Friday, December 23, 2011

Bill Bonner on Government

The Daily Reckoning's Bill Bonner has written a number of posts lately outlining his personal musings on the nature of government. They're good. Really good, in fact, so I thought I'd combine them into a single view here. The writing, of course, is all his (as anyone familiar with my vastly inferior work will immediately realize). If you haven't already, go The Daily Reckoning website and sign up for the free daily newsletter. You'll be glad you did. Enjoy…

12/06/11 Baltimore, Maryland – Not much to report from yesterday. Dow up 78 points. Gold bouncing around.

All eyes are on Europe. If the Europeans can pull off a save…well, we're all saved. At least for a few weeks. Maybe through the holiday season.

The euro has been remarkably stable. It has never collapsed — despite all the talk of Europe falling apart. Apparently, people with money don't think it is in real danger. They think it is too important to let go. They may be right. And the more people talk about the 'end of Europe' the more it doesn't end. Instead of letting it go, the authorities become more and more stubborn in trying to hold it together.

It's hard to know how this will play out. But we feel we know how this week will go. Frau Merkel and Monsieur Sarkozy will put together a new plan… It will include promises of fiscal tightness along with monetary looseness. The EZ money is expected to put short-term investors' fears at ease. The fiscal austerity, it is hoped, will help long-term investors sleep better at night.

Governments will pretend to tighten up. The ECB will lower interest rates and print up some new ersatz money. What could go wrong? The combination of mendacity and counterfeiting should do the trick…for a while. The liquidity from the central bank will come like Christmas pudding, or perhaps more like spiked eggnog. It will put some cheer into the markets during this 'dark passage' of the winter solstice. And then, the promises of austerity will allow everyone to think that things will be fine in the long run too.

So…keep your eyes on Europe…and your hands on your wallet.

Meanwhile, the US is keeping its eyes on football games and the race for president. Newt Gingrich has pulled ahead in the Republican field. According to the papers, he's the only candidate that seems to know what he was talking about.

That is probably true. A man like Herman Cain was out earning a living…building a business…creating jobs. He didn't have the time to keep his eyes on every flimflam coming out of Washington. How could he be expected to know about every disastrous piece of legislation, wrongheaded policy initiative, regulatory meddle, and military boondoggle that has come down the pike in the last 30 years? Newt on the other hand, had not only his eyes…but his fingerprints…on practically every one of them!

That makes Newt the leader of the pack. Americans don't want a leader who admits that he has no idea of what is going on. They don't want an honest president who will offer to 'learn on the job.' They much prefer a professorial blow-hard who claims to have all the answers in advance… All he has to do is to speak with authority and confidence, even if he is saying absurd and obnoxious things.

And they can love a scalawag, too. But can they love one as un-loveable as Newt Gingrich?

How about this? A new theory of government.

"I can't lead. And I don't want to follow." — Martin Clark

Yes, dear reader, we've been thinking.

We have been disappointed with political ideas and theories of government. They are nothing but scams, justifications, and puffery. One tries to put something over on the common man…the other claims it was for his own good…and the third pretends that he'd be lost without it. Most are not really 'theories' at all…but prescriptions, blueprints for creating the kind of government the 'theorist' would like to have. Not surprisingly, it is a blueprint that flatters his intellect and engages his imagination.

But it does not answer the critical questions: Why do we let other people tell us what to do; are we not all equal? What is the purpose of government? What does it cost and what benefits does it confer?

You may find these questions have drifted far afield from our usually Daily Reckoning fare. But they've been on our mind. We're coming up on a major election in the US. Several men have come forward offering to take charge of the US government. Maybe it would be worth wondering what it is that they are taking charge of. And since The Daily Reckoning is free, we feel entitled to write whatever we damned well please.

Government is a fact. It exists. It is as common as stomach gas. It is as ubiquitous as lice and as inescapable as vanity. But what is it? Why is it? And what has it become?

We know very little about the actual origins of government. All we know, and this from the archeological records, is that one group often conquered another. There are skeletons more than 100,000 years old, showing the kind of head wounds that you get from fighting. We presume this meant that 'government' changed. Whoever had been in charge was chased out or murdered. Then, someone else was in charge.

