Category: Economics

Socialized Medicine

Yuri Maltsev is one of my favorite contributors at the Ludwig von Mises Institute. He lived in the Soviet Union and was one of the members of Gorbachev’s team that was looking into economic reform. Unlike many critics of the Soviet Union, Yuri lived there and thus has firsthand experience. Part of the The 30 Day Reading List that will Lead You to Becoming a Knowledgeable Libertarian includes Maltsev’s article that discusses socialized medicine:

In 1918, the Soviet Union became the first country to promise universal “cradle-to-grave” healthcare coverage, to be accomplished through the complete socialization of medicine. The “right to health” became a “constitutional right” of Soviet citizens.

The proclaimed advantages of this system were that it would “reduce costs” and eliminate the “waste” that stemmed from “unnecessary duplication and parallelism” — i.e., competition.

What happens when you remove competition from a market? The market stagnates. The Soviet Healthcare system was a wreck and far behind the technological and basica sanitary conditions of other industrialized nations:

The system had many decades to work, but widespread apathy and low quality of work paralyzed the healthcare system. In the depths of the socialist experiment, healthcare institutions in Russia were at least a hundred years behind the average US level. Moreover, the filth, odors, cats roaming the halls, drunken medical personnel, and absence of soap and cleaning supplies added to an overall impression of hopelessness and frustration that paralyzed the system. According to official Russian estimates, 78 percent of all AIDS victims in Russia contracted the virus through dirty needles or HIV-tainted blood in the state-run hospitals.

Irresponsibility, expressed by the popular Russian saying “They pretend they are paying us and we pretend we are working,” resulted in appalling quality of service, widespread corruption, and extensive loss of life.

Everything humans, and every other creature on the planet, does is done in self-interest. Collectivists do not like this idea and instead try to encourage people to perform acts of altruism instead of acts of self-interest. This is where the collectivist philosophy hits a wall since acts of altruism ultimate have to be based on self-interest.

Medical professionals weren’t hardly motivated to do their best since the pay they were receiving didn’t match the work they were supposed to perform. Instead of providing healthcare altruistically, the medical professionals fo the Soviet Union apathetically stood aside as people died… unless they were paid by the patients:

In order to receive minimal attention by doctors and nursing personnel, patients had to pay bribes. I even witnessed a case of a “nonpaying” patient who died trying to reach a lavatory at the end of the long corridor after brain surgery. Anesthesia was usually “not available” for abortions or minor ear, nose, throat, and skin surgeries. This was used as a means of extortion by unscrupulous medical bureaucrats.

Isn’t it strange how medical care could be found if one was willing to pay? There was another exception as well, if you were an employee of the state:

Not surprisingly, government bureaucrats and Communist Party officials, as early as 1921 (three years after Lenin’s socialization of medicine), realized that the egalitarian system of healthcare was good only for their personal interest as providers, managers, and rationers — but not as private users of the system.

So, as in all countries with socialized medicine, a two-tier system was created: one for the “gray masses” and the other, with a completely different level of service, for the bureaucrats and their intellectual servants. In the USSR, it was often the case that while workers and peasants were dying in the state hospitals, the medicine and equipment that could save their lives was sitting unused in the nomenklatura system.

Marx’s theory always fell apart around the whole “eventually the all powerful state will dissolve and the communist society will be left in the socialist society’s place.” Power corrupts and the more power that is available the more it corrupts. The problem with socialism is the fact that it relies on an all powerful state to control everything. Ideally the state educations people on the wonders of communism and brings in the next era of human society, in reality corrupt power hungry psychopaths seek the positions of power and use them to rule over the proletariat.

The Soviet Union was a classic example of this fact. There were two classes in the Soviet Union, not bourgeoisie and proletariat as Marx claimed, but the state and everybody else. If you were part of the state you received better food, medical care, transportation, alcohol, etc., while everybody else suffered long breadlines, deplorable healthcare, a horribly dilapidated transportation system, poor liquor, etc.

