All right, this is a portion of the program where you ask questions and we make up answers.
So, who's going to be first?
You sir.
Yeah.
How would loaning work in a hundred percent banking industry?
Want to give that a go? Oh yeah, Walter, can't wait.
Murray Rothbard and several others of us favor 100% banking, which means you don't have fractional reserve banking.
Fractional reserve banking means you give the bank, let's say Hubert is the bank and I deposit $100 in the Hubert bank.
and now Hubert gives me a demand deposit for $100 and I can take that money whenever I want
and then Hubert the dirty rat turns around and gives Roderick a loan for $90 because he keeps 10 as a reserve
and now Roderick also has a demand deposit for $90. If Roderick and I both show up at the same time
Hubert can't possibly pay this money unless he's got the Fed behind him where he can print out more stuff
and more stuff. The point is that we have an overdetermination of ownership. Roderick and I are each the full owners of $90, not the partial owners, but the full owners, and you can't really in the libertarian society have two people owning 100% of anything.
There was this wonderful movie, The Producers, where Zerral Mostel went around and sold $10,000 worth, not 10,000, 10,000% of a play. This is fraud.
There are people like Selgen and White, who I regard as renegade libertarians, at least
on this issue, I don't think they're libertarians at all.
And there is a debate among the Austro-libertarians on that, but I've just given you the one-minute
version of why I think that fractional reserve banking is fraudulent, it creates the Austrian
business cycle, it creates inflation, whereas 100% backed money is, if I give Hubert $100,
He can't lend it out to anyone else,
any more than if he were a greenery.
He couldn't lend out greenery on a fractional reserve basis.
I think the question was, how would that work?
Yeah, if I might take a stab at it,
because I understood the question a little differently.
How would it work in 100% reserves?
I think you would have banking split the way they should be.
You'd have deposit banking and you'd have lending banking.
So, for those who would invest their money in a bank that lends money, they would know
their money was at risk and they would know that they can't come and get it at any time.
Whereas in fractional reserve bank as it is today, deposit banking combined with lending
bank, that distinction isn't made so bankers lend out money that people can come and get
any time, which is what Walter just described.
But in a 100% banking, it can certainly take place and I think it can especially take place
in technology where borrowers and lenders should be able to be hooked up the world over
in a matter of seconds. Capital here should be able to find people who need capital there
and not just at the bank down the street and lend out fractional reserves. So I think that's
and that's how it will work. I don't think it will happen through legislation. I think it will happen through technology.
Next.
Just as a follow up to that, how many people actually understand the fractional reserve system in our society?
They don't understand what you just said.
Oh, everybody. No, everybody understands fractional reserves.
I'll take a quick stab at it. I have no idea, but I know that most bankers don't understand it.
Anybody have anything to add? Not many people know what's going on.
Yes, sir. Yes, sir.
What are some of the historical examples you look to, or what include anarcho-capitalist societies?
Good historical examples of anarcho-capitalist societies.
Do we have any historians here? Iceland, perhaps?
There's never been a society of exactly the kind that we advocate, but then there's never
been a perfect example of a minarchist society either, but what you can do is you can look
at historical cases where various different mechanisms that we talk about were in place.
Maybe nobody had quite the whole package, but every part of it's been tried.
So one example people talk about is medieval Iceland.
Medieval Iceland may not have been absolutely pure energy, but it came pretty close.
There was, you could sign up with, basically your protection agency was a local chieftain,
but you could sign up with a different chieftain without having to change your geographical
location.
You know, Chieftain was also your representative in the legislature, and seats in the legislature could be bought and sold.
The problem was there was a legal limit on the upper number of seats in the legislature, so there was a legal limit on the number of Chieftain seats, and that created a problem.
It wasn't really free entry into the market. But in terms of a market for rights protection, pretty much they had it.
People talk about other cases, Medieval Ireland, the American Western frontier, in many respects, was stateless and had a competitive legal system.
Other examples people want to talk about?
There was an article, the not-so-wild Wild West and Journal of Librarian Studies, of which Roderick was the editor, and it gave that as an example.
