On March 1, former Greenpeacer Annie Leornard and the makers of “The Story of Stuff” rolled out a new video: “The Story of Citizens United v. FEC”. 

The new video addresses last year’s Citizens United v. FEC ruling by an activist ‘conservative’ Supreme Court that overthrew more than a half-century of federal election laws and held in effect that the Founding Fathers must have meant that the corporations they so despised (the property of shareholders and both creatures of government and beneficiaries of grants of limited shareholder liability and other government largess, e.g., the East India Tea Company) are “persons” for the purpose of “free speech” under the Fourth Amendment.

Yes, the new video is flawed too, but it still seems like an honest – though skewed – effort to make sense of corporations and their proper role in government.

Let me ask anyone who looks at the video to ask themselves: would there be a Left wing, pro-government agenda on the five topics the video lists – Good Jobs, Healthcare, Safe Products, Clean Air & Water, and Responsible Government – if government had not first started favoring elites by creating “legal entity” corporations whose purposed owners, the shareholders, were absolved by government for any liability whatsoever for damages caused by “corporate” acts? It seems to me that if we want the Left to back away from the fight with corporations over the wheel of government, we have to strike at the real root – the government enabled aspects of corporations that set them up as moral-hazard embodied zombies detached from personal responsibility and communities.

Can I look forward to an ‘insightful’ post by a deep Austrian thinker on this latest video to show up soon on the pages of LvMI? Expectation of disappointment Hope springs eternal!

More about The Story of Stuff Project and film funders here and here; their website indicates that they have a group on the WiserEarth global collaboration platform which I am learning of for the first time. LvMI supporters, participants and fans looking to expand the Austrian message might check out this facility to see if it has any good ideas on functionality (we, too, all want to “Discover, Connect, Share and Collaborate”, right?)

Here’s the  video:

[View:http://www.youtube.com/storyofstuffproject:550:0]

Further to my previous post (Rethinking “Rethinking IP”, or, if we step away from statism, will societies not find ways to protect ideas?), allow me to note here some conversations from the comment thread to Stephan Kinsella‘s Rethinking IP post.

My key point is that it is cooperating individuals in societies with shared values, mores and customs who come up with “property rights” in the form of agreed practices that they find mutually suitable, not thinkers who are coming up with “principles”, and using them to tell others how stupid they are.

Societes of cooperating individuals are the sine qua non of ALL property. Those who focus on the “principles” but ignore the need to build community are trying to grow trees at the risk of damaging the  forest.

I’ ve corrected a few typos and added emphasis:

Stephan Kinsella February 16, 2011 at 12:51 pm

Peter Surda February 16, 2011 at 9:46 am

Tokyo Tom,

my argument is that immaterial goods are an interpretation of the material goods, rather than a separate phenomenon. If I was wrong, it would be possible to show an immaterial good which does not contain a material good, or how to interact with an immaterial good without using the material world, or how to act without changing the physical world.

I don’t object to the claim that ideas have values. However, if we assigned property rights to them, we would need to sacrifice a proportional amount of physical property right. If you, in general, accept the concept of physical property rights (which all of IP proponents I debated so far do), then your only defence of IP can be that the rights you are gaining are more important than those that you are losing (= utilitarianism).

Reply

TokyoTom February 17, 2011 at 9:31 am

Peter, I’m afraid we may have different understandings of what ‘property’ is; my rather pragmatic concept is here:

http://mises.org/Community/blogs/tokyotom/archive/2009/12/20/what-is-quot-property-quot-a-few-weird-thoughts-on-evolution-society-quot-property-rights-quot-and-quot-intellectual-property-quot-and-the-principles-we-structure-to-justify-them.aspx

Seems to me that humans and the societies they live in have rather flexible views of what is ‘property’, and it is easy to understand the choices in a [personal] utilitarian light; that is, resources that are given protection are those that are relatively more important and relatively more easily protected [by the people involved]. What can be easily defended personally (and by relatives or employees) may be ‘personal’ property, while other property that requires cooperation may be community property or property in which individuals have limited personal rights and corresponding responsibilities, but in all cases people carry a shared sense of what is ‘right’ and ‘wrong’ — that is, a shared sense of what is ‘property’, whom it belongs to and what that means in terms of rights and obligations.

Intellectual property and physical property are not very different in these regards in our own society, and both would be likely to arise and exist in one form or another even without a state. In cases of both physical property and IP, what is considered property will be based on the relative values placed on those who control such resources and those who wish to be able to make use of them – that is, on the purely utilitarian considerations of the people involved. If those generating ideas wish to control their use by others and others find such ideas valuable, then they will come to mutually agreeable terms of use – such as a contract as to whether a book may be duplicated or shared, or the terms under which manufacturing know-how will be made available. No express social ‘utilitarian’ agreements are needed, though general/widely-accepted norms may of course arise.

Is this something that makes sense to you?

FWIW, my own view is that largely it is the material goods that are an interpretation of the immaterial ones (viz., people’s values and ideas) rather than the other way around.

TT

Reply

Peter Surda February 17, 2011 at 10:05 am

Tokyo Tom,

I am afraid that you still do not address my objection. The objection is indifferent to the exact definition of property. It merely points out that no matter what your assumptions are, if they are contradictory with respect to each other, your position is wrong. Even if you change the assumptions, as long as they continue to contradict each other, you remain in error.

I’m sorry but I don’t have the time to read your whole article, so I’ll just make a summary based on what I think it says. Please correct me with I’m wrong. You are saying that as society evolves, people create rules of conduct and some of them are mandated by the use of force. Because there is a demand for “IP”, it is possible that people will include “IP” in these rules.

I have no problem with this construct. But it goes too far ahead of the argument. First of all, it does not address the problem that no matter how the rules are constructed, as long as they are self-contradictory, they cannot be based on correct reasoning. It also does not address my second objection (which I mentioned elsewhere) in that it does not actually explain what IP is.

TokyoTom February 18, 2011 at 1:22 am

Peter, thanks for your further observations. I think you still misunderstand my position about how ‘property’ arises. Property has its roots in competition over resources, and in the choices we faces as to what resources we devote our limited energies in securing and defending. In human societies, this is a process reflecting both competition and cooperation. This piece by Bruce Yandle is useful in illustrating how property arises:

http://www.thefreemanonline.org/featured/the-commons-tragedy-or-triumph/

Now, to address your specific points:

no matter what your assumptions are, if they are contradictory with respect to each other, your position is wrong.

Okay, but what ‘assumptions’ of mine are you referring to?

You are saying that as society evolves, people create rules of conduct and some of them are mandated by the use of force. Because there is a demand for “IP”, it is possible that people will include “IP” in these rules.

A nuance: the underpinnings of property are not deliberately created rules at all, but evolved and shared viscerally felt understandings, as well as culture. It is on this foundation that some members of society may consciously build rules that the rest of scoiety may adopt – in which case, our senses of right and wrong kick in.

no matter how the rules are constructed, as long as they are self-contradictory, they cannot be based on correct reasoning.

My position is that most ‘property’ is not consciously constructed at all. There are some deliberate choices involving one or more persons, in which case they rely on the respective preferences of the people involved, not MY assumptions. But yes, some (many!) deliberately made rules can be based on incorrect reasoning – in which case the rules ultimately fail.

