Which Future Do You Want?

Yesterday, I wrote about aggression or the lack of aggression that is the mark of all Libertarians. (If a Libertarian tells you that he supports any of our current war efforts, he is not a Libertarian.) Today I present an article I ran across yesterday from L. Neil Smith. He is an author and strong supporter of Libertarianism and therefore the Zero Aggression Principal. Read and enjoy. He is much more eloquent than I.

by L. Neil Smith lneil@lneilsmith.com

Attribute to The Libertarian Enterprise

I am a novelist, by trade.

As someone once defined it, I am one the nation's four hundred professional liars. I make up long, complex, internally consistent lies, set them down on paper or disk, and people pay me money for them.

Like H.G. Wells, Edward Bellamy, and Ayn Rand before me, I write science fiction (Rand never knew she wrote science fiction, but she did, and I mean no denigration by saying so) with the purpose in mind of conveying a relatively simple set of ideas to as many readers as I can before I croak or it's too late for all of us, whichever comes first.

In the end, those ideas boil down to only three points, really:

First, that each and every individual human being is the sole and absolute owner of his or her own life and (for better or for worse; would-be polluters take extra-careful note) all the products of that life
;
Second, that the best, and possibly the only way to establish, advance, and defend that principle is to utterly renounce the use, and, I must insist, the advocacy and delegation of initiated force (the adjective is crucial, I do not preach pacifism which, at best, makes you a parastic free-rider, and, at worst, somebody's breakfast); and

Third, that humanity and civilization as a whole benefit beyond measure as long as these principles are earnestly and assidously observed (although social benefit isn't vital to the equation-it's still far better to starve in freedom than to become a sleek, well-fed slave).

Unlike Bellamy, at least, and following the example of Robert A. Heinlein who was my teacher in many things, I recognize an absolute obligation to generate the most entertaining stories I can, in advance payment for the serious consideration I want my readers to give my ideas. As I've grown older and the titles have piled up (I believe I'm working on books 25 and 26 right now-or is it 26 and 27?), it has become easier for me to do just that, as the emphasis in my literary undertakings has shifted, almost of its own accord, from direct focus on the ideas to the individual characters living by them or resisting them.

Along the way, driven by that purpose, those principles, and a fairly undampable confidence in human progress, I've made a number of predictions about the future which have come true. My first novel, The Probability Broach, predicted the universal popularity of (and necessity for) home computers, wall-sized monitors, the Internet, and laptop computers. I also envisioned and wrote about a number of the investigative innovations I'm only seeing now on TV programs like CSI.

My fourth, The Nagasaki Vector predicted an end to the Soviet empire.

Readers-and other writers, for that matter-often praise me for the "positive sense of life" that colors almost everything I write.

In the futures (or alternate histories) I write about, everything is bright and colorful. People usually live in what closely resembles American suburbia-except that the lots they live on, and the houses they build there are several times larger, better designed and kept up
.
The tech is always as high as I can credibly make it. People get sick less often, their injuries heal faster, and they live far longer (although I've observed that in societies where people are virtually immortal, there's a 100 percent likelihood that they'll eventually die by accidental violence) all because half of what they earn isn't systematically stolen from them by some government somewhere and then turned against them to control their lives and generally retard progress.

For reasons requiring an essay unto itself-or possibly 27 or 28 books-crime is an extremely rare phenomenon (which tends to make it a bit hard on the action-adventure writer in me). With few exceptions, people are prosperous, happy, forward-thinking, and mutually tolerant-and manage to stumble on plenty of wrongs to right despite all of that
.
War-along with the low, crawling political and corporate scum-sucking bastards who benefit by it-are pretty much relics of the past.

Although I haven't persuaded a single one of my colleagues to join me in it, I could never write any other way, myself. I want to give my readers "something wonderful" to look forward to-I want "something wonderful" to look forward to, myself-and even now I can't imagine adding to the mountain of tired, threadbare, gloomy prognostications that have been written and published. George Orwell, Aldous Huxley, and Mordecai Roshwald all created much better dystopias than I ever could.

And they didn't slow the march of the killer-state by a single nanosecond.

On the other hand, it would appear, neither have I.

