The Weekend Vigilante
Saturday, October 22, 2011 at 2:03PM Hello Vigilantes,
It's time for another weekend issue of TDV. As you might have noticed, the blog was a little quiet this week... that's because I've been on the road, starting with the Silver Summit in Spokane which was a truly excellent conference. And now I am writing to you from San Diego at Libertopia which has also been great so far.
But, the world does not sit still while the original dollar vigilante is in transit! What a week!
I don't even know where to begin. This week alone there were many significant events including serial killer Barack Obama's involvement in yet another killing - this time of Muammar Gaddafi. Also this week, Obama announced the US will withdraw from Iraq. Plus, in our little part of the world, Max Keiser lashed back at us for our blog post, "Does the Economy Need a Referee?".
I'm going to save any comments on Gaddafi for a future date. There are so many things to discuss about what occurred this week in Libya that I want to be able to sit down and give a good overview rather than just some quick points made in between sessions here at Liberopia. But, in regards to the Iraq pullout, I enquired with two good friends of mine who have high level knowledge of the American military for their thoughts on Obama's Iraq pullout. One is Private Parts... the other is new to the TDV blog and goes under the pen name "Ethan Hunt". And, Ed Bugos wrote in this week with a rebuke to Max Keiser's attack.
THE US OUT OF IRAQ
When I want information about the US military I always go to my two friends, Private Parts and Ethan Hunt. TDV subscribers are familiar that Private Parts was a high level NCO in Iraq for many years and is currently contracting in Afghanistan and writes monthly in the TDV newsletter for the "Dispatches From Within The Belly of the Beast". His writings and insights are read with great interest by many. Ethan Hunt served as an operator and advisor to Iraqi Special Operations Forces during the height of violence and participated in several high profile operations that received significant international media attention. His unique experiences granted him a raw perspective on the corporate marketing aspect of war.
Here are their responses when I asked them what they thought of the announcement that the US will withdraw from Iraq by the end of the year.
Private Parts:
It's about time! Doug Casey called it "the most criminally stupid military operation in history"... and considering that China and Russia got almost as much as the US did with Iraq's oil service contracts, how can anyone argue with the "most criminally stupid" assessment? I don't remember seeing China or Russia spending a trillion dollars over there, or sacrificing 4,500 of their young men and women. Could it be there is a better way to advance your nation's "strategic interests" around the world than by invading other countries?
On Obama, is there ANY campaign promise that he hasn't broken yet? Or at least TRIED to break? He only failed to break the "troops out of Iraq by the deadline" promise by his own negotiating incompetence! He was TRYING to keep troops in Iraq past the 2011 deadline, but in the end PM Maliki told him flat-out there was just no way the parliament would agree to give US troops immunity from Iraqi prosecution into 2012 and beyond, which is what the DoD demanded.
Don't worry though, we'll still be pouring money into that black hole with very little to show for it. We're still going to have thousands of American contractors and DoS civilians over there next year. But this certainly looks like the end of the road for having (military) "boots on the ground" at least.
Granted, we've kept thousands of troops in each of the gulf states for decades now (Kuwait, Bahrain, Qatar and UAE), but Iraq is different. Those countries were already used to having foreigners do all their manual labor. And, obviously, we never invaded them or killed any of their innocent civilians.
In my opinion, the defense budget will probably be the first to get gutted (of the three sacred cows I mean: SS, medicare/medicaid, defense), out of necessity, in the next year or two when our empire implodes. And with Iran now pulling the strings in the Iraqi govt. quite proficiently, I just can't see the Iraqi parliament ever agreeing to give US troops immunity from prosecution during any potential deployments in the future. So this withdrawal EOY 2011 really should be it.
FYI, I've already seen (contractor) job postings in Libya. Private security companies are still hiring like crazy to protect ships in the Gulf of Aden. And, of course, Erik Prince (Blackwater's founder) is still quietly building up his mercenary army to protect the UAE royals. It really does look like private forces are the wave of the future. At least my buddies will always be able to find work :)
I'll have much more on this in our November issue of TDV. Until then, I better get back to doing nothing.