What did socialized medicine get the Soviet Union? Horrible infant fatality rates for starters:

At the end of the socialist experiment, the official infant-mortality rate in Russia was more than 2.5 times as high as in the United States and more than 5 times that of Japan. The rate of 24.5 deaths per 1,000 live births was questioned recently by several deputies to the Russian Parliament, who claim that it is 7 times higher than in the United States. This would make the Russian death rate 55 compared to the US rate of 8.1 per 1,000 live births.

OK, the Soviet Union falled to provide proper medical care. What about the medical paradises of other nations that have implemented socialized medical care? We all know that places like the United Kingdom (UK) have far better medical care than the United States because the healthcare industry in that country is socialized, right? Wrong:

In “civilized” England, for example, the waiting list for surgeries is nearly 800,000 out of a population of 55 million. State-of-the-art equipment is nonexistent in most British hospitals. In England, only 10 percent of the healthcare spending is derived from private sources.

Britain pioneered in developing kidney-dialysis technology, and yet the country has one of the lowest dialysis rates in the world. The Brookings Institution (hardly a supporter of free markets) found that every year 7,000 Britons in need of hip replacements, between 4,000 and 20,000 in need of coronary bypass surgery, and some 10,000 to 15,000 in need of cancer chemotherapy are denied medical attention in Britain.

Age discrimination is particularly apparent in all government-run or heavily regulated systems of healthcare. In Russia, patients over 60 are considered worthless parasites and those over 70 are often denied even elementary forms of healthcare.

In the United Kingdom, in the treatment of chronic kidney failure, those who are 55 years old are refused treatment at 35 percent of dialysis centers. Forty-five percent of 65-year-old patients at the centers are denied treatment, while patients 75 or older rarely receive any medical attention at these centers.

Socialized medical systems have a major issue, shortages of critical medical supplies and technologies. Shortages are unavoidable, it’s a harsh reality that manifests in the fact that there is only a limited amount of resources on the planet. By resources I mean not only the chemicals that are used in the production of medicine but also the labor. Research and development isn’t easy and people need a way to know what is needed and what isn’t needed by society. The government tries determining such things by toiling over statistics, gathered data, and future predictions. Markets accomplish this through the price mechanism. If the price of something goes up is indicates there is a greater demand than supply so companies, hoping to cash in on the profits, start producing more of that thing.

The state doesn’t work on the price mechanism, they don’t receive profits from selling goods and services, so when they see a shortage they merely started regulating who gets access. Suddenly society is divided into groups that receive priority on medical care. If you’re elderly you’ll find yourself without treatment, unless you go to another country that has some semblance of a free market in healthcare and buy your medical needs. Collectivists decry free market medicine because the “poor” have to go without, but the exact same problem occurs under socialized medicine with the exception of who is made to go without. Of course free markets are usually able to take care of the “poor” through mutual aid, which is an option that isn’t usually available in under socialized medicine because mutual aid societies get legislated out of existence due to their “inefficiency” and “parallelism” with state controlled healthcare.

What about the paradise of Canada? Turns out that it’s not as much of a paradise as people make it out to be:

In Canada, the population is divided into three age groups in terms of their access to healthcare: those below 45, those 45–65, and those over 65. Needless to say, the first group, which could be called the “active taxpayers,” enjoys priority treatment.

The state, like individuals, works off of self-interest. If you’re an active taxpayer you get preferential treatment, if you’re collecting welfare or otherwise costing the state money you get substandard treatment.

Socialized healthcare is yet another ploy by the collectivists to hand power over to the state. History has proven it to be a bad idea time and time again but they refuse to listen. In their eyes self-interest is evil and thus they must abolish self-interest. It never dawns on them that their act of abolishing self-interest is an act of self-interest in of itself. They don’t see that they are the thing they claim to be fighting. Because they can’t bring themselves to face such a reality they continue pushing the same ideas that have historically failed. Don’t fall for the ploy the socialized medicine is a good thing, it’s not.