It … does not actually explain what IP is.

In my view, IP encompasses various ways that societies protect ideas – from simple personal private protection of them to agreed protection among company employees, to agreed protection by contracting users, to devices/techniques that restrict copying, to feelings and community morals that copying is wrong without permission, to various types of sanctions, such as being expelled from a particular community and other moral sanction.

‘IP’ does NOT require a state.

Does this help?

TT

TokyoTom February 16, 2011 at 11:05 pm

TokyoTom February 18, 2011 at 2:23 am

Wildberry, allow me a few thoughts on your comments above: http://blog.mises.org/15633/rethinking-ip/comment-page-1/#comment-759516

Mises called property a “human device”, and I have been repeating that here in support of the notion that humans agree what property is in order to facilitate the goal of cooperation, which is the very definition of society. The ways we choose, if rational, are designed to achieve goals which we seek to achieve. By “we”, I am referring to humans bound together in a society.

Except that Austrians would point out that ‘we’ don’t choose as a whole, individuals make their own choices, typically based on building blocks constructed by others but also including subconscious and cultural ones.

a “good” economic theory leads us effectively to the outcomes we desire.Therefore the operation of property rights and the economic policies employed to achieve desirable social goals should align.

I think that in the Austrian view, a ‘good’ economic theory is simply one that accurately reflects actual huiman behavior, and notes how states often frustrate problem-solving while enabling the creaming of common resources and other one-sided practices by elites.

 

The Austrian/libertarian view is that governments shouldn’t be consciously striving to employ any ‘economic policies’ to achieve any ‘desirable social goals”, as these are the objective of differening individuals all with differing preferences, and that the state mainly just gets in the way, enabling kleptocracy and incompetence and creating rigidities.

Identifying those areas where the operation of laws and government conflict with the preferred system of economic policies is one way (a very good way) to navigate among the myriad of legal and political issues that most who post here agree are not producing the outcomes we desire.

An Austrian/libertarian would agree only in the limited sense that ‘the preferred system of economic policies’ is to get government out of the way. People of more limited ambition like me would say that we should focus first on rolling back the most destructive and outrageous (reflecting a shared social sense that too much ‘theft’ and disruption is ‘too much’!) government interventions. Such an effort requires building a community of people who have shared purposes – even if the shared purposes may not share precisely the same ‘principles’.

Change, reform, revolution, whatever form of change one advocates, is best aimed at those specific conflicts. This ongoing debate about IP is simply a vehicle that is useful in the analysis of these conflicts.

Austrians oppose coercive state interventions that favor some while stifling others. While some want to do away with the state entirely, I believe it is more productive to focus on the most significant state interventions.

I would certainly agree with Stephan that IP is one the state’s significant and now increaasingly counterproductive interventions. In this sense, State-created IP is far more than simply ‘simply a vehicle that is useful in the analysis of these conflicts.’

I criticize SK and many of his followers about not granting a fair reading of IP laws in stating their opposition. As a result of this practice, much confusion results about what IP is, why it is tied to the same ethical principles, and in the same way, as any other legitimate agreement between cooperating humans. This in turn results in a non-productive debate, and little progress towards the obvious goal of coming together here on what and how to target desired change.

Let me disagree slightly: while we DO have an unproductive debate, Stephan and others are very right to point to ways that current state IP is extremely abusive and wasteful, and that the problem is growing. Yes, some may exaggerate.

But the REAL problem is that Stephan wrongly seems to feel that he has to attack ALL IP in order to round up opposition to STATE IP. But the two are entirely different; Austrians should not insist that, without state IP, there will be no free-market mechanisms and institutions that will arise to protect ideas. or that any such mecahisms, voluntarily agreed, would be ‘unprincipled’. Far from arguing with people’s rather visceral senses of what is right and wrong, Austrians should be directing such impulses to protect ideas into voluntary and non-statist avenues.

This makes us pretty ineffective agents for change. This is one explanation for why the libertarian political movement is so ineffective, in my view.

Sadly, I think you have a point. That is why I trouble Stephan by commenting here — I expect and hope for more from this particular community of libertarians.

Not sure how long you’ve been commenting here, but you’re certainly welcome, from my point of view.

TT

Wildberry February 18, 2011 at 1:00 pm

@TokyoTom February 18, 2011 at 2:32 am

Thank you for your thoughtful response. I have just a few comments:

“Austrians oppose coercive state interventions that favor some while stifling others. While some want to do away with the state entirely, I believe it is more productive to focus on the most significant state interventions.”

I think that ancaps and minarchists could cooperate in this regard. It seems a choice between doing nothing (i.e. even opposition to voting) because the whole government structure is going to collapse anyway, or doing something now. If we decided to do something, it seems rational to pick on the most egregious State interventions first. If we were really intelligent about it, we would identify those issues which have a low threshold to change while making a truly significant difference, or a high threshold for change that are game-changers, like real banking reform for example. If it got down to a point where we had accomplished minarchism and ancaps wanted to keep going, we could part company then. Before that point, it seems unnessary to be adversaries.

“I would certainly agree with Stephan that IP is one the state’s significant and now increasingly counterproductive interventions. In this sense, State-created IP is far more than simply ‘simply a vehicle that is useful in the analysis of these conflicts.’”

You are reading a little too much in my comment. I am saying the discussions here at mises.org are a vehicle for understanding principles upon which we may oppose harmful state interventions. Mercantile/State collusion is harmful and should be eliminated.

“Let me disagree slightly: while we DO have an unproductive debate, Stephan and others are very right to point to ways that current state IP is extremely abusive and wasteful, and that the problem is growing. Yes, some may exaggerate.”

Yes, it is always appropriate to give examples that support one’s position. However, if your examples support a position that is based on an inaccurate or unfair reading of the law, then it creates confusion among those who take SK at his word, given his expertise as an IP lawyer. It seems to me that if the examples are representative of some abuse, then that argument is not diminished by being honest about what the existing law actually is and how it operates.

As an example, it is common here to base an anti-IP argument on the premise that “ideas are free”, while as SK knows, both copyright and patent laws explicitly exclude ideas from protection. To even imply otherwise fosters confusion and undermines real understanding of the problem.

“Far from arguing with people’s rather visceral senses of what is right and wrong, Austrians should be directing such impulses to protect ideas into voluntary and non-statist avenues.”

Exactly. I really like your view about how principles of property rights arise as a result of the human need to cooperate with one another. That is why people HAVE a visceral objection to the assertion that there are no IP rights. It grates against a common-sense understanding of right and wrong. This point is articulated beautifully in a paper (and book) by Kathleen Touchstone. Are you familiar with her?

“Sadly, I think you have a point. That is why I trouble Stephan by commenting here — I expect and hope for more from this particular community of libertarians.”

Likewise, although I have noticed lately that more voices are coming to the fore in support of IP, perhaps because the are seeing that there is no reason to be intimidated by rude behavior.

“Not sure how long you’ve been commenting here, but you’re certainly welcome, from my point of view.”

About a year or so. It’s a pleasure corresponding with you. Thank you.

