"If the governments devalue the currency in order to betray all creditors, you politely call this procedure 'inflation'." ~ George Bernard Shaw
The Moral and Ethical Dilemma of Conducting 'Business' With the State
Exclusive to STR
December 24, 2008
After a grueling project segment at my company, I recently took time off to visit Switzerland , advertised as a real free country surrounded by thousands of miles of politically correct social democracy in every direction (I will cover this topic in another article). Upon my return, I was informed that the company -- who was hiring new engineers only a few months ago -- was downsizing by 10%, that my position was to be eliminated, and that in fact it had already been eliminated, so would I please turn in my badge and exit the building as soon as possible?
I had to laugh at the irony. Here I was, the sole voice of economic reason in the office, always making an effort to bring the Austro-libertarian perspective, i.e., the best political approximation of The Truth (TM) into any conversation regarding the world outside the cubicle walls. Nearly everyone I have talked to since 2006 has been subject to a grilling about how their savings were invested, and then advised to take it out of the capital markets immediately because the dike was already leaking. (If my quarry seemed receptive to the idea that Wall Street was due a serious hangover, I even advised them to buy gold and silver coins. Whoa! Kook territory! Very few took THAT advice.)
Many of them, upon later query, turned out to have heeded the easiest-to-digest part of my advice, to their benefit. Some did not, and were punished for the fantasy that their 401(k) was protected by some sort of amazing fantastic reality distortion field. ("It's no big deal; what goes down must come up", I'm now told. Fine, then, I'm putting all my chips into the perpetual motion industry!)
So, as life would have it, the messenger ends up first in line for the firing squad.
It is a sign of the times and the general attitudes towards the State, that when I tell people I lost my job, even middle-class, educated people, the first question they ask is, "Are you going to file for unemployment?" "No, no, heck no!", jerks my knee in response. I mean, what am I, a peon? A serf?
Well, after thoughtful consideration, the answer is yes, I am a serf. Working for a living in America , even as a middle class property "owner," is no different from sharecropping. After all, I must share the fruits of my labor with my lord, and I must continually pay tribute for the use of my lord's land for shelter and storage, or else risk forfeiting it to a more eager fellow who will pay tribute more eagerly. Phooey!
All right, fine, so I'm a serf. I can deal with that. I'm not the first. But I don't deal in stolen goods, dadgummit! Why would I set my system of ethics aside just because a carrot (actually, five big Franklins a week, but a carrot for the sake of argument) is dangled in front of me by my lord, er, ruling entity? What kind of person would I be if I became just like all those other kinds of people that I spend so much time lecturing about responsibility, self-respect, and independence?
No, no; I've got plenty of gold, you see. I'll just sell a coin every week and live off that to weather this temporary storm. It can't be any longer of a dry season than, say, the 16 years of Hoover and FDR's depression, can it? Plus, no income means no income tax! Yay! No more financing the escapades of this regime I loathe so dearly. (Heck, I'd rather throw my money into an incinerator than let the State have a thin dime to spend on its various nefarious purposes. But then the ghost of Friedman would scold me for having caused everyone else's money to appreciate, a clearly rude and loathsome thing to do!)
Wait, what did you say? Sales tax? Capital gains tax? Confiscation? You mean to say, I don't really own my gold either? Phooey!
Come to think of it, this State seems to be stealing an awful lot from me, and all it seems to do with the money is to hire more cronies, to buy more guns to point in my general direction, and to buy bigger bullhorns to order me around with. Maybe I should look at this a different way. Is it really dealing in stolen goods if I'm buying back my own stereo?
After all, I didn't choose the State to insure me for unexpected unemployment. The State chose itself. My choice in that process consisted of choosing Tweedle Dum over Tweedle Dee -- if I could bear either of them -- while I just happened to be at my local democracy outlet anyway to mark 'no' to the same taxes I marked 'no' to three months ago. Unfortunately, as it turns out, both Tweedle Dum and Tweedle Dee believe the State should provide universal unemployment insurance. Phooey!
Since the particular State now offering me its compulsory unemployment insurance has not yet discovered the printing press, I can be sure that my stolen stereo would have bought at least part of the carrot. Logically, I am entitled to at least get my stereo back, or something of equal or greater value. But if the State has stolen a stereo from me, given the stereo to someone, and now offers me a carrot of equal or greater value, am I dealing in stolen goods? I know the carrot of equal or greater value neither belonged to me, nor the State, prior to the State using its cronies, guns, and bullhorns to acquire it. Therefore, it must belong to someone else. But to whom? (And would they happen to have seen my stereo?)
So, this carrot looks fairly juicy after all. I mean, it's not hi-fi, and definitely doesn't have DTS surround sound, but it is crunchy and it does have lots of vitamins in it. (Dr. Sardi told me that I need those, especially when I can't afford food. I'd ask him again, but these days someone from the HMO jumps in front of his door whenever I come for a checkup.) If someone actually comes to me and tells me that my carrot had been stolen from them, then I'll return it to them. Heck, whoever's carrot it is could have even voted for Tweedle Dee, Tweedle Dum, or their pals. In that case, they asked for it, didn't they?