I would crawl with the question, the import of the question is you say you're in favor of full free enterprise and laissez-faire anarchism, has there ever been an example of it? No, well then your claim is invalid.
We also claim that we want a society with no murder and no rape. Has there ever been such a society with no murder and no rape? No.
Therefore we have to retract our desire to have a society with no murder and no rape? No.
So just because there's never been a perfect example, and we're on the wrong side of the Garden of Eden for perfection,
just because there's never been an example doesn't undermine the claim that it's a good thing.
There are many other examples. The Law of the Sea Merchant in the 15th or the 17th century
when somebody from Belgium was trading with somebody from England and they had a dispute.
had Admiralty Courts and the Law Merchant.
The Institution of Kosher Foods
is a anarcho-capitalist kind of a thing
because they certify foods without any government approval
and people are free to accept it or not.
We live not in a pure anarcho-libertarian state, of course,
but there are vestiges of it.
Whenever two people trade anything,
whenever you go to the store and buy a newspaper for a buck,
that's part of anarcho-capitalism.
Sometimes you can see kind of seeds of that in completely unexpected places.
I went to the Republic of South Africa recently, which is almost a socialist state.
But because of the failure of the state, there is private protection agencies.
To the point, even, that I took a picture of the headquarters of Cape Town Police Department.
It's a huge building, high-rise Cape Town Police Department.
There is a little plaque there. It said, protected by ADT.
ADT, we shoot without warning.
You go to Disney World and it's very safe, there's no murders and no rapes there and
they've got ducks and geese and mice and if you act obstreperously you're surrounded by
them and they're all packing heat and they say come with me. They've got cameras there,
you're very safe there. You go to Audubon Park in New Orleans or Central Park in New
New York City or any of the big parks. And it's like anarchy. I mean, wait, no, chaos.
Because when people get murdered there, nobody loses money. There's no weeding out of inefficient
management of public spaces. Whereas in private spaces, it's pretty safe. This place here,
this club is a pretty safe place because if it weren't, they would lose money and we would
have, they would go broke or they would tend to go broke. If something happens in the streets
One quick last note. People often point to Somalia as an example of the horrors of anarchy, but the question is, what's the relevant comparison? And there's been some interesting research done. There's an article by Ben Powell and some other people. I forget who the co-authors are, but you can find that online. Somalia after state collapse.
The point is that if you compare Somalia, if you compare stateless Somalia with its earlier
state-ridden self, and also if you compare it with its neighbors of comparable economic
and cultural and political development and so forth, it's safer and more orderly than
those places.
So what that suggests is that the market always does the best it can with the materials that
it's got.
So if you got a very poor country with a horrible history and stuff, then it can't do as well
with it as it could do with another country, but any country will do better under a state
than it will.
I mean, any country will do better without a state than it would do under a state.
Question requiring a short answer.
No, a long answer, who cares?
Where?
Behind the pole?
There's a pole?
Open Borders as a Solution to Liberty
Most of us here are open borders, apparently. We didn't have a fair representation of the other side.
So I'm for open borders, but I think others have written about it more, so I might pass it to...
Yeah, I'm for open borders, and, you know, you can say, well, these people, you know, if we don't have open borders,
people are going to come into our country, and they're going to vote for more socialism, and that's why we can't let people in across our borders.
But if you do that, you're punishing them for a crime before they've committed it, and a crime that many of them won't commit at all.
This is a very divisive issue within libertarian circles. Murray Rothbard changed his mind on that. I have an article where I say Rothbard 1 was correct and Rothbard 2 was wrong.
is incorrect because he switched to the anti-immigration border. Hans Hoppe, an eminent libertarian theoretician, I would go so far as to say the most eminent libertarian theoretician is wrong on this issue. Ron Paul is wrong on this issue.
Whereas the four of us, I think, or the five of us are on the other side, to me the question is does coming into a country per se violate the non-aggression principle? And as Hubert said, obviously not.
And if you want to take a reductio ad absurdum of it, there is this country from which people immigrate. It's called Storkovia.