Tribal groups, or even family groups for that matter, probably had "chiefs." They could have been little more than bullies…or perhaps respected elders. Over the millennia there were probably as many different examples of primitive 'government' as there were tribes. Some elected their leaders. Some may have chosen them randomly, for all we know. Many probably simply conferred leadership by consensus. Some probably had no identifiable leaders at all. But it seems to be a characteristic of the human race that some people want to be in charge…and many people want someone to be in charge of them.

In adversity, there was probably an advantage to having a leader. Hunts were often collective enterprises. There were also group decisions to be made…about how food was stored up or rationed out, for example, that would affect the survival of the whole group. Under attack from another group, a strong, able leader would make the difference between life and death.

We can guess that people enter into leader/follower roles today because they are programmed for it by evolution. Those who can't or won't…perhaps they died out many millennia ago.

We don't have to look back to the Last Glacial Period to see what happens in small political units. We can see them today. They are all around us. Every church has its governing board. Every community has some form of government. Every corporation…group…club…every place where humans get together seems to develop a political/social order. Rules evolve. Leadership arises. Informal groups typically yield to the strong personality. Juries try to control it. Families resist it. Dinner parties try to avoid it.

But that's just the way it is. Some people seek to dominate. Others like being dominated.

Trouble is, there is usually more than one person or one group that wants to do the dominating. This leads to conflict. Treachery. Murder. Rivalry. And elections. But let's not get ahead of ourselves. We're talking about the origins of government and trying to guess what they were like. On a small scale, we conclude, they were both extremely variable in form…and extremely limited in scope. That is, how much governing can you get away with in a small group? Not much. You can boss people around, but they won't take too much bossing. And there is always a rival bosser who is ready to topple the big boss if he should lose his popular support. In a tribal setting, we imagine that the strongest, fiercest warrior might have been able to set himself up as the governing authority. But he could be stabbed in the back as he slept…or even shot with an arrow in a hunting accident. Even in the best of circumstances, his reign wouldn't last much longer than his own strength.

In a small town, government proceeds tolerably well. There is not much distance between governors and the governed. The latter know where the former live…and how they live…and how little difference there is between them. If the governors over-reach, they are likely to find themselves beaten in the next election…or in the middle of the street.

But as the scale increases…as the distance between the governed and the governors increases…and as the institutional setting grows and ages…government becomes a bigger deal. More formal. More powerful. It can begin governing more effectively.

The first large scale, long-term government we know about was in Egypt. After the unification of the upper and lower kingdoms in about 3,150 BC, the dynastic period began. It continued for two millennia, not ending until the Romans conquered Egypt in 30 BC. We don't know exactly how government worked during those many centuries, but we know that a theory of government arose out of them. At the time, it was not considered a theory at all, but a fact. The ruler was divine. A god.

As a theory it is a good one. It answers the question: why should you take orders from another human being? In Ancient Egypt, the question didn't arise. Because Pharaoh was not another human being. He was something else. Precisely what he was…or what people thought he was…is not clear. But the archeological record shows that he was treated as though he was at least a step or two higher up on the ladder than the rest of us. If not a full god, he was at least a demi-god…a missing link between man and the heavens.

If that was so…and who are we to doubt it?…the theory holds together perfectly well. The divine authority is transmitted from heaven to man via his intermediary…the pharaoh.

You might think that would be the end of the story. It was not. There were Asiatic settlers moving in the delta area — the Hyskos — who apparently had a different idea. And the Thebans. And the Nubian. And the Assyrians. And the Hittites. And hundreds of years of internal warfare against dozens of different groups…not to mention the struggles within the divine families themselves.

If God had wanted his man on the throne, you'd think he would have done more to help him. Or at least you'd think he would have been a little clearer about who His man was. Why let people guess and rumble, trying to decide who is really God's choice? But who can figure the mind of God? Maybe the whole divinity hypothesis was just a lie. Maybe God liked to see His man get a workout. We can't know.

Pharaohs may have lived like lords. They may have governed like gods. But they died just like everyone else. And after the 30 dynasties, as counted by Menes, the whole system was kaput. Cleopatra Ptlolemy got herself rolled up in a carpet so she could spin out at the feet of Julius Caesar. She had a child by him…but then went over to Marc Antony's side. That proved a mistake. Caesar's nephew, Octavian, was better organized and a shrewder politician. Antony's army was beaten at Actium.

