fractional Reserve Banking Ethical: Part III- Concluding Arguments Against Fractional Reserve Banking

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Part I. Click Here

Part II. Click Here

Fractional Reserve Banking is Fraud:

If fractional reserve banking does not represent a legitimate contractual transfer of property then it must be fraudulent. However, Selgin and White precede with their ethical justifications for this form of banking. Touching upon a previous criticism levied by Hans Hermann Hoppe regarding how in the process of creating money titles what was intended to be a transfer between two parties ends up introducing third-parties (p.28). Both of the free-banking proponents dismiss this claim on the fact that “… spillovers from the others’ actions to the value .. property is an inescapable free-market phenomenon…” (p. 29 [p. 92-93] ). When these “third-party” effects veer into devaluation of another individual’s property they cannot be so easily dismissed. In terms of the context of fractional reserve banking, the devaluation of property is not equivalent to an increase in the supply of a commodity through production or harvest. It is categorically different (p.29). The difference is that an introduction of a greater supply of a commodity through market processes does not harm anyone’s property. However, the introduction of more money titles without an increase in the money supply has a “diminution” effect on the value of all the money held in the bank (p.30). This is done at the expense of all those holding money. They are the individuals who suffer from the debasement of the purchasing power.

The Appeal to Popularity Does Not Justify the Practice:

We are all familiar with the appeal to popularity fallacy. Unfortunately, Selgin and White deploy this faulty argument in favor of fractional reserve banking. Maintaining the stance that would not be commonly used if it wasn’t beneficial (p.30). All because a system is commonly used doesn’t automatically make it ethical or beneficial (p.30). If one is to utilize Rothbardian arguments to justify the methods of banking institutions we must evaluate this within the lens of his theory of demonstrated preference.  Which is best defined as “…actual choice reveals, or demonstrates, … his preferences are deducible from what he has chosen in action” (p.2). Selgin and White attempt to adapt this concept to an ethical defense of fractional reserve banking. This always the case? What about instances where the government monopolizes services such as defense and surveillance services? Hoppe et al. make this distinction in their repudiation of Selgin and White’s attempt to apply to demonstrate presence theory to an ethical defense of fractional reserve banking. After all, institutions shielded from market competition by government forces do not reflect individual preferences. Rather is the byproduct of a “territorial monopoly” (p.31). The theory of demonstrated preference only truly applies in instances where no coercion by the state is present. All because most countries have standing armies does not mean that this is the preferred method of allocating defense services.

Beyond demonstrated preference requiring conditions free of the monopolistic forces of the state, it must also be demonstrated with the rightfully obtained property. This because the theory “… presupposes…” legitimate “… property rights…”. These preferences of how to uses, retain, depose, etc. can only be demonstrated with one’s property. Anything else does not have a positive contribution to the general welfare of society (p.31). When we acquire property  due to the fact we are the one sole owner we obtain total jurisdiction over this property (p.32). Enabling us to truly demonstrate our preference. For example, If I wish to purchase a propane tank and use it for target practice on my ranch in the middle of the Sonoran Desert, it is my right to do so. As I (in theory) exclusively own the land, the propane tank, and the gun due to the rightful transfer of the lands and objects through several purchases. Through using my rightfully procured property in such a manner displays my true preferred use of these items. The practice of creating money titles in a fractional reserve banking does not demonstrate people’s preference for this system. Due to the ambiguity of rightful ownership of the currency in the vault. Rather demonstrates the demand for counterfeit money. As these money claims that are treated as being equal to currency are not being made in proportion to the notes on hand (p.33). Selgin and White hold that despite these considerations, fractional reserve banking is still ethical. Instead, it’s the government that presents a problem in the banking sector (p.34). This argument underscores the fact that in most instances this variety of banking systems were set up and supported by governments (p.34). This is only solidified by the point that legal institutions such as the courts and legislators will act by benefiting this system of banking. Most government institutions count on fractional reserve money creation for income (p.35).

Is Fractional Reserve Banking Ethical Part II: Contract Theory and the Naysayers

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See Part I: Click.

Introduction to Part II:

The key arguments against fractional reserve banking being a moral system came from a 1998 paper co-authored by Austrian economists Hans Hermann Hoppe, Jorg Guido Hulsmann, and Walter Block. The white paper entitled Against Fiduciary Media was a response to a previous paper written by George Selgin and Lawrence H. White. Hoppe at al. crafted a repudiation against  Selgin and White’s 1996 paper In Defense of Fiduciary Media or, We are Not Devo(lutionists), We are Misesians. In which both scholars provide a normative and positive defense of fractional reserve banking. Even utilizing Murray Rothbard’s Title-transfer Theory of Contract to defend the practice. However, this application of the Rothbardian contract theory did not sit well with Hoppe and the company. All being devoted and unwavering followers of Rothbard believed that Selgin and White’s interpretation of Title-Transfer Theory of Contract to be incorrect. Making their justification of fractional reserve banking on grounds of contract theory to be inherently flawed. It is worth noting that Hoppe was a direct protégé of Murray Rothbard and even owed his career and position teaching at the University of Nevada, Las Vegas to the late Austrian economist.

Rothbard’s  Title-Transfer Theory of Contract:

Before claims that Selgin and White did not faithfully adhere to or misinterpreted Title-Transfer theory, it is important to thoroughly explain this concept. A reader without a firm comprehension of this idea cannot adequately determine if free-banking proponents of fractional reserve banking suffer from profound confusion. The proceeding section will provide a brief overview of this theory. Hereby providing the reader with the requisite background information to justly assess this debate.  

