The Keynesian Circular Flow of Nonsense

Source: thelibertarianalliance

by Keir Martland

To all with an A-level in Economics, the Keynesian circular flow of income will be familiar. It is a representation of the macroeconomy, including the household, the firm, the global economy, the banks, and the government.

Injections are often represented on this diagram by a green arrow and they include consumption, investment, government spending, and exports while leakages are often represented by a red arrow and they include savings, taxes, and imports. While consumption is sometimes not included in the list of injections, injections are defined as expenditures on aggregate production, that is, money flowing into firms. On the other hand, leakages are defined as non-expenditures on aggregate production.

Keynes believed that the higher the levels of spending on aggregate production in the form of consumption, investment, government spending, and exports, and the lower the levels of non-expenditure on aggregate production in the form of savings, taxes, and imports, the better off the macroeconomy is.

Keynes, it can be seen from the above, then, was of the belief that saving, for instance, was a bad thing, to put it plainly. Since savings are just sat in the bank and are not doing anything productive, what really is the point of them? In a recession, especially, savings represent a leakage in that they are not being spent on consumer goods. Consumption, Keynesians might argue, drives the economy; when goods and services are consumed, firms are better off and can employ more workers and these workers now have wages which they can spend on goods and services, the producers of which can now afford to employ more workers, ad infinitum. Why on earth, then, would anyone save money when saving simply represents a restraint on the expansion of firms? Since saving is not investment or consumption or government spending or exports, it is a no-no.

One problem with this view of savings is that it is not up to John Maynard Keynes to tell savers that their savings are not also an investment. What is an investment, after all? A very general definition of investment is that it is the act of not consuming today in the expectation of a reward in the future. Applied to economics, investment is the acquisition of a good which will ‘pay for itself’, so to speak. A hairdresser invests in a pair of scissors only because she expects the income derived from the scissors to be more than the initial cost. What, then, of the saver? Does he not first acquire his money and then put it to some non-consumption use in the expectation of a reward in the future? The answer is: of course he does. If the saver did not expect such a reward, that is, if he did not expect to be better off as a result, then he would not save. Yet, this does not rule out the possibility that the saver could be wrong, that is, that he could actually make a loss (perhaps due to inflation). Nor does the reward have to be monetary. Indeed, even if the expected reward for not consuming was purely psychic, then the saver would still be making an investment. For saving is not simply keeping resources idle without reason. Every actor, and saving is an action carried out by an actor, has an end, and he would not act unless the end was perceived to be an improvement in some sense over his present situation. So, I repeat, it is not up to the Keynesians to tell savers that they are not also, by saving, making an investment.

Yet there is another, more fundamental problem with the Keynesian view of savings. Where does the money for investment come from in the first place? According to the Keynesian view, investment is a Good Thing, and Amen to that. Investment, though, as I have just said, is the act of not consuming – that is, saving, albeit temporarily – in the expectation of a reward. To invest, one must first save. That is, to accumulate the capital with which to buy a factory, one must first have not spent this capital on consumption. But, saving is bad. So, how, if saving is to be minimised and consumption maximised, is investment ever to take place? Perhaps one answer could be that the investor might borrow the funds with which to buy the factory. Even so, these funds, to the extent that they represent the freeing up of resources by actors in the economy and not the printing of additional loanable funds through credit expansion, would not have existed had not someone else saved. Also, what happens once the investor has borrowed these funds? Must he not refrain from consumption in order to pay them back? In a future article I shall deal with credit expansion and why this does not relieve us of the task of saving and why much of the present economic malaise is actually due to it.

Turning to government spending, in what sense is government spending ‘good’? That is, how can government spending create anything of value? The Keynesian view of government spending is that, as it generates activity, or boosts aggregate production, it reduces unemployment of factors of production. This is why the Alphabet Agencies of Franklin D. Roosevelt must be regarded as sound by Keynesian standards; they employed previously unemployed factors of production in some activity and thus boosted aggregate production.

The absurdity of this position may be more obvious. For the Keynesians, the aim is only to increase aggregate production (and aggregate demand). Production of what? That really does not matter. The production of waste is just as valuable as the production of goods. In this way, what is produced is likely to be of no value at all to consumers.

However, there is another flaw: just as investment must follow saving, government spending must follow taxation. Taxation, according to the Keynesian, is a leakage. Once again, the aim of the Keynesian economist is to maximise injections and minimise leakages. How would this work? Must we eliminate all taxes and yet simultaneously increase government spending to infinity? This is nothing but the logical conclusion of the Keynesian fiscal policy recommendations. We see that today most governments are actually making some progress towards this, with most of them running budget deficits, but none of them have actually gone so far as to run a deficit of infinity. Why is this? If governments are benevolent agencies which merely wish to increase the general welfare and which also have the power to minimise Keynesian leakages and maximise Keynesian injections, then why is there still poverty in the world? Why, in fact, do governments tend to run into problems when they run deficits? Surely, if Keynesian economics were true, a fiscal stimulus would boost aggregate production and thus increase real incomes. And so, what we ought to expect, if we accept Keynesian economics as true, is that the bigger the deficit the faster the rate of economic growth. I needn’t point out that this is not so.

Then we have to consider the opportunity cost of government spending. Everything has a cost and if something doesn’t have a monetary cost then at the very least it has opportunity cost, i.e. what was given up for it. Even if government spending does lead to the production of something identified as a good by a consumer, the money the government spent was forcibly taken from a citizen. How might he have spent the money? He would have put the money to its most highly valued end, at least in his own eyes. By taxing and then spending, the government is necessarily removing money, time, and other resources from more highly valued ends to lesser valued ends. The result of this can only be relative impoverishment. Government spending may well be an injection, but it is an injection of less value to consumers than the use which would have been made had not the government taxed.