But am I really naive enough (I pretend to hear the cynical among you asking) to believe in this kind of future? Absolutely-or there wouldn't be any point to writing about it. Although I certainly don't believe it will come to us free or easy or inevitably, especially now, five years after George Bush's version of the Reichstag Fire. But this brings me ("finally", I pretend to hear the rest of you saying) to the point.

As a writer of alternative histories (what would the world be like today if, say, the Pennsylvania farmers had won the Whiskey Rebellion; Texas had remained an independent nation; Hitler had immigrated to the New World following World War I; etc.) I also believe in alternative futures.

I've written a good many of them, myself.

Although details vary from universe to universe, pictures I paint of whatever universe it happens to be are as rosy and attractive as I can realistically make them, given certain truths of history and human nature, first, because I want to live in a future like that myself, and second, because I believe the best way to get there is to make it attractive.

And third, because contemplating doing anything else is so damned depressing. Quite frankly, if you prefer a future of dark, gritty streets, torn, faded work clothes, bad smells, garbage cans, and squawling alley cats, you're out of luck here. Write your own damned future. I want my future in brilliant Technicolor, 3D, and Surround Sound.

Yet there are, as I'm sure you'll anticipate, likely futures that aren't all that rosy and attractive. The mental picture that haunts my nightmares most consisently is finding myself squatting in bombed-out ruins with a half-brick in my hand, trying to decide if I can brain the four-year-old I've been stalking, for the can of beans she's just discovered.

That's exactly what we're coming to if we go on letting the Bushes and Clintons of the world manage events and control our lives. Western civilization will collapse from the weight of all the government that it's forced to carry around on its back, and worse, of its own bloated stupidity in looking to that government, no matter how discredited it becomes, for any answer other than simply leaving all of us the hell alone.

Do I have any better plan? Damned right I have, lots of them, 28 or 29 books full of them. Start by reading my books, yourself. I wrote them for you to use in the struggle for individual liberty. Recommend the ones you like to family and friends. Recommend the ones you don't like to enemies and unwanted relatives. If you're a writer yourself, stop the Orwellian whining and try writing of a future worth fighting for. It was a hell of an ordeal to learn how, but I did it, and so can you.

A fully-realized fictional world with its own unique characters, settings, and history is a potent weapon in the struggle. The idea is to condition readers' expectations so that they'll demand a decent future.

It's the only strategy I trust. Certainly we can get nothing that we want-absolutely nothing-by ever voting for any Republican or Democrat ever again. Or for anyone currently occupying any political office (with the possible exception of Congressman Ron Paul). These are the lowlives who passed the Patriot Act twice. They're the same lowlives who pushed the War on Drugs until it became a vast War on Everything. They're the lowlives who, at the local level, find excuses to steal your property and your pets, and who casually decide for restaurant owners whether to allow smoking in their establishments or not.

All of them put their nasty hands in your pockets and then use what they find there-your own money-to oppress you. Do you want the future that that's creating, or one of the futures I believe are possible?

The question is not rhetorical.

Which future do you want?


Four-time Prometheus Award-winner L. Neil Smith has been called one of the world's foremost authorities on the ethics of self-defense. He is the author of 25 books, including The American Zone, Forge of the Elders, Pallas, The Probability Broach, Hope (with Aaron Zelman), and his collected articles and speeches, Lever Action, all of which may be purchased through his website "The Webley Page" at lneilsmith.org.

The Initiation of Force

"No human being or group of human beings has the right-under any circumstances-to initiate force or use coercion against another human being or group of human beings, nor to threaten or delegate its initiation."

This is what being a Libertarian is all about. If you ask the average person on the street, you will most likely get something along the lines of "a Libertarian is against government." Either that or the person will have no idea what a Libertarian is.

If you ask a democrat they will tell you that Libertarians are communists. That goes well with the Democrat's standard tactic of slinging mud to avoid the subject.

Reread the quote above that is the standard by which all Libertarians are measured. Think for a moment about what the quote really means. If we really followed that principal, which would actually be a very peaceful way to live, there would not be any taxes. That alone would at least severely limit government. Maybe that is where everyone gets the "no government" idea.

But it goes beyond taxes. It goes into mandatory schooling, mandatory curriculum in public schools, the war on drugs, the war on terror, what we watch on TV, and what kind of money we have to use. If we lived by the Zero Aggression Policy and returned to strong personal property rights originally guaranteed by our constitution, life would sure be a lot easier and more peaceful for all of us.