TokyoTom February 20, 2011 at 9:48 am

“IP is antithetical to capitalism and the free market.”

Stephan, isn’t this more than a bit of an overstatement? Is IP impossible in a free-market? Is it antithetical to capitalism to invest in protecting ideas?

“Typical of IP advocates. They are either stupid or dishonest.”

I am tempted to say something flip by mirroring you, but I’ll bite my tongue, and simply say that this is utterly unhelpful, and that I hope you fell at least a little chagrin that you damage our community and your cause in this way.

Yours in striking at the root,

Tom

I recently ran across (again) the below clip by our now deceased comedian cum truth-teller, George Carlin. While he offers some refreshingly bitter criticism, Carlin is too simplistic and too black, and offers no particular avenues by which informed American sheep can seek to regain control over their lives.

There is no monolithic “them”. Our ‘Left’ and ‘Right’ politics both mask and manifest the very real power struggles among our governing elites — there is hope in this, but the real problem is not that none of them cares about making the world a better place, but that all of our elites seem to be statists who think that the struggle over the wheel of government is the only way to a better future.

Few of them seem to understand the centralization of power, parasitism and rot that have resulted from fractional-reserve banking and the subsequent capture of it by the Federal government — and none appears to understand that the very grant of legal entity status to corporations whose owners have no personal liability for what these entities do drives an even more pervasive socialization of risks, destruction of community and a snowballing growth of the regulatory state and the fight to control and profit from it.

Really improving our societies will require us really to understand and strike at, and not ignore, the roots of the problems that are strangling us.

http://www.youtube.com/watch?v=acLW1vFO-2Q

I left the following comments recently at Thomas L. Lorenzo‘s December 15, 2010 Mises Daily post, The Great Centralizer: Lincoln and the Growth of Statism in America:

TokyoTom January 6, 2011 at 6:07 am

I just stumbled across a Mises Daily post by Sterling T. Terrell (an “economist and writer living outside of San Antonio, TX”) on “The Story of Stuff” video by  Annie Leonard (a former Greenpeacer)

I couldn’t resist making a few comments, which I copy below.

Frankly, while I was disappointed by the shallow analysis by Terrell, I can’t say I was surprised – Austrians seem to like nothing better than to abandon principles and productive engagement in favor of partisanship, particularly if it enables dodging or defending corporate statism. What are principles over an emotional thrill, anyway?

Oh, you damned enviros! You make us Austrians/libertarians so stupid! (emphasis and some links added; further comments in brackets)

TokyoTom November 6, 2010 at 2:23 pm

I received the attached in my email inbox from Oathkeepers.org; I have modified the format, but not altered any of the text.

I consider it thoughtful and well worth reading – though Stewart Rhodes fails to mention the how statist corporations have led the drive to strengthen the federal government and gut the Constitution:

 IS Constitution Day a Celebration, Or a Memorial?

By Stewart Rhodes, Founder of Oath Keepers]
OathKeepers.org

Sept. 18, 2010

Yesterday, September 17, was the anniversary of the signing of the Constitution in 1787, at the Constitutional Convention in Philadelphia. According to the notes of Dr. James Machinery, one of Maryland’s delegates to the Convention, it was on the last day of deliberation that a lady asked Benjamin Franklin “well Doctor what have we got, a republic or a monarchy?” to which Franklin replied, “a republic, if you can keep it.”

Can we keep it? That has always been a central question. But another very good question is whether we still have a Republic to attempt to keep, or have we already lost it? Or more exactly, has it already been stolen right from beneath our noses?

Do We Still Have a Republic To Keep?

Thomas Jefferson, in his Autobiography of 1821, described the federal judiciary as:

[T]he corps of sappers and miners, steadily working to undermine the independent rights of the States and to consolidate all power in the hands of that government in which they have so important a freehold estate.

Truer words were never spoken, and that description also fits perfectly the political, academic, corporate, and banking elites of both major parties who have joined the judiciary in the . steady, relentless undermining, consolidation of power, and theft of the very sweat of our brows that began before the ink was barely dry

As for the banking elites, Jefferson had this to say:

If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.

We are now very near that point, with our currency on the verge of being completely devalued and what is left of our wealth sucked out of us, and our children already born into monstrous debt as indentured servants of the government supremacist elites – both Democrats and Republicans – who lord over us with increasingly brazen disdain and treat us like so many heads of cattle, as Angelo Codevilla so clearly spelled out in his recent essay, America’s Ruling Class – and the Perils of Revolution (http://spectator.org/archives/2010/07/16/americas-ruling-class-and-the/print).  Code villa’s essay is highly recommended reading, by the way.

What is left of our Republic? What is left of our Constitution? Not much.

A National Government of Unlimited, UN-enumerated, Undivided Powers

The Founders gave us a dual sovereignty republic.  That means states as much sovereign within their sphere as the national government is within its sphere, and a national government of limited, enumerated, and divided powers, where “[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

In Federalist 45, James Madison (widely considered the ‘father of the Constitution”) promised the American people that:

The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.

Does that sound like what we are living under today?  Hardly.  The design of the Founders’ has been turned on its head.  With the aid of complicit judges – that “corps of sappers and miners” – who willfully misinterpret the Commerce Clause to grant Congress the power to regulate literally anything, we now have ruling elites who will admit of no restraints on national power.   In Justice Thomas’ dissent in Gonzales vs. Raich (http://www.law.cornell.edu/supct/html/03-1454.ZD1.html), he stated the obvious:  

Respondents Diane Monsoon and Angel Raich use marijuana that has never been bought or sold, that has never crossed state lines, and that has had no demonstrable effect on the national market for marijuana. If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything-and the Federal Government is no longer one of limited and enumerated powers … By holding that Congress may regulate activity that is neither interstate nor commerce under the Interstate Commerce Clause, the Court abandons any attempt to enforce the Constitution’s limits on federal power. (emphasis added).

Because the Raich case involved medical marijuana, conservatives, including Justice Scalia, joined the liberals on the Court in championing a gross expansion of Congress’ power to regulate commerce, which is now practically unlimited.  Much like the Parliament the founding generation rebelled against, Congress now claims a power to legislate over us in all cases whatsoever, down to the minutest details of our daily lives.  Just ask Speaker Pelosi or any other Congress-critter where in the Constitution Congress is delegated the power to regulate all that it does.  The answer will be “are you serious?” because, based on the Supreme Court’s rewriting of the Commerce Clause, they presume that all power not expressly and specifically prohibited by the Constitution is granted to the national government.  In other words, the exact opposite of what our Tenth Amendment actually says and the exact opposite of what Madison promised would be the balance of power between the national government and the states. 

The claimed power of the federal government now obviously extends “to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.”   And the Tenth Amendment may as well be re-written to read “all powers not expressly prohibited to the United States by the Constitution, nor expressly reserved to the states or to the people, are delegated by it to the United States.”

Destruction of State Sovereignty, State Military Power, and Circumvention of the State Legislatures and Governors During Emergencies

Following up on the absurdly gross expansion of Congress’ claimed power to legislate anything and everything, the federal government then uses the Supremacy Clause to supersede state laws.  If Congress can regulate anything, that means that any regulation it passes, or any edict by unelected bureaucrats in some federal agency, is now the supreme law of the land, and trumps state law.  And the states are powerless to stop it (or so the story goes).   Witness the recent claim by the federal government that the Supremacy Clause prevents Arizona from doing anything meaningful about the illegal aliens crossing its borders despite federal failure to handle that problem.