Lastly, Keynesian economics strikes me as rather mercantilist in that it suggests that imports make us poorer. This is because Keynes’ circular flow of income shows imports to be a leakage, or a non-expenditure on aggregate production. This is true, in a sense. It is true that a firm or household which imports goods exchanges money for goods and does not contribute funds to the production of goods in the domestic economy. The mistake is the assumption that this will necessarily make the domestic economy shrink.

In fact, the opposite is true. Given that any actor will purchase the most highly valued good, at least in his eyes, and that goods are considered valuable because they are cheaper and of higher quality than less valuable ones, if actors in the domestic economy import goods then they are doing so because the equivalent goods in the domestic economy are either of an inferior quality or simply do not exist. Now suppose that a Keynesian, only wanting to minimise leakages, were to impose import tariffs or to ban all imports (Keynes argued for protection in the 1930s) . What would be the result? The result would be that more highly valued goods would now become either more expensive or simply unavailable and the actors would now turn to inferior substitute goods in the domestic market. Firms and households would now be worse off, since they can now get less for their money, so to speak. All else remaining constant, if a firm is worse off, it will have to either lower wages or lay off workers. Is this good for the domestic economy?

Rather than one being ‘good’ and another ‘bad’, one an injection and the other a leakage, exports and imports are simply two sides of the same coin. When a firm exports goods, it imports money, and vice versa. If an economy were to refrain from importing goods then the effect, all else remaining constant, would be a reduced demand for this economy’s goods in foreign markets. By importing goods from other countries, we give them the money with which they can import our goods. We cannot have the one without the other.

So, the circular flow of income is, I think, a very pretty diagram which does a good job of illustrating just how a domestic economy works. If the diagram were in black and white and if the terms leakage and injection were kept away from it, then that would be one way of improving it. Only by avoiding the Keynesian colouring of the circular flow of income can we avoid the palpable falsehoods that follow from it.

Skip The Ibuprofen, Try These Natural Cures Instead

Source: beforeitsnews.com

It is your body’s way of telling you that something is amiss — pain, and for many people, the chronic variety that only the constant use of painkillers seems to mitigate. The advice of many conventional doctors is to just pop a few aspirin or ibuprofen when it shows up and go about your day. But is this approach really effective or safe?

As you may already know, many pharmaceutical painkillers are derived from plants, herbs, and other substances that possess natural painkilling properties. You won’t typically hear about these natural sources of pain relief from the media because they aren’t big moneymakers for drug companies, which reap billions of dollars selling you synthetic, patented imitations that more often than not come with harmful side effects.

In the case of ibuprofen and aspirin, these side effects include things like anemia, DNA damage, hearing loss, hypertension, miscarriage, influenza mortality and heart disease. Worse is the fact that these pharmaceutical painkillers mainly just cover up the pain, doing nothing to address its cause while inflicting further harm from deadly side effects.

The good news, though, is that there are plenty of natural ways to relieve pain without destroying your vital organs and risking an early death. And in some cases, these natural remedies can actually help your body heal from whatever is causing the pain in the first place.

1) Cannabis (marijuana). The first and arguably most effective natural pain reliever is cannabis, or marijuana, which scientists from the U.S. Institute of Medicine (IoM) have determined treats all sorts of pain, both chronic and acute. As it turns out, the human body contains cannabinoid receptors that respond to marijuana cannabinoids such as tetrahydrocannabinol (THC) and cannabidiol (CBD).

As explained in the book Marijuana As Medicine?: The Science Beyond the Controversy, published by the National Academies Press, peripheral nerves throughout the body that detect pain sensations contain abundant cannabinoid receptors, which are directly activated by the cannabinoids found naturally in marijuana. When consumed, cannabis effectively blocks pain, including extreme pain caused by autoimmune diseases and cancer, without causing harmful side effects.

2) White willow bark. The natural herb used to produce aspirin, white willow bark, contains a substance known as salicin that, upon entering the stomach, turns into salicylic acid. This powerful substance is recognized in the scientific literature as an effective remedy for inflammation, fever, gastric upset and various other forms of pain. Both traditional Chinese and European medicine favor white willow bark as a treatment for headaches, lower back pain, osteoarthritis and inflammatory conditions such as bursitis and tendinitis.

3) Boswellia. Also known as “Indian frankincense,” Boswellia extract is another powerful anti-inflammatory substance found in Boswellia trees. It is rich in boswellic acids that help improve blood flow to joints and block inflammatory white blood cells from entering damaged tissue. One study found that Boswellia helped reduce the pain index of pain patients by 90 percent, as well as spur 70 percent of ulcerative colitis patients into total remission.

4) Capsaicin. Primarily a topical pain reliever, capsaicin helps relieve nerve, muscle and joint pain by blocking a chemical in the body known as “substance P” that transmits pain signals to the brain. Since it is found naturally in chili peppers, capsaicin cream can very easily be made at home by mixing cayenne pepper powder with a delivery oil such as almond or jojoba, along with beeswax. An excellent recipe for this is available here: EverydayRoots.com.

5) Cat’s claw. Also known as Uncaria tomentosa, or una de gato, cat’s claw is a South American herb that contains powerful anti-inflammatory agents that aid in naturally blocking production of prostaglandin, a hormone that contributes to pain and inflammation. It has been used for hundreds of years in traditional medicine, and modern science has found that it can promote DNA repair, joint health, immune function and normal cell division.

6)Omega-3 fatty acids. Sometimes referred to as grease for the joints, omega-3 fatty acids like the kinds found naturally in salmon, krill, skate and other sea animals, as well as hemp, chia and flax seeds, are a powerful and all-natural anti-inflammatory medicine. They are constantly being reported to help ease chronic pain and inflammatory conditions, as well as reduce the risk of cardiovascular disease.

Rheumatoid arthritis sufferers can also benefit from omega-3s, which have been shown to help relieve joint pain and morning stiffness, as well as quell inflammation naturally, potentially better than non-steroidal anti-inflammatory drugs (NSAIDs).

