Tom Woods: The Libertarian Speech I would give to the whole country

Tom Woods, historian and liberty activist, participated in the Texas Libertarian Convention June 9, 2012. His opening statement included that he would be making two speeches, the first 40 minutes being his speech to the masses to draw them to libertarianism, the last 20 minutes regarding his thoughts on the Libertarian Party.

Skip to the 40 minute mark if you want to hear what Tom Woods has to say about the LP and their on going efforts for electoral success.

Thomas E. Woods, Jr., is a senior fellow of the Ludwig von Mises Institute and creator of Tom Woods’s Liberty Classroom. He is the author of eleven books. His website can be found at http://www.tomwoods.com/

128 thoughts on “Tom Woods: The Libertarian Speech I would give to the whole country

  1. Jill Pyeatt

    I always like to hear Mr. Woods speak. I hope he comes out to Los Angeles again soon.

  2. Austin Battenberg Post author

    Agreed. And he makes the great point about the discussion we were having in another post about how we as Libertarians should stop calling ourselves fiscally responsible and socially tolerant.

  3. Jill Pyeatt

    I’ve heard Tom’s response to being asked if he would run for vice-President, and he mentions having four young daughters as a reason not to. They’ll still be young in 2016.

  4. Jill Pyeatt

    I’d certainly support him in 2020.

    BTW, I think Joe Buchman posted this speech already, but is why I didn’t re-listen (not that I’d ever make it through the whole hour, anyway–)

  5. Austin Battenberg Post author

    I never saw it here at IPR, I posted a link to it on the open thread, but thought his statements to the LP were worthy enough to have its own topic.

  6. Jill Pyeatt

    It may have been in a thread after the Texas convention, then, but it deserves its own thread. You’re doing great, Austin.

  7. Less Antman

    @2 Austin – While I certainly think it is valuable to discuss whether libertarians should describe ourselves as fiscally responsible and socially tolerant, I don’t want to miss the different point Woods was making in this speech: we shouldn’t describe ourselves as fiscally CONSERVATIVE and socially LIBERAL, because it makes it sound like we’ve just cobbled together conservative and liberal positions rather than making clear that our positions all come from a consistent advocacy for the non-initiation of force.

    Sharon Harris of Advocates for Self-Government has suggested that we say that conservatives are inconsistently libertarian on economic issues (at least in their rhetoric) and liberals are inconsistently libertarian on personal behavior issues (ditto) so that we make our own philosophy the reference point.

  8. Robert Capozzi

    12 la, that construction sounds tortured and assumes that people know what L means.

    Here’s a swing at it: Ls are for maximizing individual freedom, — economic freedoms and personal freedoms. Sometimes we sound “conservative” on economics and sometimes we sound “liberal” on civil rights, but we are the consistent ones. We want freedom across the board.

  9. Gene Berkman

    I like the phrase “fiscally conservative and socially liberal” because libertarianism is largely derived from classical liberalism.

    In Europe free market advocates are called liberals, and I have seen articles on French Trotskyite websites referring to Ronald Reagan and Margaret Thatcher as “ultra-liberals” because of their supposed support for a very free market.

    Calling ourselves economic liberals would be consistent with our heritage and European usage, but misleading here. But at least we get to keep liberal as a term of art for our stand on social issues.

  10. Gene Berkman

    I would not want to support Tom Woods for President for two reasons – he lacks credentials of having actually either run a business or held office, to show that he has a record or administrative abilities.

    Secondly, I don’t care to promote someone who does not understand why a thoughtful libertarian would have problems with Murray Rothbard.

  11. RedPhillips

    “I would not want to support Tom Woods for President for two reasons – he lacks credentials of having actually either run a business or held office, to show that he has a record or administrative abilities.”

    What difference does that make Gene? He isn’t going to be President so what does it matter if he is qualified to be President? The question is whether he is an effective advocate, and that he most certainly is.

  12. Satan's Panties

    I agree with Red.

    On the other hand, Gene’s other point bears consideration.

  13. Charles Lupton

    The problem is the Libertarianism is neither left nor right, neither Democrat nor Republican, neither liberal nor conservative as those to terms suggest the dichotomy that is the current duopoly. Using tolerant and responsible is different in that it suggests allowing others to make their own decisions on social issues and keeping spending and taxation minimal.

  14. Gene Berkman

    It does matter whether someone is qualified to be President. It is an insult to the voters you are trying to communicate with to present someone without the appropriate skills and experience.

    If you are hiring for a job, and someone applies who is totally lacking in the necessary skills or experience, they are wasting your time. Most voters will not waste their time listening to someone who is not qualified for the position he seeks.

  15. Michael H. Wilson

    There are a lot of local governments in the nation that are fiscally conservative, but still have a pile of laws that restrict economic freedom. Using that phrase does not describe a libertarian society.

  16. Austin Battenberg Post author

    I know Rothbard isn’t the greatest, as he made a lot of mistakes like the whole trying to get the racist folks on board.

    But Wood’s whole point is that he wrote MANY different fantastic articles that articulate libertarianism in a positive way, and we shouldn’t discount ALL of his work because of a few of the things he did that was a negative. Overall, Rothbard is a net positive.

    Besides, in my opinion the biggest thing that stops libertarians from growing is this HUGE fraction between those who like Mises and Rothbard, and those who like Friedman and Hayek. All four bring positive stuff to the table, and whether its CATO, Reason on the Friedman side, or the Mises Institute, or Ron Paul supporters on the Rothbardian side, we need to focus on the majority of what we agree upon, rather then the minority of what we disagree on.

    And I think Tom Woods is a FANTASTIC messenger, a philosopher of our time. But I don’t think he has any aspirations for being president, so speculating such is pointless.

  17. Austin Battenberg Post author

    Tom Woods suggestions to the LP for those who haven’t or won’t watch the video:

    1. Don’t just say we want lower taxes and lower spending. Otherwise you sound like Republican-lite. Distinguish yourself from the two parties. (I’m looking at you WAR)

    2. Do not neglect foreign policy. Some of the governments worst crimes are in foreign policy. It’s a key issue, cannot be neglected.

    3. Murray Rothbard being radioactive needs to come to an end. You don’t need to agree with everything he says, but he deserves just as much respect as Hayek and Friedman. “Whoever is infallible in this room, we will drop Rothbard and follow you.”

    4. As everyone has been discussing, we shouldn’t say fiscally conservative and socially liberal. I think we all agree on this one. We have the most consistent philosophy.

    Lastly, he said the silver lining is be happy we are not in power because when this ship goes down, there is no possible way we can get blamed.

  18. Michael H. Wilson

    re # 22 besides the people you mention Libertarians should take a look at the work of Cobden and Bright and the Anti-corn Law League that they started in England and apply that concept to solving the problems related to poverty in this day and age.

  19. johncjackson

    Woods has his own baggage not related to Rothbard, but in the same vein as Rothbard. That stuff is fine for neo-Confederates and certain factions of CP and LP types, but it’s not going to fly broadly in politics.