The Biggest Opponents of Capitalism are Often Capitalists

Ideally capitalism is a system of voluntary transactions. Unfortunately we don’t live in an ideal world and often those who profit the most from capitalism are also its biggest opponents:

In the 1940s, Joseph Schumpeter said that the capitalists would ultimately destroy capitalism by insisting that their existing profitability models perpetuate themselves in the face of change. He said that the capitalist class would eventually lose its taste for innovation and insist on government rules that brought it to an end, in the interest of protecting business elites.

While socialists often talk about profits eventually ending up in the hands of a mere few capitalists the truth is this couldn’t happen without the state’s involvement. Profits are a temporary phenomenon unless a coercive monopoly can be established. The reason for this is simple, when people see somebody making great profits they want a piece of the action and start a competing enterprise in the same market. When Henry Ford started raking in money others wanted a piece of the action and we ended up with competing companies such as Chevrolet. Chevrolet offered options that Ford didn’t, like an engine with more than four cylinders and automobiles that came in colors other than black. People wanting a six cylinder engine in a blue car now had an option and Ford found its profits dwindling as automobile buyers started going elsewhere. In the end this sparked great advancements in the automobile industry as each company tried to outdo the other, consumers won in the end.

Fast forward to today. The digital age have turned formerly scarce goods like music, movies, and literature into infinitely creatable bits. This change has caused problems for record companies, movie producers, and book publishers because their services are becoming obsolete. Instead of looking into new ways to innovate and profit they have turned to the state to protect their decrepit business models. Organizations like the Record Industry Association of American (RIAA) and the Motion Picture Association of American (MPAA) have been lobbying the state for more draconian copyright laws and stricter enforcement. The capitalists have become the ones trying to destroy capitalism.

As the article I linked to explains the Internet wasn’t the first creation to send established producers into a panic. Televisions were supposedly going to destroy live performances, cassette tapes were supposedly going to destroy album sales, and way back in the day the printing press was supposedly going to destroy new literature. None of these things have panned out and future claims of goods being destroyed by new technology won’t pan out either.

It’s Like Watching Children Argue

What do you get when you get to individuals who are entirely oblivious to economics arguing about economics? A presidential debate:

Taking the stage near Cleveland in Cuyahoga County, Mr Obama pitted his economic plan against Mr Romney’s “top-down” vision, saying Mr Romney would lead the economy down the path it had taken for the last 10 years.

Mr Obama said his vision of the economy saw growth coming from the middle class and that voters had “two very different visions to choose from”.

You know how you can tell when a presidential candidate is clueless about economics? When they talk about how the president can fix the economy. The president has as much ability to fix the economy as I do… scratch that, I actually have enough knowledge to advise people on economic issues with some competency (not much mind you, but more than either Obama or Romney).

Raising taxes isn’t going to fix the economy. Giving tax incentives isn’t going to fix the economy. Increasing regulations isn’t going to fix the economy. Reducing regulations isn’t going to fix the economy. There are only two ways to fix our economic woes, either the state must remove itself entirely from economic issues (I’ll see a leprechaun riding a unicorn before that happens) of the economy removes itself entirely from the state (this would be known as agorism).

The United States and most of Europe are learning the same lesson the Soviet Union did no so long ago, centrally planned economies fail. A centrally planned economy cannot work because it’s impossible to plan for the wants of other individuals. I cannot know what you want and you cannot know what I want, we must be allowed to employ our own means to obtain our own ends. This is what neither Romney or Obama understand, they both think the economy must be “helped” by the state.

People Living in Greece are Doing it Right

The Greek economy is in the toilet and things aren’t looking to improve anytime soon. Fortunately the people living there are doing the right thing:

Bankers said up to 800 million euros ($1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of returning to the drachma were fanned by rumors that a radical leftist leader may win the election.

