To understand what will happen to currency under ancap, it is enough to visit the site coinmarketcap.com, which provides the price history of more than seven thousand cryptocurrencies. Since there is no copyright on cryptocurrency, literally anyone can create one, and this site reflects far from all of them, but only those that are traded, more or less, on exchanges, or were traded for some time.
What do we see when studying the price history of various currencies relative to Bitcoin? In many cases, it is a short-term speculative rise, followed by a long and painful decline with occasional spikes, sometimes ending in complete oblivion. The issue is not even unrestrained emission, but the fact that the consumer does not need an excessive variety of types of money. As we know from Alexey Tereshchuk’s catallactic theory of money, money are goods used to reduce costs in indirect exchange. If there are many candidates for the role of money, under conditions of freedom of choice, the consumer will use those that can reduce their exchange costs more effectively than others.
How many types of money are needed to fully satisfy the needs of the market? Money has various parameters by which they can be compared. For example, the possibility of anonymous transfer, or conversely, the impossibility of such, or the size of costs to make a payment, or preservation during storage, or preservation of value over time, or the development of infrastructure for working with this type of money, and so on. Each such factor is interesting because it allows reducing the consumer’s costs when using money in different ways. It is very unlikely that one single type of money will be found that leads in all possible criteria. Therefore, in the course of natural currency selection, at least as many should remain as there are leaders in individual functions of money.
However, of course, this does not mean that new and new attempts will not be made in the market to displace the old leaders. They will be. Most of them will end in failure. There will also be initially fake attempts, where the creators of the currency build hype around it, profitably sell it to all who wish, and then relax, and the currency fades into oblivion.
The well-known Russian Orthodox republican Rodion Belkovich has appeared in my channel twice so far.
The first time was when I was answering the question of whether we are already living under ancap. The question was obviously inspired by Belkovich’s speech at last year’s Adam Smith Readings, where he thoroughly trolled the audience with this paradoxical assertion.
And then suddenly, a rumor reaches me that Belkovich is traveling across the country presenting this very book of his, like Svetov in the pre-covid era, and intends to visit Novosibirsk on October 4th. By today’s standards, any kind of public lectures are quite exotic; I’ve completely grown out of the habit. In short, for those who wish to drop by, here is the Timepad address for lecture registration. The book presentation will take place on October 4th from 14:00 to 15:00 at Voskhod 28, 4th floor. And from 15:00, he will be debating republicanism with local colleagues. I don’t know how reluctantly the organizers will be forced to set up chairs and, accordingly, what the capacity of the hall will be, but I hope everyone will fit comfortably. Because I remember almost fainting from the stuffiness at Svetov’s, and I don’t want that again.
In the lecturer’s gaze, one can clearly see a desire to water some tree…
Ancap is not only profitable, as economists claim. Not only just, as legal scholars insist. Not only virtuous, as ethics specialists believe. Today, I want to raise a toast to the beauty of anarcho-capitalism.
A person is free. A person is responsible for themselves. They have a right to whatever they voluntarily agree upon with others. They are ready to stand up for themselves. If they come to the aid of others, it is only because they wished to do so. If they ask for help, they always intend to reward those who help. If they accuse, they always indicate why it is their business. If they accidentally cause harm to someone, they always inquire about the amount of compensation.
Just imagine the image of the person that arises before you when you read such a description. Is he not wonderful? Does one not feel a desire to be like him? That is how the aesthetics of ancap work, and they should not be underestimated.
A person who positions themselves as an ancap but cannot stand up for themselves, takes offense at things that do not concern them, burdens others with requests, does not pay back debts, is quarrelsome and incapable of negotiation—is ridiculed. They do not correspond to the aesthetic image that arises in everyone who hears about ancap.
Place the image of an ancap next to the image of some honest statist. You will always find some aesthetic flaw. For example, the statist will insist that taxes be squeezed out of a person, even if it buries the business. Or they will insist on an obviously unfair accusation because that is the requirement of the law. Or they will demand tons of paperwork for something that normal people do much more simply, and who would be ready to give a bribe, but the honest statist does not take them. It is immediately apparent that the honest statist is a tragicomic figure, evoking hatred, pity, or laughter, depending on your position relative to them.
