Tom Robinson

I am not a “contracting party” when a counterfeiter starts running off large numbers of $20 bills. But I am certainly victimized when I find that my legitimate twenties no longer have the same buying power when they are chasing the same goods as the phony twenties. The same is true when a depositor’s receipt for one ounce of gold has to compete in a market where other receipts are issued to both depositor and borrower for the very same one ounce of gold. The 100% gold reserve depositor is victimized even though he is not one of the “contracting parties” to fractional reserve banking.

You are conflating violating rights (which involves physical force) with witnessing a violation (which involves no physical force on the part of the witness). Seeing a crime committed and then saying nothing does not constitute the initiation of force, which is the only action that morally allows the state to use retaliatory force. Unless one believes that the state owns the bodies of its citizens, then no person may be rightfully compelled to say anything against his will. The fact that a case may be difficult to prove does entitle the government to take over a person’s body -- which is precisely what it does when it forces oral or written testimony. You are already on record as accepting the legitimacy of using initiatory force and shifting the blame to the criminal: “Yes, it is an initiation of force, but it is the criminal, not the government that is trying to catch the criminal, who bears responsibility for this.” Since the government can shift all responsibility for initiating force against a witness to the real criminal, then why not in the case of suspects? Without the witness, the government cannot punish the criminal. Without suspects, the government cannot catch the criminal. You have not made a case for either coercing witnesses or shifting blame for coercion to another party. One final point: if it is morally permissible to physically force a mere witness to testify, why not, contra 5th Amendment, empower the state to force those accused of crimes to testify? Why give greater protection from force to a suspect than a non-suspect?

Every cloud has a silver lining. Knowing that Giuliani had panhandlers arrested makes his crack down of insider traders, tax evaders and porn dealers a lot easier to accept. When it comes to defending individual rights, Giuliani is great -- except when he is terrible.

It would be a straw man only if everyone on this board agreed that a bank should not issue receipts for gold exceeding the amount of actual gold in its vaults. However, it appears that some here are indeed arguing that such a practice would be legitimate. When a bank issues more receipts than it has actual gold deposits, it is not a win-win situation for everyone. If the number of gold receipts expands without a similar expansion in gold deposits, the result is inflation. And the losers include anyone who lives on a fixed income or who is not able to quickly re-negotiate prices or wages to keep up with the artificially expanding money supply. A practice is not justifiable for having been widespread. By that logic we would have to defend taxation. A bank cannot logically or ethically have assets greater than the real property that it may justly call its own. Thus if Depositor A has full and uncontested title to his gold reserves, then First National Bank (or its Borrower cannot also have full and uncontested title to any portion of what is properly A’s deposit. With both depositor and bank (or borrower) claiming the same assets but for all appearances having separate fortunes, they present a phony picture of having more wealth than there is in reality. This is a case of having your cake and eating it too. The fraud is not in the failure of the bank to provide redemption in a crisis. The fraud occurs the very moment a pseudo-receipt for gold is created, for issuing two receipts for the same bar of gold is no different than printing a counterfeit bill. Thus, even if there were no runs on the bank, the institution would still be guilty of the deceitful practice of issuing more property titles than there is property to back them.

Delightful story, gnargtharst. But I do not challenge the right of gold owners to lend out their wealth at risk and for interest. There is nothing illegitimate about Clampett individually or Clampett through the agency of Drysdale, letting another party borrow Clampett's gold or certificates to Clampett's gold. However, fiction and inflation come into play when Clampett and the borrower of Clampett’s gold are both issued separate bearer certificates (property titles) to the exact same treasure at the same time. Issuing new gold certificates without any new gold to back them is to create money out of thin air. It does not matter that Clampett and Drysdale have agreed to this arrangement or that Clampett is taking a risk, any more than it matters that a fence who purchases fake $20 bills from a counterfeiter for $5 each is doing so voluntarily and at a risk.

So the reason an Objectivist would never vote for a Nazi is because Nazis don't run in U.S. elections? Not exactly a hard core ethical stance, as it leaves open the possibility that some day, some Nazi or Nazi sympathizer might run for elective office, as David Duke did some years ago in Louisiana.