Before diving into Rothbard’s theory, it is important to note his ideological disposition.  Murray Rothbard was the modern father of an ideological subset of libertarianism known as anarcho-capitalism. Rothbard and his followers hold that there should not be limited government, but rather no government. All services and products can be produced by private industry with no necessity for government intervention. This even includes services that have been traditionally provided by the government. This includes defense/security services, law enforcement services, charity, resource management, infrastructure, private legal adjudication, and so on. Rothbardians even go so far as to assert that the government possesses a monopoly on such services. It is imperative to understand this aspect of Rothbard’s political economy and political philosophy. It illustrates the fundamental philosophical precepts that govern his theory of contract.

Rothbardian Contract Theory is expounded upon in his 1982 book The Ethics of Liberty. Rothbard derides that the concept that all contracts in a just society need to be enforced( P.133). He draws a sharp line of delineation between “promised” and “conditional” contingencies in matters of exchange. Per his logic, the utilization of legal channels to enforce a promise is wholly illegitimate. Constitutes the use of government force in a situation in which no property has been transferred. Making it equivalent to state enforcement of morality (p.133-134). The reason why the property needs to be involved for a contract to be valid pertains to the distinction between what is intrinsically alienable and inalienable to the individual. This has to do with the fact that a person cannot alienate their own will or relinquish control of their mind and body to someone else. Humans can quite easily dispense with tangible property, including money (p.135). Due to the fact enforcing a promise is a compulsion because it interferes with the free will of the individual. It is not technically a breach of contract. On the other hand, if the agreement included a transfer of property for non-compliance then it would be another story.

In instances of conditional contracts and agreements, noncompliance is equal to a form of theft.  One salient example Rothbard provides is the circumstances of service providers receiving advanced payment but never providing the service (p.137). For example, if I were to offer to paint your house and I received an advanced payment of $300.00 and never show up your house that is theft. One contractual contingency that can shift a promise to a conditional agreement would be a performance bond clause within the agreement.  For Rothbard’s example, if a movie theater has a meet and greet event with a famous actor, they can put into the agreement a clause where the actor agrees to pay the theater a sum of money for abdicating this obligation (p.137). Since a property can be transferred and not the will of the actor this is an ethically binding agreement. However, failing to fulfill a property-related obligation is not always necessarily deemed as implicit theft. In instances where a creditor provides immunity to a debtor who cannot pay their bill this is legitimate (P.144). Why?  The creditor reserves the right to forgive debts due to the fact they are the ones who transferred their property under the condition of repayment. Please note that this scenario details circumstances in which the credit lent out their funds.

It should be noted that a Rothbardian conception of contractual property rights does not preclude someone from selling off a portion of their property. For example, if I own 100 acres of land in Montana. It is well within my rights to transfer you 5 acres for $20,000.00. Concurrently, retaining my claim on the residual 95 acres of land. This does not mean that mean I in any way still own those 5 acres. Through the sale of this land, I have effectively transferred ownership to you. In turn, I have relinquished by entitlement to the lands sold.

Page 146:

“Another important point: in our title-transfer model, a person should be able to sell not only the full title of ownership to the property but also part of that property, retaining the rest for himself or others to whom he grants or sells that part of the title. Titles, as we have seen above, common-law copyright is justified as the author or publisher selling all rights to his property except the right to resell it.”

How The Free-Banking Argument For Fractional Reserve Banking Violates Contract Theory:

Selgin and White claiming that fractional reserve banking is consistent with Title-Transfer Theory suffer from some blind spots. Blind spots that are fully magnified by Hoppe et al. One of the fundamental chinks in the armor of the Free-Banking argument is that fractional reserve banking inherently violates Title-Transfer Theory. It assumes that two people can own the same piece of property simultaneously (p.21). By the very nature of how fractional reserve banking engages in lending, it creates ambiguity regarding ownership. Through issuing more promissory notes both the bank and the customer assume ownership of the same banknote, which is fraudulent by nature (p.22).  Creating more claims to money against the present supply of money will not create more money (p.22). Rather, will only serve to redistribute the present supply of actual currency from client to client without increasing the amount of money in the vaults (p.22). Effectively creating fiduciary media (money-substitutes issued by a bank that is not backed by gold or paper money) out of thin air without transferring assets or liabilities (p.22). As detailed in Rothbard’s theory, we can sell off a portion of our property. However, we relinquish our own once we transfer it to the party purchasing it.

This illusory arrangement also conflates property with property titles (p.23). Treating and categorizing banknotes( fiduciary media, money claims) as money (physical property). This only enables this fallacy to continue. Keeping in tune with the Austrian tradition the Regression Theorem states that all money had a prior use value (p.34-36). For instance, tobacco and nails at various times in human history have been used as money. Meaning that these banknotes cannot be money in the actual sense, but a claim or title to money. Through this categorical fallacy, the banks can divorce titles from ownership resulting in the redistributive practices of fractional reserve lending (p.23). Even going so far as to promising future entitlement to goods against present goods that may or may not be fulfilled. It would be honest to label these claims to future goods or debt claims, but not a claim to money (p.24).

An inquisitive observer may question why it is dishonest or even outright fraud to categorize future claims to money as money titles or even as money? Hoppe et al. frame this from the standpoint of we cannot claim or transfer ownership from a title to a car for anything but a car and the same applies to money (p.25). If we were using more precise language what banks and customers have truly agreed to is debate claims versus money titles. Per the authors of  Against Fiduciary Media Selgin and White adopted a hyper-subjective interpretation of contracts to side-step this discrepancy (p.26). The misrepresentation engaged in by practitioners of fractional reserve banking extends beyond labels of goods, but to actual quantities as well. By treating fiduciary media as money, it creates the false perception that clients own more than what they truly due on paper. The fabricated money quantities do not reflect the amounts present in the vaults of the bank (p.27). Free-banking proponents may believe that fractional reserve banking isn’t so much the problem, rather government intervention. As long as the withdrawal requests are fulfilled it cannot be tantamount to fraud. However, even without state interference, the transfer practices of fractional reserve banking blur the lines of definitive ownership (p.29). Making the system incompatible with upholding property rights or just contract enforcement.