Or take a consistent communist. He will wear standard clothing from a public warehouse, eat set lunches in a canteen, put his children in nurseries, and burn himself out at the job where the general assembly sends him—even if he dreams of something completely different. This is a tragic figure; there is even a certain grandeur in his asceticism, but once you imagine him focusedly marching across your own destiny in those very same standard boots from the public warehouse—something about the aesthetics of socialist realism begins to turn one’s stomach.
Not only is the image of the anarcho-capitalist beautiful, but so is the system of interaction under ancap. If you need something, do it yourself, buy it, or borrow it. But if it isn’t lent or sold, do it yourself—or abandon the goal. Compare this with the statist “if you need it, vote for the one who promises to do it for you using the taxes collected from you.” Or with the communist “if you need it, convince the other members of the community that you need it, and then they will vote to allocate it to you.” When a description of interaction involves compulsory social redistribution, it is first and foremost unsightly, if only in its clumsiness.
In principle, an aesthetic of relationship descriptions comparable to the ancap one exists in the model of pure violence. If you need it, do it yourself or take it. If you couldn’t take it, do it yourself or abandon the goal. When ancaps are accused of being proponents of unlimited violence, it is precisely because of this similar aesthetic. Some simply do not understand the difference, but most (I believe) simply consciously manipulate your aesthetic perception to repel you from the image of the ancap.
Of course, there is a difference, and a quite obvious one. What does an ancap do when they want to build a small piece of ancap around themselves? They simply make deals, without asking permission from outsiders and without paying any taxes. According to Hobbes, however, within the framework of the war of all against all, he would more likely go and impose a tribute on someone. That is, he would build a small piece of a state around himself.
Alright, I admit, the Fed messed up. Let’s assume the Federal Reserve really did inflate financial bubbles during the war and even after, which led to the depression of 1930-39. But what about the panics of 1873 (and subsequently the long depression of 1873-79), the devastating 1893 and the prolonged depression until 1896, and the short-term 1908. There wasn’t even a hint of a Fed back then.
Moreover, I am placing more emphasis on the depression of 1893, as it was the most terrifying in scale and damage (surpassed perhaps only by the Great one). The unemployment rate reached 17-19% at its peak! And all this happened during the administration of Grover Cleveland, who is considered the most libertarian US president. He was for: low taxes and non-interference in the economy. And against: high tariffs (which were simply enormous at the time!), business subsidies, pensions and material aid to victims (for example, he refused to allocate $100,000 to farmers in Texas affected by crop failure in 1887). And he gave a f… that is, he vetoed unconstitutional (as he believed) laws that Congress wanted to push through. By the way, what do you think of him?
And as the older brother who explains everything in much more detail, but whom few will read, this time we have the book by Milton Friedman and Anna Schwartz A Monetary History of the United States, 1867-1960. I will be taking illustrations from there.
The Crisis of 1873-1879
We see that during this time, the decline in business activity was accompanied by a decrease in the money supply, a drop in prices and — attention! — an increase in real income. In other words, production grew at a frantic pace — and this despite deflation (the reasons for deflation are well known: the US was returning to full convertibility of dollars into gold after issuing a huge number of unsecured greenbacks during the Civil War years). Thus, deflation does not necessarily lead to a slowdown in production. In general, calling this period a depression is somehow strange; rather, it was simply a structural reorganization of the economy under conditions of rapid economic growth and a decrease in the money supply. In the twenties of the 20th century, there was also frantic economic growth — but it was accompanied by the inflation of the money supply, which I wrote about when answering the question about the Great Depression.
The Crisis of 1893-1896
The crisis was preceded by a significant increase in the money supply, from 210 to 308 million dollars in Treasury accounts over the period from 1879 to 1888. This was due to the growing number of supporters of “soft money”: the return of greenbacks, i.e., unsecured treasury notes, or the unlimited issuance of silver dollars (it was precisely at this time that silver began to depreciate sharply because its mining rates increased). Meanwhile, the bimetallic standard assumed a fixed ratio between the price of gold and silver. Anyone interested can read about what arbitrage opportunities this hides in popular form in chapter four of the fanfiction Harry Potter and the Methods of Rationality. What happens when the state persists in maintaining the bimetallic standard can also be read in Saifedean Ammous’s The Bitcoin Standard, which summarizes the experience not only of the USA, but also, for example, the Chinese Empire.
