Tag: monopolies

Trajectory of the State: What Happens When Statists Overplay their Hand?

It has been a good run for state worshipers. The 1800s gave more and more people the belief that the state could bring about a good utopia for all to enjoy. (Outside those who saw peril in the state, like those in the most southern seven US states in the “deep south” in 1860 and 1861)

By the end of the 1800s it seemed that the progressive movement was about to birth and bring about a century of peace. However, WWI and WWI PLUS all the genocides of the 20th century meant millions died during as well as outside of official wars.

By the end of the 20th century we saw two collectivist Communist states morph in various ways towards entities that pay more attention to well-being of the taxpayers. Russia emerged out of a God-less era to embrace family and Christianity in the 20th century. China backed off on the underground Church (that was thriving under persecution) to a degree where this is tolerated in this Communism version 2.X coupled with quite a capitalist friendly environment where regulations are minimized that allow entrepreneurship to thrive. While these states are not perfect, it does appear they have learned the lessons of the 20th century.

This brings us to the US state complex that is exceptional enough that it still believes there are no lessons to learn. However, if Lew Rockwell’s post “Working Around Leviathan” predictions are true, their days are numbered as they get less and less relevant in society as technology advances so much faster than the state can digest it.

Lew does a great job at balancing the forces at work in 2020, where he compares the US state apparatus:

Never before has a government in human history owned more weapons of mass destruction, looted as much wealth from a country, or assumed unto itself the power to regulate the minutiae of daily life as much as this one. By comparison to the overgrown behemoth in Washington, with its printing press to crank out money for the world and its annual $2.2 trillion dollars in largesse to toss at adoring crowds, even communist states were powerless paupers.

.. to the private commercial/business side:

At the same time — and here is the paradox — the United States is overall the wealthiest society in the history of the world. The World Bank lists Luxembourg, Switzerland, and Norway as competitive in this regard, but the statistics don’t take into account the challenges to mass wealth that exist in the US relative to small, homogenous states such as its closest competitors. In the United States, more people from more classes and geographic regions have access to more goods and services at prices they can afford, and possess the disposable income and access to credit to put them to use, than any other time in history. Truly we live in the age of extreme abundance.

Some will claim it is the government’s role that has made especially large corporations most successful and should receive credit for all they do. However, Lew is quick to point out a disclaimer to that effect, but not before sharing what both the so-called “right” and so-called “left” tend to think:

It seems that people on the right and left are quick to confuse correlation with causation. They believe that the US is wealthy because the government is big and expansive. This error is probably the most common of all errors in political economy. It is just assumed that buildings are safe because of building codes, that stock markets are not dens of thieves because of the SEC (Securities and Exchange Commission), that the elderly don’t starve and die because of Social Security, and so on, all the way to concluding that we should credit big government for American wealth.

I do hope you chuckled as you read this. Only those in DC would take this seriously, most of the rest of us recognize sarcasm.

If we are looking for those that create value and wealth, do we think of government? Does on think of Obamacare, Amtrak or the United States Postal Service?

Government is not productive. It has no wealth of its own. All it acquires it must take from the private sector. You might believe that it is necessary and you might believe it does great good, but we must grant that it does not have the ability to produce wealth in the way the market does.

If you understand economics, or if you have ever spent time in a monopoly, you will find that they do not have any good feedback loop that helps them indicate what the market needs. Government is even more handicapped since no one in their bureaucracy is ever accountable for government action or inaction. They simply have no skin in the game and do not see the taxpayers as customers:

Economic law limits what the state can do. The state cannot raise wages for everyone. It cannot dampen prices that want to rise without causing shortages, or increase prices that want to fall without causing surpluses. It cannot predict the course of markets or human events. It can control surprisingly few forces that work in the world.

In all its central planning, government is forever declaring the major combat operations are over, whether in foreign or domestic policy, only to discover that its real struggles and battles last and last. A good example is in the area of foreign trade. If a good or service is more efficiently produced abroad, the logic of the market will reassign production patterns until they conform. An attempt to protect domestic industry can do nothing to change this reality. Instead, protection only increases prices for consumers, subsidizes inefficient firms, and brings about ever-increasing amounts of wasted time, work, and resources.

On the other hand are those that seek to truly bring value to the market and are rewarded with wealth that can be placed into capital improvements that can make the business even more productive, efficient and even adaptable to the changing market. This was seen by the 1700 and 1800 farmers all the way to the manufacturers of the 1800s that could accomplish this all without government involvement.