  20. Andy

    Gene Berkman said: “If you are hiring for a job, and someone applies who is totally lacking in the necessary skills or experience, they are wasting your time. Most voters will not waste their time listening to someone who is not qualified for the position he seeks.”

    The only qualifications necessary to be President are that one be a Natural Born American citizen, and that one be at least 35 years old.

    Beyond this, the only qualification that I’m really interested are does one understand what the Constitution says and does one have have the integrity to do what they say they are going to do? Does one really believe in freedom and do they have a record of activism to back up what they say?

    I think that most of the “qualifications” that a lot of people talk about for one to be President are complete BS.

  21. Andy

    “Gene Berkman // Jun 20, 2012 at 6:35 pm

    I would not want to support Tom Woods for President for two reasons – he lacks credentials of having actually either run a business or held office, to show that he has a record or administrative abilities.”

    Completely irrelevant.

    Tom Woods has an excellent understanding of the Constitution and of the concepts of individual liberty, and he’s got a record of activism to back it up. He’s a good writer and speaker. He’s got at least some name recognition which is a plus. I’d certainly consider him for as a candidate for President. He’d be a lot better than anyone running right now, including Gary Johnson.

  22. Gene Berkman

    “Murray Rothbard being radioactive needs to come to an end. You don’t need to agree with everything he says, but he deserves just as much respect as Hayek and Friedman. “Whoever is infallible in this room, we will drop Rothbard and follow you.” ”

    Milton Friedman and Friedrich Hayek never defended the southern Slaveholders and never justified the war of the rebellion.

    Milton Friedman and Friedrich Hayek never claimed the Soviet Union had a foreign policy based on peace, nor did they ever praise Mao Tse-tung or Che Guevara.
    I urge you to read “Left and Right:the Prospects for Liberty” @ http://mises.org/journals/lar/pdfs/1_1/1_1_2.pdf

    Praising Lenin and Mao are not “imperfections” they are repudiations of the libertarian position.

    Aside from theoritical issues that Murray Rothbard put forth to distinguish himself from real libertarians, his actual practice in the Libertarian Movement was consistently divisive and disruptive.

    The reason people outside the Rockwell circle don’t mention Rothbard is because they (or we) all had experience dealing with him. I don’t think Mr Woods is old enough to have the same experiences.

  23. Steve

    I heard Dr. Woods say during a speech in Iowa at a CFL event that he’d love to be the LP Presidential candidate just so he could have a “debate” with 2 stuffed dummies representing his D and R opponents. I assumed he was only joking, but if he got serious about it, I would be supportive. I think some people are trying to draft him into a Senate race as a Ron Paul Republican. Either way, great to see him involved at an LP event.

  24. Austin Battenberg Post author

    @25 John Jackson, can you please provide links to this baggage your speaking about? I’d like to read about it, instead of just taking the word of a commenter.

    @28 As Woods said, he isn’t trying to say that Rothbard is perfect, but he listed several different things that he wrote that should be of importance to libertarians. You don’t have to take the bad with the good. Instead of focusing on the man and the mistakes he made, why not take the work that he has done that was positive, and use those as tools for learning? If I sit here and wrote two articles, one promoting libertarianism, and one promoting tyranny. You can strike me down and claim me to be a statist, but if that first article is really really good, there is no reason why it can’t be required reading for libertarians?

    Not to mention by never mentioning the works of the Austrians, you are effectively pushing away allies. We need to work together, not against each other. All libertarians should help each other so we can actually gain traction in promoting our shared beliefs.

  25. Austin Battenberg Post author

    Not to mention cherry picking a few things here or there when the vast majority of his work is a net positive for the libertarian movement is just being dishonest.

    The point is, no one wants you to necessarily start treating him like he is the founder of libertarianism. Just to treat him like the other libertarian scholars. One to read, but to be critical where he is wrong.

    It’s similar to calling Ron Paul a racist because of his newsletters. It’s being intellectually dishonest. Mistakes were made. Lets focus on the present, and the contributions people provided that will help the movement, instead of just ignoring them entirely.

    Sorry, I don’t even care that much…its just that became a libertarian because of Ron Paul, and much of what he and his movement stands for is Austrian economics, and Rothbard is a leader of that perspective. I think the LP could grow if many in the party didn’t hate on Rothbard, and the Austrian so much, because you are essentially pushing Ron Paul supporters away from the LP.

    Just my two cents, for what its worth.

  26. Mark Hilgenberg

    @ Gene 28

    I agree 100% Rothbard is the reason liberty is looked at the way it is today, a right wing racist, corporatist group of elites.

    The last thing we need to do is start pushing economists and theorist in our outreach. How many people are really going to know or care who Rothbard is? People want to know how liberty will benefit their lives, not some book or rambling theory from a guy in the 70’s.

  27. RedPhillips

    “corporatist group of elites”

    “Elites” advocate liberty? You’re kidding, right?

    Yeah that’s what that Bilderberg confab was all about – liberty.

  28. Mark Hilgenberg

    @ Red 34

    Go talk to the vast majority of independents and liberals and ask them what they think Libertarians are.

    When they “hear” liberty, they hear Sarah Palin, Mit and other conservatives talking about liberty for corporations and the 1%.

    The liberty I promote and the liberty the Tea-O-Cons promote are two very different things.

  29. Ben Gleck

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    So do I. Excellent analysis, and one Rothbard himself should have revisited in later years. What specifically is your issue with it?

    I agree 100% Rothbard is the reason liberty is looked at the way it is today, a right wing racist, corporatist group of elites.

    In what sense was Rothbard ever pro-corporatist? I’d be interested in your analysis of the link Mr. Berkman provided

    “Left and Right:the Prospects for Liberty” @ http://mises.org/journals/lar/pdfs/1_1/1_1_2.pdf

    I think you’d like it.

  30. Mark Hilgenberg

    @ Ben 36

    I doubt Rothbard was pro-corporatist but his paleo conservative race baiting strategy has opened the door for all kinds of conservatives to use the term liberty.

    Sorry, I can’t read 19 pages of text with a handfull of breaks, uggg.

    Here is one of the big problems I have with him.

    http://articles.businessinsider.com/2011-10-03/politics/30237859_1_murray-rothbard-libertarian-economics-ron-paul

    http://bleedingheartlibertarians.com/2011/12/how-did-we-get-here-or-why-do-20-year-old-newsletters-matter-so-damn-much/

  31. Ben Gleck

    Rothbard went through several stages, some of which were better than others. You cite one of the worst, but he also had his period of proto-alliance with the New Left, which Berkman cites; by far a better Rothbard phase IMO. See this – easier to read

    http://www.lewrockwell.com/rothbard/rothbard33.html

    And this update from Roderick Long

    Rothbard’s “Left and Right”: Forty Years Later – Roderick T. Long …

    http://mises.org/daily/2099

    Really you should read those, I think you will like them.

    In recent years the Rockwell-Paul side of the movement has abandoned the alliance with “paleo” racists and allied once again more with the left.