But the elites who control all three branches of the federal government are not content to simply gut state legislative power.  They have also gutted the military power of the states, the power of states to deal with emergencies, and the lines of sovereignty clearly spelled out in the Constitution when it comes to use of federal power within a state.

The Gutting of the State Militias

The Founders’ answer to that ancient question of “who shall guard the guardians?” was that we, the people, would be our own guardians, in our state militias.   Students of history, they clearly saw the dangers of standing armies, and that is why the Second Amendment to the Constitution declares:

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

As Dr. Edwin Vieira has pointed out numerous times, the use of that term “necessary” is only used once in the entire Constitution, and it is used in reference to the militia because that is the one institution that is necessary to the security of a free state.   This is so because when the military power is held in the hands of the people, in militias constituted by the body of the people trained and armed, they cannot be tyrannized.  And frankly, no people can long remain free unless so armed, trained, and formed into militias.  It is necessary.    See Dr. Vieira’s excellent article Going to the Root of the Problem, available at http://www.thedailybell.com/839/Edwin-Vieira-Going-to-the-Roots-of-the-Problem-PART-1.html

And the militia was intended to comprise the great body of the citizenry, trained and equipped with arms, not a select militia.  Yes, both by statutes and by clauses within the state constitutions the militia is still defined as the body of the people.  For just one example, the Constitution of Montana, Article VI, Section 13, Militia, still declares:

(1) The governor is commander-in-chief of the militia forces of the state, except when they are in the actual service of the United States. He may call out any part or all of the forces to aid in the execution of the laws, suppress insurrection, repel invasion, or protect life and property in natural disasters.
(2) The militia forces shall consist of all able-bodied citizens of the state except those exempted by law.

But what has happened?  Where are the actual militia forces of Montana, made up of all able-bodied citizens except those exempted by law?  Certainly you can say that the people of Montana still constitute those militia forces, but they are not organized, trained, equipped, nor do they muster to train or to deploy.  When were they last called up by either the Governor of Montana or by the United States?   As with nearly all of the states, those militias have been allowed to whither away till they are but a distant memory.  As actual military forces worthy of that name, they exist on paper only.  What is left is a potential pool of unorganized militia, which may or may not be equipped, armed, and trained, depending entirely on the actions of the individual citizen.  That pool of the population is not formed up into units (except for the occasional private militia associations that have formed in an attempt to revitalize an actual militia), and those units have not been called up by anyone in living memory.

By means of slow and artful manipulation, and by means of the plain, simple laziness of the American people, we no longer have an actual, physical citizens’ militia in each state, made up of the able bodied citizenry actually trained, equipped, and organized with citizens coming together in a public militia.  Instead, the militia was allowed to atrophy and die with few exceptions.  And even with the exceptions, such as the Ohio Naval Militia, (http://navalmilitia.ohio.gov/) or the few State Defense Forces, they are usually unarmed, which makes no sense.  Just how are they supposed to “repel invasions” or “suppress insurrections” without arms? 

Instead of militia made up of the body of the people trained and armed, we have only the National Guard.  But what is the National Guard?  Or more to the point, where is the National Guard?   By and large, the National Guard is merely an auxiliary or reserve for the standing Army, and our Guard units are deployed overseas with increasing frequency.   They are most often unavailable to help here at home. The Founders never intended for the militia to be used abroad as an auxiliary for the standing Army.  Article 1, Section 8 contemplates the militia of the several states being called forth “to execute the Laws of the Union, suppress Insurrections and repel Invasions.”  The militia was meant to be used domestically, to keep the peace here at home, while the Navy and Army were to be used abroad, against external foes.

FEMA, NORTHCOM, and the Council of Governors Fill the Void

As Dr. Vieira points out, with the states having no real state militias, and with the National Guard sent abroad as an auxiliary to the standing Army, the states are left defenseless and weak, unable to provide for their own security, and unable to care for their own citizens during emergencies.   And into that vacuum, predictably, steps the federal government in the form of FEMA, DHS, and NORTHCOM, with standing Army troops now deployed here in the United States to do the job that is supposed to be done by we the people in our state militias. Once again, the Founders’ design has been stood on its head. 

What did the founders intend to be the relationship of the states to the federal government when it came to use of military force within the states in times of emergency?  Article IV, Section IV of our Constitution states:

The United States shall guarantee to every State in this Union a Republican form of Government, and shall protect each of them against Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened) against domestic Violence.

Notice that even when it comes to aiding a state that is facing domestic violence – i.e. an insurrection aimed at overthrowing the free, elected government of that state – the national government cannot enter a state with military force unless invited in by the state legislature or by the governor of the state if the state legislature cannot be convened.  The “Application of the Legislature, or of the Executive,” is a necessary prerequisite.  That requirement is a reflection of our dual sovereignty system, where we are supposed to have sovereign states that are every bit as sovereign within their sphere as the national government is within its sphere.  And it is a reflection of what it means to have a “Republican form of Government” which means a government by consent of the governed, consisting of a representative legislature, executive, and a judiciary established pursuant to the constitution of that sovereign state, and a preservation of the balance of sovereignty maintained by our national constitution. 

And what military institution was to be called forth to defend states against domestic violence (such as riots and insurrections) upon the application of that state?  The militia of the several states.  That meant that even if a state requested federal intervention in its internal affairs, the military force sent in was to be the militia of the several other states, not the standing Army.  As we saw during Hurricane Katrina, where units of the Utah National Guard (and reportedly a few other states as well) refused to participate in gun confiscation, the closer we stick to the ideal of a citizens militia, the less beholden to the federal government and the less susceptible to pressure to go along to get along will those troops be.  It is far easier to pressure a career military man to obey unconstitutional orders than it is to pressure a National Guardsman who already has a day job back home, and won’t care much if he is dismissed.  The same would go for an actual state militia member.

But Article IV, Section IV is all but ignored today.  Instead, the federal government has divided the United States into ten regions with both FEMA (which is now part of DHS) and NORTHCOM sharing those regions for both emergency and domestic military deployment.  See http://www.fema.gov/about/regions/index.shtm

Add to this the new Council of Governors, required by the Fiscal Year 2008 National Defense Authorization Act which stated, “The President shall establish a bipartisan Council of Governors to advise the Secretary of Defense, the Secretary of Homeland Security, and the White House Homeland Security Council on matters related to the National Guard and civil support missions.”  The selection of the governors to sit on that council almost exactly matches that FEMA/NORTHCOM ten regions map.   Those hand picked governors are to “advise” the federal Homeland Security/homeland military/FEMA/White House leviathan on actions it will decide to take within the states.  Even if those ten appointed governors could consent on behalf of each state – which they cannot (that being a violation of Article IV, Section IV) – their consent is not even sought – only their advice.  And that advice can be taken or simply ignored.  