Is Fractional Reserve Banking Ethical- Part I- An Introduction

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The norms of modern banking are something that most of us take for granted. Few ever question the inner mechanics of such transactions we engage in daily. However, banking has been steeped in a fog of mystery due to complex operations and seldomly failing to fulfill any obligated services. Beyond questioning the functions or internal workings of modern banking even fewer people recognize that most people are participating in a fractional reserve banking system. In a random survey of average people, you will be hard-pressed to find anyone aware of what fractional reserve banking entails nor any intimate understanding of its implications. That is to be excepted considering this is a niche area of expertise that is truly the domain of an economist, banking/ financial specialist. This assumption relieves us of any responsibility to cultivate a better understanding of these systems. After all, this is best left to the experts. How do we know whether there any inherent risks associated with fraction reserve banking? Do we just assume that due to the fact it is the most common banking system that it is the most effective and secure? Better yet, is it even a moral system of banking, or is deceptive by design and tantamount to fraud?

Over the past several decades, a controversy has been brewing among monetary economists concerning fractional reserve banking, Modern economic theorists of the Austrian School who are generally hard money advocates, find fractional reserve banking to illegitimate to its core. Equating it fraud and perceiving it to be antithetical to a free market in money. Whereas free-banking (an economic school that is arguably an outgrowth of the Austrian School) do not see fractional reserve bank as immoral. Rather, such institutions could not only ethically co-exist with 100 % reserve banks but also flourish. Any ethically questionable operations were the byproduct of government intervention and mutually exclusive from the banking practice (p.8). While their Austrian counterparts insist that the practice not only supports the monetary objectives of the state but owes its existence to the state (p.9, p.15-17).In this series of essays, we will examine the ethical arguments for and against fractional reserve banking. To present an unbiased account of the controversy.

What is Fractional Reserve Banking?

Before we can embark upon discussing the ethics of fractional reserve banking is important that we define what it is. On a high level, fractional reserve banking is a system in which banks are required to only hold a fraction of money deposited as reserves. This is done to enable banks to make loans. The recipient of the loan receives a transfer of deposited money upfront which they are expected to pay interest on. The bank customer who deposited the money that was lent out theoretically will receive the money-back in their account with sustained interest. This is done to expand the economy through “freeing capital for lending”. This is done without the depositor relinquishing their claim to this money. Effectively creating more money titles than physical money held on reserve at the bank (p.3)  The foundation of this banking system is fastened to the assumption that most customers with savings accounts will not simultaneously withdraw all of their savings at once. Otherwise, this could lead to what is known as a bank run. A phenomenon where the bank as completely depletes their liquid reserves. Since they are only mandated to hold a relatively small portion of reserves on hand.

Reserve requirements typically hovering around 10 % (presumably applicable to central banks).  Most reserve requirements are contingent on the bank’s size. Banks holding less than $15.2 Million in reserves are exempt from maintaining reserve minimums. The requirement of 10% reserves is applicable to banks holding over $100.2 million in deposits. Per the Garn-St Germain Act  banks are free from any reserve requirements for their first $2 million held. This legislation was initially passed by the Regan administration as a means of relieving pressure on banks as the federal reserve significantly increased interest rates. Banking institutions that hold excess reserves or amounts of deposited money above reserve requirements are entitled to interest payments. Under the Financial Services Regulatory Relief Act of 2006, these interest payments are allocated by the Federal Reserve.

As mentioned above fractional reserve banks issue more money titles than currency on hand. Through this process, they engage in form of indirect “money” creation. The loan itself treats the money titles as being equally as valid as actual currency notes. When the loan is issued the bank “credits” the borrower’s account with an amount equal to the loan, mimicking a transfer of physical cash. The methodology of money creation on the part of fractional-reserve banks has been distilled down to a science. Guided by the money multiplier principle. This concept broadly describes how “.. initial deposit leads to a greater final increase in the total money supply”.  More specifically how much commercial bank money ( demand deposits that can be utilized for credit and debit purposes, basically your residual after reserve requirements) using a defined unit of central bank money. Central bank money is any medium of exchange that these institutions acknowledge as being money. The correct proportion of “money” creation is determined by the below equation:


M=  Money Multiplier, R= Reserve Requirement

Tocqueville on The South and Slavery

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Some of the keenest observations made by Alexis De Tocqueville in Democracy in America were made in his comparisons between the agrarian South and industrialized north. Tocqueville’s characterization of the two regions of the new American republic was so powerful they still passively influence regional stereotypes even in the modern era. The northern eastern United States is presented as a bustling hub for commerce and productivity. The south being caricatured as being rural, lackadaisical, underdeveloped, and board-line primitive. This may have been somewhat true in the 19th century. However, to hold such a view as being accurate today would be a gross demonstration of ignorance. Not too much it would require drastically underestimate the economic potential of cities such as prosperous Atlanta, Georgia, or the buzzing tourist town of Nashville.

In the nascent period of American history, southern states weren’t luring northern away from  Boston with low taxes and warm weather. The South was still primarily reliant on agriculture to fuel its economy. As we all know most of the labor was done by slaves. Tocqueville goes so far to point to the use of slaves in the south being the core differentiating attribute between the North and the South (p. 408).  Why? The practice of slavery in the south influenced many aspects of southern culture at the time. The absence of the practice in the north also helped shape the industrialized economy and culture of New England. Where the Weberian Protestant work ethic was very much salient. Through possessing a steadfast and unwavering focus on commerce the north ended up outpacing the south economically and technologically. Due to the lack of industrialization, much of the southern United States was less apt to become urbanized. However, considering the large plots of land required for agriculture lack of infrastructure and urbanization is understandable.

