Libertarianism in action.

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This is one of those statements that on its face seems profound, but after some thought is an utterly vacuous platitude. It is about as informative as saying red is red.

it only seems profound because people like to ignore the obvious but not immediately foreseeable things. In other words it only seemed profound because you hadn't thought it through when you actually got around to it you figured out it was a pretty simple statement.

With respect, I never said that the delivery of this public good was accomplished in a just, reasonable or even competent fashion. All I said was that the provision of a currency is a necessary public good.

Now, I grant you that commerce could be commoditized. But if my employer pays me in chickens, goats, cattle and vegetables, how am I going to turn around and buy a house? Or save for my retirement?

It is no mere coincidence that societies in all parts of the world have developed the concept of currency. How many sitcom episodes have been based on the farce of an excessive succession of trades in order to bring about a single desired transaction?

You may not like how your government has provided you with a currency, but that is not the same thing as saying that a currency is not required.



Now you are conflating the public good with the subject matter of that good.

If you and I make a contract, we both need some way of ensuring that the other lives up to his end of the bargain. Now, if you make a bad bargain, the courts are still going to enforce your obligation. Does this make the courts unjust? No--you made your bargain. Similarly, if the legislature makes an unjust law, the courts are obliged to enforce it (except in the particular case of ultra vires acts). The solution lies not with the courts, but with the legislature.

You could very well argue that we might be better off with a different kind of court system. But I think you would be hard pressed to make a cogent argument that we would be better off with no court system at all.



You come very nicely to the point that the necessity for a public good and the efficacy with which government provides that good are two separate, but related, questions.

Umm..... commoditization would be something like a gold standard. What would end up happening is that one good would be considered universally sellable enough to buy other goods. It is not as if the government outright invented the idea of a standard trade good.

I'm wondering what this has to do with libertarianism.

But who establishes that fungible commodity? Do we trade it in specie? If so, we need either some immediate way to verify that it is not adulterated, or some objective standard that authenticates it (e.g. coinage). Alternatively, do we trade it in abstract? If so, we need a retention agency that issues trade notes (e.g. banknotes).

Either way, there is a public sector action that must be taken. Perhaps government licenses private banks to issue currency, or perhaps only paper currency. Perhaps government does it itself. But somewhere, somehow, someone is setting down the rules about how currency works.

The commodity spontaneously emerges as a good trade-good. If the good is acting as currency, then yes, we trade the good as itself. Even further, verification isn't this humongously difficult process. Gold, for instance, had a certain weight. Private coinage has also historically existed. Free-banking has also historically existed.

Visagrunt, your assertion is just that, an assertion. There are people whose research is based upon the falsehood of your statement. Economists known for researching instances of non-government controlled money supplies are George Selgin and Larry White, and often their research goes into historical issues., so I really don't feel much need to rebut further.

Note: I said nothing about the quality of the policy move, only that what you speak of isn't strictly necessary.

I think you are being disingenuous in your citation of Selgin and White. While they certainly set forth that banking systems can exist without central banks or with a minimal role for central banks, neither stands for the proposition that currency can exist without regulation of a financial system.

Sounds like Gulliver's Travels part two. I wonder what would have happened if an arsonsist set fire on his home purposely? Would the fire fighters try to save the evidence or let that go up in flames too? What ever happened to tax paid services? They are still paying taxes in that part of the country arnt they? Maybe this story is more about government corruption than libertarianism.

Depending on what you mean by "regulation of a financial system". Both men actually share company with a lot of anarchists who do cite their research, so I have doubts that they are very opposed to the idea of anarchism. Beyond that, I don't really see our dispute, as you're making claims about public policy, but their work is in denial of the need for much policy to exist to allow for money and banking.

I suggest that a completely anarchic currency system is doomed to fail. Suppose that all banks were free to issue currency in whatever form they chose.

Bank of A issues "dollars" based on a basket of trade commodities that it holds
Bank of B issues "bucks" based on gold holdings alone
Bank of C issues "greenbacks" based on deposits of dollars and bucks
... and so forth.

Every bank in the country is able to issue promissory notes based on whatever they choose. There is no rule to say that these units have to be equivalent. There is no rule that says these banks have to accept other banks' notes. There isn't even a rule that says that banks have to hold any commodity at all in order to issue currency--in an anarchic system, the market is free to use those notes if it chooses.

Now, for a company to do business it needs to get paid, and it is likely to keep its books denominated in a single currency. But its customers could be holding currency of any one of dozens of banks. That means that either the seller has to be willing to accept the currency of dozens of banks, imposing an administrative burden of valuation on every transaction, or the seller has to impose a single currency, obligating the consumer to exchange his currency of one type into an acceptable currency of another type.

Some form of clearinghouse is required--but that immediately raises the prospect of banks engaging in anti-competitive activity in order manage the clearance system. Again, the absence of a public sector regulator creates an opportunity for abuse. If the subprime crisis has taught us anything, it is that banks will model their own risk, but no one will model the risk to the entire system. Credit default swaps were intended to manage risk, but had the perverse effect of making risk worse.

I suspect that our disagreement is really down to the question of how large a role the government must have in the establishment and regulation of a currency. My point has always been that government must perform some role. From least interventionist, to most, these roles could include:

1) Licensing private persons to issue trade notes
2) Setting capitalization requirements for the issuance of trade notes
3) Setting fungibility rules for the exchange of trade notes
4) Holding the commodity supporting a standardized currency
5) Issuing currency against its own commodity holdings
6) Issuing all currency against its own commodity holdings
7) Issuing currency against its debt obligations (lender of last resort)

and so on. It is up to individual countries to determine how far they are content to see their governments involved.

I don't think most of your criticisms are extremely relevant, as none of these issues should prevent trade from occurring unless people are inordinately stupid. If certain currencies involve transaction costs that are too high, then those currencies may fall into disuse. If certain currencies do not seem reliable, then those currencies are likely to fall into disuse. Determining the cost of something is really very easy, and can be done electronically without issue, which also solves a lot of problems. As such, I really see your complaints as a waste.

I don't see how points 1-7 are strictly necessary, even if they might be desirable.

He was under the impression, for one reason or another, that he wasn't required to pay the fee before hand, and he would be permitted to pay the fee after the services.

Also, what if he had paid the fee and there had been some clerical error or system error and they had on record that he didn't. What if the only documents supporting that he had paid the fee were in the house, on fire.

And I believe his pets burned to death in the fire.

He was not trying to avoid the fee, he was simply unclear on when it had to be paid. He offered to pay it on the spot and they would not accept the payment.

If his neighbor had not been home to call 911, his house could have burnt down as well.

If a person "forgets" to pay an insurance premium, should he get the benefit of the insurance?

ruveyn

This is not insurance. Insurance companies have to pay out what is often times a substantial amount of money to cover the cost of damages to their clients so lose money. If they must pay out $20,000, it makes no sense for them to accept a $100 after the event.

The fired department is not funded by a risk based platform. They are funded by tax money and their operating cost is estimated on a census based platform.

They are entirely different.