Dollars and Sense

Everywhere we look, people are making money, it seems (except, perhaps people who have spent their money on real estate.) But it seems that pieces of paper – stocks, bonds, certificates, promises – are worth more every day or at least every week.

However, we may well ask ourselves whether this is really credible. Is everyone you know working harder, driving faster, learning something new every day? Or could it be that the money we use is easier to find?

Once we ask this question, then answers are not hard to find. The first Congress defined the standard dollar, making it the same as the silver dollars already circulating, and then made the gold coins with one-fifteenth as much metal. When gold coins disappeared and silver rolled into the mint, Congress cut the gold down to one-sixteenth. And that has been the history of U.S. money – degradation (with the solitary exception of the “trade” dollar, which was slightly more valuable than a standard dollar.) Now, the coins that look like silver are actually only copper, the ones that look like copper are actually only zinc, and the nickel, which is really, truly nickel, cannot be exported (outside the United States, it would be melted down to make gas turbines or other exotic products.)

Obviously, if we measure in currency – the money we use for cash transactions – then the amount of money we own may increase, or even decrease, without our actually being richer or poorer. And if we pay debts in currency, then the creditors will receive less, or more, than we actually agreed to pay.

One might have thought that this was not a new idea, even in 1787: everyone knew that when Spain explored South America, they seized literally tons of gold, so that their coins suddenly became more plentiful; everyone knew that, during the War of Independence, the States had printed so much money that the notes were, to put it politely, discounted.

And indeed the delegates to the Convention understood it perfectly well; they delegated to Congress the power to COIN money, but reserved to the States the power to define the legal tender – from only gold or silver coin. This should have been an ideal system; when new sources of gold were discovered, the “gold” States (perhaps, those that traded with Britain) would have seen high profits and the “silver” States (perhaps, those that traded with China) would have been depressed. The opposite would have occurred if silver were found, perhaps in a copper mine: people would have known that the additional money was the cause of the phenomenon.

But what actually happened was that the States – usually so eager to dictate how citizens should educate their children or treat their employees – made no decision at all: only Colorado, Missouri, and Nevada confined their coins to gold and silver. (And these States, de facto, ignore their own statutes!) Consequently business enterprises keep their accounts in Federal Reserve Accounting Unit Dollars: if the currency becomes less valuable between January 1st. and December 31st., inventories are over-estimated, depreciation is under- estimated, and therefore profits (and taxes!) are exaggerated. This goes on year after year – and thus while people may believe that they are getting more and more wealthy, in fact they arrive at retirement age and find themselves hard-pressed, or worse.

If you live somewhere other than Colorado, Missouri, or Nevada, you could play Paul Revere and awaken your fellows to the impending danger by campaigning to enact a legal tender law that does specify GOLD or SILVER coin. Every day, the radio and the television tell us that the dollar is equal to so many pounds stirling, or euros, or yen, or renminbi; but we are entitled to demand that the Congress “regulate” the value of foreign coin, rather than allowing it to vary from day to day, hour to hour. (Congress is usually eager to “regulate” what you eat or drink, what drugs you can purchase, where you travel, how you educate or punish your children – why should they not “regulate” something that the citizens would actually like to know?)

Suppose one far-sighted State – New Hampshire, perhaps – did adopt the 90%-gold “double eagle” as its legal tender; what would happen? Then a New Hampshire business might find that, instead of having a profit of 2-1/2 per cent for the year on paper, really it had a loss of 1/2 per cent. Obviously, quite a number of New Hampshire businesses would shut down: bad! But, lo and behold, plutocrats in other States would see the difference between New Hampshire and their own State, and would invest in New Hampshire: good! Because U.S. taxes are predominantly on transactions, the amount of taxes paid by New Hampshire to the U.S. would be reduced: again, good! The Congress might actually see what was happening, and revert to taxing property – this would mean that U.S. taxes would be equal PER CAPITA in every State: unbelievably good!!

Do not be afraid that, if you owe someone one thousand silver dollars, you would have to stagger into hir office carrying fifty pounds of silver coins; the law of contracts does not require “specific performance,” you can pay by a check or a draft or a wire transfer, so long as it is, that day, worth as much as a thousand silver dollars.

