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April 18, 2014 / 18 Nisan, 5774
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Posts Tagged ‘anarcho-capitalism’

What if Israel Were on the Gold Standard?

Wednesday, April 17th, 2013

Imagine for a moment that I want to buy a car for 100,000 shekels. I’d rather not work and save, so instead I decide to simply print 100,000 shekels in cash so I can buy the car. I print it, I hand the pile over to the car dealer and the car is now mine.

What just happened here? I counterfeited 100,000 shekels and increased the money supply by 100,000 when I handed those shekels over to the car dealer. The average person, the kind that has to work for his money would say that I stole 100,000 shekels. But today’s economic experts like Stanley Fischer and Ben Bernanke and Paul Krugman would say that I gave “economic stimulus to the automobile industry.” So what really happened?

When an average person works in the private economy and saves money to buy a car, he produces more than he consumes, hence savings. In other words, he puts more into the economy than he takes out, the difference represented by the money he saves. There is now more value in the economy, more stuff because he worked harder, and he takes that real value represented by the money saved and buys a car for 100,000 shekels.

The car dealer now has 100,000 shekels of real value to invest in expanding his business, and thanks to the value that the saver added to the economy through saving, there is now more value in the economy with the same money supply. The value of the shekel goes up and prices drop just a little bit, and everyone owning shekels gets a bit richer thanks to the saver. The car dealer can now expand his business and safely assume the demand is there to match his increase in supply. The economy grows.

Now, if I simply print up 100,000 shekels and give it to the car dealer, I added zero value to the economy. There is no more useful stuff. Just paper. I did not save a thing. All I am doing is taking from the economy without adding anything to it. Worse, the 100,000 shekels I added to the money supply makes the value of the shekel go down a little bit, since more shekels are now chasing the same amount of goods. Prices go up. Everyone gets poorer, except for me of course, because I got to buy the car before the money supply went up. The act of me buying the car was itself the action that made the money supply go up in the first place. I, the money printer and the first new money user, am up one car. Yay for me. But everyone else besides the first person to use newly printed money loses.

Now, let’s say I stop printing money and the car dealer expands his business with the new shekels. Since everyone is now poorer, there is no new demand to match his new supply. The signal he got of new demand for his cars was wrong, because the 100,000 shekels I printed did not represent added value to the economy through saving. Demand is not there, his business overexpands and he has to cut back and contract by selling cars for cheaper and taking a loss. His business shrinks or “goes into recession,” but cars get less expensive for everyone else.

But let’s say I keep printing 100,000 shekels every day and buy another car with it day after day after day. The car dealer will keep misinterpreting the sales as new demand that doesn’t actually exist. He will keep expanding. It will look like the economy is growing and growing, the statistics the government puts out on car sales will skyrocket. But really, only I and the car dealer are benefiting. Everyone else is suffering inflation and getting poorer and poorer every time I print. At some point I will have to print more than 100,000 to buy each car since the money supply is expanding so rapidly, but that’s no big deal for me. It takes the same effort to print 150,000 as it does to print 100,000. I keep getting richer. Inflation doesn’t bother me. The car dealer keeps expanding and cars become so expensive that no one can buy them. Then let’s say suddenly I stop printing shekels and stop buying cars. The car dealer’s business totally crashes, and he goes out of business in a bankruptcy sale. All the cars get sold to the public for ultra cheap. His business “goes into depression,” but cars are suddenly cheap for everyone else.

If I Were Prime Minister: the Gov’t of an Anarcho-Capitalist

Sunday, March 24th, 2013

Note: This is satire, but does accurately reflect my feelings towards the Israeli government.

While I do not believe in the legitimacy of any government to exist at all, if I were forced to be Israel’s prime minister at gunpoint (it could happen any day now) and I had to name ministers, what would my government look like, and who would be in it?

I started thinking about this for more than a fraction of a second when I saw who got what in the divvying up of ministerial positions. So-and-so is minister of “strategic affairs.” Some other guy is minister of “agriculture.” Another idiot is in charge of “water,” because after all, if some politician who knows nothing about water supplies is not in charge of all of our water, we’ll all thirst to death and the Kinneret will turn into sewage overnight. This has already happened twice back before politicians were in charge of water.

And agriculture. Thank goodness a politician who knows absolutely nothing about how to grow food is in charge of the entire agriculture sector so he can tell us what we can import, export, buy, sell, when and where and how. Otherwise no one would be able to grow any food and we’d all starve.

But, OK, let’s assume I had to build a government and name ministers. Who would they be? First of all, I’d build a coalition of 120 MK’s and include everyone in my government by promising everyone a ministerial position. First, I would name Yair Lapid Minister of Male Grooming. He will be responsible for training all men in the state who can’t groom themselves and look like shlubs, how to look decent, improve their smiles, and generally look kempt. I will pay him $500 a month and give him a budget of $20 all out of my own pocket, and if he goes over that amount, I will fire him and give his job to Ahmed Tibi.

Instead of only one agriculture minister, there will be 5 ministers of one lima bean plant. These 5 people will be Liberman, Silvan Shalom, Tzipi Livni, and two of the smartest apes I can find in the Jerusalem Biblical Zoo. They will all fight over how to regulate the lima bean plant and can pass whatever ministerial orders they want on how to restrict, tax, and at what age to draft the lima bean plant into the army, but nothing else. If they start fighting, they’re all fired, except for the apes, who can continue regulating at will.

There will be an Interior Minister, but he will only be in charge of regulating the interior of his Knesset office. In fact, everyone in my government can be an Interior Minister. They can all decorate them with lima beans they get from the Lima Bean Plant ministers on the off chance that the 5 lima bean plant ministers haven’t regulated and taxed the lima bean plant to death. I’ll give them each a shekel to buy some gum for their offices from my own pocket.

There will also be a Culture and Sport minister. (Yes, in Israel, there actually is a politician in charge of “culture and sport”. Because without politicians, we’d forget how to play soccer and be cultural.) The culture and sport minister will be Gidon Sa’ar, who word has it likes to go to night clubs. His job will be going to night clubs once a week and writing a report about the number of flies on the ceiling of the night club. If he doesn’t write the report every single week and submit it to my desk (This Week: Eight Flies), he will be fired and his position will not be filled.

The foreign minister will be nobody, as I’m not interested in talking to other state leaders.

The education minister will be nobody, as I’m not interested in telling parents how to educate their kids.

The housing minister will be nobody, as I’m not interested in telling people where they can and can’t build and live.

The communications minister will be nobody, as I am not interested in telling people how they can communicate and what cell phones they can buy for how much.

Printed from: http://www.jewishpress.com/blogs/settlers-of-samaria/if-i-were-prime-minister-the-govt-of-an-anarcho-capitalist/2013/03/24/

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