Lasting prosperity can only come about through human effort in the framework of a market economy that allows people to cooperate to their mutual advantage, innovate and invest in an environment of freedom, retain earnings as private property, and save generation to generation without fear of having estates looted through taxation and inflation. This is the source of wealth. This is the means by which a rising population is fed, clothed, and housed. This is the method by which even the poorest country can become rich.

I will only add one more quote and if you are interested, please read all of Lew’s words that at least to me, give hope for the generations to come:

But here I would like to concentrate on what I think is an explanation that is too often overlooked. It requires that we understand something about the extraordinary capacity of the human mind to overcome obstacles put in its path. In all the history of states and the history of reflection on social organization and economics, this component is the most underestimated because it is the least predictable and the most difficult to comprehend. Human beings are creative and determined, and, if they have a love of liberty, and cooperate through exchange, they can overcome seemingly impassable obstacles.

It is because of this power of human ingenuity and determination to improve the world around us, despite the state, that a vast gulf has come to separate the accumulated power of the nation-state from its effective power in the management and guidance of society and the world economy.

Yes, despite the state, human ingenuity can improve the world, as well as its parallel, despite religion, humans with God’s help and hope, can improve the world in loving those around them.

Praying that the future does see the archaic state fall by the wayside and that grassroots communities with free trade on a global basis can improve the lives of those all over the world.

One can dream can’t they?

Acts 2:17

Your sons and your daughters will prophesy, your young men will see visions, and your old men will dream dreams.

-SF1

Political + Business Monopolies = Mismanagement Squared: California & PG&E Blackout

Fuel treatments demonstrably protect the tracts on which they are performed. This image shows how treatment protected the previously thinned acres when the Northern California Goat Fire of 2000 swept through. In addition to protecting the treated acres themselves, it is believed that strategically located thinnings can stall the overall spread of wildfires, thus protecting acres beyond those treated.

What is extremely sad is the fact that it usually takes years to see the dysfunction, many time unseen at first, that comes from decisions made by those that have little to no skin in the game. In this case, political decisions in the 1990s, some good intentions, could result in unintended consequences in 2018 and beyond. Business joined at the hip with government is a recipe for disaster. Pure Crap-italism brought California this below instead!

In the recent ‘Watts Up With That’ article on the intentional PG&E blackout for a million or more California residents away from the metro areas to prevent wild fires, Anthony Watts rightly lays blame where it needs to be laid:

To better understand how we came to this forced blackout, it is useful to look to the past. When the gold rush led to modern California, early photographers chronicled the landscape .. the wildlife biologist depicted a California countryside of grassland with isolated stands of pines and oaks. The native Americans in the region frequently used fire to shape the landscape to increase the food available for them, as not a lot of sustenance grows on a dense forest floor.

Watts outlines the natural and then outlines what the last 150 years has brought California:

But with the arrival of hundreds of thousands of Americans came a thriving economy and the order of government. Trees were useful and valuable, and therefore harvested. Fire was a threat to towns and cities, and thus, suppressed.

For decades, up until the 1970s, California would harvest and replant about as much wood as could be grown through an abundance of sunshine, snow, and rain. But in the 1990s, concern over logging’s effect on the spotted owl (largely misplaced, as time would tell) led to a massive slowdown in the timber harvest, especially on the federal lands that make up about 60 percent of California’s forests.

With a decline in the harvest came a decline in the allied efforts to clear brush, build and maintain access roads and firebreaks. This led inexorably to a decades’ long build-up in the fuel load. Federal funds set aside for increasingly unpopular forest management efforts were instead shifted to fire-suppression expenses.

It must be noted, that the usual suspects have not been mentioned. This is because it has been the “answer” for every question since “experts” predicted Global Cooling in the 1970s and Global Warming in the 1990s who now fly the flag Climate Change as their mantra. Fact is, California is not hotter and drier due to man-made environmental impact, but annual precipitation totals over the past 100 years show no statistically meaningful trend.

In a stroke of some innovative thinking, there was a 2006 report by the Western Governors Association that promoted the use of technological advances to adjust for the overreaction to environmental concerns. The report noted that:

“over time the fire-prone forests that were not thinned, burn in uncharacteristically destructive wildfires… …In the long term, leaving forests overgrown and prone to unnaturally destructive wildfires means there will be significantly less biomass on the ground, and more greenhouse gases in the atmosphere.”