But the idea of a divine ruler survived. Antony had already begun to feel the blood of divinity pumping in his veins. And then, after he was out of the way, hardly had the half-god pharaohs gone to their graves in Egypt than the half-mad Caesars in Rome started to sprout wings…

More to come…

12/07/11 Baltimore, Maryland – You'll remember from yesterday that we have some question as to the actual divinity of the Egyptian dynastic rulers. Certainly, either the Egyptians had some doubts themselves, or they were among the most impious people who ever lived. Pharaoh was supposed to be a god. He was supposed to be in charge of everything, even the annual flooding of the Nile, the weather…life, death, you name it. But that didn't stop him from getting the old heave-ho from time to time. Rival groups didn't wait for God to decide who would sit on the throne. Men fought it out.

We don't have any way of knowing about the pharaohs' divine bona fides. We just note that as a theory of government, it does the job. Government claims the right to tell you what to do. Using the blunt instrument of 'government' some people are able to categorize, regulate, tax, inspect, dragoon, conscript, enslave, bully, incarcerate, murder and push around other people. Why do the other people stand for it? That's the general subject of these little reflections.

There must be at least 10,000 commandments we Americans are expected to obey. The IRS code probably has that many alone. We cannot build a house or cash a check without fulfilling hundreds of (often invisible) requirements. We pass through an airport and we submit to indignities, usually without question. We know the TSA agent is a moron. But "dress'd in a little brief authority," as Shakespeare put it, "most ignorant of what he's most assur d, glassy essence, like an angry ape, plays such fantastic tricks before high heaven, as make the angels weep."

Whence cometh that authority is our question.

If it comes from God, who are we to question it? We accept God's authority, at least when He's looking. And if Pharaoh were divine, we would have certainly buckled to his power too. How could we do anything else?

And yet, many people did not. For the two thousand years of the 30 dynasties, men killed each other to determine who would hold the pharaonic power. The last of them was clearly an interloper. The Ptolemies weren't even Egyptian. They were Greeks, who conquered Egypt with Alexander. Then, finally, Julius Caesar and his nephew Octavian put an end to the divine tradition in Egypt forever. God either abandoned His man on the Nile, or he is playing tricks with us.

Caesar took the role of emperor of the whole Roman world. He did not seem to be too concerned about the theory of it. People bowed to him and paid tribute. That was how an empire worked. And he never had too much time to think about it anyway. He was cut down on the Ides of March at the age of 55 in 44 BC.

But the appeal of divinity did not die with the Ptolemies. Four score years after Cleopatra's death the emperor Caligula declared that he was a god. This didn't seem to take him very far. Romans came to the conclusion that he was not divine at all, but insane. He was murdered soon after by his own guards.

Rome struggled on for another 4 centuries. If there was a theory to dignify one man's bending to another we aren't aware of it. It was considered normal and natural. Those who got control of the government of Rome were able to exercise the rights of governors. They were victors on the field of battle…and in the halls and assemblies of Roman government.

What did they do with this power? "Ad victorem spolias." Simple enough. You defeat someone. You take his stuff. His land. His wife. His children. At least there was no humbug about it. And the rules were simple. Government operated its naked form. As Mao described it two millennia later, political power came "from the barrel of a gun," not from the Rights of Man or the Social Contract.

In the exploits of Genghis Khan and Tamerlane, too, we find a very pure form of government at work…and a very clear theory about it. Genghis announced his theory of government as follows:

"Man's greatest good fortune is to chase and defeat his enemy, seize his total possessions, leave his married women weeping and wailing, ride his gelding, use his women as a nightshirt and support, gazing upon and kissing their rosy breasts, sucking their lips which are as sweet as the berries of their breasts."

Tamerlane was no less direct. He saw government as a legitimate enterprise. He raised troops with the intention of conquering other peoples and replacing their governments with his own. His warriors were paid in booty — jewels, coins, horses, women, and furs. He was paid in loot, tribute and taxes.