No government ever created has ever voluntarily reduced its size. Once in power, they become consumed with staying in power. Power is a strong, highly addictive drug that most people cannot shake. Every government throughout history has collapsed under its own weight. Our government will be no different. It is just a matter of time. Oh, they will fight tooth and nail to maintain the status quo, but in the end it will fail. Let's just hope that our government does not destroy the entire country in the process.

Feel The Burn

The Bureau of Labor Statistics reported that the Consumer Price Index shot up .9% for the month of April. That my friends works out to an annualized rate of 11.35% or if you calculate inflation using the old weighting method, a whopping 12.68%. Feel the burn.

Of course they will adjust that number using what they call a seasonal adjustment to tame the number a bit, but for you and I, there is no seasonal adjustment when we pay our bills. Have you ever had the service station lower your fuel bill with a seasonal adjustment? Of course not.

The bottom line is this...the government is having a more difficult time hiding manipulation of the country's currency. In March, they stopped reporting the M3 money measure hoping that this would take some of the focus off of their continued currency inflation, but as with all economies throughout history, there comes a time when you have to pay the piper. We are approaching that time.

Reminds me of an infamous gentleman by the name of John Law. In 1716 Mr. Law convinced the French government to establish a state-owned bank. The bank then created a government currency that was unbacked. In other words, it was a fiat currency similar to our own. The French then began printing currency and using the money to pay their bills. The only problem was that it was too easy to print a few more bills when they ran short. Eventually, people became leery of the government's paper money and began turning them in for gold. The run on the bank caused the currency to collapse in 1720 and John Law went from national hero to national criminal.

Today, our esteemed leaders would have you believe that it could never happen again because this time things are different. Beware whenever anyone tells you that "this time it is different." While it is true that things are different, the end result will be the same. Our Federal Reserve Bank is systematically destroying our currency.

Why would your government destroy our currency? Well, they believe that they can manage the currency so as to prevent a total collapse. That remains to be seen. They prefer a slow steady drop in the value of our money. Why? Because if there is continuous inflation then tomorrow's dollars are worth less than today's. (We've all experienced that, right?) The government currently owes over $8 trillion dollars. That number does not include future Social Security and Medicare payments that they have promised all of us. So if the government steadily decreases the value of our money, that allows them to pay their future obligations with dollars that are worth less.

But there is another reason why the government likes inflation. You see when you own something of value, let's say equities for example, you purchase them at a set price. As inflation works through the economy the perceived value of your equities increases. It really is not the equities that are increasing but the value of the money used to buy and sell the equities that is going down in value. However, when you sell, you are taxed on the capital gains. A large portion of those gains were created out of thin air by our government's monetary policy.

So, the purchasing value of your money goes down steadily over time which causes the prices you pay to go up and you pay more taxes. The government wins both ways.

How can you defeat them at their own game? Buy gold. It protects you against fiat currency destruction and besides, they really hate for people to own gold.

Throw Civility Out The Door

I wrote back in April about the coming collapse into another Great Depression. It is coming. When, I do not know, but that doesn't change the reality of it's coming. You may recall that I warned that things would be worse this time because of demographics. Far fewer of us live on farms and even fewer of us own those farms free and clear.

This creates a situation around logistics and just-in-time inventory control. As a country we have gotten very good at managing inventory. When know when to order and when it needs to arrive so the next customer can buy. A good example of just-in-time is the Florida orange juice commercial. The housewife walks up to the juice cooler, reaches in and a farmer in Florida hands her a fresh carton of orange juice.

Such an inventory system allows companies to minimize inventory costs and maximize profits. And it works as long as every link in the chain continues to work. But when an economy tanks, it doesn't affect everything equally or at the same time, but it doesn't have to. In today's interconnected world all it takes is a failure in one area to set off a series of increasingly bad situations. One being the food chain.

Lest you think that we will all respond to calamity in a civil, calm way, I suggest you read an interesting if not frightening article by Fred Reed. As you will read, Fred has spent a lot of time riding in police cars in some of the worst neighborhoods in America. In this article, he discusses issues that the mainstream news media refuses to discuss.

By the way, when Fred retired he moved to Mexico. He finds Mexico to be a far safer and more civilized environment in which to enjoy retirement. Enjoy today's article.

