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Archive for November, 2012

Crowd-sourcing the economy

There is an on-going debate between those who believe in the power of free markets versus those who believe in the power of government regulation. Let’s look at the pluses and minuses of these arguments.

Government regulation pluses:

  • quick results are possible, as political force is brought to bear
  • initial results may be positive, making the politicians and bureaucrats appear effective

Government regulation minuses:

  • decisions are political, with actors usually acting on their own personal best interests (consistent with human nature)
  • decisions are arbitrary, based on the judgement of a person or group of limited size
  • decisions are based only on information available to the limited number of actors
  • business failures can be politically painful, resulting in inefficiencies as resources are redirected to politically-powerful elites
  • long-term results tend to be negative because of the other minuses

Free market pluses:

  • decisions are based on the judgements of many persons (the whole market) each acting on their own best interests, using the whole pool of information
  • competition reduces the power of any person or limited group to dominate, resulting in impartiality
  • the failure of any entity within the market strengthens the market as a whole, improving efficiency, resulting in a growth of widely-distributed wealth
  • long-term results tend to be positive because competition weeds out failures and inefficiencies

Free market minuses:

  • initial results may be negative, such as the failure of inefficient businesses, with its dislocations of jobs and sources of supply
  • allowing the market to work may make politicians look like they are not doing anything constructive

Free markets can only exist within the context of limited government. We had that once, for about four score and seven years, resulting in an era of unprecedented growth of general wealth. With the growth of government has come the growth in the disparity of the (politically well-connected) rich and the poor, and the slow but consistent shrinking of real wealth. To see for yourself, go to this website (http://www.tradingeconomics.com/united-states/gdp-growth), set the “From” year to 1947, click on the Trend checkbox, and see where we have gotten to because of years of government regulation of the economy.

Will this be our legacy? It’s not too late to fix this. I’m not talking about “de-regulation” as it has been known in the past, since it still allows the few to micro-manage the economy. I am talking about a distribution of power (via cantons) that will allow the economy to once again be free of arbitrary political control.

Why juries?

Did you ever wonder why we have such a thing as “trial by jury”? Why not just let the judge decide? Throughout history there have been judges, and there have been evil judges, those who would rule unfairly for nefarious reasons (such as bribery). The natural solution to this problem is to “distribute the power” into the hands of twelve peers. It is far more difficult to bribe (or threaten) the whole jury, or even to successfully influence a majority.

The same wisdom applies to all those who exercise power over others. When the powerbase becomes too small, as it is now, we need to redistribute power to a larger base. That is basically what cantons are all about. Elsewhere on this website I noted that, to maintain the same relative number of legislators to population that was stipulated in the US Constitution, Article 1, Section 2 (1:30000), we would now need just over 10,000 members of the House of Representatives! The one thing that might accomplish is to make it more difficult for the majority to be influenced unduly by the army of lobbyists. It would, at the very least, make lobbying more costly. The problem with that still remains: the “representatives” still represent (at best) a majority of those who bothered to cast a ballot. And once elected, they can largely ignore those who elected them in favor of the special interests who more directly control them.

Cantons, which actually represent the people who freely choose to join them (unlike the so-called congressional “Representatives” who represent the special interests), can create just the redistribution of power that would free us from the dominance of the few to a very great extent.

I had a dream.

I had a dream that I was on a plane flying … somewhere. Not important. I was in a middle seat, and the fellow in the aisle seat, dressed in jacket and tie, was Congressman Ron Paul. We had a great time discussing the value of freedom, and the future possibilities of living in a truly free world. I, of course, spent a good deal of time explaining cantons to him. He was interested, and had lots of penetrating questions. Yet, even by the end of our conversation and flight, he appeared to be skeptical of the concept’s potential. We shook hands as he quickly exited the plane.

Days later he called with more questions. I did my best to answer them. When we had finished the conversation, I sat there, wondering what was up. He actually seemed interested in the whole idea. I, naturally, was thrilled, but hesitant to get my hopes up that anything would come of it.

About two months later, he called again. He and his lawyer had worked out the details to create a canton as a non-profit organization. He was going to name it the “Paleo-libertarian Canton of America”. Within a week’s time I began to see ads on various websites offering memberships to the canton. He had hired Trevor Lyman to do the publicity.

What a great dream.

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