Farming is certainly a labor-intensive vocation. Requiring years of dedication spending engaging in hours of back-breaking working daily. How could we say that southerners of the 1800s did not possess a strong work ethic? The typical plantation owner did not do the work themselves. They had their slaves sweat and toil to produce the crops they sold. Making labor a necessity of the less fortunate. As ascribed by Tocqueville this subordination of work not only would be indicative of the luxuries of “idle men” (p. 407) but a more pervasive attitude towards labor. Relegating work to being only acceptable for the poor or slaves, it implies those above a specific status should not work. Especially when men of money have much more entertaining pursuits to indulge in. Such as hunting, gambling, socializing, womanizing, participating in local politics, etc. Drawing a sharp contrast with the self-made tycoons of the industrialized northeast. Where wealth was more of the byproduct of enterprising wit than old money or traditional social arrangements. Almost expressing a distant desire to return to the days of the monarchy. Where the slaving owning elites would either serve as the ruling class. Their slaves would be nothing more than captive constituents Analogous to the serfs of medieval. However, while the serfs were owned by lords only be being tied to the land and insurmountable debts. In the humid countryside of 19th century Georgia, the plantation owner possessed the land and the workers.   

Alexis De Tocqueville did point out that slave owners advocated for the continuance of the institution for the sake of profits. But rather to maintain their aristocratic lifestyles. To many unacquainted with the economics of slavery, this may come as a bit of shock. Tocqueville flat out declares slavery less efficient than free labor. A view is also expressed in the book The Real Lincoln by economist Thomas DiLorenzo. Tocqueville citing that the observation that paid workers tend to work faster than slaves (P.406). This being a core driving force of any economy. What Mr. Tocqueville is implying that the slave owners could not possibly be solely concerned about profits. If they were they would have switched over to paid labor. Due to the increase in efficiency and decreased production costs (food, room/board, and clothing for the slaves). In contrast, the profit-centric northern capitalists would see this transition as a no-brainer and a strategic shift in production methods. This would require the southern elites to become more involved in managing the process. Rather than have administrative and managerial matters handled by slaves that have proven themselves capable of such higher-level tasks. Hence, foiling the regal lifestyle fulfilled with entitlement, unearned honor, and leisure.

The Long White Beard Fallacy

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There are few fallacies as prevalent as equating age with wisdom. This false assumption is predicated on the belief that age tends to correlate with the accumulation of life experiences. Conventional wisdom would dictate that a prudent mind would be able to formulate deep insights based upon these plentiful experiences.  However, this presumes that the individual of advancing age is capable of shrewd judgment. Much like another demographic of people, some older people are not.  This error in thinking has been enshrined in the mythical image of a sagacious prophet or philosopher. A Socratic or an Aristotelian figure radiating the mystique of lost ancient knowledge. While imagery plays a powerful role in our perception, picturing every individual with a long white beard as being wise is an illusion. Simply confuses correlation with causation. The reality reduces the saying of being “another year older and another year wiser” to an empty statement.

Believing that every older individual has amassed a stockpile of knowledge ignores several prerequisites that make an individual inclined to become a wise person.  These characteristics include intellectual curiosity, the ability to learn from experiences, and the capacity for sound reasoning. Without these attributes it doesn’t matter if a person is twenty-five or ninety-five, they cannot be wise! To credulously accept conventional wisdom without any forethought makes an individual nothing more than a passive fool. To only continue to do so for decades on end is antithetical to wisdom. It is quintessentially spending an entire lifetime relying on lazy thinking, which will not lead to acquiring any knowledge. Claiming that such an individual is wise or knowledgeable irrespective of their chronological age is borderline criminal.

Intellectual Curiosity:

Encapsulated in the words of the wisest man among the ancient Athenians, “The unexamined life is not worth living”. Arguably one of the most cited quotes in Western Philosophy conveys a lot of the nature of knowledge and wisdom. If one is not inclined to pursue the knowledge they cannot become wise. This is regardless of how many years they have spent living on this planet. Most true knowledge generally needs to be pursued, not passively obtained. The thought process of an individual content with accepting the superficial appearance of the world is not one who is going to explore ideas or the nature of the universe. Rather have their beliefs bequeathed to them.  Versus actively discriminating between two choices based on acquired knowledge. To merely accept the status quo for decades on end without any deeper contemplation is the opposite of being wise. This person has only spent their life regurgitating the ideas that have been inculcated into them since childhood. Instead of thoughtfully engaging with ideas to acquire knowledge.

Spending a lifetime staring at the surface deludes people into thinking they understand how the world works. Creating the erroneous belief that they can easily formulate solutions to problems or have a firm grasp of the nature of reality. Unfortunately, they have only been gazing at shadow puppets on a cave wall for all these years. Attempting to derive a complete understanding from such an inadequate foundation is impossible. Further substantiating the importance of having a thirst for knowledge to achieve the coveted status of a wise person.  A wise person does not succumb to the illusion of having the complete picture when all that is available are thin silhouettes. They have a firm understanding of the limitations of knowledge and acknowledge that learning is a continual process, not a destination. They echo the sentiment of the Socratic profession of ignorance keeps themselves open to accepting new information. Through remaining humble and reminding ourselves that there are severe limitations on our breadth of knowledge we allow ourselves to broaden our horizons.  If we assume that due to our age we automatically have a thorough understanding of the nature of the world, we are only fooling ourselves.  Such self-deception does not amount to wisdom.