Multiculturalism And Alligators

Better Than NASCAR

May 12, 2006

It is possible to derive an ashen satisfaction from watching really stupid people dancing on a tight rope over a den of alligators. At each resounding dental snap one yells "Yeeeeeeeee-ha! Told you so!" and reaches for another beer. It makes a better Saturday night than a six pack and a bug zapper.

From the Washington Post: "Nearly half of the nation's children under 5 are racial or ethnic minorities, and the percentage is increasing mainly because the Hispanic population is growing so rapidly, according to a census report released today."

Now in newspaper parlance, "minorities" means "permanently underperforming and inassimilable minorities," which is to say blacks, Latinos and, when anybody remembers, American Indians. It very seldom means successful minorities, such as Chinese, Greeks, white men, Jews, or Anglo-Saxons.

As we look forward to a massive slewing away from the dominance of European whites in America, what may we expect? What will these huge minority populations do? It is instructive to look at what they have done so far. Some thirteen percent of the country is now black, and thirteen percent Latino: over a quarter in all. Blacks remain intractably far below the white population academically. An astounding proportion can't read, and of those who can, few do. The gap hasn't closed, despite Head Start, integrated schools, segregated schools, more funding, welfare, black teachers, black school boards, black mayors, remedial instruction, or anything else.

The gap appears on every known test of mental capacity or scholarly achievement-SATs, GREs, ACT, LSATs, MedCats, Stanford-Binet, Wechsler, Raven's matrices. Nothing makes a difference. Everything has been tried. Because of this, we got affirmative action or, as kids once said, make believe.

Further, blacks are not assimilating. Despite pushing, shoving, laws, legislation, regulation, and relentless indoctrination, the races are not melding at a rate that will produce results any time soon. The huge black necrotic regions of the cities, that whites never see, are so big and isolated as to be impervious to outside influence. If you have not spent time in police cars in such places, you cannot imagine the hopelessness and hatred that brood there. If you think that "hatred" is too hard a word, go look. I have. Whether the hatred is justified doesn't matter. It exists.

Yes, I will be called a racist for saying these things. I hope so. Today, "racist" means "one who says what everybody else knows." It is a badge of intellectual honor. Nonetheless, it remains that if I could change any of these conditions, I would. I don't enjoy seeing people in lousy circumstance. I just don't know what to do about it. Neither does anyone else.

Now, Latinos. Americans seem to think that the word denotes one kind of people, namely Mexicans, conceived as sitting torpidly under cactuses while wearing sombreros. Actually the variety of Latinos is great, from Argentines who amount to Europeans to Bolivians who are Indians. The Latinos coming into America are heavily Indian and uneducated. Mexican ophthalmologists do not swim the river. Mexicans who can make a decent living do not want to live in the United States. Thus the US gets the losers, the second-grade educations, people who on average have neither the intellect nor the urge to study. Yes, there are exceptions. But they are exceptions.

Everyone says, "But the Hispanics work hard." They do indeed, in the first generation. Many people in fields such as construction have told me that the Latinos are the backbone of their operations, that blacks don't want to work, have attitudes, show up if they feel like it and quit without warning. The Latinos work, now. Their children do terribly in school, however, drop out, and lose the desire to work. Then they join gangs.

Nice white people don't know about gangs. Maybe they think of West Side Story. I used to ride in Chicago, with the PD and with the South Side Gang Initiative, a federally funded program in the rotting satellite cities, Markham, Robbins, and Fort Ord. I saw the gangs. There were the Black Gangster Disciples, the Vice Lords, the Latin Kings, the Latin Cobras, the P Stones, the El Ruykins who came out of the old Blackstone Rangers and, earlier, Blackstone Raiders. They aren't the Jets, people. They're killers. And they loathe white America.

I once interviewed a ranking Vice Lord in the Cook Country Jail. Why, I asked, did blacks kill each other so much? "They'd rather kill whites," he answered, "but they know they'd lose." There's a lot of that. When I left Washington four years ago, Mara Salvatrucha (look on the web) was appearing in Arlington, Virginia, and now their graffiti are show up in Springfield, Virginia.

Law enforcement in America relies on having a white population that is mostly law-abiding. It has no good way of responding to large numbers of violent criminals, especially when they are backed by politically potent voting blocs. The crucial question, or a crucial question, is what proportion of the new minorities will fall into the permanent underclass? How much permanent underclass can the nation stand?