7) Curcumin. One of the primary active components in turmeric, curcumin is widely regarded as a potent painkiller. Similar to capsaicin, curcumin helps block pain signals from reaching the brain, and chronic pain sufferers report dramatic relief from taking it daily. And the BCM-95 variety of curcumin in particular reportedly fights the joint-damaging effects of arthritis by targeting a range of inflammatory targets all at once.

This article has been written by Jonathan Benson, and first published on Ready Nutrition.

Asset Ownership and Our System of Deepening Debt-Serfdom

Source: informationclearinghouse

Debt-serfs who make the difficult and risky transition to small-scale business owners find they have simply moved to another class of serfdom.

By Charles Hugh Smith

January 21, 2015 "ICH" - "Of Two Minds" -    The core dynamic of debt-serfdom is that debt-serfs must borrow money to buy essentials while the wealthy borrow to invest in productive assets.

This is not merely a random result of free-market capitalism; it is the structure of cartel-capitalism in which highly profitable goods and services must be paid for with highly profitable debt.

This need to borrow to pay for essentials is already evident in student loans, vehicles and housing.

The cost of these essentials is so high that few debt-serfs can borrow enough to pay for these essentials and then have enough borrowing power left to buy productive assets.

Those few who do attempt to buy productive assets face regulatory hurdles and costs that limit their ability to own or launch small-scale profitable enterprises.
The net result is a system in which the vast majority of productive assets are owned by the few who then have the means to exploit the many.

This core dynamic of cartel capitalism is not new, as longtime correspondent Bart D. recently observed. This was the core dynamic at the root of Ireland's catastrophic potato famine of the 1840s: wealthy English owned the productive assets (land) and limited the opportunities for enterprises that boosted Irish self-sufficiency and competed with the assets owned by English financiers and landed gentry.

Here is Bart's commentary:

"I recently picked up a copy of a novel dealing with the topic of the Irish Potato famine of 1845-6 from a second hand book store run by charity. Author is Liam O’Flaherty and it was written in 1937. It was re-released in 2002. My edition was printed in the 1970’s, so it’s had a following over the years.

FamineI recommend this book HIGHLY as an insight into how families, communities, governments and economics will/are functioning in impoverished situations now and in the future. I know this because I was astonished (not using that word lightly here) at the similarity in the description of life and government/business portrayed in O’Flaherty’s book in 1845 and that which I have observed closely over many years in remote Australian Aboriginal communities from 1994 to 2012.

Especially fascinating to learn that the English Government provided ‘relief’ loans to Ireland at market interest with a condition that they could not be used to do anything productive. Basically they set up a scheme to pay a small proportion of each community to build roads, but not a cent could be spent on developing alternate Irish-owned industries or businesses for fear it would upset the rich English industrialists.

The English imported cheap American corn meal which everyone was forced to buy with the English Gov. financed wages (closing the loop of giving with one hand, taking with the other and adding in a profit to boot) after the Irish had to export all their own grain and livestock to England to pay the land rents.

The model of resource ownership described in the novel--English landlords owned all the Irish peasant farmer land and set rent at a level that ensured the farmers remained a hairs breadth ahead of destitution even under the best of circumstances--will be, I think, what our own future will look like. Unfortunately".

It’s very well written and engaging for the reader, but hard to read because of its infuriating and tragic subject material. No happy endings here.

One branch of my family (Scots-Irish, County Down) immigrated to the U.S. in the late 1840s, undoubtedly as a result of the potato famine. This history of exploitation and financial tyranny is not entirely abstract to me, and neither is the current American variation of the debt-serf model.

Those of us with experience in starting and operating small enterprises know that dozens of restrictive regulations and administrative costs limit debt-serfs' attempts to invest in small-scale productive ventures. We also know that the Federal Reserve's free funds for financiers enables hedge funds to invest $500 million in the latest software fad, while small-scale entrepreneurs have no equivalent conduit to near-zero cost funding.

Globalized cartels eliminate local pricing power by importing cheap goods from somewhere else. In less globalized circumstances, local producers retain some pricing power (and thus some profitability) because they can produce goods without the cost of shipping from overseas.

But the power of cartels buying millions of units at a time and the low cost of container shipping means cartels can eliminate the pricing power of local small-scale producers virtually everywhere.

Even low-income regions in developing nations cannot compete with global cartels in manufactured goods and agricultural/meat produce.

This is not a random result of free enterprise; it is the direct result of central banks' free funds for financiers that lowers the costs of borrowing and thus production for cartels.

Debt-serfs may legally start home businesses in some locales, but as soon as they become successful enough to compete with vested interests, their fixed costs are increased by regulatory and administrative rules. The resulting erosion of profitability and the lack of access to cheap credit limit their ability to expand without taking on burdensome levels of costly debt or selling their souls to vulture capitalists.

At that point, debt-serfs who make the difficult and risky transition to small-scale business owners find they have simply moved to another class of serfdom, one in which the serfs own an enterprise but cannot expand their capital. As a result, small enterprise ends up being just another version of serfdom, i.e. barely getting by or borrowing more just to survive.

Consider the evidence of the erosion of American small business: Economic Death Spiral: More American Businesses Dying Than Starting.


The net result is a system in which the vast majority of productive assets are owned by the few who then have the means to exploit the many.

5 Times “Obeying the Law” in America Was a Terrible Idea

Source: thedailysheeple.com

In the midst of outrage against police brutality, cop apologists argue that to avoid police brutality, people should simply be obeying the law. This justification, however, reveals itself as unwise at best (and flat out stupid at worst) when applied to previous laws in American history.

1. The Fugitive Slave Act- In times of slavery, the federal government attempted to pacify slave owners by passing the Fugitive Slave Act. The 1850 law mandated that even though slavery was banned in the North, if a Northern citizen (or government employee) happened upon escaped slaves from the South, they had to help return them to their owners. Escaped slaves were also denied a jury trial.