This is the most proper response. Get your fiat currency away from those thieving bankers and convert it into tangible goods. A fiat note has no actual value because it has no actual use. Commodities on the other hand are useful and thus have actual value. As people living in the Weimar Republic learned, times of hyperinflation require one to resort to barter. Nobody wants to accept a wheelbarrow full of fiat currency because that currency is constantly becoming less valuable. Sure, they may be able to buy a loaf of bread with it today, but by tomorrow they won’t be able to buy a slice of bread with it. Instead they will ask for the thing they actually want, bread.

On the other hand canned goods will give you purchasing power. Even if you don’t want to eat canned beans somebody else will, and you can ask for something in exchange. The beans will last for ages and, if nothing else, you can eat them. In economic terms the can of beans is said to have intrinsic value, that is to say the value of an item is contained within itself. This is why gold backed currencies have worked, gold has actual uses and therefore is has intrinsic value.

It’s good to see the people of Greece waking up to the reality that’s been inflicted upon them. I hope the people of my country are as smart when the dollar starts to topple down.

How the Regulation Game Works

It seems you need a license to do anything in this country. So many career paths require a stamp of approval from the state that starting a personal business is becoming harder and harder. In fact this licensing craze has reached such an absurd level that it’s actually illegal to braid hair in Utah without a license:

Then, one day, she got an email from a stranger. “It is illegal in the state of Utah to do any form of extensions without a valid cosmetology license,” the e-mail read. “Please delete your ad, or you will be reported.”

It takes nearly two years of school and about $16,000 in tuition to get a cosmetology license in Utah. And schools teach little or nothing about African hair braiding.

This article is a good read because it explains how the licensing game works:

But it’s also been driven by a push from professions themselves. Licensing rules make it harder for new people to enter a field. That’s good for people who are already in the profession, because it limits competition and allows them to raise prices. So professions go to lawmakers and say: You need to regulate us.

“Everyone assumes that private interests fight like crazy not to be regulated,” Charles Wheelan, who teaches public policy at the University of Chicago, told me. “But often, for businesses, regulation is your friend.”

Whenever you hear a business owner demanding the state regulation his industry don’t cheer him for being “socially responsible” because he’s merely trying to push competitors out of his market. The biggest threat to an established business are new startups entering the market. This is why taxicab companies demanded cities put a cap on the number of taxicabs that can operate within city limits. Such limits allow taxicab operators to charge absurd amounts of money knowing that there is a permanently fixed supply and a demand that increases with population.

Let’s face it, braiding hair isn’t rocket science and you don’t need a college degree to do it. The worst outcome of braiding hair incorrectly is a tangled mess of hair. The only reason the state of Utah requires a cosmetology license to braid hair is because cosmetologists wanted to prevent new competitors from entering the market, and $16,000 in tuition is a pretty big barrier to entry.

The next time you heard some business owner telling the state, “Regulated me!” give him a one finger salute. He’s trying to use the state’s gun to prevent competitors from entering his market so he can charge more for his services. There is no altruism going on, he’s merely trying to enrich himself at your expense.

What’s Need Got to Do With It

Advocates of gun rights know gun control advocates love to ask, “Why do you need X?” where X is any firearm that the gun control advocate is trying to ban. Gun control advocates aren’t the only group who like to use the “need” argument, collectivists love to use it to.

Whenever I talk about the wonders of the market some collectivist inevitably tries to swoop in and rain on my parade. One of my favorite aspects of the market is the ability to provide for the wants of so many. If you want an expensive sports car there are several to choose from, if you want a cheap car to get you from point A to point B there are also many to choose from. Do you want an expensive handmade wristwatch? Rolex, Ball, Omega, and many others are more than happy to provide you with one. For those who prefer a cheap wristwatch Casio, Fossil, Timex, Seiko, and many others are happy to deliver you such a product. Are you looking for a reliable handgun for self-defense? Take your pick, Glock, Smith and Wesson, Springfield Armory, and many other companies can give you want you’re looking for. Planned economies doen’t have such variety, instead you are stuck choosing between a handful of state approved goods if there is any choice at all. When you drive down the road of a communist country you don’t see much variety in automobiles, there are usually a handful of models from the handful of state approved manufacturers.

