Thursday, September 4, 2014

The two branches of the American statist religion

The American statist religion seems to have two branches, both of which coalesced in the mad “progressive” Wilsonian rush into WWI: America as a “Christian” nation with a duty to “save” the world with “democracy”. Read 8 pages of “The War for Righteousness” by Richard Gamble. The declaration of war was passed on Good Friday, 1917 and that was not a coincidence.
Since then, the Democrat “progressives” have dumped the “God” part of the religion, while the Neocon "progressives" have adopted a strange “dispensationalist” version where “Christians” and the USA have a duty to help Israel steal more land and induce WWIII and the “rapture”. (I have had the recent unfortunate experience of debating an entire army of Mark Levin types who “like” genocide of the Palestinians). The Neocons actually seem to believe that Obama is a liberal peacenik who simpathizes with radical Islam. They think Libertarians do too, while the left “progressives” think Libertarians hate everyone (and left "progressives" sure HATE us). Both sides seem to think the US government has magical powers to cure things, but they disagree about what those magic powers are and to whom and how they should be applied. Each side insists that folks who disagree are evil and/or stupid.
Both sides are still gung-ho about imposing their religion upon everyone else and the rest of the world. When their endeavors blow up in their faces, it’s because the opposing “progressive” side (left or Neocon) just didn’t do it right.
I suspect this is the real reason why we have such trouble even defining basic terms with the statists.  This would also explain the instantaneous success of Keynesianism.  Even more troubling is the realization that with this statist religion being fundamental to the statist belief system, the statist is not going to be in the mood to hear that his or her life's work has been for naught. And they are really not going to be in the mood to hear that they and their belief system are basically the worst problems facing mankind.  Unfortunately, both Libertarianism and Austrian School analysis are based upon that grim conclusion. 


  1. Hi Bob :)

    Paying USA taxes is entirely voluntary -- I have chosen not to pay them, and that is working out fine. I have chosen to pay taxes somewhere else where I think I better bargain.

    Paying taxes in the USA is a freely entered contract, where you get the benefits of USA citizenship, and you pay a yearly membership free. Many in the third world would pay much for this.

    There is no slavery -- you work to pay the membership fee for a housing association that you have freely chosen to be a member of.

    Just as working for Wal*Mart: you think that their wages are too low and health-care and pension deductions too high? Then find a better paying job, working at Wal*mart is a free choice, and you can quite anytime you want. There is a long queue outside of people eager to take your job.

    You think that the USA "housing association" is not offering good value for its membership fee? Nobody is forcing you to be a member, you can always quit it, sell your flat/house there and buy one in another "housing association".


    Most libertarianism can be interpreted on two levels.

    The first is that libertarianism is about PRINCIPLES not outcomes. If libertarian principles result in the power of large enterprises then the answer is “So?”. Because what matters is liberty of contract, and if liberty of contract results in the power of large enterprises, or 99% starving and 1% being obscenely rich, or whatever else, that is irrelevant, liberty is an absolute good in itself, and consequences are irrelevant.

    The second level is that libertarianism is really not about principles, but about about SOCIAL DARWINISM, and the principles have been chosen because “liberty of contract” favours WINNERS and punishes LOSERS. Therefore if the result is the power of large enterprises that is actually very desirable for libertarians, as long the large enterprises are run in the interests of the strong and against the interests of the weak, which they usually are. Indeed many libertarians are against those voluntary exchanges which create organizations such as governments that may occasionally be run in the interests of the weak and against the interests of the strong.

  2. "And he's really not going to be in the mood to hear that he and his belief system are basically the worst problems facing mankind."

    You state your worldview as the only one there can be. That is not the case at all.

    For example, you wouldn't have got the assets or income in the first place but for government investment.

    Government is special in that it effectively has a stake in all entities in its economy and all transactions that take place.

    Therefore it is appropriate to create as many transactions as the economy can withstand - tailored of course to create as much real worth as possible.

    So nobody is TAKING ANYTHING AWAY. The system is just being cooled down so it doesn't overheat because you didn't tax yourself sufficiently (aka saving aka voluntary taxation)

    Your understanding of the way money works is incorrect. I suggest a course of readings in MMT and then, perhaps, the scales will drop from your eyes.

  3. Bob, do you use reactive power or understand what it is?

    It's important to realise that when government INVESTS it will always generate the same amount of taxation for any positive tax rate. Pound for Pound. Each and every time.

    So why is there a government deficit you are no doubt screaming. Well that's because you've missed the other bit of taxation.

    Taxation is about reducing spending. That is its primary purpose, in aggregate, - to stop the system overspending its capacity.

    Once you understand that, then you quickly realise that people actually tax themselves. It's often called saving. That reduces the amount of spending an individual does - which is the primary purpose of taxation. So we can call saving - specifically saving in excess of investment - Voluntary Taxation.

    And that gives the simple equation:
    Voluntary Taxation + Compulsory Taxation = Government Investment
    which simplifies to:
    Taxation = Government Investment
    for those with a correct understanding of what taxation actually is.

    Therefore to increase the total amount of Taxation, you just push up Government Investment - once you've assured yourself that there is real space in the economy to take the extra investment. If there isn't enough Voluntary Taxation, then government can up the Compulsory Taxation or encourage more Voluntary Taxation to make space - should it so wish.

    The distribution argument is completely separate from this. It is about who gets to do Voluntary Taxation and who gets to do Compulsory Taxation, and whether that distribution is considered fair by the population. The government investment is already done at that point and the total amount cannot be affected by the distribution algorithm. It's just arguing about which end of the water ballon should be the highest.

    Yes it's an important debate, but it has nothing to do with whether we have public services or not.

    We will get nowhere until we get it across to people that governments are about deploying people and stuff to achieve a vision that all of us have signed up to via the democratic process. And by doing that we have given our government sovereign authority to bring it about.

    Clearly we use a monetary economy, not a barter one. Just like we use AC electricity not DC. Therefore using ideas that only apply to DC systems on an AC system is going to be a SHOCKING mistake (sorry libertarians.)

    We clearly need a generation system (the government sector) that has to circulate more money around the system (KVA) than would otherwise be the case to energise our advanced mechanised production system and ensure that it can deliver full output. If it doesn't then the system just generates less output.

    The government spending/taxation cycle is the Reactive Power in the economy. With an advanced productive economy that has a Power Factor less than 1 (doesn't need all the labour to produce all the output), it has to be there to ensure that all the real work that could be done gets done.

    Trying to get rid of Reactive Power is a fools errand. As any Electrical Engineer will tell you, the only way to get rid of reactive power is to get rid of the advanced economy. Why would we want to do that?

    Learn to love Economic Reactive Power. It's what allows the most Real Work to get done.