June 20, 2024

Tom Woods’ bestseller Meltdown placed the blame for the financial debacle of 2008–09 on the government’s counterfeiter, the Federal Reserve. It was the Fed’s policies that created the problems, although most economists and economic talking heads didn’t see it that way. The Fed’s loose monetary policies funded the meltdown and became the “elephant in the living room” most pundits couldn’t see.

Woods was right, of course; putting a monopoly counterfeiter in charge of money eventually creates financial havoc. History knows no exceptions. Counterfeiters produce a medium of exchange wherein one party in a transaction exchanges nothing for something. It used to be called stealing, but in most universities, it’s now called monetary policy. That’s not a prescription for an enduring society.

We have no trouble finding loud voices claiming the Fed is privately owned by the biggest banks, even though it took an act of government to create it in 1913. In their view, the culprit Fed is simply another market entity strangling hardworking Americans for the benefit of a parasitical elite. The solution is to turn it over to the government. Government bureaucrats will be answerable to the People. 

The days of government answering to the people they govern are found only in tall tales and government-issued publications. Government has the guns; the people they govern have the goods. Is it any wonder more and more goods are finding their way into government hands through taxation and deficit spending? 

Turning money production over to the government makes it easier for the government to steal. The president and his cronies don’t have to pressure the Fed to create a false sense of prosperity; they can do it themselves. When the economy starts to collapse, there always are market scapegoats to receive the blame.

Many who call themselves conservatives or libertarians call for a return to constitutional government, meaning limited government. No income tax, no central bank, no government schools, no national security state and its proliferation of agencies and foreign wars—sounds heavenly.

I find it interesting that these people revere the original Constitution so much when the Constitutional Convention was conducted in secret and in defiance of an agreement to modify the Articles of Confederation. One of the lies put over to hold a convention was the meaning of Shays’s Rebellion, which was widely reported as an anarchist uprising in western Massachusetts in which poor farmers refused to pay their legitimate debts. A situation such as this called for a stronger government, and thus the Constitutional Convention was held. For a brilliant analysis of this period see Leonard Richards’s Shays’s Rebellion: The American Revolution’s Final Battle. Quoting from my review of his book,

It wasn’t debt that triggered Shays’s Rebellion, Richards argues, but the new state government and “its attempt to enrich the few at the expense of the many.” The most glaring instance of this abuse was the decision of Massachusetts to consolidate its war notes at face value. 

Even when issued, the notes traded at about one-fourth par and later declined to about one-fortieth face value. Many soldiers were paid in these notes and out of desperation sold them at about one-tenth their value. Boston speculators swooped up eighty percent of these notes, with forty percent of them owned by just 35 men. Every one of those 35 men had either served in the state house during the 1780s or had a close relative who did. 

Legislators praised the speculators as “worthy patriots” who had come to the state’s aid in its time of need. But these men did not buy the notes directly from the government; they bought them from farmers and soldiers at greatly depreciated prices, who were now being taxed to redeem them at full value. The speculators, most of whom had stayed home during the war, would now benefit at the expense of veterans. . . .

Initially, the legislature tried to collect the taxes with impost and excise duties, but then added a poll tax and property tax. The poll tax taxed every family for each male 16 years or older. Poll and property taxes were going to pay 90 percent of all taxes, while impost and excise duties would account for the other 10 percent. Thus, a regressive tax ensured a wealth transfer from farm families with grown sons to the pockets of Boston speculators. As Richards observes, “Taxes levied by the state were now much more oppressive—indeed, many times more oppressive—than those that had been levied by the British on the eve of the American Revolution.”

So much for the “anarchy” that justified the Constitution.

The lie of Shays’s Rebellion has persisted to this day as a showcase for life with a weak state. This has led to a grudging admission by some that a monopoly on violence is necessary to ensure peace and prosperity.

Who will keep this monopoly in line? Who has ever kept this monopoly in line? No one has, and no one ever will. All that’s ever been done is replace one monopoly with another through rebellions.

The Constitution has checks on state growth? Every would-be tyrant knows about false flag operations and his duty as leader to “do something!” It’s the classic situation of the fox guarding the henhouse.

Those who support the legitimacy of the state support the legitimacy of a monopoly of violence. Those two words, “monopoly” and “violence,” should get their attention but they haven’t. As we see, the US state has revived the prospect of nuclear armageddon, as it keeps poking the Russian bear, hoping for a showdown. Short of that, we have the virtually endless evils of state actions, starting with rigged elections and including gun-free indoctrination centers called public schools and the orchestrated hoax of a global pandemic.

When people are unhappy with a market entity, they boycott it. Why not boycott the state by refusing to vote in its elections?