When I bring this up collectivists are often quick to see we don’t need that many choices. My response is this: what does need have to do with it? Basing your argument on need is idiotic and self-defeating. All humans need is shelter, clothing, food, water, and a handful of tools. Cavemen had all of their needs met. The caves they lived in provided shelter, the animals they hunted with their crude spears provided clothing and food, trees and bushes offered more food, and flowing streams and rivers provided water. Of course they lived incredibly short lives, the average age being under 20 years. It was also a rather miserable existence since all of their time was spent hunting and gathering food, building their crude weapons, and fighting off wild animals and competing tribes. Still, they had all of their needs.

Another problem with the “need” argument is that it’s incredibly arrogant. By telling somebody they don’t “need” something you’re also telling them that you know what they need. While you may not think the guy driving the Ford F-350 needs such a large truck you have no idea if he hauls heavy trailers, workers construction, or simply enjoys the ride and feel or a large truck. Perhaps you don’t believe the woman carrying a 9mm Glock needs a weapon but her ex-husband could have a history of stalking and abuse. Who needs an expensive suit? Perhaps the owner of a high-end jewelry store where appearance is a huge part of the business. The Austrian tradition of economics is based on the fact only an individual can know what he or she needs or wants. I can no more know what you need than you could know what I need. Each individual has different hopes, desires, weaknesses, strengths, interests, aspirations, dreams, thoughts, etc. It’s impossible, in extremely arrogant, to know what another needs.

The next time somebody tries to argue what you can and can’t have based on need kindly inform them to give up their worldly possessions, live in a cave, and hunt and gather their food. Nobody needs more than that to survive.

Like Rats Feeling a Sinking Ship

Like California, New York has been gouging the people living within its borders for more and more tax money and like the people of California the people of New York are fleeing the state:

New York State accounted for the biggest migration exodus of any state in the nation between 2000 and 2010, with 3.4 million residents leaving over that period, according to the Tax Foundation.

Over that decade the state gained 2.1 million, so net migration amounted to 1.3 million, representing a loss of $45.6 billion in income.

Where are they escaping to? The Tax Foundation found that more than 600,000 New York residents moved to Florida over the decade – opting perhaps for the Sunshine State’s more lenient tax system – taking nearly $20 billion in adjusted growth income with them.

Once again we return to the fact that demanding more from the wealthy accomplishes nothing because they are also the individuals most able to flee. Some of the wealthiest individuals have been abandoning the United States because of the oppressive tax system, which is why the state is now pushing for a Nazi-esque tax for those leaving the country (and before somebody claims Godwin’s Law note that said law doesn’t apply when one is making an accurate historical reference).

As our cracking economy beings to come apart entirely we can look forward to more individual states increasing tax rates and implementing taxes for leaving. No country can tax its way to prosperity because those being taxes will eventually get sick enough of having their wealth stolen and either leave, abandon all productive endeavors (often referred to as going Galt), or do business exclusively in the “unofficial” economy (often called the black market by racist propagandists (that was hyperbole, clam down) who believe such a label makes it sound sinister). Either way money is kept from the state, which causes the state to lash out more violently as it dies a slow death.

The Folies of Rent-Seeking

In economics the term rent-seeking is used to define actions where economic rent is sought by manipulating the social or political landscape instead of mutual trade. The classic example of this practice are patent trolls, companies that either buy or register patents for ideas they have no intention of manufacturing so they can sue another company that does attempt to manufacture a good that is covered by said patents. This has become very easy in today’s environment because almost anything is allowed to be patented including software and business models.

Microsoft has just be smacked upside the head because a judge has determined the Xbox 360 S violates the patent of another company and has recommended an import ban on the console:

An administrative law judge for the International Trade Commission issued a recommendation that the commission ban 4GB and 250 GB Xbox gaming consoles from import to the United States. The recommendation(PDF) was released to the public on Monday, and would punish Microsoft for infringing against some of Motorola’s patents. The patents permit video transmission and compression on the console and between the console and its controllers.