Another crucial question is this: If half the children today are of minorities, then in no more than eighteen years half the kids of college age will be. Unless they show a sudden scholarly afflatus which has not heretofore been in evidence, this means that soon the US will have to compete with China with the brains of only half the nation. This is not to mention secondary effects, such as enstupidating all schools to hide the failures of the minorities. Do you suppose that the Chinese are doing that?

Now, from the same story in the Washington Post, this: "William H. Frey, a demographer with the Brookings Institution, predicted that the United States will have 'a multicultural population that will probably be more tolerant, accommodating to other races and more able to succeed in a global economy."

How heart-warming. I suggest that William H. Frey is a thoroughgoing fool, but this is common among academics.The whole touchy-feely multy-culty idea that forcing people together will make them love one another, kum bah yah, is simply wrong. Right now, there is a tremendous repressed hostility between blacks and whites, the lid being held on by federal power, tight control of the press, and rigorous political correctness. Whites, huge numbers of them, detest Latino immigrants and would love to expel them from the country. Serious friction grows between blacks and Latinos as Latinos push blacks out of regions they once controlled. We're not moving toward accommodation. We're moving toward trouble.

What will happen as the economy declines and the minorities continue growing in number? As they continue demanding through political power what they cannot obtain on their merits? As standards of living drop, and the pie isn't creamy enough to give everyone juicy freebies?

It will be nothing if not entertaining. Bring it on. Love them alligators.

Fred Reed
May 2006
http://www.fredoneverything.net/FOE_Frame_Column.htm

The Solution For High Energy Costs and Peak Oil

Lest you think that your government has your best interests in mind, you should read this article about hemp. The bottom line is this: hemp is easy to grow, could provide all of our paper needs while producing a fraction of the pollution that regular paper produces, replace cotton as a comfortable, durable fabric, replace diesel fuel, reduce erosion, and save our forests.

The trouble is, your government is not interested in helping your or I, but only helping big business maintain their markets, all at our expense.

Just another reason why we do not need government taking “care” of us. Read and enjoy.

Hemp

"An acre of hemp produces four times as much paper as an acre of trees. Every pot-smoking hippy in the country knows that. The problem is, why doesn't anyone else? In this short article, I will attempt to educate you, the reader, of the many ways in which hemp can Save the Planet. No kidding…

"Herbicides are also virtually unnecessary, as the plants grow 6-16 feet tall in only 110 days. The complex root structure prevents erosion and decays quickly after harvest…

"That's all well and good, but what do you do with the hemp? Well, as I mentioned above, it's great for making paper. That's most of the reason that industrial hemp is illegal in the United States. See, in the mid-1930s, there were two industries that had just made breakthrough machines that would make paper productions much more cost-effective. One was the hemp industry, the other was DuPont. Coincidentally, the 1937 Marijuana Tax Act was passed, effectively making hemp illegal by charging transfers $1/ounce or, for unregistered dealers, $100/ounce, even for industrial-grade hemp.

"So with hemp out of the way, DuPont was free to become the giant corporation that it is today, and to produce the great majority of the toxic sludge that contaminates our Northwestern and Southeastern rivers. Had hemp become our primary paper source, this pollution would have been vastly reduced, and here is why: Hemp means no deforestation, which results in less topsoil erosion, more oxygen, less carbon dioxide, less destruction of natural habitats, etc. Hemp paper is much easier to bleach, and does not require chlorine, which means no more thousands of tons of toxic sludge pouring into the water. Scientists in Sweden have developed a hemp-bleaching process that uses only natural enzymes and some pounding of the pulp.

"Cotton, the other big evil, is grown on 3% of the world's arable land and uses 26% (wow!) of the world's pesticides and 7% of the world's fertilizer annually. It requires heavy irrigation, depleting the water supply even as it poisons it. Many developing countries grow cotton as a cash crop, trying desperately to pay off foreign debt. While the country's land and water is being destroyed, food crops are neglected, so the people go hungry.