In a race where the only two candidates were a Libertarian and a Nazi, would the Objectivist vote for the latter? In general, your strategy has considerable merit. However, there have been elections in which Libertarian candidates have won or have come close to winning office. Furthermore, in some instances it may be worthwhile to vote for a third party in order to force a major party to adopt some of the third party's positions. This was the strategy used successfully by the Conservative Party in New York to make the Republican Party move further to the right.

To simplify matters, imagine a bank where there is just one depositor and one borrower. Depositor A places 500 ounces of gold bullion into the vaults of First National Bank and receives in return receipts (notes) for those 500 ounces. The notes represent bearer certificates to the gold in the vault. In this way, Mr. A can trade the notes for the goods he needs. Now suppose First National then issues to Borrower B a loan in the form of receipts (notes) to 300 of A’s 500 ounces of gold, repayable at 10% interest. We now have a situation where two different people have claim to the very same 300 ounces of gold. Unless you believe that two people can both have exclusive title to the same object at the same time (a logical contradiction), then either A owns the gold or B owns it, but not both. To claim otherwise is to maintain a fiction. A corporation cannot legitimately (or logically) sell 25% of its worth to A, 25% to B, 25% to C, 25% to D, 25% to E, and 25% to F. I used the term in response to A. West who introduced it to the discussion. He did not specify what form this monitoring would take. In the hypothetical example I gave above, A and B cannot both exclusively own the same 300 ounces of gold, no matter how ardently they agree on the matter.

But how does proof of the existence a crime justify using force to command testimony from an individual, especially one not even charged in the crime? Surely free speech implies the right not to speak, and such right would not be invalidated no matter how much proof was presented that a crime was committed by someone other than the subpoenaed party. Ais A wrote, “Yes, it is an initiation of force, but it is the criminal, not the government that is trying to catch the criminal, who bears responsibility for this.” Now if it is permissible for the government to use initiatory force in the case of subpoenas on the grounds that the “criminal who bears responsibility for this,” why wouldn’t other forms of initiatory force be permissible for the same reason? Why not give government the power arrest every black male on the streets of downtown Detroit -- and simply declare that it is the real black male criminal “who bears responsibility for this”?

Then what about mass roundups, searches without warrants, confiscations of weapons, and suspension of trial by jury? Why would it not be legitimate for government to shift moral responsibility for these acts of coercion to the criminal? Where does it stop, short of justifying any act of tyranny on the grounds that it is the criminal, not the tyrant, who bears responsibility?

So one could vote for a Libertarian Party candidate and not vote for the Libertarian Party. Is that more imaginable than an Objectivist running on the LP ticket? (I don't suppose anyone would wish to claim that the Republican Party platform is closer to Objectivist principles than the LP's.)

To A. West: The practice of degrading the value of a gold-backed currency via pseudo-receipts for gold can happen even in a purely private banking system -- just as counterfeiting (which also degrades the value of money) can happen whether or not currency is issued by the government or by a private institution. If monitoring of banknotes is successful, it will prevent financial institutions from treating notes that are not fully gold-backed as equal in value to those that have 100% gold backing. Of course, “monitoring” need consist of nothing more than prosecuting through the law any person or institution who engages in the chicanery of issuing certificates which supposedly represent gold reserves but which in fact do not. For a demonstration of the inflationary nature of fractional reserve banking see The Possibility and Feasibility of a 100% Gold Reserve Standard

If the "essential differences" of two bank notes are not apparent, then the value of the notes is indistinguishable.

The deception would be to issue fractional reserve dollars that are supposedly the same thing as fully gold backed dollars. It's the same scam as passing bottles of colored water off as Cabernet Sauvignon. As long as the unbacked currency does not pretend to be fully convertible into 100% gold dollars then there is no problem.

It is perfectly legitimate for an investor to purchase a bond, fully knowing the potential risk of not having his principal returned. The problem with several banks issuing dollars is altogether different. If the dollars of one bank are not fully backed by gold, they will drive down the value of any dollars that are backed by gold. This is Gresham's Law at work. In any case, degrading a currency can happen with or without a government. The Founders did not have to empower Conress to print money. If they had not, banking would have been purely private. But private banks, unless checked by law, can commit fraud just as surely as central banks. The difference is that government does not prosecute its own central bank for flooding the economy with cheap money; rather, it encourages it.

Do you think a political party based on explicitly Objectivist principles is going to fare any better than the LP at election time?

Will you explain how the U.S. Constitution prevented civil war?