    Sheldon Richman writes

    http://www.fff.org/freedom/fd0706b.asp

    “Is libertarianism of the Left or of the Right? We often avoid this question with a resounding “Neither!” Given how these terms are used today, this response is understandable. But it is unsatisfying when viewed historically.

    In fact, libertarianism is planted squarely on the Left, as I will try to demonstrate here. ”

    ….

    “That libertarianism is not perceived today as it was in the 1800s — even, alas, by most libertarians — is the result of several factors that sent the earlier movement into decline. As a result, movements not always dedicated to individual liberty have stepped into the breach, leaving libertarianism to look like a quirky branch of conservatism. Murray Rothbard discusses that decline in his classic essay “Left and Right: The Prospects for Liberty,” which should be read by anyone with an interest in this subject.”

    Richman cites Rothbard:

    ” Thus, with Liberalism abandoned from within, there was no longer a Party of Hope in the Western world, no longer a “Left” movement to lead a struggle against the State and against the unbreached remainder of the Old Order. Into this gap, into this void created by the drying up of radical liberalism, there stepped a new movement: Socialism. Libertarians of the present day are accustomed to think of socialism as the polar opposite of the libertarian creed. But this is a grave mistake, responsible for a severe ideological disorientation of libertarians in the present world. As we have seen, Conservatism was the polar opposite of liberty; and socialism, while to the “left” of conservatism, was essentially a confused, middle-of-the-road movement. It was, and still is, middle-of-the-road because it tries to achieve Liberal ends by the use of Conservative means. “

  32. Alan Pyeatt

    GB @ 28: “Milton Friedman and Friedrich Hayek never defended the southern Slaveholders and never justified the war of the rebellion.”

    Lysander Spooner never defended slavery or the War of Northern Aggression, either.

    And I haven’t had a chance to read the article you linked to (don’t worry, I will), but Rothbard made it quite clear that he had no love for communism in any form. So I suspect that any “praise” for Lenin or Mao had to do with tactical or propaganda ability, not with ideology or goals. If that’s the case, it is hardly a repudiation of the libertarian position.

  33. RedPhillips

    Mark @ 35

    “When they “hear” liberty, they hear … talking about liberty for corporations and the 1%.”

    If people confuse free-markets with crony corporatism then it is our job to attempt to unconfuse them.

  34. Gene Berkman

    My issues with “Left & Right:The Prospects for Liberty” are that it was disorienting. I spent some years trying to recruit new left radicals into the libertarian movement, and got a few, but it was at the cost of alienating more normal people.

    In the essay “Left & Right” – the founding statement for his publication – he praises Lenin as being more radical than Marx, and states that Lenin focused his critique on “imperialism and monopoly capitalism” rather than Laissez Faire. That is cherry picking – as Lenin was clearly opposed to laissez faire, whereas he defined socialism as “the state capitalist monopoly made to serve the whole people.”

    The essay I linked to was written in 1965, when China was a collectivist hell overseen by Mao, yet Rothbard writes that “In their almost exclusive stress on revolution in the undevelopedcountries, the Chinese have, in addition to scorning Right-wing Marxist
    compromises with the State, unerringly centered their hostility on feudal and quasi-feudal landholdings, on monopoly concessions which have enmeshed capital with quasi-feudal land, and on Western imperialism.”

    When this essay was reprinted in “Egalitarianism as a Revolt Against Nature” the mention of the Chinese disappeared down the memory hole, because China had come to oppose Soviet expansionism. Rothbard denounced this “right-wing” trend in Chinese foreign policy.

    It can seem I am cherry picking statements by Rothbard, but there is not enough memory on the IPR server to list every statement Rothbard made in support of some third world “anti-imperialist” dictator.

  35. Mark Hilgenberg

    @ Red 40
    “If people confuse free-markets with crony corporatism then it is our job to attempt to unconfuse them.”

    I agree but much of the problem is Libertarians will repeat conservative talking points and follow the left/right script by the letter.

    As opposed to showing the difference we uplift corporations who are benefiting from government and talk as if money is the only real liberty issue.

  36. JT

    Hilgenberg: “As opposed to showing the difference we uplift corporations who are benefiting from government and talk as if money is the only real liberty issue.”

    I don’t know any Libertarians who uplift corporations that are receiving government largess or who only talk about taxes & spending (not even Wayne Root does that, although he’s close). Most of the Libertarians I’ve met talk about civil liberties & foreign policy a lot.

  37. Mark Hilgenberg

    JT Go listen to a liberal ask about taxing oil companies and see where the conversation goes.

    The Libertarian is locked into defending government protected corporate interests by the 20th word.

    Just look here, I get slammed for not worshing corporations all the time.

    Talking with libertarians and listening to them outreach is a whole other world.

  38. Michael H. Wilson

    Re Mark @ 44 and that problem comes about because the LP itself has not taken the steps to explain where the party stands on many issues and on others it is historically inaccurate. In my opinion based on what I have read and heard over the last few years it is because of a small group of dedicated reformers who gained control of the national office and the LNC for a period of time during the last decade. This opinion was reinforced by a comment one of them made in Vegas. It was not one thing that led me to this conclusion but seeing and hearing about a number of smaller things.

  39. RedPhillips

    “Nothing in the Constitution authorizes the Federal Government to subsidize oil companies or any other kind of company. ‘Conservatives’ who support oil subsidies are certainly not conserving the Constitution.”

    What is so hard about that?

  40. JT

    Hilgenberg: “JT Go listen to a liberal ask about taxing oil companies and see where the conversation goes.

    The Libertarian is locked into defending government protected corporate interests by the 20th word.”

    What? If a liberal talks about taxing companies, then of course a libertarian isn’t going to be supportive of that. At the least, a libertarian would say the U.S. corporate tax rate should be cut (it’s one of the highest in the developed world, in case you didn’t know that). So that’s what you mean by “protecting corporate interests”? Favoring tax cuts?

    You ever consider the Green Party?

    Hilgenberg: “Just look here, I get slammed for not [worshipping] corporations all the time.”

    Not once have you been slammed for “not [worshipping] corporations all the time.” That’s such a gross mischaracterization, it’s either dishonest or you’re just clueless.

  41. Mark Hilgenberg

    @JT 47

    “What? If a liberal talks about taxing companies, then of course a libertarian isn’t going to be supportive of that. At the least, a libertarian would say the U.S. corporate tax rate should be cut (it’s one of the highest in the developed world, in case you didn’t know that). So that’s what you mean by “protecting corporate interests”? Favoring tax cuts?”

    See how quickly you went down that road? Did you say anything regarding all of the liability protections, corporate welfare, tax manipulation, etc.? No, you went straight to the GOP talking point re: corporate tax rates. Is your goal just to be right or to persuade people?

    “You ever consider the Green Party?”

    Ah yes, the Libertarian purge LOL, how many times have I heard that one in my 17 years of outreach and party leadership. If you don’t march in lock-step conformity of rhetoric, off to another party for you!

    “Not once have you been slammed for “not [worshipping] corporations all the time.” That’s such a gross mischaracterization, it’s either dishonest or you’re just clueless.”