This is not to say that there was anything wrong with running a government in such a way. We are not giving advice or making suggestions. We are just trying to understand the essence of what government is.

In the case of Egypt, people listened and obeyed — at least, as much as they did — because Pharaoh was, in theory, a god. In the case of Rome — with the exception of Caligula's claims — and the Mongol empires, the theory was similarly simple, though different. Tamerlane made no claim to divinity. He merely made it clear what he would do to you if you resisted him. Towns that submitted were generally governed passably, according to the standards of the day…and taxed, but not razed to the ground. Those that contested his authority were destroyed, often with all the inhabitants killed.

In Rome and out on the steppes, those who controlled the 'government' were in the favored position. They could reach out and impose their will on those who were not favored. Which is exactly what they did. As long as they were able, the insiders took from the outsiders. In both cases, the outsiders were literally outside the ruling group and its homeland.

This is perhaps a good point to introduce our new theory about what government really is. It is a phenomenon, not a system. It is best understood as a fight between the outsiders and the insiders. The insiders always control the government…and use it to conquer and control the outsiders. Why do they want to do so? The usual reasons. Wealth. Power. Status.

Everybody — or everyone who isn't either feebleminded or a saint — wants wealth, power and status. And the easiest, fastest way to get it usually is to take it away from someone. That is government's role. Only government can take something away from someone else lawfully. Why? Because governments make the laws.

More to come…on the Divine Right of Kings…the Social Contract…and the Greatest Good for the Greatest Number….

12/09/11 Baltimore, Maryland – You'll recall that two days ago we introduced our new theory of government. Of course, we are not entirely serious. And not entirely unserious either.

But it hardly rises to the level of a theory. It is more like an insight:

Government is the natural phenomenon wherein the "insiders" take wealth, power and status from the "outsiders." They may provide a useful, even necessary, function — such as keeping the peace. Or they may not. They sometimes redistribute wealth among the outsiders. Sometimes not. They sometimes claim to be acting in the name of the greater good…and often do not. Sometimes they claim their privilege from God; sometimes, they don't bother. But they always take wealth, power and status from those who are not among the insiders.

We've already seen how a small group of Romans were able to reach beyond their home town, for nearly 1,000 years, taking wealth from people on the outside. One tribe fell under their control. Then another. Then, one town. And another. And always the power, prestige and wealth flowed back to Rome.

But not all Romans benefited in the same way. Rome itself was divided. During the Republican period the insiders were the leading families who controlled the Senate. Then came the dictators, the emperors, and the scalawags who were able to get control of the government. Often, they were military men, popular or cunning generals who rose through the ranks, murdered their rivals, and took the reins of power for themselves. Each brought in new insiders…and kicked out some of the old ones. Rome sizzled with intrigue…and sometimes erupted into open warfare, with one group of insiders battling it out with another.

After Rome fell, barbarian tribes swept over Europe. Local strongmen were able to set up their own governments. There was little theory or justification involved. They used brute force to take what they wanted. Then they settled down to govern. One local lord provided protection from other local lords. All demanded payment, tribute, wealth and power. In the largely un-moneyed economies of the Dark Ages, taxes were in the form of a share of output…and/or days of labor. A serf typically worked one day in 10 for his lord and master.

The local warlord and his entourage were the insiders. They took from the outsiders as much as they could get away with. Or as much as they thought it prudent to demand. Some even asserted a droit du seigneur, known in France by the more carnal expression "the right to the thigh." The local chief demanded the right to deflower the brides of his peasants. Even as recently as the beginning of the last century, Kurdish chieftains claimed the right to bed Armenian brides on their wedding night.

As the Dark Ages progressed, government became less locally peculiar. Across Europe, serfs, lords, and vassals knit themselves together into the feudal system. One governed a small area and was in turn governed by another, who governed a bigger one. At the top was the king, who owed his allegiance to God himself.

Justifying and explaining the phenomenon of government also evolved. How to make sense of it? Why was one man powerful and rich and another weak and poor? Europe was Christianized by then. All men were supposed to be equal in God's eyes. How come they were so different in the eyes of each other?