That is all very well as long as the only parties affected are the banker and the bank customer. However, if a fractional reserve bank issues dollar notes that are indistinguishable from the dollar notes issued a bank with full gold backing, then the value of the latter will be driven down by the former. This may be compared to the purchase of a print from a gallery. Suppose you purchase Print #14 of the work “Prometheus Unbound” in a run that you are told is limited to 500. Because there will never be more than 500 prints, your copy is somewhat of a rarity. Now suppose that another gallery starts another printing of “Prometheus Unbound” and produces 500, 1,000 or 5,000 copies. What do you suppose will happen to the value of your copy of “Prometheus Unbound”? If this is not fraud, then I don’t know what is. As far as private money, you may recall that the residents of Galt’s Gulch had their own currency of little gold coins which they used for trade with one another. But there was no mention of bank notes from Midas’s bank. I wonder why? Do you suppose the Gulchers had a healthy distrust of phony money? Certainly, when our economy starts veering towards high inflation to pay for Bush’s War for Democracy and Bush’s Medicine for the Elderly, private money or e-gold may be a viable option.

Bring back the corset.

Fine. Objectivists agree on morality. Objectivists sometimes disagree on political candidates. Ergo, agreement on morality does not always yield uniform judgments about politics. Synthlord is refuted.

Yes, that confusion crops up often, even among people who are supposedly pro-capitalist. By the way, I don't mean to dismiss McDonald altogether. He has some keen insights on such subjects as the War of 1812 (it was "stupid") and states rights (he likes them). Tom Bethel’s The Noblest Triumph is a good overview of the benefits capitalism brought to Western Civilization. Jakob Christoph Burckhardt’s Reflections on History is excellent on Europe. The only avowedly pro-capitalist history of colonial America is Murray N. Rothbard's multi-volume Conceived in Liberty. I like Carl Becker's The Declaration of Independence. Becker was another Progressive, but he's very good at showing that support for the Revolution included all classes of Americans. F.A. Hayek’s Capitalism and the Historians is the best book on refuting statist myths of the Industrial Revolution. When you get to the Civil War, you have Jeffrey R. Hummel’s Emancipating Slaves, Enslaving Free Men: A History of the American Civil War. Arthur Ekirch's The Decline of American Liberalism is a superb account of how liberalism changed course from favoring limited government early in the 19th century to big government by 1900. The best history of the New Deal is still John T. Flynn’s The Roosevelt Myth. The rise of statism in America coincides with the centralization of power in Washington. The Constitution was merely the first step taken in that direction.

Synthlord advanced the idea that disagreements among libertarians flow from the lack of a "proper moral basis." Accordingly, if everyone is in agreement on the "moral basis," there would have to be agreement on politics, including choice of a Presidential candidate. And which "dude" would that be? Are you suggesting that it would be impossible for a libertarian and a socialist to agree about a woman's right to an abortion or assisted suicide? But Synthloard's argument is that political disagreements flow from disagreements about morality. So the only way we can square the fact that one Objectivist voted for Kerry while another voted for Bush, is to stipulate that having different preferences for president is not really a political disagreement. Similarly, one could, erroneously, characterize any disagreements among libertarians as not really political. Regarding the Libertarian Party’s lack of success in winning important offices, you’re right. I attribute this failing to its inability to build a broad coalition of voters -- which is what every major party (meaning winning party) has done historically. I certainly don’t believe that adding deeper philosophical foundations to its statement of principles is going to get it more followers.

I've seen political disagreements on this board, at Google Groups HPO, and at SoloHQ. We just went through an election season where there was sharp disagreement among prominent Objectivist luminaries about which candidate to support. Would you say these differences flow from the lack of a "proper moral basis"? Show me a political party that requires unanimous agreement on metaphysics/epistemology/ethics and I’ll show you a party that will never win an office higher than village councilperson.