Thanks Pvt. Parts. And now, here is what Ethan Hunt's thoughts on the pullout:
So, Obama has announced that all combat troops will be out of Iraq by the end of the year.
First rule of political speech analysis: Look for unstated back doors. In this case, let's look at the statement:
- Combat troops. Are advisors considered combat troops? In fact, are US troops in Germany or Okinawa considered combat troops?
- Logistical issues. There are 40,000+ US troops in Iraq. It is Christmas in 9 weeks. That is a lot of airlift to get them back, unless they use ships. There is also an unnamed amount of equipment that has to be shipped home. That is apart from the taxpayer property that will be left with the Iraqi Military, which of course will in short order be available on eBay or the black market to the highest bidder. Oh, by the way, did I mention that there is an ongoing war in Afghanistan that competes (and takes priority, presumably) when it comes to logistics. If Obama is serious, book your Christmas plane tickets now because airfares are getting a shot in the arm. Yes, commercial airliners may be called to bring the dough boys home.
- RealPolitik. I have never been much of a guy to figure out how a politician thinks, because despite my numerous character flaws, even I am unable to muster the insincerity and depraved indifference to human suffering that they natively possess. That being said, let's try to put the pieces together: The US just accused Iran of seriously breaching social etiquette. And, who overruns a country, spends a crap load of money while doing it, just to give up what little scraps are left? Plus, don't forget, they have oil.
Barry may get the boys home and meet the specific points of his words, but the US meddling in Iraq is far from over. We may not see 18 year old boys return with 4 limbs missing or in a box (something which has been dropping precipitously since early 2008). The real truth is at this point the US has not participated in what most people term "combat operations" for quite some time. As a result, there are around 30 "hostile incident" related fatalities in 2011.
Personally, I think logistically it is almost impossible to pull 50,000 people out in 9 weeks in any form of orderly fashion (given there is another war to fight). From a bigger picture, the point is largely insignificant. These guys have been hanging out on bases, eating ice cream and surfing Facebook. Of the fatalities this year, only two have been killed by small arms fire. The rest are roadside bombs and rocket/indirect attacks. Not to minimize the tragedy, but the point is that the US presence has dropped to what the German presence was in Scandinavia in early 1945. Waiting for the bitter end while doing nothing to get yourself needlessly killed.
Trust me, the US presence in Iraq is only entering a new chapter.
Thank you Ethan.
To try to refine the thoughts of Pvt. Parts and Ethan Hunt into a few sentences, they both seem in agreement that this isn't a big change in the grand scheme of things but it does indicate that we may be moving to a different chapter in how the US military will operate. Looks like the contractors - which is where the real dirty money is - will not be out of work anytime soon.
And, to those who may be thinking that this may be the beginning of the end of the USA's foreign occupations, it should be noted that in the same week that Obama announced a pull-out from Iraq he also invaded Uganda - although hardly anyone noticed.
ED BUGOS' RESPONSE TO MAX KEISER
Max Keiser apparently had a response to our blog post directed at him this week. Here it is:
"Those arguing against the need for referees (i.e. the state) hide behind the non-argument that ‘the referee is the state and we don’t need a state.’ If any of these ass hats had a brain they would understand that the state we have is the state we asked for and voted on. If we don’t like the state, we need to get a new one. This is what revolutions are all about. This is what GIABO is about. This is what’s happening in Greece at the moment. The state has failed to represent the people so the people are seeking a regime change. The state in America after the reforms brought in after the 1929 crash gave rise to the ‘American Century.’ No state, no American century – as just one example. Anyone who says, ‘competition is the referee’ has obviously not read any Adam Smith or has any idea whatsoever about any of the ideas that came out of the Enlightenment. I’m tired of this intellectual laziness masquerading as insight when it’s just squawking by birdbrains with too much time on their hands."