The Ability to Learn from Experiences:

It is easy to assume that because we lived through an experience we truly have a strong comprehension of how to handle it if it reoccurs in the future. Once again, this is an attribute that is tantamount to self-depiction. Making matters only worse, our elders feel so confident in their abilities to draw meaningful inferences from these anecdotes they firmly distribute this advice to younger generations. Creating personal allegories that become imperative that younger folks learn from. However, how are these sage individuals so sure they have pin-pointed the precise source of the issue? Narrowing it down to one salient detail is an oversimplification of a complex situation. There could be multiple issues resulting in the problem at hand.  The specific contextual details of the current issue may differ just enough from the situation experienced by the older individual that their remedy may not be applicable. Dismally, even after all of these years, they have never been able to accurately determine the source of the problem. But have spent the past number years under the false impression that they know the correct course of action. People have the unfortunate propensity to conflate and transpose details that lead them astray. Rendering the solution to being ineffective. Attributing the issue to a salient detail rather than the true cause of the issue. A confusion that can lead a litany of personal fables and longwinded tales resulting in faulty advice.

It should also be noted that if an individual lacks intellectual curiosity, the aptitude of them ever getting down to the heart of a problem is slim. The capacity to learn from experiences is an attribute that dovetails to tightly with intellectual curiosity.  Those of an inquisitive nature are much more likely to weigh all the variables and then cautiously attempt to conclude. Resulting in sound retrospective analysis. While those accepting a crude and rudimentary version of the truth are prone to devise a solution from incomplete information and half-baked premises and reasoning. When examining experience and only accounting for an incomplete depiction or inaccurate assumptions about the scenario, it is impossible to learn from that experience.

Capacity for Sound Reasoning:

You can possess the learning capacity, applying information, and drive to acquire knowledge. None of this will make you wise if your thinking is plighted with biases and fallacies. To have all of the information but no means of interpreting it essentially makes this knowledge useless. What good is information if my interpretation of it is clouded by my prejudices. Capacity for sound reasoning is so integrally related to learning from experiences, it could be argued that without sober reasoning skills we would not be able to draw meaningful lessons from our past experiences. Odds are we would again resort to spouting the convention wisdom specific to our generation. Following the crowd does not lead you to the truth. Conforming for the sake of conforming is nothing more than a flaw in reasoning. Cemented and immortalized in the appeal to popularity fallacy. Popular consensus can lead us down some dark and treacherous roads. One only needs to be reminded of Nazi Germany to witness the grisly ultimate consequences of this fallacy. A genuinely wise individual would be able to recognize the danger in mindless acquiescence. Versus firmly leaning on the thoughtless cliché of referring to “back in my day”. However, times have drastically changed since the youth of well-meaning elderly folks.  Espousing outdated platitudes for fifty years ago (that most likely were even incorrect back then) is not equal to disseminating wisdom.

Assuming that advanced age automatically is equal to wisdom presents another fallacy in reasoning in its own right. That is the appeal to authority fallacy.  Utilizing age as an indicator of wisdom is setting that up as a social signaling mechanism. We hold an authoritative reverence for the advice provided by an elderly person, even though that advice could be flawed. We are allowing the variable of age to obscure our better judgment.  If we truly thought about it, only a small minority of people under the age of sixty-five are truly wise.  Do these individuals all of a sudden alter their habits and adopt a proclivity for sound reasoning magically after reaching this arbitrary age of retirement? No. Odds are as we get older we tend to become more rigid in our thinking and set in our ways. This may not be true of all individuals, but it does tend to be true for most people.

Tocqueville and The Free Press

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Over the past couple of years, the issue of media bias has become a regular talking point in public discourse. Contrary to popular belief, “fake news” has existed long before the advent of the 2016 election cycle. However, some may cite the work of William Meckling and Michael Jensen and claim that left-wing media has existed since at least the late 1970s (P. 49). One only needs to read Barry Goldwater’s 1988 memoirs to see how media coverage mispresented him during his 1964 presidential campaign. Media bias is not relegated to only left-wing media outlets. Conservative publications also suffer from distorting the facts when reporting the news. Liberal media bias is just more salient since liberals dominate the media. When ideologically loaded editorials start being presented as information this is problematic. Regardless of which political proclivities of the author or correspondent. This is nothing more than clear deception. A snake oil salesman presenting opinions as information. Talk about being sold a false bill of goods!

Alexis De Tocqueville reveals to us in Democracy in America that media bias also existed in the 19th century.

“What the latter look for in newspapers are knowledge and facts; only by altering or distorting these facts a journalist can gain some influence over his views (Tocqueville, Transl. Isaac Kramnick, P. 216-217)”.

Tocqueville didn’t dwell on the biased nature of American journalism. This is because he viewed news publications as not so much as vehicles for disseminating information. Rather, as a form of networking. Individuals who share the same values will invariably read some of the same books and obtain their information from the same sources. While it tempting to blame social media companies for indirectly creating powerful echo chambers through data aggregation to maximize user engagement; this problem predates modern technology. Due to confirmation bias, it is always easier to read publications that reinforce our prior beliefs. Converse with people who already agree with our perspective. Considering this quirk of human nature it isn’t surprising that Americans of the 19th century would levitate towards certain publications. Naturally, journalists of the era would either inject their own opinions into news stories or manipulate the facts to make their article more enticing to specific demographic.

This counterintuitive observation regarding the American press bucks our conventional understanding of the intended purpose of news media. Conventional wisdom would dictate that news is purely designed to inform.  Tocqueville obliterates the myth of a journalistic “golden age” in the mid-20th century. Romanticized images of smoke-filled greenrooms and hardnosed reporting epitomized in the likes of Edward R. Murrow. The notion of the news being fact-driven back in the early years of television is an illusion. Per Democracy in America, even in the 19th century, the line between fact and opinion was blurred. Making Tocqueville’s suggestion that the press represents institutions of political association more than they do sources of information a sizeable argument. Presents a hard reality check for those entranced by the tidy and staid conservatism of the 1950s. The news correspondences may have been more eloquent and professional, but were still imparting bias in their reporting.

