THE BOTTOM UP REVOLUTION OF TRUTH CONTINUES, ONE INDUSTRY AT A TIME

by Ed Bugos, Dollar Vigilante

"It is error alone which needs the support of government. Truth can stand by itself. Subject opinion to coercion: whom will you make your inquisitors? Fallible men; men governed by bad passions, by private as well as public reasons. And why subject it to coercion? To produce uniformity. But is uniformity of opinion desirable?" –Jefferson, Notes on State of Virginia, 1787

That’s one of the most recurring thoughts in my mind these days.  I’m usually thinking specifically of the hazards associated with central banking and fiat currencies, ideas brought to the west only a few centuries ago to support fractional reserve banking, a scheme that produces a recurring “cluster of errors” – i.e., and boom-bust cycle – in its wake.  It has fueled popular delusions of grandeur and manias from tulip speculation to world conquest, and is responsible for many economic collapses.

But history extends beyond the origin of government supported fractional reserve banking systems, Jefferson was no doubt aware, and much of it can be presented as a timeline in human fallibility.

Many important ideas widely considered good today were condemned once, and vice versa.

Most people even today are blithely unaware of what doctrines they hold are true and which are not.

[Consider this one!]

Thankfully, some scholars, not disconnected with Jefferson’s time, came to see it is perhaps better, then, not to sanction force to promote ideas and particularly religious doctrine.  How novel a time!

Jefferson’s critics believe it is naïve to think that general truths would win out by their shear veracity.

But what a farce it is to think that the bad men who would keep them from you might not somehow find their way into politics.  Standing armies were not used to realize truths such as: the sun does NOT revolve around the earth, the world is not flat, wants are infinite, means are scarce, value is subjective, and so on.

But they were certainly used to rob, loot, murder and commit atrocities in the name of God.

Historically truth has come about because someone stood up to hegemony and coercion.

The relevant lesson of history being that fallible humans endowed with too much power for their own good, or for anyone’s good, have always used force to suppress the truth…never to protect it!

But more than anything, as a classical liberal, Jefferson saw the use of initiatory force as immoral.

I don’t know whether he valued diversity of opinion for its own sake.  But I am convinced that he would have valued the free exchange of ideas, and certainly would have tolerated dissent.  He promoted it.

No doubt he understood the importance of consensus on core values, like the nonaggression axiom, property law, etc.  But the use of force to realize these truths would defeat their purpose.  Besides, we are taught government is benevolent and run by all knowing philosopher kings elected by the general population prepared to implement its general will to the betterment of everyone when it is really just an institution run by “Fallible men; men governed by bad passions, by private as well as public reasons.”

So even the justification of initiatory force is based on a lie –a lie that the truth will one day bulldoze.

Antiquity will see men like Rothbard, Mises, and Hoppe as the Socrates, Galileo’s, and Bruno’s of the day.

For the thing about truth is that once it becomes generally realized it sure is hard to stamp out.

Indeed, while critics of the laissez faire system will tend to point to the fallibility of man as a weakness of such a system, others have long realized, ”If one rejects laissez faire on account of man’s fallibility and moral weakness, one must for the same reason also reject every kind of government action” (LvM).

In the real world, much error results from the well-intended misdirection of coercion and force.

If something is true, as Jefferson said, it does not need the support of government.

If an enterprise (or idea) is truly profitable, it doesn’t need subsidies and support from government.

Of course, separation of church and state is no longer that controversial.  But separation of education and state, banking and state, money and state, security and state, and now healthcare and state all rank high as areas of substantial controversy, and industries where government still supports error.

The Bottom Up Revolution of Truth Continues, One Industry at a Time
 

“Uber Technologies Inc. has expanded a fundraising round by $1 billion amid swelling investor appetite for the mobile car-booking application. Uber submitted a filing Wednesday to the Delaware Secretary of State to bump up its fundraising by $1 billion, according to a representative of the San Francisco-based company. That would bring the total in the round, known as the Series E round, to $2.8 billion. Uber had previously collected $1.8 billion of the financing.  Uber has been on a money-raising tear. The company, led by Chief Executive Officer Travis Kalanick, raised $1.2 billion in financing in December, which valued the startup at $40 billion, one of the highest valuations for a closely held technology startup. It recently topped that off with another $600 million. Last month, Uber also closed $1.6 billion in convertible debt…” Bloomberg February 18, 2015

Huge!  A new “sharing” economy is trying to emerge thanks to the internet; ushering in new concepts like ride-sharing (Uber), home-sharing (BnB), crowdfunding, bitcoin, and other innovative services that would have never been conceivable before the internet, which would have never been conceivable before computers, which in turn would have never been conceivable before the existence of electricity, or whatever.  Imagine today what new layers of capital goods the human mind will think up next.

It’s nigh impossible to go far beyond “next” though.

But I diverge, as this isn’t supposed to be a refutation of central planning (yet maybe it is that simple).

What is interesting to note here is the reaction from the man on the street to these newly developing technologies, and the industries emerging from them.  Skepticism is high today.  He thinks that bitcoin, uber, and kickstarter are all fads; more examples of human error – like tulip mania and other bubbles.

Who knows.  It’s hard to tell in an economy where so many industries are propped up or artificial.

I’m not going to claim they won’t fail.

However, they all share in at least two telling aspects.

First, they represent a bottom up revolution of entrepreneurs challenging various government supported cartels and monopolies.  For example, ride sharing represents a challenge to the taxi and other transportation monopolies; home sharing services are challenging the hotel cartels; crowdfunding, the exchange monopolies; bitcoin, the money, banking, and financial monopolies; and so on.

In each case consumers benefit from increased accountability, cheaper and better services, more innovative products, and in the case of bitcoin, a wonderful get around the giant banking leviathan.

Second, and most importantly, the rise of these industries is occurring voluntarily; neither by fraud nor coercion.  This means that many people find true value in them, regardless of your or my opinion.

The only coercion or government support existing here is on the side of established industries.

Typically this support is justified in the name of consumer safety; but anyone with an economics background knows regulation is actually used to raise barriers, restrict competition, and rent-seek.

That’s one reason new competition can emerge –because profits are artificially high to begin with.

Yet ironically while nobody is using a gun to force the acceptance of bitcoin as currency that’s what backs the fiat and monopoly currencies that we use every day.  If it didn’t they would fail.

The first monopoly the Internet ever broke was the media and information monopoly.

No wonder the FCC has to clamp down on this thing!  It’s anarchy!

They have to protect Warren Buffett’s profits.

Heaven forbid should consumers take economic power back.

Lest that all leads to challenging the biggest monopoly of monopolies of all.  Yikes!!

[Editor's Note: For the rest of this piece, subscribe to The TDV Newsletter.]

Sharing is caring!