Is it really worth while making the effort to keep honest accounts? Yes, it is! Any society that does not have a system for telling whether it is doing right or doing wrong is, sooner or later, bound to fail. And that is just what is wrong here and now; people see bigger and bigger numbers all around them, and suppose that all is well, when in fact the amount of wealth that is actually disposable – not already committed to fulfil some obligation – is steadily diminishing. This is a campaign that could very well preserve the republic . . . and is to the disadvantage of no-one except the tax collectors!

War! War! War!

THE TWENTY-FIRST CENTURY really began, not on 01/01/00, but on 9/11/01, when two aircraft brought down three tower blocks in the World Trade Center; since then, nothing has been the same. The United States has been spending resources - men, material, money - on war, principally in the Middle East.

I have not been in the Middle East for half a century, and even then I was not in Iran or Iraq or Israel, so I cannot tell you anything about the campaigns there. But there is another war that has been going on even longer, on which I can shed light.

Had you forgotten the War on Drugs?
It is:
(a) Unconstitutional; Congress can define only crimes against the citizens of EVERY State, such as treason, piracy, and counterfeiting the current coin; the States retain the power “of prohibiting the exportation or importation of any species of goods or commodities whatsoever” (Art. IX, Articles of Confederation.)
(b) Unlawful; consent is a defense to a crime; a surgeon, or a barber, is not guilty of mayhem. It would be a crime to sell someone cocaine if, but only if, se did not know it was addictive.
(c) Unlimited; narcotics enforcement is intruding into ordinary life, interfering with medical practice. Doctors fail, or refuse, to prescribe what they think best for the patient, for fear of attracting the attention of the enforcers.
(d) Undiplomatic; the War renders our neighbors enemies - Canadians and Mexicans do nor consider marijuana a menace, but neither do they want our addicts flooding into their countries. In Colombia and other South American countries, the struggle to grow coca faster than the U.S. Customs can destroy it is making ordinary foodstuffs too expensive for the workers.
(e) UnChristian; the Pharisees sought to dictate personal hygiene, but Jesus said: “Not what goes into the mouth defiles a man, but what comes out of the mouth, this defiles a man.” (Matt. 15:11.)
(f) Unwinnable; As narcotics become more and more expensive, so the narcotics trade becomes more attractive to the best and boldest men, men who want to be respected and prominent. The best and brightest Americans do not join the police or the customs - at least, we hope they don't!

What do we do, now? First and foremost, get the U. S. government out of the War on Drugs; the U. S. government has its hands full with wars against other countries. Then, the States can find their own ways to cope with the problem: providing methadone, providing clean needles, perhaps setting up enclaves where it is safe to dope yourself . . . .

NATION BUILDING

THE UNITED STATES is, apparently, engaged in a struggle to organize a mob of violent Muslims into a coherent nation in Iraq. However, one imagines that the Iraqis have at least a few things in common. Presumably, they all do not want foreigners telling them what to do; and equally they do want to keep on selling oil overseas, rather than going back to herding goats. So one thing they and we could agree about would be, for us to keep other nations from invading them.

Presumably also, they arrange to live in neighborhoods with mutual trust, so that they can go to sleep without one man in each household having to sit up with a weapon. If so, then presumably the problem boils down to keeping large numbers of faction A from fighting large numbers of faction B . . . without forgetting there is also a faction C.

We now see our way forward; divide the whole nation into parts – we might call them STATES – each with its own territory. How do we avoid there being border wars?

We ensure that the borders do not provoke conflict – that is, there must be free trade across the borders. How can this be done – if the people of State A do not trust the people of State B? We arrange for the border between States A and B to be patrolled by the people of State C, the border between States B and C by the people of State A . . . . Presumably, if the people of A grow vegetables and the people of B farm animals and the people of C catch fish, the border zones will be advantageous to the people on both sides, and even to the people patrolling the borders.

Once the people of the different States are trading together, there must arise disputes between citizens of different States. But we Americans can explain to them the solution to this problem; it is the “common law,” the law discovered by a number of separate courts that follow one another’s precedents. Whether one is a Muslim or not, you must admit that if your case has been settled in same manner as every other person’s case, you have not been wronged.