To be accurate, Charles A. Beard was not a Marxist but a Progressive, a turn of the century word for what we today would call liberal. In his later years he would find himself regarded as “right-wing” for penning a work sharply critical of FDR’s foreign policy. Beard saw the framers of the U.S. Constitution as being motivated by certain economic interests and provided support for his thesis in An Economic Interpretation of the Constitution. He did not have to rely on Marx for this, for the same kind of class analysis was being done by Etienne de La Boétie centuries before Marx. Forrest McDonald takes issue with Beard and offers a more complex picture of the Founders. But it is not true that he sees them as motivated purely by ideas. In any case, the hero in McDonald’s history is not Jefferson (whom he regards as both backward-looking and dangerous in his revolutionary fervor), but the great centralist, Alexander Hamilton. In McDonald’s view, the Hamiltonian program, including a powerful national bank that could monetize government debt (inflate currency), was the key to political and economic progress. Thus, McDonald is really more pro-mercantilist than pro-capitalist. As someone who regards the Articles of Confederation as an arrangement superior to the Constitution, I find myself closer to Beard-Jefferson than McDonald-Hamilton.

Ludwig von Mises provides an excellent discussion of polylogism in Human Action, pp. 75-76: Marxian polylogism asserts that the logical structure of the mind is different with the members of various social classes. Racial polylogism differs from Marxian polylogism only in so far as it ascribes to each race a peculiar logical structure of mind and maintains that all members of a definite race, no matter what their class affiliation may be, are endowed with this peculiar logical structure. There is no need to enter here into a critique of the concepts social class and race as applied by these doctrines. It is not necessary to ask the Marxians when and how a proletarian who succeeds in joining the ranks of the bourgeoisie changes his proletarian mind into a bourgeois mind. It is superfluous to ask the racists to explain what kind of logic is peculiar to people who are not of pure racial stock. There are much more serious objections to be raised. Neither the Marxians nor the racists nor the supporters of any other brand of polylogism ever went further than to declare that the logical structure of mind is different with various classes, races, or nations. They never ventured to demonstrate precisely in what the logic of the proletarians differs from the logic of the bourgeois, or in what the logic of the Aryans differs from the logic of the non-Aryans, or the logic of the Germans from the logic of the French or the British. In the eyes of the Marxians the Ricardian theory of comparative cost is spurious because Ricardo was a bourgeois. The German racists condemn the same theory because Ricardo was a Jew, and the German nationalists because he was an Englishman. Some German professors advanced all these three arguments together against the validity of Ricardo's teachings. However, it is not enough to reject a theory wholesale by unmasking the background of its author. What is wanted is first to expound a system of logic different from that applied by the criticized author. Then it would be necessary to examine the contested theory point by point and to show where in its reasoning inferences are made which­--although correct from the point of view of its author's logic­­--are invalid from the point of view of the proletarian, Aryan, or German logic. And finally, it should be explained what kind of conclusions the replacement of the author's vicious inferences by the correct inferences of the critic's own logic must [p. 76] lead to. As everybody knows, this never has been and never can be attempted by anybody. Then there is the fact that there is disagreement concerning essential problems among people belonging to the same class, race, or nation. Unfortunately there are, say the Nazis, Germans who do not think in a correct german way. But if a German does not always necessarily think as he should, but may think in the manner of a man equipped with a non-German logic, who is to decide which German's ideas are truly German and which un-German? Says the late Professor Franz Oppenheimer; "The individual errs often in looking after his interests; a class never errs in the long run." [3] This would suggest the infallibility of a majority vote. However, the Nazis rejected decision by majority vote as manifestly un-German. The Marxians pay lip service to the democratic principle of majority vote.[4] But whenever it comes to a test they favor minority rule, provided it is the rule of their own party. Let us remember how Lenin dispersed by force the Constituent Assembly elected, under the auspices of his own government, by adult franchise, because only about one-fifth of its members were Bolshevik. A consistent supporter of polylogism would have to maintain that ideas are correct because their author is a member of the right class, nation, or race. But consistency is not one of their virtues. Thus the Marxians are prepared to assign the epithet "proletarian thinker" to everybody whose doctrines they approve. All the others they disparage either as foes of their class or as social traitors. Hitler was even frank enough to admit that the only method available for him to sift the true Germans from the mongrels and the aliens was to enunciate a genuinely German program and to see who were ready to support it.[5] A dark-haired man whose bodily features by no means fitted the prototype of the fair-haired Aryan master race, arrogated to himself the gift of discovering the only doctrine adequate to the German mind and of expelling from the ranks of the Germans all those who did not accept this doctrine whatever their bodily characteristics might be. No further proof is needed of the insincerity of the whole doctrine. Link: The Logical Aspects of Polylogism