Now you people think that babies come from, you know, the mother and the father get together. Not so, not so.
They come from a country called Storkovia. The stork brings them here.
The point I'm trying to make in my ineffable way or my idiotic way is that they are immigrants from this country.
And if we're really against immigrants and we want to be logically consistent, we have to stop all babies from being born.
How do you feel about foreign military marching into the United States?
Walter's point, so the anti-immigration people base their anti-immigration policies on the idea of what the people are likely to do, based on where they come from, based on their national background, so think about if we started this with babies, as Walter was saying, well you're from this demographic background, so we're going to abort you because we're not confident that you're going to be supportive enough of libertarian policies, it's just totally untenable from a libertarian perspective, it's terrible.
Yeah, well, I don't want to shoot people on the border. That would be consistent with
this abortion principle. But from another hand, there's another point of view. I mean,
I wouldn't say that we can decide this issue. This was for a very long time. Well, I think
there's two major points of view. One of Hans-Hermann Hoppe, that if you have a freedom of association,
you have a freedom of non-association as well. That means people in this country can decide
whether they want to have more new people coming from somewhere else or not.
So it's one, I think it's a pretty kind of reasonable argument, right?
And other open borders, Hayek for example, he used to say that today a lot of people are coming to the United States
not in search of American dream, not in search of hard work, whatever, but just to go on welfare roles right away.
His point was, that's not the problem of these people, that's the problem of welfare system.
The problem of welfare system. So we are sending these wrong signals, and we are getting, and so that the kind of the best Misesian approach would be that to have open borders, and then you have people immigrating, emigrating and what not.
So this is very, very important, but what I want to kind of, because I am an immigrant myself,
I would again would like to reiterate this, and maybe you will think I am obsessed or focused on that,
that please keep this country free, because I am already an old person and I don't want to shop for another defection destination again.
I think we're talking about peaceful immigrants. We're not talking about invading armies.
I think there's a relevant difference between an invading army which is intent on using violence against innocent people and immigrants who are not intent on doing that.
They don't like these people, they don't like other people, and they don't want the system of liberty that still hangs on by the thread in this country to be destroyed.
So they are worried about a foreign invasion by effectively a military.
And they may be wrong, but that's the true motive.
If you want to talk about motives, that is the true motive of Americans who are worried about immigration.
Well, I don't think I'm evading the issue. I think that we can make a clear and distinct difference between an invading army and, by definition, invasion is a violation of the non-aggression principle.
I think most people are concerned with what Yuri talked about, the welfare or getting hospital care or getting free education or whatever.
And the obvious answer to that is get rid of those things and you won't have that problem.
I think that anyone invading anyone is a violation of the non-aggression principle.
But when some people come peacefully and they're not going to invade, they just want to live here or live in a...
I travel sometimes from Vancouver to New Orleans and I go right over the Rocky Mountains
And I tell you, that place is empty. There's just no one there.
Now suppose somebody from China or Mars came in there and started homesteading some land in the middle of, I don't know, Wyoming in the Rockies.
Are they committing, per se, a crime against anyone? I don't see how they are.
Now if they come with bazookas and guns and they start shooting people, well then they're an invading army and we should stop them.
And I think, you know, Ron Paul is sometimes accused of not being in favor of defense.
I think he's in favor of defense. He would like a very strong, what do you call it, Coast Guard, if I could put words in his mouth.
He just doesn't want to have armies in every country. So you have to distinguish between offense and defense.
You have to distinguish between peaceful immigration and invading army.
And you know, there's that joke, do you know the difference between a bathroom and a living room?
Don't come to my house if you don't.
Well, if you don't know the difference between an invasion and peaceful immigration and you don't know the difference between offense and defense, then I say stay out of political economy, because those are crucial concepts.
Next. Yes, sir.
I hate to continue with that, but there's a second side, another side to that issue.