    You have read every post ever made to me? I outreach to Occupy and I am always told that they are anti-free market because they are against big corporations.

    Many Libertarians are just like conservatives, they think corporations are individuals. This is how they get stuck in our outreach.

    Fight concentrations of power on ALL fronts, not just the left.

  42. Robert Capozzi

    48 mh, I certainly don’t see a corporation as an “individual,” but an “entity.”

    I don’t care to “fight” “powers” per se. I advocate peace in all things, which is the real power. But I note that most corporations are not especially powerful, so your premise seems off-base to me.

  43. JT

    Hilgenberg: “See how quickly you went down that road? Did you say anything regarding all of the liability protections, corporate welfare, tax manipulation, etc.? No, you went straight to the GOP talking point re: corporate tax rates. Is your goal just to be right or to persuade people?”

    YOU were the one who specifically said taxing oil companies, Mark. Do you even remember what you write? Let me refresh your memory:

    “JT Go listen to a liberal ask about taxing oil companies and see where the conversation goes. ”

    So I responded by saying that of course a libertarian isn’t going to be sympathetic toward talk about taxing companies. I gave a direct response to the example you gave.

    Me: “You ever consider the Green Party?”

    Hilgenberg: “Ah yes, the Libertarian purge LOL, how many times have I heard that one in my 17 years of outreach and party leadership. If you don’t march in lock-step conformity of rhetoric, off to another party for you!”

    I didn’t suggest that you should be kicked out of the LP. I suggested that if you want to bash corporations as such & are eager to appeal to people who want to heavily tax & control them as opposed to just strip them of government benefits, then you could find a lot of sympathy in a party where that’s a very common occurrence.

    Hilgenberg: “You have read every post ever made to me?”

    No, probably not. But of the many posts that I’ve seen to you on the subject, there hasn’t been one that attacked you for “not [worshipping] corporations all the time.” If you can name one poster who has said that to you, I’m all ears.

    Hilgenberg: “I outreach to Occupy and I am always told that they are anti-free market because they are against big corporations.”

    Again, your comment referred to what has been said to you on this site. I responded directly to that.

    Hilgenberg: “Many Libertarians are just like conservatives, they think corporations are individuals. This is how they get stuck in our outreach.”

    Name one who actually says that a corporation is an individual.

    Corporations are in fact comprised of many individuals. There are board members, executives, other employees, shareholders. All of them have come together voluntarily in a joint enterprise that allows for production & sale on a very wide scale. If you’re against that per se, then you are in fact “anti-free market.”

    Did you know that the LP is itself an incorporated entity?

    Hilgenberg: “Fight concentrations of power on ALL fronts, not just the left.”

    I fight concentrations of political power (i.e. physical force). I don’t fight concentrations of economic “power” (i.e. production for profit), if that “power” is amassed through voluntary exchange & not by government-granted monopoly, trade barriers, welfare, etc.

  44. Austin Battenberg Post author

    A corporation can’t vote. It doesn’t have a heartbeat. It is certainly not a person. So for those libertarians who defend the whole corporations are people argument are hurting our cause.

    That being said, I agree with Mark that too many libertarians use conservative talking points, and that is why many liberals don’t like us. But I don’t see how that automatically gets credited to Rothbard. If you are talking about the paleo-conservatives, I mean…there aren’t exactly a lot of those in the Republican Party, and its a shame that the paleo’s get mixed up with the neocons, but that doesn’t mean it repudiates everything that Rothbard has ever done.

  45. Mark Hilgenberg

    @ 49

    So you don’t see a problem with a government created entity, which is given limits on liability and risk, given unlimited life, protections against competition and in the case of banking a monopoly on the creation of money without corresponding liability?

    The last thing corporations want are truly free markets.

  46. Mark Hilgenberg

    @ 50 JT

    “YOU were the one who specifically said taxing oil companies, Mark. Do you even remember what you write? Let me refresh your memory:”

    I am very deliberate regarding what I write. If you notice the word “tax” solicits a Pavlov’s dog response in many libertarians. You automatically defend a tax as if it is a tax on an individual.

    You took the bait and in turn you will be sounding like Limbaugh within minutes to any person you are trying to reach.

    Do you think there could be a better way?

    “I didn’t suggest that you should be kicked out of the LP. I suggested that if you want to bash corporations as such & are eager to appeal to people who want to heavily tax & control them as opposed to just strip them of government benefits, then you could find a lot of sympathy in a party where that’s a very common occurrence.”

    You followed the script, you automatically hear what you want to hear, demonizing people who just see inequities in our system and don’t know a better solution, yet. Arguing the script will guarantee that they will never hear our solutions.

    What is it I have said that even remotely sounds like I don’t want individual liberty for all?

    “Name one who actually says that a corporation is an individual.

    Corporations are in fact comprised of many individuals. There are board members, executives, other employees, shareholders. All of them have come together voluntarily in a joint enterprise that allows for production & sale on a very wide scale. If you’re against that per se, then you are in fact “anti-free market.”
    Did you know that the LP is itself an incorporated entity?”

    You really don’t think many libertarians agree with Romney that corporations are people?

    Yes, they are made up of individuals, individuals who are granted by the government special privileges and protections we as individuals do not have. If you are for government granted protections and privileges for one group or entity over and above the individual, you are in fact “anti-free market.”

  47. JT

    Hilgenberg: “I am very deliberate regarding what I write.”

    Doesn’t seem like it at all. Others can judge that for themselves.

    Hilgenberg: “If you notice the word “tax” solicits a Pavlov’s dog response in many libertarians. You automatically defend a tax as if it is a tax on an individual.”

    First, I didn’t “defend” a tax. But if you’re saying that taxing companies is somehow better than taxing individuals, then I disagree. The issue is taxing, not who or what you’re taxing.

    Hilgenberg: “You took the bait and in turn you will be sounding like Limbaugh within minutes to any person you are trying to reach.”

    I don’t listen to Limbaugh so I don’t know what he says. If he says that corporations are legitimate forms of business that shouldn’t be taxed/regulated (or receive government-granted monopolies, trade barriers, or bailouts) then I suppose so.

    Hilgenberg: “You followed the script, you automatically hear what you want to hear, demonizing people who just see inequities in our system and don’t know a better solution, yet. Arguing the script will guarantee that they will never hear our solutions.”

    What script am I following? The libertarian one?

    Hilgenberg: “What is it I have said that even remotely sounds like I don’t want individual liberty for all?”

    Individual liberty includes the liberty to voluntarily join with others in different forms of profit-seeking enterprises & to keep the results of the exchange, without being taxed/regulated by the government, as long as there’s no physical force or fraud involved.

    Hilgenberg: “You really don’t think many libertarians agree with Romney that corporations are people?”

    Name one who has said that a corporation is a person. Has anyone ever said that about the LP?

    I know that many libertarians believe that individuals have rights and a voluntary group has certain rights by extension. For example, the LP has a right to send out & publish press releases because of the rights of its members.

    Hilgenberg: “Yes, they are made up of individuals, individuals who are granted by the government special privileges and protections we as individuals do not have.”