This law was challenged by abolitionists and decent human beings and many slaves escaped to Canada. But if all Americans had simply “followed the law,” further injustice (than was already enforced with the whole “owning” other human beings policy) would have been committed. The law was later repealed.

2. Pornography Prohibition- For as long as humans have existed, they have been interested in sex. In 1873, the federal government decided it could alter human instinct. Under the puritanical Comstock laws, pornography, sex toys, contraception, and information about contraception became illegal to send in the mail, as well as to sell, give away, or own. There is no evidence that the law stopped the human sex drive, even with the threat of up to five years in prison with hard labor and a fine up to $2,000. It eventually ceased to be enforced and was undermined by Roe v. Wade, but for years, engaging in these activities meant violators “deserved” the punishment they received.

3. Alcohol Prohibition- The prohibition of alcohol was an unpopular and unsuccessful constitutional amendment enacted in 1918. It attempted to stop people from drinking by banning liquor. It unwittingly encouraged the formation of gangs, who sold bootleg drinks while underground speakeasies flourished.

This, by the logic of cop defenders, should have been brutally punished-because those heathens were breaking the sanctity of the law! (It was repealed three years later.) No matter how nonsensical or ineffective the law, dogma to and obedience of it pervades the logic of authority worshipers. It applies today with the failed war on drugs, which like alcohol prohibition, has failed to curtail usage and created waste and black markets, as well as an excess of police violence and prison populations.

4. Sedition Acts-Shortly after the creation of the United States, in 1798 President James Madison signed the Sedition Act-intended to ban criticism of the government. It was sparked by the government’s fear of Democratic-Republican rebellion and dissent against the Federalists and accompanied other laws that persecuted immigrants.

Right out of the gate of the American revolution, the federal government was doing exactly what the Constitution was intended to prevent: running away with power. A similar law, also titled The Sedition Act, was passed in 1918 to silence dissent against World War I. It was an extension of the Espionage Act of 1917, which Obama has used to prosecute whistleblowers (the other acts were repealed). The 1918 incarnation made it illegal to

“willfully utter, print, write, or publish any disloyal, profane, scurrilous, or abusive language about the form of the Government of the United States.“

In both the 18th and 20th centuries, the state was attempting to crush free speech, so anyone who had an opinion (legally guaranteed by the first amendment and philosophically by natural human rights) should have just learned to shut up to avoid a beating and prison. Right?

5. Modern Day America- It can be amusing to examine old laws and point out their absurdity and injustice (this is only a small sampling that doesn’t cover Plessy v. Ferguson, the banning of Native Americans from Boston, or bans on interracial marriage, for example). But the reality is that many unjust laws are on the books today.

The National Defense Authorization Act allows the government to indefinitely detain anyone it deems a terrorist threat or having ties to terrorists. That judgment is entirely up to the state, but if those it deems dangerous try to resist, they will be violating “the law.” Is this fair? At what point do political dissidents and activists become threats to the state when the Pentagon has already stated that protesters are “low level terrorists?”

One of the major problems in American society and politics is the belief that the law is infallible, such as the cigarette law that led to Eric Garner’s murder. In spite of so many examples to the contrary, people still believe that the law is sacrosanct and to violate it is to be an immoral, bad person who deserves whatever the government does to them. This is directly contradicted by the fact that most of the laws listed in this article were eventually repealed.

Rather than glorifying “the law,” Americans should revere the morals government claims underpin them. As long as individuals view government decrees as the gold standard of ethics, however, the government will continue to destroy humanity. Perhaps it’s time to stop making excuses for police officers and politicians and instead, judge them by how they treat their fellow humans.

Psychologist Lists 8 Reasons Young Americans Don’t Fight Back

Source: anonhq.com

Written by: EV

Clinical psychologist and author, Bruce E. Levine, has compiled an in depth list of reasons why young Americans don’t fight for their rights. His article has, of course, caused a little controversy. One journalist went as far as claiming Levine believes youthful resistance should focus on his own agenda, however it would seem most agree with Levine’s analysis, and even the skeptics admit the article is worth reading for the points listed and consideration.

According to Levine, young people have traditionally energized democratic movements, yet these efforts have been diminishing due to the ruling elite having created societal institutions that subdue young Americans, and break their spirit of resistance to domination. Young Americans—more so than older Americans—have basically resigned themselves to the idea that corporatocracy (a term used to describe an economic and political system that is controlled by corporations or corporate interests) can completely screw them over, and they feel helpless to do anything about it.

In a 2010 Gallup poll, Americans were asked, “Do you think the Social Security system will be able to pay you a benefit when you retire?” 76% of 18 to 34-year-olds said ‘no’. Despite the fact that these individuals don’t believe they’ll receive their social security benefits, few have demanded it be shored up by fairly taxing the wealthy. They accept that they will have more money deducted for social security even though they don’t believe they’ll one day receive those benefits.

How exactly has American society subdued young Americans?

1. Student-Loan Debt. During the 1970’s, tuition at many U.S. public universities was affordable. It was possible to receive a bachelor’s degree having accumulated no debt. Those days are dead and over. Large student debt, and the fear it creates, has become a pacifying force. Today, two-thirds of graduating seniors at four-year colleges are in debt, and that includes over 62 percent of public university graduates.

These debts come at a time in one’s life when it should be easy to resist authority because one does not yet have family responsibilities. Instead, young people are burdened with the stress of the cost of buckling authority, losing their job, and being unable to pay an ever-increasing debt. This has resulted in a vicious cycle where student debt has a subduing effect on activism, and political passivity makes it more likely students will accept their debt as a natural part of life.

2. Psychopathologizing and Medicating Noncompliance. Erich Fromm, who was a widely respected anti-authoritarian leftist psychoanalyst, wrote in 1955, “Today the function of psychiatry, psychology and psychoanalysis threatens to become the tool in the manipulation of man.” Fromm died in 1980, which happened to be the same year Ronald Reagan was elected president, and an increasingly authoritarian American Psychiatric Association added to their diagnostic bible (then the DSM-III) disruptive mental disorders for children and teenagers such as “oppositional defiant disorder”, or ODD.