Their solution was to construct Biomass facilities which can provide power in the kilowatt range to farms and light industry or in the multi-megawatt
range to communities, campuses and industrial complexes. These qualities alone make biomass the most diverse, complex and strategic renewable resource in the region.

Of course, innovative thinking rarely impacts those who are content with the status quo, and so now over a decade later, when the rubber meets the road, and crisis emerges, politicians look to shift the blame:

Gov. Gavin Newsom, a Democrat, supports the blackout as a preventive measure, noting that the planned power cut “shows that PG&E finally woke up to their responsibility to keep people safe.”

Ironically, it was former Gov. Jerry Brown that changed his tune in recent years as it became apparent that environmental protection turned out to be a worse Rx for the environment (kind of like the typical political wars where their prescription is worse than the “disease”, like The War on Drugs, The War on Poverty, The War on Terror, etc):

California politicians, late to realize the true nature of the wildfire danger, have finally started to play catch-up. Last year, outgoing four-term Democratic Gov. Jerry Brown reversed his longtime reluctance to active forest management when he signed two bills into law, both of which passed on the last day of the legislative session in what was to become California’s deadliest wildfire year.

SB 901 allocated $190 million a year to use prescribed burns to reduce the fuel load while improving forest health, while SB 1260 made three important policy changes to streamline the ability to conduct prescribed and controlled burns; remove air quality impediments to preventive burns; and prevent environmental quality lawsuits from slowing or stopping needed burns.

So it looks like big business married to big government has once again brought about a worse scenario than if they had been kept out of the monopolization of power (no pun intended) for those in Northern California that have escaped the urban areas. Just think what smaller utilities companies in competition along with county governments could have done for those in these areas verses what bureaucrats did in Sacramento! Instead, look at what politicians have done:

In all likelihood, these measures will prove to be too little, too late for rural Californians, many of whom flocked to build along what is known as the Wildland-Urban Interface (WUI) where land was cheaper and housing costs far less than in California’s dense and heavily regulated urban centers.

The environmentalists who hold sway over much of the California political class chafe at these homes along the edge of the forest and chaparral, calling for development restrictions and special fire taxes to discourage low-cost housing in rural areas and around the suburban periphery.

And now, as the result of forest mismanagement by both the federal government and California, many homeowners living out in the WUI can no longer obtain fire insurance. No fire insurance, no mortgage. No mortgage, no house. Today, it would also appear, no electricity as well.

Like many other states, you have the urban areas that hold most of the decision-making power and then you have the rural areas that are at the mercy of big-money men hundreds of miles away.

It was not meant to be this way, for in my sequel to this post, I will explain that one of the two versions of America saw things very differently. The root of where we (as well as the rural Californians) are today is from decisions made in the late 1700s right on up to the 1860s and beyond. Once again, democracy renders a nation hostage to the majority and powerful and marginalizes those who live and act differently. Democracy is the road one takes when on the way to Socialism, Marxism and Communism.

Stay tuned.

-SF1

Fall 1781: Momentum of the Revolutionary War Shifts, So Does “The Cause”

There is light at the end of the tunnel, and there is movement afoot that takes place mainly north of the Potomac River that I contend is normal in this broken world. When freedom breaks out, there are those that instill fear in the people that politics, bigger and more centralized, is needed to secure our future.

While this article is a bit dated (I believe I was still in the US Navy at the time), it does point out a few things that I have been saying off and on in my blog over the past year or so. I bring it up now since my ongoing coverage of Francis Marion’s activities in South Carolina, which actually saved the colonies in their efforts to exit the British Empire, is entering the post-Yorktown phase where military conflicts and such give way back to the political.

The standard American myth celebrates the Constitution as the triumphant culmination of the American Revolution. This is largely untrue and misleading.

Everyone in government schools has heard, the Articles of Confederation was weak and ill equipped to govern the thirteen colonies, let alone all the additional lands that the Treaty of Paris granted in 1783:

The facts, and not that era’s fake news, paints a much different scene:

The alleged “critical period” between the end of the Revolution and the Constitution’s adoption was not dominated by economic depression, political turmoil, and international peril, jeopardizing the independent survival of the American experiment in liberty.

There was no actual threat, but a threat was thought up in the minds of those politicians whose political descendants include the politicians that orchestrated the War of 1812, the Mexican-American War, the so-called Civil War and so on. In each of these instances, there was a fear introduced into the population that without a war, catastrophe was imminent.