Right now it’s up to the International Trade Commission (ITC) to either agree with the judge and order the import ban or disagree with the judge and overrule the ban. Of course this case is really payback for the import ban Microsoft got enacted against Motorola:

The US International Trade Commission today ordered an import ban on Motorola Mobility Android products, agreeing with Microsoft that the devices infringe a Microsoft patent on “generating meeting requests” from a mobile device.

Payback is a bitch, especially when dealing with rent-seeking. Instead of spending money on research and development to introduce newer and better products for consumers to buy Motorola and Microsoft have instead opted to sink money into costly court battles. It is becoming more common in the business world to rely on suing violators of held patents to make money instead of selling goods and services, in fact an entirely business model has developed around the process.

The patent system is a mechanism used by the state to grant monopolies over ideas. Ideas, not being scarce resources (in other words if I tell you my idea I haven’t lost my idea, we both have it), should not be artificially restricted through the state’s monopoly on violence. Unfortunately the state does grant monopolies on ideas and they do enforce those monopolies through force. Instead of fostering an environment of innovation as the founders of this country believed they were doing when implementing the patent system, an environment of liability has been created. Innovation has taken a backseat to lawsuits, after all suing somebody is still a cheaper and less risky process then researching and developing new products.

The Manipulation of the Sugar Market

If you go to grocery stores that cater to international tastes you’ll usually run across what is most often referred to say “Mexican Coke.” Truthfully it should be called international Coke because the drink people are often seeking out isn’t just available in Mexico, it’s available in many other countries. Why? Because “Mexican Coke” is made with real sugar so it tastes far different that the crape we can buy in bulk here in the United States. The sugar market, like so many other markets, has been manipulated by the state to such an extent that high fructose corn syrup is more economical than pure natural sugar:

When a government guarantees profits to those large corporations with powerful lobbies, the market loses its natural regulating mechanism. Instead of weeding out the most inefficient companies, the state subverts the consumer and keeps these companies propped up with corporate welfare. This is particularly true with respect to the agricultural industry.

In the absence of tariffs, importation quotas, and subsidies, the natural tendency of the market would be to produce cheap foreign sugar, which soda manufacturers would then import to sweeten their product. Domestic farmers are naturally opposed to this system because they cannot compete with more-efficient foreign firms. So, instead of competing for the dollar votes of the millions of individuals who form the free market, these large corporations have the power to lobby a select group of politicians to confer them special privilege. When a businessman tries to secure his profits not through free competition but through state privilege, he is not acting as a market entrepreneur but rather as a political, rent-seeking one.

In this case, the political entrepreneur was Archer Daniels Midland, a company that lobbied Congress to pass draconian quotas on sugar importation. But why would ADM, a corn producer, want to artificially raise the price of foreign sugar? A basic lesson of economics is this: when the price of a good is raised, all other things being equal, people cut back on their consumption, and (depending on the elasticity of demand) they look for substitutes.

High-fructose corn syrup, which is made from cornstarch, which ADM grows, is such a substitute.

Sugar doesn’t grow well in the United States so producing it cheaply is impractical. Because of this consumers of sugar usually import it from foreign produces. This isn’t a problem in a free market because farmers in the United States are able to grow crops that don’t do well in areas favorable to sugar cane so trade can go both ways. Unfortunately when given the option to hinder competition through the political process most economic actors will jump on the opportunity.

In this case an individual who produced a corn-based sweetener wanted to push out competing foreign sugar producers. Doing this is easy when there is a state that can impose import restrictions (and also subsidize corn producers to encourage more of the crop to be grown, thus reducing the cost). Tariffs, import quotas, and subsidies are nothing more than mechanisms available to the state to grant its cronies monopolies. If a domestic producer is having difficulties selling their produce because of a superior foreign competitor the state will happily intervene and push out the foreign competitor so long as the domestic producer has something of value to offer the politicians. In fact this demonstrates the fact that we never moved away from mercantilism. The state still controls foreign trade, they are just less overt about it. Instead of a king openly granting a monopoly to a favored merchant the state now hides those grants of monopolies behind tariffs, import restrictions, regulations, subsidies, government contracts, etc. Even though the rules of the game have changed the game itself hasn’t.