In keeping with the nationalization of everything, FEMA and NORTHCOM increasingly act as though the states don’t even exist (except as possibly convenient sub-divisions), conducting regional training operations involving standing Army, Reserves, Guard troops, FEMA, DHS, and private contractors within the ten regions with nary a call to the governors, let alone seeking permission from the legislature of any state, and assuming perpetual command of the state National Guard units.  See NORTHCOM, NORAD, Guard, Inextricably Linked    (http://www.ng.mil/news/archives/2010/03/032510-NORAD.aspx)

As that National Guard article states:

NORTHCOM has a unique degree of the jointness sought throughout the Defense Department. A mix of National Guard, Reserve, Coast Guard, active duty component, senior civilians and contractors fill the command’s ranks.

The command partners with Canada and Mexico and with Defense Department, civilian and private agencies – more than 60 organizations.
Nary a mention of any requirement to seek the permission or even participation of the various state legislatures or state governors.   The major players are federal or federalized assets and foreign governments.   And, foreign troops are increasingly invited to participate:

A feature of recent exercises has been foreign military involvement.  The Iowa Vigilant Guard exercise involved troops from Mexico, Japan, Australia, South Korea, Bahamas, and Senegal.  The Montana Vigilant Guard exercise will include the participation of Kyrgzstan.  http://publicintelligence.net/montana-vigilant-guard-2009-exercise/
The foreign troops were invited in “to learn about how the U.S. military communicates and works with civilian emergency responders.”  http://www.army.mil/-images/2009/06/22/42394/index.html
This is all being done as part of the National Guard State Partnership Program.  According to the National Guard 2010 Posture Statement: 

The National Guard State Partnership Program (SPP)
establishes enduring and mutually beneficial partnerships
between foreign countries and American states through the
National Guard. This program is an important component
of the Department of Defense’s security cooperation
strategy, the regional Combatant Commanders’ theater
engagement program, and the U.S. ambassadors’ Mission
Strategic Plans. 
http://www.ng.mil/ll/Congress_Reports/2010%20National%20Guard%20Posture%20Statement.pdf

Thus, Montana is partnered with Kyrgyzstan, Alabama is partnered with Romania, Alaska with Mongolia, Arizona with Kazakhstan, Arkansas with Guatemala, California with Nigeria and Ukraine, and so on.  For the full list, go here: http://en.wikipedia.org/wiki/State_Partnership_Program
Do you suppose the state legislatures or governors had any say about which country their state was “partnered’ with?   To borrow Pelosi’s favorite saying, “are you serious?”  So, what, exactly, are the state governors really in command of, as the supposed commanders in chief of their state militia forces?  Not much.  And how sovereign are the supposedly sovereign states?  Again, not much.  Not anymore.

We now have a national government of nearly unlimited de facto powers, grown like a metastasizing cancer far beyond the bounds of anything foreseen by even the most skeptical of Anti-Federalists from the Founding era.  All actual, physical and structural powers of any real meaning – legislative, military, legal, law enforcement, and economic – are consolidated in the hands of the federal government.   And we are not even talking about the hydra-like overlay of international law and international unelected agencies and untouchable international “officials” that are also being imposed up us by means of treaties, executive partnerships (such as the supposedly now defunct Security and Prosperity Partnership of North America   http://en.wikipedia.org/wiki/Security_and_Prosperity_Partnership_of_North_America) and other constitutionally dubious mechanisms.
The states retain only what paltry “powers” the federal government deems it convenient to leave with the state, with those powers and assets always subject to nationalization or preemption at the pleasure of the national elites.  Just look at how easily and completely the peace officers of Arizona are being outgunned and outmanned by the Mexican drug cartels now boldly occupying whole sections of that sovereign state to the degree that those areas are now “no go” zones for Arizona citizens who wish to stay alive. 

And to what degree do the states have any form of independent, real money (i.e. backed by gold or silver)?  Again, not by much.  In fact, zero.   As Vieira’s Going to the Root of the Problem article points out, this is the second great weakness of the states, right along with having no militia, and thus no security.  The states are financially and militarily impotent, and thus their populations are ripe for federal intervention during emergencies or during an economic collapse.  With no preparation and no ability to keep the peace, the people of the states (except perhaps the more hardy rural states) will be desperate for aid during emergencies and will likely welcome even “martial law” with open arms during a severe enough emergency. 

To borrow from the canned speech phrase used by every President’s state of the Union address, the state of the federal government is super-strong, the state of the states is pathetically weak.

With the concept of dual sovereignty, limited government power, and even national sovereignty nearly wiped away, and with the states weakened to the point of failure during even modest crisis, all we have left as a check on government abuse is our Bill of Rights.  But those last restraints are also under relentless assault.

The Gutting of the Bill of Rights

How is the Bill of Rights being gutted?  Here are just a few examples:

The absurdity of “free speech zones.”   All too often, citizen protesters are now confined “at a safe distance” in ‘free speech zones” during public political events.  This whole nation is supposed to be a free speech zone!  And any public sidewalk is your public forum so long as you don’t block pedestrian traffic.  But that principle is now under attack, along with the rest of the First Amendment, and you are now likely to be threatened with sound wave or microwave weapons, as occurred during the G20 meeting, for merely exercising your right to peaceably assemble, petition your government for a redress of grievances, and speak out freely.  You can only do so safely in a government approved, cordoned off “free speech zone” far away from the anointed beautiful people who cannot be bothered with ugly, dirty protesters.  And in addition to the blatant violations of free speech being carried out, we have attempts to further chill and limit speech with proposed legislation such as the Disclose Act, which would have mandated disclosure of donors to small non-profit advocacy groups but would have exempted existing large organizations, and by means of targeting people and organizations with being placed on a “list” of “extremists” by the DHS or by the Southern Poverty Law Center (essentially now part of DHS).

The watering down of the Second Amendment.  The Second Amendment was plainly meant to preserve the military power of the people.  It was meant to protect and preserve the right of the people to keep and bear arms of military utility, so that they may form the militias “necessary for the security of a free state,” with sufficient power to “execute the Laws of the Union, suppress Insurrections and repel Invasions” – as Article 1, Section 8 contemplates.   While the Supreme Court in the Heller decision finally, at last, recognized the obvious fact that the Second Amendment protected an individual right to bear arms, and that the people were expected to provide their own arms for militia duty, it failed to recognize the obvious related necessity that they thus be able to keep and bear arms of military utility (which the Miller case at least contemplated).  Instead, the Heller Court told us that we have a right to keep and bear only those weapons that are “commonly kept for lawful purposes,” whatever that means.  Such a standard leaves intact nearly any and all restrictions, registration, prohibitions on types of firearms, and even leaves intact prohibitions on the actual bearing of arms outside our homes (imagine a similar prohibition on free speech, free press, or assembly outside of your home being found “constitutional”).  The Court carved out protections for nearly any regulation or prohibition on types of weapons, and any restrictions on the keeping and bearing of arms short of a total ban.