    Most corporations have NO special privileges or protections. They get sued, go bankrupt, etc. Individuals who invest in a corporation lose what they’ve put into it in cases of legal liability. However, there’s an important distinction made between losing joint corporate assets & losing personal assets that’s properly recognized by law.

  48. JT

    Battenberg: “I have to agree with Mark also that it is a fact that corporations wouldn’t exist as they are today without the government.”

    Could you elaborate?

  49. Mark Hilgenberg

    @ JT 55

    “First, I didn’t “defend” a tax. But if you’re saying that taxing companies is somehow better than taxing individuals, then I disagree. The issue is taxing, not who or what you’re taxing.”

    You instantly followed the left/right script, while ignoring the underlying concern of the mythical liberal we are discussing.

    “I don’t listen to Limbaugh so I don’t know what he says. If he says that corporations are legitimate forms of business that shouldn’t be taxed/regulated (or receive government-granted monopolies, trade barriers, or bailouts) then I suppose so.”

    You didn’t start with the monopoly or bailout language, you immediately went to the right wing “corporations should not be taxed or regulation.” So the person “hears” you want corporations to be protected and privileged.

    If you are against regulations, I imagine you will support the ending of regulations which grant them limits on liability?

    “Most corporations have NO special privileges or protections. They get sued, go bankrupt, etc. Individuals who invest in a corporation lose what they’ve put into it in cases of legal liability. However, there’s an important distinction made between losing joint corporate assets & losing personal assets that’s properly recognized by law.”

    Exactly, government protections. The corporate shield is a regulation protecting individuals from responsibility.

    You need to read up on this, I don’t think you realize how bad libertarians sound on this issue.

    http://mutualist.blogspot.com/2006/04/corporate-personhood.html

  50. Gene Berkman

    I will waste one more post attempting to explain limited liability. Limited Liability – except for special cases like Price-Anderson- does not protect a corporation. If a corporation is sued it can be liable for all its assets, and be forced into bankruptcy and/or dissolution.

    Limited Liability means that the shareholders – individual shareholders as well as pension funds and other mutual funds – are not liable for the costs of the corporation.

    It is the same protection an individual has if he takes a public notice ad in a newspaper stating “not responsible for any debts except my own.”

    Limited Liability is a benefit only in the case of a corporation that has borrowed too much or been sued, and cannot with corporate resources pay its debts or its judgment. The benefit then is not to the corporation, which may go out of business, but to the shareholders who do not lose their home or their retirement fund other than losing the value of the stock they bought in the failed corporation.

    It does not rise above the level of a comic book to state that limited liability is the reason corporations are so financially successful.

  51. Mark Hilgenberg

    Gene, exactly, it is a government granted benefit allowing people to create an entity to protect themselves from actions of entities they own.

    Gotta love big government I guess.

  52. Austin Battenberg Post author

    @56 You can’t be a corporation without getting permission from the government. I’m not saying that something like a corporation wouldn’t exist in a true free market, but a “corporation” is a government created entity.

  53. JT

    Hilgenberg: “You instantly followed the left/right script, while ignoring the underlying concern of the mythical liberal we are discussing.”

    I didn’t ignore the underlying concern; I addressed specifically what the hypothetical liberal said about taxing companies. If this left-wing individual wants me to say that corporations shouldn’t exist & if they do exist then they’re threats to liberty in and of themselves, then I wouldn’t give the answer that person wants to hear.

    Hilgenberg: “You didn’t start with the monopoly or bailout language, you immediately went to the right wing “corporations should not be taxed or regulation.” So the person “hears” you want corporations to be protected and privileged.”

    If the person starts with taxing/regulating, then I say taxing/regulating first. If they talk about government-granted monopolies/subsidies, then I’d respond to that first. So what? It’s all one idea given in the same succinct answer.

    Hilgenberg: “If you are against regulations, I imagine you will support the ending of regulations which grant them limits on liability?”

    No, because I don’t think it’s just to hold investors (many of whom are middle-class, btw) personally liable. They risk a certain amount of capital in the enterprise & as Gene said that’s what they should lose in that context, not their house or whatever.

    Hilgenberg: “You need to read up on this, I don’t think you realize how bad libertarians sound on this issue.”

    You too:
    http://www.econlib.org/library/Enc/Corporations.html

    “By incorporating (i.e., complying with the registration procedure prescribed by state law) and then by using the symbols “Inc.” or “Corp.,” shareholders are warning potential creditors that they do not accept unlimited personal liability, that creditors must look only to the corporation’s assets (if any) for satisfaction of their claims. This process, known as “constructive notice,” offers an easy means of economizing on transactions costs. It is an alternative to negotiating explicit limited-liability contracts with each creditor.

    Creditors, moreover, are not obligated to accept limited liability. Professor Bayless Manning observed that “as a part of the bargain negotiated when the corporation incurs the indebtedness, the creditor may, of course, succeed in extracting from a shareholder (or someone else who wants to see the loan go through) an outside pledge agreement, guaranty, endorsement, or the like that will have the effect of subjecting non-corporate assets to the creditor’s claim against the corporation” (1977, p. 7).”

    I think that’s enough from me on corporations on this thread.

    To the video: I think Woods is a very good libertarian speaker & writer. He ‘s not only knowledgeable & likable but he also delivers his remarks with strong emotion. As a Libertarian candidate for President, however, I’d have a few concerns, not the least being the fact that he’d be viewed as a “neo-confederate” by the media. I don’t think it’s desirable to have a candidate who has to explain that he’s not defending human slavery when there are enough controversial issues to talk about.

  54. Mark Hilgenberg

    @62 and hence why we have people like Root stumping for Romney and voters saying we want to hand over everything to corporations.

    “No, because I don’t think it’s just to hold investors (many of whom are middle-class, btw) personally liable. They risk a certain amount of capital in the enterprise & as Gene said that’s what they should lose in that context, not their house or whatever.”

    You can cover their loss, why should I? Oh, because you like big government when it benefits you, go it!

    If libertarians don’t know what INDIVIDUAL liberty is, we are in trouble. Oh wait, we are, down about 60% in membership since 2000 when the corpratarians took over.

  55. Mark Hilgenberg

    One last point. If I drive my truck and kill someone due to my faulty driving, I am liable. If I buy a corporation, put my truck in the corporation and kill someone, I am only liable for losing the truck.

    It is called a corporate shield for a reason.

  56. Gene Berkman

    @ 64 – if you kill someone by driving – intentionally or through negligence – you will be prosecuted whether your truck belongs to a corporation or not. I cannot believe you don’t know this simple fact.

    If you can prove me wrong, please do so with evidence, not assertion.

  57. Gene Berkman

    Mark – killing someone is not a tort, it is a crime. Even if done through negligence. You as an individual will be punished if you are driving, and kill someone and it is proven to be your fault.

  58. Gene Berkman

    Mark – I looked at your link.

    Actually, according ot a book I have from Nolo Press – “Corporation or LLC?” courts in California and other states are looking behind privately owned corporations and in fact imposing liability on owners if it is clear that the corporation is owned by a single person, or is a close corporation.