Reaching back into antiquity, the doctrine of the "Divine Right of Kings" was developed to explain it. Scholars did not maintain that kings were divine, because that would undermine the foundations of Judeo-Christian monotheism. Instead, they claimed that kings had a special role to play, that they were appointed…and anointed, by God (through his ministers in the church of St. Peter)…to rule. Some people thought the kings were descended directly from the line of Jesus Christ. Others thought that God gave kings a "divine" right to govern in His name.

In the fixed order of the world, each person had a job to do. One was a hewer of wood. Another was a drawer of water. A third was a king. Each man did his duty.

Scholars in the middle ages spent a lot of time on the issue. As a theory of government it seemed coherent and logical. But there were traps and dead ends in it. If the right to rule were given by God, man could not contradict Him. But men did. One divinely-appointed ruler met another divinely-appointed ruler on the field of battle. Only one could win. What kind of game was God playing?

And if God granted a man the right to rule other men, did that mean that every order he gave must be obeyed, just as though it had come from the mouth of God himself? And what if the king seemed not to be doing God's work at all? Adultery was clearly a no-no. God disapproved of it. But kings often made it a habit and a sport. Did not the king defile his body and betray his Lord? In an effort to explain away the problem, scholars put forth the idea that the king actually had two bodies. One sacred. One profane.

But which was which?

More to come…

12/13/11 Baltimore, Maryland – "The Divine Right of Kings" was a theory of government that held water. But you had to put the water in the right container. You had to believe in God. You had to believe that He gave out job assignments. You also had to believe that He didn't mind when His employees and agents made a mess of things…or even when they contradicted His own orders. Looking at the history of the monarchs who were thought to have been given this divine authority, you would have to conclude that God was either a very tolerant task-master, or a very negligent one. Adultery, murder, thieving, lying — there was hardly one of God's commandments they obeyed.

As a theory of government, the 'divine right of kings' would have been okay had it not been for the kings themselves. Some were reasonable men. Others were tyrants. Many were incompetent, largely irrelevant and silly. Taken all together, it was very difficult to believe that they had been selected by God, without also believing that God was just choosing His most important managers at random. Kings were not especially smart. Not especially bold or especially timid. Not especially wise or stupid. For all intents and purposes, they were just like everyone else. Sometimes smart. Sometimes dumb. Sometimes good. Sometimes evil. And always subject to influence.

Towards the end of the 18th century, the 'divine right of kings' lost its following. The church, the monarch and the feudal system all seemed to lose market share. The Enlightenment had made people begin to wonder. Then, the beginning of the "Industrial Revolution" or the "energy revolution" made them stir.

In 1776, Adam Smith published his "Wealth of Nations," arguing that commerce and production were the source of wealth. Government began to seem like an obstruction and a largely unnecessary cost. Its beneficial role was limited, said Smith, to enforcing contracts and protecting property.

The school of laissez-faire economics maintained that government was a "necessary evil," to be restrained as much as possible. The "government that governs best," as Jefferson put it, "is the one that governs least."

Government was supposed to get out of the way so that the 'invisible hand' would guide men to productive, fruitful lives. Smith thought the arm attached to the invisible hand was the arm of God. Others believed that not even God was necessary. Men, without central planning or God to guide them, would create a 'spontaneous order,' which would be a lot nicer than the one created by kings, dictators or popular assemblies.

This theory of government, such as it is, leads to what we know of today as "libertarianism." Libertarians argue about how much authority the government should have. They scrap among themselves over what the government should do and how big it should be allowed to get. But all libertarians agree with Jefferson. And all agree that the governments in the world circa 2011 are much too big.

Here at The Daily Reckoning we are sympathetic to this point of view. Not that we are libertarians. We just don't like anyone telling us what to do.

But libertarianism is hardly a theory of government. It makes little attempt to explain why government is what it actually is. In fact, it is purely prescriptivist day-dreaming, focused on what government ought to be. In theory, a government ought to be small, say the libertarians.

Government ought to mind its own business, they say. It ought to sort out disagreements between members of the public…and protect the public from wrongdoing. It ought to have not to drain the resources and productive output of one part of the population for the benefit of another. But so what? Who cares what the libertarians want?