The gutting of the Fourth Amendment.  The Fourth Amendment, born out of the Founding Generation’s experiences under the egregious writs of assistance, has now been carved with so many exceptions that it is a laughable farce which can be circumvented at will by crafty government lawyers, with nearly any kind of warrantless search deemed “constitutional” under one exception or another, resulting in the FBI issuing itself “national security letters” to search without a showing of probable cause to an independent judge, sneak and peek searches of our homes, random vehicular “your papers please” check points for all manner of excuses now common, routine upholding of warrantless searches by police under a plethora of exceptions (most based on ever expanding zones of “officer safety”), and with the most extreme claim being that the Fourth Amendment doesn’t even apply at all to warrantless surveillance of Americans when it is done in the name of national security, as in the case of the NSA domestic spying, with the rationale that such is surveillance of the battlefield in the war on terror.

The gutting of the Fifth and Sixth Amendments.   The federal government now makes the Orwellian claim that we still have a right to “due process” despite the executive branch claiming the power to detain American citizens in military brigs and deprive them of their liberty without Grand Jury indictment, without jury trial (and without even a suspension of habeas corpus by Congress), and to even try American civilians before military tribunal (and note that Obama has not renounced any of those claimed powers advanced by the Bush Administration).  This is essentially a claim that American citizens can be treated exactly the same as a foreign enemy in wartime – exactly like citizens of occupied Iraq or Afghanistan, in direct violation of the Article III Treason Clause, which makes very clear what must be done with a citizen accused of making war against the United States or aiding and abetting its enemies – such a citizen must be tried for treason, in a civilian court before a civilian jury.   See Justice Scalia’s dissent in Hamdi v. Rumsfeld (http://www.law.cornell.edu/supct/html/03-6696.ZD.html). 

This claimed power now includes the asserted power  that the government can assassinate its own citizens if the President determines that they are a threat to national security – no “due process” of any kind, no trial for treason as Article III mandates, no right to face your accusers, not even a military tribunal, just straight to execution on sight.  And don’t think any of the above will be used only against Americans who have become Islamacists and embarked on jihad.  Government lawyers and judges have been very careful to ensure that there is no legal distinction whatsoever made on those grounds – the above illustrated claimed powers apply to ALL OF US;

Claims that government may impose “Martial law.”     The above noted claimed power to designate American citizens as “enemy combatants” is itself a form of martial law, being the claim that the international laws of war may be applied to the American people by their own government.  However, even aside from that extraordinary claim of power, government officials at every level are increasingly asserting that during a national emergency of any kind, the Constitution and Bill of Rights can be suspended and martial law imposed on us, though that term is nowhere even mentioned in our Constitution.  Go ahead, look for it in the text.  It is not there – and for damn good reason.

Martial law is no law at all except for the will of the commander on the battlefield.  Martial law is what we imposed on defeated and occupied Germany, Japan, and Iraq.  Nowhere in our Constitution is any branch of government, at any level, whether state or federal, given the power to set aside the Constitution of the United States and the constitutions of the several states and treat the American people like conquered enemies in wartime.  Not only is “martial law” absent from the Constitution, and in direct violation of Article IV, Section IV (the guarantee of Republican government), it is a power foreign to our system of government, which is supposed to be a government of laws, not men, with the government having only those powers granted by the consent of the people.  Remember, one of the grievances listed in our Declaration of Independence, against the King, was that “He has affected to render the Military independent of and superior to the Civil power.”  The Crown had imposed martial law on a rebellious Boston, and it was during that occupation that the expedition to seize arms at Lexington and Concord finally led to open conflict.  Martial law is in fact a complete lack of law.  It is anti-law and is anti-constitutional.  See Dr. Edwin Vieira, A Primer on Martial Law, http://www.newswithviews.com/Vieira/edwin198.htm.  And the principle of civilian command of the military is expressed both by Article II, which makes the President, an elected civilian, Commander in Chief of the armed forces, even above life-long professional military Generals. This principle is also reflected in the Third Amendment, which prohibits the quartering of soldiers in any home, even in time of war, “but in a manner to be prescribed by law” and that means by law written by Congress and signed by the President.  Add to that all of the Article 1, Section 8 powers of Congress to regulate the armed forces, to make rules for capture, and to define and punish violations of the laws of nations, and to declare war, etc. and it becomes clear how illegitimate and wildly unconstitutional any claimed power to impose “martial law” really is.  And yet, government supremacist elites increasingly insist that they have an inherit or implied power to invoke “martial law” and impose rule by fiat, by simple decree upon us.  History has a name for such rule by decree, by the dictates of The Leader – dictatorship.

The Ninth Amendment has been ignored.  The Ninth Amendment states that “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” (emphasis added).  The Ninth Amendment uses the command language “shall not” and is as much a command as “the right of the people to keep and bear arms shall not be infringed.” It also speaks of the enumeration (the listing) in the Constitution of certain rights, not the “creation by the Constitution of certain rights.”  This is no accident.  The Bill of Rights does not create rights, but merely provides protection for rights that already exist.  As our Declaration of Independence made clear, our rights predate any government and come from our creator, not from government.  Our rights come first, and are ours by virtue of nature and nature’s God.  Governments come later, being instituted among men to protect those natural rights.  And yet, we now have over us legal, political, and academic elites that assert the exact opposite – that we have only those “rights” granted by government.  And that is a common perspective of elites from both sides of the aisle. 

The Tenth Amendment has been ignored.  As already discussed above, the Tenth Amendment has been so ignored that it may as well read exactly the opposite.  We now have a national government that claims all powers not clearly and expressly prohibited to it by the Constitution, and we have states that only have whatever scraps of power the federal government deems to give them, until such time as it decides to take those powers away by simply passing federal legislation and then evoking the Supremacy Clause.

The Bizzaro Anti-Republic

The above only barely scratches the surface.  There are a great many other examples of violations of the Constitution and usurpations of powers never granted.  Suffice it to say that the elites of both parties in power in this country have almost completely cut themselves loose from the chains of the Constitution while at the same time having almost totally expanded their power, while also eviscerating the power of the states.
Right down the line, the Founders’ design of a dual sovereignty, balanced Constitutional Republic made up of sovereign states and a national government of limited powers, with those boundaries enforced both by the state legislatures, governors, by a Bill of Rights with teeth, and, as a last resort, by an armed populace in their state militias (which were to be strong enough to repel invasions), has been turned upside down and inside out till it is the exact mirror opposite of what it was supposed to be. We are now living in the “Bizzaro” Republic, or the Anti-Republic. Rather than a massive sea of the rights and powers of the people and tiny islands of government power, we now live on tiny, shrinking islands of “rights” and state powers in a great sea of federal and even international government powers. And the tide is rising.

And so, is the anniversary of the signing of the Constitution cause for celebration, or for mourning?  Should we still bother to celebrate Constitution Day? Should we bother to read that old, dusty document from so long ago?

Yes we should. By all means.  But why, you may ask, given all that I have said above, should we do so?  

In a follow-up article I will give you several very good, and very powerful reasons to celebrate, honor, read, and to DEFEND the Constitution, and to work hard for the Restoration of this Republic.  

And by the way, with all due respect to Dr. Franklin, the birth-date of this Republic was not, in fact, September 17, 1787.  I hold that our Republic was actually officially born on July 4, 1776.  That was when the American people separated themselves from their former country, Great Britain, dissolving the political bands which had connected them with another people, and assumed “among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them.”  Yes, each state was its own republic, but they together formed the united States of America, and on that day we became a separate people. 