Add to this that, although the USA did not yet have the Fed at that time, there was unregulated banknote emission by approximately 8,000 banks under conditions of fractional reserve. Therefore, once all these factors of monetary expansion had worked for long enough, any shift in market conditions was sufficient to trigger a banking panic. This happened in 1893. Under fractional reserve conditions, this inevitably meant the bankruptcy of many banks. The money supply shrank sharply, followed by a decrease in the volume of investments.
At the same time, although unemployment grew to significant levels and incomes fell at the peak of the crisis, the market adjusted very quickly to the new conditions, and soon it fell again. So here too, we see a trend: the crisis passes quickly if the state does not twitch and does not try to cure it with regulation. The illustration shows a classic V-shaped crisis structure: a rapid decline, a rapid recovery. Real income recovered to pre-crisis levels as early as 1895.
The Crisis of 1908
The same thing: credit expansion (the money supply grew from 261 million dollars in 1897 to 339 million dollars in 1906), a banking panic, the V-shaped nature of the crisis, and just over a year to recover to pre-crisis indicators.
Grover Cleveland (President in 1885-1889 and 1893-1897)
As is easy to see from the dates of the presidency, the crisis of 1893 could not possibly be Cleveland’s fault, because he had only just taken over from his Republican predecessor, Benjamin Harrison. Thus, he should rather be credited with the rapid exit from the crisis, and the record number of vetoes he placed on bills passed by Congress contributed exactly to this: he prevented the inflation of government spending (Warren Harding reacted to the crisis of 1921 in exactly the same way later — and with the same success), advocated for the reduction of tariffs, killed a bill on the emission of additional silver dollars, and solved the problem of the Treasury’s gold reserve by attracting private capital — a syndicate of several financiers simply bought up a sufficient number of bonds.
Cleveland turned out to be the only president in US history who managed to serve two non-consecutive terms — and this characterizes the intensity of the passions that prevailed at the time around the question of what is more beneficial: Laissez Faire or economic regulation. Unfortunately, Cleveland’s fight against the growth of statism ended up being lost: while under him the Democratic Party, in contrast to the Republican, remained practically libertarian, later the Democrats were consumed by the merging supporters of Mikhail Svetov the Populist party, and since then, instead of a choice between freedom and statism, US citizens choose between a giant enema and a shit sandwich.
As a reminder, Bitarch’s main idea is as follows. The cost of weapons is decreasing, their destructive power is increasing, and then we extrapolate the graph of the number of weapons over time and find that after some time, one person will be able to destroy all of humanity with a simple flick of the wrist. To prevent this, Bitarch suggests tying people’s hands in advance; they will not be able to make simple movements with them, and thus humanity will be saved.
How to tie their hands? Universal armament is required. In this case, any attempt on another person’s life must lead to the instantaneous destruction of the aggressor. Under such conditions, rational agents will not dare to encroach upon anyone’s life.
But there is a problem: besides attempts on life, there are also encroachments on property, and property rights are a matter of agreement between people and can be disputed. Therefore, Bitarch postulates: using violence to protect one’s property is unacceptable. If you are asked to choose between your wallet or your life—you can choose life, and upon an attempt on your life, destroy the assailant. But if, for example, some squatters occupy your temporarily empty house, you’re screwed. In the best case, you can ask the utility workers to cut off their electricity. And even then, it’s unclear if they will accommodate you if the squatters are paying for the electricity.
How to solve such problems? “However you like,” Bitarch answers, “these are your problems, as long as there is no violence.” And he provides as an inspiring example a tale about how states, under the threat of violence, banned the use of DDT instead of leaving it to the market. With the help of the state club, they defeated DDT, defeated ozone holes, are defeating global warming and coronavirus, are defeating common sense—they will manage violence too.
Etatism is an intellectual disease in which a person places the presumed values of imaginary collective subjects above real individual values.
Another, very tiny, chapter of Mechanics of Freedom is being published, The Conservative Error. In it, Friedman lumps together immigration, global warming, fracking, GMOs, and various other same-sex marriages, asserting that the rejection of human development in these respective directions is rooted in one simple cognitive bias. Moreover, this bias is characteristic of both those who call themselves conservatives and those who call themselves liberals (referring to the US coordinate system, of course). The bias consists of the assumption that one can stop a beautiful moment. No, you cannot.
The translation of Mechanics of Freedom is nearing completion. Parallel to this, I have finished organizing by chapters and posted on my website the English text of Friedman’s 2019 book about legal systems that are very different from ours. Vladimir Zolotorev has so far released translations of three chapters, all of which are duplicated on my site, and I intend to continue in the same vein. If you want to encourage the translation, send donations to Vladimir. But if he gets stuck for long, I will take the initiative.