I had gone from closed borders to the libertarian open borders, and I'm moving more back to closed borders,
at least because I can read more about Western culture.
and Dr. Lund's law, Ostrow Opinion League, that kind of law, the founding of Western culture, it doesn't matter, do we care, if the country is shifting, the Wall Street Journal just had a European,
______ people down about 10% last decade, we've expanded up to 24%.
You know, big issues of multiculturalism, non-assimilation of the cultures.
Is that something that, before you or you guys want to care about, is it, are we incrementally changing the nature of this country?
Are we going, are we, is the thought boiling in the pot and you know, it's not jumping out?
If I had known the name of my blog was going to convert some of the closed borders, I would have chosen a different name, but if you look at the history of this country, it doesn't seem to me that the deterioration of commitment to ideals of liberty has come primarily from immigrants.
It seems that it's come from right here in this country, right here from people of Western
European descent have been quite committed to undermining liberty.
I don't think that liberty is something that's unique to Western culture.
What Western culture ended up with is a certain set of institutions for complex historical
reasons.
But you can find ideas of liberty in other cultures.
and they just didn't end up with the right institutions to go with them.
I have an article online called Austro-Libertarian Themes in Ancient Chinese Thought, Confucian
Thought.
So if you're going to stop people from coming into the country because they might, you know,
they might move us in a more status direction, that's a reason to kick out of the country
everyone who is already moving us in a more status direction.
Unfortunately, that's the majority.
Our prospects of kicking the majority of native citizens out of the country, I think, are slim.
Others on this?
Yeah, I mean, if you talk about our European traditions, well, Europe has had that.
Before they had immigration, what did they have in the 20th century?
They had half a century of brutal war and then half a century of socialism.
Their European tradition didn't save them, so I think it's us spreading the ideas
that makes the biggest difference, not what happened in the distant past.
All right, we've got less than five minutes left and I would urge us to try another topic.
Views on working on the black market
to essentially display our freedoms, right?
I guess, is that, yeah, okay.
Yuri Maltsev should be an expert.
Well, I came from the black market kind of place, yeah.
And everything we could get was from black market.
There was nothing on the, I don't know, white market or, there was no white market, it was
central plan and black market.
The problem with black market is because property rights are blurred in the black market.
It's all the time source of violence.
People shoot each other.
In the United States, we shoot each other because of illegal drugs market, for example.
And for example, if you go south of here and you will buy something on the abandoned parking
and you will try it and find out that it's crashed aspirin or choke, not what you wanted.
Then you cannot return it back for full refund in 30 days, you cannot call Illinois Office
of Consumer Protection, cannot call your lawyer, you can just take a machine gun and enforce
property rights and contracts, right? That's what our drug industry is producing, 46 percent
of crime in the United States, at least 46 percent incarceration.
In socialist societies, almost everything is prohibited. Not only legal drugs, everything.
Entrepreneurship is illegal. Making market goods is illegal. So everything went there.
And so that's why the Soviet Union became a murder capital of the world. So black market
is, from one hand, it provides people with something. It's better than no market at all.
But from another hand, it's a source of violence in many cases. And then the idea was, for
of Reformers in Moscow, just legalize the black market and we will have a market economy.
But it's very difficult because people operating entrepreneurs of the black market, they kind
of know how to shoot others or how to poison the competition, but they don't know much
about initial public offerings or stock market or rule of law. So that's why I think that
One of the most despicable things that the government does is the FDA will not allow you if you're dying of cancer and you're on your last legs and they've given you a week to live or a month to live, they will not allow you to use an experimental drug because it's not yet approved by them. And I think that's heinous and I think if you can get the experimental drug, you should get it. Another very heinous government regulation
The regulation that creates black markets is they don't allow markets in used body parts.
And people die and have to go on dialysis machines because they can't get a kidney.
It's just despicable. If they would allow a market in this, we'd be up to our armpits and kidneys to screw up a phrase.
We wouldn't have the shortage anymore. We have the shortage because the price level is zero.