"Hemp can be used to make clothing that is, if treated properly, soft like cotton and far more durable, thus rendering cotton unnecessary. Adidas and Ralph Lauren already have hemp products, and Calvin Klein insists that hemp will hit the fashion industry full force in the years to come…

While an acre of trees is about 60% cellulose, an acre of hemp is nearly 75%. How much hemp is necessary to meet current U.S. energy needs? Somewhere between 10-90 million acres, depending on how efficient the production is. Every year, the U.S. government pays farmers (in cash or 'kind') to not farm what they call the 'soil bank,' which happens to be about 90 million acres of farmland. The math is pretty simple.

"Hemp seed oil is very similar to petroleum diesel fuel, and produces full engine power with reduced carbon monoxide and 75% less soot and particulates. Hemp stalk (different than the part that can make paper and textiles) can be converted into 500 gallons of methanol/acre…

"It seems so simple, you must be saying. If this is true, why are we still using petroleum and paper and cotton? Well, there are corporations who sponsor politicians that have a reason to keep hemp down, like, the oil industry, etc."

Whiskey & Gunpowder
May 9, 2006
by Mike "Mish" Shedlock
Illinois, U.S.A.

Our Ship Of State Is Sinking

A short but interesting article about the current state of affairs in the good ole US of A. He hits the nail on the head when he comments that all of the social safety nets that our government has created will be of little use to us in a real emergency. They have been created and maintained to give us the illusion of a safety net. This illusion keeps us all dancing on the deck of the Titanic as if there is no danger.

Our Ship Of State Is Sinking

By Larry LaBorde

I have had quite a few customers call me over the last few weeks and thank me for helping and advising them to buy precious metals over the last many years. Some have been a little smug and congratulated themselves for their recent good fortune.

Unfortunately this “good fortune” is hard to get too worked up about. Our ship of state is sinking along with our dollar. Just because you have a golden lifeboat to escape in does not mean that you are better off than if our ship of state were still afloat in safe waters.

We have veered off course and we are now in dangerous waters. There are icebergs all around us that threaten to sink us from either one fatal strike or a series of smaller ones. Congress and our leadership do nothing to put our ship back on course in safer waters. They merely rearrange the deck chairs with new programs such as the latest brilliant idea to give US families $100 to offset the high price of gasoline. The band plays on and Joe Six-pack continues to dance oblivious to the dangers all around us.

Joe says why should he worry? Our ship of state has enough lifeboats if we ever get into trouble. A closer inspection of those government built lifeboats shows that they have rotten bottoms. The holes in the lifeboats are from the under funded PBGC, inadequate FDIC reserves, and an under funded social security program (just to name a few). Our social safety nets in the form of our government built lifeboats are of little use in a major catastrophe other than to give us a false illusion of safety. In a real emergency they will be useless.

Only our own golden lifeboats will save us if and when we need them. Hopefully we can steer our ship of state into safer waters but with “deficits don’t matter” Cheney and his like at the helm I am afraid that we must consider the worst as we steam ahead at full speed.

If you have not already started then get busy building your golden lifeboat while there is still time. Continue to try to guide our ship of state into safer waters but hope for the best and plan for the worst.

The fact that gold and silver are going up is nothing to cheer about. It is only a measure of how high the water has already risen in the hull down below. Start now and try to save as many as you can.

Larry LaBorde,

Silver Trading Company

Larry and Puddy (his wife of 28 years) live in the occupied South along with their two semi-grown children and Haley the wonder dog. Larry manages the family drilling business and also sells precious metals at Silver Trading Company. www.silvertrading.net

Send questions, comments, corrections or threats to Llaborde@silvertrading.net

Inflation and Gold

A couple of weeks ago, I discussed the increasing inflation as reported in the CPI numbers. As I recall, the numbers work out to about a 7.2% annual rate.

Earlier this week the government released their numbers on personal consumption and expenditures. As is usually the case, the media put a positive spin on the data pointing to these numbers as proof of our ever-improving economy.

Let's do a little math. First they reported that wages increased by eight tenths of a percent in March. That works out to an annual rate of 9.6%. Well, that sounds good doesn't it? That means that if inflation is running at 7% then we are coming out ahead right?

Wrong. If you read a little further in the report, something that no reporter did, you will see that our savings rate remained negative in March. In fact savings came in at negative $32.5 billion. So if wages increased and savings was negative then we spent more than we earned in March. That means that the increases in wages are really nothing more than inflation. So our annual inflation rate is running closer to 10% annually. Maybe a tad higher because in a addition to spending our raises, we continue to pull money out of savings and go further into debt. And that is sure not due to the purchase of vehicles. Just ask the big three auto makers who reported large drops in the sales of cars and trucks.