I don't have the time nor the interest to do a full rebuttal to this. Nor do I think it is worthy of a response. First he dismisses the entire theoretical concept of freedom, anarchism and Austrian economics by saying it is a "non-argument. Then he calls me and by extension everyone involved in libertarianism, anarchism or Austrian economics as being "intellectually lazy"? There are hundreds of books and decades of research that have been painstakingly done by people like Ludwig von Mises, Murray Rothbard, Walter Block, Hans-Herman Hoppe, Lew Rockwell and countless others to all but prove the state is nothing but an unnecessary evil.
Someone is being intellectually lazy, Max, and I don't think it is the entire libertarian/Austrian economics movement. One side wrote a cogent, civil piece. The other side wrote a paragraph of name calling with no reference to anything to back up his statements. We leave it to the reader to decide who is more intellectually lazy.
That said, Ed Bugos almost lost it when he read Max's comments. He takes any attack on freedom from pro-statists very personally. Here is Ed Bugos' rebuttal:
Intellectual laziness? Birdbrains? Too much time on our hands? I have had many a progressive lament about how unenlightened I am. The irony is that every one of them has read less than me, and usually nothing of consequence. And Max's comments again proves that to be true. Only someone who matches Max’s description of me would hold out Adam Smith as the final arbiter about this debate.
Adam Smith’s Wealth of Nations is the very first book I’d ever read about economics - not the last, like Max. I read it in my first year of university, almost three decades ago. I've since read many books on economics... enough to have discovered that in reality, Smith was a plagiarizer.
Here is what Murray Rothbard said about Adam Smith:
“The problem is that he originated nothing that was true, and that whatever he originated was wrong; that, even in an age that had fewer citations or footnotes than our own, Adam Smith was a shameless plagiarist, acknowledging little or nothing and stealing large chunks, for example, from Cantillon. Far worse was Smith's complete failure to cite or acknowledge his beloved mentor Francis Hutcheson, from whom he derived most of his ideas as well as the organization of his economic and moral philosophy lectures. Smith indeed wrote in a private letter to the University of Glasgow of the 'never-to-be-forgotten Dr. Hutcheson,' but apparently amnesia conveniently struck Adam Smith when it came time to writing the Wealth of Nations for the general public” - The Adam Smith Myth, by Murray Rothbard: http://mises.org/daily/2012
Not only did he screw up the theory of value, which gave Marx a toehold in his Communist Manifesto and confounded the classical economists about the paradox of value, but as Rothbard noted, he was a shameless plagiarizer of everything that was correct. Rothbard of course has read more books than me and Max five times over. He’s no birdbrain. Indeed, it was Rothbard’s lineage, the Austrian School, who started the marginal revolution and developed the “subjective theory of value” which solved the paradox that the classical economists, on the shoulders of Smith, could not. For readers who aren't aware, the classical economists could never figure out why water, which was the substance of life itself, was so cheap while diamonds were so dear. The reason they couldn’t figure it out was because Smith’s concept of value was not derived by acknowledging consumer tastes and preferences with the values of the factors that go into the production of those goods ultimately derived from those consumer goods. He thought that the value of something was determined by the costs of the factors of production. And to explain the paradox he divided the theory of value into two conceptual frameworks: use-value and value in exchange. Water had use-value to Smith, but it had no value in exchange – not because it was abundant as we all know today – but because apparently the value of diamonds was created by the work that went into them.
Max, if you read that and wonder to yourself, what’s wrong with that... well, then our case has been made. Not coincidentally, it is in this world where the establishment thinks like Max that we have been arm waving about how the State education monopoly is responsible for this state of affairs.
How is it a non-argument to claim that the state is unnecessary? What kind of uneducated nimrod would say such a thing?
It was a valid argument in Rothbard’s eyes. Now, anyone is free to disagree, but they are delusional if they would say that Rothbard, the modern day intellectual beacon of our anti-statist movement, is prone to “intellectual laziness” or has “too much time” on his hands!
Max says, “If any of these ass hats had a brain they would understand that the state we have is the state we asked for and voted on.”
Who asked for this state? Who voted on it? Not me. I don’t vote.
Max, the dull thinker that he is, might retort that therefore I have even less of a right to complain.