So if you need a kidney and you can't get it and you have to break the law to do it,
The Drug Market is probably one of the most violent cases of a black market, but take
something that's a lot more benign. Take downloading songs. Now, if like most of us up here, you're
against intellectual property, you think there's nothing wrong with downloading songs, now
you could have, there are two ways you could work to be able to get free songs. One is
you could lobby the government to try and get copyright laws changed. The other is you
And so you can just go and bypass them and download stuff yourself.
And the second is the black market way, it's the agorist way.
And so I think, as I understand agorism, it's a matter of building alternative institutions, alternative practices.
Of course it's risky, sometimes more than others.
There are fairly low risk ways of doing some of these things.
But it's a matter of building institutions and practices where you bypass the government,
get it so that more and more people come to find it natural.
and gradually the government loses support and eventually sort of social power shifts
to these market institutions.
So I wouldn't advise people to go out and get involved in the drug market.
But there are other, I think, more promising ways in which we're bypassing the state.
Anybody over here?
Anybody?
You, sir.
You are the last question of the day.
Make it good and make it short.
Okay, we have the last question of the day. Is there a six-year plan that anybody up here has?
And I only have one little thing I would do. If I could do one thing, I would stop withholding from people's paychecks.
Checks. That is the only... If I could do one small thing, if people had to write a
check on April 15th, I think it would make all the difference in the world, but I give
it to the panel.
Well, I'm going to suggest an agorist approach. Trying to get the government to do something,
I've got no plan for that, but working with the right on things like homeschooling, working
with the Left on things like raw food, various non-violent things, people in the homeschooling
movement aren't shooting each other and people in the raw food industry aren't shooting
each other, so black markets don't all, and of course the government is backing down more
and more from regulating some of those things like homeschooling.
So building alternative institutions, getting more and more people involved in seeking things
through those institutions rather than through the state, I think that's something that we
I agree completely.
We can't get rid of the withholding tax because the withholding tax was offered, initiated
by Mr. Libertarian, Milton Friedman.
And therefore it must be pro-liberty, I'm kidding, although to be fair to Milton he did
I did later recant and apologize for that, but still you're not going to find Murray Rothbard or anyone like that coming up with that.
My suggestion, I notice there's not one single solitary black person in this audience.
I've long had this initiative among the black community, I've been on TV on this thing called Our Story,
trying to get them to see that the war on drugs is an anti-black law, that young black men are killing each other like flies,
The blacks are disproportionately in jail for victimless crimes and that this is something they should put on the top of their platform or the top of their agenda.
This would certainly be an opening to the left.
Instead, what you get when you hear Thomas Sowell or Walter Williams or any of these other black people who are free enterprises, although they're a little weak on the war, but what the heck, you can't get everything.
They say they're Oreo cookies.
You know, they're white on the inside and black on the outside of their Uncle Tom's.
This is a horrible thing and perhaps if we had an initiative to the black community to get them to see the heinousness of this and how it disproportionately affects their community, maybe we can make some progress in six years.
When I came to the United States, the first thing I published was, at that time they were
discussing 500-day plan, how to get out of communism, yes, and I wrote my own one-day
plan, one-day plan, I don't know whether we need six days, six days even, not six years,
because change should be going overnight, otherwise the enemies of change would mobilize
themselves, and you cannot just, you cannot, gradual change should be eschewed in favor
of dramatic change, overnight change, look how Soviet Union collapsed, it wasn't collapsing
in 500 days, it collapsed overnight.
And I would quote a famous conservative, neoconservative, imperialist, Margaret Thatcher, but she had
sometimes very good sense of humor.
She said that if, for example, gradual change never works.
If we Brits would try to switch from our left-hand driving to right-hand driving and do it say
in 100 days, sending the first week only big trucks to the right, so that would not work.
I think that we should, yes, and speaking about plans, yes, the last kind of thing about
Mr. Gorbachev, can you imagine, he really believed that planning system works, that
which just didn't have a good plan.
Can you imagine that central planning works?
And I see so many of my colleagues in American academia
saying exactly the same, that central planning works
which has never had a good plan.
And I think that in a decentralized society,
in the society of individual self-ownership,
we should promote what we believe in
and try to make change as soon as it possibly can occur.