Some people are probably curious about why this matters. It matters because market interventions come at a costs to your and me, the consumers. Our choices are artificially restricted and the lack of competition ensures prices will remain higher than they would otherwise. We end up having to pay a higher price for an inferior product. While producers of high fructose corn syrup will claim it tastes the same as sugar anybody who has had a “Mexican Coke” and a domestic Coke will let you know such claims are bullshit.

Agorism Alive and Well in Spain

Agorism is a strategy many of us in the voluntaryist movement advocate. It’s a simple idea that many people partake in without ever realizing it. Whenever you work for “cash under the table” you’re performing an act of counter-economics as you’re disobeying the state’s decree regarding income tax. In Minnesota you perform an act of counter-economics every time you buy something online or in a state with lower sales tax and don’t pay the difference to the state. Most of us are agorists in some way or another and such practices become more common in failing economies such as Spain:

More than six months ago, a 37-year-old worker here named Juan was laid off from his job delivering and assembling furniture for customers of Ikea, joining the legions of unemployed in Spain. Or so it would seem.

Since then, Juan has continued doing more or less the same work. But instead of doing it on the payroll of Pantoja, a transport subcontractor to Ikea, he hovers around the parking lot of the megastore, luring customers of his own by offering not only to deliver their furniture but also to do “general work,” like painting and repairs, all for the bargain price of €40, or $51, a day.

“I will do anything except electricity and plumbing, where I really don’t have enough expertise to guarantee a safe and decent job,” said Juan, who did not want his full name used because he does not declare his income and did not want to run afoul of the tax authorities.

One nice benefit of not having to pay income tax is the ability to undercut those who do. If you pay income tax you must make enough money to not only survive but to also pay the state its tithe. Those who don’t report income tax don’t have to worry about the additional money that will be stolen by the state and therefore can work much cheaper and still get by.

When you consider the amount of money that goes to the state in the form of taxes, licenses, and compliance with regulations you realize a great deal of economy goes to feed the state. How much of your life is spent working for the state? What percentage of the money you spent on your computer went to the state?

When you think about it we’re not better off that then serfs of yore. Serfs were those who worked land owned by or rented from nobles. In exchange for working the land they were “granted” the privilege of protection and the use of some fields for their own subsistence. Those of us living in the United States are in a similar situation although the illusion of freedom is presented to us. Like serfs our land is owned by another entity, in our case the state. We are allowed to use the land so long as we pay rent, usually referred to as property tax. The state promises to protect us from outside enemies and criminals living within its borders (and like the nobles’ promises of protection the state never really fulfills their end of the “agreement”). If we fail to pay our tithe the state kidnaps us, holds us in cages, and steals our property under the “debt” is paid off. When we lack property to take we become bonded laborers, our wages are garnished until the “debt” is paid off.

Serfdom never went away, the nobles merely changed their title to the state and pretended to give us the ability to elect a representative government.

The serfs of yore eventually awakened to their plight and revolted against the nobles. Agorists are revolting but not by using violence. Instead the agorists analyzed the enemy and discovered its weakness, it survives only on what it can take by force. If the state has no income, if they are unable to seize wealth by force, it eventually starves and dies. Why wage a violent revolution against an entity that specializes in violence? When you challenge a specializes you are likely to lose unless you are also a specialist. While the state specializes in violence it is utterly incompetent when it comes to economics and economics is something individuals specialized in. The golden rule of a fight is to never fight fair.

Fortunately for agorists the state recruits people for our movement as it attempt to bleed the serfs dry. When the serfs no longer have anything to give they must fact facts and decide whether they’re going to continue providing to the state at the cost of their lives or keep what wealth they can scrounge and disobey the decrees of the states. Most people will follow their survival instinct and give the state a giant middle finger and it is at that point that they become agorists.