Monday, July 4, 2011

Economics: Crony Capitalism pt 3 - Opting Out

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For July 4th, I thought it would be appropriate to outline the *lack* of freedom that is produced in a Crony Capitalistic society such as the one we're living in.

This is perhaps the clearest and most easily traceable link between politics and economics, because it is government who imposes the use of deadly violence to enforce the cronyism in place. You may think this is exaggeration, but let's be absolutely honest in this thought experiment...

Let's say you refuse to pay your income tax. What happens? You get a letter from the IRS saying "Hey, pay your taxes plus this extra fine for not doing it on time." What if you ignore it? You get more letters, a lot of them. Depending on your job, they may eventually decide to garnish your wages until they're paid, if they can't do this then they'll want to seize your home and liquidate your assets. In layman's terms, they will take your salary directly from your employer, then they'll take your belongings (house, car, TV) and auction it to get "their" money. They may even throw you in prison. If you refuse them? They'll send police. If you resist the police? I hear they don't like it, and have guns to make such a point. Guns = deadly violence.

I'm not saying cops are the enemy. I'm not saying the IRS is the enemy. I am saying the system is the enemy. Right now, if you don't like the system you can't opt out. There is no exit strategy that doesn't involve moving to another country and revoking your citizenship. And despite my critiques, America still has a lot going for it, so moving isn't high on the agenda.

Whether you think taxes are some kind of civil service to society is left to a political discussion, we're talking economics here, and taxes are destructive to a free market, because they take capital out of a productive environment and put it into a wasteful, destructive system.

This logic doesn't just apply to taxes though, it applies to regulations as well. In some cities if you want to add onto your house you need a permit, otherwise they can employ force if they discover your new addition. Try running a business outside of the proper zoning laws, or without the license the law says you should have. At the root of the law is the fear of force, and ultimately it's deadly violent. For what? For deciding your money is your own, or you can do with your property whatever you wish?

In a free market you can choose how to use your property so long as it doesn't hurt anyone else, there's freedom to do so. Here's to restoring our free market system and with it some forgotten freedoms. Happy 4th.
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Week 11: Crony Capitalism pt 1 - Regulation
Week 12: Crony Capitalism pt 2 - Military Industrial Complex
Week 13: Crony Capitalism pt 3 - Opting Out