Now this week gold has been on a tear and the media is blaming the increase on tensions in Iran and the steadily increasing price of oil. Those of us who read between the lines know better. Gold is on a tear because of inflation. Based on the new inflation numbers we have gold could hit $745 per ounce by the end of the year.

If you factor in a conflict in the Middle East over Iran before year-end then the sky is the limit for gold

Is the run-up in the price of gold over? Hardly. It would be well worth your time and money to own a little bit of gold.

The Merits of Poker

Today I present for your enjoyment an article about poker. The amazing part about this article is that the author shows us how the game of poker demonstrates the basic principles of Libertarianism with a dash of Austrian economics thrown in for good measure.

The reason I have posted this article is because it shows us the way that life and business should operate. The author provides us with six reasons why free market supporters enjoy the game.

The Merits of Poker

by Robert Stewart

"The game exemplifies the worst aspects of capitalism that have made our country so great."
~ Walter Matthau (Total Poker by David Spanier, page 201)

Many members of the public will have no doubt noticed the prevalence of poker tournaments on television, and the increasing number of books giving advice on how to play the game, and win. Let me say, right from the outset, that I am a poker enthusiast for many many reasons, not least of which is that it is a more enjoyable way to make money than any other method I know of. The sceptical reader will be aware that about 80% of those who play poker report that they win - a conclusion that equates with the view that 80% of those who attend public school are above average. But then poker simply reflects many of delusions and idiosyncrasies of life.

One reason I love the game is the extraordinary close affiliation with libertarian principles. Let me explain further.

Poker is usually play by between five and eight players, usually but not exclusively males who enjoy the company of each other plus the thrill and skill of being able to extract cash from their rivals. The rules are pretty simple - to avoid boring everyone they can be found in many reference books - and are enforced by all participants in an unequivocal way in much the same ways as golf rules are enforced by the American Golf Association. There are no extenuating circumstances and genuine mistakes are regarded as acts of remarkable stupidity, and penalised accordingly.

The game featured most on television is called Texas Hold 'Em and is the most elementary (and the most boring) of the many variations of poker such as Omaha, 5 card stud, 7 card stud, draw, baseball, and so on. Texas gives each player 2 cards face down, and 5 common cards that are dealt face up so that the best combination of 5 cards wins the pot. Players bet on their hands, and in the final analysis, unless he folds (gives up) or is bluffed out (is fooled by the actions of other participants) the player with the best hand wins although occasionally two players may end up with identical hands in which case they share the pot (the money in the centre).

Why would poker appeal to supporters of the free market economy? Well I can think of at least 20 reasons, but listing them be tedious, and may lead to many (probably 80% of you who think you are above average) switching off and going on to read about the glories of the Iraq War.

Let me just mention six. But before doing so, allow me to emphasize at the outset that poker, unlike the free market economy, is a zero sum game. Participants who win are exactly matched dollar for dollar by those who lose. In economic exchange, both buyer and seller gain something otherwise no exchange would take place. Against the zero-sum game argument is the fact that five or six hours of poker is exciting entertainment that may well be worth any sum lost.

1. Competing against seven hardened veterans of poker means that the risk of failure is pretty high - at least 7 to 1 against. Unlike a job in the civil service, the monetary rewards from playing poker are not predictable and it therefore does not provide a guaranteed income. There is the obvious risk of ending up penniless, and there is always uncertainty. In the free market economy, unless you serve the consumer at least as well as your competitor you will end up broke. In poker, unless you are consistently better than your rivals over a five hour period you will end up with a nil or negative income and there is no government welfare office to bail you out. It is you versus the rest, and in the poker world, there are only two types - winners and losers with the latter being the more numerous species. It is a game of immense skill, not luck, although in the short-term luck can temporarily overcome skill just as it can in economic life. But as most people know, luck comes in two packages - good luck and bad luck - and no one knows in advance which will apply.