The borders between the three States and the surrounding nations would be defended by the U. S. A.; presumably, only a token U. S. force would suffice to dissuade any neighboring nation from attempting to take advantage of the weakness of a divided Iraq.

How can there be a solution as simple and obvious as this? Because – I suspect – the people out there believe, correctly, that our success is due to “democracy,” and imagine, falsely, that “democracy” means that the majority dominates over the minority. Possibly Muslims would be less hostile to us if we were more Christian, if our commandments governed only relations with strangers – if we did not forbid polygamy, thus sentencing so many women to live in solitude, if we did not have such “crimes” as statutory rape, thus denying fertile women fulfilling lives, if we did not deny the right of parents to bring up their children as they think fit, if we did not pretend that “domestic violence” is something that happens behind locked doors and curtained windows.

“THE WORLD IS A SAFER PLACE” remarked The New York Observer, when Paris Hilton was jailed in Los Angeles, California. However, the only people who actually felt safer were the police and bailiffs and judges of Los Angeles, who were reassured that there was no prospect of domestic tranquility – a.k.a. constitutional government – emerging in their metropolis.

This may seem to be just the obvious failure of our republican form of government: elected county and district attorneys eagerly look for crimes-without-victims which they can prosecute in order to cow, or sheep, the citizens. But this persistent phenomenon is due to an institutional anomaly; the prosecutions are brought by county, or district, grand juries and attorneys, but those convicted of felonies are confined in State prisons – at State expense. If the counties were required to pay the State to keep the convicts, then the voters might find it worth their while to elect prosecutors who would discriminate dutifully.

A government of law allows no special privileges – or only ones in favor of minorities, such as bankruptcy and patents and copyright. Why is it against the law to drive without a license – on a public highway? Simply so that the State can sell licenses; were it not illegal to drive without a license, no-one would pay for a license. The State is running a plain and simple protection racket. If there were a test to measure driving ability, it might well rank the drivers in order, from 1 to, say, 10,000,000. Can you say that those from 1 to 5,000,000 are the first class, and those from 5,000,001 to 10,000,000 are the second? No, because the difference between those numbered 5,000,000 and 5,000,001 is negligible, and if you made the order a second time, people would have moved up and down across the division; to say “all men are equal” is to say “there are no classes” (not “there is no order”!) Certainly Hertz and Avis and National Car Rental are free to issue licenses to drive their own cars; if they make mistakes, they lose either customers or rentals. But the state is not at liberty to make mistakes; it exists to do justice, “No State shall . . . grant any Title of Nobility . . .:” Art. I, Sec. 10.

In California, the purpose of the criminal prosecution is to “correct” the citizen; I find it hard to believe that a person created in the image of God is improved in any way by being fenced in and given food and water. What might well “correct” hir, or hem, would be to explain exactly what is the difference between right and wrong; but, of course, if the penal code actually defined that distinction, hardly anyone would ever be convicted (how often do you see anyone fail to yield “in compliance with” a YIELD sign?) and the police and bailiffs and judges would be reduced to earning an honest living – one which their equals agreed to give them.

Let me tell you a great big, GREAT BIG, secret – one very closely guarded by the police and bailiffs and judges! In any court, the plaintiff bears the burden of proof. In a criminal case, any presumptions are in favor of the defendant: you are presumed to be a reasonable actor, if you squeezed the trigger you are presumed to have meant to fire. (If you were actually drunk or drugged, you would have to find evidence to show the fact.) The secret is that in California, and indeed several of the States, “in every crime or public offense” the penal code explicitly requires “evil design,” what the lawyers call mens rea. If you fail to yield “in compliance with” a YIELD sign, you have committed a crime malum in se, “in itself unlawful;” you are presumed to have meant to wrong the other driver. who had the right of way. You would have to prove that your brakes failed, or some other fact, in order to have an excuse. But failing to stop “in obedience to” a STOP sign is malum prohibitum, wrong only in the jurisdiction of this legislature, only since the act was signed by the governor; it is necessary for the prosecution to prove that you meant to wrong someone else, you do not have to prove that your intention was innocent.