“Symptoms” of ODD include; often actively defies or refuses to comply with adult requests or rules,often argues with adults, and often deliberately does things to annoy other people. That pretty much describes the majority of all children. Those who are actually diagnosed with ODD receive heavily tranquilizing antipsychotic drugs, such as Zyprexa and Risperdal, which are now the highest grossing class of medication in the U.S. ($16 billion in 2010). According to the Journal of the American Medical Association in 2010, many children who supposedly have ODD are being given antipsychotic drugs when they have a nonpsychotic diagnoses.

3. Schools That Educate for Compliance and Not for Democracy. John Taylor Gatto, after receiving the New York City Teacher of the Year Award on January 31, 1990, upset many who were in attendance at the ceremony by stating, “The truth is that schools don’t really teach anything except how to obey orders. This is a great mystery to me because thousands of humane, caring people work in schools as teachers and aides and administrators, but the abstract logic of the institution overwhelms their individual contributions.”

Regardless of the subject matter, the main objective in most classrooms is to socialize students to be passive and directed by others, to follow orders, to take seriously the rewards and punishments of authorities, to pretend to care about things they don’t care about, and that they are impotent to affect their situation. School teaches us that politely asserting our concerns is “moral and mature”. It demands our compliance and teaches us not to act in a friction-causing manner.

4. “No Child Left Behind” and “Race to the Top”. Thanks to corporatocracy, our already authoritarian school system has become even more authoritarian. Educational policies such as “No Child Left Behind”, and “Race to the Top”, have essentially standardized-testing tyranny that creates fear. This is contradictory to education for a democratic society. Fear forces students and teachers to constantly focus on the demands of test creators. In doing so, it crushes curiosity, critical thinking, questioning authority, and challenging and resisting illegitimate authority. Were our school system actually democratic and less authoritarian, one would evaluate the effectiveness of a teacher not by corporatocracy-sanctioned standardized tests, but by asking students, parents, and communities if a teacher is inspiring students to be more curious, to read more, to learn independently, to enjoy thinking critically, to question authorities, and to challenge illegitimate authorities.

5. Shaming Young People Who Take Education—But Not Their Schooling—Seriously. Today society has been led to believe that disliking school means disliking education in general. Many Americans are under the delusion that if you lack a college degree, you are a “loser”. In actuality, this is not the case. Gore Vidal and George Carlin, two of America’s most astute and articulate critics of the corporatocracy, never went to college. Carlin himself dropped out of school in the ninth grade. You don’t need a degree to have a voice or an opinion, and you don’t need to attend a school to read a book. Throughout history we have seen many examples of those deemed “the common man” fighting for what they believe in without schooling, and succeeding in their endeavors.

6. The Normalization of Surveillance.We are living in an era of surveillance, and in the case of our nation’s youths, they’re being born into it. The National Security Agency (NSA) has been in the world’s spotlight for monitoring American citizen’s email and phone conversations, while at the same time employer surveillance has become increasingly common as well. Young Americans are starting to accept corporatocracy surveillance because it’s become routine in their lives. From a young age people are being heavily monitored. Parents scan websites and browsing history, and like employers, they monitor their children’s Facebook pages. Some parents use the GPS in their children’s cell phones to track their whereabouts, and other people go as far as placing cameras throughout their house. Many children and teenagers have lost their confidence due to the fact they are constantly being watched. How can young Americans be expected to pull off a democratic movement below the radar of authorities when, as youths, they didn’t even have the confidence to throw a house-party when their parents were out of town?

7. Television. In our current age of technology, American children now have access not only to televisions and computers, but to cell phones, iPods, and other technologies capable of accessing the media. On average, children spend around 8 hours a day on such devices. Many progressives are concerned about the concentrated control of content by the corporate media, but the primary issue is the fact that television itself has become a pacifying agent. For example, private-enterprise prisons have recognized that providing inmates with cable television can be a more economical method to keep them quiet and subdued than it would be to hire more guards.

Fear-based television works beautifully in an authoritarian society to keep people afraid and distrustful of one another. It isolates people from one another to prevent them from joining together to create resistance to authorities. Regardless of the programing, watching television also slows down brainwaves making critical thinking difficult. Although playing video games isn’t as mind-numbing as simply viewing television, such games have become the only real form of potency boys and young men experience, and “virtual potency” is no threat to the ruling elite.

8. Fundamentalist Religion and Fundamentalist Consumerism.Young Americans are offered “choices” of fundamentalist religion and fundamentalist consumerism, however all varieties of fundamentalism—the demand for a strict, literal interpretation of certain doctrines—narrow one’s focus and inhibit critical thinking. Some progressives call fundamentalist religion the “Opiate of the masses.”

Fundamentalist consumerism destroys self-reliance. It creates people who feel completely dependent on others and who are thus more likely to turn over decision-making power to authorities. This is the precise mind-set the ruling elite is striving for. A fundamentalist consumer culture legitimizes advertising, propaganda, and all kinds of manipulations, including lies. Once society legitimizes the lies and manipulation, people cease to trust one another and form democratic movements.

In conclusion, Levine states that these are not the only aspects of our culture that subdue young Americans and crush their resistance to domination. The food-industry has helped to create an epidemic of childhood obesity, depression, and passivity, and the prison-industrial complex serves to keep young anti-authoritarians “in line”.

As Ralph Waldo Emerson observed, “All our things are right and wrong together. The wave of evil washes all our institutions alike.”