Due to the incident near Krasnoyarsk, Bitarch has resumed his reflections on balancing the potential for violence and published an article BitTorrent for Weapons, where he states that one of the most obvious ways to achieve almost complete armament is to make the cost of weapons zero. Since this is unrealizable at today’s level of technology, it should at least be as low as possible, so that volunteers could literally distribute weapons to anyone who wants them without spending too much.
He considers the following technological families:
Compact projectile weapons, where weak shot energy is compensated for by chemistry. Exactly how to deliver the toxin-charged striking element is a matter of taste and technological fantasy.
Dazzling lasers
Neutralizing the opponent with a jet of liquid or a spray (gas canisters, water pistols, etc.)
In a subsequent note, he provides a simple schematic for a flamethrower based on a water pistol, although he does not specify how functional, long-range, accurate, or safe the design is. A video showing the assembly and testing of such a device would be much more effective, and I hope such videos will also be found.
What can I say regarding the proposed mechanism for balancing the PV (Potential for Violence)?
Non-lethal self-defense weapons are a sufficiently developed industry where solutions can be found for every taste, budget, and legal framework. In particular, for Russia, gas canisters are almost without alternative as the optimal choice in terms of safety and price. They combine the advantages of compactness and cost—but most importantly, their use does not carry any serious state sanctions.
Bitarch’s fantasies are geared more toward non-lethal offensive weapons, such as the aforementioned dazzling lasers. It makes sense to use them from a distance against a crowded opponent, which is why they are used during street protests. Similarly, huge gas cylinders from fire extinguishers, various homemade flamethrowers, and so on are needed specifically for street protests. All sorts of ballistae and catapults would also fit here, though they are more of a way to amuse the imagination than to win a street skirmish.
In the Krasnoyarsk incident, the attackers’ main ally was the suddenness of the attack. Weapons would not have helped. Had the victims possessed a serious numerical advantage, or had they a couple of trauma pistols at hand, the opponent could have simply waited for them to fall asleep and then set fire to the tents. So, if such clashes occur in some remote taiga corner, protection lies either in publicity or in identifying the client and intimidating them instead.
The idea of distributing weapons for free via volunteers is an attempt to start from the wrong place. Weapons are already cheap, and practically anyone can afford them. It is a matter of priorities. What is needed instead are inspiring examples of weapon usage—and only then, on a wave of hype, should the idea of arming oneself be pushed to the masses. People do not value what they get for free.
On the evening of September 18, near Krasnoyarsk, a group of about ten public activists relaxing at a libertarian-conservative camp Krest Kappelya was attacked by a similar number of rioters wearing balaclavas and armed with clubs. The camp participants were seriously beaten, and their phones, some belongings, and tents were seized and destroyed, and their passports were burned. The attackers did not hide the political nature of the assault.
One of those attacked managed to escape, take cover at an empty summer house, and contact the police. As far as I can tell, it is about a three-hour drive from the Emelyanovo district center to the camp site; therefore, the police made excuses until the last moment, unwilling to venture into the wilderness at night, and only deployed after the attack gained publicity. By the time the police arrived, the camp site was already empty, and by morning, details of the attack and photos of the beaten activists began to appear. They made their own way to the nearest settlement and from there were evacuated to Krasnoyarsk.
Information regarding exactly where the camp would take place was not readily available in open sources. On the camp’s VK public page, it was suggested to contact the organizers personally for additional information. Thus, potential attackers would have had to either organize surveillance or have prior data on the camp’s location.
I am posting all these details for the following understanding:
Your political activism can lead to an attack by paramilitaries.
In such an attack, it will be difficult for you to encounter an opponent who is fully prepared for combat. In this case, the attack happened in the dark on people sitting by a campfire with a guitar—an almost ideal setup for the attackers. Even if you happen to have a weapon with you, using it would be problematic, and after the attack, you will almost certainly lose it.
Meetings in deserted places are not conspiracy. If they set a goal to find you, they will find you, but you, conversely, will face problems when trying to escape from a deserted place.
What organizational conclusions can be drawn from this:
Small events for ten to fifteen people are better held in the city or, for example, at guarded recreation centers.