If media organizations are nothing more than a collective association of like-minded content producers and readers, how do these coalitions form? This a profoundly difficult question to answer. Did ideology bring the members of the media outlet together? Did the political leanings of the content consumers influence what the organization produces? It is hard to say. However, there is certainly an interconnected relationship between content consumers and producers. Tocqueville expounds upon this co-dependent relationship stating:

“… a vital connection between association and newspapers; the latter creates associations which, in their turn, creates newspapers. If it is a truism that associations must multiply as social conditions become more equal, it is no less certain that the number of newspapers increases as associations proliferate. (P. 602).”

While it may be fair do disagree with Tocqueville’s assertion that political associations are the impetus for the establishment of publications, he does touch upon an important aspect of this dynamic. That is  if one media outlet of a specific political disposition is established more will follow. One just needs to look at the history of network television to see this principle in action.  Back when network television was first established in the 1980s the 24-hour news channels were all left-of-center. Conservative media was essentially relegated to AM/radio talk shows. Then in 1996 the Fox News Channel was launched and provided a conservative presence on network television. The proliferation of conservative media shifted from the dying platform of network cable to the wild frontier of cyberspace. Leading to the development of outlets such as Newsmax, The Blaze, Breitbart, The Daily Caller, The Drudge Report, The Daily Wire, etc. All platforms whose success was propelled by the internet. One can’t help but wonder if Fox News had never been established if these outlets would have ever achieved their present level of success. Especially when you consider The Blaze was founded by former Fox News personality Glenn Beck.

The above example details this relationship of associations and the growth of media outlets for conservative publications, this rule most likely applies to any ideology imaginable. Just think of all the political movements that have spurred by the zealous distribution of literature by pamphleteers.  This ranges from movements as diverse from the American Revolution to the Bolshevik Revolution in Russia. What is the first thing any wide-eyed college kid at a protest does when you approach them? Offer you a pamphlet detailing the rationale for their outrage and indignation. If a movement becomes large enough eventually formal media outlets fixated on the political movement are established.

Polemics such as Thomas Paine’s Common Sense and the Cato Letters may provide the rebel-rousing fodder for revolution. What sustains these political movements and their various supporting publications? It is easy to see that ideas spread through collective association and the proliferation of related literature/media. As enthusiasm, wanes momentum starts to sink. Convictions and commitment among supporters start to dissipate. Making the role of publications much more important.

“ This association can be more or less strictly defined, more or less restricted, more or less numerous but at least  the seed of such an association must exist in men’s minds to ensure the survival of the newspaper (P. 603).”

Tocqueville believes that the conviction conveyed by journalists only continues to live on if supported by the readers. From a business standpoint, this makes sense. If no one is buying your newspapers or magazines your firm will go out of business. In terms of the transmission of ideas, the intertwined nature of content publisher and consumer is much more co-dependent. Yes, the passions of the readers need to remain resolute for the publisher to keep their lights on. But,  the publisher needs to keep putting out engaging content to further perpetuate the movement can keep the movement from getting stale. It may be bold to argue with a thinker as brilliant as Tocqueville, however, let’s say he is only half right on this account. Fostering strong political coalitions requires both the publisher and the reader.

Some observant readers may be wondering, how does this model apply to local newspapers?  After all, they tend to be more provincial in their scope and less politicized.  The less politicized part may be a false assumption, due to the fact the local paper tends to conform to the political leanings of the region. If hypothetically there was a local or regional newspaper that was completely objective it still would provide a form of collective association. The news stories and editorials would focus on local issues.  Presumably, all the readers would have interests in the commentary about new ordinances and municipal taxes. Readership and the employees of the publication bound by a mutually shared self-interest in local affairs. A cohesion that sometimes breaks through partisan barriers and transcendent party affiliation. National and international publications look to sow a connecting ideology among its viewers and readers. The local media outlets unite its staff and audience with universal concerns about daily affairs.

Did Alexis De Tocqueville Predict “Cancel Culture”?

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Alexis De Tocqueville was arguably one of the most insightful writers to ever detail the intricacies of American Democracy. Tocqueville’s journey sounds like an unlikely one. Something analogous to an intellectual version of the excursions taken by Lewis and Clark. A royal magistrate from France traveling throughout North America in only nine months. Even spending some time with local tribal nations. Based upon his keen observations of American political culture Tocqueville made many predictions. Some of his lofty inferences fell flat and resulted in nothing more than faulty speculation.  What was truly impressive about his insights is what he got right.  He did possess an uncanny aptitude for being able to foreshadow various political and societal shifts in America. Much of his writing was quite prescient.

Any modern reader of Democracy In America can’t help but wonder if Tocqueville predicted the phenomenon of “cancel culture”. The present trend in which individuals guilty of engaging politically incorrect speech is de-platformed. Whether it be shadow-banning on twitter or having their radio talk show pulled from the airwaves. Tocqueville shared many of the same concerns that James Madison voiced in Federalist Papers #51. Both men understood how the collective passions of the people could veer into the territory of authoritarian mob rule. That is precisely what “cancel culture” has morphed into, figurative lynching-mob. Relishing the downfall of anyone transgressive of the virtue of political correctness. Resorting to de facto censorship to prevent such subversive individuals from having the ability to transmit any more socially intolerable ideas.