Why I Don't Vote

Source: dailyanarchist.com

by Davi Barker

I used to vote regularly. The last time I voted was 2008. I was heavily involved in the Ron Paul Revolution of 2007. I donated hundreds of dollars, walked districts to distribute campaign materials door to door, ran a table at a local farmer’s market, attended rallies, spoke to virtually anyone who would listen, and I held my nose and registered Republican so I could vote in the GOP primary. I had been following Ron Paul’s career since 2003, and though I disagreed with him on issues like abortion and immigration, I was entranced by the black swan of a politician who actually spoke the truth, and voted consistently according to what he said, without exception. He was a champion of the three issues most important to me, and I’d argue the most critical to the future and freedom of America; end the war on drugs, end military adventurism around the world, and end the banking cartel known as the Federal Reserve.

What I saw during the GOP primary race proved to me that the system is rigged not only at the election level, but all the way to the primary level. In the GOP debates moderators would ask the candidates questions and skip over him so he couldn’t answer, or leave the other candidates’ mics on while he spoke so the audience could hear them snickering at him. Yet through all the mistreatment he calmly and plainly spoke the truth, standing out as the only honest candidate on the stage, and the audience saw through it. Ron Paul overwhelmingly won virtually every post-debate opinion poll, and yet every media outlet either mocked him when they reported the results, or completely excluded him from the poll results as if he did not even exist. Throughout the primary the GOP itself did everything that it could to marginalize him and his supporters. Virtually every state primary and caucus was afflicted with allegations of GOP rule breaking or even Diebold voting machine hacking.

Bottom line, the GOP primary process was not an honest race. The GOP establishment decided what kind of candidate they wanted, and did everything in their power prevent any disruptive change to the status quo. Before you think that this is a GOP problem, and not a democracy problem, the Democratic Party gave virtually the same treatment to Mike Gravel and Dennis Kucinich, who were the truth tellers of the left. Even the Libertarian Party gave similar treatment to Dr. Mary Ruwart, who was the principled candidate in their primary, instead nominating Bob Barr purely as an appeal to mainstream conservatives. The parties, even the minor parties, are playing a game, and they aren’t playing fair. None of them are interested in an authentic democratic process, and none of them take seriously the desperate need for radical change. The result is a presidential race in which the parties put forward candidates who already agree on the most critical issues before the general public is even aware of the opportunity for a choice. The candidates really only differ on mostly superficial issues, so that the illusion of choice remains.

Honestly, I thought at first that Barrack Obama was different, and I seriously considered voting for him until those very last moments in the voting booth. I disagreed with him about far more of the superficial issues, but he campaigned on the right side of at least two of the issues most important to me. He campaigned unambiguously as a peace candidate, and he made a number of statements against the war on drugs, although it wasn’t a central issue of his platform. As far as I know he took no position on the Federal Reserve.

In the voting booth in 2008 I was faced with a difficult decision. Option one, cast my vote for Obama, a candidate I didn’t really want, purely for the sake of keeping Romney out of office. The lesser of evils strategy. Option two, write in Ron Paul, an act that would have literally no effect on the outcome, and probably wouldn’t even be reported anywhere, purely to assuage my own conscience.

I wrote in Ron Paul, but left the voting booth feeling utterly humiliated for having to beg not to fund policies I find truly evil, and powerless to affect any real change despite committing my fullest practical effort. That humiliation, combined with my utter disappointment with the first four Obama years was the emotional kick that convinced me not to participate anymore.

People usually assume that people don’t vote because they are apathetic, and I’m sure some are, but for me the opposite was true. When I made a conscious decision not to vote I immediately felt a desperate fire to find some action or strategy that might actually affect change. I explored civil disobedience, and tax resistance. I became self employed, both to maximize my personal freedom, and to take control of what causes I support and avoid. I wrote letters and engaged in boycotts. I signed up for the Free State Project, and got involved in Bitcoin. It was as if voting had acted as a pressure valve, and disabusing myself of the illusion that it made a difference forced me to find some direct action that did.

The catalyst for my decision was emotional, but there are a number of intellectual reasons for my decision which I had been struggling not to accept, but now do. There are specifically six.

1) The math

Statistically speaking whether I vote or not makes no difference on the outcome of an election. Being in California this is doubly true. No election ever comes down to one vote, but as we learned in 2000, even if it comes down to a hundred votes, or even a thousand votes, the result is intense controversy, demands for recounts, disputed results, and ultimately a decision made by the courts. So, even when an election seems so close it might matter, one vote is not even within the margin of error. Further, California is not a battleground state anyway. Libertarian views are such an incredible minority here there is virtually no hope of some kind of surprise landslide that needed my support. And if one occurred, well, it wouldn’t need my support. Also, because elections sweep east to west, often an election is already decided before California’s polls close.

2) My own Ignorance

In the past I have been a strong advocate of something called the “Read The Bills Act” which would require Congress to actually read bills before they vote on them. The recently passed spending bill, the so-called Cromnibus, is reportedly 16,000 pages long. Do you think anyone read it? California reportedly passed 930 new laws last year. Do you think Governor Brown read them before he signed them? Do you think he even actually signed his own name 930 times last year? The prohibitive length and number of these proposals means that they are chalked full of unrelated regulations and mandates that don’t appear in the summaries and commentaries of the proposals. This problem translates to voter initiatives, even when they are comparatively short. I realize many people are comfortable voting on propositions they haven’t actually read, but I’m not. The amount of time it would take to read and understand what I’m asked to vote on makes it virtually impossible not to vote out of ignorance.

3) I’m unqualified

Even assuming I’ve read and understood a proposition, or the platform of a candidate I’m expected to vote on, I’m still not qualified to make decisions about an entire country, or an entire city, or even another person. Does my local library need more funding? Was building a baseball stadium a good idea? Is Net Neutrality a good national policy? Would Jamie Matthews or Deborah Bress make a better Mayor of my city? Most of the time I honestly have no idea. How should I know? To wisely make broad and far-reaching decisions about an entire society requires vast amounts of inaccessible information. Sure, the teacher’s union says they need more money, but I’m willing to bet every single person that is taxed to pay for that increase would also say that they need more money. Who is correct? I’m not a central economic planner. I can’t predict and account for all the possible unintended consequences. I know many people are comfortable going into the voting booth and voting their gut, even if they’ve never heard of the candidate, but I find that irresponsible.