These stupid objections are easy to handle, but Max won’t buy it. Some people are not ready to question the things that their daddy told them. I’m being coy now, but that is because I remember my father talking like Max. He hasn’t read anything about this stuff either. In fact, he hasn’t even read Adam Smith.
Yet he agrees with you Max.
Unfortunately, neither of them (Max nor my father – God bless him) can grasp the myths that their view of the world lies on.
Max was right about one thing; if we don’t like the state that’s what revolutions are all about. But, unlike you liberals, we are consistent. In our view, the revolution is underway; it is intellectual; it is not violent. The anarchists that adopt violence as their method do not speak for our creed.
Anarchy is not chaos. Smith did not understand the spontaneous order, let alone value.
What is happening in Greece is that the people who depend on the state are extorting society through violence. It doesn’t matter to them that society clearly cannot afford such a bloated referee. They will resort to any violence to get their way. What is happening in Greece is precisely what is wrong with the state.
Max ends his commentary by saying he is tired of intellectual laziness masquerading as insight. I tire too Max, of statist liberals attacking us and holding out Adam Smith's book as though it is the end-all, be-all, when in fact it is a mostly plagiarized book with a litany of errors and misconceptions that have all been proven by the Austrian school.
If Max read that book and stopped there then that explains his stunted mental growth. There's been a few books since then Max, try reading a few before you waste our time.
ON THE LIGHTER SIDE
This edition of the Weekend Vigilante was far too serious for what I had in mind. I wanted to make the weekend blog more on the lighter side. So, I will try to salvage it now with my favorite video of the week from one of the dazed and confused Occupy Wall Street protesters. He may be a nephew or relative of Max Keiser, judging from his deep intellectual ideas on how the system should work:
PHOTO OF THE WEEK
And, here's a funny photo that made me look twice.
Have a great weekend!
Reader Comments (17)
Thanks!
I think I thought it through. Being a neophyte, I think I will take a big swing on this one...But rather than looking to my limited understanding, I think History has a near perfect example of what you are saying.
Let's assume we did not use "money" for our transactions of goods or in the production of goods. What would be used to facilitate exchange? Other commodities and labor, right? Like an advanced form barter.
Rome tried this. In the hopes to eliminate inflation, they basically mandated people in the cities they had to use silver, gold and coin. The farmers had to use wheat for their transactions. This was to ease them into a more stable economic society gradually. Guess what. The farmers found that they could grow more wheat to secure a better silver advantage. Guess what else. The farmer inflated the wheat (grew more) and it effected the purchasing power of silver!
The Roman government then "had" to exercise price controls and production controls over the farmers crop. Money is not the problem. As you stated, "what you use for money is not the problem." Seeking to control money is the problem.
You also stated: “Money is merely a 'proxy' for VALUE and it makes no difference what item is used for 'money'. You could use tobacco, tulip bulbs, copper, iron, silver, gold, or paper...it makes no difference...as 'value' is subjective.”
Good point about the value issue, but not so good on the other reason that money exists. It is my opinion that you are taking too narrow a view of what money purpose is.
It may seem that you have forgot the MMW=HE+NR x Tools equation in your example of doughnuts. The robots had to come from someone unless your mother made them. Or the materials used to make the robot were purchased, unless she made them and so on. No matter what she traded for the material - she traded money. (Please read, I Pencil)
Barter system - products and services traded are the "money" media. They are a poor money system as stores of value, divisibility, reliability, and portability. However the relation ship of value can be agreed upon. It is also important to note that the Barter System is a discourager of future growth and aggressively pushes humans to seek better means for transacting business. Barter by its nature simply limits the participants free market growth. How many cows, trucks, eggs, sea shells, etc... do you really need at once compared to the aquiring the medium used to any of these things? In every civilization in recorded history, they have used some form of money to increase their wealth position after using a barter system.