If you gather several dozen people, you can afford a tent camp, but then it is important to organize security yourselves. Sober and armed. Preferably with security credentials.
Local political paramilitaries, like the police, are tied to a specific territory. If you want a quiet, secluded vacation, go outside your region, and if you have federal notoriety, go abroad. Navalny was attacked when he flew from Moscow to vacation somewhere near Anapa, I believe. But if you have only caught the eye of the “E-center” in Krasnoyarsk, a trip to Tomsk will rid you of its attention.
VK is a terrible place for planning any kind of events. Total conspiracy is impossible, but increasing the cost of operational-search activities is within your power.
And generally, the idea of a camp is quite attractive…
In a short chapter with the strange title Capitalist Trucks, Friedman answers the question of how a state differs from a condominium, and also advises potential truck buyers on whether to buy a Kamaz.
On the one hand, Friedman’s arguments could encourage supporters of contractual jurisdictions. On the other hand, he also points out their limitations: such communities will inevitably be compact and small in number because the negative effect of scale is very pronounced in democracies. So enthusiasts of charter cities have something to think about. For example, whether their cities need a single system of law, or whether the development of most norms should be left to condominiums and other local organizations.
In general, the model turns out to be completely counterintuitive: the crisis is caused by the overproduction of goods (according to ABCT it is caused by the overproduction of money, and when there are many goods, that’s actually great, which completely corresponds to the worldview of any ordinary person)
But the gold standard in the USA was abolished only after the main crisis, in 1933. Does this mean that “overproduction of money” could not have been its cause and the Keynesians are right?
Solo 322 (question accompanied by a donation of 322.8 rubles)
To understand the causes of the Great Depression in detail, it makes sense to read Rothbard’s book America’s Great Depression. But that’s 560 pages, and I personally haven’t gotten around to it yet. So my ideas are based mainly on a much shorter essay by Pavel Usanov, The Great Depression and the New Deal – Lessons for Modernity. It’s only 44 pages, including all appendices and the bibliography; anyone can handle that volume.
For instance, it is stated there that in 1926 Keynes wrote that thanks to the Fed’s activities, there would be no more crises (this prediction would later be broadcast by mainstream economists after every major crisis, specifically citing the fact that the Fed has now learned how to deal with them). Hayek in 1927 and Mises in 1929, on the contrary, predicted a crisis, based precisely on the Austrian Theory of the Business Cycle, according to which the cause of such crises is the credit expansion of central banks.
Between 1921 and 1929, the money supply in the USA grew from $45.3 billion to $73.3 billion. This was achieved by lowering the Fed’s discount rate, based on roughly the same fractional reserve mechanisms as today. The inflated financial bubble burst in 1929. Something quite similar happened in 1921, when the stock market crash was fully comparable and was caused by the same reasons—the inflation of the money supply during World War I. But then the Harding administration ignored the crisis, and it resolved itself literally within a year. In 1929, the Hoover administration began fighting the crisis through price regulation, injecting liquidity into bankrupt banks, a public works program, and then introducing protectionist tariffs. As a result, the depression truly became Great.
Roosevelt, who came to power under slogans of deregulation and reduction of government spending, on the contrary, only intensified this policy, which later became known as the New Deal. As a result, the Great Depression lasted until the end of World War II, when Roosevelt finally passed away, and a considerable part of his regulatory measures were repealed, while simultaneously enshrining in the Twenty-second Amendment to the Constitution the prohibition of one person holding the presidential post for more than two terms. As an example, I’ll give just a couple of figures: the share of government spending decreased from 44% of GDP in 1944 to 8.9% in 1947—of course economic growth would happen with such a reduction in government appetites!
Now, what happened in 1933, and what abolition of the gold standard are we talking about? We are talking about the confiscation of gold from citizens and declaring settlements in gold illegal within the country. In international trade, gold retained its significance, and the price of gold in dollars was fixed by the government; that is, the gold standard was preserved, but in a very distorted form: there are pieces of paper, it is stated that they are worth so much gold, they must be trusted like gold, but you cannot get gold for them. When the gold standard was finally abolished in the seventies, gold became an ordinary commodity with a floating price.
Roosevelt’s confiscation of gold was not the cause of the growth of the money supply, but rather its consequence. At that time, the government had gold worth approximately $4 billion, while the demands for exchanging dollars for gold totaled $25 billion. To avoid offending anyone, the government refused to satisfy the demands of everyone)))