4) No refunds

George W. Bush originally ran on a platform of a humble foreign policy and no nation building. Barack Obama originally ran on a platform of undoing the worst transgressions of the Bush administration. As far as I can tell there is absolutely no correlation between what a candidate says, and what they actually do in office. When I go to a restaurant and order a grilled cheese sandwich, if they bring me a BLT I can demand a refund. Imagine a restaurant where they never actually served the items described in the menu. How would you decide what to order? For all you know you could order a vegan side salad and they could bring you a clubbed baby seal. I wouldn’t order food in such a restaurant. Sure, Obama looked like the peace candidate, and Romney and McCain both looked like war candidates, but who knows? When they’re all either lying to get elected, or changing their position when they see the political reality of the office, I can’t trust them enough to believe in a correlation between what I vote for and what I get.

5) Time

My time is valuable, and scarce. It requires tremendous time and attention keeping even remotely informed about the available voting options. Not just the actual time spent voting, but the time spent researching the candidates and proposals. The more important the issue, the more time it requires. And the more enthusiastic or supportive I am of a cause the more time and attention it demands. There is an opportunity cost to spending that time. Time spent preparing to vote, or campaigning is time not spent another way, and often that investment is lost. If the election doesn’t go my way, I have nothing to show for the time and attention I spent. But there are many ways I could have invested that time which would not be lost, and could potentially accomplish more proportionally.

6) Violence

This is perhaps the most important, and most explicitly anarchist objection I have to voting. It’s subtle, and most people don’t see it, but once seen it cannot be unseen. Behind most votes there is a gun, if you scratch just below the surface. If you don’t comply with a law they’ll send officers with guns out to enforce them, and if you don’t cooperate with those officers you’re going to have a bad day. Maybe they’ll send you a letter first, but even that is a threat when the price of noncompliance is the same enforcement. For example, a vote to ban marijuana points a gun at pot smokers, sellers and growers. These are victimless crimes, and I don’t support violence against non-violent drug offenders. But to vote to legalize marijuana often involves passing regulations or taxes that are also backed by violence. Maybe you want a community playground. Are you willing to force those neighbors who don’t want it to pay for it against their will? Maybe you want to ban gambling in your community. Do poker players really deserve to be threatened with fines, or arrests, or ultimately physical violence if they don’t cooperate? You can seldom vote to put the gun down. You can usually only vote to point it at someone else.

Many anarchists support what they call “defensive voting” which is voting only to prevent violence. This almost always means voting on propositions, not candidates, because candidates always have platforms that include many positions on many issues. I don’t have any objection to this approach to voting, however non-violence is rarely on the ballot, and even when it seems to be I still have the other five objections to overcome. Sure a proposition may look like non-violence. But how do you know for sure? Have you read it? Do you have the time to read it considering how little difference that makes? And if it passes, and it doesn’t turn out the way you expected, do you get your vote back? I think not.

No, really, markets do sort themselves out

Source: adamsmith.org

Written by Tim Worstall 

You’ll recall the terrified bleating from the usual suspects over the way that the supermarkets were sitting on all that land that could be used? As we recall said bleating the first set of allegations were that they had the land banks to make sure that other supermarket chains couldn’t build stores in an area. Our reaction to that was, well, issue more planning chittys then.

 More recently the story moved on to how the supermarkets were sitting on all that land that should be used for housing instead. To which our reaction was, well, issue more planning chittys then. We’re really not short of land to build on in this country, we’re only short of land someone is allowed to build upon.

And what is happening now?

Britain’s supermarkets are building on just 6pc of the land they control across the UK, underlining the problem they face with undeveloped sites as the industry battles tumbling sales.

New figures show that the pipeline of new grocery stores in the UK is 46.61m sq ft, the equivalent of more than 1,000 acres. However, just 2.8m sq ft of these new stores are actually under construction.

Building work on stores has fallen by 20pc compared to a year ago as the “big four” supermarket chains – Tesco, Asda, J Sainsbury and Wm Morrison – suffer from tumbling sales and profits.

This means that 43.81m sq ft of land across the country is sitting unutilised by grocery retailers according to property agent CBRE. This land is either subject to a proposal for a new food store, or planning permission has already been granted.

The supermarkets simply do not want to build more stores on that land that they own. That land will, therefore, in the fullness of time (given the time and effort it will take to change said planning chittys, this system is not known for its efficiency) be developed to some other purpose, most likely that housing that was being called for.

And all being done without a politician or a bureaucrat making a plan, without considering social usefulness and entirely cocking a snook at the desires of our betters in the Great and the Good.

We the peasantry have decided that we’re not all that interested in more supermarkets. So, therefore, there won’t be that many more supermarkets. Markets really do just sort themselves out, we get supplied with what we actually want for that’s what we spend our money on, what we want.

Well, markets do sort themselves out if they’re allowed to. Who’s willing to bet on the campaigns against those now won’t be supermarket sites being turned into the housing that people insist we need?

Ideas can mean the difference between wealth and poverty

Source: adamsmith.org

Written by Sam Bowman 

Adam Smith never said that “The real tragedy of the poor is the poverty of their aspirations”, as some people who have never read him think. It is hard to think of a less Smithian view – he was the opposite of that quote’s patrician and patronising voice, and had a deep compassion for people who had been unlucky in life.

But there is some evidence that disadvantaged people underinvest their savings at a huge cost to themselves. This seems to be true even when there are no social constraints or market failures that might cause this to happen.

One reason for this may simply be that poor people do not realise that the investment opportunities exist, or do not really consider that they might benefit from them. Consider those bright young students from deprived backgrounds who have never even considered applying to university, just because nobody in their families ever has either. Your experience of the world shapes how you react to various opportunities that you get.