Money is only one thing - a representation of our Human Effort (HE) having been applied to Natural resources (NR) with or without Tools from past HUMAN ACTION used for a present exchange to increase our Man's Material Welfare (MMW) (Please read Mises - Human Action)
I do not see economics as a thing unto itself. Economics in my opinion is the discipline of study that people pursue to find how the exchange of products and services work together in the creation of markets. In this, economics DOES nothing. It does not gain me wealth, it does not produce or save. It simple reveals the actions of the past in the manner it is studied.
P.S. The actual economic equation should be:
MMW = HE + NR x Tools - COG (Cost of Government not Cost of Goods). :-)
Reason: either you or a government will at sometime act to protect your MMW. If it is you; then you have to stop producing and apply your HE to defense which is a negative cost. If not you but rather some sort of governance, then it will cost you from your MMW.
The Neophyte
Comments?
For instance, I have a question:
Say I worked for two years, doing what I do. How much of material goods created by us all does this entitles me to? I mean I don't want to take more that is mine, but I don't want to leave anything that is mine to anyone else either. I know we all were conditioned to think of money as of tool to measure just that, but like you teach, money carries no meaning in time and space where I exist. So, I just want to understand how much do I get of the things that I want.
Also, where are you teaching, I mean what is the way for those interested to join the school? What school or university are you teaching at?
Thanks!
I just watched your interview of Richard Maybury and found it awesome. Thank you!
On the side note, really good sound effects to emphasize Richard's point on "Kicking the can".
Just kidding.
Just who would you empower with the authority to establish objective pricing standards? If it is your God, then you should reconsider what he has to say about gold. Deuteronomy and Proverbs make clear references to weights and measures for the purpose of using gold and silver as honest money and the book of Haggai in the Tanak explicitly states that Gold and Silver is God's money.
This is perhaps the first time I have ever heard someone make a Biblical reference against gold as money.
>> “Sorry, but prices are a result of whatever 'money unit' is used.”
They are a “function” of the value of the “good” money in exchange. That is, they are the result of two dynamics: the supply and demand for the consumer or capital good and the supply and demand for money, which is also a “good”. By definition an economic good is basically something that is scarce and has value.
The important thing is you have to treat money as a good; but it does not fall into consumer (lower order) goods or producer (higher order) goods categories; money is a separate good in its own category with unique properties.
>> “ If gold is used and 'value' is subjective, then 'prices' of other goods still are irrational and subjectively determined.”
Just because value is subjective does not mean that prices are irrational. That is a non sequitur. The term irrational contradicts the fact that a subjective valuation still implies an act or judgment, which has an end. That is, value is NEVER irrational. Perhaps you mean unpredictable. But even that is not the case for many reasons. How come the price of my milk doesn’t change day to day with my want of it?? And asset prices can be predictable as well absent Fed.
What you see as irrationally determined prices is explained by the Austrian business cycle theory.
>> “Money is merely a 'proxy' for VALUE and it makes no difference what item is used for 'money'. You could use tobacco, tulip bulbs, copper, iron, silver, gold, or paper...it makes no difference...as 'value' is subjective.”
Money is a medium of exchange. It facilitates exchanges that would not otherwise occur. This is its function. Hence it does make a difference what is used as money. The reason those other things aren’t being used today is because gold and silver ultimately proved to do this job better. So the object of money is not arbitrary. As for being a “proxy for value”, not quite. A theory of the value for money as an economic was most thoroughly developed by Ludwig von Mises.
In his first book, Theory of Money and Credit (1912), he posited similarly that the value of money is a function of the value of other goods...that its value reflects the value of the goods it is exchanged for. In this sense you could say it is a proxy. This of course is not true. Mises’s theory was incomplete.
But he completed it later in 1949 in Human Action. At any rate, first off, by definition, an exchange requires not that the goods being exchanged are of equal value, but that they are unequal. This is the motivation for exchange, and why each exchange is mutually beneficial.
So the value of money cannot “merely” reflect the value of other goods. Mises ultimately showed that the value of money is as ‘cash balances’ or ‘cash holdings’. Money is always in someone’s possession and the demand for money is an expression of the amount of cash balances that people keep on hand.