So, my problem is solved. I'll take a bite off the carrot equal to the bite the State took out of my hide when they stole my stereo, rated it AAA+ (Hey, it's dodecaphonic! They don't make those anymore!), and invested it in their asset-backed insurance fund. Now, I can sleep soundly at night, knowing that I'm not going to Hell for having participated in a criminal enterprise.
But wait a minute. As I recall, the State didn't just steal my stereo. Last year, they stole my stereo, my three cows, my Remington, and my Rembrandt. But, according to the Ministry of Solvency, dozens of cows, hundreds of Remingtons, a little piece torn off a Rembrandt, and a stereo were rated AAA+ and invested in the unemployment insurance fund for the fiscal year. Hey, this doesn't add up! How am I supposed to know how many of my cows went into this fund, rather than being sent to Africa to feed starving junta employees, or incinerated in order to increase domestic aggregate demand for cows? I mean, when I go to a store, I get a receipt telling me how many cows were allocated to each product or service I purchased. One would expect the same courtesy from the State, especially since they invite themselves in to come and do business in my living room (even if I'm only half dressed, and not very interested in the vacuum cleaner they tell me I've already paid for).
It's almost as if the rulers muddy the waters on purpose, making it difficult if not altogether impossible to do moral business with the State. But I'm sure this is an oversight, and will be worked out soon. After all, isn't it in everyone's best interest to know exactly what low, low, cost he is paying for each and every useful government service? This is, indeed, the State's big opportunity to show us how efficient its enterprises are, and how it improves our lives by always knowing what is best for us!
In the absence of this data, which I am assured is forthcoming any election now, I'm growing skinnier by the minute. I must make a decision. So, my best effort will be to assume that the portion of my stereo, cows, Remington, and Rembrandt that went into the State's unemployment insurance fund is proportional to the ratio of the portion of acquisitions that go into the State's unemployment insurance fund to the whole of the State's acquisitions. That would be one stereo, two and a half cows, and a piece torn off the Rembrandt. Phew! Problem solved. Carrots -- ones that taste ethical and moral, that is -- here I come!
Oh, no. I see that expression on your face again. What now? What? Are you kidding me? You're telling me there's an even bigger State that has a machine that spins gold from straw? Oh, but it only uses it when there's a demand for gold? Phew, that's a relief. For a second there, I was thinking that it could make as much gold as it pleased. Then what would my bathtub full of gold coins be worth? (Besides its restorative, youthifying properties to my sensitive, fair skin, that is.) But what does this have to do with morals, ethics, and carrots?
Oh, please . . . You're making that up. You're telling me that if the small State consumes too many of the cows that it doesn't ship to Africa , and there aren't enough cows left over to trade for carrots to give to the unemployed, then the big State creates gold for it to buy sufficient carrots with? Get real. But you're not making this up, are you? Jiminy Christmas, everyone's gold is going to be worthless if they do that. And why wouldn't the smaller State just underfund the unemployment insurance fund -- using the excess loot to hire more cronies and buy more guns and bullhorns -- if it knows that it will be rewarded for its lack of foresight? After all, it can always say the economic downturn was unpredictable, and that is why the fund was insufficient to handle the sudden demand. (And if it doesn't hire Austrian economists, it would be telling the truth. It would have no way to predict economic downturns.
It would benefit in good times from making unpayable promises on paper and using the loot for nefarious purposes -- any State's primary enterprise, make no mistake -- and it would get a bailout in hard times when people demand to be paid, and its fund goes broke because it was, truthfully, wholly incapable of predicting the hard times. Now why again would it want to hire any Austrian economists, anyway?)
Argh! But now I have even less of an idea what my fair share is because of all this gold being spun from straw! I mean, my fair share would include not only whatever portion of my stereo, cows, and Rembrandt went into the fund, but also however much value my bathtub full of gold coins loses due to all the new gold being created to bail out the bankrupt insurance fund. But to know how much value my coins lost, I'd have to also know how much gold everyone else has and what their relative demands for various goods and services are! If I could know this, then a centrally planned economy could prosper! But, according to Mr. Burris, my history teacher, no centrally planned economy has ever prospered! So I can probably never know this, at least until the day when I call myself a politician and run for office! Phooey!
You know what? If the State robs Peter, mugs Paul, and creates new gold to give me a bigger carrot than my stereo, two and a half cows, and a piece torn off my Rembrandt would have fetched, I'll let Peter and Paul figure out how much I owe them and send me a bill. If they can figure it out, I'll pay them for their impressive ingenuity alone. Meanwhile, I am not going to refuse this carrot. As far as I can tell, most of it is probably roughly equivalent to my stereo, two and a half cows, and the rest. What more do you people want? If I had brains, I'd be employed by now and this discussion would be over!
So, all remaining moral and ethical questions having been passed off onto other agents in this scenario, off I go to my local carrot distribution office. Name, humm, okay. Date of birth, eh, okay, here you go. Social? Social what? No, I'm told that I'm not very social. Group W? The bench over there? Cut my hair? Aargh! This is worse than just letting you keep my stereo!
Such is the futility of doing business with the State. Meanwhile, I'm off to empty my bathtub of gold and refill it with 150 year Cognac . Let them try to print that!