Tocqueville shrewdly points how often any minority must contend with institutional barriers when it comes to seeking justice. The outcry for prohibiting offensive speech targets individuals who are out of lock-step with the majority opinion, effectively infringing upon their First Amendment rights. The true intention of codifying protections for free speech is meant to protect the expression of unpopular opinions. Where is an individual to turn their right to free expression is violated, but their views are perceived as being reprehensive by society?

“My main complaint against the democratic government as organized in the United States is not its weakness, as many Europeans claim, but rather its irresistible strength And what I find most repulsive in America is not the extreme freedom that prevails there but the shortage of guarantees against tyranny.

When a man or a party suffers from an injustice in the United States, to whom can he turn? To public opinion? That is what forms the majority. To the legislative body? That represents the majority and obeys it blindly. To executive power? That is appointed by the majority and serves it as a passive instrument. (Tocqueville, P. 294-295. Transl. Isaac Kramnick).”

He could easily see that those with unpopular opinions could very well have little recourse in enforcing their liberties. It’s easy to defend someone’s right to denouncing racism. It is profoundly more difficult to defend the right of someone to publish racist literature.  This is mainly due to societal pressures. In the present climate defending the First Amendment rights of a bigoted person is tantamount to be racists. While this assumption rests on a rickety premise, public opinion only seeks to promote this fallacy. Due to public passions being more concerned with social justice, there is a willingness to mischaracterize people and to even dispense with critical rights if they do not comport with the grand objective of “tolerance”.  Both Madison and Tocqueville intuitively understood the social dynamics of crowds which would later be expounded upon by social psychologists. Not only to members of the crowd feel a decreased sense of individual responsibility, but there is an emotional amplifier effect. Having either attribute present will make an individual less apt to rely on reason and more apt to go along with the mob. Even if their outrage and indignation are hyperbolic.

The shrewd Frenchman not only understood how popular passions would overwhelm sound reason and effectively alienate minorities, but he foresaw the development of Progressive ideology. Tocqueville noticed that democracy had a proclivity for drifting towards equality. He wrote at length detailing the lack of social stratification in the United States. Even noting that the capitalistic tendencies of America could provide a man from a poor family with the opportunity for exorbitant material success if he is willing to work for it. Democracy as a whole has an equalizing effect on society.  The people elected officials that represent their will. The whole notion of “the government works for the people”.  An idea completely foreign to continental Europe in the 19th century (foreign in practice, not so much in theory). Tocqueville audaciously claims that disposition towards equality implies perfectibility within human nature.

“As classes disappear and grow closer, as a tumultuous mass of mankind, it practices, customs, and laws alter, as new facts emerge, as new truths come to light, as old opinions disappear and are replaced by others, the image of perfection in an idealized and fleeting form is offered to the human mind.

….. Some changes improve his lot and he concludes that, in general, man is endowed with the faculty of indefinite improvement. . (De Tocqueville, P. 522-523. Transl. Isaac Kramnick).”

It is the tendency towards  “indefinite improvement” that lays the groundwork for Progressive ideology. Progressivism generally holds that people are capable of constant betterment. The goal is to keep striving towards an idealized world where all the ills have been neutralized. Most adherents of Progressivism do not mind using the levers of government or other institutions to help lead people in the right direction. One of those corralling techniques would be punishment for veering off the path of social improvement. Such as making a culturally insensitive joke. This would explain the functionality of “cancel culture”. The de facto censorship is one of the means utilized to keep people on the straight and narrow.  If you say something offensive you will be ostracized and have your career ruined. The logic being you will avoid making such a social faux pas when faced with the severity of the consequences. Why? Because followers of the Progressive movement believe that you can do better. Some even sincerely believe that a world without prejudice could exist. Unfortunately, is nothing more than a pipe-dream. Nothing more than good intentions knocking on the door of utopianism. If man is fallible, the odds of offensive speech dissipating is unlikely. Such an assumption demonstrates an unrealistic perception of human nature. We can mold people into the image we desire through social pressure and coercion.  Rather, they need to come to their conclusions not to be forced into socially desirable opinions. There may be immorality in racism. However, there is also immorality in weaponizing social conventions to callously achieve social goals. Especially when innocent parties have their comments taken out of context and are used against them. Making these innocent bystanders nothing more than collateral damage.

Substance over Style

person holding a chalk in front of the chalk board
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Just a random thought. As I have gotten older I have begun to realize how you arrive at your answer is more important than what your answer is.

Anyone can get lucky with incidentally contriving a profound insight. However, your method of arriving at such a conclusion cannot be the byproduct of chance.

Rather, it would be the byproduct of sounding thinking. Replicating the feat will eliminate the potential it was a happenstance fluke.

The Paradox of Atheism


photo of person holding a bible
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Many proponents of Atheism hold it as the only perspective on religion free of dogma. The irony is that Atheism has it’s own orthodoxies that are held as strongly as a fervent belief in a higher power. Not all  Atheists fall into the “free thinker” or the “enlightened individual” trap, however, there is a number that does. Failing to see some of the parallels between devout atheism and organized religion.  The one characteristic shared by an atheist and a Baptist Minister is their immutable stance on religious faith. Being easily disposed to write off any contrary perspective as being false and ill-advised. The three main commonalities between atheism and religion are a collective association, possessing fixed views on belief in a higher power, and the proclivity to proliferate their religious perspective.


Rarely is atheism criticized from a neutral standpoint? Meaning generally it is critiqued concerning some form of religious precepts. This essay is not intended to be a polemic defense of religion over atheism but rather aims to observantly point out areas of inconsistencies. Atheism is presented as a dynamic belief system. The natural gradation in the development of human understanding and a departure from the ancient proclivities of magical thinking. It still suffers from many faults. Unbending commitment to a set of beliefs. Atheism even exhibits attributes of tribalism which can have dangerous consequences. One needs to look no further than the present political climate to witness the venomous repercussions of in-group conformity.