Obviously, these United States would not have the world’s safest highways if the citizens were inclined to violate the rights of their equals; the crimes the prosecutors try are almost always statutory crimes, crimes against the state. Paris Hilton has only to argue, “You have not proved that I meant to wrong any other citizen; your case is defective.” In California and several other States, it only needs the citizens to fight the cases, to demand that the prosecution prove “evil design,” for us to restore LIBERTY – which means that you act as you think right, anyone who thinks otherwise has to sue for damages. If your actions result in harm to one of your equals, se can sue for damages – in the civil court: the State does not get its sticky fingers on the money.

EVERY DAY, we hear that oil is scarce and becoming scarcer, that there is a need to find other sources of energy for heat and light and transportation and communication. Strange to relate, all the proposals we hear involve spending money . . . that is, the taxpayers spending money.

I beg to differ. It would seem to be more sensible to stop wasting gasoline - and, of course, diesel. There could be an end to STOP signs and NO TURN ON RED signs. The stop-on-red signals could be redefined to mean go-on-green, and the yellow lights could be made to show in all directions at once. Double yellow lines could be painted properly, so that the center lane[s] can be used in both directions (except on gradients or turns.) And in the long term, there could be an end to building highways where the several lanes are dedicated to traffic in only one direction, instead of the traffic spreading itself out evenly.

Why, we may very well ask, are today's highways so wasteful? The answer should be obvious; because motor vehicle fuel is taxed, governments are eager to see more fuel burned. (The taxes are not used to repair wear and tear on the pavements, which would be the only justification for a fuel tax.) But the governments are, as usual, wrong. The tax fails to perform the basic function of a price, which is to bring supply and demand into balance. Tolls, in contrast, could be varied from hour to hour and day to day, so that there would be a strong incentive to travel when traffic is light.

Certainly tolls also are wasteful: the only way the tolls can be collected without stopping the traffic is by giving the vehicles electronic responders, which means investing more capital in equipment that is used for perhaps only a few seconds each day. But what you see with great regularity is that there are striking differences between county, state, U.S. and Interstate highways; the traffic tends to become more and more congested as the highway becomes more nearly national (federal, if you wish.) And the reason why is blazingly obvious; more often than not, license plates are good on any highway at any time, people get on the Interstate just to go downtown. A reform that would cost little or nothing would be to sell plates that are good only on local and state highways, and/or only at off-peak hours. If there were a severe difference in cost, then we might very well find that when we are driving across the continent, we would not have to slow to a crawl whenever we are in a metropolitan area. Usually I am an extreme federalist - using the word in the opposite sense to that of Alexander Hamilton - but I find myself dreaming of Congress prescribing that red plates would never be allowed on any U. S. highway, white plates would be allowed only outside peak hours, and blue plates would have the universal access ordinary plates have today. (I imagine that drivers who have paid for the expensive plates would hoot disapprovingly at any vehicle which did not have them.)

Taxes and congestion are by no means the only problems. There is an acute, urgent need to abolish the Environmental Protection Agency and all traces thereof. The E.P.A. is regularly, consistently, limiting the choice of fuels available to the operators: it was the doing of the E.P.A. that rendered obsolete literally millions of high-efficiency engines burning leaded gasoline. Similarly, the highly efficient diesel engines of the twentieth century are no longer available, as a result of the E.P.A. demanding cleaner exhausts. But I have never heard of the E.P.A. setting up test stations in Bar Harbor, Maine, Brownsville, Texas, Anchorage, Alaska, and Honolulu, Hawaii, and testing whether the pollution is indeed the same at even those few places.

I would make a guess that, if there is any such thing as pollution, it spreads from West to East, just like the weather. If so, then if Oregon and Nevada find themselves getting polluted, they can sue California - and, of course, California can assert that Oregon and Nevada caused the alleged pollution. Plausibly, there might be some States that would restrict the use of leaded gasoline, or of high-sulfur diesel, but we can be fairly confident that there will be others that do not. And then citizens will be able to settle where they find conditions hospitable.