Throughout history, government has operated in pretty much the opposite fashion. The insiders who get control over the police power of the state use it to promote their own agenda. Sometimes it is an apparently selfless agenda. Adolf Hitler, for example, took little wealth for himself. Nor did Stalin raid the public treasury for his own benefit. Instead, each worked long and hard in the interests of his people. (It would have been better if they had been on the make for money. It might have distracted them.)

Whether the insiders want money or power hardly matters. If they seek money, they take it from the outsiders — those, by definition, who neither control nor are favored by the insiders. If they seek power, that too must be taken from someone. The outsiders pay, every time.

While the proto-libertarians focused on how much harm an activist government could do, the utilitarians, positivists, and collectivists turned their attentions to how much good it could do. According to John Stuart Mill and Jeremy Bentham, a government should provide the "greatest good to the greatest number."

Again, this was not a theory of government, it was merely an idea about what government should do. And a dumb idea, at that. Who knows what is 'good' and what is not? Only God…or people themselves. Since God keeps his own counsel, only the people can decide. But how? They can only decide if they are allowed to choose for themselves — how they will spend their time and their money. And the only way they can spend their time and money as they wish is if they are given the liberty to do so, which takes us back to libertarianism, the very creed to which the utilitarians, positivists and collectivists opposed themselves. They wanted an elite to decide what was 'good' for the masses.

Which, of course, is what really happens. The elite insiders decide what they want. They call it 'good.'

More to come…

12/14/11 Baltimore, Maryland – More on our new theory of government.

You'll recall that this series began by pointing out how worthless most "theories of government" really are. They're not theories at all. They don't explain anything. Instead, they are just wishful thinking…flattery…and apologia for the elite who use government for their own ends.

The "social contract," for example, is a fraud. You can't have a contract unless you have two willing and able parties. They must come together in a meeting of the minds — a real agreement about what they are going to do together.

But what is the 'social contract' with government? There was never a meeting of the minds. The deal was forced on the public. And now, imagine that you want out. Can you simply "break the contract?" You refuse to pay your taxes and refuse to be bossed around by TSA agents and other government employees. How long would it be before you got put in jail?

What kind of contract is it that you don't agree to and can't get out of? They can dress it up…print out a piece of paper…have a solemn ceremony in which everyone pretends it is a real contract. But it's not worth the paper it's not written on.

Also, what kind of a contract allows for one party to unilaterally change the terms of the deal? Congress passes new laws almost every day. The bureaucracy issues new edicts. The tax system is changed. The pound of flesh they got already wasn't enough; now they want a pound and a half!

Every theory of government we've come across is a scam. So we offer a better theory: government is just a way for the insiders to take advantage of the outsiders.

Until the Industrial Revolution, the apologists relied on God to justify government. If one man bossed around another, it was God's doing they said. The Almighty got the blame. Which was neat and clean as long as you accepted the major and minor premises of it.

But the system came apart for two reasons.

First, it made God look like a fool. Monarchs governed in ways that must have been inexplicable to the "divine right of kings" theorists. Kings were frequently incompetent, murderous and venal. Finally, the theorists gave the theory and the kings the heave-ho at the same time.

Second, the rising wealth and power of the productive classes required a new idea.

Insiders always use government to transfer power and money from the outsiders to themselves. When wealth was easy to identify and easy to control — that is, when it was mostly land — a few insiders could do a fairly good job of keeping it for themselves. The feudal hierarchy gave everybody a place in the system, with the insiders at the top of the heap.

But come the industrial revolution and suddenly wealth was accumulating outside the feudal structure. Populations were growing too…and growing restless. The old regime tried to tax this new money, but the new 'bourgeoisie' resisted. It wanted to be an insider too.

"No taxation without representation," was a popular slogan of the time. The outsiders wanted in.

There never is one fixed group of people who are always insiders. Instead, the insider group has a porous membrane separating it from the rest of the population. Some people enter. Some are expelled. The group swells. And shrinks. Sometimes, a military defeat brings a whole new group of insiders sweeping into power. Elections change the make-up of the core group.

But the genius of modern representative government is that it cons the masses into believing that they are insiders too. They are encouraged to vote…and to believe that their vote really matters. Of course, it matters not at all. Generally, the voters have no idea what or whom they are voting for. Often, they get the opposite of what they thought they had voted for anyway.