In fact, one could argue that our Republic was unofficially born on April 19, 1775, at Concord and Lexington, or perhaps even farther back, in the hearts and minds of the men and women of America in the early years of American resistance.  But in any case, the spirit of the American Revolution, the spirit of liberty, what came to be known as the Spirit of 76, was alive and well in the hearts and minds of the American people long before the Constitution of 1787 was written, and good men and women shed their blood for liberty, for the “fate of unborn millions” long, long before anyone even heard of the Constitution.  And that makes perfect sense.  As Judge Learned Hand once remarked:

I often wonder whether we do not rest our hopes too much upon constitutions, upon law and upon courts. These are false hopes, believe me, these are false hopes. Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can save it; no constitution, no law, no court can even do much to help it. While it lies there it needs no constitution, no law, no courts to save it.

Before we can know whether we can keep our Republic, the central question is whether liberty still lies in our hearts, as it did in the hearts of the Founding Generation and in the hearts of all who stood in its defense since.  The answer to that question makes all the difference to if and how we shall keep and restore our Republic.

For the Republic (born in the American Revolution!), and in defense of the Constitution still, as always,
Stewart Rhodes
Founder of Oath Keepers
© Oathkeepers.org
Kalispell, Montana, Sept. 18, 2010

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I refer to David Korten, a Stanford-trained economist, former professor at Harvard Business School, former adviser to the Ford Foundation and the US Agency for International Development. Korten, a prominent critic of corporate globalization and official aid, is co-founder and board chair of the Positive Futures Network, which publishes the quarterly YES! Magazine, a board member of the Business Alliance for Local Living Economies, and is author of  When Corporations Rule the World (1995 and 2001).

Korten recently published in YES! Magazine his thoughts on how we need to re-organize our economy. Since YES! publishes under a Creative Commons License, I take the liberty of reproducing the article below, with my comments interlaced.

Here are ten common sense principles to frame the New Economy that we the people must now bring forth:

1.  The proper purpose of an economy is to secure just, sustainable, and joyful livelihoods for all. This may come as something of a shock to Wall Street financiers who profit from financial bubbles, securities fraud, low wages, unemployment, foreign sweatshops, tax evasion, public subsidies, and monopoly pricing. 

An “economy” has NO purpose; it is simply shorthand for the interactions of people, acting as individuals and in groups. Securing just, sustainable, and joyful livelihoods for all is indeed a worthy goal for a society to have, among other goals that individuals, groups within the society (including those within government) and the society as a whole may have – which goals cannot all be achieved due to scarce resources and conflict between goals.

While the identification of “Wall Street Financiers” is vague, certainly it is fair criticize our financial system and those who profit from it while generating ill for the rest of society.

2.  GDP is a measure of the economic cost of producing a given level of human well-being and happiness. In the economy, as in any well-run business, the goal should be to minimize cost, not maximize it. 

Korten’s definition of GDP is idiosyncratic and not helpful. GDP is the chief measure of economic performance used by policy makers (determined either as the sum of Consumption (C), Investment (I), Government Spending (G) and Net Exports, or as the sum of income and depreciation). It is certainly a very flawed measure of economic performance, as it fails to measure damage to private and social capital (including damage to the environment), and treats wasteful government spending on wars, pork-barrel spending and building a police state on the same basis as it treats expenditure by the private economy. It does not even attempt to measure of human well-being and happiness, such as differences in income and wealth.

Maximizing GDP – especially as it is now defined – certainly should not be a public policy goal. Korten does not refer to the “environmental” cost of our economic activities; if he intended this criticism I would agree. In fact, GDP treats expenditures to deal with environmental harms as positive contributions to GDP!

3.  A rational reallocation of real resources can reduce the human burden on the Earth’s biosphere and simultaneously improve the health and happiness of all. The Wall Street economy wastes enormous resources on things that actually reduce the quality of our lives—war, automobile dependence, suburban sprawl, energy-inefficient buildings, financial speculation, advertising, incarceration for minor, victimless crimes. The most important step toward bringing ourselves into balance with the biosphere is to eliminate the things that are bad for our health and happiness. 

While I share many of Korten’s concerns here, he has completely failed to define what he means as the “Wall Street economy”, so it is difficult to have productive conversation. GOVERNMENT, not Wall Street, is chiefly or substantially responsible for wars, automobile dependence and suburban sprawl, for building a financial sector that encourages financial speculation, and for the ruinous “War on Drugs” that militarizes our police, keeps blacks in jail and undermines the growth of healthy inner cities. How is Wall Street responsible for energy-inefficient buildings or any other problem Korten identifies, other than financial speculation? Does Korten intend here simply to set up his later criticism of the “money system”? Libertarians would certainly agree that our screwed-up money system is the linchpin of many problems in our society/economy.

Nor is it clear what Korten means by “bringing ourselves into balance with the biosphere” or by a “rational reallocation of resources”, whether these are goals shared by all and are top priorities, or who is supposed to be making rational reallocation decisions. If he is suggesting that governments should have more power, I would disagree.

4.  Markets allocate efficiently only within a framework of appropriate rules to maintain competition, cost internalization, balanced trade, domestic investment, and equality. These are essential conditions for efficient market function. Without rules, a market economy quickly morphs into a system of corporate monopolies engaged in suppressing wages, exporting jobs, collecting public subsidies, poisoning air, land, and water, expropriating resources, corrupting democracy, and a host of other activities that represent an egregiously inefficient and unjust distribution of resources.

“Markets”, loosely defined, are evolved and devised cooperative institutions for interpersonal and inter-group exchange. To maintain efficient cooperation, markets typically employ rules that enforce agreements, provide clarity, limit cheating. Cost internalization （limiting costs shifted to others) and fair sharing of collective costs are a purpose of the rules, but market participants generally have no personal interest in, and markets generally have no rules regarding, “balanced trade” or domestic investment.

Sure, there are a host of problems that can be identified as relating to “corporate monopolies”, but corporations are NOT creations of markets, but creations of governments. It is governments that incentivize moral hazard and risk-shifting, by allowing people to form limited liability business firms that – unlike individuals and partnerships – have unlimited lives and whose owners have no liability for the damage that such firms may do to others. Government action creating corporations has been the trigger fuelling corrupt and damaging behavior, that in turn has fuelled citizens’ demands that government get bigger and create more “rules” to constrain their Frankensteins, who are now bigger and more powerful than government, and far more influential than REAL “persons”. 

Well, it’s not working out very well, is it? The only path I see ahead is to gradually end “limited liability” in corporations, on a number of different fronts.

5.  A proper money system roots the power to create and allocate money in people and communities in order to facilitate the creation of livelihoods and ecologically balanced community wealth. Money properly serves life, not the reverse. Wall Street uses money to consolidate its power to expropriate the real wealth of the rest of the society. Main Street uses money to connect underutilized resources with unmet needs. Public policy properly favors Main Street.