Collective Association:


Humanist groups are collectives of nonbelievers that meet periodically. Generally focusing the social gathering around discussion or other social activities. The number of activities that could encompass one of these gatherings are endless. Ranging from meeting at a coffee shop to bowling and beyond. It is reasonable to suggest that these groups are merely a surrogate for the religious communities previously forfeited by non-belief. Religion does provide a cohesive glue that voluntarily keeps communal bonds intact. This was an observation that the great political theorist Alexis De Tocqueville made back in the nineteenth century.


Considering that many atheists still grew up in a religious background, it isn’t surprising that many yearn to be a part of a community of like-minded people. Without the formal institution of an organized church, this endeavor has previously been difficult. In the age of the internet, many of the logistical costs of organizing have been minimized. Technological advancement coupled with a decline in religiosity in the United States has created fertile ground for the spread of humanist groups. As America continues to shed its Christian identity with declines in religious observance the societal acceptance of such associations increases.


The most perplexing aspect of these groups they are essentially church groups. Yet, few if any of the members of a humanist group would call it a congregation. It is a group of people drawn together by the commonly shared religious convictions. Those convictions may be a lack of faith in God, nevertheless, still are religious beliefs. It is merely the reciprocal of the traditional beliefs of a religious association. A humanist group is a community of nonbelievers. It is the embodiment of the church community that they had abandoned with losing their faith.  Somewhat analogous to converting to another religion and joining a different community of believers. Minus the immense amount of formal ceremonial procedures.


The Irreverent Dogma: The Freethinker Paradox 


Much of the rhetoric shrouding atheistic thought is fixated on purportedly on free thinking. Atheists by definition hold an inflexible view of the existence of a higher power. They have also seemed to have substituted faith in religion for an unquestionable belief in the authority of science. To be an atheist you must hold the rigid stance that there are no deity/deities that exist in the universe. If you do not conform to this crucial pillar of atheism you cannot be a part of the club. It is important to acknowledge that this argument is tautological. However, that is not grounds for disqualifying this point.  Anytime we opt to adopt a specific label whether it is a political designation, sports team affiliation, etc. there are certain characteristics we are expected to conform to.  Can an individual be a Pittsburgh Steelers fan and not even like the team?  No. Therefore, to be a part of this subset of society you must conform to this virtue of group identity. To be an atheist you must capitulate some of your capacity towards freethinking. If you question the doctrine of non-belief you are no longer categorical an atheist. This parallels the fact that a Christian cannot be a Christian without believing in god. It is merely the same premise, just inverted.


Another issue that the free thinker designation that many nonbelievers adorn themselves is that their lack of belief mirrors the intensity of the belief of religiously observant individuals. It takes a lot of faith to make a definite claim about something that cannot be falsified. This goes back to the conundrum presented before us in Pascal’s Wager.  We really can’t prove or disprove the existence of God, therefore the possibility of a higher power existing is fifty-fifty. The odds are no different than that of a coin-flip. As we are presented with two potential outcomes. Because atheists are armed with the precepts of science the inability to falsify the existence of God already disqualifies the possibility of existence.  A corollary of this idea came from the infamous atheistic polemicist Christopher Hitchens in the form of Hitchens’s Razor. Succinctly put claims made without concrete evidence can be refuted without evidence. Technically, this argument could also be applied to atheism. The enigmatic nature of the God question is one that is cloaked in uncertainty. We have no means of proving or invalidating it. Either position is a leap-of-faith. Even the exalted dismissal of religion by science is still a leap-of-faith. With no means of testing the veracity, we will still run the risk of invaliding something true. As improbable as the premise may be.


Spreading the Word:
Atheists are just as incline as Jehovah’s witnesses to spread the good news. The attempts of atheist to proselytize their beliefs is somewhat underscored.  The author of this essay knows from anecdotal experience members of humanist groups will go to great lengths to persuade you to join their congregation.  It is not uncommon for nonbelievers to engage in heated debates over religious doctrines. In a futile attempt to persuade their religious opponent they are wrong. Making many atheists agents of transmission for their position on religion.  The vocal atheists who engage in this domestic missionary work have a clear agenda of making the world less religious. Pointing out the faults in reasoning synonymous with religion and atrocities committed in the name of God. Analogous to those spreading religious doctrines highlighting how the absence of religion leads to moral decay and sin.


Just about every religious tradition has it’s philosophical defenders and intellectual apologists, the same is very much true in atheism. The number of books, pamphlets, websites, blogs, and podcasts designed to persuasively defend atheism is dizzying. These substantial efforts have been particularly evident among the New Atheist intellectuals. Minds ranging from Richard Dawkins to Sam Harris and even the previously mentioned late Christopher Hitchens provide the fodder for the growth of this movement. Their polemical treatises against religion are widely read. Mirror the popularity and purpose of many books designed to promote religiosity. Both Joel Osteen and Sam Harris are best-selling authors in the United States. Proving that those in the ranks of defending atheism are starting to exhibit similar notoriety as those who defend the faith.




This essay is not intended to be a personal attack against atheists or a moral judgment of atheism. It is merely expressing curious commonalities between atheism and organized religion. Intriguingly, atheism’s uncompromising nature does lend itself to having some peculiar similarities to strict forms of religious practice.  A conservative Christian is as equally invested in the promotion of their beliefs as of any atheist. Psychology and sociology most likely have some answers to why this is true. It is important to remember the Horseshoe Theory of Politics.  This theory asserts that the political extremes have more common characteristics than they do with the centrists. Leading one to speculate that this theory could be extrapolated and applied to other belief systems. Ranging from religion to positions on ethics issues.