But the common man likes the humbug that he is running things. And he pays dearly for it. After the insiders brought him into the voting booth, his taxes soared. In America, with taxation without representation, before the war of independence, the average tax rate was as little as 3% or so Now, with representation, government spends about a third of national income. And if you live in a high-tax jurisdiction, such as Baltimore or New York, you will find your state, local and federal tax bill will run to nearly 45% of your income.

In short, the insiders pulled a fast one. They allowed the rubes to feel that they had a solemn responsibility to set the course of government. And while the fellow was dazzled by his own power…they picked his pocket!

It didn't stop there. Under the kings and emperors, a soldier was a paid fighter. If he was lucky, his side would win and he'd get to loot and rape in a captured town for three days. Relatively few people were soldiers, however, because societies were not rich enough to afford large, standing armies.

The industrial revolution changed that too. By the 20th century, developed countries could afford the cost of maintaining expensive military preparedness, even when there was not really very much to be prepared for. But the common man was skinned again. Not only was he expected to pay for it, still under the delusion that he was in charge, he also believed he had a patriotic duty to defend the homeland insiders! That is the real reason that the modern democratic system has spread all over the world. It allows the insiders to mobilize more of the resources of the country on their behalf. Nothing can compete with it.

But now the insiders are in trouble. The typical citizen is beginning to realize that he's been had. As long as the insiders could plausibly promise him more and more benefits, he was willing to go along. But now, growth has stalled. They can't deliver. The insiders keep borrowing — more than $10 trillion this year alone. Soon, they'll be out of credit…out of time…and out of luck.

Regards,

12/20/11 Baltimore, Maryland – This is the [next to] last in a series. We began by wondering how come some people get to boss other people around…

We're not talking about wives and husbands or employees and their employers. In those cases, the bossing is legit. Husbands ask for it. And employees can walk off the job anytime they like.

We're talking about people who have the right — by law — to tell other people what to do. The TSA agent…the policeman…the building inspector…the customs agent…the IRS clerk…the FDA…the CIA…the FBI…

It is a remarkable thing, don't you think, dear reader? It says right there in the Declaration of Independence that 'all men are created equal.' Equality under the law is supposed to be the law of the land. And yet, some people are clearly above the law…some give orders to complete strangers…and some people even claim the right to make laws any way they want.

There are laws that tell you not to murder…and not to steal. In the 10 Commandments given to Moses, God named 10 laws that he considered important. But the folks walking the floors of Congress, the EPA, the SEC, the IRS and a plethora of other government agencies have added 10,000 more commandments. 'Thou shalt' this… 'thou shalt not' that. You can barely go to the bathroom or drill an oil well, without asking permission from a dozen different bureaucracies. 'Ignorance of the law,' is said to be an ineffective defense. But it's a very effective explanation. There are so many laws, rules, regulations, edicts, commandments, prohibitions, interdictions, injunctions, requirements and obligations that you are bound to miss one or two of them.

The latest Defense Authorization Bill just passed by Congress shows how far the law-makers and law-enforcers will go. The doctrine of habeas corpus goes back to before the signing of the Magna Carta in 1215. It was an ancient Anglo-Saxon limitation on the power of government. If the feds held a prisoner, a writ of habeas corpus required them to "produce the body." The government had to either release the person or charge him with a crime. For more than 800 years, this gave people some protection against government.

But now, in the Year of Our Lord 2011, the Congress of the United States of America, with the complicity of POTUS, himself, has seen fit to deny the right of habeas corpus to American citizens. Henceforth, the feds can capture you, put you in prison and waterboard you every day for the rest of your life. They don't have to charge you with murder or jay-walking or any crime at all. They don't have to let you talk to a lawyer. Or to your spouse. Or to your Congressman… They don't have to read you your rights or provide any evidence against you. Like the Argentines in the '80s, they just 'disappear' you. And you're gone forever.

The Guardian reports:

Human rights groups accused the president of deserting his principles and disregarding the long-established principle that the military is not used in domestic policing. The legislation has also been strongly criticised by libertarians on the right angered at the stripping of individual rights for the duration of "a war that appears to have no end".