To test this hypothesis, a group of researchers at Oxford performed a controlled trial in remote Ethiopian villages, where they showed one of several one-hour documentaries about poor Ethiopian farmers who had expanded a business, improved their farming practices or broken cultural norms by, say, marrying for love. “Individuals succeeded largely through their own efforts and by drawing on assistance from community members and available resources, not through outside government or NGO intervention.”

The trial involved a placebo group (shown a comedy movie) and a control group (shown nothing at all) and it seems to have been a success. Six months after the screenings, the documentary group’s savings rate had risen significantly above the control group’s and had also begun to access credit at a higher rate. (These are some of the poorest people in the world, so the absolute amounts – a few pounds – may seem very small to our eyes.)

School enrolment was up by 15 percent in the documentary group, although it was also up by 10 percent in the placebo group so the effect is unclear, and spending on school expenses was up by 17% (compared to no change in the placebo group).

Overall, the results seem to show that showing extremely poor people examples of people like them who had made something of themselves inspired them to invest in themselves and their families.

It’s just one study, but it hints at something bigger. Incentives matter, of course, but you have to be aware of the existence of an incentive for it to work on you. Even if you’re aware of it, you might discount (or exaggerate) its significance according to your experiences. In a complex world, each of us uses a different pair of glasses to focus on what matters and filter out what doesn’t. And no pair is perfect.

There is no obvious public policy lesson from any of this, except perhaps that people don’t always react predictably to incentives. Incentives matter – but so do ideas.

Voluntary Exchange vs. Government Mandates

Source: mises.org

JANUARY 7, 2015Patrick Barron

The basic unit of all economic activity is the uncoerced, free exchange of one economic good for another. Moreover, the decision to engage in exchange is based upon the ordinally ranked subjective preferences of each party to the exchange. To achieve maximum satisfaction from the exchange, each party must have full ownership and control of the good that he wishes to exchange and may dispose of his property without interference from a third party, such as government.

The exchange will take place when each party values the good to be received more than the good that he gives up. The expected — but by no means guaranteed — result is a total higher satisfaction for both parties. Any subsequent satisfaction or dissatisfaction with the exchange must accrue completely to the parties involved. The expected higher satisfaction that one or each expects may not be dependent upon harming a third party in the process.

Third Parties Cannot Create Value by Forcing Exchange

Several observations can be deduced from the above explanation. It is not possible for a third party to direct this exchange in order to create a more satisfactory outcome. No third party has ownership of the goods to be exchanged; therefore, no third party can hold a legitimate subjective preference upon which to base an evaluation as to the higher satisfaction to be gained. Furthermore, the higher satisfaction of any exchange cannot be quantified in any cardinal way, for each party's subjective preference is ordinal only.

This rules out all utilitarian measurements of satisfaction upon which interventions may be based. Each exchange is an economic world unto itself. Compiling statistics of the number and dollar amounts of many exchanges is meaningless for other than historical purposes, both because the dollars involved are not representative of the preferences and satisfactions of others not involved in the exchange, and because the volume and dollar amounts of future exchanges are independent of past exchanges.

One Example: The Case of Ethanol

Let us examine a recent, typical exchange that violates our definition of a true exchange yet is justified by government interventionists today: subsidized, protected, and mandated use of ethanol.

The use of ethanol is coerced; i.e., the government requires its mixture into gasoline. Government does not own the ethanol, so it cannot possibly hold a valid subjective preference. The parties forced to buy ethanol actually receive some dissatisfaction. Had they desired to purchase ethanol, no mandate would have been required.

Because those engaging in the forced exchange did not desire the ethanol in the first place, including the dollar value of ethanol sales in statistics purporting to measure the societal value of goods exchanged in our economy is meaningless. Yet the government includes all mandated exchanges as a source of “value” in its own calculations.

This is just one egregious example of many such measurements that are included in our GDP statistics purporting to convince us that we have "never had it so good."

Another Example: The Soviet Economy

Our flawed view that governments can improve satisfaction caused us to misjudge the military threat of the Soviet Union for decades. Our CIA placed western dollar values on Soviet production data to arrive at the conclusion that its economy was growing faster than that of the US and would surpass US GDP at some point in the not too distant future. Except for very small exceptions, all economic production resources in the Soviet Union were owned by the state. This does not necessarily mean that it was possible for the state to hold valid subjective preferences, for those who occupied important offices in the state held them at the sufferance of what can only be described as gang lords, who themselves held office very tentatively.

State ownership is not real ownership. Those in positions of power with responsibility over resources hold their offices for a given period of time and have little or no ability to pass their office on to their heirs. Thus, the resources eventually succumb to the law of the tragedy of the commons and are plundered to extinction. Nevertheless the squandering of the Soviet Union's commonly held resources was tallied by our CIA as meeting legitimate demand.

Professor Yuri Maltsev saw first-hand the total destruction of the Soviet economy. In Requiem for Marx, he gives a heartbreaking portrayal of the suffering of the Russian populace through state directed, irrational central planning that did not come close to meeting the people's legitimate needs, while our CIA continued to crank out bogus statistics of the supposed strength of the Soviet economy upon which the Reagan administration based its unprecedented peacetime military expansion.

Peaceful Exchange Allowed, Violent Exchange Redressed

With the proviso that no exchange may harm another, as explained so well in Dr. Thomas Patrick Burke's book No Harm: Ethical Principles for a Free Market, we are led to the conclusion that no outside agency can create greater economic satisfaction than can a free and uncoerced exchange. The statistics that support such interventions are meaningless, because they cannot reflect the satisfaction obtained from true ordinally held subjective preferences. Once this understanding is acknowledged and embraced, the consequences for the improvement of our total satisfaction are tremendous. Our economy can be unshackled from government directed economic exchanges and regulations.

Image Source: iStockphoto.