Korten is very right about his last three sentences; the first is spot-on: Wall Street uses money to consolidate its power to expropriate the real wealth of the rest of the society. If one understands modern “fiat money”, it is easily seen as a form of fraud. While I do not see this as a deliberate intention of those working in finance, expropriation of wealth is a natural consequence of the “fiat currency” system that banks developed and that the US government has captured (though governments often deliberately expropriate by inflating their currency – this is clearly seen in Zimbabwe). Until money systems were captured by banks and government, real money was nothing more or less than goods of various types that people found valuable and more convenient than direct barter as a means of exchange.

If fiat money was eliminated (a gradual process would eliminate “legal tender” laws and allow competing currencies), then the natural result would be a shift of power from government and Wall Street to people and local communities.

6.  Money, which is easily created with a simple accounting entry, should never be the deciding constraint in making public resource allocation decisions. This is particularly obvious in the case of economic recessions or depressions, which occur when money fails to flow to where it is needed to put people to work producing essential goods and services. If money is the only lack, then make the accounting entry and get on with it.

This is completely wrong-headed. First, wealth is not created, and long-run human needs are not addressed, simply by continuing to treat money as play money that can be created whenever one wants something – this simply hides the very real theft from the economy as a whole (particularly those least well-off).  If we want honest government that does not favor the wealthy over the middle class or the poor, then we need to end our fiat currency. But as long as we are NOT doing that, then the government should either borrow what it intends to spend, or raise it via donations or taxes – even during down times.

Second, economic recessions or depressions, while not happy times, are generally the product of government playing with money – “easy money” of the kind Korten seems to want – that leads to mal-investment. The recession is actually the process by which the economy “cures” the over-investment, as investments in unsustainable, over-heated sectors go bust and are reallocated to projects that more realistic.

7.  Speculation, the inflation of financial bubbles, risk externalization, the extraction of usury, and the use of creative accounting to create money from nothing, unrelated to the creation of anything of real value, serve no valid social purpose. The Wall Street corporations that engage in these activities are not in the business of contributing to the creation of real community wealth. They are in the business of expropriating it, a polite term for theft. They should be regulated or taxed out of existence.

Generally, agreed, with many quibbles and clarifications. Speculation as used in it’s negative sense is simply making a bet, backed with real money, that an asset (stocks) is worth more than or less than what others think. It sends a useful signal to everyone else that a particular corporations or government may be hiding its real financial and/or business condition. It is government AND banks that generate financial bubbles.

Of course risk externalization is bad, but not only is it inherent in the corporate form, but it is actually encouraged by our systems of financial and corporate regulation, and by government ownership of many resources. Government insurance of banks means government and not depositors must regulate and monitor the risks generated by banks, whose executives and traders are thus playing with “other peoples’ money”. The business models of securities firms and rating agencies has been to find ways around regulations, and to sell risky instruments to regulated entities. Likewise, the regulation of “public companies” has served to raise barriers to entry and to reduce the ability of shareholders to oversee management. The powerful “regulated” companies are always better positioned than consumers and possible upstart rivals to manipulate and take advantage of regulations.

“Usury”? Interest is nothing more than the recognition that a bird in the hand is worth two in the bush.

How to deal with Wall Street? First, end fiat money. While that is progressing, require banks and financial companies to be partnerships instead of limited liability corporations (tighten regulations on the first, relax them on the second), and roll back the counter-productive, easily corrupted effort by government to regulate risks, by limiting deposit insurance.

8.  Greed is not a virtue; sharing is not a sin. If your primary business purpose is not to serve the community, you have no business being in business.

I agree that sharing is not a sin (indeed, it’s necessary for societies to function well, particularly for common resources), but “greed” is a cop-out. While I would support whole-heartedly an effort to eliminate limited liability for corporate shareholders (it was once extremely rare, and required legislative approval on a case-by-case basis of a strong public purpose), people engage in business on an individual basis not expressly “to serve the community”, but to make a living – by providing goods and services that the community members want. If people and firms fail to do that well, they go out of business.

9.  The only legitimate reason for government to issue a corporate charter extending special privileges favoring a particular enterprise is to serve a clearly defined public purpose. That purpose should be clearly stated in the corporate charter and be subject to periodic review.

I have a very similar perspective, but my conclusion is that the government should not be issuing corporate charters at all, and certainly none that limit the potential liability of the shareholders. I don’t trust politicians who are easily influenced by the wealthy to be bestowing special favors to anyone. 

10.  Public policy properly favors local investors and businesses dedicated to creating community wealth over investors and businesses that come only to extract it. The former are most likely to be investors and businesses with strong roots in the communities in which they do business. We properly favor them. 

Muddled, but I largely agree. There are business that “extract wealth”, and damage the local community while benefitting others who have little or no stake in it. This can be addressed by insisting that states end limited liability corporations, which would allow them to apply different standards to corporations based in other states or countries, and finding ways to limit the damage done by Supreme Court decisions that say that corporations have Constitutional rights.

But rather than asking for government “favor”, communities and individuals should insist on reclaiming control over their own destinies, thus limiting the areas of “public policy” that government can screw up – a la BP and offshore drilling), in order to benefit a favored set of interest groups.

Let me conclude by saying that I share David Korten’s concerns about how screwed up our economic priorities are, and appreciate his efforts. However, his “common sense” principles miss the key factors at work in skewing our economy towards Wall Street and “extractive” corporations: fiat money, deposit insurance, limited liability for corporate shareholders, and government ownership of resources. 

David Korten is co-founder and board chair of YES! Magazine, co-chair of the New Economy Working Group, president of the People-Centered Development Forum, and a founding board member of the Business Alliance for Local Living Economies (BALLE). His books include Agenda for a New Economy: From Phantom Wealth to Real Wealth, The Great Turning: From Empire to Earth Community, and the international best seller When Corporations Rule the World.

I’ve been travelling, so I hope readers will forgive a few late comments on Stephan Kinsella’s well-read July 28 Mises Daily post, “The Death Throes of Pro-IP Libertarianism“. I copy below the comments I left on the post comment thread:

TokyoTom August 17, 2010 at 8:23 am

Stephan/others in the LvMI/libertarian community:

I tried to post a long comment on this on July 16, but it got caught in moderation limbo (and though I’ve said a dozen Hail Marys, it’s still stuck), so allow me to note to anyone who hasn’t seen it the backup copy of the comments that I posted to my blog:

IP Flamewars, Community and Principles; A few thoughts to Stephan on “The L. Neil Smith – FreeTalkLive Copyright Dispute” ; http://mises.org/Community/blogs/tokyotom/archive/2010/07/16/ip-flamewars-community-and-principles-a-few-thoughts-to-stephan-on-quot-the-l-neil-smith-freetalklive-copyright-dispute-quot.aspx

(My purpose of a cross-link is not to capture traffic, but simply to provide access to comments that, because of too many links (I guess), I could not post here.)

The gist, which I see as semi-self-evident, is that libertarians and others who would like to build a non-statist society need to pay sincere attention not simply to “principles” but to the hard work of building the sine qua non of cooperative society: a strong sense of community.

Without real community, which entails trust, mutual respect, commitment, patience, more than a little common courtesy and, yes, shared principles and rules, we are merely bickering and self-justifying and self-aggrandizing individuals and factions – for which “principles” can simply be a line of division.

Are those here genuinely interested in a free society? If so, they should understand what they need to do to actively help and not hinder the effort.

Kind regards,

TT]