The law, contained in the defence authorisation bill that funds the US military, effectively extends the battlefield in the "war on terror" to the US and applies the established principle that combatants in any war are subject to military detention.

"It's something so radical that it would have been considered crazy had it been pushed by the Bush administration," said Tom Malinowski of Human Rights Watch. "It establishes precisely the kind of system that the United States has consistently urged other countries not to adopt. At a time when the United States is urging Egypt, for example, to scrap its emergency law and military courts, this is not consistent."

Rand Paul, a strong libertarian, has said "detaining citizens without a court trial is not American" and that if the law passes "the terrorists have won".

"We're talking about American citizens who can be taken from the United States and sent to a camp at Guantánamo Bay and held indefinitely. It puts every single citizen American at risk," he said. "Really, what security does this indefinite detention of Americans give us? The first and flawed premise, both here and in the badly named Patriot Act, is that our pre-9/11 police powers were insufficient to stop terrorism. This is simply not borne out by the facts."

So now the feds, whose salaries we pay, can spy on us with drones we paid for too. They can send a swat team to disappear us…and keep us in prison.

Our question is: 'what gives them the right?' What bread to these people eat? What air do they breathe?

We've seen the theories. We've seen them in practice too. The 'divine right of kings.' The 'social contract.' 'From each according to his abilities…' 'The greatest good for the greatest number.'

What they all have in common is that they are not theories, but apologia. One claims to know God's own plan. Another imagines that the powerless masses agreed to be pushed around. Still another pretends that it's for their own good.

Some of the excuses are implausible or unbelievable. Others are absurd. The 'theories' make no sense. But the facts are undeniable. And the fact is that there are always some people who are willing, ready and able to boss others around. Some rulers — the 'insiders' — are smarter than others. Some are nicer. Over time, you see all sorts. Their goal is always the same — to take power and wealth away from the outsiders. How much? As much as they can get away with.

You may wonder, for example, how come the governments of the developed countries all seem to be in the same deep hole of debt. If you listened to the politicians, for example, you might conclude that France and America were an ocean apart. Actually, overall tax, spending, and debt levels are similar in all OECD nations. And tax levels, generally, are about 10 times higher than they were in the last century. And their forms of government are about the same too — even though the insiders claim to have very different ideas about how to govern. So what happened?

The genius of modern democracy is that it makes the citizen a party to his own enslavement. Rather than give up 10% of his output to his feudal lord and master, he gives up 30% to 50% to his democratically-elected bosses. They tell him what to do. And he believes he is giving the orders!

And then, he believes he has discovered the best form of government in the world. It is so good he can't wait to force others to be democrats too.

12/23/11 Baltimore, Maryland – A theory should explain something without reference to something else. That is, a metaphor doesn't work. It's just a description. If you say that government is a kind of 'social contract,' you are merely describing how it seems to you…or what you think it might be comparable to.

Our theory is that government is a natural phenomenon, an expression of power relationships, in which some people seek to dominate others by force. These dominators gather 'insiders' together so that they can take money, power and status away from other people, the 'outsiders.'

Many people think that government provides some service. That is true, but it is incidental. Governments often deliver the mail. But they don't have to. They would still be governments even if they didn't control the Post Office. And what if they didn't have a department of inland fisheries, or a program to teach retarded democrats to count to 20? They would still be in the government business…and still have their helicopters, chauffeurs and expense accounts. But if they lost control of the police or the army it would be an entirely different matter. Force is the essence of government, not a decorative detail. Without armies and police, they would no longer be governments. It is "from the barrel of a gun," as Mao put it, that political power projects itself.

At the end of the 19th century, people were asked what they thought the new century would bring. Almost universally they predicted that government would grow smaller. Why? Because people were becoming much richer and better educated. The thinkers of the time thought there would be less need for government. People who were rich and well-educated had no use for government, they believed.

It didn't turn out that way. Because the thinkers misunderstood what government really is. They had the wrong theory. Government is not an organization that provides benefits and services, and therefore shrinks as the need subsides. Governments grew tremendously in the 20th century. Because they are essentially parasitic luxuries. As a society grows richer it can afford more illusions, more waste, more re-distribution of wealth, more regulation, higher taxes, and more unproductive government employees.

The outsiders take more, because there is more to take.