2. The laws of the game are fixed and inflexible, and stated in language that is precise with no emotionally loaded terms. You play for money, cash money, and not for tokens or for buttons. It is not possible to allege that after a year of playing the distribution of income is unfair, and that because you find yourself in the bottom decile someone should bail you out. There are no affirmative action policies for bad poker players, no unemployment insurance, no subsidies, no tax write-offs, no pension after 40 years for having played the game sportingly. You make your bed and you have to lie in it. Just as people can trade freely with everyone irrespective of age, sex, race, national origin, income or any other irrelevance poker players have no objection to anyone participating in the game provided he plays by the rules and does not complain if he loses. Indeed, any televised poker game provides a representative sample of society, although your grandmother might think that there is more than a fair number of shady characters wearing dark glasses and baseball caps with odd nicknames like Amarillo Slim. Poker is a great equaliser. It is rare for someone who wants to borrow to be denied a loan from another player; and it is equally rare in my experience for a debt not to be repaid in full.

3. Poker is not a team game. You have personal responsibility for all your actions and conspiring with other players to rig the market is not good form; in fact, it is, as it is in the business world, cheating and depending on the character of the players in the game can be a one-way ticket to oblivion. If you are good you win, and if you are not good you lose. This game does not provide camouflage for misguided decisions. The consequences are immediate and easily calculated in hard cash. You are on your own baby with no one to depend on except yourself. If you win, you keep your winnings and can gloat over them in private - it is not good form to count your winnings in front of the losers, or to congratulate yourself in public for having come out ahead. If you are loser, there is no sympathy - at best, you can count on some bromide like "better luck next time" but that is only mentioned because the rest of the players love to have a loser in their midst. Indeed, one of the unwritten rules of poker is that if you sit in on a game and cannot immediately identify the loser (aka a rabbit) it is you.

4. Despite the flow of money from one pocket to another, poker players are congenial types. Unlike Western movies, no one pulls out a gun when he loses unexpectedly, or keeps the ace of spades under his shoe. Most games are held in private houses between friends and jokes and booze - the lubricants of a good life - are usually available in abundance. Even in casinos, there is remarkable conviviality and spontaneous order, just as there is in a fish or vegetable market. People are friendly and laugh a lot. The atmosphere is quite unlike that of the post office or immigration department. The problem with casinos is that the house, just like the government, takes a proportion of each pot. The house commission tends to be high which means that pots are substantially reduced. It should come as no surprise that the luxury hotels in Las Vegas or Atlantic City are not built from the winnings of the players, but from the rake-off of the House.

5. Poker, like economics, is a game of incomplete information. It is possible to calculate the odds of drawing a king to make a full house, or making a calculation of whether the amount in the pot is sufficient to risk calling a bet. A good poker player just does not play the odds he also plays the people. Is a bet of $100 a bluff, or is it a warning that your opponent holds four aces? Is the sweat on the hands of your opponent a result of the air conditioner not working, or does it arise from the fact that guy across the table is playing you for a sucker? All the information that you need to make a correct decision is not available and never will be (unless your opponent drops his cards and reveals his hand - unlikely). Like an entrepreneur, you need the skill to see into the future. As Ludwig von Mises puts it "What distinguishes the successful entrepreneur and promoter from other people is precisely the fact that he does not let himself be guided by what was and is, but arranges his affairs on the ground of his opinion about the future. He sees the past and the present as other people do; but he judges the future in a different way." (Human Action by Ludwig von Mises, page 582) I wonder if he ever played?

6. Most of all, poker is a game of incentives. It has been said of economics that it is only a question of incentives, the rest is merely detail. No one in his right mind would play if, at the end of the evening, the money won and lost had to be re-distributed for the purpose of ensuring fair shares. Any poker game run on that basis would be a complete flop. In real life, an economy that seeks to ensure that losers are compensated from the earnings of the winners (those who cater to the wishes of the consumer) would not be a place that winners would like to frequent.
The next time a poker game is shown, please do not switch channels. Be aware that this capitalism in action, and learn from the game even if do not wish to be part of the action.
May 2, 2006

Bob Stewart [send him mail] has lived in Bermuda all of his adult life, and was chief executive of the Royal/Dutch Shell Group of Companies in Bermuda until his retirement in 1998. Subsequently, he was President of Old Mutual Asset Managers, Bermuda, and retired from there at the end of 2002. He is a director of several Bermuda companies and investment funds, and the author of A Guide to the Economy of Bermuda.

Copyright © 2006 LewRockwell.com