In context, backing up to the period of time before even the Declaration of Independence was penned (raw thoughts by Thomas Paine and edited by Thomas Jefferson), there was a joining of efforts from people in the thirteen colonies across a political and philosophical spectrum. On one hand, we have the RADICALS:

The American Revolution, like all great social upheavals, was brought off by a disparate coalition of competing viewpoints and conflicting interests. At one end of the Revolutionary coalition stood the American radicals—men such as Samuel Adams, Patrick Henry, Thomas Paine, Richard Henry Lee, and Thomas Jefferson.

Although by no means in unanimous agreement, the radicals objected to excessive state power in general and not simply to British rule in particular. Spearheading the Revolution’s opening stages, they were responsible for the truly revolutionary alterations in the internal status quo: the abolition of slavery in the northern states, the separation of church and state in the southern states, the rooting out of remaining feudal privileges everywhere, and the adoption of new, republican state constitutions containing written bills of rights that severely hemmed in government power.

These were change agents, those daring visionaries that can see life lived differently, and at the same time knew that this would not be a utopia, but in reality would be a struggle, but a rewarding one.

On the other hand, was a class of people that we might consider to be nationalists or those whose major agenda was that of mercantilism:

At the other end of the Revolutionary coalition were the American nationalists; an array of mercantile, creditor, and landed interests. The nationalists went along with independence but opposed the Revolution’s libertarian thrust. They sought a strong American state with the hierarchical features of the 18th-century British state, only without the British.

So by the fall of 1781 as the British catastrophe at Yorktown reverberated throughout the British Empire, there were nationalist forces that were already parting ways with the radicals, and even the militias that brought them to this day.  By 1783, Francis Marion saw the writing on the wall. The NOV1782 election meant that Marion had to leave Pond Bluff yet again for the 06JAN1783 legislative session. Writing from there on January 18th he shared the inequalities that tainted his excitement about the future of the colony as well of the federation of states. It seems that the Rhode Islander Continental Nathaniel Greene was awarded 10,000 guineas from SC toward the purchase of a SC plantation and quoted an old saying “that kissed goes by favor”.  Georgia had also given Greene 24,000 acres as well. Marion eventually was awarded 300 acres in 1785.

It should be noted that the correspondence Marion had with Greene stopped abruptly as the hostilities stopped in DEC1782. Marion had hoped that Congress would follow through on the promise of a lifetime of half-pay for officers but it would be 50 years before that practice would finally start. Marion lamented that “idle spectators of war” were in charge now.

So too were the more nationalistic military leaders that benefited from a larger government:

Military conservatives such as George Washington induced Congress to focus the Revolutionary effort on a costly conventional force, the Continental Army, rather than the militias. By the 1781 Yorktown campaign, popular disgust at the army’s continuing hand-to-mouth existence gave the nationalists uncontested control of Congress. They proceeded to implement a financial program that gave the central government much more power.

While the nationalists attempted to strengthen the Articles of Confederation, their attempts through 1784 were met with resistance from the Radicals after the Treaty of Paris. The economic state of the states were generally fine economically except for two groups that put out a very public fuss:

In reality, American merchants were after uniform navigation laws, because they wanted some coercive means of monopolizing the American carrying trade. And American artisans wanted uniform protective tariffs to stop their customers from buying the cheap foreign goods flooding American markets at the end of the war. The unique economic fortunes of these two groups and their quest for special privileges contributed much to the exaggerated impression of postwar depression.

As we see today, coercive means to monopolize as well as protective tariffs are tools used yet today in 2019. Capitalism will always look to enhance their position by government if it will let them. Corporatism is the curse of politics gone too far.

So the Coup d’etat of the cause for the freedoms gained by the American Revolution would come at a convention in Philadelphia in 1787 whose purpose was to rework the Articles of Confederation, however:

Its official function was to propose revisions to the Articles. But the delegates, meeting in secret, quickly decided to draft a totally new document. Of the 55 delegates, only 8 had signed the Declaration of Independence. Most of the leading radicals, including Sam Adams, Henry, Paine,Lee, and Jefferson, were absent. In contrast, 21 delegates belonged to the militarist Society of the Cincinnati. Overall, the convention was dominated by the array of nationalist interests that the prior war had brought together: land speculators, ex-army officers, public creditors, and privileged merchants.

Things had definitely changed in one decade’s time, and not for the better! Look how far we have come since then.

Not cool!

We are much “safer” today as a result of the this early course change in this nation’s history, safe as slaves.

-SF1