>> “ Think it through. Fiat currencies today just reveal the subjectivity of 'value' and 'prices'. I have been teaching the history of money and value for 40 years”
You should read both the Theory of Money & Credit and Human Action (Mises), since you are a TEACHER. If you haven't read any Mises or Rothbard I don’t care if you've been teaching money for 2000 years. You are doing it all wrong.
The “irrationality” of oil prices and other prices you are talking about is really just volatility and that is 100% the fault of the intervention into money and interest by extra market institutions like the Fed, and as I said, the debasement of fiat, whose supply can be expanded infinitely...at will.
Here is an article on what Austrians mean by the term “rational” because that is a major economic basic that most economists screw up,
http://mises.org/daily/2249
Here is an article on the CORRECT Subjective Value Theory,
http://mises.org/daily/5333
The central bank’s interference introduces problems in economic calculation, but the term ‘irrational’ really has no place in economic phenomena. The term only applies to phenomena that cannot be explained. Often, what passes for irrational behavior is merely emotionally charged or illogical behavior. It still suits an end. As long as an action aims for an end it is rational...man is still trying to use his faculties when acting, even if misguided and stupid half the time.
You are close with this: "The problem is all the authorities (centers of power) who run the system and desire to CONTROL the people with this media. Eliminate 'money' and the people could relate as equals and then solve the societies problems with their creativity"
But you got it flip-flopped. Eliminate government, not money, and we will have peace and prosperity on earth.
Theory of Money and Credit
http://mises.org/books/tmc.pdf
It almost seems like there is a messianic complex there with the "crash JP Morgan" and now GIABO movement. Of course, I agree with buying silver and crashing Morgan.
The Israelites of old needed not the state until they so foolishly coveted one.
If you read William Engdahl's "Gods of Money", he very well describes essentially what the American Century was, it was that old corporate Council on Foreign Relations, military-industrial-complex, Rockefeller, etc. crew who took over the nation and killed multiple millions of people around the world. We could have definitely done without that.
The only Max material I've found useful has been the banker muckraking, but that is kind of where the buck stops. And it kind of gets tiring after a while. Some have said "controlled opposition."
I don't really like that Stacy chap either.
Just as I learned that geopolitics is one of the best ways to explain world events, discovery of the Austrian School seems to be the best way to explain economics.
Max identifies the problem as: Govts.--which he believes were originally est. by and for "the people" (i.e., Everyman)--have been subverted by Evil Corporations which now own and control them.
HIs solution: "We the people" need to go march in the street and demand this same Corporate-owned govt. pass more laws/regulations on top of the 10's of thousands already on the books--ahhh, but THESE laws and regulations...well, THESE will be the magical ones which solve the problem!
Questions for Max:
Why do you think the Corporate-owned govt. (this is YOUR assertion not mine!) would ever pass laws/regs that would seriously put a hurting on the SAME Evil Corporations which own them?
What makes you think YOUR preferred laws/regulations would do any more good than the 1000's of regulations that have been passed every year for decades?
You know, that was approximately what I thought (your point of view) of the problems too, a while ago...
Then I attempted to imagine I am building a country, a new country. I asked myself how would I secure it from what ills us today? What specific mechanisms and protections must be in place?
What I have realized was somewhat darker.
I now believe that most if not of our problems were not given to us by corporations, or even the government, but instead, by the people themselves, or more properly by the large part of "the people" that wanted something the easy way, and then knowingly or unknowingly agreed to how specifically that can be achieved.
What you seem to be saying is that some form of slavery (that's all govt. really is) is inevitable.
That humanity is forever doomed to be lorded over by a small ruling-class which plays the divide-and-conquer game.
You are right that folks, generally, choose the path-of-least-resistance. However, very few take this to the extreme and predate on others. I think this is the key thing to remember.
Most folks reject violence, the problem is that they've been conditioned (esp. in the last 100 or so years w/the expansion/domination of govt.-indoctrination/schooling) to overlook the violence which underpins the political system.
I guess the hope of liberty-lovers is that humanity will, eventually, come to see this violence and reject it...remember, chattel slavery existed for 1000's of years before disappearing...but disappear it did.