  59. Mark Hilgenberg

    Yes, SOME states are weaker for corporations, not all. Asset protection is a huge business. They all use government created entities to do so.

    My point is not to say limited liability is bad, or corporations are bad. My point is why must I be forced to pay for their protections and mistakes?

    They should pay for their protections.

  60. johncjackson

    @30 AB,
    I’m talking about political baggage, not pointing fingers at people and calling them “racist” or anything else. That said, I don’t think being primarily notable for defense of the Confederacy and belonging to or leading groups like League of the South aligns well with the Liberty Movement going forward.

    By the Woods baggage, I am referring to the fact that the first thing I ever heard of the guy had to do with the Confederacy and his founding of the League of the South. This was notably and proudly mentioned back in 2004-2005 when he was a “politically incorrect” NYT best-selling author celebrated by neo-confederates. That’s really what he was known for and celebrated by that particular LRC/LvMI faction. I guess after his apparent association with Ron Paul that stuff is being erased from his history.

    I don’t have any problem with “politically incorrect” historical viewpoints, adult converts to Catholicism, or personal social conservatism- but that doesn’t mean I celebrate these things as part of some “liberty” movement. And I certainly don’t think neo-Confederate fetishism and that whole LRC-type paleo segment serves any purpose politically.

  61. Austin Battenberg Post author

    I never heard of this whole neo confederate stuff and I have read some of his books and I am a fan of his.

    So I guess we will have to agree to disagree. I still think Tom Woods is also a net positive to the liberty movement, if not necessarily to the libertarian party.

  62. Mark Hilgenberg

    The neo-confederate stuff was big in the 90’s, it stems from the states rights crowd. A crowd I don’t understand being that I am in the individual rights crowd.

  63. Austin Battenberg Post author

    I read the Political Incorrect Guide to American History, and I don’t see anything bad about it. Just because someone with bad philosophical views endorses it doesn’t mean that Woods endorses them. Guilt by association? I thought we as libertarians are better then that.

    And Tom Woods is an individual rights guy, practically an anarchist if you listen to his interviews with Stefan Molenuex or listen to Woods when he guest hosts for the Peter Schiff Show. That being said, he wrote an entire book on the idea of nullification, where states can nullify unconstitutional laws, whether it be marijuana prohibition, or Obamacare.

    Just because you support the mechanism of using states to nullify bad laws doesn’t mean you have to support states that apply bad laws. I live in California, we passed Prop 215 which in effect nullifies to an extent federal marijuana laws on medical patients. I support that as it protect our individual rights. But I don’t support Prop 8, which prevents gays from marrying. That is trampling over our individual rights.

    And have you guys actually read Meltdown? A fantastic libertarian manifesto that explains how the crash of 2008 occurred from a free-market perspective. Or have you read Rollback? A fantastic libertarian book that explains in detail what should be done about governments. He is a fantastic spokesman for libertarianism.

    I learn a lot from the Austrian side. It’s where my libertarianism comes from. Of course I don’t support racism, as that is a collectivist viewpoint. And whatever associations that some may have had is unfortunate. But that doesn’t mean they should be cast out because of mistakes. I have a friend that went to prison for a crime. Does that make me guilty by association because I am still friends with him now that he is out of prison and has reformed and is no longer doing what he was doing?

    Let’s unite, rather then divide the libertarian movement. The reformers and the radicals and the Austrians. We all have something to bring to the table. But if we continue this game of exclusion, then the statists will continue to hold power over us.

  64. Mark Hilgenberg

    @ Austin 73

    I wasn’t really talking about Woods, just the whole neo-confederate thing which was popular.

    I haven’t paid much attention to Woods primarily due to his guilt by association, most people I see promoting him have been Republicans. That is unfair and I will give more of a listen.

    I do like the idea of state nullification. States have rights but no right to trample individual rights, your examples are spot on.

    I just always wonder, where would our movement be, had we been dominated by classical liberals as opposed to former conservatives over the past 40 years?

  65. Austin Battenberg Post author

    I saw a Woods speech at a Ron Paul rally and his words spoke to me better then a lot of other speakers. Very eloquent. And especially if you read Rollback, it is a VERY radical book. The cover is misleading because it shows Obama and Tom Woods has said he regretted letting his publisher convince him to use it, because he wanted to try and get Tea Partiers to get libertarianism. But if you read it, you will go wow, this is very good.

  66. Gene Berkman

    “I just always wonder, where would our movement be, had we been dominated by classical liberals as opposed to former conservatives over the past 40 years?”

    Actually, in the wake of the New Deal and the FDR pro-government progressives claiming the word “liberal” the classical liberals in America – Nock, Chodorov, etc – took refuge in the Right.
    The “former conservatives” that make up so much of the early Libertarian Movement (1965 on) were either classical liberals inspired mainly by Mises, or they were students of Objectivism.

    Classical Liberalism, like Objectivism, is pro-Capitalist and anti-totalitarian. There has not been room on the Left for classical liberalism, although it looked like a revival might be possible in 1989, influenced by events in East Europe.

  67. Jill Pyeatt

    Tom Woods’ speech in Los Angeles in May 2011 at the Nullify event moved me to tears. He is an excellent speaker and is definitely an asset to the Libertarian party.

  68. paulie

    Neo-confederate stuff is bogus, but Austin makes a lot of good points here, and Hilgenberg is right about corporations and about how we come off sounding to people coming from the left all too often.

  69. Mark Hilgenberg

    That was a good foreign policy speech but I don’t see the relevance to the LP, all he talked about was how he is a conservative and not a liberal.

  70. Austin Battenberg Post author

    He is speaking in front of conservatives. I only was making the point that if you read his books or listen to his speeches, he doesn’t talk or act like a conservative. He tries to bring people over to our train of thought. Jill made the point of liking that speech, so I posted a part of it.

    But remember, Woods is an author and a historian. He isn’t a politician, never has been and never will be. Unlike Wayne Root, Woods will talk in front of Republicans or conservatives but still try to convince them the values of libertarianism. He just cuts through all the propaganda.

  71. Jill Pyeatt

    I admit that I feel quite a connection with the “Liberty” movement in Los Angeles. It includes many groups, including the Ron Paul-type Republicans, Oath Keepers, some Occupy folks and (gasp!) some Wearechange people. Many of us attend several of those groups’ meetings. So, my reaction to Tom’s speech was a bit more of my “Liberty” hat than specifically “Libertarian”.

    I think the above is the only way our party will survive (in California at least). I’m sure I’ll get negative comments about that, but, that’s the way it is in California.

  72. Jill Pyeatt

    Well, we need to grow because of Top-Two, but there are other things going on in the state which makes me think the current state of the party in CA is unsustainable. I’m out the door for an event with one of the aforementioned groups, though, so I’ll elaborate when I get home tonight, if you’re still interested.

  73. Austin Battenberg Post author

    I was thinking about that. I talked briefly with Michael Pickens about me joining the neighboring chapter for the time being over at Placer County. But being a father and working full time, that really isn’t convenient for me. I would like a local one. However I don’t really know the steps to starting one and getting people to sign up. El Dorado County is like your typical meat and potato conservative county. The Tea Party is active, we elect Tom McClintock as our congressman (who’s voting record is actually pretty decent).

    I tried contacting the state party but they haven’t gotten back to me either.

    I know I’m making excuses, but I guess I just need some help. I don’t think I can do it by myself.

  74. JT

    Paulie: “Neo-confederate stuff is bogus, but Austin makes a lot of good points here, and Hilgenberg is right about corporations and about how we come off sounding to people coming from the left all too often.”

    Let’s get real here: There are many people who consider themselves modern liberals in certain parts of the country who are so primarily because they favor personal privacy & are anti-war. These individuals aren’t big fans of the welfare state or bureaucratic mandates, but they do oppose corporate welfare & bailouts. They’re good prospects for the LP.

    There are also many people who consider themselves modern liberals primarily because they hate economic inequality. These “99 percenters” aren’t really concerned with “limited liability” or any other legal feature of corporate law–they think the fact that some are rich & others are poor is proof of “social injustice (though even the “poor” in America generally are as well-off as middle-class people in most other countries). If limited liability didn’t exist–as well as any government privileges, however infrequent–these liberals would still hate large businesses that operate for profit & people who have amassed great wealth through them. There are only the effects, you see, and not causes.

    I’ve spoken to Occupiers as well, Mark. With regard to many (though not all) of them, I don’t care one iota that they don’t like how most libertarians sound–just as I don’t care one iota if many (though not all) Tea Partiers don’t like how most libertarians sound. The people I’m referring to don’t like how most libertarians sound because we don’t hate what they do most passionately.

  75. Paulie

    Yeah, that’s all true, although many of the occupiers don’t necessarily oppose everyone in the 1% per se but the fact that many of them have cheated to get there.

    I don’t think your position is that bad. Just helps if you pivot it to address their underlying concerns. Many of them are open to libertarianism if we make it sound like we care about giving everyone a fair shot, a clean environment, etc. All too often we don’t make it clear that we do.

  76. Mark Hilgenberg

    @ 91 JT

    “They’re good prospects for the LP.”

    “If limited liability didn’t exist–as well as any government privileges, however infrequent–these liberals would still hate large businesses that operate for profit & people who have amassed great wealth through them. There are only the effects, you see, and not causes.”

    We didn’t see a rise in large businesses until corporate charters were granted things like infinite lives and their risk was reduced along with other perks and privileges added.

    Without those things, we would not be worrying about big business growing to the size where they concentrate power over the individual.

    “The people I’m referring to don’t like how most libertarians sound because we don’t hate what they do most passionately.”

    How do you know that it is not how you word things, based on what I read, that could be a big part of the problem?

    I hate concentrations of power over the individual, maybe if more Libertarians did, we would not be looked at as right wingers.

  77. Be Rational

    The major cause of the growth in size of corportations is the income tax which causes a massive increase in the financially efficient size. The tax loss of earnings distribution makes the slower growth rate of excessive size organizations financially efficient enough to overcome the higher operating costs.

    If we repeal all taxes on income and property, it will no longer be financially efficient to leave profits inside large corporations to grow at slower rates.

  78. Paulie

    There are many causes for the concentration of wealth and power, but they all or almost all boil down to monopoly initiation of force, directly or indirectly.

  79. Be Rational

    @97 I didn’t say “corporate” taxes. I said Income taxes – meaning all of them. It’s the personal income tax paid on distributed earnings that’s the biggest problem. In addition, global factors that involve multi-national tax policies allow larger organizations to use their size advantage to reduce their total tax exposures as a percentage of income.

    Repeal of ALL taxes on income and property will cause a significant shift in a short time frame toward a more efficient smaller size for corporate and non-corporate business entities. Most of the largest corporations of today would shrink rapidly through spinoffs, sale, divestiture and earnings distributions.

    The one exception would be the infrastructure development industry which is nearly non-existant and grossly undercapitalized.

  80. JT

    Hilgenberg: “We didn’t see a rise in large businesses until corporate charters were granted things like infinite lives and their risk was reduced along with other perks and privileges added.”

    Seriously, Mark? You have things backward. The rise of large business enterprises in America during a period of technological progress, industrialization & entrepreneurship preceded political patronage.

    In your world, there would still be multinational, for-profit enterprises, Mark. There are very good economic reasons for them to exist. They wouldn’t disappear.

    Hilgenberg: “Without those things, we would not be worrying about big business growing to the size where they concentrate power over the individual.”

    Who’s “we”? I’m not worried about the size of any private enterprise, per se. In fact, I want some to grow a hell of a lot more so that they employ more people & produce more goods for sale.

    Hilgenberg: “How do you know that it is not how you word things, based on what I read, that could be a big part of the problem?”

    Come on, Mark. Are you denying that many (though not all) such individuals just hate what I said they do? If you’ve really talked to many Occupiers with whatever language you chose, then you’d know that’s true.

    Hilgenberg: “I hate concentrations of power over the individual, maybe if more Libertarians did, we would not be looked at as right wingers.”

    As power is the ability to command & control, I hate that too. That’s not an inherent feature of billion-dollar businesses though.

  81. JT

    Paulie: “Yeah, that’s all true, although many of the occupiers don’t necessarily oppose everyone in the 1% per se but the fact that many of them have cheated to get there.”

    The fact is that a tiny percentage of the ultra-wealthy committed any kind of fraud to get there. And I don’t think the individuals I’m talking about dislike people who are just in the top 1%.

  82. JT

    Nor did they cheat in the sense that they received government welfare or monopoly grants.

  83. Paulie

    The fact is that a tiny percentage of the ultra-wealthy committed any kind of fraud to get there.

    A huge percentage benefited directly or indirectly from force-based manipulation.

  84. paulie

    Means that they did not cheat (actually I think many did, although many of those did so indirectly) – not that it would have been OK to cheat.

  85. paulie

    I think so, too, but JT doesn’t. JT does not think most of the system is a cheat nor that most individuals have cheated to get in the 1%, and JT expects a truly free market to distribute wealth a lot like the market we have now, with large corporations accumulating a lot of power. I disagree with JT.

  86. Mark Hilgenberg

    Paulie,

    Well put.

    For me it is easy to see since our whole monetary system is a cheat. Until I am allowed to loan out more than I have in my bank account (reserve) like banks do, I consider their changes as cheating.

  87. zapper

    In a truly free market, many individuals would be far richer than today since they would no longer be forced to pay draconian income and property taxes, they would be free to invest in a greater variety of profitable enterprises, the economy would be growing at a faster rate, sustained for longer periods of time, and the market would be more dynamic allowing new ideas to be developed and brought to market quicker and more profitably.

    OTOH, corporations would be smaller without the income tax. They incentive for retained earnings at suboptimum rates of return would vanish without the personal income tax that makes payouts to individuals disadvantageous.

    Corporate shareholders would make more overall while top corporate managers would make less in a truly free market.

  88. zapper

    @111 What you have written is not true and makes no sense. It’s obvious that you have never taken accounting and do not understand a financial statement.

    There are two sides of a balance sheet. These are always equal. Banks have Equity and Liabilities on one side. Equity means money invested by the owners and earnings they have retaines. Liabilities is money they have borrowed from depositors (savings, checking accts and a variety of time deposits and loans from bonds, other financial institutions etc and, of course, the FED.

    On the other side are Assets including: land, buildings, furniture and equipment and loans of various types they have made.

    The amount of money a bank can lend can never exceed the amount of money it has on deposit plus borrowed funds plus the equity of the owners less physical and other non-earning assets.

    In short, they cannot lend money they don’t have.

  89. JT

    Paulie: “I think so, too, but JT doesn’t. JT does not think most of the system is a cheat nor that most individuals have cheated to get in the 1%.”

    Right. But what specifically do you mean by “cheated”? Cheating, in this context, means to me that those people defrauded people or received government welfare or government lockouts of competitors or something similar.

    Paulie: “JT expects a truly free market to distribute wealth a lot like the market we have now, with large corporations accumulating a lot of power.”

    I don’t know how close it would be to what we have now. I do know that individuals vary very, very widely in their abilities & personal ambition, in the value they place on saving/investing vs. consumption, in whether they spend thriftily or not, how much they care for their health, etc. Such things naturally lead to some people accumulating far, far more wealth than other people.

    The incomes of most lower-income individuals would rise, of course. Of course, the incomes of most companies would also rise without all the taxes & mandates & compliance costs.

    And as I’ve explained over & over again, I don’t see corporations accumulating a lot of “power.” They’d still exist for good economic reasons, but commanding & controlling isn’t an inherent feature of business.

  90. Mark Hilgenberg

    @Zapper 113.

    Read up on Fractional Reserve Banking.

    Here is Rothbard on the topic.

    “Banks make money by literally creating money out of thin air, nowadays exclusively deposits rather than bank notes. This sort of swindling or counterfeiting is dignified by the term “fractional-reserve banking,” which means that bank deposits are backed by only a small fraction of the cash they promise to have at hand and redeem. (Right now, in the United States, this minimum fraction is fixed by the Federal Reserve System at 10 percent.)

    Fractional Reserve Banking

    Let’s see how the fractional reserve process works, in the absence of a central bank. I set up a Rothbard Bank, and invest $1,000 of cash (whether gold or government paper does not matter here). Then I “lend out” $10,000 to someone, either for consumer spending or to invest in his business. How can I “lend out” far more than I have? Ahh, that’s the magic of the “fraction” in the fractional reserve. I simply open up a checking account of $10,000 which I am happy to lend to Mr. Jones. Why does Jones borrow from me? Well, for one thing, I can charge a lower rate of interest than savers would. I don’t have to save up the money myself, but simply can counterfeit it out of thin air. (In the nineteenth century, I would have been able to issue bank notes, but the Federal Reserve now monopolizes note issues.) Since demand deposits at the Rothbard Bank function as equivalent to cash, the nation’s money supply has just, by magic, increased by $10,000. The inflationary, counterfeiting process is under way.”

    http://www.lewrockwell.com/rothbard/frb.html

  91. zapper

    The first step of what you have posted from Rothbard or whoever is wrong, impossible and illegal:

    You cannot set up a bank with $1000 in equity and no other funds and then lend more than $1000. That is not possible, not legal, and not allowed. It does NOT happen that way.

  92. zapper

    ” I set up a Rothbard Bank, and invest $1,000 of cash (whether gold or government paper does not matter here). Then I “lend out” $10,000 to someone, either for consumer spending or to invest in his business. How can I “lend out” far more than I have?”

    This part is impossible. It is illegal, but since it is actually impossible illegality is irrelevant.

    Perhaps you have the quote wrong. Did you leave out part of it, or did your source leave out part of the original? I doubt that Rothbard would have written something so obviously inane. It is so obviously wrong that it amazes me that anyone wouldn’t see it if they have any math ability beyond 2nd grade and an ounce of logic.

  93. zapper

    More @117

    If YOU understood fractional reserve banking and how it really works you would see that what you’ve posted cannot be correct.

    Look for your mistake. Rothbard knew better than this, although he was wrong in part on this very topic, he did not have this part wrong.

  94. zapper

    NO, you are wrong.

    You have a misquote. You are missing a step or several steps from whoever you may be quoting. Perhaps your source made the error and you have repeated it.

    If you understood the topic you could see your mistake.

    Fractional reserve banking is real, but banks cannot lend money they don’t have. You have steps missing and you don’t get it.

    Rothbard, Mises and Paul did get it.

    They could see the missing steps – the mistake that you can’t see.

  95. mark hilgenberg

    Rothbard was off in the first part of the quote but he is correct, banks create money from nothing via debt.

    Can you as an individual do what a bank does, if yes, how, if not, why not?

  96. Ok Speech

    He just incessantly rambles. He makes 15-20 second statements with hardly any follow up. It’s as if he just goes up and there and talks about whatever he is thinking about. He goes from poverty, to development, to free trade, to manufacturing, to comparative advantage, all in less than 5 minutes.

  97. zapper

    It takes a series of steps for a bank to create money. In every step, the bank cannot lend more money than it has. The process works when the borrow doesn’t spend the money immediately, but leaves the money in the bank for some period of time. This allows the bank to lend that money again, minus the reserve. Then the new borrower also leaves the money in the bank before spending it and the bank makes yet another loan of this lesser amount, minus another required reserve.

    So, when the bank starts with $1000 with a 10% reserve requirement, the first loan will be for $900. The borrower leaves the money in the bank, so the bank can then lend that money again, minus another 10%, so $810 in the second round.

    This continues until the bank has made $10,00o in loans all of which have been redeposited at the bank and not spent.

    Of course, the bank has to continuously make new loans to replace the old ones and take in new demand deposits to replace the money spent.

    YES. An individual can do the same thing and with no reserve requirement whatsoever – IF you can lend money to someone and then get them to leave the money in your hands so you can lend it again until they actually spend it and then find a series of borrowers who will do the same. Just like the bank, the individual would have to create a large, ongoing operation that allowed him to collect loans with interest, replacing spent funds and allowing a new series of loans to be made.

    The difficulty for an individual is that at some point they would become might legally become to be defined as a lending business, bank or financial insitution of some kind and no longer just an individual.

  98. Mark Hilgenberg

    “So, when the bank starts with $1000 with a 10% reserve requirement, the first loan will be for $900. The borrower leaves the money in the bank, so the bank can then lend that money again, minus another 10%, so $810 in the second round.

    This continues until the bank has made $10,00o in loans all of which have been redeposited at the bank and not spent.”

    You as an individual can’t do that. You need government intervention make make it legal.

  99. Be Rational

    @125 There is no law making it illegal. It wouldn’t work only because it would take a large group of assistants, just as a one person bank couldn’t make it work either. A one person bank couldn’t make loans fast enough to actually create money.

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